Home / Variable Insurance Funds / The Merger Fund® VL
Variable Insurance Fund Alternative Event Driven

The Merger Fund® VL

Image specific to each asset class and market style grouping.
CUSIP
Inception
Morningstar Category
Total Assets by Fund
$
Total Assets by Class
$

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

Show More
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

Show More

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

Westchester Capital Management launched their flagship strategy, The Merger Fund®, in 1989. Since then, they have been providing investors access to a proven array of alternative strategies, like The Merger Fund® VL, with the goal of identifying publicly announced, event-driven opportunities.

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.

Portfolio Characteristics

Position Summary

(as of 09/30/2021)
Average position size 1.28%
Number of long positions(1) 71
Number of short positions(1) 17
Percent Invested 90.80%
Short positions as a % of net assets 29.11%

Top 10 Positions (% Fund)

(as of 09/30/2021)
Security
IHS Markit Ltd.
5.56
 5.56%
Willis Towers Watson Public Limited Co.
5.40
 5.40%
Nuance Communications, Inc.
4.74
 4.74%
Coherent, Inc.
4.45
 4.45%
Xilinx, Inc.
4.33
 4.33%
Kansas City Southern
4.14
 4.14%
PPD, Inc.
3.61
 3.61%
Athene Holding Ltd.
2.40
 2.40%
Deutsche Wohnen SE
2.34
 2.34%
Altaba Inc.
2.23
 2.23%

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
27.88
 27.88%
Financials
20.68
 20.68%
Industrials
12.23
 12.23%
Health Care
10.61
 10.61%
Consumer Discretionary
7.85
 7.85%
Materials
7.50
 7.50%
Utilities
4.06
 4.06%
Real Estate
3.79
 3.79%
Communication Services
2.73
 2.73%
Consumer Staples
2.30
 2.30%
Energy
0.36
 0.36%

Regional Exposure (% Long Positions)

(as of 09/30/2021)
United States
70.26
 70.26%
Europe ex-U.K.
11.89
 11.89%
United Kingdom
10.87
 10.87%
Australia
3.71
 3.71%
Asia ex-Japan
1.27
 1.27%
Japan
0.90
 0.90%
Canada
0.66
 0.66%
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.

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

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® VL Fact Sheet

Holdings

The Merger Fund® VL Holdings Fiscal Q1
The Merger Fund® VL Holdings Fiscal Q3

Financial Materials

The Merger Fund VL Statutory Prospectus
The Merger Fund VL Summary Prospectus
The Merger Fund VL Prospectus XBRL 485B 10 01 2021
The Merger Fund VL SAI
The Merger Fund VL Annual Report
The Merger Fund VL Semiannual Report


The investments for the Virtus Variable Insurance Funds (the “Funds”) are managed by the same portfolio manager(s) who manage one or more other funds that have similar names, investment objectives, and investment styles as the Funds. You should be aware that the Funds are likely to differ from the other mutual funds in size, cash flow pattern, and tax matters. Accordingly, the holdings and performance of the Funds can be expected to vary from those of the other mutual funds.

Shares of the Funds are sold only through the currently effective prospectuses and are not available to the general public. Shares of the Funds may be purchased only by life insurance companies to be used with their separate accounts which fund variable annuity and variable life insurance policies or qualified retirement plans and are also available as an underlying investment fund for certain qualified retirement plans. The performance information for the Funds does not reflect fees and expenses of the insurance companies. If such fees and expenses were deducted, performance would be lower.

Please carefully consider the investment objectives, risks, charges, and expenses of the Virtus Variable Insurance Funds before investing. For this and other information about any Virtus Variable Insurance Fund, call 1-800-367-5877 or visit Virtus.com for a prospectus and/or summary prospectus. Read it carefully before you invest or send money.


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.

1 Yields/Distributions: Distribution Yield (at NAV) is calculated by annualizing the latest month's distribution and dividing by the NAV on the last business day of the period. SEC Yield represents the net investment income earned by a fund over a 30-day period (7-day period for Money Market Funds), expressed as an annual percentage rate based on the fund's public offering share price at the end of the 30-day period (7-day period for Money Market Funds).

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-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.

Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value.