N-2

As filed with the Securities and Exchange Commission on December 22, 2006

Investment Company Act File No. 811-05620
Securities Act File No. 333-          

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-2

þ	REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
o	Pre-effective Amendment No.
o	Post-Effective Amendment No.
	and/or
o	REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
þ	Amendment No. 10

THE ZWEIG TOTAL RETURN FUND, INC.

(Exact name of Registrant as specified in charter)

900 Third Avenue
New York, New York 10022
(Address of Principal Executive Offices)

Registrant’s Telephone Number, including Area Code:
212-451-1100

George R. Aylward
President
The Zweig Total Return Fund, Inc.
900 Third Avenue
New York, New York 10022
(Name and Address of Agent for Service)

With Copies to:

Robert E. Smith, Esq.
Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022

Approximate date of proposed public offering:  As soon as practicable after the effective date of this Registration Statement.

If any securities being registered on this form will 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.  o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum
Title of Securities	Amount Being	Offering Price Per	Aggregate Offering	Amount of
Being Registered	Registered	Share(1)	Price	Registration Fee
Common Stock, par value $0.001 per share	170,358 Shares	$5.87	$1,000,000	$107.00

(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 December 21, 2006.

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.

THE ZWEIG TOTAL RETURN 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.	Cover Pages; Other Offering Information	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.	Portfolio Managers	Management of the Fund (in Part A); Portfolio Managers
	22.	Brokerage Allocation and Other Practices	Portfolio Transactions and Brokerage
	23.	Tax Status	Taxation
	24.	Financial Statements	Financial Statements

Subject to Completion, Dated          , 2006

           SHARES OF COMMON STOCK

THE ZWEIG TOTAL RETURN FUND, INC.

ISSUABLE UPON EXERCISE OF NON-TRANSFERABLE

RIGHTS TO SUBSCRIBE FOR SUCH SHARES OF COMMON STOCK

The Zweig Total Return Fund, Inc. (the “Fund”) is issuing to its shareholders of record (“Record Date Shareholders”) as of the close of business on          , 2007 (the “Record Date”) non-transferable rights (the “Rights”). These Rights entitle their holders to subscribe for up to an aggregate of           shares (the “Shares”) of the Fund’s Common Stock, par value $0.001 per share (the “Common Stock”) at the rate of one Share of Common Stock for every five 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           shares of Common Stock, for an aggregate total of          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”) or any other exchange. See “The Offer.” THE SUBSCRIPTION PRICE PER SHARE (THE “SUBSCRIPTION PRICE”) WILL BE EQUAL TO THE LOWER OF THE NET ASSET VALUE PER SHARE OF THE FUND’S COMMON STOCK (“NAV”) AT THE CLOSE OF BUSINESS ON          , 2007 (THE “PRICING DATE”) OR 95% OF THE AVERAGE OF THE LAST REPORTED SALES PRICE OF A SHARE OF THE FUND’S COMMON STOCK ON THE NYSE ON THE PRICING DATE AND THE FOUR PRECEDING BUSINESS DAYS.

THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON          , 2007 UNLESS EXTENDED AS DESCRIBED HEREIN (THE “EXPIRATION DATE”).

The Fund announced the Offer on           , 2006. The Fund’s Common Stock trades on the NYSE under the symbol “ZTR.” Shares issued upon the exercise of Rights and the Over-Subscription Privilege will be listed for trading on the NYSE, subject to notice of issuance. The net asset value per share of the Fund’s Common Stock at the close of business on          , 2006 and          , 2007, the Record Date, were $      and $     , respectively, and the last reported sales price of a share of the Fund’s Common Stock on the NYSE on those dates were $      and $     , respectively.

The Fund is a diversified, closed-end management investment company. Its investment objective is to seek the highest total return, consisting of capital appreciation and current income, consistent with the preservation of capital. The Fund will invest up to 65% of its total assets in U.S. government securities, non-convertible debt securities of domestic issuers rated among the two highest rating categories of either Moody’s Investors Services, Inc. (“Moody’s”) or Standard & Poor’s Corporation (“S&P”) (or, if unrated, of comparable quality as determined by the investment adviser, Phoenix/Zweig Advisers LLC (the “Investment Adviser”)), and certain foreign government securities (collectively, the “Bond Investments”), and up to 50% of its total assets in equity securities. The Fund may, however, under certain circumstances, invest up to 75% of its total assets in equity securities as determined by the Investment Adviser. The Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by 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 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 debt and equity securities will be determined primarily on the basis of asset allocation techniques developed by Dr. Martin E. Zweig, President of the Sub-Adviser, and his staff. The Investment Adviser (and its predecessor) has 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 35 years. While the Investment Adviser seeks to reduce the risks associated with investing in debt and 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, Sub-Adviser and Administrator will benefit from the Offer. See “Management of the Fund.”

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.

			Estimated Proceeds to
	Estimated Price		Registrant or
	to Public(1)	Sales Load	Other Persons(2)(3)
Per Share		N/A
Total Maximum(4)		N/A

(Footnotes on the following page)

The date of this Prospectus is          , 2006.

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          , 2007 (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. The Table of Contents of the SAI appears on Page    of this Prospectus.

Shareholders may obtain a copy, free of charge, of the SAI and the Fund’s annual and semi-annual report to shareholders, or request other information about the Fund, 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 Fund makes available, free of charge, the SAI and the Fund’s annual and semi-annual report to shareholders at http://www.phoenixinvestments.com. 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 web site
(http://www.sec.gov) that contains the SAI and other information regarding the Fund.

(Footnotes from the previous page)

(1)	Estimated, equal to the lower of the NAV at the close of business on          , 2007 or 95% of the average of the last reported sales price of a share of the Fund’s Common Stock on the NYSE on          , 2007 and the four preceding business days.
(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           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 offering 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 LAWFUL 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 Total Return 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 September 1988. The Fund’s investment objective is to seek the highest total return, consisting of capital appreciation and current income, consistent with the preservation of capital. The Fund will invest up to 65% of its total assets in U.S. government securities, non-convertible debt securities of domestic issuers rated among the two highest rating categories of either Moody’s Investors Services, Inc. (“Moody’s”) or Standard & Poor’s Corporation (“S&P”) (or, if unrated, of comparable quality as determined by the investment adviser, Phoenix/Zweig Advisers LLC (the “Investment Adviser”)), and certain foreign government securities (collectively, the “Bond Investments”), and up to 50% of its total assets in equity securities. The Fund may, however, under certain circumstances, invest up to 75% of its total assets in equity securities as determined by the Investment Adviser. The Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by 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 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 debt and equity securities will be determined primarily on the basis of asset allocation techniques developed by Dr. Martin E. Zweig, President of the Sub-Adviser, and his staff. The Investment Adviser (and its predecessor) has 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 35 years. While the Investment Adviser seeks to reduce the risks associated with investing in debt and equity securities by using these techniques, the risk of investment in debt and equity securities 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 outstanding Common Stock, par value $0.001 per share (the “Common Stock”) is listed and traded on the New York Stock Exchange (the “NYSE”). The average weekly trading volume of the Common Stock on the NYSE during the year ended December 31, 2005 was           shares and was           shares as of          , 2006. As of          , 2006, the net assets of the Fund were approximately $     .

Phoenix Equity Planning Corporation (the “Administrator”) serves as the Fund’s administrator and receives from the Fund an administrative fee computed at the annual rate of 0.065% of the Fund’s average daily net assets. The Fund pays the Investment Adviser a monthly investment advisory fee computed at the annual rate of 0.70% 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          , 2007 (the “Record Date”) non-transferable rights (the “Rights”) to subscribe for up to an aggregate of           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           Shares of Common Stock, for an aggregate total of           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 five Rights held (the “Offer”). Fractional

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Shares will not be issued upon the exercise of Rights. If a Record Date Shareholder’s total ownership is fewer than five shares, such shareholder may subscribe for one Share.

Rights may be exercised at any time during the Subscription Period, which commences on          , 2007 and ends at 5:00 p.m. New York City time, on          , 2007, unless extended by the Fund until 5:00 p.m., New York City time, to a date not later than          , 2007 (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 five 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 equal to the lower of the net asset value per share of the Fund’s Common Stock (“NAV”) at the close of business on          , 2007 (the “Pricing Date”) or 95% of the average of the last reported sales price of a share of the Fund’s Common Stock on the NYSE on the Pricing Date and the four preceding business days, unless the Offer is extended. Since the Expiration Date and the Pricing Date are each          , 2007, 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, Computershare Trust Company, N.A. (“Computershare” 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 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. Although the Board of Directors believe that a well-subscribed rights offering may result in certain economies of scale which could reduce the Fund’s expense ratio in future years, there is no assurance that by increasing the size of the Fund, the Fund’s aggregate expenses, and correspondingly, its expense ratio, will be lowered. 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

2

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, Sub-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, Sub-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 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.

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Important Dates to Remember

Event	Date
Record Date		, 2007
Subscription Period		, 2007 to          , 2007	*
Expiration Date and Pricing Date		, 2007	*
Subscription Certificates and Payment for Shares Due+		, 2007	*
Notice of Guaranteed Delivery Due+		, 2007	*
Subscription Certificates and Payment for Guarantees of Delivery Due		, 2007	*
Confirmation to Participants		, 2007	*
Final Payment for Shares		, 2007	*

*	Unless the Offer is extended to a date not later than          , 2007.
+	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. This Prospectus contains certain forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of certain uncertainties set forth below and elsewhere in this Prospectus.

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 per Share 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 Expiration 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 Expiration Date is $           per share (the net asset value per share on          , 2007), and (iii) the Subscription Price is $           per share (equal to the lower of the NAV per share of the Fund’s Common Stock at the close of business on          , 2007 or 95% of the average of the last reported sale price per share of the Fund’s Common Stock on the NYSE on          , 2007 and the four preceding business days), 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 debt and equity securities will be determined primarily on the basis of asset allocation 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 debt and equity

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	securities by using these techniques, the risk of investment in debt and equity securities cannot be eliminated. There is no assurance that these asset allocation techniques will provide protection from the risks of debt or 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 believes that the special investment methods discussed in this Prospectus under “Investment Objectives and Policies — Special Investment Methods” (including purchasing and selling, when such use is deemed appropriate, stock index and other futures contracts and purchasing options on such futures; purchasing and writing listed put and call security options and options on stock indexes; short sales of securities; borrowing from banks to purchase securities; investing in securities of exchange traded funds, foreign issuers and closed-end investment companies; and lending portfolio securities to brokers, dealers, banks or other recognized institutional borrowers of securities) will further the Fund’s investment objective of capital appreciation and reduce losses that might otherwise occur during a time of general decline in stock prices, no assurance can be given that these investment methods will achieve this result. These methods may subject an investor in the Fund to greater than average risks and costs.
Certain Bond Investments	The Fund, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser). Generally, securities rated below investment grade (high yield-high risk fixed income securities — also sometimes referred to as junk bonds) have a greater chance that the issuer will be unable to make scheduled interest or principal payments when due. Furthermore, to the extent that the Fund may invest in such high yield-high risk fixed income securities, this will entail greater price volatility and credit and interest rate risk than investment-grade securities. Analysis of the creditworthiness of high yield-high risk issuers is more complex than for higher-rated securities, making it more difficult for the Investment Adviser to accurately predict risk. If the Fund pursues missed interest or principal payments, there is a risk that the Fund’s expenses could increase. In addition, lower-rated securities may not trade as often and may be less liquid than higher-rated securities.
Unrealized Appreciation	As of December 31, 2005, there was $           or approximately $           per share of net unrealized appreciation in the Fund’s net assets of $          ; if realized and distributed, or deemed distributed, such gains would, in general, be taxable to shareholders, including holders at that time of Shares acquired upon the exercise of Rights. See “Taxation.”
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 September 1988. The Fund cannot predict

5

	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 monthly distributions equal to 0.83% of its net asset value (10% on an annualized basis). If, for any monthly distribution, 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, as well as 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, 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 monthly 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. The Fund has capital loss carryovers in the amount of $           as of December 31, 2005. Capital loss carryovers will reduce or, possibly, eliminate the Fund’s taxable long-term capital gains in the year(s) to which such losses are carried, but will not reduce the Fund’s current earnings and profits in such year(s). Consequently, a greater portion of the Fund’s dividend distributions in the year(s) to which the Fund carries and applies its capital loss carryovers may be taxable to shareholders as ordinary income dividends than would be the case if the Fund did not have capital loss carryovers. Moreover, to the extent that such ordinary income dividends are paid out of capital gains or other non-dividend income of the Fund, they might not qualify for the 15% preferential tax rate.
	The Fund also might make distributions to shareholders that exceed the Fund’s current earnings and profits. In that event, because the Fund does not have positive accumulated earnings and profits, the excess distributions will be a non-taxable return of capital to a shareholder to the extent the distribution does not exceed the shareholder’s tax basis in its Fund shares, but will also reduce the shareholder’s tax basis in its Fund shares.
	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

6

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. Shares purchased pursuant to the Offer will be issued after the record date for the monthly distribution declared in          , and, accordingly, the Fund will not pay a monthly distribution with respect to such Shares until the distribution to be declared and paid in the next month.

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)
Management and Administration Fees	0.765%
Other Expenses	%
Total Annual Expenses(2)	%

(1)	Includes fees payable under the Investment Advisory Agreement and Administration Agreement (as defined in this Prospectus). These fees 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, 2005 were  % 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.

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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.

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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, 2005 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 has been incorporated by reference in the SAI and are available without charge upon written request to the Fund’s Administrator, Phoenix Equity Planning Corporation, One American Row, Hartford, CT 06102.

	Years Ended December 31,
	2005		2004		2003		2002		2001		2000		1999		1998		1997		1996
Per Share Data:
Net asset value, beginning of year	$		$		$		$		$		$		$		$		$		$
Income From Investment Operations:
Net investment income
Net realized and unrealized gains(losses) on investments
Total from investment operations
Dividends and Distributions:
Dividends from net investment income
Distributions from net realized gains on investments
Tax return of capital
Total Dividends and Distributions
Effect on net asset value as a result of rights offering*
Net asset value, end of year	$		$		$		$		$		$		$		$		$		$
Market value, end of year**	$		$		$		$		$		$		$		$		$		$
Total investment return***		%		%		%		%		%		%		%		%		%		%
Ratios/Supplemental Data:
Net assets, end of year (in thousands)	$		$		$		$		$		$		$		$		$		$
Ratio of expenses to average net assets (excluding dividends on short sales)		%		%		%		%		%		%		%		%		%		%
Ratio of net investment income to average net assets		%		%		%		%		%		%		%		%		%		%
Portfolio turnover rate		%		%		%		%		%		%		%		%		%		%
Average commission rate per share on portfolio transactions

*	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.

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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           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           Shares, for an aggregate total of           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 five Rights held (1 for 5). Fractional Shares will not be issued upon the exercise of Rights. A Record Date Shareholder whose total ownership is fewer than five shares of Common Stock and, accordingly, receives fewer than five 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 five 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          , 2007 and ends at 5:00 p.m. New York City time, on          , 2007, unless extended by the Fund until 5:00 p.m., New York City time, to a date not later than          , 2007. 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 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. 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. However, there is no assurance that by increasing the size of the Fund, the Fund’s aggregate expenses, and correspondingly, its expense ratio, will be lowered. 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.”

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The Investment Adviser, Sub-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, Sub-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 and the Securities Act of 1933, as amended.

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           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 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 equal to the lower of the NAV at the close of business on          , 2007 (the “Pricing Date”) or 95% of the average of the last reported sales price of a share of the Fund’s Common Stock on the NYSE on the Pricing Date and the four preceding business days, unless the Offer is extended. For example, if the average of the last reported sales price of a share on the NYSE on the Pricing Date and the four preceding business days of a share of the Fund’s Common Stock is $5.50, the Subscription Price will be           (equal to the lower of the NAV or 95% of $5.50). 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          , 2006. The net asset value per share of Common Stock at the close of business on          , 2007 and          , 2007, 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          , 2007, unless extended by the Fund until 5:00 p.m., New York City time, to a date not later than          , 2007. 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

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announcement shall 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 five shares of Common Stock and, accordingly, receives fewer than five 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 five 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, bank or trust company, must contact such nominee to exercise their Rights. In that case, the nominee will complete the Subscription Certificate on behalf of the shareholder 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.

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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:

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 Computershare Trust Company, 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 (800) 272-2700.

(1)  BY FIRST CLASS MAIL ONLY:

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

(2)  BY HAND:

(3)  BY EXPRESS MAIL OR OVERNIGHT COURIER:

Computershare Trust Company, N.A.
Attention: Zweig Funds
250 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 (800) 272-2700.

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.

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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 monies 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 CHECK DRAWN ON A BANK LOCATED IN THE UNITED STATES, MUST BE PAYABLE TO THE ZWEIG TOTAL RETURN 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 brokerage 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 (          , 2007, unless the Offer is extended).

Within four business days following the Expiration Date (          , 2007, 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 TOTAL RETURN 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 AGENT, EXCEPT AS PROVIDED BELOW UNDER “POSSIBLE SUSPENSION OR WITHDRAWAL OF THE OFFER.”

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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 ninth 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, AT THE DISCRETION OF THE FUND, MAY 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.

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

As required by the Commission’s registration form, the Fund has 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 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, 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 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

15

other depository or nominee on their behalf or their broker-dealer’s 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:

U.S. Shareholders who receive Rights pursuant to the Offer should 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 should be allocated to such Rights, and such Shareholder should 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 should remain unchanged and the shareholder’s basis in the Rights should 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 should not recognize any gain or loss for U.S. Federal income tax purposes upon the exercise. The tax basis of the newly acquired Common Stock should 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). See “Taxation” in this Prospectus and in the SAI.

Each U.S. Shareholder is urged to consult his or her own tax advisor with respect to the specific Federal, state and local tax consequences to such U.S. Shareholder of receiving Rights in this offer.

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 $5.14 per share, 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          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

16

net proceeds of the Offer will be invested in investments conforming to the Fund’s investment objective and policies within two 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 July 21, 1988, is a diversified, closed-end management investment company registered under the 1940 Act. The Fund’s investment objective is to seek the highest total return, consisting of capital appreciation and current income, consistent with the preservation of capital. The Fund will invest up to 65% of its total assets in U.S. government securities, non-convertible debt securities of domestic issuers rated among the two highest rating categories of either Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser), and certain foreign government securities (collectively, the “Bond Investments”), and up to 50% of its total assets in equity securities. The Fund may, however, under certain circumstances, invest up to 75% of its total assets in equity securities as determined by the Fund’s Investment Adviser. The Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by the 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 independent 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 35 years. See “Management of the Fund.”

The Fund completed an initial public offering of 60,375,000 shares of its Common Stock in September and October 1988. The net proceeds to the Fund from such offering were approximately $559,912,503. The Fund also received net proceeds of approximately $76 million from its April 1998 rights offering. As of          , 2007, the net assets of the Fund were $     , and since inception, the Fund has paid or declared distributions (including dividends and capital gains distributions) aggregating $     .

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

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MARKET PRICE AND NET ASSET VALUE INFORMATION

Shares of the Fund’s Common Stock are listed on the NYSE under the symbol “ZTR.” 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 Common Stock of the Fund traded at a premium over, or discount from, the Fund’s high and low net asset values per share.

	High	Net Asset	Premium		Low	Net Asset	Premium
Quarter Ended	Sales Price*	Value	(Discount)		Sales Price*	Value	(Discount)
12/31/04	$	$		%	$	$		%
3/31/05	$	$		%	$	$		%
6/30/05	$	$		%	$	$		%
9/30/05	$	$		%	$	$		%
12/31/05	$	$		%	$	$		%
3/31/06	$	$		%	$	$		%
6/30/06	$	$		%	$	$		%
9/30/06	$	$		%	$	$		%
12/31/06	$	$		%	$	$		%

*  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 September 1988. The Fund’s officers cannot predict whether the Subscription Price will be at or below the Fund’s net asset value per Share on the Pricing Date. Since the Fund’s inception in 1988, the Fund has generally maintained a policy of making monthly distributions equal to 0.83% of its net asset value (10% on an annualized basis). The Fund’s officers believe that without this monthly distribution policy, there would likely be a decrease in the amount of any premium at which the Fund’s shares would be trading above net asset value or an increase in the amount of any discount at which the Fund’s shares would be trading from net asset value; however, the Fund’s officers cannot predict whether such policy will have this effect in the future. 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 from net asset value. The Fund has not engaged in any such repurchases. See “Description of Common Stock — Repurchase of Shares.” Since the Fund’s inception, the Board of Directors has maintained a policy pursuant to which the Board of Directors considers the making of tender offers of the Fund each quarter during periods when the Fund’s shares are trading at a discount from net asset value. The Fund has not made any such tender offers. See “Description of Common Stock — Tender Offers.” The Fund’s Articles of Incorporation provide that if during any fiscal quarter beginning on or after January 1, 1990, the Fund’s shares trade, on the principal securities exchange on which they are traded, at an average discount from net asset value of 10% or more, the Fund generally is required to submit to shareholders within 60 days after the end of such quarter, a proposal to convert the Fund to an open-end investment company (the “Conversion Proposal”). Approval of the Conversion Proposal would require the affirmative vote of a majority of the outstanding shares of the Fund entitled to be voted thereon. The Fund submitted a Conversion Proposal to its shareholders in 2001, 2002 and 2004 since the Fund’s shares had traded at an average discount from net asset value of 10% or more during the quarter ended March 31, 2000, the quarter ended December 31, 2000 and the quarter ended December 31, 2003, respectively. The Fund’s shareholders did not approve the Conversion Proposal on any of those occasions. See “Description of Common Stock — Provision for Conversion to Open-End Fund.”

On          , 2007, the net asset value per share of Common Stock was $      and the last reported sales price was $     , representing a           from net asset value per share of  %.

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INVESTMENT OBJECTIVE AND POLICIES

Investment Objective

The Fund’s investment objective is to seek the highest total return, consisting of capital appreciation and current income, consistent with the preservation of capital. The Fund will invest up to 65% of its total assets in U.S. government securities, non-convertible debt securities of domestic issuers rated among the two highest rating categories of either Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser), and certain foreign government securities (collectively, the “Bond Investments”), and up to 50% of its total assets in equity securities. If, however, the Investment Adviser perceives a change in the relationship between the debt and equity markets (such as a change in the spread between the yields of debt and equity securities) then, depending on the nature of such change, the Fund may increase the percentage of its total assets invested in debt securities (including money market instruments) or equity securities. The Fund will not, under any circumstances, invest more than 75% of its total assets in equity securities. The Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser).

The extent of the Fund’s investment in debt and equity securities will be determined by the Investment Adviser primarily on the basis of asset allocation techniques developed by Dr. Martin E. Zweig, the President of the Fund’s Sub-Adviser, and his staff. In an effort to meet the Fund’s investment objective, the Fund may use the following investment methods when such use is deemed appropriate: purchasing and selling interest rate, stock index and other futures contracts and purchasing options on such futures; purchasing and writing listed put and call security options and options on stock indexes; short sales of securities; borrowing from banks to purchase securities; investing in securities of exchange traded funds, foreign issuers and closed-end investment companies; lending portfolio securities to brokers, dealers, banks or other recognized institutional borrowers of securities; entering into repurchase or reverse repurchase agreements; and purchasing when-issued and delayed-delivery securities. See “Special Investment Methods.” During periods when the Investment Adviser believes an overall defensive position is advisable, greater than 50% (and under certain circumstances perhaps all) of the Fund’s total assets may be temporarily invested in money market instruments and cash. There is no assurance that the Fund will use any or all of such methods or, whether or not they are used, the Fund 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 extent of the Fund’s investment in debt and equity securities will be determined primarily on the basis of asset allocation techniques developed by Dr. Martin E. 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 debt and equity securities based on these techniques. The debt allocation techniques, which seek to identify the risks and trends in the debt markets at any given time, will incorporate various indicators, including the momentum of bond prices, short-term interest rate trends, inflation indicators and general economic and liquidity indicators, as well as other market indicators and statistics which the Investment Adviser believes tend to point to significant trends in the overall performance and the risk of the debt markets. The equity allocation 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 Investment 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

19

consistent with the major trends of the markets. There is no assurance that these asset allocation techniques will provide protection from the risks of debt or equity investment, enable the Fund to be invested consistent with the major trends of the markets or enable the Fund to achieve its investment objective.

The maturities of the debt securities in the Fund’s portfolio will vary based in large part on the Investment Adviser’s expectations of future changes in interest rates using the Investment Adviser’s own internal research and debt allocation techniques. The primary consideration in choosing among bonds is managing risk related to changes in interest rate levels. A bond’s duration measures its sensitivity to changes in interest rates (interest rate risk). Duration is the approximate percentage change in the price of a bond or bond portfolio in response to a 100 basis point (one percent) change in the general level of interest rates in the market. For example, if a bond portfolio has an average duration of five years, the value of such bond portfolio would increase by 5% if interest rates declined by 1% and conversely would decrease by 5% if interest rates rose by 1%. The longer the duration, the greater the bond’s price movement will be as interest rates change. The Investment Adviser manages the duration of the Fund’s portfolio, or interest rate risk, by altering the Fund’s mix of short, medium, and long term bonds, or by buying or selling interest rate futures contracts, and also by actively using money market and cash instruments. Over time, the duration will vary depending on the Investment Adviser’s interest rate outlook.

The U.S. government securities (“U.S. Government Securities”) in which the Fund may invest are securities issued or guaranteed by the U.S. government or its agencies or instrumentalities (including repurchase agreements secured by such instruments). Certain of these securities, including U.S. Treasury bills, notes and bonds, mortgage participation certificates guaranteed by GNMA, and Federal Housing Administration debentures, are supported by the full faith and credit of the United States. Other U.S. Government Securities issued or guaranteed by federal agencies or government-sponsored enterprises are not supported by the full faith and credit of the United States. These securities include obligations supported by the right of the issuer to borrow from the U.S. Treasury, such as obligations of Federal Home Loan Banks, and obligations supported only by the credit of the instrumentality, such as Federal National Mortgage Association bonds. Debt securities of domestic issuers, other than U.S. Government Securities, will be generally limited to those that are rated, as of the date of purchase, among the two highest rating categories (Aaa and Aa) of Moody’s or the two highest rating categories (AAA and AA) of S&P. The Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser).

The money market instruments in which the Fund may invest include U.S. Government Securities or obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions, agencies or instrumentalities (“Foreign Government Securities”) having a maturity of less than one year, commercial paper rated A-1 or higher by S&P or Prime-1 or higher by Moody’s, or if such commercial paper is not rated, issued by companies which have an outstanding debt issue rated Aa or higher by Moody’s or AA or higher by S&P, repurchase agreements secured by collateral at least equal to the repurchase price, 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 invest up to 10% of its total assets in Foreign Government Securities that, in the opinion of the Investment Adviser, do not subject the Fund to unreasonable credit risks. The percentage of the Fund’s assets invested in Foreign Government Securities will vary depending on the relative yields of such securities, the economic and financial markets of the countries in which the investments are made, the interest rate climate of such countries and the relationship of such countries’ currencies to the U.S. dollar. During the past year, the Fund has not owned any Foreign Government Securities.

The Fund’s investments in equity securities provide the opportunity for enhanced returns through capital appreciation. The Investment Adviser expects that the stocks in the Fund’s portfolio will be widely diversified by both industry and the number of issuers. The Investment Adviser expects that a majority of the stocks in the Fund’s portfolio will be selected on the basis of a proprietary stock selection model that evaluates and

20

ranks approximately 1,000 of the largest, most liquid stocks. This stock selection model evaluates and ranks such stocks on the basis of various factors, which may include earnings momentum, earnings growth, price-to-book value, price-to-earnings, price-to-cash flow, cash flow trend, payout ratio trend and other market measurements. The Investment Adviser then performs further analysis of certain of those companies that have been identified by the stock selection model, in order to determine whether to purchase those stocks. This stock selection model may evolve or be replaced by other stock selection models intended to achieve the Fund’s investment objective.

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.

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 underlying portfolio securities.

The Fund may purchase or sell futures contracts and related options for any purpose deemed appropriate, including but not limited to, managing the risks inherent in its investment strategy generally and, in particular, in protecting 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.

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

Where the Fund anticipates a significant market or market sector advance, establishing long positions in (purchasing) stock index futures contracts affords protection against not participating in such advance at a time when the Fund is not fully invested. Such a long position 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.

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

21

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 or tender offer transactions when its shares are trading at a discount from their net asset value. See “Description of Common Stock — Repurchase of Shares; Tender Offers.” 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 or tender offer 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.

Exchange Traded Funds.

The Fund may invest in passively managed registered open-end investment companies or other baskets of securities, such as unit investment trusts, which trade on a national securities exchange or NASDAQ and are commonly called exchange-traded funds (“ETFs”). These investments represent shares of ownership in ETFs that hold portfolios of securities which are designed to generally correspond to and closely track the price and yield performance of an index of securities. Accordingly, ETFs have risks similar to those of stocks and are subject to market volatility. Investment returns may fluctuate so that invested shares, when redeemed or sold, may be worth more or less than their original cost. ETFs may include, among others, the 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 10% of its total assets in securities of foreign issuers and up to 10% of its total assets in Foreign Government Securities. 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.

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. The foreign markets also have different clearance and settlement procedures. 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, legal remedies for defaults and disputes may have to be pursued in foreign courts whose procedures differ substantially from those of 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

22

(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.

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.

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.

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 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.

Repurchase Agreements.

The Fund may from time to time acquire U.S. Government Securities and concurrently enter into so-called “repurchase agreements” with the seller, a member bank of the Federal Reserve System or primary dealers in U.S. Government Securities, whereby the seller agrees to repurchase such securities at the Fund’s cost plus interest within a specified time (usually on the next business day). Repurchase agreements offer a means of generating income from excess cash that the Fund might otherwise hold. Delays in payment or losses

23

may result if the other party to the agreement defaults or becomes bankrupt. The Fund’s repurchase agreements must be fully backed by collateral that is marked to market, or priced, each day.

Reverse Repurchase Agreements.

The Fund may enter from time to time into reverse repurchase agreements whereby the Fund sells an underlying debt instrument and simultaneously obtains the commitment of the purchaser, a commercial bank or a broker or dealer, to sell the security back to the Fund at an agreed upon price on an agreed upon date. The value of the underlying securities will be required to be maintained at a level at least equal at all times to the total amount of the resale obligation, including the interest factor. The Fund receives payment for such securities only upon physical delivery or evidence of book entry transfer by its custodian. The Fund will establish a segregated account with the Fund’s custodian, in which the Fund will maintain cash and U.S. Government Securities or other high grade debt obligations at least equal in value to the total amount of the repurchase obligation, including accrued interest. The value of the segregated securities will be marked-to-market on a daily basis to ensure that such value is maintained. Reverse repurchase agreements could involve certain risks in the event of default or insolvency of the other party, including possible delays or restrictions upon the Fund’s ability to dispose of the underlying securities. An additional risk is that the market value of securities sold by the Fund under a reverse repurchase agreement could decline below the price at which the Fund is obligated to repurchase them. Reverse repurchase agreements will be considered borrowings by the Fund and as such will be subject to the restrictions on borrowing described in the SAI under “Investment Restrictions.” The value of all the Fund’s reverse repurchase agreements will not exceed 5% of the Fund’s total assets.

Below Investment Grade Fixed Income Securities.

The Fund, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertable debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser). Generally, securities rated below investment grade (high yield-high risk fixed income securities — also sometimes referred to as junk bonds) have a greater chance that the issuer will be unable to make scheduled interest or principal payments when due. Furthermore, to the extent that the Fund may invest in such high yield-high risk fixed income securities, this will entail greater price volatility and credit and interest rate risk than investment-grade securities. Analysis of the creditworthiness of high yield-high risk issuers is more complex than for higher-rate securities, making it more difficult for the Investment Adviser to accurately predict risk. If the Fund pursues missed interest or principal payments, there is a risk that the Fund’s expenses could increase. In addition, lower-rated securities may not trade as often and may be less liquid than higher-rated securities.

When-Issued and Delayed-Delivery Securities.

The Fund may from time to time purchase securities on a “when-issued” or “delayed-delivery” basis whereby the Fund purchases a bond or stock with delivery of the security and payment deferred to a future date. The money to purchase such securities will be invested in other securities until the Fund receives delivery. This could increase the possibility that the Fund’s net asset value would increase or decrease faster than would otherwise be the case. There is no restriction on the percentage of the Fund’s assets that may be invested in when-issued or delay-delivery securities, and such securities are not considered to be short sales for purposes of the Fund’s Investment Restrictions on short sales.

Securities purchased on a when-issued or delayed-delivery basis may expose the Fund to risk, since such securities may experience fluctuations in value (based upon, in the case of bonds, the public’s perception of the creditworthiness of the issuer and changes, real or anticipated, in the level of interest rates) prior to their time of delivery. In addition, the yield available in the market when the delivery takes place actually may be higher than that obtained in the transaction itself.

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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          , 2007), and (iii) the Subscription Price is $      per share (equal to the lower of the NAV at the close of business on          , 2007 or 95% of the average of the last reported sale price of a share of the Fund’s Common Stock on the NYSE on          , 2007, and the four preceding business days), 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 debt and equity securities will be determined primarily on the basis of asset allocation 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 debt and equity securities by using these techniques, such risks cannot be eliminated. There is no assurance that these asset allocation 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 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.

Certain Bond Investments

The Fund, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest rating categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser). Generally, securities rated below investment grade (high yield-high risk fixed income securities — also sometimes referred to as junk bonds) have a greater chance that the issuer will be unable to make scheduled interest or principal payments when due. Furthermore, to the extent that the Fund may invest in such high yield-high risk fixed income securities, this will entail greater price volatility and credit and interest rate risk than investment-grade securities. Analysis of the

25

creditworthiness of high yield-high risk issuers is more complex than for higher-rated securities, making it more difficult for the Investment Adviser to accurately predict risk. If the Fund pursues missed interest or principal payments, there is a risk that the Fund’s expenses could increase. In addition, lower-rated securities may not trade as often and may be less liquid than higher-rated securities.

Unrealized Appreciation

As of December 31, 2005, there was $      or approximately $      per share of net unrealized appreciation in the Fund’s net assets of $     ; if realized and distributed, or deemed distributed, such gains would, in general, be taxable to shareholders, including holders at that time of Shares acquired upon the exercise of Rights. See “Taxation.”

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 September 1988. 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 SAI.

Distributions

The Fund’s policy is to make monthly distributions equal to 0.83% of its net asset value (10% on an annualized basis). If, for any monthly 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, as well as 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. Such excess, however, will be treated as ordinary dividend income, and will not reduce a shareholder’s adjusted basis in his or her shares, up to the amount of the Fund’s current and accumulated earnings and profits. Pursuant to the requirements of the 1940 Act and other applicable laws, a notice will accompany each monthly 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.

The Fund has capital loss carryovers in the amount of $      as of December 31, 2005. Capital loss carryovers will reduce or, possibly, eliminate the Fund’s taxable long-term capital gains in the year(s) to which such losses are carried, but will not reduce the Fund’s current earnings and profits in such year(s). Consequently, a greater portion of the Fund’s dividend distributions in the year(s) to which the Fund carries and applies its capital loss carryovers may be taxable to shareholders as ordinary income dividends than would be the case if the Fund did not have capital loss carryovers. Moreover, to the extent that such ordinary income dividends are paid out of capital gains or other non-dividend income of the Fund, they might not qualify for the 15% preferential tax rate.

The Fund also might make distributions to shareholders that exceed the Fund’s current earnings and profits. In that event, because the Fund does not have positive accumulated earnings and profits, the excess distributions will be a non-taxable return of capital to a shareholder to the extent the distribution does not exceed the shareholder’s tax basis in its Fund shares, but will also reduce the shareholder’s tax basis in its Fund shares.

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

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of its investment portfolio at a time when independent investment judgment might not dictate such action. Shares purchased pursuant to the Offer will be issued after the record date for the monthly distribution declared in          , and, accordingly, the Fund will not pay a monthly distribution with respect to such Shares until the distribution to be declared and paid in the next month. 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 Total Return 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 “Acquisition”). The Investment Adviser is a wholly owned subsidiary of Phoenix Investment Partners, Ltd., wholly-owned investment management subsidiary of The Phoenix Companies, Inc., a 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, 2005, Phoenix Investment Partners, Ltd. had approximately $37.4 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 the supervision of 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 and actively collaborates in the stock selection process with the Investment

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Adviser’s portfolio management team. The extent of the Fund’s investment in debt and equity securities is determined primarily by the Investment Adviser utilizing asset allocation techniques developed by Dr. Martin E. 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 0.70% of the Fund’s average daily net assets during the previous month. For the fiscal years ended December 31, 2005, 2004 and 2003, the Fund accrued investment advisory fees of $     , $      and $     , respectively. The Investment Adviser will pay the Sub-Adviser an annual fee equal to 40% of the investment advisory fees received by the Investment Adviser from the Fund and The Zweig Fund, Inc., payable monthly in arrears.

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. At a meeting of the Directors held on February 15, 2006, the Board of Directors, including a majority of the disinterested Directors, approved the continuance of the Investment Advisory Agreement and the Sub-Advisory until March 1, 2007. A discussion regarding the basis for the approval of this continuance is contained in the Fund’s June 30, 2006 Semi-Annual Report to Shareholders.

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 the Brokerage Affiliate in any portfolio transaction in which the Brokerage Affiliate would act as principal.

Dr. Martin E. Zweig

Dr. Martin E. Zweig, the President of the Sub-Adviser, has been in the business of providing investment advisory services for over 35 years. Dr. Zweig and his associates determine asset allocation strategies to assist the Investment Adviser in its management of the Fund. Dr. Zweig, on behalf of the Sub-Adviser, actively collaborates in the stock selection process with the Investment Adviser’s portfolio management team.

Portfolio Managers

The Investment Adviser’s day-to-day stock and bond selections for the Fund are made by Mr. Carlton Neel and Mr. David Dickerson.

Mr. Neel has been the Executive Vice President and Portfolio Manager of the Fund since 2003, and he is also the portfolio manager for The Zweig Fund, Inc. He had been making the day-to-day bond selections for the Fund from 1995-2002. In addition, Mr. Neel is a portfolio manager of the Phoenix Market Neutral Fund and the Phoenix Small Cap Value Fund, both managed by Euclid Advisors, an investment management subsidiary of Phoenix Investment Partners. Prior to joining the Investment Adviser in 1995, Mr. Neel was a Vice President with J.P. Morgan & Co., Inc. From 2002-2003, he was a Managing Director and co-founder of Shelter Rock Capital Partners, L.P.

Mr. Dickerson has been Senior Vice President and Portfolio Manager of the Fund since 2003, and he is also the portfolio manager for The Zweig Fund, Inc. In addition, Mr. Dickerson is a portfolio manager of the Phoenix Market Neutral Fund and the Phoenix Small Cap Value Fund, both managed by Euclid Advisors, an investment management subsidiary of Phoenix Investment Partners. Mr. Dickerson, who is a Senior Vice President of the Investment Adviser, had been with the Investment Adviser from 1993-2002. From 2002-2003, he was a Managing Director and co-founder of Shelter Rock Capital Partners, L.P.

The SAI provides additional information about the Portfolio Managers’ compensation, other accounts managed by the Portfolio Managers, and the Portfolio Managers’ ownership of securities of the Fund.

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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 any 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 (including salaries of shareholder relations personnel), 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 (if any), 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 techniques, research and analysis and provide advice thereon to the Investment Adviser and to actively collaborate in the stock selection process with the Investment Adviser’s portfolio management team. Pursuant to the Sub-Advisory Agreement, the services are rendered by Dr. Martin E. Zweig and his designated research associates on behalf of the Sub-Adviser.

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For services provided by the Sub-Adviser to the Fund under the Sub-Advisory Agreement, the Investment Adviser will pay the Sub-Adviser an annual fee equal to 40% of the investment advisory fees received by the Investment Adviser from the Fund and The Zweig Fund, Inc., payable monthly in arrears.

The Sub-Advisory Agreement will remain in effect until March 1, 2007, provided that from year to year it has been 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 0.065% of the Fund’s average daily net assets during the previous month. For the fiscal years ended December 31, 2005, 2004 and 2003, the Fund accrued administrative fees of $     , $     , and $     .

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DISTRIBUTIONS; DISTRIBUTION REINVESTMENT AND CASH PURCHASE PLAN

The Fund’s policy is to distribute to shareholders on a monthly basis 0.83% of its net asset value (10% on an annualized basis). If, for any monthly 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, as well as 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. Such excess, however, will be treated as ordinary dividend income up to the amount of the Fund’s current and accumulated earnings and profits. The Fund has capital loss carryovers in the amount of $           as of December 31, 2005. Capital loss carryovers will reduce or, possibly, eliminate the Fund’s taxable long-term capital gains in the year(s) to which such losses are carried, but will not reduce the Fund’s current earnings and profits in such year(s). Consequently, a greater portion of the Fund’s dividend distributions in the year(s) to which the Fund carries and applies its capital loss carryovers may be taxable to shareholders as ordinary income dividends than would be the case if the Fund did not have capital loss carryovers. Moreover, to the extent that such ordinary income dividends are paid out of capital gains or other non-dividend income of the Fund, they might not qualify for the 15% preferential tax rate.

The Fund also might make distributions to shareholders that exceed the Fund’s current earnings and profits. In that event, because the Fund does not have positive accumulated earnings and profits, the excess distributions will be a non-taxable return of capital to a shareholder to the extent the distribution does not exceed the shareholder’s tax basis in its Fund shares, but will also reduce the shareholder’s tax basis in its Fund shares.

In calculating the amount of each monthly 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 monthly 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.

Shares purchased pursuant to the Offer will be issued after the record date for the monthly distribution declared in          , and, accordingly, the Fund will not pay a monthly distribution with respect to such Shares until the distribution to be declared and paid in the next month.

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

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, Computershare, as agent for the participants, will buy shares on the NYSE or elsewhere in the open market, for the participants’ accounts. If, before Computershare has completed its purchases, the market price equals or exceeds the net asset value of the shares, Computershare is permitted to cease

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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. Computershare 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 Computershare for investment in the Fund’s shares. Such payments may be made in any amount from $100 to $3,000. Computershare 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 Computershare, it is suggested that participants send voluntary cash payments to Computershare at least five business days prior to the date for which a voluntary purchase is desired. A participant may withdraw a voluntary cash payment by written notice, if the notice is received by Computershare at least five business days before such payment is to be invested.

Computershare 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 Computershare 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. Computershare’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 Computershare’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, Computershare 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 Computershare will be purchasing shares for all participants in blocks and prorating the lower commission thus attainable. Computershare 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 Computershare to sell part or all of the shares in the account and remit the proceeds to the shareholder, net of any brokerage commission, or (ii) ask Computershare 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.

Experience under the Plan may indicate that changes are desirable. Accordingly, 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. The Plan also may be amended or terminated by Computershare, with the Fund’s prior written consent, upon written notice sent to participants in the Plan. All correspondence concerning the Plan should be directed to Computershare Trust Company, N.A., P.O. Box 43010, Providence, RI 02940-3010.

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DESCRIPTION OF COMMON STOCK

The authorized capital stock of the Fund consists of 500,000,000 shares of Common Stock, par value $0.001 per share, of which 92,233,099.4993 shares were outstanding as of December 11, 2006. 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 under the symbol “ZTR.”

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; Tender Offers

The Fund is authorized to repurchase its shares on the open market when the shares are trading at a discount 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 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 has not repurchased any shares of its Common Stock.

Since the Fund’s inception in 1988, the Board of Directors has maintained a policy pursuant to which the Board of Directors considers the making of tender offers of the Fund each quarter during periods when the Fund’s shares are trading at a discount from net asset value. The Board may at any time, however, decide that the Fund should not make tender offers. The net asset value at which shares may be tendered will be established at the close of business on the last day the tender offer is open. Since the Fund’s inception, however, the Fund has not made any tender offers for the shares of its Common Stock.

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 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.

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Each person tendering shares will pay to the Fund a reasonable service charge to help defray certain costs, including the processing of tender forms, effecting payment, postage and handling. Any such service charge will be paid directly by the tendering shareholder and will not be deducted from the proceeds of the purchase. The Fund’s transfer agent will receive the fee as an offset to these costs. The Fund expects the cost to the Fund of effecting a tender offer will exceed the aggregate of all service charges received from those who tender their shares. Costs associated with the tender will be charged against capital. During the pendency of any tender offer, shareholders may ascertain the net asset value of the Fund’s shares by calling a telephone number as provided in any tender offer materials.

Provision For Conversion To Open-End Fund

If during any fiscal quarter beginning on or after January 1, 1990, the Fund’s shares trade, on the principal securities exchange on which they are traded, at an average discount from net asset value of 10% or more (determined on the basis of the discount as of the end of the last trading day in each week during such quarter), the Fund’s Articles of Incorporation generally require the Board of Directors to submit to shareholders a proposal to convert the Fund to an open-end investment company (the “Conversion Proposal”). The Fund submitted a Conversion Proposal to its shareholders in 2001, 2002 and 2004 since the Fund’s shares had traded at an average discount from net asset value of 10% or more during the quarter ended March 31, 2000, the quarter ended December 31, 2000 and the quarter ended December 31, 2003, respectively. The Fund’s shareholders did not approve the Conversion Proposal on any of those occasions. Approval of a Conversion Proposal would require the affirmative vote of a majority of the outstanding shares of the Fund entitled to be voted thereon. The Fund’s Articles of Incorporation provide, however, that a Conversion Proposal need not be submitted to shareholders with respect to a quarter if a Conversion Proposal was submitted to shareholders with respect to the immediately preceding quarter.

If the Fund converted to an open-end investment company, its shareholders could require the company to redeem their shares at any time (except in certain circumstances as authorized by the 1940 Act) at the next determined net asset value of such shares, less such redemption charges, if any, as might be in effect at the time of redemption, and such redemption payment must be made within seven days. This may require changes in the Fund’s portfolio management, since such redemption requests could require the Fund’s liquidation of a portion of its investment portfolio 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. In addition, if the Fund converted to an open-end investment company, its shares would no longer be listed on any stock exchange, and certain of the Fund’s expenses (including transfer agency and shareholder services expenses) would be greater than those that would be incurred by a closed-end investment company.

In the event the Fund’s shareholders did not approve a proposal to convert the Fund to an open-end investment company, the Fund would continue as a closed-end investment company, but pursuant to the Fund’s Articles of Incorporation, the Board of Directors would be required to submit to the Fund’s shareholders a subsequent Conversion Proposal with respect to any subsequent quarter during which there was an average discount of 10% or more from net asset value, unless the Conversion Proposal had been submitted to shareholders with respect to the immediately preceding quarter. The Fund cannot predict whether any open market repurchases or tender offer purchases of its shares made while the Fund is a closed-end investment company would decrease the discount from net asset value. To the extent that any such open market repurchases or tender offer purchases decreased the average discount from net asset value to below 10% for a fiscal quarter, the Fund would not be required to submit to its shareholders the Conversion Proposal with respect to such quarter.

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

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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.

The maximum number of Directors (twelve) may be increased, or a Director may be removed from office, only by the affirmative vote of the holders of at least 75% of the shares of the Fund entitled to be voted for the election of Directors. In addition, the affirmative vote of the holders of 75% of the outstanding shares of the Fund is required to authorize the conversion of the Fund from a closed-end to an open-end investment company (except pursuant to the Conversion Proposal described above), to amend certain of the provisions of the Articles of Incorporation or generally to authorize any of the following transactions:

(i) merger or consolidation or statutory share exchange of the Fund with or into any other corporation;

(ii) a sale of all or substantially all of the Fund’s assets (other than in the regular course of the Fund’s investment activities); or

(iii) a liquidation or dissolution of the Fund,

unless such action has been approved, adopted or authorized by the affirmative vote of two-thirds of the total number of Directors fixed in accordance with the By-Laws, in which case the affirmative vote of a majority of the Fund’s outstanding shares is required. Such 75% voting requirements described above, which are greater than the minimum requirements under Maryland law or the Act, can only be changed by a similar 75% vote. 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 or make a tender offer for shares of its common stock could have the effect of depriving the owners of shares of opportunities 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” and “Tender Offers.”

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, whether paid in cash or in shares, will be taxable as ordinary income to shareholders of the Fund who are subject to tax, and the Fund’s capital gain distributions, whether paid in cash or in shares, will be taxable as capital gain to such shareholders. Distributions in excess of the Fund’s earnings and profits will first reduce the adjusted tax basis of a shareholder’s shares and, after such adjusted tax basis is reduced to zero will constitute capital gain to such shareholder (assuming such shares are held as a capital asset). For non-corporate U.S. shareholders, the Fund’s capital gains distributions and certain of its ordinary income distributions will be taxable at a maximum marginal Federal income tax rate of 15%. 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.

35

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 is generally subject to U.S. Federal income tax (“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. It assumes that each U.S. Shareholder holds Common Stock as a capital asset. 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 should 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 should be allocated to such Rights, and such Shareholder should 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 should remain unchanged and the shareholder’s basis in the Rights should 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 should not recognize any gain or loss for U.S. Federal income tax purposes upon the exercise. The tax basis of the newly acquired Common Stock should 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). The holding period for Common Stock acquired upon the exercise of Rights should begin on the date of exercise of the Rights. See “Taxation” in the SAI.

Each U.S. Shareholder is urged to consult his or her own tax advisor with respect to the specific Federal, state and local tax consequences to such U.S. Shareholder of receiving Rights in this offer.

CUSTODIAN, DIVIDEND PAYING AGENT, TRANSFER AGENT AND REGISTRAR

State Street Bank and Trust Company, P.O. Box 5501, Boston, MA 02206-5501 serves as the Fund’s custodian. Computershare Trust Company, 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, 2005, and the financial highlights included in this Prospectus, have been so included in reliance on the report of PricewaterhouseCoopers LLP, Boston, Massachusetts, 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 LLP, Baltimore, Maryland. Certain other matters may be passed on for the Fund by Katten Muchin Rosenman LLP, New York, New York, which serves as counsel to the Fund.

36

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, 2004 and December 31, 2005 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, 100 F Street, NE, 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 100 F Street, NE, Washington, DC 20549 at prescribed rates. 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.

37

TABLE OF CONTENTS

OF

STATEMENT OF ADDITIONAL INFORMATION

INVESTMENT OBJECTIVE AND POLICIES	3
INVESTMENT RESTRICTIONS	8
MANAGEMENT	11
INVESTMENT ADVISER AND SUB-ADVISER	17
PORTFOLIO MANAGERS	18
EXPENSES	20
PORTFOLIO TRANSACTIONS AND BROKERAGE	20
NET ASSET VALUE	21
TAXATION	23
INDEPENDENT ACCOUNTANTS	26
PRINCIPAL SHAREHOLDERS	26
FINANCIAL STATEMENTS	F-1

38

No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus in connection with the offer made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Fund, the Investment Adviser or the Sub-Adviser. This Prospectus does not constitute an offer to sell or a solicitation of any offer to buy any security other than the Shares of Common Stock offered by this Prospectus, nor does it constitute an offer to sell or the solicitation of any offer to buy the Shares of Common Stock by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so, or to any such person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that information contained herein is correct as of any time subsequent to the date hereof. However, if any material change occurs while this Prospectus is required by law to be delivered, this Prospectus will be amended or supplemented accordingly.

Prospectus Summary	1
Financial Highlights	9
The Offer	10
Use of Proceeds	16
The Fund	17
Market Price and Net Asset Value Information	18
Investment Objective and Policies	19
Risk Factors and Special Considerations	25
Management of the Fund	27
Distributions; Distribution Reinvestment and Cash Purchase Plan	31
Description of Common Stock	33
Taxation	35
Custodian, Dividend Paying Agent, Transfer Agent and Registrar	36
Experts	36
Legal Matters	36
Further Information	37
Table of Contents of Statement of Additional Information	38

      Shares of Common Stock

THE ZWEIG TOTAL

RETURN FUND, INC.

Issuable Upon Exercise of
Non-Transferable Rights to
Subscribe for Such
Shares of Common Stock

_ _

PROSPECTUS

          , 2006

The information in the Statement of Additional Information is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. The Statement of Additional Information is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer is not permitted.

Subject to Completion, Dated          , 2006

PART B

THE ZWEIG TOTAL RETURN 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          , 2006 (the “Prospectus”). This SAI does not include all information that a shareholder 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 (          )          . You may also obtain a copy of the Prospectus on the Securities and Exchange Commission’s website (http://www.sec.gov). 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 shall have the same meaning as provided in the Prospectus. The date of this SAI is          , 2006.

TABLE OF CONTENTS

INVESTMENT OBJECTIVE AND POLICIES	3
INVESTMENT RESTRICTIONS	8
MANAGEMENT	11
INVESTMENT ADVISER AND SUB-ADVISER	17
PORTFOLIO MANAGERS	18
EXPENSES	20
PORTFOLIO TRANSACTIONS AND BROKERAGE	20
NET ASSET VALUE	21
TAXATION	23
INDEPENDENT ACCOUNTANTS	26
PRINCIPAL SHAREHOLDERS	26
FINANCIAL STATEMENTS	F-1
EX-99.E: DISTRIBUTION REINVESTMENT AND CASH PURCHASE PLAN
EX-99.J: CUSTODIAN CONTRACT
EX-99.K.1: ADMINISTRATION AGREEMENT
EX-99.K.2: ASSIGNMENT OF ADMINISTRATION AGREEMENT
EX-99.K.3: LETTER AGREEMENT
EX-99.R.1: CODE OF ETHICS
EX-99.R.2: CODE OF ETHICS
EX-99.R.3: CODE OF ETHICS

2

INVESTMENT OBJECTIVE AND POLICIES

The Fund’s investment objective is to seek the highest total return, consisting of capital appreciation and current income, consistent with the preservation of capital. The Fund will invest up to 65% of its total assets in U.S. government securities, non-convertible debt securities of domestic issuers rated among the two highest rating categories of either Moody’s Investors Services, Inc. (“Moody’s”) or Standard & Poor’s Corporation (“S&P”) (or, if unrated, of comparable quality as determined by the Investment Adviser), and certain foreign government securities (collectively, the “Bond Investments”), and up to 50% of its total assets in equity securities. The Fund may, however, under certain circumstances, invest up to 75% of its total assets in equity securities, as determined by the Fund’s Investment Adviser. The Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities rated below the two highest categories of Moody’s or S&P (or, if unrated, of comparable quality as determined by the Investment Adviser).

The Investment Adviser uses the Fund’s Sub-Adviser to perform asset allocation research and analysis and provide advice thereon to the Investment Adviser and to actively collaborate in the stock selection process with the Investment Adviser’s portfolio management team. The extent of the Fund’s investment in debt and equity securities will be determined primarily on the basis of asset allocation techniques developed by Dr. Martin E. Zweig, President of the Fund’s Sub-Adviser, and his staff. While the Investment Adviser seeks to reduce the risks associated with investing in debt and equity securities by using these techniques, such risks cannot be eliminated. There is no assurance that the Fund will achieve its investment objective. See “Investment Objective and Policies” in the Prospectus.

The following describes certain investment strategies in which the Investment Adviser may engage, on behalf of the Fund, each of which may involve certain special risks.

Futures Contracts and Related Options

The Fund may purchase or sell futures contracts for any purpose deemed appropriate. 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.

3

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 trading futures contracts. 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.

In addition, 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 contact 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.

There are risks in trading futures contracts, even if such contracts are used for risk management purposes. One such risk arises due to the imperfect correlation between movements in the price of the futures contracts and movements in the price of the underlying securities. The price of the futures contract may move more than or less than the price of the securities.

If the price of the futures contracts moves less than the price of the underlying securities, the transaction will not be fully effective, but, if the price of the securities has moved in an unfavorable direction, the Fund would be in a better position than if it had not entered into a futures transaction at all. If the price of the securities 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 contract which will not be completely offset by movements in the prices of the underlying securities.

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 underlying securities 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 underlying securities is less than the historical volatility of the futures contracts.

It is also possible that, where the Fund has sold futures to protect 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 protect 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

4

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.

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 risk management transaction over a very short period of time.

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.

5

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.

Exchange Traded Funds

The Fund may invest in passively managed registered open-end investment companies or other baskets of securities, such as unit investment trusts, which trade on a national securities exchange or NASDAQ and are commonly called exchange-traded funds (“ETFs”). These investments represent shares of ownership in ETFs that hold portfolios of securities which are designed to generally correspond to and closely track the price and yield performance of an index of securities. Accordingly, ETFs have risks similar to those of stocks and are subject to market volatility. Investment returns may fluctuate so that invested shares, when redeemed or sold, may be worth more or less than their original cost. ETFs may include, among others, the 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 up to 10% of its total assets in securities of foreign issuers and 10% of its total assets in obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions, agencies or instrumentalities (“Foreign Government Securities”). 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.

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

6

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 Investment Company Act of 1940, as amended (the “1940 Act”), the Fund’s Board of Directors has delegated to the Fund’s Custodian, State Street Bank and Trust Company, 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 Custodian Contract between State Street Bank and Trust Company and the Fund, State Street Bank and Trust Company 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.

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. 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.

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.

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,

7

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.

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 below.

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.

When-Issued and Delayed-Delivery Securities

The Fund may from time to time purchase securities on a “when-issued” or “delayed-delivery” basis whereby the Fund purchases a bond or stock with delivery of the security and payment deferred to a future date. The money to purchase such securities will be invested in other securities until the Fund receives delivery. This could increase the possibility that the Fund’s net asset value would increase or decrease faster than would otherwise be the case. Securities purchased on a when-issued or delayed-delivery basis may expose the Fund to risk, since such securities may experience fluctuations in value (based upon, in the case of bonds, the public’s perception of the creditworthiness of the issuer and changes, real or anticipated, in the level of interest rates) prior to their time of delivery. In addition, the yield available in the market when the delivery takes place actually may be higher than that obtained in the transaction itself.

At the time the Fund makes the commitment to purchase a security on a when-issued or delayed-delivery basis, it will record the transaction and reflect the value of the security less the liability to pay the purchase price in determining the fund’s net asset value. The value of the security on the settlement date may be more or less than the price paid. No interest accrues on the security between the time the Fund enters into the commitment and the time the security is delivered. The Fund will establish a segregated account with the Custodian in which it will maintain cash and short-term high quality debt securities equal in value to commitments for when-issued or delayed-delivery securities. Such segregated securities will be “marked-to-market” daily. While when-issued or delayed-delivery securities may be sold prior to the settlement date, it is intended that the Fund will purchase such securities with the purpose of actually acquiring them unless a sale appears desirable for investment reasons. The Fund is dependent on the other party to successfully complete when-issued and delayed delivery transactions. If such other party fails to complete its portion of the transaction, the Fund may have lost a favorable investment opportunity. There is no limitation on the percentage of the Fund’s assets that may be invested in when-issued or delayed-delivery securities.

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.

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2. Purchase more than 10% of the outstanding voting securities, or any class of securities, of any one issuer. This investment restriction does not apply to investments in U.S. Government Securities.

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. 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.

5. Purchase any securities on margin. For purposes of this investment restriction, the following do not constitute margin purchases: (i) effecting short sales, to the extent permitted by 9. below, (ii) making margin deposits in connection with any futures contracts or any options the Fund may purchase, sell or write, or (iii) entering into any currency transactions.

6. Lend any funds or other assets, except that the Fund may purchase publicly distributed debt obligations (including repurchase agreements) consistent with its investment objective and policies, and the Fund may make loans of portfolio securities if such loans do not cause the aggregate amount of all outstanding securities loans to exceed 331/3% of the Fund’s total assets, 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.

7. Borrow money (through reverse repurchase agreements or otherwise), 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 331/3% of the Fund’s total assets.

8. 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 be necessary in connection with borrowings mentioned in 7, above. For the purposes of this investment restriction and 7, above, collateral or escrow arrangements with respect to the making of short sales, writing of stock options, purchase of securities on a forward commitment or delayed-delivery basis, and purchase of foreign currency forward contracts and collateral arrangements with respect to margin for futures contracts and foreign currency forward 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, foreign currency forward contracts or related options are deemed to be the issuance of a senior security.

9. Make any short sales of securities, unless 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 total 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 total assets, (iii) the market value of all securities of any one issuer sold short does not exceed 2% of the Fund’s total 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, together with collateral deposited with the broker-dealer, 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.” For the purposes of this investment restriction, sales of securities on a when-issued or delayed-delivery basis are not considered to be short sales.

10. 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.

11. 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.

9

12. Purchase or sell commodities or commodity or futures contracts or options on commodity or futures contracts except in compliance with such rules and interpretations of the Commodity Futures Trading Commission which exempt the Fund from regulation as a commodity pool operator.

10

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

		Number of
		Portfolios in
		Fund
Name (Age) Address	Term of Office and	Complex		Principal Occupation(s)
and Position(s)	Length of Time	Overseen by		During Past 5 Years and Other
with Fund	Served	Director		Directorships Held
Charles H. Brunie Brunie Associates 600 Third Avenue, 17th Floor New York, NY 10016 DOB: 7/17/30 Director	Term: Until 2009. Served since: 1988.		2	Director, The Zweig Fund, Inc. (since 1998); Chairman, Brunie Associates (investments) (since April 2001); Oppenheimer Capital (1969-2000); Chairman (1980-1990), Chairman Emeritus (1990-2000). Chairman Emeritus, Board of Trustees, Manhattan Institute (since 1990); Trustee, Milton and Rose D. Friedman Foundation for Vouchers (since 1999); Trustee, Hudson Institute (since 2002); Trustee, American Spectator (since 2002); Chartered Financial Analyst (since 1969).
Wendy Luscombe 480 Churchtown Rd. Craryville, NY 12521 DOB: 10/29/51 Director	Term: Until 2008. Served since: 2002.		2	Director of The Zweig Fund, Inc. (since 2002); Co-lead Independent Director of the Zweig Total Return Fund, Inc. and of The Zweig Fund, Inc. (since 2006); Principal, WKL Associates, Inc. (Real Estate Investment Consultant) (since 1994); Fellow, Royal Institution of Chartered Surveyors; Member, Chartered Institute of Arbitrators; Director, Endeavour Real Estate Securities, Ltd. REIT Mutual Fund (2000-2006); Director, PXRE, Corp. (reinsurance) (since 1994); Member and Chairman of Management Oversight Committee, Deutsche Bank Real Estate Opportunities Fund (since 2003); Trustee Acadia Realty Trust (since 2004).
Alden C. Olson 2711 Ramparte Path Holt, MI 48842 DOB: 5/10/28 Director	Term: Until 2007. Served since: 1996.		2	Director of The Zweig Fund, Inc. (since 1996); Currently retired; Chartered Financial Analyst (since 1964); Professor of Financial Management, Investments at Michigan State University (1959 to 1990).

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		Number of
		Portfolios in
		Fund
Name (Age) Address	Term of Office and	Complex		Principal Occupation(s)
and Position(s)	Length of Time	Overseen by		During Past 5 Years and Other
with Fund	Served	Director		Directorships Held
James B. Rogers, Jr. 352 Riverside Dr. New York, NY 10025 DOB: 10/19/42 Director	Term: Until 2009. Served since: 1988.		2	Director of The Zweig Fund, Inc. (since 1986); Private investor (since 1980); Chairman, Beeland Interests (Media and Investments) (since 1980); Regular Commentator on Fox News (since 2002); Author of ‘‘Investment Biker: On the Road with Jim Rogers” (1994),‘‘Adventure Capitalist” (2003) and ‘‘Hot Commodities” (2004); Director, Emerging Markets Brewery Fund (1993-2002); Director, Levco Series Trust (since 1996).
R. Keith Walton 15 Claremont Avenue New York, NY 10027 DOB: 9/28/64	Term: Until 2008. Served since: 2004.		2	Director of The Zweig Fund, Inc. (since 2004); Co-lead Independent Director of the Zweig Total Return Fund, Inc. and of The Zweig Fund, Inc. (since 2006); Director, Blue Crest Capital Management Funds (since 2006); Executive Vice President and the Secretary (since 1996) of the University at Columbia University; Director (since 2002), Member, Executive Committee (since 2002), Chair, Audit Committee (since 2003), Apollo Theater Foundation, Inc.; Director, Orchestra of St. Luke’s (since 2000); Vice President and Trustee, The Trinity Episcopal School Corporation (since 2003); Member (since 1997), Nominating and Governance Committee Board of Directors (since 2004), Council on Foreign Relations.

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INTERESTED DIRECTOR

		Number of
		Portfolios in
		Fund
Name (Age) Address	Term of Office and	Complex		Principal Occupation(s)
and Position(s)	Length of Time	Overseen by		During Past 5 Years and Other
with Fund	Served	Director		Directorships Held
George R. Aylward 56 Prospect Street Hartford, CT 06115 DOB: 8/17/64 Director, Chairman of the Board and President	Term: Until 2007. Served since: 2006.		2	Director, The Zweig Fund, Inc. (since 2006); Senior Vice President and Chief Operating Officer, Asset Management, The Phoenix Companies, Inc. (2004-present); President (since November 2006) and Chief Operating Officer (2004-present), Phoenix Investment Partners, Ltd.; President, certain funds within the Phoenix Funds Family (since November 2006); Previously, Executive Vice President, Phoenix Investment Partners, Ltd. (2004-November 2006); Vice President, Phoenix Life Insurance Company (2002-2004); Vice President, The Phoenix Companies, Inc. (2001-2004); Vice President, Finance, Phoenix Investment Partners, Ltd. (2001-2002); Assistant Controller, Phoenix Investment Partners, Ltd. (1996-2001); Executive Vice President, certain funds within the Phoenix Funds Family (2004-November 2006).

OFFICERS WHO ARE NOT DIRECTORS

	Position with the
Name, Address and	Fund and Length	Principal Occupation(s) During Past 5 Years and
Date of Birth	of Time Served	Other Directorships Held
Carlton Neel 900 Third Avenue New York, NY 10022 DOB: 12/19/67	Executive Vice President since: 2003. Expires: Immediately following the 2007 Annual Meeting of Shareholders.	Executive Vice President of The Zweig Fund, Inc. (since 2003); Senior Vice President and Portfolio Manager, Phoenix/Zweig Advisers LLC (since 2003); Managing Director and Co-Founder, Shelter Rock Capital Partners, LP (2002-2003); Senior Vice President and Portfolio Manager, Phoenix/Zweig Advisers LLC (1995-2002); Vice President, JP Morgan & Co. (1990-1995).
David Dickerson 900 Third Avenue New York, NY 10022 DOB: 12/27/67	Senior Vice President since: 2003. Expires: Immediately following the 2007 Annual Meeting of Shareholders.	Senior Vice President of The Zweig Fund, Inc. (since 2003); Senior Vice President and Portfolio Manager, Phoenix/Zweig Advisers LLC (since 2003); Managing Director and Co-Founder, Shelter Rock Capital Partners, LP (2002-2003); Vice President and Portfolio Manager, Phoenix/Zweig Advisers LLC (1993-2002).

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	Position with the
Name, Address and	Fund and Length	Principal Occupation(s) During Past 5 Years and
Date of Birth	of Time Served	Other Directorships Held
Marc Baltuch 900 Third Avenue New York, NY 10022 DOB: 9/23/45	Vice President and Chief Compliance Officer since: 2004. Expires: Immediately following the 2007 Annual Meeting of Shareholders.	Vice President and Chief Compliance Officer of The Zweig Fund, Inc. (since 2004); Chief Compliance Officer of Phoenix/Zweig Advisers LLC (since 2004); President and Director of Watermark Securities, Inc. (since 1991); Secretary of Phoenix-Zweig Trust (1989-2003); Secretary of Phoenix-Euclid Market Neutral Fund (1998-2002); Assistant Secretary of Gotham Advisors, Inc. (1990-2005); Chief Compliance Officer of the Zweig Companies (since 1989) and of the Phoenix Funds Complex (since 2004).
Kevin J. Carr One American Row Hartford, CT 06102 DOB: 8/30/54	Secretary and Chief Legal Officer since: 2005. Expires: Immediately following the 2007 Annual Meeting of Shareholders.	Secretary and Chief Legal Officer of The Zweig Total Return Fund, Inc. (since 2005); Vice President and Counsel, Phoenix Life Insurance Company (since 2005); Vice President, Counsel, Chief Legal Officer and Secretary, certain Funds within Phoenix Fund Complex (since 2005); Compliance Officer of Investments and Counsel, Travelers Life and Annuity Company (January 2005-May 2005); Assistant General Counsel, The Hartford Financial Services Group (1999-2005).
Moshe Luchins 900 Third Avenue New York, NY 10022 DOB: 12/22/71	Vice President since: 2004. Expires: Immediately following the 2007 Annual Meeting of Shareholders.	Vice President of The Zweig Fund, Inc. (since 2004); Associate Counsel (1996-2005), Associate General Counsel (since 2006) of the Zweig Companies.
Nancy Curtiss 56 Prospect Street Hartford, CT 06115 DOB: 11/24/52	Treasurer since: 2003. Expires: Immediately following the 2007 Annual Meeting of Shareholders.	Treasurer of The Zweig Fund, Inc. (since 2003); Vice President, Operations (since 2003); Vice President, Fund Accounting (1994-2003) and Treasurer (1996-2003), Phoenix Equity Planning Corporation. Treasurer, multiple funds in Phoenix Fund Complex (since 1994).

*  Director considered to be an “interested person,” as that term is defined in the 1940 Act. George R. Aylward 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 Committee 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. Brunie, Olson, Rogers and Walton 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 four meetings during the year ended December 31, 2005 and held four meetings during the year ended December 31, 2006.

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

14

possible nominees. Shareholders are required to submit a biography of the recommended candidate to the Secretary of the Fund. All shareholder recommended nominee submissions must be received by the Fund by the deadline for submission of any shareholder proposals which would be included in the Fund’s proxy statement for the next annual meeting of the Fund. This deadline can be found in the proxy statement for the Fund’s most recent annual meeting. When nominating a director candidate, shareholders must include in their notice to the Fund’s Secretary the required information, as specified in Article II — Section 3 of the By-Laws. Such information includes (i) as to each person whom the shareholder proposes to nominate for election as a director (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the class and number of shares of the capital stock of the Fund that are beneficially owned by such person and (D) any other information relating to such person that is required to be disclosed in solicitations of proxies for the election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934 or any successor regulation thereto (including without limitation such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected and whether any person intends to seek reimbursement from the Fund of the expenses of any solicitation of proxies should such person be elected a director of the Fund); and (ii) as to the shareholder giving the notice (A) the name and address, as they appear on the Fund’s books, of such shareholder, (B) the class and number of shares of the capital stock of the Fund which are beneficially and/or owned or record by such shareholder, (C) the nature of any such beneficial ownership of such stock, the beneficial ownership of any such stock held of record by such shareholder but beneficially owned by one or more other persons, and the length of time for which all such stock has been beneficially owned and/or owned of record by such shareholder, (D) a representation that the shareholder is a holder of record of shares of the Fund entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to present such nomination(s) and (E) whether the shareholder intends or is part of a group which intends to solicit proxies from other shareholders in support of such nomination(s).

The Fund’s Nominating Committee held one meeting during the year ended December 31, 2005 and held one meeting during the year ended December 31, 2006. The Fund does not have a standing compensation committee. All of the Directors attended at least 75% of the total number of Board meetings, and his or her respective committee meetings, held during the year ended December 31, 2005. All of the Directors, other than Mr. Brunie, attended at least 75% of the total number of Board meetings, and his or her respective committee meetings, held during the year ended December 31, 2006.

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, 2007 at a meeting of the Directors held on February 15, 2006.

Direct Ownership of Securities

The dollar range of the Fund’s securities owned by each Director in the Fund 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 in
	Securities in the Fund(1)		the Zweig Fund Complex
Charles H. Brunie		Over $100,000		Over $100,000
Wendy Luscombe		$10,001 - $50,000		$10,001 - $50,000
Alden C. Olson		$1 - $10,000		$10,001 - $50,000
James B. Rogers, Jr.		$1 - $10,000		$10,001 - $50,000
R. Keith Walton		$1 - $10,000		$10,001 - $50,000
George R. Aylward		$0		$0

(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, 2005. Except as otherwise indicated, each person has sole

15

voting and investment power with respect to the shares listed as 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.

Executive Compensation

The aggregate compensation paid to each of the Directors for the year ended December 31, 2005 by the Fund and The Zweig Fund, Inc. (ZF), constituting 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	$	25,000	$	50,000
Wendy Luscombe	$	35,500	$	72,500
Alden C. Olson	$	28,000	$	56,000
James B. Rogers, Jr.	$	26,500	$	54,500
R. Keith Walton	$	35,500	$	72,500
George R. Aylward	$	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 an Officer of the Fund only if he or she 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 also 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 set forth the terms and conditions upon which personnel subject to the codes may invest in securities, including securities that may be purchased or held by the Fund. These codes contains policies and procedures that, among other things, prohibit personnel from trading on the basis of material nonpublic information, place limitations on personal trading by personnel, impose preclearance on certain types of trading, and impose reporting obligations on such personnel, including requiring initial and annual reports of securities holdings. Copies of the Codes of Ethics can be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-202-942-8090. Copies of these Codes of Ethics are also available on the EDGAR Database on the Commission’s Internet site at http://www.sec.gov, and copies of these codes may be obtained, after paying a duplicating fee, by electronic request at the

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following E-mail address: publicinfo@sec.gov, or by writing the Commission’s Public Reference Section, Washington, D.C. 20549-0102.

Proxy Voting

The Investment Adviser votes proxies relating to the Fund’s portfolio securities in accordance with procedures that have been approved by the Fund’s Board of Directors. It is the intention of the Fund to exercise stock ownership rights in portfolio securities in a manner that is reasonably anticipated to further the best economic interests of shareholders of the Fund. Accordingly, the Investment Adviser endeavors to analyze and vote all proxies that are considered likely to have financial implications, and, where appropriate, to participate in corporate governance, shareholder proposals, management communications and legal proceedings.

If in the voting of proxies, a conflict of interest arises between the interests of Fund shareholders, on one hand, and those of the Investment Adviser or any affiliated person of the Fund, on the other hand, the Investment Adviser may take one or more of the following actions, among others, or otherwise give weight to the following factors, in addressing material conflicts of interest in voting the proxies: (i) rely on the recommendations of an established, independent third party with qualifications to vote proxies such as Institutional Shareholder Services; or (ii) abstaining. The Investment Adviser will promptly notify the President of the Fund once any actual or potential conflict of interest exists. The Investment Adviser will not waive any conflict of interest or vote any conflicted proxies without the prior written approval of either the Board of Directors or the President of the Fund, in which case the President will report on the conflict at the next following meeting of the Board of Directors.

Shareholders may obtain information regarding how the Fund voted proxies during the most recent 12-month period ended June 30, 2006, free of charge by calling toll-free 1-800-243-1574 or from the EDGAR Database on the Commission’s Internet site at http://www.sec.gov.

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 Total Return 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 “Acquisition”). 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 NYSE-listed company. Phoenix/Zweig Advisers LLC and Phoenix Investment Partners, Ltd. are Delaware corporations and independent advisory firms registered with the Commission under the Investment Advisers Act of 1940, as amended. As of December 31, 2005, Phoenix Investment Partners, Ltd. had approximately $37.4 billion of assets under management.

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 the supervision of 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 and actively collaborates in the stock selection process with the Investment Adviser’s portfolio management team. The extent of the Fund’s investment in debt and equity securities will be determined primarily on the

17

basis of asset allocation techniques developed by Dr. Martin E. Zweig, President of the Sub-Adviser, and his staff.

For the services provided by the Investment Adviser under the Investment Advisory Agreement, the Fund will pay the Investment Adviser a monthly fee computed at the annual rate of 0.70% of the Fund’s average daily net assets during the previous month. For the fiscal years ended December 31, 2005, 2004 and 2003, the Fund accrued investment advisory fees of $          , $           and $          , 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. Martin E. Zweig, the President of the Sub-Adviser, has been in the business of providing investment advisory services for over 35 years. Dr. Zweig and his associates determine asset allocation strategies to assist the Investment Adviser in its management of the Fund. Dr. Zweig, on behalf of the Sub-Adviser, actively collaborates in the security selection process with the Investment Adviser’s portfolio management team.

PORTFOLIO MANAGERS

Portfolio Managers

The Fund’s portfolio managers (each referred to as a “portfolio manager”) are listed below. Each portfolio manager manages other investment companies and/or investment vehicles and accounts in addition to the Fund. The following tables show, as of December 1, 2006, the number of accounts each portfolio manager managed in each of the listed categories and the total assets in the accounts managed within each category.

	Registered		Other Pooled
Portfolio Manager	Investment Companies		Investment Vehicles		Other Accounts
Carlton Neel		4		0		0
David Dickerson		4		0		0

The dollar range of the Fund’s securities owned by each portfolio manager and the aggregate dollar range of securities owned in the Zweig Fund Complex (as defined above under “Executive Compensation”) is set forth below.

			Aggregate Dollar Range of
	Dollar Range of Equity		Equity Securities in the
	Securities in the Fund(1)		Zweig Fund Complex
Carlton Neel	$	50,001 - $100,000	Over $	100,000
David Dickerson	$	10,001 - $50,000	$	50,001 - $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, 2005. Except as otherwise indicated, each person has sole voting and investment power with respect to the shares listed as 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.

It is possible that conflicts of interest may arise in connection with the portfolio managers’ management of the Fund’s investments on the one hand and the investments of other accounts or vehicles for which the portfolio managers are responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and the other

18

accounts or vehicles he advises. In addition, due to differences in the investment strategies or restrictions among the Fund and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the Fund. In some cases, another account managed by a portfolio manager may provide more revenue to the Investment Adviser. While this may appear to create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities, the Investment Adviser strives to ensure that portfolio managers endeavor to exercise their discretion in a manner that is equitable to all interested persons. In this regard, in the absence of specific account-related impediments (such as client-imposed restrictions or lack of available cash), it is the policy of the Investment Adviser to allocate investment ideas pro rata to all accounts with the same primary investment objective.

Portfolio Manager Compensation Structure and Method

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

The bonus package for portfolio managers is based upon how well the individual manager meets or exceeds assigned goals and a subjective assessment of contribution to the team effort. Their incentive bonus also reflects a performance component for achieving and/or exceeding performance competitive with peers managing similar strategies. Such component is further adjusted to reward investment personnel for managing within the stated framework and for not taking unnecessary risks. This ensures that investment personnel will remain focused on managing and acquiring securities that correspond to a fund’s mandate and risk profile. It also avoids the temptation for portfolio managers to take on more risk and unnecessary exposure to chase performance for personal gain. Finally, portfolio managers and investment professionals may also receive The Phoenix Companies, Inc. stock options and/or may be granted The Phoenix Companies, Inc. restricted stock at the direction of the parent’s Board of Directors.

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

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

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

(1) Seventy percent of the target incentive is based on achieving investment area investment goals and individual performance. The Investment Incentive pool will be established based on actual pre-tax investment performance compared with specific peer group or index measures established at the beginning of each calendar year. Performance of the funds managed is measured over one, three and five-year periods against specified benchmarks and/or peer groups (as indicated in the table below) for each fund managed. Performance of the The Phoenix Companies, Inc. general account and growth of revenue, if applicable to a particular portfolio manager, is measured on a one-year basis. Generally, individual portfolio manager’s participation is based on the performance of each fund/account managed as weighted roughly by total assets in each of those funds/accounts. The Lipper Large Cap Core peer group is used as the benchmark for the equity portion of the Fund, and the Lipper General U.S. Government Funds peer group is used for the fixed income portion of the Fund. These benchmarks are subject to change dependent upon evaluation of the appropriate groupings.

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FUND	BENCHMARK(S) AND/OR PEER GROUPS
The Zweig Total Return Fund, Inc.	Lipper Large Cap Core/Lipper General U.S. Government Funds

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

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

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

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

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

EXPENSES

For the fiscal years ended December 31, 2005, 2004 and 2003, the Fund’s net expenses amounted to $          , $           and $          , respectively.

Expenses of the Offer will be charged to capital.  The Fund’s annual expense ratio was     %,     % and     % of the Fund’s average net assets for the fiscal years ended December 31, 2005, 2004 and 2003, 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

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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, 2005, of which $0 was paid to PXP Securities Corp., representing 0% of the aggregate brokerage commissions paid by the Fund and 0% 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, 2004, of which $0 was paid to PXP Securities Corp., representing 0% of the aggregate brokerage commissions paid by the Fund and 0% 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, 2003, of which $0 was paid to PXP Securities Corp., representing 0% of the aggregate brokerage commissions paid by the Fund and 0% 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 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, 2005, December 31, 2004 and December 31, 2003 were     %,     % and     %, 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

21

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.

The outstanding shares of Common Stock are, and the Shares will be, listed on the New York Stock Exchange, Inc. 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 September 1988. The Fund’s Officers cannot predict whether the Fund’s Common Stock will trade in the future at a premium or a discount to net asset value, and if so, the level of such premium or discount.

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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 non-corporate shareholders, certain of the Fund’s ordinary income distributions received (or deemed received) in taxable years through and including 2010 may qualify for the 15% Federal income tax rate applicable to “qualified dividend income.” For corporate shareholders,

23

certain of the Fund’s ordinary income distributions may qualify for the 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 15%, 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. 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.

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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 28% 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 paid 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) ordinarily are 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 are 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.” However, “short-term capital gain dividends” and “interest-related dividends” paid by the Fund with respect to the Fund’s 2006 and 2007 taxable years generally will be exempt from 30% withholding. “Short-term capital gain dividends” generally are limited to the excess (if any) of the Fund’s net short-term capital gains over its net long-term capital losses, and “interest-related dividends” generally are limited to the Fund’s income (less expenses) from interest paid by U.S. issuers and interest paid on deposits with U.S. banks. 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 28% 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 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.

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INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 125 High Street, Boston, Massachusetts 02110, 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 December 11, 2006, there were 93,233,099.4993 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 10004

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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, 2005. The Fund will furnish, without charge, a copy of the foregoing documents upon written request to the Fund’s Administrator, Phoenix Equity Planning Corporation, One American Row, Hartford, CT 06102, Attention: Shareholders Services.

F-1

PART C

OTHER INFORMATION

Item 25.   Financial Statements and Exhibits

(1) Financial Statements: The following financial statements and schedules of the Registrant included in the Prospectus and/or SAI are filed with and made a part of this Registration Statement: Statement of Assets and Liabilities, December 31, 2005; Statement of Operations for the fiscal year ended December 31, 2005; Statement of Changes in Net Assets for the fiscal years ended December 31, 2005 and 2004; Schedule of Investments and Securities Sold Short, December 31, 2005; Notes to Financial Statements at December 31, 2005; Financial Highlights for the five fiscal years ended December 31, 2005; 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 Exhibit (1) of the Registrant’s Amendment No. 2 to the Registrant’s Registration Statement (Filed on September 22, 1988, Securities Act File No. 33-23252; Investment Company Act File No. 811-5620) (‘‘Amendment No. 2”))
(b)	– Amended and Restated By-Laws (Incorporated by reference to Exhibit 99.77Q1 to the Registrant’s N-SAR-A for the period ending June 30, 2004.)
(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.*
(e)	– Distribution Reinvestment and Cash Purchase Plan.**
(f)	– Not applicable.
(g)(1)	– Investment Advisory Agreement with Zweig Total Return Advisors, Inc. dated March 1, 1999. (Incorporated by reference to Exhibit A to the Registrant’s Proxy Statement dated January 19, 1999.)
(g)(2)	– Amended and Restated Servicing Agreement by and among Phoenix/Zweig Advisers LLC and Zweig Consulting LLC dated March 2, 2004. (Incorporated by reference to Exhibit 99.77Q2 to the Registrant’s N-SAR-A for the period ending June 30, 2004.)
(h)	– Not applicable.
(i)	– Not applicable.
(j)	– Custodian Contract with State Street Bank and Trust Company dated as of May 1, 1997.**
(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)	– Letter Agreement, dated March 1, 2006, between Registrant and Phoenix Equity Planning Corporation with respect to the Administration Agreement.**
(k)(4)	– Stock Transfer Agent Service Agreement with Computershare Trust Company, N.A. (formerly EquiServe Trust Company, N.A.) dated as of September 1, 2001.*
(k)(5)	– Form of Subscription Agent Agreement between the Registrant and Computershare Trust Company, N.A.*
(k)(6)	– Form of Information Agent Agreement between the Registrant and          .*
(l)	– Opinion and Consent of Katten Muchin Rosenman LLP.*
(m)	– Not applicable.
(n)	– Consent of PricewaterhouseCoopers LLP.*
(o)	– Not applicable.
(p)	– Not applicable.
(q)	– Not applicable.

C-1

(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.**

*	To be Filed by Amendment
**	Filed herewith

Item 26.  Marketing Arrangements

Not applicable.

Item 27.  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:

CATEGORY	ESTIMATED EXPENSES*
Legal Fees	$
Transfer Agent	$
Postage Fees	$
Listing & Registration Fees	$
Printing Fees	$
Audit Fees	$

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

Item 28.   Persons Controlled by or Under Common Control with Registrant

None.

Item 29.   Number of Holders of Securities as of          , 2006

Title of Class	Number of Record Holders
Common Stock, par value $0.001 per share

Item 30.   Indemnification

Under Article VII, 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 6, 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.

C-2

Item 31.  Business and Other Connections of Investment Adviser and Sub-Adviser

For information regarding Dr. Martin E. Zweig, George R. Aylward, Carlton Neel, David Dickerson, and Marc Baltuch see “Management — Directors and Officers” in the SAI, which is incorporated herein by reference.

John H. Beers is the Vice President and Secretary of Phoenix/Zweig Advisers, LLC since 2002. He also serves as Vice President and Litigation and Governance Counsel, and Assistant Secretary, of The Phoenix Companies, Inc. and its subsidiary Phoenix Life Insurance Company. In addition he serves the following subsidiaries of The Phoenix Companies, Inc. in the capacities indicated: A.F.J.P. Prorenta, S.A. (Alternate Director); AGL Life Assurance Company (Vice President and Assistant Secretary); American Phoenix Life and Reassurance Company (Vice President and Secretary); BOA Properties, Inc. (Vice President and Secretary); DPCM Holding, Inc. (Vice President and Secretary); Duff & Phelps Investment Management Company (Vice President and Secretary); Emprendimiento Compartido, S.A. (Alternate Director); Engemann Asset Management (Vice President and Secretary); Euclid Advisers, LLC (Vice President and Secretary); Pasadena Capital Corporation (Vice President and Secretary); PFG Distribution Company (Vice President and Assistant Secretary); PFG Holdings, Inc. (Vice President and Assistant Secretary); Philadelphia Financial Group, Inc. (Vice President and Assistant Secretary); PHL Variable Insurance Company (Vice President and Secretary); Phoenix Distribution Holding Company (Vice President and Secretary); Phoenix Equity Planning Corporation (Vice President and Secretary); Phoenix Founders, Inc. (Vice President and Secretary); Phoenix Global Solutions, Inc. (Director/Vice President and Secretary); Phoenix International Capital Corporation (Vice President and Secretary); Phoenix Investment Counsel, Inc. (Vice President and Clerk); Phoenix Investment Management Company (Vice President and Secretary); Phoenix Investment Partners, Ltd. (Vice President and Secretary); Phoenix Life and Annuity Company (Vice President and Secretary); Phoenix Life and Reassurance Company of New York (Vice President and Secretary); Phoenix National Trust Holding Company (Vice President and Secretary); Phoenix New England Trust Holding Company (Vice President and Secretary); Phoenix Realty Equity Investments, Inc. (Vice President and Secretary); Phoenix Realty Investors, Inc. (Vice President and Secretary); Phoenix Variable Advisors, Inc. (Vice President and Secretary); PM Holdings, Inc. (Vice President and Secretary); Practicare, Inc. (Vice President and Secretary); PXP Institutional Markets Group, Ltd. (Vice President and Secretary); PXP International, Ltd. (Director); PXP Securities Corp. (Vice President and Secretary); Rutherford Financial Corporation (Vice President and Secretary); Rutherford, Brown & Catherwood, LLC (Vice President and Secretary); Seneca Capital Management LLC (Vice President and Secretary); The Phoenix Edge Series Fund (Assistant Secretary); Walnut Asset Management, LLC (Vice President and Secretary); WS Griffith Advisors, Inc. (Vice President and Secretary); and WS Griffith Securities, Inc. (Vice President and Secretary).

Glenn H. Pease has been the Vice President and Treasurer of Phoenix/Zweig Advisers, LLC since 2002. He is currently Vice President, Finance, Phoenix Investment Partners, Ltd.; Vice President, Finance, Phoenix Investment Counsel, Inc.; Vice President, Finance PXP Institutional Markets Group, Ltd.; Vice President, Chief Financial Officer and Treasurer, PXP Securities Corp.; Vice President and Treasurer, Seneca Capital Management, LLC; Vice President, Finance and Treasurer, Duff & Phelps Investment Management Co.; Vice President and Chief Financial Officer, Engemann Asset Management; Vice President, Finance and Treasurer, Rutherford Financial Corporation; Vice President, Finance and Treasurer, Euclid Advisors, LLC; Vice President, Finance and Treasurer, Phoenix Equity Planning Corporation, all affiliates of the Investment Adviser.

Item 32.  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

C-3

Records relating to its function as Administrator to the Registrant:

Phoenix Equity Planning Corporation

One American Row

Hartford, CT 06102

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

Computershare Trust Company, N.A.

P.O. Box 43010

Providence, RI 02940-3010

Records relating to its function as Custodian of the Registrant:

State Street Bank and Trust Company

P.O. Box 5501

Boston, MA 02206-5501

Item 33.  Management Services

Not applicable.

Item 34.  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.

C-4

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 21st day of December, 2006.

THE ZWEIG TOTAL RETURN FUND, INC.

By:  /s/  George R. Aylward

George R. Aylward

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/  George R. Aylward	Director, Chairman of the Board and President	December 21, 2006
George R. Aylward
/s/  Charles H. Brunie	Director	December 21, 2006
Charles H. Brunie
/s/  Wendy Luscombe	Director	December 21, 2006
Wendy Luscombe
/s/  Alden C. Olson	Director	December 21, 2006
Alden C. Olson
/s/  James B. Rogers, Jr.	Director	December 21, 2006
James B. Rogers, Jr.
/s/  R. Keith Walton	Director	December 21, 2006
R. Keith Walton

C-5

EXHIBIT INDEX

(a)	– Amended and Restated Articles of Incorporation. (Incorporated by reference to Exhibit (1) of the Registrant’s Amendment No. 2 to the Registrant’s Registration Statement (Filed on September 22, 1988, Securities Act File No. 33-23252; Investment Company Act File No. 811-5620) (‘‘Amendment No. 2”))
(b)	– Amended and Restated By-Laws (Incorporated by reference to Exhibit 99.77Q1 to the Registrant’s N-SAR-A for the period ending June 30, 2004.)
(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.*
(e)	– Distribution Reinvestment and Cash Purchase Plan.**
(f)	– Not applicable.
(g)(1)	– Investment Advisory Agreement with Zweig Total Return Advisors, Inc. dated March 1, 1999. (Incorporated by reference to Exhibit A to the Registrant’s Proxy Statement dated January 19, 1999.)
(g)(2)	– Amended and Restated Servicing Agreement by and among Phoenix/Zweig Advisers LLC and Zweig Consulting LLC dated March 2, 2004. (Incorporated by reference to Exhibit 99.77Q2 to the Registrant’s N-SAR-A for the period ending June 30, 2004.)
(h)	– Not applicable.
(i)	– Not applicable.
(j)	– Custodian Contract with State Street Bank and Trust Company dated as of May 1, 1997.**
(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)	– Letter Agreement, dated March 1, 2006, between Registrant and Phoenix Equity Planning Corporation with respect to the Administration Agreement.**
(k)(4)	– Stock Transfer Agent Service Agreement with Computershare Trust Company, N.A. (formerly EquiServe Trust Company, N.A.) dated as of September 1, 2001.*
(k)(5)	– Form of Subscription Agent Agreement between the Registrant and Computershare Trust Company, N.A.*
(k)(6)	– Form of Information Agent Agreement between the Registrant and          .*
(l)	– Opinion and Consent of Katten Muchin Rosenman 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.**

*	To be Filed by Amendment
**	Filed herewith

EX-99.E

Exhibit E

THE ZWEIG FUND, INC.
AND THE ZWEIG TOTAL RETURN FUND,
INC.

TERMS AND CONDITIONS OF THE
AUTOMATIC REINVESTMENT AND CASH PURCHASE
PLAN

1. Each holder of shares (a “Shareholder”) of common stock in The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. (the “Fund”) whose Fund shares are registered in his or her own name will automatically be a participant (“Participant”) in the Automatic Reinvestment and Cash Purchase Plan (the “Plan”). Shareholders should note that ANY request to update the registration of an existing shareowner account (e.g., adding or removing a Joint Tenant), may result in the establishment of a new account. If a Shareholder requests to make a change to the registration on his or her current account, he or she should specify if the dividends should be reinvested or paid in cash. If neither is mentioned in the request, the new account will automatically be enrolled in the Plan. A Shareholder whose shares are registered in the name of a broker-dealer or other nominee (the “Nominee”) will be a Participant if (a) such a service is provided by the Nominee and (b) the Nominee makes such an election on behalf of the Shareholder to participate in the Plan. Computershare Trust Company, N.A., with Computershare Shareholder Services, Inc. acting as service agent for Computershare Trust Company, N.A., (the “Administrator” or “Plan Administrator”) will act as agent for Participants and will open an account under the Plan for each Participant in the same name as such Participant’s common stock is registered on the books and records of the transfer agent for the common stock.

2. Whenever the Fund declares a distribution payable in shares of common stock or cash, Participants will receive such distribution in the manner described in paragraph 3 below as determined on the record date for such distribution.

3. Whenever the market price of the Fund’s common stock is equal to or exceeds net asset value per share, Participants will be issued shares of common stock valued at the greater of (i) the net asset value per share on the record date or (ii) 95% of the market price on the record date. Participants will receive any such distribution entirely in shares of common stock, and the Administrator shall automatically receive such shares of common stock, including fractions, for all Participants’ accounts. If net asset value per share of the common stock at the time of valuation exceeds the market price of the common stock at such time, or if the Fund should declare a distribution payable only in cash, the Administrator will, as purchasing agent for the Participants, buy shares of common stock in the open market, on the New York Stock Exchange (the “Exchange”) or elsewhere, for each Participant’s account. The purchase price per share will be equal to the weighted average price of all shares purchased, including commissions. If, following the commencement of such purchases and before the Plan Administrator has completed its purchases, the trading price equals or exceeds the most recent net asset value of the shares of common stock, the Plan Administrator may cease purchasing shares on the open market and the Fund may issue the remaining shares at a price equal to the greater of (a) the net asset value on the last day the Plan Administrator purchased shares or (b) 95% of the market price on such day. In the case where the Plan Administrator has terminated open market purchases and the Fund has issued the remaining shares, the number of shares received by the Participant in respect of the cash dividend or distribution will be based on the weighted average of prices paid for shares purchased in the open market and the price at which the Fund issued the remaining shares.

If the record date for a distribution precedes the ex-date for such distribution (which generally occurs in connection with the Fund’s final distribution for the calendar year), the determination of whether new Shares will be issued by the Fund or whether the Administrator will buy Fund shares in the open market will be made on the basis of the closing market price and the net asset value for the shares of the Fund’s common stock on the ex-date for such distribution. In such case, the ex-date will also be the valuation date.

The Administrator will apply all cash received as a distribution to purchase shares of common stock on the open market as soon as practicable after the record date of such distribution, but in no event later than 30 days after such date, except where necessary to comply with the applicable provisions of the federal securities law.

4. For all purposes of the Plan: (a) the market price of the Fund’s common stock on a particular date shall be the last sale price on the Exchange at the close of the trading day or, if there is no sale on the Exchange on that date, then the mean between the closing bid and asked quotations for such stock on the Exchange on such date and (b) net asset value per share of common stock on a particular date shall be as determined by or on behalf of the Fund.

5. Participants in the Plan may make additional cash payments of at least $100 per payment but not more than $3,000 per month for investment in the Fund. Such voluntary cash payments received by the Administrator either by check, automatic monthly investment or by any other means the Plan Administrator accepts, will be applied by the Administrator to purchase additional Shares on the open market on or about the investment date following the Administrator’s receipt of the voluntary cash payment provided the Administrator receives the cash payment at least 2 business days prior to such investment date. The investment date will be the 15th day of each month or the next business day if the 15th falls on a weekend or a holiday (the “Investment Date”). The purchase price per share will be equal to the weighted average price of all shares purchased on the applicable Investment Date, including commissions. Participants have an unconditional right to obtain the return of any voluntary cash payments if the Administrator receives written notice at least 5 business days prior to the applicable investment date.

In the event that any cash payment is received or processed too late to be applied toward a purchase for the current month’s Investment Date, it will be held by the Plan Administrator and applied to a purchase for the next month’s Investment Date.

Participants will not receive interest on voluntary cash payments held by the Administrator pending investment. All cash payments must be drawn against a United States bank and payable in United States funds. Cash and third party checks are not accepted. In the event that any deposit is returned unpaid for any reason, the Administrator will consider the request for investment of such money null and void and shall immediately remove from the Participant’s account shares, if any, purchased upon the prior credit of such money. The Administrator shall thereupon be entitled to sell these shares to satisfy any uncollected amounts. If the net proceeds of the sale of such shares are insufficient to satisfy the balance of the uncollected amount, the Administrator shall be entitled to sell additional shares from the Participant’s account to satisfy the uncollected balance. In addition, a $25 returned funds fee will be applied to the Participant’s account at the discretion of the Plan Administrator.

6. The open market purchases provided for above may be made on any securities exchange where the shares of common stock of the Fund are traded, in the over-the-counter market or in negotiated transactions, and may be on such terms as to price, delivery and otherwise as the Administrator shall determine. Funds held by the Administrator uninvested will not bear interest, and it is understood that, in any event, the Administrator shall have no liability in connection with any inability to purchase shares of common stock within 30 days after the initial date of such purchase as herein provided, or with the timing of any purchases effected. The Administrator shall have no responsibility as to the value of the shares of common stock of the Fund acquired for any Participant’s account.

7. The Administrator will hold shares of common stock acquired pursuant to the Plan in book-entry (non-certificated) form in the Administrator’s name or that of its Nominee. The Administrator will forward to each Participant any proxy solicitation material and will vote any shares of common stock so held for each Participant only in accordance with the proxy returned by any such Participant to the Fund. Upon any Participant’s request, the Administrator will deliver to her or him, without charge, a certificate or certificates for the full shares of common stock. Certificates will be issued as soon as practical (generally, within 5 business days) after the Plan Administrator receives the request. Upon any Participant’s request, the Plan Administrator will also sell a portion of his or her shares. Such sales will be processed as soon as practical (generally, within 5 business days) after the Plan Administrator receives the request. Shareholders may call 1-800-272-2700 to liquidate shares if the dollar value of a sale is expected to be $50,000 or less. If the dollar value is expected to exceed $50,000, the Participant must submit a written request to the Plan Administrator. This limitation is set to protect Participants’ accounts against unauthorized sales. In addition, the Administrator has the right to decline to process a sale by telephone if it determines, in its sole discretion, that supporting legal documentation is required. The sale price per share will be equal to the weighted average price of all shares sold by the Plan Administrator on the applicable trading day, less brokerage commissions (currently $0.02 per share, this cost is subject to change).

8. The Administrator will confirm to each Participant acquisitions made for its account as soon as practicable but not later than 60 days after the date thereof. Although a Participant may from time to time have an undivided fractional interest in a share of common stock of the Fund, no certificates for a fractional share will be issued. However, distributions on fractional shares of common stock will be credited to Participants’ accounts.

9. Any stock dividends or split shares distributed by the Fund on shares of common stock held by the Administrator for any Participant will be credited to such Participant’s account. In the event that the Fund makes available to Participants rights to purchase additional shares of common stock or other securities, the number of rights will be based upon the Participant’s total holdings, including shares of common stock held by the Administrator.

10. The Administrator’s service fee for investing distributions will be paid by the Fund. Participants will be charged a pro rata share of brokerage commissions (currently $0.02 per share, this cost is subject to change) on all open market purchases.

11. A shareholder wishing to terminate his or her participation may do so by notifying the Plan Administrator of such intent. Such termination will be processed as soon as practical (generally, within 5 business days) after receipt by the Plan Administrator provided such notice is received by the Plan Administrator not less than 7 business days prior to any distribution payment date. If such notice is received less than 7 business days prior to any distribution payment date, termination requests may not be processed until shares to be received from the reinvestment of distributions have been posted in such terminating shareholder’s account. In such case, all shares including the newly posted distribution reinvestment shares will then be sold or a certificate for the appropriate number of full shares issued, along with a check in payment for any fraction of a share, on the first trading day after such shares have been posted to such terminating shareholder’s account (generally, a few days after the payable date).

The Plan may be terminated by the Fund or the Administrator with the Fund’s prior written consent, upon notice in writing mailed to each Participant. Upon any termination, the Administrator will cause to be delivered to each Participant a certificate or certificates for the appropriate number of full shares and a cash adjustment for any fractional share held for each such Participant under the Plan. If the Participant prefers, he or she may request to sell all shares held by the Plan Administrator in order to terminate participation in the Plan.

12. These terms and conditions may be amended or supplemented by the Fund or the Administrator with the Fund’s prior written consent, at any time or times, except when necessary or appropriate to comply with applicable law or the rules or policies of the Securities and Exchange Commission or any other regulatory authority, only by mailing to each Participant appropriate written notice. The amendment or supplement shall be deemed to be accepted by each Participant unless, with respect to any such Participant, prior to the effective date thereof, the Administrator receives notice of the termination of the Participant’s account under the Plan. Any such amendment may include an appointment by the Administrator in its place and stead of a successor Administrator under these terms and conditions, with full power and authority to perform all or any of the acts to be performed by the Administrator under these terms and conditions. Upon any such appointment of a successor Administrator for the purpose of receiving distributions, the Fund will be

authorized to pay to such successor Administrator, for Participants’ accounts, all distributions payable on the shares of common stock held in each Participant’s name or under the Plan for retention or application by such successor Administrator as provided in these terms and conditions.

13. The Administrator shall at all times act in good faith and agree to use its best efforts within reasonable limits to ensure the accuracy of all services performed under this Agreement to comply with applicable law, but assumes no responsibility and shall not be liable for loss or damage due to errors unless such error is caused by its or its employees’ negligence, bad faith or willful misconduct.

14. The Participant shall have no right to draw checks or drafts against such Participant’s account or to give instructions to the Plan Administrator in respect of any shares or cash held therein except as expressly provided herein.

15. The Participant agrees to notify the Plan Administrator promptly of any change of address. Notices to the Participant may be given by the Administrator by letter addressed to the Participant as shown on the records of the Administrator.

16. This Agreement and the account established hereunder for the Participant shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts and the Rules and Regulations of the Securities and Exchange Commission, as they may be changed or amended from time to time.

17. The Plan Administrator may use its affiliates and/or affiliates of the Fund’s 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.

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ZW-DRP 12/05

EX-99.J

Exhibit J

CUSTODIAN CONTRACT
Between
EACH OF THE PARTIES LISTED ON APPENDIX 1
and
STATE STREET BANK AND TRUST COMPANY

TABLE OF CONTENTS

			Page
1.	Employment of Custodian and Property to be Held By It			1
2.	Duties of the Custodian with Respect to Property of each Fund Held by the Custodian in the United States			2
	2.1	Holding Securities		2
	2.2	Delivery of Securities		2
	2.3	Registration of Securities		4
	2.4	Bank Accounts		4
	2.5	Availability of Federal Funds		5
	2.6	Collection of Income		5
	2.7	Payment of Fund Moneys		5
	2.8	Liability for Payment in Advance of Receipt of Securities Purchased		6
	2.9	Appointment of Agents		6
	2.10	Deposit of Fund Assets in U.S. Securities System		6
	2.11	Fund Assets Held in the Custodian’s Direct Paper System		8
	2.12	Segregated Account		8
	2.13	Ownership Certificates for Tax Purposes		9
	2.14	Proxies		9
	2.15	Communications Relating to Fund Securities		9
3.	Duties of the Custodian with Respect to Property of each Fund Held Outside of the United States			9
	3.1	Appointment of Foreign Sub-Custodians		9
	3.2	Assets to be Held		10
	3.3	Foreign Securities Systems		10
	3.4	Holding Securities		10
	3.5	Agreements with Foreign Banking Institutions		10
	3.6	Access of Independent Accountants of each Fund		11
	3.7	Reports by Custodian		11
	3.8	Transactions in Foreign Custody Account		11
	3.9	Liability of Foreign Sub-Custodians		11
	3.10	Liability of Custodian		11
	3.11	Reimbursement for Advances		12
	3.12	Monitoring Responsibilities		12
	3.13	Branches of U.S. Banks		12
	3.14	Tax Law		13
4.	Payments for Sales or Repurchase or Redemptions of Shares of each Fund			13
5.	Proper Instructions			13

		Page
6.	Actions Permitted Without Express Authority		14
7.	Evidence of Authority		14
8.	Duties of Custodian With Respect to the Books of Account and Calculation of Net Asset Value and Net Income		14
9.	Records		15
10.	Opinion of Fund’s Independent Accountants		15
11.	Reports to Fund by Independent Public Accountants		15
12.	Compensation of Custodian		15
13.	Responsibility of Custodian		15
14.	Effective Period, Termination and Amendment		17
15.	Successor Custodian		17
16.	Interpretive and Additional Provisions		18
17.	Additional Funds		18
18.	Massachusetts Law to Apply		18
19.	Prior Contracts		19
20.	Shareholder Communications		19
21.	Limitation of Liability		19

MASTER CUSTODIAN CONTRACT

     This Contract between each fund or series of a fund listed on Appendix 1 which evidences its agreement to be bound hereby by executing a copy of this Contract (each such fund, any and all separate series or portfolios thereof and any additional portfolios or separate series thereof which become subject to this Contract pursuant to Section 17 hereof, are individually hereafter referred to as a “Fund”), and State Street Bank and Trust Company, a Massachusetts trust company, having its principal place of business at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the “Custodian,”

WITNESSETH:

     WHEREAS, each of the Funds has previously entered into a Custodian Contract with the Custodian;

     WHEREAS, the Custodian and each of the Funds desire to replace such existing Custodian Contracts with this Master Custodian Contract between the Custodian and all of the Funds;

     NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:

1. Employment of Custodian and Property to be Held by It

     Each Fund hereby employs the Custodian as the custodian of the assets of such Fund, including securities which such Fund desires to be held in places within the United States (“domestic securities”) and securities it desires to be held outside the United States (“foreign securities”) pursuant to the provisions of such Fund’s governing documents (domestic securities and foreign securities are sometimes collectively referred to herein as “Securities”). Each Fund agrees to deliver to the Custodian all securities and cash of such Fund, and all payments of income, payments of principal or capital distributions received by it with respect to all securities owned by such Fund from time to time, and the cash consideration received by it for such new or treasury shares each class of capital stock or beneficial interest, as applicable, of such Fund, (“Shares”) as may be issued or sold from time to time. The Custodian shall not be responsible for any property of a Fund held or received by such Fund and not delivered to the Custodian.

     Upon receipt of “Proper Instructions” (within the meaning of Article 5), the Custodian shall on behalf of the applicable Fund from time to time employ one or more sub-custodians, located in the United States but only in accordance with an applicable vote by the Board of the Fund, and provided that the Custodian shall have no more or less responsibility or liability to the Fund on account of any actions or omissions of any sub-custodian so employed than any such sub-custodian has to the Custodian. The Fund shall approve in writing the terms of any subcustodian agreement with a United States subcustodian. The Custodian may employ as sub-custodian for each Fund’s foreign securities the foreign banking institutions and foreign securities depositories designated in Schedule A hereto but only in accordance with the provisions of Article 3.

1

2.	Duties of the Custodian with Respect to Property of each Fund Held By the Custodian in the United States
2.1	Holding Securities. The Custodian shall hold and physically segregate for the account of each Fund all non-cash property, to be held by it in the United States including all domestic securities owned by such Fund, other than (a) securities which are maintained pursuant to Section 2.10 in a clearing agency which acts as a securities depository or in a book-entry system authorized by the U.S. Department of the Treasury (each, a “U.S. Securities System”) and (b) commercial paper of an issuer for which State Street Bank and Trust Company acts as issuing and paying agent (“Direct Paper”) which is deposited and/or maintained in the Direct Paper System of the Custodian (the “Direct Paper System”) pursuant to Section 2.11.
2.2	Delivery of Securities. The Custodian shall release and deliver domestic securities owned by a Fund held by the Custodian or in a U.S. Securities System account of the Custodian or in the Custodian’s Direct Paper book entry system account (“Direct Paper System Account”) only upon receipt of Proper Instructions from such Fund, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

1)	Upon sale of such securities for the account of such Fund and receipt of payment therefor;
2)	Upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by such Fund;
3)	In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.10 hereof;
4)	To the depository agent in connection with tender or other similar offers for securities of such Fund;
5)	To the issuer thereof or its agent when such securities are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian;
6)	To the issuer thereof, or its agent, for transfer into the name of such Fund or into the name of any nominee or nominees of the Custodian or into the name or nominee name of any agent appointed pursuant to Section 2.9 or into the name or nominee name of any sub-custodian appointed pursuant to Article 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new securities are to be delivered to the Custodian;

2

7)	Upon the sale of such securities for the account of such Fund, to the broker or its clearing agent, against a receipt, for examination in accordance with “street delivery” custom; provided that in any such case, the Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Custodian’s own negligence or willful misconduct;
8)	For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
9)	In the case of warrants, rights or similar securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
10)	For delivery in connection with any loans of securities made by such Fund, but only against receipt of adequate collateral as agreed upon from time to time by the Custodian and such Fund, which may be in the form of cash or obligations issued by the United States government, its agencies or instrumentalities, except that in connection with any loans for which collateral is to be credited to the Custodian’s account in the book-entry system authorized by the U.S. Department of the Treasury, the Custodian will not be held liable or responsible for the delivery of securities owned by such Fund prior to the receipt of such collateral;
11)	For delivery as security in connection with any borrowings by such Fund requiring a pledge of assets by such Fund, but only against receipt of amounts borrowed;
12)	For delivery in accordance with the provisions of any agreement among such Fund, the Custodian and a broker-dealer registered under the Securities Exchange Act of 1934 (the “Exchange Act”) and a member of The National Association of Securities Dealers, Inc. (“NASD”), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by such Fund;
13)	For delivery in accordance with the provisions of any agreement among such Fund, the Custodian, and a Futures Commission Merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission and/or any Contract Market, or any similar organization or organizations, regarding account deposits in connection with transactions by such Fund;

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14)

Upon receipt of instructions from the transfer agent (“Transfer Agent”) for such Fund, for delivery to such Transfer Agent or to the holders of shares in connection with distributions in kind, as may be described from time to time in the currently effective prospectus and statement of additional information of such Fund (“Prospectus”), in satisfaction of requests by holders of Shares for repurchase or redemption; and

15)

For any other proper corporate purpose, but only upon receipt of, in addition to Proper Instructions from such Fund, a certified copy of a resolution of the Board or of the Executive Committee of such Fund signed by an officer of such Fund and certified by the Secretary or an Assistant Secretary, specifying the securities of such Fund to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom delivery of such securities shall be made.

2.3

Registration of Securities. Domestic securities held by the Custodian (other than bearer securities) shall be registered in the name of each Fund or in the name of any nominee of each Fund or of any nominee of the Custodian which nominee shall be assigned exclusively to each Fund, unless a Fund has authorized in writing the appointment of a nominee to be used in common with other registered investment companies having the same investment adviser as such Fund, or in the name or nominee name of any agent appointed pursuant to Section 2.9 or in the name or nominee name of any sub-custodian appointed pursuant to Article 1. All securities accepted by the Custodian under the terms of this Contract shall be in “street name” or other good delivery form. If, however, a Fund directs the Custodian to maintain securities in “street name”, the Custodian shall utilize commercially reasonable means to timely collect income due such Fund on such securities and to timely notify each Fund of relevant corporate actions including, without limitation, pendency of calls, maturities, tender or exchange offers.

2.4

Bank Accounts. The Custodian shall open and maintain a separate bank account or accounts in the United States in the name of each Fund, subject only to draft or order by the Custodian acting pursuant to the terms of this Contract, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of such Fund, other than cash maintained by such Fund in a bank account established and used in accordance with Rule 17f-3 under the Investment Company Act of 1940. Funds held by the Custodian for each Fund may be deposited by it to its credit as Custodian in the Banking Department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable; provided, however, that every such bank or trust company shall be qualified to act as a custodian under the Investment Company Act of 1940 and that each such bank or trust company and the funds to be deposited with each such bank or trust company shall on behalf of each applicable Fund be approved by vote of a majority of the Board of such Fund. Such funds shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that capacity.

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2.5	Availability of Federal Funds. Upon mutual agreement between a Fund and the Custodian, the Custodian shall, upon the receipt of Proper Instructions from such Fund, make federal funds available to such Fund as of specified times agreed upon from time to time by such Fund and the Custodian in the amount of checks received in payment for Shares of such Fund which are deposited into such Fund’s account.
2.6	Collection of Income. Subject to the provisions of Section 2.3, the Custodian shall collect on a timely basis all income and other payments with respect to Securities held hereunder to which each Fund shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer securities if, on the date of payment by the issuer, such securities are held by the Custodian or its agent thereof and shall credit such income, as collected, to such Fund’s custodian account. Without limiting the generality of the foregoing, the Custodian shall detach and present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when due on securities held hereunder. Unless otherwise agreed to by the parties, income due each Fund on securities loaned pursuant to the provisions of Section 2.2 (10) shall be the responsibility of the Fund. The Custodian will have no duty or responsibility in connection therewith, other than to provide each Fund with such information or data as may be necessary to assist each Fund in arranging for the timely delivery to the Custodian of the income to which each Fund is properly entitled.
2.7	Payment of Fund Moneys. Upon receipt of Proper Instructions from a Fund, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out moneys of each Fund in the following cases only:

1) Upon the purchase of Securities, options, futures contracts or options on futures contracts for the account of such Fund but only (a) against the delivery of such securities or evidence of title to such options, futures contracts or options on futures contracts to the Custodian (or any bank, banking firm or trust company doing business in the United States or abroad which is qualified under the Investment Company Act of 1940, as amended, to act as a custodian and has been designated by the Custodian as its agent for this purpose) registered in the name of such Fund or in the name of a nominee of the Custodian referred to in Section 2.3 hereof or in proper form for transfer; (b) in the case of a purchase effected through a U.S. Securities System, in accordance with the conditions set forth in Section 2.10 hereof; (c) in the case of a purchase involving the Direct Paper System, in accordance with the conditions set forth in Section 2.11; (d) in the case of repurchase agreements entered into between such Fund and the Custodian, or another bank, or a broker-dealer which is a member of NASD, (i) against delivery of the securities either in certificate form or through an entry crediting the Custodian’s account at the Federal Reserve Bank with such securities or (ii) against delivery of the receipt evidencing purchase by such Fund of securities owned by the Custodian along with written evidence of the agreement by the Custodian to repurchase such securities from such Fund or (e) for transfer to a time deposit account of such Fund in any bank, whether domestic or foreign; such transfer may be effected prior to receipt of a confirmation

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from a broker and/or the applicable bank pursuant to Proper Instructions from such Fund as defined in Article 5;

2)	In connection with conversion, exchange or surrender of Securities owned by such Fund as set forth in Section 2.2 hereof;
3)	For the redemption or repurchase of Shares issued by such Fund as set forth in Article 4 hereof;
4)	For the payment of any expense or liability incurred by such Fund, including but not limited to the following payments for the account of such Fund: interest, taxes, management, accounting, transfer agent and legal fees, and operating expenses of such Fund whether or not such expenses are to be in whole or part capitalized or treated as deferred expenses;
5)	For the payment of any dividends on Shares of such Fund declared pursuant to the governing documents of such Fund;
6)	For payment of the amount of dividends received in respect of securities sold short;
7)	For any other proper purpose, but only upon receipt of, in addition to Proper Instructions from such Fund, a certified copy of a resolution of the Board or of the Executive Committee of such Fund signed by an officer of such Fund and certified by its Secretary or an Assistant Secretary, specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper purpose, and naming the person or persons to whom such payment is to be made.

2.8	Liability for Payment in Advance of Receipt of Securities Purchased. Except as specifically stated otherwise in this Contract, in any and every case where payment for purchase of Securities for the account of such Fund is made by the Custodian in advance of receipt of the securities purchased in the absence of specific Proper Instructions from such Fund to so pay in advance, the Custodian shall be absolutely liable to such Fund for such securities to the same extent as if the securities had been received by the Custodian.
2.9	Appointment of Agents. The Custodian may at any time or times, subject to the applicable Fund’s prior approval, in its discretion appoint (and may at any time remove) any other bank or trust company which is itself qualified under the Investment Company Act of 1940, as amended, to act as a custodian, as its agent to carry out such of the provisions of this Article 2 as the Custodian may from time to time direct; provided, however, that the appointment of any agent shall not relieve the Custodian of its responsibilities or liabilities hereunder.
2.10	Deposit of Fund Assets in U.S. Securities Systems. The Custodian may deposit and/or maintain securities owned by a Fund in a clearing agency registered with the Securities and Exchange Commission under Section 17A of the Exchange Act, which acts as a securities depository, or in the book-entry system authorized by the U.S. Department of the Treasury

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and certain federal agencies, collectively referred to herein as “U.S. Securities System” in accordance with applicable Federal Reserve Board and Securities and Exchange Commission rules and regulations, if any, and subject to the following provisions:

1)	The Custodian may keep securities of each Fund in a U.S. Securities System provided that such securities are represented in an account (“Account”) of the Custodian in the U.S. Securities System which shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers;
2)	The records of the Custodian with respect to securities of each Fund which are maintained in a U.S. Securities System shall identify by book-entry those securities belonging to each Fund;
3)	The Custodian shall pay for securities purchased for the account of each Fund upon (i) receipt of advice from the U.S. Securities System that such securities have been transferred to the Account, and (ii) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of each Fund. The Custodian shall transfer securities sold for the account of each Fund upon (i) receipt of advice from the U.S. Securities System that payment for such securities has been transferred to the Account, and (ii) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of each Fund. Copies of all advices from the U.S. Securities System of transfers of securities for the account of each Fund shall identify each Fund, be maintained for each Fund by the Custodian and be provided to each Fund at its request. Upon request, the Custodian shall furnish each Fund confirmation of each transfer to or from the account of each Fund in the form of a written advice or notice and shall furnish to each Fund copies of daily transaction sheets reflecting each day’s transactions in the U.S. Securities System for the account of each Fund.
4)	The Custodian shall provide each Fund with any report obtained by the Custodian on the U.S. Securities System’s accounting system, internal accounting control and procedures for safeguarding securities deposited in the U.S. Securities System;
5)	The Custodian shall have received from each Fund the initial certificate required by Article 14 hereof;
6)	Anything to the contrary in this Contract notwithstanding, the Custodian shall be liable to each Fund for the benefit of such Fund for any loss or damage to such Fund resulting from use of the U.S. Securities System by reason of any negligence, misfeasance or misconduct of the Custodian or any of its agents or of any of its or their employees or from failure of the Custodian or any such agent to enforce effectively such rights as it may have against the U.S. Securities System; at the election of the affected Fund, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claim against the U.S. Securities System or any other person which the Custodian may have as a consequence of any such loss or damage

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if and to the extent that such Fund has not been made whole for any such loss or damage.

2.11 Fund Assets Held in the Custodian’s Direct Paper System. The Custodian may deposit and/or maintain securities owned by each Fund in the Direct Paper System of the Custodian subject to the following provisions:

1)	No transaction relating to securities in the Direct Paper System will be effected in the absence of Proper Instructions from each Fund;
2)	The Custodian may keep securities of each Fund in the Direct Paper System only if such securities are represented in an account of the Custodian in the Direct Paper System which shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers;
3)	The records of the Custodian with respect to securities of each Fund which are maintained in the Direct Paper System shall identify by book-entry those securities belonging to each Fund;
4)	The Custodian shall pay for securities purchased for the account of each Fund upon the making of an entry on the records of the Custodian to reflect such payment and transfer of securities to the account of each Fund. The Custodian shall transfer securities sold for the account of each Fund upon the making of an entry on the records of the Custodian to reflect such transfer and receipt of payment for the account of each Fund;
5)	The Custodian shall furnish each Fund confirmation of each transfer to or from the account of each Fund, in the form of a written advice or notice, of Direct Paper on the next business day following such transfer and shall furnish to each Fund copies of daily transaction sheets reflecting each day’s transactions in the Direct Paper System for the account of each Fund;
6)	The Custodian shall provide each Fund with any report on its system of internal accounting control as each Fund may reasonably request from time to time.

2.12 Pledged Account. The Custodian shall upon receipt of Proper Instructions from a Fund establish and maintain a pledged account or accounts for and on behalf of such Fund, into which account or accounts may be transferred cash and/or securities, including securities maintained in an account by the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the provisions of any agreement among such Fund, the Custodian and a broker-dealer registered under the Exchange Act and a member of the NASD (or any futures commission merchant registered under the Commodity Exchange Act), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange (or the Commodity Futures Trading Commission or any registered contract market), or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by such Fund, (ii) for

8

	purposes of segregating cash or government securities in connection with options purchased, sold or written by such Fund or commodity futures contracts or options thereon purchased or sold by such Fund, (iii) for the purposes of compliance by such Fund with the procedures required by Investment Company Act Release No. 10666, and subsequent release or releases of the Securities and Exchange Commission relating to the maintenance of segregated accounts by registered investment companies and (iv) for other proper corporate purposes, but only, in the case of clause (iv), upon receipt of, in addition to Proper Instructions from such Fund, a certified copy of a resolution of the Board or of the Executive Committee of such Fund signed by an officer of such Fund and certified by the Secretary or an Assistant Secretary, setting forth the purpose or purposes of such segregated account.
2.13	Ownership Certificates for Tax Purposes. The Custodian shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to securities of each Fund held by it and in connection with transfers of securities.
2.14	Proxies. The Custodian shall, with respect to the securities held hereunder, cause to be promptly executed by the registered holder of such securities, if the securities are registered otherwise than in the name of such Fund or a nominee of such Fund, all proxies, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to the applicable Fund such proxies, all proxy soliciting materials and all notices relating to such securities.
2.15	Communications Relating to Fund Securities. Subject to the provisions of Section 2.3, the Custodian shall transmit promptly to each Fund all written information (including, without limitation, pendency of calls and maturities of domestic securities and expirations of rights in connection therewith and notices of exercise of call and put options written by such Fund and the maturity of futures contracts purchased or sold by such Fund) received by the Custodian from issuers of the securities being held for such Fund. With respect to tender or exchange offers, the Custodian shall transmit promptly to each Fund all written information received by the Custodian from issuers of the securities whose tender or exchange is sought and from the party (or his agents) making the tender or exchange offer. If a Fund desires to take action with respect to any tender offer, exchange offer or any other similar transaction, such Fund shall notify the Custodian at least three business days prior to the date on which the Custodian is to take such action.
3.	Duties of the Custodian with Respect to Property of each Fund Held Outside of the United States
3.1	Appointment of Foreign Sub-Custodians. Each Fund hereby authorizes and instructs the Custodian to employ as sub-custodians for such Fund’s securities and other assets maintained outside the United States the foreign banking institutions and foreign securities depositories designated on Schedule A hereto (“foreign sub-custodians”). Upon receipt of “Proper Instructions”, as defined in Section 5 of this Contract, together with a certified resolution of such Fund’s Board, the Custodian and such Fund may agree to amend

9

	Schedule A hereto from time to time to designate additional foreign banking institutions and foreign securities depositories to act as sub-custodian. Upon receipt of Proper Instructions, a Fund may instruct the Custodian to cease the employment of any one or more such sub-custodians for maintaining custody of such Fund’s assets.
3.2	Assets to be Held. The Custodian shall limit the securities and other assets maintained in the custody of the foreign sub-custodians to: (a) “foreign securities”, as defined in paragraph (c)(1) of Rule 17f-5 under the Investment Company Act of 1940, and (b) cash and cash equivalents in such amounts as the Custodian or each Fund may determine to be reasonably necessary to effect such Fund’s foreign securities transactions. The Custodian shall identify on its books as belonging to each Fund, the foreign securities of each Fund held by each foreign sub-custodian.
3.3	Foreign Securities Systems. Except as may otherwise be agreed upon in writing by the Custodian and each Fund, assets of each Fund shall be maintained in a clearing agency which acts as a securities depository or in a book-entry system for the central handling of securities located outside of the United States (each a “Foreign Securities System”) only through arrangements implemented by the foreign banking institutions serving as sub-custodians pursuant to the terms hereof (Foreign Securities Systems and U.S. Securities Systems are collectively referred to herein as the “Securities Systems”). Where possible, such arrangements shall include entry into agreements containing the provisions set forth in Section 3.6 hereof.
3.4	Holding Securities. The Custodian may hold securities and other non-cash property for all of its customers, including each Fund, with a foreign sub-custodian in a single account that is identified as belonging to the Custodian for the benefit of its customers, provided however, that (i) the records of the Custodian with respect to securities and other non-cash property of each Fund which are maintained in such account shall identify by book-entry those securities and other non-cash property belonging to each Fund and (ii) the Custodian shall require that securities and other non-cash property so held by the foreign sub-custodian be held separately from any assets of the foreign sub-custodian or of others.
3.5	Agreements with Foreign Banking Institutions. Each agreement with a foreign banking institution shall provide that: (a) the assets of each Fund will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the foreign banking institution or its creditors or agents, except a claim of payment for their safe custody or administration; (b) beneficial ownership for the assets of each Fund will be freely transferable without the payment of money or value other than for custody or administration; (c) adequate records will be maintained identifying the assets as belonging to each Fund; (d) officers of or auditors employed by, or other representatives of the Custodian, including to the extent permitted under applicable law the independent public accountants for each Fund, will be given access to the books and records of the foreign banking institution relating to its actions under its agreement with the Custodian; and (e) assets of each Fund held by the foreign sub-custodian will be subject only to the instructions of the Custodian or its agents. Agreements with foreign banking institutions shall contain those provisions required by subparagraph (c) of Section 17f-5 under the Investment Company Act of 1940.

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3.6	Access of Independent Accountants of each Fund. Upon request of each Fund, the Custodian will use its best efforts to arrange for the independent accountants of each Fund to be afforded access to the books and records of any foreign banking institution employed as a foreign sub-custodian insofar as such books and records relate to the performance of such foreign banking institution under its agreement with the Custodian.
3.7	Reports by Custodian. The Custodian will supply to each Fund from time to time, as mutually agreed upon, statements in respect of the securities and other assets of each Fund held by foreign sub-custodians, including but not limited to an identification of entities having possession of such Fund’s securities and other assets and advices or notifications of any transfers of securities to or from each custodial account maintained by a foreign banking institution for the Custodian on behalf of such Fund indicating, as to securities acquired for such Fund, the identity of the entity having physical possession of such securities.
3.8	Transactions in Foreign Custody Account. (a) Except as otherwise provided in paragraph (b) of this Section 3.8, the provisions of Sections 2.2 and 2.7 of this Contract shall apply, mutatis mutandis to the foreign securities of each Fund held outside the United States by foreign sub-custodians. (b) Notwithstanding any provision of this Contract to the contrary, settlement and payment for securities received for the account of each Fund and delivery of securities maintained for the account of each Fund may be effected in accordance with the customary established securities trading or securities processing practices and procedures in the jurisdiction or market in which the transaction occurs, including, without limitation, delivering securities to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) against a receipt with the expectation of receiving later payment for such securities from such purchaser or dealer. (c) Securities maintained in the custody of a foreign sub-custodian may be maintained in the name of such entity’s nominee to the same extent as set forth in Section 2.3 of this Contract, and each Fund agrees to hold any such nominee harmless from any liability as a holder of record of such securities.
3.9	Liability of Foreign Sub-Custodians. Each agreement pursuant to which the Custodian employs a foreign banking institution as a foreign sub-custodian shall require the institution to exercise reasonable care in the performance of its duties and to indemnify, and hold harmless, the Custodian and each Fund from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the institution’s performance of such obligations. At the election of a Fund, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a foreign banking institution as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that such Fund has not been made whole for any such loss, damage, cost, expense, liability or claim.
3.10	Liability of Custodian. The Custodian shall be liable for the acts or omissions of a foreign banking institution to the same extent as set forth with respect to sub-custodians generally in this Contract and, regardless of whether assets are maintained in the custody of a foreign banking institution, a foreign securities depository or a branch of a U.S. bank as contemplated by Section 3.13 hereof, the Custodian shall not be liable for any loss, damage,

11

	cost, expense, liability or claim resulting from nationalization, expropriation, currency restrictions, or acts of war or terrorism or any loss where the sub-custodian has otherwise exercised reasonable care. Notwithstanding the foregoing provisions of this Section 3.10, in delegating custody duties to State Street London Ltd., the Custodian shall not be relieved of any responsibility to each Fund for any loss due to such delegation, except such loss as may result from (a) political risk (including, but not limited to, exchange control restrictions, confiscation, expropriation, nationalization, insurrection, civil strife or armed hostilities) or (b) other losses (excluding a bankruptcy or insolvency of State Street London Ltd. not caused by political risk) due to Acts of God, nuclear incident or other losses under circumstances where the Custodian and State Street London Ltd. have exercised reasonable care.
3.11	Reimbursement for Advances. If, pursuant to Proper Instructions, a Fund requires the Custodian to advance cash or securities for any purpose for the benefit of a Fund including the purchase or sale of foreign exchange or of contracts for foreign exchange, or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Contract, except such as may arise from events or circumstances for which the Custodian or a sub-custodian are liable pursuant to Sections 3.9 and 3.10 above, or from its or its nominee’s own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the applicable Fund shall be security therefor and should such Fund fail to repay the Custodian promptly, the Custodian shall upon prior written notice be entitled to utilize available cash and to dispose of such Fund’s assets to the extent necessary to obtain reimbursement.
3.12	Monitoring Responsibilities. The Custodian shall furnish annually to each Fund, during the month of June, information concerning the foreign sub-custodians employed by the Custodian and such other information needed to permit the Fund to comply with Section 17f-5 under the 1940 Act. Such information shall be similar in kind and scope to that furnished to each Fund in connection with the initial approval of this Contract. In addition, the Custodian will promptly inform each Fund in the event that the Custodian learns of a material adverse change in the financial condition of a foreign sub-custodian or any material loss of the assets of each Fund or in the case of any foreign sub-custodian not the subject of an exemptive order from the Securities and Exchange Commission is notified by such foreign sub-custodian that there appears to be a substantial likelihood that its shareholders’ equity will decline below $200 million (U.S. dollars or the equivalent thereof) or that its shareholders’ equity has declined below $200 million (in each case computed in accordance with generally accepted U.S. accounting principles).
3.13	Branches of U.S. Banks. (a) Except as otherwise set forth in this Contract, the provisions hereof shall not apply where the custody of a Fund’s assets are maintained in a foreign branch of a banking institution which is a “bank” as defined by Section 2(a)(5) of the Investment Company Act of 1940 meeting the qualification set forth in Section 26(a) of said Act. The appointment of any such branch as a sub-custodian shall be governed by Article 1 of this Contract. (b) Cash held for each Fund in the United Kingdom shall be maintained in an interest bearing account established for each Fund with the Custodian’s London branch,

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	which account shall be subject to the direction of the Custodian, State Street London Ltd. or both.
3.14	Tax Law. The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on any Fund or the Custodian as custodian of such Fund by the tax law of the United States of America or any state or political subdivision thereof. It shall be the responsibility of each Fund to notify the Custodian of the obligations imposed on each Fund or the Custodian as custodian of each Fund by the tax law of jurisdictions other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist each Fund with respect to any claim for exemption or refund under the tax law of jurisdictions for which each Fund has provided such information.
4.	Payments for Sales or Repurchases or Redemptions of Shares of each Fund

          The Custodian shall receive from the distributor for the Shares or from the Transfer Agent of each Fund and deposit into the account of each Fund such payments as are received for Shares of each Fund issued or sold from time to time by each Fund. The Custodian will provide timely notification to each Fund and the Transfer Agent of any receipt by it of payments for Shares of such Fund.

          From such funds as may be available for the purpose but subject to the limitations of each Fund’s governing documents and any applicable votes of the Board of each Fund pursuant thereto, the Custodian shall, upon receipt of instructions from the Transfer Agent, make funds available for payment to holders of Shares who have delivered to the Transfer Agent a request for redemption or repurchase of their Shares. In connection with the redemption or repurchase of Shares of each Fund, the Custodian is authorized upon receipt of instructions from the Transfer Agent to wire funds to or through a commercial bank designated by the redeeming shareholders. In connection with the redemption or repurchase of Shares of each Fund, the Custodian shall honor checks drawn on the Custodian by a holder of Shares, which checks have been furnished by such Fund to the holder of Shares, when presented to the Custodian in accordance with such procedures and controls as are mutually agreed upon from time to time between each Fund and the Custodian.

5. Proper Instructions

          Proper Instructions as used throughout this Contract means a writing signed or initialed by one or more person or persons as the Board of each Fund shall have from time to time authorized. Each such writing shall set forth the specific transaction or type of transaction involved, including a specific statement of the purpose for which such action is requested. Oral instructions will be considered Proper Instructions if the Custodian reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. Each Fund shall cause all oral instructions to be confirmed in writing. Upon receipt of a certificate of the Secretary or an Assistant Secretary as to the authorization by the Board of each Fund accompanied by a detailed description of procedures approved by the Board, Proper Instructions may include communications effected directly between electro-mechanical or electronic devices provided that

13

the Board and the Custodian are satisfied that such procedures afford adequate safeguards for such Fund’s assets. For purposes of this Section, Proper Instructions shall include instructions received by the Custodian pursuant to any three-party agreement which requires a segregated asset account in accordance with Section 2.12.

6.	Actions Permitted without Express Authority
	The Custodian may in its discretion, without express authority from each Fund:

1)	make payments to itself or others for minor expenses of handling securities or other similar items relating to its duties under this Contract, provided that all such payments shall be accounted for to the applicable Fund;
1)	surrender securities in temporary form for securities in definitive form;
2)	endorse for collection, in the name of each Fund, checks, drafts and other negotiable instruments; and
3)	in general, attend to all ministerial details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and property of each Fund except as otherwise directed by the Board of each Fund.

7. Evidence of Authority

          The Custodian shall be protected in acting upon any instructions, notice, request, consent, certificate or other instrument or paper reasonably believed by it to be genuine and to have been properly executed by or on behalf of each Fund. The Custodian may receive and accept a certified copy of a vote of the Board of each Fund as conclusive evidence (a) of the authority of any person to act in accordance with such vote or (b) of any determination or of any action by the Board pursuant to the governing documents of each Fund as described in such vote, and such vote may be considered as in full force and effect until receipt by the Custodian of written notice to the contrary.

8. Duties of Custodian with Respect to the Books of Account and Calculation of Net Asset Value and Net Income

          The Custodian shall cooperate with and supply necessary information to the entity or entities appointed by the Board of each Fund to keep the books of account of each Fund and/or compute the net asset value per share of the outstanding shares of each Fund or, if directed in writing to do so by each Fund, shall itself keep such books of account and/or compute such net asset value per share. If so directed, the Custodian shall also calculate daily the net income of each Fund as described in each Fund’s currently effective Prospectus and shall advise each Fund and the Transfer Agent daily of the total amounts of such net income and, if instructed in writing by an officer of each Fund to do so, shall advise the Transfer Agent periodically of the division of such net income among its various components. The calculations of the net asset value per share and the

14

daily income of each Fund shall be made at the time or times described from time to time in each Fund’s currently effective Prospectus.

9. Records

          The Custodian shall with respect to each Fund create and maintain all records relating to its activities and obligations under this Contract in such manner as will meet the obligations of each Fund under the Investment Company Act of 1940, with particular attention to Section 31 thereof and Rules 31a-l and 31a-2 thereunder. All such records shall be the property of each Fund and shall at all times during the regular business hours of the Custodian be open for inspection by duly authorized officers, employees or agents of the applicable Fund and employees and agents of the Securities and Exchange Commission. The Custodian shall, at the request of any Fund, supply such Fund with a tabulation of securities owned by such Fund and held by the Custodian and shall, when requested to do so by a Fund and for such compensation as shall be agreed upon between such Fund and the Custodian, include certificate numbers in such tabulations.

10. Opinion of Fund’s Independent Accountant

          The Custodian shall take all reasonable action, as each Fund may from time to time request, to obtain from year to year favorable opinions from each Fund’s independent accountants with respect to its activities hereunder in connection with the preparation of each Fund’s Form N-1A, and Form N-SAR or other annual reports to the Securities and Exchange Commission and with respect to any other requirements of such Commission.

11. Reports to Fund by Independent Public Accountants

          The Custodian shall provide each Fund, at such times as each Fund may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding securities, futures contracts and options on futures contracts, including securities deposited and/or maintained in a Securities System, relating to the services provided by the Custodian under this Contract; such reports, shall be of sufficient scope and in sufficient detail, as may reasonably be required by each Fund to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.

12. Compensation of Custodian

          The Custodian shall be entitled to reasonable compensation for its services and expenses as Custodian, determine in accordance with the fee schedule attached hereto as Schedule B, as amended from time to time as agreed by each Fund and the Custodian.

13. Responsibility of Custodian

          So long as and to the extent that it is in the exercise of reasonable care, the Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Contract and shall be held harmless in acting upon

15

any notice, request, consent, certificate or other instrument reasonably believed by it to be genuine and to be signed by the proper party or parties, including any futures commission merchant acting pursuant to the terms of a three-party futures or options agreement. The Custodian shall be held to the exercise of reasonable care in carrying out the provisions of this Contract, but shall be kept indemnified by and shall be without liability to any Fund for any action taken or omitted by it in good faith without negligence. It shall be entitled to rely on and may act upon advice of counsel (who may be counsel for a Fund) on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice.

          Except as may arise from the Custodian’s own negligence or willful misconduct or the negligence or willful misconduct of a sub-custodian or agent, the Custodian shall be without liability to any Fund for any loss, liability, claim or expense resulting from or caused by; (i) events or circumstances beyond the reasonable control of the Custodian or any sub-custodian or Securities System or any agent or nominee of any of the foregoing, including, without limitation, nationalization or expropriation, imposition of currency controls or restrictions, the interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, acts of war or terrorism, riots, revolutions, work stoppages, natural disasters or other similar events or acts provided Custodian has maintained an adequate disaster recovery plan; (ii) errors by a Fund or its investment advisor in their instructions to the Custodian provided such instructions have been in accordance with this Contract; (iii) the insolvency of or acts or omissions by a Securities System; (iv) any delay or failure of any broker, agent or intermediary, central bank or other commercially prevalent payment or clearing system to deliver to the Custodian’s subcustodian or agent securities purchased or in the remittance or payment made in connection with securities sold; (v) any delay or failure of any company, corporation, or other body in charge or registering or transferring securities in the name of the Custodian, a Fund, the Custodian’s subcustodians, nominees or agents or any consequential losses arising out of such delay or failure to transfer such securities including non-receipt of bonus, dividends and rights and other accretions or benefits; (vi) delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security or Securities System; and (vii) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction.

          Except as expressly provided in Section 3.9, the Custodian shall be liable for the acts or omissions of a foreign banking institution appointed pursuant to the provisions of Article 3 to the same extent as set forth in Article 1 hereof with respect to sub-custodians located in the United States.

          If a Fund requires the Custodian to take any action with respect to securities, which action involves the payment of money or which action may, in the reasonable opinion of the Custodian, result in the Custodian or its nominee assigned to a Fund being liable for the payment of money or incurring liability of some other form, such Fund, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form satisfactory to it.

          If a Fund requires the Custodian, its affiliates, subsidiaries or agents, to advance cash or securities for any purpose (including but not limited to securities settlements, foreign exchange

16

contracts and assumed settlements) or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Contract, except such as may arise from its or its nominee’s own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of such Fund shall be security therefor and should such Fund fail to repay the Custodian promptly, the Custodian shall be entitled to utilize available cash and to dispose of such Fund’s assets to the extent necessary to obtain reimbursement.

          In no event shall the Custodian be liable for indirect, special or consequential damages.

14. Effective Period, Termination and Amendment

          This Contract shall become effective as of its execution, shall continue in full force and effect until terminated as hereinafter provided, may be amended at any time by mutual agreement of the parties hereto and may be terminated by either party by an instrument in writing delivered or mailed, postage prepaid to the other party, such termination to take effect not sooner than thirty (30) days after the date of such delivery or mailing; provided, however that the Custodian shall not with respect to each Fund act under Section 2.10 hereof in the absence of receipt of an initial certificate of the Secretary or an Assistant Secretary that the Board of each Fund has approved the initial use of a particular Securities System by each Fund, as required by Rule 17f-4 under the Investment Company Act of 1940, as amended and that the Custodian shall not with respect to a Fund act under Section 2.11 hereof in the absence of receipt of an initial certificate of the Secretary or an Assistant Secretary that the Board has approved the initial use of the Direct Paper System by each Fund; provided further, however, that a Fund shall not amend or terminate this Contract in contravention of any applicable federal or state regulations, or any provision of its governing documents, and further provided, that a Fund may at any time by action of its Board (i) substitute another bank or trust company for the Custodian by giving notice as described above to the Custodian, or (ii) immediately terminate this Contract in the event of the appointment of a conservator or receiver for the Custodian by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction.

          Upon termination of the Contract, each Fund shall pay to the Custodian such compensation as may be due as of the date of such termination as provided herein.

15. Successor Custodian

          If a successor custodian for a Fund shall be appointed by the Board of such Fund, the Custodian shall, upon termination, and upon receipt of a certified copy of such vote, deliver to such successor custodian at the office of the Custodian, duly endorsed and in the form for transfer, all securities of such Fund then held by it hereunder and shall transfer to an account of the successor custodian all of the securities of such Fund held in a Securities System.

          If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of a certified copy of a vote of the Board of the applicable Fund, deliver at the office of the Custodian and transfer such securities, funds and other properties in accordance with such vote.

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          In the event that no written order designating a successor custodian or certified copy of a vote of the Board shall have been delivered to the Custodian on or before the date when such termination shall become effective, then the Custodian shall have the right to deliver to a bank or trust company, which is a “bank” as defined in the Investment Company Act of 1940, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $25,000,000, all securities, funds and other properties held by the Custodian on behalf of such Fund and all instruments held by the Custodian relative thereto and all other property held by it under this Contract on behalf of such Fund and to transfer to an account of such successor custodian all of the securities of such Fund held in any Securities System. Thereafter, such bank or trust company shall be the successor of the Custodian under this Contract.

          In the event that securities, funds and other properties remain in the possession of the Custodian after the date of termination hereof owing to failure of a Fund to procure the certified copy of the vote referred to above or of the Board to appoint a successor custodian, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian retains possession of such securities, funds and other properties and the provisions of this Contract relating to the duties and obligations of the Custodian shall remain in full force and effect.

16. Interpretive and Additional Provisions

          In connection with the operation of this Contract, the Custodian and each Fund, may from time to time agree on such provisions interpretive of or in addition to the provisions of this Contract as may in their joint opinion be consistent with the general tenor of this Contract. Any such interpretive or additional provisions shall be in a writing signed by both parties and shall be annexed hereto, provided that no such interpretive or additional provisions shall contravene any applicable federal or state regulations or any provision of the governing documents of any Fund. No interpretive or additional provisions made as provided in the preceding sentence shall be deemed to be an amendment of this Contract.

17. Additional Funds

          In the event that any mutual funds in addition to the Funds are hereafter established which desire to have the Custodian render services as custodian under the terms hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to provide such services, such fund shall become a Fund hereunder, subject to the delivery by the new Fund of resolutions authorizing the appointment of the Custodian and such other supporting or related documentation as the Custodian may request. All references to the “Fund” are to each of the Funds listed on Appendix 1 individually, as if this Contract were between each such individual Fund and the Custodian.

18. Massachusetts Law to Apply

          This Contract shall be construed and the provisions thereof interpreted under and in accordance with laws of The Commonwealth of Massachusetts.

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19. Prior Contracts

          This Contract supersedes and terminates, as of the date hereof, all prior contracts between each of the Funds and the Custodian relating to the custody of such Fund’s assets.

20. Shareholder Communications

          Securities and Exchange Commission Rule 14b-2 requires banks which hold securities for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, the Custodian needs each Fund to indicate whether such Fund authorizes the Custodian to provide such Fund’s name, address, and share position to requesting companies whose stock each Fund owns. If a Fund tells the Custodian “no”, the Custodian will not provide this information to requesting companies. If a Fund tells the Custodian “yes” or do not check either “yes” or “no” below, the Custodian is required by the rule to treat such Fund as consenting to disclosure of this information for all securities owned by such Fund or any funds or accounts established by each Fund. For each Fund’s protection, the Rule prohibits the requesting company from using such Fund’s name and address for any purpose other than corporate communications. Please indicate below whether each Fund consents or objects by checking one of the alternatives below.

YES	o	The Custodian is authorized to release the name, address, and share positions of each Fund listed on Appendix 1.
NO	þ	The Custodian is not authorized to release the name, address, and share positions of each Fund listed on Appendix 1.

21. Limitation of Liability.

          The execution of this Contract has been authorized by each Fund’s Board. This Contract is executed on behalf of each Fund or, in the case of a Fund organized as a business trust, the trustees of such Fund as trustees and not individually and the obligations of each Fund under this Contract are not binding upon any of such Fund’s trustees, officers or shareholders individually but are binding only upon the assets and property of such Fund. A Certificate of Trust in respect of each Fund organized as a business trust is on file with the Secretary of the Commonwealth of Massachusetts.

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          IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and behalf by its duly authorized representative and its seal to be hereunder affixed as of the 1st day of May, 1997.

EACH OF THE FUNDS LISTED ON APPENDIX 1
By:	/s/ Michael E. Haylon
STATE STREET BANK AND TRUST COMPANY
By:	/s/ Ronald E. Logue
Executive Vice President

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APPENDIX 1

Fund Names
(as of May 1, 1997)

Phoenix California Tax Exempt Bonds, Inc.

The Phoenix Edge Series Fund

Real Estate Securities Series

Phoenix Income and Growth Fund

Phoenix Multi-Portfolio Fund

Phoenix Diversified Income Portfolio
Phoenix Emerging Markets Bond Portfolio
Phoenix Endowment Equity Portfolio
Phoenix Real Estate Securities Portfolio
Phoenix Mid Cap Portfolio
Phoenix Tax-Exempt Bond Portfolio

Phoenix Multi-Sector Fixed Income Fund, Inc.

Phoenix Multi-Sector Short Term Bond Fund

Phoenix Series Fund

Phoenix Aggressive Growth Fund Series
Phoenix Balanced Fund Series
Phoenix Convertible Fund Series
Phoenix Growth Fund Series
Phoenix High Yield Fund Series
Phoenix Money Market Series
Phoenix U.S. Government Securities Fund Series

Phoenix Strategic Allocation Fund, Inc.

Phoenix Strategic Equity Series Fund

Phoenix Equity Opportunities Fund
Phoenix Micro Cap Fund
Phoenix Small Cap Fund
Phoenix Strategic Theme Fund

Phoenix Duff & Phelps Institutional Mutual Funds

Enhanced Reserves Portfolio
Real Estate Equity Securities Portfolio

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Schedule A

     The following foreign banking institutions and foreign securities depositories have been approved by the Board of each Fund for use as sub-custodians for the Fund’s securities and other assets:

(Insert banks and securities depositories)

Certified:

Fund’s Authorized Officer

Date:

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AMENDMENT TO MASTER CUSTODIAN CONTRACT

     Amendment dated February 10, 2000, to the custody contract, dated May 1, 1997, as amended, by and between State Street Bank and Trust Company (the “Custodian”) and Each of the Parties listed on Appendix 1, on behalf of each of its Portfolios, (each a “Fund”) (the “Custodian Contract”).

     In consideration of the promises and covenants contained herein, the Custodian and the Fund hereby agree to amend and replace Section 5 of the Custodian Contract as follows:

5. Proper Instructions

Proper Instructions as used throughout this Contract means a writing signed or initialed by one or more person or persons as the Board of Trustees shall have from time to time authorized. Each such writing shall set forth the specific transaction or type of transaction involved, including a specific statement of the purpose for which such action is requested. Oral instructions will be considered Proper Instructions if the Custodian reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. Each Fund shall cause all oral instructions to be confirmed in writing. Proper Instructions may include communications effected directly between electro-mechanical or electronic devices; provided that the Fund has followed any security procedures agreed to from time to time by Fund and the Custodian, including, but not limited to, the security procedures selected by the Fund in the Funds Transfer Agreement. For purposes of this Section, Proper Instructions shall include instructions received by the Custodian pursuant to any multi-party agreement which requires a segregated asset account in accordance with Section 2.12.

     IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and on its behalf by its duly authorized representative as of the 10^th day of February, 2000.

EACH OF THE FUNDS LISTED ON APPENDIX 1
By:	/s/ Nancy G. Curtiss
Its:	Treasurer
STATE STREET BANK AND TRUST COMPANY
By:	/s/ Ronald E. Logue
Its:	Vice Chairman

C-1

AMENDMENT TO MASTER CUSTODIAN CONTRACT

     This Amendment to the Master Custodian Contract is made effective as of July 2, 2001 by and between each party listed on Appendix 1 affixed to the Master Custodian Contract (as amended from time to time, the “Fund”) and State Street Bank and Trust Company (the “Custodian” or “Foreign Custody Manager”). Capitalized terms used in this Amendment without definition shall have the respective meanings given to such terms in the Master Custodian Contract referred to below.

     WHEREAS, the Fund and the Custodian entered into a Master Custodian Contract dated as of May 1, 1997 (as amended and in effect from time to time, the “Contract”);

     WHEREAS, the Fund is authorized to issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets, and the Fund has made each such series subject to the Contract (each such series, together with all other series subsequently established by the Fund and made subject to the Contract in accordance with the terms thereof, shall be referred to as a “Portfolio”, and, collectively, the “Portfolios”); and

     WHEREAS, the Fund and the Custodian desire to amend certain provisions of the Contract to reflect revisions to Rule 17f-5 (“Rule 17f-5”) and the adoption of Rule 17f-7 (“Rule 17f-7”) promulgated under the Investment Company Act of 1940, as amended (the “1940 Act”).

     NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter contained, the parties hereby agree to amend the Contract, pursuant to the terms thereof, as follows:

I.	Articles 3 through 21 of the Contract are hereby renumbered, as of the effective date of this Amendment, as
	Articles 4 through 22, respectively.
II.	New Article 3 is hereby added, as of the effective date of this Amendment, as set forth below.

3. Provisions Relating to Rules 17f-5 and 17f-7

3.1. Definitions. Capitalized terms in this Amendment shall have the following meanings:

“Country Risk” means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country including, but not limited to, such country’s political environment, economic and financial infrastructure (including any Eligible Securities Depository operating in the country), prevailing or developing custody and settlement practices, and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country.

“Eligible Foreign Custodian” has the meaning set forth in section (a)(1) of Rule 17f-5.

“Eligible Securities Depository” has the meaning set forth in section (b)(1) of Rule 17f-7.

“Foreign Assets” means any of the Portfolios’ investments (including foreign currencies) for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect the Portfolios’ transactions in such investments.

“Foreign Custody Manager” has the meaning set forth in section (a)(3) of Rule 17f-5.

3.2. The Custodian as Foreign Custody Manager.

     3.2.1 Delegation to the Custodian as Foreign Custody Manager. The Fund, by resolution adopted by its Board of Trustees or its Board of Directors, as applicable (the “Board”), hereby delegates to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 3.2 with respect to Foreign Assets of

the Portfolios held outside the United States, and the Custodian hereby accepts such delegation as Foreign Custody Manager with respect to the Portfolios.

     3.2.2 Countries Covered. The Foreign Custody Manager shall be responsible for performing the delegated responsibilities defined below only with respect to the countries and custody arrangements for each such country listed on Schedule A to this Contract, which list of countries may be amended from time to time by the Fund with the agreement of the Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign Custodians selected by the Foreign Custody Manager to maintain the assets of the Portfolios, which list of Eligible Foreign Custodians may be amended from time to time in the sole discretion of the Foreign Custody Manager. The Foreign Custody Manager will provide amended versions of Schedule A in accordance with Section 3.2.5 hereof.

Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account or to place or maintain Foreign Assets in a country listed on Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of the applicable account opening requirements for such country, the Foreign Custody Manager shall be deemed to have been delegated by the Board on behalf of the Portfolios responsibility as Foreign Custody Manager with respect to that country and to have accepted such delegation. Execution of this Amendment by the Fund shall be deemed to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in each country listed on Schedule A in which the Custodian has previously placed or currently maintains Foreign Assets pursuant to the terms of the Contract. Following the receipt of Proper Instructions directing the Foreign Custody Manager to close the account of a Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody Manager in a designated country, the delegation by the Board on behalf of the Portfolios to the Custodian as Foreign Custody Manager for that country shall be deemed to have been withdrawn and the Custodian shall immediately cease to be the Foreign Custody Manager of the Portfolios with respect to that country.

The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect to a designated country upon written notice to the Fund. Thirty days (or such longer period to which the parties agree in writing) after receipt of any such notice by the Fund, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund with respect to the country as to which the Custodian’s acceptance of delegation is withdrawn.

     3.2.3 Scope of Delegated Responsibilities:

          (a) Selection of Eligible Foreign Custodians. Subject to the provisions of this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign Assets in the care of the Eligible Foreign Custodian selected by the Foreign Custody Manager in each country listed on Schedule A, as amended from time to time. In performing its delegated responsibilities as Foreign Custody Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in relevant market, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(l).

          (b) Contracts With Eligible Foreign Custodians. The Foreign Custody Manager shall determine that the contract governing the foreign custody arrangements with each Eligible Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).

          (c) Monitoring. In each case in which the Foreign Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian selected by the Foreign Custody Manager, the Foreign Custody Manager shall establish a system to monitor (i) the appropriateness of maintaining the Foreign Assets with such Eligible Foreign Custodian and (ii) the performance of the contract governing the custody arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian. In the event the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian it has selected are no longer appropriate, the Foreign Custody Manager shall notify the Board in accordance with Section 3.2.5 hereunder.

     3.2.4 Guidelines for the Exercise of Delegated Authority. For purposes of this Section 3.2, the Board shall be deemed to have considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for which the Custodian is serving as Foreign Custody Manager of the Portfolios, provided that this shall not affect the standard of care set forth in Section 3.2.6.

     3.2.5 Reporting Requirements. The Foreign Custody Manager shall report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the placement of such Foreign Assets with another Eligible Foreign Custodian by providing to the Board an amended Schedule A at the end of the calendar quarter in which an amendment to such Schedule has occurred. The Foreign Custody Manager shall make written reports notifying the Board of any other material change in the foreign custody arrangements of the Portfolios described in this Section 3.2 after the occurrence of the material change.

     3.2.6 Standard of Care as Foreign Custody Manager of a Portfolio. In performing the responsibilities delegated to it, the Foreign Custody Manager agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of Foreign Assets of management investment companies registered under the 1940 Act would exercise.

     3.2.7 Representations with Respect to Rule 17f-5. The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as defined in section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the Board has determined that it is reasonable for the Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Contract to the Custodian as the Foreign Custody Manager of the Portfolios.

     3.2.8 Effective Date and Termination of the Custodian as Foreign Custody Manager. The Board’s delegation to the Custodian as Foreign Custody Manager of the Portfolios shall be effective as of the date hereof and shall remain in effect until terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective thirty (30) days after receipt by the non-terminating party of such notice. The provisions of Section 3.2.2 hereof shall govern the delegation to and termination of the Custodian as Foreign Custody Manager of the Portfolios with respect to designated countries.

3.3 Eligible Securities Depositories.

     3.3.1 Analysis and Monitoring. The Custodian shall (a) provide the Fund (or its duly-authorized investment manager or investment adviser) with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B hereto in accordance with section (a)(l)(i)(A) of Rule 17f-7, and (b) monitor such risks on a continuing basis, and promptly notify the Fund (or its duly-authorized investment manager or investment adviser) of any material change in such risks, in accordance with section (a)(l)(i)(B) of Rule 17f-7.

     3.3.2 Standard of Care. The Custodian agrees to exercise reasonable care, prudence and diligence in performing the duties set forth in Section 3.3.1.

III. Except as specifically superseded or modified herein, the terms and provisions of the Contract shall continue to apply with full force and effect. In the event of any conflict between the terms of the Contract prior to this Amendment and this Amendment, the terms of this Amendment shall prevail. If the Custodian is delegated the responsibilities of Foreign Custody Manager pursuant to the terms of Article 3 hereof, in the event of any conflict between the provisions of Articles 3 and 4, the provisions of Article 3 shall prevail.

     IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed in its name and behalf by its duly authorized representative as of the date first above written.

Witnessed By:	STATE STREET BANK and TRUST COMPANY
/s/ Raelene S. LaPlante	By:	/s/ Joseph L. Hooley
Raelene S. LaPlante	Name:	Joseph L. Hooley
V.P. & Senior Counsel	Title:	Executive Vice President
Fund Signature Witnessed By:	Each of the Funds listed on Appendix 1:
/s/ Pamela S. Sinofsky	By:	/s/ Nancy J. Curtiss
Pamela S. Sinofsky	Name:	Nancy J. Curtiss
Assistant Secretary	Title:	Treasurer

AMENDMENT TO MASTER CUSTODIAN CONTRACT

     This Amendment to the Master Custodian Contract is made effective as of May 10, 2002 by and between each party listed on Appendix 1 affixed to the Master Custodian Contract (as amended from time to time, the “Fund”) and State Street Bank and Trust Company (the “Custodian” or “Foreign Custody Manager”). Capitalized terms used in this Amendment without definition shall have the respective meanings given to such terms in the Master Custodian Contract referred to below.

     WHEREAS, the Fund and the Custodian entered into a Master Custodian Contract dated as of May 1, 1997 (as amended and in effect from time to time, the “Contract”);

     WHEREAS, the Fund is authorized to issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets, and the Fund has made each such series subject to the Contract (each such series, together with all other series subsequently established by the Fund and made subject to the Contract in accordance with the terms thereof, shall be referred to as a “Portfolio”, and, collectively, the “Portfolios”); and

     WHEREAS, the Fund and the Custodian desire to amend and restate certain provisions of the Contract relating to the custody of assets of each of the Portfolios held outside of the United States.

     NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter contained, the parties hereby agree to amend the Contract, pursuant to the terms thereof, as follows:

I.	Articles 4 through 21 of the Contract are hereby renumbered, as of the effective date of this Amendment, as Articles 5 through 22, respectively.
II.	New Article 4 of the Contract is hereby added, as of the effective date of this Amendment, as set forth below.

4. Duties of the Custodian with Respect to Property of the Portfolios Held Outside the United States.

4.1 Definitions. Capitalized terms in this Article 4 shall have the following meanings:

“Foreign Securities System” means an Eligible Securities Depository listed on Schedule B.

“Foreign Sub-Custodian” means a foreign banking institution serving as an Eligible Foreign Custodian.

4.2. Holding Securities. The Custodian shall identify on its books as belonging to the Portfolios the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities for all of its customers, including the Portfolios, with any Foreign Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers, provided however, that (i) the records of the Custodian with respect to foreign securities of the Portfolios which are maintained in such account shall identify those securities as belonging to the Portfolios and (ii), to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

4.3. Foreign Securities Systems. Foreign securities shall be maintained in a Foreign Securities System in a designated country through arrangements implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in such country.

4.4. Transactions in Foreign Custody Account.

     4.4.1. Delivery of Foreign Assets. The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of the Portfolios held by the Custodian or such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

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(i)	upon the sale of such foreign securities for the Portfolio in accordance with commercially reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System;
(ii)	in connection with any repurchase agreement related to foreign securities;
(iii)	to the depository agent in connection with tender or other similar offers for foreign securities of the Portfolios;
(iv)	to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;
(v)	to the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;
(vi)	to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case the Foreign Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Foreign Sub-Custodian’s own negligence or willful misconduct;
(vii)	for exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;
(viii)	in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;
(ix)	for delivery as security in connection with any borrowing by the Portfolios requiring a pledge of assets by the Portfolios;
(x)	in connection with trading in options and futures contracts, including delivery as original margin and variation margin;
(xi)	in connection with the lending of foreign securities; and
(xii)	for any other purpose, but only upon receipt of Proper Instructions specifying the foreign securities to be delivered and naming the person or persons to whom delivery of such securities shall be made.

     4.4.2. Payment of Portfolio Monies. Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of a Portfolio in the following cases only:

(i) upon the purchase of foreign securities for the Portfolio, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System;

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(ii)	in connection with the conversion, exchange or surrender of foreign securities of the Portfolio;
(iii)	for the payment of any expense or liability of the Portfolio, including but not limited to the following payments: interest, taxes, investment advisory fees, transfer agency fees, fees under this Contract, legal fees, accounting fees, and other operating expenses;
(iv)	for the purchase or sale of foreign exchange or foreign exchange contracts for the Portfolio, including transactions executed with or through the Custodian or its Foreign Sub-Custodians;
(v)	in connection with trading in options and futures contracts, including delivery as original margin and variation margin;
(vi)	for payment of part or all of the dividends received in respect of securities sold short;
(vii)	in connection with the borrowing or lending of foreign securities; and
(viii)	for any other purpose, but only upon receipt of Proper Instructions specifying the amount of such payment and naming the person or persons to whom such payment is to be made.

     4.4.3. Market Conditions. Notwithstanding any provision of this Contract to the contrary, settlement and payment for Foreign Assets received for the account of the Portfolios and delivery of Foreign Assets maintained for the account of the Portfolios may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer.

The Custodian shall provide to the Board the information with respect to custody and settlement practices in countries in which the Custodian employs a Foreign Sub-Custodian described on Schedule C hereto at the time or times set forth on such Schedule. The Custodian may revise Schedule C from time to time, provided that no such revision shall result in the Board being provided with substantively less information than had been previously provided hereunder.

4.5. Registration of Foreign Securities. The foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer securities) shall be registered in the name of the applicable Portfolio or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and the Fund on behalf of such Portfolio agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities, in the absence of the nominee’s negligence and willful misconduct. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a Portfolio under the terms of this Contract unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice.

4.6 Bank Accounts. The Custodian shall identify on its books as belonging to the Fund cash (including cash denominated in foreign currencies) deposited with the Custodian. Where the Custodian is unable to maintain, or market practice does not facilitate the maintenance of, cash on the books of the Custodian, a bank account or bank accounts shall be opened and maintained outside the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All accounts referred to in this Section shall be subject only to draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian) acting pursuant to the terms of this Agreement to hold cash received by or from or for the account of the Portfolio. Cash maintained on the books of the Custodian (including its branches, subsidiaries and affiliates), regardless of currency denomination, is maintained in bank accounts established under, and subject to the laws of, The Commonwealth of Massachusetts.

4.7. Collection of Income. The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which the Portfolios shall be entitled and shall credit such income, as collected, to the applicable Portfolio. In the event that extraordinary measures are required to collect such income, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures.

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4.8 Shareholder Rights. With respect to the foreign securities held pursuant to this Article 4, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. The Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Fund to exercise shareholder rights.

4.9. Communications Relating to Foreign Securities. The Custodian shall transmit promptly to the Fund written information with respect to materials received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Portfolios (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith). With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund written information with respect to materials so received by the Custodian from issuers of the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer. Absent negligence and willful misconduct on the part of the Custodian, the Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with foreign securities or other property of the Portfolios at any time held by it unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual possession of such foreign securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least three business days prior to the date on which the Custodian is to take action to exercise such right or power.

4.10. Liability of Foreign Sub-Custodians.

Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the extent possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties, and to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian’s performance of such obligations. At the Fund’s election, the Portfolios shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Portfolios have not been made whole for any such loss, damage, cost, expense, liability or claim.

4.11. Tax Law.

The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on the Fund, the Portfolios or the Custodian as custodian of the Portfolios by the tax law of the United States or of any state or political subdivision thereof. It shall be the responsibility of the Fund to notify the Custodian of the obligations imposed on the Fund with respect to the Portfolios or the Custodian as custodian of the Portfolios by the tax law of countries other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist the Fund with respect to any claim for exemption or refund under the tax law of countries for which the Fund has provided such information.

4.12. Liability of Custodian.

Except as may arise from the Custodian’s own negligence or willful misconduct or the negligence or willful misconduct of a Sub-Custodian, the Custodian shall be without liability to the Fund for any loss, liability, claim or expense resulting from or caused by anything which is part of Country Risk.

The Custodian shall be liable for the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth with respect to sub-custodians generally in the Contract and, regardless of whether assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign Securities System, the Custodian shall not be liable for any loss, damage, cost, expense, liability or claim resulting from nationalization, expropriation, currency restrictions, or acts of war or terrorism, or any other loss where the Sub-Custodian has otherwise acted with reasonable care.

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III. Except as specifically superseded or modified herein, the terms and provisions of the Contract shall continue to apply with full force and effect. In the event of any conflict between the terms of the Contract prior to this Amendment and this Amendment, the terms of this Amendment shall prevail. If the Custodian is delegated the responsibilities of Foreign Custody Manager pursuant to the terms of Article 3, in the event of any conflict between the provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall prevail.

     IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed in its name and behalf by its duly authorized representative as of the date first above written.

Witnessed By:	STATE STREET BANK and TRUST COMPANY
/s/ Jean Carr	By:	/s/ Joseph L. Hooley
Jean Carr	Name:	Joseph L. Hooley
Counsel	Title:	Executive Vice President
Fund Signature Witnessed By:	Each of the Funds listed on Appendix 1:
/s/ Noreen M. O’Connell	By:	/s/ Richard J. Wirth
Noreen M. O’Connell	Name:	Richard J. Wirth
Paralegal IV	Title:	Secretary

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SCHEDULE C
MARKET INFORMATION

Publication/Type of Information	Brief Description
(scheduled frequency)
The Guide to Custody in World Markets (hardcopy annually and regular website updates)	An overview of settlement and safekeeping procedures, custody practices and foreign investor considerations for the markets in which State Street offers custodial services.
Global Custody Network Review (annually)	Information relating to Foreign Sub-Custodians in State Street’s Global Custody Network. The Review stands as an integral part of the materials that State Street provides to its U.S. mutual fund clients to assist them in complying with SEC Rule 17f-5. The Review also gives insight into State Street’s market expansion and Foreign Sub-Custodian selection processes, as well as the procedures and controls used to monitor the financial condition and performance of our Foreign Sub-Custodian banks.
Securities Depository Review (annually)	Custody risk analyses of the Foreign Securities Depositories presently operating in Network markets. This publication is an integral part of the materials that State Street provides to its U.S. mutual fund clients to meet informational obligations created by SEC Rule 17f-7.
Global Legal Survey (annually)	With respect to each market in which State Street offers custodial services, opinions relating to whether local law restricts (i) access of a fund’s independent public accountants to books and records of a Foreign Sub-Custodian or Foreign Securities System, (ii) a fund’s ability to recover in the event of bankruptcy or insolvency of a Foreign Sub-Custodian or Foreign Securities System, (iii) a fund’s ability to recover in the event of a loss by a Foreign Sub-Custodian or Foreign Securities System, and (iv) the ability of a foreign investor to convert cash and cash equivalents to U.S. dollars
Subcustodian Agreements (annually)	Copies of the contracts that State Street has entered into with each Foreign Sub-Custodian that maintains U.S. mutual fund assets in the markets in which State Street offers custodial services.
Global Market Bulletin (daily or as necessary)	Information on changing settlement and custody conditions in markets where State Street offers custodial services. Includes changes in market and tax regulations, depository developments, dematerialization information, as well as other market changes that may impact State Street’s clients.
Foreign Custody Advisories (as necessary)	For those markets where State Street offers custodial services that exhibit special risks or infrastructures impacting custody, State Street issues market advisories to highlight those unique market factors which might impact our ability to offer recognized custody service levels.
Material Change Notices (presently on a quarterly basis or as otherwise necessary)	Informational letters and accompanying materials confirming State Street’s foreign custody arrangements, including a summary of material changes with Foreign Sub-Custodians that have occurred during the previous quarter. The notices also identify any material changes in the custodial risks associated with maintaining assets with Foreign Securities Depositories.

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Phoenix Portfolios
The Zweig Fund, Inc.
The Zweig Total Return Fund, Inc.

State Street Bank and Trust Company

Lafayette Corporate Center

Legal Division LCC/2S

2 Avenue de Lafayette

Boston, MA 02111

Attention: Jean S. Carr

Re: Phoenix Portfolios, on behalf of its series Phoenix Market Neutral Fund
The Zweig Fund, Inc.
The Zweig Total Return Fund, Inc.

Ladies and Gentlemen:

This is to advise you that we intend to move custody for Phoenix Market Neutral Fund, a series of Phoenix Portfolios, The Zweig Fund, Inc., and The Zweig Total Return Fund, Inc. (each, a “Fund”), from Bank of New York to State Street Bank and Trust Company, per instructions from the Funds, effective as of October 21, 2005. In accordance with the Additional Funds provision of Section 17 of the Custodian Contract, dated as of May 1, 1997, between each of the parties listed on Appendix 1 and State Street Bank and Trust Company, by this letter the Funds below hereby request that you act as Custodian for the Funds under the terms of the aforementioned contract. Attached is an amended Appendix 1 to the Custodian Contract.

Please indicate your acceptance of the foregoing by executing two copies of this letter agreement, returning one to the Funds and retaining one copy for your records.

Sincerely, Phoenix Portfolios, on behalf of its series Phoenix Market Neutral Fund
By:	/s/ Nancy G. Curtiss
	Nancy G. Curtiss
	Chief Financial Officer and Treasurer

The Zweig Fund, Inc. The Zweig Total Return Fund, Inc.
By:	/s/ Nancy G. Curtiss
	Nancy G. Curtiss
	Treasurer

Agreed and Accepted: STATE STREET BANK AND TRUST COMPANY
By:	/s/ Joseph L. Hooley
Name:		Joseph L. Hooley
Title:		Executive Vice President	Date: Oct 21, 2005

Appendix 1

FUND NAMES
(as of October 1, 2005)

Phoenix Funds

Phoenix-Engemann Funds:
Phoenix All-Cap Growth Fund
Phoenix Balanced Return Fund
Phoenix Nifty Fifty Fund
Phoenix Small-Cap Growth Fund

Phoenix Equity Trust:

Phoenix Mid-Cap Value Fund

Phoenix Pathfinder Fund
Phoenix Total Value Fund

Phoenix Relative Value Fund

Phoenix Equity Series Fund:

Phoenix Growth & Income Fund

Phoenix CA Tax-Exempt Bond Fund

Phoenix Institutional Mutual Funds:

Phoenix Institutional Bond Fund

Phoenix Low-Duration Core Plus Bond Fund

Phoenix Investment Series Fund:

Phoenix Global Utilities Fund

Phoenix Income & Growth Fund

Phoenix Investment Trust 97:

Phoenix Small-Cap Value Fund

Phoenix Value Equity Fund

Phoenix-Kayne Funds:

Phoenix CA Intermediate Tax-Free Bond Fund

Phoenix Intermediate Bond Fund
Phoenix Overseas Fund

Phoenix Rising Dividends Fund
Phoenix Small-Mid Cap Fund

Phoenix Multi-Portfolio Fund:

Phoenix Emerging Markets Bond Fund

Phoenix Real Estate Securities Fund

Phoenix Tax-Exempt Bond Fund

Phoenix Multi-Series Trust:

Phoenix Multi-Sector Fixed Income Fund

Phoenix Multi-Sector Short Term Bond Fund

Phoenix High Yield Securities Fund

Phoenix PHOLIOs^(sm):

Phoenix Conservative Income PHOLIO^(sm)

Phoenix Wealth Accumulator PHOLIO^(sm)

Phoenix Wealth Builder PHOLIO^(sm)

Phoenix Wealth Guardian PHOLIO^(sm)

Phoenix Wealth Preserver PHOLIO^(sm)

Phoenix Portfolios:

Phoenix Market Neutral Fund

Phoenix-Seneca Funds:

Phoenix Bond Fund

Phoenix Earnings Driven Growth Fund

Phoenix Equity Income Fund

Phoenix Series Fund:

Phoenix Balanced Fund

Phoenix Capital Growth Fund

Phoenix Core Bond Fund

Phoenix High Yield Fund

Phoenix Mid-Cap Growth Fund

Phoenix Money Market Fund

Phoenix Strategic Equity Series Fund:

Phoenix Dynamic Growth Fund

Phoenix Fundamental Growth Fund

Phoenix Large-Cap Growth Fund

Phoenix Strategic Growth Fund

Zweig Fund, Inc.

Zweig Total Return Fund, Inc.

The Phoenix Edge Series Fund

The Phoenix Edge Series Fund:

Phoenix-AIM Growth Series
Phoenix-Alger Small Cap Growth Series

Phoenix-Alliance/Bernstein Enhanced Index Series
Phoenix-Duff & Phelps Real Estate Securities Series 
Phoenix-Engemann Capital Growth Series
Phoenix-Engemann Growth and Income Series
Phoenix-Engemann Small-Cap Growth Series
Phoenix-Engemann Strategic Allocation Series
Phoenix-Engemann Value Equity Series
Phoenix-Goodwin Money Market Series
Phoenix-Goodwin Multi-Sector Fixed Income Series
Phoenix-Goodwin Multi-Sector Short Term Bond Series
Phoenix-Kayne Rising Dividends Series
Phoenix-Kayne Small-Cap Quality Value Series
Phoenix-Northern Dow 30 Series
Phoenix-Northern Nasdaq-100 Index ® Series
Phoenix-Sanford Bernstein Mid-Cap Value Series
Phoenix-Sanford Bernstein Small-Cap Value Series
Phoenix-Seneca Mid-Cap Growth Series
Phoenix-Seneca Strategic Theme Series

EX-99.K.1

Exhibit K(1)

THE ZWEIG TOTAL RETURN FUND, INC.
ADMINISTRATION AGREEMENT

     ADMINISTRATION AGREEMENT, dated as of the 1st day of March, 1999 between THE ZWEIG TOTAL RETURN FUND, INC., a Maryland corporation (the “Fund”), and ZWEIG/GLASER ADVISERS, a New York general partnership (the “Administrator”).

W I T N E S S E T H

     WHEREAS, the Fund is a closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”); and

     WHEREAS, the Fund desires to avail itself of the facilities available to the Administrator with respect to the administration of the Fund’s day to day corporate affairs, and the Administrator is willing to furnish such administrative services to or for the benefit of the Fund on the terms and conditions hereinafter set forth;

     NOW, THEREFORE, the parties hereby agree as follows:

     1. The Fund appoints the Administrator to administer its corporate affairs, subject to the overall supervision of the Board of Directors of the Fund, for the period and on the terms set forth in this Agreement. The Administrator accepts such appointment and agrees during such period to render the services herein described and to assume the obligations set forth herein, for the compensation herein provided.

     2. (a) Subject to the supervision of the Board of Directors of the Fund, the Administrator shall provide office facilities and personnel adequate to perform the following services at such office facilities for the Fund:

     (i) determine the net asset value per share of the Fund’s Common Stock ($.001 par value) (the “Shares”) as of the close of trading on the New York Stock Exchange on each day the exchange is open for trading, and make such net asset value available for purposes of publication in accordance with the Fund’s policy, as adopted from time to time by the Fund’s Board of Directors;

     (ii) maintain the books and records of the Fund required under Rule 31a-l(b)(2) under the 1940 Act;

     (iii) assist in preparing and providing to the Fund’s accountants information necessary for such accountants to prepare and file the Fund’s U.S. federal, state and local income tax returns;

     (iv) assist in preparing the financial information for the Fund’s proxy statements and quarterly and annual reports to shareholders;

     (v) assist in preparing and providing to the Fund and its counsel information necessary for the preparation of the Fund’s reports to the Securities and Exchange Commission;

     (vi) respond to or refer to the Fund’s officers or transfer agent shareholder inquiries relating to the Fund; and

     (vii) authorize and permit any of the Administrator’s directors, officers and employees who may be elected as directors or officers of the Fund to serve in the capacities in which they are elected.

The performance of services described in clauses (i), (ii), (iii), (iv) and (v) is subject to the Fund’s investment adviser furnishing, on behalf of the Fund, the Administrator with information on a daily basis with respect to the Fund’s portfolio transactions and such other information as the Administrator may reasonably request. All services to be furnished by the Administrator under this Agreement may be furnished through any medium selected by the Administrator.

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     (b) In connection with services rendered by the Administrator under this Agreement, the Administrator will bear all of the following expenses:

     (i) the salaries and expenses of all personnel of the Administrator, and

     (ii) all of the Administrator’s own office expenses incurred by the Administrator in connection with the services to be provided to the Fund and set forth in paragraph 2(a) hereof.

     The Fund assumes and will pay all expenses other than those assumed by the Administrator pursuant to this Agreement, including but not limited to the expenses described below:

     (a) the fees and expenses of the Fund’s investment adviser or expenses otherwise incurred by the Fund in connection with the management of the Fund’s assets;

     (b) the fees and expenses of Fund directors who are not affiliated persons of the Administrator or the Fund’s investment adviser (including out-of-pocket expenses received for attendance of board of directors’ meetings);

     (c) the fees and expenses of the Fund’s custodian arising under the custody agreement or any other agreement between the Fund and its custodian;

     (d) the fees and expenses of the Fund’s transfer and dividend disbursing agent and registrar (which may be the custodian) arising under the transfer agency agreement or any other agreement with the Fund;

     (e) the charges and expenses of legal counsel and independent accountants for the Fund;

     (f) brokers’ commissions and any issue or transfer taxes chargeable to the Fund in connection with its securities transactions;

     (g) all taxes and corporate fees payable by the Fund to federal, state or other governmental agencies;

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     (h) the fees of any trade association of which the Fund may be a member;

     (i) the cost of stock certificates representing, and non-negotiable share deposit receipts evidencing, the Fund’s Shares,

     (j) all of the fees and expenses involved in registering and maintaining registrations of the Fund and of its Shares with the Securities and Exchange Commission, and to the extent applicable under state securities laws, including the preparation and printing of the Fund’s registration statements and prospectuses for filing under federal and state securities laws for such purposes;

     (k) the fees and expenses involved in obtaining and maintaining any stock exchange listings of the Fund’s Shares;

     (l) allocable communications expenses with respect to investor services (including, without limitation, telephone, stationery and postage) and all expenses of stockholders’ and directors’ meetings and of preparing, printing and mailing reports to stockholders in the amount necessary for distribution to the Fund’s stockholders; and

     (m) insurance premiums and litigation, indemnification and other expenses not expressly provided for herein or in the Fund’s investment advisory agreement.

     3. As full compensation for the services performed and the facilities furnished by the Administrator, the Fund shall pay the Administrator a fee at the annual rate of 0.13% of the average daily net assets of the Fund during the previous month. This fee will be computed daily and paid monthly.

     If in any fiscal year the aggregate expenses of the Fund (including fees pursuant to this Agreement and the Fund’s investment advisory agreement, but excluding interest, taxes, brokerage and, with the prior written consent of the necessary state securities

4

commissions, extraordinary expenses) exceed the expense limitations of any state having jurisdiction over the Fund, the Fund may deduct from the fees to be paid hereunder, or the Administrator will bear, to the extent required by state law, that portion of such excess which bears the same relation to the total of such excess as the Administrator’s fee hereunder bears to the total fees otherwise payable for the fiscal year by the Fund, pursuant to this Agreement and the investment advisory agreement between the Fund and its investment adviser. The Administrator’s reimbursement obligation under this paragraph 3 is limited by the amount of fees received by it under this Agreement. Such deduction or payment, if any, will be estimated weekly, and reconciled and effected or paid, as the case may be, on a monthly basis.

     4. The Administrator assumes no responsibility under this Agreement other than to render the services called for hereunder, and specifically assumes no responsibilities for investment advice or the investment or reinvestment of the Fund’s assets, or any other responsibilities not specifically assumed herein.

     5. The Administrator shall not be liable for any error of judgment or for any loss suffered by the Fund in connection with any matter to which this Agreement relates, except a loss resulting from its own willful misfeasance, bad faith or gross negligence in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement.

     6. The Administrator and the Fund each hereby represent and warrant, but only as to themselves, that each has all requisite authority to enter into, execute, deliver and perform its obligations under, this Agreement, and that this Agreement is legal, valid and binding, and enforceable in accordance with its terms.

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     7. The Fund hereby covenants and agrees that it will:

     (a) promptly advise the Administrator of all portfolio transactions made for the Fund on a daily basis;

     (b) provide the Administrator with any information it requires to furnish services pursuant to this Agreement, in a timely fashion, and will provide any other information, in a timely fashion, as the Administrator may reasonably request; and

     (c) immediately notify the Administrator in the event of any material change in the condition, operation or activities of the Fund.

     8. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of the Administrator who may also be a director, officer or employee of the Fund to engage in any other business or to devote his time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the right of the Administrator to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.

     9. This Agreement shall continue in effect for a period of two years from the date hereof and thereafter shall continue in effect only so long as such continuance is specifically approved at least annually by the Board of Directors (including a majority of the directors who are not “interested persons” (as defined in the 1940 Act)) of the Fund or the Administrator; provided, however, that this Agreement may be terminated by the Fund at any time, without the payment of any penalty, by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities (as such term is defined in the 1940 Act) of the Fund and may be terminated by the Administrator at any time, without the payment of any penalty, in either case on not more than 90 days’ nor less than 60 days’ written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as such term is defined in the 1940 Act).

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     10. During the term of this Agreement, the Fund shall furnish the Administrator, at its office at 900 Third Avenue, New York, New York, 10022, or such other place as the Administrator may designate in writing, with all prospectuses, proxy statements, reports to stockholders, sales literature, or other material prepared for distribution to stockholders of the Fund or the public, that refer in any way to the Administrator, prior to the public dissemination or use thereof, and shall not use such material if the Administrator reasonably objects in writing within five business days after the receipt thereof or at such other time as may be mutually agreed upon. In the event of termination of this Agreement, the Fund will continue to furnish to the Administrator copies of any of the above-mentioned materials which refer in any way to the Administrator. The Fund shall furnish or otherwise make available to the Administrator such other information relating to the business affairs of the Fund as the Administrator at any time, and from time to time, reasonably requests in order to discharge its obligations hereunder.

     11. This Agreement may be amended or modified, but only by mutual written consent.

     12. It is understood that the Administrator is an independent contractor and not an employee or agent of the Fund and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund.

     13. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by certified or registered mail, postage prepaid, (a) to the Administrator at 900 Third Avenue, New York, New York 10022, Attention: Fund Services; or (b) to the Fund at 900 Third Avenue, New York, New

7

York 10022, Attention: President with a copy to Robert E. Smith, Esq. of Rosenman & Colin LLP, 575 Madison Avenue, New York, New York 10022.

     14. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangement with respect to the subject matter hereof.

     15. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.

THE ZWEIG TOTAL RETURN FUND, INC.
By:	/s/
	President
ZWEIG/GLASER ADVISERS
By:	/s/
	President

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EX-99.K.2

Exhibit K(2)

ASSIGNMENT

     For valuable consideration, the receipt of which is hereby acknowledged, Zweig/Glaser Advisers, LLC (“ZGA”) hereby assigns, transfers and delivers to Phoenix Equity Planning Corporation (“PEPCO”) all of ZGA’s rights and obligations under the administration agreement, dated as of March 1,1999, between ZGA and The Zweig Total Return Fund, Inc., such assignment to be effective as of October 31,1999.

     IN WITNESS WHEREOF, the undersigned has duly executed this Assignment.

ZWEIG/GLAZER ADVISERS, LLC

By: PHOENIX INVESTMENT PARTNERS, LTD, its sole member

 /s/ Nancy J. Engberg

Nancy J. Engberg

Vice President and Counsel

EX-99.K.3

Exhibit K(3)

March 1, 2006

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

     Re: Administration Agreement

Ladies and Gentlemen:

     This will confirm that effective as of March 1, 2006, the first sentence of Section 3 of the Administration Agreement between The Zweig Total Return Fund, Inc. and Phoenix Equity Planning Corp. is amended and restated to read as follows:

     “3. As full compensation for the services performed and the facilities furnished by the Administrator, the Fund shall pay the Administrator a fee at the annual rate of 0.065% of the average daily net assets of the Fund during the previous month.”

Kindly indicate your agreement to the foregoing by signing and returning a copy of this letter.

Very truly yours,

Carlton Neel,
Executive Vice President

AGREED TO:

PHOENIX EQUITY PLANNING CORP.

By: /s/ Nancy Curtiss
Name:	Nancy Curtiss
Title:	VP, Operations

900 Third Avenue • New York, New York 10022
(212) 451-1100

EX-99.R.1

Exhibit R(1)

CODE OF ETHICS

THE ZWEIG TOTAL RETURN FUND, INC.

I. Introduction

     This Code of Ethics (“Code”) is adopted by The Zweig Total Return Fund, Inc. (the “Fund”), in keeping with the general principles and objectives set forth in Sections II and III below and in light of the Fund’s fiduciary obligations to its shareholders.

II.	General Principles
	Shareholder Interests Come First; Avoid Actual and Potential Conflicts of Interest

     It is the duty of all directors, officers and employees of the Fund to conduct themselves in conformance with their fiduciary and ethical obligations and to not take inappropriate advantage of their positions. Therefore, each such individual (i) has a duty at all times to place the interests of Fund shareholders first; and (ii) must conduct his or her personal securities transactions consistent with this Code and in such a manner so as to avoid any actual or potential conflict of interest or any abuse of that individual’s position of trust and responsibility.

III. Objective

     The Securities and Exchange Commission’s code of ethics rule contained in the Investment Company Act of 1940 under Rule 17j-l makes it unlawful for certain persons associated with investment companies to engage in conduct which is deceitful, fraudulent, or manipulative, or which involves false or misleading statements, in connection with the purchase or sale of a security held or proposed to be acquired by an investment company. The objective of this Code is to set forth certain standards with respect to the behavior of certain individuals associated with the Fund (herein called “Access Persons”) within the general principles set forth above. Access Persons generally include all directors, officers and employees of the Fund (and, in each case, their respective family members). Access Persons do not include any director of the Fund who is not an “interested person” of the Fund. In addition, Access Persons do not include any director of the Fund who is an “interested person” of the Fund, but (i) is not an officer of the Fund, the Fund’s investment adviser or the Fund’s administrator, (ii) does not devote any substantial portion of his working time to the activities of the Fund, and (iii) does not have

knowledge of the day-to-day investment activities of the Fund; nevertheless, such an interested director must file quarterly transaction reports pursuant to Section IV.D below.

IV. Personal Transactions in Securities

1. Prohibited Activities

A. IPO Rule: No Access Person may purchase securities in an Initial Public Offering, except with the prior approval of the Compliance Department. This rule also applies to IPO’s offered through the Internet.

B. Private Placement Rule: No Access Person may purchase securities in a Private Placement unless the Compliance Department has approved such purchase. Any such approved purchase should be disclosed to the Fund if that issuer’s securities are being considered for purchase or sale by the Fund.

C. Preclearance Rule: No Access Person may purchase or sell a security unless the Compliance Department has precleared such purchase or sale. Preclearance is required prior to executing a trade through a personal Internet brokerage account. Preclearance is required for all transactions in options, puts, calls and well-known stock indices (e.g. the S&P 500). Preclearance is valid through the business day next following the day preclearance is given.

Exceptions: The following securities transactions do not require preclearance. These exceptions do not apply to transactions in options:

1.	Purchases or sales of up to 500 shares of securities of issuers ranked in the Standard & Poor’s 500 Composite Stock Index (S&P 500) at the time of purchase or sale. The Compliance Department maintains this list on the Intranet web site and updates it after the end of each quarter.
2.	Purchase orders sent directly to the issuer via mail (other than in connection with a Private Placement) or sales of such securities which are redeemed directly by the issuer via mail.

Note: The Compliance Department may deny approval of any transaction requiring preclearance under this Preclearance Rule, even if nominally permitted under this Code of Ethics, if it is believed that denying preclearance is necessary for the protection of a Fund. Any such denial may be appealed to the Fund’s Counsel. The decision of Counsel shall be final.

D. Open Order Rule: No Access Person may purchase or sell, directly or indirectly, any security in which he has, or by reason of such transaction acquires, any direct or indirect beneficial ownership, when a Fund has a pending “buy” or “sell” order for that security of the same type (i.e. buy or sell) as the proposed personal trade, until the Fund’s order is executed or withdrawn.

Exceptions: The following securities transactions are exempt from the Open Order Rule:

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1. Purchases or sales of up to 500 shares of securities of issuers in the S&P 500 at the time of the transaction.

2. Purchases or sales approved by the Compliance Department in his/her discretion.

Any profits realized on a personal trade in violation of this Section 1D must be disgorged.

E. Blackout Rule: If a Portfolio Manager’s Managed Fund holds a security that is the subject of a proposed personal trade by that Portfolio Manager, the Portfolio Manager is prohibited from buying or selling such security within 7 calendar days before and after the Managed Fund trades in such security.

Exceptions: The following securities are exempt from the Blackout Period:

1. Purchases or sales of up to 500 shares of securities of issuers in the S&P 500 at the time of the transaction.

2. Purchases or sales approved by the Compliance Department in his/her discretion.

Any profits realized by a Portfolio Manager on a personal trade in violation of this Section 1E must be disgorged.

F. Holding Period Rule: Access Persons must hold each Security, for a period of not less than sixty (60) days, whether or not the purchase of such Security was an exempt transaction under any other provision of Section 4.

Any profits realized on trading in contravention of this policy must be disgorged.

G. No Access Person shall annually accept any gift or other item of more than $100 in value from any person or entity that does business with or on behalf of the Fund.

H. No Advisory Person shall serve on the board of directors of a publicly traded company without prior authorization from Counsel or the Compliance Officer of the Fund. If board service is authorized, such Advisory Person shall have no role in making investment decisions with respect to the publicly traded company.

I. No Portfolio Manager shall engage in excessive trading or market timing activities with respect to any mutual fund whether or not such mutual fund is managed by such Adviser/Subadvisor or any affiliated adviser/subadvisor. For the purposes of the foregoing, “market timing” shall be defined as a purchase and redemption, regardless of size, in and out of the same mutual fund within any sixty (60) day period. The foregoing restrictions shall not apply to Portfolio Managers investing in mutual funds through asset allocation programs, automatic reinvestment programs, 401(k) and similar

3

retirement accounts and any other non-volitional investment vehicles. Portfolio Managers shall provide quarterly certifications as to their compliance with this restriction.

J. No Advisory Person shall divulge or act upon any material, non-public information, as such term is defined under relevant securities laws.

2.	Exempted Transactions
	The prohibitions of Section 1 of this Code shall not apply to:

A. Purchases or sales effected in any account over which the Access Person has no direct or indirect influence or control in the reasonable estimation of the Compliance Officer.

B. Purchases or sales of securities (1) not eligible for purchase or sale by the Fund; or (2) specified from time to time by the Trustees, subject to such rules, if any, as the Trustees shall specify.

C. Purchases or sales which are non-volitional on the part of either the Access Person or the Fund.

D. Purchases of shares necessary to establish an automatic dividend reinvestment plan or pursuant to an automatic dividend reinvestment plan, and subsequent sales of such securities.

E. Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired.

F. Purchase or sale of securities issued under an employee stock purchase or incentive program unless otherwise restricted.

3.	Accounts Covered
	Advance clearance must be obtained for any personal transaction in a security by an Access Person if such Access Person has, or as a result of the transaction acquires, any direct or indirect beneficial ownership in the security.
	The term “beneficial ownership” is defined by rules of the SEC which will be applicable in all cases. Generally, under the SEC rules, a person is regarded as having beneficial ownership of securities held in the name of:

a) a husband, wife or a minor child;

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b)	a relative (including in-laws, step-children, or step-parents) sharing the same house;
c)	anyone else if the Access Person:

(i)	obtains benefits substantially equivalent to ownership of the securities; or
(ii)	can obtain ownership of the securities immediately or at some future time.

4. Exemption from Clearance Requirement

Clearance is not required for any account over which the Access Person has no influence or control; however, the existence of such an account must be reported to the Compliance Officer. The Compliance Officer, in his sole discretion, has the authority to request further information and documentation regarding any account over which an Access Person reports he has no influence or control.

5. Report of Transactions

A. Transactions and Accounts Covered

i)	All personal transactions in any account for which advance clearance is required must also be reported in the next quarterly transaction report after the transaction is effected.
ii)	Every Access Person must file a report when due even if such person made no purchases or sales of securities during the period covered by the report.
iii)	Directors who are “interested persons” but who, pursuant to Section III, are exempt from advance clearance are subject to the quarterly personal transaction reporting requirements of 2.A below.
iv)	Any Access Person shall immediately report any potential violation of this Code of which he or she becomes aware to the Compliance Department.

B. Time of Reporting

i). Reports of personal transactions must be made within 10 days after the end of each calendar

5

quarter. Thus, reports are due on the 10th day of January, April, July and October.

ii). All employees are also required to report on an annual basis a listing of all non-exempt securities holdings as of December 31 of the preceding year. Reports are due on the 31^st day of January. New employees will be required to provide a listing of all non- exempt securities holdings as of the date of commencement of employment.

C. Form of Reporting

The report must be on the form provided by the Compliance Department. A copy of the form is attached.

D. Responsibility to Report

The responsibility for taking the initiative to report is imposed on each individual required to make a report. Any effort by the Compliance Department to facilitate the reporting process does not change or alter that responsibility.

E. Where to File Report

All reports must be filed with the Compliance Department.

V.	Review
	The Compliance Officer will review and consider any proper request of an Access Person for relief or exemption from any restriction, limitation or procedure contained herein, which restriction, limitation or procedure is claimed to cause a hardship for such Access Person. The Compliance Officer’s decision is completely within his sole discretion.

VI. Service as Director

No Access Person may serve on the board of any company whose securities are publicly traded (other than a closed-end investment company to which the Fund’s investment adviser or an affiliate thereof is the investment adviser) without prior approval of the Fund’s Board of Directors. If such approval is granted, it will be subject to the implementation of appropriate procedures to isolate investment personnel serving as directors from making investment decisions for the Fund concerning the company in question.

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VII.	Gifts
	No Access Person shall accept, directly or indirectly, anything of value, including gifts and gratuities, in excess of $100 per year from any person or entity that does business with the Fund. This restriction does not apply to bona fide dining or bona fide entertainment if, during such dining or entertainment, the Access Person is with the person or representative of the entity that does business with the Fund.
VIII.	Sanctions
	Upon discovering a violation of this Code, the Board of Trustees of the Fund may impose such sanctions as it deems appropriate, including inter alia, a letter of censure or suspension or termination of employment, or suspension of personal trading privileges for such period as it may deem appropriate.
IX.	Annual Report to the Fund’s Board of Directors
	The Fund’s management shall prepare an annual report to the Fund’s Board of Directors, which report shall (i) summarize existing procedures concerning personal investing and any changes in the procedures made during the past year, (ii) identify any violations requiring significant remedial action during the past year, (iii) identify any recommended changes in existing restrictions or procedures based upon the Fund’s experience under this Code, evolving industry practices, or developments in applicable laws or regulations, and (iv) include such other information as the Board of Directors of the Fund may request.
X.	Effective Date
	All employees, officers and directors of the Fund (other than directors who are not interested persons of the Fund) are required to sign a copy of this Code indicating their agreement to abide by the terms of this Code.
	In addition, all employees, officers and directors of the Fund (other than directors who are not interested persons of the Fund) will be required to certify annually that (i) they have read and understand the terms of this Code and recognize the responsibilities and obligations incurred by their being subject to this Code, and (ii) they are in compliance with the requirements of this Code, including but not limited to the preclearance for Access Persons and the reporting of all non-exempt personal securities transactions in accordance with this Code.

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XI.	Certification
	I have read and understand the terms of the above Code of Ethics. I recognize the responsibilities and obligations incurred by me as a result of my being subject to this Code of Ethics. I hereby agree to abide by the above Code of Ethics.

(Signature)	(Date)
(Print name)

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EX-99.R.2

Exhibit R(2)

POLICY AND PROCEDURES OF
PHOENIX/ZWEIG ADVISERS LLC AND EUCLID ADVISORS LLC
DESIGNED TO DETECT AND PREVENT INSIDER TRADING

SECTION I. POLICY STATEMENT ON INSIDER TRADING

A. Introduction

     Phoenix/Zweig Advisers LLC and Euclid Advisors LLC (each of which is hereinafter referred to as an “Adviser” or the “Adviser”) each seeks to foster a reputation for integrity and professionalism. That reputation is a vital business asset. The confidence and trust placed in us by our clients is something we should value and endeavor to protect. To further that goal, this Policy Statement implements procedures to deter the misuse of material, nonpublic information in securities transactions.

     Trading securities while in possession of material, nonpublic information or improperly communicating that information to others may expose you to stringent penalties. Criminal sanctions may include a fine of up to $1,000,000 and/or ten years imprisonment. The Securities and Exchange Commission can recover the profits gained or losses avoided through the violative trading, impose a penalty of up to three times the illicit windfall and issue an order permanently barring you from the securities industry. Finally, you may be sued by investors seeking to recover damages for insider trading violations.

     Regardless of whether a government inquiry occurs, the Advisers view seriously any violation of this Policy Statement. Such violations constitute grounds for disciplinary sanctions, including dismissal.

B. Scope of the Policy Statement

     This Policy Statement is drafted broadly; it will be applied and interpreted in a similar manner. This Policy Statement applies to securities trading and information handling by directors, officers and employees of the Advisers (including spouses, minor children and adult members of their households).

     This Policy Statement on Insider Trading and the following procedures to implement the Adviser’s Policy represent the Adviser’s current such Policy Statement and Procedures. Such Policy Statement and Procedures may be revised or supplemented from time to time by the issuance of a new Policy Statement and Procedures or a supplement or memorandum from the Adviser’s chief executive officer and/or compliance officer.

     The law of insider trading is unsettled and continuously developing; an individual legitimately may be uncertain about the application of the Policy Statement in a particular circumstance. Often, a single question can forestall disciplinary action or complex legal problems. You should direct any questions relating to this Policy Statement to the Compliance Officer, who is Marc Baltuch, or, in his absence, Melinda Reibel or Jennifer Marinpetro. You also must notify the Compliance Officer immediately if you have any reason to believe that a violation of this Policy Statement has occurred or is about to occur.

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C. Policy Statement on Insider Trading

     No person to whom this Policy Statement applies, including you, may trade, either personally or on behalf of others (such as mutual funds and private accounts managed by the Advisers), while in possession of material, nonpublic information; nor may any personnel of an Adviser communicate material, nonpublic information to others in violation of the law. This section reviews principles important to this Policy Statement.

     1. What is Material Information?

     Information is material where there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions. Generally, this is information whose disclosure will have a substantial effect on the price of a company’s securities. No simple “bright line” test exists to determine when information is material; assessments of materiality involve a highly fact-specific inquiry. For this reason, you should direct any questions about whether information is material to the Compliance Officer.

     Material information often relates to a company’s results and operations, including, for example, dividend changes, earnings results, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments.

     Material information also may relate to the market for a company’s securities. Information about a significant order to purchase or sell securities may, in some contexts, be deemed material. Similarly, prepublication information regarding reports in the financial press also may be deemed material. For example, the United States Supreme Court upheld the criminal convictions of insider trading defendants who capitalized on prepublication information about the WALL STREET JOURNAL’S Heard on the Street column.

     2. What is Nonpublic Information?

     Information is “public” when it has been disseminated broadly to investors in the marketplace. Tangible evidence of such dissemination is the best indication that the information is public. For example, information is public after it has become available to the general public through a public filing with the SEC or some other government agency, the Dow Jones “tape” or the WALL STREET JOURNAL or some other publication of general circulation, and after sufficient time has passed so that the information has been disseminated widely.

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     3. Identifying Inside Information

     Before executing any trade for yourself or others, including investment companies or private accounts managed by an Adviser, you must determine whether you have access to material, nonpublic information. If you think that you might have access to material, nonpublic information, you should take the following steps.

i.	Report the information and proposed trade immediately to the Compliance Officer.
ii.	Do not purchase or sell the securities on behalf of yourself or others, including investment companies or private accounts managed by the Advisers.
iii.	Do not communicate the information inside or outside the Advisers, other than to the Compliance Officer.
iv.	After the Compliance Officer has reviewed the issue, the firm will determine whether the information is material and nonpublic and, if so, what action the firm should take.

You should consult with the Compliance Officer before taking any action. This degree of caution will protect you, your clients and the firm.

     4. Contacts with Public Companies

     For the Advisers, contacts with public companies represent an important part of our research efforts. An Adviser may make investment decisions on the basis of the firm’s conclusions formed through such contacts and analysis of publicly-available information. Difficult legal issues arise, however, when, in the course of these contacts, an employee of an Adviser or other person subject to this Policy Statement becomes aware of material, nonpublic information. This could happen, for example, if a company’s Chief Financial Officer prematurely discloses quarterly results to an analyst, or an investor relations representative makes a selective disclosure of adverse news to a handful of investors. In such situations, the Adviser must make a judgment as to its further conduct. To protect yourself, your clients and the firm, you should contact the Compliance Officer immediately if you believe that you may have received material, nonpublic information.

     5. Tender Offers

     Tender offers represent a particular concern in the law of insider trading for two reasons. First, tender offer activity often produces extraordinary gyrations in the price of the target company’s securities. Trading during this time period is more likely to attract regulatory attention (and produces a disproportionate percentage of insider trading cases). Second, the SEC has adopted a rule which expressly forbids trading and “tipping” while in possession of material, nonpublic information regarding a tender offer received from the tender offeror, the target company or anyone acting on behalf of either. Employees of an Adviser and others subject to this Policy Statement should exercise particular caution any time they become aware of nonpublic information relating to a tender offer.

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SECTION II.	PROCEDURES TO IMPLEMENT THE ADVISERS’
	POLICY STATEMENT ON INSIDER TRADING

     The following procedures have been established to aid the officers, directors and employees of the Advisers in avoiding insider trading, and to aid the Advisers in preventing, detecting and imposing sanctions against insider trading. Every officer, director and employee of an Adviser must follow these procedures or risk serious sanctions, including dismissal, substantial personal liability and criminal penalties. If you have any questions about these procedures, you should consult the Compliance Officer.

A. Personal Securities Trading

1. Definitions

(a)	“Access Person:” pursuant to Rule 17j-1 of the Investment Company Act of 1940, means any Advisory Person of a Fund or of a Fund’s investment adviser. All of Advisers directors, officers, and general partners are presumed to be Access Persons of any Fund advised by the investment adviser. All of the Funds directors, officers, and general partners are presumed to be Access Persons of the Fund.
(b)	In addition, Access Persons include any director, officer or general partner of PEPCO, the principal underwriter of the Funds, who, in the ordinary course of business, makes, participates in or obtains information regarding the purchase or sale of Covered Securities by the Fund for which PEPCO acts, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Fund regarding the purchase or sale of Covered Securities.
(c)	Advisory Person of a Fund or of a Fund’s investment adviser means:

(i)	Any director, officer, general partner or employee of the Fund or investment advisor (or of any company in a control relationship to the Fund or investment adviser) who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding, the purchase or sale of Covered Securities by a Fund, or whose functions relate to the making of any recommendations with respect to such purchases or sales;
(ii)	Any natural person in a control relationship to the Fund or investment adviser who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of Covered Securities by the Fund; and
(iii)	Any Investment Personnel.

(d)	“Affiliated person” of an issuer is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such issuer.
(e)	“Beneficial ownership” shall be interpreted in the same manner as it would be under Rule 16a-l(a)(2) in determining whether a person is the beneficial owner of a security

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for purposes of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations thereunder. Generally, beneficial ownership means having or sharing, directly or indirectly through any contract, arrangement, understanding, relationship, or otherwise, a direct or indirect “pecuniary interest” in the security. For the purposes hereof,

(i)

“Pecuniary interest” means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security.

(ii)

“Indirect pecuniary interest” includes, but is not limited to: (a) securities held by members of the person’s “immediate family” (this means any child, child-in-law, stepchild, grandchild, parent, parent-in-law, stepparent, grandparent, spouse, sibling, or sibling-in-law and includes adoptive relationships) sharing the same household (which ownership interest may be rebutted); (b) a general partner’s proportionate interest in portfolio securities held by a general or limited partnership; (c) a person’s right to dividends that is separated or separable from the underlying securities (otherwise, a right to dividends alone will not constitute a pecuniary interest in securities); (d) a person’s interest in securities held by a trust; (e) a person’s right to acquire securities through the exercise or conversion of any derivative security, whether or not presently exercisable; and (f) a performance-related fee, other than an asset based fee, received by any broker, dealer, bank, insurance company, investment company, investment manager, trustee, or person or entity performing a similar function, with certain exceptions (see Rule 16a-1(a)(2)).

(f)	“Chief Compliance Officer” refers to the person appointed by the Boards of the funds pursuant to the provisions of Rule 38a-1. Such person is identified on Schedule A hereto.
(g)	“Compliance Officer” may refer to the Fund’s designated Compliance Officer or an Adviser’s Compliance Officer or any person designated by each such to perform the administrative functions of this Code.
(h)	“Control” shall have the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.
(i)	“Covered Security” means all securities including those issued by any reportable fund, except securities that are direct obligations of the Government of the United States, bankers’ acceptances, bank certificates of deposit, commercial paper and shares of unaffiliated registered open-end investment companies.
(j)	“Disinterested Trustee” means a Trustee of a Fund who is not an “interested person” of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.
(k)	“Initial Public Offering” means an offering of securities registered under the Securities Act of 1933, as amended, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act.
(l)	“Investment Personnel” shall mean:

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(i)

any employee of the Fund or Adviser (or of any company in a control relationship to the Fund or Adviser) who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Fund; and

(ii)

any natural person who controls the Fund or an Adviser and who obtains information concerning recommendations made to the Fund regarding the purchase or sale of securities by the Fund. Investment Personnel includes any Portfolio Manager or other investment person, such as an analyst or trader, who provides information and advice to a Portfolio Manager or assists in the execution of the investment decisions.

(1)	“Limited Offering” or “Private Placement” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) thereof, or pursuant to Rule 504, Rule 505, or Rule 506 thereunder.
(m)	“Managed Portfolio” shall mean those Funds, individually and collectively, for which the Portfolio Manager makes buy and sell decisions. For those Funds operating as series companies, Managed Portfolio shall include only the series for which the Portfolio Manager serves as the Portfolio Manager.
(n)	“Portfolio Manager” means the person or portfolio management team entrusted to make or participate in the making of the buy and sell decisions for a Fund, or series thereof; as disclosed in the Fund(s) prospectus.
(o)	“Purchase or sale of a security” includes, among other things, the writing of an option to purchase or sell a security or the purchase or sale of a security that is exchangeable for or convertible into a security.
(p)	“Reportable Fund” includes those 1940 Act registered investment companies for which the Adviser or an affiliate acts as adviser or sub-adviser, or principal underwriter.
(q)	“Security” shall have the meaning set forth in Section 2(a)(36) of the 1940 Act.
(r)	“Security Held or to be Acquired” by a Fund means:

(i) any Covered Security which, within the most recent 15 days:

(A)	is or has been held by the Fund; or
(B)	is being or has been considered by the Fund or any of its investment advisers for purchase by the Fund; and

(ii) any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security described in paragraph (p)(i) of this Section.

A security is “being considered for purchase or sale” when a recommendation to purchase or sell a security has been made and communicated and, with respect to the

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Investment Personnel making the recommendation, when such person seriously considers making such a recommendation.

2. Prohibited Activities

(a)	IPO Rule: No Advisory Person may directly or indirectly acquire beneficial ownership in any securities in an Initial Public Offering (including IPOs offered through the Internet), except with the prior written approval of the Adviser’s Compliance Officer. No NASD registered person may participate in an IPO pursuant to NASD Rule 2790.
(b)	Limited Offering/Private Placement Rule: No Advisory Person may directly or indirectly acquire beneficial ownership in any securities in a Limited Offering or Private Placement except with the prior written approval of the Adviser’s Compliance Officer.

(i) The Adviser’s Compliance Officer will make a record of any decision, and the reasons supporting the decision, to grant approval for transactions in IPOs and Limited Offerings, and will maintain these records for at least five years after the end of the fiscal year in which the approval is granted.

(c) Preclearance Rule: No Advisory Person may directly or indirectly acquire or dispose of beneficial ownership in a Covered Security unless such transaction has been precleared by the Adviser’s Compliance Officer. Preclearance is required prior to executing any trade through any personal brokerage account, unless specially exempted under Section 4 above. Preclearance is valid through the business day next following the day preclearance is given.

(i)	The Adviser’s Compliance Officer will monitor investment activity by the Advisory Person involving the precleared transaction.
(ii)	Compliance reserves up to one business day to respond to any request for preclearance.

Note: The Compliance Officer may deny approval of any transaction requiring preclearance under this Preclearance Rule, even if the transaction is nominally permitted under this Code of Ethics, if he or she reasonably believes that denying preclearance is necessary for the protection of a Fund. Any such denial may be appealed to the Fund’s Chief Compliance Officer. The decision of the Chief Compliance Officer shall be final.

(f)	Open Order Rule: No Advisory Person may directly or indirectly acquire or dispose of beneficial ownership in any Covered Security on a day during which a Fund has a pending “buy” or “sell” order for that security of the same type (i.e., buy or sell) as the proposed personal trade, until the Fund’s order is executed or withdrawn.
	Exceptions: The following securities transactions are exempt from the Open Order Rule:

1. Purchases or sales of up to 500 shares of an issuer ranked in the Standard & Poor’s 500 Composite Stock Index (S&P 500) at the time of purchase or sale The Adviser’s Compliance Officer shall make available an updated list of such issuers quarterly.

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2. Purchases or sales approved by the Adviser’s Compliance Officer in his/her discretion.

(g)	Blackout Rule: No Investment Personnel may directly or indirectly acquire or dispose of beneficial ownership in a Covered Security within seven calendar days before and after a Managed Portfolio trades in that Security.
	Transactions permitted under the Blackout Rule must also satisfy the Open Order Rule and the Preclearance Rule, if and to the extent the transaction is not covered by exceptions to those rules.
(h)	Holding Period Rule: Advisory Persons must hold each Security for a period of not less than sixty (60) days from date of acquisition.
(i)	Gifts: No Access Person shall accept any gift or other item (for the purpose of this Code “gifts” include but are not limited to cash, merchandise, gifts, prizes, travel expenses, meals and certain types of entertainment) of more than $100 in value from any person or entity that does business with or on behalf of the Advisor or the Fund. All gifts received must be reported to the Advisor’s Compliance Department.

Any profits realized by Advisory Personnel on a personal trade in violation of Sections 1(f),(g) and (h) must be disgorged at the request of the Fund.

(j)

Service as Director. No Advisory Person shall serve on the board of directors of a publicly traded company without prior authorization by the President or the Compliance Officer of the Fund. If board service is authorized, such Advisory Person shall have no role in making investment decisions with respect to the publicly traded company.

(k)

Market Timing Prohibited. No Portfolio Manager shall engage in excessive trading or market timing activities with respect to any mutual fund whether or not such mutual fund is a Managed Portfolio, or is managed by such Adviser/Subadvisor or any affiliated adviser or subadviser. For the purposes of the foregoing, “market timing” shall be defined as a purchase and redemption, regardless of size, in and out of the same mutual fund within any sixty (60) day period. The foregoing restrictions shall not apply to Portfolio Managers investing in mutual funds through automatic reinvestment programs, and any other non-volitional investment vehicles. Portfolio Managers shall provide quarterly certifications as to their compliance with this restriction.

3. Exempted Transactions

The preclearance prohibitions of Section 1 of this Code, shall not apply to:

(a) Purchases or sales effected in any account over which the Advisory Person has no direct or indirect influence or control in the reasonable estimation of the Adviser’s

8

Compliance Officer. This exemption will also apply to personal brokerage accounts for which a third party (e.g. broker, financial advisor) makes all investment decisions on behalf of the Access Person. The discretionary arrangement must be documented to the Adviser’s Compliance Officer or his or her designee.

(b)	Purchases or sales of securities not eligible for purchase or sale by the Fund.
(c)	Purchases or sales which are non-volitional on the part of either the Advisory Person or the Fund.
(d)	Purchases of shares necessary to establish an automatic dividend reinvestment plan or pursuant to an automatic dividend reinvestment plan, and subsequent sales of such securities.
(e)	Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired.
(f)	Purchase or sale of securities issued under an employee stock purchase or incentive program unless otherwise restricted.

4. Accounts Covered

Advance clearance must be obtained for any personal transaction in a security by an officer, director or employee of an Adviser if such person has, or as a result of the transaction acquires, any direct or indirect beneficial ownership in the security.

The term “beneficial ownership” is defined by rules of the SEC which will be applicable in all cases. Generally, under the SEC rules, a person is regarded as having beneficial ownership of securities held in the name of:

a)	a husband, wife or a minor child;
b)	a relative (including in-laws, step-children, or step-parents) sharing the same house;
c)	anyone else if the officer, director or employee:

(i)	obtains benefits substantially equivalent to ownership of the securities; or
(ii)	can obtain ownership of the securities immediately or at some future time.

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5. Exemption from Clearance Requirement

Clearance is not required for any account over which an officer, director or employee has no influence or control; however, the existence of such an account must be reported to the Compliance Officer. The Compliance Officer, in his sole discretion, has the authority to request further information and documentation regarding any account over which an officer, director or employee reports he has no influence or control.

B. Report of Transactions

1. Transactions and Accounts Covered

a)	All personal transactions in any account for which advance clearance is required must also be reported in the next quarterly transaction report after the transaction is effected.
b)	Every officer, director and employee of an Adviser must file a report when due even if such person made no purchases or sales of securities during the period covered by the report.
c)	Any Access Person shall immediately report any potential violation of this Code of which he or she becomes aware to the Compliance Department.

2. Time of Reporting

A.

Reports of personal transactions must be made within 10 days after the end of each calendar quarter. Thus, reports are due on the 10th day of January, April, July and October.

B.

All employees are also required to report on an annual basis a listing of all non-exempt securities holdings as of December 31 of the preceding year. Reports are due no later than the 14th of February. New employees will be required to provide a listing of all non-exempt securities holdings as of the date of commencement of employment. The initial holdings report must be current as of a date not more than 45 days prior to the individual becoming an access person.

3.	Form of Reporting
	The report must be on the form provided by the Compliance Department. A copy of the form is attached.

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4.	Responsibility to Report
	The responsibility for taking the initiative to report is imposed on each individual required to make a report. Any effort by the Compliance Department to facilitate the reporting process does not change or alter that responsibility.
5.	Where to File Report
	All reports must be filed with the Compliance Department.
6.	Code of Ethics Reports
	In addition, “Access Persons” of Phoenix/Zweig Advisers LLC., The Zweig Fund, Inc., The Zweig Total Return Fund, Inc., Phoenix-Zweig Trust, Euclid Advisors LLC (i) are required to make any reports required under the Code of Ethics of such advisers or funds, as the case may be, and (ii) must comply with all the other provisions (including the personal trading restrictions) of such Code of Ethics.

C. High-Risk Trading Activities

Certain high-risk trading activities, if used in the management of a personal trading portfolio, are risky not only because of the nature of the securities transactions themselves, but also because of the potential that action necessary to close out the transactions may become prohibited during the pendency of the transactions. Examples of such activities include short sales of common stock and trading in derivative instruments such as option contracts to purchase (“call”) or sell (“put”) securities at certain predetermined prices. Officers, directors and employees of the Advisers should understand that short sales and trading in derivative instruments involve special risks — derivative instruments, for example, ordinarily have greater price volatility than the underlying security. The fulfillment of the obligations owed by each officer, director and employee to his or her employer may heighten those risks. For example, if an Adviser becomes aware of material, nonpublic information about the issuer of the underlying securities, such Adviser’s personnel may find themselves “frozen” in a position in a derivative security. The Advisers will not bear any losses resulting in personal accounts through the implementation of this Policy Statement.

D. Restrictions on Disclosures

Officers, directors and employees of the Advisers shall not disclose any nonpublic information (whether or not it is material) relating to the Advisers or their securities transactions on behalf of clients to any person outside an Adviser (unless such disclosure has been authorized by such Adviser). Material, nonpublic information may not be communicated to anyone, including persons within an Adviser, except as provided in Section I above. Such information must be secured. For example, access to files containing material, nonpublic information and computer files containing such information should be restricted, and conversations containing such information, if appropriate at all, should be conducted in private (for example, not by cellular telephone, to avoid potential interception).

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E. Review

The Compliance Officer will review and consider any proper request of an officer, director or employee of an Adviser for relief or exemption from any restriction, limitation or procedure contained herein, which restriction, limitation or procedure is claimed to cause a hardship for such person. The Compliance Officer’s decision is completely within his sole discretion.

F. Sanctions

Upon discovering a violation of this Code, the Board of Trustees of a Fund may impose such sanctions as it deems appropriate, including inter alia, a letter of censure or suspension or termination of employment, or suspension of personal trading privileges for such period as it may deem appropriate. Provided further, the Adviser’s Compliance Officer shall review and present sanctions levied for non-compliance at each regularly scheduled Board meeting. Please see attached Appendix B of Sanctions that may be levied for violations of this Code.

G. Recordkeeping

All Code of Ethics records will be maintained pursuant to the provisions of Rules 17j-1 and 204A-1.

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4. Acknowledgement

     I have read and understand this Policy Statement on Insider Trading. I certify that I have, to date, complied and will continue to comply with this Policy Statement. I understand that any violation of this Policy Statement may lead to sanctions, including dismissal.

(Signature)	(Date)
(Print name)

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SECTION III. SUPERVISORY PROCEDURES

     The Advisers have assigned the Compliance Officer the primary responsibility for the implementation and maintenance of the Advisers’ policy and procedures against insider trading. Supervisory Procedures can be divided into two classifications — prevention of insider trading and detection of insider trading.

1. Prevention of Insider Trading

     To prevent insider trading, the Compliance Officer should:

i.	provide, on a regular basis, an education program to familiarize officers, directors and employees with the Advisers’ policy and procedures;
ii.	answer questions regarding the Advisers’ policy and procedures;
iii.	resolve issues of whether information received by an officer, director or employee of an Adviser is material and nonpublic and determine what action, if any, should be taken;

iv.	review on a regular basis and update as necessary an Adviser’s policy and procedures;
v.	when it has been determined that an officer, director or employee of an Adviser has material, nonpublic information:

1. implement measures to prevent dissemination of such information, and

2. if necessary, restrict officers, directors and employees from trading the securities; and

vi. promptly review, and either approve or disapprove, in writing, each request of an officer, director or employee of an Adviser for clearance to trade in specified securities.

2. Detection of Insider Trading

     To detect insider trading, the Compliance Officer should:

i. review the trading activity reports filed by each officer, director and employee;

ii.	review the trading activity of mutual funds and private accounts managed by the Advisers;
iii.	review trading activity (if any) of an Adviser’s own account;
iv.	promptly investigate all reports of any possible violations of the Advisers’ Policy and Procedures to Detect and Prevent Insider Trading; and

v. coordinate the review of such reports with other appropriate officers, directors or employees of an Adviser.

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3. Sanctions

     Upon discovering a violation of this Code, the Board of Trustees of the Fund may impose such sanctions as it deems appropriate, including inter alia, a letter of censure or suspension or termination of employment, or suspension of personal trading privileges for such period as it may deem appropriate.

4. General Reports to Management

     On an as-needed or periodic basis, the Advisers may find it useful for the Compliance Officer to prepare a written report to the management and/or Board of Directors of an Adviser setting forth some or all of the following:

i.	a summary of existing procedures to detect and prevent insider trading;
ii.	a summary of any changes in procedures made in the last year;

iii. full details of any investigation since the last report (either internal or by a regulatory agency) of any suspected insider trading, the results of the investigation and a description of any changes in procedures prompted by any such investigation;

iv. an evaluation of the current procedures and a description of any anticipated changes in procedures; and

v. a description of the Advisers’ continuing educational program regarding insider trading, including the dates of such programs since the last report to management.

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INVESTMENT REPORTING MATRIX
(Appendix A to Code of Ethics)

Type of Investment	Reportable	Preclearance
Bank Conversions	YES	YES
Blind Trusts	YES	NO
Call/Matured Securities	YES	NO
Cash Management Accounts (No Securities Trading)*	NO	NO
Closely Held Corporate Stock	YES	NO
Co-op Apartment Shares	NO	NO
Commercial Paper	NO	NO
Convertible Bonds	YES	YES
Corporate Bonds	YES	YES
Corporate Mergers/Tenders	YES	NO
Dividend Reinvestment Plans	YES-annually	NO
Exchange Traded Funds (“ETF”)	YES	YES
Family Business (Private)	NO	NO
Foreign Government Bonds	YES	YES
Futures	YES	YES
Gifts of Securities	YES	NO
Initial Public Offering	NOT ALLOWED	N/A
Insurance Company Conversions	YES	YES
Limit Orders/Good Til Canceled	YES	Every Other Day
Money Market Funds- Direct	NO	NO
Municipal Bonds	YES	YES
Mutual Funds- Closed End	YES	YES
Mutual Funds- Open End- Direct	NO	NO
Opening of a Bank Trading Account	YES	YES
Opening of a Brokerage Account	YES	YES
Options (60 + days)	YES	YES
Private Partnerships- Affiliated **	NO	NO
Private Investment Partnerships-Unaffiliated	YES	YES
Restricted Stock (Private Placements)	YES	YES
Rights Offering (including over subscriptions)-Exercising	YES	NO
Structured Notes	YES	YES
Stock- Purchase/Sales	YES	YES
Stock- Short Sales	YES	YES
Stock- Dividends/Splits	YES-annually	NO
Systematic Investment Plan with Corporate Issuer	YES-annually	NO
Transfer of a Brokerage Account	YES	YES
Trust Accounts	YES	See Compliance
Unit Investment Trust	YES	NO
US Government Securities	NO	NO
US Savings Bonds (EE)	NO	NO
Variable Annuities	NO	NO
Wrap Accounts	YES	See Compliance
Zweig Fund/Zweig Total Return Fund	YES	See Compliance and Legal

*	Registered Representatives must receive permission from their respective broker/dealer to open this account.
**	This information will not be reportable to compliance; however, the information will be maintained by the partnerships’ general counsel.
1/1/98

Appendix B — Sanctions

				Q Report Affiliated MF
Initial Holdings Report		Q Report		Transactions		Annual Report		Pre-Clear
	All Access Persons		All Access Persons		Investment Personnel		All Access Persons		Advisory Persons
•	1st violation — written warning	•	1st violation — written warning	•	1st violation — written warning	•	1st violation — written warning	•	1st violation — written warning
• •	2nd violation within the same year — $50.00 fine payable to the Phoenix Foundation 3rd violation within the same year — suspension of trading privileges for 30 days	• •	2nd violation within the same year — $50.00 fine payable to the Phoenix Foundation 3rd violation within the same year — suspension of trading privileges for 30 days	• •	2nd violation within the same year — $50.00 fine payable to the Phoenix Foundation 3rd violation within the same year — suspension of trading privileges for 30 days			• •	2nd violation within the same year — $100 fine payable to the Phoenix Foundation and suspension of trading privileges for 30 days 3rd violation within the same year — suspension of trading privileges for 90 days

Pre-Clear IPOs &				60-Day Holding		Market Timing Prohibition
Limited Offerings*		Blackout		Requirement		and Q Certificate		Open Order Rule
	Advisory Personnel				Advisory Personnel		Investment Personnel		Investment Personnel
			Investment Personnel
• •	1st violation — Reported to Chief Legal Officer and President of Phoenix Investment Counsel for determination of appropriate sanctions. 2nd violation — possible grounds for termination	• • •	1st violation — disgorgement of profits on the personal trade 2nd violation — Reported to Chief Legal Officer and President of Phoenix Investment Counsel for determination of appropriate sanctions. 3rd violation — possible grounds for termination	• • •	1st violation — written warning 2nd violation — violation within the same year - $50.00 fine payable to the Phoenix Foundation 3rd violation within the same year — suspension of trading privileges for 60 days	•	1st violation — possible grounds for termination at determination of Chief Legal Officer and President of Phoenix Investment Counsel	• •	1st violation — Reported to Chief Legal Officer and President of Phoenix Investment Counsel for determination of appropriate sanctions. 2nd violation — possible grounds for termination

*s/t NASD Prohibition Rule 2790.

EX-99.R.3

Exhibit R(3)

POLICY AND PROCEDURES OF
ZWEIG CONSULTING LLC
DESIGNED TO DETECT AND PREVENT INSIDER TRADING

SECTION I. POLICY STATEMENT ON INSIDER TRADING

A. Introduction

     Zweig Consulting LLC (hereinafter referred to as the “Adviser”) seeks to foster a reputation for integrity and professionalism. That reputation is a vital business asset. The confidence and trust placed in us by our clients is something we should value and endeavor to protect. To further that goal, this Policy Statement implements procedures to deter the misuse of material, nonpublic information in securities transactions.

     Trading securities while in possession of material, nonpublic information or improperly communicating that information to others may expose you to stringent penalties. Criminal sanctions may include a fine of up to $1,000,000 and/or ten years imprisonment. The Securities and Exchange Commission can recover the profits gained or losses avoided through the violative trading, impose a penalty of up to three times the illicit windfall and issue an order permanently barring you from the securities industry. Finally, you may be sued by investors seeking to recover damages for insider trading violations.

     Regardless of whether a government inquiry occurs, the Adviser views seriously any violation of this Policy Statement. Such violations constitute grounds for disciplinary sanctions, including dismissal.

B. Scope of the Policy Statement

     This Policy Statement is drafted broadly; it will be applied and interpreted in a similar manner. This Policy Statement applies to securities trading and information handling by directors, officers and employees of the Adviser (including spouses, minor children and adult members of their households).

     This Policy Statement on Insider Trading and the following procedures to implement the Adviser’s Policy represent the Adviser’s current such Policy Statement and Procedures. Such Policy Statement and Procedures may be revised or supplemented from time to time by the issuance of a new Policy Statement and Procedures or a supplement or memorandum from the Adviser’s chief executive officer and/or compliance officer.

     The law of insider trading is unsettled and continuously developing; an individual legitimately may be uncertain about the application of the Policy Statement in a particular circumstance. Often, a single question can forestall disciplinary action or complex legal problems. You should direct any questions relating to this Policy Statement to the Compliance Officer, who is Marc Baltuch, or, in his absence, Melinda Bercy or Jennifer McGovern. You also must notify the Compliance Officer immediately if you have any reason to believe that a violation of this Policy Statement has occurred or is about to occur.

C. Policy Statement on Insider Trading

     No person to whom this Policy Statement applies, including you, may trade, either personally or on behalf of others (such as mutual funds and private accounts managed by the Adviser), while in possession of material, nonpublic information; nor may any personnel of the Adviser communicate material, nonpublic information to others in violation of the law. This section reviews principles important to this Policy Statement.

     1. What is Material Information ?

     Information is material where there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions. Generally, this is information whose disclosure will have a substantial effect on the price of a company’s securities. No simple “bright line” test exists to determine when information is material; assessments of materiality involve a highly fact-specific inquiry. For this reason, you should direct any questions about whether information is material to the Compliance Officer.

     Material information often relates to a company’s results and operations, including, for example, dividend changes, earnings results, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments.

     Material information also may relate to the market for a company’s securities. Information about a significant order to purchase or sell securities may, in some contexts, be deemed material. Similarly, prepublication information regarding reports in the financial press also may be deemed material. For example, the United States Supreme Court upheld the criminal convictions of insider trading defendants who capitalized on prepublication information about the WALL STREET JOURNAL’S Heard on the Street column.

     2. What is Nonpublic Information ?

     Information is “public” when it has been disseminated broadly to investors in the marketplace. Tangible evidence of such dissemination is the best indication that the information is public. For example, information is public after it has become available to the general public through a public filing with the SEC or some other government agency, the Dow Jones “tape” or the WALL STREET JOURNAL or some other publication of general circulation, and after sufficient time has passed so that the information has been disseminated widely.

     3. Identifying Inside Information

     Before executing any trade for yourself or others, including investment companies or private accounts managed by the Adviser, you must determine whether you have access to material, nonpublic information. If you think that you might have access to material, nonpublic information, you should take the following steps.

i. Report the information and proposed trade immediately to the Compliance Officer.

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ii.	Do not purchase or sell the securities on behalf of yourself or others, including investment companies or private accounts managed by the Adviser.
iii.	Do not communicate the information inside or outside the Adviser, other than to the Compliance Officer.
iv.	After the Compliance Officer has reviewed the issue, the firm will determine whether the information is material and nonpublic and, if so, what action the firm should take.

You should consult with the Compliance Officer before taking any action. This degree of caution will protect you, your clients and the firm.

     4. Contacts with Public Companies

     For the Adviser, contacts with public companies represent an important part of research efforts. The Adviser may make investment decisions on the basis of the firm’s conclusions formed through such contacts and analysis of publicly-available information. Difficult legal issues arise, however, when, in the course of these contacts, an employee of the Adviser or other person subject to this Policy Statement becomes aware of material, nonpublic information. This could happen, for example, if a company’s Chief Financial Officer prematurely discloses quarterly results to an analyst, or an investor relations representative makes a selective disclosure of adverse news to a handful of investors. In such situations, the Adviser must make a judgment as to its further conduct. To protect yourself, your clients and the firm, you should contact the Compliance Officer immediately if you believe that you may have received material, nonpublic information.

     5. Tender Offers

     Tender offers represent a particular concern in the law of insider trading for two reasons. First, tender offer activity often produces extraordinary gyrations in the price of the target company’s securities. Trading during this time period is more likely to attract regulatory attention (and produces a disproportionate percentage of insider trading cases). Second, the SEC has adopted a rule which expressly forbids trading and “tipping” while in possession of material, nonpublic information regarding a tender offer received from the tender offeror, the target company or anyone acting on behalf of either. Employees of the Adviser and others subject to this Policy Statement should exercise particular caution any time they become aware of nonpublic information relating to a tender offer.

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SECTION II. PROCEDURES TO IMPLEMENT THE ADVISER’S POLICY STATEMENT ON INSIDER TRADING

     The following procedures have been established to aid the officers, directors and employees of the Adviser in avoiding insider trading, and to aid the Adviser in preventing, detecting and imposing sanctions against insider trading. Every officer, director and employee of the Adviser must follow these procedures or risk serious sanctions, including dismissal, substantial personal liability and criminal penalties. If you have any questions about these procedures, you should consult the Compliance Officer.

1. Personal Securities Trading

A. Prohibited Conduct — Advance Clearance Required for Securities Transactions; Subsequent Reporting of Authorized Securities Transactions

     No officer, director or employee of the Adviser (or his or her respective family members) shall buy or sell any security for his (or her) own account or for an account in which he (or she) has, or as a result of the transaction acquires, any direct or indirect beneficial ownership (referred to herein as a “personal transaction”) unless:

1.	Advance clearance of the transaction has been obtained; and
2.	The transaction is reported in writing to the Compliance Officer in accordance with the requirements below (pages 8 - 9).

     The term “security” includes any stock, warrant, option, corporate bond, or any single stock derivative instrument. In addition, any trades in commodities or financial futures, including broad based market index futures, are subject to the reporting requirement only.

B. Restrictions and Limitations on Personal Securities Transactions

     The following restrictions and limitations govern investments and personal securities transactions by all officers, directors and employees of the Adviser (and their family members):

1. Prohibition on 60 Day Short-Term Trading

Securities purchased may not be sold at a profit until at least 60 days from the purchase trade date, and securities sold may not be purchased at a lower price until at least 60 days from the sale trade date. Any violation will result in disgorgement of all profits from the transaction. This restriction on 60 day short-term trades may be waived by the Compliance Officer with respect to trades of 500 shares or less of the common stock of a company with a market capitalization of at least $1 billion.

2. Prohibition on Participation in IPO’s

No officer, director or employee of the Adviser may acquire any security in an Initial Public Offering (IPO).

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3. Special Permission Required for Private Placements

Private placements of any kind (including without limitation limited partnership investments and venture capital investments) may only be acquired with special permission of the Compliance Officer (who will generally consult in-house counsel) and, if approved, will be subject to continuous monitoring for possible future conflict. A request for approval of a private placement should generally be submitted at least one week in advance of the proposed date of investment.

4. Disclosure of Private Placements in Subsequent Investment Decisions

Any officer, director or employee of the Adviser who has or acquires a personal position in an issuer through a private placement must affirmatively disclose that interest if such officer, director or employee is involved in consideration of any subsequent investment decision regarding any security of that issuer or an affiliate by any account managed by the Adviser. In such event, the final investment decision shall be independently reviewed by the Compliance Officer. Written records of any such circumstance shall be maintained and sent to the Compliance Officer.

C. Advance Clearance Requirement

1. Procedures

a)	From Whom Obtained
	In addition to the above Restrictions and Limitations on Personal Securities Transactions, advance clearance of a personal transaction in a security must be obtained from the Compliance Officer. If the personal transaction relates to the stock of either The Zweig Fund, Inc. or The Zweig Total Return Fund, Inc., the transaction will also require advance clearance from in-house counsel.
b)	Time of Clearance
	All approved securities transactions must take place on the same day or the next business day that the advance clearance is obtained. If the transaction is not completed on the date of clearance or the next business day, a new clearance must be obtained, including one for any uncompleted portion. Post-approval is not permitted under this Policy Statement. If it is determined that a trade was completed before approval, it will be considered a violation of this Policy Statement.
c)	Watermark Securities, Inc. Brokerage Account
	Transactions are required to be executed through a Watermark Securities, Inc. (“Watermark”) brokerage account. Using “Watermark On-Line” will satisfy the advance clearance requirement.

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	In order to maintain an account outside of Watermark Securities, express written permission of the Chief Compliance Officer is required. It is the employee’s responsibility to seek approval for trades and to arrange for the broker-dealer to send duplicate confirmations of such trades and duplicate brokerage statements to the Compliance Officer. Failure to do so will be considered a significant violation of this Policy Statement.
d)	Form
	For trades other than “Watermark On-Line,” clearance must be obtained by completing and signing the Securities Transaction Approval Form provided for that purpose by the Compliance Department and obtaining the signature of a Compliance Officer.
	A sample copy of the Securities Transaction Approval Form is attached.

2.

Factors Considered in Clearance of Personal Transactions

In addition to the above Restrictions and Limitations on Personal Securities Transactions, the Compliance Officer, in keeping with the general principles and objectives of this Policy Statement, may refuse to grant clearance of a personal transaction in his sole discretion without being required to specify any reason for the refusal. Generally, the Compliance Officer will consider the following factors in determining whether or not to clear a proposed transaction:

a)	Whether the amount or the nature of the transaction or person making it is likely to affect the price or market of the security.
b)	Whether the individual making the proposed purchase or sale is likely to benefit from purchases or sales being made or considered on behalf of any account managed by the Adviser.
c)	Whether the transaction is non-volitional on the part of the individual.
d)	As discussed above, certain of the restrictions and limitations on personal securities transactions may not apply to trades of 500 shares or less in the common stock of a company with a market capitalization of at least $1 billion. A list of such companies is maintained by the Compliance Department. Such trades nevertheless do require advance clearance from the Compliance Officer.

(Important: The Compliance Department monitors all transactions by all officers, directors and employees of the Adviser (including transactions in the common stock of such $1 billion market

6

capitalization companies) in order to ascertain any pattern of conduct which may evidence conflicts or potential conflicts with the principles and objectives of this Policy Statement, including a pattern of frontrunning.)

3.	Exempt Securities
	The securities listed below are exempt from the above advance clearance requirement and the quarterly and annual reporting requirements described below. Therefore, it is not necessary to obtain advance clearance for personal transactions in any of the following securities nor is it necessary to report such securities in the quarterly transaction reports or annual securities holdings list:

a)	U.S. Government Securities (including options and futures on such);
b)	Bank Certificates of Deposit;
c)	Bankers’ Acceptances;
d)	Commercial Paper;
e)	Money Market Instruments; and
f)	Money Market Funds and Other Open-end Investment Companies (Mutual Funds) (Closed-end funds must be pre-approved).
g)	Such other exempt securities as may from time to time be listed on the attached appendix A.

Automatic dividend reinvestment plan investments (DRIP’s) for stock in publicly traded companies are also exempt from the advance clearance requirement and the quarterly reporting requirement; however, DRIP acquisitions should be reported on an annual basis.

4.	Accounts Covered
	Advance clearance must be obtained for any personal transaction in a security by an officer, director or employee of the Adviser if such person has, or as a result of the transaction acquires, any direct or indirect beneficial ownership in the security.
	The term “beneficial ownership” is defined by rules of the SEC which will be applicable in all cases. Generally, under the SEC rules, a person is regarded as having beneficial ownership of securities held in the name of:

a)	a husband, wife or a minor child;
b)	a relative (including in-laws, step-children, or step-parents) sharing the same house;
c)	anyone else if the officer, director or employee:

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(i)	obtains benefits substantially equivalent to ownership of the securities; or
(ii)	can obtain ownership of the securities immediately or at some future time.

5.

Exemption from Clearance Requirement

Clearance is not required for any account over which an officer, director or employee has no influence or control; however, the existence of such an account must be reported to the Compliance Officer. The Compliance Officer, in his sole discretion, has the authority to request further information and documentation regarding any account over which an officer, director or employee reports he has no influence or control.

D. Report of Transactions

1. Transactions and Accounts Covered

a)	All personal transactions in any account for which advance clearance is required must also be reported in the next quarterly transaction report after the transaction is effected.
b)	Every officer, director and employee of the Adviser must file a report when due even if such person made no purchases or sales of securities during the period covered by the report.

2. Time of Reporting

A.	Reports of personal transactions must be made within 10 days after the end of each calendar quarter. Thus, reports are due on the 10th day of January, April, July and October.
B.	The January Report also requires an annual listing of all non-exempt securities holdings as of December 31 of the preceding year (a current listing will also be required upon the effectiveness of this Policy Statement). New employees will be required to provide a listing of all non-exempt securities holdings as of the date of commencement of employment.

3.	Form of Reporting
	The report must be on the form provided by the Compliance Department. A copy of the form is attached.

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4.	Responsibility to Report
	The responsibility for taking the initiative to report is imposed on each individual required to make a report. Any effort by the Compliance Department to facilitate the reporting process does not change or alter that responsibility.
5.	Where to File Report
	All reports must be filed with the Compliance Department.
6.	Codes of Ethics
	To the extent the Adviser acts as subadvisor to registered investment companies, personnel of the Adviser may be subject to the Codes of Ethics of such investment companies.

E. High-Risk Trading Activities

     Certain high-risk trading activities, if used in the management of a personal trading portfolio, are risky not only because of the nature of the securities transactions themselves, but also because of the potential that action necessary to close out the transactions may become prohibited during the pendency of the transactions. Examples of such activities include short sales of common stock and trading in derivative instruments such as option contracts to purchase (“call”) or sell (“put”) securities at certain predetermined prices. Officers, directors and employees of the Adviser should understand that short sales and trading in derivative instruments involve special risks - derivative instruments, for example, ordinarily have greater price volatility than the underlying security. The fulfillment of the obligations owed by each officer, director and employee to his or her employer may heighten those risks. For example, if the Adviser becomes aware of material, nonpublic information about the issuer of the underlying securities, such Adviser’s personnel may find themselves “frozen” in a position in a derivative security. The Adviser will not bear any losses resulting in personal accounts through the implementation of this Policy Statement.

F. Restrictions on Disclosures

     Officers, directors and employees of the Adviser shall not disclose any nonpublic information (whether or not it is material) relating to the Adviser or their securities transactions on behalf of clients to any person outside the Adviser (unless such disclosure has been authorized by such Adviser). Material, nonpublic information may not be communicated to anyone, including persons within the Adviser, except as provided in Section I above. Such information must be secured. For example, access to files containing material, nonpublic information and computer files containing such

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information should be restricted, and conversations containing such information, if appropriate at all, should be conducted in private (for example, not by cellular telephone, to avoid potential interception).

G. Review

     The Compliance Officer will review and consider any proper request of an officer, director or employee of the Adviser for relief or exemption from any restriction, limitation or procedure contained herein, which restriction, limitation or procedure is claimed to cause a hardship for such person. The Compliance Officer’s decision is completely within his sole discretion.

2. Service as Director

     No officer, director or employee of the Adviser may serve on the board of any company whose securities are publicly traded (other than a registered investment company managed by the Adviser) without prior approval of the Compliance Officer. If such approval is granted, it will be subject to the implementation of appropriate procedures to isolate investment personnel serving as directors from making investment decisions for an account managed by such Adviser concerning the company in question.

3. Gifts

     No officer, director or employee of the Adviser shall accept, directly or indirectly, anything of value, including gifts and gratuities, in excess of $100 per year from any person or entity that does business with the Adviser. This restriction does not apply to bona fide dining or bona fide entertainment if, during such dining or entertainment, the officer, director or employee is with the person or representative of the entity that does business with the Adviser.

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4. Acknowledgement

     I have read and understand this Policy Statement on Insider Trading. I certify that I have, to date, complied and will continue to comply with this Policy Statement. I understand that any violation of this Policy Statement may lead to sanctions, including dismissal.

 

(Signature)	(Date)
(Print name)

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SECTION III. SUPERVISORY PROCEDURES

     The Adviser has assigned the Compliance Officer the primary responsibility for the implementation and maintenance of the Adviser’s policy and procedures against insider trading. Supervisory Procedures can be divided into two classifications — prevention of insider trading and detection of insider trading.

1. Prevention of Insider Trading

     To prevent insider trading, the Compliance Officer should:

i.	provide, on a regular basis, an education program to familiarize officers, directors and employees with the Adviser’s policy and procedures;
ii.	answer questions regarding the Adviser’s policy and procedures;
iii.	resolve issues of whether information received by an officer, director or employee of the Adviser is material and nonpublic and determine what action, if any, should be taken;
iv.	review on a regular basis and update as necessary the Adviser’s policy and procedures;
v.	when it has been determined that an officer, director or employee of the Adviser has material, nonpublic information:

1.	implement measures to prevent dissemination of such information, and
2.	if necessary, restrict officers, directors and employees from trading the securities; and

vi. promptly review, and either approve or disapprove, in writing, each request of an officer, director or employee of the Adviser for clearance to trade in specified securities.

2. Detection of Insider Trading

     To detect insider trading, the Compliance Officer should:

i.	review the trading activity reports filed by each officer, director and employee;
ii.	review the trading activity of mutual funds and private accounts managed by the Advisers;
iii.	review trading activity (if any) of the Adviser’s own account;

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iv.	promptly investigate all reports of any possible violations of the Adviser’s Policy and Procedures to Detect and Prevent Insider Trading; and
v.	coordinate the review of such reports with other appropriate officers, directors or employees of the Adviser.

3. Special Reports to Management

     Promptly upon learning of a serious violation of the Adviser’s Policy and Procedures to Detect and Prevent Insider Trading, the Compliance Officer should prepare a written report to management providing full details, which may include (1) the name of the particular securities involved, if any; (2) the date(s) the Compliance Officer learned of such violation and began investigating; (3) the account(s) and individual(s) involved; (4) any actions taken as a result of the investigation; and (5) recommendations for further action.

4. General Reports to Management

     On an as-needed or periodic basis, the Adviser may find it useful for the Compliance Officer to prepare a written report to the management and/or Board of Directors of the Adviser setting forth some or all of the following:

i.	a summary of existing procedures to detect and prevent insider trading;
ii.	a summary of any changes in procedures made in the last year;
iii.	full details of any investigation since the last report (either internal or by a regulatory agency) of any suspected insider trading, the results of the investigation and a description of any changes in procedures prompted by any such investigation;
iv.	an evaluation of the current procedures and a description of any anticipated changes in procedures; and
v.	a description of the Adviser’s continuing educational program regarding insider trading, including the dates of such programs since the last report to management.

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INVESTMENT REPORTING MATRIX
(Appendix A to Code of Ethics)

Type of Investment	Reportable	Preclearance
Bank Conversions	YES	YES
Blind Trusts	YES	NO
Call/Matured Securities	YES	NO
Cash Management Accounts (No Securities Trading)*	NO	NO
Closely Held Corporate Stock	YES	NO
Co-op Apartment Shares	NO	NO
Commodities	YES	NO
Convertible Bonds	YES	YES
Corporate Debentures	YES	NO
Corporate Mergers/Tenders	YES	NO
Dividend Reinvestment Plans	YES-annually	NO
Exchange Traded Funds (“ETF”)	YES	YES
Financial Futures	YES	NO
Foreign Government Bonds	YES	NO
Futures (excluding U.S. Govt Securities)	YES	YES
Gifts of Securities	YES	NO
Initial Public Offering	NOT ALLOWED	N/A
Insurance Company Conversions	YES	YES
Limit Orders/Good Til Canceled	YES	Every Other Day
Money Market Funds-Direct	NO	NO
Municipal Bonds	YES	NO
Mutual Funds-Closed End	YES	YES
Mutual Funds-Open End-Direct	NO	NO
Opening of a Bank Trading Account	YES	YES
Opening of a Brokerage Account	YES	YES
Options (30 + days) (excluding U.S. Govt Securities)	YES	YES
Private Partnerships- Affiliated **	NO	NO
Private Investment Partnerships- Unaffiliated	YES	YES
Restricted Stock (Private Placements)	YES	YES
Rights Offering (including over subscriptions)-Exercising	YES	NO
Structured Notes	YES	YES
Stock- Purchase/Sales	YES	YES
Stock- Short Sales	YES	YES
Stock- Dividends/Splits	YES-annually	NO
Systematic Investment Plan with Corporate Issuer	YES-annually	NO
Transfer of a Brokerage Account	YES	YES
Trust Accounts	YES	See Compliance
Unit Investment Trust/Rolls	YES	NO
US Government Securities	NO	NO
US Savings Bonds (EE)	NO	NO
Variable Annuities	NO	NO
Wrap Accounts	YES	See Compliance
Zweig Fund/Zweig Total Return Fund	YES	See Compliance and Legal

*	Registered Representatives must receive permission from their respective broker/dealer to open this account.
**	This information will not be reportable to compliance; however, the information will be maintained by the partnerships’ general counsel.

1/1/04

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CORRESP

The Zweig Total Return Fund, Inc.
900 Third Avenue
New York, New York 10022
(212) 451-1100

December 22, 2006

Securities and Exchange Commission
100 F. Street, NE
Washington, DC 20549

To Whom It May Concern:

     Pursuant to Section 8(b) of the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended, The Zweig Total Return Fund, Inc. is transmitting herewith for filing a Registration Statement on Form N-2 (the “Registration Statement”), Investment Company Act File No. 811-05620.

     Please direct any comments or inquiries regarding the Registration Statement to Daren R. Domina, Katten Muchin Rosenman LLP, 575 Madison Avenue, New York, New York 10022, telephone number: (212) 940-6517; facsimile number: (212) 894-5517.

     Thank you.

Very truly yours,

/s/ The Zweig Total Return Fund, Inc.

The Zweig Total Return Fund, Inc.