HOLDRS can offer real value to investors of all kinds: to fans of indexing, to tax-conscious investors, to cost-sensitive investors, to sector investors and to active stock pickers. Use HOLDRS to achieve your financial objectives more effectively:

HOLDRS as an inexpensive way to own a basket of stocks. Financial and Internet technologies are dramatically lowering the cost of trading and owning stocks. HOLDRS are at the forefront of this revolution. You buy HOLDRS just like a stock. With each HOLDR, you get ownership in 20 or more stocks, but you pay only a single commission. And the annual fees on HOLDRS are inexpensive—only eight cents per HOLDR. Assuming you bought 100 shares of a HOLDR with a market price of $100, the annual fee on your $10,000 investment would be $8 (or 0.08%, expressed as a percentage). And it can get even better: The annual fee is waived to the extent that dividends and cash distributions on the underlying stocks are not enough to cover the fee.

HOLDRS as an alternative to index funds. Are you serious about having low taxes and low fees on your investments? For good reason, indexing has been your traditional answer. But even index funds need to trade their portfolios in order to meet investor redemptions, satisfy fund concentration limits or match changes to an index. This trading frequently increases costs and could impose tax liabilities on investors. Over time, such costs can compound and lower the value of your investment. HOLDRS don't change your stocks to match an index, or cap any big winners to satisfy concentration limits. The result? A new standard in low-cost, tax-efficient investing.

HOLDRS as a sector investment. Sector investing has become popular, but sometimes it's difficult to find ways to invest in the sectors you want. HOLDRS aim to change all that. HOLDRS are designed to be a convenient, tax-efficient, low-cost way to invest in sectors–for the trader and the longer-term investor. There are a variety of HOLDRS available on very specific sectors as well as on broader-based themes.

HOLDRS as a foundation for building your stock portfolio. In stock investing, your losses are limited to the amount you invested, but your upside is unlimited. When investing in a group of stocks, gains in a few big winners can sometimes be critical in driving the investment performance of your entire portfolio. HOLDRS let your best-performing stocks achieve their full potential. Why? Because HOLDRS do not place concentration limits on how much money you can have in one stock. With HOLDRS, concentration limits will not force you to sell your winners and, therefore, you will not experience the "double whammy" of foregoing gains and triggering taxes on your best-performing stocks. HOLDRS also let you unbundle your basket at any time without triggering tax liability. This in turn allows you, for example, to take tax losses in stocks that are down, while continuing to hold your winners.