<PAGE>
"THIS IS A CONFIRMING COPY OF A PAPER FILING OF OUR MARCH 31, 1995 INTERIM
REPORT TO SHAREHOLDERS (N-30B-2) SUBMITTED IN MAY 1995."
May 1, 1995
Dear Shareholder:
The Zweig Total Return Fund's net asset value increased 3.9% during the
quarter ended March 31, 1995, including $0.21 in reinvested distributions.
DISTRIBUTION DECLARED
In accordance with our policy of distributing 10% of net asset value per
year, which equals 0.83% per month (10% divided by 12 months), the Fund
recently announced a distribution of $0.07 payable on May 24, 1995 to
shareholders of record on May 11, 1995. The value of a distribution depends on
the exact net asset value at the time of declaration. For the May distribution,
0.83% of the Fund's net asset value was equivalent to $0.07 per share.
Including this distribution, the Fund's payout since its inception is now
$6.14.
MARKET OUTLOOK
Our bond holdings at this writing are at about 24% compared with 39% at year-
end. If fully invested, we would be at 62 1/2% for bonds. Consequently, we are
at about 38% of a full position (24%/62 1/2%). This is a very conservative
exposure, especially in view of the short-term duration of our bonds. These
bonds fluctuate far less than the long-term bonds.
When our bond model improved last year, we increased our exposure. However,
in recent weeks the bond model deteriorated, primarily as a result of rising
commodity prices. For example, copper, crude oil, gold, and the Commodity
Research Bureau Price Index have advanced. Although the momentum indicators
have been bullish, with yields declining in the past three or four months, our
overall bond model is negative at the moment. We cut back our exposure as
commodity prices began to rise.
Although there has been some weakness in the economy, I still see inflation,
which would be bearish for bonds, as a threat. Despite the slowdown in the
growth of Gross Domestic Product (GDP), pressures persist for higher prices.
Capacity utilization remains high and inventories continue tight in relation to
sales. Then there is the factor of the weak dollar as compared with the
Japanese yen and the German mark, which could lead to still higher prices of
imports. Overall, import prices were up about 6% in the last year compared with
a decline of 1% twelve months ago. If import prices climb, domestic producers
would have more leeway to follow suit.
As for equities, we have increased our exposure from about 11% at year-end to
about 21% at this writing. With full investment in stocks at 37 1/2% for our
Fund, we are presently at 56% (21%/37 1/2%) of a full position.
We increased our equity exposure during the quarter because of the
improvement in our monetary and momentum indicators. However, I still consider
the major trend risk as very high. Market negatives include overvaluation, the
threat of inflation, negative sentiment indicators, and the continuing mutual
fund bubble, with people still heavily buying mutual funds.
I will continue to be conservative, careful, and constantly concerned not to
lose money. By following my time-tested indicators, we will have the
flexibility to increase our exposure if conditions warrant or cut back further
if risk rises.
PORTFOLIO COMPOSITION
Conforming to our investment policy guidelines, most of our bonds are U.S.
Government obligations. We also own a small
<PAGE>
percentage of high grade corporate bonds. At this writing, the average duration
of the bond portion of the Fund is 2.5 years.
While my asset allocation strategy remains an important part of our portfolio
management, the majority of our stocks, as stated in the last annual report,
are now being acquired on the basis of a proprietary computer-driven model that
evaluates and ranks higher dividend yield stocks. This model was developed and
tested by me and my research staff over a period of many years.
From a list of approximately 1,500 of the most liquid stocks, we consider
about 750 stocks with the highest dividend yields. Each stock is then evaluated
and ranked on the basis of various market factors. Weights of the variables
will change over time but valuation will tend to get the greatest weight.
Based on our model readings, we have sharply reduced our holdings in the
technology sector. However, we have maintained our position in IBM which,
incidentally, continues to be our largest individual position -- and it has
done quite well recently.
Currently oil is the leading industry group in our portfolio, followed
closely by utilities. Other top ranking sectors include chemicals, banks,
telecommunications and paper.
Our top individual holdings no longer include HealthTrust, Oracle Systems,
Applied Materials, and Hercules, Inc. New to our leading positions are Georgia
Pacific, Dow Chemical, Ford, and duPont.
Other prominent individual positions, in addition to those already cited,
include Phillips Petroleum, British Petroleum, Philip Morris, Citicorp, and
Union Carbide.
Sincerely,
/s/ Martin E. Zweig
Martin E. Zweig, Ph.D.
Chairman
2
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS
MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
Common Stocks 17.41%
Aerospace & Defense 0.41%
Lockheed Martin Corporation................................... 33,208 $ 1,755,873
Northrop Grumman Corporation.................................. 8,700 425,212
Sunstrand Corporation......................................... 5,800 292,175
------------
2,473,260
------------
Air Transportation 0.11%
British Airways, ADS.......................................... 10,400 683,800
------------
Automotive 0.69%
Chrysler Corporation.......................................... 47,600 1,993,250
Ford Motor Company............................................ 79,700 2,151,900
------------
4,145,150
------------
Banks 1.29%
Bank of Boston Corporation.................................... 37,900 1,127,525
Bank of New York, Inc. ....................................... 34,800 1,144,050
BankAmerica Corporation....................................... 15,000 723,750
Citicorp...................................................... 45,100 1,916,750
GP Financial Corporation...................................... 61,500 1,422,188
Great Western Financial Corporation........................... 13,000 243,750
Norwest Corporation........................................... 26,500 672,437
SouthTrust Corporation........................................ 24,600 516,600
------------
7,767,050
------------
Chemicals 1.40%
Dow Chemical Company.......................................... 29,000 2,117,000
duPont (E.I.) deNemours & Co. ................................ 27,100 1,639,550
Eastman Chemical Company...................................... 14,500 806,562
Lyondell Petrochemical Company................................ 43,100 1,045,175
Olin Corporation.............................................. 12,700 682,625
Union Carbide Corporation..................................... 71,300 2,183,563
------------
8,474,475
------------
Computer Hardware 0.67%
International Business Machines Corporation................... 49,300 4,036,438
------------
Conglomerates 0.65%
ITT Corporation............................................... 15,800 1,621,475
Unilever N.V. ADR............................................. 4,400 577,500
Xerox Corporation............................................. 14,500 1,701,937
------------
3,900,912
------------
Consumer Durables 0.05%
Outboard Marine Corporation................................... 7,800 163,800
Toro Company.................................................. 4,800 137,400
------------
301,200
------------
</TABLE>
3
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
Containers & Packaging 0.22%
Federal Paper Board Inc. ..................................... 22,600 $ 644,100
Temple-Inland Inc. ........................................... 14,800 664,150
------------
1,308,250
------------
Drugs 0.31%
Baxter International Inc. .................................... 56,900 1,863,475
------------
Electrical Equipment 0.21%
Harris Corporation............................................ 26,100 1,249,538
------------
Finance & Financial Services 0.57%
Aetna Life & Casualty Company................................. 17,400 991,800
American General Corporation.................................. 24,600 793,350
Household International Inc. ................................. 14,500 630,750
Ryder System Inc. ............................................ 41,500 996,000
------------
3,411,900
------------
Forest Products 0.46%
Georgia-Pacific Corporation................................... 25,300 2,017,675
Weyerhaeuser Company.......................................... 18,800 730,850
------------
2,748,525
------------
Healthcare 0.06%
Bergen Brunswig Corporation................................... 14,500 387,875
------------
Industrial Services 0.28%
Safety-Kleen Corporation...................................... 7,500 134,062
WMX Technologies Inc. ........................................ 55,800 1,534,500
------------
1,668,562
------------
Metals & Mining 0.78%
Aluminum Company of America................................... 11,600 479,950
Cyprus Amax Minerals Company.................................. 16,200 459,675
Homestake Mining Company...................................... 26,300 486,550
Phelps Dodge Corporation...................................... 32,100 1,825,688
Reynolds Metals Company....................................... 29,000 1,428,250
------------
4,680,113
------------
Oil & Gas Services 2.35%
Atlantic Richfield Company ................................... 15,500 1,782,500
British Petroleum Co. PLC, ADS................................ 28,700 2,407,213
Chevron Corporation........................................... 23,800 1,142,400
Diamond Shamrock Inc. ........................................ 7,900 208,363
Halliburton Company........................................... 31,900 1,160,362
Kerr-McGee Corporation........................................ 5,800 293,277
Mobil Corporation............................................. 16,200 1,500,525
Nova Corporation.............................................. 29,000 253,750
Phillips Petroleum Company.................................... 66,300 2,428,237
</TABLE>
4
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
Oil & Gas Services--(Continued)
Repsol S.A. ADS....................................... 29,000 $ 841,000
Royal Dutch Petroleum Company, ADR.................... 15,400 1,848,000
Unocal Corporation.................................... 10,100 290,375
------------
14,156,002
------------
Paper 0.90%
Boise Cascade Corporation............................. 14,500 503,875
Bowater, Inc. ........................................ 54,100 1,934,075
International Paper Company........................... 24,800 1,863,100
Westvaco Corporation.................................. 11,000 456,500
Willamette Industries Inc. ........................... 12,700 692,150
------------
5,449,700
------------
Photography 0.08%
Polaroid Corporation.................................. 14,500 503,875
------------
Producer Manufacturing 0.44%
Corning Inc. ......................................... 14,500 522,000
Eaton Corporation..................................... 13,500 732,375
Parker-Hannifin Corporation........................... 7,200 318,600
Timken Company........................................ 11,500 408,250
TRW Inc. ............................................. 9,800 674,975
------------
2,656,200
------------
Publishing 0.14%
New York Times Company................................ 37,900 876,437
------------
Retail Trade & Services 0.63%
Bruno's, Inc. ........................................ 74,600 671,400
CPI Corporation....................................... 5,800 92,075
Limited Inc. ......................................... 81,200 1,877,750
Rite Aid Corporation.................................. 23,200 568,400
Woolworth Corporation................................. 33,300 611,888
------------
3,821,513
------------
Rubber & Plastic 0.18%
Goodyear Tire & Rubber Company........................ 29,000 1,065,750
------------
Telecommunications 1.29%
BellSouth Corporation................................. 14,000 833,000
GTE Corporation....................................... 38,100 1,266,825
NYNEX Corporation..................................... 24,600 974,775
Pacific Telesis Group................................. 27,000 816,750
Sprint Corporation.................................... 41,100 1,243,275
Telefonica de Espana S.A. ADS......................... 32,500 1,218,750
U.S. West Inc. ....................................... 36,300 1,452,000
------------
7,805,375
------------
</TABLE>
5
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES/
PRINCIPAL
AMOUNT VALUE
----------- ------------
<S> <C> <C>
Tobacco 0.63%
American Brands Inc. ............................... 37,700 $ 1,479,725
Philip Morris Companies, Inc. ...................... 35,700 2,329,425
------------
3,809,150
------------
Transportation 0.56%
Alexander & Baldwin Inc. ........................... 15,700 353,250
Conrail Inc. ....................................... 15,800 886,775
CSX Corporation..................................... 19,000 1,496,250
Norfolk Southern Corporation........................ 9,700 648,688
------------
3,384,963
------------
Utilities 2.05%
American Electric Power Inc......................... 66,200 2,101,850
Central & South West Corporation.................... 27,000 654,750
Cincinnati Bell Inc................................. 14,500 311,750
DQE Inc............................................. 10,200 335,325
Enron Corporation................................... 6,300 207,900
FPL Group Inc....................................... 49,600 1,804,200
Long Island Lighting Company........................ 7,800 114,075
Niagra Mohawk Power Company......................... 29,000 398,750
Ohio Edison Company................................. 31,800 636,000
Pacific Gas & Electric Company...................... 31,600 786,050
Panhandle Eastern Corporation....................... 65,000 1,495,000
Portland General Corporation........................ 53,700 1,120,988
Public Service Company of Colorado.................. 21,100 648,825
SCE Corp. .......................................... 30,300 473,437
Unicom Corporation.................................. 29,000 688,750
Union Electric Company.............................. 17,400 615,525
------------
12,393,175
------------
Total Common Stocks............................... 105,022,663
------------
Corporate Bonds 2.05%
Exxon Capital Corporation, 7.875%, 08/15/1997....... $ 6,000,000 6,120,000
General Electric Capital Corporation, 8.375%,
03/01/2001......................................... 6,000,000 6,232,500
------------
Total Corporate Bonds............................. 12,352,500
------------
</TABLE>
6
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
U.S. Government and Other Agency Obligations 27.61%
Federal Home Loan Mortgage Corporation, 7.050%,
03/24/2004........................................... $12,185,000 $11,617,543
Federal Home Loan Mortgage Corporation, 7.610%,
09/01/2004........................................... 4,000,000 3,933,920
Federal National Mortgage Association, 6.200%,
07/10/2003........................................... 4,490,000 4,098,292
Federal National Mortgage Association, 6.480%,
02/18/2004........................................... 4,000,000 3,697,120
Federal National Mortgage Association, 6.900%,
03/10/2004........................................... 4,600,000 4,350,864
Federal National Mortgage Association, 6.850%,
04/05/2004........................................... 10,385,000 9,967,003
Federal National Mortgage Association, 7.600%,
04/14/2004........................................... 6,810,000 6,700,971
U.S. Treasury Notes, 4.625%, 02/15/1996............... 2,640,000 2,599,819
U.S. Treasury Notes, 5.500%, 04/15/2000............... 35,660,000 33,336,034
U.S. Treasury Notes, 5.750%, 08/15/2003............... 5,763,000 5,233,898
U.S. Treasury Notes, 5.875%, 02/15/2004............... 8,100,000 7,389,791
U.S. Treasury Notes, 7.250%, 08/15/2004............... 6,700,000 6,708,106
U.S. Treasury Notes, 7.875%, 11/15/2004............... 4,700,000 4,906,894
U.S. Treasury Bonds, 8.125%, 08/15/2019............... 15,600,000 16,536,154
U.S. Treasury Bonds, 7.625%, 11/15/2022............... 917,000 928,013
U.S. Treasury Bonds, 7.125%, 02/15/2023 (a)........... 15,600,000 14,883,180
U.S. Treasury Bonds, 7.625%, 02/15/2025............... 28,900,000 29,568,454
-----------
Total U.S. Government and Other Agency Obligations.. 166,456,056
-----------
Short-Term Money Market Instruments 52.29%
Abbott Laboratories, 5.920%, 04/04/1995............... 25,000,000 24,987,667
American Telephone & Telegraph Company,
5.950%, 04/18/1995................................... 20,000,000 19,943,806
Anheuser Busch Companies, Inc., 6.200%, 04/03/1995.... 24,900,000 24,891,423
Atlantic Richfield Company, 5.930%, 04/03/1995........ 21,600,000 21,592,884
Bell Atlantic Financial Service, Inc., 5.980%,
04/06/1995........................................... 12,000,000 11,990,033
duPont (E.I.) deNemours & Co., 5.920%, 04/13/1995..... 11,900,000 11,876,477
Emerson Electric Company, 5.950%, 04/20/1995.......... 22,000,000 21,930,914
Exxon Asset Management, 5.950%, 04/11/1995............ 17,500,000 17,471,076
Heinz (H.J.) Company, 5.950%, 04/05/1995.............. 20,000,000 19,986,778
IBM Credit Corporation, 5.950%, 04/17/1995............ 10,400,000 10,372,498
</TABLE>
7
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONCLUDED)
MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT/NUMBER
OF CONTRACTS VALUE
------------- ------------
<S> <C> <C>
Short-Term Money Market Instruments--(Continued)
Koch Industries, Inc., 6.300%, 04/03/1995....... $25,000,000 $ 24,991,250
Lilly (Eli) & Company, Inc., 5.950%, 04/07/1995. 11,600,000 11,588,497
Nestle Capital Corporation, 5.960%, 04/18/1995.. 17,400,000 17,351,029
Pfizer, Inc., 5.950%, 04/10/1995................ 10,100,000 10,084,976
Raytheon Company, 5.950%, 04/18/1995............ 25,000,000 24,929,757
Smithkline Beecham Corporation, 5.960%,
04/21/1995..................................... 7,300,000 7,275,829
Southwestern Bell Telephone Company,
5.970%, 04/06/1995............................. 11,500,000 11,490,464
U.S. West Capital Funding, Inc., 5.950%,
04/28/1995..................................... 12,600,000 12,543,772
Xerox Credit Corporation, 5.970%, 04/17/1995.... 10,000,000 9,973,467
------------
Total Short-Term Money Market Instruments..... $315,272,597
------------
Futures 1.88%
Standard & Poor's 500 Index, June 1995.......... 45 11,349,000
------ ------------
Total Investments................................. 101.24% 610,452,816
Other Assets Less Liabilities..................... (1.24)% (7,475,857)
------ ------------
Net Assets (Equivalent to $8.21 per share based
on 73,477,671 shares of capital stock outstand- 100.00% $602,976,959
ing)........................................... ====== ============
</TABLE>
- --------
(a) $625,000 of this security designated as collateral for futures contracts.
8
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
FINANCIAL HIGHLIGHTS*
MARCH 31, 1995
<TABLE>
<CAPTION>
NET ASSET VALUE
TOTAL NET ASSETS PER SHARE
-------------------------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of period: 12/31/94.... $591,658,838 $ 8.11
Net investment income........... $ 7,506,528 $ 0.10
Net realized and unrealized gain
from security transactions..... 14,779,529 0.21
Distributions to shareholders... (15,354,891) (0.21)
--------
Net asset value of shares issued
to shareholders in reinvestment
of distributions............... 4,386,955
------------
Net increase in net asset val-
ue............................ 11,318,121 0.10
------------ -------
End of period: 03/31/95.......... $602,976,959 $ 8.21
============ =======
</TABLE>
- --------
* Financial information included in this report has been taken from the records
of the Fund without examination by independent accountants.
9
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
KEY INFORMATION
The Shareholder Services Group, Inc.
P.O. Box 1376
Boston, MA 02104
For questions about our Reinvestment Plan, shareholders may write to The
Shareholder Services Group or call 1-800 331-1710.
THE ZWEIG TOTAL RETURN FUND HOTLINE
For weekly updates on the Fund's major industry holdings, our market stance
and our net asset value call (212) 486-3122.
THE ZWEIG TOTAL RETURN FUND, INC. GENERAL INFORMATION
1-800-272-2700
REINVESTMENT PLAN
Many of you have questions about the 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 from
their net asset value.
10
<PAGE>
OFFICERS AND DIRECTORS
Martin E. Zweig, Ph.D.
Chairman of the Board and President
Jeffrey Lazar
Vice President, Treasurer and Secretary
Timothy R. Clark
Vice President
Edward S. Babbitt, Jr.
Director
William M. Batten
Director
Charles H. Brunie
Director
Elliot S. Jaffe
Director
James B. Rogers, Jr.
Director
Anthony M. Santomero, Ph.D.
Director
Robert E. Smith
Director
INVESTMENT ADVISER
Zweig Total Return Advisors, Inc.
900 Third Avenue
New York, New York 10022
FUND ADMINISTRATOR
The Shareholder Services Group, Inc.
Exchange Place
Boston, MA 02109
CUSTODIAN
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02109
TRANSFER AGENT
The Shareholder Services Group, Inc.
P.O. Box 1376
Boston, MA 02104
LEGAL COUNSEL
Rosenman & Colin
575 Madison Avenue
New York, New York 10022
11
<PAGE>
This report is transmitted to the shareholders of The Zweig Total Return
Fund, Inc. for their information. This is not a prospectus, circular or repre-
sentation intended for use in the purchase of shares of the Fund or any securi-
ties mentioned in this report.
[LOGO] THE ZWEIG TOTAL RETURN FUND, INC.
QUARTERLY REPORT
MARCH 31, 1995
