Summary

• The Merger Fund® (Fund) returned +0.82% in 1Q 2026 compared to the S&P 500® Index return of -4.33% and the Bloomberg U.S. Aggregate Bond Index return of -0.05%.
• SPACs were the top contributor (+0.21%) to the Fund in the quarter.
• The largest detractor during the quarter was Norfolk Southern Corp./Union Pacific Corp. (-0.18%), as spreads widened amid heightened regulatory scrutiny from the Surface Transportation Board.

Market Review

Global merger and acquisition (M&A) activity entered 2026 on solid footing, with announced transaction volume approaching $1.4 trillion during the first quarter, placing the year-to-date pace among the strongest starts on record. Importantly, deal activity proved resilient despite periods of