December 19, 1996
Securities and Exchange Commission
Attn: Filing Desk
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Merger Fund (the "Fund")
CIK 0000701804
1940 Act Filing No. 811-3445
Gentlemen:
Attached for filing please find a supplement, dated December
19, 1996, to the Fund's prospectus, dated February 7, 1996. The
filing is made pursuant to Rule 497(e) of the Securities Act of
1933.
Please contact the undersigned at (212) 318-3318 with any
questions you may have regarding the foregoing.
Sincerely,
William H. Bohnett
Enclosure
THE MERGER FUND
100 SUMMIT LAKE DRIVE
VALHALLA, NEW YORK 10595
SUPPLEMENT DATED DECEMBER 19, 1996
TO PROSPECTUS DATED FEBRUARY 7, 1996
Effective the date hereof, The Merger Fund (the "Fund") will
maintain a segregated account consisting of cash, cash
equivalents and liquid securities at all times when the Fund
does not own, or have an unconditional right to receive,
securities sold short. The segregated account will be equal in
value to the securities sold short on a daily marked-to-market
basis. Liquid securities
shall include equity and debt securities which are listed on a
national securities exchange, including securities traded on the
NASDAQ National Market System.
