AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 23, 2010

1933 ACT FILE NO. 333-170187
1940 ACT FILE NO. 811 - 03763

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

-----------------------

REGISTRATION STATEMENT ON
FORM S-6
AMENDMENT NO. 1

------------------------

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2

A. EXACT NAME OF TRUST: GUGGENHEIM DEFINED PORTFOLIOS, SERIES 749

B. NAME OF DEPOSITOR: GUGGENHEIM FUNDS DISTRIBUTORS, INC.

C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:

Guggenheim Funds Distributors, Inc.
2455 Corporate West Drive
Lisle, Illinois 60532

D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:

Copies to:

KEVIN ROBINSON, ESQ. ERIC F. FESS
Senior Managing Director, General Chapman and Cutler LLP
Counsel and Secretary 111 West Monroe Street
Guggenheim Funds Distributors, Inc. Chicago, Illinois 60603
2455 Corporate West Drive (312) 845-3000
Lisle, Illinois 60532
(630) 505-3736

It is proposed that this filing will become effective (check appropriate box)

/ / immediately upon filing pursuant to paragraph (b)

/ / on (date) pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)

/ / on (date) pursuant to paragraph (a) of rule 485 or 486

/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

E. TITLE OF SECURITIES BEING REGISTERED: Units of fractional undivided
beneficial interest.

F. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as practicable
after the effective date of the Registration Statement.

/ / Check box if it is proposed that this filing will become effective on
(date) at (time) pursuant to Rule 487.

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The registration hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.

Preliminary Prospectus Dated November 23, 2010, Subject to Completion

Guggenheim Defined Portfolios, Series 749

Closed-End Equity & Income Portfolio, Series 27

Closed-End California Municipal Portfolio, Series 4

Strategic Income Portfolio, Series 49

GUGGENHEIM LOGO

PROSPECTUS PART A DATED _____ , 2010

Diversified portfolios of securities
selected by Guggenheim Funds Distributors, Inc.

The Securities and Exchange Commission has not approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.

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INVESTMENT SUMMARY

Overview

Guggenheim Defined Portfolios, Series 749 is a unit investment trust that
consists of the Closed-End Equity & Income Portfolio, Series 27 (the
"Closed-End Equity Trust"), the Closed-End California Municipal Portfolio,
Series 4 (the "California Municipal Trust"), and the Strategic Income
Portfolio, Series 49 (the "Strategic Income Trust") (collectively referred to
as the "trusts" and individually referred to as a "trust"). Guggenheim Funds
Distributors, Inc. ("Guggenheim Funds" or the "sponsor") serves as the sponsor
of the trusts.

The Closed-End Equity Trust and the Strategic Income Trust are scheduled
to terminate in approximately two years. The California Municipal Trust is
scheduled to terminate in approximately five years.

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CLOSED-END EQUITY & INCOME PORTFOLIO, SERIES 27

Use this Investment Summary to help you decide whether an investment in
this trust is right for you. More detailed information can be found later in
this prospectus.

Investment Objective

The Closed-End Equity Trust seeks to provide total return that is
comprised of current income and capital appreciation.

Principal Investment Strategy

The trust contains common shares of closed-end investment companies
("Closed-End Funds") that invest primarily in equity securities and/or
income-producing securities.

See "Investment Policies" in Part B of the prospectus for additional
information.

Security Selection

The trust invests in a diversified portfolio of Closed-End Funds that
consist primarily of equity securities and/or income-producing securities. The
assets held by such Closed-End Funds may include both foreign and domestic
equity securities and fixed-income securities. The equity securities held in a
Closed-End Fund may include common stocks, preferred stocks, convertible bonds,
warrants and other securities with equity characteristics. The fixed-income
securities held by a Closed-End Fund may consist of taxable bonds, government
securities, high-yield or junk securities and other income-producing assets.

Closed-End Funds are investment companies that consist primarily of
securities issued by various corporate or government entities. Closed-End Funds
are typically traded on national securities exchanges and are managed by an
investment adviser in accordance with the fund's investment objectives and
policies. The investment adviser generally charges a fee for such service.

When selecting Closed-End Funds for inclusion in this portfolio the
sponsor looks at numerous factors. These factors include, but are not limited
to:

o Investment Objective. The sponsor favors funds that have a clear
investment objective in line with the trust's objective and, based
upon a review of publicly available information, appear to be
maintaining it.

o Premium/Discount. The sponsor favors funds that are trading at a
discount relative to their peers and relative to their long-term
average.

o Consistent Dividend. The sponsor favors funds that have a history of
paying a consistent and competitive dividend which, in the opinion of
the sponsor, can be maintained.

o Performance. The sponsor favors funds that have a history of strong
relative performance (based on market price and net asset value) when
compared to their peers and an applicable benchmark.

Future Trusts

The sponsor intends to create future trusts that follow the same investment
strategy. One such trust is expected to be available approximately two months
after the trust's initial date of deposit (the "Inception Date") and upon the
trust's termination. If these future trusts are available, you may be able to
reinvest into one of the trusts at a reduced sales charge. Each trust is
designed to be part of a longer term strategy.

- --------------------------------------------------------------------------------
Essential Information
(as of the Inception Date)

Inception Date _____ , 2010

Unit Price $10.00

Termination Date _____ , 2012

Distribution Date 25th day of each month
(commencing _____ 25, 2010, if any)

Record Date 15th day of each month
(commencing _____ 15, 2010, if any)

CUSIP Numbers

Cash Distributions
Standard Accounts 40167R485
Fee Account Cash 40167R501

Reinvested Distributions
Standard Accounts 40167R493
Fee Account Reinvest 40167R519

Ticker CCEEBX

Portfolio Diversification

Approximate
Sector Portfolio Percentage
- --------------------- --------------------
Closed-End Funds 100.00%
------
Total 100.00%
======

Minimum Investment
All accounts $250
- --------------------------------------------------------------------------------

Principal Risks

As with all investments, you may lose some or all of your investment in
the trust. No assurance can be given that the trust's investment objective will
be achieved. The trust also might not perform as well as you expect. This can
happen for reasons such as these:

o Securities prices can be volatile. The value of your investment may
fall over time. Market value fluctuates in response to various
factors. These can include stock market movements, purchases or sales
of securities by the trust, government policies, litigation, and
changes in interest rates, inflation, the financial condition of the
securities' issuer or even perceptions of the issuer. Units of the
trust are not deposits of any bank and are not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government
agency.

o Due to the current state of the economy, the value of the securities
held by the trust may be subject to steep declines or increased
volatility due to changes in performance or perception of the issuers.
Starting in December 2007, economic activity declined across all
sectors of the economy, and the United States experienced increased
unemployment. The economic crisis affected the global economy with
European and Asian markets also suffering historic losses.
Extraordinary steps have been taken by the governments of several
leading countries to combat the economic crisis; however, the impact
of these measures is not yet fully known and cannot be predicted.

o The trust includes Closed-End Funds. Closed-End Funds are actively
managed investment companies that invest in various types of
securities. Closed-End Funds issue common shares that are traded on a
securities exchange. Closed-End Funds are subject to various risks,
including management's ability to meet the Closed-End Fund's
investment objective and to manage the Closed-End Fund's portfolio
during periods of market turmoil and as investors' perceptions
regarding Closed-End Funds or their underlying investments change.
Closed-End Funds are not redeemable at the option of the shareholder
and they may trade in the market at a discount to their net asset
value. Closed-End Funds may also employ the use of leverage which
increases risk and volatility. Instability in the auction rate
preferred shares market may affect the volatility of Closed-End Funds
that use such instruments to provide leverage.

o Certain Closed-End Funds held by the trust invest in common stocks.
Common stocks represent a proportional share of ownership in a
company. Common stock prices fluctuate for several reasons including
changes in investors' perceptions of the financial condition of an
issuer, changes in the general condition of the relevant stock market,
such as the market volatility recently exhibited, or when political or
economic events affect the issuers. Common stock prices may also be
particularly sensitive to rising interest rates, as the cost of
capital rises and borrowing costs increase.

o The value of the fixed-income securities in the Closed-End Funds will
generally fall if interest rates, in general, rise. Typically,
fixed-income securities with longer periods before maturity are more
sensitive to interest rate changes.

o Certain Closed-End Funds held by the trust may invest in bonds that
are rated below investment-grade and are considered to be "junk"
securities. Below investment-grade obligations are considered to be
speculative and are subject to greater market and credit risks, and
accordingly, the risk of non-payment or default is higher than with
investment-grade securities. In addition, such securities may be more
sensitive to interest rate changes and more likely to receive early
returns of principal.

o Certain Closed-End Funds held by the trust may invest in bonds that
are rated as investment-grade by only one rating agency. As a result,
such split-rated securities may have more speculative characteristics
and are subject to a greater risk of default than securities rated as
investment-grade by more than one rating agency.

o Certain Closed-End Funds held by the trust invest in foreign
securities. Investment in foreign securities presents additional risk.
Foreign risk is the risk that foreign securities will be more volatile
than U.S. securities due to such factors as adverse economic,
currency, political, social or regulatory developments in a country,
including government seizure of assets, excessive taxation,
limitations on the use or transfer of assets, the lack of liquidity or
regulatory controls with respect to certain industries or differing
legal and/or accounting standards.

o Certain Closed-End Funds held by the trust may invest in securities
issued by companies headquartered or incorporated in countries
considered to be emerging markets. Emerging markets are generally
defined as countries with low per capita income in the initial stages
of their industrialization cycles. Risks of investing in developing or
emerging countries include the possibility of investment and trading
limitations, liquidity concerns, delays and disruptions in settlement
transactions, political uncertainties and dependence on international
trade and development assistance. Companies headquartered in emerging
market countries may be exposed to greater volatility and market risk.

o Certain Closed-End Funds held by the trust invest in convertible
securities. Convertible securities generally offer lower interest or
dividend yields than non-convertible fixed-income securities of
similar credit quality because of the potential for capital
appreciation. The market values of convertible securities tend to
decline as interest rates increase and, conversely, to increase as
interest rates decline. However, a convertible security's market value
also tends to reflect the market price of the common stock of the
issuing company, particularly when that stock price is greater than
the convertible security's "conversion price." Convertible securities
fall below debt obligations of the same issuer in order of preference
or priority in the event of a liquidation and are typically unrated or
rated lower than such debt obligations.

o A Closed-End Fund or an issuer of securities held by a Closed-End Fund
may be unwilling or unable to make principal payments and/or to
declare distributions in the future, may call a security before its
stated maturity, or may reduce the level of distributions declared.
This may result in a reduction in the value of your units.

o The financial condition of a Closed-End Fund or an issuer of
securities held by a Closed-End Fund may worsen or its credit ratings
may drop, resulting in a reduction in the value of your units. This
may occur at any point in time, including during the primary offering
period.

o Current economic conditions may lead to limited liquidity and greater
volatility. The markets for fixed-income securities, such as those
held by certain Closed-End Funds held by the trust, may experience
periods of illiquidity and volatility. General market uncertainty and
consequent repricing risk have led to market imbalances of sellers and
buyers, which in turn have resulted in significant valuation
uncertainties in a variety of fixed-income securities. These
conditions resulted, and in many cases continue to result in, greater
volatility, less liquidity, widening credit spreads and a lack of
price transparency, with many debt securities remaining illiquid and
of uncertain value. These market conditions may make valuation of some
of the securities held by a Closed-End Fund uncertain and/or result in
sudden and significant valuation increases or declines in its
holdings.

o Inflation may lead to a decrease in the value of assets or income from
investments.

o The sponsor does not actively manage the portfolio. The trust will
generally hold, and may, when creating additional units, continue to
buy, the same securities even though a security's outlook, market
value or yield may have changed.

See "Investment Risks" in Part A of the prospectus and "Risk Factors" in
Part B of the prospectus for additional information.

Who Should Invest

You should consider this investment if:

o You want to achieve total return through current income and capital
appreciation;

o The trust represents only a portion of your overall investment
portfolio; and

o The trust is part of a longer-term strategy that may include
investment in subsequent portfolios, if available.

You should not consider this investment if:

o You are uncomfortable with the risks of an unmanaged investment in
securities;

o You are unwilling to accept the risks involved with owning Closed-End
Funds;

o You are seeking capital preservation as a primary investment
objective; or

o You are seeking a short-term investment or an investment to be used as
a trading vehicle.

Fees and Expenses

The amounts below are estimates of the direct and indirect expenses that
you may incur based on a $10 unit price. Actual expenses may vary.

Percentage
of Public Amount Per
Offering $1,000
Investor Fees Price (4) Invested
- -------------------------- ------------ ----------
Initial sales fee
paid on purchase (1) 1.00% $ 10.00
Deferred sales fee (2) 2.45 24.50
Creation and
development fee (3) 0.50 5.00
------- -------
Maximum sales fees
(including creation
and development fee) 3.95% $ 39.50
======= =======

Estimated organization costs
(amount per 100 units paid
by the trust at the end of
the initial offering period
or after six months, at the
discretion of the sponsor) $8.00
========

Approximate
Annual Fund % of Public
Operating Offering Amount Per
Expenses Price (4) 100 Units
- -------------------------- ------------ ----------
Trustee's fee 0.1050% $ 1.050
Sponsor's supervisory fee 0.0300 0.300
Evaluator's fee 0.0350 0.350
Bookkeeping and
administrative fee 0.0350 0.350
Estimated other trust
operating expenses (5)
Estimated Closed-End
Fund expenses (6)
-------- -------
Total %
========= =======

(1) The initial sales fee provided above is based on the unit price on the
Inception Date. Because the initial sales fee equals the difference between
the maximum sales fee and the sum of the remaining deferred sales fee and
the creation and development fee ("C&D Fee") (as described below), the
percentage and dollar amount of the initial sales fee will vary as the unit
price varies and after deferred fees begin. Despite the variability of the
initial sales fee, each investor is obligated to pay the entire applicable
maximum sales fee.

(2) The deferred sales fee is fixed at $0.245 per unit and is deducted in
monthly installments of $0.0817 per unit on the last business day of _____
2011 and _____ 2011 and $0.0816 in _____ 2011. The percentage provided is
based on a $10 unit as of the Inception Date and the percentage amount will
vary over time. If units are redeemed prior to the deferred sales fee
period, the entire deferred sales fee will be collected.

(3) The C&D Fee compensates the sponsor for creating and developing your trust.
The actual C&D Fee is $0.05 per unit and is paid to the sponsor at the
close of the initial offering period, which is expected to be approximately
two months from the Inception Date. The percentages provided are based on a
$10 unit as of the Inception Date and the percentage amount will vary over
time. If the unit price exceeds $10.00 per unit, the C&D Fee will be less
than 0.50% of the Public Offering Price; if the unit price is less than
$10.00 per unit, the C&D Fee will exceed 0.50% of the Public Offering
Price. However, in no event will the maximum sales fee exceed 3.95% of a
unitholder's initial investment.

(4) Based on 100 units with a $10.00 per unit Public Offering Price as of the
Inception Date.

(5) The estimated trust operating expenses are based upon an estimated trust
size of approximately $__ million. Because certain of the operating
expenses are fixed amounts, if the trust does not reach such estimated size
or falls below the estimated size over its life, the actual amount of the
operating expenses may exceed the amounts reflected. In some cases, the
actual amount of the operating expenses may greatly exceed the amounts
reflected. Other operating expenses do not include brokerage costs and
other transactional fees.

(6) Although not an actual trust operating expense, the trust, and therefore
the unitholders of the trust, will indirectly bear similar operating
expenses of the Closed-End Funds held by the trust in the estimated amount
provided above. Estimated Closed-End Fund expenses are based upon the net
asset value of the number of Closed-End Fund shares held by the trust per
unit multiplied by the Annual Operating Expenses of the Closed-End Funds
for the most recent fiscal year. Please note that the sponsor or an
affiliate may be engaged as a service provider to certain Closed-End Funds
held by your trust and therefore certain fees paid by your trust to such
Closed-End Funds will be paid to the sponsor or an affiliate for its
services to such Closed-End Funds.

Example

This example helps you compare the costs of this trust with other unit
trusts and mutual funds. In the example we assume that you reinvest your
investment in a new trust every other year at a reduced sales charge, the
trust's operating expenses do not change and the trust's annual return is 5%.
Your actual returns and expenses will vary. Based on these assumptions, you
would pay these expenses for every $10,000 you invest:

1 year $
3 years
5 years
10 years

These amounts are the same regardless of whether you sell your investment
at the end of a period or continue to hold your investment. The example does
not consider any brokerage fees the trust pays or any transaction fees that
broker-dealers may charge for processing redemption requests.

See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Trust Portfolio

Guggenheim Defined Portfolios, Series 749
Closed-End Equity & Income Portfolio, Series 27
The Trust Portfolio as of the Inception Date, _____ , 2010
- ----------------------------------------------------------------------------------------------------
Percentage
of Aggregate Initial Per Share Cost To
Ticker Company Name (1) Offer Price Shares Price Portfolio (2)(3)
- ----------------------------------------------------------------------------------------------------

-------------
$
=============

(1) All securities are represented entirely by contracts to purchase
securities, which were entered into by the sponsor on _____ , 2010. All
contracts for securities are expected to be settled by the initial
settlement date for the purchase of units.

(2) Valuation of securities by the trustee was performed as of the Evaluation
Time on _____ , 2010. For securities quoted on a national exchange,
including the Nasdaq Stock Market, Inc., securities are generally valued at
the closing sales price using the market value per share. For foreign
securities traded on a foreign exchange, securities are generally valued at
the closing sale prices on the applicable exchange converted into U.S.
dollars. The trust's investments are classified as Level 1, which refers to
security prices determined using quoted prices in active markets for
identical securities.

(3) There was a $___ loss to the sponsor on the Inception Date.

================================================================================
CLOSED-END CALIFORNIA MUNICIPAL PORTFOLIO, SERIES 4

Use this Investment Summary to help you decide whether an investment in
this trust is right for you. More detailed information can be found later in
this prospectus.

Investment Objective

The California Municipal Trust seeks to provide high current income and
the potential for capital appreciation.

Principal Investment Strategy

The trust contains common shares of closed-end investment companies
("Closed-End Funds"), the majority of which contain portfolios that are
concentrated in California municipal bonds, which are rated investment-grade by
at least one nationally recognized statistical rating organization.

See "Description of Ratings" in Part B of the prospectus for additional
information regarding the ratings criteria. See "Investment Policies" in Part B
of the prospectus for additional information.

Security Selection

The sponsor has selected for the portfolio Closed-End Funds believed to
have the best potential to achieve the trust's investment objective. The trust
seeks to provide monthly income that is exempt from federal income taxes by
investing in Closed-End Funds that invest in California municipal bonds.
Municipal bonds generally offer investors the potential for stable tax-free
income. However, a portion of the income may be subject to the alternative
minimum tax as well as state and local taxes.

When selecting Closed-End Funds for inclusion in this portfolio the
sponsor looks at numerous factors. These factors include, but are not limited
to:

o Premium/Discount. The sponsor favors funds that are trading at a
discount relative to their peers and relative to their long-term
average.

o Consistent Dividend. The sponsor favors funds that have a history of
paying a consistent and competitive dividend which, in the opinion of
the sponsor, can be maintained.

o Performance. The sponsor favors funds that have a history of strong
relative performance (based on market price and net asset value) when
compared to their peers and an applicable benchmark.

Future Trusts

The sponsor intends to create future trusts that follow the same investment
strategy. One such trust is expected to be available approximately seven months
after the trust's initial date of deposit (the "Inception Date") and upon the
trust's termination. If these future trusts are available, you may be able to
reinvest into one of the trusts at a reduced sales charge. Each trust is
designed to be part of a longer term strategy.

- --------------------------------------------------------------------------------
Essential Information
(as of the Inception Date)

Inception Date _____ , 2010

Unit Price $10.00

Termination Date _____ , 2015

Distribution Date 25th day of each month
(commencing _____ 25, 2010, if any)

Record Date 15th day each month
(commencing _____ 15, 2010, if any)

CUSIP Numbers

Cash Distributions
Standard Accounts 40167R725
Fee Account Cash 40167R741

Reinvested Distributions
Standard Accounts 40167R733
Fee Account Reinvest 40167R758

Ticker CECADX

Portfolio Diversification

Approximate
Sector Portfolio Percentage
- ---------------------- --------------------
Closed-End Funds 100.00%
------
Total 100.00%
======

Minimum Investment
All accounts $250
- --------------------------------------------------------------------------------

Principal Risks

o Closed-End Funds held by the trust invest in California municipal
bonds. Municipal bonds are long-term fixed rate debt obligations that
decline in value with increases in interest rates, an issuer's
worsening financial condition, a drop in bond ratings or when there is
a decrease in the federal income tax rate. Typically, bonds with
longer periods before maturity are more sensitive to interest rate
changes. Municipal bonds generally generate income exempt from federal
income taxation, but may be subject to the alternative minimum tax. In
addition, some or all of the income generated by a Closed-End Fund may
not be exempt from regular federal or California state income taxes
and as a result, the related income paid by the trust may also be
subject to regular federal and state income taxes. Capital gains, if
any, may be subject to tax. Because the Closed-End Funds are
concentrated in bonds of issuers located in California, there may be
more risk than if the bonds were issued by issuers located in several
states.

o Current economic conditions may lead to limited liquidity and greater
volatility. The markets for fixed-income securities, such as those
held by the Closed-End Funds, may experience periods of illiquidity
and volatility. General market uncertainty and consequent repricing
risk have led to market imbalances of sellers and buyers, which in
turn have resulted in significant valuation uncertainties in a variety
of fixed-income securities. These conditions resulted, and in many
cases continue to result in, greater volatility, less liquidity,
widening credit spreads and a lack of price transparency, with many
debt securities remaining illiquid and of uncertain value. These
market conditions may make valuation of some of the securities held by
the Closed-End Fund uncertain and/or result in sudden and significant
valuation increases or declines in its holdings.

o Inflation may lead to a decrease in the value of assets or income from
investments.

See "Investment Risks" in Part A of the prospectus and "Risk Factors" in
Part B of the prospectus for additional information.

Tax Status

Federal Tax. Some dividends on the securities in the trust may be
designated as "capital gains dividends" for federal and state tax purposes,
generally taxable to you as long-term capital gains. Some dividends on the
securities in the trust may qualify as "exempt-interest dividends," which
generally are excluded from your gross income for federal income tax purposes.
Some or all of the exempt-interest dividends, however, may be taken into account
in determining your alternative minimum tax, and may have other tax consequences
(e.g., they may affect the amount of your social security benefits that are
taxed). Other dividends on the securities in the trust will generally be taxable
to you as ordinary income. See "Tax Status" in Part B of the prospectus for
additional information.

California Tax. Chapman and Cutler LLP has examined the income tax laws of
the State of California to determine its applicability to the trust and to the
holders of units in the trust who are full-time residents of the State of
California. See "California State Taxes" in Part B of the prospectus for
further information regarding California state tax applicable to the trust and
California unitholders.

Who Should Invest

You should consider this investment if:

o You want current income and diversification;

o The trust represents only a portion of your overall investment
portfolio; and

o The trust is part of a longer term investment strategy.

You should not consider this investment if:

o You are unwilling to accept the risks involved with owning Closed-End
Funds that hold municipal bonds;

o You are seeking a short-term investment or an investment to be used as
a trading vehicle;

o You are seeking an aggressive high-growth investment strategy;

o You are uncomfortable with the risks of an unmanaged investment in
securities; or

o You want capital preservation.

Fees and Expenses

The amounts below are estimates of the direct and indirect expenses that
you may incur based on a $10 unit price. Actual expenses may vary.

Percentage
of Public Amount Per
Offering $1,000
Investor Fees Price (4) Invested
- -------------------------- ----------- ----------
Initial sales fee
paid on purchase (1) 1.00% $ 10.00
Deferred sales fee (2) 3.45 34.50
Creation and
development fee (3) 0.50 5.00
-------- -------
Maximum sales fees
(including creation
and development fee) 4.95% $ 49.50
======== =======

Estimated organization costs
(amount per 100 units paid
by the trust at the end of the
initial offering period or
after six months, at the
discretion of the sponsor) $8.00
========

Approximate
Annual Fund % of Public
Operating Offering Amount Per
Expenses Price (4) 100 Units
- -------------------------- ----------- ----------
Trustee's fee 0.1050% $ 1.050
Sponsor's supervisory fee 0.0300 0.300
Evaluator's fee 0.0350 0.350
Bookkeeping and
administrative fee 0.0350 0.350
Estimated other trust
operating expenses (5)
Estimated Closed-End
Fund expenses (6)
-------- -------
Total % $
======== =======

(2) The deferred sales fee is fixed at $0.345 per unit and is deducted in four
monthly installments. The first three installments (approximately $0.0817
per unit) will be deducted on the last business day of each month from
_____ 2011 through _____ 2011 and the remaining amount of the deferred
sales fee ($0.10 per unit) will be deducted on the last business day in
_____ 2012. The percentage provided is based on a $10 unit as of the
Inception Date and the percentage amount will vary over time. If units are
redeemed prior to the deferred sales fee period, the entire deferred sales
fee will be collected.

(3) The C&D Fee compensates the sponsor for creating and developing your trust.
The actual C&D Fee is $0.05 per unit and is paid to the sponsor at the
close of the initial offering period, which is expected to be approximately
seven months from the Inception Date. The percentages provided are based on
a $10 unit as of the Inception Date and the percentage amount will vary
over time. If the unit price exceeds $10.00 per unit, the C&D Fee will be
less than 0.50% of the Public Offering Price; if the unit price is less
than $10.00 per unit, the C&D Fee will exceed 0.50% of the Public Offering
Price. However, in no event will the maximum sales fee exceed 4.95% of a
unitholder's initial investment.

(4) Based on 100 units with a $10 per unit Public Offering Price as of the
Inception Date.

Example

This example helps you compare the costs of this trust with other unit
trusts and mutual funds. In the example we assume that the trust's operating
expenses do not change and the trust's annual return is 5%. Your actual returns
and expenses will vary. Based on these assumptions, you would pay these expenses
for every $10,000 you invest:

1 year $
3 years
5 years (life of trust)

See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Trust Portfolio

Guggenheim Defined Portfolios, Series 749
Closed-End California Municipal Portfolio, Series 4
The Trust Portfolio as of the Inception Date, _____ , 2010
- ----------------------------------------------------------------------------------------------------
Percentage
of Aggregate Initial Per Share Cost To
Ticker Company Name (1) Offer Price Shares Price Portfolio (2)(3)
- ----------------------------------------------------------------------------------------------------

-------------
$
=============

(3) There was a $___ loss to the sponsor on the Inception Date.

================================================================================
STRATEGIC INCOME PORTFOLIO, SERIES 49

Use this Investment Summary to help you decide whether an investment in
this trust is right for you. More detailed information can be found later in
this prospectus.

Investment Objective

The Strategic Income Trust seeks to provide current income and the
potential for capital appreciation by investing in common shares of closed-end
investment companies ("Closed-End Funds") that are considered to be income
funds.

What is the Strategic Income Trust?

The Strategic Income Trust is a strategic allocation by Guggenheim Funds
of various income-oriented Closed-End Funds containing securities of different
asset classes. These may include, but are not limited to:

o high-yield bonds;

o convertible bonds;

o preferred securities;

o real estate investment trusts ("REITs");

o corporate bonds;

o government bonds;

o international bonds; and

o equities.

Principal Investment Strategy

The trust will invest 100% of its assets in Closed-End Funds that are
considered to be income funds. Guggenheim Funds, through proprietary research
and strategic alliances, will strive to select Closed-End Funds featuring the
potential for current income, diversification and overall liquidity.

See "Investment Policies" in Part B of the prospectus for additional
information.

Security Selection

The sponsor has selected Closed-End Funds for the portfolio believed to
have the best potential to achieve the trust's investment objective. The
Closed-End Funds' portfolios consist primarily of income-producing securities,
including: high-yield bonds, convertible bonds, preferred securities, REITs,
corporate bonds, government bonds, international bonds and equities.

When selecting Closed-End Funds for inclusion in the portfolio the sponsor
looks at numerous factors. These factors include, but are not limited to:

o Premium/Discount. The sponsor favors funds that are trading at a
discount relative to their peers and relative to their long-term
average.

o Consistent Dividend. The sponsor favors funds that have a history of
paying a consistent and competitive dividend which, in the opinion of
the sponsor, can be maintained.

o Performance. The sponsor favors funds that have a history of strong
relative performance (based on market price and net asset value) when
compared to their peers and an applicable index.

Future Trusts

The sponsor intends to create future trusts that follow the same investment
strategy. One such trust is expected to be available approximately one month
after the trust's initial date of deposit (the "Inception Date") and upon the
trust's termination. If these future trusts are available, you may be able to
reinvest into one of the trusts at a reduced sales charge. Each trust is
designed to be part of a longer term strategy.

- --------------------------------------------------------------------------------
Essential Information
(as of the Inception Date)

Inception Date _____ , 2010

Unit Price $10.00

Termination Date _____ , 2012

Distribution Date 25th day of each month
(commencing _____ 25, 2010, if any)

Record Date 15th day of each month
(commencing _____ 15, 2010, if any)

CUSIP Numbers

Cash Distributions
Standard Accounts 40167R527
Fee Account Cash 40167R543

Reinvested Distributions
Standard Accounts 40167R535
Fee Account Reinvest 40167R550

Ticker CSIPYX

Portfolio Diversification

Approximate
Sector Portfolio Percentage
- ---------------------- --------------------
Closed-End Funds 100.00%
------
Total 100.00%
======

Minimum Investment
All accounts $250
- --------------------------------------------------------------------------------

Principal Risks

o Certain Closed-End Funds held by the trust invest in preferred
securities. Preferred securities are typically subordinated to bonds
and other debt instruments in a company's capital structure in terms
of priority to corporate income and therefore will be subject to
greater credit risk than those debt instruments.

o Certain Closed-End Funds held by the trust invest in bonds that are
rated below investment-grade and are considered to be "junk"
securities. Below investment-grade obligations are considered to be
speculative and are subject to greater market and credit risks, and
accordingly, the risk of non-payment or default is higher than with
investment-grade securities. In addition, such securities may be more
sensitive to interest rate changes and more likely to receive early
returns of principal.

o Certain Closed-End Funds held by the trust invest in call options. The
call writing portion of the investment strategy of the Closed-End
Funds may not be successful in that the Closed-End Funds may not
realize the full appreciation of stocks on which the Closed-End Funds
have written call options. The ability to successfully implement the
Closed-End Fund's investment strategy depends on the Closed-End Fund's
adviser's ability to predict pertinent market movements, which cannot
be assured.

o The value of a call option held by a Closed-End Fund may be adversely
affected if the market for the option becomes less liquid or smaller.
The value of an option will be affected by changes in the value and
dividend rates of the stock subject to the option, an increase in
interest rates, a change in the actual and perceived volatility of the
stock market and the common stock, and the remaining time to
expiration.

o Certain Closed-End Funds held by the trust invest in securities issued
by companies headquartered or incorporated in countries considered to
be emerging markets. Emerging markets are generally defined as
countries with low per capita income in the initial stages of their
industrialization cycles. Risks of investing in developing or emerging
countries include the possibility of investment and trading
limitations, liquidity concerns, delays and disruptions in settlement
transactions, political uncertainties and dependence on international
trade and development assistance. Companies headquartered in emerging
market countries may be exposed to greater volatility and market risk.

o Certain Closed-End Funds held by the trust invest in REITs and other
real estate securities. REITs may concentrate their investments in
specific geographic areas or in specific property types, such as
hotels, shopping malls, residential complexes and office buildings.
The value of the REIT and the ability of the REIT to distribute income
may be adversely affected by several factors, including: rising
interest rates; changes in the national, state and local economic
climate and real estate conditions; perceptions of prospective tenants
about the safety, convenience and attractiveness of the properties;
the ability of the owner to provide adequate management, maintenance
and insurance; the cost of complying with the Americans with
Disabilities Act; increased competition from new properties; the
impact of present or future environmental legislation and compliance
with environmental laws; changes in real estate taxes and other
operating expenses; adverse changes in governmental rules and fiscal
policies; adverse changes in zoning laws; declines in the value of
real estate; the downturn in the subprime mortgage lending market and
the real estate markets in the United States; and other factors beyond
the control of the issuer of the REIT.

o Current economic conditions may lead to limited liquidity and greater
volatility. The markets for fixed-income securities, such as those
held by the Closed-End Funds, may experience periods of illiquidity
and volatility. General market uncertainty and consequent repricing
risk have led to market imbalances of sellers and buyers, which in
turn have resulted in significant valuation uncertainties in a variety
of fixed-income securities. These conditions resulted, and in many
cases continue to result in, greater volatility, less liquidity,
widening credit spreads and a lack of price transparency, with many
debt securities remaining illiquid and of uncertain value. These
market conditions may make valuation of some of the securities held by
a Closed-End Fund uncertain and/or result in sudden and significant
valuation increases or declines in its holdings.

o Inflation may lead to a decrease in the value of assets or income from
investments.

See "Investment Risks" in Part A of the prospectus and "Risk Factors" in
Part B of the prospectus for additional information.

Who Should Invest

You should consider this investment if:

o You want current income and asset class diversification;

o The trust represents only a portion of your overall investment
portfolio; and

o The trust is part of a longer term investment strategy that may
include investment in subsequent trusts, if available.

You should not consider this investment if:

o You are unwilling to accept the risks involved with owning Closed-End
Funds;

o You are uncomfortable with the risks of an unmanaged investment in
securities;

o You are seeking capital preservation as a primary investment
objective; or

o You are seeking a short-term investment or an investment to be used as
a trading vehicle.

Fees and Expenses

This table shows the fees and expenses you may pay, directly or indirectly,
when you invest in the portfolio.

Amount Per
$1,000
Invested
Percentage at a Public
of Public Offering
Offering Price of
Investor Fees Price (1) $10 Per Unit
- -------------------------- ----------- -----------
Initial sales fee
paid on purchase 0.00% $ 0.00
Deferred sales fee (2) 3.95 34.50
Creation and
development fee (3) 0.50 5.00
--------------------
Maximum sales fees (1)(3)
(including creation
and development fee) 4.45% $ 39.50
======= =======
Estimated organization costs
(amount per 100 units paid
by the trust at the end of
the initial offering period
or after six months, at the
discretion of the sponsor) $8.00
=======

Approximate
Annual Fund % of Public
Operating Offering Amount Per
Expenses Price (4) 100 Units
- -------------------------- ----------- ----------
Trustee's fee 0.1050% $1.050
Sponsor's supervisory fee 0.0300 0.300
Evaluator's fee 0.0350 0.350
Bookkeeping and
administrative fee 0.0350 0.350
Estimated other trust
operating expenses (5)
Estimated Closed-End
Fund expenses (6)
-------- ------
Total % $
======== ======

(1) The maximum sales fee equals the sum of the deferred sales fee and the
creation and development fee ("C&D Fee") (as described below). Together,
the deferred sales fee and the C&D Fee is a fixed dollar amount equaling
$0.395 per unit. Because of this, the maximum sales fee, as a percentage of
the Public Offering Price, will vary with changes in the Public Offering
Price. The percentages noted above do not assume a Public Offering Price of
$10 per unit. Assuming a Public Offering Price of $10 per unit, the maximum
sales fee will be 3.95% of the Public Offering Price per unit. If the price
you pay for your units exceeds $10 per unit, the maximum sales fee will be
less than 3.95%. If the price you pay for your units is less than $10 per
unit, the maximum sales fee will exceed 3.95%, but in no event will the
maximum sales fee exceed 4.45% of the Public Offering Price.

(2) The deferred sales fee is a fixed dollar amount equal to $0.345 per unit
which, as a percentage of the Public Offering Price, will vary over time.
At a Public Offering Price of $10 per unit, the deferred sales fee will be
3.45% of the Public Offering Price per unit. If the price you pay for your
units exceeds $10 per unit, the deferred sales fee will be less than 3.45%
of the Public Offering Price per unit. If the price you pay for your units
is less than $10 per unit, the deferred sales fee will exceed 3.45% of the
Public Offering Price per unit; however, in no event will the maximum sales
fee exceed 4.45% of the Public Offering Price per unit. The deferred sales
fee will be deducted in four monthly installments. The first three
installments (approximately $0.0817 per unit) will be deducted on the last
business day of each month from _____ 2011 through _____ 2011 and the
remaining amount of the deferred sales fee ($0.10 per unit) will be
deducted on the last business day in _____ 2012. If units are redeemed
prior to the deferred sales fee period, the entire deferred sales fee will
be collected. If you purchase units after the first deferred sales fee
payment has been assessed, your maximum sales fee will consist of an
initial sales fee and the amount of any remaining deferred sales fee
payments. The initial sales fee, which you will pay at the time of
purchase, is equal to the difference between $0.345 per unit and the
remaining deferred sales fee. If you purchase units after the last deferred
sales fee payment has been assessed, your maximum sales fee will consist of
a one-time sales fee of $0.345 per unit.

(3) The C&D Fee compensates the sponsor for creating and developing your trust.
The actual C&D Fee is $0.05 per unit and is paid to the sponsor at the
close of the initial offering period, which is expected to be approximately
one month from the Inception Date. The percentages provided are based on a
$10 unit as of the Inception Date and the percentage amount will vary over
time. If the unit price exceeds $10.00 per unit, the C&D Fee will be less
than 0.50% of the Public Offering Price; if the unit price is less than
$10.00 per unit, the C&D Fee will exceed 0.50% of the Public Offering
Price. However, in no event will the maximum sales fee exceed 4.45% of a
unitholder's initial investment.

(4) Based on 100 units with a $10.00 per unit Public Offering Price as of the
Inception Date.

Example

1 year $
3 years
5 years
10 years

See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Trust Portfolio

Guggenheim Defined Portfolios, Series 749
Strategic Income Portfolio, Series 49
The Trust Portfolio as of the Inception Date, _____ , 2010
- ----------------------------------------------------------------------------------------------------
Percentage
of Aggregate Initial Per Share Cost To
Ticker Company Name (1) Offer Price Shares Price Portfolio (2)(3)
- ----------------------------------------------------------------------------------------------------

Trust Portfolio (continued)

-------------
$
=============

(3) There was a $___ loss to the sponsor on the Inception Date.

================================================================================
UNDERSTANDING YOUR INVESTMENTS

How to Buy Units

You can buy units of your trust on any business day by contacting your
financial professional. Public offering prices of units are available daily on
the Internet at www.guggenheimfunds.com. The unit price includes:

o the value of the securities,

o organization costs,

o the maximum sales fee (which may include an initial sales fee, if
applicable, a deferred sales fee and the creation and development
fee), and

o cash and other net assets in the portfolio.

We often refer to the purchase price of units as the "offer price" or the
"Public Offering Price." We must receive your order to buy units prior to the
close of the New York Stock Exchange (normally 4:00 p.m. Eastern time) to give
you the price for that day. If we receive your order after this time, you will
receive the price computed on the next business day.

Value of the Securities. The sponsor serves as the evaluator of your trust
(the "evaluator"). We cause the trustee to determine the value of the
securities as of the close of the New York Stock Exchange on each day that the
exchange is open (the "Evaluation Time").

Pricing the Securities. The value of securities is generally determined by
using the last sale price for securities traded on a national or foreign
securities exchange or the Nasdaq Stock Market. In some cases we will price a
security based on the last asked or bid price in the over-the-counter market or
by using other recognized pricing methods. We will only do this if a security is
not principally traded on a national or foreign securities exchange or the
Nasdaq Stock Market, or if the market quotes are unavailable or inappropriate.

The trustee determined the initial prices of the securities shown in
"Trust Portfolio" for your trust in this prospectus. Such prices were
determined as described above at the close of the New York Stock Exchange on
the business day before the date of this prospectus. On the first day we sell
units we will compute the unit price as of the close of the New York Stock
Exchange or the time the registration statement filed with the Securities and
Exchange Commission becomes effective, if later.

Organization Costs. During the initial offering period, part of your
purchase price includes a per unit amount sufficient to reimburse us for some
or all of the costs of creating your trust. These costs include the costs of
preparing the registration statement and legal documents, legal fees, federal
and state registration fees and the initial fees and expenses of the trustee.
Your trust will sell securities to reimburse us for these costs at the end of
the initial offering period or after six months, at the discretion of the
sponsor. Organization costs will not exceed the estimates set forth in "Fees
and Expenses."

Transactional Sales Fee. You pay a fee when you buy units. We refer to this
fee as the "transactional sales fee." The transactional sales fee of the
Closed-End Equity Trust has both an initial and a deferred component and is
3.45% of the Public Offering Price, based on a $10 unit. The transactional sales
fee of the California Municipal Trust also has both an initial and deferred
component and is 4.45% of the Public Offering Price, based on a $10 unit. The
percentage amount of the transactional sales fee is based on the unit price on
the Inception Date. Because the transactional sales fee equals the difference
between the maximum sales fee and the C&D Fee, the percentage and dollar amount
of the transactional sales fee will vary as the unit price varies.

The transactional sales fee of the Strategic Income Trust typically has
only a deferred component and is a fixed-dollar amount of $0.345 per unit
which, as a percentage of the Public Offering Price, will vary over time. At a
Public Offering Price of $10 per unit, the deferred sales fee will be 3.45% of
the Public Offering Price per unit. If the price you pay for your units exceeds
$10 per unit, the deferred sales fee will be less than 3.45% . If the price you
pay for your units is less than $10 per unit, the deferred sales fee will
exceed 3.45%; however, in no event will the maximum sales fee exceed 4.45% of
the Public Offering Price per unit.

The transactional sales fee does not include the C&D Fee which is
described under "Expenses of the Trust" in Part B of the prospectus and in
"Fees and Expenses" in Part A of the prospectus.

Initial Sales Fee. Based on a $10 unit, the initial sales fee of the
Closed-End Equity Trust and the California Municipal Trust is initially 1% of
the Public Offering Price. The initial sales fee, which you will pay at the
time of purchase, is equal to the difference between the maximum sales fee
(3.95% of the Public Offering Price for the Closed-End Equity Trust and 4.95%
of the Public Offering Price for the California Municipal Trust) and the sum of
the maximum remaining deferred sales fees and the C&D Fee (initially $0.295 per
unit of the Closed-End Equity Trust and $0.395 per unit of the California
Municipal Trust). The dollar amount and percentage amount of the initial sales
fee will vary over time.

Typically, the Strategic Income Trust does not charge an initial sales
fee. However, if you purchase units of this trust after the first deferred
sales fee payment has been assessed, your maximum sales fee will consist of an
initial sales fee and the amount of any remaining deferred sales fee payments.
The initial sales fee of the Strategic Income Trust, which you will pay at the
time of purchase, is equal to the difference between $0.345 per unit and the
remaining deferred sales fee. If you purchase units after the last deferred
sales fee payment has been assessed, your maximum sales fee will consist of a
one-time sales fee of $0.345 per unit.

Deferred Sales Fee. To keep your money working longer, we defer payment of
the rest of the transactional sales fee through the deferred sales fee ($0.245
per unit of the Closed-End Equity Trust and $0.345 per unit of the California
Municipal Trust and the Strategic Income Trust). You pay any remaining deferred
sales fee when you sell or redeem units. The trusts may sell securities to meet
the trusts' obligations with respect to the deferred sales fee. Thus, no
assurance can be given that a trust will retain its present size and
composition for any length of time.

In limited circumstances and only if deemed in the best interests of
unitholders, the sponsor may delay the payment of the deferred sales fee from
the dates listed under "Fees and Expenses."

Reducing Your Sales Fee. We offer a variety of ways for you to reduce the
maximum sales fee you pay. It is your financial professional's responsibility to
alert us of any discount when you order units. Since the deferred sales fee and
the C&D Fee are a fixed dollar amount per unit, your trust must charge the
deferred sales fee and the C&D Fee per unit regardless of any discounts.
However, when you purchase units of your trust, if you are eligible to receive a
discount such that your total maximum sales fee is less than the fixed dollar
amount of the deferred sales fee and the C&D Fee, we will credit you the
difference between your maximum sales fee and the sum of the deferred sales fee
and the C&D Fee at the time you buy units by providing you with additional
units.

Large Purchases. You can reduce your maximum sales fee by increasing the
size of your investment.

Investors who make large purchases are entitled to the following sales
charge reductions:

Closed-End Equity Trust:

Sales Charge
Reductions (as a
% of the Public
Purchase Amount Offering Price)
- ---------------------- -----------------
Less than $50,000 0.00%
$50,000 - $99,999 0.25
$100,000 - $249,999 0.50
$250,000 - $499,999 0.75
$500,000 - $999,999 1.00
$1,000,000 or more 1.50

California Municipal Trust:

Sales Charge
Reductions (as a
% of the Public
Purchase Amount Offering Price)
- ---------------------- -----------------
Less than $50,000 0.00%
$50,000 - $99,999 0.25
$100,000 - $249,999 0.50
$250,000 - $499,999 1.00
$500,000 - $999,999 2.00
$1,000,000 or more 2.90

Strategic Income Trust:

Sales Charge
Reductions
Purchase Amount (amount per unit)
- ---------------------- -----------------
Less than $50,000 $0.000
$50,000 - $99,999 0.025
$100,000 - $249,999 0.050
$250,000 - $499,999 0.075
$500,000 - $999,999 0.100
$1,000,000 or more 0.150

You may aggregate unit purchases of any Guggenheim Funds trust by the same
person on any single day from any one broker-dealer to qualify for a purchase
level. You can include these purchases as your own for purposes of this
aggregation:

o purchases by your spouse or minor children, and

o purchases by your trust estate or fiduciary accounts.

The discounts described above apply only during the initial offering
period.

There can be no assurance that the sponsor will create future trusts with
investment strategies similar to your trust or that may fit within your
investment parameters.

Advisory and Fee Accounts. We eliminate your transactional sales fee for
purchases made through registered investment advisers, certified financial
planners or registered broker-dealers who charge periodic fees in lieu of
commissions or who charge for financial planning or for investment advisory or
asset management services or provide these services as part of an investment
account where a comprehensive "wrap fee" is imposed (a "Fee Account").

This discount applies during the initial offering period and in the
secondary market. Your financial professional may purchase units with the Fee
Account CUSIP numbers to facilitate purchases under this discount, however, we
do not require that you buy units with these CUSIP numbers to qualify for the
discount. If you purchase units with these special CUSIP numbers, you should be
aware that you may have the distributions automatically reinvest into
additional units of your trust or receive cash distributions. We reserve the
right to limit or deny purchases of units not subject to the transactional
sales fee by investors whose frequent trading activity we determine to be
detrimental to your trust. We, as sponsor, will receive and you will pay the
C&D Fee. See "Expenses of the Trust" in Part B of the prospectus.

Exchange or Rollover Option. If you are buying units of a trust in the
primary market with redemption or termination proceeds from any other Guggenheim
Funds unit trust, you may purchase units of the Closed-End Equity Trust and the
California Municipal Trust at 99% of the maximum Public Offering Price or you
may purchase units of the Strategic Income Trust at a $0.10 per unit reduction,
which may include an upfront sales fee and a deferred sales fee. You may also
buy units with this reduced sales fee if you are purchasing units in the primary
market with (1) the termination proceeds from a non-Guggenheim Funds unit trust
with a similar investment strategy or (2) the redemption proceeds from a
non-Guggenheim Funds trust if such trust has a similar investment strategy and
that trust is scheduled to terminate within 30 days of redemption. To qualify
for this sales charge reduction, the termination or redemption proceeds being
used to purchase units of the trust must be no more than 30 days old. Such
purchases entitled to this sales charge reduction may be classified as "Rollover
Purchases." An exchange or rollover is generally treated as a sale for federal
income tax purposes. See "Taxes" in Part B of the prospectus.

Rollover Purchases are also subject to the C&D Fee. See "Expenses of the
Trust" in Part B of the prospectus.

Employees. We do not charge the portion of the transactional sales fee
that we would normally pay to your financial professional for purchases made by
officers, directors and employees and their family members (spouses, children
and parents) of Guggenheim Funds and its affiliates, or by registered
representatives of selling firms and their family members (spouses, children
and parents). You pay only the portion of the fee that the sponsor retains.
Such purchases are also subject to the C&D Fee. This discount applies during
the initial offering period and in the secondary market. Only those
broker-dealers that allow their employees to participate in employee discount
programs will be eligible for this discount.

Dividend Reinvestment Plan. We do not charge any transactional sales fee
when you reinvest distributions from your trust into additional units of the
trust. Since the deferred sales fee is a fixed dollar amount per unit, your
trust must charge the deferred sales fee per unit regardless of this discount.
If you elect the distribution reinvestment plan, we will credit you with
additional units with a dollar value sufficient to cover the amount of any
remaining deferred sales fee that will be collected on such units at the time
of reinvestment. The dollar value of these units will fluctuate over time. This
discount applies during the initial offering period and in the secondary
market.

See "Purchase, Redemption and Pricing of Units" in Part B of the
prospectus for more information regarding buying units.

How We Distribute Units. We sell units to the public through
broker-dealers and other firms. We pay part of the sales fee you pay to these
distribution firms when they sell units. The distribution fee paid for a given
transaction is as follows:

Closed-End Equity Trust:

Concession
per Unit (as a
Purchase Amount/ % of the Public
Form of Purchase Offering Price)
- --------------------- ----------------
Less than $50,000 3.10%
$50,000 - $99,999 2.85
$100,000 - $249,999 2.60
$250,000 - $499,999 2.35
$500,000 - $999,999 2.25
$1,000,000 or more 1.80
Rollover Purchases 2.20
Fee Account and
Employee Purchases 0.00

California Municipal Trust:

Concession
per Unit (as a
Purchase Amount/ % of the Public
Form of Purchase Offering Price)
- --------------------- ----------------
Less than $50,000 3.60%
$50,000 - $99,999 3.35
$100,000 - $249,999 3.25
$250,000 - $499,999 2.75
$500,000 - $999,999 2.00
$1,000,000 or more 1.25
Rollover Purchases 2.60
Fee Account and
Employee Purchases 0.00

We apply these amounts as a percent of the unit price per transaction at
the time of the transaction.

Strategic Income Trust:

Purchase Amount/ Concession
Form of Purchase per Unit
- ---------------------- -----------
Less than $50,000 $0.300
$50,000 - $99,999 0.275
$100,000 - $249,999 0.250
$250,000 - $499,999 0.235
$500,000 - $999,999 0.225
$1,000,000 or more 0.175
Rollover Purchases 0.200
Fee Account and
Employee Purchases 0.000

We apply these amounts at the time of the transaction.

Broker-dealers and other firms that sell units of certain Guggenheim Funds
unit trusts are eligible to receive additional compensation for volume sales.
Such payments will be in addition to the regular concessions paid to dealer
firms as set forth in the applicable trust's prospectus. The additional
payments will be as follows:

Primary Offering Additional
Period Sales During Volume
Calendar Quarter Concession
- --------------------------- ----------
$0 but less than $10 million 0.000%
$10 million but
less than $25 million 0.075
$25 million but
less than $50 million 0.100
$50 million or more 0.125

Eligible unit trusts include all Guggenheim Funds unit trusts sold in the
primary market. Redemptions of units during the primary offering period will
reduce the amount of units used to calculate the volume concessions. In
addition, dealer firms will not receive volume concessions on the sale of units
which are not subject to a transactional sales fee. However, such sales will be
included in determining whether a firm has met the sales level breakpoints for
volume concessions.

Guggenheim Funds reserves the right to modify or terminate the volume
concession program at any time. The sponsor may also pay to certain dealers an
administrative fee for information or service used in connection with the
distribution of trust units. Such amounts will be in addition to any
concessions received for the sale of units.

In addition to the concessions described above, the sponsor may pay
additional compensation out of its own assets to broker-dealers that meet
certain sales targets and that have agreed to provide services relating to the
trusts to their customers.

Other Compensation and Benefits to Broker-Dealers. The sponsor, at its own
expense and out of its own profits, may provide additional compensation and
benefits to broker-dealers who sell shares of units of this trust and other
Guggenheim Funds products. This compensation is intended to result in
additional sales of Guggenheim Funds products and/or compensate broker-dealers
and financial advisors for past sales. A number of factors are considered in
determining whether to pay these additional amounts. Such factors may include,
but are not limited to, the level or type of services provided by the
intermediary, the level or expected level of sales of Guggenheim Funds products
by the intermediary or its agents, the placing of Guggenheim Funds products on
a preferred or recommended product list, access to an intermediary's personnel,
and other factors.

The sponsor makes these payments for marketing, promotional or related
expenses, including, but not limited to, expenses of entertaining retail
customers and financial advisers, advertising, sponsorship of events or
seminars, obtaining information about the breakdown of unit sales among an
intermediary's representatives or offices, obtaining shelf space in
broker-dealer firms and similar activities designed to promote the sale of the
sponsor's products. The sponsor may make such payments to many intermediaries
that sell Guggenheim Funds products. The sponsor may also make certain payments
to, or on behalf of, intermediaries to defray a portion of their costs incurred
for the purpose of facilitating unit sales, such as the costs of developing
trading or purchasing trading systems to process unit trades.

Payments of such additional compensation, some of which may be
characterized as "revenue sharing," may create an incentive for financial
intermediaries and their agents to sell or recommend a Guggenheim Funds
product, including your trust, over products offered by other sponsors or fund
companies. These arrangements will not change the price you pay for your
units.

We generally register units for sale in various states in the United
States. We do not register units for sale in any foreign country. It is your
financial professional's responsibility to make sure that units are registered
or exempt from registration if you are a foreign investor or if you want to buy
units in another country. This prospectus does not constitute an offer of units
in any state or country where units cannot be offered or sold lawfully. We may
reject any order for units in whole or in part.

We may gain or lose money when we hold units in the primary or secondary
market due to fluctuations in unit prices. The gain or loss is equal to the
difference between the price we pay for units and the price at which we sell or
redeem them. We may also gain or lose money when we deposit securities to create
units. For example, we lost the amounts set forth in your trust's "Trust
Portfolio" on the initial deposit of securities in your trust.

See "Purchase, Redemption and Pricing of Units" in Part B of the
prospectus for additional information.

How to Sell Your Units

You can sell your units on any business day by contacting your financial
professional or, in some cases, the trustee. Unit prices are available daily on
the Internet at www.guggenheimfunds.com or through your financial professional.
We often refer to the sale price of units as the "liquidation price." You pay
any remaining deferred sales fee when you sell or redeem your units. Certain
broker-dealers may charge a transaction fee for processing unit redemptions or
sale requests.

Until the end of the initial offering period or six months after the
Inception Date, at the discretion of the sponsor, the price at which the
trustee will redeem units and the price at which the sponsor may repurchase
units include estimated organization costs. After such period, the amount paid
will not include such estimated organization costs. If units of the Strategic
Income Trust are redeemed prior to the deferred sales fee period, the entire
deferred sales fee will be collected.

Selling Units. We do not intend to but may maintain a secondary market for
units. This means that if you want to sell your units, we may buy them at the
current price which is based on their net asset value. We may then resell the
units to other investors at the public offering price or redeem them for the
redemption price. Our secondary market repurchase price is generally the same as
the redemption price. Certain broker-dealers might also maintain a secondary
market in units. You should contact your financial professional for current unit
prices to determine the best price available. We may discontinue our secondary
market at any time without notice. Even if we do not make a market, you will be
able to redeem your units with the trustee on any business day for the current
price.

Redeeming Units. You may also be able to redeem your units directly with
the trustee, The Bank of New York Mellon, on any day the New York Stock
Exchange is open. The trustee must receive your completed redemption request
prior to the close of the New York Stock Exchange for you to receive the unit
price for a particular day. (For what constitutes a completed redemption
request, see "Purchase, Redemption and Pricing of Units--Redemption" in Part B
of the prospectus.) If your request is received after that time or is
incomplete in any way, you will receive the next price computed after the
trustee receives your completed request. Rather than contacting the trustee
directly, your financial professional may also be able to redeem your units by
using the Investors Voluntary Redemptions and Sales (IVORS) automated
redemption service offered through Depository Trust Company.

If you redeem your units, the trustee will generally send you a payment
for your units no later than three business days after it receives all
necessary documentation.

You can generally request an in-kind distribution of the securities
underlying your units if you own units worth at least $25,000 or you originally
paid at least that amount for your units. This option is generally available
only for securities traded and held in the United States and is not available
within 30 business days of a trust's termination. We may modify or discontinue
this option at any time without notice. If you request an in-kind distribution
of the securities underlying units of your trust, you will incur any
distribution or service fees (Rule 12b-1 fees) applicable to those securities.

Exchange Option. You may be able to exchange your units for units of other
Guggenheim Funds unit trusts at a reduced sales fee. You can contact your
financial professional or Guggenheim Funds for more information about the
trusts currently available for exchanges. Before you exchange units, you should
read the prospectus carefully and understand the risks and fees. You should
then discuss this option with your financial professional to determine whether
your investment goals have changed, whether current trusts suit you and to
discuss tax consequences. To qualify for a reduced sales fee, you may need to
meet certain criteria. We may discontinue this option at any time.

For more complete information regarding selling or redeeming your units,
see "Purchase, Redemption and Pricing of Units" in Part B of the prospectus.

Distributions

Dividends. Your trust generally pays dividends from its net investment
income, if any, along with any excess capital on each distribution date to
unitholders of record on the preceding record date. You can elect to:

o reinvest distributions in additional units of your trust at no fee, or

o receive distributions in cash.

You may change your election by contacting your financial professional or
the trustee. Once you elect to participate in a reinvestment program, the
trustee will automatically reinvest your distributions into additional units at
their net asset

value three business days prior to the distribution date. We waive the sales
fee for reinvestments into units of your trust. We cannot guarantee that units
will always be available for reinvestment. If units are unavailable, you will
receive cash distributions. We may discontinue these options at any time
without notice.

Distributions will be made from the Income and Capital Accounts on the
distribution date provided the aggregate amount available for distribution
equals at least 0.1% of the net asset value of your trust. Undistributed money
in the Income and Capital Accounts will be distributed in the next month in
which the aggregate amount available for distribution equals or exceeds 0.1% of
the net asset value of your trust.

In some cases, your trust might pay a special distribution if it holds an
excessive amount of principal pending distribution. For example, this could
happen as a result of a merger or similar transaction involving a company whose
security is in your portfolio. The amount of your distributions will vary from
time to time as companies change their dividends, trust expenses change or as a
result of changes in the trust's portfolio.

Reinvest in Your Trust. You can keep your money working by electing to
reinvest your distributions in additional units of your trust. The easiest way
to do this is to have your financial professional purchase units with one of
the Reinvestment CUSIP numbers listed in the "Investment Summary" section of
this prospectus. You may also make or change your election by contacting your
financial professional or the trustee. This reinvestment option may be subject
to availability or limitation by the broker-dealer or selling firm. In certain
circumstances, broker-dealers may suspend or terminate the offering of a
reinvestment option at any time.

Reports. The trustee will send your financial professional a statement
showing income and other receipts of your trust for each distribution. Each
year the trustee will also provide an annual report on your trust's activity
and certain tax information. You can request copies of security evaluations to
enable you to complete your tax forms and audited financial statements for your
trust, if available.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

Investment Risks

All investments involve risk. This section describes the main risks that
can impact the value of the securities in your trust. You should understand
these risks before you invest. You could lose some or all of your investment in
your trust. Recently, equity markets have experienced significant volatility.
If the value of the Closed-End Funds in your trust falls, the value of your
units will also fall. We cannot guarantee that your trust will achieve its
objective or that your investment return will be positive over any period.

Market risk. Market risk is the risk that a particular security in your
trust, the trust itself or securities in general may fall in value. Market
value may be affected by a variety of factors including:

o General securities markets movements;

o Changes in the financial condition of an issuer or a sector;

o Changes in perceptions about an issuer or a sector;

o Interest rates and inflation;

o Governmental policies and litigation; and

o Purchases and sales of securities by a trust.

Even though we carefully supervise your portfolio, you should remember
that we do not manage your portfolio. Your trust will not sell a security
solely because the market value falls as is possible in a managed fund.

Current economic conditions risk. The U.S. economy's recession began in
December 2007. This recession began with problems in the housing and credit
markets, many of which were caused by defaults on "subprime" mortgages and
mortgage-backed securities, eventually leading to the failures of some large
financial institutions. Economic activity declined across all sectors of the
economy, and the United States experienced increased unemployment. The economic
crisis affected the global economy with European and Asian markets also
suffering historic losses. Due to the current state of uncertainty in the
economy, the value of the securities held by the trust may be subject to steep
declines or increased volatility due to changes in performance or perception of
the issuers. Extraordinary steps have been taken by the governments of several
leading economic countries to combat the economic crisis; however, the impact
of these measures is not yet fully known and cannot be predicted.

Closed-End Fund risk. Your trust invests in Closed-End Funds. Closed-End
Funds are subject to various risks, including management's ability to meet the
Closed-End Fund's investment objective and to manage the Closed-End Fund's
portfolio during periods of market turmoil and as investors' perceptions
regarding Closed-End Funds or their underlying investments change.

Shares of Closed-End Funds frequently trade at a discount from their net
asset value in the secondary market. This risk is separate and distinct from the
risk that the net asset value of Closed-End Fund shares may decrease. The amount
of such discount from net asset value is subject to change from time to time in
response to various factors.

Certain Closed-End Funds included in your trust may employ the use of
leverage in their portfolios through the issuance of preferred stock. While
leverage often serves to increase the yield of an Closed-End Fund, this
leverage also subjects the Closed-End Fund to increased risks, including the
likelihood of increased volatility and the possibility that the Closed-End
Fund's common share income will fall if the dividend rate on the preferred
shares or the interest rate on any borrowings rises. Instability in the auction
rate preferred shares market may affect the volatility of Closed-End Funds that
use such instruments to provide leverage. In addition, Closed-End Funds are
subject to their own annual fees and expenses, including a management fee. Such
fees reduce the potential benefits associated with owning a Closed-End Fund and
are in addition to your trust's expenses.

Interest rate risk. Interest rate risk is the risk that the value of
securities held by a Closed-End Fund in your trust will decline in value
because of a rise in interest rates. Generally, securities that pay fixed rates
of return will increase in value when interest rates decline and decrease in
value when interest rates rise. Typically, securities that pay fixed rates of
return with longer periods before maturity are more sensitive to interest rate
changes.

Credit and dividend payment risk. Credit risk is the risk that an issuer
of a security or a Closed-End Fund is unable or unwilling to make dividend
and/or principal payments. High-yield or "junk" securities that are rated below
investment-grade are generally more susceptible to this risk than
investment-grade securities.

Call risk. Call risk is the risk that securities held by a Closed-End Fund
in your trust can be prepaid or "called" by the issuer before their stated
maturity. If securities are called, your income will decline and you may not be
able to reinvest the money you receive at as high a yield. Also, an early call
at par of a security trading at a premium will reduce your return. Securities
held by your trust are more likely to be called when interest rates decline.
This would result in early returns of principal to the Closed-End Funds in your
trust. The securities may also be subject to special or extraordinary call
provisions and "mandatory put" features that may cause the securities to be
removed from a fund prior to maturity or stated call dates. High-yield or
"junk" securities that are rated below investment-grade are generally more
susceptible to this risk than investment-grade securities.

Security quality risk. Security quality risk is the risk that a reduction
in a securities rating may decrease its value, the value of a Closed-End Fund
and the value of your investment in your trust. Securities ratings may be
reduced at any time, including during the primary offering period of your
trust.

High-yield securities risk. Certain Closed-End Funds held by the
Closed-End Equity Trust and the Strategic Income Trust may invest in high-yield
securities. High-yield, high risk securities are subject to greater market
fluctuations and risk of loss than securities with higher investment ratings.
The value of these securities will decline significantly with increases in
interest rates, not only because increase in rates generally decrease values,
but also because increased rates may indicate an economic slowdown. An economic
slowdown, or a reduction in an issuer's creditworthiness, may affect an
issuer's ability to make dividend payments.

High-yield or "junk" securities, the general names for securities rated
below investment-grade, are frequently issued by corporations in the growth
state of their development or by established companies who are highly leveraged
or whose operations or industries are depressed. Obligations rated below
investment-grade should be considered speculative as these ratings indicate a
quality of less than investment-grade. Because high-yield securities are
generally subordinated obligations and are perceived by investors to be riskier
than higher rated securities, their prices tend to fluctuate more than higher
rated securities and are affected by short-term credit developments to a
greater degree. Also, the market for high-yield securities is generally smaller
and less liquid than that for investment-grade securities.

The market for high-yield bonds is smaller and less liquid than that for
investment-grade bonds. High-yield bonds are generally not listed on a national
securities exchange but trade in the over-the-counter markets. Due to the
smaller, less liquid market for high-yield bonds, the bid-offer spread on such
bonds is generally greater than it is for investment-grade bonds and the
purchase or sale of such bonds may take longer to complete.

Split ratings risk. Split-rated securities are those securities that, at
the time of investment, are rated below investment-grade by one rating agency,
so long as at least one other rating agency rates such securities within the
four highest grades (i.e., investment-grade quality). This means that a
split-rated security may be regarded by one rating agency as having
predominately speculative characteristics with respect to the issuer's capacity
to pay interest and repay principal, and accordingly subject to a greater risk
of default. The prices of split-rated securities, in the view of one but not all
rating agencies, may be more sensitive than securities without a split-rating to
negative developments, such as a decline in the issuer's revenues or a general
economic downturn.

Foreign securities risk. Certain Closed-End Funds held by the Closed-End
Equity Trust and the Strategic Income Trust invest in foreign securities.
Securities of foreign issuers present risks beyond those of domestic
securities. The prices of foreign securities can be more volatile than U.S.
securities due to such factors as political, social and economic developments
abroad, the differences between the regulations to which U.S. and foreign
issuers and markets are subject, the seizure by the government of company
assets, excessive taxation, withholding taxes on dividends and interest,
limitations on the use or transfer of portfolio assets, and political or social
instability. Other risks include the following:

o Enforcing legal rights may be difficult, costly and slow in foreign
countries, and there may be special problems enforcing claims against
foreign governments.

o Foreign issuers may not be subject to accounting standards or
governmental supervision comparable to U.S. issuers, and there may be
less public information about their operations.

o Foreign markets may be less liquid and more volatile than U.S.
markets.

o Foreign securities often trade in currencies other than the U.S.
dollar. Changes in currency exchange rates may affect a Closed-End
Fund's net asset value, the value of dividends and interest earned,
and gains and losses realized on the sale of securities. An increase
in the strength of the U.S. dollar relative to these other currencies
may cause the value of a trust to decline. Certain foreign currencies
may be particularly volatile, and foreign governments may intervene in
the currency markets, causing a decline in value or liquidity in a
trust's foreign currency holdings.

o Future political and governmental restrictions which might adversely
affect the payment or receipt of income on the foreign securities.

Emerging market risk. Certain Closed-End Funds held by the Closed-End
Equity Trust and the Strategic Income Trust may invest in securities issued by
companies headquartered or incorporated in countries considered to be emerging
markets. Risks of investing in developing or emerging countries include the
possibility of investment and trading limitations, liquidity concerns, delays
and disruptions in settlement transactions, political uncertainties and
dependence on international trade and development assistance. In addition,
emerging market countries may be subject to overburdened infrastructures,
obsolete financial systems and environmental problems. For these reasons,
investments in emerging markets are often considered speculative.

Convertible securities risk. Certain Closed-End Funds held by the
Closed-End Equity Trust and the Strategic Income Trust invest in convertible
securities. Convertible securities generally offer lower interest or dividend
yields than non-convertible fixed-income securities of similar credit quality
because of the potential for capital appreciation. The market values of
convertible securities tend to decline as interest rates increase and,
conversely, to increase as interest rates decline. However, a convertible
security's market value also tends to reflect the market price of the common
stock of the issuing company, particularly when that stock price is greater than
the convertible security's "conversion price." The conversion price is defined
as the predetermined price or exchange ratio at which the convertible security
can be converted or exchanged for the underlying common stock. As the market
price of the underlying common stock declines below the conversion price, the
price of the convertible security tends to be increasingly influenced more by
the yield of the convertible security. Thus, it may not decline in price to the
same extent as the underlying common stock. In the event of a liquidation of the
issuing company, holders of convertible securities would be paid before that
company's common stockholders. Consequently, an issuer's convertible securities
generally entail less risk than its common stock. However, convertible
securities fall below debt obligations of the same issuer in order of preference
or priority in the event of a liquidation and are typically un-rated or rated
lower than such debt obligations.

Mandatory convertible securities are distinguished as a subset of
convertible securities because the conversion is not optional and the
conversion price at maturity is based solely upon the market price of the
underlying common stock, which may be significantly less than par or the price
(above or below par) paid. For these reasons, the risks associated with
investing in mandatory convertible securities most closely resemble the risks
inherent in common stocks. Mandatory convertible securities customarily pay a
higher coupon yield to compensate for the potential risk of additional price
volatility and loss upon conversion. Because the market price of a mandatory
convertible security increasingly corresponds to the market price of its
underlying common stock, as the convertible security approaches its conversion
date, there can be no assurance that the higher coupon will compensate for a
potential loss.

Preferred securities risk. Certain Closed-End Funds held by the Strategic
Income Trust invest in preferred securities, such as preferred stock and trust
preferred securities.

Similar to bonds, preferred stocks typically offer a fixed rate of return
paid in the form of a dividend. Like common stock, most preferred stocks are
equity securities representing ownership in a company. Preferred stocks are
generally considered "senior securities" and preferred stockholders enjoy
preference over common stockholders with regard to dividends and liquidations.
For the prospect of a higher yield, preferred stockholders may forfeit or at
least be limited in their voting rights. Preferred stocks are generally traded
on major stock exchanges. Preferred securities are typically subordinated to
bonds and other debt instruments in a company's capital structure, in terms of
priority to corporate income and therefore will be subject to greater credit
risk than those debt instruments.

Trust preferred securities are limited-life securities typically issued by
corporations, generally in the form of interest-bearing notes or preferred
securities, or by an affiliated business trust of a corporation, generally in
the form of beneficial interests in subordinated debentures issued by the
corporation, or similarly structured securities. Dividend payments of the trust
preferred securities generally coincide with interest payments on the
underlying obligations. Trust preferred securities and the underlying
subordinated debentures typically rank senior to the company's common and
preferred stock and junior to the company's senior debt, subordinated debt and
other indebtedness.

In addition to the risks set forth above, these securities are also
subject to the following risks:

o Trust preferred securities are designed to create the same business
risk for an investor as if the investor had bought the securities
underlying the trust preferred securities. A corporation's ability to
pay distributions on the trust preferred securities is generally
dependent on whether the corporation issuing the securities is able to
pay interest on the underlying securities.

o Unitholders have no right to accelerate the trust preferred securities
or the underlying securities for non-payment.

o A corporation issuing the underlying securities may elect to defer
interest payments on those securities at any time during the life of
the trust preferred securities for up to 20 consecutive quarters. If
such an election is made, distributions on the trust preferred
securities will not be made during the deferral period. During any
deferral period investors may be taxed as if the trust had received
current income. In such a case, unitholders will have income taxes
due, but will not have received income distributions to pay the taxes.

o Tax or regulatory changes may change the tax characterization of the
preferred securities or the underlying securities, and, as a result,
may effect the value of your units.

o Preferred securities may be subject to redemption after a certain call
date or as a result of certain tax or regulatory events. This may
occur prior to maturity.

Municipal bond risk. A majority of the Closed-End Funds held by the
California Municipal Trust invest in municipal bonds, which are subject to
various risks. The primary risk associated with an investment in municipal bonds
is that the issuer or an insurer of the municipal bond will default on principal
and/or interest payments when due on the municipal bond. In addition, fixed-rate
municipal bonds are subject to further risks, including the risk that the value
of such municipal bonds will decline with increases in interest rates or a
decrease in the federal or state (if applicable) income tax rate.

Certain of the municipal bonds held by the Closed-End Funds may be
original issue discount bonds and/or zero coupon bonds. Original issue discount
bonds are bonds originally issued at less than the market interest rate. Zero
coupon bonds are original issue discount bonds that do not provide for the
payment of any current interest. Zero coupon bonds are subject to substantially
greater price fluctuations during periods of changing market interest rates
than bonds of comparable quality that pay current income.

Certain of the municipal bonds held by the Closed-End Funds may have been
purchased by the sponsor or issuers of the securities in a trust on a "when
issued" basis. Municipal bonds purchased on a "when issued" basis have not yet
been issued by their governmental entity on the initial date of deposit
(although such governmental entity had committed to issue such municipal
bonds). In the case of these and/or certain other municipal bonds, the delivery
of the municipal bonds may be delayed ("delayed delivery") or may not occur.

Certain of the municipal bonds held by the Closed-End Funds are subject to
redemption prior to their stated maturity date pursuant to sinking fund or call
provisions. A call or redemption provision is more likely to be exercised when
the offering price valuation of a bond is higher than its call or redemption
price. Such price valuation is likely to be higher in periods of declining
interest rates.

Some dividends on certain of the bonds in your trust may not qualify as
"exempt-interest dividends," which generally are excluded from your gross
income for federal income tax purposes. Some or all of the exempt-interest
dividends, however, may be taken into account in determining your alternative
minimum tax, and may have other tax consequences (e.g., they may affect the
amount of your social security benefits that are taxed).

California state specific risk. Because the California Municipal Trust
includes Closed-End Funds containing bonds of issuers located in California,
there may be more risk than if the bonds were issued by issuers located in
several states. The financial condition of California is affected by various
national and local, economic, social and environmental policies and conditions
and may have an effect on the value of the units in the trust. Additionally,
Constitutional and statutory limitations imposed on the State and its local
governments concerning taxes, bond indebtedness and other matters may constrain
the revenue-generating capacity of the State and its local governments and,
therefore, the ability of the issuers of the bonds to satisfy their
obligations.

The economic vitality of California and its various regions and,
therefore, the ability of the State and its local governments to satisfy the
bonds, are affected by numerous factors, such as natural disasters, weakness in
the technology sector and fluctuations in the energy supply. In addition,
California's population increase has resulted in traffic congestion, school
overcrowding and high housing costs which have caused an increased demand for
government services and which may impede future economic growth.

Options risk. The value of an option held by certain of the Closed-End
Funds in the Strategic Income Trust may be adversely affected if the market for
the option becomes less liquid or smaller, and will be affected by changes in
the value and dividend rates of the stock subject to the option, an increase in
interest rates, a change in the actual and perceived volatility of the stock
market and the common stock, and the remaining time to expiration. Additionally,
the value of an option does not increase or decrease at the same rate as the
underlying stock (although they generally move in the same direction). However,
as an option approaches its expiration date, its value increasingly moves with
the price of the stock subject to an option. The strike price for an option may
be adjusted downward before an option expiration triggered by certain corporate
events affecting that stock. A downward adjustment to the strike price will have
the effect of reducing the equity appreciation. Option strike prices may be
adjusted to reflect certain corporate events such as extraordinary dividends,
stock splits, merger or other extraordinary distributions or events. If the
value of the underlying stock exceeds the strike price of an option, it is
likely that the holder of that option will exercise their right to purchase the
stock.

REIT risk. Certain Closed-End Funds held by the Strategic Income Trust
invest primarily in REITs and other real estate securities. REITs may
concentrate their investments in specific geographic areas or in specific
property types, such as hotels, shopping malls, residential complexes and office
buildings. The value of the REIT and the ability of the REIT to distribute
income may be adversely affected by several factors, including: rising interest
rates; changes in the national, state and local economic climate and real estate
conditions; perceptions of prospective tenants about the safety, convenience and
attractiveness of the properties; the ability of the owner to provide adequate
management, maintenance and insurance; increased competition from new
properties; the impact of present or future environmental legislation and
compliance with environmental laws; changes in real estate taxes and other
operating expenses; adverse changes in governmental rules and fiscal policies;
adverse changes in zoning laws; declines in the value of real estate; and other
factors beyond the control of the issuer of the REIT.

The value of a REIT may also be affected by the downturn in the subprime
mortgage lending market in the United States. Subprime loans have higher
defaults and losses than prime loans. Subprime loans also have higher serious
delinquency rates than prime loans. The downturn in the subprime mortgage
lending market may have far-reaching consequences into many aspects and
geographic regions of the real estate business, and consequently, the value of
the portfolio may decline in response to such developments.

Limited liquidity and volatility risk. The markets for fixed-income
securities, such as those held by certain Closed-End Funds held by your trust,
may experience periods of illiquidity and volatility. General market
uncertainty and consequent repricing risk have led to market imbalances of
sellers and buyers, which in turn have resulted in significant valuation
uncertainties in a variety of fixed-income securities. These conditions
resulted, and in many cases continue to result in, greater volatility, less
liquidity, widening credit spreads and a lack of price transparency, with many
debt securities remaining illiquid and of uncertain value. These market
conditions may make valuation of some of the securities held by a Closed-End
Fund uncertain and/or result in sudden and significant valuation increases or
declines in its holdings. In addition, illiquidity and volatility in the credit
markets may directly and adversely affect the setting of dividend rates on the
shares of the Closed-End Funds.

Litigation and legislation risk. Your trust is also subject to litigation
and legislation risk. From time to time, various legislative initiatives are
proposed in the United States and abroad which may have a negative impact on
certain issuers represented in your trust. In addition, litigation regarding
any of the issuers of the securities or of the sectors represented by these
issuers, may raise potential bankruptcy concerns and may negatively impact the
share prices of these securities. We cannot predict what impact any pending or
threatened litigation or any bankruptcy concerns will have on the share prices
of the securities.

Inflation risk. Inflation risk is the risk that the value of assets or
income from investments will be less in the future as inflation decreases the
value of money.

See "Risk Factors" in Part B of the prospectus for additional information.

How the Trust Works

Your Trust. Your trust is a unit investment trust registered under the
Investment Company Act of 1940 and the Securities Act of 1933. We created your
trust under a trust agreement between Guggenheim Funds Distributors, Inc. (as
sponsor, evaluator and supervisor) and The Bank of New York Mellon (as
trustee). To create your trust, we deposited contracts to purchase securities
with the trustee along with an irrevocable letter of credit or other
consideration to pay for the securities. In exchange, the trustee delivered
units of your trust to us. Each unit represents an undivided interest in the
assets of your trust. These units remain outstanding until redeemed or until
your trust terminates.

Changing Your Portfolio. Your trust is not a managed fund. Unlike a managed
fund, we designed your portfolio to remain relatively fixed after its inception.
Your trust will generally buy and sell securities:

o to pay expenses,

o to issue additional units or redeem units,

o in limited circumstances to protect a trust,

o to avoid direct or indirect ownership of a passive foreign investment
company,

o to make required distributions or avoid imposition of taxes on a
trust, or

o as permitted by the trust agreement.

Your trust will generally reject any offer for securities or property
other than cash in exchange for the securities in its portfolio. However, if a
public tender offer has been made for a security or a merger or acquisition has
been announced affecting a security, your trust may either sell the security or
accept a tender offer for cash if the supervisor determines that the sale or
tender is in the best interest of unitholders. The trustee will distribute any
cash proceeds to unitholders. If your trust receives securities or property
other than cash, it may either hold the securities or property in its portfolio
or sell the securities or property and distribute the proceeds. For example,
this could happen in a merger or similar transaction.

Only the trustee may vote the shares of the Closed-End Funds held in your
trust. The trustee will vote the shares in the same general proportion as the
shares held by other shareholders of each Closed-End Fund.

We will increase the size of your trust as we sell units. When we create
additional units, we will seek to replicate the existing portfolio. When your
trust buys securities, it will pay brokerage or other acquisition fees. You
could experience a dilution of your investment because of these fees and
fluctuations in security prices between the time we create units and the time
your trust buys the securities. When your trust buys or sells securities, we may
direct that it place orders with and pay brokerage commissions to brokers that
sell units or are affiliated with your trust. We will not select firms to handle
these transactions on the basis of their sale of units of a trust. We cannot
guarantee that a trust will keep its present size and composition for any length
of time.

Termination of Your Trust. Your trust will terminate no later than the
termination date listed in the "Investment Summary" section of this prospectus.
The trustee may terminate your trust early if the value of the trust is less
than $1 million or less than 40% of the value of the securities in the trust at
the end of the initial offering period. At this size, the expenses of your
trust may create an undue burden on your investment. Investors owning
two-thirds of the units in your trust may also vote to terminate the trust
early. We may also terminate your trust in other limited circumstances.

The trustee will notify you of any termination and sell any remaining
securities. The trustee will send your final distribution to you within a
reasonable time following liquidation of all the securities after deducting
final expenses. Your termination distribution may be less than the price you
originally paid for your units.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

General Information

Guggenheim Funds. Guggenheim Funds Distributors, Inc. specializes in the
creation, development and distribution of investment solutions for advisors and
their valued clients. In November 2001, we changed our name from Ranson &
Associates, Inc. to Claymore Securities, Inc. ("Claymore"). On September 27,
2010, Claymore officially changed its name to Guggenheim Funds Distributors,
Inc. This change follows the acquisition of Claymore by Guggenheim Partners, LLC
on October 14, 2009. Since the finalization of the acquisition, we have been
operating as a wholly-owned subsidiary of Guggenheim Partners, LLC.

During our history we have been active in public and corporate finance,
have underwritten closed-end funds and have distributed bonds, mutual funds,
closed-end funds, exchange-traded funds, structured products and unit trusts in
the primary and secondary markets. We are a registered broker-dealer and member
of the Financial Industry Regulatory Authority (FINRA). If we fail to or cannot
perform our duties as sponsor or become bankrupt, the trustee may replace us,
continue to operate your trust without a sponsor, or terminate your trust. You
can contact us at our headquarters at 2455 Corporate West Drive, Lisle,
Illinois 60532 or by using the contacts listed on the back cover of this
prospectus. Guggenheim Funds personnel may from time to time maintain a
position in certain securities held by your trust.

Guggenheim Funds and your trust have adopted a code of ethics requiring
Guggenheim Funds's employees who have access to information on trust
transactions to report personal securities transactions. The purpose of the
code is to avoid potential conflicts of interest and to prevent fraud,
deception or misconduct with respect to your trust.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

The Trustee. The Bank of New York Mellon is the trustee of your trust. It
is a trust company organized under New York law. You can contact the trustee by
calling the telephone number on the back cover of this prospectus or write to
Unit Investment Trust Division, 2 Hanson Place, 12th Fl., Brooklyn, New York
11217. We may remove and replace the trustee in some cases without your
consent. The trustee may also resign by notifying Guggenheim Funds and
investors.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

Expenses

Your trust will pay various expenses to conduct its operations. The
"Investment Summary" section of this prospectus shows the estimated amount of
these expenses.

Your trust will pay a fee to the trustee for its services. The trustee
also benefits when it holds cash for your trust in non-interest bearing
accounts. Your trust will reimburse the sponsor as supervisor and evaluator for
providing portfolio supervisory services, evaluating your portfolio and
performing bookkeeping and administrative services. Our reimbursements may
exceed the costs of the services we provide to your trust but will not exceed
the costs of services provided to all Guggenheim Funds unit investment trusts
in any calendar year. In addition, the trustee may reimburse the sponsor out of
its own assets for services performed by employees of the sponsor in connection
with the operation of your trust. All of these fees may adjust for inflation
without your approval.

Your trust will pay a fee to the sponsor for creating and developing the
trust, including determining the trust objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and development fee" of $0.05 per unit from the assets of the trust as
of the close of the initial public offering period. The sponsor does not use the
fee to pay distribution expenses or as compensation for sales efforts.

Your trust will also pay its general operating expenses, including any
licensing fees. Your trust may pay expenses such as trustee expenses (including
legal and auditing expenses), organization expenses, various governmental
charges, fees for extraordinary trustee services, costs of taking action to
protect your trust, costs of indemnifying the trustee and Guggenheim Funds,
legal fees and expenses, expenses incurred in contacting you and costs incurred
to reimburse the trustee for advancing funds to meet distributions. Your trust
may pay the costs of updating its registration statement each year. The trustee
may sell securities to pay trust expenses.

Your trust, and therefore the unitholders of your trust, will also
indirectly bear the expenses of the underlying Closed-End Funds. While your
trust will not pay these expenses directly out of its assets, these expenses
are shown under "Annual Fund Operating Expenses of the Trust" in the "Fees and
Expenses" section of the prospectus to illustrate the impact of these expenses.
Please note that the sponsor or an affiliate may be engaged as a service
provider to certain Closed-End Funds held by your trust and therefore certain
fees paid by your trust to such Closed-End Funds will be paid to the sponsor or
an affiliate for its services to such Closed-End Funds.

See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Report of Independent Registered Public Accounting Firm

Unitholders

Guggenheim Defined Portfolios, Series 749

We have audited the accompanying statements of financial condition,
including the trust portfolios set forth on pages 8, 15, 23 and 24 of this
prospectus, of Guggenheim Defined Portfolios, Series 749, as of _____ , 2010,
the initial date of deposit. These statements of financial condition are the
responsibility of the trusts' sponsor. Our responsibility is to express an
opinion on these statements of financial condition based on our audits.

We conducted our audits in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance
about whether the statements of financial condition are free of material
misstatement. The trusts are not required to have, nor were we engaged to
perform audits of their internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
trusts' internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statements of financial
condition, assessing the accounting principles used and significant estimates
made by the sponsor, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation with The Bank of New York
Mellon, trustee, of cash or an irrevocable letter of credit deposited for the
purchase of securities as shown in the statements of financial condition as of
_____ , 2010. We believe that our audits of the statements of financial
condition provide a reasonable basis for our opinion.

In our opinion, the statements of financial condition referred to above
present fairly, in all material respects, the financial position of Guggenheim
Defined Portfolios, Series 749, as of _____ , 2010, in conformity with
accounting principles generally accepted in the United States of America.

Grant Thornton LLP

Chicago, Illinois

_____ , 2010

Guggenheim Defined Portfolios, Series 749
Statements of Financial Condition
as of the Inception Date, ______ , 2010

Closed-End California Strategic
Equity Municipal Income
Investment in securities Trust Trust Trust

Sponsor's contracts to purchase underlying securities
backed by cash deposited (1)(2) $ $ $
---------- ---------- ----------
$ $ $
========== ========== ==========
Liabilities and interest of unitholders
Liabilities:
Organization costs (3) $ $ $
Creation and development fee (6)
Deferred sales fee (4)
========== ========== ==========
Interest of unitholders:
Cost to unitholders (5)
Less: initial sales fee (4)
Less: organization costs, C&D and deferred
sales fees (3)(4)(5)(6)
---------- ---------- ----------
Net interest of unitholders
---------- ---------- ----------
Total $ $ $
========== ========== ==========
Number of units
========== ========== ==========
Net Asset Value per Unit $ $ $
========== ========== ==========

(1) Aggregate cost of the securities is based on the closing sale price
evaluations as determined by the trustee.

(2) Cash and/or a letter of credit has been deposited with The Bank of New York
Mellon, trustee, covering the funds (aggregating $_____, $_____ and $_____
per trust) necessary for the purchase of the securities in the Closed-End
Equity Trust, the California Municipal Trust and the Strategic Income
Trust, respectively, represented by purchase contracts.

(3) A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing your trusts.
These costs have been estimated at $8.00 per 100 units of a trust. A
distribution will be made as of the close of the initial offering period or
six months after the initial date of deposit (at the discretion of the
sponsor) to an account maintained by the trustee from which this obligation
of the investors will be satisfied. Organization costs will not be assessed
to units that are redeemed prior to the close of the initial offering
period or six months after the initial date of deposit (at the discretion
of the sponsor). To the extent that actual organization costs are greater
than the estimated amount, only the estimated organization costs added to
the Public Offering Price will be deducted from the assets of a trust.

(4) The aggregate cost to unitholders includes a maximum sales fee, which
consists of an initial sales fee, a deferred sales fee and a creation and
development fee. The initial sales fee is equal to the difference between
the maximum sales fee and the sum of the remaining deferred sales fee and
the creation and development fee. On the Inception Date, the maximum sales
fee of the Closed-End Equity Trust is 3.95% of the Public Offering Price
(equivalent to 3.99% of the net amount invested). The maximum sales fee of
the California Municipal Trust is 4.95% of the Public Offering Price
(equivalent to 5.00% of the net amount invested). The maximum sales fee of
the Strategic Income Trust is $0.395 per unit (equivalent to 3.95% of the
net amount invested). The deferred sales fee is equal to $0.245 per unit of
the Closed-End Equity Trust; and $0.345 per unit of the California
Municipal Trust and the Strategic Income Trust.

(5) The aggregate cost to investors includes the applicable transactional sales
fee assuming no reduction of transactional sales fees for quantity
purchases.

(6) Each trust is committed to pay a creation and development fee of $5.00 per
100 units at the close of the initial public offering period. The creation
and development fee will not be assessed to units that are redeemed prior
to the close of the initial offering period.

GUGGENHEIM DEFINED PORTFOLIOS

GUGGENHEIM PORTFOLIO PROSPECTUS

PART B DATED _____ , 2010

The prospectus for a Guggenheim Defined Portfolio (a "trust") is divided
into two parts. Part A of the prospectus relates exclusively to a particular
trust or trusts and provides specific information regarding each trust's
portfolio, strategies, investment objectives, expenses, financial highlights,
income and capital distributions, hypothetical performance information, risk
factors and optional features. Part B of the prospectus provides more general
information regarding the Guggenheim Defined Portfolios. You should read both
parts of the prospectus and retain them for future reference. Except as
provided in Part A of the prospectus, the information contained in this Part B
will apply to each trust.

Contents

General Information 2
Investment Policies 2
Risk Factors 3
Administration of the Trust 27
Expenses of the Trust 33
Portfolio Transactions and Brokerage Allocation 35
Purchase, Redemption and Pricing of Units 35
Taxes 40
Experts 45
Description of Ratings 45

General Information

Each trust is one of a series of separate unit investment trusts created
under the name Guggenheim Defined Portfolios and registered under the
Investment Company Act of 1940 and the Securities Act of 1933. Each trust was
created as a common law trust on the inception date described in the prospectus
under the laws of the state of New York. Each trust was created under a trust
agreement among Guggenheim Funds Distributors, Inc. (as sponsor, evaluator and
supervisor) and The Bank of New York Mellon (as trustee).

When your trust was created, the sponsor delivered to the trustee
securities or contracts for the purchase thereof for deposit in the trust and
the trustee delivered to the sponsor documentation evidencing the ownership of
units of the trust. After your trust is created, the sponsor may deposit
additional securities in the trust, contracts to purchase additional securities
along with cash (or a bank letter of credit in lieu of cash) to pay for such
contracted securities or cash (including a letter of credit) with instructions
to purchase additional securities. Such additional deposits will be in amounts
which will seek to replicate, as closely as practicable, the portfolio
immediately prior to such deposits. If the sponsor deposits cash, existing and
new investors may experience a dilution of their investments and a reduction in
their anticipated income because of fluctuations in the prices of the
securities between the time of the cash deposit and the purchase of the
securities and because the trust will pay the associated brokerage fees.

A trust consists of (a) the securities listed under "Trust Portfolio" in
the prospectus as may continue to be held from time to time in the trust, (b)
any additional securities acquired and held by the trust pursuant to the
provisions of the trust agreement and (c) any cash held in the accounts of the
trust. Neither the sponsor nor the trustee shall be liable in any way for any
failure in any of the securities. However, should any contract for the purchase
of any of the securities initially deposited in a trust fail, the sponsor will,
unless substantially all of the moneys held in the trust to cover such purchase
are reinvested in substitute securities in accordance with the trust agreement,
refund the cash and sales charge attributable to such failed contract to all
unitholders on the next distribution date.

Investment Policies

The trust is a unit investment trust and is not an "actively managed"
fund. Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analysis. The portfolio of a trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its securities from a portfolio.

The trust agreement provides that the sponsor may (but need not) direct the
trustee to dispose of a security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations, the issuer
having qualified as a passive foreign investment company under the Internal
Revenue Code or the price of a security has declined to such an extent or other
such credit factors exist so that in the opinion of the sponsor the retention of
such securities would be detrimental to the trust. If a public tender offer has
been made for a security or a merger or acquisition has been announced affecting
a security, the trustee may either sell the security or accept a tender offer
for cash if the supervisor determines that the sale or tender is in the best
interest of unitholders. The trustee will distribute any cash proceeds to
unitholders. Pursuant to the trust agreement and with limited exceptions, the
trustee may sell any securities or other properties acquired in exchange for
securities such as those acquired in connection with a merger or other
transaction. If offered such new or exchanged securities or property other than
cash, the trustee shall reject the offer. However, in the event such securities
or property are nonetheless acquired by the trust, they may be accepted for
deposit in a trust and either sold by the trustee or held in a trust pursuant to
the direction of the sponsor. Proceeds from the sale of securities (or any
securities or other property received by the trust in exchange for securities)
are credited to the Capital Account for distribution to unitholders or to meet
redemptions.

Except as stated in the trust agreement, or in the prospectus, the
acquisition by the trust of any securities other than the portfolio securities
is prohibited. The trustee may sell securities, designated by the sponsor, from
the trust for the purpose of redeeming units of a trust tendered for redemption
and the payment of expenses and for such other purposes as permitted under the
trust agreement.

Notwithstanding the foregoing, the trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending distribution, in U.S.
Treasury obligations which mature on or before the next applicable distribution
date. Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.

Proceeds from the sale of securities (or any securities or other property
received by a trust in exchange for securities) are credited to the Capital
Account of a trust for distribution to unitholders or to meet redemptions.
Except for failed securities and as provided in the prospectus or in the trust
agreement, the acquisition by a trust of any securities other than the
portfolio securities is prohibited. The trustee may sell securities from a
trust for limited purposes, including redeeming units tendered for redemption
and the payment of expenses.

Risk Factors

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

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

The sponsor's buying and selling of the securities, especially during the
initial offering of units of the trust or to satisfy redemptions of units may
impact upon the value of the underlying securities and the units. The
publication of the list of the securities selected for the trust may also cause
increased buying activity in certain of the stocks comprising the portfolio.
After such announcement, investment advisory and brokerage clients of the
sponsor and its affiliates may purchase individual securities appearing on the
list during the course of the initial offering period or may purchase warrants
issued by the sponsor or its affiliates which are based on the performance of
the securities on the list. The sponsor or its affiliates may also purchase
securities as a hedge against its risk on the warrants (although generally the
sponsor and its affiliates will not purchase securities for their own account
until after the trust portfolio has been acquired). Such buying activity in the
stock of these companies or issuance of the warrants prior to the purchase of
the securities by the trust may cause the trust to purchase stocks at a higher
price than those buyers who effect purchases by the trust.

Fixed Portfolio. Investors should be aware that the trust is not "managed"
and as a result, the adverse financial condition of a company will not result in
the elimination of its securities from the portfolio of the trust except under
extraordinary circumstances. Investors should note in particular that the
securities were selected on the basis of the criteria set forth in the
prospectus and that the trust may continue to purchase or hold securities
originally selected through this process even though the evaluation of the
attractiveness of the securities may have changed. A number of the securities in
the trust may also be owned by other clients of the sponsor. However, because
these clients may have differing investment objectives, the sponsor may sell
certain securities from those accounts in instances where a sale by the trust
would be impermissible, such as to maximize return by taking advantage of market
fluctuations. In the event a public tender offer is made for a security or a
merger or acquisition is announced affecting a security, the sponsor may
instruct the trustee to tender or sell the security on the open market when, in
its opinion, it is in the best interest of the unitholders of the unit to do so.
Although the portfolio is regularly reviewed and evaluated and the sponsor may
instruct the trustee to sell securities under certain limited circumstances,
securities will not be sold by the trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. As a result, the
amount realized upon the sale of the securities may not be the highest price
attained by an individual security during the life of the trust. The prices of
single shares of each of the securities in the trust vary widely, and the effect
of a dollar of fluctuation, either higher or lower, in stock prices will be much
greater as a percentage of the lower-price stocks' purchase price than as a
percentage of the higher-price stocks' purchase price.

Closed-End Fund Risks. If set forth in Part A of the prospectus, a trust
may invest in the common stock of closed-end funds ("Closed-End Funds").
Closed-End Funds are actively managed investment companies which invest in
various types of securities. Closed-End Funds issue shares of common stock that
are traded on a securities exchange. Closed-End Funds are subject to various
risks, including management's ability to meet the Closed-End Fund's investment
objective, and to manage the Closed-End Fund portfolio when the underlying
securities are redeemed or sold, during periods of market turmoil and as
investors' perceptions regarding Closed-End Funds or their underlying
investments change.

Shares of Closed-End Funds frequently trade at a discount from their net
asset value in the secondary market. This risk is separate and distinct from
the risk that the net asset value of Closed-End Fund shares may decrease. The
amount of such discount from net asset value is subject to change from time to
time in response to various factors.

Certain of the Closed-End Funds included in a trust may employ the use of
leverage in their portfolios through the issuance of preferred stock. While
leverage often serves to increase the yield of a Closed-End Fund, this leverage
also subjects the Closed-End Fund to increased risks, including the likelihood
of increased volatility and the possibility that the Closed-End Fund's common
share income will fall if the dividend rate on the preferred shares or the
interest rate on any borrowings rises.

Municipal Bond Risks. If set forth in Part A of the prospectus, a trust,
or issuers of securities held by a trust, may invest in municipal bonds. If
this is the case, an investment in units should be made with an understanding
of the risks which an investment in municipal bonds entails.

Failure of issuers to pay interest and/or principal. The primary risk
associated with an investment in municipal bonds is that the issuer or an
insurer of the municipal bond will default on principal and/or interest
payments when due on the municipal bond. Such a default would have the effect
of lessening the income generated by each trust and/or the value of the trust's
units. The bond ratings assigned by major rating organizations are an
indication of the issuer's ability to make interest and principal payments when
due on its municipal bonds. Subsequent to the initial date of deposit the
rating assigned to a municipal bond may decline. Neither the sponsor nor the
trustee shall be liable in any way for any default, failure or defect in any
bond.

Fixed-rate bonds. Municipal bonds are subject to the risk that the value
of such municipal bonds (and, therefore, of the units) will decline with
increases in interest rates or a decrease in the federal or state (if
applicable) income tax rate. Inflation and economic recession are two of the
major factors, among others, which contribute to fluctuations in interest rates
and the values of fixed-rate municipal bonds.

Original issue discount bonds and zero coupon bonds. Certain municipal
bonds may be original issue discount bonds and/or zero coupon bonds. Original
issue discount bonds are bonds originally issued at less than the market
interest rate. Zero coupon bonds are original issue discount bonds that do not
provide for the payment of any current interest. Zero coupon bonds are subject
to substantially greater price fluctuations during periods of changing market
interest rates than bonds of comparable quality that pay current income. For
federal income tax purposes, original issue discount on tax-exempt bonds must
be accrued over the term of the bonds. On sale or redemption of the bonds, the
difference between (i) the amount realized (other than amounts treated as
tax-exempt income) and (ii) the tax basis of such bonds (properly adjusted, in
the circumstances described below, for the accrual of original issue discount)
will generally be treated as taxable gain or loss.

"When issued" and "delayed delivery" bonds. Certain municipal bonds have
been purchased by the sponsor or issuers of the securities in a trust on a
"when issued" basis. Municipal bonds purchased on a "when issued" basis have
not yet been issued by their governmental entity on the initial date of deposit
(although such governmental entity had committed to issue such municipal
bonds). In the case of these and/or certain other municipal bonds, the delivery
of the municipal bonds may be delayed ("delayed delivery") or may not occur.
The effect of a trust containing "delayed delivery" or "when issued" municipal
bonds is that unitholders who purchased their units prior to the date such
municipal bonds are actually delivered to the trustee may have to make a
downward adjustment in the tax basis of their units. Such downward adjustment
may be necessary to account for interest accruing on such "when issued" or
"delayed delivery" municipal bonds during the time between their purchase of
units and delivery of such municipal bonds to a trust.

Redemption or sale prior to maturity. Certain municipal bonds are subject
to redemption prior to their stated maturity date pursuant to sinking fund or
call provisions. A call or redemption provision is more likely to be exercised
when the offering price valuation of a bond is higher than its call or
redemption price. Such price valuation is likely to be higher in periods of
declining interest rates. Certain municipal bonds may be sold or redeemed or
otherwise mature.

Market discount. Certain municipal bonds have current market values below
face value. A primary reason for the market value of such municipal bonds being
less than face value at maturity is that the interest rate of such municipal
bonds is at lower rates than the current market interest rate for comparably
rated municipal bonds. Municipal bonds selling at market discounts tend to
increase in market value as they approach maturity. A market discount
tax-exempt municipal bond held to maturity will have a larger portion of its
total return in the form of taxable ordinary income and less in the form of
tax-exempt income than a comparable municipal bond bearing interest at current
market rates.

General obligation bonds. Certain municipal bonds may be general
obligations of a governmental entity that are secured by the taxing power of
the entity. General obligation bonds are backed by the issuer's pledge of its
full faith, credit and taxing power for the payment of principal and interest.
The taxing power of any governmental entity may be limited, however, by
provisions of state constitutions or laws. An entity's credit will depend on
many factors: tax base, reliance on federal or state aid, and factors that are
beyond the entity's control.

Appropriations bonds. Certain municipal bonds may be municipal bonds that
are, in whole or in part, subject to and dependent upon either the governmental
entity making appropriations from time to time or the continued existence of
special temporary taxes which require legislative action for their reimposition.
The availability of any appropriation is subject to the willingness or ability
of the governmental entity to continue to make such special appropriations or to
reimpose such special taxes. The obligation to make lease payments exists only
to the extent of the monies available to the governmental entity therefor, and
no liability is incurred by the governmental entity beyond the monies so
appropriated. Once an annual appropriation is made, the governmental entity's
obligation to make lease rental payments is absolute and unconditional
regardless of any circumstances or occurrences which might arise. In the event
of non-appropriation, certificateholders' or bondowners' sole remedy (absent
credit enhancement) generally is limited to repossession of the collateral for
resale or releasing. In the event of non-appropriation, the sponsor may instruct
the trustee to sell such municipal bonds.

Industrial development revenue bonds ("IDRs"). IDRs, including pollution
control revenue bonds, are tax-exempt securities issued by states,
municipalities, public authorities or similar entities to finance the cost of
acquiring, constructing or improving various projects. These projects are
usually operated by corporate entities. IDRs are not general obligations of
governmental entities backed by their taxing power. Issuers are only obligated
to pay amounts due on the IDRs to the extent that funds are available from the
unexpended proceeds of the IDRs or receipts or revenues of the issuer. Payment
of IDRs is solely dependent upon the creditworthiness of the corporate operator
of the project or corporate guarantor. Such corporate operators or guarantors
that are industrial companies may be affected by many factors which may have an
adverse impact on the credit quality of the particular company or industry.

Hospital and health care facility bonds. The ability of hospitals and
other health care facilities to meet their obligations with respect to revenue
bonds issued on their behalf is dependent on various factors. Some such factors
are the level of payments received from private third-party payors and
government programs and the cost of providing health care services. There can
be no assurance that payments under governmental programs will remain at levels
comparable to present levels or will be sufficient to cover the costs
associated with their bonds. It also may be necessary for a hospital or other
health care facility to incur substantial capital expenditures or increased
operating expenses to effect changes in its facilities, equipment, personnel
and services. Hospitals and other health care facilities are additionally
subject to claims and legal actions by patients and others in the ordinary
course of business. There can be no assurance that a claim will not exceed the
insurance coverage of a health care facility or that insurance coverage will be
available to a facility.

Housing bonds. Multi-family housing revenue bonds and single family
mortgage revenue bonds are state and local housing issues that have been issued
to provide financing for various housing projects. Multi-family housing revenue
bonds are payable primarily from mortgage loans to housing projects for low to
moderate income families. Single-family mortgage revenue bonds are issued for
the purpose of acquiring notes secured by mortgages on residences. The ability
of housing issuers to make debt service payments on their obligations may be
affected by various economic and non-economic factors. Such factors include:
occupancy levels, adequate rental income in multi-family projects, the rate of
default on mortgage loans underlying single family issues and the ability of
mortgage insurers to pay claims. All single family mortgage revenue bonds and
certain multi-family housing revenue bonds are prepayable over the life of the
underlying mortgage or mortgage pool. Therefore, the average life of housing
obligations cannot be determined. However, the average life of these obligations
will ordinarily be less than their stated maturities. Mortgage loans are
frequently partially or completely prepaid prior to their final stated
maturities. To the extent that these obligations were valued at a premium when a
unitholder purchased units, any prepayment at par would result in a loss of
capital to the unitholder and reduce the amount of income that would otherwise
have been paid to unitholders.

Power bonds. The ability of utilities to meet their obligations with
respect to bonds they issue is dependent on various factors. These factors
include the rates they may charge their customers, the demand for a utility's
services and the cost of providing those services. Utilities may also be
subject to extensive regulations relating to the rates which they may charge
customers. Utilities can experience regulatory, political and consumer
resistance to rate increases. Utilities engaged in long-term capital projects
are especially sensitive to regulatory lags in granting rate increases.
Utilities are additionally subject to increased costs due to governmental
environmental regulation and decreased profits due to increasing competition.
Any difficulty in obtaining timely and adequate rate increases could adversely
affect a utility's results of operations. The sponsor cannot predict at this
time the ultimate effect of such factors on the ability of any issuers to meet
their obligations with respect to municipal bonds.

Water and sewer revenue bonds. Water and sewer bonds are generally payable
from user fees. The ability of state and local water and sewer authorities to
meet their obligations may be affected by a number of factors. Some such
factors are the failure of municipalities to utilize fully the facilities
constructed by these authorities, declines in revenue from user charges, the
possible inability to obtain rate increases, rising construction and
maintenance costs, impact of environmental requirements, the difficulty of
obtaining or discovering new supplies of fresh water, the effect of
conservation programs, the impact of "no growth" zoning ordinances and the
continued availability of federal and state financial assistance and of
municipal bond insurance for future bond issues.

Education, university and college bonds. The ability of educational
institutions, including universities and colleges, to meet their obligations is
dependent upon various factors. Some of these factors include the size and
diversity of their sources of revenues, enrollment, reputation, management
expertise, the availability and restrictions on the use of endowments and other
funds, the quality and maintenance costs of campus facilities. Also, in the
case of public institutions, the financial condition of the relevant state or
other governmental entity and its policies with respect to education may affect
an institution's ability to make payment on its own.

Lease rental bonds. Lease rental bonds are predominantly issued by
governmental authorities that have no taxing power or other means of directly
raising revenues. Rather, the authorities are financing vehicles created solely
for the construction of buildings or the purchase or equipment that will be
used by a state or local government. Thus, the bonds are subject to the ability
and willingness of the lessee government to meet its lease rental payments
which include debt service on the bonds. Lease rental bonds are subject to the
risk that the lessee government is not legally obligated to budget and
appropriate for the rental payments beyond the current fiscal year. These bonds
are also subject to the risk of abatement in many states as rental bonds cease
in the event that damage, destruction or condemnation of the project prevents
its use by the lessee. Also, in the event of default by the lessee government,
there may be significant legal and/or practical difficulties involved in the
reletting or sale of the project.

Capital improvement facility bonds. Capital improvement bonds are bonds
issued to provide funds to assist political subdivisions or agencies of a state
through acquisition of the underlying debt of a state or local political
subdivision or agency. The risks of an investment in such bonds include the
risk of possible prepayment or failure of payment of proceeds on and default of
the underlying debt.

Solid waste disposal bonds. Municipal bonds issued for solid waste
disposal facilities are generally payable from tipping fees and from revenues
that may be earned by the facility on the sale of electrical energy generated
in the combustion of waste products. The ability of solid waste disposal
facilities to meet their obligations depends upon the continued use of the
facility, the successful and efficient operation of the facility and, in the
case of waste-to-energy facilities, the continued ability of the facility to
generate electricity on a commercial basis. Also, increasing environmental
regulation of the federal, state and local level has a significant impact on
waste disposal facilities. While regulation requires most waste producers to
use waste disposal facilities, it also imposes significant costs on the
facilities.

Moral obligation bonds. Certain bonds may be "moral obligation" bonds. If
an issuer of moral obligation bonds is unable to meet its obligations, the
repayment of the bonds becomes a moral commitment but not a legal obligation of
the state or municipality in question. Thus, such a commitment generally
requires appropriation by the state legislature and accordingly does not
constitute a legally enforceable obligation of debt of the state. The agencies
or authorities generally have no taxing power.

Refunded bonds. Refunded bonds are typically secured by direct obligations
of the U.S. Government, or in some cases obligations guaranteed by the U.S.
Government, placed in an escrow account maintained by an independent trustee
until maturity or a predetermined redemption date. These obligations are
generally non-callable prior to maturity or the predetermined redemption date.
In a few isolated instances to date, however, bonds which were thought to be
escrowed to maturity have been called for redemption prior to maturity.

Airport, port and highway revenue bonds. Certain facility revenue bonds
are payable from and secured by the revenues from the ownership and operation
of particular facilities, such as airports, highways and port authorities.
Airport operating income may be affected by the ability of airlines to meet
their obligations under the agreements with airports. Similarly, payment on
bonds related to other facilities is dependent on revenues from the projects,
such as use fees from ports, tolls on turnpikes and bridges and rents from
buildings. Payment may be adversely affected by reduction in revenues due to
such factors and increased cost of maintenance or decreased use of a facility.
The sponsor cannot predict what effect conditions may have on revenues which
are dependent for payment on these bonds.

Special tax bonds. Special tax bonds are payable for and secured by the
revenues derived by a municipality from a particular tax. Examples of special
taxes are a tax on the rental of a hotel room, on the purchase of food and
beverages, on the rental of automobiles or on the consumption of liquor.
Special tax bonds are not secured by the general tax revenues of the
municipality, and they do not represent general obligations of the
municipality. Payment on special tax bonds may be adversely affected by a
reduction in revenues realized from the underlying special tax. Also, should
spending on the particular goods or services that are subject to the special
tax decline, the municipality may be under no obligation to increase the rate
of the special tax to ensure that sufficient revenues are raised from the
shrinking taxable base.

Tax allocation bonds. Tax allocation bonds are typically secured by
incremental tax revenues collected on property within the areas where
redevelopment projects, financed by bond proceeds are located. Municipal bond
payments are expected to be made from projected increases in tax revenues
derived from higher assessed values of property resulting from development in
the particular project area and not from an increase in tax rates. Special risk
considerations include: variations in taxable values of property in the project
area; successful appeals by property owners of assessed valuations; substantial
delinquencies in the payment of property taxes; or imposition of any
constitutional or legislative property tax rate decrease.

Transit authority bonds. Mass transit is generally not self-supporting
from fare revenues. Additional financial resources must be made available to
ensure operation of mass transit systems as well as the timely payment of debt
service. Often such financial resources include federal and state subsidies,
lease rentals paid by funds of the state or local government or a pledge of a
special tax. If fare revenues or the additional financial resources do not
increase appropriately to pay for rising operating expenses, the ability of the
issuer to adequately service the debt may be adversely affected.

Convention facility bonds. Municipal bonds in the convention facilities
category include special limited obligation securities issued to finance
convention and sports facilities payable from rental payments and annual
governmental appropriations. The governmental agency is not obligated to make
payments in any year in which the monies have not been appropriated to make
such payments. In addition, these facilities are limited use facilities that
may not be used for purposes other than as convention centers or sports
facilities.

Correctional facility bonds. Municipal bonds in the correctional
facilities category include special limited obligation securities issued to
construct, rehabilitate and purchase correctional facilities payable from
governmental rental payments and/ or appropriations.

Tobacco settlement bonds. Tobacco settlement bonds are municipal
obligations that are backed entirely by expected revenues to be derived from
lawsuits settled between governmental entities and American tobacco companies
involving tobacco related deaths and illnesses. The settlements primarily
involve Phillip Morris; R.J. Reynolds; Brown & Williamson, a division of
British American Tobacco; and Lorillard, a division of the Loews Corporation.
Revenues from approximately 17 other companies are also providing part of the
settlement payments. Because tobacco settlement bonds are backed by a single
source of revenue--the payments from tobacco companies, the creditworthiness of
the bonds depends in large part, on the ability of these companies to meet
their obligations. Risk factors facing tobacco companies include: reduced
cigarette consumption, increased taxes on cigarettes, continuing litigation and
the possibility of bankruptcy. The initial and annual payments made by the
tobacco companies will be adjusted based on a number of factors, the most
important of which is domestic cigarette consumption. If the volume of
cigarettes shipped in the U.S. by manufacturers participating in the settlement
decreases significantly, payments due from them will also decrease. Demand for
cigarettes in the U.S. could continue to decline due to price increases needed
to recoup the cost of payments by tobacco companies. Demand could also be
affected by: anti-smoking campaigns, tax increases, reduced advertising,
enforcement of laws prohibiting sales to minors; elimination of certain sales
venues such as vending machines; and the spread of local ordinances restricting
smoking in public places.

California State Risks. The California Municipal Trust is susceptible to
political, economic or regulatory factors affecting issuers of California
municipal obligations (the "California Municipal Obligations"). These include
the possible adverse effects of certain California constitutional amendments,
legislative measures, voter initiatives and other matters that are described.
The information provided below is only a brief summary of the complex factors
affecting the financial situation in California and is derived from sources
that are generally available to investors and are believed to be accurate. No
independent verification has been made of the accuracy or completeness of any
of the following information. It is based in part on information obtained from
various State and local agencies in California or contained in official
statements for various California municipal obligations.

Economic Outlook. The economic outlook for the nation and California began
to improve in the early part of the 2009-10 fiscal year. The real estate
markets, which accelerated the economic downturn and intensified underlying
imbalances in the economy, were beginning to show signs of life. Median home
prices, which had dropped by 54.3% from their peak during early 2007, are
beginning to level off. More new construction activity is expected as a result
of the increase in home sales. These trends should have positive implications
for the housing market.

As of December 2009, the unemployment rates in the U.S. and California
were 10.0% and 12.4%, respectively. However, fewer jobs were lost in the last
half of 2009 than were lost during the first half of the year. This is a
positive indication that California's labor markets and economy are starting to
recover. Economists forecast that the recession is at or nearing an end, but
the recovery will be slow due to the widespread damage that the economy has
sustained.

The outlook for the California economy is modest growth in 2010 followed
by moderate growth in 2011 and good growth in 2012. Personal income is
projected to grow 2.4 percent in 2010, 3.6 percent in 2011, and 4.8 percent in
2012, as compared to falling by 2.8 percent in 2009 and the 5.6 -percent
average growth rate from 1988 to 2008. Nonfarm payroll employment is forecast
to fall by 0.7 percent in 2010 and grow by 1.3 percent in 2011 and 1.9 percent
in 2012, as compared to falling by 5.6 in 2009 and the 1.3 percent average
growth rate from 1988 to 2008.

Net Assets. The most recently published financial statements for the State
are for the fiscal year ended June 30, 2009. The primary government's net
assets as of June 30, 2009, were $9.8 billion. After the total net assets are
reduced by $83.2 billion for investment in capital assets (net of related debt)
and by $12.2 billion for restricted net assets, the resulting unrestricted net
assets totaled a negative $85.6 billion. Restricted net assets are dedicated
for specified uses and are not available to fund current activities. Almost
two-thirds of the negative $85.6 billion consists of $58.1 billion in
outstanding bonded debt issued to build capital assets for school districts and
other local governmental entities. The bonded debt reduces the unrestricted
net assets; however, local governments, not the State, record the capital
assets that would offset this reduction.

General Fund. The General Fund (the State's main operating fund) ended the
fiscal year with assets of $14.7 billion, liabilities of $30.7 billion, and fund
balance reserves of $2.3 billion, leaving the General Fund with an unreserved
fund deficit of $18.3 billion. Total assets of the General Fund changed little
during the year, because the $1.2 billion decrease in cash and pooled
investments was offset by a $1.2 billion increase in due from other funds,
primarily from the Federal Fund. During the 2008-09 fiscal year, the General
Fund experienced severe cash shortages, resulting in a 30-day delay of payments
to individuals and businesses, the deferral of certain payments to the next
fiscal year, and legislative changes to increase the General Fund's internal
borrowing capacity. The liabilities of the General Fund increased by $12.4
billion (67.3%), mainly in amounts due to other funds ($3.2 billion) and
interfund payables ($8.8 billion) resulting from the General Fund's increased
cash-flow borrowing from other state funds to meet its payment obligations.

The General Fund had $84.2 billion in revenues, $92.6 billion in
expenditures, and a net $3.5 billion disbursement from other financing sources
(uses) for the year ended June 30, 2009. Approximately 94% of General Fund
revenue ($79.2 billion) is derived from the State's big three taxes--personal
income taxes ($44.7 billion), sales and use taxes ($23.8 billion), and
corporation taxes ($10.7 billion).

During the 2008-09 fiscal year, total General Fund tax revenue decreased
by $12.9 billion, or 13.7%; the decrease in revenue from the State's big three
taxes account for almost the entire decline. Revenue from personal income taxes
decreased by $9.5 billion (17.6%), primarily due to a decline in capital gains
and other variable income, such as bonuses and stock options, and also by the
increase in California's unemployment. Revenue from sales and use taxes
decreased by $2.8 billion (10.6%), primarily due to a decline in consumer
spending on big-ticket items such as vehicles, building supplies, and home
furnishings. Revenue from corporation taxes decreased by $463 million; the
decrease would have been much higher if not for revenue enhancing measures
adopted as part of the 2008-09 Budget Act.

General Fund expenditures decreased by $6.4 billion, to $92.6 billion. The
programs with the largest decreases were education, which decreased by $5.1
billion, to $46.0 billion, and health and human services, which decreased by
$1.2 billion, to $28.0 billion. The General Fund's ending fund balance
(including reserves) for the year ended June 30, 2009, was a negative $16.1
billion, a decrease of $11.9 billion over the prior year's ending fund balance
of negative $4.2 billion. Continued deterioration of the State's revenues has
caused a decline in the Proposition 98 funding requirement (known as the
minimum education funding guarantee), which allowed the State to reduce General
Fund spending on K-14 education in the 2008-09 fiscal year. Additional
reductions were also made in the funding provided to California's higher
education facilities. The decreased expenditures for health and human services
were mainly the result of economic relief provide by ARRA that reduced the
General Fund's share of Medical Assistance program costs and increased the
required federal share.

Budget Outlook. California's initial 2009-10 Budget Act was enacted on
February 20, 2009, more than four months before the fiscal year began. The
budget included $36 billion in solutions to what was then estimated to be a $42
billion General Fund budget shortfall. It also included an estimated $6 billion
provided from five budget-related measures that were later rejected by voters.
After adoption of the initial 2009-10 Budget Act, the State continued to
experience declines in revenues and other financial pressures. On May 14, 2009,
the Governor released the 2009-10 May Revision, which identified a further
budget shortfall of approximately $24 billion through the 2009-10 fiscal year.

In response, an amended 2009-10 Budget Act was enacted on July 28, 2009. It
authorized spending of $119.2 billion--$84.6 billion from the General Fund,
$25.1 billion from special funds, and $9.5 billion from bond funds. The General
Fund's available resources were projected to be $86.2 billion, leaving a reserve
for economic uncertainties of $500 million. The amended 2009-10 Budget Act and
additional legislation included spending reductions in virtually every state
program and changes to certain tax laws to increase tax compliance and
accelerate revenue collection.

The 2010-11 Governor's Budget includes revised revenue and expenditure
estimates for the 2009-10 fiscal year. Based on those estimates, if no
corrective budget actions are taken by the Governor and the Legislature, the
new estimated budget shortfall by the end of the 2009-10 fiscal year will be
$6.6 billion.

The Governor released his proposed 2010-11 budget on January 8, 2010. This
proposed budget projects a $19.9 billion gap between estimated revenues and
state expenditures over the next 18 months. The Governor's Budget proposes $8.5
billion in spending reductions, $6.9 billion in additional federal funds, and
$4.5 billion in alternative funding and fund shifts. To resolve the projected
budget shortfall, the Governor declared a fiscal emergency and called the
Legislature into special session on January 8, 2010. The proposed budget
anticipates action on $8.9 billion in solutions during the special session, as
waiting until the enactment of the 2010-11 budget would result in the loss of
$2.4 billion of expected budget solutions. Such a loss would require even
deeper cuts in the 2010-11 fiscal year.

The 2010-11 Governor's Budget projects (with all budget solutions
enacted), General Fund revenues and transfers of $89.3 billion and expenditures
of $82.9 billion, resulting in a $1 billion reserve. The proposed 2010-11
General Fund revenues and transfers are 1.4% greater than the revised 2009-10
estimate of $88.1 billion, while proposed 2010-11 General Fund expenditures are
3.7% less than the revised 2009-10 estimate of $86.1 billion. The Governor's
2010-11 proposed budget relies heavily on federal funding and seeks flexibility
to more effectively manage program costs currently restricted by federal
maintenance-of-effort requirements, court decisions and underfunded federal
mandates. The proposed budget also relies heavily on reductions to State
spending, and funding shifts--some that would require voter approval.

Capital Assets. California's investment in capital assets for its
governmental and business-type activities as of June 30, 2009, amounted to
$103.5 billion (net of accumulated depreciation). This investment in capital
assets includes land, state highway infrastructure, collections, buildings and
other depreciable property, and construction in progress. Depreciable property
includes buildings, improvements other than buildings, equipment, personal
property, intangible assets, certain infrastructure assets, certain books, and
other capitalized and depreciable property. Infrastructure assets are items
that are normally immovable and can be preserved for a greater number of years
than can most capital assets. Infrastructure assets include roads and bridges.

Debt Administration. At June 30, 2009, the primary government had total
bonded debt outstanding of $101.2 billion. Of this amount, $70.4 billion
(69.6%) represents general obligation bonds, which are backed by the full faith
and credit of the State. Included in the $70.4 billion of general obligation
bonds is $8.6 billion of Economic Recovery bonds that are secured by a pledge
of revenues derived from dedicated sales and use taxes. The current portion of
general obligation bonds outstanding is $3.0 billion and the long-term portion
is $67.4 billion. The remaining $30.8 billion (30.4%) of bonded debt
outstanding represents revenue bonds, which are secured solely by specified
revenue sources. The current portion of revenue bonds outstanding is $1.2
billion and the long-term portion is $29.6 billion.

Budgetary Control. The California Legislature prepares an annual budget
that contains estimates of revenues and expenditures for the ensuing fiscal
year. This budget is the result of negotiations between the Governor and the
Legislature. Throughout the fiscal year, adjustments, in the form of budget
revisions, executive orders, and financial legislation agreed to by the
Governor and the Legislature are made to the budget. The State Controller is
statutorily responsible for control over revenues due the primary government
and for expenditures of each appropriation contained in the budget. Budgeted
appropriations are the expenditure authorizations that allow state agencies to
purchase or create liabilities for goods and services.

The State's accounting system provides the State Controller's Office with
a centrally-controlled record system to fully account for each budgeted
appropriation, including its unexpended balance, and for all cash receipts and
disbursements. The accounting system is decentralized, meaning the detail of
each control account is maintained by each state agency. During the fiscal
year, the control accounts and the agency accounts are maintained and
reconciled on a cash basis. At the end of the fiscal year, each agency prepares
annual accrual reports for receivables and payables. The State Controller's
Office combines its control account balances with the agency accrual reports to
prepare California's Budgetary/Legal Basis Annual Report and the Budgetary/
Legal Basis Annual Report Supplement. State laws and regulations that, in some
cases, do not fully agree with GAAP govern the methods of accounting for
expenditures and revenues in these reports.

Cash Management. Commencing July 2, 2009, the State began issuing
registered warrants (IOUs) in lieu of warrants (checks) for certain obligations
labeled lower-priority by the State Constitution. The registered warrants,
which bore interest, were not scheduled to be redeemed until October 2, 2009.

In August 2009, the State issued $1.5 billion of interim revenue
anticipation notes (RANs). The proceeds from the interim RANs permitted the
early redemption of the outstanding registered warrants on September 4, 2009.
In late September 2009, the primary government issued RANs of $8.8 billion, of
which $2.8 billion will mature on May 25, 2010, and $6.0 billion will mature on
June 25, 2010. The proceeds from these notes will help fund cash flow needs of
the 2009-10 fiscal year and redeem the interim RANs that matured on October 5,
2009.

Risk Management. The primary government has elected, with a few
exceptions, to be self-insured against loss or liability. Generally, the
exceptions are when a bond resolution or a contract requires the primary
government to purchase commercial insurance for coverage against property loss
or liability. There have been no significant reductions in insurance coverage
from the prior year. In addition, no insurance settlement in the last three
years has exceeded insurance coverage. The primary government generally does
not maintain reserves. Losses are covered by appropriations from each fund
responsible for payment in the year in which the payment occurs. All claim
payments are on a "pay as you go" basis, with workers' compensation benefits
for self-insured agencies being initially paid by the State Compensation
Insurance Fund.

The discounted liability for unpaid self-insured workers' compensation
losses is estimated to be $2.6 billion as of June 30, 2009. This estimate is
based on actuarial reviews of the State's employee workers' compensation program
and includes indemnity payments to claimants, as well as all other costs of
providing workers' compensation benefits, such as medical care and
rehabilitation. The estimate also includes the liability for unpaid services
fees, industrial disability leave benefits, and incurred-but-not-reported
amounts. The estimated total liability of approximately $3.6 billion is
discounted to $2.6 billion using a 3.5% interest rate. Of the total, $298
million is a current liability, of which $191 million is included in the General
Fund, $105 million in the special revenue funds, and $2 million in the internal
service funds. The remaining $2.3 billion is reported as other noncurrent
liabilities in the government-wide Statement of Net Assets.

The University of California, a discretely presented component unit, is
self-insured for medical malpractice, workers' compensation, employee health
care, and general liability claims. These risks are subject to various claim
and aggregate limits, with excess liability coverage provided by an independent
insurer. Liabilities are recorded when it is probable that a loss has occurred
and the amount of the loss can be reasonably estimated. These losses include an
estimate for claims that have been incurred but not reported. The estimated
liabilities are based on an independent actuarial determination of the
anticipated future payments, discounted at rates ranging from 4.5% to 5.5% .
The other major discretely presented component units do not have significant
liabilities related to self-insurance.

Ratings. As of December 2010, all outstanding general obligation bonds of
the State of California are rated AA with a stable outlook by Standard & Poor's
Ratings Services and A1 with a stable outlook by Moody's Investors Service,
Inc. Any explanation concerning the significance of such ratings must be
obtained from the rating agencies. There is no assurance that any ratings will
continue for any period of time or that they will not be revised or withdrawn.

Local Issuances. It should be noted that the creditworthiness of
obligations issued by local California issuers may be unrelated to the
creditworthiness of obligations issued by the State of California, and there is
no obligation on the part of the State to make payment on such local
obligations in the event of default.

The foregoing information constitutes only a brief summary of some of the
general factors which may impact certain issuers of bonds contained in the
California Municipal Trust and does not purport to be a complete or exhaustive
description of all adverse conditions to which the issuers of such obligations
are subject. Additionally, many factors including national economic, social and
environmental policies and conditions, which are not within the control of the
issuers of such bonds, could affect or could have an adverse impact on the
financial condition of the State and various agencies and political
subdivisions thereof. The sponsor is unable to predict whether or to what
extent such factors or other factors may affect the issuers of the bonds
contained in the California Municipal Trust, the market value or marketability
of such bonds or the ability of the respective issuers of such bonds acquired
by the California Municipal Trust to pay interest on or principal of such
bonds.

Market Discounts or Premiums. Certain of the securities may have been
deposited at a market discount or premium principally because their dividend
rates are lower or higher than prevailing rates on comparable securities. The
current returns of market discount securities are lower than comparably rated
securities selling at par because discount securities tend to increase in
market value as they approach maturity. The current returns of market premium
securities are higher than comparably rated securities selling at par because
premium securities tend to decrease in market value as they approach maturity.
Because part of the purchase price is returned through current income payments
and not at maturity, an early redemption at par of a premium security will
result in a reduction in yield to the trust. Market premium or discount
attributable to dividend rate changes does not indicate market confidence or
lack of confidence in the issue.

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

Additional Deposits. The trust agreement authorizes the sponsor to
increase the size of a trust and the number of units thereof by the deposit of
additional securities, or cash (including a letter of credit) with instructions
to purchase additional securities, in such trust and the issuance of a
corresponding number of additional units. If the sponsor deposits cash,
existing and new investors may experience a dilution of their investments and a
reduction in their anticipated income because of fluctuations in the prices of
the securities between the time of the cash deposit and the purchase of the
securities and because a trust will pay the associated brokerage fees. To
minimize this effect, the trusts will attempt to purchase the securities as
close to the evaluation time or as close to the evaluation prices as possible.

Some of the securities may have limited trading volume. The trustee, with
directions from the sponsor, will endeavor to purchase securities with
deposited cash as soon as practicable reserving the right to purchase those
securities over the 20 business days following each deposit in an effort to
reduce the effect of these purchases on the market price of those stocks. This
could, however, result in the trusts' failure to participate in any
appreciation of those stocks before the cash is invested. If any cash remains
at the end of this period (and such date is within the 90-day period following
the inception date) and cannot be invested in one or more stocks, at what the
sponsor considers reasonable prices, it intends to use that cash to purchase
each of the other securities in the original proportionate relationship among
those securities. Similarly, at termination of the trust, the sponsor reserves
the right to sell securities over a period of up to nine business days to
lessen the impact of its sales on the market price of the securities. The
proceeds received by unitholders following termination of the trust will
reflect the actual sales proceeds received on the securities, which will likely
differ from the closing sale price on the termination date.

Litigation and Legislation. At any time litigation may be initiated on a
variety of grounds, or legislation may be enacted with respect to the
securities in a trust or the issuers of the securities. There can be no
assurance that future litigation or legislation will not have a material
adverse effect on the trust or will not impair the ability of issuers to
achieve their business goals.

Financial Sector Risks. If set forth in Part A of the prospectus, certain
of the issuers of securities in a trust may be involved in the financial
sector. An investment in units of a trust containing securities of such issuers
should be made with an understanding of the problems and risks inherent in the
financial sector in general.

Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession; volatile interest rates; portfolio
concentrations in geographic markets, in commercial and residential real estate
loans or any particular segment or industry; and competition from new entrants
in their fields of business. Banks and thrifts are highly dependent on net
interest margin. Banks and thrifts traditionally receive a significant portion
of their revenues from consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As home purchasing and refinancing activity has
subsided, this revenue has diminished. Economic conditions in the real estate
markets have deteriorated, leading to asset write-offs and decreased liquidity
in the credit markets, which can have a substantial negative effect upon banks
and thrifts because they generally have a portion of their assets invested in
loans secured by real estate. Difficulties in the mortgage and broader credit
markets have resulted in decreases in the availability of funds. Financial
performance of many banks and thrifts, especially in securities collateralized
by mortgage loans has deteriorated.

In response to recent market and economic conditions, the United States
Government, particularly the U.S. Department of the Treasury ("U.S. Treasury"),
the Federal Reserve Board ("FRB"), and the Federal Deposit Insurance
Corporation ("FDIC") have taken a variety of extraordinary measures including
capital injections, guarantees of bank liabilities and the acquisition of
illiquid assets from banks designed to provide fiscal stimulus, restore
confidence in the financial markets and to strengthen financial institutions.
The Emergency Economic Stabilization Act of 2008 ("EESA") gave the U.S.
Treasury $700 billion to purchase bad mortgage-related securities that caused
much of the difficulties experienced by financial institutions and the credit
markets in general. Additionally, the American Recovery and Reinvestment Act of
2009 ("ARRA") was signed into law in February, 2009. The EESA and ARRA, along
with the U.S. Treasury's Capital Purchase Program (which provides for direct
purchases by the U.S. Treasury of equity from financial institutions), contain
provisions limiting the way banks and their holding companies are able pay
dividends, purchase their own common stock, and compensate officers.
Furthermore, participants have been subject to forward looking stress tests to
determine if they have sufficient capital to withstand certain economic
scenarios, including situations more severe than the current recession. As a
result of these stress tests, some financial institutions were required to
increase their level of capital through a combination of asset sales,
additional equity offerings and the conversion of preferred shares into common
stock. The long-term effects of the EESA, ARRA, and the stress tests are not
yet known and cannot be predicted. This uncertainty may cause increased costs
and risks for the firms associated with the respective programs.

Banks, thrifts and their holding companies are subject to extensive
federal regulation and, when such institutions are state-chartered, to state
regulation as well. Such regulations impose strict capital requirements and
limitations on the nature and extent of business activities that banks and
thrifts may pursue. Furthermore, bank regulators have a wide range of
discretion in connection with their supervisory and enforcement authority and
may substantially restrict the permissible activities of a particular
institution if deemed to pose significant risks to the soundness of such
institution or the safety of the federal deposit insurance fund. Regulatory
actions, such as increases in the minimum capital requirements applicable to
banks and thrifts and increases in deposit insurance premiums required to be
paid by banks and thrifts to the FDIC, can negatively impact earnings and the
ability of a company to pay dividends. Neither federal insurance of deposits
nor governmental regulations, however, insures the solvency or profitability of
banks or their holding companies, or insures against any risk of investment in
the securities issued by such institutions.

In light of the current credit market difficulties, the U.S. Government is
considering changes to the laws and regulatory structure. New legislation and
regulatory changes could cause business disruptions, result in significant loss
of revenue, limit financial firms' ability to pursue business opportunities,
impact the value of business assets and impose additional costs that may
adversely affect business. There can be no assurance as to the actual impact
these laws and their implementing regulations, or any other governmental
program, will have on the financial markets. Currently the FRB, FDIC, Securities
and Exchange Commission, Office of Comptroller of the Currency (a bureau of the
U.S. Treasury which regulates national banks), and the U.S. Commodities Futures
Trading Commission (which oversees commodity futures and option markets) all
play a role in the supervision of the financial markets. Recently passed
legislation calls for swift government intervention which includes the creation
of new federal agencies that will have a direct impact on the financial, banking
and insurance industries. This new legislation includes the creation of a
Financial Oversight Council to advise the FRB on the identification of firms who
failure could pose a threat to financial stability due to their combination of
size, leverage, and interconnectedness. Additionally, these financial firms
would be subject to increased scrutiny concerning their capital, liquidity, and
risk management standards.

The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly and
have undergone substantial change in the recent past. To a great extent, these
changes are embodied in the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, the Federal Deposit Insurance Corporation Improvement
Act of 1991, the Resolution Trust Corporation Refinancing, Restructuring, and
Improvement Act of 1991, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 and the regulations promulgated under these laws. In
1999, the Gramm--Leach--Bliley Act repealed most of the barriers set up by the
1933 Glass--Steagall Act which separated the banking, insurance and securities
industries. Banks and thrifts now face significant competition from other
financial institutions such as mutual funds, credit unions, mortgage banking
companies and insurance companies. Banks, insurance companies and securities
firms can merge to form one-stop financial conglomerates marketing a wide range
of financial service products to investors. This legislation has resulted in
increased merger activity and heightened competition among existing and new
participants in the field. Efforts to expand the ability of federal thrifts to
branch on an interstate basis have been initially successful through
promulgation of regulations and legislation to liberalize interstate banking
has been signed into law. Under the legislation, banks are able to purchase or
establish subsidiary banks in any state. Since mid-1997, banks have been
allowed to turn existing banks into branches, thus leading to continued
consolidation.

The Securities and Exchange Commission and the Financial Accounting
Standards Board ("FASB") require the expanded use of market value accounting by
banks and have imposed rules requiring mark-to-market accounting for investment
securities held in trading accounts or available for sale. Adoption of
additional such rules may result in increased volatility in the reported health
of the industry, and mandated regulatory intervention to correct such problems.
Accounting Standards Codification 820, "Fair Value Measurements and Disclosures"
changed the requirements of mark-to-market accounting and determining fair value
when the volume and level of activity for the asset or liability has
significantly decreased. These changes and other potential changes in financial
accounting rules and valuation techniques may have a significant impact on the
banking and financial services industries in terms of accurately pricing assets
or liabilities. Additional legislative and regulatory changes may be
forthcoming. For example, the bank regulatory authorities have proposed
substantial changes to the Community Reinvestment Act and fair lending laws,
rules and regulations, and there can be no certainty as to the effect, if any,
that such changes would have on the securities in a trust's portfolio. In
addition, from time to time the deposit insurance system is reviewed by Congress
and federal regulators, and proposed reforms of that system could, among other
things, further restrict the ways in which deposited moneys can be used by banks
or change the dollar amount or number of deposits insured for any depositor. On
October 3, 2008, EESA increased the maximum amount of federal deposit insurance
coverage payable as to any certificate of deposit from $100,000 to $250,000 per
depositor. The impact of this reform is unknown and could reduce profitability
as investment opportunities available to bank institutions become more limited
and as consumers look for savings vehicles other than bank deposits. The sponsor
makes no prediction as to what, if any, manner of bank and thrift regulatory
actions might ultimately be adopted or what ultimate effect such actions might
have on a trust's portfolio.

The Federal Bank Holding Company Act of 1956 ("BHC Act") generally
prohibits a bank holding company from (1) acquiring, directly or indirectly,
more than 5% of the outstanding shares of any class of voting securities of a
bank or bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a bank,
or (4) merging or consolidating with another bank holding company, without
first obtaining FRB approval. In considering an application with respect to any
such transaction, the FRB is required to consider a variety of factors,
including the potential anti-competitive effects of the transaction, the
financial condition and future prospects of the combining and resulting
institutions, the managerial resources of the resulting institution, the
convenience and needs of the communities the combined organization would serve,
the record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the prospective
availability to the FRB of information appropriate to determine ongoing
regulatory compliance with applicable banking laws. In addition, the federal
Change In Bank Control Act and various state laws impose limitations on the
ability of one or more individuals or other entities to acquire control of
banks or bank holding companies.

The FRB has issued a policy statement on the payment of cash dividends by
bank holding companies in which the FRB expressed its view that a bank holding
company experiencing earnings weaknesses should not pay cash dividends which
exceed its net income or which could only be funded in ways that would weaken
its financial health, such as by borrowing. The FRB also may impose limitations
on the payment of dividends as a condition to its approval of certain
applications, including applications for approval of mergers and acquisitions.
The sponsor makes no prediction as to the effect, if any, such laws will have
on the securities in a trust or whether such approvals, if necessary, will be
obtained.

Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/ dealers, investment banks, finance
companies and mutual fund companies. Earnings and share prices of companies in
this industry are quite volatile, and often exceed the volatility levels of the
market as a whole. Negative economic events in the credit markets have led some
firms to declare bankruptcy, forced short-notice sales to competing firms, or
required government intervention by the FDIC or through an infusions of
Troubled Asset Relief Program funds. Consolidation in the industry and the
volatility in the stock market have negatively impacted investors.

Additionally, government intervention has required many financial
institutions to become bank holding companies under the BHC Act. Under the
system of functional regulation established under the BHC Act, the FRB
supervises bank holding companies as an umbrella regulator. The BHC Act and
regulations generally restrict bank holding companies from engaging in business
activities other than the business of banking and certain closely related
activities. The FRB and FDIC have also issued substantial risk-based and
leverage capital guidelines applicable to U.S. banking organizations. The
guidelines define a three-tier framework, requiring depository institutions to
maintain certain leverage ratios depending on the type of assets held. If any
depository institution controlled by a financial or bank holding company ceases
to meet capital or management standards, the FRB may impose corrective capital
and/ or managerial requirements on the company and place limitations on its
ability to conduct broader financial activities. Furthermore, proposed
legislation will allow the Treasury and the FDIC to create a resolution regime
to "take over" bank and financial holding companies. The "taking over" would be
based on whether the firm is in default or in danger of defaulting and whether
such a default would have a serious adverse affect on the financial system or
the economy. This mechanism would only be used by the government in exceptional
circumstances to mitigate these effects. This type of intervention has unknown
risks and costs associated with it, which may cause unforeseeable harm in the
industry.

Companies involved in the insurance industry are engaged in underwriting,
reinsuring, selling, distributing or placing of property and casualty, life or
health insurance. Other growth areas within the insurance industry include
brokerage, reciprocals, claims processors and multi-line insurance companies.
Interest rate levels, general economic conditions and price and marketing
competition affect insurance company profits. Property and casualty insurance
profits may also be affected by weather catastrophes and other disasters. Life
and health insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers. Insurance
companies are subject to extensive governmental regulation, including the
imposition of maximum rate levels, which may not be adequate for some lines of
business. Proposed or potential tax law changes may also adversely affect
insurance companies' policy sales, tax obligations, and profitability. In
addition to the foregoing, profit margins of these companies continue to shrink
due to the commoditization of traditional businesses, new competitors, capital
expenditures on new technology and the pressures to compete globally.

In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including those
applicable to regulated insurance companies, such as: (i) the inherent
uncertainty in the process of establishing property-liability loss reserves,
particularly reserves for the cost of environmental, asbestos and mass tort
claims, and the fact that ultimate losses could materially exceed established
loss reserves which could have a material adverse effect on results of
operations and financial condition; (ii) the fact that insurance companies have
experienced, and can be expected in the future to experience, catastrophe losses
which could have a material adverse impact on their financial condition, results
of operations and cash flow; (iii) the inherent uncertainty in the process of
establishing property-liability loss reserves due to changes in loss payment
patterns caused by new claims settlement practices; (iv) the need for insurance
companies and their subsidiaries to maintain appropriate levels of statutory
capital and surplus, particularly in light of continuing scrutiny by rating
organizations and state insurance regulatory authorities, and in order to
maintain acceptable financial strength or claims-paying ability rating; (v) the
extensive regulation and supervision to which insurance companies' subsidiaries
are subject, various regulatory initiatives that may affect insurance companies,
and regulatory and other legal actions; (vi) the adverse impact that increases
in interest rates could have on the value of an insurance company's investment
portfolio and on the attractiveness of certain of its products; (vii) the need
to adjust the effective duration of the assets and liabilities of life insurance
operations in order to meet the anticipated cash flow requirements of its
policyholder obligations; and (viii) the uncertainty involved in estimating the
availability of reinsurance and the collectibility of reinsurance recoverables.
This enhanced oversight into the insurance industry may pose unknown risks to
the sector as a whole.

The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners ("NAIC")
and state insurance regulators are re-examining existing laws and regulations,
specifically focusing on insurance companies, interpretations of existing laws
and the development of new laws. In addition, Congress and certain federal
agencies have investigated the condition of the insurance industry in the
United States to determine whether to promulgate additional federal regulation.
The sponsor is unable to predict whether any state or federal legislation will
be enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the industry.

All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the amount of
investments in certain investment categories. Failure to comply with these laws
and regulations would cause non-conforming investments to be treated as
non-admitted assets for purposes of measuring statutory surplus and, in some
instances, would require divestiture.

Environmental pollution clean-up is the subject of both federal and state
regulation. By some estimates, there are thousands of potential waste sites
subject to clean up. The insurance industry is involved in extensive litigation
regarding coverage issues. The Comprehensive Environmental Response
Compensation and Liability Act of 1980 ("Superfund") and comparable state
statutes ("mini-Superfund") govern the clean-up and restoration by "Potentially
Responsible Parties" ("PRPs"). Superfund and the mini-Superfunds
("Environmental Clean-up Laws" or "ECLs") establish a mechanism to pay for
clean-up of waste sites if PRPs fail to do so, and to assign liability to PRPs.
The extent of liability to be allocated to a PRP is dependent on a variety of
factors. The extent of clean-up necessary and the assignment of liability has
not been fully established. The insurance industry is disputing many such
claims. Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is triggered,
applicability of pollution exclusions, the potential for joint and several
liability and definition of an occurrence. Similar coverage issues exist for
clean up and waste sites not covered under Superfund. To date, courts have been
inconsistent in their rulings on these issues. An insurer's exposure to
liability with regard to its insureds which have been, or may be, named as PRPs
is uncertain. Superfund reform proposals have been introduced in Congress, but
none have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide for a
fair, effective and cost-efficient system for settlement of Superfund related
claims.

While current federal income tax law permits the tax-deferred accumulation
of earnings on the premiums paid by an annuity owner and holders of certain
savings-oriented life insurance products, no assurance can be given that future
tax law will continue to allow such tax deferrals. If such deferrals were not
allowed, consumer demand for the affected products would be substantially
reduced. In addition, proposals to lower the federal income tax rates through a
form of flat tax or otherwise could have, if enacted, a negative impact on the
demand for such products.

Major determinants of future earnings of companies in the financial
services sector are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and short-term
interest rates, and the outlook for emerging markets. Negative trends in any of
these earnings determinants could have a serious adverse effect on the
financial stability, as well as the stock prices, of these companies.
Furthermore, there can be no assurance that the issuers of the securities
included in the trust will be able to respond in a timely manner to compete in
the rapidly developing marketplace. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization of
traditional businesses, new competitors, capital expenditures on new technology
and the pressures to compete globally.

Foreign Securities Risk. If set forth in Part A of the prospectus, a
trust, or issuers of securities held by a trust, may invest in foreign issuers,
and therefore, an investment in such a trust involves some investment risks
that are different in some respects from an investment in a trust that invests
entirely in securities of domestic issuers. Those investment risks include
future political and governmental restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant securities, currency
exchange rate fluctuations, exchange control policies, and the limited
liquidity and small market capitalization of such foreign countries' securities
markets. In addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less publicly
available information than is available from a domestic issuer. Also, foreign
issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic issuers. However, due to the nature of the issuers of
the securities included in the trust, the sponsor believes that adequate
information will be available to allow the sponsor to provide portfolio
surveillance.

Certain of the securities in the trust may be in ADR or GDR form. ADRs,
American Depositary Receipts and GDRs, Global Depositary Receipts, represent
common stock deposited with a custodian in a depositary. American Depositary
Receipts and Global Depositary Receipts (collectively, the "Depositary
Receipts") are issued by a bank or trust company to evidence ownership of
underlying securities issued by a foreign corporation. These instruments may
not necessarily be denominated in the same currency as the securities into
which they may be converted. For purposes of the discussion herein, the terms
ADR and GDR generally include American Depositary Shares and Global Depositary
Shares, respectively.

Depositary Receipts may be sponsored or unsponsored. In an unsponsored
facility, the depositary initiates and arranges the facility at the request of
market makers and acts as agent for the Depositary Receipts holder, while the
company itself is not involved in the transaction. In a sponsored facility, the
issuing company initiates the facility and agrees to pay certain administrative
and shareholder-related expenses. Sponsored facilities use a single depositary
and entail a contractual relationship between the issuer, the shareholder and
the depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. The depositary bank that issues
Depositary Receipts generally charges a fee, based on the price of the
Depositary Receipts, upon issuance and cancellation of the Depositary Receipts.
This fee would be in addition to the brokerage commissions paid upon the
acquisition or surrender of the security. In addition, the depositary bank
incurs expenses in connection with the conversion of dividends or other cash
distributions paid in local currency into U.S. dollars and such expenses are
deducted from the amount of the dividend or distribution paid to holders,
resulting in a lower payout per underlying shares represented by the Depositary
Receipts than would be the case if the underlying share were held directly.
Certain tax considerations, including tax rate differentials and withholding
requirements, arising from the application of the tax laws of one nation to
nationals of another and from certain practices in the Depositary Receipts
market may also exist with respect to certain Depositary Receipts. In varying
degrees, any or all of these factors may affect the value of the Depositary
Receipts compared with the value of the underlying shares in the local market.
In addition, the rights of holders of Depositary Receipts may be different than
those of holders of the underlying shares, and the market for Depositary
Receipts may be less liquid than that for the underlying shares. Depositary
Receipts are registered securities pursuant to the Securities Act of 1933 and
may be subject to the reporting requirements of the Securities Exchange Act of
1934.

For the securities that are Depositary Receipts, currency fluctuations
will affect the United States dollar equivalent of the local currency price of
the underlying domestic share and, as a result, are likely to affect the value
of the Depositary Receipts and consequently the value of the securities. The
foreign issuers of securities that are Depositary Receipts may pay dividends in
foreign currencies which must be converted into dollars. Most foreign
currencies have fluctuated widely in value against the United States dollar for
many reasons, including supply and demand of the respective currency, the
soundness of the world economy and the strength of the respective economy as
compared to the economies of the United States and other countries. Therefore,
for any securities of issuers (whether or not they are in Depositary Receipt
form) whose earnings are stated in foreign currencies, or which pay dividends
in foreign currencies or which are traded in foreign currencies, there is a
risk that their United States dollar value will vary with fluctuations in the
United States dollar foreign exchange rates for the relevant currencies.

On January 1, 1999, Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal and Spain (eleven of the fifteen
member states of the European Union ("EU"), as of such date) established fixed
conversion rates between their existing sovereign currencies and the Euro. On
such date the Euro became the official currency of these eleven countries. The
participating countries do not control their own monetary policies by directing
independent interest rates for their currencies. Greece, Slovenia, Cyprus and
Malta have also adopted the Euro as their official currency. In these member
states, the authority to direct monetary policy, including money supply and
official interest rates for the Euro, is exercised by the European Central
Bank. The conversion of the national currencies of the participating countries
to the Euro could negatively impact the market rate of the exchange between
such currencies (or the Euro) and the U.S. dollar. As of January 1, 2010, there
were 27 member states in the EU.

In addition, European corporations, and other entities with significant
markets or operations in Europe (whether or not in the participating countries),
face strategic challenges as these entities adapt to a single transnational
currency. The Euro conversion may have a material impact on revenues, expenses
or income from operations; increase competition due to the increased price
transparency of EU markets; effect issuers' currency exchange rate risk and
derivatives exposure; disrupt current contracts; cause issuers to increase
spending on information technology updates required for the conversion; and
result in potential adverse tax consequences. The sponsor is unable to predict
what impact, if any, the Euro conversion will have on any of the issuers of
securities contained in a trust.

Preferred Stock Risks. If set forth in Part A of the prospectus, a trust,
or issuers of securities held by a trust, may invest in preferred stock. If
this is the case, an investment in units should be made with an understanding
of the risks which an investment in preferred stocks entails, including the
risk that the financial condition of the issuers of the securities or the
general condition of the preferred stock market may worsen, and the value of
the preferred stocks and therefore the value of the units may decline.
Preferred stocks may be susceptible to general stock market movements and to
volatile increases and decreases of value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors, including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, market liquidity, and global or regional political, economic or
banking crises. Preferred stocks are also vulnerable to congressional
reductions in the dividends-received deduction which would adversely affect the
after-tax return to the investors who can take advantage of the deduction. Such
a reduction might adversely affect the value of preferred stocks in general.
Holders of preferred stocks, as owners of the entity, have rights to receive
payments from the issuers of those preferred stocks that are generally
subordinate to those of creditors of, or holders of debt obligations or, in
some cases, other senior preferred stocks of, such issuers. Preferred stocks do
not represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or senior preferred
stocks will create prior claims for payment of principal and interest and
senior dividends which could adversely affect the ability and inclination of
the issuer to declare or pay dividends on its preferred stock or the rights of
holders of preferred stock with respect to assets of the issuer upon
liquidation or bankruptcy. The value of preferred stocks is subject to market
fluctuations for as long as the preferred stocks remain outstanding, and thus
the value of the securities may be expected to fluctuate over the life of the
trust to values higher or lower than those prevailing on the initial date of
deposit.

Trust Preferred Securities Risks. If set forth in Part A of the prospectus,
a trust, or issuers of securities held by a trust, may invest in trust preferred
securities. Holders of trust preferred securities incur risks in addition to or
slightly different than the typical risks of holding preferred stocks. Trust
preferred securities are limited-life preferred securities that are typically
issued by corporations, generally in the form of interest-bearing notes or
preferred securities issued by corporations, or by an affiliated business trust
of a corporation, generally in the form of beneficial interests in subordinated
debentures issued by the corporation, or similarly structured securities. The
maturity and dividend rate of the trust preferred securities are structured to
match the maturity and coupon interest rate of the interest-bearing notes,
preferred securities or subordinated debentures. Trust preferred securities
usually mature on the stated maturity date of the interest-bearing notes,
preferred securities or subordinated debentures and may be redeemed or
liquidated prior to the stated maturity date of such instruments for any reason
on or after their stated call date or upon the occurrence of certain
circumstances at any time. Trust preferred securities generally have a yield
advantage over traditional preferred stocks, but unlike preferred stocks,
distributions on the trust preferred securities are generally treated as
interest rather than dividends for federal income tax purposes. Unlike most
preferred stocks, distributions received from trust preferred securities are
generally not eligible for the dividends-received deduction. Certain of the
risks unique to trust preferred securities include: (i) distributions on trust
preferred securities will be made only if interest payments on the
interest-bearing notes, preferred securities or subordinated debentures are
made; (ii) a corporation issuing the interest-bearing notes, preferred
securities or subordinated debentures may defer interest payments on these
instruments for up to 20 consecutive quarters and if such election is made,
distributions will not be made on the trust preferred securities during the
deferral period; (iii) certain tax or regulatory events may trigger the
redemption of the interest-bearing notes, preferred securities or subordinated
debentures by the issuing corporation and result in prepayment of the trust
preferred securities prior to their stated maturity date; (iv) future
legislation may be proposed or enacted that may prohibit the corporation from
deducting its interest payments on the interest-bearing notes, preferred
securities or subordinated debentures for tax purposes, making redemption of
these instruments likely; (v) a corporation may redeem the interest-bearing
notes, preferred securities or subordinated debentures in whole at any time or
in part from time to time on or after a stated call date; (vi) trust preferred
securities holders have very limited voting rights; and (vii) payment of
interest on the interest-bearing notes, preferred securities or subordinated
debentures, and therefore distributions on the trust preferred securities, is
dependent on the financial condition of the issuing corporation.

Convertible Securities Risks. If set forth in Part A of the prospectus, a
trust, or issuers of securities held by a trust, may invest in convertible
securities.

Convertible securities generally offer lower interest or dividend yields
than non-convertible fixed-income securities of similar credit quality because
of the potential for capital appreciation. The market values of convertible
securities tend to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, a convertible security's market
value also tends to reflect the market price of the common stock of the issuing
company, particularly when the stock price is greater than the convertible
security's conversion price. The conversion price is defined as the
predetermined price or exchange ratio at which the convertible security can be
converted or exchanged for the underlying common stock. As the market price of
the underlying common stock declines below the conversion price, the price of
the convertible security tends to be increasingly influenced more by the yield
of the convertible security than by the market price of the underlying common
stock. Thus, it may not decline in price to the same extent as the underlying
common stock, and convertible securities generally have less potential for gain
or loss than common stocks. However, mandatory convertible securities (as
discussed below) generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. In the event of a
liquidation of the issuing company, holders of convertible securities would be
paid before that company's common stockholders. Consequently, an issuer's
convertible securities generally entail less risk than its common stock.
However, convertible securities fall below debt obligations of the same issuer
in order of preference or priority in the event of a liquidation and are
typically unrated or rated lower than such debt obligations. In addition,
contingent payment, convertible securities allow the issuer to claim deductions
based on its nonconvertible cost of debt, which generally will result in
deduction in excess of the actual cash payments made on the securities (and
accordingly, holders will recognize income in amounts in excess of the cash
payments received).

Mandatory convertible securities are distinguished as a subset of
convertible securities because the conversion is not optional and the conversion
price at maturity is based solely upon the market price of the underlying common
stock, which may be significantly less than par or the price (above or below
par) paid. For these reasons, the risks associated with investing in mandatory
convertible securities most closely resemble the risks inherent in common
stocks. Mandatory convertible securities customarily pay a higher coupon yield
to compensate for the potential risk of additional price volatility and loss
upon conversion. Because the market price of a mandatory convertible security
increasingly corresponds to the market price of its underlying common stock as
the convertible security approaches its conversion date, there can be no
assurance that the higher coupon will compensate for the potential loss.

Senior Loan Risks. If set forth in Part A of the prospectus, a trust, or
issuers of securities held by a trust, may invest in senior loans.

Senior loans in which a Closed-End Fund may invest:

o generally are of below investment-grade credit quality;

o may be unrated at the time of investment;

o generally are not registered with the SEC or any state securities
commission; and

o generally are not listed on any securities exchange.

The amount of public information available on senior loans generally will
be less extensive than that available for other types of assets.

No reliable, active trading market currently exists for many senior loans,
although a secondary market for certain senior loans has developed over the
past several years. Senior loans are thus relatively illiquid. Liquidity
relates to the ability of a Closed-End Fund to sell an investment in a timely
manner at a price approximately equal to its value on the Closed-End Fund's
books. The illiquidity of senior loans may impair a Closed-End Fund's ability
to realized the full value of its assets in the event of a voluntary or
involuntary liquidation of such assets. Because of the lack of an active
trading market, illiquid securities are also difficult to value and prices
provided by external pricing services may not reflect the true value of the
securities. However, many senior loans are of a large principal amount and are
held by a large number of financial institutions. To the extent that a
secondary market does exist for certain senior loans, the market may be subject
to irregular trading activity, wide bid/ask spreads and extended trade
settlement periods. The market for senior loans could be disrupted in the event
of an economic downturn or a substantial increase or decrease in interest
rates. This could result in increased volatility in the market and in the
trusts' net asset value.

If legislation or state or federal regulators impose additional
requirements or restrictions on the ability of financial institutions to make
loans that are considered highly leveraged transactions, the availability of
senior loans for investment by the Closed-End Funds may be adversely affected.
In addition, such requirements or restrictions could reduce or eliminate
sources of financing for certain borrowers. This would increase the risk of
default. If legislation or federal or state regulators require financial
institutions to dispose of senior loans that are considered highly leveraged
transactions or subject such senior loans to increased regulatory scrutiny,
financial institutions may determine to sell such senior loans. Such sales
could result in depressed prices. If a Closed-End Fund attempts to sell a
senior loan at a time when a financial institution is engaging in such a sale,
the price a Closed-End Fund could get for the senior loan may be adversely
affected.

Some senior loans are subject to the risk that a court, pursuant to
fraudulent conveyance or other similar laws, could subordinate the senior loans
to presently existing or future indebtedness of the borrower or take other
action detrimental to lenders. Such court action could under certain
circumstances include invalidation of senior loans. Any lender, which could
include a Closed-End Fund, is subject to the risk that a court could find the
lender liable for damages in a claim by a borrower arising under the common
laws of tort or contracts or anti-fraud provisions of certain securities laws
for actions taken or omitted to be taken by the lenders under the relevant
terms of a loan agreement or in connection with actions with respect to the
collateral underlying the senior loan.

Small-Capitalization and Mid-Capitalization Stocks Risk. If set forth in
Part A of the prospectus, a trust may invest in small-capitalization or
mid-capitalization stocks. Investing in small-capitalization stocks or
mid-capitalization stocks may involve greater risk than investing in
large-capitalization stocks, since they can be subject to more abrupt or
erratic price movements. Many small market capitalization companies ("Small-Cap
Companies") or middle market capitalization companies ("Mid-Cap Companies")
will have had their securities publicly traded, if at all, for only a short
period of time and will not have had the opportunity to establish a reliable
trading pattern through economic cycles. The price volatility of Small-Cap
Companies and Mid-Cap Companies is relatively higher than larger, older and
more mature companies. The greater price volatility of Small-Cap Companies and
Mid-Cap Companies may result from the fact that there may be less market
liquidity, less information publicly available or fewer investors who monitor
the activities of these companies. In addition, the market prices of these
securities may exhibit more sensitivity to changes in industry or general
economic conditions. Some Small-Cap Companies or Mid-Cap Companies will not
have been in existence long enough to experience economic cycles or to
demonstrate whether they are sufficiently well managed to survive downturns or
inflationary periods. Further, a variety of factors may affect the success of a
company's business beyond the ability of its management to prepare or
compensate for them, including domestic and international political
developments, government trade and fiscal policies, patterns of trade and war
or other military conflict which may affect industries or markets or the
economy generally.

Administration of the Trust

Distributions to Unitholders. Income received by a trust is credited by the
trustee to the Income Account of the trust. Other receipts are credited to the
Capital Account of a trust. Income received by a trust will be distributed on or
shortly after the distribution dates each year shown in the prospectus on a pro
rata basis to unitholders of record as of the preceding record date shown in the
prospectus. However, if set forth in Part A of the prospectus that the trust
will prorate distributions on an annual basis ("Income Averaging"), then income
received by the trust will be distributed on a prorated basis of one-twelfth of
the estimated annual income to the trust for the ensuing 12 months. All
distributions will be net of applicable expenses. There is no assurance that any
actual distributions will be made since all dividends received may be used to
pay expenses. In addition, excess amounts from the Capital Account of a trust,
if any, will be distributed at least annually to the unitholders then of record.
Proceeds received from the disposition of any of the securities after a record
date and prior to the following distribution date will be held in the Capital
Account and not distributed until the next distribution date applicable to the
Capital Account. The trustee shall be required to make a distribution from the
Capital Account if the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least $1.00 per 100 units. The
trustee is not required to pay interest on funds held in the Capital or Income
Accounts (but may itself earn interest thereon and therefore benefits from the
use of such funds). The trustee is authorized to reinvest any funds held in the
Capital or Income Accounts, pending distribution, in U.S. Treasury obligations
which mature on or before the next applicable distribution date. Any obligations
so acquired must be held until they mature and proceeds therefrom may not be
reinvested.

The distribution to the unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the unitholders' pro rata share
of the dividend distributions then held in the Income Account after deducting
estimated expenses. Because dividends are not received by a trust at a constant
rate throughout the year, such distributions to unitholders are expected to
fluctuate. However, if the trust uses Income Averaging, the trust prorates the
income distribution on an annual basis and annual income distributions are
expected to vary from year to year. If the amount on deposit in the Income
Account is insufficient for payment of the amount of income to be distributed
on a monthly basis, the trustee shall advance out of its own funds and cause to
be deposited in and credited to such Income Account such amount as may be
required to permit payment of the monthly income distribution. The trustee
shall be entitled to be reimbursed by the trust, without interest, out of
income received by the trust subsequent to the date of such advance and subject
to the condition that any such reimbursement shall be made only if it will not
reduce the funds in or available for the Income Account to an amount less than
required for the next ensuing distribution. Persons who purchase units will
commence receiving distributions only after such person becomes a record owner.
A person will become the owner of units, and thereby a unitholder of record, on
the date of settlement provided payment has been received. Notification to the
trustee of the transfer of units is the responsibility of the purchaser, but in
the normal course of business such notice is provided by the selling
broker-dealer.

The trustee will periodically deduct from the Income Account of a trust
and, to the extent funds are not sufficient therein, from the Capital Account
of a trust amounts necessary to pay the expenses of a trust. The trustee also
may withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges payable out of a trust.
Amounts so withdrawn shall not be considered a part of a trust's assets until
such time as the trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the trustee may withdraw from the Income and
Capital Accounts of a trust such amounts as may be necessary to cover
redemptions of units.

Distribution Reinvestment. Unitholders may elect to have distributions of
capital (including capital gains) or dividends, if any, or both automatically
invested into additional units of their trust without a sales fee.

Your trust will pay any deferred sales fee per unit regardless of any
sales fee discounts. However, if you elect to have distributions on your units
reinvested into additional units of your trust, you will be credited the amount
of any remaining deferred sales charge on such additional units at the time of
reinvestment.

Unitholders who are receiving distributions in cash may elect to
participate in distribution reinvestment by filing with the Program Agent an
election to have such distributions reinvested without charge. Such election
must be received by the Program Agent at least ten days prior to the record
date applicable to any distribution in order to be in effect for such record
date. Any such election shall remain in effect until a subsequent notice is
received by the Program Agent.

The Program Agent is The Bank of New York Mellon. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of
New York Mellon at its Unit Investment Trust Division office.

Statements to Unitholders. With each distribution, the trustee will
furnish to each registered holder a statement of the amount of income and the
amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per unit.

The accounts of a trust will not be audited annually unless the sponsor
determines that such an audit would be in the best interest of the unitholders
of the trust. If an audit is conducted, it will be done at the related trust's
expense, by independent public accountants designated by the sponsor. The
accountants' report will be furnished by the trustee to any unitholder upon
written request. Within a reasonable period of time after the end of each
calendar year, the trustee shall furnish to each person who at any time during
the calendar year was a unitholder of a trust a statement, covering the
calendar year, generally setting forth for the trust:

(A) As to the Income Account:

(1) Income received;

(2) Deductions for applicable taxes and for fees and expenses of the
trust and for redemptions of units, if any; and

(3) The balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each unit
outstanding on the last business day of such calendar year; and

(B) As to the Capital Account:

(1) The dates of disposition of any securities and the net proceeds
received therefrom;

(2) Deductions for payment of applicable taxes and fees and expenses
of the trust; and

(3) The balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each unit outstanding on the
last business day of such calendar year; and

(1) A list of the securities as of the last business day of such
calendar year;

(2) The number of units outstanding on the last business day of such
calendar year;

(3) The redemption price based on the last evaluation made during
such calendar year; and

(4) The amount actually distributed during such calendar year from
the Income and Capital Accounts separately stated, expressed both
as total dollar amounts and as dollar amounts per unit
outstanding on the record dates for each such distribution.

Rights of Unitholders. A unitholder may at any time tender units to the
trustee for redemption. The death or incapacity of any unitholder will not
operate to terminate a trust nor entitle legal representatives or heirs to
claim an accounting or to bring any action or proceeding in any court for
partition or winding up of a trust. No unitholder shall have the right to
control the operation and management of a trust in any manner, except to vote
with respect to the amendment of the trust agreement or termination of a
trust.

Amendment and Termination. The trust agreement may be amended by the
trustee and the sponsor without the consent of any of the unitholders: (1) to
cure any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (2) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor
governmental agency; (3) to make such provisions as shall not materially
adversely affect the interests of the unitholders; or (4) to make such other
amendments as may be necessary for a trust to qualify as a regulated investment
company, in the case of a trust which has elected to qualify as such. The trust
agreement with respect to any trust may also be amended in any respect by the
sponsor and the trustee, or any of the provisions thereof may be waived, with
the consent of the holders of units representing 66 2/3% of the units then
outstanding of the trust, provided that no such amendment or waiver will reduce
the interest of any unitholder thereof without the consent of such unitholder
or reduce the percentage of units required to consent to any such amendment or
waiver without the consent of all unitholders of the trust. In no event shall
the trust agreement be amended to increase the number of units of a trust
issuable thereunder, to permit the acquisition of any securities in addition to
or in substitution for those initially deposited in the trust or to adversely
affect the characterization of a trust as a regulated investment company for
federal income tax purposes, except in accordance with the provisions of the
trust agreement. The trustee shall promptly notify unitholders of the substance
of any such amendment.

The trust agreement provides that a trust shall terminate upon the
liquidation, redemption or other disposition of the last of the securities held
in the trust but in no event is it to continue beyond the mandatory termination
date set forth in Part A of the prospectus. If the value of a trust shall be
less than the applicable minimum value stated in the prospectus, the trustee
may, in its discretion, and shall, when so directed by the sponsor, terminate
the trust. A trust may be terminated at any time by the holders of units
representing 66 2/3% of the units thereof then outstanding. In addition, the
sponsor may terminate a trust if it is based on a security index and the index
is no longer maintained.

Beginning nine business days prior to, but no later than, the mandatory
termination date described in the prospectus, the trustee may begin to sell all
of the remaining underlying securities on behalf of unitholders in connection
with the termination of the trust. The sponsor may assist the trustee in these
sales and receive compensation to the extent permitted by applicable law. The
sale proceeds will be net of any incidental expenses involved in the sales.

The trustee will attempt to sell the securities as quickly as it can
during the termination proceedings without, in its judgment, materially
adversely affecting the market price of the securities, but it is expected that
all of the securities will in any event be disposed of within a reasonable time
after a trust's termination. The sponsor does not anticipate that the period
will be longer than one month, and it could be as short as one day, depending
on the liquidity of the securities being sold. The liquidity of any security
depends on the daily trading volume of the security and the amount that the
sponsor has available for sale on any particular day. Of course, no assurances
can be given that the market value of the securities will not be adversely
affected during the termination proceedings.

Within a reasonable period after termination, the trustee will sell any
securities remaining in a trust and, after paying all expenses and charges
incurred by the trust, will distribute to unitholders thereof their pro rata
share of the balances remaining in the Income and Capital Accounts of the
trust.

The sponsor currently intends, but is not obligated, to offer for sale
units of a subsequent series of certain trusts at approximately one year after
the inception date of such trusts. If the sponsor does offer such units for
sale, unitholders may be given the opportunity to purchase such units at a
public offering price which includes a reduced sales fee. There is, however, no
assurance that units of any new series of a trust will be offered for sale at
that time, or if offered, that there will be sufficient units available for
sale to meet the requests of any or all unitholders.

The Trustee. The trustee is The Bank of New York Mellon, a trust company
organized under the laws of New York. The Bank of New York Mellon has its Unit
Investment Trust Division offices at 2 Hanson Place, 12th Fl., Brooklyn, New
York 11217, telephone 1-800-701-8178. The Bank of New York Mellon is subject to
supervision and examination by the Superintendent of Banks of the State of New
York and the Board of Governors of the Federal Reserve System, and its deposits
are insured by the Federal Deposit Insurance Corporation to the extent
permitted by law.

The trustee, whose duties are ministerial in nature, has not participated
in selecting the portfolio of any trust. In accordance with the trust
agreement, the trustee shall keep records of all transactions at its office.
Such records shall include the name and address of, and the number of units
held by, every unitholder of a trust. Such books and records shall be open to
inspection by any unitholder at all reasonable times during usual business
hours. The trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation. The trustee shall keep a certified copy or duplicate original of
the trust agreement on file in its office available for inspection at all
reasonable times during usual business hours by any unitholder, together with a
current list of the securities held in each trust. Pursuant to the trust
agreement, the trustee may employ one or more agents for the purpose of custody
and safeguarding of securities comprising a trust.

Under the trust agreement, the trustee or any successor trustee may resign
and be discharged of a trust created by the trust agreement by executing an
instrument in writing and filing the same with the sponsor. The trustee or
successor trustee must mail a copy of the notice of resignation to all
unitholders then of record, not less than sixty days before the date specified
in such notice when such resignation is to take effect. The sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within thirty days after notification, the retiring
trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The sponsor may at any time remove the trustee, with or without
cause, and appoint a successor trustee as provided in the trust agreement.
Notice of such removal and appointment shall be mailed to each unitholder by the
sponsor. Upon execution of a written acceptance of such appointment by such
successor trustee, all the rights, powers, duties and obligations of the
original trustee shall vest in the successor. The trustee must be a corporation
organized under the laws of the United States, or any state thereof, be
authorized under such laws to exercise trust powers and have at all times an
aggregate capital, surplus and undivided profits of not less than $5,000,000.

The Sponsor. Guggenheim Funds Distributors, Inc. specializes in the
creation, development and distribution of investment solutions for advisors and
their valued clients. Guggenheim Funds Distributors, Inc. was created as Ranson
& Associates, Inc., in 1995 and is the successor sponsor to unit investment
trusts formerly sponsored by EVEREN Unit Investment Trusts, a service of EVEREN
Securities, Inc. Guggenheim Funds Distributors, Inc. is also the sponsor and
successor sponsor of Series of Ranson Unit Investment Trusts and The Kansas
Tax-Exempt Trust and Multi-State Series of The Ranson Municipal Trust. On
October 29, 2001, Ranson & Associates, Inc. was acquired by Claymore Group LLC.
The sale to Claymore Group LLC was financed by a loan from The Bank of New York
Mellon, the trustee. In November 2001, the sponsor changed its name from Ranson
& Associates, Inc. to Claymore Securities, Inc. On October 14, 2009, Guggenheim
Partners, LLC acquired Claymore Securities, Inc. Since the finalization of the
acquisition, Claymore Securities, Inc. has been operating as a wholly-owned
subsidiary of Guggenheim Partners, LLC. On September 27, 2010, Claymore
Securities, Inc. officially changed its name to Guggenheim Funds Distributors,
Inc.

Guggenheim Funds Distributors, Inc. has been active in public and
corporate finance, has underwritten closed-end funds and has sold bonds, mutual
funds, closed-end funds, exchange-traded funds, structured products and unit
investment trusts and maintained secondary market activities relating thereto.
At present, Guggenheim Funds Distributors, Inc. which is a member of the
Financial Industry Regulatory Authority (FINRA), is the sponsor to each of the
above-named unit investment trusts. The sponsor's offices are located at 2455
Corporate West Drive, Lisle, Illinois 60532.

If at any time the sponsor shall fail to perform any of its duties under
the trust agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the trust agreement and liquidate any trust as
provided therein, or (c) continue to act as trustee without terminating the
trust agreement.

The Supervisor and the Evaluator. Guggenheim Funds Distributors, Inc., the
sponsor, also serves as evaluator and supervisor. The evaluator and supervisor
may resign or be removed by the trustee in which event the trustee is to use its
best efforts to appoint a satisfactory successor. Such resignation or removal
shall become effective upon acceptance of appointment by the successor
evaluator. If upon resignation of the evaluator no successor has accepted
appointment within thirty days after notice of resignation, the evaluator may
apply to a court of competent jurisdiction for the appointment of a successor.
Notice of such registration or removal and appointment shall be mailed by the
trustee to each unitholder. As evaluator, Guggenheim Funds Distributors, Inc.
utilizes the trustee to perform certain evaluation services.

Limitations on Liability. The sponsor is liable for the performance of its
obligations arising from its responsibilities under the trust agreement, but
will be under no liability to the unitholders for taking any action or
refraining from any action in good faith pursuant to the trust agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct or its reckless disregard for its duties thereunder. The
sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any securities.

The trust agreement provides that the trustee shall be under no liability
for any action taken in good faith in reliance upon prima facie properly
executed documents or for the disposition of moneys, securities or certificates
except by reason of its own gross negligence, bad faith or willful misconduct,
or its reckless disregard for its duties under the trust agreement, nor shall
the trustee be liable or responsible in any way for depreciation or loss
incurred by reason of the sale by the trustee of any securities. In the event
that the sponsor shall fail to act, the trustee may act and shall not be liable
for any such action taken by it in good faith. The trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or
in respect of the securities or upon the interest thereof. In addition, the
trust agreement contains other customary provisions limiting the liability of
the trustee.

The unitholders may rely on any evaluation furnished by the evaluator and
shall have no responsibility for the accuracy thereof. The trust agreement
provides that the determinations made by the evaluator shall be made in good
faith upon the basis of the best information available to it, provided,
however, that the evaluator shall be under no liability to the trustee or
unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the trust agreement.

Expenses of the Trust

The sponsor does not charge a trust an annual advisory fee. The sponsor
will receive a portion of the sale commissions paid in connection with the
purchase of units and will share in profits, if any, related to the deposit of
securities in the trust. The sponsor and/or its affiliates do, also, receive an
annual fee as set forth in Part A of the prospectus for maintaining surveillance
over the portfolio and for performing certain administrative services for the
trust (the "Sponsor's Supervisory Fee"). In providing such supervisory services,
the sponsor may purchase research from a variety of sources, which may include
dealers of the trusts. If so provided in Part A of the prospectus, the sponsor
may also receive an annual fee for providing bookkeeping and administrative
services for a trust (the "Bookkeeping and Administrative Fee"). Such services
may include, but are not limited to, the preparation of various materials for
unitholders and providing account information to the unitholders. If so provided
in Part A of the prospectus, the evaluator may also receive an annual fee for
performing evaluation services for the trusts (the "Evaluator's Fee"). In
addition, if so provided in Part A of the prospectus, a trust may be charged an
annual licensing fee to cover licenses for the use of service marks, trademarks,
trade names and intellectual property rights and/or for the use of databases and
research. The trust will bear all operating expenses. Estimated annual trust
operating expenses are as set forth in Part A of the prospectus; if actual
expenses are higher than the estimate, the excess will be borne by the trust.
The estimated expenses include listing fees but do not include the brokerage
commissions and other transactional fees payable by the trust in purchasing and
selling securities.

The trustee receives for its services that fee set forth in Part A of the
prospectus. The trustee's fee, which is paid monthly, is based on the largest
number of units of a trust outstanding at any time during the primary offering
period. After the primary offering period, the fee shall accrue daily and be
based on the number of units outstanding on the first business day of each
calendar year in which the fee is calculated or the number of units outstanding
at the end of the primary offering period, as appropriate. The Sponsor's
Supervisory Fee, the Bookkeeping and Administrative Fee and the Evaluator's Fee
are paid monthly and are based on the largest number of units of a trust
outstanding at any time during the primary offering period. After the primary
offering period, these fees shall accrue daily and be based on the number of
units outstanding on the first business day of each calendar year in which a
fee is calculated or the number of units outstanding at the end of the primary
offering period, as appropriate. The trustee benefits to the extent there are
funds for future distributions, payment of expenses and redemptions in the
Capital and Income Accounts since these Accounts are non-interest bearing and
the amounts earned by the trustee are retained by the trustee. Part of the
trustee's compensation for its services to a trust is expected to result from
the use of these funds. In addition, the Sponsor's Supervisory Fee, Bookkeeping
and Administrative Fee, Evaluator's Fee and the Trustee's Fee may be adjusted
in accordance with the cumulative percentage increase of the United States
Department of Labor's Consumer Price Index entitled "All Services Less Rent"
since the establishment of the trust. In addition, with respect to any fees
payable to the sponsor or an affiliate of the sponsor for providing bookkeeping
and other administrative services, supervisory services and evaluation
services, such individual fees may exceed the actual costs of providing such
services for a trust, but at no time will the total amount received for such
services, in the aggregate, rendered to all unit investment trusts of which
Guggenheim Funds Distributors, Inc. is the sponsor in any calendar year exceed
the actual cost to the sponsor or its affiliates of supplying such services, in
the aggregate, in such year. In addition, the trustee may reimburse the sponsor
out of its own assets for services performed by employees of the sponsor in
connection with the operation of your trust.

The trust will also pay a fee to the sponsor for creating and developing
the trust, including determining the trust objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and development fee" as a fixed dollar amount at the close of the
initial offering period. The sponsor does not use the fee to pay distribution
expenses or as compensation for sales efforts.

The following additional charges are or may be incurred by the trust: (a)
fees for the trustee's extraordinary services; (b) expenses of the trustee
(including legal and auditing expenses, but not including any fees and expenses
charged by an agent for custody and safeguarding of securities) and of counsel,
if any; (c) various governmental charges; (d) expenses and costs of any action
taken by the trustee to protect the trust or the rights and interests of the
unitholders; (e) indemnification of the trustee for any loss, liability or
expense incurred by it in the administration of the trust not resulting from
gross negligence, bad faith or willful misconduct on its part; (f)
indemnification of the sponsor for any loss, liability or expense incurred in
acting in that capacity without gross negligence, bad faith or willful
malfeasance or its reckless disregard for its obligations under the trust
agreement; (g) any offering costs incurred after the end of the initial offering
period; and (h) expenditures incurred in contacting unitholders upon termination
of the trust. The fees and expenses set forth herein are payable out of a trust
and, when owing to the trustee, are secured by a lien on the trust. Since the
securities are all stocks, and the income stream produced by dividend payments,
if any, is unpredictable, the sponsor cannot provide any assurance that
dividends will be sufficient to meet any or all expenses of a trust. If the
balances in the Income and Capital Accounts are insufficient to provide for
amounts payable by the trust, the trustee has the power to sell securities to
pay such amounts. These sales may result in capital gains or losses to
unitholders. It is expected that the income stream produced by dividend payments
may be insufficient to meet the expenses of a trust and, accordingly, it is
expected that securities will be sold to pay all of the fees and expenses of the
trust.

The trust shall also bear the expenses associated with updating the
trust's registration statement and maintaining registration or qualification of
the units and/or a trust under federal or state securities laws subsequent to
initial registration. Such expenses shall include legal fees, accounting fees,
typesetting fees, electronic filing expenses and regulatory filing fees. The
expenses associated with updating registration statements have been
historically paid by a unit investment trust's sponsor.

Portfolio Transactions and Brokerage Allocation

When a trust sells securities, the composition and diversity of the
securities in the trust may be altered. In order to obtain the best price for a
trust, it may be necessary for the supervisor to specify minimum amounts (such
as 100 shares) in which blocks of securities are to be sold. In effecting
purchases and sales of a trust's portfolio securities, the sponsor may direct
that orders be placed with and brokerage commissions be paid to brokers,
including brokers which may be affiliated with the trust, the sponsor or
dealers participating in the offering of units.

Purchase, Redemption and Pricing of Units

Public Offering Price. Units of a trust are offered at the public offering
price (which is based on the aggregate underlying value of the securities in the
trust and includes the initial sales fee plus a pro rata share of any
accumulated amounts in the accounts of the trust). The initial sales fee is
equal to the difference between the maximum sales fee and the sum of the
remaining deferred sales fee and the creation and development fee ("C&D Fee").
The maximum sales fee is set forth in Part A of the prospectus. The deferred
sales fee and the C&D Fee will be collected as described in this prospectus.
Units purchased subsequent to the initial deferred sales fee payment will be
subject to the initial sales fee, the remaining deferred sales fee payments and
the C&D Fee. Units sold or redeemed prior to such time as the entire applicable
deferred sales fee has been collected will be assessed the remaining deferred
sales fee at the time of such sale or redemption. During the initial offering
period, a portion of the public offering price includes an amount of securities
to pay for all or a portion of the costs incurred in establishing a trust
("organization costs"). These organization costs include the cost of preparing
the registration statement, the trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the trust portfolio, legal fees, fees paid to a portfolio
consultant for assisting the sponsor in selecting the trust's portfolio, and the
initial fees and expenses of the trustee. These costs will be deducted from a
trust as of the end of the initial offering period or after six months, at the
discretion of the sponsor. As indicated above, the initial public offering price
of the units was established by dividing the aggregate underlying value of the
securities by the number of units outstanding. Such price determination as of
the opening of business on the date a trust was created was made on the basis of
an evaluation of the securities in the trust prepared by the evaluator. After
the opening of business on this date, the evaluator will appraise or cause to be
appraised daily the value of the underlying securities as of the close of the
New York Stock Exchange on days the New York Stock Exchange is open and will
adjust the public offering price of the units commensurate with such valuation.
Such public offering price will be effective for all orders properly received at
or prior to the close of trading on the New York Stock Exchange on each such
day. Orders received by the trustee, sponsor or any dealer for purchases, sales
or redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price.

The value of the securities is determined on each business day by the
evaluator based on the closing sale prices on a national securities exchange or
the Nasdaq National Market System or by taking into account the same factors
referred to under "Computation of Redemption Price."

Public Distribution of Units. During the initial offering period, units of
a trust will be distributed to the public at the public offering price thereof.
Upon the completion of the initial offering, units which remain unsold or which
may be acquired in the secondary market may be offered at the public offering
price determined in the manner provided above.

The sponsor intends to qualify units of a trust for sale in a number of
states. Units will be sold through dealers who are members of the FINRA and
through others. Broker-dealers and others will be allowed a concession or
agency commission in connection with the distribution of units during the
initial offering period as set forth in the prospectus.

Certain commercial banks may be making units of a trust available to their
customers on an agency basis. Furthermore, as a result of certain legislative
changes effective November 1999, banks are no longer prohibited from certain
affiliations with securities firms. This new legislation grants banks new
authority to conduct certain authorized activity, such as sales of units,
through financial subsidiaries. A portion of the sales charge discussed above is
retained by or remitted to the banks or their financial subsidiaries for these
agency and brokerage transactions. The sponsor reserves the right to change the
concessions or agency commissions set forth in the prospectus from time to time.
In addition to such concessions or agency commissions, the sponsor may, from
time to time, pay or allow additional concessions or agency commissions, in the
form of cash or other compensation, to dealers employing registered
representatives who sell, during a specified time period, a minimum dollar
amount of units of unit investment trusts underwritten by the sponsor. At
various times the sponsor may implement programs under which the sales force of
a broker or dealer may be eligible to win nominal awards for certain sales
efforts, or under which the sponsor will reallow to any such broker or dealer
that sponsors sales contests or recognition programs conforming to criteria
established by the sponsor, or participates in sales programs sponsored by the
sponsor, an amount not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such programs.
Also, the sponsor in its discretion may from time to time pursuant to objective
criteria established by the sponsor pay fees to qualifying brokers or dealers
for certain services or activities which are primarily intended to result in
sales of units of a trust. Such payments are made by the sponsor out of its own
assets, and not out of the assets of any trust. These programs will not change
the price unitholders pay for their units or the amount that a trust will
receive from the units sold. The difference between the discount and the sales
charge will be retained by the sponsor.

The sponsor reserves the right to reject, in whole or in part, any order
for the purchase of units.

Sponsor Profits. The sponsor will receive gross sales fees equal to the
percentage of the public offering price of the units of a trust described in
the prospectus. In addition, the sponsor may realize a profit (or sustain a
loss) as of the date a trust is created resulting from the difference between
the purchase prices of the securities to the sponsor and the cost of such
securities to the trust. Thereafter, on subsequent deposits the sponsor may
realize profits or sustain losses from such deposits. The sponsor may realize
additional profits or losses during the initial offering period on unsold units
as a result of changes in the daily market value of the securities in the
trust.

Market for Units. After the initial offering period, the sponsor may
maintain a market for units of a trust offered hereby and continuously offer to
purchase said units at prices, determined by the evaluator, based on the value
of the underlying securities. Unitholders who wish to dispose of their units
should inquire of their broker as to current market prices in order to
determine whether there is in existence any price in excess of the redemption
price and, if so, the amount thereof. Unitholders who sell or redeem units
prior to such time as the entire deferred sales fee on such units has been
collected will be assessed the amount of the remaining deferred sales fee at
the time of such sale or redemption. The offering price of any units resold by
the sponsor will be in accord with that described in the currently effective
prospectus describing such units. Any profit or loss resulting from the resale
of such units will belong to the sponsor. If the sponsor decides to maintain a
secondary market, it may suspend or discontinue purchases of units of the trust
if the supply of units exceeds demand, or for other business reasons.

Redemption. A unitholder who does not dispose of units in the secondary
market described above may cause units to be redeemed by the trustee by making
a written request to the trustee at its Unit Investment Trust Division office
in the city of New York. Unitholders must sign the request, and such transfer
instrument, exactly as their names appear on the records of the trustee. If the
amount of the redemption is $500 or less and the proceeds are payable to the
unitholder(s) of record at the address of record, no signature guarantee is
necessary for redemptions by individual account owners (including joint
owners). Additional documentation may be requested, and a signature guarantee
is always required, from corporations, executors, administrators, trustees,
guardians or associations. The signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for, STAMP, as
may be accepted by the trustee.

Redemption shall be made by the trustee no later than the third business
day following the day on which a tender for redemption is received (the
"Redemption Date") by payment of cash equivalent to the redemption price,
determined as set forth below under "Computation of Redemption Price," as of the
close of the New York Stock Exchange next following such tender, multiplied by
the number of units being redeemed. Any units redeemed shall be canceled and any
undivided fractional interest in the related trust extinguished. The price
received upon redemption might be more or less than the amount paid by the
unitholder depending on the value of the securities in the trust at the time of
redemption. Unitholders who sell or redeem units prior to such time as the
entire deferred sales fee on such units has been collected will be assessed the
amount of the remaining deferred sales fee at the time of such sale or
redemption. Certain broker-dealers may charge a transaction fee for processing
redemption requests.

Under regulations issued by the Internal Revenue Service, the trustee is
required to withhold a specified percentage of the principal amount of a unit
redemption if the trustee has not been furnished the redeeming unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the unitholder only when filing a tax return. Under normal circumstances the
trustee obtains the unitholder's tax identification number from the selling
broker. However, any time a unitholder elects to tender units for redemption,
such unitholder should make sure that the trustee has been provided a certified
tax identification number in order to avoid this possible "back-up
withholding." In the event the trustee has not been previously provided such
number, one must be provided at the time redemption is requested. Any amounts
paid on redemption representing unpaid dividends shall be withdrawn from the
Income Account of a trust to the extent that funds are available for such
purpose. All other amounts paid on redemption shall be withdrawn from the
Capital Account for a trust.

Unitholders tendering units for redemption may request an in-kind
distribution (a "Distribution In Kind") from the trustee in lieu of cash
redemption. A unitholder may request a Distribution In Kind of an amount and
value of securities per unit equal to the redemption price per unit as
determined as of the evaluation time next following the tender, provided that
the tendering unitholder is (1) entitled to receive at least $25,000 of
proceeds as part of his or her distribution or if he paid at least $25,000 to
acquire the units being tendered and (2) the unitholder has elected to redeem
at least thirty business days prior to the termination of the trust. If the
unitholder meets these requirements, a Distribution In Kind will be made by the
trustee through the distribution of each of the securities of the trust in book
entry form to the account of the unitholder's bank or broker-dealer at
Depository Trust Company. The tendering unitholder shall be entitled to receive
whole shares of each of the securities comprising the portfolio of the trust
and cash from the Capital Account equal to the fractional shares to which the
tendering unitholder is entitled. The trustee shall make any adjustments
necessary to reflect differences between the redemption price of the units and
the value of the securities distributed in kind as of the date of tender. If
funds in the Capital Account are insufficient to cover the required cash
distribution to the tendering unitholder, the trustee may sell securities. The
in-kind redemption option may be terminated by the sponsor at any time. The
trustee is empowered to sell securities in order to make funds available for
the redemption of units. To the extent that securities are sold or redeemed in
kind, the size of a trust will be, and the diversity of a trust may be, reduced
but each remaining unit will continue to represent approximately the same
proportional interest in each security. Sales may be required at a time when
securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption may be more or
less than the amount paid by the unitholder depending on the value of the
securities in the portfolio at the time of redemption.

Unitholders of a trust that holds closed-end funds or other investment
company securities who request a Distribution In Kind will be subject to any
12b-1 Fees or other service or distribution fees applicable to the underlying
securities.

The right of redemption may be suspended and payment postponed for more
than three business days following the day on which tender for redemption is
made (1) for any period during which the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or during which (as
determined by the Securities and Exchange Commission) trading on the New York
Stock Exchange is restricted; (2) for any period during which an emergency
exists as a result of which disposal by the trustee of securities is not
reasonably practicable or it is not reasonably practicable to fairly determine
the value of the underlying securities in accordance with the trust agreement;
or (3) for such other period as the Securities and Exchange Commission may by
order permit. The trustee is not liable to any person in any way for any loss or
damage which may result from any such suspension or postponement.

Computation of Redemption Price. The redemption price per unit (as well as
the secondary market public offering price) will generally be determined on the
basis of the last sale price of the securities in a trust. The redemption price
per unit is the pro rata share of each unit in a trust determined generally on
the basis of (i) the cash on hand in the trust or moneys in the process of
being collected and (ii) the value of the securities in the trust less (a)
amounts representing taxes or other governmental charges payable out of the
trust, (b) any amount owing to the trustee for its advances and (c) the accrued
expenses or remaining deferred sales fees of the trust. During the initial
offering period, the redemption price and the secondary market repurchase price
will also include estimated organizational costs. The evaluator may determine
the value of the securities in the trust in the following manner: if the
securities are listed on a national or foreign securities exchange or the
Nasdaq National Market System, such evaluation shall generally be based on the
last available sale price on or immediately prior to the Evaluation Time on the
exchange or Nasdaq National Market System which is the principal market
therefor, which shall be deemed to be the New York Stock Exchange if the
securities are listed thereon (unless the evaluator deems such price
inappropriate as a basis for evaluation) or, if there is no such available sale
price on such exchange, at the last available bid prices (offer prices for
primary market purchases) of the securities. Securities not listed on the New
York Stock Exchange but principally traded on the Nasdaq National Market System
will be valued at the Nasdaq National Market System's official closing price.
If the securities are not so listed or, if so listed, the principal market
therefor is other than on such exchange or there is no such available sale
price on such exchange, such evaluation shall generally be based on the
following methods or any combination thereof whichever the evaluator deems
appropriate: (i) on the basis of the current bid price (offer prices for
primary market purchases) for comparable securities (unless the evaluator deems
such price inappropriate as a basis for evaluation), (ii) by determining the
valuation of the securities on the bid side (offer side for primary market
purchases) of the market by appraisal or (iii) by any combination of the above.
Notwithstanding the foregoing, the evaluator or its designee, will generally
value foreign securities primarily traded on foreign exchanges at their fair
value which may be other than their market price. If the trust holds securities
denominated in a currency other than U.S. dollars, the evaluation of such
security is based upon U.S. dollars based on current bid side (offer side for
primary market purchases) exchange rates (unless the evaluator deems such
prices inappropriate as a basis for valuation).

Retirement Plans. A trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other qualified retirement
plans. Generally, capital gains and income received under each of the foregoing
plans are deferred from federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered
by brokerage firms and other financial institutions. The trust will lower the
minimum investment requirement for IRA accounts to $250. Fees and charges with
respect to such plans may vary.

Ownership of Units. Ownership of units will not be evidenced by
certificates. All evidence of ownership of units will be recorded in book entry
form at Depository Trust Company ("DTC") through an investor's brokers'
account. Units held through DTC will be registered in the nominee name of Cede
& Co. Individual purchases of beneficial ownership interest in the trust will
be made in book entry form through DTC. Ownership and transfer of units will be
evidenced and accomplished by book entries made by DTC and its participants.
DTC will record ownership and transfer of the units among DTC participants and
forward all notices and credit all payments received in respect of the units
held by the DTC participants. Beneficial owners of units will receive written
confirmation of their purchases and sale from the broker dealer or bank from
whom their purchase was made. Units are transferable by making a written
request properly accompanied by a written instrument or instruments of transfer
which should be sent registered or certified mail for the protection of the
unitholder. Record holders must sign such written request exactly as their
names appear on the records of the trust. The signatures must be guaranteed by
a participant in the STAMP or such other signature guaranty program in addition
to, or in substitution for, STAMP, as may be acceptable by the trustee.

Units may be purchased in denominations of one unit or any multiple
thereof, subject to the minimum investment requirement. Fractions of units, if
any, will be computed to three decimal places.

Taxes

This section summarizes some of the main U.S. federal income tax
consequences of owning units of a trust. This section is current as of the date
of this prospectus. Tax laws and interpretations change frequently, and these
summaries do not describe all of the tax consequences to all taxpayers. For
example, these summaries generally do not describe your situation if you are a
corporation, a non-U.S. person, a broker/dealer, or other investor with special
circumstances. In addition, this section does not describe your state, local or
foreign tax consequences.

This federal income tax summary is based in part on the advice and opinion
of counsel to the sponsor. The Internal Revenue Service could disagree with any
conclusions set forth in this section. In addition, our counsel was not asked
to review, and has not reached a conclusion with respect to the federal income
tax treatment of the assets to be deposited in your trust. This may not be
sufficient for you to use for the purpose of avoiding penalties under federal
tax law.

As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.

Assets of the Trusts. Each trust is expected to hold shares (the "RIC
Shares") in funds qualifying as regulated investment companies ("RICs") that
are treated as interests in regulated investment companies for federal income
tax purposes. It is possible that your trust will also hold other assets,
including assets that are treated differently for federal income tax purposes
from those described above, in which case you will have federal income tax
consequences different from or in addition to those described in this section.
All of the assets held by a trust constitute the "Trust Assets." Neither our
counsel nor we have analyzed the proper federal income tax treatment of the
Trust Assets and thus neither our counsel nor we have reached a conclusion
regarding the federal income tax treatment of the Trust Assets.

Trust Status. If your trust is at all times operated in accordance with
the documents establishing the trust and certain requirements of federal income
tax law are met, the trust will not be taxed as a corporation for federal
income tax purposes. As a unit owner, you will be treated as the owner of a pro
rata portion of each of the Trust Assets, and as such you will be considered to
have received a pro rata share of income (e.g., dividends and capital gains, if
any) from each Trust Asset when such income would be considered to be received
by you if you directly owned the Trust Assets. This is true even if you elect
to have your distributions reinvested into additional units. In addition, the
income from Trust Assets that you must take into account for federal income tax
purposes is not reduced by amounts used to pay sales charges or trust expenses.
Under the "Health Care and Education Reconciliation Act of 2010," income from a
trust may also be subject to a new 3.8% "medicare tax" imposed for taxable
years beginning after 2012. This tax will generally apply to your net
investment income if your adjusted gross income exceeds certain threshold
amounts, which are $250,000 in the case of married couples filing joint returns
and $200,000 in the case of single individuals. Interest that is excluded from
gross income, including exempt-interest dividends from the RIC Shares held by a
trust, are generally not included in your net investment income for purposes of
this tax.

Your Tax Basis and Income or Loss Upon Disposition. If your trust disposes
of Trust Assets, you will generally recognize gain or loss. If you dispose of
your units or redeem your units for cash, you will also generally recognize
gain or loss. To determine the amount of this gain or loss, you must subtract
your tax basis in the related Trust Assets from your share of the total amount
received in the transaction. You can generally determine your initial tax basis
in each Trust Asset by apportioning the cost of your units, including sales
charges, among the Trust Assets ratably according to their values on the date
you acquire your units. In certain circumstances, however, you may have to
adjust your tax basis after you acquire your units (for example, in the case of
certain dividends that exceed a corporation's accumulated earnings and profits,
as discussed below).

If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 15% (generally 0% for certain taxpayers in the 10%
and 15% tax brackets). These capital gains rates are generally effective for
taxable years beginning before January 1, 2011. Because these lower rates
expire after December 31, 2010, it is unlikely that you will receive any
long-term capital gains from the trust eligible for these lower rates (except
for any "capital gains dividends" as discussed below). For later periods, if
you are an individual, the maximum marginal federal tax rate for net capital
gain is generally 20% (10% for certain taxpayers in the 10% and 15% tax
brackets). The 20% rate is reduced to 18% for long-term capital gains from most
property acquired after December 31, 2000 with a holding period of more than
five years, and the 10% rate is reduced to 8% for net capital gains from most
property (regardless of when acquired) with a holding period of more than five
years.

Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if the
holding period for the asset is more than one year and is short-term if the
holding period for the asset is one year or less. You must exclude the date you
purchase your units to determine your holding period. The tax rates for capital
gains realized from assets held for one year or less are generally the same as
for ordinary income. The Internal Revenue Code, however, treats certain capital
gains as ordinary income in special situations.

Dividends from RIC Shares. Some dividends on the RIC Shares may be
designated as "capital gain dividends," generally taxable to you as long-term
capital gains. Some dividends on the RIC shares may qualify as "exempt-interest
dividends," which generally are excluded from your gross income for federal
income tax purposes. Some or all of the exempt-interest dividends, however, may
be taken into account in determining your alternative minimum tax, and may have
other tax consequences (e.g., they may affect the amount of your Social Security
benefits that are taxed). Other dividends on the RIC Shares will generally be
taxable to you as ordinary income. Certain ordinary income dividends from a RIC
may qualify to be taxed at the same rates that apply to net capital gain (as
discussed above), provided certain holding period requirements are satisfied and
provided the dividends are attributable to qualifying dividends received by the
RIC itself. These special rules relating to the taxation of ordinary income
dividends from regulated investment companies generally apply to taxable years
beginning before January 1, 2011. RICs are required to provide notice to their
shareholders of the amount of any distribution that may be taken into account as
a dividend that is eligible for the capital gains tax rates. If you hold a unit
for six months or less or if your trust holds a RIC Share for six months or
less, any loss incurred by you related to the disposition of such RIC Share will
be disallowed to the extent of the exempt-interest dividends you received. To
the extent, if any, it is not disallowed, it will be treated as a long-term
capital loss to the extent of any long-term capital gain distributions received
(or deemed to have been received) with respect to such RIC Share. Distributions
of income or capital gains declared on the RIC Shares in October, November or
December will be deemed to have been paid to you on December 31 of the year they
are declared, even when paid by the RIC during the following January.

Dividends Received Deduction. A corporation that owns units will generally
not be entitled to the dividends received deduction with respect to many
dividends received by your trust, because the dividends received deduction is
generally not available for dividends from RICs. However, certain dividends on
the RIC Shares that are attributable to dividends received by the RIC itself
from certain domestic corporations may be designated by the RIC as being
eligible for the dividends received deduction.

In-Kind Distributions. Under certain circumstances as described in this
prospectus, you may request an in-kind distribution of Trust Assets when you
redeem your units at any time prior to 30 business days before your trust's
termination. However, this ability to request an in-kind distribution will
terminate at any time that the number of outstanding units has been reduced to
10% or less of the highest number of units issued by your trust. By electing to
receive an in-kind distribution, you will receive Trust Assets plus, possibly,
cash. You will not recognize gain or loss if you only receive whole Trust
Assets in exchange for the identical amount of your pro rata portion of the
same Trust Assets held by your trust. However, if you also receive cash in
exchange for a Trust Asset or a fractional portion of a Trust Asset, you will
generally recognize gain or loss based on the difference between the amount of
cash you receive and your tax basis in such Trust Asset or fractional portion.

Exchanges. If you elect to have your proceeds from your trust rolled over
into a future series of the trust, it is considered a sale for federal income
tax purposes and any gain on the sale will be treated as a capital gain, and
any loss will be treated as a capital loss. However, any loss you incur in
connection with the exchange of your units of your trust for units of the next
series will generally be disallowed with respect to this deemed sale and
subsequent deemed repurchase, to the extent the two trusts have substantially
identical Trust Assets under the wash sale provisions of the Internal Revenue
Code.

Limitations on the Deductibility of Trust Expenses. Generally, for federal
income tax purposes, you must take into account your full pro rata share of your
trust's income, even if some of that income is used to pay trust expenses. You
may deduct your pro rata share of each expense paid by your trust to the same
extent as if you directly paid the expense. You may be required to treat some or
all of the expenses of your trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to the
extent they exceed 2% of adjusted gross income.

Because some of the RICs pay exempt-interest dividends, which are treated
as tax-exempt interest for federal income tax purposes, you will not be able to
deduct some of your share of the trust expenses. In addition, you will not be
able to deduct some of your interest expense for debt that you incur or
continue to purchase or carry your units.

Foreign Investors, Taxes and Investments. If you are a foreign investor
(i.e., an investor other than a U.S. citizen or resident or a U.S. corporation,
partnership, estate or trust), you may not be subject to U.S. federal income
taxes, including withholding taxes, on some or all of the income from your
trust or on any gain from the sale or redemption of your units, provided that
certain conditions are met. You should consult your tax advisor with respect to
the conditions you must meet in order to be exempt for U.S. tax purposes.
Distributions after December 31, 2012 may be subject to a U.S. withholding tax
of 30% in the case of distributions to (i) certain non-U.S. financial
institutions that have not entered into an agreement with the U.S. Treasury to
collect and disclose certain information and (ii) certain other non-U.S.
entities that do not provide certain certifications and information about the
entity's U.S. owners. You should also consult your tax advisor with respect to
other U.S. tax withholding and reporting requirements.

Under certain circumstances, a RIC may elect to pass through to its
shareholders certain foreign taxes paid by the RIC. If the RIC makes this
election with respect to RIC Shares, you must include in your income for
federal income tax purposes your portion of such taxes and you may be entitled
to a credit or deduction for such taxes.

New York Tax Status. Based on the advice of Dorsey & Whitney LLP, special
counsel to the trusts for New York tax matters, under the existing income tax
laws of the State and City of New York, your trust will not be taxed as a
corporation, and the income of your trust will be treated as the income of the
unit holders in the same manner as for federal income tax purposes. You should
consult your tax advisor regarding potential foreign, state or local taxation
with respect to your units.

California State Taxes. Chapman and Cutler LLP has examined the income tax
laws of the State of California to determine its applicability to the
California Municipal Trust and to the holders of units in such trust who are
full-time residents of the State of California ("California Unitholders").

The assets of the trust will consist of shares in entities each of which
is taxed as a regulated investment company (each a "RIC" and collectively, the
"RICs") for federal income tax purposes (the "RIC Shares").

Neither the sponsor nor its counsel have independently examined the RIC
Shares to be deposited in and held in the trust. In rendering its opinion,
Chapman & Cutler LLP has assumed that: (i) each RIC qualifies as a regulated
investment company for federal income tax purposes and (ii) at the close of each
quarter of the taxable year of each RIC, at least 50 percent of the value of
such RIC's total assets consists of obligations the interest on which is exempt
from the income tax imposed by the State of California that is applicable to
individuals, trusts and estates (the "California Personal Income Tax").

In the opinion of Chapman & Cutler LLP, counsel to the sponsor, in summary
under existing California Law:

1) The trust is not an association taxable as a corporation for purposes
of the California Corporation Tax Law, and each California Unitholder
will be treated as the owner of a pro rata portion of the trust, and
the income of such portion of the trust will be treated as the income
of the California Unitholders under the California Personal Income
Tax.

2) The portion of each dividend paid by a RIC to the trust and
distributed to a California Unitholder which (i) is excludable from
California taxable income for purposes of the California Personal
Income Tax if received directly by a California Unitholder, (ii) is
properly designated as an exempt-interest dividend for California
income tax purposes in a written notice mailed to its shareholders not
later than 60 days after the close of its taxable year and (iii) does
not exceed the amount of interest received by the RIC during its
taxable year (minus certain non-deductible expenses) on obligations
the interest on which would be excludable from California taxable
income for purposes of the California Personal Income Tax if received
directly by a California Unitholder, will be excludable from
California taxable income for purposes of the California Personal
Income Tax when received by the trust and distributed to a California
Unitholder. However, dividends other than exempt-interest dividends
paid by a RIC will generally be taxable for purposes of the California
Personal Income Tax.

3) Each California Unitholder of the trust will generally recognize gain
or loss for California Personal Income Tax purposes if the trustee
disposes of a RIC Share (whether by redemption, sale or otherwise) or
when the California Unitholder redeems or sells units of the trust, to
the extent that such a transaction results in a recognized gain or
loss to such California Unitholder for federal income tax purposes.
However, there are certain differences between the recognition of gain
or loss for federal income tax purposes and for California Personal
Income Tax purposes, and California Unitholders are advised to consult
their own tax advisers.

4) Under the California Personal Income Tax, interest on indebtedness
incurred or continued by a California Unitholder to purchase units in
the trust is not deductible for purposes of the California Personal
Income Tax.

Chapman and Cutler LLP has expressed no opinion with respect to taxation
under any other provisions of the California law. This disclosure does not
address the taxation of persons other than full time residents of California and
relates only to California Unitholders subject to the California Personal Income
Tax. Chapman and Cutler LLP has expressed no opinion with respect to the
taxation of California Unitholders subject to the California Corporation Tax Law
and such California Unitholders are advised to consult their own tax advisers.
Please note, however, that dividends from the RIC Shares attributed to a
California Unitholder that is subject to the California Corporation Tax Law may
be includible in its gross income for purposes of determining its California
franchise tax and its California income tax. Neither the Sponsor nor its counsel
has independently examined any of the RIC Shares to be deposited and held in the
trust or the opinions of bond counsel with respect thereto. Ownership of the
units may result in collateral California tax consequences to certain taxpayers
and prospective investors should consult their tax advisers.

Experts

Legal Matters. Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
Illinois 60603, acts as counsel for the trusts and has passed upon the legality
of the units.

Independent Registered Public Accounting Firm. The statements of financial
condition, including the Trust Portfolios, appearing herein, have been audited
by Grant Thornton LLP, an independent registered public accounting firm, as set
forth in their report thereon appearing elsewhere herein, and are included in
reliance on such report given on the authority of such firm as experts in
accounting and auditing.

Description of Ratings

Standard & Poor's Issue Credit Ratings

A Standard & Poor's issue credit rating is a forward-looking opinion about
the credit worthiness of an obligor with respect to a specific financial
obligation, a specific class of financial obligations, or a specific financial
program (including ratings on medium-term note programs and commercial paper
programs). It takes into consideration the creditworthiness of guarantors,
insurers, or other forms of credit enhancement on the obligation and takes into
account the currency in which the obligation is denominated. The opinion
reflects Standard & Poor's view of the obligor's capacity and willingness to
meet its financial commitments as they come due, and may assess terms, such as
collateral security and subordination, which could affect ultimate payment in
the event of default.

Issue credit ratings can be either long term or short term. Short-term
ratings are generally assigned to those obligations considered short-term in
the relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days, including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. The result is a dual
rating, in which the short-term rating addresses the put feature, in addition
to the usual long-term rating. Medium-term notes are assigned long-term
ratings.

The ratings and other credit related opinions of Standard & Poor's and its
affiliates are statements of opinion as of the date they are expressed and not
statements of fact or recommendations to purchase, hold, or sell any securities
or make any investment decisions. Standard & Poor's assumes no obligation to
update any information following publication. Users of ratings and credit
related opinions should not rely on them in making any investment decision.
Standard &Poor's opinions and analyses do not address the suitability of any
security. Standard & Poor's Financial Services LLC does not act as a fiduciary
or an investment advisor. While Standard & Poor's has obtained information from
sources it believes to be reliable, Standard & Poor's does not perform an audit
and undertakes no duty of due diligence or independent verification of any
information it receives. Ratings and credit related opinions may be changed,
suspended, or withdrawn at any time.

Long-term issue credit ratings

Issue credit ratings are based, in varying degrees, on the following
considerations:

o Likelihood of payment-capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation;

o Nature of and provisions of the obligation;

o Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under
the laws of bankruptcy and other laws affecting creditors' rights.

Issue ratings are an assessment of default risk, but may incorporate an
assessment of relative seniority or ultimate recovery in the event of default.
Junior obligations are typically rated lower than senior obligations, to
reflect the lower priority in bankruptcy, as noted above. (Such differentiation
may apply when an entity has both senior and subordinated obligations, secured
and unsecured obligations, or operating company and holding company
obligations).

AAA An obligation rated "AAA" has the highest rating assigned by Standard
& Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.

AA An obligation rated "AA" differs from the highest-rated obligations
only to a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.

A An obligation rated "A" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. However, the obligor's
capacity to meet its financial commitment on the obligation is still
strong.

BBB An obligation rated "BBB" exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

Obligations rated "BB," "B," "CCC," "CC," and "C" are regarded as
having significant speculative characteristics. "BB" indicates the
least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or
major exposures to adverse conditions.

BB An obligation rated "BB" is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which
could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

B An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to
meet its financial commitment on the obligation. Adverse business,
financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the
obligation.

CCC An obligation rated "CCC" is currently vulnerable to nonpayment, and
is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the
obligation. In the event of adverse business, financial, or economic
conditions, the obligor is not likely to have the capacity to meet its
financial commitment on the obligation.

CC An obligation rated "CC" is currently highly vulnerable to nonpayment.

C A "C" rating is assigned to obligations that are CURRENTLY HIGHLY
VULNERABLE to nonpayment, obligations that have payment arrearages
allowed by the terms of the documents, or obligations of an issuer
that is the subject of a bankruptcy petition or similar action which
have not experienced a payment default. Among others, the 'C' rating
may be assigned to subordinated debt, preferred stock or other
obligations on which cash payments have been suspended in accordance
with the instrument's terms or when preferred stock is the subject of
a distressed exchange offer, whereby some or all of the issue is
either repurchased for an amount of cash or replaced by other
instruments having a total value that is less than par.

D An obligation rated "D" is in payment default. The "D" rating category
is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace
period. The "D" rating also will be used upon the filing of a
bankruptcy petition or the taking of a similar action if payments on
an obligation are jeopardized.

Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.

NR This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard &
Poor's does not rate a particular obligation as a matter of policy.

GUGGENHEIM DEFINED PORTFOLIOS

GUGGENHEIM PORTFOLIO PROSPECTUS-PART B

_____ , 2010

Where to Learn More
You can contact us for free information about this and other investments.

Visit us on the Internet
http://www.guggenheimfunds.com

Call Guggenheim Funds
(800) 345-7999

Pricing Line
(888) 248-4954

Call the Bank of New York Mellon
(800) 701-8178 (investors)
(800) 647-3383 (brokers)

Additional Information
This prospectus does not contain all information filed with the Securities and
Exchange Commission.
To obtain a copy of this information (a duplication fee may be required):

E mail: publicinfo@sec.gov
Write: Public Reference Room
Washington, D.C. 20549-0102
Visit: http://www.sec.gov (EDGAR Database)
Call: 1-202-942-8090 (only for information on the operation of the Public
Reference Room)

When units of the trusts are no longer available, we may use this
prospectus as a preliminary prospectus for future trusts. In this case you
should note that:

The information in this prospectus is not complete with respect to future
trusts and may be changed. No one may sell units of a future trust until a
registration statement is filed with the Securities and Exchange Commission and
is effective. This prospectus is not an offer to sell units and is not
soliciting an offer to buy units in any state where the offer or sale is not
permitted.

Contents Investment Summary
- --------------------------------------------------------------------------------
2 Overview

Closed-End Equity & Income Portfolio, Series 27
- --------------------------------------------------------------------------------
A concise 2 Investment Objective
description 2 Principal Investment Strategy
of essential 2 Security Selection
information 3 Future Trusts
about the 3 Essential Information
portfolio 3 Portfolio Diversification
3 Principal Risks
6 Who Should Invest
6 Fees and Expenses
7 Example
8 Trust Portfolio

Closed-End California Municipal Portfolio, Series 4
- --------------------------------------------------------------------------------
A concise 9 Investment Objective
description 9 Principal Investment Strategy
of essential 9 Security Selection
information 9 Future Trusts
about the 10 Essential Information
portfolio 10 Portfolio Diversification
10 Principal Risks
12 Tax Status
12 Who Should Invest
13 Fees and Expenses
14 Example
15 Trust Portfolio

Strategic Income Portfolio, Series 49
- --------------------------------------------------------------------------------
A concise 16 Investment Objective
description 16 Principal Investment Strategy
of essential 16 Security Selection
information 17 Future Trusts
about the 17 Essential Information
portfolio 17 Portfolio Diversification
17 Principal Risks
20 Who Should Invest
21 Fees and Expenses
22 Example
23 Trust Portfolio

Understanding Your Investments
- --------------------------------------------------------------------------------
Detailed 25 How to Buy Units
information 31 How to Sell Your Units
to help you 32 Distributions
understand 33 Investment Risks
your 40 How the Trust Works
investment 41 General Information
42 Expenses
43 Report of Independent Registered Public
Accounting Firm
44 Statements of Financial Condition

For the Table of Contents of Part B, See Part B of the prospectus.

Where to Learn More
- --------------------------------------------------------------------------------
You can contact us for Visit us on the Internet
free information about http://www.guggenheimfunds.com
these investments. Call Guggenheim Funds (800) 345-7999
Pricing Line (888) 248-4954
Call The Bank of New York
(800) 701-8178 (investors) / (800) 647-3383 (brokers)

Additional Information
- --------------------------------------------------------------------------------
This prospectus does not contain all information filed with the Securities and
Exchange Commission. To obtain or copy this information (a duplication fee may
be required):

E-mail: publicinfo@sec.gov
Write: Public Reference Room, Washington, D.C. 20549-0102
Visit: http://www.sec.gov (EDGAR Database)
Call: 1-202-942-8090 (only for information on
the operation of the Public Reference Room)
Refer to:
Guggenheim Defined Portfolios, Series 749
Securities Act file number: 333-170187
Investment Company Act file number: 811-03763

- -----------------
When units of the trusts are no longer available, we may use this prospectus as
a preliminary prospectus for future trusts. In this case you should note that:

GUGGENHEIM LOGO

PROSPECTUS

Closed-End Equity & Income
Portfolio, Series 27

Closed-End California
Municipal Portfolio, Series 4

Strategic Income Portfolio,
Series 49

Guggenheim
Defined Portfolios
Series 749

DATED _____ , 2010

CONTENTS OF REGISTRATION STATEMENT

A. Bonding Arrangements of Depositor:

The Depositor has obtained the following Securities Dealer Blanket Bond for
its officers, directors and employees:

INSURER/POLICY NO. AMOUNT

National Union Fire Insurance
Company of Pittsburgh, Pennsylvania $4,000,000
5692790

This Registration Statement comprises the following papers and documents.

The Facing Sheet
The Prospectus
The Signatures
Consents of Counsel

The following exhibits:

1.1 Reference Trust Agreement (to be supplied by amendment).

1.1.1 Standard Terms and Conditions of Trust (Reference is made to Exhibit
1.1.1 to Amendment No. 2 to the Registration Statement on Form S-6 for
Claymore Securities Defined Portfolios, Series 116 (File No.
333-72828) filed on December 18, 2001.

2.1 Code of Ethics (Reference is made to Exhibit 2.1 to the Registration
Statement on Form S-6 for Claymore Securities Deferred Portfolios,
Series 213 (File No. 333-122184 filed on February 9, 2005).

3.1 Opinion of counsel as to legality of the securities being registered
including a consent to the use of its name in the Registration
Statement (to be supplied by amendment).

3.2 Opinion of counsel as to Federal Income tax status of the securities
being registered including a consent to the use of its name in the
Registration Statement (to be supplied by amendment).

3.3 Opinion of counsel as to New York Income tax status of the securities
being registered including a consent to the use of its name in the
Registration Statement (to be supplied by amendment).

3.4 Opinion of counsel as to the Trustee and the Trust(s) including a
consent to the use of its name in the Registration Statement (to be
supplied by amendment).

4.1 Consent of Independent Registered Public Accounting Firm (to be
supplied by amendment).

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Guggenheim Defined Portfolios, Series 749 has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, in the City of Lisle, and State of Illinois, on the
23rd day of November, 2010.

GUGGENHEIM DEFINED PORTFOLIOS, SERIES 749
Registrant

By: GUGGENHEIM FUNDS DISTRIBUTORS, INC.
Depositor

By: /s/ Kevin Robinson
------------------------
Kevin Robinson

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below on November 23, 2010
by the following persons, who constitute a majority of the Board of Directors of
Guggenheim Funds Distributors, Inc.

SIGNATURE* TITLE*** DATE

)
) By: /s/ Kevin Robinson
-------------------
) Kevin Robinson
Attorney-in-Fact*
)
DAVID HOOTEN* Chief Executive Officer and ) November 23, 2010
Chairman of the Board of )
Directors )

MICHAEL RIGERT** Vice Chairman ) November 23, 2010

ANTHONY DILEONARDI* Vice Chairman ) November 23, 2010

BRUCE ALBELDA* Chief Financial Officer and November 23, 2010
Director
/s/ Kevin Robinson
KEVIN ROBINSON Senior Managing Director, November 23, 2010
General Counsel and Secretary

- ------------------
* An executed copy of the related power of attorney was filed as Exhibit
6.0 to Registration Statement No. 333-167997 on September 24, 2010.

** An executed copy of the related power of attorney was filed as Exhibit
6.0 to Registration Statement No. 333-168383 on October 7, 2010.

*** The titles of the persons named herein represent their capacity in and
relationship to Guggenheim Funds Distributors, Inc., the Depositor.

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The consent of Grant Thornton LLP to the use of its report and to the
reference to such firm in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.

CONSENT OF CHAPMAN AND CUTLER LLP

The consent of Chapman and Cutler LLP to the use of its name in the
Prospectus included in the Registration Statement will be contained in its
opinion to be filed as Exhibits 3.1 and 3.2 to the Registration Statement.

CONSENT OF DORSEY & WHITNEY LLP

The consent of Dorsey & Whitney LLP to the use of its name in the
Prospectus included in the Registration Statement will be contained in its
opinion to be filed as Exhibits 3.3 and 3.4 to the Registration Statement.

MEMORANDUM

Re: Guggenheim Defined Portfolios, Series 749

The list of securities comprising the trust of the fund, the
evaluation, record and distribution dates and other changes pertaining
specifically to the new series, such as size and number of units of the trust in
the fund and the statement of financial condition of the new fund will be filed
by amendment.

1940 ACT

FORMS N-8A AND N-8B-2

Form N-8A and Form N-8B-2 were filed in respect of Guggenheim Defined
Portfolios, Series 718 (and subsequent series) (File No. 333-169214).

1933 ACT

THE INDENTURE

The form of the proposed Standard Terms and Conditions of Trust is
expected to be in all respects consistent with the form of the Standard Terms
and Conditions of Trust dated December 18, 2001 relative to Claymore Securities
Defined Portfolios, Series 116.

CHAPMAN AND CUTLER LLP

Chicago, Illinois
November 23, 2010