As filed with the Securities and Exchange Commission on September 8, 2016
Securities and Exchange Commission
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement Under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
The Zweig Fund, Inc.
(Name of Subject Company [Issuer])
The Zweig Fund, Inc.
(Name of Filing Persons)
Common Stock, Par Value $0.10 Per Share
(Title of Class of Securities)
989834205
(CUSIP Number of Class of Securities)
101 Munson
Street
Greenfield, MA 01301-9683
(Address of Principal Executive Office)
Telephone Number, Including Area Code:
(800) 272-2700
William Renahan, Esq.
Vice President, Chief Legal Officer &
Secretary for
the Registrant
100 Pearl Street
Hartford, CT 06103-4506
(Name and Address of Agent for Service)
Copy to:
Christopher
P. Harvey, Esq.
Dechert LLP
One International Place
40th Floor 100 Oliver Street
Boston, MA 02110
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement)
Calculation of Filing Fee
Transaction Valuation* | Amount Of Filing Fee | |
Not Applicable | Not Applicable |
* | No filing fee is required because this filing includes only preliminary communications made before the commencement of a tender offer. |
¨ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
Amount Previously Paid: Not Applicable | Filing Party: Not Applicable |
Form or Registration No.: Not Applicable | Date Filed: Not Applicable |
x | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
¨ | third party tender offer subject to Rule 14d-1. | |
x | issuer tender offer subject to Rule 13e-4. | |
¨ | going-private transaction subject to Rule 13e-3. | |
¨ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer. ¨
Registration
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Valid Signature
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Corporate Accounts | | | ||
(1)
ABC Corp.
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| | ABC Corp. | |
(2)
ABC Corp.
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| | John Doe, Treasurer | |
(3)
ABC Corp.
c/o John Doe, Treasurer
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| | John Doe |
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(4)
ABC Corp. Profit Sharing Plan
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| | John Doe, Trustee | |
Partnership Accounts | | | ||
(1)
The XYZ partnership
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| | Jane B. Smith, Partner | |
(2)
Smith and Jones, limited partnership
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| | Jane B. Smith, General Partner | |
Trust Accounts | | | ||
(1)
ABC Trust
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| | Jane B. Doe, Trustee | |
(2)
Jane B. Doe, Trustee
u/t/d 12/28/78
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| | Jane B. Doe |
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Custodial or Estate Accounts | | | ||
(1)
John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA
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| | John B. Smith |
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(2)
Estate of John B. Smith
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| | John B. Smith, Jr., Executor | |
Fund
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Year to date ended
September 30, 2016 based on NAV |
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One Year ended
September 30, 2016 based on NAV |
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Three Year ended
September 30, 2016 based on NAV |
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Five Year ended
September 30, 2016 based on NAV |
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DCA | | | | | | ||||||||
ZF | | | | | | ||||||||
Difference | | | | | |
Fund
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Year to date ended
September 30, 2016 based on Market Price |
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One Year ended
September 30, 2016 based on Market Price |
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Three Year ended
September 30, 2016 based on Market Price |
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Five Year ended
September 30, 2016 based on Market Price |
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DCA | | | | | | ||||||||
ZF | | | | | | ||||||||
Difference | | | | | |
| | THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. | | |
| | | | | 5 | | | |
| | | | | 5 | | | |
| | | | | 5 | | | |
| | | | | 11 | | | |
| | | | | 23 | | | |
| | | | | 36 | | | |
| | | | | 37 | | | |
| | | | | 39 | | | |
| | | | | 40 | | | |
| | | | | 41 | | | |
| | | | | 43 | | | |
| | | | | 44 | | | |
| | | | | 44 | | | |
| | | | | 46 | | | |
| | | | | 65 | | | |
| | | | | 67 | | | |
| | | | | 71 | | | |
| | | | | 72 | | | |
| | | | | 72 | | | |
| | | | | 72 | | | |
| | | | | 76 | | | |
| | | | | 83 | | | |
| | | | | 83 | | | |
| | | | | 84 | | | |
| | | | | A-1 | | | |
| | | | | B-1 | | | |
| | | | | C-1 | | |
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DCA
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ZF(a)
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DCA Pro Forma
Combined Fund(b) |
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Shareholder Transactions | | | | | ||||||
Maximum Sales Load (as a percentage of the offering price) imposed on purchases of common shares
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None
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None
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None
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Annual Total Expenses (as a percentage of average net assets attributable to common shares)
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Investment Management Fees(c)
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1.15%
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1.07%
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1.15%
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Administration Fees
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0.18%
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0.08%
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0.18%
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Interest and Fees on Leverage
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0.40%
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0.21%
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0.40%
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Dividend and Interest Expense on Shorts
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0.00%
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0.09%
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0.00%
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Acquired Fund Fees and Expenses
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0.01%
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0.02%
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0.01%
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Other Expenses
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0.33%
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0.34%
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0.27%
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Total Annual Expenses
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2.07%
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1.81%
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2.01%
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1 Year
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3 Years
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5 Years
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10 Years
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DCA (Acquiring Fund)
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| | | $ | 21 | | | | | $ | 65 | | | | | $ | 111 | | | | | $ | 240 | | |
ZF (Acquired Fund)
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| | | $ | 18 | | | | | $ | 57 | | | | | $ | 98 | | | | | $ | 213 | | |
Pro Forma Combined Fund
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| | | $ | 20 | | | | | $ | 63 | | | | | $ | 108 | | | | | $ | 234 | | |
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DCA
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ZF(a)
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DCA Pro Forma
Combined Fund(b) |
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Shareholder Transactions | | | | | ||||||
Maximum Sales Load (as a percentage of the offering price) imposed on purchases of common shares
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None
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None
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None
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Annual Total Expenses (as a percentage of average net assets attributable to common shares)
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Investment Management Fees(c)
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1.15%
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1.15%
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1.15%
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Administration Fees
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0.18%
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0.09%
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0.18%
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Interest and Fees on Leverage
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0.40%
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0.40%
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0.40%
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Acquired Fund Fees and Expenses
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0.01%
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0.02%
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0.01%
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Other Expenses
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0.33%
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0.35%
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0.27%
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Total Annual Expenses
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2.07%
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2.01%
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2.01%
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1 Year
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3 Years
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5 Years
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10 Years
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DCA (Acquiring Fund)
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| | | $ | 21 | | | | | $ | 65 | | | | | $ | 111 | | | | | $ | 240 | | |
ZF (Acquired Fund)
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| | | $ | 20 | | | | | $ | 63 | | | | | $ | 108 | | | | | $ | 234 | | |
Pro Forma Combined Fund
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| | | $ | 20 | | | | | $ | 63 | | | | | $ | 108 | | | | | $ | 234 | | |
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DCA
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ZF
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Organization | | | DCA is a Delaware statutory trust registered as a non-diversified, closed-end management investment company under the 1940 Act. | | | ZF is a Maryland corporation registered as a diversified, closed-end management investment company under the 1940 Act. | |
Fiscal Year End | | | November 30 | | | December 31 | |
Investment Advisory Fee | | | DCA pays its adviser, Virtus Investment Advisers, Inc., a monthly fee at an annual rate of 0.85% of the Fund’s average daily managed assets. | | | ZF pays its adviser, Virtus Investment Advisers, Inc., a monthly fee at an annual rate of 0.85% of the Fund’s average daily managed assets. | |
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DCA
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ZF
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Administrative Fee | | | DCA pays Virtus Fund Services, LLC an administration fee of 0.10%. | | | ZF pays Virtus Fund Services, LLC an administration fee of 0.065%. | |
Net Assets as of June 30, 2016 | | | $136 million | | | $243 million | |
Listing | | |
NYSE under the symbol “DCA”
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| | NYSE under the symbol “ZF” | |
Leverage | | | DCA has entered into a Credit Agreement with a commercial bank that allows the Fund to borrow cash from the bank, up to a limit of $55 million which may be increased to $75 million under certain circumstances. As of June 30, 2016, DCA had $43.5 million in leverage outstanding. | | | ZF employs leverage in the form of borrowing on margin and/or using proceeds from short positions. As of June 30, 2016, ZF had $42.163 million in leverage outstanding. | |
DCA
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ZF
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Differences
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Total return, consisting of both capital appreciation and current income. | | | Capital appreciation, with income as a secondary objective. | | | ZF has comparatively greater focus on capital appreciation with income as secondary objective. | |
DCA
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ZF
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Differences
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Investment Universe: The Fund invests globally in equity securities of owners/operators of infrastructure and across 14 sectors of the fixed income markets currently identified to generate high current income and total return. Currently, and subject to change at the discretion of the Fund’s portfolio managers, 60% of investments are allocated to equities and 40% to fixed income. The Fund also pursues an options income strategy whereby it purchases and sells out-of-the money puts and calls, creating an options spread. | | | Investment Universe: The Fund invests primarily in equity securities, but may use the following investment methods when such use is deemed appropriate: purchasing and selling stock index and other futures contracts and purchasing options on such futures; purchasing and writing listed put and call security options and options on stock indexes; short sales of securities; borrowing from banks to purchase securities; investing in securities of exchange traded funds, foreign issuers and closed-end investment companies; and lending portfolio securities to brokers, dealers, banks or other recognized institutional borrowers of securities. Currently, and subject to change at the discretion of the Fund’s portfolio managers, 60% of investments are allocated to equities and 40% to fixed income. The Fund also pursues an options income strategy whereby it purchases and sells out-of-the money puts and calls, creating an options spread. | | | DCA focuses its equity investments in infrastructure. | |
Acting as Underwriter: The Fund may not act as an underwriter of securities of other issuers, except to the extent that the Fund might be considered an underwriter | | | Acting as Underwriter: The Fund may not underwrite securities of other issuers except insofar as it might be deemed to be an underwriter for purposes of the | | | No material differences. | |
DCA
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ZF
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Differences
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within the meaning of the Securities Act of 1933 (the “1933 Act”) in the disposition of securities. | | | Securities Act of 1933, as amended, in the resale of any securities held in its own portfolio. | | | | |
Cash Equivalents: The Fund’s cash reserves, held to provide sufficient flexibility to take advantage of new opportunities for investments and for other cash needs, will be invested in money market instruments. Money market instruments in which the Fund may invest its cash reserves will generally consist of obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities and such obligations which are subject to repurchase agreements and commercial paper. | | | Cash Equivalents: No equivalent policy. | | | ZF intends to be fully invested at all possible times. | |
Closed-end Investment Companies and Exchange Traded Funds: No equivalent policy.
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| | Closed-end Investment Companies and Exchange Traded Funds: The Fund may invest in passively managed registered open-end investment companies or other baskets of securities, such as unit investment trusts, which trade on a national securities exchange or NASDAQ and are commonly called exchange-traded funds (“ETFs”). These investments represent shares of ownership in ETFs that hold portfolios of securities which are designed to generally correspond to and closely track the price and yield performance of an index of securities. Accordingly, ETFs have risks similar to those of stocks and are subject to market volatility. Investment returns may fluctuate so that invested shares, when redeemed or sold, may be worth more or less than their original cost. ETFs may include, among others, the PowerShares QQQ, Standard & Poor’s Depositary Receipts (SPDRS), the DIAMONDS Trust, and other ETF’s as determined from time to time by | | | DCA’s investment in other funds is limited to its investment in money market funds for cash management or defensive investment purposes. | |
DCA
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ZF
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Differences
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| | | the Investment Adviser.The Fund may also invest in other closed-end investment companies if the Adviser believes that such investments will further the Fund’s investment objective. If the Fund purchases shares of another investment company at a discount which subsequently declines, the performance of such investment generally would be better than if the Fund had purchased the underlying portfolio investments of such other investment company. Such investments in other investment companies will constitute less than 10% of the Fund’s net assets. | | | | |
Common Stock: The Fund may invest in Common stock. Common stock represents the residual ownership interest in the issuer. | | |
Common Stock: The Fund may invest in Common stock.
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No material differences.
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Convertible Securities: The Fund may invest in convertible securities and synthetic convertible securities. Convertible securities include bonds, debentures, notes, preferred stocks and other securities that entitle the holder to acquire common stock or other equity securities of the same or a different issuer. | | | Convertible Securities: The Fund may invest in convertible securities and synthetic convertible securities. | | | No material differences. | |
Credit Quality: With respect to the portion of its assets allocated to preferred securities and debt securities, the Fund may invest without limit in securities that at the time of investment are rated below investment grade (Baa or lower) by Moody’s Investors Services Inc. (“Moody’s”), (BBB or lower) by Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. (“S&P”), or an equivalent rating by a nationally recognized statistical rating agency or that are unrated but judged to be below investment grade by the Adviser. | | | Credit Quality: Non-convertible debt securities other than U.S. Government Securities are expected to be limited to those that are investment grade, as of the date of purchase. The Fund does not currently own, and has no current plans to acquire, any bonds which are not investment grade. | | | ZF debt investment is limited to investment grade. | |
DCA
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ZF
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Differences
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Debt Securities: The Fund may invest in debt securities. The Fund may also invest in loans and loan participations. The Fund may invest in debt securities of any rating, including below investment grade and unrated debt securities. | | | Debt Securities: The Fund may also invest in bonds or other forms of debt instruments that appear to present opportunities for capital appreciation through anticipated or potential decreases in interest rates or market recognition of improved creditworthiness. These instruments may include U.S. Government Securities, as well as other bonds or forms of fixed-income securities. The Investment Adviser will select debt securities primarily on the basis of certain monetary analysis techniques and indicators. Non-convertible debt securities other than U.S. Government Securities are expected to be limited to those that are investment grade, as of the date of purchase. The Fund has no current plans to acquire any bonds which are not investment grade. | | | ZF does not invest in loans and loan participations, and debt investment is limited to investment grade. | |
Derivatives: The Fund may use various derivative instruments, such as exchange-listed and over-the-counter put and call options, future contracts, options on futures contracts, swaps, caps, floors or collars, to earn income, generate investment return, facilitate portfolio management and mitigate risks. The Fund may also seek to gain exposure to securities, indices or baskets of securities by investing in derivative instruments such as swap agreements. | | | Derivatives: In an effort to meet the Fund’s investment objective, the Fund may use the following investment methods when such use is deemed appropriate: purchasing and selling stock index and other futures contracts and purchasing options on such futures, and purchasing and writing listed put and call security options and options on stock indexes. | | | DCA may invest more extensively in derivatives. | |
Emerging Markets: The Fund may invest in securities of issuers located or doing business in developing or “emerging market” countries. The Adviser has broad discretion to identify and invest in countries that it considers to qualify as emerging market countries. | | | Emerging Markets: No equivalent policy. | | | ZF does not generally invest in these securities. | |
DCA
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ZF
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Differences
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Foreign Issuers: The Fund may invest without limit in securities of foreign issuers. The Fund may seek to gain exposure to foreign issuers by investing in derivative instruments, including swap agreements. | | | Foreign Securities: The Fund may invest up to 20% of its net assets in securities of foreign issuers. | | | ZF may invest up to 20% of net assets, while DCA may invest without limit. | |
Forward Foreign Currency Contracts: In the event that the Funds execute a foreign security transaction, the Funds may enter into forward foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency. | | | Foreign Currency Transactions: The Fund may also enter into foreign currency transactions in connection with its investment activity in foreign securities. | | | No material differences. | |
Illiquid Securities: The Fund may invest without limit in illiquid securities (i.e. securities that are no readily marketable). Illiquid securities may include, but are not limited to, restricted securities, securities that may only be resold pursuant to Rule 144A under the 1933 Act, as amended and repurchase agreements with maturities in excess of seven days. Illiquid securities may also include interests in senior, senior subordinated or subordinated debt obligations. | | | Illiquid Securities: No equivalent policy. | | | ZF does not generally invest in these securities. | |
Industry Concentration: The Fund may not purchase any security if, as a result, 25% or more of its total assets (taken at current value) would be invested in securities of issuers having their principal business activities in the same industry. | | | Industry Concentration: The Fund may not purchase securities which would cause 25% or more of its total assets at the time of such purchase to be concentrated in the securities of issuers engaged in any one particular industry or group of related industries. This investment restriction does not apply to investments in U.S. Government Securities. | | | No material differences. | |
Interest Rate Hedging Transactions: The Fund may enter into interest rate hedging transactions to hedge against interest rate risks inherent in its underlying investments and use of leverage. | | |
Interest Rate Hedging Transactions: No equivalent policy.
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| | ZF invests primarily in equity securities, so interest rate hedging is less significant than for DCA. | |
DCA
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ZF
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Differences
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Lending: The Fund may not make loans, except through the lending of securities held by it (but not to exceed a value of one-third of total assets), through the use of repurchase agreements, and by the purchase of debt securities, CMBS, commercial mortgages and mortgage loan participations. | | | Lending: The Fund may not make loans of money, except to the extent permitted by the Investment Company Act of 1940, as amended. The Fund may lend portfolio securities, generally on a short-term basis, to brokers or dealers in corporate or governmental securities, banks or other institutional borrowers of securities, and financial institutions as a means of earning income. A borrower of securities from the Fund must maintain with the Fund cash or U.S. Government Securities equal to at least 100% of the market value of the securities borrowed. The Fund may not lend portfolio securities if such loan would cause the aggregate amount of all outstanding securities loans to exceed 20% of the current market value of the Fund’s net assets. | | | No material differences. | |
Leverage: The Fund may use leverage through bank borrowings, reverse repurchase agreements or other transactions involving indebtedness or through the issuance of preferred shares. The Fund may also enter into derivatives transactions, including total return swaps, that may in certain circumstances produce effects similar to leverage, although such leveraging effect is not limited by the percentage restrictions contained in this paragraph, provided that the Fund “covers” its obligations under such transactions. See “Leverage.”The Fund may vary its use of leverage in response to changing market conditions and the Fund may significantly reduce or not utilize leverage for a period of time if it determines that the costs of leverage either would exceed the return that it anticipates on the securities | | | Leverage: The Fund may from time to time increase its ownership of securities above the amounts otherwise possible by borrowings from banks on an unsecured basis and investing the borrowed funds. In addition, the Fund may borrow to finance share repurchase or tender offer transactions when its shares are trading at a discount of 10% or more from their net asset value. Any such borrowing will be made only from banks, and pursuant to the requirements of the 1940 Act, will only be made to the extent that the value of the Fund’s total assets, less its liabilities other than borrowings, is equal to at least 300% of all borrowings including the proposed borrowing. The Fund also employs leverage in the form of borrowing on margin and/or using proceeds from shorts. The Fund may enter | | | DCA may use more extensive forms of leverage. | |
DCA
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ZF
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Differences
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purchased with the leverage proceeds or would require investment in securities with a higher risk profile than is desirable. The Fund will not use leverage if it anticipates that a leveraged capital structure would result in a lower return to shareholders than the Fund could obtain over time without leverage. | | | from time to time into reverse repurchase agreements. | | | | |
Mortgage-Related and Asset Backed Securities: The Fund may invest in mortgage-related and asset-backed securities including mortgage pass-through securities, CMBS, CRE CDOs, CLOs and other securities that directly or indirectly represent a participation in, or are secured by or payable from, mortgage loans on real property or other assets. These investments may include subordinate classes including the “equity” or first loss class. | | |
Mortgage-Related and Asset Backed Securities: No equivalent policy.
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| | ZF does not invest in these securities. | |
Preferred Securities: The Fund may invest in preferred securities and convertible preferred securities. Preferred securities pay fixed or floating dividends to investors and have “preference” over common stock in payment of dividends and liquidation of a company’s assets. | | | Preferred Securities: The Fund may invest in preferred securities and convertible preferred securities. | | | No material differences. | |
Real Estate: The Fund may not purchase or sell real estate, except that the Fund may invest in securities of real estate companies, including real estate investment trusts (“REITs”) and securities secured by real estate or interests therein (including commercial mortgage-backed securities (“CMBS”) and commercial mortgages), and the Fund may hold and sell real estate or mortgages on real estate acquired through default, liquidation, or other distributions of an interest in real estate as a result of the Fund’s ownership of such securities. | | | Real Estate: The Fund may not purchase or sell real estate; provided that the Fund may invest in securities secured by real estate or real estate interests or issued by companies which invest in real estate or real estate interests. | | | No material differences. | |
DCA
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ZF
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Differences
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Repurchase Agreements: In a repurchase agreement, the Fund purchases a security and simultaneously commits to sell that security back to the original seller at an agreed-upon price. The resale price reflects the purchase price plus an agreed-upon incremental amount that is unrelated to the coupon rate or maturity of the purchased security. As protection against the risk that the original seller will not fulfill its obligation, the securities are held in a separate account at a bank, marked-to-market daily and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to a fund in connection with bankruptcy proceedings), the Fund will engage in repurchase agreement transactions only with parties whose creditworthiness has been reviewed and found satisfactory by the Adviser. | | | Repurchase Agreements: The Fund may from time to time acquire U.S. Government Securities and concurrently enter into so-called “repurchase agreements” with the seller, a member bank of the Federal Reserve System or primary dealers in U.S. Government Securities, whereby the seller agrees to repurchase such securities at the Fund’s cost plus interest within a specified time (usually on the next business day). Repurchase agreements offer a means of generating income from excess cash that the Fund might otherwise hold. Delays in payment or losses may result if the other party to the agreement defaults or becomes bankrupt. The Fund’s repurchase agreements must be fully backed by collateral that is marked to market, or priced, each day. | | | ZF limits repurchase agreements to U.S. government securities. | |
Reverse Repurchase Agreements: The Fund may enter into reverse repurchase agreements with respect to its portfolio investments subject to the investment restrictions set forth herein. Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement by the Fund to repurchase the securities at an agreed upon price, date and interest payment. The use by the Fund of reverse repurchase agreements involves many of the same risks of leverage described under “Leverage” and “Risks of the Fund — Leverage Risk,” since the proceeds derived from such reverse repurchase agreements | | | Reverse Repurchase Agreements: The Fund may enter from time to time into reverse repurchase agreements whereby the Fund sells an underlying debt instrument and simultaneously obtains the commitment of the purchaser, a commercial bank or a broker or dealer, to sell the security back to the Fund at an agreed upon price on an agreed upon date. The value of the underlying securities will be required to be maintained at a level at least equal at all times to the total amount of the resale obligation, including the interest factor. The Fund receives payment for such securities only upon physical delivery or | | | No material differences. | |
DCA
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ZF
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Differences
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may be invested in additional securities. At the time the Fund enters into a reverse repurchase agreement, it may designate on its books and records liquid instruments having a value not less than the repurchase price (including accrued interest). If the Fund designates liquid instruments on its books and records, a reverse repurchase agreement will not be considered a borrowing by the Fund; however, under circumstances in which the Fund does not designate liquid instruments on its books and records, such reverse repurchase agreement will be considered a borrowing for the purpose of the Fund’s limitation on borrowings. Reverse repurchase agreements involve the risk that the market value of the securities acquired in connection with the reverse repurchase agreement may decline below the price of the securities the Fund has sold but is obligated to repurchase. Also, reverse repurchase agreements involve the risk that the market value of the securities retained in lieu of sale by the Fund in connection with the reverse repurchase agreement may decline in price. If the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine whether to enforce the Fund’s obligation to repurchase the securities, and the Fund’s use of the proceeds of the reverse repurchase agreement may effectively be restricted pending such decision. Also, the Fund would bear the risk of loss to the extent that the proceeds of the reverse repurchase agreement are less than the value of the securities subject to such agreement. | | | evidence of book entry transfer by its custodian. The Fund will establish a segregated account with the Fund’s custodian, in which the Fund will maintain cash and U.S. Government Securities or other high grade debt obligations at least equal in value to the total amount of the repurchase obligation, including accrued interest. The value of the segregated securities will be marked-to-market on a daily basis to ensure that such value is maintained. Reverse repurchase agreements could involve certain risks in the event of default or insolvency of the other party, including possible delays or restrictions upon the Fund’s ability to dispose of the underlying securities. An additional risk is that the market value of securities sold by the Fund under a reverse repurchase agreement could decline below the price at which the Fund is obligated to repurchase them. Reverse repurchase agreements will be considered borrowings by the Fund and as such will be subject to the restrictions on borrowing described in the SAI under “Investment Restrictions.” | | | | |
DCA
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ZF
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Differences
|
|
Senior Securities and Borrowing: The Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act; provided that, notwithstanding the foregoing, the Fund may borrow up to an additional 5% of its total assets for temporary or emergency purposes. | | | Senior Securities and Borrowing: The Fund may not issue senior securities in contravention of the 1940 Act. The Fund may not borrow money (through reverse repurchase agreements or otherwise), except in an amount not greater than 33 1/3% of the Fund’s total assets | | | No material differences. | |
Temporary Defensive Positions: When changing economic conditions and other factors cause the yield difference between lower-rated and higher-rated securities to narrow, the Fund may purchase higher-rated debt instruments if the Adviser believes that the risk of loss of income and principal may be reduced substantially with only a relatively small reduction in yield. In addition, under unusual market or economic conditions or for temporary defensive purposes, the Fund may invest up to 100% of its total assets in securities issued or guaranteed by the U.S. government or its instrumentalities or agencies, investment grade securities, short-term debt securities, certificates of deposit, bankers’ acceptances and other bank obligations, commercial paper rated in the highest category by a rating agency or other fixed-income securities deemed by the Adviser to be consistent with a defensive posture, or may hold cash. The yield on such securities may be lower than the yield on lower-rated fixed-income securities. | | | Temporary Defensive Positions: If the Adviser believes that the investment environment is particularly uncertain or unfavorable and justifies such a defensive position, then little, if any, of the Fund’s assets, during the existence of such circumstances, may consist of equity securities, with the balance of the Fund’s assets held in cash or investments in money market instruments. The money market instruments in which the Fund may invest are securities issued or guaranteed by the U.S. Treasury or U.S. government or its agencies or instrumentalities, commercial paper rated A-1 or higher by Standard & Poor’s Corporation (“S&P”) or Prime-1 or higher by Moody’s Investors Service, Inc. (“Moody’s”), commercial paper not rated but issued by companies that have outstanding debt rated Aa or higher by Moody’s or AA or higher by S&P and certificates of deposit, bankers’ acceptances and other short-term obligations issued by domestic branches of U.S. banks that are insured by the Federal Deposit Insurance Corporation and have assets in excess of $500 million. | | | No material differences. | |
U.S. Government Securities: The Fund will generally invest in U.S. government securities, which are those securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, including U.S. | | | U.S. Government Securities: The money market instruments in which the Fund may invest include securities issued or guaranteed by the U.S. Treasury or U.S. Government or its agencies or instrumentalities. | | | DCA may invest more extensively in fixed income and U.S. Government securities. | |
DCA
|
| |
ZF
|
| |
Differences
|
|
Treasury securities that differ in their interest rates, maturities and times of issuance. Some obligations issued or guaranteed by U.S. government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the Treasury; others by discretionary authority of the U.S. government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. These securities bear fixed, floating or variable rates of interest. While the U.S. government provides financial support to such U.S. government-sponsored agencies and instrumentalities, no assurance can be given that it will always do so since it is not so obligated by law. | | | The Fund may also invest in bonds or other forms of debt instruments that appear to present opportunities for capital appreciation through anticipated or potential decreases in interest rates or market recognition of improved creditworthiness, which may include U.S. Government Securities. | | | | |
DCA
|
| |
ZF
|
| |
Differences
|
|
Commodities: The Fund may not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except that the Fund may purchase or sell options and futures contracts or invest in securities or other instruments backed by physical commodities. | | | Commodities: The Fund may not purchase physical commodities or contracts relating to physical commodities, except as permitted under the 1940 Act and other applicable laws, rules and regulations, as such may be interpreted or modified by regulatory authorities having jurisdiction, from time to time. | | | No material differences. | |
Margin Transactions: The Fund may not purchase securities on margin, except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof, or any exemptions therefrom which may be granted by the SEC. | | | Margin Transactions: The Fund has no investment restriction regarding purchasing securities on margin, other than the limitations imposed on all closed-end funds under Section 12(a) and Section 18 of the 1940 Act. | | | No material differences. | |
Other Investment Companies: The Fund may not invest in securities of other investment companies, except that the Fund may (a) acquire securities of investment companies up to the | | | Other Investment Companies: The Fund has no investment restriction regarding investments in the securities of other investment companies, other than the limitations imposed on | | | No material differences. | |
DCA
|
| |
ZF
|
| |
Differences
|
|
limits permitted by Section 12(d)(1) of the 1940 Act, or any exemption granted under the 1940 Act and (b) acquire securities of any investment company as part of a merger, consolidation, or similar transaction. | | | all closed-end funds under Section 12(d) of the 1940 Act. | | | | |
Short Sales: The Fund may not engage in short sales except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC staff interpretations thereof, or any exemptions therefrom which may be granted by the SEC. | | | Short Sales: The Fund has no investment restriction regarding short sales. | | | No material differences. | |
Name of Portfolio Manager or Team Member |
| |
Type of Accounts
|
| |
Total
No. of Accounts Managed |
| |
Total
Assets ($) |
| |
No. of Accounts
where Advisory Fee is Based on Performance |
| |
Total Assets
in Accounts where Advisory Fee is Based on Performance ($) |
| ||||||||||||
Connie Luecke
|
| | Registered Investment Companies: | | | | | 1 | | | | | | 124M | | | | | | 0 | | | | | | 0 | | |
| | | Other Pooled Investment Vehicles: | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
| | | Other Accounts: | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Randle Smith
|
| | Registered Investment Companies: | | | | | 1 | | | | | | 124M | | | | | | 0 | | | | | | 0 | | |
| | | Other Pooled Investment Vehicles: | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
| | | Other Accounts: | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
David L. Albrycht
|
| | Registered Investment Companies: | | | | | 16 | | | | | | 10.3B | | | | | | 2 | | | | | | 140M | | |
| | | Other Pooled Investment Vehicles: | | | | | 1 | | | | | | 27M | | | | | | 0 | | | | | | 0 | | |
| | | Other Accounts: | | | | | 0 | | | | | | — | | | | | | — | | | | | | — | | |
Name of Portfolio Manager or Team Member
|
| |
Dollar ($) Range
of Fund Shares Beneficially Owned |
|
Connie Luecke
|
| |
$10,001 – $50,000
|
|
Randle Smith
|
| |
None
|
|
David L. Albrycht
|
| |
None
|
|
Expiration
|
| |
DCA
|
| |
ZF
|
| ||||||
2016
|
| | | $ | 43,964 | | | | | | — | | |
2017
|
| | | $ | 57,671 | | | | | | — | | |
2018
|
| | | $ | 12,736 | | | | | | — | | |
Unlimited (Short-Term)
|
| | | | — | | | | | | — | | |
Unlimited (Long-Term)
|
| | | | — | | | | | | — | | |
Total
|
| | | $ | 114,371 | | | | | | — | | |
|
Fund
|
| |
Title of Class
|
| |
Amount Authorized
|
| |
Amount Held by Fund
for its Own Account |
| |
Amount Outstanding
Exclusive of Amount Shown in Previous Column |
| ||||||
DCA
|
| | | | Common | | | | | | Unlimited | | | | | ||||
ZF
|
| | | | Common | | | | | | 200,000,000 | | | | |
Quarter Ended
|
| |
Min
Price |
| |
Min
NAV |
| |
Min
Premium/Discount |
| |
Max
Price |
| |
Max
NAV |
| |
Max
Premium/Discount |
| ||||||||||||||||||
3/31/2014
|
| | | $ | 3.92 | | | | | $ | 4.75 | | | | | | -17.47% | | | | | $ | 4.42 | | | | | $ | 5.06 | | | | | | -12.65% | | |
6/30/2014
|
| | | $ | 4.31 | | | | | $ | 5.03 | | | | | | -14.31% | | | | | $ | 4.80 | | | | | $ | 5.43 | | | | | | -11.60% | | |
9/30/2014
|
| | | $ | 4.55 | | | | | $ | 5.15 | | | | | | -11.65% | | | | | $ | 4.93 | | | | | $ | 5.41 | | | | | | -8.87% | | |
12/31/2014
|
| | | $ | 4.23 | | | | | $ | 4.78 | | | | | | -11.51% | | | | | $ | 4.75 | | | | | $ | 5.20 | | | | | | -8.65% | | |
3/31/2015
|
| | | $ | 4.34 | | | | | $ | 4.91 | | | | | | -11.61% | | | | | $ | 4.61 | | | | | $ | 5.06 | | | | | | -8.89% | | |
6/30/2015
|
| | | $ | 4.41 | | | | | $ | 5.00 | | | | | | -11.80% | | | | | $ | 4.84 | | | | | $ | 5.18 | | | | | | -6.56% | | |
9/30/2015
|
| | | $ | 3.78 | | | | | $ | 4.57 | | | | | | -17.29% | | | | | $ | 4.46 | | | | | $ | 5.05 | | | | | | -11.68% | | |
12/31/2015
|
| | | $ | 3.61 | | | | | $ | 4.34 | | | | | | -16.82% | | | | | $ | 4.06 | | | | | $ | 4.78 | | | | | | -15.06% | | |
3/31/2016
|
| | | $ | 3.15 | | | | | $ | 3.92 | | | | | | -19.64% | | | | | $ | 4.24 | | | | | $ | 4.64 | | | | | | -8.62% | | |
6/30/2016
|
| | | $ | 4.10 | | | | | $ | 4.47 | | | | | | -8.28% | | | | | $ | 4.62 | | | | | $ | 4.96 | | | | | | -6.85% | | |
9/30/2016 | | | | | | | |
Quarter Ended
|
| |
Min
Price |
| |
Min
NAV |
| |
Min
Premium/Discount |
| |
Max
Price |
| |
Max
NAV |
| |
Max
Premium/Discount |
| ||||||||||||||||||
3/31/2014
|
| | | $ | 13.79 | | | | | $ | 15.85 | | | | | | -13.00% | | | | | $ | 15.19 | | | | | $ | 17.18 | | | | | | -11.58% | | |
6/30/2014
|
| | | $ | 14.60 | | | | | $ | 16.46 | | | | | | -11.30% | | | | | $ | 15.72 | | | | | $ | 17.60 | | | | | | -10.68% | | |
9/30/2014
|
| | | $ | 14.96 | | | | | $ | 16.79 | | | | | | -10.90% | | | | | $ | 15.93 | | | | | $ | 17.75 | | | | | | -10.25% | | |
12/31/2014
|
| | | $ | 13.67 | | | | | $ | 15.66 | | | | | | -12.71% | | | | | $ | 15.67 | | | | | $ | 17.76 | | | | | | -11.77% | | |
3/31/2015
|
| | | $ | 14.68 | | | | | $ | 16.46 | | | | | | -10.81% | | | | | $ | 15.83 | | | | | $ | 17.85 | | | | | | -11.32% | | |
6/30/2015
|
| | | $ | 14.63 | | | | | $ | 16.81 | | | | | | -12.97% | | | | | $ | 15.59 | | | | | $ | 17.63 | | | | | | -11.57% | | |
9/30/2015
|
| | | $ | 12.60 | | | | | $ | 14.51 | | | | | | -13.16% | | | | | $ | 14.77 | | | | | $ | 16.93 | | | | | | -12.76% | | |
12/31/2015
|
| | | $ | 12.77 | | | | | $ | 14.81 | | | | | | -13.77% | | | | | $ | 13.77 | | | | | $ | 15.62 | | | | | | -11.84% | | |
3/31/2016
|
| | | $ | 11.07 | | | | | $ | 13.09 | | | | | | -15.43% | | | | | $ | 12.95 | | | | | $ | 14.53 | | | | | | -10.87% | | |
6/30/2016
|
| | | $ | 12.15 | | | | | $ | 13.56 | | | | | | -10.40% | | | | | $ | 13.22 | | | | | $ | 14.42 | | | | | | -8.32% | | |
9/30/2016 | | | | | | | |
| | |
Net Asset Value per Share
|
| |
NYSE Closing Price
|
| |
Premium/Discount
|
|
DCA
|
| | | | ||||||
ZF | | | | |
Fund
|
| |
Trailing
12-month distribution Yield based on September 30, 2016 NAV |
| |
One Year
ended September 30, 2016 based on NAV |
| |
One Year
ended September 30, 2016 based on Market Price |
| |
Five Year
ended September 30, 2016 based on NAV |
| |
Five Year
ended September 30, 2016 based on Market Price |
| |
Ten Year
ended September 30, 2016 based on NAV |
| |
Ten Year
ended September 30, 2016 based on Market Price |
| |||||||||||||||||||||
DCA
|
| | | | % | | | | | | % | | | | | | % | | | | | | % | | | | | | % | | | | | | % | | | | | | % | | |
ZF
|
| | | | % | | | | | | % | | | | | | % | | | | | | % | | | | | | % | | | | | | % | | | | | | % | | |
| | |
Six Months
Ended May 31, 2016 |
| |
Fiscal
Period Ended(9) November 30, 2015 |
| |
Year Ended December 31,
|
| |||||||||||||||
| | |
2014
|
| |
2013
|
| ||||||||||||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |||
PER SHARE OPERATING DATA: | | | | | | ||||||||||||||||||||
Net asset value, Beginning of Period
|
| | | $ | 4.60 | | | | | $ | 5.08 | | | | | $ | 4.84 | | | | | $ | 4.43 | | |
Income from investment operations: | | | | | | ||||||||||||||||||||
Net Investment Income/(Loss)(2)
|
| | | | 0.09 | | | | | | 0.18 | | | | | | 0.32 | | | | | | 0.20 | | |
Net Realized and Unrealized Gain/(Loss)
|
| | | | 0.20 | | | | | | (0.26) | | | | | | 0.28 | | | | | | 0.42 | | |
Total from investment operations
|
| | | | 0.29 | | | | | | (0.08) | | | | | | 0.60 | | | | | | 0.62 | | |
Dividends and/or Distributions to Shareholders: | | | | | | ||||||||||||||||||||
Dividends from Net Investment Income
|
| | | | (0.20) | | | | | | (0.40) | | | | | | (0.36) | | | | | | (0.21) | | |
Total Dividends and Distributions to Shareholders
|
| | | | (0.20) | | | | | | (0.40) | | | | | | (0.36) | | | | | | (0.21) | | |
Net Asset Value, End of Period
|
| | | $ | 4.69 | | | | | $ | 4.60 | | | | | $ | 5.08 | | | | | $ | 4.84 | | |
Market Price, End of Period(3)
|
| | | $ | 4.39 | | | | | $ | 3.86 | | | | | $ | 4.52 | | | | | $ | 4.01 | | |
Total Return, Net Asset Value(4)
|
| | | | 7.29%(7) | | | | | | (0.92)%(7) | | | | | | 13.59% | | | | | | 15.02% | | |
Total Return, Market Value(5)
|
| | | | 19.68%(7) | | | | | | (6.56)%(7) | | | | | | 21.98% | | | | | | 9.08% | | |
Net Assets, End of Year (000’s)
|
| | | $ | 128,760 | | | | | $ | 126,454 | | | | | $ | 139,630 | | | | | $ | 132,857 | | |
RATIOS/SUPPLEMENTAL DATA: | | | | | | ||||||||||||||||||||
Ratio of Total Expenses After Interest Expense to Average Net Assets(6)
|
| | | | 2.06%(8) | | | | | | 1.97%(8) | | | | | | 1.93% | | | | | | 2.01% | | |
Ratio of Net Investment Income/(Loss) to Average Net Assets
|
| | | | 4.03%(8) | | | | | | 3.90%(8) | | | | | | 6.31% | | | | | | 4.42% | | |
Portfolio Turnover Rate
|
| | | | 22%(7) | | | | | | 32%(7) | | | | | | 33% | | | | | | 42% | | |
Bank Borrowings: | | | | | | ||||||||||||||||||||
Loan Outstanding, End of Period (000’s)
|
| | | $ | 43,500 | | | | | $ | 43,500 | | | | | $ | 50,500 | | | | | $ | 50,500 | | |
Asset Coverage for Loan Outstanding, End of Period
|
| | | | 396% | | | | | | 389% | | | | | | 377% | | | | | | 360% | | |
| | |
Year Ended December 31,(1)
|
| |||||||||||||||
| | |
2012
|
| |
2011
|
| |
2010
|
| |||||||||
PER SHARE OPERATING DATA: | | | | | | | | | | | | | | | | | | | |
Net asset value, Beginning of Period
|
| | | $ | 4.06 | | | | | $ | 3.96 | | | | | $ | 2.77 | | |
Income from investment operations: | | | | | |||||||||||||||
Net Investment Income/(Loss)(2)
|
| | | | 0.19 | | | | | | 0.18 | | | | | | 0.23 | | |
Net Realized and Unrealized Gain/(Loss)
|
| | | | 0.41 | | | | | | 0.07 | | | | | | 1.15 | | |
Total from investment operations
|
| | | | 0.60 | | | | | | 0.25 | | | | | | 1.38 | | |
Dividends and/or Distributions to Shareholders: | | | | | |||||||||||||||
Dividends from Net Investment Income
|
| | | | (0.23) | | | | | | (0.15) | | | | | | (0.19) | | |
Total Dividends and Distributions to Shareholders
|
| | | | (0.23) | | | | | | (0.15) | | | | | | (0.19) | | |
Net Asset Value, End of Period
|
| | | $ | 4.43 | | | | | $ | 4.06 | | | | | $ | 3.96 | | |
Market Price, End of Period(3)
|
| | | $ | 3.87 | | | | | $ | 3.50 | | | | | $ | 3.45 | | |
Total Return, Net Asset Value(4)
|
| | | | 16.05% | | | | | | 6.73% | | | | | | 51.90% | | |
Total Return, Market Value(5)
|
| | | | 17.60% | | | | | | 5.61% | | | | | | 53.38% | | |
Net Assets, End of Period (000’s)
|
| | | $ | 121,681 | | | | | $ | 111,490 | | | | | $ | 108,871 | | |
RATIOS/SUPPLEMENTAL DATA: | | | | | |||||||||||||||
Ratio of Total Expenses After Interest Expense to Average Net
Assets(6) |
| | | | 1.99% | | | | | | 1.38% | | | | | | 1.90% | | |
Ratio of Net Investment Income/(Loss) to Average Net Assets
|
| | | | 4.51% | | | | | | 4.42% | | | | | | 6.51% | | |
Portfolio Turnover Rate
|
| | | | 43% | | | | | | 138% | | | | | | 67% | | |
Bank Borrowings: | | | | | |||||||||||||||
Loan Outstanding, End of Period (000’s)
|
| | | $ | 42,500 | | | | | | N/A | | | | | | N/A | | |
Asset Coverage for Loan Outstanding, End of Period
|
| | | | 386% | | | | | | N/A | | | | | | N/A | | |
| | |
Six Months
Ended June 30,2016 |
| |
Year Ended December 31,
|
| ||||||||||||||||||||||||||||||
| | |
2015
|
| |
2014
|
| |
2013
|
| |
2012
|
| |
2011
|
| |||||||||||||||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
PER SHARE DATA | | | | | | | | ||||||||||||||||||||||||||||||
Net asset value, beginning of period
|
| | | $ | 14.78 | | | | | $ | 17.55 | | | | | $ | 16.94 | | | | | $ | 13.89 | | | | | $ | 13.48 | | | | | $ | 15.20 | | |
Income from investment operations | | | | | | | | ||||||||||||||||||||||||||||||
Net investment income (loss)(3)
|
| | | | 0.05 | | | | | | 0.11 | | | | | | 0.11 | | | | | | 0.14 | | | | | | 0.10 | | | | | | 0.04 | | |
Net realized and unrealized gains (losses)
|
| | | | (0.29) | | | | | | (1.70) | | | | | | 1.49 | | | | | | 3.66 | | | | | | 1.28 | | | | | | (0.28) | | |
Total from investment operations
|
| | | | (0.24) | | | | | | (1.59) | | | | | | 1.60 | | | | | | 3.80 | | | | | | 1.38 | | | | | | (0.24) | | |
Dividends and Distributions | | | | | | | | ||||||||||||||||||||||||||||||
Dividends from net investment
income |
| | | | (0.36)(10) | | | | | | (0.12) | | | | | | (0.11) | | | | | | (0.13) | | | | | | (0.10) | | | | | | (0.04) | | |
Distributions from net realized gains
|
| | | | — | | | | | | (1.10) | | | | | | (0.92) | | | | | | (0.65) | | | | | | (0.33) | | | | | | (0.36) | | |
Tax return of capital
|
| | | | — | | | | | | — | | | | | | — | | | | | | (0.10) | | | | | | (0.54) | | | | | | (1.08) | | |
Total dividend and distributions
|
| | | | (0.36) | | | | | | (1.22) | | | | | | (1.03) | | | | | | (0.88) | | | | | | (0.97) | | | | | | (1.48) | | |
Fund Share Transactions (Note 7) | | | | | | | | ||||||||||||||||||||||||||||||
Anti-dilutive impact of repurchase
plan |
| | | | —(11) | | | | | | 0.04 | | | | | | 0.04 | | | | | | 0.13 | | | | | | — | | | | | | — | | |
Anti-dilutive impact of tender offer
|
| | | | 0.05 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net asset value, end of period
|
| | | $ | 14.23 | | | | | $ | 14.78 | | | | | $ | 17.55 | | | | | $ | 16.94 | | | | | $ | 13.89 | | | | | $ | 13.48(5) | | |
Market value, end of period(1)
|
| | | $ | 12.59 | | | | | $ | 13.14 | | | | | $ | 15.46 | | | | | $ | 14.86 | | | | | $ | 12.19 | | | | | $ | 11.60(5) | | |
Total investment return(2)
|
| | | | (1.56)%(9) | | | | | | (7.33)% | | | | | | 11.34% | | | | | | 30.31% | | | | | | 13.62% | | | | | | (3.54)% | | |
Total return on net asset value(4)
|
| | | | (1.01)%(9) | | | | | | (8.18)% | | | | | | 10.93% | | | | | | 30.29% | | | | | | 11.41% | | | | | | (1.18)% | | |
RATIOS/SUPPLEMENTAL DATA | | | | | | | | ||||||||||||||||||||||||||||||
Net assets, end of period (in
thousands) |
| | | $ | 242,904 | | | | | $ | 296,844 | | | | | $ | 359,153 | | | | | $ | 353,176 | | | | | $ | 309,124 | | | | | $ | 310,028 | | |
Ratio of net expenses to average net
assets (after expense waivers, custody credits and dividend and interest expense) |
| | | | 1.55%(8) | | | | | | 1.17% | | | | | | 1.26% | | | | | | 1.19% | | | | | | 1.15%(6) | | | | | | 1.06% | | |
Ratio of expenses to average net assets
(before expense waivers, custody credits and after dividend and interest expense)(7) |
| | | | 1.55%(8) | | | | | | 1.17% | | | | | | 1.26% | | | | | | 1.25% | | | | | | 1.32%(6) | | | | | | 1.17% | | |
Ratio of net investment income (loss) to
average net assets |
| | | | 0.79%(8) | | | | | | 0.65% | | | | | | 0.66% | | | | | | 0.91% | | | | | | 0.74% | | | | | | 0.32% | | |
Portfolio turnover rate
|
| | | | 59%(9) | | | | | | 98% | | | | | | 57% | | | | | | 62% | | | | | | 82% | | | | | | 78% | | |
For the Year Ended December 31, 2011
|
| | |||||
Net Asset Value (prior to reverse stock split)
|
| | | $ | 3.37 | | |
Market Price (prior to reverse stock split)
|
| | | $ | 2.90 | | |
|
Six Months
Ended June 30, 2016 |
| |
Year Ended
|
| |||||||||||||||||||||||||||
|
2015
|
| |
2014
|
| |
2013
|
| |
2012
|
| |
2011
|
| ||||||||||||||||||
|
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
1.39%
|
| | | | 1.15% | | | | | | 1.19% | | | | | | 1.22% | | | | | | 1.27% | | | | | | 1.17% | | |
| | |
DCA
|
| |
ZF
|
| |
Adjustments
|
| |
DCA Pro Forma
Combined Fund |
| ||||||||||||
Net Assets
|
| | | $ | 136,099,191 | | | | | $ | 243,100,942 | | | | | | [_______] | | | | | $ | 379,200,133 | | |
Common Shares Outstanding
|
| | | | 27,466,109 | | | | | | 17,066,804 | | | | | | [31,945,494] | | | | | | 76,478,407 | | |
Net Asset Value Per Share
|
| | | $ | 4.96 | | | | | $ | 14.24 | | | | | | — | | | | | $ | 4.96 | | |
Name, Year of Birth and Address(1) |
| |
Position(s)
Held with the Funds |
| |
Term of Office
and Length of Time Served(2) |
| |
Principal Occupation(s)
During Past Five Years |
| |
Number of
Portfolios in Funds Complex Overseen by Trustee(3) |
| |
Other Directorships/Trusteeships
Held During Past Five Years |
|
Independent Trustees | | |||||||||||||||
Brian T. Zino Year of Birth: 1952 |
| | Nominee | | | Nominee, term expires at the 2019 Annual Meeting | | | President (1994 – 2008), J. & W Seligman Co. Incorporated (1982 – 2008) | | |
2
|
| | Director, The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. (since 2013); Trustee (since 2011), Bentley University; Director (1998 – 2009), ICI Mutual Insurance Company | |
R. Keith Walton Year of Birth: 1964 |
| | Director | | | Director since 2016, term expires at 2019 Annual Meeting | | | Vice President, Strategy, Arizona State University (2013 – Present); Vice President, Global Government & Affairs, Alcoa (2011 – 2013); | | |
5
|
| | Director, The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. (since 2004); Director, Blue Crest Capital Management, LLC Funds (since 2006); Trustee/ | |
Name, Year of Birth and Address(1) |
| |
Position(s)
Held with the Funds |
| |
Term of Office
and Length of Time Served(2) |
| |
Principal Occupation(s)
During Past Five Years |
| |
Number of
Portfolios in Funds Complex Overseen by Trustee(3) |
| |
Other Directorships/Trusteeships
Held During Past Five Years |
|
| | | | | | | | | Senior Managing Director, BSE Management LLC (2010); Principal and Chief Administrative Officer, Global Infrastructure Partners (2007 – 2009) | | | | | | Director (since 2016), Virtus Closed-End Funds (3 portfolios) | |
James B. Rogers, Jr. Year of Birth: 1942 |
| | Director | | | Director since 2016, term expires at 2019 Annual Meeting | | | Private investor (since 1980) | | |
5
|
| | Director, The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. (since 1986 and 1988, respectively); Director, First China Financial Network Holdings Limited (since 2014); Director, Phos Agro (since 2014); Director Spanish Mountain Gold Limited (since 2014) Director, Geo Energy Resources, Limited (since 2012); Director, FAB Universal Corp. (2013 – 2014); Director, Genagro Services, Ltd. (since 2011); Chairman, Beeland Interests (Media and Investments) (since 1980); Trustee/Director (since 2016), Virtus Closed-End Funds (3 portfolios) | |
Name, Year of Birth and Address(1) |
| |
Position(s)
Held with the Funds |
| |
Term of Office
and Length of Time Served(2) |
| |
Principal Occupation(s)
During Past Five Years |
| |
Number of
Portfolios in Funds Complex Overseen by Trustee(3) |
| |
Other Directorships/Trusteeships
Held During Past Five Years |
|
Independent Trustees | | |||||||||||||||
William R. Moyer Year of Birth: 1944 |
| | Trustee | | | Trustee since 2011; term expires at the 2017 annual meeting | | | Financial and Operations Principal (2006 to present), Newcastle Distributors LLC (broker dealer); Partner (2006 to 2012), CrossPond Partners, LLC (strategy consulting firm); Partner (2008 to 2010), Seacap Partners, LLC (investment management); and former Chief Financial Officer, Phoenix Investment Partners | | |
7
|
| | Trustee/Director (since 2011), Virtus Closed-End Funds (3 portfolios); and Trustee (since 2013), Virtus Alternative Solutions Trust (4 portfolios) | |
James M. Oates Year of Birth: 1946 |
| | Trustee | | | Trustee since 2013; term expires at the 2017 annual meeting | | | Managing Director (since 1984), Wydown Group (consulting firm). | | |
63
|
| | Trustee (since 1987), Virtus Mutual Fund Complex (52 portfolios); Director (since 1996), Stifel Financial; Director (1998 – 2014), Connecticut River Bancorp; Chairman and Director (1999 to 2014), Connecticut River Bank; Chairman (since 2000), Emerson Investment | |
Name, Year of Birth and Address(1) |
| |
Position(s)
Held with the Funds |
| |
Term of Office
and Length of Time Served(2) |
| |
Principal Occupation(s)
During Past Five Years |
| |
Number of
Portfolios in Funds Complex Overseen by Trustee(3) |
| |
Other Directorships/Trusteeships
Held During Past Five Years |
|
| | | | | | | | | | | | | | | Management, Inc.; Director (2002 – 2014), New Hampshire Trust Company; Chairman and Trustee (since 2005), John Hancock Fund Complex (228 portfolios); Non-Executive Chairman (since 2007), Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services); Trustee/Director (since 2013), Virtus Closed-End Funds (3 portfolios); Trustee (since 2013), Virtus Alternative Solutions Trust (4 portfolios); and Director, The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. (since 2016) | |
Name, Year of Birth and Address(1) |
| |
Position(s)
Held with the Funds |
| |
Term of Office
and Length of Time Served(2) |
| |
Principal Occupation(s)
During Past Five Years |
| |
Number of
Portfolios in Funds Complex Overseen by Trustee(3) |
| |
Other Directorships/Trusteeships
Held During Past Five Years |
|
Independent Trustees | | |||||||||||||||
Philip R. McLoughlin Year of Birth: 1946 |
| | Nominee, Trustee and Chairman | | | Trustee since 2011; term expires at the 2018 annual meeting | | | Partner (2006 to 2010), Cross Pond Partners, LLC (investment management consultant); and Partner (2008 to 2010), SeaCap Partners, LLC (strategic advisory firm) | | |
76
|
| | Director (since 1991) and Chairman (since 2010), World Trust Fund (closed-end investment firm in Luxembourg); Director (since 1995), closed-end funds managed by Duff & Phelps Investment Management Co. (4 portfolios); Chairman (since 2002) and Trustee (since 1999), Virtus Mutual Fund Complex (52 portfolios); Chairman and Trustee (since 2003), Virtus Variable Insurance Trust (9 portfolios); Trustee/Director and Chairman (since 2011), Virtus Closed-End Funds (3 portfolios); Trustee and Chairman (since 2013), Virtus Alternative Solutions Trust (4 portfolios); Director, The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. (since 2016); and Director (1985 to 2009), Argo Group International Holdings Inc. and its predecessor, PXRE Corporation (insurance) | |
Name, Year of Birth and Address(1) |
| |
Position(s)
Held with the Funds |
| |
Term of Office
and Length of Time Served(2) |
| |
Principal Occupation(s)
During Past Five Years |
| |
Number of
Portfolios in Funds Complex Overseen by Trustee(3) |
| |
Other Directorships/Trusteeships
Held During Past Five Years |
|
Interested Trustee | | |||||||||||||||
George R. Aylward* Year of Birth: 1964 |
| | Nominee, Trustee and President | | | Trustee since 2011; term expires at the 2018 annual meeting | | | Director, President and Chief Executive Officer (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various senior officer positions with Virtus affiliates (since 2005). | | |
70
|
| | Trustee (since 2006), Virtus Mutual Funds (52 portfolios); Chairman, President and Chief Executive Officer (since 2006), The Zweig Closed-End Funds (2 portfolios); Trustee (since 2012) and President (since 2010), Virtus Variable Insurance Trust (9 portfolios); Trustee and President (since 2011), Virtus Closed-End Funds (3 portfolios); Director (since 2013), Virtus Global Funds, PLC (2 portfolios); Trustee (since 2013), Virtus Alternative Solutions Trust (4 portfolios); and Chairman and Trustee (since 2015), Virtus ETF Trust II. | |
Name, Year of Birth and Address(1) |
| |
Position held with the
Fund and Length of Time Served(2) |
| |
Principal Occupation(s) During Past 5 Years
|
|
Francis G. Waltman YOB: 1962 |
| | Executive Vice President since 2011 | | | Executive Vice President, Product Development (since 2009), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various senior officer positions with Virtus affiliates (since 2006). | |
W. Patrick Bradley YOB: 1972 |
| | Executive Vice President, Chief Financial Officer and Treasurer since 2011 | | | Senior Vice President, Fund Services (since 2010), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2006) with Virtus affiliates; Chief Financial Officer and Treasurer (since 2011) of various Virtus-affiliated funds. | |
William Renahan YOB: 1969 |
| | Vice President, Chief Legal Officer, and Secretary since 2012 | | | Vice President, Chief Legal Officer, and Secretary of various Virtus-affiliated closed-end funds (since 2012); and a Managing Director, Legg Mason, Inc. and predecessor firms (1999 – 2012). | |
Nancy J. Engberg YOB: 1956 |
| | Vice President and Chief Compliance Officer since 2011 | | | Vice President (since 2008) and Chief Compliance Officer (2008 to 2011 and 2016 to Present), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions with Virtus affiliates (since 2008); Vice President (since 2008) and Chief Compliance Officer (since 2011), Virtus Mutual Funds; Vice President (since 2010), Chief Compliance Officer (since 2011) of various Virtus-affiliated funds. | |
Fiscal Year
|
| |
Audit Fees
|
| |
Audit-Related
Fees* |
| |
Tax Fees**
|
| |
All Other
Fees*** |
| ||||||||||||
2015
|
| | | $ | 26,000 | | | | | $ | 4,476 | | | | | $ | 3,950 | | | | | $ | 0 | | |
2014
|
| | | $ | 26,000 | | | | | $ | 2,268 | | | | | $ | 4,850 | | | | | $ | 0 | | |
Name of Trustee
|
| |
Dollar Range of
Equity Securities in the Fund |
| |
Aggregate Dollar Range of
Equity Securities in All Funds Overseen by Trustees in Family of Registered Investment Companies* |
|
Independent Trustees | | | | ||||
Philip R. McLoughlin
|
| |
$10,001 – $50,000
|
| |
Over $100,000
|
|
William R. Moyer
|
| |
$10,001 – $50,000
|
| |
Over $100,000
|
|
James M. Oates
|
| |
$10,001 – $50,000
|
| |
Over $100,000
|
|
James B. Rogers, Jr.**
|
| |
$0
|
| |
$50,001 – $100,000
|
|
R. Keith Walton**
|
| |
$0
|
| |
$50,001 – $100,000
|
|
Trustee Nominee | | | | ||||
Brian T. Zino
|
| |
$0
|
| |
Over $100,000
|
|
Interested Trustee | | | | ||||
George R. Aylward
|
| |
$10,001 – $50,000
|
| |
Over $100,000
|
|
Name of Trustee
|
| |
Aggregate
Compensation from the Fund |
| |
Pension or Retirement
Benefits Accrued as Part of Fund Expenses |
| |
Estimated Annual
Benefits Upon Retirement |
| |
Total
Compensation from the Funds and Fund Complex(1) |
| ||||||||||||
Thomas F. Mann(2)
|
| | | $ | 18,550 | | | | | | N/A | | | | | | N/A | | | | | $ | 142,283 | | |
Philip R. McLoughlin
|
| | | $ | 22,833 | | | | | | N/A | | | | | | N/A | | | | | $ | 755,283 | | |
William R. Moyer
|
| | | $ | 19,463 | | | | | | N/A | | | | | | N/A | | | | | $ | 148,283 | | |
James M. Oates
|
| | | $ | 18,340 | | | | | | N/A | | | | | | N/A | | | | | $ | 405,283 | | |
James B. Rogers, Jr.(3)
|
| | | $ | 0 | | | | | | N/A | | | | | | N/A | | | | | $ | 86,000 | | |
R. Keith Walton(3)
|
| | | $ | 0 | | | | | | N/A | | | | | | N/A | | | | | $ | 116,000 | | |
| | | | THE ZWEIG FUND, INC. | | |||
| | | | By: | | |
|
|
| | | | By: Title: |
| | ||
| | | | VIRTUS TOTAL RETURN FUND | | |||
| | | | By: | | |
|
|
| | | | By: Title: |
| | ||
| | | | Agreed and accepted as to paragraph 10.3 only: | | |||
| | | | By: | | |
|
|
| | | | By: Title: |
| |