<PAGE>
OFFICERS AND DIRECTORS
Martin E. Zweig, Ph.D.
Chairman of the Board and President
Jeffrey Lazar
Vice President and Treasurer
Stuart B. Panish
Vice President and Secretary
Christopher M. Capano
Assistant Vice President
Charles H. Brunie
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 Total Return 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, Massachusetts 02110
LEGAL COUNSEL
Rosenman & Colin LLP
575 Madison Avenue
New York, New York 10022
- --------------------------------------------------------------------------------
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.
3206-3Q-
[LOGO OF THE ZWEIG TOTAL RETURN FUND, INC.]
QUARTERLY REPORT
SEPTEMBER 30, 1997
<PAGE>
October 16, 1997
Dear Shareholder:
The Zweig Total Return Fund's net asset value increased 6.4% during the
quarter ended September 30, 1997, including $0.21 in reinvested distributions.
For the nine months ended September 30, 1997, the Fund's net asset value
increased 13.0%, including $0.63 in reinvested distributions. Maintaining our
risk-averse policy, the Fund's average overall exposure during the period was
70%.
DISTRIBUTION DECLARED
In accordance with our policy of distributing 10% of net assets per year,
which equals 0.83% per month (10% divided by 12 months), the Fund will
announce a distribution of $0.07 per share payable on November 26, 1997, to
shareholders of record on November 13, 1997. The amount of the distribution
depends on the exact net asset value at the time of declaration. For the
November 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 $8.24.
MARKET OUTLOOK
Our bond exposure is currently at 43%. If our Fund was fully invested, we
would be 62 1/2% in bonds and 37 1/2% in stocks. Consequently, at 43%, we are
at about 69% of a full position (43%/62 1/2%). This reflects my high neutral
position on bonds.
We adjusted our duration--sensitivity to interest rates--quite a bit last
quarter in response to rapid changes in the bond market. Thus we were able to
stay in gear with the market's overall upward trend. At present our duration
is 5.0 years, a cautiously optimistic reading. This figure is probably a bit
higher than that of the average bond fund manager, indicating that we are
somewhat on the bullish side.
The bond market's ups and downs were due to shifting sentiment about the
strength of the U.S economy. During the summer, investors feared that low
unemployment and strong industrial production would lead to inflation and a
Federal Reserve interest hike. During September, however, new data revealed
that fears about inflation may have been unfounded. Some economists even began
discussing the possibility of deflation, and the bond market rallied in
relief.
The big positive for bonds is low inflation. In fact, it is virtually the
whole story. We did have a recent report of a jump in producer prices but much
of that figure was seasonally distorted. For the year, producer prices have
been reasonably flat. Consumer prices, the most common measure of inflation,
have been rising at a rate under 2%.
There are always a few commodities that have gone up in price but they are
so volatile that it is not very significant. Materials like lumber, copper,
and gold fluctuate so wildly they could turn by the time you read this report.
On balance--with wages stable--the inflation numbers have been pretty decent
despite the growing economy. This makes for a good environment for bonds.
Equities are also benefiting from the low inflation rate. In spite of strong
corporate profits and near record low unemployment, interest rates do not
appear to be heading upward--a positive for stocks as well as bonds.
Among my key equity indicators, the monetary model is moderately bullish but
the
<PAGE>
sentiment indicators are not so terrific. Although the sentiment indicators
are below average, they are not extremely negative. Basically, sentiment is
lower because the market rally has brought a return to some optimism. But this
is not the kind of optimism you generally see at the top. Because of recent
market activity, my tape indicators are very solid. Valuation is at high
levels but this should not be a serious problem if inflation stays in check
and earnings continue to grow.
Our equity position is currently at 36%. At this figure, we are at 96% of a
full position for our Fund (36%/37 1/2%). This is in line with my bullish
stance on the market. Right now the market looks O.K. to me but I don't think
it will necessarily go straight up. As a defensive money manager, I will
always be prepared to reduce our exposure if my indicators point to rising
risk.
PORTFOLIO COMPOSITION
In accordance with our investment policy guidelines, all of our bonds are
U.S. Government obligations. As indicated earlier, the average duration of the
bond portion of our portfolio is 5.0 years. Since these bonds are liquid, they
give us the flexibility to adjust quickly to changing market conditions.
Most of our equities are bought and 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 rank the most
liquid stocks with the highest dividend yields.
Although our equity holdings have grown because of appreciation and
acquisitions to increase our exposure, the composition of our leading industry
groups showed little change during the third quarter. Our leading sectors
continue to include financial services, oil, utilities, investment companies,
manufacturing and metals.
Two new holdings--ARCO (Atlantic Richfield) and Caliber Systems, the large
trucking company slated to be acquired by FedEx--occupy prominent positions in
our portfolio. Other top listings include Bear Stearns, Ford, Ashland, YPF
S.A. (a leading Argentine oil and gas company), Sun, USX-Marathon,
RJR/Nabisco, and Ahmanson.
In the financial services area, our performance benefited from the gains in
Bear Stearns, PaineWebber, A.G. Edwards, and Salomon. This sector was
strengthened by the pending merger of Travelers Group (which already owns
Smith Barney) with Salomon, leading to the possibility of further takeovers.
The UPS strike was a plus for other trucking companies. Here we profited by
higher prices for CNF Transportation and Caliber Systems. Our holdings in the
oil sector saw significant gains in Sun, YPF S.A., and USX-Marathon.
During the quarter we increased our positions in Ashland, YPF S.A., Sun, and
Cummins Engine, reduced our holdings in Dayton-Hudson, USX-Steel, Chrysler,
and Harris and sold our stake in Royal Dutch.
Our portfolio also includes a number of closed-end funds that are selling at
significant discounts from their net asset values. When the market again
places a premium on valuation, as it has done historically, discounts should
narrow and more closely reflect the net asset values. This would enhance the
profitability of these positions.
Sincerely,
LOGO
Martin E. Zweig, Ph.D.
Chairman
2
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1997(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCKS 32.39%
AEROSPACE & DEFENSE 0.46%
Gencorp Inc. ......................................... 14,800 $ 420,875
General Motors Corp., Class H......................... 41,100 2,717,738
------------
3,138,613
------------
AUTOMOTIVE 1.59%
Chrysler Corp. ....................................... 65,700 2,418,582
Ford Motor Co. ....................................... 95,700 4,330,425
General Motors Corp. ................................. 32,700 2,188,856
Volvo AB, ADR......................................... 64,900 1,841,537
------------
10,779,400
------------
CHEMICALS 0.85%
Albemarle Corp. ...................................... 36,300 907,500
Millenium Chemicals, Inc. ............................ 35,100 772,200
Rohm & Haas Co. ...................................... 34,200 3,281,063
Wellman, Inc. ........................................ 35,600 825,475
------------
5,786,238
------------
CONSUMER DURABLES 0.87%
Cooper Tire & Rubber Co. ............................. 87,400 2,321,562
Huffy Corp. .......................................... 13,200 217,800
Whirlpool Corp. ...................................... 50,600 3,355,413
------------
5,894,775
------------
CONTAINERS & PACKAGING 0.05%
Sea Containers Ltd., Class A.......................... 12,100 343,338
------------
ELECTRONICS 0.13%
Hitachi Ltd., ADR..................................... 1,200 105,825
Philips Electronics N.V., ADR......................... 9,600 806,400
------------
912,225
------------
FINANCIAL SERVICES 4.45%
A.G. Edwards, & Sons, Inc. ........................... 48,400 2,486,550
Bear, Stearns & Co., Inc. ............................ 114,882 5,054,808
Charter One Financial, Inc. .......................... 12,900 762,712
CIGNA Corp. .......................................... 13,000 2,421,250
Fremont General Corp. ................................ 29,500 1,408,625
GATX Corp. ........................................... 9,100 614,819
H.F. Ahmanson, & Co. ................................. 64,600 3,670,088
Lincoln National Corp. ............................... 28,500 1,984,312
Old Republic International Corp. ..................... 38,500 1,501,500
Orion Capital Corp. .................................. 25,400 1,150,938
PaineWebber Group Inc. ............................... 61,400 2,858,937
PIMCO Advisors L.P. .................................. 18,600 584,738
Providian Corp. ...................................... 59,600 2,365,375
</TABLE>
3
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
SEPTEMBER 30, 1997(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
FINANCIAL SERVICES (CONTINUED)
Ryder Systems, Inc. .................................. 71,100 $ 2,555,156
Selective Insurance Group, Inc. ...................... 9,800 504,700
St. Paul BanCorp. .................................... 12,100 302,500
------------
30,227,008
------------
FOOD & BEVERAGE 0.27%
Adolph Coors Co., Class B............................. 48,300 1,829,363
------------
HOME BUILDERS & MATERIALS 0.24%
Kaufman & Broad Home Corp. ........................... 44,500 965,094
Lafarge Corp. ........................................ 20,800 670,800
------------
1,635,894
------------
INDUSTRIAL SERVICES 0.17%
Browning Ferris Industries, Inc. ..................... 12,300 468,168
Ogden Corp. .......................................... 28,400 670,950
------------
1,139,118
------------
INVESTMENT COMPANIES 2.44%
Argentina Fund, Inc. ................................. 12,600 187,425
Blackrock 2001 Term Trust Inc. ....................... 29,000 246,500
Blackrock Strategic Term Trust Inc. .................. 29,000 241,063
Brazil Fund, Inc. .................................... 25,800 722,400
Central European Equity Fund, Inc. ................... 12,300 316,725
Chile Fund, Inc. ..................................... 24,600 625,762
China Fund Inc. ...................................... 20,400 363,375
Clemente Global Growth Fund, Inc. .................... 13,100 137,550
Emerging Markets Infrastructure Fund, Inc. ........... 57,400 796,425
Emerging Markets Telecommunications Fund, Inc. ....... 24,600 444,338
Emerging Mexico Fund, Inc. ........................... 16,200 186,300
Fidelity Advisor Emerging Asia Fund Inc. ............. 25,100 304,337
G.T. Global Eastern Europe Fund, Inc. ................ 11,000 215,875
Gabelli Equity Trust Inc. ............................ 62,900 684,037
Gabelli Global Multimedia Trust Fund, Inc. ........... 50,600 433,263
Greater China Fund, Inc. ............................. 8,600 185,438
Italy Fund, Inc. ..................................... 6,600 68,887
Mexico Fund, Inc. .................................... 37,700 862,388
Morgan Stanley Asia-Pacific Fund, Inc. ............... 49,400 453,862
Morgan Stanley Emerging Markets Fund, Inc. ........... 58,500 1,005,469
New Germany Fund, Inc. ............................... 61,100 958,506
Portgugal Fund, Inc. ................................. 18,000 333,000
R.O.C. Taiwan Fund.................................... 43,800 531,075
Royce Value Trust Inc. ............................... 70,160 1,140,100
Scudder New Asia Fund Inc. ........................... 15,000 185,625
Southern Africa Fund, Inc. ........................... 14,900 264,475
Spain Fund Inc. ...................................... 25,400 387,350
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
INVESTMENT COMPANIES (CONTINUED)
Swiss Helvetia Fund, Inc. ............................ 40,800 $ 1,045,500
Taiwan Fund, Inc. .................................... 39,500 1,002,312
Templeton China World Fund, Inc. ..................... 39,600 537,075
Templeton Dragon Fund, Inc. .......................... 75,200 1,203,200
Templeton Vietnam Opportunities Fund, Inc. ........... 15,000 171,563
Tri-Continental Corp. ................................ 12,400 363,475
------------
16,604,675
------------
LEISURE 0.13%
Royal Caribbean Cruises Ltd. ......................... 19,500 853,125
------------
LODGING 0.05%
Marcus Corp. ......................................... 11,000 320,375
------------
MANUFACTURING 2.43%
Borg-Warner Automotive, Inc. ......................... 18,600 1,057,875
Brown Group, Inc. .................................... 26,000 472,875
Cummins Engine Company, Inc. ......................... 36,900 2,880,506
Dexter Corp. ......................................... 14,900 596,931
Excel Industries, Inc. ............................... 18,000 358,875
Herman Miller, Inc. .................................. 19,200 1,027,200
Johnson Controls Inc. ................................ 26,000 1,288,625
PACCAR Inc. .......................................... 28,600 1,601,600
Simpson Industries, Inc. ............................. 20,300 234,718
Standard Products Co. ................................ 12,200 321,013
Stewart & Stevenson Services, Inc. ................... 20,900 502,906
Timken Co. ........................................... 63,800 2,555,988
Trinity Industries, Inc. ............................. 44,600 2,151,950
TRW Inc. ............................................. 26,800 1,470,650
------------
16,521,712
------------
METALS & MINING 2.20%
ASARCO, Inc. ......................................... 110,500 3,536,000
Birmingham Steel Corp. ............................... 25,000 432,813
British Steel Plc, ADR................................ 70,800 2,062,050
Cleveland-Cliffs Inc. ................................ 6,400 279,200
Cyprus Amax Minerals Co. ............................. 71,500 1,716,000
Oregon Steel Mills, Inc. ............................. 37,000 1,003,625
Phelps Dodge Corp. ................................... 37,300 2,895,412
USX-U.S. Steel Group.................................. 87,400 3,037,150
------------
14,962,250
------------
OIL & OIL SERVICES 4.39%
Ashland Inc. ......................................... 78,300 4,257,563
Atlantic Richfield Co. ............................... 47,600 4,066,825
Elf Aquitaine S.A., ADR............................... 42,500 2,834,218
</TABLE>
5
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
SEPTEMBER 30, 1997(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
OIL & OIL SERVICES (CONTINUED)
Equitable Resources, Inc. .......................... 4,900 $ 154,350
Helmerich & Payne, Inc. ............................ 11,400 912,000
Murphy Oil Corp. ................................... 24,900 1,422,413
Occidental Petroleum Corp. ......................... 70,900 1,838,968
Pennzoil Co. ....................................... 20,500 1,633,594
Quaker State Corp. ................................. 33,700 575,006
Sun Company, Inc. .................................. 92,800 4,065,800
USX-Marathon Group.................................. 102,800 3,822,875
YPF Sociedad Anonima, ADR........................... 114,500 4,222,188
------------
29,805,800
------------
PAPER & FOREST PRODUCTS 0.98%
Bowater Inc. ....................................... 51,700 2,636,700
Fort James Corp. of Virginia........................ 61,400 2,812,888
Pope & Talbot, Inc. ................................ 15,900 336,881
Westvaco Corp. ..................................... 24,750 892,547
------------
6,679,016
------------
RETAIL TRADE & SERVICES 1.07%
American Stores Co. ................................ 63,700 1,552,688
Dayton Hudson Corp. ................................ 38,800 2,325,575
Ross Stores Inc. ................................... 17,000 580,125
Shopko Stores Inc. ................................. 30,700 798,200
Supervalu Inc. ..................................... 52,100 2,044,925
------------
7,301,513
------------
TECHNOLOGY 1.70%
Applied Materials Inc. ............................. 11,600(a) 1,104,900
Dell Computer Corp. ................................ 30,800(a) 2,983,750
Digital Equipment Corp. ............................ 32,300(a) 1,398,993
Harris Corp. ....................................... 42,800 1,958,100
Intel Corp. ........................................ 20,600 1,901,638
Microsoft Corp. .................................... 16,900(a) 2,236,081
------------
11,583,462
------------
TELECOMMUNICATIONS 1.71%
BCE Inc. ........................................... 56,800 1,696,900
Comsat Corp. ....................................... 55,200 1,314,450
Telecomunicacoes Brasileiras S.A. .................. 19,800 2,549,250
Telefonica de Espana S.A., ADR...................... 35,100 3,303,787
Telefonos de Mexico S.A., ADR....................... 53,400 2,763,450
------------
11,627,837
------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
TOBACCO 0.61%
RJR Nabisco Holdings Corp. ........................... 109,800 $ 3,774,375
Universal Corp. of Virginia........................... 10,500 380,625
------------
4,155,000
------------
TRANSPORTATION 1.68%
British Airways Plc, ADR.............................. 8,100 884,925
Caliber Systems, Inc. ................................ 74,300 4,030,775
Canadian Pacific Ltd. ................................ 77,900 2,302,919
CNF Transportation, Inc. ............................. 46,200 2,012,587
CSX Corp. ............................................ 20,700 1,210,950
KLM Royal Dutch Airlines N.V., ADR.................... 20,145 691,225
Rollins Truck Leasing Corp. .......................... 18,500 315,657
------------
11,449,038
------------
UTILITIES-ELECTRIC & NATURAL GAS 3.92%
American Electric Power Co., Inc. .................... 48,800 2,220,400
CMS Energy Corp. ..................................... 58,000 2,146,000
Columbia Gas Systems, Inc. ........................... 1,900 133,000
DQE Inc. ............................................. 37,250 1,257,188
DTE Energy Co. ....................................... 39,300 1,196,193
Edison International.................................. 97,700 2,466,925
FPL Group, Inc. ...................................... 39,000 1,998,750
GPU, Inc. ............................................ 73,800 2,647,575
Illinova Corp. ....................................... 48,400 1,043,625
New York State Electric & Gas Corp. .................. 58,000 1,558,750
Ohio Edison Co. ...................................... 28,800 675,000
Pacific Enterprises................................... 24,800 840,100
PacifiCorp. .......................................... 33,600 751,800
Pinnacle West Capital Corp. .......................... 54,900 1,846,013
Public Service Co. of New Mexico...................... 36,100 697,181
Sierra Pacific Resources Inc. ........................ 9,300 298,181
Transcanada Pipelines Ltd. ........................... 46,700 904,812
United Illuminating Co. .............................. 6,500 236,844
UtiliCorp United Inc. ................................ 36,200 1,090,525
Valero Energy Corp. .................................. 45,800 1,502,812
Western Resources Inc. ............................... 31,900 1,094,569
------------
26,606,243
------------
TOTAL COMMON STOCKS................................... $220,156,018
------------
</TABLE>
7
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS--(CONCLUDED)
SEPTEMBER 30, 1997(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------- ------------
<S> <C> <C>
UNITED STATES GOVERNMENT & AGENCY OBLIGA-
TIONS 47.22%
Federal National Mortgage Association, 6.85%,
4/5/2004..................................... $ 10,385,000 $ 10,697,931
United States Treasury Bonds, 10.750%,
5/15/2003.................................... 15,000,000 18,314,055
United States Treasury Bonds, 7.25%,
8/15/2022.................................... 27,500,000 30,060,937
United States Treasury Bonds, 7.50%,
11/15/2024................................... 36,500,000 41,233,576
United States Treasury Notes, 6.25%,
8/31/2000.................................... 13,500,000 13,630,775
United States Treasury Notes, 5.625%,
11/30/2000................................... 19,745,000 19,584,572
United States Treasury Notes, 7.50%,
2/15/2005.................................... 16,300,000 17,609,085
United States Treasury Notes, 6.50%,
5/15/2005.................................... 7,600,000 7,766,250
United States Treasury Notes, 6.875%,
5/15/2006.................................... 101,300,000 105,953,418
United States Treasury Notes, 6.50%,
10/15/2006................................... 54,900,000 56,083,754
------------
Total United States Government & Agency Obli-
gations...................................... 320,934,353
------------
SHORT-TERM INVESTMENTS 18.96%
du Pont (E.I.) de Nemours & Co., 5.50%,
10/02/97..................................... 20,000,000 19,996,944
Ford Motor Credit Co., 5.55%, 10/03/97........ 16,000,000 15,995,067
Goldman, Sachs & Co., 6.35%, 10/01/97......... 14,100,000 14,100,000
Merrill Lynch & Co., Inc., 5.60%, 10/07/97.... 24,300,000 24,277,320
PepsiCo., Inc., 5.50%, 10/03/97............... 9,500,000 9,497,097
Sara Lee Corp., 6.30%, 10/01/97............... 20,000,000 20,000,000
Wal-Mart Stores Inc., 5.53%, 10/01/97......... 25,000,000 25,000,000
------------
Total Short-Term Investments................ 128,866,428
------------
TOTAL INVESTMENTS IN SECURITIES................. 98.57% 669,956,799
CASH AND OTHER ASSETS LESS LIABILITIES.......... 1.43 9,701,164
------------ ------------
NET ASSETS (Equivalent to $8.69 per share based
on 78,218,582 shares of capital stock outstand- 100.0% $679,657,963
ing)........................................... ============ ============
<CAPTION>
NUMBER OF
SHARES/CONTRACTS
----------------
<S> <C> <C>
SECURITIES SOLD SHORT
Webs Hong Kong................................ 76,700 $ 1,193,644
------------
TOTAL SECURITIES SOLD SHORT (Proceeds
$1,167,899).................................. $ 1,193,644
------------
NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS
Standard and Poor's 500 December 1997 Long $ 794,630
futures...................................... 55 (b) ============
</TABLE>
- --------
(a) Non-income producing security.
(b) The market value of the long futures was $26,251,380 (representing 3.86% of
the Fund's net assets) with a cost of $25,456,750.
8
<PAGE>
THE ZWEIG TOTAL RETURN FUND, INC.
FINANCIAL HIGHLIGHTS
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET VALUE
TOTAL NET ASSETS PER SHARE
------------------------- ----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period: December 31,
1996.............................. $638,767,568 $ 8.29
Net investment income............. $20,480,743 $ 0.26
Net realized and unrealized gains
on investments................... 59,348,794 0.77
Dividends from net investment
income and distributions from net
long-term and short-term capital
gains............................ (48,826,840) (0.63)
Net asset value of shares issued
to shareholders for reinvestment
of dividends and distributions... 9,887,698 --
----------- -------
Net increase in net assets/net
asset value..................... 40,890,395 0.40
------------ -------
End of period: September 30, 1997.. $679,657,963 $ 8.69
============ =======
</TABLE>
9
<PAGE>
KEY INFORMATION
1-800-272-2700 ZWEIG SHAREHOLDER RELATIONS: For general information and
literature
(212) 486-3122 THE ZWEIG TOTAL RETURN 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. If
you want to take advantage of
this plan and your shares are
held in "Street Name," we urge
you to consult your broker as
soon as possible to determine if
you must change registration to
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
