The Merger Fund VL

Objective And Strategy

Objective
Capital growth by engaging in merger arbitrage.

Strategy
Under normal market conditions, the Fund will invest at least 80% of its assets principally in the equity securities of companies which are involved in publicly announced mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations and other corporate reorganizations. Merger arbitrage is a highly specialized investment approach generally designed to profit from the successful completion of such transactions. Westchester Capital Management, Inc. (the "Adviser") believes that the Fund's investment results should be less volatile than the returns typically associated with conventional equity investing.

Principle Risks

* This portfolio is subject to the risks of short selling (selling securities that the portfolio does not own). The Fund may be required to pay a premium to sell a security short. There is no guarantee that the price of a shorted stock will fall, or that the portfolio will produce positive returns. It is possible for the portfolio to lose money on shorted stocks.

* A percentage of the fund’s investments may be held for relatively short periods of time. Shorter holding periods, in turn, result in higher portfolio turnover and increased brokerage commission costs.