-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PTxEOvchhIS9f6p+o4riQRcDK/R8eigoTU3RSfCnvdVWUY7fF2b0//D9Sw0ZJZCk 2tDS6Whee8Ai51M9K+TW9A== 0000950130-99-003098.txt : 19990518 0000950130-99-003098.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950130-99-003098 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZWEIG TOTAL RETURN FUND INC CENTRAL INDEX KEY: 0000836412 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133474242 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-05620 FILM NUMBER: 99628051 BUSINESS ADDRESS: STREET 1: 900 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2125100360 MAIL ADDRESS: STREET 1: 5 HANOVER SQUARE CITY: NEW YORK STATE: NY ZIP: 10004 N-30B-2 1 THE ZWEIG TOTAL RETURN FUND, INC. May 1, 1999 Dear Shareholder: The Zweig Total Return Fund's net asset value, including $0.21 in reinvested distributions, decreased 1.1% during the quarter ended March 31, 1999. Consistent with our policy of seeking to minimize risk while earning reasonable returns, the Fund's average exposure during the period was 78%. The first quarter was a volatile and difficult period for U.S. Treasuries. Yields of the long bond--the 30-year Treasury--began the year at a 5.10% yield to maturity. As the quarter progressed and the slowdown, expected by many street economists, failed to materialize, the yield of the long bond soared as high as a 5.70% yield to maturity. Although the S&P 500 Index gained 5.0%, including dividends, in the first quarter, it is important to note that the index does not really reflect the performance of the overall market. Actually the few top stocks in the S&P 500 were responsible for most of the advance. For comparison purposes, the unweighted S&P 500 was up 1.2% while the S&P 500 midcap was down 6.4%. The Value Line Index, which measures the average performance of 1,700 major stocks, also dropped 6.4%. The Russell 2000 Index fell 5.8% You can see by these numbers what kind of market it was. We hold many mid- cap and big-cap value stocks in our portfolio and they have been underperforming for some time. There has been somewhat of a turnaround in that picture recently but that was the market situation from mid-April of 1998 through mid-April, 1999. Out of a universe of 8,000 stocks, about 78% were down from April, 1998 to April, 1999, according to Ned Davis Research. The market was buoyed by some of the big stocks like Microsoft and Dell, both of which we own. However, the average stock just wasn't keeping up. DISTRIBUTION DECLARED In accordance with our policy of distributing 10% of net asset value per year, which equals 0.83% per month (10% divided by 12 months), the Fund announced a distribution of $0.07 payable on May 26, 1999, to shareholders of record on May 13, 1999. The value of a distribution depends on the exact net asset value at the time of declaration. For the May distribution, 0.83% of the Fund's net asset value was equivalent to $0.07 per share. Including this distribution, the Fund's payout since its inception is now $9.50 MARKET OUTLOOK Our bond exposure at the end of the first quarter was 34% compared with 53% at year-end. If we were fully invested, we would be at 62.5% in bonds and 37.5% in stocks. Consequently, at 34% in bonds, we are at about 54% of a full position (34%/62.5%). As evidenced by robust job growth and healthy output numbers, the U.S. economy in the first quarter continued to be much stronger than had been anticipated. Unemployment hit a 30-year low of 4.2% and the Gross National Product for the first quarter is expected to be close to 4.0%. Yields of the 30-year Treasury Bond ended the quarter at 5.625%, rising over 50 basis points in the three-month period. With commodity prices rising and global growth improving, our outlook for bonds continues to be fairly bearish. Although the long bond has rallied somewhat recently, this is largely attributed to relief that the Federal Reserve did not tighten at its last meeting. Additionally, many central banks--including the European Central Bank, The Bank of England, and The Bank of Canada--have eased, which has helped other bond markets. Moreover, there is evidence that Japan has finally made an economic turnaround and the Nikkei is certainly showing signs of life. If Japan's economic engine is truly picking up steam, the ensuing global strength would be very bearish for the Treasury bond market. Our equity exposure at the end of the first quarter was 30% compared with 37% at year-end. At this figure we were 80% of a full position (30%/37.5%). As far as equities are concerned, we seem to be in what used to be called a "Goldilocks economy"--not too cold and not too hot. At this writing, there is no budget deficit, virtually no inflation, low unemployment, and a growing but not overheating economy. Under these circumstances, price/earning ratios generally go higher, which has been happening for some time. They are currently about the highest in history. As long as the economy continues its present course, the stock market will probably be okay. But if the economic variables start to deteriorate, we will just have further down to go to achieve more normal price/earnings levels. I am not particularly concerned by Commerce Department figures that the economy expanded by almost 4% last year while profits fell 2.2%. Believe it or not, the market generally does better when profits are moderately weak. That's because such a period usually sees less inflation and lower interest rates. With the market focused on a shrinking number of growth stocks and with most stocks declining, some market observers see a similarity to the situation in the 1970's when the steady rise of the so-called "Nifty Fifty" stocks foreshadowed a bear market. While there are some parallels in the current market, there are important differences. For one thing, the "Nifty Fifty" were not as solid as people thought at the time. Many of today's big stocks are benefiting from the technological revolution which is far greater than that of the 1970's. What finally derailed that market wasn't the speculation in those stocks. It was a return to higher inflation, higher interest rates, and a tight monetary policy by the Federal Reserve. If we get these conditions, the present market will also go down. Although the Fed acknowledges that the economy is stronger than expected and bond yields are creeping higher, I do not think that the Fed will do any tightening in the near term. At least, that's my guess. Some market observers believe that the so-called nosebleed valuations of some fast-growing companies are worrisome. I think valuations will keep going up until something happens to these individual companies or higher interest rates hit the entire market. If interest rates and inflation remain low, I think these stocks can move still higher. However, I would be more comfortable if price/earnings ratios were more reasonable. A recent phenomenon is the belief by a lot of traders that momentum is the only yardstick and that traditional fundamentals can be ignored. I strongly disagree. That is not an intelligent way to buy and sell stocks. The straight momentum players will get killed when the market turns. Summing up, the market positives include the current economy with the low inflation and okay interest rates--the Fed cut three times last fall with no apparent increase on the horizon. Among the negatives, there is some excess speculation in the market and valuations are on the high side but I don't see these as significant problems. Overall, my indicators are slightly positive. PORTFOLIO COMPOSITION Reflecting our investment policy guidelines, all of our bonds are U.S. Government & Agency 2 obligations. The average duration of the bond portion of our portfolio (sensitivity to interest rates) is 4.0 years, compared with 6.1 years at the close of the fourth quarter. Since these bonds are liquid, they give us the flexibility to adjust swiftly to changing market conditions. With equities, the composition of the leading industry groups in our portfolio showed little change during the first quarter. On March 31 these sectors included financial services, utilities, technology, telecommunications, retail trade and services, and manufacturing. With the exception of retail trade and services, which replaced oil and oil services, all of the above were in our top ranking at the close of the fourth quarter of 1998. In the retail field, our previous holdings appreciated in value and we added three major factors: Sears, Best Buy Company (a retailer of consumer electronics and related equipment with over 300 stores in 36 states), and Claire's Stores (a mall-based retailer of popular-priced teen's fashion items). As oil stocks fell in value, we trimmed the USX-Marathon Group and several other positions. Our largest individual positions include Ford, Telefonos de Mexico, Microsoft, General Motors, Burlington Northern, Morgan Stanley Dean Witter, EMC, Amgen, Daimler Chrysler, and Dell. New to the above rankings are General Motors, which we acquired during the quarter, and Telefonos de Mexico, Morgan Stanley Dean Witter, EMC, and Amgen, all of which appreciated in value. We also added to our position in Telefonos de Mexico. Among the previous quarter's top positions, we have sold out our holdings in Maytag, McKesson, and AT&T, and trimmed our stake in Home Depot and MCI Worldcom. Sincerely, Martin E. Zweig, Ph.D. Chairman 3 THE ZWEIG TOTAL RETURN FUND, INC. STATEMENT OF NET ASSETS March 31, 1999 (Unaudited)
Number of Shares Value --------- ------------ Common Stocks 33.23% Aerospace & Defense 0.62% B.F. Goodrich & Co. .................................. 75,800 $ 2,600,888 Northrop Corp. ....................................... 32,100 1,921,987 ------------ 4,522,875 ------------ Apparel Manufacturer 0.67% Liz Claiborne, Inc. .................................. 35,900 1,171,238 VF Corp. ............................................. 37,600 1,774,250 Warnaco Group, Inc. .................................. 80,700 1,992,281 ------------ 4,937,769 ------------ Automotive 1.62% Daimler Chrysler AG................................... 42,015 3,605,412 Ford Motor Co. ....................................... 75,900 4,307,325 General Motors Corp. ................................. 45,900 3,987,563 ------------ 11,900,300 ------------ Biotechnology 0.49% Amgen, Inc. .......................................... 48,200 3,608,975 ------------ Cable & Television 0.22% Comcast Corp. ........................................ 25,600 1,611,200 ------------ Chemicals 0.31% IMC Global, Inc. ..................................... 111,100 2,270,606 ------------ Consumer Durables 0.65% Cooper Tire & Rubber Co. ............................. 70,800 1,300,950 Whirlpool Corp. ...................................... 63,400 3,447,375 ------------ 4,748,325 ------------ Consumer Products 0.46% Fortune Brands, Inc. ................................. 51,900 2,007,881 Premark International, Inc. .......................... 42,100 1,386,669 ------------ 3,394,550 ------------ Consumer Services 0.17% Service Corp., Inc. .................................. 87,100 1,241,175 ------------ Electronics 0.16% Avnet, Inc. .......................................... 32,200 1,179,325 ------------ Engineering & Construction 0.24% Fluor Corp. .......................................... 66,200 1,787,400 ------------ Financial Services 5.01% ACE Ltd. ............................................. 88,500 2,760,093 A.G. Edwards & Sons, Inc. ............................ 47,200 1,542,850 Allstate Corp. ....................................... 81,600 3,024,300 Astoria Financial Corp. .............................. 61,900 3,095,000 Bear Stearns & Co., Inc. ............................. 46,916 2,096,559
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Number of Shares Value ---------- ------------ Financial Services -- (Continued) Charter One Financial, Inc. ......................... 36,084 $ 1,041,362 Conseco, Inc. ....................................... 74,800 2,309,450 Dime BanCorp., Inc. ................................. 72,200 1,674,138 Fidelity National Financial Corp. ................... 38,400 576,000 GATX Corp. .......................................... 26,600 876,138 Hartford Financial Services Group, Inc. ............. 51,400 2,920,163 Loews Corp. ......................................... 37,800 2,820,825 Morgan Stanley, Dean Witter, Discover & Co. ......... 37,500 3,747,655 Old Republic International Corp. .................... 57,750 1,053,938 PaineWebber Group Inc. .............................. 67,100 2,675,613 Reliance Group Holdings, Inc. ....................... 32,500 245,781 Reliastar Financial Corp. ........................... 20,900 890,863 Ryder Systems, Inc. ................................. 84,500 2,334,313 Selective Insurance Group, Inc. ..................... 19,600 345,450 UnionBancal Corp. ................................... 19,500 664,218 ------------ 36,694,709 ------------ Food & Beverage 0.35% Adolph Coors Co., Class B............................ 47,800 2,581,200 ------------ Home Builders & Materials 0.30% Fleetwood Enterprises, Inc. ......................... 44,300 1,268,087 Kaufman & Broad Home Corp. .......................... 40,600 916,038 ------------ 2,184,125 ------------ Industrial Services 0.11% Ogden Corp. ......................................... 33,600 808,500 ------------ Investment Companies 0.95% Blackrock 2001 Term Trust, Inc. ..................... 29,000 261,000 Blackrock Strategic Term Trust, Inc. ................ 29,000 266,438 Central European Equity Fund, Inc. .................. 18,600 224,363 Emerging Markets Infrastructure Fund, Inc. .......... 94,200 765,375 Emerging Markets Telecommunications Fund, Inc. ...... 30,800 286,825 France Growth Fund, Inc. ............................ 25,700 348,556 Gabelli Equity Trust, Inc. .......................... 44,100 523,688 Gabelli Global Multimedia Trust Fund, Inc. .......... 51,700 613,938 Italy Fund, Inc. .................................... 28,900 435,306 Mexico Fund, Inc. ................................... 68,900 1,046,419 Morgan Stanley Emerging Markets Fund, Inc. .......... 51,400 491,513 Portugal Fund, Inc. ................................. 10,200 138,975 Royce Value Trust, Inc. ............................. 70,160 793,682 Swiss Helvetia Fund, Inc. ........................... 56,800 798,750 ------------ 6,994,828 ------------ Leisure 0.13% Brunswick Corp. ..................................... 48,700 928,344 ------------ Lodging 0.18% Starwood Hotels & Resorts............................ 45,500 1,299,594 ------------ Manufacturing 2.23% Borg-Warner Automotive, Inc. ........................ 25,600 1,224,000 Cummins Engine Company, Inc. ........................ 51,900 1,845,694 Dana Corp. .......................................... 82,700 3,142,600 Dexter Corp. ........................................ 14,900 469,350
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Number of Shares Value ---------- ------------ Manufacturing -- (Continued) Ingersoll Rand Co. ............................... 45,100 $ 2,238,087 Johnson Controls, Inc. ........................... 26,000 1,621,750 Kennametal, Inc. ................................. 40,600 710,500 Milacron, Inc. ................................... 31,000 488,250 PACCAR, Inc. ..................................... 24,100 992,619 Timken Co. ....................................... 83,600 1,358,500 Tyco International Ltd. .......................... 31,900 2,288,825 ------------ 16,380,175 ------------ Metals & Mining 1.28% AK Steel Holding Corp. ........................... 93,400 2,107,338 Alcan Aluminum Ltd. .............................. 65,200 1,682,975 Reynolds Metals Co. .............................. 56,600 2,734,487 USX-U.S. Steel Group.............................. 120,700 2,836,450 ------------ 9,361,250 ------------ Oil & Oil Services 1.49% Ashland, Inc. .................................... 58,500 2,394,844 Diamond Offshore Drilling, Inc. .................. 19,900 629,338 Santa Fe International Corp. ..................... 62,500 1,167,969 Sunoco, Inc. ..................................... 57,200 2,062,775 Tidewater, Inc. .................................. 48,700 1,260,112 YPF Sociedad Anonima, ADR......................... 108,100 3,411,906 ------------ 10,926,944 ------------ Paper & Forest Products 0.50% Boise Cascade Corp. .............................. 39,000 1,257,750 Georgia Pacific Corp. ............................ 27,900 2,071,575 Mead Corp. ....................................... 10,000 307,500 ------------ 3,636,825 ------------ Pharmaceuticals 0.37% Warner Lambert Co. ............................... 41,100 2,720,306 ------------ Printing & Publishing 0.21% Knight Ridder, Inc. .............................. 30,200 1,510,000 ------------ Real Estate Investment Trusts 0.13% Crescent Real Estate Equities Co. ................ 28,100 604,150 FelCor Lodging Trust.............................. 16,400 380,275 ------------ 984,425 ------------ Retail Trade & Services 2.55% Best Buy, Inc. ................................... 66,200 3,442,400 Claire's Stores, Inc. ............................ 37,500 1,129,688 Home Depot, Inc. ................................. 56,800 3,535,800 May Department Stores Co. ........................ 15,000 586,875 Pier 1 Imports, Inc. ............................. 145,200 1,179,750 Sears Roebuck & Co. .............................. 75,000 3,389,063 Supervalu, Inc. .................................. 119,400 2,462,624 Wal Mart Stores, Inc. ............................ 32,000 2,950,000 ------------ 18,676,200 ------------ Technology 3.25% Applied Materials, Inc. .......................... 31,000(a) 1,912,313 Broadvision, Inc. ................................ 38,400(a) 2,294,400
6
Number of Shares Value ---------- ------------ Technology -- (Continued) Cisco Systems, Inc. .............................. 27,400(a) $ 3,002,013 Compaq Computer Corp. ............................ 74,402 2,357,613 Dell Computer Corp. .............................. 88,200(a) 3,605,175 EMC Corp. ........................................ 29,100(a) 3,717,524 Intel Corp. ...................................... 23,600 2,811,350 Microsoft Corp. .................................. 46,400(a) 4,158,600 ------------ 23,858,988 ------------ Telecommunications 2.64% Lucent Technologies Co. .......................... 31,900 3,437,225 MCI Worldcom, Inc. ............................... 39,900(a) 3,533,644 Nokia Corp. ...................................... 19,200(a) 2,990,400 Tele Norte Leste Participacoes S.A., ADR.......... 95,000 1,460,625 Telefonica de Argentina, S.A., ADR................ 52,300 1,582,075 Telefonos de Mexico S.A., ADR..................... 64,600 4,231,300 Telephone & Data Systems, Inc. ................... 9,400 531,100 Telesp Participacoes S.A., ADR.................... 77,100(a) 1,590,187 ------------ 19,356,556 ------------ Textiles 0.20% Armstrong World Industries, Inc. ................. 25,700 1,161,319 Shaw Industries, Inc. ............................ 15,000 277,500 ------------ 1,438,819 ------------ Tobacco 0.36% RJR Nabisco Holdings Corp. ....................... 105,700 2,642,500 ------------ Transportation 1.79% Airborne Freight Corp. ........................... 58,500 1,820,813 Burlington Northern Santa Fe Corp. ............... 120,900 3,974,588 Canadian Pacific Ltd. ............................ 55,300 1,074,894 CNF Transportation, Inc. ......................... 86,400 3,267,000 Comair Holdings, Inc. ............................ 68,700 1,623,036 USFreightways Corp. .............................. 42,100 1,384,038 ------------ 13,144,369 ------------ Utilities -- Electric & Natural Gas 3.59% Central & South West Corp. ....................... 56,100 1,314,844 DTE Energy Co. ................................... 51,200 1,968,000 Edison International.............................. 101,800 2,265,050 Energy East Corp. ................................ 44,200 2,323,263 Entergy, Inc. .................................... 98,000 2,695,000 GPU, Inc. ........................................ 83,000 3,096,938 PG&E Corp. ....................................... 111,300 3,457,256 Pinnacle West Capital Corp. ...................... 37,000 1,345,875 Public Service Co. of New Mexico.................. 30,100 511,700 Texas Utilities Co. .............................. 75,000 3,126,562 UniCom Corp. ..................................... 92,200 3,371,062 UtiliCorp United, Inc. ........................... 38,700 880,425 ------------ 26,355,975 ------------ Total Common Stocks............................. 243,687,132 ------------
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Principal Amount Value ------------ ------------ United States Government & Agency Obliga- tions 34.40% Federal Home Loan Mortgage Corp., 5.125%, 10/15/2008..................................... $100,200,000 $ 95,251,622 United States Treasury Notes, 6.25%, 8/31/2000.. 13,500,000 13,732,038 United States Treasury Notes, 10.75%, 5/15/2003. 15,000,000 18,004,695 United States Treasury Notes, 7.50%, 2/15/2005.. 16,300,000 18,077,727 United States Treasury Notes, 6.50%, 5/15/2005.. 7,600,000 8,060,750 United States Treasury Notes, 6.50%, 10/15/2006. 30,100,000(b) 32,084,734 United States Treasury Notes, 6.125%, 8/15/2007. 13,400,000 14,015,569 United States Treasury Bonds, 8.125%, 8/15/2021. 13,000,000 16,514,069 United States Treasury Bonds, 7.50%, 11/15/2024. 1,200,000 1,452,000 United States Treasury Bonds, 6.50%, 11/15/2026. 19,300,000 20,898,291 United States Treasury Bonds, 6.375%, 8/15/2027. 13,300,000 14,206,063 ------------ Total United States Government & Agency Obligations.................................. 252,297,558 ------------ Short-Term Investments 30.49% BP Amoco Capital Corp., 5.00%, 4/1/99........... 27,000,000 27,000,000 Ford Motor Credit Corp., 4.82%, 4/8/99.......... 25,000,000 24,976,547 General Electric Capital Corp., 4.81%, 4/5/99... 20,000,000 19,989,297 Gillette Company, 5.00%, 4/1/99................. 27,000,000 27,000,000 GMAC Corp., 4.89%, 4/6/99....................... 25,000,000 24,983,014 Goldman Sachs Corp., 4.84%, 4/6/99.............. 20,000,000 19,986,537 Honeywell Corp., 5.00%, 4/1/99.................. 24,700,000 24,700,000 Household Financial Corp., 4.85%, 4/9/99........ 30,000,000 29,967,658 Merrill Lynch & Co., 4.85%, 4/7/99.............. 25,000,000 24,979,784 ------------ Total Short-Term Investments.................. 223,582,837 ------------ Number of Contracts ------------ Net Unrealized Appreciation on Futures Con- tracts 0.02% Standard and Poor's June 1999 Short Futures..... 77(c) 142,242 ------------ Total Investments............................. 98.14% 719,709,769 Cash and Other Assets Less Liabilities........ 1.86% 13,621,527 ------ ------------ Net Assets (Equivalent to $8.13 per share based on 90,197,796 shares of capital stock outstanding)................................. 100.00% $733,331,296 ====== ============ Number of Shares ------------ Security Sold Short W.E.B.S. Index Fund, Inc. -- Mexico Series (Proceeds $390,725)............................ 28,400 $ 374,525 ============
- -------- (a) Non-income producing security. (b) Used as collateral on short sales. (c) The market value of short futures was $24,896,025 (representing 3.39% of the Fund's net assets) with a cost of $24,753,783. 8 THE ZWEIG TOTAL RETURN FUND, INC. FINANCIAL HIGHLIGHTS March 31, 1999 (Unaudited)
Net Asset Value Total Net Assets per share -------------------------- ---------------- Beginning of period: December 31, 1998............................ $757,212,047 $ 8.43 Net investment income........... $ 6,231,160 $ 0.07 Net realized and unrealized losses on investments.......... (14,781,856) (0.16) Dividends from net investment income and distributions from net long-term and short-term capital gains.................. (18,881,541) (0.21) Net asset value of shares issued to shareholders for reinvestment of dividends and distributions.................. 3,551,486 -- ------------ ------- Net decrease in net assets/net asset value.................... (23,880,751) (0.30) ------------ ------- End of period: March 31, 1999.... $733,331,296 $ 8.13 ============ =======
9 KEY INFORMATION 1-800-272-2700 Zweig Shareholder Relations: For general information and literature (212) 486-3122 The Zweig Total Return Fund Hot Line: For updates on net asset value, share price, major industry groups and other key information REINVESTMENT PLAN Many of you have questions about our reinvestment plan. We urger shareholders who want to take advantage of this plan and whose shares are held in "Street Name," to consult your broker as soon as possible to determine if you must change registration into your own name to participate. ---------------- Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may from time to time purchase its shares of common stock in the open market when Fund shares are trading at a discount from their net asset value. 10 OFFICERS AND DIRECTORS Martin E. Zweig, Ph.D. Chairman of the Board and President Jeffrey Lazar Vice President and Treasurer Stuart B. Panish Vice President and Secretary Christopher M. Capano Assistant Vice President Charles H. Brunie Director Elliot S. Jaffe Director Alden C. Olson, Ph.D. Director James B. Rogers, Jr. Director Anthony M. Santomero, Ph.D. Director Investment Adviser Zweig Total Return Advisors, Inc. 900 Third Avenue New York, New York 10022 Fund Administrator Zweig/Glaser Advisers LLC 900 Third Avenue New York, New York 10022 Custodian The Bank of New York One Wall Street New York, New York 10286 Transfer Agent State Street Bank & Trust Co. 225 Franklin Street Boston, MA 02110 Legal Counsel Rosenman & Colin LLP 575 Madison Avenue New York, New York 10022 - -------------------------------------------------------------------------------- This report is transmitted to the shareholders of The Zweig Total Return Fund, Inc. for their information. This is not a prospectus, circular or repre- sentation intended for use in the purchase of shares of the Fund or any securi- ties mentioned in this report. ZTR991 3206-1Q-99 [LOGO OF THE ZWEIG TOTAL RETURN FUND, INC. QUARTERLY REPORT ------------------- March 31, 1999 -----END PRIVACY-ENHANCED MESSAGE-----