May 1, 2004
Dear Fellow ZF Shareholder:
As announced in March, I was appointed president of The Zweig Fund and a
director of the Fund's Board, bringing with me 23 years of investment
experience. I am honored to serve the Fund, and committed to working closely
with the Board and Fund Management to improve the Fund's performance and tax
efficiency in the months and years ahead.
The Fund recently announced a distribution of $0.010 payable on April 26,
2004, to shareholders of record on April 8, 2004. Including this distribution,
the Fund's total payout since its inception is now $17.981.
The April payout was the first under the new variable policy adopted by the
Board last July to address growing tax consequences associated with the former
fixed policy. The tax situation remains a concern, and we will continue to
uphold the variable policy for the time being. At the same time, we are working
to strengthen the Fund's performance and tax efficiency over the longer term.
The Zweig Fund's net asset value increased 2.52% for the three months ended
March 31, 2004, including the $0.046 distribution paid on January 12, 2004.
During the same period, the Standard & Poor's 500 Index gained 1.69%, including
dividends. In accordance with our policy of seeking reasonable returns while
minimizing risk, the Fund's average exposure in U.S. common stocks during the
quarter was approximately 70%. We also had an average exposure of 24% in U.S.
government bonds.
In the enclosed review, Dr. Martin Zweig and Carlton Neel provide market
insights and details about the Fund's allocations and top holdings. At the
Board's request, Dr. Zweig is working more closely with Mr. Neel and the
portfolio management team with regard to the stock selection process for the
portfolio. We are pleased by the future prospect of this collaboration.
As always, we welcome your comments and feedback.
Sincerely,
/s/ Daniel T. Geraci
Daniel T. Geraci
President
The Zweig Fund, Inc.
MARKET OUTLOOK
The markets were on a roller coaster ride in the first quarter. After
reaching a 23-month peak in mid-February, the markets stumbled, with the Dow
Jones Industrial Average ending the period down 0.9% while the NASDAQ Composite
Index was off 0.46%. The Standard & Poor's 500 Index gained 1.69%. It was the
Dow's first down quarter since the first quarter of 2003 and the NASDAQ's first
down quarter since the third quarter of 2002.
Interest rates were not of any help. They started to back up and battered
the market. Also, sentiment in the market became very optimistic. As a result
of too much enthusiasm and too much euphoria, the market just finally hit the
wall. The market also reacted to the difficult situation in Iraq, the bombings
in Spain and the overhanging threats of terrorism at home and abroad.*
At its March meeting the Federal Reserve again saw equal upside and downside
risks for the economy as well as for deflation and inflation. Holding its
federal funds rate at 1%, the lowest level in about 46 years, the Fed said it
can be patient about raising rates. This reassured the
markets that rates would not be raised in the near future. Given the strength
of the economy, I found the Fed statement moderately surprising. However,
employment numbers were not very good until the March report of the creation of
308,000 jobs. That report put more pressure on interest rates and helped push
bond yields up dramatically. Apparently the Fed's attitude is that it will keep
rates low until the job market shows more signs of life over a significant
period.*
I believe the Fed may not be entirely realistic about the threat of
inflation. The Reuter's CRB Index of 17 commodities is up about 20% over the
past year and nearly 40% over the last two years. Much of the strength in
commodity prices can be traced to China. China's booming economy has created a
tremendous demand for raw materials -- everything from steel scrap to petroleum
to copper and paper. Oil prices have gone up a lot, which reflects stronger
economies around the world. Meanwhile OPEC has threatened to cut back
production by about a million barrels a month. Incidentally, I think oil price
increases are more deflationary than inflationary. We cannot do without oil. If
the oil price climbs, it means there is less money available for other goods,
which would slow the economy. However, the higher oil prices were probably one
more factor that hurt the stock market recently.*
I believe that many investors are concerned about a possible Fed hike but
the market hasn't done that badly when an initial boost follows a long period
of low rates. The market has rallied on average one, three, six, nine and
twelve months after the Fed's initial boost. Because it is concentrating on the
strength of the economy, the market tends to shrug off the first rise.
Eventually, if inflation picks up, which has happened many times in the past,
the Fed keeps on hiking, which negatively impacts the market.*
There has been a lot written that Fed chairman Alan Greenspan would not
raise rates before the election because that would hurt President Bush's
reelection chances. I disagree with that assumption. I don't believe Greenspan
wants to raise rates but he would do so if he felt it was necessary. Checking
the numbers, you find that the Fed has raised rates many times before an
election. However, the uncertainty about the election outcome is another
concern weighing on the market. I think the market is worried that if John
Kerry is elected he may try to raise taxes, including the tax on dividends.*
We are in a period of high trade and budget deficits. Although it has
weakened the dollar, I am not overly concerned about the trade deficit -- we
have had one for a long time. As for budget deficits, I believe they are fine
when you prime the pump for a while trying to come out of a recession. When the
economy strengthens, the budget deficits ideally should narrow and turn into
surpluses. I don't know whether that will happen this time. Huge budget
deficits are a long-term concern. To finance them, the Treasury has to sell
more and more bonds and notes. This puts upward pressure on interest rates that
can damage the economy.*
Meanwhile, higher corporate earnings have bolstered the economy. Pre-tax
corporate profits in the fourth quarter were 29% above the like 2002 quarter.
It was the biggest quarterly increase since the first quarter of 1984. Some
analysts attribute much of the gain to higher productivity, the weaker dollar,
and outsourcing, rather than from core operations. As I see it, part of the
rise is simply that it is a comparison with a very weak quarter. Estimates for
the first quarter of this year indicate a gain of about 17%. I don't see why
increased productivity should be a concern. It results in greater output
without increasing inflation. Outsourcing, of course, does cut jobs and labor
costs.*
The question of outsourcing has been making headlines in the presidential
race. Of the $125 billion annually in direct foreign investment by U.S.
corporations, a growing portion has been
2
directed to cheap labor and resources to make products and services for sale
back to the U.S. To my mind, outsourcing is just a fact of life in the global
economy and I don't see anything wrong with it. Since it does make it tougher
to create jobs or raise pay, politicians want to make a big deal of it. If we
didn't have outsourcing, we'd have more inflation and higher prices. So
consumers benefit hugely from outsourcing. The problem is how to create more
jobs in the U.S. One thing not talked about is the outsourcing into the U.S.
There are many foreign companies with plants here that employ domestic workers.
In fact, I just read about another Japanese auto company that will put up a new
plant somewhere in the South and will create a lot of jobs here.*
As far as earnings are concerned, I was pleased to see that the Financial
Accounting Standards Board recently proposed that companies be required to
expense the value of stock options they give to employees and executives. They
should be expensed because they are an expense. Corporations are giving stock
options to compensate people without using cash. In addition to artificially
inflating profits, this hurts earnings per share by creating excess shares.*
Americans invested more than $69 billion in stock mutual funds in the first
two months of this year, according to the Investment Company Institute. An
average of $5 billion a month after redemptions was the pace in 2003 and 2002.
I don't think it is healthy when inflows get that high. It is most bullish for
the market when inflows are nice and steady. When investors get too aggressive
in buying, there is excess optimism, and that is a negative sign for the
market. To put the latest figures in perspective, some of the inflow is
seasonal. January and, to some extent, February, tend to be strong months
because of reinvestment demand. So, while part of the increase is seasonal, the
rest of the inflows are still high.*
Net foreign purchases of U.S. stocks totaled $12.8 billion in January, down
from $13.3 billion in December. That's not a figure to cause concern. As with
domestic inflows, it is okay if foreigners buy more stocks. But if foreigners
get too aggressive, they tend to be wrong, frequently buying at tops and
selling at bottoms.*
The Conference Board recently reported that the confidence of chief
executives in the U.S. economy climbed to 73 in the first quarter from 66 in
the previous quarter. It was the highest figure since 74 in the first quarter
of 1983. Any number above 50 is considered bullish. This is a sentiment
indicator. When the executives get too enthusiastic, it is usually not a good
sign. They were very pessimistic near the market bottom about a year and a half
ago. People are pretty confident about the economy when it is strong and the
market is high. But the stock market is a discounting mechanism. It goes up
ahead of the economy and generally goes down first. We have to be careful now
because the economy is very strong and the market may weaken. However, the
market usually doesn't start to go down until the Fed has been hiking for a
while and that is not yet the case.*
While executives express their confidence in the outlook, insiders in March
sold $28.38 worth of stock for every dollar's worth they bought. It was the
eleventh consecutive month where the sell/buy ratio topped twenty to one. In
February, the sell/buy ratio was fifty to one. While a lot of buying and
selling by insiders is normal, it is the amount of selling that is bothersome.
Also, the buying has been rather miniscule. I see it as another negative sign.*
Another figure to watch is margin debt. The New York Stock Exchange reported
that margin debt increased 4.1% from December through February. At the end of
February, debt balances in margin accounts reached $180 billion against $173
billion a year ago. Although a good portion of the debt was worked down during
the bear market, I am not enthused about the overall level relative to, say,
stock market assets. However it is very hard to evaluate this figure because of
the
3
many structural changes in the market. For example, we now have a significant
number of hedge funds that stay market neutral. They have to sell short a great
deal and wind up using margin debt. While it is hard to know the specifics of
margin debt, I believe it is probably true that if it expands at a very rapid
rate, it is usually not healthy. I don't think we are yet at that point.*
We are also seeing increased initial public offerings. In the first quarter,
28 IPOs were floated, raising about $6.6 billion in proceeds, according to
Dealogic. The current backlog includes 82 offerings from companies seeking to
raise $12 billion. Offerings tend to get very high near market tops and are
almost non-existent during market bottoms. I believe the quality of the stocks
currently coming out is fairly high. It is not the kind of technology mania
that we saw back in 1999. When a lot of speculative offerings come out, that is
the time to worry. I don't think the present numbers are out of control. We
have a long way to go for that particular indicator.*
As with IPOs, we are seeing more U.S. based mergers and acquisitions. They
totaled $290 billion in the first quarter. This was the most since the fourth
quarter of 2002 when they amounted to $346 billion, according to Thomson
Financial. As with everything else, you tend to get heavier merger dealings
near bull market tops but you also see many in the middle of bull markets. When
the market is in the doldrums, mergers tend to slacken off. Here, too, I don't
think we are at a danger point in a merger craze; but it is getting closer.
A good thing for the market is that dividend payments are going up. Standard
& Poor's reports that in the first quarter 508 companies increased their
dividends by 10.9%, more than the 458 in last year's first quarter and 17.9%
over the first quarter of 2002. These increases are a direct result of the tax
cut that has lowered the maximum tax on dividends to 15% at the federal level.
That has really helped the stock market.*
However, in my opinion, stocks are still overpriced. The average stock in
the S&P currently trades at about 21 times the index's estimated earnings for
2004. This compares with the average historical price/earnings multiple of
about 15. People will argue that because inflation and interest rates are
fairly low, the market deserves a higher multiple. I agree to a point. But the
multiples are high and, as previously mentioned, the earnings in many cases do
not include the expense of stock options. So, I think the earnings numbers are
inflated. I don't think that stocks can be considered cheap by any definition.
There seems to have been a shift in market sentiment. The bullish sentiment
of the American Association of Individual Investors fell from 84.8% in
February, the highest reading since July 1987, to 58% in mid-March. Investors
Intelligence reported that bulls in its polls fell below 50%, while the ratio
of bulls to bears fell below 2 to 1. This was the lowest level since last
spring. The decline in optimism followed the sell-off after the terrorist
attack in Spain. While not exactly bullish, the numbers are way down from the
extremes of optimism. I believe the move to more subdued levels is somewhat
positive.*
Among my indicators, the monetary model has shown some wear and tear; and
the sentiment, which has improved in recent weeks, is still not very good.
Momentum in the market is about neutral. If you add them together, the
indicators are not that great. The very strong earnings are the most promising
feature of the market. Normally, I would be very worried about this because it
would tend to exacerbate inflation and prompt the Fed to hike rates. However,
we haven't seen bad inflation (except in commodity prices and the March up tick
in consumer prices) and the Fed doesn't seem ready to raise rates. If earnings
stay high and interest rates remain low, it would really help the market.* The
short rates are low because of the Fed, but the longer rates have been going
up, and that's not great. Overall, my indicators are mostly in neutral
territory.
4
Currently, we are at about 61% long in U.S. common stocks.
Sincerely,
[SIGNATURE]
/s/ Martin E. Zweig
Martin E. Zweig, Ph.D.
President
Zweig Consulting LLC
PORTFOLIO COMPOSITION
Our leading industry groups on March 31, 2004, included health care,
financials, industrials, consumer discretionary and technology. During the
quarter, we added to our holdings in health care and industrials and trimmed
our positions in financials and technology. Aside from percentages held, the
only change from the year-end listings is the replacement of consumer staples
by industrials.
Among individual companies, our top holdings on March 31 included Citigroup,
Wells Fargo, Deere, Occidental Petroleum, PACCAR, Pfizer, Freeport-McMoRan, L-3
Communications, McKesson and UnitedHealth Group. During the quarter we added to
our holdings in Deere, PACCAR, L-3 Communications, McKesson and UnitedHealth
Group. Although Cisco Systems, Dell, Microsoft and Alcoa, which appeared on our
previous report, are no longer listed in this top group, there has been no
change in the number of shares held in these companies.
Sincerely,
[SIGNATURE]
/s/ Carlton Neel
Carlton Neel
Executive Vice President
Phoenix/Zweig Advisers LLC
--------
*Source: Zweig Consulting LLC
The preceding information is the opinion of fund management. There is no
guarantee that market forecasts discussed will be realized.
5
THE ZWEIG FUND, INC.
INVESTMENTS AND SECURITIES SOLD SHORT
March 31, 2004
(Unaudited)
Number of
Shares Value
--------- ------------
INVESTMENTS
DOMESTIC COMMON STOCKS 73.93%
CONSUMER DISCRETIONARY 9.35%
AnnTaylor Stores Corp......................... 150,000(a) $ 6,420,000
AutoZone, Inc................................. 35,000(a) 3,008,950
Best Buy Co., Inc............................. 70,000 3,620,400
GAP (The), Inc................................ 242,000 5,304,640
Home Depot, Inc............................... 160,000(b) 5,977,600
Liz Claiborne, Inc............................ 90,000 3,302,100
Tribune Co.................................... 120,000 6,052,800
Viacom, Inc. Class B.......................... 150,000 5,881,500
------------
39,567,990
------------
CONSUMER STAPLES 6.15%
Altria Group, Inc............................. 75,000(b) 4,083,750
Coca-Cola Enterprises, Inc.................... 220,000 5,317,400
Kimberly-Clark Corp........................... 70,000 4,417,000
PepsiCo, Inc.................................. 58,900 3,171,765
Procter & Gamble Co........................... 56,600 5,936,208
Wal-Mart Stores, Inc.......................... 52,000 3,103,880
------------
26,030,003
------------
ENERGY 5.72%
ConocoPhillips................................ 90,000 6,282,900
Halliburton Co................................ 160,000 4,862,400
Kerr-McGee Corp............................... 120,000 6,180,000
Occidental Petroleum Corp..................... 149,500 6,884,475
------------
24,209,775
------------
FINANCIALS 13.32%
Allstate Corp................................. 135,000 6,137,100
Bank of America Corp.......................... 75,000 6,073,500
Capital One Financial Corp.................... 85,000(b) 6,411,550
Citigroup, Inc................................ 165,000 8,530,500
First Tennessee National Corp................. 135,000 6,439,500
Morgan Stanley................................ 50,000 2,865,000
National City Corp............................ 165,000 5,870,700
Wachovia Corp................................. 130,000 6,110,000
6
Number of
Shares Value
--------- ------------
FINANCIALS (CONTINUED)
Wells Fargo & Co.............................. 140,200 $ 7,945,134
------------
56,382,984
------------
HEALTH CARE 14.04%
Amgen, Inc.................................... 100,000(a) 5,817,000
Angiotech Pharmaceuticals, Inc................ 240,000(a) 5,858,400
Bristol-Myers Squibb Co....................... 250,000 6,057,500
C. R. Bard, Inc............................... 43,000 4,198,520
Caremark RX, Inc.............................. 90,000(a) 2,992,500
CV Therapeutics, Inc.......................... 149,500(a) 2,261,935
McKesson Corp................................. 215,000 6,469,350
Merck & Co., Inc.............................. 85,000 3,756,150
Mylan Laboratories, Inc....................... 260,000 5,909,800
Pfizer, Inc................................... 190,000 6,659,500
Transkaryotic Therapies, Inc.................. 173,000(a) 2,968,680
UnitedHealth Group, Inc....................... 100,000 6,444,000
------------
59,393,335
------------
INDUSTRIALS 10.50%
Boeing Co..................................... 140,000 5,749,800
Deere & Co.................................... 100,000(b) 6,931,000
L-3 Communications Holdings, Inc.............. 110,000 6,542,800
Lockheed Martin Corp.......................... 70,000 3,194,800
Norfolk Southern Corp......................... 275,000 6,074,750
Northrop Grumman Corp......................... 29,000 2,854,180
PACCAR, Inc................................... 120,000 6,748,800
Waste Management, Inc......................... 210,000 6,337,800
------------
44,433,930
------------
INFORMATION TECHNOLOGY 6.51%
Amdocs Ltd.................................... 220,000(a) 6,113,800
Cisco Systems, Inc............................ 269,000(a) 6,326,880
Dell, Inc..................................... 186,000(a) 6,253,320
Internet Security Systems, Inc................ 203,000(a) 3,580,920
Microsoft Corp................................ 212,000 5,293,640
------------
27,568,560
------------
MATERIALS 4.52%
Alcoa, Inc.................................... 175,000 6,070,750
Freeport-McMoRan Copper & Gold, Inc., Class B
(Indonesia)................................. 170,000(b) 6,645,300
Georgia-Pacific Corp.......................... 190,000 6,401,100
------------
19,117,150
------------
7
Number of
Shares Value
----------- ------------
TELECOMMUNICATION SERVICES 1.48%
AT&T Corp..................................... 320,000 $ 6,262,400
------------
UTILITIES 2.34%
Entergy Corp.................................. 52,900 3,147,550
Exelon Corp................................... 65,000 (b) 4,476,550
PPL Corp...................................... 50,000 2,280,000
------------
9,904,100
------------
Total Domestic Common Stocks (cost $271,787,975)..... 312,870,227
------------
FOREIGN COMMON STOCKS 7.36%
CONSUMER DISCRETIONARY 1.51%
Honda Motor Co., Ltd. ADR (Japan)............. 275,000 (b) 6,363,500
------------
ENERGY 1.74%
Talisman Energy, Inc. (Canada)................ 75,000 4,422,750
Total S.A., ADR (France)...................... 32,000 2,944,000
------------
7,366,750
------------
INFORMATION TECHNOLOGY 1.20%
Nokia Corp., ADR (Finland).................... 251,000 5,090,280
------------
MATERIALS 2.91%
BHP Billiton Ltd. (Australia)................. 405,032 3,791,068
Newcrest Mining Ltd. (Australia).............. 266,563 2,619,149
Rio Tinto Ltd. (Australia).................... 128,086 3,364,868
WMC Resources Ltd. (Australia)................ 650,343 (a) 2,542,109
------------
12,317,194
------------
Total Foreign Common Stocks (cost $31,921,105)....... 31,137,724
------------
PREFERRED STOCKS 2.83%
FINANCIALS 2.83%
ABN Amro North America, 144A, 8.75% Pfd....... 11,500 (c) 11,776,725
Citibank NA Series A, 6.34% Pfd............... 2,000 (a) 202,375
------------
Total Preferred Stocks (cost $12,461,173)............ 11,979,100
------------
Principal
Amount
-----------
U.S. GOVERNMENT SECURITIES 13.93%
United States Treasury Notes, 12.75% 11/15/10
(cost $60,111,683).......................... $50,000,000 58,947,300
------------
8
Contracts Value
---------- ------------
OPTION -- CALLS 0.02%
Japanese Yen Call Option expiring 10/29/04 @ 90
(cost $100,000).............................. 800,000(a) $ 88,000
------------
Principal
Amount
----------
SHORT-TERM INVESTMENT 1.91%
Honeywell International, Inc., 1.02%, 4/01/04
(cost $8,100,000)............................ $8,100,000 8,100,000
------------
Total Investments (cost $384,481,936) -- 99.98%....... 423,122,351
Securities Sold Short (proceeds $14,177,531) -- (3.43)% (14,543,000)
Other assets less liabilities -- 3.45%................ 14,620,303
------------
Net Assets -- 100%.................................... $423,199,654
============
--------
(a) Non-income producing security.
(b) Position, or portion thereof, with an aggregate market value of
$28,715,580 has been segregated to collateralize securities sold short.
(c) Securities exempt from registration under Rule 144A of the securities Act
of 1933. These securities may be resold in transactions except from
registration, normally to qualified institutional buyers. At March 31,
2004 these securities amounted to a value of $11,776,725 or 2.78% of net
assets.
Glossary:
ADR -- American Depositary Receipt
For Federal income tax purposes, the tax basis of investments owned at March
31, 2004 was $384,481,936 and net unrealized appreciation of investments
consisted of:
Gross unrealized appreciation.. $46,867,676
Gross unrealized depreciation.. (8,227,261)
-----------
Net unrealized appreciation.... $38,640,415
===========
9
Number of
Shares Value
--------- -----------
SECURITIES SOLD SHORT 3.43%
DOMESTIC COMMON STOCKS 3.43%
FINANCIALS 2.18%
Bank of New York Co., Inc. (The)........................ 190,000 $ 5,985,000
Marsh & McLennan Cos., Inc.............................. 70,000 3,241,000
-----------
9,226,000
-----------
HEALTH CARE 0.79%
Medtronic, Inc.......................................... 70,000 3,342,500
-----------
INDUSTRIALS 0.46%
Expeditors International of Washington, Inc. ........... 50,000 1,974,500
-----------
Total Securities Sold Short
(proceeds $14,177,531).................................. $14,543,000
===========
--------
For Federal income tax purposes, the tax basis of securities held short at
March 31, 2004 was $14,177,531 and net unrealized depreciation of
investments consisted of:
Gross unrealized appreciation.. $ --
Gross unrealized depreciation.. (365,469)
---------
Net unrealized depreciation.... $(365,469)
=========
10
THE ZWEIG FUND, INC.
FINANCIAL HIGHLIGHTS
March 31, 2004
(Unaudited)
Net Asset Value
Total Net Assets per share+
------------------------- ---------------
Beginning of period: December 31, 2003.................. $416,707,064 $5.69
Net investment income................................ $ 1,997,175 $ 0.03
Net realized and unrealized gain on investments...... 7,864,137 0.11
Dividends from net investment income and
distributions from net long-term and short-term
capital gains...................................... (1,997,175) (0.03)
Tax return of capital................................ (1,371,547) (0.02)
Net asset value of shares issued to shareholders in
reinvestment of dividends resulting in issuance of
common stock....................................... -- --
----------- ------
Net increase in net assets/net asset value........... 6,492,590 0.09
------------ -----
End of period: March 31, 2004........................... $423,199,654 $5.78
============ =====
--------
+ Per share data are being calculated based on average share method.
--------------------------------------------------------------------------------
KEY INFORMATION
1-800-272-2700 Zweig Shareholder Relations:
For general information and literature, as well as 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.
11
OFFICERS AND DIRECTORS
Daniel T. Geraci
President and Chief Executive Officer
Carlton Neel
Executive Vice President
David Dickerson
Senior Vice President
Nancy J. Engberg
Secretary
Nancy Curtiss
Treasurer
Charles H. Brunie
Director
Wendy Luscombe
Director
Alden C. Olson, Ph.D.
Director
James B. Rogers, Jr.
Director
R. Keith Walton
Director
Investment Adviser
Phoenix/Zweig Advisers LLC
900 Third Avenue
New York, NY 10022
Fund Administrator
Phoenix Equity Planning Corporation
56 Prospect St.
PO Box 150480
Hartford, CT 06115-0480
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Transfer Agent
EquiServe Trust Co., N.A.
PO Box 43010
Providence, RI 02940-3010
Legal Counsel
Katten Muchin Zavis Rosenman
575 Madison Avenue
New York, NY 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.
PXP 1375 4902-1Q-04
Quarterly Report
Zweig
The Zweig Fund, Inc.
March 31, 2004
[GRAPHIC]