Home / Mutual Fund / The Merger Fund®
Mutual Fund Alternative Event Driven

The Merger Fund®

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Ticker
MERFX
CUSIP
589509108
POP
$ (as of )
Inception
01/31/1989
Total Assets by Class
$874,858,114.98 (as of 11/26/2021)
Total Assets by Fund
$4,303,533,236.81 (as of 11/26/2021)
Morningstar Category
Event Driven

Portfolio Overview

Investment Overview

The Fund seeks to deliver consistent, positive absolute returns with lower volatility to traditional stocks by investing in publicly announced mergers, acquisitions, takeovers, and other corporate reorganizations globally. The highly specialized team seeks to profit from the timely completion of corporate transactions with minimal correlation to traditional stocks and bonds and positive correlation to interest rates, all while striving to minimize drawdowns in volatile markets.

Management Team

Investment Partner

Westchester Capital Management, LLC

For over 30 years, Westchester Capital Management has endeavored to deliver consistent, absolute returns through the disciplined execution of event-driven alternative investment strategies.


Learn more about Westchester Capital Management, LLC

Investment Professionals

Roy Behren 400 x 400

Roy D. Behren

Co-President and Co-Chief Investment Officer

Industry start date: 1987
Start date as fund Portfolio Manager: 2007

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Michael Shannon 400 x 400

Michael T. Shannon, CFA

Co-President and Co-Chief Investment Officer

Industry start date: 1988
Start date as fund Portfolio Manager: 2007

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Key Features

Portfolio Diversifier and Potential Volatility Dampener

Merger arbitrage strategies have historically provided attractive absolute returns with lower volatility and minimal correlation relative to traditional stock and bond strategies, making for a powerful portfolio diversifier.

A Pioneer in Liquid Alternative Investments

The Merger Fund® was the first mutual fund devoted exclusively to merger arbitrage, offering access to an alternative strategy in a regulated, transparent, and daily liquidity fund that has provided investors positive performance in 29 of 32 years since its inception in 1989.*

Proven Expertise

A leader in global event driven investing for over 30 years, Westchester has evaluated more than 10,000 announced transactions, and invested in over 4,500 mergers, acquisitions, and corporate reorganizations, of which more than 98% were completed.

The track record refers to the original share class of the Fund, which was known as Investor Class at the time and is now known as Class A, from inception of 1/31/89 until inception on 8/1/13 of the Institutional Class which is now known as Class I. Returns would differ only to the extent that Class I shares do not have the same expenses as Class A shares.

Portfolio Characteristics

Position Summary

(as of 09/30/2021)
Average position size 1.22%
Number of long positions(1) 73
Number of short positions(1) 18
Percent Invested 88.80%
Short positions as a % of net assets 29.18%

Top 10 Positions (% Fund)

(as of 09/30/2021)
Security
IHS Markit Ltd.
5.56
 5.56%
Willis Towers Watson Public Limited Co.
5.43
 5.43%
Nuance Communications, Inc.
4.82
 4.82%
Coherent, Inc.
4.45
 4.45%
Xilinx, Inc.
4.35
 4.35%
Kansas City Southern
4.13
 4.13%
PPD, Inc.
3.59
 3.59%
Athene Holding Ltd.
2.41
 2.41%
Deutsche Wohnen SE
2.34
 2.34%
Altaba Inc.
2.25
 2.25%

Holdings are subject to change.

Deal Terms (% Long Positions)

(as of 09/30/2021)

Deal terms, regional exposure, sector exposure, and top positions are subject to change.

Deal terms reflect the classification of the type of transaction. Cash reflects an all-cash proposal by one company to buy another’s outstanding shares; cash and stock involves a cash proposal and additional stock in the acquiring company; stock with a fixed exchange ratio refers to a strategy whereby the acquired company safeguards itself from fluctuation in share prices; stock with stub represents remaining equity left over after a company converts its bonds to stub stocks because of the takeover or bankruptcy; and risk reversal is a hedging strategy that protects a long or short position by using put and call options. *The compensation is undetermined because the compensation to be received (e.g., stock, cash, escrow notes, other) will be determined at a later date, potentially at the option of the Fund's investment adviser.

Sector Exposure (% Long Positions ex-SPACs)

(as of 09/30/2021)
Information Technology
28.31
 28.31%
Financials
20.90
 20.90%
Industrials
12.30
 12.30%
Health Care
10.68
 10.68%
Consumer Discretionary
8.00
 8.00%
Materials
7.55
 7.55%
Utilities
4.06
 4.06%
Real Estate
3.82
 3.82%
Consumer Staples
2.34
 2.34%
Communication Services
1.69
 1.69%
Energy
0.36
 0.36%

Regional Exposure (% Long Positions)

(as of 09/30/2021)
United States
69.54
 69.54%
Europe ex-U.K.
12.14
 12.14%
United Kingdom
11.15
 11.15%
Australia
3.79
 3.79%
Asia ex-Japan
1.32
 1.32%
Japan
0.96
 0.96%
Canada
0.67
 0.67%
North America Offshore
0.43
 0.43%

Performance & Risk

Growth of $10,000 Investment

From to
This chart assumes an initial investment of $10,000 made on for Class ddd shares including any applicable sales charges. Performance assumes reinvestment of dividends and capital gain distributions.

Performance

As of
As of

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Sales Charge and Expenses

Risk Statistics3

(as of )
Fund Index
R2
Beta
Alpha
Std Dev

Risk Considerations

Fundamental Risk of Investing: There can be no assurance that the portfolio will achieve its investment objectives. An investment in the portfolio is subject to the risk of loss of principal; shares may decrease in value.
Merger-arbitrage & Event-driven investing: Merger-arbitrage and event-driven investing involve the risk that the adviser's evaluation of the outcome of a proposed event, whether it be a merger, reorganization, regulatory issue, or other event, will prove incorrect and that the Fund's return on the investment may be negative.
Short Sales: The portfolio may engage in short sales, and may incur a loss if the price of a borrowed security increases before the date on which the portfolio replaces the security.
Foreign Investing: Investing in foreign securities subjects the portfolio to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk.
Portfolio Turnover: The portfolio's principal investment strategies may result in a consistently high portfolio turnover rate. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when the portfolio is held in a taxable account.
Credit & Interest: Debt instruments are subject to various risks, including credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt instruments may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.
Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment.
Hedging: The portfolio's hedging strategy will be subject to the portfolio's investment adviser's ability to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the investments in the portfolio being hedged.
Market Volatility: Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the portfolio and its investments, including hampering the ability of the portfolio manager(s) to invest the portfolio's assets as intended.
Prospectus: For additional information on risks, please see the fund's prospectus.

Related Literature

Marketing Materials

The Merger Fund® Fact Sheet
The Merger Fund® Enhanced Fact Sheet
The Merger Fund® Commentary
An Introduction to Merger Arbitrage

Financial Materials

The Merger Fund Virtus Event Opportunities Trust Statutory Prospectus
The Merger Fund Summary Prospectus
The Merger Fund Virtus Event Opportunities Trust SAI
The Merger Fund WCF Annual Report
The Merger Fund WCF Semiannual Report
The Merger Fund Prospectus XBRL 485B 10 01 2021

Holdings

The Merger Fund® Top Positions
The Merger Fund® Holdings Fiscal Q1
The Merger Fund® Holdings Fiscal Q3

Investors should carefully consider the investment objectives, risks, charges and expenses of any Virtus Mutual Fund before investing. The prospectus and summary prospectus contains this and other information about the fund. Please contact your financial representative, call 1-800-243-4361 to obtain a current prospectus and/or summary prospectus. You should read the prospectus and/or summary prospectus carefully before you invest or send money.

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Average annual total return is the annual compound return for the indicated period. It reflects the change in share price and the reinvestment of all dividends and capital gains. NAV returns do not include the effect of any applicable sales charges. POP and w/CDSC returns include the effect of maximum applicable sales charges.

Returns for periods of less than one year are cumulative total returns.

1 Yields/Distributions: 30-day SEC Yield is a standardized yield calculated according to a formula set by the SEC, and is subject to change. 30-day SEC Yield (unsubsidized) is the 30-day SEC Yield without the effect of applicable expense waivers. Distribution Rate is calculated by (a) annualizing the latest income distribution for fixed income funds or funds less than 1 year old, or (b) summing all income distributions over the preceding 12 months for all other funds, and dividing the NAV on the last business date of the period, unless otherwise indicated. The Distribution Rate may be comprised of ordinary income, net realized capital gains and returns of capital.

2 Distribution History: Distributions are represented on a cash basis and may be reclassified at year end for tax purposes. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. STCG: Short Term Capital Gain, LTCG: Long Term Capital Gain

3 Risk Statistics: R2 is a statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index. Beta is a quantitative measure of the volatility of a given portfolio to the overall market. Alpha is a risk adjusted measure of an investment's excess return relative to a benchmark. A positive Alpha indicates that the investment produced a return greater than expected for the risk (as measured by Beta) taken. Standard Deviation measures variability of returns around the average return for an investment fund. Higher standard deviation suggests greater risk. Risk Statistics are calculated using 36 monthly returns.

4 Characteristics: For Equity Funds: Avg. Weighted Market Cap (bn): The total dollar market value of all of a company’s outstanding shares. Trailing P/E Ex-Negative Earnings: Per-share stock price divided by the latest 12-months Earnings per Share; Price/Cash Flow: Per-share stock price divided by the per-share operating cash flow; Price/Book: Per-share stock price divided by the latest 12-month per-share Book Value; 3-Year EPS Growth Rate: Average of earnings per share growth for latest 3-year period. The 3-Year EPS Growth Rate is not a forecast of the fund's performance.

4 Characteristics: For Fixed Income Funds: Effective Duration represents the interest rate sensitivity of a fixed income fund. For example, if a fund's effective duration is five years, a 1% increase in interest rates would result in a 5% decline in the fund's price. Similarly, a 1% decline in interest rates would result in a 5% gain in the fund's price.

Morningstar Disclosures:
The Morningstar Rating for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads.

© Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.