Edgar Filing: ZWEIG FUND INC /MD/

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-04739

The Zweig Fund, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in charter)

900 Third Ave, 31st Floor
New York, NY 10022-4728
-----------------------------------------------------
(Address of principal executive offices) (Zip code)

Kevin J. Carr, Esq.
Chief Legal Officer and Secretary for John H. Beers, Esq.
Registrant Vice President and Counsel
Phoenix Life Insurance Company Phoenix Life Insurance Company
One American Row One American Row
Hartford, CT 06103-2899 Hartford, CT 06103-2899
(Name and address of agent for service)

Registrant's telephone number, including area code: 800-272-2700

Date of fiscal year end: December 31

Date of reporting period: December 31, 2006

Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. Section 3507.

Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

February 1, 2007

Dear ZF Shareholder:

I am pleased to share with you the manager's report and commentary for The
Zweig Fund, Inc. for the year ended December 31, 2006.

The Zweig Fund's net asset value increased 5.61% in the fourth quarter of
2006, including the $0.144 in reinvested distribution paid on October 26.
During the same period, the S&P 500(R) Index gained 6.69%, including reinvested
dividends. The Fund's average equity exposure for the quarter was approximately
90%.

For the year ended December 31, 2006, the Fund's net asset value rose
14.58%, including distributions. For the same period, the S&P 500(R) Index
increased 15.78%, including reinvested dividends. The Fund's average equity
exposure for the year was approximately 82%.

As previously announced, the Fund's distribution for the quarter ended
December 31, 2006, was $0.151, payable on January 8, 2007 to shareholders of
record on December 29, 2006.

Sincerely,

/s/ George R. Aylward
George R. Aylward
President, Chairman and Chief Executive Officer
The Zweig Fund, Inc.

MARKET REVIEW AND OUTLOOK

After setting dozens of record highs from the start of October until the
year-end, the Dow Jones Industrial Average/SM/ (the Dow) ended 2006 at
12,463.15 -- an increase of 16.3% for the year and fewer than 50 points from
the peak of 12,510.57 touched on December 27. For the year, the Nasdaq
Composite(R) Index (the Nasdaq) gained 9.5% to 2,415.29 and the S&P 500(R)
Index (the S&P 500) climbed 13.6% (excludes reinvested dividends) to 1,418.30.
Overall, it was the best year for the markets since 2003 -- when the Dow rose
25.3%, the Nasdaq soared 50%, and the S&P 500 was up 26.4%.

Most of the gain came in the fourth quarter, after it became apparent that
the Fed had decided to keep its rate increases at bay. We believe that the
election was a positive factor for the market. Ordinarily, the market prefers
the Republicans to win, but the market started to perk up even when it was
quite likely the Democrats would control the House and, in all likelihood, the
Senate. We like the fact that the market was acting well on supposedly bad
news. After the election, the market continued to climb. Perhaps investors
wanted political gridlock with a Republican president and a Democratic
congress. Another factor for the strong run was the takeover rush. There was a
large amount of cash circulating that was winding up in the market.

As it had done in its last three previous meetings, the Fed left its
short-term interest rate unchanged at 5.25% at its December session. In its
statement, the Fed noted that economic growth had slowed partly, "...reflecting
a substantial cooling of the housing market..." and saw the economy expanding
at a moderate pace in coming quarters. While the Fed noted, "...inflation
pressures seem likely to moderate over time," it simultaneously warned that,
"...some inflation risks remain." It added that, "...the extent and

timing of additional firming..." will depend on "...the evolution of the
outlook for both inflation and economic growth."

On the inflation front, the main factor is the drop in commodity prices,
especially that of crude oil. It has fallen about a third from its peak. The
higher oil prices had put a crimp in the economy, and the lower levels could be
a stimulant, leading to inflationary trends. Probably that is what gives the
Fed concern. However, at this point, it is not something we are worried about.

The housing slump and slower vehicle sales were factors in the cooling of
the gross domestic product (GDP) annual growth rate from a robust 5.6% in the
first quarter of 2006 to 2% in the third quarter, according to the Commerce
Department. The slower growth was accompanied by mixed news on inflationary
pressures. Consumer prices were unchanged in November, following 0.5% declines
in both September and October, while producer prices rose 2%.

Right now, the economy and inflation seem to be roughly in balance. The
economy is decent but not strong and inflation seems in control. We believe
that overall, the situation is close to the so-called "Goldilocks" scenario
where the market is not too hot or too cold.

Part of the recent strength in the stock market has been attributed to the
flood of mergers and acquisitions. Thomson Financial reports that the value of
deals in the U.S. jumped 36% in 2006 to $1.56 trillion. This figure is close to
the record $1.7 trillion set in 2000.

Takeover firms have done fairly well and have been able to raise more and
more money. It is money that makes the market go and institutional money has
been pouring in. We have heard numbers that are north of a trillion dollars
that they now have under their control. The amount of cash held by corporations
is probably close to double what was normal a decade ago. After the recession
and 9/11, corporations became timid and hoarded their cash. Since they aren't
spending as much on capital equipment, they have to do something with the
funds. Some increased their dividends; others bought back their stock; still
others bought another company. These are all bullish moves.

While we believe there is a correlation between merger mania and market
highs, we are not likely at that point yet. There is so much money out there
ready to be put to work and the market is not wildly valued either. Eventually,
it could get out of bounds and then we would have to pay the piper. But we
believe it is too early to worry about that.

Also making news last year was the surge in initial public offerings (IPOs).
Dialogic reported that 78 new issues came out in the U.S. during the final
three months of 2006, raising $16.68 billion, the highest total since the final
quarter of 1999. This was a substantial gain from the 48 stocks that raised
$7.6 billion in the same time frame in 2005. For all of 2006, there were 198
newly listed companies that raised $44.1 billion.

Although the number is huge, we do not consider it to be out of control.
This is not 1999. We're not seeing the clunky ones, the start-ups without
earnings that triple on the first day. Although the IPOs' growth trend will
continue, we do not consider the current amount unusually large.

As more new issues were coming out, more companies were buying back their
own stock. Standard & Poor's reported that companies in the S&P 500 bought back
an estimated $110 billion of their stock in the third quarter of 2006. This
followed $117 billion buybacks in the second quarter and $110 billion in the
first. All told, the nine-month total was $337 billion, an increase of 33% from
the $245 billion in the same period in 2005.

These buybacks are another bullish factor. The real question when the
company buys back

its own stock is whether it is reasonably priced or cheap. Back in the late
'90s, some companies were buying in their own stock at multiples we felt were
inappropriate. But now the market does not seem to be too lofty on a valuation
basis. Some companies are probably overpaying, but on average, valuations seem
fine overall.

Incidentally, a significant reason for the buyback is that companies don't
want to be taken over. If they sit on a mountain of cash, they are likely to
become a target. Conversely, if they buy their own stock, they have less cash
and tend to be less attractive for a takeover. With buybacks, they are also
seeking to raise the price of their stock. We believe the trend of stock
buybacks as a defense against takeovers will continue.

Although remaining respectable, corporate earnings are expected to slow
their growth rate. Standard & Poor's estimated that companies in its 500-Stock
Index in the fourth quarter of 2006 were 9% above the 2005 figure. After 18
consecutive quarters of double-digit growth, this would be the first quarter
with a single-digit gain. Earnings in the third quarter were at an
exceptionally strong 19%. Looking ahead, Thomson Financial predicts that
earnings per share for these companies will slip below 10% in 2007, making this
year the first since 2002 with single-digit growth. That would still be above
the long-term average growth of 7.5%.

Forecasts of lower earnings are made in advance of every quarter and they
frequently turn out to be too low. It is difficult to know whether the overall
growth rate will slow. Every industry has a different outlook. For example, the
drop in oil prices will help many companies, but hurt the oil companies, which
represent a major market sector. Without making any predictions, we don't see
earnings running off the track soon.

The dollar slipped sharply in 2006 against the euro and the British pound.
The euro gained 11.49% and the British pound, 13.8%. Both were close to record
highs against the dollar. Meanwhile, the Dow Jones Index of stocks outside the
U.S. climbed 23% in 2006. The strong markets abroad and the cheaper dollar are
combining to make foreign stocks more attractive to U.S. investors as far as
potential appreciation, capital gains and dividends are concerned. That's why
such a tremendous amount of money is pouring into foreign funds. However, these
investments are, of course, not guaranteed. If the dollar reverses its course,
these investors could get hurt. That will likely happen eventually, but it is
impossible to predict when.

At year-end, companies in the S&P 500 were trading at 18.2 times operating
earnings, slightly above the 17.9 valuation in September, but below the 19.2
figure at the close of 2005. Data from Thomson Financial placed the
price-to-earnings ratio of the S&P 500 in 2007 at about 15 times estimated
earnings. This coincides with the long-term average. There are analysts who
believe the market is undervalued, but we don't consider the current levels to
be that unreasonable. Given the state of the economy and the inflation level,
the market appears to us to be fairly valued.

Indicating that many investors borrowed money to buy stocks during the
market rally, margin debt, as reported by Ned Davis Research, increased 21%
from February through November. At the end of November, margin debt was put at
2% of GDP, the highest percentage since November 2000. Much of the margin surge
is due to hedge fund borrowing and these funds are under-invested. What we are
not seeing at this time is the public plunging heavily into margin and later
running into trouble.

There has been mounting concern about the long-running inverted yield curve,
with yields on short-term U.S. Treasury bills topping returns on long-term
Treasury notes. In early January, the three-month Treasury bill yielded 5.05%
against a 4.648% rate on the 10-year note. This inversion had continued for
about six months and, histor-

ically, recessions have frequently caused long-term inversions.

The yield curve used to be one of our favorite indicators, but times have
changed. In the past, banks had limits on their loans and the economy would
slow when the Fed raised interest rates. There are no such restrictions on
banks now and the current inversion occurred because the bond market did very
well.

Market advisers are very optimistic on the outlook. The year-end survey by
Investors Intelligence showed 56% bulls and 20% bears. This was a significant
increase from the end of the third quarter, when bulls stood at 49% and bears
at 33% -- but not very different from the 2005 year-end, when there were 56%
bulls and 24% bears. While there definitely is a lot more optimism in the
marketplace than there was a few months ago, the level of optimism is still
relatively subdued. For example, many analysts are predicting that the market
will rise about 7% for this year, which is pretty normal.

In summary, the biggest positives for the market in 2006 included the
previously discussed large levels of cash held by corporations, hedge funds and
buyout companies. In addition, we are now in a pre-election year -- which,
historically, has often proven to be the strongest year in the four-year
presidential cycle -- a fact that should not be overlooked.

Although all sorts of negative things are happening around the world, the
market keeps going up. It is climbing the proverbial wall of worry and is doing
a pretty good job. All things considered, our market stance on equities is
bullish and we are about 90% invested.

Sincerely,

/s/Martin E. Zweig, Ph.D.

Martin E. Zweig, Ph.D.
President
Zweig Consulting LLC

The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts will be realized.
For definitions of indexes cited and certain investment terms used in this
report see the glossary on page 6.

PORTFOLIO COMPOSITION

The Fund's leading stock market sectors on December 31, 2006 included
financials, information technology, health care, consumer discretionary and
consumer staples. Compared with our previous listing, the only new sector is
consumer staples, which replaced industrials. During the fourth quarter, we
added to our positions in financial and consumer staples and trimmed our
holdings in consumer discretionary and materials.

As of December 31, 2006, our top individual positions included Allstate,
Boeing, Cisco Systems, Continental Airlines, EMC, Goldman Sachs, Morgan
Stanley, NASDAQ 100 Trust, Seagate Technology and UnitedHealth Group.

During the quarter, we added to our positions in Boeing and UnitedHealth
Group and reduced our holdings in Continental Airlines. There were no changes
in shares held in EMC and Seagate Technology. No longer among our top positions
are AT&T, JPMorgan Chase and McDonald's, where we reduced our holdings --and
Abercrombie & Fitch and Verizon, where there were no changes in shares owned.

Sincerely,

[SIGNATURE]

/s/ Carlton Neel
Carlton Neel
Executive Vice President
Phoenix/Zweig Advisers LLC

Glossary

American Depositary Receipt (ADR): Represents shares of foreign companies
traded in U.S. dollars on U.S. exchanges that are held by a bank or a trust.
Foreign companies use ADRs in order to make it easier for Americans to buy
their shares.

Dow Jones Industrial Average/SM/: A price-weighted average of 30 blue chip
stocks. The index is calculated on a total return basis with dividends
reinvested.

Federal funds rate: The interest rate charged on overnight loans of reserves by
one financial institution to another in the United States. The federal funds
rate is the most sensitive indicator of the direction of interest rates since
it is set daily by the market.

Federal Reserve (the "Fed"): The central bank of the United States, responsible
for controlling the money supply, interest rates and credit with the goal of
keeping the U.S. economy and currency stable. Governed by a seven-member board,
the system includes 12 regional Federal Reserve Banks, 25 branches and all
national and state banks that are part of the system.

Gross domestic product (GDP): An important measure of the United States'
economic performance, GDP is the total market value of all final goods and
services produced in the U.S. during any quarter or year.

Initial public offering (IPO): A company's first sale of stock to the public.

Investors Intelligence Survey: A weekly survey published by Chartcraft, an
investment services company, of the current sentiment of approximately 150
market newsletter writers. Participants are classified into three categories:
bullish, bearish or waiting for a correction.

NASDAQ Composite/(R)/ Index: A market capitalization-weighted index of all
issues listed in the NASDAQ (National Association Of Securities Dealers
Automated Quotation System) Stock Market, except for closed-end funds,
convertible debentures, exchange traded funds, preferred stocks, rights,
warrants, units and other derivative securities. The index is calculated on a
total return basis with dividends reinvested.

S&P 500/(R)/ Index: A free-float market capitalization-weighted index of 500 of
the largest U.S. companies. The index is calculated on a total return basis
with dividends reinvested.

Yield curve: A line chart that shows interest rates at a specific point in time
for securities of equivalent quality but with different maturities. A "normal
or positive" yield curve indicates that short-term securities have a lower
interest rate than long-term securities; an "inverted or negative" yield curve
indicates short-term rates are exceeding long-term rates; and a "flat yield
curve" means short- and long-term rates are about the same.

Indexes cited are unmanaged and not available for direct investment; therefore
their performance does not reflect the expenses associated with the active
management of an actual portfolio.

THE ZWEIG FUND, INC.

Sector Weightings 12/31/06
(as a percentage of total investments)

[CHART]

Financials 20%
Information Technology 17%
Health Care 8%
Consumer Discretionary 8%
Consumer Staples 8%
Industrials 7%
Energy 6%
Other (including short-term investments) 26%

SCHEDULE OF INVESTMENTS AND SECURITIES SOLD SHORT

December 31, 2006

Number of
Shares Value
--------- -----------

INVESTMENTS
DOMESTIC COMMON STOCKS -- 77.07%
CONSUMER DISCRETIONARY -- 7.33%
Abercrombie & Fitch Co.................... 80,000 $ 5,570,400
Ford Motor Corp./(d)/..................... 800,000 6,008,000
McDonald's Corp........................... 150,000 6,649,500
Newell Rubbermaid, Inc./(d)/.............. 235,000 6,803,250
Nike, Inc. Class B........................ 72,000 7,130,160
-----------
32,161,310
-----------
CONSUMER STAPLES -- 8.68%
Altria Group, Inc......................... 80,000 6,865,600
Archer-Daniels-Midland Co................. 170,000 5,433,200
Costco Wholesale Corp..................... 125,000 6,608,750
Kimberly-Clark Corp....................... 100,000 6,795,000
PepsiCo, Inc.............................. 95,000 5,942,250
Procter & Gamble Co....................... 100,000 6,427,000
-----------
38,071,800
-----------
ENERGY -- 5.53%
ConocoPhillips............................ 95,000 6,835,250
Halliburton Co............................ 190,000 5,899,500
Occidental Petroleum Corp................. 110,000 5,371,300
Valero Energy Corp........................ 120,000 6,139,200
-----------
24,245,250
-----------

See notes to financial statements

Number of
Shares Value
--------- -----------

FINANCIALS -- 19.87%
Allstate Corp............................. 115,000 $ 7,487,650
Bank of America Corp...................... 110,000 5,872,900
Goldman Sachs Group, Inc.................. 45,000 8,970,750
Huntington Bancshares, Inc................ 250,000 5,937,500
JPMorgan Chase & Co./(d)/................. 125,000 6,037,500
Merrill Lynch & Co., Inc./(d)/............ 75,000 6,982,500
Morgan Stanley/(d)/....................... 100,000 8,143,000
NASDAQ Stock Market, Inc./(b)(d)/......... 190,000 5,850,100
New York Community Bancorp, Inc./(d)/..... 340,000 5,474,000
PNC Financial Services Group, Inc......... 90,000 6,663,600
Reinsurance Group of America, Inc......... 110,000 6,127,000
Wachovia Corp./(d)/....................... 120,000 6,834,000
Wells Fargo & Co.......................... 190,000 6,756,400
-----------
87,136,900
-----------
HEALTH CARE -- 8.93%
Amgen, Inc./(b)/.......................... 85,000 5,806,350
Bristol-Myers Squibb Co./(d)/............. 250,000 6,580,000
Gilead Sciences, Inc./(b)/................ 100,000 6,493,000
Merck & Co., Inc.......................... 150,000 6,540,000
Pfizer, Inc............................... 240,000 6,216,000
UnitedHealth Group, Inc................... 140,000 7,522,200
-----------
39,157,550
-----------
INDUSTRIALS -- 8.10%
AMR Corp./(b)(d)/......................... 240,000 7,255,200
Boeing Co. (The).......................... 85,000 7,551,400
Continental Airlines, Inc. Class B/(b)(d)/ 190,000 7,837,500
General Electric Co....................... 170,000 6,325,700
L-3 Communications Holdings, Inc.......... 80,000 6,542,400
-----------
35,512,200
-----------
INFORMATION TECHNOLOGY -- 14.02%
Cisco Systems, Inc./(b)/.................. 285,000 7,789,050
EMC Corp./(b)(d)/......................... 575,000 7,590,000
Hewlett-Packard Co........................ 160,000 6,590,400
International Business Machines Corp...... 70,000 6,800,500
Microsoft Corp............................ 250,000 7,465,000
National Semiconductor Corp............... 290,000 6,583,000
Palm, Inc./(b)(d)/........................ 410,000 5,776,900
QUALCOMM, Inc............................. 190,000 7,180,100
RealNetworks, Inc./(b)(d)/................ 520,000 5,688,800
-----------
61,463,750
-----------

See notes to financial statements

Number of
Shares Value
---------- ------------

MATERIALS -- 1.46%
Dow Chemical Co./(d)/........................ 160,000 $ 6,390,400
------------
TELECOMMUNICATIONS SERVICES -- 3.15%
AT&T Corp.................................... 190,000 6,792,500
Verizon Communications, Inc.................. 190,000 7,075,600
------------
13,868,100
------------
Total Domestic Common Stocks (Identified Cost
$269,038,408).................................. 338,007,260
------------
FOREIGN COMMON STOCKS/(c)/ -- 9.31%
CONSUMER DISCRETIONARY -- 1.53%
Honda Motor Co., Ltd. ADR (Japan)/(d)/....... 170,000 6,721,800
------------
ENERGY -- 1.39%
Nabors Industries Ltd. (United States)/(b)/.. 205,000 6,104,900
------------
FINANCIALS -- 1.67%
Deutsche Bank AG (Germany)................... 55,000 7,328,200
------------
INFORMATION TECHNOLOGY -- 4.72%
Amdocs Ltd. (United States)/(b)/............. 170,000 6,587,500
Nokia Oyj ADR (Finland)...................... 315,000 6,400,800
Seagate Technology (Singapore)/(d)/.......... 290,000 7,685,000
------------
20,673,300
------------
Total Foreign Common Stocks (Identified Cost
$32,341,240)................................... 40,828,200
------------
EXCHANGE TRADED FUNDS -- 2.93%
iShares MSCI Japan Index Fund................ 145,000 2,060,450
NASDAQ-100 Shares/(d)/....................... 250,000 10,790,000
------------
Total Exchange Traded Funds (Identified Cost
$11,463,484)................................... 12,850,450
------------
Total Long-Term Investments -- 89.31% (Identified
Cost $312,843,132)............................. 391,685,910
------------
SHORT-TERM INVESTMENTS -- 19.70%
MONEY MARKET MUTUAL FUNDS -- 9.03%
State Street Navigator Prime Plus (5.32%
seven day effective
yield)/(e)/ (Identified Cost $39,587,450).. 39,587,450 39,587,450

See notes to financial statements

Par
(000's) Value
------- ------------

COMMERCIAL PAPER -- 10.67%/(f)/
Pitney Bowes, Inc. 5.29%, 1/3/07............. $ 8,800 $ 8,797,414
BMW US Capital Corp. 5.27%, 1/4/07........... 20,000 19,991,217
7-Eleven, Inc. 5.25%, 1/5/07................. 18,000 17,989,500
------------
Total Commercial Paper (Identified Cost
$46,778,131)................................ 46,778,131
------------
Total Short-Term Investments (Identified cost
$86,365,581)................................ 86,365,581
------------
Total Investments (Identified Cost
$399,208,713) -- 109.01%.................... 478,051,491/(a)/
Securities Sold Short (Proceeds $0) -- 0%..... (0)
Other Assets Less Liabilities -- (9.01)%...... (39,507,470)
------------
Net Assets -- 100.00%......................... $438,544,021
============

--------
(a) Federal Tax information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $84,109,246 and gross
depreciation of $6,336,273 for federal tax purposes. At December 31, 2006,
the aggregate cost of securities for federal income tax purposes was
$400,278,518.
(b) Non-income producing.
(c) A common stock is considered to be foreign if the security is issued in a
foreign country. The country of risk, noted parenthetically, is determined
based on criteria in Note 2F "Foreign security country determination" in
the Notes to Financial Statements.
(d) All or a portion of security is on loan.
(e) Represents security purchased with cash collateral for securities on loan.
(f) The rate shown is the discount rate.

See notes to financial statements

THE ZWEIG FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2006

ASSETS
Investment securities at value, including $38,593,082 of securities on loan
(Identified cost $399,208,713 )........................................... $ 478,051,491
Cash........................................................................ 66,752
Dividends and interest...................................................... 499,018
Tax reclaims................................................................ 10,739
Prepaid expenses............................................................ 88,015
-------------
Total Assets............................................................ 478,716,015
-------------
LIABILITIES
Payables
Upon return of securities loaned............................................ 39,587,450
Investment advisory fee (Note 4)............................................ 316,852
Professional fee............................................................ 60,552
Transfer agent fee.......................................................... 61,490
Administration fee (Note 4)................................................. 24,230
Printing and postage fees................................................... 99,961
Directors' fees and expenses................................................ 10,209
Other accrued expenses...................................................... 11,250
-------------
Total Liabilities....................................................... 40,171,994
-------------
NET ASSETS $ 438,544,021
=============
NET ASSET VALUE PER SHARE
($438,544,021 / 73,233,013)................................................. $ 5.99
=============

Net Assets Consist of:
Capital paid in on shares of beneficial interest............................ $ 501,354,131
Undistributed net investment income......................................... 1,315,272
Accumulated net realized loss............................................... (142,968,160)
Net unrealized appreciation................................................. 78,842,778
-------------
Net Assets $ 438,544,021
=============

See notes to financial statements

THE ZWEIG FUND, INC.

STATEMENT OF OPERATIONS

Year Ended December 31, 2006

INVESTMENT INCOME
Income
Dividends (net of foreign taxes withheld of $108,339)............................. $ 6,584,117
Interest.......................................................................... 3,625,309
Security lending.................................................................. 55,416
------------
Total Investment Income.................................................... 10,264,842
------------
Expenses
Investment advisory fees.......................................................... 3,616,231
Transfer agent fees............................................................... 345,021
Administration fees............................................................... 321,415
Printing and postage fees......................................................... 174,471
Professional fees................................................................. 137,746
Directors' fees and expenses...................................................... 121,374
Registration fees................................................................. 68,107
Custodian fees.................................................................... 33,137
Miscellaneous..................................................................... 225,094
------------
Expenses prior to dividends on short sales..................................... 5,042,596
Dividends on short sales....................................................... 120,907
------------
Total Expenses............................................................. 5,163,503
Less custodian fees paid indirectly............................................ (2,966)
------------
Net Expenses............................................................... 5,160,537
------------
Net Investment Income................................................... 5,104,305
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments....................................................................... 25,109,041
Short Sales....................................................................... (10,712,958)
Net change in unrealized appreciation (depreciation) on:
Investments....................................................................... 30,415,792
Short Sales....................................................................... 4,798,271
------------
Net realized and unrealized gain (loss).................................... 49,610,146
------------
Net increase (decrease) in net assets resulting from operations............ $ 54,714,451
============

See notes to financial statements

THE ZWEIG FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS

Year Ended Year Ended
December 31, 2006 December 31, 2005
----------------- -----------------

INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income (loss)................................... $ 5,104,305 $ 5,528,957
Net realized gain (loss)....................................... 14,396,083 18,405,081
Net change in unrealized appreciation (depreciation)........... 35,214,063 5,007,967
------------ ------------
Net increase (decrease) in net assets resulting from
operations................................................ 54,714,451 28,942,005
------------ ------------
Dividends and distributions to shareholders from
Net investment income.......................................... (5,164,215) (7,883,236)
Net realized short-term gains.................................. (15,285,877) (20,803,017)
Tax return of capital.......................................... (22,098,318) (14,521,247)
------------ ------------
Total dividends and distributions to shareholders........... (42,548,410) (43,207,500)
------------ ------------
Net increase (decrease) in net assets....................... 12,166,041 (14,265,495)
NET ASSETS
Beginning of period................................................ 426,377,980 440,643,475
------------ ------------
End of period (including undistributed net investment
income of $1,315,272 and $1,375,182, respectively)............... $438,544,021 $426,377,980
============ ============

See notes to financial statements

THE ZWEIG FUND, INC.

FINANCIAL HIGHLIGHTS

(Selected data for a share outstanding throughout each year)

Year Ended December 31,
----------------------------------------------------
2006 2005 2004 2003 2002
-------- -------- -------- -------- --------

Per Share Data
Net asset value, beginning of period............................... $ 5.82 $ 6.02 $ 5.69 $ 5.46 $ 7.96
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (loss)/(6)/............................... 0.07 0.08 0.11 0.03 0.01
Net realized and unrealized gains (losses)...................... 0.68 0.31/(5)/ 0.44 0.70 (1.76)
-------- -------- -------- -------- --------
Total from investment operations................................... 0.75 0.39 0.55 0.73 (1.75)
-------- -------- -------- -------- --------
Dividends and Distributions
Dividends from net investment income............................ (0.07) (0.11) (0.06) (0.03) (0.01)
Distributions from net realized gains........................... (0.21) (0.28) (0.16) -- --
Tax return of capital........................................... (0.30) (0.20) -- (0.47) (0.68)
-------- -------- -------- -------- --------
Total dividends and distributions............................... (0.58) (0.59) (0.22) (0.50) (0.69)
-------- -------- -------- -------- --------
Effect on net asset values as a result of capital contribution.. -- -- /(4)/ -- -- --
Effect on net asset values as a result of rights offering/(1)/.. -- -- -- -- (0.06)
-------- -------- -------- -------- --------
Change in net asset value.......................................... 0.17 (0.20) 0.33 0.23 (2.50)
-------- -------- -------- -------- --------
Net asset value, end of period.................................. $ 5.99 $ 5.82 $ 6.02 $ 5.69 $ 5.46
======== ======== ======== ======== ========
Market value, end of period/(2)/................................ $ 5.90 $ 5.25 $ 5.55 $ 4.90 $ 4.93
======== ======== ======== ======== ========
Total investment return/(3)/....................................... 24.87% 5.78% 18.13% 9.53% (29.78)%
======== ======== ======== ======== ========
Ratios/Supplemental Data:
Net assets, end of period (in thousands)........................... $438,544 $426,378 $440,643 $416,707 $400,163
Ratio of expenses to average net assets
(excluding dividends on short sales).............................. 1.18% 1.26% 1.33% 1.28% 1.20%
Ratio of expenses to average net assets
(including dividends on short sales).............................. 1.21% 1.33% 1.38% 1.33% 1.20%
Ratio of net investment income to average net assets............... 1.20% 1.31% 1.87% 0.54% 0.14%
Portfolio turnover rate............................................ 38.9% 44.6% 89.2% 74.8% 104.8%

--------
(1)Shares were sold at a 5% discount from the average market price.
(2)Closing Price -- New York Stock Exchange.
(3)Total investment return is calculated assuming a purchase of a share of the
Fund's common stock at the opening NYSE share price on the first business
day and a sale at the closing NYSE share price on the last business day of
each period reported. Dividends and distributions, if any, are assumed for
the purpose of this calculation, to be reinvested at prices obtained under
the Fund's Automatic Reinvestment and Cash Purchase Plan. Generally, total
investment return based on net asset value will be higher than total
investment return based on market value in periods where there is an
increase in the discount or a decrease in the premium of the market value to
the net assets from the beginning to the end of such years. Conversely,
total investment return based on net asset value will be lower than total
investment return based on market value in periods where there is a decrease
in the discount or an increase in the premium of the market value to the net
asset value from the beginning to the end of such periods.
(4)Amount is less than $0.01.
(5)The net realized and unrealized gains (losses) includes a voluntary payment
made by the Adviser to fully offset the net gains and losses associated with
a violation of investment restrictions. If this payment was not included,
the per share impact would be less than $0.01. See Note 4d "Payment by
affiliate" in the notes to financial statements.
(6)Computed using average shares outstanding.

See notes to financial statements

THE ZWEIG FUND, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2006

NOTE 1 -- ORGANIZATION

The Zweig Fund, Inc. (the "Fund") is a closed-end, diversified management
investment company registered under the Investment Company Act of 1940 (the
"Act"). The Fund was incorporated under the laws of the State of Maryland on
June 30, 1986. The Fund's objective is to increase capital primarily with
investment in equity securities, consistent with capital preservation and
reduction of risk.

NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principals
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.

A. Security Valuation:

Equity securities are valued at the official closing price (typically last
sale) on the exchange on which the securities are primarily traded, or if no
closing price is available, at the last bid price.

Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service, which utilizes information with respect to
recent sales, market transactions in comparable securities, quotations from
dealers, and various relationships between securities in determining value.

As required, some securities and other assets may be valued at fair value as
determined in good faith by or under the direction of the Directors.

Certain foreign common stocks may be fair valued in cases where closing
prices are not readily available or are deemed not reflective of readily
available market prices. For example, significant events (such as movement in
the U.S. securities market, or other regional and local developments) may occur
between the time that foreign markets close (where the security is principally
traded) and the time that the Fund calculates its net asset value (generally,
the close of the NYSE) that may impact the value of securities traded in these
foreign markets. In these cases, information from an external vendor may be
utilized to adjust closing market prices of certain foreign common stocks to
reflect their fair value. Because the frequency of significant events is not
predictable, fair valuation of certain foreign common stocks may occur on a
frequent basis.

Short-term investments having a remaining maturity of 60 days or less are
valued at amortized cost, which approximates market.

In September 2006, Statement of Financial Accounting Standards No. 157,
"Fair Value Measurements" ("SFAS 157"), was issued and is effective for fiscal
years beginning after November 15, 2007.

SFAS 157 defines fair value, establishes a framework for measuring fair value
and expands disclosures about fair value measurements. Management is currently
evaluating the impact the adoption of SFAS 157 will have on the Fund's
financial statement disclosures.

B. Security Transactions and Related Income:

Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date, or in the case of certain foreign securities,
as soon as the Fund is notified. Interest income is recorded on the accrual
basis. The Fund amortizes premiums and accretes discounts using the effective
interest method. Realized gains and losses are determined on the identified
cost basis.

C. Income Taxes:

It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes or excise taxes
has been made.

The Fund may be subject to foreign taxes on income, gains on investments or
currency repatriation, a portion of which may be recoverable. The Fund will
accrue such taxes and recoveries as applicable based upon current
interpretations of the tax rules and regulations that exist in the markets in
which they invest.

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes."
This standard defines the threshold for recognizing the benefits of tax-return
positions in the financial statements as "more-likely-than-not" to be sustained
by the taxing authority and requires measurement of a tax position meeting the
more-likely-than-not criterion, based on the largest benefit that is more than
50 percent likely to be realized. FIN 48 is effective as of the beginning of
the first fiscal year beginning after December 15, 2006, with early application
permitted if no interim financial statements have been issued. At adoption,
companies must adjust their financial statements to reflect only those tax
positions that are more likely-than-not to be sustained as of the adoption
date. The evaluation of the impact that will result from adopting FIN 48 is in
progress.

D. Dividends and Distributions to Shareholders:

Distributions are recorded by the Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. These differences may include the treatment of
non-taxable dividends, market premium and discount, non-deductible expenses,
expiring capital loss carryovers, foreign currency gain or loss, operating
losses and losses deferred due to wash sales. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassifications to capital paid in on shares of beneficial interest. As of
December 31, 2006, the Fund increased undistributed net investment income by
$22,098,318, decreased the accumulated net realized loss by $15,285,877, and
decreased capital paid in on shares of beneficial interest by $37,384,195.

The components of distributable earnings on a tax basis (excluding
unrealized appreciation (depreciation) which is disclosed in the Schedules of
Investments and Securities Sold Short) consist of undistributed ordinary income
of $0 and undistributed long-term capital gains of $0.

The Fund has $141,898,355 of capital loss carryovers, $115,096,193 expiring
in 2010 and $26,802,162 expiring in 2011, which may be used to offset future
capital gains. The Fund may not realize the benefit of these losses to the
extent it does not realize gains on investments prior to the expiration of the
capital loss carryovers. For the fiscal year (the "period") ended December 31,
2006, the Fund utilized losses deferred in prior years of $14,517,336.

In addition, under certain conditions, the Fund may lose the benefit of
these losses to the extent that distributions to shareholders exceed required
distribution amounts as defined under the Internal Revenue Code. Shareholders
may also pay additional taxes on these excess distributions.

E. Foreign Currency Translation:

Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at
the trade date. The gain or loss resulting from a change in currency exchange
rates between the trade and settlement dates of a portfolio transaction is
treated as a gain or loss on foreign currency. Likewise, the gain or loss
resulting from a change in currency exchange rates between the date income is
accrued and paid is treated as a gain or loss on foreign currency. The Fund
does not isolate that portion of the results of operations arising from changes
in exchange rates and that portion arising from changes in the market prices of
securities.

F. Foreign Security Country Determination:

A combination of the following criteria is used to assign the countries of
risk listed in the Schedule of Investments and Securities Sold Short: country
of incorporation, actual building address, primary exchange on which the
security is traded and country in which the greatest percentage of company
revenue is generated.

G. Options:

The Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.

The Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the
proceeds on sales or amounts paid are adjusted by the amount of premium
received. Options written are reported as a liability in the Statement of
Assets and Liabilities and subsequently marked-to-market to reflect the current
value of the option. The risk associated with written options is that the
change in value of options contracts may not correspond to the change in value
of the hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, or if a liquid, secondary market does not
exist for the contracts.

The Fund may purchase options, which are included in the Fund's Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option.

When a purchased option is exercised, the cost of the security is adjusted
by the amount of premium paid. The risk associated with purchased options is
limited to the premium paid.

H. Short Sales:

A short sale is a transaction in which the Fund sells a security it does not
own in anticipation of a decline in market price. To sell a security short, the
Fund must borrow the security. The Fund's

obligation to replace the security borrowed and sold short will be fully
collateralized at all times by the proceeds from the short sale retained by the
broker and by cash and securities deposited in a segregated account with the
Fund's custodian. If the price of the security sold short increases between the
time of the short sale and the time the Fund replaces the borrowed security,
the Fund will realize a loss, and if the price declines during the period, the
Fund will realize a gain. Any realized gain will be decreased, and any realized
loss increased, by the amount of transaction costs. On ex-dividend date,
dividends on short sales are recorded as an expense to the Fund. The collateral
includes the deposits with the broker for securities held short and the value
of the segregated investments held long, as shown in the Schedule of
Investments and Securities Sold Short. Short selling used in the management of
the Fund may accelerate the velocity of potential losses if the prices of
securities sold short appreciate quickly. Stocks purchased may decline in value
at the same time stocks sold short may appreciate in value, thereby increasing
potential losses. At December 31, 2006, there were no securities sold short.

I. Security Lending:

The Fund may loan securities to qualified brokers through an agreement with
State Street Bank and Trust (the "Custodian"). Under the terms of the
agreement, the Fund receives collateral with a market value not less than 100%
of the market value of loaned securities. Collateral is adjusted daily in
connection with changes in the market value of securities on loan. Collateral
may consist of cash, securities issued or guaranteed by the U.S. Government or
its agencies and the sovereign debt of foreign countries. Cash collateral has
been invested in a short-term money market fund. Dividends earned on the
collateral and premiums paid by the borrower are recorded as income by the Fund
net of fees and rebates charged by the Custodian for its services in connection
with this securities lending program. Lending portfolio securities involves a
risk of delay in the recovery of the loaned securities or in the foreclosure on
collateral.

NOTE 3 -- PURCHASES AND SALES OF SECURITIES:

Purchases and sales of securities (excluding U.S. Government and agency
securities and short-term securities) for the period ended December 31, 2006,
were as follows:

Purchases...................... $141,533,864
Sales.......................... 167,196,705
Short sales.................... 5,782,622
Purchases to cover short sales. 32,831,259

There were no purchases or sales of long-term U.S. Government and agency
securities for the period ended December 31, 2006.

NOTE 4 -- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES

a) Investment Advisory Fee: The Investment Advisory Agreement (the
"Agreement") between Phoenix/Zweig Advisers LLC (the "Adviser"), the Fund's
investment adviser, and the Fund provides that, subject to the direction of the
Board of Directors of the Fund and the applicable provisions of the Act, the
adviser is responsible for the actual management of the Fund's portfolio. The
Adviser is a wholly-owned

subsidiary of Phoenix Investment Partners, Ltd. ("PXP"). PXP is an indirect,
wholly-owned subsidiary of The Phoenix Companies, Inc. ("PNX"). The
responsibility for making decisions to buy, sell or hold a particular
investment rests with the Adviser, subject to review by the Board of Directors
and the applicable provisions of the Act. For the services provided by the
Adviser under the Agreement, the Fund pays the Adviser a monthly fee equal, on
an annual basis, to 0.85% of the Fund's average daily net assets. During the
period ended December 31, 2006, the Fund incurred advisory fees of $3,616,231.

Zweig Consulting LLC (the "Sub-Adviser"), which serves as the Sub-Adviser
for the Fund, performs certain asset allocation research and analysis and
provides such advice to the Adviser. The Sub-Adviser's fees are paid by the
Adviser.

b) Administration Fee: Phoenix Equity Planning Corporation ("PEPCO"), an
indirect wholly owned subsidiary of PNX, serves as the Fund's Administrator
(the "Administrator") pursuant to an Administration Agreement. Effective March
1, 2006, the Administrator receives a fee for financial reporting, tax
services, and oversight of the subagent's performance at a rate of 0.065% of
the Fund's average daily net assets. For the period January 1, 2006 though
February 28, 2006, the rate was 0.13% of the Fund's average daily net assets.
During the period ended December 31, 2006, the Fund incurred Administration
fees of $321,415.

c) Directors Fee: The Fund pays each Director who is not an interested
person of the Fund or the Adviser a fee of $10,000 per year plus $1,500 per
Directors' or committee meeting attended, together with the out-of-pocket costs
relating to attendance at such meetings. Any Director of the Fund who is an
interested person of the Fund or the Adviser receives no remuneration from the
Fund.

d) Payment by Affiliate: The Adviser made a voluntary payment on August 25,
2005 in the amount of $131,874 to fully offset the net gains and losses
associated with a violation of investment restrictions.

NOTE 5 -- INDEMNIFICATIONS

Under the Fund's organizational documents, its directors and officers are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, the Fund enters into contracts that contain a
variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these contracts and expects the risk of loss to be remote.

NOTE 6 -- CAPITAL STOCK AND REINVESTMENT PLAN

At December 31, 2006, the Fund had one class of common stock, par value $.10
per share, of which 100,000,000 shares are authorized and 73,233,013 shares are
outstanding.

Registered shareholders may elect to have all distributions paid by check
mailed directly to the shareholder by Computershare as dividend paying agent.
Pursuant to the Automatic Reinvestment and Cash Purchase Plan (the "Plan"),
shareholders not making such election will have all such amounts automatically
reinvested by Computershare, as the Plan agent, in whole or fractional shares
of the Fund, as the case may be. During the years ended December 31, 2006 and
2005, there were no shares issued pursuant to the Plan.

On December 19, 2006, the Fund announced a distribution of $0.151 per share
to shareholders of record on December 29, 2006. This distribution has an
ex-dividend date of January 3, 2007, and is payable on January 8, 2007.

NOTE 7 -- CREDIT RISK AND ASSET CONCENTRATIONS

In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as the Fund's ability to
repatriate such amounts.

The Fund may invest a high percentage of its assets in specific sectors of
the market in its pursuit of a greater investment return. Fluctuations in these
sectors of concentration may have a greater impact on the Fund, positive or
negative, than if the Fund did not concentrate its investments in such sectors.

NOTE 8 -- THE ZWEIG FUND YEAR END RESULTS

Total Return
on Net Asset Net Asset NYSE Premium
Value Value Share Price (Discount)
------------ --------- ----------- ----------

Year ended 12/31/2006......... 14.6% $ 5.99 $ 5.9000 (1.5%)
Year ended 12/31/2005......... 7.9% 5.82 5.2500 (9.8%)
Year ended 12/31/2004......... 10.4% 6.02 5.5500 (7.8%)
Year ended 12/31/2003......... 14.9% 5.69 4.9000 (13.9%)
Year ended 12/31/2002......... (22.8%) 5.46 4.9300 (9.7%)
Year ended 12/31/2001......... (15.0%) 7.96 7.9000 (0.8%)
Year ended 12/31/2000......... (5.1%) 10.32 9.8125 (4.9%)
Year ended 12/31/1999......... 12.9% 12.20 10.0625 (17.5%)
Year ended 12/31/1998......... 6.6% 12.03 10.8125 (10.1%)
Year ended 12/31/1997......... 22.0% 12.63 13.2500 4.9%
Year ended 12/31/1996......... 14.5% 11.45 10.8750 (5.0%)
Year ended 12/31/1995......... 18.3% 11.06 11.2500 1.7%
Year ended 12/31/1994......... (2.7%) 10.33 10.3750 0.4%
Year ended 12/31/1993......... 13.3% 11.68 13.7500 17.7%
Year ended 12/31/1992......... 0.4% 11.36 13.0000 14.4%
Year ended 12/31/1991......... 30.1% 12.40 13.7500 10.9%
Year ended 12/31/1990......... 1.9% 10.48 11.0000 5.0%
Year ended 12/31/1989......... 22.3% 11.43 12.3750 8.3%
Year ended 12/31/1988......... 17.9% 10.35 10.3750 0.2%
Year ended 12/31/1987......... 14.7% 9.73 9.0000 (7.5%)
Inception 10/2/1986-12/31/1986 (0.4%) 9.31 9.1250 (2.0%)

CERTIFICATION (Unaudited)

In accordance with the requirements of the Sarbanes-Oxley Act, the Fund's
CEO (the President of the Fund) and CFO (the Treasurer of the Fund) have filed
the required "Section 302" certifications with the SEC on Form N-CSR.

In accordance with Section 303A of the NYSE listed company manual, the CEO
certification has been filed with the NYSE.

TAX INFORMATION (Unaudited)

For the fiscal year ended December 31, 2006, for federal income tax
purposes, 30.7% of the ordinary income dividends earned by the Fund qualify for
the dividends received deduction for corporate shareholders.

For the fiscal year ended December 31, 2006, the Fund hereby designates
34.1%, or the maximum amount allowable, of its ordinary income dividends to
qualify for the lower tax rates applicable to individual shareholders.

The actual percentage for the calendar year will be designated in the
year-end tax statements.

[LOGO] PRICEWATERHOUSECOOPERS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of The Zweig Fund, Inc.

In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments and securities sold short, and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
The Zweig Fund, Inc. (the "Fund") at December 31, 2006, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 2006 by
correspondence with the custodian and brokers, provides a reasonable basis for
our opinion.

/s/ PricewaterhouseCooper LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 15, 2007

SUPPLEMENTARY PROXY INFORMATION

The Annual Meeting of Shareholders of The Zweig Fund, Inc. was held on May
9, 2006. The meeting was held for the purposes of electing two (2) nominees to
the Board of Directors.

The results of the above matters were as follows:

Directors Votes For Votes Against Votes Withheld Abstentions
--------- ---------- ------------- -------------- -----------

Charles H. Brunie... 78,680,273 N/A 1,584,706 N/A
James B. Rogers, Jr. 78,729,890 N/A 1,535,089 N/A

Based on the foregoing, Charles H. Brunie and James B. Rogers, Jr. were
elected as Directors. The Fund's other Directors who continue in office are
Wendy Luscombe, Alden C. Olson, Ph.D. and R. Keith Walton.

FUND MANAGEMENT

Information pertaining to the Directors and officers of the Fund as of
December 31, 2006 is set forth below. The address of each individual, unless
otherwise noted, is c/o Phoenix/Zweig Advisers LLC, 900 Third Avenue, New York,
NY 10022.

DISINTERESTED DIRECTORS

Number of
Portfolios
in Fund
Term of Office Complex
Name (Age) Address and and Length of Overseen by Principal Occupation(s)
Position(s) with Fund Time Served Director During Past 5 Years and Other Directorships Held
---------------------- ----------------- ----------- ---------------------------------------------------------

Charles H. Brunie........... Term: Until 2009. 2 Director, The Zweig Total Return Fund, Inc. (since
Brunie Associates Served since: 1998); Chairman, Brunie Associates (investments)
600 Third Avenue, 17th Floor 1988. (since April 2001); Oppenheimer Capital (1969-2000);
New York, NY 10016 Chairman (1980-1990), Chairman Emeritus (1990-2000).
DOB: 7/17/30 Chairman Emeritus, Board of Trustees, Manhattan
Director Institute (since 1990); Trustee, Milton and Rose D.
Friedman Foundation for Vouchers (since 1999);
Trustee, Hudson Institute (since 2002); Trustee,
American Spectator (since 2002); Chartered Financial
Analyst (since 1969).

Wendy Luscombe.............. Term: Until 2008. 2 Director of The Zweig Total Return Fund, Inc. (since
480 Churchtown Rd. Served since: 2002); Co-lead Independent Director of the Zweig Total
Craryville, NY 12521 2002. Return Fund, Inc. and of The Zweig Fund, Inc. (since
DOB: 10/29/51 2006); Principal, WKL Associates, Inc. (Real Estate
Director Investment Consultant) (since 1994); Fellow, Royal
Institution of Chartered Surveyors; Member, Chartered
Institute of Arbitrators; Director, Endeavour Real Estate
Securities, Ltd. REIT Mutual Fund (2000-2006); Director,
PXRE, Corp. (reinsurance) (since 1994); Member and
Chairman of Management Oversight Committee,
Deutsche Bank Real Estate Opportunities Fund (since
2003); Trustee Acadia Realty Trust (since 2004).

Alden C. Olson.............. Term: Until 2007. 2 Director of The Zweig Total Return Fund, Inc. (since
2711 Ramparte Path Served since: 1996); Currently retired; Chartered Financial Analyst
Holt, MI 48842 1996. (since 1964); Professor of Financial Management,
DOB: 5/10/28 Investments at Michigan State University (1959 to
Director 1990).

James B. Rogers, Jr......... Term: Until 2009. 2 Director of The Zweig Total Return Fund, Inc. (since
352 Riverside Dr. Served since: 1986); Private investor (since 1980); Chairman, Beeland
New York, NY 10025 1988. Interests (Media and Investments) (since 1980); Regular
DOB: 10/19/42 Commentator on Fox News (since 2002); Author of
Director "Investment Biker: On the Road with Jim Rogers"
(1994), "Adventure Capitalist" (2003) and "Hot
Commodities" (2004); Director, Emerging Markets
Brewery Fund (1993-2002); Director, Levco Series Trust
(1996-2006).

DISINTERESTED DIRECTORS

R. Keith Walton...... Term: Until 2008. 2 Director of The Zweig Total Return Fund, Inc. (since
15 Claremont Avenue Served since: 2004); Co-lead Independent Director of the Zweig Total
New York, NY 10027 2004. Return Fund, Inc. and of The Zweig Fund, Inc. (since
DOB: 9/28/64 2006); Director, Blue Crest Capital Management Funds
Director (since 2006); Executive Vice President and the
Secretary (since 1996) of the University at Columbia
University; Director (since 2002), Member, Executive
Committee (since 2002), Chair, Audit Committee (since
2003), Apollo Theater Foundation, Inc.; Director,
Orchestra of St. Luke's (since 2000); Vice President and
Trustee, The Trinity Episcopal School Corporation
(since 2003); Member (since 1997), Nominating and
Governance Committee Board of Directors (since
2004), Council on Foreign Relations.

INTERESTED DIRECTOR

George R. Aylward............ Term: Until 2007. 2 Director, The Zweig Total Return Fund, Inc. (since
56 Prospect Street Chairman of the 2006); Senior Vice President and Chief Operating
Hartford, CT 06115 Board and Officer, Asset Management, The Phoenix Companies,
DOB: 8/17/64 President Inc. (2004-present); President (since November 2006)
President, Chairman and Chief since and Chief Operating Officer (2004-present), Phoenix
Executive Officer December 2006. Investment Partners, Ltd.; President, certain funds
within the Phoenix Funds Family (since November
2006); Previously, Executive Vice President, Phoenix
Investment Partners, Ltd. (2004-November 2006); Vice
President, Phoenix Life Insurance Company (2002-
2004); Vice President, The Phoenix Companies, Inc.
(2001-2004); Vice President, Finance, Phoenix
Investment Partners, Ltd. (2001-2002); Assistant
Controller, Phoenix Investment Partners, Ltd. (1996-
2001); Executive Vice President, certain funds within
the Phoenix Funds Family (2004-November 2006).

OFFICERS WHO ARE NOT DIRECTORS

Position
with the Fund
Name, Address and and Length of Principal Occupation(s)
Date of Birth Time Served During Past 5 Years and Other Directorships Held
----------------- --------------------- -------------------------------------------------------

Carlton Neel...... Executive Vice Executive Vice President of The Zweig Total Return
900 Third Avenue President Fund, Inc. (since 2003); Senior Vice President and
New York, NY 10022 since: 2003. Portfolio Manager, Phoenix/Zweig Advisers LLC (since
DOB: 12/19/67 Expires: Immediately 2003); Managing Director and Co-Founder, Shelter Rock
following the 2007 Capital Partners, LP (2002-2003); Senior Vice President
Annual Meeting of and Portfolio Manager, Phoenix/Zweig Advisers LLC
Shareholders. (1995-2002); Vice President, JP Morgan & Co. (1990-
1995).

David Dickerson... Senior Vice President Senior Vice President of The Zweig Total Return Fund,
900 Third Avenue since: 2003. Inc. (since 2003); Senior Vice President and Portfolio
New York, NY 10022 Expires: Immediately Manager, Phoenix/Zweig Advisers LLC (since 2003);
DOB: 12/27/67 following the 2007 Managing Director and Co-Founder, Shelter Rock
Annual Meeting of Capital Partners, LP (2002-2003); Vice President and
Shareholders. Portfolio Manager, Phoenix/Zweig Advisers LLC (1993-
2002).

Marc Baltuch...... Vice President and Vice President and Chief Compliance Officer of The
900 Third Avenue Chief Compliance Zweig Total Return Fund, Inc. (since 2004); Chief
New York, NY 10022 Officer Compliance Officer of Phoenix/Zweig Advisers LLC
DOB: 9/23/45 since: 2004. (since 2004); President and Director of Watermark
Expires: Immediately Securities, Inc. (since 1991); Secretary of Phoenix-
following the 2007 Zweig Trust (1989-2003); Secretary of Phoenix-Euclid
Annual Meeting of Market Neutral Fund (1998-2002); Assistant Secretary
Shareholders. of Gotham Advisors, Inc. (1990-2005); Chief Compliance
Officer of the Zweig Companies (since 1989) and of the
Phoenix Funds Complex (since 2004).

Kevin J. Carr..... Secretary and Chief Secretary and Chief Legal Officer of The Zweig Total
One American Row Legal Officer Return Fund, Inc. (since 2005); Vice President and
Hartford, CT 06102 since: 2005. Counsel, Phoenix Life Insurance Company (since 2005);
DOB: 8/30/54 Expires: Immediately Vice President, Counsel, Chief Legal Officer and
following the 2007 Secretary, certain Funds within Phoenix Fund Complex
Annual Meeting of (since 2005); Compliance Officer of Investments and
Shareholders. Counsel, Travelers Life and Annuity Company (January
2005-May 2005); Assistant General Counsel, The
Hartford Financial Services Group (1999-2005).

Moshe Luchins..... Vice President Vice President of The Zweig Total Return Fund, Inc.
900 Third Avenue since: 2004. (since 2004); Associate Counsel (1996-2005), Associate
New York, NY 10022 Expires: Immediately General Counsel (since 2006) of the Zweig Companies.
DOB: 12/22/71 following the 2007
Annual Meeting of
Shareholders.

Nancy Curtiss..... Treasurer Treasurer of The Zweig Total Return Fund, Inc. (since
56 Prospect Street since: 2003. 2003); Vice President, Operations (since 2003); Vice
Hartford, CT 06115 Expires: Immediately President, Fund Accounting (1994-2003) and Treasurer
DOB: 11/24/52 following the 2007 (1996-2003), Phoenix Equity Planning Corporation.
Annual Meeting of Treasurer, multiple funds in Phoenix Fund Complex
Shareholders. (since 1994).

Jacqueline Porter. Vice President and Vice President and Assistant Treasurer of The Zweig
56 Prospect Street Assistant Treasurer Total Return Fund, Inc. (since 2006); Assistant Vice
Hartford, CT 06115 since: 2006. President, Fund Administration and Tax (since 1995),
DOB: 2/19/58 Expires: Immediately Phoenix Equity Planning Corporation. Assistant
following the 2007 Treasurer and Vice President, multiple funds in Phoenix
Annual Meeting of Fund Complex (since 1995).
Shareholders.

KEY INFORMATION

Zweig Shareholder Relations: 1-800-272-2700
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.

REPURCHASE OF SECURITIES

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.

PROXY VOTING INFORMATION (FORM N-PX)

The Adviser and Sub-Adviser vote proxies relating to portfolio securities in
accordance with procedures that have been approved by the Fund's Board of
Directors. You may obtain a description of these procedures, along with
information regarding how the Fund voted proxies during the most recent
12-month period ended June 30, 2006, free of charge, by calling toll-free
1-800-243-1574. This information is also available through the Securities and
Exchange Commission's website at http://www.sec.gov.

FORM N-Q INFORMATION

The Fund files a complete schedule of portfolio holdings with the Securities
and Exchange Commission (the "SEC") for the first and third quarters of each
fiscal year on Form N-Q. Form N-Q is available on the SEC's website at
http://www.sec.gov. Form N-Q may be reviewed and copied at the SEC's Public
Reference Room. Information on the operation of the SEC's Public Reference Room
can be obtained by calling toll-free 1-800-SEC-0330.

QUARTERLY REPORTS

The first and third quarter reports will no longer be mailed to
shareholders. These reports may be obtained by visiting PhoenixFunds.com or by
calling 1-800-272-2700.

OFFICERS AND DIRECTORS
George R. Aylward
President, Chairman and Chief Executive Officer

Carlton Neel
Executive Vice President

David Dickerson
Senior Vice President

Marc Baltuch
Chief Compliance Officer and Vice President

Moshe Luchins
Vice President

Kevin J. Carr
Chief Legal Officer and Secretary

Nancy Curtiss
Treasurer

Jacqueline Porter
Vice President and Assistant 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
One American Row
Hartford, CT 06102

Custodian
State Street Bank and Trust Company
P.O. Box 5501
Boston, MA 02206-5501

Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110

Legal Counsel
Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022

Transfer Agent
Computershare Trust Company, NA
P.O. Box 43010
Providence, RI 02940-3010

--------------------------------------------------------------------------------

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.

PXP4132 Q4-06

Annual Report

Zweig

The Zweig Fund, Inc.

December 31, 2006

[GRAPHIC]

PHOENIX
INVESTMENT PARTNERS, LTD.

Item 2. Code of Ethics.

(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.

(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics described in Item 2(b) of the
instructions for completion of Form N-CSR.

(d) The registrant has not granted any waivers, during the period covered
by this report, including an implicit waiver, from a provision of the
code of ethics that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third
party, that relates to one or more of the items set forth in paragraph
(b) of the instructions for completion of this Item.

Item 3. Audit Committee Financial Expert.

The registrant does not have an audit committee financial expert at this time
because none of the registrant's board of directors meets the technical
definition of such an expert in form N-CSR. The audit committee of the board is
in compliance with applicable rules of the listing requirements for closed-end
fund audit committees, including the requirement that all members of the audit
committee be "financially literate" and that at least one member of the audit
committee have "accounting or related financial management expertise", as
determined by the board.

Item 4. Principal Accountant Fees and Services.

Audit Fees

(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$32,000 for 2006 and $32,000 for 2005.

Audit-Related Fees

(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $1,000 for 2006 and $1,000 for 2005. This represents the
review of the semi-annual financial statements.

Tax Fees

(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $5,025 for 2006 and
$6,350 for 2005.

"Tax Fees" are those primarily associated with review of the Trust's
tax provision and qualification as a regulated investment company
(RIC) in connection with audits of the Trust's financial statement,
review of year-end distributions by the Fund to avoid excise tax for
the Trust, periodic discussion with management on tax issues affecting
the Trust, and reviewing and signing the Fund's federal income and
excise tax returns.

All Other Fees

(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 for 2006 and $0 for 2005.

(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

The Zweig Fund, Inc. (the "Fund") Board has adopted policies and
procedures with regard to the pre-approval of services provided by
PwC. The Audit Committee pre-approves: (i) all audit and non-audit
services to be rendered to the Fund by PwC; and (ii) all non-audit
services to be rendered to the Fund, financial reporting of the Fund
provided by PwC to the Adviser or any affiliate thereof that provides
ongoing services to the Fund (collectively, "Covered Services"). The
Audit Committee has adopted pre-approval procedures authorizing a
member of the Audit Committee to pre-approve from time to time, on
behalf of the Audit Committee, all Covered Services to be provided by
PwC which are not otherwise pre-approved at a meeting of the Audit
committee, provided that such delegate reports to the full Audit
Committee at its next meeting. The pre-approval procedures do not
include delegation of the Audit committee's responsibilities to
management. Pre-approval has not been waived with respect to any of
the services described above since the date on which the Audit
Committee adopted its current pre-approval procedures.

(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:

(b) 100% for 2006; 100% for 2005

(d) Not applicable for 2006; Not applicable for 2005

(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was less than fifty percent.

(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $961,830 for 2006 and $892,561 for 2005.

(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.

Item 5. Audit Committee of Listed registrants.

The registrant has a separately designated audit committee consisting of all
the independent directors of the registrant. Audit Committee Members are:
Charles H. Brunie, Wendy Luscombe, Prof. Alden C. Olson, James B. Rogers and R.
Keith Walton.

Item 6. Schedule of Investments.

Schedule of Investments in securities of unaffiliated issuers as of the close
of the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.

The Proxy Voting Policies are attached herewith.

THE ZWEIG FUND, INC

THE ZWEIG TOTAL RETURN FUND, INC

STATEMENT OF POLICY WITH RESPECT TO PROXY VOTING

I Definitions. As used in this Statement of Policy, the following terms shall
have the meanings ascribed below:

A. "Adviser" refers to Phoenix/Zweig Advisers LLC.

B. "Corporate Governance Matters" refers to changes involving the
corporate ownership or structure of an issuer whose securities are
within a Portfolio Holding, including changes in the state of
incorporation, changes in capital structure, including increases and
decreases of capital and preferred stock issuance, mergers and other
corporate restructurings, and anti-takeover provisions such as
staggered boards, poison pills, and supermajority voting provisions.

C. "Delegate" refers to the Adviser or Subadviser to whom responsibility
has been delegated to vote proxies for the applicable Portfolio
Holding, including any qualified, independent organization engaged by
the Adviser to vote proxies on behalf of such delegated entity.

D. "Fund" shall individually and collectively mean and refer to The Zweig
Fund, Inc. and The Zweig Total Return Fund, Inc., and each of them.

E. "Management Matters" refers to stock option plans and other management
compensation issues.

F. "Portfolio Holding" refers to any company or entity whose securities
is held within the investment portfolio(s) of one or more of the Fund
as of the date a proxy is solicited.

G. "Proxy Contests" refer to any meeting of shareholders of an issuer for
which there are at least two sets of proxy statements and proxy cards,
one solicited by management and the others by a dissident or group of
dissidents.

H. "Social Issues" refers to social and environmental issues.

I. "Takeover" refers to "hostile" or "friendly" efforts to effect radical
change in the voting control of the board of directors of a company.

II. General Policy. It is the intention of the Fund to exercise stock ownership
rights in Portfolio Holdings in a manner that is reasonably anticipated to
further the best economic interests of shareholders of the Fund.
Accordingly, the Fund or its Delegate(s) shall endeavor to analyze and vote
all proxies that are considered likely to have financial implications, and,
where appropriate, to participate in corporate governance, shareholder
proposals, management communications and legal proceedings. The Fund and
its Delegate(s) must also identify potential or actual conflicts of
interests in voting proxies and address any such conflict of interest in
accordance with this Statement of Policy.

III Factors to consider when voting.

A. A Delegate may abstain from voting when it concludes that the effect
on shareholders' economic interests or the value of the Portfolio
Holding is indeterminable or insignificant.

B In analyzing anti-takeover measures, the Delegate shall vote on a
case-by-case basis taking into consideration such factors as overall
long-term financial performance of the target company relative to its
industry competition. Key measures which shall be considered include,
without limitation, five-year annual compound growth rates for sales,
operating income, net income, and total shareholder returns (share
price appreciation plus dividends). Other financial indicators that
will be considered include margin analysis, cash flow, and debit
levels.

C. In analyzing contested elections, the Delegate shall vote on a
case-by-case basis taking into consideration such factors as the
qualifications of all director nominees. The Delegate shall also
consider the independence and attendance record of board and key
committee members. A review of the corporate governance profile shall
be completed highlighting entrenchment devices that may reduce
accountability.

D. In analyzing corporate governance matters, the Delegate shall vote on
a case-by-case basis taking into consideration such factors as tax and
economic benefits associated with amending an issuer's state of
incorporation, dilution or improved accountability associated with
changes in capital structure, management proposals to require a
supermajority shareholder vote to amend charters and bylaws and
bundled or "conditioned" proxy proposals.

E. In analyzing executive compensation proposals and management matters,
the Adviser shall vote on a case-by-case basis taking into
consideration such factors as executive pay and spending on
perquisites, particularly in conjunction with sub-par performance and
employee layoffs.

F. In analyzing proxy contests for control, the Delegate shall vote on a
case-by-case basis taking into consideration such factors as long-term
financial performance of the target company relative to its industry;
management's track record; background to the proxy contest;
qualifications of director nominees (both slates); evaluation of what
each side is offering shareholders as well as the likelihood that the
proposed objectives and goals can be met; and stock ownership
positions.

G. A Delegate shall generally vote against shareholder social matters
proposals.

IV Delegation.

A. In the absence of a specific direction to the contrary from the Board
of Trustees of the Fund, the Adviser will be responsible for voting
proxies for all Portfolio Holdings in accordance with this Statement
of Policy, or for delegating such responsibility as described below.

B. The Adviser delegated with authority to vote proxies for Portfolio
Holdings shall be deemed to assume a duty of care to safeguard the
best interests of the Fund and its shareholders. No Delegate shall
accept direction or inappropriate influence from any other client,
director or employee of any affiliated company and shall not cast any
vote inconsistent with this Statement of Policy without obtaining the
prior approval of the Fund or its duly authorized representative(s).

C. With regard to each Series for which there is a duly appointed
Subadviser acting pursuant to an investment advisory agreement
satisfying the requirements of Section 15(a) of the Investment Company
Act of 1940, as amended, and the rules thereunder, the Subadviser may,
pursuant to delegated authority from the Adviser, vote proxies for
Portfolio Holdings with regard to the Series or portion of the assets
thereof for which the Subadviser is responsible. In such case, the
Subadviser shall vote proxies for the Portfolio Holdings in accordance
with Sections II, III and V of this Statement of Policy, provided,
however, that the Subadviser may vote proxies in accordance with its
own proxy voting policy/procedures ("Subadviser Procedures") if the
following two conditions are satisfied: (1) the Adviser must have
approved the Subadviser Procedures based upon the Adviser's
determination that the Subadviser Procedures are reasonably designed
to further the best economic interests of the affected Fund
shareholders, and (2) the Subadviser Procedures are reviewed and
approved annually by the Board of Trustees. The Subadviser will
promptly notify the Adviser of any material changes to the Subadviser
Procedures. The Adviser will periodically review the votes by the
Subadviser for consistency with this Statement of Policy.

V. Conflicts of Interest

A. The Fund and its Delegate(s) seek to avoid actual or perceived
conflicts of interest in the voting of proxies for Portfolio Holdings
between the interests of Fund shareholders, on one hand, and those of
the Adviser, Delegate, principal underwriter, or any affiliated person
of the Fund, on the other hand. The Board of Trustees may take into
account a wide array of factors in determining whether such a conflict
exists, whether such conflict is material in nature, and how to
properly address or resolve the same.

B. While each conflict situation varies based on the particular facts
presented and the requirements of governing law, the Board of Trustees
or its delegate(s) may take the following actions, among others, or
otherwise give weight to the following factors, in addressing material
conflicts of interest in voting (or directing Delegates to vote)
proxies pertaining to Portfolio Holdings: (i) rely on the
recommendations of an established, independent third party with
qualifications to vote proxies such as Institutional Shareholder
Services; (ii) vote pursuant to the recommendation of the proposing
Delegate; (iii) abstaining; or (iv) where two or more Delegates
provide conflicting requests, vote shares in proportion to the assets
under management of the each proposing Delegate.

C. The Adviser shall promptly notify the President of the Fund once any
actual or potential conflict of interest exists and their
recommendations for protecting the best interests of Fund's
shareholders. No Adviser shall waive any conflict of interest or vote
any conflicted proxies without the prior written approval of the Board
of Trustees or the President of the Fund pursuant to section D of this
Article.

D. In the event that a determination, authorization or waiver under this
Statement of Policy is requested at a time other than a regularly
scheduled meeting of the Board of Trustees, the President of the Fund
shall be empowered with the power and responsibility to interpret and
apply this Statement of Policy and provide a report of his or her
determinations at the next following meeting of the Board of Trustees.

VI. Miscellaneous.

A. A copy of the current Statement of Policy with Respect to Proxy Voting
and the voting records for the Fund reconciling proxies with Portfolio
Holdings and recording proxy voting guideline compliance and
justification, shall be kept in an easily accessible place and
available upon request.

B. The Adviser shall present a report of any material deviations from
this Statement of Policy at every regularly scheduled meeting of the
Board of Trustees and shall provide such other reports as the Board of
Trustees may request from time to time. The Adviser shall provide to
the Fund or any shareholder a record of its effectuation of proxy
voting pursuant to this Statement of Policy at such times and in such
format or medium as the Fund shall reasonably request. The Adviser
shall be solely responsible for complying with the disclosure and
reporting requirements under applicable laws and regulations,
including, without limitation, Rule 206(4)-6 under the Investment
Advisers Act of 1940. The Adviser shall gather, collate and present
information relating to the its proxy voting activities of those of
each Delegate in such format and medium as the Fund shall determine
from time to time in order for the Fund to discharge its disclosure
and reporting obligations pursuant to Rule 30b1-4 under the Investment
Company Act of 1940, as amended.

C. The Adviser shall pay all costs associated with proxy voting for
Portfolio Holdings pursuant to this Statement of Policy and assisting
the Fund in providing public notice of the manner in which such
proxies were voted.

D. The Adviser may delegate its responsibilities hereunder to a proxy
committee established from time to time by the Adviser, as the case
may be. In performing its duties hereunder, the Adviser, or any

duly authorized committee, may engage the services of a research
and/or voting adviser or agent, the cost of which shall be borne by
such entity.

This Statement of Policy shall be presented to the Board of Trustees
annually for their amendment and/or approval.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a)(1) Identification of Portfolio Manager(s) or Management Team Members and
Description of Role of Portfolio Manager(s) or Management Team Members

Following are the names, titles and length of service of the person or
persons employed by or associated with the registrant or an investment
adviser of the registrant who are primarily responsible for the
day-to-day management of the registrant's portfolio ("Portfolio
Manager") and each Portfolio Manager's business experience during the
past 5 years as of March 9, 2007: Carlton Neel and David Dickerson have
served as Co-Portfolio Managers of the Zweig Fund, Inc., a closed end
fund managed by Phoenix/Zweig Advisers LLC (the "Fund") since April 1,
2003. Mr. Neel and Mr. Dickerson are Senior Vice Presidents of
Phoenix/Zweig Advisers LLC ("PZA") and Euclid Advisors, LLC ("Euclid"),
a subsidiary of PZA. Mr. Neel and Mr. Dickerson were previously employed
by PZA and managed the Phoenix Market Neutral Fund from April 2000
through June 2002. Since April 1, 2003, they have served as Portfolio
Managers for The Zweig Total Return Fund, Inc., a closed-end fund
managed by PZA, and as Portfolio Managers for the Phoenix Small-Cap
Value Fund and Phoenix Market Neutral Fund, two funds managed by Euclid.
For the period from July 2002 until returning to PZA on April 1, 2003,
Mr. Neel and Mr. Dickerson co-founded and managed a hedge fund.

Mr. Neel previously served as Senior Portfolio Manager for a number of
the former Phoenix-Zweig mutual funds from 1995 until July 2002.

Mr. Dickerson began his investment career at the Zweig Companies in 1993.

(a)(2) Other Accounts Managed by Portfolio Manager(s) or Management Team Member
and Potential Conflicts of Interest

Other Accounts Managed by Portfolio Manager(s) or Management Team Member

The following information is provided as of the fiscal year ended
December 31, 2006.

Mr. Neel and Mr. Dickerson are responsible for the day-to-day management
of other portfolios of other accounts, namely The Zweig Total Return
Fund, Inc., Phoenix Small-Cap Value Fund and Phoenix Market Neutral
Fund. For both Mr. Neel and Mr. Dickerson, the following are tables
which provide the number of other accounts managed within the Type of
Accounts and the Total Assets for each Type of Account. Also provided
for each Type of Account is the number of accounts and the total assets
in the accounts with respect to which the advisory fee is based on the
performance of the account.

No. of Total Assets
Accounts in Accounts
where where
Name of Total Advisory Advisory
Portfolio No. of Fee Fee
Manager or Type of Accounts is Based on is Based on
Team Member Accounts Managed Total Assets Performance Performance
----------- --------------------------------- -------- ------------ ----------- ------------

David Dickerson Registered Investment Companies: 3 $773.3 mil None None
Other Pooled Investment Vehicles: None None None None
Other Accounts: None None None None

Carlton Neel Registered Investment Companies: 3 $773.3 mil None None
Other Pooled Investment Vehicles: None None None None
Other Accounts: None None None None

Potential Conflicts of Interests

There may be certain inherent conflicts of interest that arise in
connection with the Mr. Neel's and Mr. Dickerson's management of each
Fund's investments and the investments of any other accounts he manages.
Such conflicts could arise from the aggregation of orders for all
accounts managed by a particular portfolio manager, the allocation of
purchases across all such accounts, the allocation of IPOs and any soft
dollar arrangements that the Adviser may have in place that could
benefit the Funds and/or such other accounts. The Board of
Trustees/Directors has adopted on behalf of the Funds policies and
procedures designed to address any such conflicts of interest to ensure
that all transactions are executed in the best interest of the Funds'
shareholders. The Advisers and Subadviser are required to certify their
compliance with these procedures to the Board of Trustees on a quarterly
basis. There have been no material compliance issues with respect to any
of these policies and procedures during the Funds' most recent fiscal
year ended December 31, 2006. Additionally, there are no material
conflicts of interest between the investment strategy of a Fund and the
investment strategy of other accounts managed by Mr. Neel and
Mr. Dickerson since portfolio managers generally manage funds and other
accounts having similar investment strategies.

(a)(3) Compensation Structure of Portfolio Manager(s) or Management Team Members

For the most recently completed fiscal year ended December 31, 2006,
following is a description of Mr. Neel's and Mr. Dickerson's
compensation structure as portfolio managers of PZA and Euclid.

Phoenix Investment Partners, Ltd. and its affiliated investment
management firms (collectively, "PXP"), believe that the firm's
compensation program is adequate and competitive to attract and retain
high-caliber investment professionals. Investment professionals at PXP
receive a competitive base salary, an incentive bonus opportunity and a
benefits package. Managing Directors and portfolio investment
professionals who supervise and manage others also participate in a
management incentive program reflecting their personal contribution and
team performance. Highly compensated individuals can also take advantage
of a long-term Incentive Compensation program to defer their
compensation and reduce tax implications.

The bonus package for portfolio managers is based upon how well the
individual manager meets or exceeds assigned goals and subjective
assessment of contribution to the team effort. Their incentive bonus
also reflects a performance component for achieving and/or exceeding
performance competitive with

peers managing similar strategies. Such component is further adjusted to
reward investment personnel for managing within the stated framework and
for not taking unnecessary risks. This ensures that investment personnel
will remain focused on managing and acquiring securities that correspond
to a fund's mandate and risk profile. It also avoids the temptation for
portfolio managers to take on more risk and unnecessary exposure to
chase performance for personal gain.

Finally, Portfolio Managers and investment professionals may also
receive The Phoenix Companies, Inc. ("PNX") stock options and/or be
granted PNX restricted stock at the direction of the parent's Board of
Directors.

Following is a more detailed description of the compensation structure
of the Fund's portfolio managers.

Base Salary. Each Portfolio Manager is paid a fixed base salary, which
is determined by PXP and is designed to be competitive in light of the
individual's experience and responsibilities. PXP management uses
compensation survey results of investment industry compensation
conducted by an independent third party in evaluating competitive market
compensation for its investment management professionals.

Incentive Bonus. Generally, the current Performance Incentive Plan for
portfolio managers at PXP is made up of three components:

(1)Seventy percent of the target incentive is based on achieving
investment area investment goals and individual performance. The
Investment Incentive pool will be established based on actual
pre-tax investment performance compared with specific peer group
or index measures established at the beginning of each calendar
year. Performance of the funds managed is measured over one,
three and five-year periods against specified benchmarks and/or
peer groups for each fund managed. Performance of the PNX general
account and growth of revenue, if applicable to a particular
portfolio manager, is measured on a one-year basis. Generally,
individual manager's participation is based on the performance of
each fund/account managed as weighted roughly by total assets in
each of those funds/accounts.

(2)Fifteen percent of the target incentive is based on the
profitability of the investment management division with which
the portfolio manager is associated. This component of the plan
is paid in restricted stock units of The Phoenix Companies, Inc.,
which vest over three years.

(3)Fifteen percent of the target incentive is based on the portfolio
manager's investment area's competencies and on individual
performance. This pool is funded based on The Phoenix Companies,
Inc.'s return on equity.

The Performance Incentive Plan applicable to some portfolio managers may
vary from the description above. For instance, plans applicable to
certain portfolio managers (i) may specify different percentages of
target incentive that is based on investment goals and individual
performance and on The Phoenix Companies, Inc. return on equity,
(ii) may not contain the component that is based on the profitability of
the management division with which the portfolio manager is associated,
or (iii) may contain a guarantee payout percentage of certain portions
of the Performance Incentive Plan.

Long-Term Incentive Bonus. Certain portfolio managers are eligible for a
long-term incentive plan that is paid in restricted stock units of The
Phoenix Companies, Inc. which vest over three years. Awards under this
plan are contingent upon PNX achieving its cash return on equity
objective, generally over a three-year period. Target award
opportunities for eligible participants are determined by PNX's
Compensation Committee.

Other Benefits. Portfolio managers are also eligible to participate in
broad-based plans offered generally to the firm's employees, including
broad-based retirement, 401(k), health and other employee benefit plans.

(a)(4) Disclosure of Securities Ownership

For the most recently completed fiscal year ended December 31, 2006,
beneficial ownership of shares of the Fund by Messrs. Dickerson and Neel
is as follows. Beneficial ownership was determined in accordance with
rule 16a-1(a)(2) under the Securities Exchange Act of 1934 (17 CFR
240.161-1(a)(2)).

Name of Portfolio Dollar ($) Range of
Manager or Fund Shares
Team Member Beneficially Owned
----------------- ------------------------
David Dickerson $50,001 - $100,000
Carlton Neel $50,001 - $100,000

(b) Not applicable.

Item 9.Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.

Not applicable.

Item 10.Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.

Item 11.Controls and Procedures.

(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).

(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

Item 12. Exhibits.

(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

(registrant) The Zweig Fund, Inc.

By (Signature and Title)* /s/ George R. Aylward
---------------------
George R. Aylward, President
(principal executive officer)

Date 3/9/07

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title)* /s/ George R. Aylward
---------------------
George R. Aylward, President
(principal executive officer)

Date 3/9/07

By (Signature and Title)* /s/ Nancy G. Curtiss
--------------------
Nancy G. Curtiss, Treasurer
(principal financial officer)

Date 3/9/07
--------
* Print the name and title of each signing officer under his or her signature.