1933 ACT FILE NO.:
1940 ACT FILE NO.: 811-21056
CIK NO.: 1425300

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-6

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: ADVISOR'S DISCIPLINED TRUST 256

B. Name of depositor: FIXED INCOME SECURITIES, INC.

C. Complete address of depositor's principal executive offices:

18925 Base Camp Road
Monument, Colorado 80132

D. Name and complete address of agent for service:

WITH A COPY TO:

SCOTT COLYER MARK J. KNEEDY
Fixed Income Securities, Inc. Chapman and Cutler LLP
18925 Base Camp Road 111 West Monroe Street
Monument, Colorado 80132 Chicago, Illinois 60603-4080

E. Title of securities being registered: Units of undivided beneficial
interest in the trust

F. Approximate date of proposed public offering:

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 _______, 2008 at _____ pursuant to Rule 487.

- -------------------------------------------------------------------------------
The registrant 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. No one
may sell units of the trust until the registration statement filed with the
Securities and Exchange Commission 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.

PRELIMINARY PROSPECTUS DATED __________, 2008
SUBJECT TO COMPLETION

VALUE LINE SELECT ETF INDEX PORTFOLIO, SERIES 1

(ADVISOR'S DISCIPLINED TRUST 256)

A portfolio of shares of the
exchange-traded funds included in the
Value Line Select ETF Index
seeking above average total return,
primarily through capital appreciation

An investment can be made in the
funds directly. Direct investments
would not be subject to the trust sales
fee, expenses or organization costs.

PROSPECTUS

__________, 2008

[LOGO]
As with any investment, the Securities
ADVISOR'S and Exchange Commission has not approved
ASSET MANAGEMENT or disapproved of these securities or
passed upon the adequacy or accuracy of
A DIVISION OF FIXED this prospectus. Any contrary
INCOME SECURITIES, INC. representation is a criminal offense.

- ------------------
INVESTMENT SUMMARY
- ------------------

INVESTMENT OBJECTIVE

The trust seeks to provide above average total return primarily through
capital appreciation.

PRINCIPAL INVESTMENT STRATEGY

The trust seeks to provide above average total return primarily through
capital appreciation by investing in a portfolio of shares of the exchange-
traded funds ("ETFs") included in the Value Line Select ETF Index. Of course,
as with any similar investment, there can be no assurance that the objective of
the trust will be achieved.

The trust seeks to invest on an ongoing basis in substantially all of the
ETFs that comprise the Value Line Select ETF Index. There can be no assurance
that this objective will be met. The initial portfolio seeks to replicate the
composition of the Value Line Select ETF Index to the extent practicable.
During the trust's life, the trust will change to reflect any change in the
component funds in the Value Line Select ETF Index. The trust will generally
change to reflect any changes in the weightings of the components within the
index only at the time that the index is rebalanced. Precise replication of the
securities in the index may not be achieved at the time of an index rebalancing
because it may be economically impracticable or impossible to acquire very small
numbers of shares of certain funds and because of other procedural policies of
the trust.

Approximately __% of the portfolio consists of funds classified as "non-
diversified" under the Investment Company Act of 1940. These funds have the
ability to invest more than 5% of their assets in securities of a single issuer
which could reduce diversification.

PRINCIPAL RISKS

As with all investments, you can lose money by investing in this trust. The
trust also might not perform as well as you expect. This can happen for reasons
such as these:

* SECURITY PRICES WILL FLUCTUATE. The value of your investment may fall over
time.

* AN ISSUER MAY BE UNABLE TO MAKE INCOME AND/OR PRINCIPAL PAYMENTS IN THE
FUTURE. This may reduce the level of dividends an ETF pays which would
reduce your income and cause the value of your units to fall.

* THE FINANCIAL CONDITION OF AN ISSUER 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.

* THE TRUST INVESTS IN SHARES OF ETFS. You should understand the section
titled "Exchange-Traded Funds" before you invest. In particular, shares of
these funds tend to trade at a discount from their net asset value and are
subject to risks related to factors such as the manager's ability to
achieve a fund's objective, market conditions affecting a fund's
investments. The trust and underlying funds have management and operating
expenses. You will bear not only your share of the trust's expenses, but
also the expenses of the underlying funds. By investing in other funds,
the trust incurs greater expenses than you would incur if you invested
directly in the funds.

* THE TRUST'S PERFORMANCE MIGHT NOT SUFFICIENTLY CORRESPOND WITH THAT OF ITS
TARGET INDEX. This can happen for reasons such as an inability to
replicate the weighting of each ETF, the timing of trust rebalancings,
index tracking errors, round lot trading requirements, regulatory
restrictions, the time that elapses between an index change and a change in
the trust, and trust expenses.

* STOCKS OF FOREIGN COMPANIES HELD BY THE UNDERLYING FUNDS IN THE TRUST PRESENT
RISKS BEYOND THOSE OF U.S. ISSUERS. These risks may include market and
political factors related to the company's foreign market, international
trade conditions, less regulation, smaller or less liquid markets,
increased volatility, differing accounting practices and changes in the
value of foreign currencies.

* WE<FN1>* DO NOT ACTIVELY MANAGE THE PORTFOLIO. Except in limited
circumstances, the trust will generally hold, and continue to buy, shares
of the same securities even if their market value declines.

- --------------------
<FN1>* "FIS," "we" and related terms mean Fixed Income Securities, Inc., the
trust sponsor, unless the context clearly suggests otherwise.

2 Investment Summary

WHO SHOULD INVEST

You should consider this investment if you want:

* to own a portfolio of shares of ETFs included in an index that pursues a
capital appreciation oriented strategy.

* the potential for above average total return primarily through capital
appreciation.

You should not consider this investment if you:

* are uncomfortable with the risks of an unmanaged investment in shares of
ETFs included in an index that pursues a capital appreciation oriented
strategy.

* seek income or capital preservation.

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

ESSENTIAL INFORMATION
---------------------

UNIT PRICE AT INCEPTION $10.0000

INCEPTION DATE __________, 2008
TERMINATION DATE __________, 2010

[ESTIMATED NET ANNUAL DISTRIBUTIONS
First year $______ per unit
Second year $______ per unit]

DISTRIBUTION DATES 25th day of June
and December
RECORD DATES 10th day of June
and December

CUSIP NUMBERS
Standard Accounts
Cash distributions __________
Reinvest distributions __________
Fee Based Accounts
Cash distributions __________
Reinvest distributions __________

TICKER SYMBOL __________

MINIMUM INVESTMENT $1,000/100 units

* As of __________, 2008 and may vary thereafter.

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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.

AS A % AMOUNT
OF $1,000 PER 100
SALES FEE INVESTED UNITS
------------------------

Initial sales fee 1.00% $10.00
Deferred sales fee 2.35 23.50
Creation & development fee 0.60 6.00
------- -------
Maximum sales fee 3.95% $39.50
======= =======

ORGANIZATION COSTS 0.50% $5.00
======= =======

AS A % AMOUNT
ANNUAL OF NET PER 100
OPERATING EXPENSES ASSETS UNITS
------------------------

Trustee fee & expenses __.__% $_____
Supervisory, evaluation
and administration fees __.__ 1.00
Underlying funds' expenses __.__ _____
------- -------
Total __.__% $_____
======= =======

The initial sales fee is the difference between the total sales fee (maximum
of 3.95% of the unit offering price) and the sum of the remaining deferred sales
fee and the total creation and development fee. The deferred sales fee is fixed
at $0.235 per unit and is paid in three monthly installments beginning
_____________ 20, 2008. The creation and development fee is fixed at $0.06 per
unit and is paid at the end of the initial offering period (anticipated to be
six months). The trust will bear the management and operating expenses of the
underlying ETFs. While the trust will not pay these expenses directly out of
its assets, these expenses are shown in the trust's annual expenses above to
illustrate the impact of these expenses. The trustee or sponsor will waive fees
otherwise payable by the trust in an amount equal to any 12b-1 fees or other
compensation the trustee, sponsor or an affiliate receives from the funds in
connection with the trust's investment in the funds.

EXAMPLE

This example helps you compare the cost of this trust with other unit trusts
and mutual funds. In the example we assume that the expenses do not change and
that 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 in the trust:

1 year $_____
2 years (life of trust) $_____

These amounts are the same regardless of whether you sell your investment at
the end of a period or continue to hold your investment.

Investment Summary 3

VALUE LINE SELECT ETF INDEX PORTFOLIO, SERIES 1
(ADVISOR'S DISCIPLINED TRUST 256)
PORTFOLIO
AS OF THE TRUST INCEPTION DATE, __________, 2008

PERCENTAGE OF MARKET COST OF
NUMBER TICKER AGGREGATE OFFERING VALUE PER SECURITIES
OF SHARES SYMBOL ISSUER(1) PRICE SHARE(1) TO TRUST(2)
- -------------------------------------------------------------------------------------------------------------------------------

(continued)

4 Investment Summary

VALUE LINE SELECT ETF INDEX PORTFOLIO, SERIES 1
(ADVISOR'S DISCIPLINED TRUST 256)
PORTFOLIO (CONTINUED)
AS OF THE TRUST INCEPTION DATE, __________, 2008

--------- ------------
100.00% $_________
========= ============

<FN>
Notes to Portfolio

(1) Securities are represented by contracts to purchase securities. The value
of each security is based on the most recent closing sale price or fair
market value of each security as of the close of regular trading on the New
York Stock Exchange on the business day prior to the trust's inception
date.

(2) The cost of the securities to the sponsor and the sponsor's profit or
(loss) (which is the difference between the cost of the securities to the
sponsor and the cost of the securities to the trust) are $__________ and
($__________), respectively.

Investment Summary 5

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UNDERSTANDING YOUR INVESTMENT
- -----------------------------

THE VALUE LINE SELECT ETF INDEX

The Value Line Select ETF Index is an equal-dollar weighted index comprised
of between 30 and 100 U.S.-traded ETFs ranked #1 by Value Line Publishing, Inc.
("VLPI") in the Value Line ETF Ranking System. For purposes of the index, Value
Line currently defines ETFs to include open-end management investment companies
("open-end funds"), unit investment trusts ("UITs") and Holding Company
Depositary Receipts ("HOLDRs") that issue shares that are approved for listing
and trading on a national securities exchange. It is possible that the Value
Line Select ETF Index could include other exchange-traded portfolios in the
future. Value Line does not currently include exchange-traded notes, commodity
pools or close-end management investment companies in the index. Value Line ETF
Ranking System is a purely quantitative computer model applying the approach of
the Value Line Timeliness(TM) Ranking System to the universe of ETFs. The Value
Line ETF Ranking System seeks to select the "best-for-investment" ETFs among all
U.S.-traded ETFs. Since the total number of U.S.-traded ETFs varies year-over-
year, the Value Line Select ETF Index historically includes approximately 10% of
all traded ETFs but no more than 100 ETFs. The Value Line Select ETF Index is
rebalanced and reconstituted once per quarter.

The index assumes equally weighted positions in every ETF, as of each
rebalance. Upon Value Line Select ETF Index's introduction in 2008, the index
values were computed on a daily basis dating back to 2003 to provide a
historical frame of reference. The decision to include or to exclude a new ETF
in the Value Line ETF Ranking System is based on several factors, including but
not limited to liquidity (i.e., average volume), market capitalization, and
availability of other ETFs based on the same or practically-identical
underlying. The Value Line ETF Ranking System requires each included ETF to
have at least one year of trading history.

VLPI'S ONLY RELATIONSHIP TO THE SPONSOR AND THE TRUST IS VLPI'S LICENSING TO
THE SPONSOR OF CERTAIN VLPI TRADEMARKS AND TRADE NAMES AND THE VALUE LINE SELECT
ETF INDEX (THE "INDEX") WHICH IS COMPOSED BY VLPI WITHOUT REGARD TO THE SPONSOR,
THE TRUST OR ANY INVESTOR. VLPI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE
SPONSOR OR ANY INVESTOR IN THE TRUST INTO CONSIDERATION IN COMPOSING THE INDEX.
THE TRUST RESULTS MAY DIFFER FROM THE HYPOTHETICAL OR PUBLISHED RESULTS OF THE
INDEX. VLPI IS NOT RESPONSIBLE FOR HOW THE SPONSOR MAKES USE OF INFORMATION
SUPPLIED BY VLPI. VLPI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE PRICES AND COMPOSITION OF THE TRUST OR THE TIMING OF THE
ISSUANCE FOR SALE OF THE TRUST OR IN THE CALCULATION OF THE EQUATIONS BY WHICH
THE TRUST IS TO BE CONVERTED INTO CASH VLPI MAKES NO WARRANTY CONCERNING THE
INDEX, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY PERSON'S
INVESTMENT PORTFOLIO, OR ANY IMPLIED WARRANTIES ARISING FROM USAGE OR TRADE,
COURSE OF DEALING

6 Understanding Your Investment

OR COURSE OF PERFORMANCE, AND VLPI MAKES NO WARRANTY AS THE POTENTIAL PROFITS OR
ANY OTHER BENEFITS THAT MAY BE ACHIEVED BY USING THE INDEX OR ANY INFORMATION OR
MATERIALS GENERATED THEREFROM. VLPI DOES NOT WARRANT THAT THE INDEX WILL MEET
ANY REQUIREMENTS OR BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES NOT GUARANTEE ANY
USES, INFORMATION, DATA OR OTHER RESULTS GENERATED FROM THE INDEX OR TRUST.
VLPI HAS NO OBLIGATION OR LIABILITY (I) IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE TRUST; OR (II) FOR ANY LOSS, DAMAGE, COST OR
EXPENSES SUFFERED OR INCURRED BY ANY INVESTOR OR ANY OTHER PERSON OR ENTITY IN
CONNECTION WITH THIS TRUST, AND IN NO EVENT SHALL VLPI BE LIABLE FOR ANY LOST
PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR
EXEMPLARY DAMAGES IN CONNECTION WITH THE INDEX OR THE TRUST.

HOW TO BUY UNITS

You can buy units of the trust on any business day the New York Stock
Exchange is open by contacting your financial professional. Unit prices are
available daily on the Internet at WWW.AAMPORTFOLIOS.COM. The public offering
price of units includes:

* the net asset value per unit plus

* organization costs plus

* the sales fee.

The "net asset value per unit" is the value of the securities, cash and other
assets in the trust reduced by the liabilities of the trust divided by the total
units outstanding. We often refer to the public offering price of units as the
"offer price" or "purchase price." The offer price will be effective for all
orders received prior to the close of regular trading on the New York Stock
Exchange (normally 4:00 p.m. Eastern time). If we receive your order prior to
the close of regular trading on the New York Stock Exchange or authorized
financial professionals receive your order prior to that time and properly
transmit the order to us by the time that we designate, then you will receive
the price computed on the date of receipt. If we receive your order after the
close of regular trading on the New York Stock Exchange, if authorized financial
professionals receive your order after that time or if orders are received by
such persons and are not transmitted to us by the time that we designate, then
you will receive the price computed on the date of the next determined offer
price provided that your order is received in a timely manner on that date. It
is the responsibility of the authorized financial professional to transmit the
orders that they receive to us in a timely manner. Certain broker-dealers may
charge a transaction or other fee for processing unit purchase orders.

VALUE OF THE SECURITIES. We determine the value of the securities as of the
close of regular trading on the New York Stock Exchange on each day that
exchange is open. We generally determine the value of securities using the last
sale price for securities traded on a national securities exchange. For this
purpose, the trustee provides us closing prices from a reporting service
approved by us. 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

Understanding Your Investment 7

securities exchange, or if the market quotes are unavailable or inappropriate.

We determined the initial prices of the securities shown under "Portfolio" in
this prospectus as described above at the close of regular trading on 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
regular trading on 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 the value of
the securities represents an amount that will pay the costs of creating your
trust. These costs include the costs of preparing the registration statement
and legal documents, federal and state registration fees, the initial fees and
expenses of the trustee and the initial audit. Your trust will sell securities
to reimburse us for these costs at the end of the initial offering period or
after six months, if earlier. The value of your units will decline when the
trust pays these costs.

TRANSACTIONAL SALES FEE. You pay a fee in connection with purchasing units.
We refer to this fee as the "transactional sales fee." The transactional sales
fee has both an initial and a deferred component and equals 3.35% of the public
offering price per unit based on a $10 public offering price per unit. This
percentage amount of the transactional sales fee is based on the unit price on
the trust's inception date. The transactional sales fee equals the difference
between the total sales fee and the creation and development fee. As a result,
the percentage and dollar amount of the transactional sales fee will vary as the
public offering price per unit varies. The transactional sales fee does not
include the creation and development fee which is described under "Expenses."

The maximum sales fee equals 3.95% of the public offering price per unit at
the time of purchase. You pay the initial sales fee at the time you buy units.
The initial sales fee is the difference between the total sales fee percentage
(maximum of 3.95% of the public offering price per unit) and the sum of the
remaining fixed dollar deferred sales fee and the total fixed dollar creation
and development fee. The initial sales fee will be approximately 1.00% of the
public offering price per unit depending on the public offering price per unit.
The deferred sales fee is fixed at $0.235 per unit. Your trust pays the
deferred sales fee in equal monthly installments as described on page 3. If you
redeem or sell your units prior to collection of the total deferred sales fee,
you will pay any remaining deferred sales fee upon redemption or sale of your
units.

If you purchase units after the last deferred sales fee payment has been
assessed, the secondary market sales fee is equal to 3.95% of the public
offering price and does not include deferred payments.

REDUCING YOUR SALES FEE. We offer a variety of ways for you to reduce the
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
creation and development fee are fixed dollar amounts per unit, your trust must
charge these fees per unit regardless of any discounts. However, if you are
eligible to receive a discount such that your total sales fee is less than the
fixed dollar amounts of the deferred sales fee and the creation and development
fee, we will credit you the difference between your total sales fee and these
fixed dollar fees at the time you buy units.

8 Understanding Your Investment

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

IF YOU PURCHASE: YOUR FEE WILL BE:
------------------------------------------

Less than $50,000 3.95%
$50,000 - $99,999 3.70
$100,000 - $249,999 3.45
$250,000 - $499,999 3.10
$500,000 - $999,999 2.95
$1,000,000 or more 2.45

We apply these fees as a percent of the public offering price per unit at the
time of purchase. We also apply the different purchase levels on a unit basis
using a $10 unit equivalent. For example, if you purchase between 10,000 and
24,999 units, your fee is 3.45% of your public offering price per unit.

You may AGGREGATE unit orders submitted by the same person for units of any
of the trusts we sponsor on any single day from any one broker-dealer to qualify
for a purchase level. You can also include these orders as your own for
purposes of this aggregation:

* orders submitted by your spouse or minor children living in the same
household and

* orders submitted by your trust estate or fiduciary accounts.

The discounts described above apply during the initial offering period.

Fee Accounts. We waive the 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. You should consult your financial advisor
to determine whether you can benefit from these accounts. To purchase units in
these fee-based accounts, your financial advisor must purchase units designated
with one of the fee account CUSIP numbers, if available. Please contact your
financial advisor for more information. Fee account purchases are not subject
to the transactional sales fee but will be subject to the creation and
development fee that is retained by the sponsor. For example, this table
illustrates the sales fee you will pay as a percentage of the initial $10 public
offering price per unit (the percentage will vary with the unit price).

Initial sales fee 0.00%
Deferred sales fee 0.00%
-------
Transactional sales fee 0.00%
=======
Creation and development fee 0.60%
-------
Total sales fee 0.60%
=======

This discount applies during the initial offering period and in the secondary
market. Certain fee account investors may be assessed transaction or other fees
on the purchase and/or redemption of units by their broker-dealer or other
processing organizations for providing certain transaction or account
activities. We reserve the right to limit or deny purchases of units in fee
accounts by investors or selling firms whose frequent trading activity is
determined to be detrimental to the trust.

Employees. We waive the transactional sales fee for purchases made by
officers, directors and employees of the sponsor and its affiliates and their
family members (spouses, children and parents). These purchases are not subject
to the transactional sales fee but will be subject to the creation and
development fee.

Understanding Your Investment 9

We also waive a portion of the sales fee for purchases made by registered
representatives of selling firms and their family members (spouses, children and
parents). These purchases may be made at the public offering price per unit
less the applicable regular dealer concession.

These discounts apply during the initial offering period and in the secondary
market.

Rollover/Exchange Option. We waive a portion of the sales fee on units of
the trust offered in this prospectus if you buy your units with redemption or
termination proceeds from any of our other unit trusts. You may also purchase
units of the trust offered in this prospectus at this reduced fee if you
purchase your units with (1) termination proceeds from an unaffiliated unit
trust or (2) redemption proceeds from an unaffiliated unit trust if such trust
is scheduled to terminate within 30 days of the redemption. The discounted
public offering price per unit for these transactions is equal to the regular
public offering price per unit less 1.00%. However, if you invest redemption or
termination proceeds of $500,000 or more in units of the trust, the maximum
sales fee on your units will be limited to the maximum sales fee for the
applicable amount invested in the table under "Large Purchases" above. To
qualify for this discount, the termination or redemption proceeds used to
purchase units of the trust offered in this prospectus must be derived from a
transaction that occurred within 30 days of your purchase of units of the trust
offered in this prospectus. In addition, the discount will only be available
for investors that utilize the same broker-dealer (or a different broker-dealer
with appropriate notification) for both the unit purchase and the transaction
resulting in the receipt of the termination or redemption proceeds used for the
unit purchase. You may be required to provide appropriate documentation or
other information to your broker-dealer to evidence your eligibility for this
sales fee discount.

Please note that if you purchase units of the trust in this manner using
redemption proceeds from trusts which assess the amount of any remaining
deferred sales fee at redemption, you should be aware that any deferred sales
fee remaining on these units will be deducted from those redemption proceeds.
These discounts apply only during the initial offering period.

Dividend Reinvestment Plan. We do not charge any sales fee when you reinvest
distributions from your trust into additional units of the trust. This sales
fee discount applies during the initial offering period and in the secondary
market. Since the deferred sales fee and the creation and development fee are
fixed dollar amounts per unit, your trust must charge these fees 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 or creation and development fee
that will be collected on such units at the time of reinvestment. The dollar
value of these units will fluctuate over time.

RETIREMENT ACCOUNTS. The portfolio may be suitable for purchase in tax-
advantaged retirement accounts. You should contact your financial professional
about the accounts offered and any additional fees imposed.

HOW TO SELL YOUR UNITS

You can sell or redeem your units on any business day the New York Stock
Exchange is open by contacting your financial professional. Unit prices are
available daily on the Internet at WWW.AAMPORTFOLIOS.COM or through your
financial

10 Understanding Your Investment

professional. The sale and redemption price of units is equal to the net asset
value per unit, provided that you will not pay any remaining creation and
development fee or organization costs if you sell or redeem units during the
initial offering period. The sale and redemption price is sometimes referred to
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 or
other fee for processing unit redemption or sale requests.

SELLING UNITS. We may maintain a secondary market for units. This means
that if you want to sell your units, we may buy them at the current net asset
value, provided that you will not pay any remaining creation and development fee
or organization costs if you sell units during the initial offering period. 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
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 repurchase 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 redemption price.

REDEEMING UNITS. You may also redeem your units directly with the trustee,
The Bank of New York, on any day the New York Stock Exchange is open. The
redemption price that you will receive for units is equal to the net asset value
per unit, provided that you will not pay any remaining creation and development
fee or organization costs if you redeem units during the initial offering
period. You will pay any remaining deferred sales fee at the time you redeem
units. You will receive the net asset value for a particular day if the trustee
receives your completed redemption request prior to the close of regular trading
on the New York Stock Exchange. Redemption requests received by authorized
financial professionals prior to the close of regular trading on the New York
Stock Exchange that are properly transmitted to the trustee by the time
designated by the trustee, are priced based on the date of receipt. Redemption
requests received by the trustee after the close of regular trading on the New
York Stock Exchange, redemption requests received by authorized financial
professionals after that time or redemption requests received by such persons
that are not transmitted to the trustee until after the time designated by the
trustee, are priced based on the date of the next determined redemption price
provided they are received in a timely manner by the trustee on such date. It
is the responsibility of authorized financial professionals to transmit
redemption requests received by them to the trustee so they will be received in
a timely manner. If your request is not received in a timely manner or is
incomplete in any way, you will receive the next net asset value computed after
the trustee receives your completed request.

If you redeem your units, the trustee will generally send you a payment for
your units no later than seven days after it receives all necessary
documentation (this will usually only take three business days). The only time
the trustee can delay your payment is if the New York Stock Exchange is closed
(other than weekends or holidays), the Securities and Exchange Commission
determines that trading on that exchange is restricted or an emergency exists
making sale or evaluation of the securities not reasonably practicable, and for
any other period that the Securities and Exchange Commission permits.

Understanding Your Investment 11

To redeem your units, you must send the trustee any certificates for your
units. You must properly endorse your certificates or sign a written transfer
instrument with a signature guarantee. The trustee may require additional
documents such as a certificate of corporate authority, trust documents, a death
certificate, or an appointment as executor, administrator or guardian. The
trustee cannot complete your redemption or send your payment to you until it
receives all of these documents in complete form.

You can request an in-kind distribution of the securities underlying your
units if you tender at least 2,500 units for redemption (or such other amount as
required by your financial professional's firm). This option is generally
available only for securities traded and held in the United States. The trustee
will make any in-kind distribution of securities by distributing applicable
securities in book entry form to the account of your financial professional at
Depository Trust Company. You will receive whole shares of the applicable
securities and cash equal to any fractional shares. You may not request this
option in the last 30 days of your trust's life. We may discontinue this option
at any time without notice.

EXCHANGE OPTION. You may be able to exchange your units for units of our
other unit trusts at a reduced sales fee. You can contact your financial
professional for more information about 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. We
may discontinue this option upon sixty days notice.

DISTRIBUTIONS

DISTRIBUTIONS. Your trust generally pays distributions of its net investment
income along with any excess capital on each distribution date to unitholders of
record on the preceding record date. The record and distribution dates are
shown under "Essential Information" in the "Investment Summary" section of this
prospectus. In some cases, your trust might pay a special distribution if it
holds an excessive amount of cash pending distribution. For example, this could
happen as a result of a merger or similar transaction involving a company whose
stock is in your portfolio. The trust will also generally make required
distributions or distributions to avoid imposition of tax at the end of each
year because it is structured as a "regulated investment company" for federal
tax purposes. The amount of your distributions will vary from time to time as
companies change their dividends or trust expenses change.

[ESTIMATED ANNUAL DISTRIBUTIONS. The estimated net annual distributions are
shown under "Essential Information" in the "Investment Summary" section of this
prospectus. We generally base the estimate of the dividends the trust will
receive from the ETFs by annualizing the most recent dividends declared by the
funds. Due to various factors, actual dividends received from the funds will
most likely differ from their most recent annualized dividends. The actual net
annual distributions you will receive will vary with changes in the trust's fees
and expenses, in dividends received and with the sale of securities. The
estimated net annual distributions for subsequent years are expected to be less
than estimated distributions for the first year because a portion of the
securities included in the trust portfolio will be sold during the first year to
pay for organization costs, creation and development fee and the deferred sales
fee.]

12 Understanding Your Investment

REPORTS. The trustee or your financial professional will make available to
you 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.

INVESTMENT RISKS

All investments involve risk. This section describes the main risks that can
impact the value of the securities in your portfolio or in the underlying ETFs.
You should understand these risks before you invest. If the value of the
securities 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 is the risk that the value of the securities in your trust or in
the underlying ETFs will fluctuate. This could cause the value of your units to
fall below your original purchase price. Market value fluctuates in response to
various factors. These can include changes in interest rates, inflation, the
financial condition of a security's issuer, perceptions of the issuer, or
ratings on a security. Even though we 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.

DIVIDEND PAYMENT RISK is the risk that an issuer of an ETF or an underlying
security in an ETF is unwilling or unable to pay income on a security. Stocks
represent ownership interests in the issuers and are not obligations of the
issuers. Common stockholders have a right to receive dividends only after the
company has provided for payment of its creditors, bondholders and preferred
stockholders. Common stocks do not assure dividend payments. Dividends are
paid only when declared by an issuer's board of directors and the amount of any
dividend may vary over time.

EXCHANGE TRADED FUNDS. The trust invests in shares of exchange-traded funds.
You should understand the section titled "Exchange-Traded Funds" before you
invest. Shares of ETFs 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 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. ETFs are subject to various risks, including management's
ability to meet the fund's investment objective, and to manage the fund's
portfolio when the underlying securities are redeemed or sold, during the
periods of market turmoil and as investors' perceptions regarding ETFs or their
underlying investment change. The trust and the underlying funds have operating
expenses. You will bear not only your share of the trust's expenses, but also
the expenses of the underlying funds. By investing in the other funds, the
trust incurs greater expenses than you would incur if you invested directly in
the funds.

ETFs also face index correlation risk which is the risk that the performance
of an ETF will vary from the actual performance of the fund's target index,
known as "tracking error." This can happen due to transaction costs, market
impact, corporate actions (such as mergers and spin-offs) and timing variances.
Some funds use a technique called "representative sampling," which means that
the fund invests in a representative sample of securities in its target index
rather than all of the index securities. This could increase the risk of
tracking error.

Understanding Your Investment 13

INDEX CORRELATION RISK is the risk that the performance of the trust will not
sufficiently correspond with the target index. This can happen for reasons such
as:

* the impracticability of owning each of the index components with the exact
weightings at a given time,

* the trust will generally adjust component share weightings in an effort to
match the index only when the index itself is rebalanced,

* the possibility of index tracking errors,

* the inability to adequately replicate the weightings of certain index
components due to round lot trading requirements or practices, especially
in certain foreign securities markets,

* regulatory restrictions applicable to the trust,

* the time that elapses between a change in the index and a change in the
trust, and

* fees and expenses of the trust.

FOREIGN ISSUER RISK. Many of the underlying securities held by certain of
the ETFs in the trust may be issued by foreign issuers. This subjects the trust
to more risks than if it only invested in ETFs which invest solely in securities
of domestic issuers. Risks of foreign issuers include restrictions on foreign
investments and exchange of securities and inadequate financial information.
Foreign securities may also be affected by market and political factors specific
to the issuer's country as well as fluctuations in foreign currency exchange
rates. Risks associated with investing in foreign securities may be more
pronounced in emerging markets where the securities markets are substantially
smaller, less developed, less liquid, less regulated, and more volatile than the
securities markets of the U.S. and developed foreign markets. Investments in
debt securities of foreign governments present special risks, including the fact
that issuers may be unable or unwilling to repay principal and/or interest when
due in accordance with the terms of such debt, or may be unable to make such
repayments when due in the currency required under the terms of the debt.
Political, economic and social events also may have a greater impact on the
price of debt securities issued by foreign governments than on the price of U.S.
securities. In addition, brokerage and other transaction costs on foreign
securities exchanges are often higher than in the United States and there is
generally less government supervision and regulation of exchanges, brokers and
issuers in foreign countries.

LEGISLATION/LITIGATION. From time to time, various legislative initiatives
are proposed in the United States and abroad which may have a negative impact on
certain of the companies represented in the trust. In addition, litigation
regarding any of the issuers of the securities or of the industries represented
by these issuers may negatively impact the share prices of these securities. No
one can predict what impact any pending or threatened litigation will have on
the share prices of the securities.

LIQUIDITY RISK is the risk that the value of a security will fall if trading
in the security is limited or absent. No one can guarantee that a liquid
trading market will exist for any security.

NO FDIC GUARANTEE. An investment in the trust is not a deposit of any bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.

14 Understanding Your Investment

EXCHANGE-TRADED FUNDS

Exchange-traded funds are investment pools that hold other securities. The
ETFs that are currently included in the Value Line Select ETF Index are open-end
funds or UITs registered under the Investment Company Act of 1940 and HOLDRs
that issue shares that are approved for listing and trading on a national
securities exchange. HOLDRs are depositary receipts that represent an undivided
beneficial ownership in the stocks of a group of specified companies selected
according to a defined strategy. Unlike typical open-end funds or UITs, ETFs
generally do not sell or redeem their individual shares at net asset value.
ETFs generally sell and redeem shares in large blocks (often known as "Creation
Units"), however the sponsor does not intend to sell or redeem ETF shares in
this manner. In addition, securities exchanges list ETF shares for trading,
which allows investors to purchase and sell individual ETF shares among
themselves at market prices throughout the day. The trust will purchase and
sell ETF shares on these securities exchanges. ETFs therefore possess
characteristics of traditional open-end funds and UITs, which issue redeemable
shares, and of corporate common stocks, which generally issue shares that trade
at negotiated prices on securities exchanges and are not redeemable.

ETFs can provide exposure to broad-based indices, growth and value styles,
market cap segments, sectors and industries, and specific countries or regions
of the world. The securities comprising ETFs may be common equity securities or
fixed income securities. In general, ETFs contain anywhere from fewer than 20
securities to more than 1000 securities. As a result, investors in ETFs (and
investors in the trust) obtain exposure to a much greater number of securities
than an individual investor would typically be able to obtain on their own. The
performance of ETFs is generally highly correlated with the indices or sectors
which they are designed to track.

Only the trustee may vote the shares of the funds held in the trust. The
trustee will vote the shares in the same general proportion as shares held by
other shareholders of each fund. Your trust is generally required, however, to
reject any offer for securities or other property in exchange for portfolio
securities as described under "How the Trust Works--Changing Your Portfolio".

HOW THE TRUST WORKS

YOUR TRUST. Your trust is a unit investment trust registered under the
Investment Company Act of 1940. We created the trust under a trust agreement
between Fixed Income Securities, Inc. (as depositor/sponsor, evaluator and
supervisor) and The Bank of New York (as trustee). We provide services to unit
trusts through our Advisor's Asset Management division. To create your trust,
we deposited securities with the trustee (or contracts to purchase securities
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. At the
close of the New York Stock Exchange on the trust's inception date, the number
of units may be adjusted so that the public offering price per unit equals $10.
The number of units and fractional interest of each unit in the trust will
increase or decrease to the extent of any adjustment.

CHANGING YOUR PORTFOLIO. Your trust is not a managed fund. Unlike a managed
fund, we

Understanding Your Investment 15

designed your portfolio to remain relatively fixed. Your trust will generally
buy and sell securities:

* to invest on an ongoing basis in substantially all of the ETFs that
comprise the trust's target index and to replicate the composition of the
index,

* to pay expenses,

* to issue additional units or redeem units,

* in limited circumstances to protect the trust,

* to make required distributions or avoid imposition of taxes on the trust,
or

* as permitted by the trust agreement.

When your trust sells securities, the composition and diversity of the
securities in the portfolio may be altered. However, if the trustee sells fund
shares to redeem units or to pay trust expenses or sales charges, the trustee
will do so, as nearly as practicable, on a pro rata basis. If a public tender
offer has been made for a security or a merger, acquisition or similar
transaction has been announced affecting a security, the trustee may either sell
the security or accept a tender offer if the supervisor determines that the
action is in the best interest of unitholders. The trustee will distribute any
cash proceeds to unitholders, except to the extent such proceeds are used to
replicate the target index composition. If your trust receives securities or
other property, it will either hold the securities or property in the portfolio
or sell the securities or property and distribute the proceeds, except to the
extent such proceeds are used to replicate the target index. If any contract
for the purchase of securities fails, the sponsor will refund the cash and sales
fee attributable to the failed contract to unitholders on or before the next
distribution date unless substantially all of the moneys held to cover the
purchase are reinvested in substitute securities in accordance with the trust
agreement. The sponsor may direct the reinvestment of security sale proceeds if
the sale is the direct result of serious adverse credit factors which, in the
opinion of the sponsor, would make retention of the securities detrimental to
the trust. In such a case, the sponsor may, but is not obligated to, direct the
reinvestment of sale proceeds in any other securities that meet the criteria for
inclusion in the trust. The sponsor may also instruct the trustee to take
action necessary to ensure that the portfolio continues to satisfy the
qualifications of a regulated investment company.

Notwithstanding the preceding discussion, the trust will consist of as many
of the stocks in the trust's target index as is feasible on an ongoing basis.
The trust seeks to invest in no less than 95% of the stocks comprising its
target index. It may be impracticable for the trust to own certain of such
stocks at any time. Adjustments to the trust to match the weightings of the
securities as closely as is feasible with their weightings in the trust's target
index will generally only be made at the time the index itself is rebalanced,
however, the trust reserves the right to do so as securities are sold to pay
expenses or meet redemptions. Of course, there is no guarantee that this will
always be practicable. The excess proceeds from any sale will generally be
invested in those securities that are most under-represented in the trust.
Changes in the index may occur as a result of merger or acquisition activity.
In such cases, the trust, as a shareholder of an issuer which is the object of
such merger or acquisition activity, will presumably receive various offers from
potential acquirers of the issuer. The trust is not permitted to accept any
such offers until such time as the issuer has been removed from the target
index. Since, in most cases, an issuer is removed from an index only after the
consummation of a merger or acquisition, it is anticipated that the trust will

16 Understanding Your Investment

generally acquire, in exchange for the stock of the deleted issuer, the
consideration that is being offered to shareholders of that issuer who have not
tendered their shares prior to that time. Any cash received as consideration in
such transactions will be reinvested in the most under-represented securities.
Any securities received as consideration which are not included in the target
index will be sold as soon as practicable and will also be reinvested in the
most underrepresented securities. If the target index is no longer maintained,
we may continue operation of the trust using the index as it existed on the last
date it was available or we may terminate the trust.

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 may 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 us, your trust or the trustee.

AMENDING THE TRUST AGREEMENT. The sponsor and the trustee can change the
trust agreement without your consent to correct any provision that may be
defective or to make other provisions that will not materially adversely affect
your interest (as determined by the sponsor and the trustee). We cannot change
this agreement to reduce your interest in your trust without your consent.
Investors owning two-thirds of the units in your trust may vote to change this
agreement.

TERMINATION OF YOUR TRUST. Your trust will terminate on the termination date
set forth under "Essential Information" in the "Investment Summary" section of
this prospectus. The trustee may terminate your trust early if the value of the
trust is less than 40% of the original value of the securities in the trust at
the time of deposit. 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. The trustee will
liquidate the trust in the event that a sufficient number of units not yet sold
to the public are tendered for redemption so that the net worth of the trust
would be reduced to less than 40% of the value of the securities at the time
they were deposited in the trust. If this happens, we will refund any sales
charge that you paid. We may also terminate the trust if the target index is no
longer maintained.

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.

THE SPONSOR. The sponsor of the trust is Fixed Income Securities, Inc.
acting through its Advisor's Asset Management division. We are a broker-dealer
specializing in providing trading and support services to broker-dealers,
registered representatives, investment advisers and other financial
professionals. Our headquarters are located at 18925 Base Camp Road, Monument,
Colorado 80132. You can contact our Advisor's Asset Management division at 8100
East 22nd Street North, Suite 900B, Wichita, Kansas 67226-2309 or by using the
contacts listed on the back cover of this prospectus. FIS is a registered
broker-dealer and investment adviser, a member of the Financial Industry
Regulatory Authority, Inc. (FINRA) and Securities Investor Protection

Understanding Your Investment 17

Corporation (SIPC) and a registrant of the Municipal Securities Rulemaking Board
(MSRB). 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.

We and your trust have adopted a code of ethics requiring our 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.

THE TRUSTEE. The Bank of New York is the trustee of your trust. Its
principal unit investment trust division office is located at 2 Hanson Place,
12th Floor, Brooklyn, New York 11217. You can contact the trustee by calling
the telephone number on the back cover of this prospectus or by writing to its
unit investment trust office. We may remove and replace the trustee in some
cases without your consent. The trustee may also resign by notifying us and
investors.

HOW WE DISTRIBUTE UNITS. We sell units to the public through broker-dealers
and other firms. We pay part of the sales fee to these distribution firms when
they sell units. During the initial offering period, the distribution fee (the
broker-dealer concession or agency commission) for broker-dealers and other
firms is as follows:

TRANSACTION CONCESSION OR
AMOUNT: AGENCY COMMISSION:
------------------------------------------

Less than $50,000 3.00%
$50,000 - $99,999 2.75
$100,000 - $249,999 2.50
$250,000 - $499,999 2.00
$500,000 - $999,999 1.00
$1,000,000 or more 1.00

We apply these concessions or agency commissions as a percent of the public
offering price per unit at the time of the transaction. We also apply the
different levels on a unit basis using a $10 unit equivalent. The broker-dealer
concession or agency commission is 65% of the sales fee for secondary market
sales. For transactions involving unitholders of other unit investment trusts
who use their redemption or termination proceeds to purchase units of the trust,
the distribution fee is 2.00% of the public offering price per unit. No
distribution fee is paid to broker-dealers or other selling firms in connection
with unit sales in investment accounts that charge a "wrap fee" or periodic fees
for investment advisory, financial planning or asset management services in lieu
of commissions.

Broker-dealers and other firms that sell units of all Advisor's Disciplined
Trusts are eligible to receive additional compensation for volume sales. Such
payments will be in addition to the regular concessions paid to firms as set
forth in the applicable trust's prospectus. The additional concession is based
on total initial offering period sales of all Advisor's Disciplined Trusts
during a calendar quarter as set forth in the following table:

INITIAL OFFERING PERIOD SALES VOLUME
DURING CALENDAR QUARTER CONCESSION
---------------------------------------------------------

Less than $5,000,000 0.000%
$5,000,000 but less than $10,000,000 0.050
$10,000,000 but less than $25,000,000 0.075
$25,000,000 but less than $50,000,000 0.100
$50,000,000 but less than $100,000,000 0.125
$100,000,000 but less than $1,000,000,000 0.150
$1,000,000,000 or more 0.175

This volume concession will be paid on units of all eligible Advisor's
Disciplined Trusts sold in the initial offering period. For a trust to be
eligible for this additional compensation for calendar

18 Understanding Your Investment

quarter sales, the trust's prospectus must include disclosure related to this
additional compensation; a trust is not eligible for this additional
compensation if the prospectus for such trust does not include disclosure
related to this additional compensation. Broker-dealer firms will not receive
additional compensation unless they sell at least $5.0 million of units during a
calendar quarter. For example, if a firm sells $4.5 million of units in the
initial offering period during a calendar quarter, the firm will not receive any
additional compensation. Once a firm reaches a particular breakpoint during a
quarter, the firm will receive the stated volume concession on all initial
offering period sales during the applicable quarter. For example, if a firm
sells $7.5 million of units in the initial offering period during a calendar
quarter, the firm will receive additional compensation of 0.05% of $7.5 million
and if a firm sells $12.5 million of units in the initial offering period during
a calendar quarter, the firm will receive additional compensation of 0.075% of
$12.5 million.

In addition, dealer firms will not receive volume concessions on the sale of
units which are not subject to a transactional sales charge. However, such
sales will be included in determining whether a firm has met the sales level
breakpoints for volume concessions. Secondary market sales of all unit trusts
are excluded for purposes of these volume concessions. We will pay these
amounts out of our own assets within a reasonable time following each calendar
quarter.

Any sales fee discount is borne by the broker-dealer or selling firm out of
the distribution fee. We reserve the right to change the amount of concessions
or agency commissions from time to time.

We may provide, at our own expense and out of our own profits, additional
compensation and benefits to broker-dealers who sell units of this trust and our
other products. This compensation is intended to result in additional sales of
our products and/or compensate broker-dealers and financial advisors for past
sales. We may make these payments for marketing, promotional or related
expenses, including, but not limited to, expenses of entertaining retail
customers and financial advisors, advertising, sponsorship of events or
seminars, obtaining shelf space in broker-dealer firms and similar activities
designed to promote the sale of the our products. These arrangements will not
change the price you pay for your units. As part of its general broker-dealer
business, the sponsor provides training, account servicing and related services
to TD AMERITRADE, Inc. and receives compensation for these services that is
partially comprised of an amount equal to twenty percent of the gross sales
concessions earned by TD AMERITRADE, Inc. on transactions in various securities,
including transactions in units of all unit investment trusts, whether or not
issued or distributed by the sponsor.

We generally register units for sale in various states in the U.S. We do not
register units for sale in any foreign 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. The amount of our profit or loss on the initial deposit of
securities into the trust is shown in the "Notes to Portfolio."

Understanding Your Investment 19

TAXES

This section summarizes some of the main U.S. federal income tax consequences
of owning units of the 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 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 the 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.

TRUST STATUS. The trust intends to qualify as a "regulated investment
company" under the federal tax laws. If the trust qualifies as a regulated
investment company and distributes its income as required by the tax law, the
trust generally will not pay federal income taxes.

DISTRIBUTIONS. Trust distributions are generally taxable. After the end of
each year, you will receive a tax statement that separates your trust's
distributions into two categories, ordinary income distributions and capital
gains dividends. Ordinary income distributions are generally taxed at your
ordinary tax rate, however, as further discussed below, certain ordinary income
distributions received from the trust may be taxed at the capital gains tax
rates. Generally, you will treat all capital gains dividends as long-term
capital gains regardless of how long you have owned your units. To determine
your actual tax liability for your capital gains dividends, you must calculate
your total net capital gain or loss for the tax year after considering all of
your other taxable transactions, as described below. In addition, the trust may
make distributions that represent a return of capital for tax purposes and thus
will generally not be taxable to you. The tax status of your distributions from
your trust is not affected by whether you reinvest your distributions in
additional units or receive them in cash. The income from your trust that you
must take into account for federal income tax purposes is not reduced by amounts
used to pay a deferred sales fee, if any. The tax laws may require you to treat
distributions made to you in January as if you had received them on December 31
of the previous year.

DIVIDENDS RECEIVED DEDUCTION. A corporation that owns units generally will
not be entitled to the dividends received deduction with respect to many
dividends received from the trust because the dividends received deduction is
generally not available for distributions from regulated investment companies.
However, certain ordinary income dividends on units that are attributable to
qualifying dividends received by the trust from certain corporations may be
designated by the trust as being eligible for the dividends received deduction.

SALE OR REDEMPTION OF UNITS. If you sell or redeem your units, you will
generally recognize a taxable gain or loss. To determine the amount of this
gain or loss, you must subtract your tax basis

20 Understanding Your Investment

in your units from the amount you receive in the transaction. Your tax basis in
your units is generally equal to the cost of your units, generally including
sales charges. In some cases, however, you may have to adjust your tax basis
after you purchase your units.

CAPITAL GAINS AND LOSSES AND CERTAIN ORDINARY INCOME DIVIDENDS. If you are
an individual, the maximum marginal federal tax rate for net capital gain is
generally 15% (generally 5% for certain taxpayers in the 10% and 15% tax
brackets). These new capital gains rates are generally effective for taxable
years beginning before January 1, 2011. 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% and the 10% rate is reduced to 8% for long-term
capital gains from most property acquired after December 31, 2000 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. However, if you receive a
capital gain dividend from your trust and sell your unit at a loss after holding
it for six months or less, the loss will be recharacterized as long-term capital
loss to the extent of the capital gain dividend received. 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 treats certain capital
gains as ordinary income in special situations.

Ordinary income dividends received by an individual unitholder from a
regulated investment company such as the trust are generally 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 trust 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. The trust will provide notice to its unitholders of the amount
of any distribution which may be taken into account as a dividend which is
eligible for the new capital gains tax rates.

IN-KIND DISTRIBUTIONS. Under certain circumstances, as described in this
prospectus, you may receive an in-kind distribution of trust securities when you
redeem units or when your trust terminates. This distribution is subject to
taxation and you will recognize gain or loss, generally based on the value at
that time of the securities and the amount of cash received.

EXCHANGES. If you elect to have your proceeds from your trust rolled over
into a future 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 realized on a sale or exchange
will be disallowed to the extent that units disposed of are replaced (including
through reinvestment of dividends) within a period of 61 days beginning 30 days
before and ending 30 days after disposition of units or to the extent that the
unitholder, during such period, acquires or enters into an option or contract to
acquire, substantially identical stock or securities. In such a case, the basis
of the units acquired will be adjusted to reflect the disallowed loss.

Understanding Your Investment 21

DEDUCTIBILITY OF TRUST EXPENSES. Generally, expenses incurred by your trust
will be deducted from the gross income received by your trust and only your
share of the trust's net income will be paid to you and reported as taxable
income to you. However, if the units of your trust are held by fewer than 500
unitholders at any time during a taxable year, your trust will generally not be
able to deduct certain expenses from income, thus resulting in your reported
share of the trust's taxable income being increased by your share of those
expenses, even though you do not receive a corresponding cash distribution. In
this case you may be able to take a deduction for these expenses; however,
certain miscellaneous itemized deductions, such as investment expenses, may be
deducted by individuals only to the extent that all of these deductions exceed
2% of the individual's adjusted gross income.

FOREIGN TAX CREDIT. If your trust invests in any foreign securities, the tax
statement that you receive may include an item showing foreign taxes your trust
paid to other countries. In this case, dividends taxed to you will include your
share of the taxes your trust paid to other countries. You may be able to
deduct or receive a tax credit for your share of these taxes.

FOREIGN INVESTORS. 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 should be aware that, generally, subject to applicable tax treaties,
distributions from the trust will be characterized as dividends for federal
income tax purposes (other than dividends which the trust designates as capital
gain dividends) and will be subject to U.S. income taxes, including withholding
taxes, subject to certain exceptions described below. However, distributions
received by a foreign investor from the trust that are properly designated by
the trust as capital gain dividends may not be subject to U.S. federal income
taxes, including withholding taxes, provided that the trust makes certain
elections and certain other conditions are met.

EXPENSES

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

The sponsor will receive a fee from your trust for creating and developing
the trust, including determining the trust's objectives, policies, composition
and size, selecting service providers and information services and for providing
other similar administrative and ministerial functions. This "creation and
development fee" is a charge of $0.06 per unit. The trustee will deduct this
amount from your trust's assets as of the close of the initial offering period.
No portion of this fee is applied to the payment of distribution expenses or as
compensation for sales efforts. This fee will not be deducted from proceeds
received upon a repurchase, redemption or exchange of units before the close of
the initial public offering period.

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 us as supervisor, evaluator and sponsor for providing
portfolio supervisory services, for evaluating your portfolio and for providing
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 of our unit investment trusts in any calendar year.
All of these fees may adjust for inflation without your approval.

22 Understanding Your Investment

Your trust will also pay its general operating expenses. Your trust may pay
expenses such as trustee expenses (including legal and auditing expenses),
various governmental charges, fees for extraordinary trustee services, costs of
taking action to protect your trust, costs of indemnifying the trustee and the
sponsor, legal fees and expenses, expenses incurred in contacting you and costs
incurred to reimburse the trustee for advancing funds to meet distributions.
Your trust will pay a license fee to Value Line Publishing, Inc. for the use of
the Value Line Select ETF Index and related data and trademarks/service marks.
Your trust may pay the costs of updating its registration statement each year.
The trustee will generally pay trust expenses from distributions received on the
securities but in some cases may sell securities to pay trust expenses.

The trust will also bear the expenses of the underlying ETFs. While the
trust will not pay these expenses directly out of its assets, these expenses are
shown in the trust's annual operating expenses in the "Fees and Expenses Table"
to illustrate the impact of these expenses.

EXPERTS

LEGAL MATTERS. Chapman and Cutler LLP acts as counsel for the trust and has
given an opinion that the units are validly issued. Dorsey & Whitney LLP acts
as counsel for the trustee.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. Grant Thornton LLP,
independent registered public accounting firm, audited the statement of
financial condition and the portfolio included in this prospectus.

ADDITIONAL INFORMATION

This prospectus does not contain all the information in the registration
statement that your trust filed with the Securities and Exchange Commission.
The Information Supplement, which was filed with the Securities and Exchange
Commission, includes more detailed information about the securities in your
portfolio, investment risks and general information about your trust. You can
obtain the Information Supplement by contacting us or the Securities and
Exchange Commission as indicated on the back cover of this prospectus. This
prospectus incorporates the Information Supplement by reference (it is legally
considered part of this prospectus).

Understanding Your Investment 23

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

UNITHOLDERS
ADVISOR'S DISCIPLINED TRUST 256

We have audited the accompanying statement of financial condition, including the
trust portfolio on pages 4 through 6, of Advisor's Disciplined Trust 256, as of
__________, 2008, the initial date of deposit. The statement of financial
condition is the responsibility of the trust's sponsor. Our responsibility is
to express an opinion on this statement of financial condition based on our
audit.

We conducted our audit in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the statement of financial condition is free of material misstatement. The
trust is not required to have, nor were we engaged to perform an audit of its
internal control over financial reporting. Our audit 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 trust's 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 statement of financial condition, assessing the accounting
principles used and significant estimates made by the sponsor, as well as
evaluating the overall statement of financial condition presentation. Our
procedures included confirmation with The Bank of New York, trustee, of cash or
an irrevocable letter of credit deposited for the purchase of securities as
shown in the statement of financial condition as of __________, 2008. We
believe that our audit of the statement of financial condition provides a
reasonable basis for our opinion.

In our opinion, the statement of financial condition referred to above presents
fairly, in all material respects, the financial position of Advisor's
Disciplined Trust 256 as of __________, 2008, in conformity with accounting
principles generally accepted in the United States of America.

Chicago, Illinois GRANT THORNTON LLP
__________, 2008

ADVISOR'S DISCIPLINED TRUST 256

STATEMENT OF FINANCIAL CONDITION AS OF __________, 2008
- ---------------------------------------------------------------------------------------------------------

INVESTMENT IN SECURITIES
Contracts to purchase underlying securities (1)(2) . . . . . . . . . . . . . . . . . . . . . $
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
==========

LIABILITIES AND INTEREST OF INVESTORS
Liabilities:
Organization costs (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Deferred sales fee (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Creation and development fee (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
----------

----------

Interest of investors:
Cost to investors (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: initial sales fee (4)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: deferred sales fee, creation & development fee and organization costs (3)(4)(5) . .
----------
Net interest of investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
==========

Number of units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
==========

Net asset value per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
==========

<FN>
(1) Aggregate cost of the securities is based on the closing sale price
evaluations as determined by the evaluator.
(2) Cash or an irrevocable letter of credit has been deposited with the trustee
covering the funds (aggregating $__________) necessary for the purchase of
securities in the trust 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 and offering
the trust. These costs have been estimated at $0.05 per unit for the
trust. A distribution will be made as of the earlier of the close of the
initial offering period or six months following the trust's inception date
to an account maintained by the trustee from which this obligation of the
investors will be satisfied. To the extent the actual organization costs
are greater than the estimated amount, only the estimated organization
costs added to the public offering price will be reimbursed to the sponsor
and deducted from the assets of the trust.
(4) The total sales fee consists of an initial sales fee, a deferred sales fee
and a creation & 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 total creation & development fee. On the
inception date, the total sales fee is 3.95% of the public offering price
per unit. The deferred sales fee is equal to $0.235 per unit and the
creation &development fee is equal to $0.06 per unit.
(5) The aggregate cost to investors includes the applicable sales fee assuming
no reduction of sales fees.

24 Understanding Your Investment

CONTENTS

INVESTMENT SUMMARY
- -------------------------------------------------------------------

A concise description 2 Investment Objective
of essential information 2 Principal Investment Strategy
about the portfolio 2 Principal Risks
3 Who Should Invest
3 Essential Information
3 Fees and Expenses
4 Portfolio

UNDERSTANDING YOUR INVESTMENT
- -------------------------------------------------------------------

Detailed information to 6 The Value Line Select ETF Index
help you understand 7 How to Buy Units
your investment 10 How to Sell Your Units
12 Distributions
13 Investment Risks
15 Exchange-Traded Funds
15 How the Trust Works
20 Taxes
22 Expenses
23 Experts
23 Additional Information
24 Report of Independent Registered
Public Accounting Firm
24 Statement of Financial Condition

WHERE TO LEARN MORE
- -------------------------------------------------------------------

You can contact us for VISIT US ON THE INTERNET
free information about http://www.AAMPortfolios.com
this and other investments, BY E-MAIL
including the Information info@AAMPortfolios.com
Supplement CALL ADVISOR'S ASSET MANAGEMENT
(877) 858-1773
CALL THE BANK OF NEW YORK
(800) 848-6468

ADDITIONAL INFORMATION
- -------------------------------------------------------------------

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

E-MAIL: publicinfo@sec.gov
WRITE: Public Reference Section
Washington, D.C. 20549
VISIT: http://www.sec.gov
(EDGAR Database)
CALL: 1-202-551-8090
(only for information on the operation of the
Public Reference Section)

REFER TO:
ADVISOR'S DISCIPLINED TRUST 256
Securities Act file number: 333-__________
Investment Company Act file number: 811-21056

VALUE LINE SELECT ETF
INDEX PORTFOLIO,
SERIES 1

PROSPECTUS

__________, 2008

[LOGO]

ADVISOR'S
ASSET MANAGEMENT
A DIVISION OF FIXED INCOME SECURITIES, INC.

ADVISOR'S DISCIPLINED TRUST 256

VALUE LINE SELECT ETF INDEX PORTFOLIO, SERIES 1

INFORMATION SUPPLEMENT

This Information Supplement provides additional information concerning each
trust described in the prospectus for the Advisor's Disciplined Trust series
identified above. This Information Supplement should be read in conjunction
with the prospectus. It is not a prospectus. It does not include all of the
information that an investor should consider before investing in a trust. It
may not be used to offer or sell units of a trust without the prospectus. This
Information Supplement is incorporated into the prospectus by reference and has
been filed as part of the registration statement with the Securities and
Exchange Commission. Investors should obtain and read the prospectus prior to
purchasing units of a trust. You can obtain the prospectus without charge by
contacting your financial professional or by contacting the Advisor's Asset
Management division of Fixed Income Securities, Inc. at 18925 Base Camp Road,
Suite 203, Monument, Colorado 80132, at 8100 East 22nd Street North, Suite 900B,
Wichita, Kansas 67226-2309 or by calling (877) 858-1773. This Information
Supplement is dated as of the date of the prospectus.

CONTENTS

General Information 2
Investment Objective and Policies 3
Exchange-Traded Funds 6
Risk Factors 7
Administration of the Trust 17
Portfolio Transactions and Brokerage Allocation 26
Purchase, Redemption and Pricing of Units 26
Taxation 32
Performance Information 34

GENERAL INFORMATION

Each trust is one of a series of separate unit investment trusts created
under the name Advisor's Disciplined Trust and registered under the Investment
Company Act of 1940. 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 Fixed Income
Securities, Inc. (as sponsor, evaluator and supervisor) and The Bank of New York
(as trustee). The sponsor provides services to unit investment trusts through
its Advisor's Asset Management division.

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. At the close of the New York Stock Exchange on the trust's
inception date, the number of units may be adjusted so that the public offering
price per unit equals $10. The number of units, fractional interest of each
unit in the trust and estimated income distributions per unit will increase or
decrease to the extent of any adjustment. Additional units of each trust may be
issued from time to time by depositing in the trust additional securities (or
contracts for the purchase thereof together with cash or irrevocable letters of
credit) or cash (including a letter of credit or the equivalent) with
instructions to purchase additional securities. As additional units are issued
by a trust as a result of the deposit of additional securities by the sponsor,
the aggregate value of the securities in the trust will be increased and the
fractional undivided interest in the trust represented by each unit will be
decreased. The sponsor may continue to make additional deposits of securities
into a trust, provided that such additional deposits will be in amounts, which
will generally maintain, as closely as practicable, the same proportionate
relationship among the securities in such trust as reflected in the trust's
target index. Thus, although additional units will be issued, each unit will
generally continue to represent approximately a weighting of the then current
components of the target index at any such deposit. Precise duplication of the
relationship among the securities in a trust may not be achieved because it may
be economically impracticable as a result of certain economic factors and
procedural policies of the trust, including, but not limited to: (1) price
movements of the various securities will not duplicate one another, (2) the
trust may purchase shares of the securities in round lot quantities or may face
round lot trading requirements or practices in certain securities markets,
especially in certain foreign securities markets, (3) the impracticability of
owning each of the index securities with the exact weightings at a given time,
(4) the trust will generally adjust component security weightings in an effort
to match the index only when the index itself is rebalanced, (5) the possibility
of index tracking errors, (6) regulatory restrictions applicable to the trust,
(7) the time that elapses between a change in the index and a change in the
trust, (8) fees and expenses of the trust, (9) reinvestment of excess proceeds
not needed to meet redemptions of units may not be sufficient to acquire equal
round lots of all the securities in the trust, and (10) reinvestment of proceeds
received from securities which are no longer components of the target index
might not result in the purchase of an equal number of shares in any replacement
security. If the sponsor deposits cash to purchase additional securities,
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 deposit and the purchase of the
securities and because the trust will pay any associated brokerage fees and
costs.

-2-

Each unit initially offered represents an undivided interest in the related
trust. To the extent that any units are redeemed by the trustee or additional
units are issued as a result of additional securities being deposited by the
sponsor, the fractional undivided interest in a trust represented by each
unredeemed unit will increase or decrease accordingly, although the actual
interest in such trust represented by such fraction will remain unchanged.
Units will remain outstanding until redeemed upon tender to the trustee by
unitholders, which may include the sponsor, or until the termination of the
trust agreement.

A trust consists of (a) the securities listed under "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 fee attributable to such failed contract to all
unitholders on the next distribution date.

INVESTMENT OBJECTIVE AND POLICIES

The trust seeks to provide above average total return primarily through
capital appreciation by investing in a portfolio of shares of the exchange-
traded funds ("ETFs") included in the Value Line Select ETF Index. There is, of
course, no guarantee that the trust will achieve its objective. The prospectus
provides additional information regarding the trust's objective and investment
strategy.

The trust seeks to invest on an ongoing basis in substantially all of the
ETFs that comprise the Value Line Select Index. There can be no assurance that
this objective will be met. The initial portfolio seeks to replicate the
composition of the Value Line Select ETF Index to the extent practicable.
During the trust's life, the trust will change to reflect any change in the
component funds in the Value Line Select ETF Index. The trust will generally
change to reflect any changes in the weightings of the components within the
index only at the time that the index is rebalanced. Precise replication of the
securities in the index may not be achieved at the time of an index rebalancing
because it may be economically impracticable or impossible to acquire very small
numbers of shares of certain funds and because of other procedural policies of
the trust.

By investing in substantially all of the securities, in substantially the
same proportions, which comprise an index, the trust seeks to produce investment
results that generally correspond to the price and yield performance of the
securities represented by such index over the term of the trust after
consideration of trust sales fees, expenses and other charges. An investment in
units should be made with an understanding that each trust includes payments of
sales fees and expenses which are not be considered in public statements of the
total return of the target index. If the trust's target index is no longer
maintained, the trust may continue operations using the index as it existed on
the last date it was available or the trust may be terminated.

-3-

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.

Adjustments to the trust portfolio will be made during the life of the
trust to match the weightings of the securities as closely as is feasible with
their weightings in the trust's target index as the trust invests in new
securities in connection with the creation of additional units, as companies are
dropped from or added to such index or as securities are sold to meet
redemptions. Adjustments may also be made from time to time to maintain the
appropriate correlation between a trust and its target index. The proceeds from
any sale will generally be invested in those securities that are most under-
represented in the portfolio. In the case of merger and acquisition or similar
corporate action activity, a trust, as a shareholder of an issuer which is the
object of such activity, will presumably receive offers from potential acquirers
of the issuer. The trustee is not permitted to accept any such offers until
such time as the issuer has been removed from the trust's target index. Since,
in most cases, an issuer is removed from an index only after the consummation of
a merger or acquisition, it is anticipated that a trust will generally acquire,
in exchange for the securities of the deleted issuer, the consideration that is
being offered to shareholders of that issuer who have not tendered their shares
prior to that time. Any cash received as consideration in such transactions
will generally be reinvested in the most under-represented securities. Any
securities received as consideration which are not included in the trust's
target index will be sold as soon as practicable and will also generally be
reinvested in the most under-represented securities.

As a general rule, the only purchases and sales that will be made with
respect to a trust's portfolio will be those necessary to maintain, to the
extent feasible, a portfolio which reflects the current components of the
trust's target index, taking into consideration redemptions, sales of additional
units and the other adjustments referred to elsewhere herein and in the
prospectus. Such purchases and sales will be made in accordance with the trust
agreement and procedures to be specified by the sponsor. The sponsor may direct
the trustee to dispose of securities and either to acquire other securities
through the use of the proceeds of such disposition in order to make changes in
a portfolio or to distribute the proceeds of such disposition to unitholders (i)
as necessary to reflect any additions to or deletions from the trust's target
index, (ii) as may be necessary to establish a closer correlation between the
trust portfolio and the target index or (iii) as may be required for purposes of
distributing to unitholders, when required, their pro rata share of any net
realized capital gains or (iv) as the sponsor may otherwise determine. The
sponsor may direct the trustee to acquire round lots of shares of the securities
rather than odd lot amounts. Any funds not used to acquire round lots will be
held for future purchases of shares, for redemptions of units or for
distributions to unitholders. In the event the trustee receives any securities
or other properties relating to the securities (other than normal dividends)
acquired in exchange for securities such as those acquired in connection with a
reorganization, recapitalization, merger or other transaction, the trustee is
directed to sell such securities or other property and reinvest the proceeds in
shares of the security for which such securities or other property relates, or
if such security is thereafter removed from the trust's target index, in any new
security which is added as a component of such index.

-4-

The sponsor may not alter the portfolio of a trust by the purchase, sale or
substitution of securities, except in the circumstances provided in the trust
agreement. Thus, the assets of a trust will generally remain unchanged under
normal circumstances, except as described herein and in the prospectus to
replicate the components of the trust's target index. Subject to the trust's
objective and investment strategy, the trust agreement also 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 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
supervisor the retention of such securities would be detrimental to the trust.

Subject to the trust's objective and investment strategy, if a public
tender offer has been made for a security or a merger, acquisition or similar
transaction has been announced affecting a security, the trustee may either sell
the security or accept a tender offer if the supervisor determines that the
action is in the best interest of unitholders. The trustee will distribute any
excess cash proceeds to unitholders, except to the extent used to replicate the
trust's target index. If your trust receives securities or other property, it
will either hold the securities or property in the portfolio or sell the
securities or property and distribute the proceeds, except to the extent used to
replicate the trust's target index. Subject to the trust's objective and
investment strategy, the sponsor may direct the reinvestment of security sale
proceeds if the sale is the direct result of serious adverse credit factors
which, in the opinion of the sponsor, would make retention of the securities
detrimental to the trust. In such a case, the sponsor may direct the
reinvestment of sale proceeds in any other securities that meet the criteria for
inclusion in the trust on the trust's inception date. The sponsor may also
instruct the trustee to take action necessary to ensure that the portfolio
continues to satisfy the qualifications of a regulated investment company for
federal tax purposes if the trust has elected to be taxed as a regulated
investment company.

The trustee may sell securities, designated by the supervisor, from a trust
for the purpose of redeeming units of such trust tendered for redemption and the
payment of expenses.

In addition, if a trust has elected to be taxed as a regulated investment
company, the trustee may dispose of certain securities and take such further
action as may be needed from time to time to ensure that a trust continues to
satisfy the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the Internal
Revenue Code, and as may be needed from time to time to avoid the imposition of
any tax on a trust or undistributed income of a trust as a regulated investment
company.

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 herein, in the prospectus or in the
trust agreement, the acquisition by a trust of any securities other than the
portfolio securities is prohibited.

Because certain of the securities in certain of the trusts may from time to
time under certain circumstances be sold or otherwise liquidated and because the
proceeds from such events will be distributed to unitholders and will not be
reinvested, no assurance can be given that a trust will retain for any length of
time its present size and composition. Neither the sponsor nor the

-5-

trustee shall be liable in any way for any default, failure or defect in any
security. In the event of a failure to deliver any security that has been
purchased for a trust under a contract ("Failed Securities"), the sponsor is
authorized under the trust agreement to direct the trustee to acquire other
securities ("Replacement Securities") to make up the original corpus of such
trust.

The Replacement Securities must be purchased within 20 days after delivery
of the notice that a contract to deliver a security will not be honored and the
purchase price may not exceed the amount of funds reserved for the purchase of
the Failed Securities. The Replacement Securities must be equity securities of
the type selected for the trust and must not adversely affect the federal income
tax status of the trust. Whenever a Replacement Security is acquired for a
trust, the trustee shall notify all unitholders of the trust of the acquisition
of the Replacement Security and shall, on the next monthly distribution date
which is more than 30 days thereafter, make a pro rata distribution of the
amount, if any, by which the cost to the trust of the Failed Security exceeded
the cost of the Replacement Security. Once all of the securities in a trust are
acquired, the trustee will have no power to vary the investments of the trust,
i.e., the trustee will have no managerial power to take advantage of market
variations to improve a unitholder's investment.

If the right of limited substitution described in the preceding paragraphs
is not utilized to acquire Replacement Securities in the event of a failed
contract, the sponsor will refund the sales fee attributable to such Failed
Securities to all unitholders of the trust and the trustee will distribute the
cash attributable to such Failed Securities not more than 30 days after the date
on which the trustee would have been required to purchase a Replacement
Security. In addition, unitholders should be aware that, at the time of receipt
of such cash, they may not be able to reinvest such proceeds in other securities
at a return equal to or in excess of the return which such proceeds would have
earned for unitholders of such trust.

In the event that a Replacement Security is not acquired by a trust, the
income for such trust may be reduced.

To the best of the sponsor's knowledge, there is no litigation pending as
of the trust's inception in respect of any security that might reasonably be
expected to have a material adverse effect on the trust. At any time after the
trust's inception, litigation may be instituted on a variety of grounds with
respect to the securities. The sponsor is unable to predict whether any such
litigation may be instituted, or if instituted, whether such litigation might
have a material adverse effect on the trust. The sponsor and the trustee shall
not be liable in any way for any default, failure or defect in any security.

EXCHANGE-TRADED FUNDS

ETFs are investment pools that hold other securities. The ETFs in the
Value Line Select ETF Index may include open-end management investment companies
("open-end funds") or unit investment trusts ("UITs") registered under the
Investment Company Act of 1940 and Holding Company Depositary Receipts
("HOLDRs") that issue shares that are approved for listing and trading on a
national securities exchange. HOLDRs are depositary receipts that represent an
undivided beneficial ownership in the stocks of a group of specified companies
selected according to a defined strategy. Unlike typical open-end funds or
UITs, ETFs generally do not

-6-

sell or redeem their individual shares at net asset value. ETFs generally sell
and redeem shares in large blocks (often known as "Creation Units"), however the
sponsor does not intend to sell or redeem ETF shares in this manner. In
addition, securities exchanges list ETF shares for trading, which allows
investors to purchase and sell individual ETF shares among themselves at market
prices throughout the day. The trust will purchase and sell ETF shares on these
securities exchanges. ETFs therefore possess characteristics of traditional
open-end funds and UITs, which issue redeemable shares, and of corporate common
stocks, which generally issue shares that trade at negotiated prices on
securities exchanges and are not redeemable.

Only the trustee may vote the shares of the funds held in the trust. The
trustee will vote the shares in the same general proportion as shares held by
other shareholders of each fund. Your trust is generally required, however, to
reject any offer for securities or other property in exchange for portfolio
securities as described in the prospectus under "How the Trust Works--Changing
Your Portfolio".

RISK FACTORS

MARKET RISK. Because the trust invests in securities, you should
understand the risks of investing in securities before purchasing units. These
risks include the risk that the financial condition of the company or the
general condition of the stock market may worsen and the value of the securities
(and therefore units) will fall. Securities are especially susceptible to
general stock market movements. The value of securities often rises or falls
rapidly and unpredictably as market confidence and perceptions of companies
change. These perceptions are based on factors including expectations regarding
government economic policies, inflation, interest rates, economic expansion or
contraction, political climates and economic or banking crises. The value of
units will fluctuate with the value of the securities in the trust and may be
more or less than the price you originally paid for your units. As with any
investment, we cannot guarantee that the performance of the trust will be
positive over any period of time. Because the trust is unmanaged, the Trustee
will not sell securities in response to market fluctuations as is common in
managed investments. In addition, because some trusts hold a relatively small
number of securities, you may encounter greater market risk than in a more
diversified investment.

EXCHANGE TRADED FUNDS. Because the trust invests in ETFs, you should
understand the risks of investing in ETFs before purchasing units. Shares of
ETFs may 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
ETFs may decrease. The amount of such discount from net asset value is subject
to change from time to time in response to various factors. ETFs are subject to
various

-7-

risks, including management's ability to meet the ETF's investment objective,
and to manage the ETF portfolio when the underlying securities are redeemed or
sold during periods of market turmoil and as investors' perceptions regarding
ETFs or their underlying investments change. The trust and the underlying funds
have operating expenses. You will bear not only your share of the trust's
expenses, but also the expenses of the underlying funds. By investing in the
other funds, the trust incurs greater expenses than you would incur if you
invested directly in the funds.

ETFs are also face index correlation risk which is the risk that the
performance of an ETF will vary from the actual performance of the fund's target
index, known as "tracking error." This can happen due to transaction costs,
market impact, corporate actions (such as mergers and spin-offs) and timing
variances. Some funds use a technique called "representative sampling," which
means that the fund invests in a representative sample of securities in its
target index rather than all of the index securities. This could increase the
risk of tracking error.

Some of the ETFs held by the trust are open-end funds. Open-end funds of
the type held by the trust are passively-managed investment companies that are
registered under the Investment Company Act of 1940. These open-end funds have
received orders from the Securities and Exchange Commission exempting them from
various provisions of the Investment Company Act of 1940. Regular open-end
funds generally issue redeemable securities that are issued and redeemed at a
price based on the fund's current net asset and are not traded on a securities
exchange. The open-end funds selected for the trust, however, issue shares of
common stock that are traded on a securities exchange based on negotiated prices
rather than the fund's current net asset value. These funds only issue new
shares and redeem outstanding shares in very large blocks, often called
"creation units," in exchange for an in-kind distribution of the fund's
portfolio securities. Due to a variety of cost and administrative factors, the
trust will generally buy and sell shares of its underlying open-end funds on
securities exchanges rather than engaging in transactions in creation units.
Shares of exchange-traded open-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 open-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.

Some of the ETFs held by the trust may be UITs. UITs of the type held by
the trust are passively-managed investment companies that are registered under
the Investment Company Act of 1940. These UITs differ significantly from your
trust in certain respects, even though the UITs held in the trust's portfolio
and the trust itself are registered unit investment trusts. The UITs in the
trust's portfolio have received orders from the Securities and Exchange
Commission exempting them from various provisions of the Investment Company Act
of 1940. Regular UITs, such as your trust, generally issue redeemable
securities that are issued and redeemed at a price based on the UIT's current
net asset and are not traded on a securities exchange. The UITs selected for
the trust, however, issue units that are traded on a securities exchange based
on negotiated prices rather than the UIT's current net asset value. These UITs
only issue new shares and redeem outstanding shares in very large blocks, often
called "creation units," in exchange for an in-kind distribution of the UIT's
portfolio securities. Due to a variety of cost and administrative factors, the
trust will generally buy and sell shares of its underlying UITs on securities
exchanges rather than engaging in transactions in creation units. Units of
exchange-

-8-

traded UITs 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 UIT units may decrease. The amount of such discount from net
asset value is subject to change from time to time in response to various
factors.

Some of the ETFs held by the trust may be HOLDRs. HOLDRS are trusts formed
under a depositary trust agreement among The Bank of New York, as trustee,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the
owners of HOLDRS. Contrary to the other funds in your trust, a HOLDRS trust is
not a registered investment company under the Investment Company Act of 1940.
HOLDRS trusts issue depositary receipts representing an undivided beneficial
ownership in the common stock of their underlying companies. HOLDRS trusts hold
shares of common stock issued by a group of companies specified at the time of
the initial offering of the HOLDRS trust. HOLDRS are separate from the
underlying common stocks that are represented by a HOLDRS trust. HOLDRS
represent a beneficial ownership of the underlying securities in the HOLDRS
trust. Owners of HOLDRS, such as your trust, have the same rights and
privileges as if they owned the underlying securities beneficially outside of
HOLDRS. Your trust, as an owner of HOLDRS, retains the right to receive any
reports and communications that the issuers of underlying securities are
required to send to beneficial owners of their securities. The HOLDRS
depositary trust agreement entitles owners of HOLDRS, such as your trust, to
receive, subject to certain limitations and net of any fees and expenses of the
trustee, any distributions of cash (including dividends), securities or property
made with respect to the underlying securities. However, any distribution of
securities by an issuer of underlying securities will generally be deposited
into the HOLDRS trust and will become part of the underlying securities unless
the distributed securities are not listed for trading on a U.S. national
securities exchange or through the Nasdaq National Market System or the
distributed securities have a Standard & Poor's Global Industry Classification
Standard ("GICS") sector classification that is different from the GICS sectors
classifications represented in the HOLDRS at the time of the distribution. In
addition, if the issuer of underlying securities offers rights to acquire
additional underlying securities or other securities, the rights may be made
available to your trust, as an owner of HOLDRS, may be disposed of or may lapse.
The underlying securities in a HOLDRS trust may change as a result of certain
corporate actions, distributions of securities by the underlying issuers or
other events. Investors only may acquire, hold or transfer HOLDRS in a round-
lot amount of 100 HOLDRS or round-lot multiples. A HOLDRS trust generally
issues additional HOLDRS on a continuous basis. HOLDRS are neither interests in
nor obligations of Merrill Lynch, Pierce, Fenner & Smith Incorporated. HOLDRS
are not interests in the Bank of New York, as trustee. A HOLDRS trust generally
does not publish or otherwise calculate the aggregate value of the underlying
securities represented by a HOLDRS receipt. HOLDRS may trade at a discount from
the aggregate value of the underlying securities in a HOLDRS trust in the
secondary market. This risk is separate and distinct from the risk that the
value of the HOLDRS may decrease. The amount of such discount from net asset
value is subject to change from time to time in response to various factors.

INDEX CORRELATION. The performance and/or composition of the trust might
not sufficiently correspond with the performance or composition of the target
index. This can happen for the following reasons, among others:

-9-

* the impracticability of owning each of the index components with the exact
weightings at a given time,

* the trust will generally adjust component share weightings in an effort to
match the index only when the index itself is rebalanced,

* the possibility of index tracking errors,

* the inability to adequately replicate the weightings of certain index
components due to round lot trading requirements or practices, especially
in certain foreign securities markets,

* regulatory restrictions applicable to the trust, the time that elapses
between a change in the index and a change in the trust, and

* fees and expenses of the trust.

The trust will not be able, and does not seek, to replicate exactly the
performance of its target index because the total return generated by the
securities will be reduced by transaction costs incurred in adjusting the actual
balance of the securities and other trust expenses and sales fees, whereas such
transaction costs, expenses and charges are not included in the calculation of
an index. It is also possible that for periods of time, a trust may not
replicate the composition of its target index due to the temporary
unavailability of certain index securities in the secondary market or due to
other extraordinary circumstances. It is also possible that the composition of
a trust may not exactly replicate the composition of its target index if the
trust has to adjust its portfolio holdings in order to continue to qualify as a
"regulated investment company" under the federal tax laws.

FOREIGN ISSUERS. Since certain or all of the underlying securities held by
certain of the ETFs in the trust are issued by foreign companies, an investment
in the trust involves certain investment risks that are different in some
respects from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or receipt of
payment of dividends on the relevant securities, the possibility that the
financial condition of the issuers of the securities may become impaired or that
the general condition of the relevant stock market may worsen (both of which
would contribute directly to a decrease in the value of the securities and thus
in the value of the units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or confiscatory
taxation, economic uncertainties and foreign currency devaluations and
fluctuations. 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. In
addition, foreign issuers are not necessarily subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic issuers. The securities of many
foreign issuers are less liquid and their prices more volatile than securities
of comparable domestic issuers. In addition, fixed brokerage commissions and
other transaction costs in foreign securities markets are generally higher than
in the United States and there is

-10-

generally less government supervision and regulation of exchanges, brokers and
issuers in foreign countries than there is in the United States. However, due
to the nature of the issuers of the securities in the ETFs selected for the
trust, the sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the trust.

Securities issued by non-U.S. issuers generally pay income in foreign
currencies and principally trade in foreign currencies. Therefore, there is a
risk that the U.S. dollar value of these securities will vary with fluctuations
in the U.S. dollar foreign exchange rates for the various securities.

There can be no assurance that exchange control regulations might not be
adopted in the future which might adversely affect payment to the ETFs or the
trust. The adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in the trust and on the ability of the trust to satisfy its
obligation to redeem units tendered to the trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or sale
side, or both, could cause delays or increase the costs associated with the
purchase and sale of the foreign Securities and correspondingly could affect the
price of the units.

Investors should be aware that it may not be possible to buy all securities
at the same time because of the unavailability of any security, and restrictions
applicable to the trust relating to the purchase of a security by reason of the
federal securities laws or otherwise.

Foreign securities generally have not been registered under the Securities
Act of 1933 and may not be exempt from the registration requirements of such
Act. Sales of non-exempt securities by an ETF in the United States securities
markets are subject to severe restrictions and may not be practicable.
Accordingly, sales of these securities by an ETF will generally be effected only
in foreign securities markets. Investors should realize that the securities in
the ETFs might be traded in foreign countries where the securities markets are
not as developed or efficient and may not be as liquid as those in the United
States. The value of the securities will be adversely affected if trading
markets for the securities are limited or absent.

SMALL-CAP AND MID-CAP COMPANIES. While historically smaller company stocks
have outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Small-cap and mid-cap companies may have
limited product lines, markets or financial resources; may lack management depth
or experience; and may be more vulnerable to adverse general market or economic
developments than large companies. Some of these companies may distribute, sell
or produce products which have recently been brought to market and may be
dependent on key personnel.

The prices of small or mid-size company securities are often more volatile
than prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less publicly
available information. Also, because small-cap and mid-cap companies normally
have fewer shares outstanding and these shares trade less frequently than large
companies, it may be more difficult for a trust which contains these securities
to buy

-11-

and sell significant amounts of such shares without an unfavorable impact on
prevailing market prices.

HIGH-YIELD SECURITIES. Certain of the ETFs in the trust may invest in
"high-yield, high-risk" debt obligations or "junk" obligations may entail,
including increased credit risks and the risk that the value of the units will
decline, and may decline precipitously, with increases in interest rates. In
recent years there have been wide fluctuations in interest rates and thus in the
value of debt obligations generally. Certain of the securities included in the
funds in the trust may be subject to greater market fluctuations and risk of
loss of income and principal than are investments in lower-yielding, higher-
rated securities, and their value may decline precipitously because of increases
in interest rates, not only because the increases in rates generally decrease
values, but also because increased rates may indicate a slowdown in the economy
and a decrease in the value of assets generally that may adversely affect the
credit of issuers of high-yield, high-risk securities resulting in a higher
incidence of defaults among high-yield, high-risk securities. A slowdown in the
economy, or a development adversely affecting an issuer's creditworthiness, may
result in the issuer being unable to maintain earnings or sell assets at the
rate and at the prices, respectively, that are required to produce sufficient
cash flow to meet its interest and principal requirements. For an issuer that
has outstanding both senior commercial bank debt and subordinated high-yield,
high-risk securities, an increase in interest rates will increase that issuer's
interest expense insofar as the interest rate on the bank debt is fluctuating.
However, many leveraged issuers enter into interest rate protection agreements
to fix or cap the interest rate on a large portion of their bank debt. This
reduces exposure to increasing rates, but reduces the benefit to the issuer of
declining rates. The sponsor cannot predict future economic policies or their
consequences or, therefore, the course or extent of any similar market
fluctuations in the future.

"High-yield" or "junk" securities, the generic names for securities rated
below BBB by Standard & Poor's, or below Baa by Moody's, are frequently issued
by corporations in the growth stage of their development, by established
companies whose operations or industries are depressed or by highly leveraged
companies purchased in leveraged buyout transactions. The market for high-yield
securities is very specialized and investors in it have been predominantly
financial institutions. High-yield securities are generally not listed on a
national securities exchange. Trading of high-yield securities, therefore,
takes place primarily in over-the-counter markets that consist of groups of
dealer firms that are typically major securities firms. Because the high-yield
security market is a dealer market, rather than an auction market, no single
obtainable price for a given security prevails at any given time. Prices are
determined by negotiation between traders. 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. Not all dealers maintain
markets in all high-yield securities. Therefore, since there are fewer traders
in these securities than there are in "investment grade" securities, the bid-
offer spread is usually greater for high-yield securities than it is for
investment grade securities. The value of these securities will be adversely
affected if trading markets for the securities are limited or absent.

-12-

Lower-rated securities tend to offer higher yields than higher-rated
securities with the same maturities because the creditworthiness of the issuers
of lower-rated securities may not be as strong as that of other issuers.
Moreover, if a security is recharacterized as equity by the Internal Revenue
Service for federal income tax purposes, the issuer's interest deduction with
respect to the security will be disallowed and this disallowance may adversely
affect the issuer's credit rating. Because investors generally perceive that
there are greater risks associated with the lower-rated securities in the funds
in the trust, the yields and prices of these securities tend to fluctuate more
than higher-rated securities with changes in the perceived quality of the credit
of their issuers. In addition, the market value of high-yield, high-risk
securities may fluctuate more than the market value of higher-rated securities
since these securities tend to reflect short-term credit development to a
greater extent than higher-rated securities. Lower-rated securities generally
involve greater risks of loss of income and principal than higher-rated
securities. Issuers of lower-rated securities may possess fewer
creditworthiness characteristics than issuers of higher-rated securities and,
especially in the case of issuers whose obligations or credit standing have
recently been downgraded, may be subject to claims by debtholders, owners of
property leased to the issuer or others which, if sustained, would make it more
difficult for the issuers to meet their payment obligations. High-yield, high-
risk securities are also affected by variables such as interest rates, inflation
rates and real growth in the economy. Therefore, investors should consider
carefully the relative risks associated with investment in securities that carry
lower ratings.

The value of the shares of the ETFs reflects the value of the portfolio
securities, including the value (if any) of securities in default. Should the
issuer of any security default in the payment of principal or interest, the ETFs
in the trust may incur additional expenses seeking payment on the defaulted
security. Because amounts (if any) recovered by the funds in payment under the
defaulted security may not be reflected in the value of the fund shares until
actually received by the funds, and depending upon when a unitholder purchases
or sells his or her units, it is possible that a unitholder would bear a portion
of the cost of recovery without receiving any portion of the payment recovered.

High-yield, high-risk securities are generally subordinated obligations.
The payment of principal (and premium, if any), interest and sinking fund
requirements with respect to subordinated obligations of an issuer is
subordinated in right of payment to the payment of senior obligations of the
issuer. Senior obligations generally include most, if not all, significant debt
obligations of an issuer, whether existing at the time of issuance of
subordinated debt or created thereafter. Upon any distribution of the assets of
an issuer with subordinated obligations upon dissolution, total or partial
liquidation or reorganization of or similar proceeding relating to the issuer,
the holders of senior indebtedness will be entitled to receive payment in full
before holders of subordinated indebtedness will be entitled to receive any
payment. Moreover, generally no payment with respect to subordinated
indebtedness may be made while there exists a default with respect to any senior
indebtedness. Thus, in the event of insolvency, holders of senior indebtedness
of an issuer generally will recover more, ratably, than holders of subordinated
indebtedness of that issuer.

Obligations that are rated lower than "BBB" by Standard & Poor's, or "Baa"
by Moody's, respectively, should be considered speculative as such ratings
indicate a quality of less than

-13-

investment grade. Investors should carefully review the objective of the trust
and consider their ability to assume the risks involved before making an
investment in the trust.

CONVERTIBLE SECURITIES RISKS. The ETFs 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.

REAL ESTATE INVESTMENT TRUSTS. The ETFs held by a trust may invest in
securities issued by real estate investment trusts or other real estate-related
investments. Many factors can have an adverse impact on the performance of a
particular real estate investment trust or other real estate-related investments
(a "REIT"), including its cash available for distribution, the credit quality of
a particular REIT or the real estate industry generally. The success of REITs
depends on various factors, including the occupancy and rent levels,
appreciation of the underlying property and the ability to raise rents on those
properties. Economic recession, overbuilding, tax law changes,

-14-

higher interest rates or excessive speculation can all negatively impact REITs,
their future earnings and share prices.

Risks associated with the direct ownership of real estate include, among
other factors,

* general U.S. and global as well as local economic conditions,

* decline in real estate values,

* the financial health of tenants,

* overbuilding and increased competition for tenants,

* oversupply of properties for sale,

* changing demographics,

* changes in interest rates, tax rates and other operating expenses,

* changes in government regulations,

* changes in zoning laws,

* the ability of the owner to provide adequate management, maintenance and
insurance,

* faulty construction and the ongoing need for capital improvements,

* the cost of complying with the Americans with Disabilities Act,

* regulatory and judicial requirements, including relating to liability for
environmental hazards,

* natural or man-made disasters,

* changes in the perception of prospective tenants of the safety, convenience
and attractiveness of the properties changes in neighborhood values and
buyer demand, and

* the unavailability of construction financing or mortgage loans at rates
acceptable to developers.

Variations in rental income and space availability and vacancy rates in
terms of supply and demand are additional factors affecting real estate
generally and REITs in particular. Properties owned by a REIT may not be
adequately insured against certain losses and may be subject to significant
environmental liabilities, including remediation costs.

The value of REITs 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

-15-

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 trust may decline in
response to such developments.

You should also be aware that REITs may not be diversified and are subject
to the risks of financing projects. The real estate industry may be cyclical,
and, if a fund acquires REIT securities at or near the top of the cycle, there
is increased risk of a decline in value of the REIT securities and therefore the
value of the units. REITs are also subject to defaults by borrowers and the
market's perception of the REIT industry generally.

Because of their structure, and the legal requirement that they distribute
at least 90% of their taxable income to shareholders annually, REITs require
frequent amounts of new funding, through both borrowing money and issuing stock.
Thus, REITs historically have frequently issued substantial amounts of new
equity shares (or equivalents) to purchase or build new properties. This may
have adversely affected REIT equity share market prices. Both existing and new
share issuances may have an adverse effect on these prices in the future,
especially when REITs continue to issue stock when real estate prices are
relatively high and stock prices are relatively low.

DISCOUNT SECURITIES. Certain of the securities held by the ETFs in the
trust may have been acquired at a market discount from par value at maturity.
The coupon interest rates on the discount securities at the time they were
purchased and deposited in the funds were lower than the current market interest
rates for newly issued securities of comparable rating and type. If such
interest rates for newly issued comparable securities increase, the market
discount of previously issued securities will become greater, and if such
interest rates for newly issued comparable securities decline, the market
discount of previously issued securities will be reduced, other things being
equal. Investors should also note that the value of securities purchased at a
market discount will increase in value faster than securities purchased at a
market premium if interest rates decrease. Conversely, if interest rates
increase, the value of securities purchased at a market discount will decrease
faster than securities purchased at a market premium. In addition, if interest
rates rise, the prepayment risk of higher yielding, premium securities and the
prepayment benefit for lower yielding, discount securities will be reduced.
Market discount attributable to interest changes does not indicate a lack of
market confidence in the issue. Neither the sponsor nor the trustee shall be
liable in any way for any default, failure or defect in any of the securities.

PREMIUM SECURITIES. Certain of the securities held by the ETFs in the
trust may have been acquired at a market premium from par value at maturity.
The coupon interest rates on the premium securities at the time they were
purchased by the fund were higher than the current market interest rates for
newly issued securities of comparable rating and type. If such interest rates
for newly issued and otherwise comparable securities decrease, the market
premium of previously issued securities will be increased, and if such interest
rates for newly issued comparable securities increase, the market premium of
previously issued securities will be reduced, other things being equal. The
current returns of securities trading at a market premium are initially higher
than the current returns of comparable securities of a similar type issued at

-16-

currently prevailing interest rates because premium securities tend to decrease
in market value as they approach maturity when the face amount becomes payable.
Because part of the purchase price is thus returned not at maturity but through
current income payments, early redemption of a premium security at par or early
prepayments of principal will result in a reduction in yield. Redemption
pursuant to call provisions generally will, and redemption pursuant to sinking
fund provisions may, occur at times when the redeemed securities have an
offering side valuation which represents a premium over par or for original
issue discount securities a premium over the accreted value.

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 or the equivalent)
with instructions to purchase additional securities, in such trust and the
issuance of a corresponding number of additional units. In connection with
these deposits, 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 deposit and the purchase
of the securities and because a trust will pay the associated brokerage fees and
other acquisition costs.

ADMINISTRATION OF THE TRUST

DISTRIBUTIONS TO UNITHOLDERS. Income received by a trust is credited by
the trustee to the Income Account for the trust. All other receipts are
credited by the trustee to a separate Capital Account for the trust. The
trustee will normally distribute any income received by a trust on each
distribution date or shortly thereafter to unitholders of record on the
preceding record date. The trust will also generally make required
distributions or distributions to avoid imposition of tax at the end of each
year if it has elected to be taxed as a "regulated investment company" for
federal tax purposes. Unitholders will receive an amount substantially equal to
their pro rata share of the available balance of the Income Account of the
trust. 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 $0.01 per unit. 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 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 the unitholders' pro rata share of the available
balance of the Income Account of the trust 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. 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

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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 the selling broker-dealer provides such notice.

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 the 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 reinvest distributions into
additional units of their trust without a sales fee. Your trust will pay any
deferred sales fee and creation and development fee per unit regardless of any
sales fee discounts. However, if you are eligible to receive a discount such
that the sales fee you must pay is less than the applicable deferred sales fee
and creation and development fee, you will be credited the difference between
your sales fee and the deferred sales fee and the creation and development fee
at the time you buy your units. Accordingly, if you reinvest distributions into
additional units of your trust, you will be credited the amount of any remaining
deferred sales fee and creation and development fee on such units at the time of
reinvestment.

STATEMENTS TO UNITHOLDERS. With each distribution, the trustee will
furnish to each unitholder 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 are required to be audited annually, at the related
trust's expense, by independent public accountants designated by the sponsor,
unless the sponsor determines that such an audit would not be in the best
interest of the unitholders of the trust. 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, setting forth for the trust:

(A) As to the Income Account:

(1) the amount of income received on the securities (including income
received as a portion of the proceeds of any disposition of
securities);

(2) the amounts paid for purchases of replacement securities or for
purchases of securities otherwise pursuant to the trust
agreement, if any, and for redemptions;

(3) the deductions, if any, from the Income Account for payment into
the Reserve Account;

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(4) the deductions for applicable taxes and fees and expenses of the
trustee, the depositor, the evaluator, the supervisor, counsel,
auditors and any other expenses paid by the trust;

(5) the amounts reserved for purchases of contract securities, for
purchases made pursuant to replace failed contract securities or
for purchases of securities otherwise pursuant to the trust
agreement, if any;

(6) the deductions for payment of the depositor's expenses of
maintaining the registration of the trust units, if any;

(7) the aggregate distributions to unitholders; and

(8) the balance remaining after such deductions and distributions,
expressed both as a total dollar amount and as a dollar amount
per unit outstanding on the last business day of such calendar
year;

(B) As to the Capital Account:

(1) the net proceeds received due to sale, maturity, redemption,
liquidation or disposition of any of the securities, excluding
any portion thereof credited to the Income Account;

(2) the amount paid for purchases of replacement securities or for
purchases of securities otherwise pursuant to the trust
agreement, if any, and for redemptions;

(3) the deductions, if any, from the Capital Account for payments
into the Reserve Account;

(4) the deductions for payment of applicable taxes and fees and
expenses of the trustee, the depositor, the evaluator, the
supervisor, counsel, auditors and any other expenses paid by the
trust;

(5) the deductions for payment of the depositor's expenses of
organizing the trust;

(6) the amounts reserved for purchases of contract securities, for
purchases made pursuant to replace failed contract securities or
for purchases of securities otherwise pursuant to the trust
agreement, if any;

(7) the deductions for payment of deferred sales fee and creation and
development fee, if any;

(8) the deductions for payment of the depositor's expenses of
maintaining the registration of the trust units, if any;

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(9) the aggregate distributions to unitholders; and

(10) the balance remaining after such distributions and deductions,
expressed both as a total dollar amount and as a dollar amount
per unit outstanding on the last business day of such calendar
year; and

(1) a list of the securities held as of the last business day of such
calendar year and a list which identifies all securities sold or
other securities acquired during such calendar year, if any;

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

(3) the unit value based on the last trust evaluation of such trust
made during such calendar year; and

(4) the amounts 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 such distributions.

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 from time to
time by the sponsor and trustee or their respective successors, without the
consent of any of the unitholders, (i) to cure any ambiguity or to correct or
supplement any provision which may be defective or inconsistent with any other
provision contained in the trust agreement, (ii) to make such other provision in
regard to matters or questions arising under the trust agreement as shall not
materially adversely affect the interests of the unitholders or (iii) to make
such amendments as may be necessary (a) for the trust to continue to qualify as
a regulated investment company for federal income tax purposes if the trust has
elected to be taxed as such under the United States Internal Revenue Code of
1986, as amended, or (b) to prevent the trust from being deemed an association
taxable as a corporation for federal income tax purposes if the trust has not
elected to be taxed as a regulated investment company under the United States
Internal Revenue Code of 1986, as amended. The trust agreement may not be
amended, however, without the consent of all unitholders then outstanding, so as
(1) to permit, except in accordance with the terms and conditions thereof, the
acquisition hereunder of any securities other than those specified in the
schedules to the trust agreement or (2) to reduce the percentage of units the
holders of which are required to consent to certain of such amendments. The
trust agreement may not be amended so

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as to reduce the interest in a trust represented by units without the consent of
all affected unitholders. Except for the amendments, changes or
modifications described above, neither the sponsor nor the trustee may consent
to any other amendment, change or modification of the trust agreement without
the giving of notice and the obtaining of the approval or consent of unitholders
representing at least 66 2/3% of the units then outstanding of the affected
trust. No amendment may reduce the aggregate percentage of units the holders of
which are required to consent to any amendment, change or modification of the
trust agreement without the consent of the unitholders of all of the units then
outstanding of the affected trust and in no event may any amendment be made
which would (1) alter the rights to the unitholders as against each other, (2)
provide the trustee with the power to engage in business or investment
activities other than as specifically provided in the trust agreement, (3)
adversely affect the tax status of the trust for federal income tax purposes or
result in the units being deemed to be sold or exchanged for federal income tax
purposes or (4) unless the trust has elected to be taxed as a regulated
investment company for federal income tax purposes, result in a variation of the
investment of unitholders in the trust. The trustee will 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. If the value of a trust shall be less than the applicable minimum value
stated in the prospectus (generally 40% of the total value of securities
deposited in the trust during the initial offering period), 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. A trust will be liquidated by the trustee in the event that a
sufficient number of units of the trust not yet sold are tendered for redemption
by the sponsor, so that the net worth of the trust would be reduced to less than
40% of the value of the securities at the time they were deposited in the trust.
If a trust is liquidated because of the redemption of unsold units by the
sponsor, the sponsor will refund to each purchaser of units the entire sales fee
paid by such purchaser.

Beginning nine business days prior to, but no later than, the scheduled
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 sponsor will generally instruct the trustee to sell the securities as
quickly as practicable 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.

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Approximately thirty days prior to termination of a trust, the trustee will
notify unitholders of the termination and provide a form allowing qualifying
unitholders to elect an in-kind distribution. A unitholder who owns the minimum
number of units described in the prospectus may request an in-kind distribution
from the trustee instead of cash. The trustee will make an in-kind distribution
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 unitholder will be entitled to receive whole shares of each
of the securities comprising the portfolio of a trust and cash from the Capital
Account equal to the fractional shares to which the unitholder is entitled. The
trustee may adjust the number of shares of any security included in a
unitholder's in-kind distribution to facilitate the distribution of whole
shares. The sponsor may terminate the in-kind distribution option at any time
upon notice to the unitholders. Special federal income tax consequences will
result if a unitholder requests an in-kind distribution.

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 (upon surrender
for cancellation of certificates for units, if issued) their pro rata share of
the balances remaining in the Income and Capital Accounts of the trust.

The sponsor may, but is not obligated to, offer for sale units of a
subsequent series of a trust at approximately the time of the mandatory
termination date. If the sponsor does offer such units for sale, unitholders
may be given the opportunity to purchase such units at a public offering price
that 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, a trust company
organized under the laws of New York. The Bank of New York has its principal
unit investment trust division offices at 2 Hanson Place, 12th Floor, Brooklyn,
New York 11217, (800) 848-6468. The Bank of New York 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.

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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. In case at any time the
trustee shall not meet the requirements set forth in the trust agreement, or
shall become incapable of acting, or if a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the trustee in
an involuntary case, or the trustee shall commence a voluntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or any receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) for the trustee or for any substantial part of its
property shall be appointed, or the trustee shall generally fail to pay its
debts as they become due, or shall fail to meet such written standards for the
trustee's performance as shall be established from time to time by the sponsor,
or if the sponsor determines in good faith that there has occurred either (1) a
material deterioration in the creditworthiness of the trustee or (2) one or more
grossly negligent acts on the part of the trustee with respect to a trust, the
sponsor, upon sixty days' prior written notice, may remove the trustee and
appoint a successor trustee, as hereinafter provided, by written instrument, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee. 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. The sponsor of the trust is Fixed Income Securities, Inc.
acting through its Advisor's Asset Management division. The sponsor is a
broker-dealer specializing in providing services to broker-dealers, registered
representatives, investment advisers and other financial professionals. The
sponsor's headquarters are located at 18925 Base Camp Road, Monument, Colorado
80132. You can contact the Advisor's Asset Management division at 8100 East
22nd Street North, Suite 900B, Wichita, Kansas 67226-2309 or by using the
contacts listed on the back cover of the prospectus. The sponsor is a
registered broker-dealer and investment adviser and a member of the Financial
Industry Regulatory Authority, Inc. (FINRA) and the Securities Investor
Protection Corporation (SIPC), and a registrant of the Municipal Securities
Rulemaking Board (MSRB).

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, (b) terminate the

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trust agreement and liquidate any trust as provided therein, or (c) continue to
act as trustee without terminating the trust agreement.

THE EVALUATOR AND SUPERVISOR. Fixed Income Securities, Inc., the sponsor,
also serves as evaluator and supervisor. The evaluator and supervisor may
resign or be removed by the sponsor and trustee in which event the sponsor or
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 resignation or removal and appointment shall be
mailed by the trustee to each unitholder.

LIMITATIONS ON LIABILITY. The sponsor, evaluator, and supervisor are
liable for the performance of their obligations arising from their
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 trustee and 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 will not charge a trust any fees for
services performed as sponsor. 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 may receive a fee from your trust for creating and developing
the trust, including determining the trust's objectives, policies, composition
and size, selecting service providers and information services and for providing
other similar administrative and ministerial

-24-

functions. The amount of this "creation and development fee" is set forth in
the prospectus. The trustee will deduct this amount from your trust's assets as
of the close of the initial offering period. No portion of this fee is applied
to the payment of distribution expenses or as compensation for sales efforts.
This fee will not be deducted from proceeds received upon a repurchase,
redemption or exchange of units before the close of the initial public offering
period.

The trustee receives for its services that fee set forth in the prospectus.
The trustee's fee which is calculated and paid monthly is based on the total
number of units of the related trust outstanding as of January 1 for any annual
period, except during the initial offering period the fee will be based on the
units outstanding at the end of each month. 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.

The supervisor will charge a trust a surveillance fee for services
performed for the trust in an amount not to exceed that amount set forth in the
prospectus but in no event will such compensation, when combined with all
compensation received from other unit investment trusts for which the sponsor
both acts as sponsor and provides portfolio surveillance, exceed the aggregate
cost to the sponsor of providing such services. Such fee shall be based on the
total number of units of the related trust outstanding as of January 1 for any
annual period, except during the initial offering period the fee will be based
on the units outstanding at the end of each month.

For evaluation of the securities in a trust, the evaluator shall receive an
evaluation fee in an amount not to exceed that amount set forth in the
prospectus but in no event will such compensation, when combined with all
compensation from other unit investment trusts for which the sponsor acts as
sponsor and provides evaluation services, exceed the aggregate cost of providing
such services. Such fee shall be based on the total number of units of the
related trust outstanding as of January 1 for any annual period, except during
the initial offering period the fee will be based on the units outstanding at
the end of each month.

For providing bookkeeping and administrative services to a trust, the
sponsor shall receive an administration fee in an amount not to exceed that
amount set forth in the prospectus but in no event will such compensation, when
combined with all compensation from other unit investment trusts for which the
sponsor acts as sponsor and provides evaluation services, exceed the aggregate
cost of providing such services. Such fee shall be based on the total number of
units of the related trust outstanding as of January 1 for any annual period,
except during the initial offering period the fee will be based on the units
outstanding at the end of each month.

The trustee's fee, sponsor's fee for providing bookkeeping and
administrative services to the trust, supervisor's fee and evaluator's fee are
deducted from the Income Account of the related trust to the extent funds are
available and then from the Capital Account. Each such fee (other than any
creation and development fee) may be increased without approval of unitholders
by amounts not exceeding a proportionate increase in the Consumer Price Index or
any equivalent index substituted therefor.

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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 and reimbursement of the cost of advances
to the trust for payment of expenses and distributions, 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 negligence, bad faith or willful misconduct on
its part or its reckless disregard of its obligations under the trust agreement;
(f) indemnification of the sponsor for any loss, liability or expense incurred
in acting in that capacity without gross negligence, bad faith or willful
misconduct or its reckless disregard for its obligations under the trust
agreement; and (g) expenditures incurred in contacting unitholders upon
termination of the trust. The trust will also pay a license fee to the provider
of the trust's target index for the use of such index and related data,
trademarks/service marks and other intellectual property. A trust may pay the
costs of updating its registration statement each year. 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. 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. A trust may pay the costs of
updating its registration statement each year.

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 sponsor to specify minimum amounts 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 thereof. The public offering price per unit is equal to the net asset
value per unit plus organization costs plus the applicable sales fee referred to
in the prospectus. 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 total
creation and development fee. The sales fee as a percentage of the public
offering price and the net amount invested is set forth in the prospectus. The
deferred sales fee is a fixed dollar amount and will be collected in
installments as described in the prospectus. The creation and development fee
is a fixed dollar amount and will be collected at the end of the initial
offering period as described in the prospectus. Units purchased after the
initial deferred sales fee payment will be subject to the remaining deferred
sales fee payments. 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. Units sold or
redeemed prior to such time as the entire applicable creation and development
fee has been collected will not be

-26-

assessed the remaining creation and development 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. These 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 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, if earlier.
Certain broker-dealers may charge a transaction fee for processing unit
purchases.

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 regular trading
on 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 received
at or prior to the close of regular trading on the New York Stock Exchange on
each such day as discussed in the prospectus. Orders received by the trustee,
sponsor or authorized financial professionals 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 as discussed in the
prospectus.

Had units of a trust been available for sale at the close of business on
the business day before the inception date of the trust, the public offering
price would have been as shown under "Essential Information" in the prospectus.
The public offering price per unit of a trust on the date of the prospectus or
on any subsequent date will vary from the amount stated under "Essential
Information" in the prospectus in accordance with fluctuations in the prices of
the underlying securities. Net asset value per unit is determined by dividing
the value of a trust's portfolio securities, cash and other assets, less all
liabilities, by the total number of units outstanding. The portfolio securities
are valued by the evaluator as follows: If the security is listed on a national
securities exchange, the evaluation will generally be based on the last sale
price on the exchange (unless the evaluator deems the price inappropriate as a
basis for evaluation). If the security is not so listed or, if so listed and
the principal market for the security is other than on the exchange, the
evaluation will generally be made by the evaluator in good faith based on an
appraisal of the fair value of the securities using recognized pricing methods.

The foregoing evaluations and computations shall be made as of the close of
regular trading on the New York Stock Exchange, on each business day commencing
with the trust's inception date of the securities, effective for all sales made
during the preceding 24-hour period.

Although payment is normally made three business days following the order
for purchase, payments may be made prior thereto. A person will become the
owner of units on the date of settlement provided payment has been received.
Cash, if any, made available to the sponsor prior to the date of settlement for
the purchase of units may be used in the sponsor's business and may be deemed to
be a benefit to the sponsor, subject to the limitations of the Securities
Exchange

-27-

Act of 1934. If a unitholder desires to have certificates representing units
purchased, such certificates will be delivered as soon as possible following his
written request therefor.

PUBLIC DISTRIBUTION OF UNITS. The sponsor intends to qualify the units for
sale in a number of states. Units will be sold through dealers who are members
of the National Association of Securities Dealers, Inc. and through others.
Sales may be made to or through dealers at prices which represent discounts from
the public offering price as set forth in the prospectus. Certain commercial
banks may be making units available to their customers on an agency basis. The
sponsor reserves the right to change the discounts from time to time.

We may provide, at our own expense and out of our own profits, additional
compensation and benefits to broker-dealers who sell shares of units of this
trust and our other products. This compensation is intended to result in
additional sales of our products and/or compensate broker-dealers and financial
advisors for past sales. We may make these payments for marketing, promotional
or related expenses, including, but not limited to, expenses of entertaining
retail customers and financial advisors, advertising, sponsorship of events or
seminars, obtaining shelf space in broker-dealer firms and similar activities
designed to promote the sale of the our products. These arrangements will not
change the price you pay for your units.

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

PROFITS OF SPONSOR. The sponsor will receive gross sales fees equal to the
percentage of the offering price of the units of such trusts stated in the
prospectus and will pay a portion of such sales fees to dealers and agents. In
addition, the sponsor may realize a profit or a loss resulting from the
difference between the purchase prices of the securities to the sponsor and the
cost of such securities to a trust. The sponsor may also realize profits or
losses with respect to securities deposited in a trust which were acquired from
underwriting syndicates of which the sponsor was a member. An underwriter or
underwriting syndicate purchases securities from the issuer on a negotiated or
competitive bid basis, as principal, with the motive of marketing such
securities to investors at a profit. The sponsor may realize additional profits
or losses during the initial offering period on unsold units as a result of
changes in the daily evaluation of the securities in a trust.

MARKET FOR UNITS. After the initial offering period, while not obligated
to do so, the sponsor may, subject to change at any time, maintain a market for
units of the trust offered hereby and to continuously offer to purchase said
units at the net asset value determined by the evaluator, provided that the
repurchase price will not be reduced by any remaining creation and development
fee or organization costs during the initial offering period. While the sponsor
may repurchase units from time to time, it does not currently intend to maintain
an active secondary market for units. 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. Unitholders who sell or redeem units prior to
such time as the entire creation and development fee on such

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units has been collected will not be assessed the amount of the remaining
creation and development 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 and,
in the case of units evidenced by a certificate, by tendering such certificate
to the trustee properly endorsed or accompanied by a written instrument or
instruments of transfer in form satisfactory to the trustee. Unitholders must
sign the request, and such certificate or transfer instrument, exactly as their
names appear on the records of the trustee and on any certificate representing
the units to be redeemed. 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. A certificate
should only be sent by registered or certified mail for the protection of the
unitholder. Since tender of the certificate is required for redemption when one
has been issued, units represented by a certificate cannot be redeemed until the
certificate representing such units has been received by the purchasers.

Redemption shall be made by the trustee no later than the seventh 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 regular
trading on 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. Unitholders who sell or redeem units prior to such time as the
entire creation and development fee on such units has been collected will not be
assessed the amount of the remaining creation and development 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

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"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 interest 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 a distribution in
kind (a "Distribution In Kind") from the trustee in lieu of cash redemption 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 meets the requirements stated in the prospectus
and the unitholder has elected to redeem at least thirty 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.

The trustee is irrevocably authorized in its discretion, if the sponsor
does not elect to purchase any unit tendered for redemption, in lieu of
redeeming such units, to sell such units in the over-the-counter market for the
account of tendering unitholders at prices which will return to the unitholders
amounts in cash, net after brokerage commissions, transfer taxes and other
charges, equal to or in excess of the redemption price for such units. In the
event of any such sale, the trustee shall pay the net proceeds thereof to the
unitholders on the day they would otherwise be entitled to receive payment of
the redemption price.

The right of redemption may be suspended and payment postponed (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

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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 for units of each
trust is computed by the evaluator as of the evaluation time stated in the
prospectus next occurring after the tendering of a unit for redemption and on
any other business day desired by it, by:

A. Adding: (1) the cash on hand in the trust other than cash deposited in the
trust to purchase securities not applied to the purchase of such securities
and (2) the aggregate value of each issue of the securities held in the
trust as determined by the evaluator as described above;

B. Deducting therefrom (1) amounts representing any applicable taxes or
governmental charges payable out of the trust and for which no deductions
have been previously made for the purpose of additions to the Reserve
Account; (2) an amount representing estimated accrued expenses, including
but not limited to fees and expenses of the trustee (including legal and
auditing fees), the evaluator, the sponsor and counsel, if any; (3) cash
held for distribution to unitholders of record as of the business day prior
to the evaluation being made; and (4) other liabilities incurred by the
trust, provided that the redemption price will not be reduced by any
remaining creation and development fee or organization costs during the
initial offering period; and

C. Finally dividing the results of such computation by the number of units of
the trust outstanding as of the date thereof.

RETIREMENT PLANS. A trust may be 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. Fees and charges with respect
to such plans may vary.

OWNERSHIP OF UNITS. Ownership of units will not be evidenced by
certificates unless a unitholder, the unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
trustee. Units are transferable by making a written request to the trustee and,
in the case of units evidenced by a certificate, by presenting and surrendering
such certificate to the trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered or
certified mail for the protection of the unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the trustee and on any certificate representing
the units to be transferred. Such signatures must be guaranteed as described
above.

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Units may be purchased and certificates, if requested, will be issued 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. Any certificate issued will be numbered serially for
identification, issued in fully registered form and will be transferable only on
the books of the trustee. The trustee may require a unitholder to pay a
reasonable fee, to be determined in the sole discretion of the trustee, for each
certificate re-issued or transferred and to pay any governmental charge that may
be imposed in connection with each such transfer or interchange. The trustee at
the present time does not intend to charge for the normal transfer or
interchange of certificates. Destroyed, stolen, mutilated or lost certificates
will be replaced upon delivery to the trustee of satisfactory indemnity
(generally amounting to 3% of the market value of the units), affidavit of loss,
evidence of ownership and payment of expenses incurred.

TAXATION

The prospectus contains a discussion of certain U.S. federal income tax
issues concerning your trust and the purchase, ownership and disposition of
trust units. The discussion below supplements the prospectus discussion and is
qualified in its entirety by the prospectus discussion. Prospective investors
should consult their own tax advisors with regard to the federal tax
consequences of the purchase, ownership, or disposition of trust units, as well
as the tax consequences arising under the laws of any state, locality, non-U.S.
country, or other taxing jurisdiction.

The federal income tax summary below and in the prospectus is based in part
on the advice of counsel to your trust. The Internal Revenue Service could
disagree with any conclusions set forth in these discussions. 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 held by your trust.
This may not be sufficient for prospective investors to use for the purpose of
avoiding penalties under federal tax law.

If so indicated in the prospectus, your trust intends (i) to elect and (ii)
to qualify annually as a regulated investment company under the Code and to
comply with applicable distribution requirements so that it will not pay federal
income tax on income and capital gains distributed to its unitholders.

To qualify for the favorable U.S. federal income tax treatment generally
accorded to regulated investment companies, your trust must, among other things,
(a) derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of stock, securities or foreign currencies or other income
derived with respect to its business of investing in such stock, securities or
currencies, and net income from certain publicly traded partnerships; (b)
diversify its holdings so that, at the end of each quarter of the taxable year,
(i) at least 50% of the market value of the trust's assets is represented by
cash and cash items (including receivables), U.S. government securities, the
securities of other regulated investment companies and other securities, with
such other securities of any one issuer generally limited for the purposes of
this calculation to an amount not greater than 5% of the value of the trust's
total assets and not greater than 10% of the outstanding voting securities of
such issuer, and (ii) not more than 25% of the value of its total

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assets is invested in the securities (other than U.S. government securities or
the securities of other regulated investment companies) of any one issuer, or
two or more issuers which the trust controls and are engaged in the same,
similar or related trades or businesses, or the securities of certain publicly
traded partnerships; and (c) distribute at least 90% of its investment company
taxable income (which includes, among other items, dividends, interest and net
short-term capital gains in excess of net long-term capital losses but excludes
net capital gain, if any) and at least 90% of its net tax-exempt interest income
each taxable year.

As a regulated investment company, your trust generally will not be subject
to U.S. federal income tax on its investment company taxable income (as that
term is defined in the Code, but without regard to the deduction for dividends
paid) and net capital gain (the excess of net long-term capital gain over net
short term capital loss), if any, that it distributes to unitholders. The
trusts intend to distribute to its unitholders, at least annually, substantially
all of its investment company taxable income and net capital gain. If your
trust retains any net capital gain or investment company taxable income, it will
generally be subject to federal income tax at regular corporate rates on the
amount retained. In addition, amounts not distributed on a timely basis in
accordance with a calendar year distribution requirement are subject to a
nondeductible 4% excise tax unless, generally, your trust distributes during
each calendar year an amount equal to the sum of (1) at least 98% of its
ordinary income (not taking into account any capital gains or losses) for the
calendar year, (2) at least 98% of its capital gains in excess of its capital
losses (adjusted for certain ordinary losses) for the one-year period ending
October 31 of the calendar year, and (3) any ordinary income and capital gains
for previous years that were not distributed during those years. To prevent
application of the excise tax, your trust intends to make its distributions in
accordance with the calendar year distribution requirement. Further, if your
trust retains any net capital gain, the trust may designate the retained amount
as undistributed capital gains in a notice to unitholders who, if subject to
federal income tax on long-term capital gains (i) will be required to include in
income for federal income tax purposes, as long-term capital gain, their share
of such undistributed amount, and (ii) will be entitled to credit their
proportionate share of the tax paid by the trust against their federal income
tax liabilities if any, and to claim refunds to the extent the credit exceeds
such liabilities. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared by your trust in October, November or
December with a record date in such a month and paid by your trust during
January of the following calendar year. These distributions will be taxable to
unitholders in the calendar year in which the distributions are declared, rather
than the calendar year in which the distributions are received.

If your trust failed to qualify as a regulated investment company or failed
to satisfy the 90% distribution requirement in any taxable year, the trust would
be taxed as an ordinary corporation on its taxable income (even if such income
were distributed to its unitholders) and all distributions out of earnings and
profits would be taxed to unitholders as ordinary dividend income.

If the trust is treated as holding directly or indirectly 10 percent or
more of the combined voting power of the stock of a foreign corporation, and all
U.S. shareholders collectively own more than 50 percent of the vote or value of
the stock of such corporation, the foreign corporation may be treated as a
"controlled foreign corporation" (a "CFC") from a U.S. tax

-33-

perspective. In such circumstances, the trust will be required to include
certain types of passive income and certain other types of income relating to
insurance, sales and services with related parties and oil related income in the
trust's taxable income whether or not such income is distributed.

If the trust holds an equity interest in any "passive foreign investment
companies" ("PFICs"), which are generally certain foreign corporations that
receive at least 75% of their annual gross income from passive sources (such as
interest, dividends, certain rents and royalties or capital gains) or that hold
at least 50% of their assets in investments producing such passive income, the
trust could be subject to U.S. federal income tax and additional interest
charges on gains and certain distributions with respect to those equity
interests, even if all the income or gain is timely distributed to its
unitholders. The trust will not be able to pass through to its unitholders any
credit or deduction for such taxes. The trust may be able to make an election
that could ameliorate these adverse tax consequences. In this case, the trust
would recognize as ordinary income any increase in the value of such PFIC
shares, and as ordinary loss any decrease in such value to the extent it did not
exceed prior increases included in income. Under this election, the trust might
be required to recognize in a year income in excess of its distributions from
PFICs and its proceeds from dispositions of PFIC stock during that year, and
such income would nevertheless be subject to the distribution requirement and
would be taken into account for purposes of the 4% excise tax (described above).
Dividends paid by PFICs will not be treated as qualified dividend income.

PERFORMANCE INFORMATION

Information contained in this Information Supplement or in the prospectus,
as it currently exists or as further updated, may also be included from time to
time in other prospectuses or in advertising material. Information on the
performance of a trust strategy or the actual performance of a trust may be
included from time to time in other prospectuses or advertising material and may
reflect sales fees and expenses of a trust. The performance of a trust may also
be compared to the performance of money managers as reported in SEI Fund
Evaluation Survey or of mutual funds as reported by Lipper Analytical Services
Inc. (which calculates total return using actual dividends on ex-dates
accumulated for the quarter and reinvested at quarter end), Money Magazine Fund
Watch (which rates fund performance over a specified time period after sales fee
and assuming all dividends reinvested) or Wiesenberger Investment Companies
Service (which states fund performance annually on a total return basis) or of
the New York Stock Exchange Composite Index, the American Stock Exchange Index
(unmanaged indices of stocks traded on the New York and American Stock
Exchanges, respectively), the Dow Jones Industrial Average (an index of 30
widely traded industrial common stocks) or the Standard & Poor's 500 Index (an
unmanaged diversified index of 500 stocks) or similar measurement standards
during the same period of time.

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CONTENTS OF REGISTRATION STATEMENT

This Amendment to the Registration Statement comprises the following papers
and documents:
The facing sheet
The prospectus
The signatures
The consents of the initial evaluator, independent public accountants and
legal counsel

The following exhibits:

1.1 Trust Agreement (to be filed by amendment).

1.1.1 Standard Terms and Conditions of Trust (to be filed by amendment).

1.2 Certificate of Incorporation of Fixed Income Securities, Inc. Reference
is made to Exhibit 1.2 to the Registration Statement on Form S-6 for
Advisor's Disciplined Trust 213 (File No. 333-148484) as filed on
January 4, 2008.

1.3 Bylaws of Fixed Income Securities, Inc. Reference is made to Exhibit 1.3
to the Registration Statement on Form S-6 for Advisor's Disciplined
Trust 213 (File No. 333-148484) as filed on January 4, 2008.

1.5 Form of Dealer Agreement. Reference is made to Exhibit 1.5 to the
Registration Statement of Form S-6 for Advisor's Disciplined Trust 230
(File No. 333-149300) as filed of March 6, 2008.

2.1 Copy of Certificate of Ownership (included in Exhibit 1.1.1 filed
herewith and incorporated herein by reference).

2.2 Form of Code of Ethics. Reference is made to Exhibit 2.2 to the
Registration Statement on Form S-6 for Advisor's Disciplined Trust 73
(File No. 333-131959) as filed on March 16, 2006.

3.1 Opinion of counsel as to legality of securities being registered (to be
filed by amendment).

3.2 Opinion of counsel as to the New York and federal income tax status of
securities being registered (to be filed by amendment).

3.3 Opinion of counsel as to the Trustee and the Trust. (to be filed by
amendment).

4.1 Consent of evaluator (to be filed by amendment).

4.2 Consent of independent auditors (to be filed by amendment).

6.1 Directors and Officers of Fixed Income Securities, Inc. Reference is
made to Exhibit 6.1 to the Registration Statement on Form S-6 for
Advisor's Disciplined Trust 213 (File No. 333-148484) as filed on
January 4, 2008.

7.1 Power of Attorney. Reference is made to Exhibit 7.1 to the Registration
Statement on Form S-6 for Advisor's Disciplined Trust 213
(File No. 333- 148484) as filed on January 4, 2008.

S-1

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Advisor's Disciplined Trust 256 has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wichita and State of Kansas on the 4th day of June, 2008.

ADVISOR'S DISCIPLINED TRUST 256

By FIXED INCOME SECURITIES, INC., DEPOSITOR

By /s/ ALEX R MEITZNER
-----------------------------
Alex R. Meitzner
Senior Vice President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on June 4, 2008 by the following
persons in the capacities indicated:

SIGNATURE TITLE

Scott I. Colyer Director of Fixed Income )
Securities, Inc. )

Lisa A. Colyer Director of Fixed Income )
Securities, Inc. )

James R. Costas Director of Fixed Income )
Securities, Inc. )

Christopher T. Genovese Director of Fixed Income )
Securities, Inc. )

Randy J. Pegg Director of Fixed Income )
Securities, Inc. )

R. Scott Roberg Director of Fixed Income )
Securities, Inc. )

S-2

Jack Simkin Director of Fixed Income )
Securities, Inc. )

Andrew Williams Director of Fixed Income )
Securities, Inc. )

By /s/ ALEX R MEITZNER
-----------------------------
Alex R. Meitzner
Attorney-in-Fact*

- -------------------------------------------------------------------------------
*An executed copy of each of the related powers of attorney is filed
herewith or incorporated herein by reference as Exhibit 7.1.

S-3