October 30, 1998
Dear Shareholder:
The Zweig Total Return Fund's net asset value decreased 0.7% during the
quarter ended September 30, 1998, including $0.21 in reinvested distributions.
For comparison purposes, Lipper Analytical Services reported that the average
balanced U.S. fund delivered a negative 6.4% return for the quarter.
For the nine months ended September 30, 1998, the Fund's net asset value
increased 4.3%, including $0.63 in reinvested distributions. Lipper reported
that the average balanced fund showed a 1.9% gain for the nine months.
Maintaining our risk-averse policy, the Fund's average overall exposure for the
period was 86%.
Since we are a conservative fund, our equity position was heavily loaded
with utility stocks, a group which held up better than the market and actually
set new highs in September. However, we still got hurt with some stocks,
particularly financials.
While we have owned a few growth stocks, including Dell, Microsoft, and
Intel for some time, the bulk of our portfolio consists of value stocks. 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, including the recent one, when our method
did 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 balanced fund in the third quarter and for the year to date.
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 announced a
distribution of $0.07 per share payable on November 25, 1998 to shareholders of
record on November 12, 1998. 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 $9.08.
MARKET OUTLOOK
Our bond exposure is currently at 59% compared with 54% on June 30. If we
were fully invested, our Fund would be at 62.5% for bonds and 37.5% for stocks.
Consequently, at 59% in bonds we are at about 94% of a full position,
reflecting our bullish position.
Government bond prices continued to climb during the third quarter. The
prices of U.S. Treasury bonds, which move in the opposite direction of yields,
climbed as yields fell to their lowest levels in decades. The strong
performance of government bonds was due to turbulence in global equity markets,
falling commodity prices, and virtually no inflation.
In addition, a Russian financial crisis sparked volatility around the
world and resulted in a flight to quality, or movement to government bonds from
stocks. Finally, the Federal Reserve cut interest rates by 0.25%, spurring the
prices of Treasury bonds even higher. Subsequently the Fed cut rates by another
0.25%.
The Fund ended the quarter with a duration (sensitivity to interest
rates) of 6.5, an extremely bullish posture for us. We are positive about bonds
because our models suggest that they will continue their robust performance as
the economy slows. A softening economy lessens the need to raise interest rates
and typically increases demand for bonds.
Our equity exposure is currently at 32% against 34% at the end of the
second quarter. At this figure, we are at about 85% of a full position. We
raised our exposure judiciously after the early October crash. The Fed moves
made me more comfortable and we increased our exposure further. If conditions
warrant, I am prepared to go even higher.
I believe the Fed will continue to be responsive to any economic
downturn. 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.
<PAGE>
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 nations would probably follow
suit. That would be very bad news economically.
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.
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 generally are not 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 early in 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 zero
inflation make the odds positive for the next three to six months.
Counting bonds and stocks, we are about 91% invested. 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
Reflecting 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 6.5. Since these bonds are liquid, they give us the
flexibility to adjust swiftly to changing market conditions.
To implement my basic allocation strategy, most of our equities continue
to be bought and sold on the basis of a proprietary computer-driven model that
is weighted toward a value approach with secondary emphasis on growth.
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
2
<PAGE>
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, Ford, GPU, Microsoft,
Reynolds Metals, PG&E, Energy East, Chrysler, Burlington Northern Santa Fe and
AT&T.
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 Microsoft increased as a result of appreciation.
During the quarter we cut back our holdings in Bear Stearns, Dayton
Hudson, Sun, PaineWebber, 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 TOTAL RETURN FUND, INC.
STATEMENT OF NET ASSETS
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -------------
<S> <C> <C>
COMMON STOCKS 24.54%
AEROSPACE & DEFENSE 0.17%
B.F. Goodrich & Co. ........................... 39,000 $1,274,813
----------
APPAREL MANUFACTURER 0.16%
VF Corp. ...................................... 24,200 898,425
Warnaco Group, Inc. ........................... 12,800 296,000
----------
1,194,425
----------
AUTOMOTIVE 0.97%
Chrysler Corp. ................................ 63,200 3,025,700
Ford Motor Co. ................................ 89,100 4,182,131
----------
7,207,831
----------
CHEMICALS 0.14%
Millennium Chemicals, Inc. .................... 35,100 653,738
Wellman, Inc. ................................. 27,600 351,900
----------
1,005,638
----------
CONSUMER DURABLES 0.57%
Cooper Tire & Rubber Co. ...................... 70,800 1,274,400
Whirlpool Corp. ............................... 63,400 2,979,800
----------
4,254,200
----------
CONSUMER PRODUCTS 0.21%
Fortune Brands, Inc. .......................... 51,900 1,537,538
----------
CONTAINERS & PACKAGING 0.04%
Sea Containers Ltd., Class A .................. 12,100 291,156
----------
ELECTRONICS 0.50%
Avnet, Inc. ................................... 32,200 1,185,363
General Motors Corp., Class H ................. 67,400 2,481,162
----------
3,666,525
----------
ENGINEERING & CONSTRUCTION 0.27%
Fluor Corp. ................................... 49,500 2,032,594
----------
FINANCIALS 3.57%
A.G. Edwards & Sons, Inc. ..................... 47,200 1,430,750
Allstate Corp. ................................ 41,800 1,742,537
Astoria Financial Corp. ....................... 25,300 1,065,763
Bear Stearns & Co., Inc. ...................... 49,682 1,537,036
Charter One Financial, Inc. ................... 46,084 1,146,340
Conseco, Inc. ................................. 57,000 1,742,063
Countrywide Credit Industries, Inc. ........... 31,300 1,302,862
GATX Corp. .................................... 26,600 879,463
Hartford Financial Services Group, Inc. ....... 14,400 683,100
J.P. Morgan, & Co., Inc. ...................... 12,800 1,083,200
Loews Corp. ................................... 18,900 1,594,687
Metris Cos. ................................... 7,832 365,167
Morgan Stanley, Dean Witter & Co. ............. 23,500 1,011,969
NationsBank Corp. ............................. 31,400 1,679,900
Old Republic International Corp. .............. 57,750 1,299,375
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -------------
<S> <C> <C>
FINANCIALS -- (Continued)
Orion Capital Corp. .................................. 25,400 $ 906,463
PaineWebber Group, Inc. .............................. 81,000 2,430,000
PIMCO Advisors L.P. .................................. 13,800 405,375
Provident Companies, Inc. ............................ 32,100 1,083,375
Quinenco S.A., ADR ................................... 24,700 171,356
Reliance Group Holdings, Inc. ........................ 35,700 502,031
Reliastar Financial Corp. ............................ 20,900 815,100
Ryder Systems, Inc. .................................. 47,100 1,171,613
Selective Insurance Group, Inc. ...................... 19,600 374,850
----------
26,424,375
----------
FOOD & BEVERAGE 0.30%
Adolph Coors Co., Class B ............................ 47,800 2,195,812
----------
HOME BUILDERS & MATERIALS 0.27%
Fleetwood Enterprises, Inc. .......................... 22,700 685,256
Kaufman & Broad Home Corp. ........................... 29,500 691,406
Lafarge Corp. ........................................ 20,800 594,100
----------
1,970,762
----------
INDUSTRIAL SERVICES 0.15%
Ogden Corp. .......................................... 38,400 1,092,000
----------
INVESTMENT COMPANIES 0.95%
Blackrock 2001 Term Trust, Inc. ...................... 29,000 261,000
Blackrock Strategic Term Trust, Inc. ................. 29,000 266,436
Central European Equity Fund ......................... 18,600 204,600
Emerging Markets Infrastructure Fund, Inc. ........... 94,200 582,863
Emerging Markets Telecommunications Fund, Inc. ....... 30,800 271,425
France Growth Fund, Inc. ............................. 25,700 301,975
Gabelli Equity Trust, Inc. ........................... 44,100 457,538
Gabelli Global Multimedia Trust Fund, Inc. ........... 51,700 449,144
Italy Fund, Inc. ..................................... 16,100 185,150
Mexico Fund, Inc. .................................... 74,400 725,400
Morgan Stanley Emerging Markets Fund, Inc. ........... 51,400 353,375
Morgan Stanley India Investment Fund, Inc. ........... 28,300 189,256
Portgugal Fund, Inc. ................................. 23,900 403,313
Royce Value Trust, Inc. .............................. 70,160 903,310
Scudder New Europe Fund, Inc. ........................ 43,600 713,950
Swiss Helvetia Fund, Inc. ............................ 28,400 777,450
----------
7,046,185
----------
LEISURE 0.13%
Brunswick Corp. ...................................... 24,400 315,675
Royal Caribbean Cruises Ltd. ......................... 25,600 680,000
----------
995,675
----------
MANUFACTURING 1.38%
Aeroquip-Vickers, Inc. ............................... 27,100 779,125
Borg-Warner Automotive, Inc. ......................... 25,600 948,800
Cincinnati Milacron, Inc. ............................ 24,600 379,763
Cummins Engine Company, Inc. ......................... 51,900 1,544,025
Dexter Corp. ......................................... 14,900 365,050
Herman Miller, Inc. .................................. 34,400 679,400
Johnson Controls, Inc. ............................... 26,000 1,209,000
Kennametal, Inc. ..................................... 31,600 851,225
PACCAR, Inc. ......................................... 16,400 675,475
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
--------------- -------------
<S> <C> <C>
MANUFACTURING -- (Continued)
Timken Co. .............................. 76,300 $1,154,037
Trinity Industries, Inc. ................ 50,400 1,634,850
----------
10,220,750
----------
METALS & MINING 1.22%
AK Steel Holding Corp. .................. 79,200 1,301,850
Alcan Aluminum Ltd. ..................... 65,200 1,528,124
British Steel Plc, ADR .................. 55,800 1,014,863
Reynolds Metals Co. ..................... 67,000 3,404,438
USX-U.S. Steel Group .................... 73,600 1,757,200
----------
9,006,475
----------
OIL & OIL SERVICES 2.47%
Ashland, Inc. ........................... 58,500 2,705,625
Elf Aquitaine S.A., ADR ................. 30,000 1,865,625
Equitable Resources, Inc. ............... 22,100 562,169
Helmerich & Payne, Inc. ................. 16,900 354,900
Murphy Oil Corp. ........................ 19,900 771,125
Occidental Petroleum Corp. .............. 35,900 771,850
Pennzoil Co. ............................ 51,200 1,795,200
Sun Company, Inc. ....................... 57,200 1,830,400
Tidewater, Inc. ......................... 48,000 996,000
Transocean Offshore, Inc. ............... 34,600 1,200,188
USX-Marathon Group ...................... 75,500 2,675,531
YPF Sociedad Anonima, ADR ............... 108,100 2,810,600
----------
18,339,213
----------
PAPER & FOREST PRODUCTS 0.47%
Bowater, Inc. ........................... 66,600 2,372,625
Mead Corp. .............................. 38,500 1,133,344
----------
3,505,969
----------
REAL ESTATE INVESTMENT TRUSTS 0.41%
Camden Property Trust ................... 18,500 516,844
Crescent Real Estate Equities Co. ....... 42,700 1,078,175
FelCor Suite Hotels, Inc. ............... 25,600 622,400
New Plan Excel Realty Trust, Inc. ....... 15,240 355,282
Reckson Associates Realty Co. ........... 18,900 444,150
----------
3,016,851
----------
RESTAURANTS 0.18%
Bob Evans Farms, Inc. ................... 19,900 396,756
Wendy's International, Inc. ............. 41,900 929,656
----------
1,326,412
----------
RETAIL TRADE & SERVICES 0.70%
Dayton Hudson Corp. ..................... 29,700 1,061,775
Fingerhut Co., Inc. ..................... 24,600 270,600
Pier 1 Imports, Inc. .................... 25,600 192,000
Ross Stores, Inc. ....................... 17,000 486,625
Saks, Inc. .............................. 28,200 632,738
Supervalu, Inc. ......................... 108,000 2,517,750
----------
5,161,488
----------
TECHNOLOGY 2.00%
Applied Materials, Inc. ................. 23,200(a) 585,800
Compaq Computer Corp. ................... 56,002 1,771,063
Dell Computer Corp. ..................... 97,500(a) 6,410,625
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Value
--------------- --------------
<S> <C> <C>
TECHNOLOGY -- (Continued)
Harris Corp. .................................... 25,700 $ 822,400
Intel Corp. ..................................... 20,600 1,766,450
Microsoft Corp. ................................. 31,300(a) 3,444,956
-----------
14,801,294
-----------
TELECOMMUNICATIONS 1.61%
AT&T Corp. ...................................... 51,200 2,992,000
BCE, Inc. ....................................... 21,900 611,831
MCI Worldcom, Inc. .............................. 25,600 1,251,200
Telebras Holders, S.A., ADR ..................... 28,800 2,028,600
Telefonica de Argentina S.A., ADR ............... 52,300 1,539,581
Telefonica de Espana S.A., ADR .................. 18,654 2,013,466
Telefonos de Mexico S.A., ADR ................... 33,800 1,495,650
-----------
11,932,328
-----------
TEXTILES 0.20%
Interface, Inc. ................................. 29,600 355,200
Shaw Industries, Inc. ........................... 67,100 1,090,375
-----------
1,445,575
-----------
TOBACCO 0.06%
Universal Corp. ................................. 13,000 464,750
-----------
TRANSPORTATION 1.01%
Airborne Freight Corp. .......................... 12,800 221,600
Burlington Northern Santa Fe Corp. .............. 94,500 3,024,000
Canadian Pacific Ltd. ........................... 40,700 841,981
CNF Transportation, Inc. ........................ 51,300 1,494,113
FDX Corp. ....................................... 22,980 1,036,973
USFreightways Corp. ............................. 42,100 836,737
-----------
7,455,404
-----------
UTILITIES -- ELECTRIC & NATURAL GAS 4.44%
CMS Energy Corp. ................................ 43,800 1,908,038
Central & South West Corp. ...................... 38,500 1,099,656
Columbia Gas System, Inc. ....................... 20,750 1,216,469
Consolidated Edison Co. of New York, Inc. ....... 32,600 1,699,275
DTE Energy Co. .................................. 46,100 2,083,144
Edison International, Inc. ...................... 111,400 2,861,588
Energy East Corp. ............................... 61,200 3,121,200
FPL Group, Inc. ................................. 21,900 1,526,156
GPU, Inc. ....................................... 83,000 3,527,500
PECO Energy Co. ................................. 75,000 2,742,188
PG&E Corp. ...................................... 104,200 3,327,888
Pinnacle West Capital Corp. ..................... 45,300 2,030,006
Public Service Co. of New Mexico ................ 41,600 923,000
Sierra Pacific Resources ........................ 9,300 360,956
Texas Utilities Co. ............................. 5,700 265,406
UniCom Corp. .................................... 74,400 2,780,700
UtiliCorp United, Inc. .......................... 36,200 1,425,374
-----------
32,898,544
-----------
Total Common Stocks ........................... 181,754,582
-----------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
------------------- --------------
<S> <C> <C>
UNITED STATES GOVERNMENT OBLIGATIONS 56.78%
United States Treasury Bonds, 10.750%, 5/15/2003 ....... $ 15,000,000 $18,932,820
United States Treasury Bonds, 7.25%, 8/15/2022 ......... 12,800,000 16,368,013
United States Treasury Bonds, 7.50%, 11/15/2024 ........ 10,200,000 13,553,260
United States Treasury Bonds, 6.375%, 8/15/2027 ........ 8,900,000 10,510,348
United States Treasury Notes, 6.25%, 8/31/2000 ......... 13,500,000 13,959,851
United States Treasury Notes, 7.50%, 2/15/2005 ......... 16,300,000 19,111,766
United States Treasury Notes, 6.50%, 5/15/2005 ......... 7,600,000 8,533,379
United States Treasury Notes, 6.875%, 5/15/2006 ........ 71,600,000 82,787,572
United States Treasury Notes, 6.50%, 10/15/2006 ........ 80,100,000(b) 91,013,705
United States Treasury Notes, 6.625%, 5/15/2007 ........ 85,300,000 98,308,335
United States Treasury Notes, 6.125%, 8/15/2007 ........ 42,300,000(c) 47,376,042
-----------
Total United States Government Obligations ........... 420,455,091
-----------
SHORT-TERM INVESTMENTS 17.28%
Avery Dennison Corp., 5.75%, 10/1/98 ................... 14,700,000 14,700,000
BP America Inc., 5.75%, 10/1/98 ........................ 25,000,000 25,000,000
Ford Motor Credit Corp., 5.51%, 10/1/98 ................ 18,300,000 18,300,000
General Electric Capital Corp., 5.51%, 10/5/98 ......... 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%, 10/8/98 .............. 20,000,000 19,978,312
-----------
Total Short-Term Investments ......................... 127,959,146
-----------
</TABLE>
<TABLE>
<CAPTION>
Number of
Contracts
--------------
<S> <C> <C>
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS
Standard and Poor's December 1998 Long futures ................. 35(d) (146,718)
--------
Total Investments ........................................... 98.58% 730,032,101
Cash and Other Assets Less Liabilities ...................... 1.42% 10,525,145
-------- -----------
Net Assets (Equivalent to $8.29 per share based on 89,338,013
shares of capital stock outstanding) ....................... 100.00% $740,557,246
======== ============
Number of
Shares
-----------
SECURITY SOLD SHORT
W.E.B.S. Index Fund, Inc. - Mexico Series
(Proceeds $390,725)........................................... 28,400 $ 257,375
============
</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 long futures was $9,027,375 (representing 1.22% of
the Fund's net assets) with a cost of $9,174,093.
8
<PAGE>
THE ZWEIG TOTAL RETURN 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 ................... $677,133,054 $ 8.61
Net investment income .................................. $ 21,175,218 $ 0.26
Net realized and unrealized gains on
investments ........................................... 7,674,221 0.11
Dividends from net investment income,
distributions from net long-term and
short-term capital gains, and capital paid-in ......... (52,523,772) (0.63)
Net asset value of shares issued to shareholders
for reinvestment of dividends and
distributions ......................................... 10,679,210 0.00
Net proceeds from the sale of shares during
rights offering/effect on net asset value as a
result of rights offering * ........................... 76,419,315 (0.06)
------------- -------
Net increase in net assets/(decrease) in net
asset value ......................................... 63,424,192 (0.32)
------------ -------
End of period: September 30, 1998 ........................ $740,557,246 $ 8.29
============ =======
</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) 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. 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
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 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
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 Total Return
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.
ZTR983 3206-3Q-98
[THE ZWEIG TOTAL RETURN FUND, INC. LOGO APPEARS HERE]
QUARTERLY REPORT
-----------------------------------------------
September 30, 1998
