[LOGO]
THE ZWEIG FUND
QUARTERLY REPORT
----------------
MARCH 31, 1998
<PAGE>
April 24, 1998
Dear Shareholder:
The Zweig Fund's net asset value increased 9.5% during the three months
ended March 31, 1998, including the $0.31 distribution paid on January 9, 1998.
During the same period the Standard & Poor's 500 Index gained 13.9%, including
dividends. The Fund's equity exposure during the first quarter averaged
approximately 86%.
I believe that we timed the market right during the quarter. Counting bonds
as well as stocks, we were over 90% invested. For us this is quite bullish,
especially compared to our long-term average exposure of about 60% to 65%.
However this was one of those markets where the S&P 500 Index was beating
everything. Given the fact that we tend to pick more conservative stocks, I
consider our 9.5% return pretty decent.
- --------------------------------------------------------------------------------
DISTRIBUTION DECLARED
- --------------------------------------------------------------------------------
On March 16, 1998, the Fund announced a distribution of $0.33 per share
payable on April 27, 1998 to shareholders of record on April 9, 1998. Including
this distribution, our total payout since the Fund's inception is now $12.89 per
share.
- --------------------------------------------------------------------------------
MARKET OUTLOOK
- --------------------------------------------------------------------------------
The recent series of bank mergers has had a positive impact on the equity
markets. People have been bidding up the prices of banks and other financial
institutions in anticipation of more mergers. This is not happening in just the
U.S. We have seen large mergers of Canadian banks and the same is occurring in
Europe. What we are witnessing is the consolidation of the entire financial
industry.
There are at least two reasons for the merger activity. One is cost savings
and that has been going on in the banking field for several years. Merged banks
eliminate duplicate expenses and the surviving company tends to be more
profitable. Another reason, typified by the Citicorp-Travelers merger, is the
opportunity of cross-selling of various products to new customers. We are surely
going to see more similar mergers. Whether this is ultimately good or bad, I
just don't know. Let the historians worry about the consequences five or ten
years from now. But, for the present, it is a plus.
A more significant plus is the record $37.5 billion that investors poured
into long-term mutual funds in March, beating the previous peak of $33.2 billion
in January, 1996. More and more is going into so-called aggressive funds.
Although I get a little nervous when the flow into aggressive funds is so high,
I remember that the market did quite well after January, 1996.
Part of the reason for the heavy inflow is the strong economy that has put
an awful lot of money into the hands of more Americans. Baby boomers, in
particular, are approaching middle age and tend to save more. Meanwhile,
legislation has made available new and improved vehicles like 401Ks, IRAs, Roth
IRAs, and various annuities that make it more attractive to save through mutual
funds. Also, the lower tax rates on capital gains give investors a better break
with their earnings. All in all, we have seen a structural change which is
beneficial to the markets.
When fund managers know that they will continue to be inundated with new
money, they tend to hold less cash. The uninvested cash position at mutual funds
in March was down to 4.6% of domestic stock fund assets, the lowest point in two
or three decades. However cash levels were lower in the 1950s and 1960s and
stocks went higher. I would feel better about the market if mutual funds held
more uninvested cash but you can't have everything. It is late in the bull
market and you can't expect things to be as they are early in such a market.
1
<PAGE>
The slowdown in Asia has had an adverse effect on the earnings of some
multi-national companies. They are hurting because of the stronger dollar and,
to some extent, the weakening of their sales to Asia. I am not terribly
concerned because the trade-off is lower inflation and higher multiples for
stocks. Of course I would be concerned if earnings fell off the cliff. I don't
know if that is going to happen but it is a potential one has to watch
carefully.
Producer prices fell for the fifth consecutive month in March and consumer
prices were flat. But that does not worry me. Moderate deflation historically
has been very bullish for stocks. However extreme deflation is terrible. For
producer prices, you can take a six-month range and analyze it. When we have
been at zero to minus 10%, which is moderate deflation, the Dow Jones average
climbed more than 49% a year, which is remarkable. But when the producer price
index fell more than 10% annualized, the Dow declined 26.6% a year.
My theory of calculating the impact of higher deflation or inflation uses a
chicken soup analogy. One bowl is fine if you are ill and two bowls may actually
be good for you. But ten bowls will make you sick. As with chicken soup, a
little bit of deflation or inflation may serve a function but a larger dose is
another story. I am not concerned about where we stand now on deflation but I
would be alarmed if it deepened and got really worse.
Analysts have been commenting for some time about a resemblance between the
apparent excesses in the U.S. markets today and those of Japan in 1989. I do not
think the comparison is valid. Our price/earnings ratios are nowhere near
Japan's in the late 1980s. We don't have all the cross-ownerships of stocks. We
don't have a rigged economy and a rigged stock market. Things are not nearly as
bad as they were in Japan. However I have some concern about our own valuations.
The markets are not cheap. That's okay for now because markets can stay
overvalued or undervalued for long periods of time. I have found that valuations
are a very poor forecaster for near-term and intermediate-term market movements.
When stocks get overvalued, their performance over the subsequent five to ten
years tends to be sub-normal but it doesn't really tell you much about the next
three to six months. Another relatively poor indicator of market direction is
insider sales, which are currently at a five-year high. The highest insider
sales I saw were in the fall of 1982, just a couple of months after the bull
market began. They clearly were wrong. Insiders tend to sell strength and buy
weakness. We are enjoying a lot of strength so they are selling.
Summing up, the major market positives include the lack of inflation and
the huge amounts of savings and money pouring into the market through mutual
funds and other sources. The biggest negatives include the potential problems
developing out of Asia and the high levels of valuation.
At this writing my key indicators are bullish. Counting stocks and bonds we
are about 90% invested, a pretty aggressive position for us. However I remain
committed to my risk-averse mandate. As always, I will react quickly to adjust
our market exposure as conditions warrant.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Implementing my basic allocation strategy, the majority of our stocks
continue to be selected on the basis of a proprietary computer-driven model that
employs various criteria--including price/earnings ratios, earnings growth, cash
flow, and price-to-book value ratios--to evaluate and rank stocks. We consider
about 750 stocks with the highest dividend yields from a universe of
approximately 1,500 of the most liquid stocks.
2
<PAGE>
This procedure has been in effect since the beginning of 1995.
At the end of the first quarter our leading industry groups included
financial services, utilities, oil and oil services, manufacturing,
telecommunications, and the automotive sector. All of the above groups also
occupied prominent positions at the close of 1997. The most significant changes
during the quarter included an increase for financial services and a decline for
oil and oil services.
Among our largest individual holding are Ford, Bear Stearns, Sun, General
Public Utilities, Ahmanson, General Motors, Providian, Dell, PaineWebber, and
Travelers.
New to our largest positions are General Motors, Providian, Dell, and
PaineWebber. All were previously held but increased in market value without
further acquisitions. Dell, in particular, showed a significant gain. Ahmanson,
one of our largest holdings, benefitted from a recent announcement that
Washington Mutual plans to take over the company.
The quarter saw a decline for RJR/Nabisco, USX-Marathon, YPF, and Pennzoil
but these holdings still have prominent positions in our portfolio because they
rank favorably in our models.
Utilities, which had benefitted from the so-called flight to quality in the
fourth quarter, cooled down but financial services picked up. Strong
performances among our other holdings included those of Telefonica de Espana and
Telebras.
Sincerely,
/s/ MARTIN E. ZWEIG
Martin E. Zweig, Ph.D.
Chairman
3
<PAGE>
THE ZWEIG FUND, INC.
STATEMENT OF NET ASSETS
March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<S> <C> <C> <C>
COMMON STOCKS 85.91%
AEROSPACE & DEFENSE 0.90%
B.F. Goodrich Co. .................................................... 73,300 $ 3,742,881
Raytheon Co. Class A ................................................. 47,430 2,697,581
------------
6,440,462
------------
APPAREL MANUFACTURER 0.24%
Russell Corp. ........................................................ 46,100 1,236,056
VF Corp. ............................................................. 9,200 483,575
------------
1,719,631
------------
AUTOMOTIVE 4.64%
Chrysler Corp. ....................................................... 158,900 6,604,281
Ford Motor Co. ....................................................... 223,100 14,459,669
General Motors Corp. ................................................. 147,600 9,953,775
Volvo AB, ADR ........................................................ 71,300 2,272,688
------------
33,290,413
------------
CHEMICALS 2.11%
Dow Chemical Corp. ................................................... 68,100 6,622,725
Goodyear Tire & Rubber Co. ........................................... 56,700 4,295,025
Millennium Chemicals, Inc. ........................................... 87,700 2,937,950
Wellman, Inc. ........................................................ 58,600 1,267,225
------------
15,122,925
------------
CONSUMER DURABLES 1.71%
Cooper Tire & Rubber Co. ............................................. 193,500 4,595,625
Whirlpool Corp. ...................................................... 112,000 7,679,000
------------
12,274,625
------------
CONSUMER PRODUCTS 0.13%
American Greetings Corp. ............................................. 19,900 915,400
------------
CONTAINERS & PACKAGING 0.13%
Sea Containers Ltd., Class A ......................................... 25,200 971,775
------------
ELECTRONICS 1.35%
Avnet, Inc. .......................................................... 27,600 1,588,725
General Motors Corp., Class H ........................................ 113,400 5,131,350
Tektronix, Inc. ...................................................... 67,500 3,012,188
------------
9,732,263
------------
ENGINEERING & CONSTRUCTION 0.85%
Fluor Corp. .......................................................... 122,500 6,094,375
------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<S> <C> <C> <C>
FINANCIALS 14.23%
A.G.Edwards, Inc. .................................................... 184,650 $ 8,078,437
Bear, Stearns & Co., Inc. ............................................ 231,736 11,905,437
Charter One Financial, Inc. .......................................... 41,185 2,756,821
Countrywide Credit Industries, Inc. .................................. 71,500 3,802,906
Fremont General Corp. ................................................ 36,150 2,126,072
GATX Corp. ........................................................... 41,300 3,221,400
H. F. Ahmanson, & Co. ................................................ 124,100 9,617,750
Hartford Financial Services Group, Inc. .............................. 37,200 4,036,200
Horace Mann Education Corp. .......................................... 34,300 1,204,788
Loews Corp. .......................................................... 56,100 5,848,425
Morgan Stanley Dean Witter ........................................... 58,600 4,270,475
Old Republic International Corp. ..................................... 99,500 4,409,094
Orion Capital Corp. .................................................. 58,000 3,171,875
PaineWebber Group, Inc. .............................................. 235,000 9,429,375
PIMCO Advisors L.P. .................................................. 35,200 1,179,200
Providian Corp. ...................................................... 164,700 9,459,956
Quinenco S.A., ADR ................................................... 15,400 189,613
Ryder Systems, Inc. .................................................. 168,500 6,403,000
Selective Insurance Group, Inc. ...................................... 48,000 1,290,000
Travelers, Inc. ...................................................... 138,000 8,280,000
USF & G Corp. ........................................................ 61,500 1,533,656
------------
102,214,480
------------
FOOD & BEVERAGE 0.54%
Adolph Coors Co., Class B ............................................ 110,400 3,864,000
------------
HOME BUILDERS & MATERIALS 0.72%
Kaufman & Broad Home Corp. ........................................... 98,600 3,210,663
Lafarge Corp. ........................................................ 50,400 1,934,100
------------
5,144,763
------------
INDUSTRIAL SERVICES 0.70%
Browning-Ferris Industries, Inc. ..................................... 87,600 2,857,950
Ogden Corp. .......................................................... 75,800 2,179,250
------------
5,037,200
------------
INVESTMENT COMPANIES 3.78%
Argentina Fund, Inc. ................................................. 61,200 807,075
Blackrock 2001 Term Trust, Inc. ...................................... 52,600 456,963
Blackrock Strategic Term Trust, Inc. ................................. 52,600 453,675
Brazil Fund, Inc. .................................................... 59,500 1,364,781
Central European Equity Fund, Inc. ................................... 46,400 913,500
</TABLE>
5
<PAGE>
THE ZWEIG FUND, INC.
STATEMENT OF NET ASSETS--(Continued)
March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<S> <C> <C> <C>
INVESTMENT COMPANIES--(Continued)
Chile Fund, Inc. ..................................................... 61,400 $ 1,062,988
Emerging Markets Infrastructure Fund, Inc. ........................... 173,500 2,125,375
Emerging Markets Telecommunications Fund, Inc. ....................... 76,800 1,152,000
Emerging Mexico Fund, Inc. ........................................... 48,500 475,906
G.T. Global Eastern Europe Fund ...................................... 43,100 530,668
Gabelli Equity Trust, Inc. ........................................... 89,800 1,105,663
Gabelli Global Multimedia Trust Fund, Inc. ........................... 99,700 1,015,693
India Fund, Inc. ..................................................... 48,100 348,725
Italy Fund, Inc. ..................................................... 29,700 456,638
Mexico Equity and Income Fund, Inc. .................................. 21,500 212,312
Mexico Fund, Inc. .................................................... 173,900 3,195,413
Morgan Stanley Emerging Markets Fund, Inc. ........................... 121,900 1,523,750
Morgan Stanley India Investment Fund, Inc. ........................... 70,600 560,388
New Germany Fund, Inc. ............................................... 125,400 2,100,450
Portugal Fund, Inc. .................................................. 38,200 814,138
Royce Value Trust, Inc. .............................................. 144,155 2,459,645
Scudder New Europe Fund, Inc. ........................................ 118,100 2,310,331
Swiss Helvetia Fund, Inc. ............................................ 53,600 1,698,450
------------
27,144,526
------------
LEISURE 0.50%
Brunswick Corp. ...................................................... 95,800 3,341,025
Fleetwood Enterprises, Inc. .......................................... 6,100 284,031
------------
3,625,056
------------
MANUFACTURING 6.99%
Aeroquip-Vickers, Inc. ............................................... 57,300 3,312,656
Borg-Warner Automotive, Inc. ......................................... 67,700 4,341,262
Cincinnati Milacron, Inc. ............................................ 61,400 1,957,125
Cummins Engine Company, Inc. ......................................... 110,400 6,085,800
Dexter Corp. ......................................................... 36,700 1,518,463
Eaton Corp. .......................................................... 26,900 2,560,543
Herman Miller, Inc. .................................................. 185,200 6,209,978
Interface, Inc. ...................................................... 36,800 1,529,500
Johnson Controls, Inc. ............................................... 55,800 3,386,363
PACCAR, Inc. ......................................................... 77,800 4,633,963
Parker Hannifin Corp. ................................................ 101,000 5,176,250
Quanex Corp. ......................................................... 17,700 532,106
Timken Co. ........................................................... 166,000 5,612,875
Trinity Industries, Inc. ............................................. 61,300 3,363,838
------------
50,220,722
------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<S> <C> <C> <C>
METALS & MINING 3.63%
AK Steel Holdings Corp. .............................................. 167,000 $ 3,527,875
Alcan Aluminum Ltd. .................................................. 135,300 4,228,125
ASARCO, Inc. ......................................................... 105,100 2,804,856
Birmingham Steel Corp. ............................................... 44,400 727,050
British Steel Plc, ADR ............................................... 178,700 4,333,475
Cleveland-Cliffs, Inc. ............................................... 14,700 790,125
Cyprus Amax Minerals Co. ............................................. 87,000 1,446,375
USX-U.S. Steel Group ................................................. 216,700 8,180,425
------------
26,038,306
------------
OIL & OIL SERVICES 9.45%
Apache Corp. ......................................................... 131,800 4,843,650
Ashland, Inc. ........................................................ 141,500 8,012,438
Elf Aquitaine S.A., ADR .............................................. 97,700 6,326,075
Equitable Resources, Inc. ............................................ 44,300 1,472,975
Helmerich & Payne, Inc. .............................................. 98,800 3,087,500
Murphy Oil Corp. ..................................................... 52,300 2,621,537
Occidental Petroleum Corp. ........................................... 205,400 6,020,788
Pennzoil Co. ......................................................... 124,600 8,052,275
Sun Company, Inc. .................................................... 260,300 10,639,762
USX-Marathon Group ................................................... 215,200 8,096,900
YPF Sociedad Anonima, ADR ............................................ 255,900 8,700,600
------------
67,874,500
------------
PAPER & FOREST PRODUCTS 1.83%
Bowater, Inc. ........................................................ 155,500 8,776,031
Fort James Corp. ..................................................... 95,800 4,388,838
------------
13,164,869
------------
R.E.I.T.S. 0.48%
Camden Property Trust ................................................ 46,000 1,362,750
Crescent Real Estate Equities Co. .................................... 57,300 2,062,800
------------
3,425,550
------------
RESTAURANTS 0.11%
Bob Evans Farms, Inc. ................................................ 12,300 260,606
Wendy's International, Inc. .......................................... 24,500 546,656
------------
807,262
------------
</TABLE>
7
<PAGE>
THE ZWEIG FUND, INC.
STATEMENT OF NET ASSETS--(Continued)
March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<S> <C> <C> <C>
RETAIL TRADE & SERVICES 3.10%
Dayton Hudson Corp. .................................................. 104,100 $ 9,160,800
Fingerhut Co., Inc. .................................................. 61,400 1,592,562
Hasbro, Inc. ......................................................... 93,100 3,287,594
Ross Stores, Inc. .................................................... 74,600 3,291,725
Supervalu, Inc. ...................................................... 106,500 4,965,563
-----------
22,298,244
------------
TECHNOLOGY 3.88%
Applied Materials, Inc. .............................................. 56,600(a) 1,998,688
Dell Computer Corp. .................................................. 144,000(a) 9,756,000
Digital Equipment Corp. .............................................. 25,900(a) 1,354,893
Harris Corp. ......................................................... 81,600 4,253,400
Intel Corp. .......................................................... 45,600 3,559,650
Microsoft Corp. ...................................................... 77,400(a) 6,927,300
------------
27,849,931
------------
TELECOMMUNICATIONS 4.64%
BCE, Inc. ............................................................ 79,000 3,298,250
Telefonica de Argentina S.A., ADR .................................... 158,200 6,021,487
Telecomunicacoes Brasileiras S.A., ADR-- (Telebras) .................. 47,900 6,218,019
Telefonica de Espana S.A., ADR ....................................... 66,400 8,781,400
Telefonos de Mexico S.A., ADR ........................................ 159,400 8,986,175
------------
33,305,331
------------
TOBACCO 1.35%
RJR Nabisco Holdings Corp. ........................................... 264,600 8,285,287
Universal Corp. ...................................................... 32,300 1,423,219
------------
9,708,506
------------
TRANSPORTATION 4.10%
Canadian Pacific Ltd. ................................................ 242,500 7,153,750
CNF Transportation, Inc. ............................................. 143,300 5,149,844
FDX Corp. ............................................................ 114,240 8,125,320
KLM Royal Dutch Airlines N.V., ADR ................................... 61,933 2,516,028
Laidlaw, Inc. ........................................................ 107,400 1,704,975
Rollins Truck Leasing Corp. .......................................... 61,550 850,159
US Freightways Corp. ................................................. 108,900 3,920,400
------------
29,420,476
------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<S> <C> <C> <C>
UTILITIES-ELECTRIC & NATURAL GAS 13.82%
Allegheny Energy, Inc. ............................................... 64,700 $ 2,171,494
American Electric Power Co., Inc. .................................... 18,000 904,500
Columbia Gas System, Inc. ............................................ 57,200 4,447,300
CMS Energy Corp. ..................................................... 167,200 7,847,950
Consolidated Edison, Inc. ............................................ 73,600 3,440,800
DQE Inc. ............................................................. 85,950 3,201,637
DTE Energy Co. ....................................................... 99,100 3,895,869
Edison International ................................................. 294,500 8,650,937
FPL Group, Inc. ...................................................... 129,600 8,326,800
FirstEnergy Co. ...................................................... 79,200 2,440,350
GPU, Inc. ............................................................ 240,700 10,650,975
New York State Electric & Gas Corp. .................................. 228,000 9,091,500
Pacific Enterprises .................................................. 61,300 2,501,806
PECO Energy Co. ...................................................... 211,300 4,675,013
PG&E Corp. ........................................................... 199,100 6,570,300
Pinnacle West Capital Corp. .......................................... 166,900 7,416,618
PP&L Resources, Inc. ................................................. 204,900 4,840,763
Public Service Co. of New Mexico ..................................... 101,600 2,482,850
Sierra Pacific Resources ............................................. 59,800 2,246,238
UtiliCorp United, Inc. ............................................... 88,100 3,474,444
------------
99,278,144
------------
TOTAL COMMON STOCKS $616,983,735
------------
</TABLE>
9
<PAGE>
THE ZWEIG FUND, INC.
STATEMENT OF NET ASSETS--(Continued)
March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----------
<S> <C> <C> <C>
UNITED STATES GOVERNMENT & AGENCY OBLIGATIONS 4.09%
United States Treasury Bonds, 10.750%, 5/15/2003 ..................... $4,000,000 $ 4,887,500
United States Treasury Bonds, 7.50%, 11/15/2024 ...................... 2,500,000 2,989,843
United States Treasury Notes, 6.875%, 5/15/2006 ...................... 7,500,000 8,039,062
United States Treasury Notes, 6.50%, 10/15/2006 ...................... 8,100,000 8,497,402
United States Treasury Notes, 6.625%, 5/15/2007 ...................... 4,700,000 4,987,875
------------
29,401,682
------------
TOTAL UNITED STATES GOVERNMENT & AGENCY
OBLIGATIONS ................................................. 29,401,682
------------
SHORT-TERM INVESTMENTS 9.51%
Baker Hughes, Inc., 6.00%, 4/1/98 .................................... 20,000,000 20,000,000
GMAC, 5.55%, 4/6/98 .................................................. 12,700,000 12,690,211
Merrill Lynch & Co., Inc., 5.58%, 4/3/98 ............................. 20,000,000 19,993,800
Pitney Bowes Credit, 6.00%, 4/1/98 ................................... 15,600,000 15,600,000
------------
68,284,011
------------
TOTAL SHORT-TERM INVESTMENTS .................................. 68,284,011
TOTAL INVESTMENTS IN SECURITIES ........................................... 99.51% 714,669,428
CASH AND OTHER ASSETS LESS LIABILITIES .................................... 0.49% 3,516,048
---------- ------------
NET ASSETS (Equivalent to $13.50 per share based on
53,186,244 shares of capital stock outstanding) ......................... 100.00% $718,185,476
========== ============
<CAPTION>
Number of
Contracts
---------
<S> <C> <C>
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS
Standard and Poor's June 1998 Short futures .......................... 22(b) $ (139,700)
===========
</TABLE>
- ------------
(a) Non-income producing security.
(b) The market value of the short futures was $6,105,000 (representing 0.85% of
the Fund's net assets) with a cost of $5,965,300
10
<PAGE>
THE ZWEIG FUND, INC.
FINANCIAL HIGHLIGHTS
March 31,1998
(Unaudited)
<TABLE>
<CAPTION>
Net Asset Value
Total Net Assets per share
---------------------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value
Beginning of period: December 31,1997 .................. $666,365,791 $12.63
Net investment income .................................. $ 3,383,842 $0.06
Net realized and unrealized gains
on investments ....................................... 59,471,502 1.12
Dividends from net investment income and
distributions from net long-term and
short-term capital gains ............................. (16,357,324) (0.31)
Net asset value of shares issued to
shareholders for reinvestment of-
dividends and distributions .......................... 5,321,665 0.00
----------- -----
Net increase in net assets/in net asset value ........ 51,819,685 0.87
------------ ------
End of period:March 31,1998 .............................. $718,185,476 $13.50
============ ======
</TABLE>
- --------------------------------------------------------------------------------
KEY INFORMATION
1-800-272-2700 Zweig Shareholder
Relations:
For general information
and literature
(212) 644-2188 The Zweig Fund Hot Line:
For updates on net asset
value, share price, major
industry groups and other
key information
- --------------------------------------------------------------------------------
REINVESTMENT PLAN
Many of you have questions about our reinvestment plan. We urge
shareholders who want to take advantage of this plan and whose shares are held
in "Street Name," to consult your broker as soon as possible to determine if you
must change registration into your own name to participate.
- --------------------------------------------------------------------------------
----------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may from time to time purchase its shares of
common stock in the open market when Fund shares are trading at a discount of
10% or more from their net asset value.
11
<PAGE>
OFFICERS AND DIRECTORS
Martin E. Zweig, Ph.D.
Chairman of the Board and President
Jeffrey Lazar
Director, Vice President and Treasurer
Stuart B. Panish
Vice President and Secretary
Christopher M. Capano
Assistant Vice President
Annemarie Gilly
Director
Eugene J. Glaser
Director
Elliot S. Jaffe
Director
Alden C. Olson, Ph.D.
Director
James B. Rogers, Jr.
Director
Anthony M. Santomero, Ph.D.
Director
Robert E. Smith
Director
Investment Adviser
Zweig Advisors Inc.
900 Third Avenue
New York, New York 10022
Fund Administrator
Zweig/Glaser Advisers
900 Third Avenue
New York, New York 10022
Custodian
The Bank of New York
48 Wall Street
New York, New York 10015
Transfer Agent
State Street Bank & Trust Co.
225 Franklin Street
Boston, MA 02110
Legal Counsel
Rosenman & Colin LLP
575 Madison Avenue
New York, New York 10022
- --------------------------------------------------------------------------------
This report is transmitted to the shareholders of The Zweig Fund, Inc. for
their information. This is not a prospectus, circular or representation intended
for use in the purchase of shares of the Fund or any securities mentioned in
this report.
ZF981 4902-1Q-98
