<PAGE> PAGE 1
000 A000000 03/31/97
000 C000000 0000701804
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001 A000000 THE MERGER FUND
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<PAGE> PAGE 2
012 C020001 WI
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013 A000001 PRICE WATERHOUSE LLP
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<PAGE> PAGE 3
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<PAGE> PAGE 7
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<PAGE> PAGE 9
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SIGNATURE FREDERICK GREEN
TITLE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000701804
<NAME> THE MERGER FUND
<MULTIPLIER> 1000
<S> <C>
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<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 498,224
<INVESTMENTS-AT-VALUE> 483,581
<RECEIVABLES> 254,665
<ASSETS-OTHER> 62,237
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<TOTAL-ASSETS> 800,483
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<TOTAL-LIABILITIES> 323,844
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 464,676
<SHARES-COMMON-STOCK> 33,409
<SHARES-COMMON-PRIOR> 31,742
<ACCUMULATED-NII-CURRENT> (83)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 17,791
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (5,745)
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<DIVIDEND-INCOME> 1,233
<INTEREST-INCOME> 5,501
<OTHER-INCOME> 0
<EXPENSES-NET> 6,382
<NET-INVESTMENT-INCOME> 352
<REALIZED-GAINS-CURRENT> 17,862
<APPREC-INCREASE-CURRENT> (8,813)
<NET-CHANGE-FROM-OPS> 9,401
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,757
<DISTRIBUTIONS-OF-GAINS> 38,090
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,821
<NUMBER-OF-SHARES-REDEEMED> 5,981
<SHARES-REINVESTED> 2,827
<NET-CHANGE-IN-ASSETS> (12,445)
<ACCUMULATED-NII-PRIOR> 5,323
<ACCUMULATED-GAINS-PRIOR> 38,018
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,604
<INTEREST-EXPENSE> 3,004
<GROSS-EXPENSE> 6,382
<AVERAGE-NET-ASSETS> 484,228
<PER-SHARE-NAV-BEGIN> 15.41
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 0.28
<PER-SHARE-DIVIDEND> 0.19
<PER-SHARE-DISTRIBUTIONS> 1.24
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.27
<EXPENSE-RATIO> 1.36
<AVG-DEBT-OUTSTANDING> 136,535
<AVG-DEBT-PER-SHARE> 4.15
</TABLE>
The Merger Fund
Form N-SAR Report for the Period Ended 3/31/97
Item 77Q3
Effective December 1, 1996, the Fund's fiscal year end was changed from
November 30 to September 30.
