October 30, 1998
Dear Shareholder:
The Zweig Fund's net asset value decreased 12.3% during the three months
ended September 30, 1998, including the $0.31 distribution paid on July 27,
1998. During the same period, the Standard & Poor's 500 Index declined 9.9%,
including dividends. For comparison purposes, the average diversified U.S.
stock fund delivered a negative 15.02% return for the third quarter, according
to Lipper Analytical Services. Maintaining our risk-averse policy, our Fund's
equity exposure during the third quarter averaged approximately 79%.
For the nine months ended September 30, 1998, the Fund's net asset value
decreased 6.1%, including $0.95 in distributions. During this span the Standard
& Poor's 500 Index increased 6.0%. Our average exposure for this period was
approximately 82%.
In assessing our performance, I would like to point out that the S&P's
500 Index was very misleading for comparison purposes. Rather than measuring
what the real market was doing, it only reflected the gains in a handful of
stocks.
For the first three quarters of this year, the five largest stocks --
weighted for capitalization -- in the S&P 500 Index were up 16.5%. The rest of
the list -- the other unweighted 495 stocks -- showed an average decline of
7.2%. During that same period the Russell 2000 Index of small cap stocks had a
27% negative return.
Since we are a conservative fund, we were heavily loaded with utility
stocks, a group which held up better than the market and actually set new highs
in September. Maintaining our defensive posture, we also held bonds and cash.
However we still got hurt with some stocks, particularly financials.
While we have held a few growth stocks, including Dell, Microsoft, and
Intel for some time, the bulk of our portfolio consists of value stocks, a
group which has greatly underperformed the market in the past few years. Our
policy in general is not to buy stocks that we consider to have outrageous
price/earnings ratios. As a consequence, our p/e ratios are among the lowest in
the entire mutual fund industry. Our aim is to achieve reasonable returns at a
good price. While there are periods when our method does not work, we are
sticking to a strategy that has beaten the market in the long run. Meanwhile,
our defensive stance has enabled us to do better than the average mutual fund
in the third quarter.
DISTRIBUTION DECLARED
On September 21, 1998, the Fund announced a distribution of $0.27 payable
on October 26, 1998 to shareholders of record on October 9, 1998. Including
this distribution, our total payout since the Fund's inception is now $13.47.
MARKET OUTLOOK
The big market news recently was the second Fed cut of one-quarter
percent. I believe the Fed was prompted to loosen by the damage done to the
banking system by loans to leveraged positions in bonds and foreign debts. The
Russian default didn't help although the U.S. bank exposure there was small.
Responding to signs that banks were less willing to lend, the Fed wanted to
supply liquidity to the system and preempt a recession. In the days since the
Fed's action, the markets have certainly stabilized. Hopefully, that will help
the economy as well.
I believe the Fed will continue to be responsive to any economic
downturn. They waited for so long to loosen because the economy was acting well
and some Fed members feared inflation. Declining industrial production in
September and steady consumer prices helped ease some inflationary concerns. If
we see further weakness in production, retail sales, or other economic
indicators, the Fed will have more room to loosen. I think the Fed wants to
retain some fire power for when they need it.
The rate cuts are clearly driving down the dollar's value, especially
against the Japanese currency. At this point I think that is more of a positive
than a negative. First, a strengthened yen against the dollar has taken a lot
of pressure off China. If China were to devalue, it could cause economic chaos.
Secondly, it takes pressure off Brazil, the next line of battle. If Brazil
devalued, other South American and Latin American countries would probably
follow suit. That would be very bad news economically.
<PAGE>
Domestically, the effect of the weaker dollar is mixed. Multinational
companies might actually benefit from their earnings abroad. Exporters will
gain a bit but importers will not fare as well. Overall, a weaker dollar is
more desirable provided, of course, that it does not collapse.
Some market observers have compared our recent market crash to that of
1987 but, aside from the fact that both were crashes, I do not see any
resemblance. Back then, higher interest rates and inflation were problems but
that is not the case now. The biggest factor in the 1987 crash was a
combination of program trading and portfolio insurance. It was more or less a
technical market mechanism that turned what might have been an intermediate
correction of say 15% into a crash.
The recent crash was based on real economic factors -- fears of
deflation, competitive devaluations of currencies, and the Russian default.
That caused three or four days of panic selling in markets around the world. As
in 1987, the Fed came to the rescue. The jury is still out on how the economy
will respond.
I don't see equity mutual funds affected by the credit crunch that hit
some hedge funds. Mutual funds do not borrow except in small amounts to meet
redemptions and they are not generally leveraged. Although the cash position at
mutual funds has picked up in the last couple of months, it is still low by
historical standards. I would feel more comfortable if their cash position,
which is now 5.6%, would rise to the 8% or 9% range. More cash at mutual funds
would mean additional power on the sidelines to buy stocks, providing the
market with more of a cushion.
I haven't considered the market cheap for several years. The S&P 500 is
currently at about 23 times earnings, down from its peak of 28 but still high
historically. However valuations as a whole are very poor predictors of
near-term price movements. If interest rates and inflation stay low and the
economy manages to muddle through, it is possible stocks could go higher -- but
I would feel better if price/earnings ratios were lower.
The wide swings in stock averages on a daily basis do not bother me. No
one really likes volatility. It makes people uncomfortable. However my studies
have shown that periods of high volatility generally lead to better than
average returns. That's because volatility tends to go higher late in bear
markets or at the beginnings of bull markets. It doesn't always work but, more
often than not, high volatility is a positive.
Also positive are the gloom and doom covers on mass-market magazines. We
did a research study several years ago and checked all Time and Newsweek covers
to see if bullish or bearish covers made a difference in the market's
subsequent performance. We found that when covers were bearish, the markets
generally went up after a time lag of about one month. Bullish covers did not
make much of a difference. Both magazines have run bearish covers recently. The
last time that happened previously was in early April of 1994, a period that
was essentially close to the 1994 bottom.
Summing up, there are many market positives. We have had a crash with a
selling climax -- a large one-day reversal on record volume -- which tends to
be a plus. We have also seen much better tape action over the past few weeks.
The previously mentioned Fed cuts have given the markets breathing room.
On the negative side, the world is not particularly stable. The Japanese
economy is still dormant and the Russians are in deep trouble. Also, the market
is not cheap. However, favorable monetary indicators combined with virtually no
inflation make the odds positive for the next three to six months.
Counting stocks and bonds, we are currently about 91% invested, a bullish
position for us. We raised our exposure judiciously after the early October
crash. The Fed moves made me more comfortable and we increased our exposure
further. We are in a bullish mode and, if conditions warrant, I am prepared to
go even higher. Should fundamentals deteriorate, we will of course reduce our
exposure in keeping with the dictates of our research models. As always, our
approach will be pragmatic and disciplined.
PORTFOLIO COMPOSITION
In accordance with a policy instituted at the beginning of 1995, the
majority of our stocks are acquired or sold on the basis of a proprietary
computer-driven model that is weighted toward a value approach with secondary
emphasis on growth. Various criteria are used to evaluate and
2
<PAGE>
rank the most liquid stocks with the highest dividend yields.
Our leading industry categories at the close of the third quarter
included utilities, financial services, oil and oil services, technology,
telecommunications, and manufacturing. With the exception of
telecommunications, which edged out transportation, all of the above were in
our top groupings previously.
The quarter did see a reduction in our exposure to financial services and
manufacturing, where we trimmed our holdings. However such groups as utilities,
technology, oil and oil services, and telecommunications, which tend to be
defensive in nature, increased in value or remained steady despite the
difficult quarter. Surprisingly, technology held up especially well.
Our largest individual holdings include Dell, Energy East, Ford, Reynolds
Metals, GPU, Microsoft, PECO Energy, AT&T, Edison International, and Unicom.
With the exception of AT&T and Unicom -- both new positions -- all of the
above were previously held. We added to our positions in Reynolds Metals and
GPU while our holdings in PECO Energy and Microsoft increased as a result of
appreciation.
During the quarter we cut back our holdings in Bear Stearns, Dayton
Hudson, Sun, Paine Webber, and NationsBank (now BankAmerica) but all remain in
our portfolio.
Sincerely,
/s/ Martin E. Zweig
Martin E. Zweig, Ph.D.
Chairman
3
<PAGE>
THE ZWEIG FUND, INC.
STATEMENT OF NET ASSETS
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -------------
<S> <C> <C>
COMMON STOCKS 69.18%
AEROSPACE & DEFENSE 0.43%
B.F. Goodrich & Co. ........................... 85,600 $2,798,050
----------
APPAREL MANUFACTURER 0.46%
VF Corp. ...................................... 60,500 2,246,062
Warnaco Group, Inc. ........................... 32,300 746,938
----------
2,993,000
----------
AUTOMOTIVE 2.38%
Chrysler Corp. ................................ 140,100 6,707,288
Ford Motor Co. ................................ 187,000 8,777,312
----------
15,484,600
----------
CHEMICALS 0.40%
Millennium Chemicals, Inc. .................... 97,700 1,819,663
Wellman, Inc. ................................. 58,600 747,150
----------
2,566,813
----------
CONSUMER DURABLES 1.41%
Cooper Tire & Rubber Co. ...................... 157,800 2,840,400
Whirlpool Corp. ............................... 58,600 6,312,100
----------
9,152,500
----------
CONSUMER PRODUCTS 0.57%
Fortune Brands, Inc. .......................... 125,300 3,712,013
----------
CONTAINERS & PACKAGING 0.09%
Sea Containers Ltd., Class A .................. 25,200 606,375
----------
ELECTRONICS 1.33%
Avnet, Inc. ................................... 79,700 2,933,957
General Motors Corp., Class H ................. 154,100 5,672,806
----------
8,606,763
----------
ENGINEERING & CONSTRUCTION 0.71%
Fluor Corp. ................................... 112,500 4,619,531
----------
FINANCIALS 10.65%
A.G. Edwards & Sons, Inc. ..................... 105,600 3,201,000
Allstate Corp. ................................ 147,600 6,153,075
Astoria Financial Corp. ....................... 63,600 2,679,150
Bear Stearns & Co., Inc. ...................... 130,161 4,033,043
Charter One Financial, Inc. ................... 80,503 2,002,512
Conseco Inc. .................................. 139,700 4,269,581
Countrywide Credit Industries, Inc. ........... 89,800 3,737,925
GATX Corp. .................................... 82,600 2,730,963
Hartford Financial Services Group, Inc. ....... 49,300 2,338,669
J.P. Morgan & Co., Inc. ....................... 29,000 2,454,125
Loews Corp. ................................... 46,800 3,948,750
Metris Companies, Inc. ........................ 19,549 911,472
Morgan Stanley, Dean Witter & Co. ............. 58,600 2,523,463
NationsBank Corp. ............................. 95,600 5,114,600
Old Republic International Corp. .............. 149,250 3,358,125
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -------------
<S> <C> <C>
FINANCIALS -- (Continued)
Orion Capital Corp. .................................. 58,000 $2,069,875
PaineWebber Group, Inc. .............................. 186,700 5,601,000
PIMCO Advisors L.P. .................................. 35,200 1,034,000
Provident Companies, Inc. ............................ 86,200 2,909,250
Quinenco S.A., ADR ................................... 61,500 426,656
Reliance Group Holdings, Inc. ........................ 72,100 1,013,906
Reliastar Financial Corp. ............................ 67,200 2,620,800
Ryder Systems, Inc. .................................. 125,000 3,109,375
Selective Insurance Group, Inc. ...................... 48,000 918,000
----------
69,159,315
----------
FOOD & BEVERAGE 0.74%
Adolph Coors Co., Class B ............................ 104,200 4,786,688
----------
HOME BUILDERS & MATERIALS 0.87%
Fleetwood Enterrprises, Inc. ......................... 53,700 1,621,068
Kaufman & Broad Home Corp. ........................... 98,600 2,310,938
Lafarge Corp. ........................................ 60,400 1,725,175
----------
5,657,181
----------
INDUSTRIAL SERVICES 0.33%
Ogden Corp. .......................................... 75,800 2,155,563
----------
INVESTMENT COMPANIES 2.45%
Blackrock 2001 Term Trust, Inc. ...................... 52,600 473,400
Blackrock Strategic Term Trust, Inc. ................. 52,600 483,262
Central European Equity Fund, Inc. ................... 46,400 510,400
Emerging Markets Infrastructure Fund, Inc. ........... 76,800 676,800
Emerging Markets Telecommunications Fund, Inc. ....... 199,600 1,235,025
France Growth Fund, Inc. ............................. 64,500 757,875
Gabelli Equity Trust, Inc. ........................... 106,000 1,099,750
Gabelli Global Multimedia Trust Fund, Inc. ........... 99,700 866,144
Italy Fund, Inc. ..................................... 29,700 341,550
Mexico Fund, Inc. .................................... 173,900 1,695,525
Morgan Stanley Emerging Markets Fund, Inc. ........... 121,900 838,063
Morgan Stanley India Investment Fund, Inc. ........... 70,600 472,138
Portgugal Fund, Inc. ................................. 56,300 950,062
Royce Value Trust, Inc. .............................. 144,155 1,855,995
Scudder New Europe Fund, Inc. ........................ 133,400 2,184,425
Swiss Helvetia Fund, Inc. ............................ 53,600 1,467,300
----------
15,907,714
----------
LEISURE 0.42%
Brunswick Corp. ...................................... 79,500 1,028,531
Fleetwood Enterprises, Inc. .......................... 64,700 1,718,594
----------
2,747,125
----------
MANUFACTURING 4.13%
Aeroquip-Vickers, Inc. ............................... 57,300 1,647,375
Borg-Warner Automotive, Inc. ......................... 82,600 3,061,362
Cincinnati Milacron, Inc. ............................ 71,400 1,102,238
Cummins Engine Company, Inc. ......................... 110,400 3,284,400
Dexter Corp. ......................................... 36,700 899,150
Herman Miller, Inc. .................................. 155,200 3,065,200
Johnson Controls, Inc. ............................... 55,800 2,594,700
Kennametal, Inc. ..................................... 67,100 1,807,506
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
--------------- -------------
<S> <C> <C>
MANUFACTURING -- (Continued)
PACCAR, Inc. ............................ 67,800 $2,792,512
Timken Co. .............................. 166,000 2,510,750
Trinity Industries, Inc. ................ 125,800 4,080,638
----------
26,845,831
----------
METALS & MINING 3.16%
AK Steel Holdings Corp. ................. 167,000 2,745,063
Alcan Aluminum Ltd. ..................... 135,300 3,171,094
British Steel Plc, ADR .................. 126,400 2,298,900
Reynolds Metals Co. ..................... 158,200 8,038,537
USX-U.S. Steel Group .................... 179,300 4,280,787
----------
20,534,381
----------
OIL & OIL SERVICES 6.88%
Ashland, Inc. ........................... 122,300 5,656,375
Elf Aquitaine S.A., ADR ................. 68,900 4,284,719
Equitable Resources, Inc. ............... 44,300 1,126,881
Helmerich & Payne, Inc. ................. 73,200 1,537,200
Murphy Oil Corp. ........................ 46,100 1,786,375
Occidental Petroleum Corp. .............. 90,400 1,943,600
Pennzoil Co. ............................ 124,600 4,368,788
Sun Company, Inc. ....................... 158,100 5,059,200
Tidewater, Inc. ......................... 121,300 2,516,975
Transocean Offshore, Inc. ............... 87,200 3,024,750
USX-Marathon Group ...................... 190,200 6,740,212
YPF Sociedad Anonima, ADR ............... 255,900 6,653,400
----------
44,698,475
----------
PAPER & FOREST PRODUCTS 1.29%
Bowater, Inc. ........................... 155,500 5,539,688
Mead Corp. .............................. 96,800 2,849,550
----------
8,389,238
----------
REAL ESTATE INVESTMENT TRUSTS 1.17%
Camden Property Trust ................... 46,000 1,285,125
Crescent Real Estate Equities Co. ....... 108,200 2,732,050
Felcor Suite Hotels Inc. ................ 64,700 1,573,019
New Plan Excel Realty Trust, Inc. ....... 38,040 886,807
Reckson Associates Realty Co. ........... 47,600 1,118,600
----------
7,595,601
----------
RESTAURANTS 0.51%
Bob Evans Farms, Inc. ................... 49,500 986,906
Wendy's International, Inc. ............. 104,500 2,318,594
----------
3,305,500
----------
RETAIL TRADE & SERVICES 2.23%
Dayton Hudson Corp. ..................... 110,800 3,961,100
Fingerhut Co., Inc. ..................... 61,400 675,400
Pier 1 Imports, Inc. .................... 64,600 484,500
Ross Stores, Inc. ....................... 74,600 2,135,425
Saks, Inc. .............................. 71,100 1,595,306
Supervalu, Inc. ......................... 242,700 5,657,944
----------
14,509,675
----------
TECHNOLOGY 5.39%
Applied Materials Inc. .................. 56,600(a) 1,429,150
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
---------------- --------------
<S> <C> <C>
TECHNOLOGY -- (Continued)
Compaq Computer Corp. ........................... 131,126 $ 4,146,860
Dell Computer Corp. ............................. 235,700(a) 15,497,275
Harris Corp. .................................... 64,000 2,048,000
Intel Corp. ..................................... 45,600 3,910,200
Microsoft Corp. ................................. 72,400(a) 7,968,525
-----------
35,000,010
-----------
TELECOMMUNICATONS 4.73%
AT&T Corp. ...................................... 129,300 7,555,969
BCE, Inc. ....................................... 64,700 1,807,556
MCI Worldcom, Inc. .............................. 64,500 3,152,438
Telebras Holders, S.A., ADR ..................... 73,600 5,184,200
Telefonica de Argentina S.A., ADR ............... 148,200 4,362,638
Telefonica de Espana S.A., ADR .................. 47,436 5,120,122
Telefonos de Mexico S.A., ADR ................... 79,400 3,513,450
-----------
30,696,373
-----------
TEXTILES 0.55%
Interface, Inc. ................................. 73,600 883,200
Shaw Industries, Inc. ........................... 163,600 2,658,500
-----------
3,541,700
-----------
TOBACCO 0.18%
Universal Corp. ................................. 32,300 1,154,725
-----------
TRANSPORTATION 2.83%
Airborne Freight Corp. .......................... 32,300 559,194
Burlington Northern Santa Fe Corp. .............. 197,700 6,326,400
Canadian Pacific Ltd. ........................... 97,400 2,014,962
CNF Transportation, Inc. ........................ 146,200 4,258,075
FDX Corp. ....................................... 62,640 2,826,630
USFreightways Corp. ............................. 118,900 2,363,138
-----------
18,348,399
-----------
UTILITIES -- ELECTRIC & NATURAL GAS 12.89%
Central & Southwest Corp. ....................... 96,800 2,764,850
CMS Energy Corp. ................................ 91,100 3,968,544
Columbia Gas System, Inc. ....................... 45,100 2,643,987
Consolidated Edison Co. of New York, Inc. ....... 75,100 3,914,587
DTE Energy Co. .................................. 99,100 4,478,081
Edison International, Inc. ...................... 276,100 7,092,319
Energy East Corp. ............................... 185,000 9,435,000
FPL Group, Inc. ................................. 70,900 4,940,844
GPU, Inc. ....................................... 187,700 7,977,250
PECO Energy Co. ................................. 217,600 7,956,000
PG&E Corp. ...................................... 218,300 6,971,956
Pinnacle West Capital Corp. ..................... 131,800 5,906,287
Public Service Co. of New Mexico ................ 101,600 2,254,250
Sierra Pacific Resources ........................ 59,800 2,320,987
Texas Utilities Co. ............................. 12,300 572,719
Unicom Corp. .................................... 187,300 7,000,337
UtiliCorp United, Inc. .......................... 88,100 3,468,938
-----------
83,666,936
-----------
Total Common Stocks ........................... 449,240,077
-----------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
------------------ --------------
<S> <C> <C>
UNITED STATES GOVERNMENT OBLIGATIONS 7.48%
United States Treasury Bonds, 10.750%, 5/15/2003 ....... $ 4,000,000 $ 5,048,752
United States Treasury Bonds, 7.50%, 11/15/2024 ........ 1,200,000 1,594,501
United States Treasury Bonds, 6.375%, 8/15/2027 ........ 300,000 354,281
United States Treasury Notes, 6.875%, 5/15/2006 ........ 7,500,000 8,671,883
United States Treasury Notes, 6.50%, 10/15/2006 ........ 8,100,000(b) 9,203,633
United States Treasury Notes, 6.625%, 5/15/2007 ........ 15,500,000(c) 17,863,766
United States Treasury Notes, 6.125%, 8/15/2007 ........ 5,200,000 5,824,005
-----------
Total United States Government Obligations .............................. 48,560,821
-----------
SHORT-TERM INVESTMENTS 22.40%
Avery Dennison Corp., 5.75%, 10/1/1998 ................. 22,500,000 22,500,000
BP America Inc., 5.75%, 10/1/1998 ...................... 30,000,000 30,000,000
E.I. du Pont de Nemours & Co., 5.52%, 10/7/98 .......... 23,000,000 22,978,817
General Electric Capital Corp., 5.51%, 10/5/1998 ....... 25,000,000 24,984,673
General Motors Acceptance Corp., 5.52% , 10/2/98 ....... 25,000,000 24,996,161
Merrill Lynch & Co., Inc., 5.57%, 10/8/1998 ............ 20,000,000 19,978,312
-----------
Total Short-Term Investments ............................................ 145,437,963
-----------
</TABLE>
<TABLE>
<CAPTION>
Number of
Contracts
-------------
<S> <C> <C>
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS
Standard and Poor's December 1998 Long futures ................ 30(d) (129,282)
--------
Total Investments .......................................... 99.04% 643,109,577
Cash and Other Assets Less Liabilities ..................... 0.96% 6,243,062
-------- -----------
Net Assets (Equivalent to $10.87 per share based on 59,715,233
shares of capital stock outstanding) ...................... 100.00% $649,352,639
======== ============
Number of
Shares
-----------
SECURITY SOLD SHORT
W.E.B.S. Index Fund, Inc. - Mexico Series
(Proceeds $985,054).......................................... 71,600 $ 648,875
============
</TABLE>
- ----------
(a) Non-income producing security.
(b) Used as collateral on short sales.
(c) Used as collateral on futures.
(d) The market value of the short futures was $7,737,750 (representing 1.19% of
the Fund's net assets) with a cost of $7,867,032.
8
<PAGE>
THE ZWEIG FUND, INC.
FINANCIAL HIGHLIGHTS
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Net Asset Value
Total Net Assets per share
---------------------------------- ------------------------
<S> <C> <C> <C> <C>
Beginning of period: December 31, 1997 .......... $666,365,791 $ 12.63
Net investment income .......................... $ 10,352,469 $ 0.19
Net realized and unrealized losses on
investments .................................. (56,990,159) (0.84)
Dividends from net investment income and
distributions from net long-term and
short-term capital gains ..................... (52,420,645) (0.95)
Net asset value of shares issued to
shareholders for reinvestment of dividends
and distributions ............................ 10,898,714 0.00
Net proceeds from the sale of shares during
rights offering/effect on net asset value as a
result of rights offering* ................... 71,146,469 (0.16)
------------- -------
Net increase in net assets/(decrease) in net
asset value ................................. (17,013,152) ( 1.76)
------------ --------
End of period: September 30, 1998 ............... $649,352,639 $ 10.87
============ ========
</TABLE>
* Shares were sold at a 5% discount from the average market price.
9
<PAGE>
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.
10
<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 & Secretary
Christopher M. Capano
Assistant Vice President
Charles H. Brunie
Director
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
One Wall Street
New York, New York 10286
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.
ZF983 4902-3Q-98
[THE ZWEIG FUND LOGO APPEARS HERE]
QUARTERLY REPORT
-------------------------------------------
September 30, 1998
