The Merger Fund, reopened in October after two years of refusing new accounts, charges 1.34% of assets in annual expenses.
Gabelli trails Merger in long-term performance with an annualized 9.8% over five years, although Gabelli has clocked a superior 4.1% return in 2001, to Merger Fund's 2.3%.
So compare it to a money market: A Vanguard money fund would have earned you only 4.9% a year during the time the Merger Fund has been running.
However, a recently proposed merger with a sister fund, the DCA Total Return Fund ( DCA), aims to change the investment focus away from the real estate sector.
In our diversified micro cap GAMCO Westwood Mighty Mites Fund (WEMMX), merger and acquisition activity has also been robust, with six announced acquisitions of holdings in the September quarter joining the seven announced in the first half of the year.
In February, Morgan Stanley, an American investment bank, announced its merger with Dean Witter, Discover, a mutual-fund and credit-card group.
Professor MACDUFFIE: My view is that I don't think the fund should be used to facilitate a General Motors-Chrysler merger, for example.
Gudefin's hedge fund background helps explain two of her other specialties at Discovery: merger arbitrage and distressed-debt investing.
The most prominently mentioned suitor has been Lampert, the hedge fund manager who has already bought out Sears and engineered a successful merger with Kmart two years ago.
They were due to meet representatives of Diageo, the food and drinks group formed by the merger of Guinness and Grand Metropolitan, on Thursday, for talks about the fund.
The fund cautiously stayed clear of Enron-Dynegy because it wasn't sure the merger was a go.
While Qatar Holdings, the sovereign wealth fund of Gulf state Qatar, has said it will vote in favour of the merger, it added that it would abstain on a controversial linked vote on whether Xstrata's board members should receive multi-million pound payments to stay with the future merged company.
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