-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S5K5khH4lhIx0lQI41ZYVUKZetKb8mYfdvcH5+/EceUQTN4ahtKR7sww+KZzxbTF y+uqBmZoGuBfMd1BPf9JEw== 0000940180-97-001002.txt : 19971111 0000940180-97-001002.hdr.sgml : 19971111 ACCESSION NUMBER: 0000940180-97-001002 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971110 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZWEIG TOTAL RETURN FUND INC CENTRAL INDEX KEY: 0000836412 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133474242 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-05620 FILM NUMBER: 97711631 BUSINESS ADDRESS: STREET 1: 5 HANOVER SQUARE CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2125100360 MAIL ADDRESS: STREET 1: 5 HANOVER SQUARE CITY: NEW YORK STATE: NY ZIP: 10004 N-30B-2 1 QUARTERLY REPORT OFFICERS AND DIRECTORS Martin E. Zweig, Ph.D. Chairman of the Board and President Jeffrey Lazar Vice President and Treasurer Stuart B. Panish Vice President and Secretary Christopher M. Capano Assistant Vice President Charles H. Brunie Director Elliot S. Jaffe Director Alden C. Olson, Ph.D. Director James B. Rogers, Jr. Director Anthony M. Santomero, Ph.D. Director Robert E. Smith Director INVESTMENT ADVISER Zweig Total Return Advisors, Inc. 900 Third Avenue New York, New York 10022 FUND ADMINISTRATOR Zweig/Glaser Advisers 900 Third Avenue New York, New York 10022 CUSTODIAN The Bank of New York 48 Wall Street New York, New York 10015 TRANSFER AGENT State Street Bank & Trust Co. 225 Franklin Street Boston, Massachusetts 02110 LEGAL COUNSEL Rosenman & Colin LLP 575 Madison Avenue New York, New York 10022 - -------------------------------------------------------------------------------- This report is transmitted to the shareholders of The Zweig Total Return Fund, Inc. for their information. This is not a prospectus, circular or repre- sentation intended for use in the purchase of shares of the Fund or any securi- ties mentioned in this report. 3206-3Q- [LOGO OF THE ZWEIG TOTAL RETURN FUND, INC.] QUARTERLY REPORT SEPTEMBER 30, 1997 October 16, 1997 Dear Shareholder: The Zweig Total Return Fund's net asset value increased 6.4% during the quarter ended September 30, 1997, including $0.21 in reinvested distributions. For the nine months ended September 30, 1997, the Fund's net asset value increased 13.0%, including $0.63 in reinvested distributions. Maintaining our risk-averse policy, the Fund's average overall exposure during the period was 70%. DISTRIBUTION DECLARED In accordance with our policy of distributing 10% of net assets per year, which equals 0.83% per month (10% divided by 12 months), the Fund will announce a distribution of $0.07 per share payable on November 26, 1997, to shareholders of record on November 13, 1997. The amount of the distribution depends on the exact net asset value at the time of declaration. For the November distribution, 0.83% of the Fund's net asset value was equivalent to $0.07 per share. Including this distribution, the Fund's payout since its inception is now $8.24. MARKET OUTLOOK Our bond exposure is currently at 43%. If our Fund was fully invested, we would be 62 1/2% in bonds and 37 1/2% in stocks. Consequently, at 43%, we are at about 69% of a full position (43%/62 1/2%). This reflects my high neutral position on bonds. We adjusted our duration--sensitivity to interest rates--quite a bit last quarter in response to rapid changes in the bond market. Thus we were able to stay in gear with the market's overall upward trend. At present our duration is 5.0 years, a cautiously optimistic reading. This figure is probably a bit higher than that of the average bond fund manager, indicating that we are somewhat on the bullish side. The bond market's ups and downs were due to shifting sentiment about the strength of the U.S economy. During the summer, investors feared that low unemployment and strong industrial production would lead to inflation and a Federal Reserve interest hike. During September, however, new data revealed that fears about inflation may have been unfounded. Some economists even began discussing the possibility of deflation, and the bond market rallied in relief. The big positive for bonds is low inflation. In fact, it is virtually the whole story. We did have a recent report of a jump in producer prices but much of that figure was seasonally distorted. For the year, producer prices have been reasonably flat. Consumer prices, the most common measure of inflation, have been rising at a rate under 2%. There are always a few commodities that have gone up in price but they are so volatile that it is not very significant. Materials like lumber, copper, and gold fluctuate so wildly they could turn by the time you read this report. On balance--with wages stable--the inflation numbers have been pretty decent despite the growing economy. This makes for a good environment for bonds. Equities are also benefiting from the low inflation rate. In spite of strong corporate profits and near record low unemployment, interest rates do not appear to be heading upward--a positive for stocks as well as bonds. Among my key equity indicators, the monetary model is moderately bullish but the sentiment indicators are not so terrific. Although the sentiment indicators are below average, they are not extremely negative. Basically, sentiment is lower because the market rally has brought a return to some optimism. But this is not the kind of optimism you generally see at the top. Because of recent market activity, my tape indicators are very solid. Valuation is at high levels but this should not be a serious problem if inflation stays in check and earnings continue to grow. Our equity position is currently at 36%. At this figure, we are at 96% of a full position for our Fund (36%/37 1/2%). This is in line with my bullish stance on the market. Right now the market looks O.K. to me but I don't think it will necessarily go straight up. As a defensive money manager, I will always be prepared to reduce our exposure if my indicators point to rising risk. PORTFOLIO COMPOSITION In accordance with our investment policy guidelines, all of our bonds are U.S. Government obligations. As indicated earlier, the average duration of the bond portion of our portfolio is 5.0 years. Since these bonds are liquid, they give us the flexibility to adjust quickly to changing market conditions. Most of our equities are bought and sold on the basis of a proprietary computer-driven model that is weighted toward a value approach with secondary emphasis on growth. Various criteria are used to evaluate and rank the most liquid stocks with the highest dividend yields. Although our equity holdings have grown because of appreciation and acquisitions to increase our exposure, the composition of our leading industry groups showed little change during the third quarter. Our leading sectors continue to include financial services, oil, utilities, investment companies, manufacturing and metals. Two new holdings--ARCO (Atlantic Richfield) and Caliber Systems, the large trucking company slated to be acquired by FedEx--occupy prominent positions in our portfolio. Other top listings include Bear Stearns, Ford, Ashland, YPF S.A. (a leading Argentine oil and gas company), Sun, USX-Marathon, RJR/Nabisco, and Ahmanson. In the financial services area, our performance benefited from the gains in Bear Stearns, PaineWebber, A.G. Edwards, and Salomon. This sector was strengthened by the pending merger of Travelers Group (which already owns Smith Barney) with Salomon, leading to the possibility of further takeovers. The UPS strike was a plus for other trucking companies. Here we profited by higher prices for CNF Transportation and Caliber Systems. Our holdings in the oil sector saw significant gains in Sun, YPF S.A., and USX-Marathon. During the quarter we increased our positions in Ashland, YPF S.A., Sun, and Cummins Engine, reduced our holdings in Dayton-Hudson, USX-Steel, Chrysler, and Harris and sold our stake in Royal Dutch. Our portfolio also includes a number of closed-end funds that are selling at significant discounts from their net asset values. When the market again places a premium on valuation, as it has done historically, discounts should narrow and more closely reflect the net asset values. This would enhance the profitability of these positions. Sincerely, LOGO Martin E. Zweig, Ph.D. Chairman 2 THE ZWEIG TOTAL RETURN FUND, INC. STATEMENT OF NET ASSETS SEPTEMBER 30, 1997(UNAUDITED)
NUMBER OF SHARES VALUE --------- ------------ COMMON STOCKS 32.39% AEROSPACE & DEFENSE 0.46% Gencorp Inc. ......................................... 14,800 $ 420,875 General Motors Corp., Class H......................... 41,100 2,717,738 ------------ 3,138,613 ------------ AUTOMOTIVE 1.59% Chrysler Corp. ....................................... 65,700 2,418,582 Ford Motor Co. ....................................... 95,700 4,330,425 General Motors Corp. ................................. 32,700 2,188,856 Volvo AB, ADR......................................... 64,900 1,841,537 ------------ 10,779,400 ------------ CHEMICALS 0.85% Albemarle Corp. ...................................... 36,300 907,500 Millenium Chemicals, Inc. ............................ 35,100 772,200 Rohm & Haas Co. ...................................... 34,200 3,281,063 Wellman, Inc. ........................................ 35,600 825,475 ------------ 5,786,238 ------------ CONSUMER DURABLES 0.87% Cooper Tire & Rubber Co. ............................. 87,400 2,321,562 Huffy Corp. .......................................... 13,200 217,800 Whirlpool Corp. ...................................... 50,600 3,355,413 ------------ 5,894,775 ------------ CONTAINERS & PACKAGING 0.05% Sea Containers Ltd., Class A.......................... 12,100 343,338 ------------ ELECTRONICS 0.13% Hitachi Ltd., ADR..................................... 1,200 105,825 Philips Electronics N.V., ADR......................... 9,600 806,400 ------------ 912,225 ------------ FINANCIAL SERVICES 4.45% A.G. Edwards, & Sons, Inc. ........................... 48,400 2,486,550 Bear, Stearns & Co., Inc. ............................ 114,882 5,054,808 Charter One Financial, Inc. .......................... 12,900 762,712 CIGNA Corp. .......................................... 13,000 2,421,250 Fremont General Corp. ................................ 29,500 1,408,625 GATX Corp. ........................................... 9,100 614,819 H.F. Ahmanson, & Co. ................................. 64,600 3,670,088 Lincoln National Corp. ............................... 28,500 1,984,312 Old Republic International Corp. ..................... 38,500 1,501,500 Orion Capital Corp. .................................. 25,400 1,150,938 PaineWebber Group Inc. ............................... 61,400 2,858,937 PIMCO Advisors L.P. .................................. 18,600 584,738 Providian Corp. ...................................... 59,600 2,365,375
3 THE ZWEIG TOTAL RETURN FUND, INC. STATEMENT OF NET ASSETS--(CONTINUED) SEPTEMBER 30, 1997(UNAUDITED)
NUMBER OF SHARES VALUE --------- ------------ FINANCIAL SERVICES (CONTINUED) Ryder Systems, Inc. .................................. 71,100 $ 2,555,156 Selective Insurance Group, Inc. ...................... 9,800 504,700 St. Paul BanCorp. .................................... 12,100 302,500 ------------ 30,227,008 ------------ FOOD & BEVERAGE 0.27% Adolph Coors Co., Class B............................. 48,300 1,829,363 ------------ HOME BUILDERS & MATERIALS 0.24% Kaufman & Broad Home Corp. ........................... 44,500 965,094 Lafarge Corp. ........................................ 20,800 670,800 ------------ 1,635,894 ------------ INDUSTRIAL SERVICES 0.17% Browning Ferris Industries, Inc. ..................... 12,300 468,168 Ogden Corp. .......................................... 28,400 670,950 ------------ 1,139,118 ------------ INVESTMENT COMPANIES 2.44% Argentina Fund, Inc. ................................. 12,600 187,425 Blackrock 2001 Term Trust Inc. ....................... 29,000 246,500 Blackrock Strategic Term Trust Inc. .................. 29,000 241,063 Brazil Fund, Inc. .................................... 25,800 722,400 Central European Equity Fund, Inc. ................... 12,300 316,725 Chile Fund, Inc. ..................................... 24,600 625,762 China Fund Inc. ...................................... 20,400 363,375 Clemente Global Growth Fund, Inc. .................... 13,100 137,550 Emerging Markets Infrastructure Fund, Inc. ........... 57,400 796,425 Emerging Markets Telecommunications Fund, Inc. ....... 24,600 444,338 Emerging Mexico Fund, Inc. ........................... 16,200 186,300 Fidelity Advisor Emerging Asia Fund Inc. ............. 25,100 304,337 G.T. Global Eastern Europe Fund, Inc. ................ 11,000 215,875 Gabelli Equity Trust Inc. ............................ 62,900 684,037 Gabelli Global Multimedia Trust Fund, Inc. ........... 50,600 433,263 Greater China Fund, Inc. ............................. 8,600 185,438 Italy Fund, Inc. ..................................... 6,600 68,887 Mexico Fund, Inc. .................................... 37,700 862,388 Morgan Stanley Asia-Pacific Fund, Inc. ............... 49,400 453,862 Morgan Stanley Emerging Markets Fund, Inc. ........... 58,500 1,005,469 New Germany Fund, Inc. ............................... 61,100 958,506 Portgugal Fund, Inc. ................................. 18,000 333,000 R.O.C. Taiwan Fund.................................... 43,800 531,075 Royce Value Trust Inc. ............................... 70,160 1,140,100 Scudder New Asia Fund Inc. ........................... 15,000 185,625 Southern Africa Fund, Inc. ........................... 14,900 264,475 Spain Fund Inc. ...................................... 25,400 387,350
4
NUMBER OF SHARES VALUE --------- ------------ INVESTMENT COMPANIES (CONTINUED) Swiss Helvetia Fund, Inc. ............................ 40,800 $ 1,045,500 Taiwan Fund, Inc. .................................... 39,500 1,002,312 Templeton China World Fund, Inc. ..................... 39,600 537,075 Templeton Dragon Fund, Inc. .......................... 75,200 1,203,200 Templeton Vietnam Opportunities Fund, Inc. ........... 15,000 171,563 Tri-Continental Corp. ................................ 12,400 363,475 ------------ 16,604,675 ------------ LEISURE 0.13% Royal Caribbean Cruises Ltd. ......................... 19,500 853,125 ------------ LODGING 0.05% Marcus Corp. ......................................... 11,000 320,375 ------------ MANUFACTURING 2.43% Borg-Warner Automotive, Inc. ......................... 18,600 1,057,875 Brown Group, Inc. .................................... 26,000 472,875 Cummins Engine Company, Inc. ......................... 36,900 2,880,506 Dexter Corp. ......................................... 14,900 596,931 Excel Industries, Inc. ............................... 18,000 358,875 Herman Miller, Inc. .................................. 19,200 1,027,200 Johnson Controls Inc. ................................ 26,000 1,288,625 PACCAR Inc. .......................................... 28,600 1,601,600 Simpson Industries, Inc. ............................. 20,300 234,718 Standard Products Co. ................................ 12,200 321,013 Stewart & Stevenson Services, Inc. ................... 20,900 502,906 Timken Co. ........................................... 63,800 2,555,988 Trinity Industries, Inc. ............................. 44,600 2,151,950 TRW Inc. ............................................. 26,800 1,470,650 ------------ 16,521,712 ------------ METALS & MINING 2.20% ASARCO, Inc. ......................................... 110,500 3,536,000 Birmingham Steel Corp. ............................... 25,000 432,813 British Steel Plc, ADR................................ 70,800 2,062,050 Cleveland-Cliffs Inc. ................................ 6,400 279,200 Cyprus Amax Minerals Co. ............................. 71,500 1,716,000 Oregon Steel Mills, Inc. ............................. 37,000 1,003,625 Phelps Dodge Corp. ................................... 37,300 2,895,412 USX-U.S. Steel Group.................................. 87,400 3,037,150 ------------ 14,962,250 ------------ OIL & OIL SERVICES 4.39% Ashland Inc. ......................................... 78,300 4,257,563 Atlantic Richfield Co. ............................... 47,600 4,066,825 Elf Aquitaine S.A., ADR............................... 42,500 2,834,218
5 THE ZWEIG TOTAL RETURN FUND, INC. STATEMENT OF NET ASSETS--(CONTINUED) SEPTEMBER 30, 1997(UNAUDITED)
NUMBER OF SHARES VALUE --------- ------------ OIL & OIL SERVICES (CONTINUED) Equitable Resources, Inc. .......................... 4,900 $ 154,350 Helmerich & Payne, Inc. ............................ 11,400 912,000 Murphy Oil Corp. ................................... 24,900 1,422,413 Occidental Petroleum Corp. ......................... 70,900 1,838,968 Pennzoil Co. ....................................... 20,500 1,633,594 Quaker State Corp. ................................. 33,700 575,006 Sun Company, Inc. .................................. 92,800 4,065,800 USX-Marathon Group.................................. 102,800 3,822,875 YPF Sociedad Anonima, ADR........................... 114,500 4,222,188 ------------ 29,805,800 ------------ PAPER & FOREST PRODUCTS 0.98% Bowater Inc. ....................................... 51,700 2,636,700 Fort James Corp. of Virginia........................ 61,400 2,812,888 Pope & Talbot, Inc. ................................ 15,900 336,881 Westvaco Corp. ..................................... 24,750 892,547 ------------ 6,679,016 ------------ RETAIL TRADE & SERVICES 1.07% American Stores Co. ................................ 63,700 1,552,688 Dayton Hudson Corp. ................................ 38,800 2,325,575 Ross Stores Inc. ................................... 17,000 580,125 Shopko Stores Inc. ................................. 30,700 798,200 Supervalu Inc. ..................................... 52,100 2,044,925 ------------ 7,301,513 ------------ TECHNOLOGY 1.70% Applied Materials Inc. ............................. 11,600(a) 1,104,900 Dell Computer Corp. ................................ 30,800(a) 2,983,750 Digital Equipment Corp. ............................ 32,300(a) 1,398,993 Harris Corp. ....................................... 42,800 1,958,100 Intel Corp. ........................................ 20,600 1,901,638 Microsoft Corp. .................................... 16,900(a) 2,236,081 ------------ 11,583,462 ------------ TELECOMMUNICATIONS 1.71% BCE Inc. ........................................... 56,800 1,696,900 Comsat Corp. ....................................... 55,200 1,314,450 Telecomunicacoes Brasileiras S.A. .................. 19,800 2,549,250 Telefonica de Espana S.A., ADR...................... 35,100 3,303,787 Telefonos de Mexico S.A., ADR....................... 53,400 2,763,450 ------------ 11,627,837 ------------
6
NUMBER OF SHARES VALUE --------- ------------ TOBACCO 0.61% RJR Nabisco Holdings Corp. ........................... 109,800 $ 3,774,375 Universal Corp. of Virginia........................... 10,500 380,625 ------------ 4,155,000 ------------ TRANSPORTATION 1.68% British Airways Plc, ADR.............................. 8,100 884,925 Caliber Systems, Inc. ................................ 74,300 4,030,775 Canadian Pacific Ltd. ................................ 77,900 2,302,919 CNF Transportation, Inc. ............................. 46,200 2,012,587 CSX Corp. ............................................ 20,700 1,210,950 KLM Royal Dutch Airlines N.V., ADR.................... 20,145 691,225 Rollins Truck Leasing Corp. .......................... 18,500 315,657 ------------ 11,449,038 ------------ UTILITIES-ELECTRIC & NATURAL GAS 3.92% American Electric Power Co., Inc. .................... 48,800 2,220,400 CMS Energy Corp. ..................................... 58,000 2,146,000 Columbia Gas Systems, Inc. ........................... 1,900 133,000 DQE Inc. ............................................. 37,250 1,257,188 DTE Energy Co. ....................................... 39,300 1,196,193 Edison International.................................. 97,700 2,466,925 FPL Group, Inc. ...................................... 39,000 1,998,750 GPU, Inc. ............................................ 73,800 2,647,575 Illinova Corp. ....................................... 48,400 1,043,625 New York State Electric & Gas Corp. .................. 58,000 1,558,750 Ohio Edison Co. ...................................... 28,800 675,000 Pacific Enterprises................................... 24,800 840,100 PacifiCorp. .......................................... 33,600 751,800 Pinnacle West Capital Corp. .......................... 54,900 1,846,013 Public Service Co. of New Mexico...................... 36,100 697,181 Sierra Pacific Resources Inc. ........................ 9,300 298,181 Transcanada Pipelines Ltd. ........................... 46,700 904,812 United Illuminating Co. .............................. 6,500 236,844 UtiliCorp United Inc. ................................ 36,200 1,090,525 Valero Energy Corp. .................................. 45,800 1,502,812 Western Resources Inc. ............................... 31,900 1,094,569 ------------ 26,606,243 ------------ TOTAL COMMON STOCKS................................... $220,156,018 ------------
7 THE ZWEIG TOTAL RETURN FUND, INC. STATEMENT OF NET ASSETS--(CONCLUDED) SEPTEMBER 30, 1997(UNAUDITED)
PRINCIPAL AMOUNT VALUE ---------------- ------------ UNITED STATES GOVERNMENT & AGENCY OBLIGA- TIONS 47.22% Federal National Mortgage Association, 6.85%, 4/5/2004..................................... $ 10,385,000 $ 10,697,931 United States Treasury Bonds, 10.750%, 5/15/2003.................................... 15,000,000 18,314,055 United States Treasury Bonds, 7.25%, 8/15/2022.................................... 27,500,000 30,060,937 United States Treasury Bonds, 7.50%, 11/15/2024................................... 36,500,000 41,233,576 United States Treasury Notes, 6.25%, 8/31/2000.................................... 13,500,000 13,630,775 United States Treasury Notes, 5.625%, 11/30/2000................................... 19,745,000 19,584,572 United States Treasury Notes, 7.50%, 2/15/2005.................................... 16,300,000 17,609,085 United States Treasury Notes, 6.50%, 5/15/2005.................................... 7,600,000 7,766,250 United States Treasury Notes, 6.875%, 5/15/2006.................................... 101,300,000 105,953,418 United States Treasury Notes, 6.50%, 10/15/2006................................... 54,900,000 56,083,754 ------------ Total United States Government & Agency Obli- gations...................................... 320,934,353 ------------ SHORT-TERM INVESTMENTS 18.96% du Pont (E.I.) de Nemours & Co., 5.50%, 10/02/97..................................... 20,000,000 19,996,944 Ford Motor Credit Co., 5.55%, 10/03/97........ 16,000,000 15,995,067 Goldman, Sachs & Co., 6.35%, 10/01/97......... 14,100,000 14,100,000 Merrill Lynch & Co., Inc., 5.60%, 10/07/97.... 24,300,000 24,277,320 PepsiCo., Inc., 5.50%, 10/03/97............... 9,500,000 9,497,097 Sara Lee Corp., 6.30%, 10/01/97............... 20,000,000 20,000,000 Wal-Mart Stores Inc., 5.53%, 10/01/97......... 25,000,000 25,000,000 ------------ Total Short-Term Investments................ 128,866,428 ------------ TOTAL INVESTMENTS IN SECURITIES................. 98.57% 669,956,799 CASH AND OTHER ASSETS LESS LIABILITIES.......... 1.43 9,701,164 ------------ ------------ NET ASSETS (Equivalent to $8.69 per share based on 78,218,582 shares of capital stock outstand- 100.0% $679,657,963 ing)........................................... ============ ============ NUMBER OF SHARES/CONTRACTS ---------------- SECURITIES SOLD SHORT Webs Hong Kong................................ 76,700 $ 1,193,644 ------------ TOTAL SECURITIES SOLD SHORT (Proceeds $1,167,899).................................. $ 1,193,644 ------------ NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS Standard and Poor's 500 December 1997 Long $ 794,630 futures...................................... 55 (b) ============
- -------- (a) Non-income producing security. (b) The market value of the long futures was $26,251,380 (representing 3.86% of the Fund's net assets) with a cost of $25,456,750. 8 THE ZWEIG TOTAL RETURN FUND, INC. FINANCIAL HIGHLIGHTS SEPTEMBER 30, 1997 (UNAUDITED)
NET ASSET VALUE TOTAL NET ASSETS PER SHARE ------------------------- ---------------- NET ASSET VALUE Beginning of period: December 31, 1996.............................. $638,767,568 $ 8.29 Net investment income............. $20,480,743 $ 0.26 Net realized and unrealized gains on investments................... 59,348,794 0.77 Dividends from net investment income and distributions from net long-term and short-term capital gains............................ (48,826,840) (0.63) Net asset value of shares issued to shareholders for reinvestment of dividends and distributions... 9,887,698 -- ----------- ------- Net increase in net assets/net asset value..................... 40,890,395 0.40 ------------ ------- End of period: September 30, 1997.. $679,657,963 $ 8.69 ============ =======
9 KEY INFORMATION 1-800-272-2700 ZWEIG SHAREHOLDER RELATIONS: For general information and literature (212) 486-3122 THE ZWEIG TOTAL RETURN FUND HOT LINE: For updates on net asset value, share price, major industry groups and other key information REINVESTMENT PLAN Many of you have questions about our reinvestment plan. If you want to take advantage of this plan and your shares are held in "Street Name," we urge you to consult your broker as soon as possible to determine if you must change registration to your own name to participate. ---------------- Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may from time to time purchase its shares of common stock in the open market when Fund shares are trading at a discount from their net asset value. 10 -----END PRIVACY-ENHANCED MESSAGE-----