Edgar Filing: ZWEIG FUND INC /MD/

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 2002
INVESTMENT COMPANY ACT FILE NO. 811-4739
SECURITIES ACT FILE NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-2
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[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] PRE-EFFECTIVE AMENDMENT NO.
[ ] POST-EFFECTIVE AMENDMENT NO.

AND/OR

[ ] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] AMENDMENT NO. 16
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THE ZWEIG FUND, INC.
(Exact name of Registrant as specified in its charter)

900 THIRD AVENUE
NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices) (Zip Code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
212-451-1100
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DR. MARTIN E. ZWEIG
PRESIDENT
THE ZWEIG FUND, INC.
900 THIRD AVENUE
NEW YORK, NEW YORK 10022
(Name and Address of Agent for Service)

WITH COPIES TO:

ROBERT E. SMITH, ESQ.
ROSENMAN & COLIN LLP
575 MADISON AVENUE
NEW YORK, NEW YORK 10022
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this Registration Statement.

If the securities being registered on this form are to be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE

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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT BEING OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
BEING REGISTERED REGISTERED SHARE(1) PRICE REGISTRATION FEE
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Common Stock, par value $.10 per
share........................... 11,000,000 Shares $8.00 $88,000,000 $8,096.00
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(1) Estimated solely for the purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933. Based on the
average of the high and low prices for the Fund's Common Stock reported on
the New York Stock Exchange, Inc. on , 2002.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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THE ZWEIG FUND, INC.

FORM N-2

CROSS REFERENCE SHEET

PURSUANT TO RULE 481(A)

ITEM
NUMBER FORM N-2 LOCATION IN PROSPECTUS
------ -------- ----------------------

PART A
1. Outside Front Cover........................ Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Page... Outside Front Cover of Prospectus
3. Fee Table and Synopsis..................... Fund Expenses
4. Financial Highlights....................... Financial Highlights
5. Plan of Distribution....................... The Offer
6. Selling Shareholders....................... Not Applicable
7. Use of Proceeds............................ The Offer; Use of Proceeds
8. General Description of the Registrant...... The Fund; Market Price and Net Asset
Value Information; Investment Objective
and Policies; Risk Factors and Special
Considerations
9. Management................................. Management of the Fund; Custodian,
Dividend Paying Agent, Transfer Agent and
Registrar
10. Capital Stock, Long-Term Debt and Other
Securities................................. Distributions; Distribution Reinvestment
and Cash Purchase Plan; Taxation;
Description of Common Stock
11. Defaults and Arrears on Senior
Securities................................. Not Applicable
12. Legal Proceedings.......................... Legal Matters
13. Table of Contents of the Statement of
Additional Information..................... Table of Contents of the Statement of
Additional Information

ITEM
NUMBER FORM N-2 LOCATION IN SAI
------ -------- ---------------

PART B
14. Cover Page................................. Cover Page
15. Table of Contents.......................... Table of Contents
16. General Information and History............ The Fund (in Part A)
17. Investment Objectives and Policies......... Investment Objective and Policies;
Investment Restrictions
18. Management................................. Management
19. Control Persons and Principal Holders of
Securities................................. Principal Shareholders
20. Investment Advisory and Other Services..... Management of the Fund (in Part A);
Custodian, Dividend Paying Agent,
Transfer Agent and Registrar (in Part A)
21. Brokerage Allocation and Other Practices... Portfolio Transactions and Brokerage
22. Tax Status................................. Taxation
23. Financial Statements....................... Financial Statements

SUBJECT TO COMPLETION, DATED MARCH 26, 2002

PROSPECTUS

8,800,000 SHARES OF COMMON STOCK

THE ZWEIG FUND, INC.
ISSUABLE UPON EXERCISE OF NON-TRANSFERABLE
RIGHTS TO SUBSCRIBE FOR SUCH SHARES OF COMMON STOCK

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The Zweig Fund, Inc. (the "Fund") is issuing to its shareholders of record
("Record Date Shareholders") as of the close of business on , 2002 (the
"Record Date") non-transferable rights (the "Rights"). These rights entitle
their holders to subscribe for up to an aggregate of 8,800,000 shares (the
"Shares") of the Fund's Common Stock, par value $0.10 per share (the "Common
Stock") at the rate of one Share of Common Stock for every seven Rights held
(the "Offer"). Record Date Shareholders will receive one non-transferable Right
for each whole share of Common Stock held on the Record Date. Record Date
Shareholders who fully exercise their Rights will be entitled to subscribe for
additional shares of Common Stock pursuant to an over-subscription privilege
described in this Prospectus (the "Over-Subscription Privilege"). The Fund may
increase the number of shares of Common Stock subject to subscription by up to
25% of the Shares, or up to an additional 2,200,000 shares of Common Stock, for
an aggregate total of 11,000,000 Shares. Fractional Shares will not be issued
upon the exercise of Rights. The Rights are non-transferable and, therefore, may
not be purchased or sold. The Rights will not be admitted for trading on the New
York Stock Exchange, Inc. (the "NYSE"), the Pacific Exchange, Incorporated (the
"PCX") or any other exchange. See "The Offer." THE SUBSCRIPTION PRICE PER SHARE
(THE "SUBSCRIPTION PRICE") WILL BE 95% OF THE AVERAGE OF THE LAST REPORTED SALES
PRICE OF A SHARE OF THE FUND'S COMMON STOCK ON THE NYSE ON , 2002 (THE
"PRICING DATE") AND THE FOUR PRECEDING BUSINESS DAYS.

THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
2002, UNLESS EXTENDED AS DESCRIBED HEREIN (THE "EXPIRATION DATE").

The Fund announced the Offer before the commencement of trading on the NYSE
on , 2002. The Fund's Common Stock trades on the NYSE and PCX under the
symbol "ZF." Shares issued upon the exercise of Rights and the Over-Subscription
Privilege will be listed for trading on the NYSE and PCX, subject to notice of
issuance. The net asset value per share of the Fund's Common Stock at the close
of business on , 2002 and , 2002, was $ and $ ,
respectively, and the last reported sales price of a share of the Fund's Common
Stock on the NYSE on those dates was $ and $ , respectively.

The Fund is a diversified, closed-end management investment company. Its
investment objective is capital appreciation, primarily through investment in
equity securities, consistent with the preservation of capital and reduction of
risk, as determined by the Fund's investment adviser, Phoenix/Zweig Advisers LLC
(the "Investment Adviser"). The Investment Adviser is a wholly-owned subsidiary
of Phoenix Investment Partners, Ltd., a wholly-owned investment management
subsidiary of The Phoenix Companies, Inc., an NYSE-listed company. The
Investment Adviser uses Zweig Consulting LLC (the "Sub-Adviser") to perform
asset allocation research and analysis and provide advice thereon to the
Investment Adviser. The extent of the Fund's investment in equity securities is
determined by the Investment Adviser, primarily utilizing market timing
techniques developed by Dr. Martin E. Zweig, President of the Sub-Adviser, and
his staff. The Investment Adviser (and its predecessor) have provided investment
advisory services to the Fund since its inception. Dr. Zweig has been engaged in
the business of providing investment advisory services for over 28 years. While
the Investment Adviser seeks to reduce the risks associated with investing in
equity securities by using these techniques, such risks cannot be eliminated.
See "Investment Objective and Policies." No assurance can be given that the
Fund's investment objective will be realized. The Fund's administrator is
Phoenix Equity Planning Corporation (the "Administrator"). The Fund's Investment
Adviser and the Administrator will benefit from the Offer. See "Management of
the Fund."
(Continued on the following page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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ESTIMATED ESTIMATED SALES ESTIMATED PROCEEDS
SUBSCRIPTION PRICE(1) LOAD TO FUND(2)(3)
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Per Share.................................... $ N/A
Total Maximum(4)............................. $ N/A
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(Footnotes on the following page)

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The date of this Prospectus is , 2002.

Upon the completion of the Offer, Record Date Shareholders who do not fully
exercise their Rights will own a smaller proportional interest in the Fund than
they owned prior to the Offer. In addition, because the Subscription Price may
be less than the net asset value per share as of the Pricing Date, the Offer may
result in an immediate dilution of the net asset value per share for all
shareholders. Although it is not possible to state precisely the amount of such
decrease in net asset value per share, if any, because it is not known how many
Shares will be subscribed for, what the net asset value or market price of the
Common Stock will be on the Pricing Date or what the Subscription Price will be,
such dilution could be minimal or substantial. Any such dilution will
disproportionately affect non-exercising shareholders. See "The Offer" and "Risk
Factors and Special Considerations." Except as described in this Prospectus,
Record Date Shareholders will have no right to rescind their subscriptions after
receipt of their payment for Shares by the Subscription Agent.

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Investors are advised to
read this Prospectus and retain it for future reference. A Statement of
Additional Information, dated , 2002 (the "SAI"), containing
additional information about the Fund, has been filed with the Securities and
Exchange Commission (the "Commission") and is incorporated by reference in its
entirety into this Prospectus.

Shareholders may obtain a copy of the SAI from, and should direct all
questions and inquires relating to the Offer to, the Fund's Information Agent,
. Banks and Brokers should call ( ) collect, and all other
shareholders should call ( ) . The address of the Fund is 900
Third Avenue, New York, New York 10022, and its telephone number is (212)
451-1100. The Commission maintains a world wide web site at http://www.sec.gov
that contains the SAI and other information regarding the Fund.

(Footnotes from the previous page)
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(1) Estimated, using 95% of the average of the last reported sales price of a
share of the Fund's Common Stock on the NYSE on , 2002.

(2) Before deduction of offering expenses incurred by the Fund, estimated at
approximately $ .

(3) The funds received by check prior to the final due date of this Offer will
be deposited into a segregated interest-bearing account (which interest will
be paid to the Fund) pending proration and distribution of the Shares.

(4) Assumes all 8,800,000 Shares are purchased at the Estimated Subscription
Price. Pursuant to the Over-Subscription Privilege, the Fund may, at the
discretion of the Board of Directors, increase the number of Shares subject
to subscription by up to 25% of the Shares offered hereby. If the Fund
increases the number of Shares subject to subscription by 25%, the Total
Maximum Estimated Subscription Price and Estimated Proceeds to the Fund will
be $ and $ , respectively. The expenses in connection with this
offering will be charged against paid-in capital of the Fund.

Certain numbers in this Prospectus have been rounded for ease of presentation
and, as a result, may not total precisely.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information included elsewhere in this Prospectus. Unless otherwise
indicated, the information in this Prospectus assumes that the allowable
increase of 25% of the Shares offered hereby pursuant to the Over-Subscription
Privilege will not occur.

THE FUND

The Zweig Fund, Inc. (the "Fund") is a diversified, closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund commenced operations in October 1986. The
Fund's investment objective is capital appreciation, primarily through
investment in equity securities, consistent with the preservation of capital and
reduction of risk, as determined by the Fund's investment adviser, Phoenix/Zweig
Advisers LLC (the "Investment Adviser"). The Investment Adviser is a
wholly-owned subsidiary of Phoenix Investment Partners, Ltd., a wholly-owned
investment management subsidiary of The Phoenix Companies, Inc., a New York
Stock Exchange, Inc. ("NYSE")-listed company. The Investment Adviser uses Zweig
Consulting LLC (the "Sub-Adviser") to perform asset allocation research and
analysis and provide advice thereon to the Investment Adviser. The extent of the
Fund's investment in equity securities is determined by the Investment Adviser,
primarily utilizing market timing techniques developed by Dr. Martin E. Zweig,
President of the Sub-Adviser, and his staff. While the Investment Adviser seeks
to reduce the risks associated with investing in equity securities by using
these techniques, such risks cannot be eliminated. The Fund's outstanding Common
Stock, par value $.10 per share (the "Common Stock"), is listed and traded on
the NYSE and the Pacific Exchange, Incorporated ("PCX"). The average weekly
trading volume of the Common Stock on the NYSE during the year ended December
31, 2001 was shares. As of , 2002, the net assets of the
Fund were approximately $ .

The Investment Adviser (and its predecessor) have provided investment
advisory services to the Fund since its inception. Dr. Zweig has been engaged in
the business of providing investment advisory services for over 28 years.
Phoenix Equity Planning Corporation (the "Administrator") serves as the Fund's
administrator and receives an administrative fee computed at the annual rate of
0.13% of the Fund's average daily net assets. The Fund pays the Investment
Adviser an investment advisory fee computed at the annual rate of 0.85% of the
Fund's average daily net assets. See "Management of the Fund."

TERMS OF THE OFFER

The Fund is issuing to its shareholders of record ("Record Date
Shareholders") as of the close of business on , 2002 (the "Record
Date"), non-transferable rights (the "Rights") to subscribe for up to an
aggregate of 8,800,000 shares of Common Stock (the "Shares") of the Fund. The
Fund may increase the number of shares of Common Stock subject to subscription
by up to 25% of the Shares, or up to an additional 2,200,000 shares of Common
Stock, for an aggregate total of 11,000,000 shares. Each Record Date Shareholder
is being issued one Right for each whole share of Common Stock owned on the
Record Date. The Rights entitle the holders thereof to subscribe for one Share
for every seven Rights held (the "Offer"). Fractional shares will not be issued
upon the exercise of Rights. If a Record Date Shareholder's total ownership is
fewer than seven shares, such shareholder may subscribe for one Share.

Rights may be exercised at any time during the Subscription Period, which
commences on , 2002 and ends at 5:00 p.m., New York City time, on
, 2002, unless extended by the Fund until 5:00 p.m., New York City
time, to a date not later than , 2002 (such date, as it may be
extended, is referred to in this Prospectus as the "Expiration Date"). A Record
Date Shareholder's right to acquire during the Subscription Period at the
Subscription Price (as described below) one additional Share for every seven
Rights held is hereinafter referred to as the "Primary Subscription." The Rights
are evidenced by subscription certificates (the "Subscription Certificates"),

which will be mailed to Record Date Shareholders, except as discussed in "The
Offer -- Foreign Restrictions."

The subscription price per share (the "Subscription Price") will be 95% of
the average of the last reported sales prices of a share of the Fund's Common
Stock on the NYSE on , 2002 (the "Pricing Date") and the four
preceding business days. Since the Expiration Date and the Pricing Date are each
, 2002, Record Date Shareholders who choose to exercise their Rights
will not know at the time of exercise the Subscription Price for Shares acquired
pursuant to such exercise. Record Date Shareholders will have no right to
rescind a purchase after receipt of their payment for Shares by the Fund's
subscription agent, EquiServe Trust Co., N.A. ("EquiServe" or the "Subscription
Agent"). There is no minimum number of Rights that must be exercised in order
for the Offer to close.

Pursuant to the over-subscription privilege (the "Over-Subscription
Privilege"), any Record Date Shareholder who fully exercises all Rights issued
to such shareholder in the Primary Subscription (other than those Rights that
cannot be exercised because they represent the right to acquire less than one
Share) will be entitled to subscribe for additional Shares at the Subscription
Price. Shares available, if any, pursuant to the Over-Subscription Privilege are
subject to allotment and may be subject to increase, as is more fully discussed
under "The Offer -- Over-Subscription Privilege." For purposes of determining
the maximum number of Shares a Record Date Shareholder may acquire pursuant to
the Offer, Record Date Shareholders whose shares of Common Stock are held of
record by Cede & Co. Inc. ("Cede") or by any other depository or nominee will be
deemed to be the holders of the Rights that are issued to Cede or such other
depository or nominee on their behalf.

The Rights are non-transferable. Therefore, only the underlying Shares will
be listed for trading on the NYSE, PCX or any other exchange.

PURPOSE OF THE OFFER

The Board of Directors of the Fund has determined that it would be in the
best interests of the Fund and its shareholders to increase the assets of the
Fund available for investment, thereby enabling the Fund to more fully take
advantage of investment opportunities consistent with the Fund's investment
objective. The Fund's Board of Directors has voted unanimously to approve the
terms of the Offer as set forth in this Prospectus.

In reaching its decision, the Board of Directors considered, among other
things, advice by the Investment Adviser and the Sub-Adviser that new funds
would allow the Fund additional flexibility to capitalize on available
investment opportunities without the necessity of having to sell existing
portfolio securities that the Investment Adviser believes should be held.
Proceeds from the Offer will allow the Investment Adviser to better take
advantage of such existing and future investment opportunities.

The Board of Directors also considered that the Offer would provide
shareholders with an opportunity to purchase additional shares of the Fund below
its market price, and that a well-subscribed rights offering may result in
certain economies of scale which could reduce the Fund's expense ratio in future
years. Finally, the Board of Directors considered that, because the Subscription
Price per Share may be less than the net asset value per share on the Pricing
Date, the Offer may result in dilution of the Fund's net asset value per share.
The Board of Directors believes that the factors in favor of the Offer outweigh
this possible dilution. See "Risk Factors and Special
Considerations -- Dilution -- Net Asset Value and Non-Participation in the
Offer."

not known how many Shares will be subscribed for and because the proceeds of the
Offer will be invested in additional portfolio securities, which will fluctuate
in value. See "Management of the Fund."

The information agent (the "Information Agent") for the Offer is:

[ ]

Banks and Brokers Call Collect:
( )

All Others Call Toll-Free:
( )

Shareholders may also contact their brokers or nominees for information
with respect to the Offer.

IMPORTANT DATES TO REMEMBER

EVENT DATE
----- ----

Record Date , 2002
Subscription Period , 2002 to , 2002*
Expiration Date and Pricing Date , 2002*
Subscription Certificates and Payment for Shares Due+ , 2002*
Notice of Guaranteed Delivery Due+ , 2002*
Subscription Certificates and Payment for Guarantees of
Delivery Due , 2002*
Confirmation to Participants , 2002*
Final Payment for Shares , 2002*

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* Unless the Offer is extended to a date not later than , 2002.

+ Record Date Shareholders exercising Rights must deliver to the Subscription
Agent by the Expiration Date either (i) the Subscription Certificate together
with payment or (ii) a Notice of Guaranteed Delivery.

RISK FACTORS AND SPECIAL CONSIDERATIONS

The following summarizes certain matters that should be considered, among
others, in connection with the Offer.

Dilution -- Net Asset Value
and Non-Participation in the
Offer Record Date Shareholders who do not fully
exercise their Rights will, upon the completion
of the Offer, own a smaller proportional
interest in the Fund than they owned prior to
the Offer. In addition, an immediate dilution
of the Fund's net asset value per share may be
experienced by all shareholders as a result of
the Offer because the Subscription Price per
Share may be less than the Fund's net asset
value per share on the Pricing Date, and the
number of shares outstanding after the Offer
may increase in greater percentage than the
increase in the size of the Fund's assets.
Although it is not possible to state precisely
the amount of such decrease in net asset value
per share, if any, because it is not known at
this time what the Subscription Price will be,
what the net asset value per share will be on
the Pricing Date, or what proportion of the
Shares will be subscribed for, such dilution
could be minimal or substantial. For example,
assuming (i) all Rights are exercised, (ii) the
Fund's net asset value on the Pricing Date is
$ per share (the net asset value per share
on

, 2002) and (iii) the Subscription Price is
$ per share (95% of the last reported sale
price per share on the NYSE on ,
2002), then the Fund's net asset value per
share would be reduced by approximately
$ per share or %.

Certain Investment Strategies The extent of the Fund's investment in equity
securities will be determined by the Investment
Adviser, primarily utilizing market timing
techniques developed by Dr. Martin E. Zweig,
President of the Sub-Adviser, and his staff.
While the Investment Adviser seeks to reduce
the risks associated with investing in equity
securities by using these techniques, such
risks cannot be eliminated. There is no
assurance that these market timing techniques
will provide protection from the risks of
equity investment, enable the Fund to be
invested consistent with the major trends of
the market or enable the Fund to achieve its
investment objective of capital appreciation.
See "Investment Objective and Policies --
Investment Objective." In addition, although
the Investment Adviser may use one or more of
the special investment methods discussed in
this Prospectus under "Investment Objectives
and Policies -- Special Investment Methods" to
further the Fund's investment objective of
capital appreciation and/or reduce losses that
might otherwise occur during a time of general
decline in stock prices, no assurance can be
given that any or all of these investment
methods will be used or, if used, will achieve
either or both of these results. These methods
may subject an investor in the Fund to greater
than average risks and costs.

Discount From Net Asset Value The Fund's shares of Common Stock have traded
in the market above, at and below net asset
value since the commencement of the Fund's
operations in October 1986. The Fund cannot
predict whether the Fund's Common Stock will in
the future trade at a premium to or discount
from net asset value. The risk of the Common
Stock trading at a discount is a risk separate
from a decline in the Fund's net asset value.
See "Market Price and Net Asset Value
Information" in this Prospectus and "Net Asset
Value" in the Statement of Additional
Information (the "SAI").

Distributions The Fund's policy is to make quarterly
distributions equal to 2.5% of its net asset
value (10% on an annualized basis). If, for any
quarterly distribution, the Fund's net
investment income and net realized short-term
capital gains are less than the amount of the
distribution, the difference will be
distributed from the Fund's assets. The Fund's
final distribution for each calendar year will
include any remaining net investment income and
net realized short-term capital gains deemed,
for Federal income tax purposes, undistributed
during the year, and may, but need not, include
all net long-term capital gains realized during
the year. If, for any calendar year, the Fund's
total distributions exceed its net investment
income and net realized capital gains, the
excess, distributed from the Fund's assets,
will generally be treated as a tax-free return
of capital (up to the amount of the

shareholder's tax basis in his or her shares).
The amount treated as a tax-free return of
capital will reduce a shareholder's adjusted
basis in his or her shares, thereby increasing
his or her potential gain or reducing his or
her potential loss on the sale of his or her
shares. Pursuant to the requirements of the
1940 Act and other applicable laws, a notice
will accompany each quarterly distribution with
respect to the estimated source of the
distribution made. This distribution policy
may, under certain circumstances, have certain
adverse consequences to the Fund and its
shareholders. In the event the Fund distributes
amounts in excess of its net investment income
and net realized capital gains, such
distributions will decrease the Fund's total
assets and, therefore, have the likely effect
of increasing the Fund's expense ratio. In
addition, in order to make such distributions,
the Fund may have to sell a portion of its
investment portfolio at a time when independent
investment judgment might not dictate such
action.

Anti-takeover Provisions The Fund has provisions in its Articles of
Incorporation and By-Laws that may have the
effect of limiting the ability of other
entities or persons to acquire control of the
Fund, to cause it to engage in certain
transactions or to modify its structure. The
Board of Directors is divided into three
classes. At the annual meeting of shareholders
each year, the term of one class will expire
and directors will be elected to serve in that
class for terms of three years. This provision
could delay for up to two years the replacement
of a majority of the Board of Directors.

FUND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES
Sales Load N/A
ANNUAL EXPENSES (as a percentage of the Fund's net
assets)(1)
Advisory Fees 0.85%
Administration Fees 0.13%
Other Expenses %
---
Total Annual Expenses(2) %
===

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(1) Fees payable under the Investment Advisory Agreement and Administration
Agreement (as defined in this Prospectus) are calculated on the basis of the
Fund's average net assets. The Investment Adviser is responsible for the
payment of sub-advisory fees to the Sub-Adviser. "Other Expenses" have been
estimated for the current fiscal year. See "Management of the Fund."

(2) The indicated % expense ratio assumes that the Offer (including the
Over-Subscription Privilege) is fully subscribed and assumes estimated net
proceeds from the Offer of approximately $ million (assuming an
estimated Subscription Price of $ per share). Other expenses for the
fiscal year ended December 31, 2001 were 0.21% as a percentage of average
net assets.

THE FOREGOING FEE TABLE IS INTENDED TO ASSIST FUND INVESTORS IN
UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT AN INVESTOR IN THE FUND WILL
BEAR DIRECTLY OR INDIRECTLY.

EXAMPLE

An investor would directly or indirectly pay the following expense on a
$1,000 investment in the Fund, assuming a 5% annual return throughout the
periods:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------

$ $ $ $

This hypothetical example assumes that all dividends and other
distributions are reinvested at net asset value and that the % expense
ratio listed under Total Annual Expenses remains the same in the years shown.
The above tables and the assumption in this example of a 5% annual return are
required by regulations of the Securities and Exchange Commission (the
"Commission") applicable to all investment companies; the assumed 5% annual
return is not a prediction of, and does not represent, the projected or actual
performance of the Fund's Shares. For a more complete description of certain of
the Fund's costs and expenses, see "Management of the Fund -- Investment Adviser
and Sub-Adviser; -- Investment Advisory Agreement; and -- Administrator" in this
Prospectus and "Expenses" and "Portfolio Transactions and Brokerage" in the SAI.

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

FINANCIAL HIGHLIGHTS

The table below sets forth certain specified information for a share of the
Fund's Common Stock outstanding throughout each period presented. This
information is derived from the financial and accounting records of the Fund.
The financial highlights for the fiscal year ended December 31, 2001 and the
prior nine years have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose reports thereon were unqualified. The financial statements
and notes thereto, together with the report of independent accountants, have
been incorporated by reference in the SAI.

YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- -------- --------

PER SHARE DATA:
Net asset value, beginning of year.... $ 10.32 $ 12.20 $ 12.03 $ 12.63 $ 11.45 $ 11.06 $ 10.33
-------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................. -- $ 0.20 $ 0.20 $ 0.23 0.35 0.34 0.39
Net realized and unrealized gains
(losses) on investments............. (1.47) (0.90) 1.16 0.55 2.03 1.15 1.41
-------- -------- -------- -------- -------- -------- --------
Total from investment operations...... (1.47) (0.70) 1.36 0.78 2.38 1.49 1.80
-------- -------- -------- -------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.01) (0.21) (0.19) (0.35) (0.31) (0.30) (0.51)
Distributions from net realized gains
on investments...................... (0.07) (0.97) (1.00) (0.87) (0.89) (0.80) (0.56)
Tax return of capital................. (0.81) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total Dividends and Distributions..... (0.89) (1.18) (1.19) (1.22) (1.20) (1.10) (1.07)
-------- -------- -------- -------- -------- -------- --------
Effect on net asset value as a result
of rights offering*................. -- -- -- (0.16) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of year........ $ 7.96 $ 10.32 $ 12.20 $ 12.03 $ 12.63 $ 11.45 $ 11.06
======== ======== ======== ======== ======== ======== ========
Market value, end of year**......... $ 7.90 $ 9.81 $ 10.06 $ 10.81 $ 13.25 $ 10.875 $ 11.25
======== ======== ======== ======== ======== ======== ========
Total investment return***............ (11.27)% 9.45% 3.61% (8.68)% 34.76% 6.92% 19.83%
======== ======== ======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
thousands).......................... $489,261 $620,354 $733,523 $723,521 $666,366 $589,081 $547,886
Ratio of expenses to average net
assets.............................. 1.19% 1.12% 1.12% 1.12% 1.16% 1.18% 1.22%
Ratio of net investment income to
average net assets.................. (0.03)% 1.74% 1.68% 1.90% 2.88% 3.12% 3.62%
Portfolio turnover rate............... 80.3% 114.8% 114.9% 68.7% 93.0% 137.2% 160.2%

YEARS ENDED DECEMBER 31,
------------------------------
1994 1993 1992
-------- -------- --------

PER SHARE DATA:
Net asset value, beginning of year.... $ 11.68 $ 11.36 $ 12.40
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................. 0.24 0.13 0.20
Net realized and unrealized gains
(losses) on investments............. (0.45) 1.41 (0.10)
-------- -------- --------
Total from investment operations...... (0.21) 1.54 0.10
-------- -------- --------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.03) (0.22) (0.10)
Distributions from net realized gains
on investments...................... (1.11) (1.00) (1.04)
Tax return of capital................. -- -- --
-------- -------- --------
Total Dividends and Distributions..... (1.14) (1.22) (1.14)
-------- -------- --------
Effect on net asset value as a result
of rights offering*................. -- -- --
-------- -------- --------
Net asset value, end of year........ $ 10.33 $ 11.68 $ 11.36
======== ======== ========
Market value, end of year**......... $ 10.375 $ 13.75 $ 13.00
======== ======== ========
Total investment return***............ (16.95)% 16.59% 3.61%
======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
thousands).......................... $492,004 $534,813 $500,101
Ratio of expenses to average net
assets.............................. 1.25% 1.23% 1.26%
Ratio of net investment income to
average net assets.................. 2.24% 1.18% 1.73%
Portfolio turnover rate............... 257.0% 235.5% 172.5%

---------------
* Shares were sold at a 5% discount from the average market price.
** Closing Price -- New York Stock Exchange, Inc.
*** Total investment return is calculated assuming a purchase of common stock on
the opening of the first business day and a sale on the closing of the last
business day of each period reported. Dividends and distributions, if any,
are assumed for the purposes of this calculation, to be reinvested at prices
obtained under the Fund's Distribution 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 end of such periods.

THE OFFER

TERMS OF THE OFFER

The Fund is issuing to the Record Date Shareholders the Rights to subscribe
for up to an aggregate of 8,800,000 Shares. The Fund may increase the number of
shares of Common Stock subject to subscription by up to 25% of the Shares, or up
to an additional 2,200,000 shares, for an aggregate total of 11,000,000 shares.
Each Record Date Shareholder is being issued one Right for each whole share of
Common Stock owned on the Record Date. The Rights entitle the holders thereof to
subscribe for one Share for every seven Rights held (1 for 7). Fractional shares
will not be issued upon the exercise of Rights. A Record Date Shareholder whose
total ownership is fewer than seven shares of Common Stock and, accordingly,
receives fewer than seven Rights will be able to subscribe for one Share upon
the exercise of all of such Rights received and, if he or she subscribes for one
Share, may subscribe for additional Shares pursuant to the Over-Subscription
Privilege. Record Date Shareholders who otherwise have remaining fewer than
seven Rights will not be able to purchase a Share upon the exercise of such
Rights and will not be entitled to receive any cash in lieu thereof, although
such Record Date Shareholders may subscribe for additional Shares pursuant to
the Over-Subscription Privilege.

Rights may be exercised at any time during the Subscription Period, which
commences on , 2002 and ends at 5:00 p.m., New York City time, on
, 2002, unless extended by the Fund until 5:00 p.m., New York City time,
to a date not later than , 2002. See "Expiration of the Offer" below. The
Rights are evidenced by Subscription Certificates, which will be mailed to
Record Date Shareholders, except as discussed below under "Foreign
Restrictions."

Any Record Date Shareholder who fully exercises all Rights issued to such
shareholder in the Primary Subscription will be entitled to subscribe for
additional Shares at the Subscription Price pursuant to the terms of the
Over-Subscription Privilege, as described below. Shares available, if any,
pursuant to the Over-Subscription Privilege are subject to allotment and may be
subject to increase, as is more fully discussed below under "Over-Subscription
Privilege." For purposes of determining the maximum number of Shares a
shareholder may acquire pursuant to the Offer, Record Date Shareholders whose
shares of Common Stock are held of record by Cede or by any other depository or
nominee will be deemed to be the holders of the Rights that are issued to Cede
or such other depository or nominee on their behalf.

PURPOSE OF THE OFFER

The Board of Directors also considered that the Offer would provide
shareholders with an opportunity to purchase additional shares of the Fund below
its market price. The Board of Directors also believes that a well-subscribed
rights offering may result in certain economies of scale which could reduce the
Fund's expense ratio in future years. Finally, the Board of Directors considered
that, because the Subscription Price per Share may be less than the net asset
value per share on the Pricing Date, the Offer may result in dilution of the
Fund's net asset value per share. The Board of Directors believes that the
factors in favor of the Offer outweigh this possible dilution. See "Risk Factors
and Special Considerations -- Dilution-Net Asset Value and Non-Participation in
the Offer."

The Investment Adviser and Administrator will benefit from the Offer
because their fees are based on the average net assets of the Fund. It is not
possible to state precisely the amount of additional compensation the Investment
Adviser or Administrator will receive as a result of the Offer because it is not
known how many Shares will be subscribed for and because the proceeds of the
Offer will be invested in additional portfolio securities, which will fluctuate
in value. See "Management of the Fund."

The Fund may, in the future and at its discretion, choose to make
additional rights offerings from time to time for a number of shares and on
terms that may or may not be similar to the Offer. Any such future rights
offerings will be made in accordance with the then applicable requirements of
the 1940 Act.

OVER-SUBSCRIPTION PRIVILEGE

To the extent Record Date Shareholders do not exercise all of the Rights
issued to them, any underlying Shares represented by such Rights will be offered
by means of the Over-Subscription Privilege to those Record Date Shareholders
who have exercised all of the Rights issued to them and who wish to acquire more
than the number of Shares to which they are entitled. Only Record Date
Shareholders who exercise all the Rights issued to them may indicate, on the
Subscription Certificate which they submit with respect to the exercise of the
Rights issued to them, how many Shares they desire to purchase pursuant to the
Over-Subscription Privilege. If sufficient Shares remain after completion of the
Primary Subscription, all over-subscription requests will be honored in full. If
sufficient Shares are not available to honor all over-subscription requests, the
Fund may, at the discretion of the Board of Directors, issue shares of Common
Stock up to an additional 25% of the Shares available pursuant to the Offer, or
2,200,000 additional shares of Common Stock, in order to cover such
over-subscription requests. Regardless of whether the Fund issues additional
shares pursuant to the Offer and to the extent Shares are not available to honor
all over-subscription requests, the available Shares will be allocated among
those who over-subscribe based on the number of shares of Common Stock owned by
them on the Record Date. This allocation process may involve a series of
allocations in order to assure that the total number of Shares available for
over-subscription is distributed, as nearly as may be practicable, on a pro rata
basis. The Fund will not offer to sell in connection with the Offer any Shares
that are not subscribed for pursuant to the Primary Subscription or the
Over-Subscription Privilege.

SUBSCRIPTION PRICE

The Subscription Price for the Shares to be issued pursuant to the Offer
will be 95% of the average of the last reported sales price of a share of the
Fund's Common Stock on the NYSE on , 2002 (the "Pricing Date") and the
four preceding business days. For example, if the average of the last reported
sales price on the NYSE on the Pricing Date and the four preceding business days
of a share of the Fund's Common Stock is $8.00, the Subscription Price will be
$7.60 (95% of $8.00). The Subscription Price may be higher or lower than the
Fund's then current net asset value per share.

The Fund announced the Offer on March 14, 2002. The net asset value per
share of Common Stock at the close of business on , 2002 and ,
2002, was $ and $ , respectively, and the last reported sales prices of
a share of the Fund's Common Stock on the NYSE on those dates was $
and $ , respectively.

EXPIRATION OF THE OFFER

The Offer will expire at 5:00 p.m., New York City time, on , 2002,
unless extended by the Fund until 5:00 p.m., New York City time, to a date not
later than , 2002. The Rights will expire on the Expiration Date and
thereafter may not be exercised. Since the Expiration Date and the Pricing Date
will be the same date, Record Date Shareholders who decide to acquire Shares in
the Primary Subscription or pursuant to the Over-Subscription Privilege will not
know when they make such decision the purchase price of such Shares. Any
extension of the Offer will be followed as promptly as practicable by
announcement thereof. Such announcement will be issued no later than 9:00 a.m.,
New York City time, on the next business day following the previously scheduled
Expiration Date. Without limiting the

manner in which the Fund may choose to make such announcement, the Fund will
not, unless otherwise required by law, have any obligation to publish, advertise
or otherwise communicate any such announcement other than by making a release to
the Dow Jones News Service or such other means of announcement as the Fund deems
appropriate.

METHOD OF EXERCISE OF RIGHTS

The Subscription Certificates, which evidence the Rights, will be mailed to
Record Date Shareholders or, if a Record Date Shareholder's shares of Common
Stock are held by Cede or any other depository or nominee on their behalf, to
Cede or such other depository or nominee. Rights may be exercised by fully
completing and signing the Subscription Certificate which accompanies this
Prospectus and mailing it in the envelope provided, or otherwise delivering the
completed and signed Subscription Certificate to the Subscription Agent,
together with payment in full for the Shares at the estimated payment price (the
"Estimated Payment Price") as described below under "Payment for Shares." Rights
may also be exercised by a Record Date Shareholder contacting his or her broker,
bank or trust company, which can arrange, on his or her behalf, to guarantee
delivery of payment (using a "Notice of Guaranteed Delivery") and of a properly
completed and executed Subscription Certificate. The broker, bank or trust
company may charge a fee for this service. Fractional Shares will not be issued.
A Record Date Shareholder whose total ownership is fewer than seven shares of
Common Stock and, accordingly, receives fewer than seven Rights will be able to
subscribe for one Share upon the exercise of all of such Rights received and, if
he or she subscribes for one Share, will be able to request additional Shares
pursuant to the terms of the Offer applicable to the Over-Subscription
Privilege. Record Date Shareholders who otherwise have remaining fewer than
seven Rights will not be able to purchase a Share upon the exercise of such
Rights but will be able to request additional Shares pursuant to the terms of
the Offer applicable to the Over-Subscription Privilege. Completed Subscription
Certificates must be received by the Subscription Agent prior to 5:00 p.m., New
York City time, on the Expiration Date (unless the guaranteed delivery
procedures are complied with as described below under "Payment for Shares") at
the offices of the Subscription Agent at the address set forth below.

Shareholders Who Are Record Owners. Shareholders who are record owners can
choose between either option set forth under "Payment for Shares" below. If time
is of the essence, option (2), under "Payment for Shares" below, will permit
delivery of the Subscription Certificate and payment after the Expiration Date.

Shareholders Whose Shares Are Held By A Nominee. Shareholders whose shares
are held by a nominee, such as a broker or trustee, must contact such nominee to
exercise their Rights. In that case, the nominee will complete the Subscription
Certificate on behalf of the investor and arrange for proper payment by one of
the methods set forth under "Payment for Shares" below.

Nominees. Nominees who hold shares of Common Stock for the account of
others must (to the extent required by applicable law) notify the beneficial
owners of such shares as soon as possible to ascertain such beneficial owners'
intentions and to obtain instructions with respect to the Rights. If the
beneficial owner so instructs, the nominee should complete the Subscription
Certificate and submit it to the Subscription Agent with the proper payment
described under "Payment for Shares" below.

INFORMATION AGENT

Any questions or requests for assistance may be directed to the Information
Agent at its telephone number and address listed below:

The Information Agent for the Offer is:

[
---------------------]
[Address]

Banks and Brokers Call Collect:
( )

All Others Call Toll-Free:
( )

Shareholders may also contact their brokers or nominees for information
with respect to the Offer.

The Information Agent will receive a fee estimated to be approximately
$ , which includes reimbursement for all out-of-pocket expenses related to
the Offer.

SUBSCRIPTION AGENT

The Subscription Agent is EquiServe Trust Co., N.A., which will receive for
its administrative, processing, invoicing and other services as subscription
agent, a fee estimated to be approximately $ , which includes
reimbursement for all out-of-pocket expenses related to the Offer. Signed
Subscription Certificates must be sent, together with payment at the Estimated
Payment Price for all Shares subscribed in the Primary Subscription and
Over-Subscription Privilege by one of the methods described below, prior to 5:00
p.m., New York City time, on the Expiration Date. Alternatively, if using a
Notice of Guaranteed Delivery, the Notice of Guaranteed Delivery (see "Method of
Exercise of Rights" above) may also be sent by facsimile to (781) 828-8813, with
the originals to be sent promptly thereafter by one of the methods described
below. Facsimiles should be confirmed by telephone to ( ) -
.

(1) By First Class Mail Only:

EquiServe Trust Co., N.A.
Attention: Zweig Funds
P.O. Box 43010
Providence, RI 02940-3010

(2) By Hand:

[ ]

(3) By Express Mail or Overnight Courier:

EquiServe Trust Co., N.A.
Attention: Zweig Funds
150 Royall Street
Canton, MA 02021

(4) Guarantee of Delivery: For Eligible Institutions Only:

The Notice of Guaranteed Delivery may also be sent by facsimile to (781)
828-8813, with the originals to be sent promptly thereafter by one of the
methods described above. Facsimiles should be confirmed by telephone to ( )
- .

DELIVERY TO AN ADDRESS OTHER THAN ONE OF THE ADDRESSES LISTED ABOVE, OR
TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN AS LISTED ABOVE, WILL NOT
CONSTITUTE VALID DELIVERY.

PAYMENT FOR SHARES

Record Date Shareholders who acquire Shares in the Primary Subscription and
pursuant to the Over-Subscription Privilege may choose between the following
methods of payment:

(1) A Record Date Shareholder can send the Subscription Certificate
together with payment for the Shares acquired in the Primary Subscription and
for additional Shares subscribed for pursuant to the Over-Subscription Privilege
to the Subscription Agent. Payment should be calculated on the basis of the
Estimated Payment Price of $ per Share for all Shares requested. To be
accepted, such payment, together with the executed Subscription Certificate,
must be received by the Subscription Agent at one of the Subscription Agent's
offices at the addresses set forth above prior to 5:00 p.m., New York City time,
on the Expiration Date. The Subscription Agent will deposit all checks and money
orders received by it prior to the final payment date into a segregated
interest-bearing account (which interest will be paid to the Fund) pending
proration and distribution of the Shares. A PAYMENT PURSUANT TO THIS METHOD MUST
BE IN UNITED STATES DOLLARS BY MONEY ORDER OR CHECK DRAWN ON A BANK LOCATED IN
THE UNITED STATES, MUST BE PAYABLE TO THE ZWEIG FUND, INC. AND MUST ACCOMPANY A
PROPERLY COMPLETED AND EXECUTED SUBSCRIPTION CERTIFICATE FOR SUCH SUBSCRIPTION
CERTIFICATE TO BE ACCEPTED.

(2) Alternatively, a subscription will be accepted by the Subscription
Agent if, prior to 5:00 p.m., New York City time, on the Expiration Date, the
Subscription Agent has received a Notice of Guaranteed Delivery by facsimile
(telecopy) or otherwise from a bank, a trust company or a NYSE member firm
guaranteeing delivery of (i) payment of the Estimated Payment Price of $
per share for the Shares subscribed for in the Primary Subscription and for any
additional Shares subscribed for pursuant to the Over-Subscription Privilege,
and (ii) a properly completed and executed Subscription Certificate. The
Subscription Agent will not honor a Notice of Guaranteed Delivery unless a
properly completed and executed Subscription Certificate together with full
payment is received by the Subscription Agent by the close of business on the
third business day after the Expiration Date ( , 2002, unless the Offer is
extended).

Within business days following the Expiration Date ( , 2002,
unless the Offer is extended, the "Confirmation Date"), a confirmation will be
sent by the Subscription Agent to each subscribing Record Date Shareholder (or,
if the Record Date Shareholder's shares of Common Stock are held by Cede or any
other depository or nominee, to Cede or such depository or nominee), showing (i)
the number of Shares acquired pursuant to the Primary Subscription, (ii) the
number of Shares, if any, acquired pursuant to the Over-Subscription Privilege,
(iii) the per Share and total purchase price of the Shares, and (iv) any
additional amount payable by such Record Date Shareholder to the Fund or any
excess to be refunded by the Fund to such Record Date Shareholder, in each case
based on the Subscription Price as determined on the Pricing Date. If any Record
Date Shareholder exercises his or her right to acquire Shares pursuant to the
Over-Subscription Privilege, any such excess payment which would otherwise be
refunded to the Record Date Shareholder will be applied by the Fund toward
payment for additional Shares acquired pursuant to exercise of the
Over-Subscription Privilege. Any additional payment required from a Record Date
Shareholder must be received by the Subscription Agent within ten business days
after the Confirmation Date. Any excess payment to be refunded by the Fund to a
Record Date Shareholder will be mailed by the Subscription Agent to such Record
Date Shareholder as promptly as possible. All payments by a Record Date
Shareholder must be in United States dollars by money order or check drawn on a
bank located in the United States of America and payable to THE ZWEIG FUND, INC.

Whichever of the two methods described above is used, issuance and delivery
of certificates for the Shares purchased are subject to collection of checks and
actual payment pursuant to any Notice of Guaranteed Delivery.

RECORD DATE SHAREHOLDERS WILL HAVE NO RIGHT TO RESCIND THEIR SUBSCRIPTION
AFTER RECEIPT OF THEIR PAYMENT FOR SHARES BY THE SUBSCRIPTION
12

AGENT, EXCEPT AS PROVIDED BELOW UNDER "POSSIBLE SUSPENSION OR WITHDRAWAL OF THE
OFFER."

If a Record Date Shareholder who acquires Shares pursuant to the Primary
Subscription or Over-Subscription Privilege does not make payment of any
additional amounts due by the tenth business day after the Confirmation Date,
the Fund reserves the right to take any or all of the following actions: (i)
sell such subscribed and unpaid-for Shares to other Record Date Shareholders,
(ii) apply any payment actually received by it toward the purchase of the
greatest whole number of Shares which could be acquired by such holder upon
exercise of the Primary Subscription or Over-Subscription Privilege, or (iii)
exercise any and all other rights or remedies to which it may be entitled.

THE METHOD OF DELIVERY OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE
SUBSCRIPTION PRICE TO THE FUND WILL BE AT THE ELECTION AND RISK OF THE RIGHTS
HOLDERS, BUT IF SENT BY MAIL IT IS RECOMMENDED THAT SUCH CERTIFICATES AND
PAYMENT BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT
REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO ENSURE DELIVERY TO
THE FUND AND CLEARANCE OF PAYMENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE. BECAUSE UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE
BUSINESS DAYS TO CLEAR AND, MAY AT THE DISCRETION OF THE FUND, NOT BE ACCEPTED
IF NOT CLEARED PRIOR TO THE EXPIRATION DATE, YOU ARE STRONGLY ENCOURAGED TO PAY,
OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR BANK CASHIER'S CHECK OR MONEY
ORDER.

All questions concerning the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by the Fund, whose determinations will
be final and binding. The Fund in its sole discretion may waive any defect or
irregularity, or permit a defect or irregularity to be corrected within such
time as it may determine, or reject the purported exercise of any Right.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as the Fund determines
in its sole discretion. The Fund will not be under any duty to give notification
of any defect or irregularity in connection with the submission of Subscription
Certificates or incur any liability for failure to give such notification.

POSSIBLE SUSPENSION OR WITHDRAWAL OF THE OFFER

The Fund has, as required by the Commission's registration form, undertaken
to suspend the Offer until it amends this Prospectus if, subsequent to the
effective date of the Fund's Registration Statement, the Fund's net asset value
declines more than 10% from its net asset value as of such effective date or its
net asset value increases to an amount greater than its net proceeds as stated
herein. Accordingly, the Fund will notify Record Date Shareholders of any such
decline or increase and permit them to cancel their exercise of Rights.

NON-TRANSFERABILITY OF RIGHTS

The Rights are non-transferable and, therefore, may not be purchased or
sold. The Rights will not be listed for trading on the NYSE, PCX or any other
exchange. However, the additional Shares of Common Stock to be issued upon the
exercise of the Rights and the Over-Subscription Privilege will be listed for
trading on the NYSE and PCX, subject to notice of issuance.

DELIVERY OF SHARE CERTIFICATES

Stock certificates for all Shares acquired in the Primary Subscription will
be mailed promptly after the expiration of the Offer and full payment for the
subscribed Shares has been received and cleared. Certificates representing
Shares acquired pursuant to the Over-Subscription Privilege will be mailed as
soon as practicable after full payment has been received and cleared and all
allocations have been effected. Participants in the Fund's Distribution
Reinvestment and Cash Purchase Plan (the "Plan") will have any
13

Shares acquired in the Primary Subscription and pursuant to the
Over-Subscription Privilege credited to their shareholder distribution
reinvestment accounts in the Plan. Participants in the Plan wishing to exercise
Rights for the shares of Common Stock held in their accounts in the Plan must
exercise them in accordance with the procedures set forth above. Record Date
Shareholders whose shares of Common Stock are held of record by Cede or by any
other depository or nominee on their behalf or their broker-dealers' behalf will
have any Shares acquired in the Primary Subscription credited to the account of
Cede or such other depository or nominee. Shares acquired pursuant to the
Over-Subscription Privilege will be credited directly to Cede or such other
depository or nominee.

FOREIGN RESTRICTIONS

Record Date Shareholders whose record addresses are outside the United
States (for these purposes, the United States includes its territories and
possessions and the District of Columbia) will receive written notice of the
Offer; however, Subscription Certificates will not be mailed to such
shareholders. The Rights to which those Subscription Certificates relate will be
held by the Subscription Agent for such foreign Record Date Shareholders'
accounts until instructions are received in writing with payment to exercise the
Rights. If no such instructions are received by the Expiration Date, such Rights
will expire.

FEDERAL INCOME TAX CONSEQUENCES

The U.S. Federal income tax consequences to holders of Common Stock with
respect to the Offer will be as follows:

For Federal income tax purposes, the distribution of Rights will not result
in taxable income to a shareholder nor will the shareholder recognize gain or
loss as a result of the exercise of the Rights. No loss will be recognized by a
shareholder if the Rights expire without exercise.

The tax basis of a U.S. shareholder's Common Stock will remain unchanged
and the shareholder's basis in the Rights will be zero, unless such U.S.
shareholder affirmatively and irrevocably elects (in a statement attached to
such shareholder's U.S. Federal income tax return for the year in which the
Rights are received) to allocate the basis in the Common Stock between such
Common Stock and the Rights in proportion to their respective fair market values
on the date of distribution.

If Rights are exercised by the holder of Common Stock, the basis of the
Common Stock received will equal the Subscription Price (plus any basis
allocated to the Rights in the manner described in the preceding paragraph). For
purposes of determining whether capital gain or loss recognized upon a
subsequent sale of the Common Stock acquired upon exercise of a Right (assuming
the Common Stock is held as a capital asset) is short-term or long-term, the
holding period of the Common Stock so acquired will begin on the day after the
date the Right is exercised.

The foregoing is only a general summary of the applicable U.S. Federal
income tax law and does not include any state, local or foreign tax consequences
of the Offer. Such applicable U.S. Federal income tax law is subject to change
by legislative or administrative action. Shareholders should consult their tax
advisers concerning the tax consequences of the Offer. See "Taxation" in this
Prospectus and in the SAI.

EMPLOYEE PLAN CONSIDERATIONS

Shareholders that are employee benefit plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (including
corporate savings and 401(k) plans), Keogh or H.R. 10 plans of self-employed
individuals and Individual Retirement Accounts ("IRAs") (collectively, "Plans")
should be aware of the complexity of the rules and regulations governing Plans
and the penalties for noncompliance, and Plans should consult with their counsel
regarding the consequences of their exercise of Rights under ERISA and the
Internal Revenue Code of 1986, as amended (the "Code").

USE OF PROCEEDS

If all of the Rights are exercised in full and assuming a Subscription
Price of $ per share (95% of the last reported sales price per share on
the NYSE on , 2002), the net proceeds to the Fund would be
approximately $ , after deducting expenses payable by the Fund in
connection with the offering estimated to total $ . If the Fund
increases the number of shares of Common Stock subject to subscription by up to
2,200,000 shares, in order to satisfy over-subscription requests, the additional
net proceeds will be approximately $ . However, there can be no
assurance that all Rights will be exercised in full, and the Subscription Price
will not be determined until the close of business on the Expiration Date. The
Investment Adviser has advised the Fund that it anticipates that substantially
all of the net proceeds of the Offer will be invested in investments conforming
to the Fund's investment objective and policies within four weeks from their
receipt by the Fund, but in no event will such investment take longer than six
months from the Expiration Date. Pending such investment, the proceeds will be
invested in cash or cash equivalent short-term obligations, including, but not
limited to, U.S. Government obligations, certificates of deposit, commercial
paper and short-term notes. See "The Offer -- Purpose of the Offer."

THE FUND

The Fund, incorporated in Maryland on June 30, 1986, is a diversified,
closed-end management investment company registered under the 1940 Act. The
Fund's investment objective is capital appreciation, primarily through
investment in equity securities, consistent with the preservation of capital and
reduction of risk, as determined by the Fund's Investment Adviser. See
"Investment Objective and Policies."

The Investment Adviser, Phoenix/Zweig Advisers LLC, is a New York limited
liability company and a wholly-owned subsidiary of Phoenix Investment Partners,
Ltd., a Delaware corporation. Phoenix/Zweig Advisers LLC and Phoenix Investment
Partners, Ltd. are investment advisory firms registered with the Commission
under the Investment Advisers Act of 1940, as amended. Such registration does
not involve supervision or approval by the Commission of investment advice
rendered by the Investment Adviser. See "Management of the Fund."

The Sub-Adviser, Zweig Consulting LLC, is a New York limited liability
company and an investment advisory firm registered with the Commission under the
Investment Advisers Act of 1940, as amended. The President of the Sub-Adviser is
Dr. Martin E. Zweig, who has been engaged in the business of providing
investment advisory services for over 28 years. See "Management of the Fund."

The Fund completed an initial public offering of 34,010,696 shares of its
Common Stock in October 1986. The net proceeds to the Fund from such offering
were approximately $317,000,000. As of , 2002, the net assets of
the Fund were $ , and since inception, the Fund has paid distributions
(including dividends and capital gains distributions) aggregating $ .
The increase in the Fund's net assets since inception is attributable primarily
to appreciation in the value of its portfolio securities and the receipt of net
proceeds of approximately $44 million and $71 million from the Fund's August
1991 and April 1998 rights offerings.

The Fund's principal office is located at 900 Third Avenue, New York, New
York 10022, and its telephone number is (212) 451-1100.

MARKET PRICE AND NET ASSET VALUE INFORMATION

Shares of the Fund's Common Stock are listed on the NYSE and the PCX under
the symbol "ZF." The following table sets forth for the calendar quarters
indicated: (i) the high and low net asset value per share of the Fund's Common
Stock, (ii) the high and low closing prices per share of the Fund's Common

Stock on the NYSE and (iii) the percentage by which the shares of the Fund's
Common Stock traded at a premium over, or discount from, the Fund's high and low
net asset values per share.

HIGH HIGH NET PREMIUM LOW LOW NET PREMIUM
QUARTER ENDED SALES PRICE* ASSET VALUE (DISCOUNT) SALES PRICE* ASSET VALUE (DISCOUNT)
------------- ------------ ----------- ---------- ------------ ----------- ----------

3/31/00 $10.44 $12.20 -14.4% $9.13 $11.26 -19.0%
6/30/00 $10.00 $12.02 -16.8% $9.25 $10.99 -15.8%
9/30/00 $10.38 $11.88 -12.7% $9.75 $11.15 -12.6%
12/31/00 $10.38 $11.35 -8.6% $9.56 $ 9.92 -3.6%
3/31/01 $10.65 $10.50 1.4% $9.34 $ 8.40 11.2%
6/30/01 $10.10 $ 9.55 5.8% $9.30 $ 8.21 13.3%
9/30/01 $10.11 $ 8.95 13.0% $6.85 $ 6.74 1.6%
12/31/01 $ 8.38 $ 8.13 3.1% $7.81 $ 7.23 8.0%
3/31/02

---------------
* As reported by the NYSE.

The Fund's shares of Common Stock have traded in the market above, at and
below net asset value since the commencement of the Fund's operations in October
1986, and the Fund's Officers cannot predict whether the Subscription Price will
be above, at or below the Fund's net asset value per share on the Pricing Date.
In June 1987, the Fund established a policy of making quarterly distributions
equal to 2.5% of its net asset value (10% on an annualized basis). The Fund's
Officers cannot predict whether the Fund's shares of Common Stock in the future
will generally trade in the market at a premium above net asset value. See
"Distributions; Distribution Reinvestment and Cash Purchase Plan." The Fund is
authorized to repurchase its shares on the open market when the shares are
trading at a discount of 10% or more from net asset value. See "Description of
Common Stock -- Repurchase of Shares."

On , 2002, the net asset value per share of Common Stock was
$ and the last reported sales price was $ , representing a
net asset value per share of %.

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE

The Fund's investment objective is capital appreciation, primarily through
investment in equity securities, consistent with the preservation of capital and
reduction of risk, as determined by the Fund's Investment Adviser. The
Investment Advisor uses the Sub-Adviser to perform asset allocation research and
analysis and provide advice thereon to the Investment Adviser. The extent of the
Fund's investment in equity securities is determined by the Investment Adviser,
primarily utilizing market timing techniques developed by Dr. Martin E. Zweig,
President of the Sub-Adviser, and his staff. See "Management of the Fund." While
the Investment Adviser seeks to reduce the risks associated with investing in
equity securities by using these techniques, such risks cannot be eliminated. In
an effort to meet the Fund's investment objective, the Fund may use one or more
of the following investment methods when such use is deemed appropriate:
purchasing and selling, for hedging purposes, 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 other closed-end investment companies and foreign issuers; and lending
portfolio securities to brokers, dealers, banks or other recognized
institutional borrowers of securities. Debt securities which present
opportunities for capital appreciation may also be purchased. There is no
assurance that the Fund will use any or all of such methods or, whether or not
they are used, will achieve its investment objective. The Fund's investment
objective may not be changed without the approval of a majority of the Fund's
outstanding voting securities. As used in this Prospectus, the term "majority of
the Fund's outstanding voting securities" means the lesser of either (i) 67% of
the shares represented at a shareholders meeting at which the holders of more
than 50% of the outstanding shares are present in person or by proxy or (ii)
more than 50% of the outstanding shares.

INVESTMENT POLICIES

The Investment Adviser expects that the stocks in the Fund's portfolio will
be widely diversified by both industry and the number of issuers. It expects
that a majority of the stocks in the Fund's portfolio will be selected from
among the 700 largest companies trading on various U.S. stock exchanges. The
Investment Adviser then uses a proprietary computer-driven selection model that
evaluates and ranks such stocks on the basis of various factors, which may
include price-to-book value, price-to-earnings, per share earnings, per share
growth rate, price-to-cash flow, cash flow per share growth rate, analysts'
projections of future earnings per share growth and revenue per share growth,
recent price movements and market capitalization. Various qualitative measures
may also be employed.

In determining the extent of the Fund's investment in equity securities,
the Investment Adviser will rely primarily on market timing techniques developed
by Dr. Zweig, President of the Sub-Adviser, and his staff. It is expected that
the Investment Adviser will make most of the decisions with respect to the
extent of the Fund's investment in equity securities based on these techniques.
These techniques, which seek to identify the risks and trends in the equity
markets at any given time, include general market indicators, including interest
rate and monetary analysis, market sentiment indicators, price and trading
volume statistics and measures of valuation, as well as other market indicators
and statistics which the Sub-Adviser believes tend to point to significant
trends in the overall performance and the risk of the stock market. These
techniques are not an all-in or all-out approach that attempts to predict market
tops and bottoms. Instead, they are intended to be a gradual and disciplined
approach that reacts to changes in risk levels as determined by the indicators.
The goal is to be invested consistent with the major trends of the market. There
is no assurance that these market timing techniques will provide protection from
the risks of equity investment, enable the Fund to be invested consistent with
the major trends of the market or enable the Fund to achieve its investment
objective.

The Investment Adviser expects that at least 65% of the Fund's net assets
will consist of equity securities, including convertible securities and
warrants, with any balance composed of cash, investments in money market
instruments, non-convertible debt securities, short sales, security and stock
index options
17

and futures contracts and options on futures contracts. However, if the
Investment Adviser believes, in its judgment, on the basis of these market
timing techniques, that the investment environment is uncertain or unfavorable
and justifies a defensive position (during the period of such uncertainty), a
substantially lower percentage than 65% of the Fund's net assets, during the
existence of such circumstances, may consist of equity securities. If the
Investment Adviser so 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 ("U.S.
Government Securities"), 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.

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 will be limited to those that are rated, as of the date of
purchase, among the four highest rating categories of Moody's (Aaa, Aa, A and
Baa for bonds) or S&P (AAA, AA, A and BBB for bonds) or, if not rated by either
of them, determined by the Investment Adviser to be of comparable quality. The
Fund does not currently own, and has no current plans to acquire, any bonds
which are rated Baa or lower by Moody's or BBB or lower by S&P.

SPECIAL INVESTMENT METHODS

The Fund may use some or all of the following special investment methods
where their use appears appropriate to the Investment Adviser. No assurance can
be given that the Fund will use any or all of such investment methods or, if
used, that their use will achieve its investment objective. The investment
methods described below are subject to, and should be read in conjunction with,
the discussion under "Investment Restrictions" and "Investment Objective and
Policies" in the SAI. The restrictions set forth under "Investment Restrictions"
are fundamental, and thus may be changed only with the approval of a majority of
the Fund's outstanding voting securities.

Futures Contracts and Related Options.

The Fund may purchase and sell stock index futures contracts and futures
contracts based upon interest rates and other financial instruments, and
purchase options on such contracts. The Fund will not write options on any
futures contracts. Such investments may be made by the Fund for the purpose of
hedging against the effect that changes in general market conditions and
conditions affecting particular industries may have on the values of securities
held in the Fund's portfolio, or which the Fund intends to purchase.

In general, the Fund may establish short positions in (sell) futures
contracts to hedge against anticipated or potential declines in the market value
of the Fund's portfolio of securities. For example, when the Fund anticipates a
general market or market sector decline that may adversely affect the market
value of the Fund's portfolio securities, it may establish short positions in
stock index futures contracts.

Where the Fund anticipates a significant market or market sector advance,
establishing long positions in (purchasing) stock index futures contracts ("long
hedge") affords a hedge against not participating in such advance at a time when
the Fund is not fully invested. Such long hedges would serve as a temporary
substitute for the purchase of individual stocks, which may then be purchased in
an orderly fashion. As

purchases of stock are made, an amount of stock index futures contracts which is
comparable to the amount of stock purchased may be terminated by offsetting
closing sales transactions.

There are certain risks associated with the use of futures contracts and
related options. The low margin normally required in such trading provides a
large amount of leverage. Thus, a relatively small change in the price of a
contract can produce a disproportionately large profit or loss, and the Fund may
gain or lose substantially more than the initial margin on a trade. Although the
Fund intends to purchase or sell futures which appear to have an active market,
there is no assurance that a liquid market will exist for any particular
contract at any particular time. Thus, it may not be possible to close a futures
position in anticipation of adverse price movements. In addition, there may be
an imperfect correlation between the price movements of the futures contracts
and price movements of the portfolio securities being hedged.

Security and Stock Index Options.

The Fund may purchase and write listed put and call options on securities
and on stock indexes that are traded on U.S. securities exchanges at such times
as the Investment Adviser deems appropriate and consistent with the Fund's
investment objective. In general, the Fund may purchase or write such options to
hedge against anticipated or potential declines in the market value of the
Fund's portfolio of securities, or to facilitate the rapid implementation of
investment strategies if the Fund anticipates a significant market or market
sector advance.

Borrowing.

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 transactions when its shares are trading at a discount of 10%
or more from their net asset value. See "Description of Common
Stock -- Repurchase of Shares." 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.

Borrowing for investment and to finance share repurchase transactions
increases both investment opportunity and investment risk. Since substantially
all of the Fund's assets will fluctuate in value, but the obligation resulting
from the borrowing is relatively fixed, the Fund's shares will increase in value
more when the Fund's assets increase in value and decrease more when the Fund's
assets decrease in value than would otherwise be the case. In addition, the cost
of borrowing may exceed the income or gain on any securities purchased with the
funds borrowed, in which case the Fund's net asset value will decline.

Closed-end Investment Companies.

The Fund may also invest in other closed-end investment companies if the
Investment 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.

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
19

include, among others, the Nasdaq-100 Index Tracking Stock (QQQ), Standard &
Poor's Depositary Receipts (SPDRS), the DIAMONDS Trust, and other ETF's as
determined from time to time by the Investment Adviser.

Foreign Securities.

The Fund may invest up to 20% of its net assets in securities of foreign
issuers. Investments in foreign securities offer potential benefits not
available through investment solely in securities of domestic issuers. Foreign
securities offer the opportunity to invest in foreign issuers that appear to
have growth potential, or in foreign countries with economic policies or
business cycles different from those of the United States, or to reduce
fluctuations in portfolio value by taking advantage of foreign markets that do
not move in a manner parallel to United States markets. The Fund may also enter
into foreign currency transactions in connection with its investment activity in
foreign securities.

Short Sales.

The Fund may from time to time make short sales of securities. 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. The Fund may make short sales to
offset a potential decline in a long position or a group of long positions, or
if the Investment Adviser believes that a decline in the price of a particular
security or group of securities is likely. The Fund may also make short sales in
an attempt to maintain portfolio flexibility and facilitate the rapid
implementation of investment strategies if the Investment Adviser believes that
the price of a particular security or group of securities is likely to decline.

The Fund may make a short sale only if, at the time the short sale is made
and after giving effect thereto, the market value of all securities sold short
is 25% or less of the value of its net assets and the market value of securities
sold short which are not listed on a national securities exchange does not
exceed 10% of the Fund's net assets.

In addition to the short sales described above, the Fund may make short
sales "against-the-box." A short sale "against-the-box" is a short sale where,
at the time of the short sale, the Fund owns or has the immediate and
unconditional right, at no added cost, to obtain the identical security. The
Fund would enter into such a transaction to defer a gain or loss for Federal
income tax purposes on the security owned by the Fund. Short sales
against-the-box are not subject to the collateral requirements described above
or the percentage limitations on short sales described above.

Lending Portfolio Securities.

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. If a
borrower becomes bankrupt or defaults on its obligation to return the loaned
security, delays or losses could result.

RISK FACTORS AND SPECIAL CONSIDERATIONS

The following discusses certain matters that should be considered, among
others, in connection with the Offer.

DILUTION -- NET ASSET VALUE AND NON-PARTICIPATION IN THE OFFER

Record Date Shareholders who do not fully exercise their Rights will, upon
the completion of the Offer, own a smaller proportional interest in the Fund
than they owned prior to the Offer. In addition, an immediate dilution of the
net asset value per share may be experienced by all shareholders as a result of
the Offer because the Subscription Price may be less than the then current net
asset value per share, and the number of shares outstanding after the Offer may
increase in greater percentage than the increase in the size of the Fund's
assets. Although it is not possible to state precisely the amount of such
decrease in net asset value per share, if any, because it is not known at this
time what the Subscription Price will be, what the net asset value per share
will be on the Pricing Date or what proportion of the Shares will be subscribed
for, such dilution could be minimal or substantial. For example, assuming (i)
all Rights are exercised, (ii) the Fund's net asset value on the Pricing Date is
$ per share (the net asset value per share on , 2002) and (iii)
the Subscription Price is $ per share (95% of the last reported sale price
per share on the NYSE on , 2002), then the Fund's net asset value
per share would be reduced by approximately $ per share or %.

LEVERAGE AND BORROWING

As discussed above under "Investment Objectives and Policies -- Special
Investment Methods," the Fund is authorized to borrow. The Fund currently does
not have any intention to borrow money. Borrowings create an opportunity for
greater capital appreciation with respect to the Fund's investment portfolio,
but at the same time such borrowing is speculative in that it will increase the
Fund's exposure to capital risk. In addition, borrowed funds are subject to
interest costs that may offset or exceed the return earned on the borrowed
funds.

CERTAIN INVESTMENT STRATEGIES

The extent of the Fund's investment in equity securities will be determined
primarily on the basis of market timing techniques developed by Dr. Zweig,
President of the Sub-Adviser, and his staff. While the Investment Adviser seeks
to reduce the risks associated with investing in equity securities by using
these techniques, such risks cannot be eliminated. There is no assurance that
these market timing techniques will provide protection from the risks of equity
investment, enable the Fund to be invested consistent with the major trends of
the market or enable the Fund to achieve its investment objective of capital
appreciation.

In addition, although the Investment Adviser may use one or more of the
special investment methods discussed above under "Investment Objectives and
Policies -- Special Investment Methods" to further the Fund's investment
objective of capital appreciation and/or reduce losses that might otherwise
occur during a time of general decline in stock prices, no assurance can be
given that any or all of these investment methods will be used or, if used, will
achieve either or both of these results. These methods may subject an investor
in the Fund to greater than average risks and costs.

DISCOUNT FROM NET ASSET VALUE

The Fund's shares of Common Stock have traded in the market above, at and
below net asset value since the commencement of the Fund's operations in October
1986. The Fund cannot predict whether its Common Stock will in the future trade
at a premium to or discount from net asset value. The risk of the Common Stock
trading at a discount is a risk separate from a decline in the Fund's net asset
value. See "Market Price and Net Asset Value Information" in this Prospectus and
"Net Asset Value" in the SAI.

DISTRIBUTIONS

The Fund's policy is to make quarterly distributions equal to 2.5% of its
net asset value (10% on an annualized basis). If, for any quarterly
distribution, the Fund's net investment income and net realized short-term
capital gains are less than the amount of the distribution, the difference will
be distributed from the Fund's assets. The Fund's final distribution for each
calendar year will include any remaining net investment income and net realized
short-term capital gains deemed, for Federal income tax purposes, undistributed
during the year, and may, but need not, include all net long-term capital gains
realized during the year. If, for any calendar year, the total distributions
exceed net investment income and net realized capital gains, the excess will
generally be treated as a tax-free return of capital (up to the amount of the
shareholder's tax basis in his or her shares). The amount treated as a tax-free
return of capital will reduce a shareholder's adjusted basis in his or her
shares, thereby increasing his or her potential gain or reducing his or her
potential loss on the sale of his or her shares. Pursuant to the requirements of
the 1940 Act and other applicable laws, a notice will accompany each quarterly
distribution with respect to the estimated source of the distribution made. Such
distribution policy may, under certain circumstances, have certain adverse
consequences to the Fund and its shareholders. In the event the Fund distributes
amounts in excess of its net investment income and net realized capital gains,
such distributions will decrease the Fund's total assets and, therefore, have
the likely effect of increasing the Fund's expense ratio. In addition, in order
to make such distributions, the Fund may have to sell a portion of its
investment portfolio at a time when independent investment judgment might not
dictate such action. See "Distributions; Distribution Reinvestment and Cash
Purchase Plan" for a discussion of the Fund's distribution policy.

ANTI-TAKEOVER PROVISIONS

The Fund has provisions in its Articles of Incorporation and By-Laws that
may have the effect of limiting the ability of other entities or persons to
acquire control of the Fund, to cause it to engage in certain transactions or to
modify its structure. The Board of Directors is divided into three classes. At
the annual meeting of shareholders each year, the term of one class will expire
and directors will be elected to serve in that class for terms of three years.
This provision could delay for up to two years the replacement of a majority of
the Board of Directors.

These provisions could have the effect of limiting shareholders'
opportunity to sell their shares at a premium over prevailing market prices by
discouraging a third party from seeking to obtain control of the Fund in a
tender offer or similar transaction. See "Description of Common Stock -- Special
Voting Provisions."

MANAGEMENT OF THE FUND

BOARD OF DIRECTORS

The management of the Fund, including general supervision of the duties
performed by the Investment Adviser under the Investment Advisory Agreement (as
described below), is the responsibility of the Fund's Board of Directors. For
certain information regarding the Directors and Officers of the Fund, see
"Management -- Directors and Officers" in the SAI.

INVESTMENT ADVISER AND SUB-ADVISER

The Investment Adviser, Phoenix/Zweig Advisers LLC, is a New York limited
liability company, with offices at 900 Third Avenue, New York, New York 10022.
The Investment Adviser became the Fund's investment adviser on January 1, 2000,
following the acquisition of Zweig Advisors Inc., the Fund's former investment
adviser, Zweig/Glaser Advisers, the Fund's former administrator, and Zweig
Securities Corp. by Phoenix Investment Partners, Ltd. on March 1, 1999. The
Investment Adviser is a wholly-owned subsidiary of Phoenix Investment Partners,
Ltd., a wholly-owned investment management subsidiary of The Phoenix Companies,
Inc., an NYSE-listed company. Phoenix/Zweig Advisers LLC and Phoenix Investment
Partners, Ltd. are registered with the Commission under the Investment Advisers
Act of 1940, as amended. As of December 31, 2001, Phoenix Investment Partners,
Ltd. had approximately $52 billion in assets under management through its
investment partners.

Pursuant to an investment advisory agreement dated March 1, 1999 (the
"Investment Advisory Agreement"), the Investment Adviser is responsible for the
actual management of the Fund's portfolio. The responsibility for making
decisions to buy, sell or hold a particular investment rests with the Investment
Adviser, subject to review by the Board of Directors and the applicable
provisions of the 1940 Act. The Investment Adviser is also obligated to provide
the Fund with such executive, administrative, data processing, clerical,
accounting and bookkeeping services and statistical and research data as are
deemed advisable by the Board of Directors, except to the extent these services
are provided by an administrator hired by the Fund. The Investment Adviser may
consider analyses from various other sources, including broker-dealers with
which the Fund does business and affiliates of the Investment Adviser. Under a
services agreement (the "Sub-Advisory Agreement") with the Investment Adviser,
the Sub-Adviser, Zweig Consulting LLC, performs asset allocation research and
analysis and provides advice thereon to the Investment Adviser. The extent of
the Fund's investment in equity securities is determined by the Investment
Adviser, primarily utilizing market timing techniques developed by Dr. Martin
Zweig, President of the Sub-Adviser, and his staff.

For the services provided by the Investment Adviser under the Investment
Advisory Agreement, the Fund pays the Investment Adviser a monthly fee computed
at the annual rate of 0.85% of the Fund's average daily net assets during the
previous month. For the fiscal years ended December 31, 2001, 2000 and 1999, the
Fund accrued investment advisory fees of $4,448,708, $5,774,100 and $6,052,325,
respectively.

PXP Securities Corp. or any other brokerage affiliate (the "Brokerage
Affiliate") may act as a broker for the Fund. In order for the Brokerage
Affiliate to effect any portfolio transactions for the Fund, the commissions,
fees or other remuneration received by the Brokerage Affiliate must be
reasonable and fair compared to the commissions, fees or other remuneration paid
to other brokers in connection with comparable transactions involving similar
securities being purchased or sold on an exchange during a comparable period of
time. The Fund will not deal with a Brokerage Affiliate in any portfolio
transaction in which the Brokerage Affiliate would act as principal.

DR. MARTIN E. ZWEIG

Dr. Zweig, the President of the Fund and the Sub-Adviser, has been in the
business of providing investment advisory services for over 28 years. Dr. Zweig
and his associates determine asset allocation strategies to assist the
Investment Adviser in its management of the Fund. Dr. Zweig does not select the
24

individual securities to implement the strategy. The portfolio managers of the
Investment Adviser select the specific securities for the Fund.

PORTFOLIO MANAGERS

The Investment Adviser's day-to-day stock selections for the Fund are made
by Mr. Jeffrey Lazar, and day-to-day bond selections for the Fund are made by
Mr. Carlton Neel.

Mr. Lazar is an Executive Vice President of the Fund. He has been making
day-to-day stock selections for the Fund and The Zweig Total Return Fund, Inc.
since January 1995. Mr. Lazar, who is a Senior Vice President of the Investment
Adviser, has been with the Investment Adviser since 1999 and was previously with
Zweig Advisors Inc. since 1986.

Mr. Neel has been making day-to-day bond selections for the Fund since July
1995. He is also the portfolio manager for The Zweig Total Return Fund, Inc. and
several series of Phoenix-Zweig Trust. Mr. Neel, who is a Senior Vice President
of the Investment Adviser, has been with the Investment Adviser since 1999 and
was previously with Zweig Advisors Inc. Prior to joining Zweig Advisors Inc. in
1995, Mr. Neel was a Vice President with J.P. Morgan & Co., Inc.

INVESTMENT ADVISORY AGREEMENT

The Investment Advisory Agreement sets forth the services to be provided by
and the fees to be paid to each party, as described above. The Investment
Advisory Agreement provides that the Investment Adviser's liability to the Fund
and its shareholders is limited to situations involving its own willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its duties and obligations under the
Investment Advisory Agreement.

The services of the Investment Adviser to the Fund are not deemed to be
exclusive, and the Investment Adviser or any affiliate thereof may provide
similar services to other investment companies and other clients or engage in
other activities.

The Investment Advisory Agreement obligates the Investment Adviser to
provide advisory services and to pay all expenses arising from the performance
of its obligations under the Investment Advisory Agreement, as well as the fees
of all Directors of the Fund who are employees of the Investment Adviser or any
of its affiliates. The Fund pays all other expenses incurred in the operation of
the Fund, including, but not limited to, direct charges relating to the purchase
and sale of portfolio securities, interest charges, fees and expenses of
attorneys and auditors, taxes and governmental fees, cost of stock certificates
and any other expenses (including clerical expenses) of issuance, sale or
repurchase of shares of the Fund's Common Stock, expenses in connection with the
Fund's Distribution Reinvestment and Cash Purchase Plan, membership fees in
trade associations, expenses of registering and qualifying shares of the Fund's
Common Stock for sale under Federal and state securities laws, expenses of
obtaining and maintaining stock exchange listings of the Fund's Common Stock,
expenses of printing and distributing reports, prospectuses, shareholder notices
and proxy materials, expenses of corporate data processing and related services,
shareholder record-keeping and shareholder account services, expenses of
auditors and escrow agents, expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of annual and special
shareholders' meetings, fees and disbursements of the Fund's Administrator,
transfer agents, custodians and subcustodians, expenses of disbursing dividends
and distributions, fees, expenses and out-of-pocket costs of Directors of the
Fund who are not interested persons of the Fund or the Investment Adviser,
insurance premiums and litigation, indemnification and other expenses not
expressly provided for in the Investment Advisory Agreement or the
Administration Agreement.

The Investment Advisory Agreement will remain in effect from year to year
if approved annually (i) by the Board of Directors of the Fund or by the holders
of a majority of the Fund's outstanding voting securities, and (ii) by a
majority of the Directors who are not parties to the Investment Advisory
Agreement or interested persons of any such party. The Investment Advisory
Agreement terminates on its

assignment by either party, and may be terminated without penalty on not more
than 60 days' prior written notice at the option of either party thereto or by
the affirmative vote of the holders of a majority of the Fund's outstanding
voting securities.

The Investment Advisory Agreement provides that the Fund may use "Zweig" as
part of its name for so long as the Investment Adviser serves as investment
adviser to the Fund. The Fund has agreed that, in the event the Investment
Advisory Agreement is terminated, the Fund will promptly take such actions as
may be necessary to change its corporate name to one not containing the word
"Zweig", and the Fund will thereafter not transact business in a corporate name
using the word "Zweig" in any form or combination whatsoever. Phoenix Investment
Partners, Ltd. has obtained, pursuant to an agreement, an exclusive worldwide
license to use the word "Zweig" with respect to its investment advisory
business.

SUB-ADVISORY AGREEMENT

The Sub-Advisory Agreement sets forth the services to be provided by and
the fees to be paid to the Sub-Adviser. The Sub-Adviser has been engaged by the
Investment Adviser to perform asset allocation research and analysis and provide
advice thereon to the Investment Adviser at a level and in a manner consistent
with the practices of the Sub-Adviser and the Investment Adviser prior to the
Acquisition. Pursuant to the Sub-Advisory Agreement, the services are rendered
by Dr. Zweig and his designated research associates on behalf of the
Sub-Adviser.

For services provided by the Sub-Adviser to the Fund, The Zweig Total
Return Fund, Inc. and Phoenix-Zweig Trust under the Sub-Advisory Agreement, the
Investment Adviser pays the Sub-Adviser an annual consulting fee of up to
$2,500,000, payable monthly.

The Sub-Advisory Agreement will remain in effect from year to year if
approved annually (i) by the Board of Directors of the Fund or by the holders of
a majority of the Fund's outstanding voting securities and (ii) by a majority of
the Directors who are not parties to the Sub-Advisory Agreement or interested
persons of any such party. The Sub-Advisory Agreement terminates on its
assignment by either party, and may be terminated without penalty on not more
than 60 days' prior written notice at the option of the Fund's Board of
Directors or by the affirmative vote of the holders of a majority of the Fund's
outstanding voting securities.

ADMINISTRATOR

The Administrator, Phoenix Equity Planning Corporation, serves as the
Fund's administrator pursuant to an assignment by Zweig/Glaser Advisers of the
administration agreement dated March 1, 1999 (the "Administration Agreement").
The Administrator generally assists in the administration of the Fund's day-
to-day corporate affairs, subject to the overall authority of the Fund's Board
of Directors. The Administrator determines the Fund's net asset value daily,
prepares such figures for publication on a weekly basis, maintains certain of
the Fund's books and records that are not maintained by the Investment Adviser,
custodian or transfer agent, assists in the preparation of financial information
for the Fund's income tax returns, proxy statement, quarterly and annual
shareholder reports, assists in the preparation of Commission Reports and
responds to shareholder inquiries.

The Fund pays the Administrator a monthly fee computed at an annual rate of
0.13% of the Fund's average daily net assets during the previous month. For the
fiscal years ended December 31, 2001, 2000 and 1999, the Fund accrued
administrative fees of $680,390, $883,098 and $925,676.

DISTRIBUTIONS; DISTRIBUTION REINVESTMENT AND CASH PURCHASE PLAN

The Fund's policy is to distribute to shareholders on a quarterly basis
2.5% of its net asset value (10% on an annualized basis). If, for any quarterly
distribution, the Fund's net investment income and net realized short-term
capital gains are less than the amount of the distribution, the difference will
be distributed from the Fund's assets. The Fund's final distribution for each
calendar year will include any remaining net investment income and net realized
short-term capital gains deemed, for Federal income tax purposes, undistributed
during the year, and may, but need not, include all net long-term capital gains
realized during the year. The Fund may retain for reinvestment and pay Federal
income taxes on the excess of its net realized long-term capital gains over its
net realized short-term capital losses, if any, although the Fund reserves the
authority to distribute such excess in any year. Since the Fund's inception, the
Fund has distributed such excess. If, for any calendar year, the total
distributions exceed net investment income and net realized capital gains, the
excess will generally be treated as a tax-free return of capital (up to the
amount of the shareholder's tax basis in his or her shares). The amount treated
as a tax-free return of capital will reduce a shareholder's adjusted basis in
his or her shares, thereby increasing his or her potential gain or reducing his
or her potential loss on the sale of his or her shares. In calculating the
amount of each quarterly distribution, the Fund's net asset value will be
measured as of the business day immediately preceding the declaration date of
such distribution. Pursuant to the requirements of the 1940 Act and other
applicable laws, a notice will accompany each quarterly distribution with
respect to the estimated source of the distribution made.

In the event the Fund distributes amounts in excess of its net investment
income and net realized capital gains, such distributions will decrease the
Fund's total assets and, therefore, have the likely effect of increasing the
Fund's expense ratio. In addition, in order to make such distributions, the Fund
may have to sell a portion of its investment portfolio at a time when
independent investment judgment might not dictate such action.

Shareholders may elect to receive all distributions in cash paid by check
mailed directly to the shareholder by EquiServe, as dividend paying agent.
Pursuant to the Distribution Reinvestment and Cash Purchase Plan (the "Plan"),
shareholders not making such election will have all such amounts automatically
reinvested by EquiServe, as the Plan agent, in whole or fractional shares of the
Fund, as the case may be.

If the Directors of the Fund declare a distribution payable either in
shares or in cash, as shareholders may have elected, then nonparticipants in the
Plan will receive cash and participants in the Plan will receive the equivalent
in shares, determined as follows: Whenever the market price of the shares on the
record date for the distribution is equal to or exceeds their net asset value,
participants will be issued shares at the higher of net asset value or 95% of
the closing market price of the shares on the NYSE on the previous trading day.
If the shares' net asset value at such time exceeds their market price or if the
Fund should declare a distribution payable only in cash, EquiServe, as agent for
the participants, will buy shares on the NYSE or elsewhere in the open market,
for the participants' accounts. If, before EquiServe has completed its
purchases, the market price exceeds the shares' net asset value, EquiServe is
permitted to cease purchasing the shares in the open market and the Fund may
issue the remaining shares at a price equal to the higher of net asset value or
95% of the then market price. EquiServe will apply all cash received as a
distribution to purchase shares on the open market as soon as practicable after
the payment date of such distribution, but in no event later than 30 days after
such date, except where necessary to comply with applicable provisions of the
Federal securities laws.

Participants in the Plan have the option of making additional cash payments
monthly to EquiServe for investment in the Fund's shares. Such payments may be
made in any amount from $100 to $3,000. EquiServe will use all such payments
received from participants to purchase shares on the open market on or about the
fifteenth day of each month (or the closest business day thereto, if a weekend
or holiday). To avoid unnecessary cash accumulations and also to allow ample
time for receipt and processing by EquiServe, it is suggested that participants
send voluntary cash payments to EquiServe by the fifth day of the month for
which a voluntary purchase is desired. A participant may withdraw a voluntary
cash

payment by written notice, if the notice is received by EquiServe at least 48
hours before such payment is to be invested.

EquiServe maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the accounts, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by EquiServe in non-certificated form in the
name of the participant, and each shareholder's proxy will include those shares
purchased pursuant to the Plan.

There is no charge to participants for reinvesting distributions or
voluntary cash payments. EquiServe's fees for handling reinvestment of
distributions will be paid by the Fund. There will be no brokerage charges with
respect to shares issued directly by the Fund as a result of distributions
payable either in stock or in cash. However, each participant will pay a
pro-rata share of brokerage commissions incurred with respect to EquiServe's
open market purchases in connection with the reinvestment of distributions as
well as from voluntary cash payments. With respect to purchases from voluntary
cash payments, EquiServe will charge each participant a pro-rata share of the
brokerage commissions. Brokerage charges for purchasing small amounts of stock
for individual accounts through the Plan are expected to be less than the usual
brokerage charges for such transactions, as EquiServe will be purchasing shares
for all participants in blocks and prorating the lower commission thus
attainable. EquiServe may use its affiliates and/or affiliates of the Investment
Adviser for all trading activity relative to the Plan on behalf of Plan
participants. Such affiliates will receive a commission in connection with such
trading transactions.

If a shareholder desires to discontinue his or her participation in the
Plan, the shareholder may either (i) request EquiServe to sell part or all of
the shares in the account and remit the proceeds to the shareholder, net of any
brokerage commissions, or (ii) ask EquiServe for a certificate for the number of
full shares in his or her account, along with a check in payment for any
fractional shares.

Although many brokers do participate in the Plan on behalf of their
customers, a participant in the Plan who does change his or her broker may not
be able to transfer the shares to another broker and continue to participate in
the Plan.

The automatic reinvestment of distributions will not relieve participants
of any income tax that may be payable on such distributions.

The Fund reserves the right to amend or terminate the Plan as applied to
any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to participants in the Plan at
least 90 days before the record date for such distribution. The Plan also may be
amended or terminated by EquiServe, with the Fund's prior written consent, on at
least 90 days' written notice to participants in the Plan. All correspondence
concerning the Plan should be directed to EquiServe Trust Co., N.A., P.O. Box
43010, Providence, RI 02940-3010.

DESCRIPTION OF COMMON STOCK

The authorized capital stock of the Fund consists of 100,000,000 shares of
Common Stock, par value $0.10 per share, of which 61,834,947 shares were
outstanding as of March 7, 2002. The Shares, when issued, will be fully paid and
nonassessable. All shares of Common Stock are equal as to dividends, assets and
voting privileges and have no conversion, preemptive or exchange rights. In the
event of liquidation, each share of Common Stock is entitled to its proportion
of the Fund's assets after payment of debts and expenses. Shareholders are
entitled to one vote per share. All voting rights for directors are non-
cumulative, which means that the holders of more than 50% of the shares of
Common Stock can elect 100% of the directors if they choose to do so, and, in
such event, the holders of the remaining shares of Common Stock will not be able
to elect any directors. The Fund's outstanding shares of Common Stock are, and
the Shares offered hereby will be, listed on the NYSE and PCX under the symbol
"ZF."

The Fund has no present intention of offering additional shares beyond this
Offering, except that additional shares may be issued under the Distribution
Reinvestment and Cash Purchase Plan. See "Distributions; Distribution
Reinvestment and Cash Purchase Plan." Other offerings of its Common Stock, if
made, will require approval of the Fund's Board of Directors. Any additional
offering will be subject to the requirements of the 1940 Act that shares may not
be sold at a price below the then current net asset value (exclusive of
underwriting discounts and commissions) except in certain circumstances,
including in connection with an offering to existing shareholders or with the
consent of a majority of the Fund's outstanding shareholders.

REPURCHASE OF SHARES

The Fund is authorized to repurchase its shares on the open market when the
shares are trading at a discount of 10% or more from net asset value, and the
Fund may incur debt to refinance share repurchase transactions. In addition,
pursuant to the 1940 Act, the Fund retains the right to repurchase its shares
under other circumstances on a securities exchange or such other open market
designated by the Commission (provided that the Fund has informed shareholders
within the preceding six months of its intention to repurchase such shares), by
a tender offer open to all the Fund's shareholders or as otherwise permitted by
the Commission. When a repurchase of Fund shares is to be made that is not to be
effected on a securities exchange or such an open market or by the making of a
tender offer, the 1940 Act provides that certain conditions must be met
regarding, among other things, distribution of net income, identity of the
seller, price paid, brokerage commissions, prior notice to shareholders of an
intention to purchase shares and purchasing in a manner or on a basis which does
not discriminate unfairly against the other shareholders indirectly through
their interest in the Fund. The Fund may incur debt to finance share repurchase
transactions (see "Investment Restrictions" in the SAI).

When the Fund repurchases its shares for a price below their net asset
value, the net asset value of the shares that remain outstanding will be
enhanced, but this does not necessarily mean that the market price of those
outstanding shares will be affected, either positively or negatively.

The Fund currently has no established tender offer program, and no
established schedule for considering tender offers. No assurance can be given
that the Board of Directors will decide to undertake any such tender offers in
the future or, if undertaken, that they will reduce any market discount.

Any acquisition of shares by the Fund (whether through a share repurchase
or a tender offer) will decrease the total assets of the Fund and therefore have
the likely effect of increasing the Fund's expense ratio. Furthermore, if the
Fund borrows to finance share repurchases or tender offers, interest on such
borrowings will reduce the Fund's net investment income. If the Fund must
liquidate a portion of its investment portfolio in connection with a share
repurchase or tender offer, such liquidation might be at a time when independent
investment judgment might not dictate such action and, accordingly, may increase
the Fund's portfolio turnover and make it more difficult for the Fund to achieve
its investment objective.

SPECIAL VOTING PROVISIONS

The Fund has provisions in its Articles of Incorporation and By-Laws
(collectively, the "Charter Documents") that could have the effect of limiting
the ability of other entities or persons to acquire control of the Fund, to
cause it to engage in certain transactions or to modify its structure. The Board
of Directors is divided into three classes. At the annual meeting of
shareholders each year, the term of one class will expire and directors will be
elected to serve in that class for terms of three years. This provision could
delay for up to two years the replacement of a majority of the Board of
Directors.

Under Maryland law and the Fund's Articles of Incorporation, the
affirmative vote of the holders of two-thirds of the votes entitled to be cast
is required for the consolidation of the Fund with another corporation, a merger
of the Fund with or into another corporation (except for certain mergers in
which the Fund is the successor), a statutory share exchange in which the Fund
is not the successor, a sale or transfer of all or substantially all of the
Fund's assets, the dissolution of the Fund and any amendment to the Fund's
Articles of Incorporation. In addition, the affirmative vote or consent of the
holders of two-thirds of the outstanding Shares is required to authorize the
conversion of the Fund from a closed-end to an open-end investment company, to
amend certain of the provisions of the Charter Documents or generally to
authorize any of the following transactions:

(i) a merger or consolidation of the Fund with or into any other
corporation;

(ii) the issuance of any securities of the Fund to any person or
entity for cash;

(iii) the sale, lease or exchange of all or any substantial part of
the Fund's assets to any entity or person (except assets having an
aggregate fair market value of less than $1,000,000); or

(iv) the sale, lease or exchange to the Fund, in exchange for
securities of the Fund, of any assets of any entity or person (except
assets having an aggregate fair market value of less than $1,000,000);

if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of more than 5% of the outstanding shares of
the Fund. However, such two-thirds vote would not be required when, under
certain conditions, the Board of Directors, in accordance with the Fund's
Articles of Incorporation, approves the transaction. Reference is made to the
Charter Documents of the Fund, on file with the Commission, for the full text of
these provisions. See "Further Information."

The provisions of the Charter Documents described above and the Fund's
right to repurchase its shares could have the effect of depriving shareholders
of an opportunity to sell their shares at a premium over prevailing market
prices by discouraging a third party from seeking to obtain control of the Fund
in a tender offer or similar transaction. See "Repurchase of Shares" above.

TAXATION

FEDERAL TAXATION OF THE FUND AND ITS DISTRIBUTIONS

The Fund has qualified and elected to be treated, and intends to continue
to qualify and be treated, as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code"). The Fund currently intends to
distribute all or substantially all its investment company taxable income (all
taxable income and net short-term capital gains) and its net capital gain each
year, thereby avoiding the imposition on the Fund of Federal income and excise
taxes on such distributed income and gain. Such distributions from investment
company taxable income will be taxable as ordinary income to shareholders of the
Fund who are subject to tax, and the Fund's capital gain distributions will be
taxable as capital gain to such shareholders. For non-corporate U.S.
shareholders, the Fund's capital gains distributions will be taxable at a
maximum marginal Federal income tax rate of 20%. Shareholders that are not
subject to tax on their income generally will not be required to pay tax on
amounts distributed to them. Notwithstanding the above, the Fund may decide to
retain all or part of any net capital gain for reinvestment. After the end of
each taxable year, the Fund will notify shareholders of the Federal income tax
status of any

distributions, or deemed distributions, made by the Fund during such year. For a
discussion of certain income tax consequences to shareholders of the Fund, see
"Taxation" in the SAI.

FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE OFFER

The following discussion describes certain United States Federal income tax
consequences of the Offer generally applicable to citizens or residents of the
United States and U.S. trusts, estates, corporations and any other person who
would be subject to U.S. Federal income tax upon the sale or exchange of Common
Stock acquired upon the exercise of Rights ("U.S. Shareholders"). This summary
is intended to be descriptive only and does not purport to be a complete
analysis or listing of all potential tax effects relevant to the ownership of
Rights or Common Stock. Additionally, this summary does not specifically address
the U.S. Federal income tax consequences that might be relevant to holders of
Rights or Common Stock entitled to special treatment under the U.S. Federal
income tax laws, such as individual retirement accounts and other tax deferred
accounts, financial institutions, life insurance companies and tax-exempt
organizations, and does not discuss the effect of state, local and other tax
laws. Further, this summary is based on interpretations of existing law as of
the date of this Prospectus as contained in the Code, applicable current and
proposed Treasury Regulations, judicial decisions and published administrative
positions of the Internal Revenue Service, all of which are subject to change
either prospectively or retroactively.

U.S. Shareholders who receive Rights pursuant to the Offer will not
recognize taxable income for U.S. Federal income tax purposes upon their receipt
of the Rights. If Rights issued to a U.S. Shareholder expire without being sold
or exercised, no basis will be allocated to such Rights, and such Shareholder
will not recognize any gain or loss for U.S. Federal income tax purposes upon
such expiration.

The tax basis of a U.S. Shareholder's Common Stock will remain unchanged
and the shareholder's basis in the Rights will be zero, unless such U.S.
Shareholder affirmatively and irrevocably elects (in a statement attached to
such shareholder's U.S. Federal income tax return for the year in which the
Rights are received) to allocate the basis in the Common Stock between such
Common Stock and the Rights in proportion to their respective fair market values
on the date of distribution.

A U.S. Shareholder who exercises Rights will not recognize any gain or loss
for U.S. Federal income tax purposes upon the exercise. The basis of the newly
acquired Common Stock will equal the Subscription Price paid for the Common
Stock (plus the basis, if any, allocated to the Rights in the manner described
in the immediately preceding paragraph). Upon a sale or exchange of the Common
Stock so acquired, the Shareholder will recognize gain or loss measured by the
difference between the proceeds of the sale or exchange and the cost basis of
such Common Stock. Assuming the U.S. Shareholder holds the Common Stock as a
capital asset, any gain or loss realized upon its sale will generally be treated
as a capital gain or loss, which gain or loss will be short-term or long-term,
depending on the length of the U.S. Shareholder's holding period for such Common
Stock. However, it currently appears that any loss recognized upon the sale of
shares of Common Stock with a tax holding period of 6 months or less will be
treated as a long-term capital loss to the extent of any capital gain
distribution previously received by the U.S. Shareholder with respect to such
shares, and a loss may be disallowed under wash sale rules to the extent that
the U.S. Shareholder purchases additional Common Stock (including by
reinvestment of distributions) within 30 days before or after the sale date. The
holding period for Common Stock acquired upon the exercise of Rights will begin
on the day after the date of exercise of the Rights.

A U.S. Shareholder may be subject to backup withholding at the rate of 30%
with respect to Fund distributions and gross proceeds from the sale or exchange
of Common Stock (if the Fund is the payor) unless such U.S. Shareholder (a) is a
corporation or comes within certain other exempt categories and, when required,
demonstrates and/or certifies this fact, or (b) provides a correct taxpayer
identification number, along with certain required certifications, and otherwise
complies with applicable requirements of the backup withholding rules. U.S.
Shareholders who choose to transfer their Common Stock and who do not provide
the appropriate withholding agent with their correct taxpayer identification
number in the

manner required may be subject to penalties imposed by the Internal Revenue
Service. Any amount withheld under these rules is not an additional tax; it will
be creditable against the U.S. Shareholder's U.S. Federal income tax liability.

This summary is not intended to be, nor should it be, construed as legal or
tax advice to any current holder of Common Stock. Further, because the U.S.
Federal income tax consequences of the Offer may vary depending upon the
particular circumstances of each shareholder of the Fund and other facts, and
because this summary is not exhaustive of all possible U.S. Federal income tax
considerations (such as situations involving taxpayers who are dealers in
securities or whose functional currency is not the U.S. dollar), the Fund's
shareholders are urged to consult their own tax advisors to determine the U.S.
Federal income tax consequences to them of the Offer and their ownership of
Rights and Common Stock. In addition, such shareholders are urged to consult
their own tax advisors in determining the U.S. state and local tax consequences
to them of the Offer and such ownership. See "Taxation" in the SAI.

CUSTODIAN, DIVIDEND PAYING AGENT, TRANSFER AGENT AND REGISTRAR

The Bank of New York, One Wall Street, New York, New York 10286, serves as
the Fund's custodian. EquiServe Trust Co., N.A., P.O. Box 43010, Providence,
Rhode Island 02940-3010, serves as the Fund's dividend paying agent, transfer
agent and registrar.

EXPERTS

The financial statements of the Fund for the year ended December 31, 2001,
and the financial highlights included in this Prospectus, have been so included
in reliance on the report of PricewaterhouseCoopers LLP, New York, New York,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

LEGAL MATTERS

The validity of the Shares under Maryland law will be passed on for the
Fund by Venable, Baetjer & Howard, LLP, Baltimore, Maryland. Certain other
matters may be passed on for the Fund by Rosenman & Colin LLP, New York, New
York, which serves as counsel to the Fund.

FURTHER INFORMATION

Further information concerning these securities and the Fund may be found
in the Registration Statement on file with the Commission, of which this
Prospectus and the SAI incorporated by reference herein constitute a part.
Financial statements of the Fund for fiscal years ended December 31, 2000 and
December 31, 2001 are included in the Fund's annual reports to shareholders for
such years, copies of which are on file with and may be inspected at the
Commission as indicated below.

The Fund is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the 1940 Act, and in
accordance therewith, is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Such information is available for inspection at the
public reference facilities of the Commission at Room 1024, 450 Fifth Street,
NW, Washington, DC 20549. Copies of such information are obtainable, by mail,
upon payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, NW, Washington, DC 20549. The
Commission maintains a web site (http://www.sec.gov) that contains periodic
reports, proxy statements and other information regarding registrants that file
documents electronically with the Commission. Such reports and other information
concerning the Fund may also be inspected at the offices of the NYSE.

TABLE OF CONTENTS
OF
STATEMENT OF ADDITIONAL INFORMATION

Investment Objective and Policies........................... 3
Investment Restrictions..................................... 8
Management.................................................. 10
Expenses.................................................... 15
Portfolio Transactions and Brokerage........................ 15
Net Asset Value............................................. 16
Taxation.................................................... 17
Independent Accountants..................................... 20
Principal Shareholders...................................... 21
Financial Statements........................................ F-1

SUBJECT TO COMPLETION

PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION

The information in this Statement of Additional Information is not complete and
may be changed. The Fund may not sell its shares of Common Stock until the
registration statement relating to them filed with the Securities and Exchange
Commission is effective. This Statement of Additional Information is not an
offer to sell these securities and the Fund is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.

PART B

THE ZWEIG FUND, INC.
900 THIRD AVENUE, NEW YORK, N.Y. 10022

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

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information ("SAI") is not a Prospectus and
should be read in conjunction with the Fund's Prospectus dated , 2002
(the "Prospectus"). This SAI does not include all information that a prospective
investor should consider before purchasing shares of the Fund, and investors
should obtain and read the Prospectus prior to purchasing shares. A copy of the
Prospectus may be obtained without charge by calling the Fund's Information
Agent, . Banks and Brokers should call ( ) collect, and all
other shareholders should call ( ) . The address of the Fund is 900
Third Avenue, New York, New York 10022, and its telephone number is (212)
451-1100. This SAI incorporates by reference the entire Prospectus. Defined
terms used herein have the same meaning as provided in the Prospectus. The date
of this SAI is , 2002.

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

TABLE OF CONTENTS

INVESTMENT OBJECTIVE AND POLICIES

The following describes certain investment strategies which the Investment
Adviser may use for the Fund, each of which may involve certain special risks.
No assurance can be given that the Fund's use of any or all of such investment
strategies will achieve its investment objective.

FUTURES CONTRACTS AND RELATED OPTIONS

Upon entering into a futures contract, the Fund will initially be required
to deposit with the custodian an amount of initial margin using cash or U.S.
Treasury bills equal to approximately 2% to 5% of the contract amount. The
nature of initial margin in futures transactions is different from that of
margin in securities transactions in that the futures contract initial margin
does not involve the borrowing of funds by customers to finance the
transactions. Rather, the initial margin is in the nature of a performance bond
or good faith deposit on the contract which is returned to the Fund upon
termination of the futures contract, assuming all contractual obligations have
been satisfied. In addition to initial margin, the Fund is required to deposit
cash, liquid debt obligations, liquid equity securities or cash equivalents in
an amount equal to the notional value of all long futures contracts, less the
initial margin amount, in a segregated account with the custodian to ensure that
the use of such futures contracts is not leveraged. If the value of the
securities placed in the segregated account declines, additional securities,
cash or cash equivalents must be placed in the segregated account so that the
value of the account will at least equal the amount of the Fund's commitments
with respect to such futures contracts.

Subsequent payments, called maintenance margin, to and from the broker,
will be made on a daily basis as the price of the underlying security
fluctuates, making the long and short positions in the futures contract more or
less valuable, a process known as "marking to the market." For example, when the
Fund has purchased a futures contract and the price of the underlying security
has risen, that position will have increased in value and the Fund will receive
from the broker a maintenance margin payment equal to that increase in value.
Conversely, when the Fund has purchased a futures contract and the price of the
underlying security has declined, the position would be less valuable and the
Fund would be required to make a maintenance margin payment to the broker. At
any time prior to expiration of the futures contract, the Fund may elect to
close the position by taking an opposite position which will operate to
terminate the Fund's position in the futures contract. A final determination of
maintenance margin is then made, additional cash is required to be paid by or
released to the Fund, and the Fund realizes a loss or a gain.

While futures contracts based on securities provide for the delivery and
acceptance of securities, such deliveries and acceptances are very seldom made.
Generally, the futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract sale is effected
by the Fund entering into a futures contract purchase for the same aggregate
amount of the specific type of financial instrument with the same delivery date.
If the price in the sale exceeds the price in the offsetting purchase, the Fund
immediately is paid the difference and thus realizes a gain. If the offsetting
purchase price exceeds the sales price, the Fund pays the difference and
realizes a loss. Similarly, the closing out of a futures contract purchase is
effected by the Fund entering into a futures contract sale. If the offsetting
sale price exceeds the purchase price, the Fund realizes a gain, and if the
purchase price exceeds the offsetting price, the Fund realizes a loss.

There are several risks in connection with the use of futures contracts as
a hedging device. One risk arises due to the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the subject of the hedge. The price of the futures contract may move more than
or less than the price of the securities being hedged.

If the price of the futures contracts moves less than the price of the
securities hedged, the hedge will not be fully effective, but, if the price of
the securities being hedged has moved in an unfavorable direction, the Fund
would be in a better position than if it had not hedged at all. If the price of
the securities being hedged has moved in a favorable direction, this advantage
will be partially offset by the movement in the price of the futures contract.
If the price of the futures contract moves more than the

price of the security, the Fund will experience either a loss or gain on the
futures which will not be completely offset by movements in the prices of the
securities which are the subject of the hedge.

To compensate for the imperfect correlation of such movements in price, the
Fund may buy or sell futures contracts in a greater dollar amount than the
dollar amount of the securities being hedged if the historical volatility of the
prices of such securities have been greater than the historical volatility of
the futures contracts. Conversely, the Fund may buy or sell fewer futures
contracts if the historical volatility of the prices of the securities being
hedged is less than the historical volatility of the futures contracts.

It is also possible that, where the Fund has sold futures to hedge its
portfolio against a decline in the market, the market may advance and the value
of securities held in the Fund's portfolio may decline. If this occurred, the
Fund would lose money on the futures contracts and also experience a decline in
value in its portfolio securities. However, while this could occur for a very
brief period or to a very small degree, over time the value of a diversified
portfolio will tend to move in the same direction as the futures contracts.

Where futures are purchased to hedge against a possible increase in the
cost of securities before the Fund is able to invest its cash (or cash
equivalents) in an orderly fashion, it is possible that the market may decline
instead; if the Fund then concludes not to invest in the relevant securities at
that time because of concern as to possible further market decline or for other
reasons, the Fund will realize a loss on the futures contract that is not offset
by a reduction in the price of securities purchased.

Another risk arises because the market prices of futures contracts may be
affected by certain factors. First, all participants in the futures market are
subject to initial margin and maintenance margin requirements. Rather than
meeting maintenance margin requirements, investors may close futures contracts
through offsetting transactions which could distort the normal relationship
between the securities and futures markets. Second, from the point of view of
speculators, the margin requirements in the futures market are less onerous than
margin requirements in the securities market. Therefore, increased participation
by speculators in the futures market may also cause temporary price distortions.

Due to the possibility of price distortion in the futures market and
because of the imperfect correlation between movements in securities and
movements in the prices of futures contracts, a correct forecast of market
trends by the Investment Adviser may still not result in a successful hedging
transaction over a very short period of time.

The hours of trading for futures contracts may not conform to the hours
during which the underlying securities are traded. To the extent that the
futures contracts markets close after the markets for the underlying securities,
significant price movements can take place in the futures contracts markets that
cannot be reflected in the markets of the underlying securities.

Positions in futures contracts may be closed out only on an exchange or
board of trade which provides a secondary market for such futures. Although the
Fund intends to purchase or sell futures only on exchanges or boards of trade
where there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an exchange or board of trade will exist for any
particular contract or at any particular time. In such event, it may not be
possible to close a futures position and, in the event of adverse price
movements, the Fund would continue to be required to make daily cash payments of
maintenance margin. However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not be sold until the futures
contracts can be terminated. In such circumstances, an increase in the price of
the securities, if any, may partially or completely offset losses on the futures
contract. However, as described above, there is no guarantee that the price of
the securities will, in fact, correlate with the price movements in the futures
contract and thus provide an offset to losses on a futures contract. The Fund
does not intend to devote more than 5% of its net assets as initial margin or
option premiums for futures transactions.

SECURITY AND STOCK INDEX OPTIONS

When the Fund writes an option, an amount equal to the premium received by
the Fund is recorded as an asset and as an offsetting liability. The amount of
the liability is "marked-to-market" daily to reflect the current market value of
the option, which is the last sale price on the principal exchange on which such
option is traded or, in the absence of a sale, the mean between the latest bid
and offering prices. If an option written by the Fund expires or the Fund enters
into a closing purchase transaction, the Fund will realize a gain (or, in the
latter case, a loss, if the cost of a closing transaction exceeds the premium
received) and the liability related to such option will be extinguished.

The premium paid by the Fund for the purchase of a put option (its cost) is
recorded initially as an investment, the value of which is subsequently adjusted
to the current market value of the option. If the current market value of a put
option exceeds its premium, the excess represents unrealized appreciation;
conversely, if the premium exceeds the current market value, the excess
represents unrealized depreciation. The current market value of an option
purchased by the Fund equals the option's last sale price on the principal
exchange on which it is traded or, in the absence of a sale, the mean between
the latest bid and offering prices.

An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although the Fund generally
will purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option or at any particular time, and
for some options no secondary market on an exchange may exist. In such event, it
might not be possible to effect closing transactions in particular options, with
the result that the Fund would have to exercise its options in order to realize
any profit and would incur transaction costs on the sale of underlying
securities pursuant to the exercise of put options. If the Fund, as a covered
call option writer, is unable to effect a closing purchase transaction in a
secondary market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise.

Reasons for the absence of a liquid secondary market on an exchange include
the following: (a) there may be insufficient interest in trading certain
options; (b) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (c) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (d) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (e) the facilities of an exchange or
the Options Clearing Corporation (the "OCC") may not at all times be adequate to
handle current trading volume; or (f) one or more exchanges might, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the OCC as a result of trades on that exchange would continue to
be exercisable in accordance with their terms.

In addition, there is no assurance that higher-than-anticipated trading
activity or other unforeseen events might not, at times, render certain of the
facilities of the OCC inadequate, and thereby result in the institution by an
exchange of special procedures which may interfere with the timely execution of
customers' orders.

The amount of the premiums which the Fund may pay or receive may be
adversely affected as new or existing institutions, including other investment
companies, engage in or increase their option purchasing and writing activities.

In the event of a shortage of the underlying securities deliverable on
exercise of a listed option, the OCC has the authority to permit other,
generally comparable securities to be delivered in fulfillment of option
exercise obligations. If the OCC exercises its discretionary authority to allow
such other securities to be delivered, it may also adjust the exercise prices of
the affected options by setting different prices at which otherwise ineligible
securities may be delivered. As an alternative to permitting such substitute
deliveries, the OCC may impose special exercise settlement procedures.

CLOSED-END INVESTMENT COMPANIES

When the Fund invests in other closed-end investment companies, the
investments made by such other investment companies will be effected by
independent investment managers, and the Fund will have no control over the
investment management, custodial arrangements or operations of any investments
made by such investment managers. Some of the funds in which the Fund may invest
could also incur more risks than would be the case for direct investments made
by the Fund. For example, they may engage in investment practices that entail
greater risks or invest in companies whose securities and other investments are
more volatile. In addition, the funds in which the Fund invests may or may not
have the same fundamental investment limitations as those of the Fund itself.
While a potential benefit of investing in closed-end investment companies would
be to realize value from a decrease in the discount from net asset value at
which some closed-end funds trade, there is also the potential that such
discount could grow, rather than decrease.

By investing in investment companies indirectly through the Fund, a
shareholder of the Fund will bear not only a proportionate share of the expenses
of the Fund (including operating costs and investment advisory and
administrative fees) but also, indirectly, similar expenses of the investment
companies in which the Fund invests. Pursuant to the Fund's investment
restrictions and current law, the Fund will not (i) own more than 3% of the
voting securities of any one investment company; (ii) invest more than 5% of its
assets in the securities of any one investment company; or (iii) invest more
than 10% of its assets in securities issued by other investment companies.

FOREIGN SECURITIES

Investments in foreign securities present special additional risks and
considerations not typically associated with investments in domestic securities.
Foreign investments may be affected by changes in foreign currency rates and
exchange control regulations. There may be less information available about a
foreign company than a domestic company, and foreign companies may not be
subject to accounting, auditing and reporting standards and requirements
comparable to those applicable to domestic companies. Foreign securities may be
less liquid and subject to greater price volatility than domestic securities.
Foreign brokerage commissions and custodial fees are generally higher than those
in the United States. The foreign markets also have different clearance and
settlement procedures and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays or
problems with settlements might affect the liquidity of the Fund's portfolio and
might adversely affect the Fund's performance. Foreign investments may also be
subject to local economic or political risks, political instability and possible
nationalization of issuers or expropriation of their assets which might
adversely affect the Fund's ability to realize or liquidate its investment in
such securities. Furthermore, some foreign securities are subject to brokerage
taxes levied by foreign governments, which have the effect of increasing the
cost of such investment and reducing the realized gain or increasing the
realized loss on such securities at the time of sale. Furthermore, legal
remedies for defaults and disputes may have to be pursued in foreign courts
whose procedures differ substantially from those of the U.S. courts. In the
event of a default in payment on foreign securities, the Fund may incur
increased costs to obtain and/or to enforce a judgment against the foreign
issuer (or the other parties to the transaction) in the United States or abroad,
and no assurance can be given that the Fund will be able to collect on any such
judgment.

Income earned or received by the Fund from sources within foreign countries
may be reduced by withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States, however, may reduce
or eliminate such taxes. Any such taxes paid by the Fund will reduce its net
income available for distribution to shareholders.

Pursuant to the provisions of Rule 17f-5 under the 1940 Act, the Fund's
Board of Directors has delegated to the Fund's Custodian, The Bank of New York,
as the Fund's Foreign Custody Manager, the responsibilities for selecting and
monitoring any foreign custodians that may be used in connection with the Fund's
investments in foreign securities. Pursuant to and subject to the terms and
conditions of the Foreign Custody Manager Agreement between The Bank of New York
and the Fund, The Bank of New York will, among other things, (i) determine that
the assets held by foreign custodians are subject to reasonable care, based on
the standards applicable to custodians in the relevant market in which such
foreign custodian operates, (ii) determine that the foreign custodial
arrangements are governed by a written contract that provides reasonable care
for the Fund's assets based on such standards, (iii) establish a system to
monitor the appropriateness of maintaining the Fund's assets with a particular
foreign custodian and any material changes in such contract, and (iv) report to
the Fund's Board of Directors with respect to the Fund's foreign custodial
arrangements.

SHORT SALES

When the Fund determines to make a short sale of a security, it must borrow
the security. The Fund's obligation to replace the security borrowed in
connection with the short sale will be fully secured by the proceeds from the
short sale retained by the broker and by cash or liquid securities deposited in
a segregated account with the Fund's custodian. The Fund may have to pay a
premium to borrow the security. The Fund must also pay any dividends or interest
payable on the security until the Fund replaces the security.

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
incur a loss, and if the price declines during this period, the Fund will
realize a capital gain. Any realized capital gain will be decreased, and any
incurred loss increased, by the amount of transaction costs and any premium,
dividend or interest which the Fund may have to pay in connection with such
short sale.

INVESTMENT RESTRICTIONS

The Fund has adopted the following fundamental policies, which cannot be
changed without the approval of the holders of a majority of its outstanding
voting securities (as defined under "Investment Objective and Policies" in the
Prospectus). Except as otherwise noted, all percentage limitations set forth
below apply immediately after a purchase or initial investment, and any
subsequent change in any applicable percentage resulting from market
fluctuations does not require elimination of any security or other investment
from the portfolio. The Fund may not:

1. With respect to 75% of its total assets, invest in securities of
any one issuer if immediately after and as a result of such investment more
than 5% of the total assets of the Fund, taken at market value, would be
invested in the securities of such issuer. This investment restriction does
not apply to investments in U.S. Government Securities.

2. Purchase more than 10% of the outstanding voting securities, or any
class of securities, of any one issuer.

3. 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.

4. Invest more than 5% of its total assets in securities of issuers
that, at the time of purchase, have a record, together with predecessors,
of less than three years of continuous operation. This investment
restriction does not apply to investments in U.S. Government Securities.

5. Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization, if
more than 10% of the market value of the Fund's total assets would be
invested in securities of other investment companies, more than 5% of the
market value of the Fund's total assets would be invested in the securities
of any one investment company, or the Fund would own more than 3% of any
other investment company's securities.

6. 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.

7. Purchase participations or other direct interests in oil, gas or
other mineral exploration or development programs; provided that the Fund
may invest in the securities of companies which operate, invest in or
sponsor such programs.

8. Purchase any securities on margin, except that the Fund may make
margin deposits in connection with any futures contracts or any options it
may purchase or write. Effecting short sales, to the extent permitted by
paragraph 12 below, does not constitute a margin purchase for purposes of
this investment restriction.

9. Make loans of money, except that the Fund may purchase publicly
distributed debt obligations consistent with its investment objective and
policies, and the Fund may make loans of portfolio securities; provided
that the loan is collateralized by cash or cash equivalents or U.S.
Government Securities in an amount equal, on a daily basis, to the market
value of the securities loaned; and provided further that immediately after
giving effect to any such loan, the aggregate amount of all outstanding
loans of securities does not exceed 20% of the current market value of the
Fund's net assets.

10. Borrow money, except (i) for temporary emergency purposes in
amounts not in excess of 5% of the value of the Fund's total assets at the
time the loan is made; or (ii) in an amount not greater than 20% of the
Fund's net assets; provided that the Fund maintains asset coverage of 300%
with respect to such borrowings.

11. Issue senior securities, as defined in the 1940 Act, or mortgage,
pledge, hypothecate or in any manner transfer, as security for
indebtedness, any securities owned or held by the Fund except as may
8

be necessary in connection with borrowings mentioned in paragraph 10 above.
(For the purposes of this investment restriction, collateral or escrow
arrangements with respect to the making of short sales, writing of stock
options and collateral arrangements with respect to margin for futures
contracts or related options are not deemed to be a pledge of assets; and
neither such arrangements nor the purchase or sale of futures contracts or
purchases of related options are deemed to be the issuance of a senior
security.)

12. Make any short sales of securities, unless, if, at the time the
short sale is made and after giving effect thereto, (i) the market value of
all securities sold short is 25% or less of the value of the Fund's net
assets, (ii) the market value of such securities sold short which are not
listed on a national securities exchange does not exceed 10% of the Fund's
net assets, (iii) the market value of all securities sold short of any one
issuer does not exceed 2% of the Fund's net assets, (iv) short sales are
not made of more than 2% of the outstanding securities of one class of any
issuer, and (v) the Fund maintains collateral deposits consisting of cash
or U.S. Government Securities in a segregated account which are at all
times equal to 100% of the current market value of the securities sold
short. This investment restriction does not apply to short sales
"against-the-box."

13. Underwrite securities of other issuers except insofar as it might
be deemed to be an underwriter for purposes of the Securities Act of 1933,
as amended, in the resale of any securities held in its own portfolio.

14. Invest more than 10% of the Fund's total assets in securities that
at the time of purchase are subject to restrictions on disposition under
the Securities Act of 1933, as amended.

15. Purchase or sell commodities or futures contracts or options on
commodity or futures contracts, except if: (i) the purchase or sale of
futures contracts or options thereon is to hedge the Fund's existing
portfolio of securities, or to anticipate a market or market sector
advance; and (ii) the Fund creates, at the time of its purchase of a
futures contract, a segregated account with its Custodian consisting of
cash, U.S. Government Securities or other appropriate high-grade debt
obligations in an amount equal to the total market value of such contract,
less the amount of initial margin for such contract.

MANAGEMENT

DIRECTORS AND OFFICERS

The names and addresses of the Directors and Officers of the Fund are set
forth below, together with their positions and their principal occupations
during the past five years and, in the case of the Directors, their positions
with certain other organizations and companies.

DISINTERESTED DIRECTORS

TERM OF NUMBER OF
OFFICE AND PORTFOLIOS IN FUND PRINCIPAL OCCUPATION(S)
NAME (AGE) ADDRESS LENGTH OF COMPLEX OVERSEEN DURING PAST 5 YEARS AND OTHER
AND POSITION(S) WITH FUND TIME SERVED BY DIRECTOR DIRECTORSHIPS HELD
------------------------- ------------------- ------------------ -----------------------------

Charles H. Brunie (71) Term: Until 2003. 2 Director, The Zweig Total
Brunie Associates Served since: 1998. Return Fund, Inc. (since
600 Third Avenue, 1988). Chairman, Brunie
17th Floor Associates (investments)
New York, NY 10016 (since April 2001);
Director Oppenheimer Capital (1969-
2000). Chairman Emeritus,
Board of Trustees, Manhattan
Institute (since 1990).
Trustee, Milton and Rose D.
Friedman Foundation for
Vouchers (since 1999).
Elliot S. Jaffe (75) Term: Until 2002. 2 Chairman and Chief Executive
30 Dunnigan Drive Served since: 1988. Officer of The Dress Barn,
Suffern, NY 10901 Inc. (since 1963). Director,
Director The Zweig Total Return Fund,
Inc. (since 1988); Citigroup
Funds (since 1990); National
Retail Federation (since
1994); Stamford Hospital
Foundation (since 1997).
Member, Board of Overseers of
The School of Arts and
Sciences, University of
Pennsylvania (since 1998);
Trustee, Teachers College,
Columbia University (since
1996).
Wendy Luscombe (50) Term: Until 2002. 2 Principal, WKL Associates,
c/o Phoenix/Zweig Served since: 2001. Inc. (investment management)
Advisers LLC (since 1994). Fellow, Royal
900 Third Avenue Institution of Chartered
New York, NY 10022 Surveyors. Member, Chartered
Director Institute of Arbitrators.
Director, Amadeus Vision
Capital, plc (since 1999);
Endeavour Real Estate
Securities, Ltd. (since
2000); The Zweig Total Return
Fund, Inc. (since 2001); PXRE
Corp. (reinsurance) (since
1994).

Alden C. Olson (73) Term: Until 2004. 2 Director of The Zweig Total
2711 Ramparte Path Served since: 1996. Return Fund, Inc. (since
Holt, MI 48842 1996). Currently retired.
Director Chartered Financial Analyst
(since 1964). Professor of
Financial Management,
Investments at Michigan State
University (1959 to 1990).
James B. Rogers, Jr. (59) Term: Until 2003. 2 Private investor (since
352 Riverside Drive Served since: 1986. 1980). Chairman, Beeland
New York, NY 10025 Interests (Media and
Director Investments) (since 1980).
Regular Commentator on CNBC
(1992-1998). Author of
"Investment Biker: On the
Road with Jim Rogers" (1994).
Visiting Professor, Columbia
University (1983-1998).
Columnist, WORTH Magazine
(since 1995). Director, The
Zweig Total Return Fund, Inc.
(since 1988); Emerging
Markets Brewery Fund (since
1993); Levco Series Trust 2
portfolios (since 1996).

INTERESTED DIRECTOR

Martin E. Zweig (59)* Term: Until 2004. 9 President, Zweig Consulting
900 Third Avenue Served since: 1986. LLC (investment management)
New York, NY 10022 (since 1999). President,
Chairman and President Phoenix-Zweig Trust (since
1986) and Phoenix-Euclid
Funds (since 1998). Chairman
of the Board and President of
The Zweig Total Return Fund,
Inc. (since 1988). Managing
Director, Zweig-DiMenna
Associates LLC (investment
management) (since 1995).
President, Zweig-DiMenna
International Managers, Inc.,
Zweig-DiMenna Associates,
Inc. and Gotham Advisors,
Inc. Shareholder, Watermark
Securities, Inc. Director and
President, Zweig Total Return
Advisors, Inc. and Zweig
Advisors Inc. (until 1999).
Chairman, Zweig/Glaser
Advisers and Euclid Advisors
LLC (until 1999). Member,
Undergraduate Executive Board
of The Wharton School,
University of Pennsylvania.
Trustee, Manhattan Institute.

OFFICERS WHO ARE NOT DIRECTORS

Jeffrey Lazar (42) Served since: 1987. Vice President, Phoenix/
900 Third Avenue Zweig Advisers LLC (since
New York, NY 10022 1999). Executive Vice
Executive Vice President President and Treasurer, The
and Treasurer Zweig Total Return Fund, Inc.
(since 1988). Director, Zweig
Funds 2 portfolios (until
1999). Vice President and
Treasurer, Zweig Total Return
Advisors Inc. (until 1999);
Zweig Advisors Inc. (until
1999).

Christopher M. Capano (34) Served since: 1996. Investment Professional,
900 Third Avenue Phoenix/Zweig Advisers LLC
New York, NY 10022 (since 1994). Vice President,
Vice President The Zweig Total Return Fund,
Inc. (since 1996).
Nancy J. Engberg (45) Served since: 2000. Vice President and Counsel,
56 Prospect Street Phoenix Investment Partners,
Hartford, CT 06115 Ltd. (since 1999). Counsel,
Secretary Phoenix Home Life Mutual
Insurance Company (1994 to
1999). Secretary, The Zweig
Total Return Fund, Inc.
(since 2000).

---------------
* Director considered to be an "interested person," as that term is defined in
the 1940 Act. Dr. Zweig is considered an interested person because, among
other things, he is an officer of the Fund.

The Fund's Board of Directors has appointed a standing Audit Committee and
Nominating Committee. The Fund's Board of Directors has adopted a written
charter for the Fund's Audit Committee. The purposes of the Audit Committees are
set forth in the Audit Committee Charter. The Audit Committee assists the Board
of Directors in its oversight of the Fund's financial reporting process. The
Audit Committee of the Board of Directors will normally meet two times during
each full fiscal year with representatives of the independent auditors to
discuss and review various matters as contemplated by the Audit Committee
Charter. The members of the Audit Committee, Messrs. Jaffe and Olson and Ms.
Luscombe, are "independent" within the meaning of the 1940 Act and the NYSE
corporate governance standards for audit committees. The Fund's Audit Committee
held two meetings during the year ended December 31, 2001.

Messrs. Brunie, Olson and Rogers, each of whom is not an interested person
of the Fund, are members of the Nominating Committee of the Board of Directors.
The Nominating Committee considers candidates for election to fill vacancies on
the Board of Directors, and will consider recommendations from shareholders for
possible nominees. Shareholders are required to submit a biography of the
recommended candidate to the Secretary of the Fund. The Fund does not have a
standing compensation committee. The Fund's Nominating Committee held one
meeting during the year ended December 31, 2001. All of the Directors attended
at least 75% of the total number of Board meetings, and his or her respective
committee meetings, held during fiscal year 2001.

The Board of Directors, including a majority of the Disinterested
Directors, has the responsibility under the 1940 Act to approve the continuance
of the Investment Advisory Agreement and the Sub-Advisory Agreement. Both the
Investment Advisory Agreement and the Sub-Advisory Agreement were approved to be
continued until March 1, 2003 at a meeting of the Directors held on February 13,
2002. In its deliberations concerning the continuance of the Investment Advisory
Agreement and Sub-Advisory Agreement, the Directors considered, among other
things, the nature, quality and extent of services rendered by the Investment
Adviser and Sub-Adviser, alternatives to the Fund's advisory fee structure and a
comparison of the Fund's advisory fee structure, performance, operating expenses
and expense ratio with those of other investment companies.

DIRECT OWNERSHIP OF SECURITIES

The dollar range of the Fund's securities owned by each Director and the
aggregate dollar range of securities owned in the Zweig Fund Complex (as defined
below under "Executive Compensation") is set forth below.

AGGREGATE DOLLAR RANGE
DOLLAR RANGE OF EQUITY OF EQUITY SECURITIES
SECURITIES IN THE FUND(1) IN THE ZWEIG FUND COMPLEX
------------------------- -------------------------

Charles H. Brunie Over $100,000 Over $100,000
Elliot S. Jaffe $50,001 - $100,000(2) Over $100,000
Wendy Luscombe $1 - $10,000 $10,001 - $50,000
Alden C. Olson $10,001 - $50,000 $10,001 - $50,000
James B. Rogers, Jr. $10,001 - $50,000 $10,001 - $50,000
Martin E. Zweig Over $100,000 Over $100,000

---------------
(1) The information as to beneficial ownership is based on statements furnished
to the Fund by its Directors and reflects ownership as of December 31, 2001.
Except as otherwise indicated, each person has sole voting and investment
power with respect to the shares owned by him or her. Fractional shares are
rounded off to the nearest whole share. The Directors and Officers of the
Fund, as a group, beneficially own less than 1% of the outstanding shares of
the Fund.

(2) Does not include 10,000 Fund shares held by Mr. Jaffe's wife, as to which he
disclaims beneficial ownership.

EXECUTIVE COMPENSATION

The aggregate compensation paid to each of the Directors for the year ended
December 31, 2001 by all of the funds to which the Investment Adviser provides
investment advisory services (collectively, the "Zweig Fund Complex"), and the
total number of registered investment companies (and separate investment
portfolios within those companies) in the Zweig Fund Complex with respect to
which any of the Directors serves as a director or trustee are set forth below.
The Fund does not pay any fees to, or reimburse expenses of, its Director who is
considered an "interested person" of the Fund. Neither the Fund nor any other
fund in the Zweig Fund Complex provides compensation in the form of pension or
retirement benefits to any of its directors or trustees.

TOTAL COMPENSATION FROM
AGGREGATE COMPENSATION THE ZWEIG FUND COMPLEX,
NAME OF DIRECTOR FROM THE FUND INCLUDING THE FUND
---------------- ---------------------- -----------------------

Charles H. Brunie........................... $17,500 $35,000
Elliot S. Jaffe............................. $17,500 $35,000
Wendy Luscombe.............................. $17,500 $35,000
Alden C. Olson.............................. $19,000 $38,000
James B. Rogers, Jr......................... $17,500 $35,000
Martin E. Zweig............................. $ 0 $ 0

LIMITATION OF DIRECTORS' AND OFFICERS' LIABILITY

The Fund's Articles of Incorporation limit the personal liability of its
Officers and Directors to the Fund and its shareholders for money damages to the
maximum extent permitted by the Maryland General Corporation Law. Accordingly, a
shareholder will be able to recover money damages against a Director or Officer
of the Fund only if he is able to prove that (a) the action, or failure to act,
by the Director or Officer was the result of active and deliberate dishonesty
which was material to the cause of action adjudicated in the proceeding, (b) the
Director or Officer actually received an improper benefit or profit in money,
property or services (in which case recovery is limited to the actual amount of
such improper benefit or profit), or (c) the Director or Officer acted with
willful misfeasance, bad faith, gross negligence,

or reckless disregard of the duties involved in the conduct of his or her
office. The limitation does not apply to claims against Directors or Officers
arising out of their responsibilities under the Federal securities laws. The
Fund's Articles of Incorporation do not limit the right of the Fund or any
shareholder to sue for an injunction or any other nonmonetary relief in the
event of a breach of a Director's or Officer's duty of care or other breach of
duty or responsibility.

CODE OF ETHICS

The Fund, the Investment Adviser and the Sub-Adviser have each adopted
codes of ethics pursuant to Rule 17j-1 under the 1940 Act. These codes of ethics
permit personnel subject to the codes to invest in securities, including
securities that may be purchased or held by the Fund. Copies of the codes of
ethics are attached to the Registration Statement, of which this Statement of
Additional Information is a part, as Exhibits (r)(1), (r)(2) and (r)(3).

EXPENSES

For the fiscal years ended December 31, 2001, 2000 and 1999, the Fund's
expenses amounted to $6,239,545, $7,600,333 and $7,976,363, respectively.

Expenses of the Offer will be charged to capital. The Fund's annual expense
ratio was 1.19%, 1.12% and 1.12% of the Fund's average net assets for the fiscal
years ended December 31, 2001, 2000 and 1999, respectively.

PORTFOLIO TRANSACTIONS AND BROKERAGE

In the purchase and sale of portfolio securities for the Fund, the
Investment Adviser will seek the best combination of price (inclusive of
brokerage commissions) and execution, and, consistent with that policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Investment Adviser for its use. The Investment Adviser
is also authorized to place orders with brokers who provide supplemental
investment, market research and security and economic analysis, although the use
of such brokers may result in a higher brokerage charge to the Fund than the use
of brokers selected solely on the basis of seeking the best combination of price
(inclusive of brokerage commissions) and execution for the same order. Brokerage
may be allocated entirely on the basis of net results to the Fund, including the
difficulty of the order and the reputation of the broker-dealer. Research and
analysis received by the Investment Adviser may benefit the Investment Adviser,
the Sub-Adviser and their respective affiliates in connection with their
services to other clients, as well as the Fund. Subject to the foregoing, the
Fund may effect a portion of its securities transactions through affiliated
broker-dealers of the Investment Adviser, including PXP Securities Corp. In
accordance with the provisions of Rule 17e-1 under the 1940 Act, the Fund's
Board of Directors has adopted certain procedures which are designed to provide
that brokerage commissions paid to PXP Securities Corp. and any other affiliated
broker-dealers are reasonable and fair as compared to the brokerage commissions
received by other brokers in connection with comparable transactions involving
similar securities being purchased or sold on securities exchanges during a
comparable period of time. The Fund, however, has no obligation to deal with PXP
Securities Corp. or any other broker-dealer in effecting portfolio transactions.

The Fund paid brokerage commissions of $ to brokers for the year ended
December 31, 2001, of which $89,430 was paid to PXP Securities Corp.,
representing % of the aggregate brokerage commissions paid by the Fund and
% of the aggregate amount of transactions involving the payment of
commissions for such year. The Fund paid brokerage commissions of $ to
brokers for the year ended December 31, 2000, of which $143,629 was paid to PXP
Securities Corp., representing % of the aggregate brokerage commissions
paid by the Fund and % of the aggregate amount of transactions involving
the payment of commissions for such year. The Fund paid brokerage commissions of
$ to brokers for the year ended December 31, 1999, of which $202,411 was
paid to PXP Securities Corp.,

representing % of the aggregate brokerage commissions paid by the Fund and
% of the aggregate amount of transactions involving the payment of
commissions for such year.

A portion of the securities in which the Fund will invest may be traded in
the over-the-counter markets, and the Fund intends to deal directly with the
dealers who make markets in the securities involved, except in those
circumstances where better prices and execution are available elsewhere. Fixed
income securities purchased or sold on behalf of the Fund normally will be
traded in the over-the-counter market on a net basis (i.e. without a commission)
through dealers acting for their own account and not as brokers or otherwise
through transactions directly with the issuer of the instrument. Some fixed
income securities may be purchased and sold on an exchange or in
over-the-counter transactions conducted on an agency basis involving a
commission. Futures transactions generally will be effected through those
futures commission merchants the Fund believes will obtain the most favorable
results for the Fund.

When the Fund and one or more accounts managed by the Investment Adviser or
certain of its affiliates propose to purchase or sell the same security, the
available opportunities will be allocated in a manner the Investment Adviser
believes to be equitable. In some cases, this procedure may affect adversely the
price paid or received by the Fund or the size of the position purchased or sold
by the Fund. In other cases, coordination with transactions for other accounts
and the ability to participate in volume or block transactions could benefit the
Fund.

PORTFOLIO TURNOVER

The Fund's portfolio turnover rates for the fiscal years ended December 31,
2001, December 31, 2000 and December 31, 1999 were 80.3%, 114.8% and 114.9%,
respectively. Portfolio turnover rate is calculated by dividing the lesser of
the Fund's annual sales or purchases of portfolio securities by the monthly
average value of securities in the portfolio during the year, excluding
portfolio securities the maturities of which at the time of acquisition were one
year or less. Portfolio turnover will not be a limiting factor in making
investment decisions, and the Fund's investment policies may result in portfolio
turnover substantially greater than that of other investment companies. A high
rate of portfolio turnover (over 100%) involves greater brokerage commission
expense, which must be borne by the Fund and its shareholders. A high rate of
portfolio turnover may also result in the realization of capital gains, and to
the extent that portfolio turnover results in the realization of net short-term
capital gains, such gains, when distributed, would be taxed to shareholders at
ordinary income tax rates.

NET ASSET VALUE

The net asset value of the Fund's shares will be determined by the
Administrator as of the close of regular trading on the NYSE, on each day the
NYSE is open for trading, by dividing the Fund's total assets, less the Fund's
total liabilities, by the total number of Shares outstanding. Net asset value
will be published weekly in a financial newspaper of general circulation.

Portfolio securities (including stock options) which are traded only on
stock exchanges will be valued at the last sale price. Securities traded in the
over-the-counter market which are National Market Systems securities will be
valued at the last sale price. Other over-the-counter securities will be valued
on the basis of the mean between the current bid and asked prices obtained from
market makers in such securities. Debt securities that mature in 60 days or less
will be valued at amortized cost, unless the Board of Directors determines that
such valuation does not constitute fair value. Debt securities that have an
original maturity of less than 61 days will be valued at their cost, plus or
minus amortized discount or premium, unless the Board of Directors determines
that such valuation does not constitute fair value. Futures and options thereon
which are traded on commodities exchanges will be valued at their closing
settlement price on such exchange. Securities and assets for which market
quotations are not readily available, and other assets, if any, will be valued
at fair value as determined in good faith and pursuant to procedures established
by the Board of Directors of the Fund.

TAXATION

The following is a summary of the principal U.S. Federal income, and
certain state and local, tax considerations regarding the purchase, ownership
and disposition of shares of the Fund. The summary does not address special tax
rules applicable to certain classes of investors, such as tax-exempt entities,
insurance companies and financial institutions. Each prospective shareholder is
urged to consult his or her own tax adviser with respect to the specific
Federal, state, local and foreign tax consequences of investing in the Fund. The
summary is based on the laws in effect on the date of this SAI, which are
subject to change.

GENERAL

The Fund has elected to be treated, has qualified and intends to continue
to qualify for each taxable year, as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
so qualify, the Fund must comply with certain requirements of the Code relating
to, among other things, the source of its income and the diversification of its
assets.

If the Fund complies with such requirements, then in any taxable year for
which the Fund distributes, in accordance with the Code's timing requirements,
ordinary income dividends of at least 90% of its investment company taxable
income, the Fund (but not its shareholders) will be relieved of Federal income
tax on any income of the Fund, including capital gains, that is distributed to
shareholders in accordance with the Code's requirements. However, if the Fund
retains any investment company taxable income or net capital gain, it will be
subject to a tax at regular corporate rates on the amount retained. If the Fund
retains any net capital gain, the Fund may designate the retained amount as
undistributed capital gains in a notice to its shareholders who, if subject to
U.S. Federal income tax on capital gains, (i) will be required to include in
income for Federal income tax purposes, as capital gain, their shares of such
undistributed amount, and (ii) will be entitled to credit their proportionate
shares of the tax paid by the Fund against their U.S. Federal income tax
liabilities, if any, and to claim refunds to the extent the credit exceeds such
liabilities. For U.S. Federal income tax purposes, the tax basis of shares owned
by a shareholder of the Fund will be increased by an amount equal under current
law to 65% of the amount of undistributed net capital gain included in the
shareholder's gross income.

In order to avoid a 4% Federal excise tax, the Fund must distribute (or be
deemed to have distributed) by December 31 of each calendar year at least 98% of
its taxable ordinary income for such year, at least 98% of the excess of its
capital gains over its capital losses, and all taxable ordinary income and the
excess of capital gains over capital losses for the previous year that were not
distributed for such year and on which the Fund did not pay Federal income tax.
The Fund intends to distribute at least annually to its shareholders all or
substantially all of its investment company taxable income and its net capital
gain, but reserves the right to retain and designate as described in the above
paragraph, its net capital gain.

The Fund's investments, if any, in securities issued at a discount or
providing for deferred interest payments or payments of interest in kind will
generally cause the Fund to realize income prior to the receipt of cash payments
with respect to these securities. Mark to market rules applicable to certain
options and futures contracts may also require that net gains be recognized
without a concurrent receipt of cash. In order to obtain cash to distribute its
income or gains, maintain its qualification as a regulated investment company
and avoid Federal income or excise taxes, the Fund may be required to liquidate
portfolio securities that it might otherwise have continued to hold.

TAXABLE U.S. SHAREHOLDERS -- DISTRIBUTIONS

For U.S. Federal income tax purposes, distributions by the Fund, whether
reinvested in additional shares or paid in cash, generally will be taxable to
shareholders who are subject to tax.

Distributions from the Fund's investment company taxable income will be
taxable as ordinary income, and generally cannot be offset by capital losses.
For corporate shareholders, distributions designated as

derived from the Fund's dividend income that would be eligible for the dividends
received deduction if the Fund were not a regulated investment company will be
eligible, subject to certain holding period and debt-financing restrictions, for
the 70% dividends received deduction. (However, the entire dividend, including
the deducted amount, is includable in determining a corporate shareholder's
alternative minimum taxable income.) So long as the Fund qualifies as a
regulated investment company and satisfies the 90% distribution requirement,
capital gain dividends if properly designated as such in a written notice to
shareholders mailed not later than 60 days after the Fund's taxable year closes,
will be taxed to shareholders as capital gain which, as to non-corporate
shareholders, will be taxable at a maximum marginal Federal income tax rate of
20%, regardless of how long the shareholder has held his or her Fund shares.
Distributions, if any, that are in excess of the Fund's current and accumulated
earnings and profits, as computed for Federal income tax purposes, will first
reduce a shareholder's tax basis in his or her shares and, after such basis is
reduced to zero, will constitute capital gains to a shareholder who holds his or
her shares as capital assets.

All distributions, whether received in shares or in cash, as well as sales
and exchanges of Fund shares, must be reported by each shareholder who is
required to file a U.S. Federal income tax return. For Federal income tax
purposes, dividends declared by the Fund in October, November or December and
paid during January of the following year are treated as if they were paid by
the Fund and received by such shareholders on December 31 of the year declared.
In addition, certain other distributions made after the close of a taxable year
may be "spilled back" and treated as paid by the Fund (other than for purposes
of avoiding the 4% excise tax) during such year. Such dividends would be taxable
to the shareholders in the taxable year in which the distribution was actually
made by the Fund.

The Fund will send written notices to shareholders regarding the amount and
Federal income tax status of all distributions made during each calendar year.

With respect to distributions paid in cash or, for shareholders
participating in the Distribution Reinvestment and Cash Purchase Plan (the
"Plan"), reinvested in shares purchased in the open market, the amount of the
distribution for tax purposes is the amount of cash distributed or allocated to
the shareholder. With respect to distributions issued in shares of the Fund, the
amount of the distribution for tax purposes is the fair market value of the
issued shares on the payment date.

Distributions by the Fund result in a reduction in the net asset value of
the Fund's shares and may also reduce their market value. Should a distribution
reduce the net asset value or market value below a shareholder's cost basis,
such distribution (to the extent paid from the Fund's current or accumulated
earnings and profits) would nevertheless be taxable to the shareholder as
ordinary income or capital gain as described above even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution. Since the market price of shares
purchased at that time may include the amount of any forthcoming distribution,
investors purchasing shares just prior to a distribution will in effect receive
a return of a portion of their investment in the form of a distribution which
nevertheless will be taxable to them.

TAXABLE U.S. SHAREHOLDERS -- SALE OF SHARES

When a shareholder's shares are sold, exchanged or otherwise disposed of,
the shareholder will generally recognize gain or loss equal to the difference
between the shareholder's adjusted tax basis in the shares and the cash, or fair
market value of any property, received. Assuming the shareholder holds the
shares as a capital asset at the time of such sale or other disposition, such
gain or loss should be capital gain or loss which will be long-term if the
shares were held for more than one year, and short-term if the shares are held
for one year or less. For non-corporate shareholders, short-term gain is taxable
at a maximum marginal Federal income tax rate of 38.6%, whereas long-term
capital gains qualify for a lower maximum marginal Federal income tax rate
(20%). However, any loss realized on the sale, exchange or other disposition of
Fund shares with a tax holding period of six months or less will be treated as a
long-term capital loss to the extent of any capital gain dividend received by
the selling shareholder with respect

to such shares. Additionally, any loss realized on a sale or other disposition
of shares of the Fund may be disallowed under "wash sale" rules to the extent
the shares disposed of are replaced with other shares of the Fund within a
period of 61 days beginning 30 days before and ending 30 days after the shares
are disposed of, such as pursuant to a distribution reinvestment in shares of
the Fund under the Plan. If disallowed, the loss will be reflected in an
adjustment to the basis of the shares acquired.

BACKUP WITHHOLDING

The Fund will be required to report to the Internal Revenue Service all
distributions, as well as gross proceeds from the sale or exchange of Fund
shares with respect to which the Fund is a payor (such as pursuant to a tender
offer), except in the case of certain exempt recipients, i.e., corporations and
certain other investors to which distributions are exempt from the information
reporting provisions of the Code. Under the backup withholding provisions of
Code Section 3406 and applicable Treasury regulations, all such reportable
distributions and proceeds may be subject to backup withholding of Federal
income tax at the rate of 30% in the case of nonexempt shareholders who fail to
furnish the Fund with their correct taxpayer identification number and with
certain required certifications or if the Internal Revenue Service or a broker
notifies the Fund that the number furnished by the shareholder is incorrect or
that the shareholder is subject to backup withholding as a result of failing to
report interest or dividend income. The Fund may refuse to accept any
subscription that does not contain any required taxpayer identification number
or certification that the number provided is correct. If the backup withholding
provisions are applicable, any such distributions and proceeds, whether taken in
cash or reinvested in shares, will be reduced by the amounts required to be
withheld. Any amounts withheld would be credited against a shareholder's U.S.
Federal income tax liability. Investors should consult their tax advisers about
the applicability of the backup withholding provisions.

NON-U.S. SHAREHOLDERS

Dividends of investment company taxable income distributed by the Fund to a
shareholder who is not a U.S. person (i.e., a nonresident alien individual, or a
foreign corporation, foreign partnership, foreign trust or foreign estate) will
be subject to U.S. withholding tax at the rate of 30% (or a lower rate provided
by an applicable tax treaty) unless the dividends are effectively connected with
a U.S. trade or business of the shareholder, in which case the dividends will be
subject to tax on a net income basis at the graduated rates applicable to U.S.
individuals or domestic corporations and, in the case of a shareholder that is a
foreign corporation, may be subject to U.S. "branch profit tax." Capital gain
distributions, including amounts retained by the Fund which are designated as
undistributed capital gains, to a non-U.S. shareholder will not be subject to
U.S. income or withholding tax unless the distributions are effectively
connected with the shareholder's trade or business in the U.S. or, in the case
of a shareholder who is a nonresident alien individual, if the shareholder is
present in the U.S. for 183 days or more during the taxable year and certain
other conditions are met.

Any gain realized by a shareholder who is not a U.S. person upon a sale or
other disposition of shares of the Fund will not be subject to U.S. Federal
income or withholding tax unless the gain is effectively connected with the
shareholder's trade or business in the U.S., or in the case of a shareholder who
is a nonresident alien individual, if the shareholder is present in the U.S. for
183 days or more during the taxable year and certain other conditions are met.
Non-U.S. persons who fail to furnish the Fund with an IRS Form W-8BEN or
acceptable substitute Form W-8BEN may be subject to backup withholding at the
rate of 30% on capital gain dividends and the proceeds of certain sales of their
shares with respect to which the Fund is a payor (such as pursuant to a tender
offer). Investors who are not U.S. persons should consult their tax advisers
about the U.S. and non-U.S. tax consequences of ownership of shares of, and
receipt of distributions from, the Fund.

STATE AND LOCAL TAXES

The Fund may be subject to state or local taxes in jurisdictions in which
the Fund may be deemed to be doing business. In addition, in those states or
localities which have income tax laws, the treatment of
19

the Fund and its shareholders under such laws may differ from their treatment
under Federal income tax laws, and an investment in the Fund may have tax
consequences for shareholders different from those of a direct investment in the
Fund's portfolio securities. Shareholders should consult their own tax advisers
concerning these matters.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036, serves as the independent accountants for the Fund. In addition to
reporting annually on the financial statements of the Fund, the Fund's
accountants also review certain filings of the Fund with the Commission.

PRINCIPAL SHAREHOLDERS

There are no persons known to the Fund to be control persons of the Fund,
as such term is defined in Section 2(a)(9) of the 1940 Act. Except for the
following, there is no person known to the Fund to hold beneficially 5% or more
of the outstanding shares of the Fund. As of March 7, 2002, there were
61,834,947 outstanding shares of the Fund.

NAME AND ADDRESS OF RECORD OWNER AMOUNT OF RECORD OWNERSHIP PERCENT OF CLASS
-------------------------------- -------------------------- ----------------

Cede & Co.
55 Water Street
New York, New York 10041

FINANCIAL STATEMENTS

The audited financial statements and the notes thereto, together with the
report of PricewaterhouseCoopers LLP thereon, are incorporated herein by
reference to the Fund's Annual Report to Shareholders for the fiscal year ended
December 31, 2001. The Fund will furnish, without charge, a copy of the
foregoing documents upon written request to the Fund's Administrator, Phoenix
Equity Planning Corporation, 56 Prospect Street, P.O. Box 150480, Hartford, CT
06115-0480, Attention: Shareholders Services.

F-1

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(1) Financial Statements: The following financial statements and schedules
of the Registrant included in the Prospectus and/or SAI are incorporated by
reference to the Registrant's Annual Report to Shareholders for the fiscal year
ended December 31, 2001 and made a part of this Registration Statement:
Statement of Assets and Liabilities, December 31, 2001; Statement of Operations
for the fiscal year ended December 31, 2001; Statement of Changes in Net Assets
for the fiscal years ended December 31, 2001 and 2000; Schedule of Investments,
December 31, 2001; Notes to Financial Statements at December 31, 2001; Financial
Highlights for the ten fiscal years ended December 31, 2001; all other schedules
are omitted because the information is included elsewhere in the Prospectus or
SAI or is not required.

(2) Exhibits

(a) -- Amended and Restated Articles of Incorporation (Incorporated
by reference to Amendment No. 11 to the Registrant's
Registration Statement (Securities Act File No. 333-40594;
Investment Company Act File No. 811-4739)).
(b) -- Amended and Restated By-Laws (Incorporated by reference to
Amendment No. 14 to the Registrant's Registration Statement
(Securities Act File No. 333-46955; Investment Company Act
File No. 811-4739)).
(c) -- Not applicable.
(d)(1) -- Form of Subscription Certificate.*
(d)(2) -- Form of Notice of Guaranteed Delivery.*
(d)(3) -- Form of Nominee Holder Over-Subscription Exercise Form.*
(d)(4) -- Form of Subscription Agent Agreement between the Registrant
and EquiServe Trust Co., N.A.**
(d)(5) -- Form of Information Agent Agreement between the Registrant
and [ ].**
(e) -- Distribution Reinvestment and Cash Purchase Plan
(Incorporated by reference to Amendment No. 13 to the
Registrant's Registration Statement (Securities Act File No.
333-46955; Investment Company Act File No. 811-4739)).
(f) -- Not applicable.
(g)(1) -- Investment Advisory Agreement with Zweig Advisors Inc. dated
March 1, 1999.*
(g)(2) -- Servicing Agreement by and among Zweig/Glaser Advisers,
Zweig Total Return Advisors, Inc., Zweig Advisors Inc. and
Zweig Consulting LLC dated March 1, 1999.*
(h) -- Not applicable.
(i) -- Not applicable.
(j) -- Custodian Agreement with The Bank of New York dated as of
September 17, 1986 (Incorporated by reference to Amendment
No. 11 to the Registrant's Registration Statement
(Securities Act File No. 333-40594; Investment Company Act
File No. 811-4739)).
(k)(1) -- Administration Agreement with Zweig/Glaser Advisers dated as
of March 1, 1999.*
(k)(2) -- Assignment of Administration Agreement by Zweig/Glaser
Advisers to Phoenix Equity Planning Corporation effective as
of October 31, 1999.*
(k)(3) -- Stock Transfer Agent Service Agreement with EquiServe Trust
Co., N.A. dated as of .**
(l) -- Opinion and Consent of Rosenman & Colin LLP.**
(m) -- Not applicable.
(n) -- Consent of PricewaterhouseCoopers LLP.**
(o) -- Not applicable.
(p) -- Not applicable.
(q) -- Not applicable.
(r)(1) -- Code of Ethics of the Registrant.*

(r)(2) -- Code of Ethics of Phoenix/Zweig Advisers LLC.*
(r)(3) -- Code of Ethics of Zweig Consulting LLC.*

Other Exhibits: Powers of Attorney for Martin E. Zweig, Charles H. Brunie,
Elliot S. Jaffe, Wendy Luscombe, Alden C. Olson and James B. Rogers, Jr.*
---------------

* Filed herewith

** To be Filed by Amendment

ITEM 25. MARKETING ARRANGEMENTS

Not applicable.

ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses expected to be
incurred in connection with the offering described in this Registration
Statement:

ESTIMATED
CATEGORY EXPENSES
-------- ---------

Printing Fees............................................... *
Legal Fees.................................................. $125,000
Registration Fees........................................... $ 25,000
Information Agent Fees...................................... $ 23,750
Subscription Agent Fees..................................... *
Listing Fees................................................ $ 38,500
Miscellaneous............................................... *

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

* This information will be given by amendment, and may be subject to future
contingencies.

ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 28. NUMBER OF HOLDERS OF SECURITIES AS OF , 2002

NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------

Common Stock, par value $0.10 per share

ITEM 29. INDEMNIFICATION

Under Article VI, Sections 4 through 7, of the Registrant' Articles of
Incorporation and Article V, Section 1, of the Registrant's By-Laws, any past or
present director or officer of the Registrant will be indemnified, and will be
advanced expenses, to the fullest extent permitted by Maryland law, but not in
violation of Section 17(h) or 17(i) of the Investment Company Act of 1940, as
amended.

As permitted by Section 2-418(k) of the Maryland General Corporation Law,
Article V, Section 3, of the Registrant's By-Laws provides that the Registrant
shall have the power to purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the Registrant or who,
while a director, officer, employee or agent of the Registrant, is or was
serving at the request of the Registrant as a director, officer, partner,
trustee, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or employee benefit plan, against any liability asserted
against and incurred by him or her in any such capacity, or arising out of his
or her status as such, provided that, pursuant to the By-Laws, no insurance may
be obtained by the Registrant for liabilities against which it would not

have the power to indemnify him or her under the Article of the By-Laws
regarding indemnification or applicable law.

ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER AND SUB-ADVISER

For information regarding Dr. Martin E. Zweig, Jeffrey Lazar and Nancy J.
Engberg, see "Management -- Directors and Officers" in the SAI, which is
incorporated herein by reference.

Phillip R. McLoughlin is the Chairman, President and Chief Executive
Officer of Phoenix/Zweig Advisers LLC. Mr. McLoughlin is Director, CEO and
Chairman of Phoenix Investment Partners, Ltd.; Chairman and Director of Phoenix
Investment Counsel, Inc.; Director and President of Phoenix Equity Planning
Corporation; Executive Vice President and CIO of Phoenix Life Insurance Company;
President and Director of Townsend Financial Advisers, Inc.; Director of PHL
Associates, Inc.; Chairman, President and CEO of Phoenix/Zweig Advisers LLC;
President of Euclid Advisors LLC; Director and Chairman of Duff & Phelps
Investment Management Co.; and Director of PXP Institutional Market Group, Ltd.

Carlton Bryan Neel is Senior Vice President of Phoenix/Zweig Advisers LLC,
Phoenix-Zweig Trust, Zweig-Euclid Funds and Euclid Advisors LLC.

Nancy Curtiss is Vice President and CFO of Phoenix/Zweig Advisers LLC and
Euclid Advisors LLC; Vice President and Treasurer of Phoenix Equity Planning
Corporation; and Second Vice President and Treasurer of Phoenix Life Insurance
Co.

Michael E. Haylon is Executive Vice President of Phoenix/Zweig Advisers
LLC; was Director and President of PXP Institutional Markets Group, Ltd. until
October 2000; Director and President of Phoenix Investment Counsel, Inc.;
Executive Vice President and Director of Phoenix Investment Partners, Ltd.;
Director of Phoenix Equity Planning Corporation; President of PXP Securities
Corp.

ITEM 31. LOCATION OF ACCOUNTS AND RECORDS

Corporate records of the Registrant and records relating to the function of
Phoenix/Zweig Advisers LLC as Investment Adviser to the Registrant:

Phoenix/Zweig Advisers LLC
900 Third Avenue
New York, NY 10022

Records relating to its function as Administrator to the Registrant:

Phoenix Equity Planning Corporation
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480

Records relating to its function as the Registrant's Dividend Paying Agent,
Distribution Reinvestment and Cash Purchase Plan Agent, Transfer Agent and
Registrar:

EquiServe Trust Co., N.A.
150 Royall Street
Canton, MA 02021

Records relating to its function as Custodian of the Registrant:

The Bank of New York
One Wall Street
New York, NY 10286

ITEM 32. MANAGEMENT SERVICES

Not applicable.

ITEM 33. UNDERTAKINGS

(a) Registrant undertakes to suspend offering of the shares covered hereby
until it amends its Prospectus contained herein if (1) subsequent to the
effective date of this Registration Statement, its net asset value per share
declines more than ten percent from its net asset value per share as of the
effective date of this Registration Statement, or (2) its net asset value per
share increases to an amount greater than its net proceeds as stated in the
Prospectus contained herein.

(b) Registrant undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
form of prospectus filed by the Registrant pursuant to 497(h) under the
Securities Act shall be deemed to be part of this registration statement as
of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(c) The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days of receipt
of a written or oral request, any Statement of Additional Information.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and State of New York on the 13th day of
March, 2002.

THE ZWEIG FUND, INC.

By: /s/ MARTIN E. ZWEIG
------------------------------------
Martin E. Zweig
Chairman of the Board and President

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:

SIGNATURE TITLE DATE
--------- ----- ----

/s/ MARTIN E. ZWEIG Director, Chairman of the Board March 13, 2002
--------------------------------------------------- and President (Chief Executive
Martin E. Zweig Officer)

/s/ CHARLES H. BRUNIE Director March 13, 2002
---------------------------------------------------
Charles H. Brunie

/s/ ELLIOT S. JAFFE Director March 13, 2002
---------------------------------------------------
Elliot S. Jaffe

/s/ WENDY LUSCOMBE Director March 13, 2002
---------------------------------------------------
Wendy Luscombe

/s/ ALDEN C. OLSON Director March 13, 2002
---------------------------------------------------
Alden C. Olson

/s/ JAMES B. ROGERS, JR. Director March 13, 2002
---------------------------------------------------
James B. Rogers, Jr.

EXHIBIT INDEX

(b) -- Amended and Restated By-Laws (Incorporated by reference to
Amendment No. 14 to the Registrant's Registration Statement
(Securities Act File No. 333-46955; Investment Company Act
File No. 811-4739)).
(c) -- Not applicable.
(d)(1) -- Form of Subscription Certificate.*
(d)(2) -- Form of Notice of Guaranteed Delivery.*
(d)(3) -- Form of Nominee Holder Over-Subscription Exercise Form.*
(d)(4) -- Form of Subscription Agent Agreement between the Registrant
and EquiServe Trust Co., N.A.**
(d)(5) -- Form of Information Agent Agreement between the Registrant
and [ ].**
(e) -- Distribution Reinvestment and Cash Purchase Plan
(Incorporated by reference to Amendment No. 13 to the
Registrant's Registration Statement (Securities Act File No.
333-46955; Investment Company Act File No. 811-4739)).
(f) -- Not applicable.
(g)(1) -- Investment Advisory Agreement with Zweig Advisors Inc. dated
March 1, 1999.*
(g)(2) -- Servicing Agreement by and among Zweig/Glaser Advisers,
Zweig Total Return Advisors, Inc., Zweig Advisors Inc. and
Zweig Consulting LLC dated March 1, 1999.*
(h) -- Not applicable.
(i) -- Not applicable.
(j) -- Custodian Agreement with The Bank of New York dated as of
September 17, 1986 (Incorporated by reference to Amendment
No. 11 to the Registrant's Registration Statement
(Securities Act File No. 333-40594; Investment Company Act
File No. 811-4739)).
(k)(1) -- Administration Agreement with Zweig/Glaser Advisers dated as
of March 1, 1999.*
(k)(2) -- Assignment of Administration Agreement by Zweig/Glaser
Advisers to Phoenix Equity Planning Corporation effective as
of October 31, 1999.*
(k)(3) -- Stock Transfer Agent Service Agreement with EquiServe Trust
Co., N.A. dated as of .**
(l) -- Opinion and Consent of Rosenman & Colin LLP.**
(m) -- Not applicable.
(n) -- Consent of PricewaterhouseCoopers LLP.**
(o) -- Not applicable.
(p) -- Not applicable.
(q) -- Not applicable.
(r)(1) -- Code of Ethics of the Registrant.*
(r)(2) -- Code of Ethics of Phoenix/Zweig Advisers LLC.*
(r)(3) -- Code of Ethics of Zweig Consulting LLC.*
Other Exhibits: Powers of Attorney for Martin E. Zweig, Charles H.
Brunie, Elliot S. Jaffe, Wendy Luscombe, Alden C. Olson and James B.
Rogers, Jr.*

---------------
* Filed herewith

** To be Filed by Amendment