Health Care Portfolio Series 16

Under normal circumstances, the Trust invests at least 80% of the value of its assets in stocks of companies that are classified as being in the health care sector by the Global Industry Classification Standard (“GICS”), or are believed by the Sponsor to have a significant level of revenues directly derived from health care related products and services. The Sponsor selects securities for the portfolio that it believes have the potential to achieve the Trust’s investment objective.

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

The Sponsor selects U.S.-traded securities that it believes are core holdings of a health care portfolio. To select the portfolio, the Sponsor follows a disciplined process that includes both quantitative and qualitative analysis. The Sponsor begins with the securities of companies that are classified as being in the health care sector by GICS, or are believed by the Sponsor to have a significant level of revenues directly derived from health care related products and services, and are either components of the Russell 3000 Index (“R3K”) or have market capitalizations larger than the smallest company within the R3K. The Sponsor then reduces the size of this universe to approximately 250 securities by performing quantitative screening, which may be primarily based on, but not limited to, the following factors:

• Valuation. The Sponsor may screen for reasonably valued securities based on measures such as price-to-earnings, price-to-book, and price-to-cash flow.

• Growth. The Sponsor may screen for companies with a history of better than average growth of revenues and earnings.

• Profitability. The Sponsor may screen for companies with a history of consistent and high profitability as measured by return-on-assets, return-on-equity, gross margin and net margin.

The Sponsor then reduces the 250 securities to 40 securities by performing qualitative analysis, which may be primarily based on, but not limited to, the following factors:

• Balance Sheet. The Sponsor favors companies which possess overall financial strength and exhibit balance sheet improvements relative to their peers and the marketplace.

• Industry Leadership. The Sponsor favors companies which possess a strong competitive position among their domestic and global peers.

• Valuation. The Sponsor favors stocks for which valuations appear to be attractive based on measures such as price-to-earnings, price-to-book, and price-to-cash flow.

• Growth. The Sponsor favors companies with a history of (and prospects for) better than average growth of revenues and earnings.

• Profitability. The Sponsor favors companies with a history of (and prospects for) consistent and high profitability as measured by return-on-assets, return-on-equity, gross margin and net margin.

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

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

• The Trust is concentrated in the health care sector. As a result, the factors that impact the health care sector will likely have a greater effect on this Trust than on a more broadly diversified Trust. Some of the risks associated with the health care sector are listed below. General risks of companies in the health care sector include extensive competition, generic drug sales, the loss of patent protection, product liability litigation and increased government regulation.

• The Trust includes securities issued by small-capitalization and mid-capitalization companies. These securities customarily involve more investment risk than large-capitalization companies. Small-capitalization and mid-capitalization companies may have limited product lines, markets or financial resources and may be more vulnerable to adverse general market or economic developments.

• Share prices or dividend rates on the securities in the Trust may decline during the life of the Trust. There is no guarantee that share prices of the securities in the Trust will not decline and that the issuers of the securities will declare dividends in the future and, if declared, whether they will remain at current levels or increase over time.

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

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

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