Edgar Filing: ZWEIG FUND INC /MD/

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-04739

The Zweig Fund, Inc.
------------------------------------------------------
(Exact name of registrant as specified in charter)

900 Third Avenue
New York, NY 10022
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Bank of New York
101 Barclay Street, 13E
New York, NY 10286
---------------------------------------------------------------------
(Name and address of agent for service)

registrant's telephone number, including area code: (212) 298-1635

Date of fiscal year end: December 31, 2003

Date of reporting period: June 30, 2003

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. (S) 3507.

Item 1. Reports to Stockholders.

August 1, 2003

Dear Shareholder:

The Zweig Fund's net asset value gained 7.10% for the three months ended
June 30, 2003, including the $0.131 distribution paid on April 28, 2003. During
the same period, the Standard & Poor's 500 Index increased 15.39%, including
dividends. The Fund's average equity exposure during the period was
approximately 60%.

For the six months ended June 30, 2003, the Fund's net asset value,
including reinvested distributions, increased 6.40%. During the same period,
the S&P 500 Index gained 11.78%, including dividends. The Fund's average
exposure for the six months was 61%.

The Fund recently announced a distribution of $0.139 payable on July 28,
2003 to shareholders of record on July 9, 2003. This amount was consistent with
the Fund's historic policy of distributing 10% of net asset value per year.
Including this distribution, our total payout since the Fund's inception is now
$17.833.

As announced on July 28, 2003, the Fund, which had been paying an annual 10%
fixed distribution based on net asset value, will move to a variable
distribution, to be phased in by the end of the year. The variable distribution
will be calculated based on earnings and distribution requirements under the
Internal Revenue Code.

The 10% payout policy was adopted during a very different economic climate
and is now considered to be no longer appropriate in light of current
conditions in the capital markets and economy. In past years, a significant
portion of the 10% payout was not investment income, but instead a return of
capital. These returns reduced shareholders investment in the fund and in
future periods may be subject to additional taxation.

As you know, we installed a new portfolio management team on April 1, and
they are focused on strengthening performance and earning the continued
commitment of our shareholders. The change in management and new payout policy
are intended to serve your best interests by seeking to grow and preserve your
investment over the long term.

The fund's objective to seek the highest total return, consisting of capital
appreciation and current income, consistent with the preservation of capital
remains unchanged. For more information about the Zweig Fund, visit
PhoenixInvestments.com or call 1-800-243-4361.

Sincerely,

/s/ Philip R. McLoughlin
Philip R. McLoughlin
Chairman

MARKET OUTLOOK

Stocks made a strong showing in the second quarter. The rally lifted the Dow
Jones Industrial Average 12% for the quarter and 8.8% for the first half. The
S&P 500 Index gained 15% for the quarter and 11.8% for the six months, while
the Nasdaq Composite climbed 21% for the quarter and 21.5% for the half.

Stocks began to rally just before we invaded Iraq. When the war went well,
the market picked up steam. It was as if investors no longer had to worry about
the war. Also, there was a reasonable amount of pessimism, on a short-term
basis, around March. That helped to strengthen the market. While I don't see it
as a huge factor, the tax cuts may have played a role in this development, as
well. With dividends so miniscule to begin with, I don't see where the lower
rate will benefit people all that much in the short run. The

capital gains tax went down some and, on the margin, it was a plus.

Another reason for the market rise was the very large drop in short-term
interest rates. Suddenly, people began looking at their money market funds
yielding 1% or less and decided to put some money in the stock market. I don't
think it was the smartest thing they could have done, but they were doing it.
There was a huge move into junk bonds. By chasing the yield, they increased
their risk--a much higher yield than a money market fund, but a completely
different ball game. Also, there was a big move into investment grade bonds,
corporate bonds, and government bonds. All of these factors combined to help
give the market a lift.

However, I don't think that the rally is sustainable. Why did interest rates
go down? Why did the Federal Reserve Board recently cut again by a
quarter-point to 1.00%, the lowest level since 1958? Rates are low because the
economy is in trouble and the Fed can't seem to fix it. It did not reduce rates
thirteen times since early 2001 because things were going well. The Fed actions
have helped on the margin, but they don't solve the economy's major problems.

First, there is the excess capacity and the lack of capital spending. Lower
rates won't change that. Second, there are the cheap labor costs in China,
Mexico, India, and elsewhere, squeezing profit margins and threatening us with
deflation. The rate cuts won't change that. Third, there is the excess debt
still in the economy. The lower rates do help those who are in debt, especially
homeowners who can refinance. But, it's terrible for savers who are seeing the
interest rates go way down on their bonds or money funds. They have less money
to spend.

Mortgage rates are based on government bonds and not on short-term rates.
Interestingly, when the fed cut by one-quarter point in June, the bond market
reacted and yields rose steeply in a little over three weeks. If they continue
in this direction, I believe it will put the kibosh on refinancing of home
mortgages. So far, the last cut in short-term rates has hurt the bond market.

It is important for me to clarify that I can no longer trust the Fed as a
market indicator. Going back to 1913, every time the Fed cut three consecutive
times (which I believed was a pretty aggressive tactic) and allowed the money
supply to grow, the market was up eighteen months later by approximately 34%.
This time, the market was significantly down--about 22%/1/. Previously, the Fed
never failed as a market predictor. This time it not only failed, it failed
utterly. The bubble may have worked its way so deeply through the economy that
lowering rates isn't enough to revive the economy.

I don't think we are anywhere near to washing out the bubble. The bubble got
going in 1996 and lasted for about four years. I think we have seen elements of
the revival of the bubble lately among tech stocks. In some cases, the
price-to- earnings ratios are outrageous. I don't see earnings to justify the
boom. Again, speculation is rampant. In my view, we have seen a rally in a
massive bear market.

Previous bear markets have seen many advances as steep as the current one.
Since the late 1920s, 36 bear rallies were greater than 10%. We have had 18
bear rallies of at least 17% and six bear rallies of at least 25%.
Incidentally, in the bear market that began in 2000, we have already had four
prior rallies that averaged about 20%/1/. I still don't believe that last
October's lows were the final lows of this bear market.

Some people are placing high hopes on the administration's huge tax cut
package as a strong stimulus to the economy and the stock market. As I
mentioned earlier, the dividend tax cut doesn't do much for me because
dividends are so low to begin with. I do think it will push compa-

nies to increase their dividend payments. The question is, where's the money
coming from? If earnings aren't so great, it will be tough for companies to
raise dividends.

You could argue that people would retain more in after-tax dividends and
spend the money, boosting the economy. The lower capital gains tax might help
the market somewhat. To my mind, a broad cut in income tax rates would have
been a better market stimulus. Overall, the tax package will help on the
margin, but I don't know if it's enough to turn the economy around.

There are those who may think that the current weak dollar is beneficial to
our economy and hence the stock market. Well, we have tested the dollar to
death as a stock market indicator and have not been able to find a stable
relationship. As we've seen in the last few months, the market sometimes does
better with a weak dollar. Sometimes it does poorly. It gets us to the question
as to why the dollar is weak. One reason is that the economy is not doing as
well as it should. Also, the dollar may be overvalued against other currencies.
We have a poor interest rate differential now against Europe and that may be
hurting the dollar. The weak dollar does help our exports, but one wonders how
long foreigners will continue to hold our stocks and bonds if they think the
dollar will continue to drop. Of course, the weak dollar does make investments
here cheaper for foreigners. But, if they expected the dollar to keep
declining, why would they buy?

At this time, stocks are not cheap. The ratio of the S&P 500 stocks to
earnings over the past twelve months has recently hit around 32, nearly double
the historical range. Their overvaluation is another reason why I don't think
we have hit a bottom. Even a number like 16, which is average, doesn't do it
for me. If you research the Dow Jones Industrial Average back to the bottom of
most major markets for the last 130 years, you would count some 13 horrendous
bear markets. The average price-to-earnings ratio at those bottoms was around
8. It gets complicated when you start computing operating earnings and forward
earnings. But, in my opinion, it doesn't look like we are near the
price-to-earning ratio you should expect at market bottoms.

In the second quarter, the market got a big lift when, following three
quarters of net withdrawals, the net inflow of funds into domestic stock mutual
funds increased by over $32 billion. If such inflows are moderately positive,
that's fine and it's bullish. But, if they get excessive, it's apt to mean
there's too much speculation. For the moment, I think the inflow is probably a
positive, but I'm concerned that too much money may be going into speculative
funds. While there were fairly heavy redemptions in the funds last summer, I
don't think they approached the levels we'll find at the eventual bottom.
Percentage-wise, they weren't as high as we saw after the crash of 1987.

Meanwhile, cash levels at mutual funds are down to about 4 or 5%, their most
fully invested position in the past two years. That is a telling indicator for
me. The average cash/assets level at funds is approximately 9.2% and we have
seen much higher levels. To put the current figure in perspective, recall that
we have had the greatest speculative bubble in the 200-year history of the
stock market. How can we wash out such a bubble and wind up with so low a
cash/assets ratio? I believe it shows that there is just too much optimism out
there and it is another indication that the market hasn't seen its lows.

In addition, I have some concern that margin debt grew by nearly 8% from
March and it is now at its highest level since 2002. Roughly half of the margin
debt had been eliminated from the peak of early 2000. Since the level seemed to
have been close to infinity, cutting it by half didn't do the trick. The level
never got low enough in relation to gross domestic product, a gauge I like to
use. Now, the quick comeback in recent months doesn't appear to be a legitimate
one to me.

A plus for the market is that the number of initial public offerings (IPOs)
remains on the light side. There were only five IPOs in the second quarter,
raising $1.58 billion against 39 IPOs, raising $6.7 billion in the second
quarter of last year. Recently, we have seen a few more, but the environment
remains hostile for offerings. It's hard to bring out non-earning tech stocks
as we saw three years ago and I think that is good as I believe it keeps the
supply low.

Wall Street is also more sober when it comes to mergers and acquisitions.
Although there was a spurt in July, the second quarter was the third
consecutive quarter in which mergers and acquisitions fell below $100 billion.
It came to $91.1 billion compared with $106.4 billion in the second quarter of
last year. Typically, at market bottoms, there is a big reduction in merger
activity and new issues, pointing to the kind of pessimism I believe you want
to see. I don't really know if that activity has gotten low enough.

A not-so-favorable market sign is that corporate insiders are selling at
their highest levels since back in the 1980s. In the 32 years of data that I
have, there were only three times that the percentage of sales has been higher
than in the last few weeks. I think insiders tend to be right more often than
not. Sometimes, as happened in 1982, insiders sold too soon, coming off the
bottom. But, I take the current heavy insider sales as a negative. Why are they
dumping all this stock while the public is buying hand-over-fist?

Also, I don't like the fact that investment advisers are currently 60%
bullish and only 16% bearish. The bearish figure is the lowest since before the
crash of 1987. More than 70% of stock market newsletter advisers are
bullish/1/. No matter what kind of pessimism we had when the rally started a
few months ago, sentiment has turned into ridiculous optimism. I feel that is
not good for the market.

In summary, the first negative for the market is the excessive optimism.
Sentiment was not nearly pessimistic enough at the bottoms last fall or earlier
this year. Second, I think valuations are way too high. Third, while the
economy is limping along on the upside, I don't expect a recovery huge enough
to bail out the stock market. On the positive side, the Fed cut again and the
tax cut package could be helpful. I have a hard time finding other significant
positives.

Consequently, I am very cautious at this writing. We have cut our exposure
down to 55%, which means 45% cash. If conditions warrant, I may want to cut
back further and raise our cash position.

PORTFOLIO COMPOSITION

At the end of the second quarter our leading industry groups included
financials, health care, technology, consumer discretionary, and energy. The
only changes from our March 31 listing were the differences in ranking between
financials and health care and the replacement of consumer staples by consumer
discretionary. During the quarter, we added to our positions in financials and
consumer discretionary and trimmed our holdings in consumer staples and energy.

Our leading individual positions include Pfizer, Citigroup, Wells Fargo,
General Electric, Bank of America, Amgen, Dell, Microsoft, Procter & Gamble,
and Occidental Petroleum. New to the above listing are Amgen, Procter & Gamble,
and Occidental Petroleum. No longer in this top category are IBM and Johnson &
Johnson, where we reduced our holdings, and Pharma Holders, which we sold out.

Sincerely,

[SIGNATURE]

/s/ Carlton Neel
Carlton Neel
Executive Vice President
Phoenix/Zweig Advisers LLC

1 Per Zweig Consulting LLC

OUR PRIVACY COMMITMENT

The Zweig Fund, Inc. recognizes that protecting the privacy and security of
the confidential personal information we collect about you is an important
responsibility. The following information will help you understand our privacy
policy and how we will handle and maintain confidential personal information as
we fulfill our obligations to protect your privacy. "Personal information"
refers to the nonpublic financial information obtained by us in connection with
providing you a financial product or service.

Information We Collect

We collect personal information to help us serve your financial needs, offer
new products or services, provide customer service and fulfill legal and
regulatory requirements. The type of information that we collect varies
according to the products or services involved, and may include:

.. Information we receive from you on applications and related forms (such as
name, address, social security number, assets and income); and

.. Information about your transactions and relationships with us, our
affiliates, or others (such as products or services purchased, account
balances and payment history).

Information Disclosed in Administering Products and Services

We will not disclose personal information about current or former customers
to non-affiliated third parties except as permitted or required by law. We do
not sell any personal information about you to any third party. In the normal
course of business, personal information may be shared with persons or entities
involved in servicing and administering products and services on our behalf,
including your broker, financial advisor or financial planner and other service
providers and affiliates assisting us.

Procedures to Protect Confidentiality and Security of Your Personal Information

We have procedures in place that limit access to personal information to
those employees and service providers who need to know such information in
order to perform business services on our behalf. We educate our employees on
the importance of protecting the privacy and security of confidential personal
information. We also maintain physical, electronic and procedural safeguards
that comply with federal and state regulations to guard your personal
information.

We will update our policy and procedures where necessary to ensure that your
privacy is maintained and that we conduct our business in a way that fulfills
our commitment to you. If we make any material changes in our privacy policy,
we will make that information available to customers through our Web site
and/or other communications.

THE ZWEIG FUND, INC.

SCHEDULE OF INVESTMENTS

June 30, 2003
(Unaudited)

Number of
Shares Value
--------- ------------

COMMON STOCKS 55.55%
CONSUMER DISCRETIONARY 7.54%
AutoZone, Inc................................. 35,000(a) $ 2,658,950
Best Buy Co., Inc............................. 70,000(a) 3,074,400
Clear Channel Communications, Inc............. 51,500(a) 2,183,085
GAP (The), Inc................................ 242,000 4,539,920
Home Depot, Inc............................... 139,000 4,603,680
Liz Claiborne, Inc............................ 65,000 2,291,250
Lowe's Cos., Inc.............................. 70,500 3,027,975
Reebok International Ltd...................... 52,000(a) 1,748,760
Royal Caribbean Cruises Ltd................... 104,000 2,408,640
Tribune Co.................................... 80,500 3,888,150
------------
30,424,810
------------
CONSUMER STAPLES 4.11%
Coca-Cola Enterprises, Inc.................... 137,000 2,486,550
Kimberly-Clark Corp........................... 70,000 3,649,800
PepsiCo, Inc.................................. 58,900 2,621,050
Procter & Gamble Co........................... 56,600 5,047,588
Wal-Mart Stores, Inc.......................... 52,000 2,790,840
------------
16,595,828
------------
ENERGY 4.43%
ConocoPhillips................................ 76,000 4,164,800
Halliburton Co................................ 127,000 2,921,000
Occidental Petroleum Corp..................... 149,500 5,015,725
Talisman Energy, Inc.......................... 51,200 2,347,520
Total S.A., ADR............................... 45,500 3,448,900
------------
17,897,945
------------
FINANCIALS 14.47%
AFLAC, Inc.................................... 92,000 2,829,000
Allstate Corp................................. 69,400 2,474,110
American International Group, Inc............. 55,000 3,034,900
Bank of America Corp.......................... 86,500 6,836,095
Capital One Financial Corp.................... 39,000 1,918,020
Citigroup, Inc................................ 189,800 8,123,440
Fannie Mae.................................... 52,300 3,527,112

See notes to financial statements

Number of
Shares Value
--------- ------------

FINANCIALS (CONTINUED)
First Tennessee National Corp................. 85,000 $ 3,732,350
Goldman Sachs Group, Inc...................... 35,000 2,931,250
Lehman Brothers Holdings, Inc................. 69,600 4,627,008
Morgan Stanley................................ 69,500 2,971,125
National City Corp............................ 94,000 3,074,740
Wachovia Corp................................. 96,000 3,836,160
Washington Mutual, Inc........................ 35,000 1,445,500
Wells Fargo & Co.............................. 140,200 7,066,080
------------
58,426,890
------------
HEALTH CARE 10.20%
Amgen, Inc.................................... 100,000(a) 6,644,000
Angiotech Pharmaceuticals, Inc................ 26,000(a) 1,059,240
C. R. Bard, Inc............................... 15,000 1,069,650
Caremark RX, Inc.............................. 91,000(a) 2,336,880
Guidant Corp.................................. 64,000 2,840,960
Johnson & Johnson............................. 49,000 2,533,300
McKesson Corp................................. 31,500 1,125,810
MedImmune, Inc................................ 26,000(a) 945,620
Medtronic, Inc................................ 35,000 1,678,950
Mylan Laboratories, Inc....................... 143,000 4,972,110
Pfizer, Inc................................... 276,000 9,425,400
St. Jude Medical, Inc......................... 53,000(a) 3,047,500
UnitedHealth Group, Inc....................... 69,600 3,497,400
------------
41,176,820
------------
INDUSTRIALS 3.91%
Boeing Co..................................... 52,100 1,788,072
General Electric Co........................... 242,000 6,940,560
L-3 Communications Holdings, Inc.............. 52,500(a) 2,283,225
Northrop Grumman Corp......................... 29,000 2,502,410
Raytheon Co................................... 68,500 2,249,540
------------
15,763,807
------------
INFORMATION TECHNOLOGY 8.08%
Amdocs Ltd.................................... 158,000(a) 3,792,000
Cisco Systems, Inc............................ 269,000(a) 4,489,610
Dell Computer Corp............................ 186,000(a) 5,944,560
First Data Corp............................... 69,300 2,871,792
Intel Corp.................................... 176,000 3,657,984
International Business Machines Corp.......... 28,000 2,310,000
Microsoft Corp................................ 212,000 5,429,320
Nokia Corp., ADR.............................. 251,000 4,123,930
------------
32,619,196
------------

See notes to financial statements

Number of
Shares Value
----------- ------------

MATERIALS 0.48%
International Paper Co........................ 54,700 $ 1,954,431
------------
TELECOMMUNICATION SERVICES 0.91%
CenturyTel, Inc............................... 105,000 3,659,250
------------
UTILITIES 1.42%
Entergy Corp.................................. 52,900 2,792,062
Exelon Corp................................... 49,000 2,930,690
------------
5,722,752
------------
Total Common Stocks (Cost $225,277,483).............. 224,241,729
------------
PREFERRED STOCKS 3.04%
FINANCIALS 3.04%
ABN AMRO North America, 144A, 8.75% Pfd. (Cost
$12,259,173)................................ 11,500 (b) 12,287,037
------------

Contracts
-----------
OPTIONS
CALL OPTIONS 0.05%
Japanese Yen expiring 12/31/03 @$0.0085 (Cost
$376,000)................................... 47,000,000(a) 211,500
------------

Principal
Amount
-----------
SHORT-TERM INVESTMENTS 38.39%
Allstate Corp., 1.28%, 7/01/03................ $ 7,000,000 7,000,000
BMW US Capital LLC, 1.05%, 7/01/03............ 19,000,000 19,000,000
Gannett Co., Inc., 1.28%, 7/01/03............. 19,000,000 19,000,000
Merrill Lynch & Co., Inc., 1.30%, 7/01/03..... 19,000,000 19,000,000
UBS Financial Corp., 1.31%, 7/01/03........... 19,000,000 19,000,000
Washington Post, 1.23%, 7/01/03............... 15,000,000 15,000,000
BMW US Capital LLC, 1.25%, 7/07/03............ 19,000,000 18,996,676
New York Life Cap. Corp., 1.06%, 7/14/03...... 19,000,000 18,992,727
Toyota Motor Credit Corp., 1.05%, 7/17/03..... 19,000,000 18,991,133
------------
Total Short-Term Investments (Cost $154,980,536)..... 154,980,536
------------
Total Investments (Cost $392,893,192) -- 97.03%...... 391,720,802
Other assets less liabilities -- 2.97%............... 11,990,884
------------
Net Assets -- 100%................................... $403,711,686
============

--------
(a) Non-income producing security.
(b) Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These securities my be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
2003, these securities had a value of $12,287,037 or 3.04% of net assets.

See notes to financial statements

For Federal income tax purposes, the tax basis of investments owned at June
30, 2003 was $395,137,101 and net unrealized depreciation of investments
consisted of:

Gross unrealized appreciation. $ 22,174,855
Gross unrealized depreciation. (25,591,154)
------------
Net unrealized depreciation... (3,416,299)
============

See notes to financial statements

THE ZWEIG FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2003
(Unaudited)

ASSETS
Investments, at value (identified cost $392,893,192)... $ 391,720,802
Cash................................................... 14,996
Receivable for securities sold......................... 12,366,940
Dividends receivable................................... 183,990
Prepaid expenses....................................... 76,228
-------------
Total Assets....................................... 404,362,956
=============
LIABILITIES
Accrued advisory fees (Note 4)......................... 283,382
Accrued administration fees (Note 4)................... 43,340
Other accrued expenses................................. 324,548
-------------
Total Liabilities.................................. 651,270
=============
NET ASSETS $ 403,711,686
=============
NET ASSET VALUE, PER SHARE
($403,711,686/73,233,013 shares outstanding -- Note 5). $ 5.51
=============

Net Assets consist of
Capital paid-in........................................ $ 600,815,988
Accumulated net realized loss on investments........... (195,931,912)
Net unrealized depreciation on investments............. (1,172,390)
-------------
$ 403,711,686
=============

See notes to financial statements

THE ZWEIG FUND, INC.

STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2003
(Unaudited)

INVESTMENT INCOME
Income
Interest........................................................ $ 946,971
Dividends (net of foreign withholding taxes of $23,980)......... 1,881,250
------------
Total Income................................................. 2,828,221
------------
Expenses
Investment advisory fees (Note 4)............................... 1,652,640
Administrative fees (Note 4).................................... 252,757
Transfer agent fees............................................. 198,946
Printing and postage expenses................................... 102,837
Professional fees............................................... 66,661
Directors' fees and expenses (Note 4)........................... 47,357
Custodian fees.................................................. 33,532
Miscellaneous................................................... 128,244
------------
Total Expenses............................................... 2,482,974
------------
Net Investment Income.................................... 345,247
------------
NET REALIZED AND UNREALIZED GAIN (LOSSES)
Net realized loss on investments.................................... (18,328,232)
Net change in unrealized appreciation (depreciation) on investments. 41,158,355
------------
Net gain on investments......................................... 22,830,123
------------
Net increase in net assets resulting from operations............ $ 23,175,370
============

See notes to financial statements

THE ZWEIG FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS

For the Six
Months Ended For the Year
June 30, 2003 Ended
(Unaudited) December 31, 2002
------------- -----------------

INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income............................................ $ 345,247 $ 624,793
Net realized loss on investments................................. (18,328,232) (137,974,324)
Net change in unrealized appreciation (depreciation)............. 41,158,355 21,342,523
------------ -------------
Net increase (decrease) in net assets resulting from
operations.................................................. 23,175,370 (116,007,008)
------------ -------------
Dividends and distributions to shareholders from
Net investment income............................................ (345,247) (624,793)
Tax return of capital............................................ (19,281,216) (45,982,141)
------------ -------------
Total dividends and distributions to shareholders............. (19,626,463) (46,606,934)
------------ -------------
Capital share transactions
Net asset value of shares issued to shareholders in
reinvestment of distributions resulting in the issuance of
common stock................................................... -- 6,178,332
Net proceeds from the sales of shares during rights
offering....................................................... -- 67,337,079
------------ -------------
Net increase in net assets derived from capital share
transactions................................................... -- 73,515,411
------------ -------------
Net increase (decrease) in net assets............................ 3,548,907 (89,098,531)
NET ASSETS
Beginning of period.................................................. 400,162,779 489,261,310
------------ -------------
End of period........................................................ $403,711,686 $ 400,162,779
============ =============

See notes to financial statements

THE ZWEIG FUND, INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2003
(Unaudited)

NOTE 1 -- Organization

The Zweig Fund, Inc. (the "Fund") is a closed-end, diversified management
investment company registered under the Investment Company Act of 1940 (the
"Act"). The Fund was incorporated under the laws of the State of Maryland on
June 18, 1986.

NOTE 2 -- Significant Accounting Policies

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.

A. Portfolio Valuation

Equity securities are valued at the official closing price (typically last
sale) on the exchange on which the securities are primarily traded, or if no
closing price is available, at the last bid price. Other over-the-counter
securities are valued at the most recently quoted bid price provided by the
principal market makers. Portfolio securities which are traded both in the
over-the-counter market and on a stock exchange are valued according to the
broadest and most representative market, as determined by the Adviser. Debt
securities may be valued on the basis of prices provided by an independent
pricing service, when such prices are believed by the Adviser to reflect the
fair market value of such securities. Short-term investments having a remaining
maturity of 60 days or less when purchased are valued at amortized cost (which
approximates market value). Futures contracts traded on commodities exchanges
are valued at their closing settlement price on such exchange. Securities for
which market quotations are not readily available (of which there were none at
June 30, 2003) and other assets, if any, are valued at fair value as determined
under procedures approved by the Board of Directors of the Fund.

B. Options

The Fund may purchase options contracts for the purpose of hedging against
changes in the market value of the underlying securities or foreign currencies.

Options purchased by The Fund are included in the Funds' Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid. The Fund will realize a gain or loss
upon the expiration or closing of the option transaction.

C. Security Transactions and Investment Income

Security transactions are recorded on trade date. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. Discount and premium on securities
purchased other than short-term securities are accreted on the constant yield
method over the life of the respective securities.

Realized gains and losses on sales of investments are determined on the
identified cost basis for financial reporting and tax purposes.

D. Federal Income Tax Information

It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code ("the Code"), applicable to regulated investment companies, and to
distribute all of its taxable income to its shareholders. In addition, the Fund
intends to distribute an amount sufficient to avoid the imposition of any
excise tax under Section 4982 of the Code. Therefore, no provision for federal
income taxes or excise taxes has been made.

E. Dividends and Distributions to Shareholders

Distributions to shareholders are recorded on the ex-dividend date. Income
and capital gain distributions are determined in accordance with tax
regulations that may differ from generally accepted accounting principles.
These differences include the treatment of premium amortization, losses
deferred due to wash sales, differing treatment of certain income and gain
transactions, and the timing of distributions. For financial reporting
purposes, book basis capital accounts are adjusted to reflect the tax character
of permanent book/tax differences. The reclassifications have no impact on the
net assets or net asset value of the Fund.

The Fund has $175,351,977 of capital loss carryovers, $38,468,937 expiring
in 2009 and $136,883,040 expiring in 2010 which may be used to offset future
capital gains. The Fund may not realize the benefits of these losses to the
extent it does not realize gains on investments prior to the expiration of the
capital loss carryovers. In addition, under certain conditions, the Fund may
lose the benefit of these losses to the extent that distributions to
shareholders exceed required distribution amounts as defined under the Internal
Revenue Code. Shareholders may also pay additional taxes on these excess
distributions.

NOTE 3 -- Portfolio Transactions

During the six months ended June 30, 2003, purchases and sales of
investments, excluding short-term investments were:

Common
Stocks
------------

Purchases.................................... $102,424,346
============
Sales........................................ $135,541,956
============

NOTE 4 -- Investment Advisory Fees and Other Transactions with Affiliates

a) Investment Advisory Fee: The Investment Advisory Agreement (the
"Agreement") between Phoenix/Zweig Advisers LLC (the "Adviser"), the Fund's
investment adviser, and the Fund provides that, subject to the direction of the
Board of Directors of the Fund and the applicable provisions of the Act, the
Adviser is responsible for the actual management of the Fund's portfolio.
Phoenix/Zweig Advisers LLC is a wholly-owned subsidiary of Phoenix Investment
Partners, Ltd. ("PXP"). PXP is an indirect, wholly-owned subsidiary of The
Phoenix Companies, Inc. ("PNX"). The responsibility for making decisions to
buy, sell or hold a particular investment rests with the Adviser, subject to
review by the Board of Directors and the applicable provisions of the Act. For
the services provided by the Adviser under the Agreement, the Fund pays the
Adviser a monthly fee equal, on an annual basis, to 0.85% of the Fund's average
daily net assets. During the six months ended June 30, 2003, the Fund accrued
advisory fees of $1,652,640.

Zweig Consulting LLC (the "Sub-Adviser"), which serves as the Sub-Adviser
for the Fund performs certain asset allocation research and analysis and
provides such advice to the Adviser. The Sub-Adviser's fees are paid by the
Adviser.

b) Administration Fee: Phoenix Equity Planning Corporation ("PEPCO"), an
indirect wholly-owned subsidiary of PNX, serves as the Fund's Administrator
(the "Administrator") pursuant to an Administration Agreement with the Fund.
Under the terms of the Agreement, the Administrator receives a fee for
financial reporting, tax services and oversight of subagent's performance at a
rate of 0.13% of the Fund's average daily net assets. During the six months
ended June 30, 2003, the Fund accrued administration fees of $252,757.

The Bank of New York, a subagent to PEPCO, receives a fee from PEPCO.

c) Directors' Fee: The Fund pays each Director who is not an interested
person of the Fund or the Adviser a fee of $10,000 per year plus $1,500 per
Directors' or committee meeting attended, together with the out-of-pocket costs
relating to attendance at such meetings. Any Director of the Fund who is an
interested person of the Fund or the Adviser receives no remuneration from the
Fund.

d) Brokerage Commission: During the six months ended June 30, 2003, the Fund
paid PXP Securities Corp., a wholly-owned subsidiary of PXP, brokerage
commissions of $0 in connection with portfolio transactions effected through
them. In addition, PXP Securities Corp. charged $48,649 in commissions for
transactions effected on behalf of the participants in the Fund's Automatic
Reinvestment and Cash Purchase Plan.

NOTE 5 -- Capital Stock and Reinvestment Plan

At June 30, 2003, the Fund had one class of common stock, par value $.10 per
share, of which 100,000,000 shares are authorized and 73,233,013 shares are
outstanding.

Registered shareholders may elect to receive all distributions in cash paid
by check mailed directly to the shareholder by EquiServe as dividend paying
agent. Pursuant to the Automatic Reinvestment and Cash Purchase Plan (the
"Plan") shareholders not making such election will have all such amounts
automatically reinvested by EquiServe, as the Plan agent, in whole or
fractional shares of the Fund, as the case may be. During the six months ended
June 30, 2003 and the year ended December 31, 2002, 0 and 787,167 shares
respectively, were issued pursuant to the Plan.

In a non transferable rights offering ended June 17, 2002, shareholders
exercised rights to purchase 11,000,000 shares of common stock at an offering
price of $6.17 per share for proceeds, net of expenses, of $67,337,079.

On June 16, 2003, the Fund announced a distribution of $0.139 per share to
shareholders of record on July 9, 2003. This distribution has an ex-dividend
date of July 7, 2003 and is payable on July 28, 2003.

On December 16, 2002, the Board of Directors declared a distribution of the
greater of 2.5% of its net value on December 13, 2002 or all available net
investment income plus net short and long term gains. On January 2, 2003, the
Fund announced a distribution of $0.137 per share to shareholders of record on
December 31, 2002. This distribution had an ex-dividend date of January 3, 2003
and was payable on January 10, 2003.

NOTE 6 -- Financial Highlights

Selected data for a share outstanding throughout each year:

Six Months
Ended June Year Ended December 31
30, 2003 --------------------------------------------------
(Unaudited) 2002 2001 2000 1999 1998
----------- -------- -------- -------- -------- --------

Per Share Data
Net asset value, beginning of period..................... $ 5.46 $ 7.96 $ 10.32 $ 12.20 $ 12.03 $ 12.63
-------- -------- -------- -------- -------- --------
Income From Investment Operations
Net investment income.................................... 0.01 0.01 -- 0.20 0.20 0.23
Net realized and unrealized gains (losses)............... 0.31 (1.76) (1.47) (0.90) 1.16 0.55
-------- -------- -------- -------- -------- --------
Total from investment operations......................... 0.32 (1.75) (1.47) (0.70) 1.36 0.78
-------- -------- -------- -------- -------- --------
Dividends and Distributions
Dividends from net investment income..................... (0.01) (0.01) (0.01) (0.21) (0.19) (0.35)
Distributions from net realized gains.................... -- -- (0.07) (0.97) (1.00) (0.87)
Tax return of capital.................................... (0.26) (0.68) (0.81) -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and distributions........................ (0.27) (0.69) (0.89) (1.18) (1.19) (1.22)
-------- -------- -------- -------- -------- --------
Effect on net asset value as a result of rights offering* -- (0.06) -- -- -- (0.16)
-------- -------- -------- -------- -------- --------
Net asset value, end of period........................... $ 5.51 $ 5.46 $ 7.96 $ 10.32 $ 12.20 $ 12.03
======== ======== ======== ======== ======== ========
Market value, end of period**......................... $ 5.48 $ 4.93 $ 7.90 $ 9.81 $ 10.06 $ 10.81
======== ======== ======== ======== ======== ========
Total investment return***............................ 17.20% (29.78)% (11.27)% 9.45% 3.61% (8.68)%
======== ======== ======== ======== ======== ========
Ratios/Supplemental Data
Net assets, end of period (in thousands)................. $403,712 $400,163 $489,261 $620,354 $733,523 $723,521
Ratio of expenses to average net assets.................. 1.28% **** 1.20% 1.19% 1.12% 1.12% 1.12%
Ratio of net investment income (loss) to average net
assets.................................................. 0.18% **** 0.14% (0.03)% 1.74% 1.68% 1.90%
Portfolio turnover rate.................................. 43.0% ***** 104.8% 80.3% 114.8% 114.9% 68.7%

--------
* Shares were sold at a 5% discount from the average market price.
** Closing Price -- New York Stock Exchange.
*** 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 purpose of this calculation, to be reinvested at
prices obtained under the Fund's Automatic 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 the end of
such periods.
**** Annualized.
***** Not Annualized.

SUPPLEMENTARY PROXY INFORMATION

The Annual Meeting of Shareholders of The Zweig Fund, Inc. was held on June
23, 2003. The meeting was held for the purpose of electing Charles H. Brunie,
Philip R. McLoughlin and James B. Rogers, Jr. as directors. The Fund's other
Directors who continue in office are Elliot S. Jaffe, Wendy Luscombe and Alden
C. Olson.

The results of the above matters were as follows:

Votes Votes
Directors Votes For Against Withheld Abstentions
--------- ---------- ------- --------- -----------

Charels H. Brunie... 59,618,329 N/A 1,652,126 N/A
Philip R. McLoughlin 59,685,751 N/A 1,584,704 N/A
James B. Rogers, Jr. 59,765,055 N/A 1,505,400 N/A

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

KEY INFORMATION

1-800-272-2700 Zweig Shareholder
Relations:
For general information and literature

1-800-272-2700 The Zweig 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 urge
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.

OFFICERS AND DIRECTORS
Philip R. McLoughlin
Chairman of the Board and President

Carlton Neel
Executive Vice President

David Dickerson
Senior Vice President

Nancy J. Engberg
Secretary

Nancy Curtis
Treasurer

Charles H. Brunie
Director

Elliot S. Jaffe
Director

Wendy Luscombe
Director

Alden C. Olson, Ph.D.
Director

James B. Rogers, Jr.
Director

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

Fund Administrator
Phoenix Equity Planning Corporation
56 Prospect St.
PO Box 150480
Hartford, CT 06115-0480

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

Transfer Agent
EquiServe Trust Co., N.A.
P.O. Box 43010
Providence, RI 02940-3010

Legal Counsel
Katten Muchin Zavis Rosenman
575 Madison Avenue
New York, NY 10022

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

This report is transmitted to the shareholders of The Zweig Fund, Inc. for
their information. This is not a prospectus, circular or representation
intended for use in the purchase of shares of the Fund or any securities
mentioned in this report.

PXP 1337
4902-SEM 6/03

Semiannual Report

Zweig

The Zweig Fund, Inc.

June 30, 2003

[GRAPHIC]

Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed registrants.

Not applicable.

Item 6. [Reserved]

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.

Not applicable.

Item 8. [Reserved]

Item 9. Controls and Procedures.

(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the "1940
Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days
of the filing date of the report that includes the disclosure required
by this paragraph, based on their evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act
(17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act(17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.

Item 10. Exhibits.

(a)(1) Not applicable.

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 are attached hereto.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(registrant) The Zweig Fund, Inc.
------------------------

By (Signature and Title)* /S/ PHILIP R. MCLOUGHLIN
----------------------------------------------
Philip R. McLoughlin, Chairman
(principal executive officer)

Date September 5, 2003
-------------------------------------------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title)* /S/ PHILIP R. MCLOUGHLIN
----------------------------------------------
Philip R. McLoughlin, Chairman
(principal executive officer)

Date September 5, 2003
-------------------------------------------------------------------

By (Signature and Title)* /S/ NANCY G. CURTISS
-----------------------------------------------
Nancy G. Curtiss, Treasurer
(principal financial officer)

Date September 5, 2003
--------------------------------------------------------------------