Edgar Filing: ZWEIG FUND INC /MD/

November 1, 2003

Dear Shareholder:

The Zweig Fund's net asset value gained 0.91% for the three months ended
September 30, 2003, including the $0.139 distribution paid on July 28, 2003.
During the same period, the Standard & Poor's 500 Index/1/ increased 2.65%,
including dividends. The Fund's average equity exposure during the period was
approximately 52%.

For the nine months ended September 30, 2003, the Fund's net asset value,
including reinvested distributions, increased 7.37%. During the same period,
the S&P 500 Index rose 14.71%, including dividends. The Fund's average exposure
for the nine months was approximately 58%.

DISTRIBUTION DECLARED

The Fund recently announced a distribution of $0.090 payable on October 27,
2003 to shareholders of record on October 8, 2003. Including this distribution,
our total payout since the Fund's inception is now $17.925.

Sincerely,

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

MARKET OUTLOOK

Stocks finished higher in the third quarter but the gains were smaller than
in the second three months. The Dow Jones Industrial Average/2/ rose 3.8%
against 12% in the preceding quarter. The Standard & Poor's 500 Index was up
2.65% against 15%, and the NASDAQ/3/ composite gained 10.1% against 21%.

I attribute the market's positive performance to the perception that the
economy was improving and earnings were good. The Federal Reserve left
short-term interest rates unchanged at its September meeting and indicated that
it had no plans to raise rates. Some people from the Fed independently said
that the gross domestic product would be very high for the quarter--perhaps
even 5% or in that vicinity. The perception that the Fed is in no hurry to
boost rates is normally beneficial for the market and stocks generally
maintained their momentum.

The market surged recently on reports from the Institute of Supply
Management that manufacturing expanded for the third consecutive month in
September. The factory index was 53.7, slightly lower than August's 54.7.
Readings above 50 indicate growth rather than contraction. Although
manufacturing has picked up, it certainly isn't strong. Activity in the low 50s
is a positive but a weak one. Meanwhile, capacity utilization remains extremely
low at around 75%.

The market also rose on reports that non-farm payrolls grew by 57,000 in
September after a seven-month string of job losses totaling 551,000. The
unemployment rate held steady at 6.1%. I think the market probably overreacted
to that report. There had been a really strong selloff the week before with the
NASDAQ alone down 6%. So the market was ready to bounce because it had sold off
sharply right before that.

Careful reading of the non-farm payroll report reveals that half of the job
increases were for temporary employees and the average wage rates were actually
down. Also, because of the growing labor force, you need a monthly gain of
125,000 just to keep the jobless rate from rising. While the report was better
than Wall Street had expected, it did not represent a major turnaround.

Illustrating the weakness in the labor market, worker productivity increased
6.8% in the second quarter. Since the end of 2001, productivity has risen at a
5% annual rate, the fastest pace in the beginning phases of an economic
recovery since the early 1960s. Productivity historically has jumped after you
come out of a recession. Since many people have been laid off, the output per
worker increases as business picks up. The flip side of high productivity is
the poor employment situation. If productivity continues to rise year after
year, it indicates that more jobs are being exported.

Problems in the labor picture were highlighted in the Conference Board's
report that consumer confidence dropped to 76.8 in September, the lowest figure
since the start of the Iraq war. The percentage of people who saw jobs as hard
to get increased to 35.3%, the highest figure since December 1993. I was
surprised by the consumer confidence slippage because both the economy and the
stock market had gotten a bit better. But jobs are the problem. People that
have them are worried about keeping them and people who are looking are not
very optimistic.

Meanwhile, consumer debt is increasing at a rapid rate. It rose $6 billion
in July to $1.774 trillion against an increase of only $100 million in June.
While the month-to-month changes in consumer debt are notoriously volatile, I
believe that there is too much debt out there and that is one of the drags on
the economy. The consumer is in hock up to his eyeballs and if the consumer
doesn't start turning the economy around, who will?

The economy is facing another challenge with the news that OPEC will cut
production by 3.5% effective November 1. Other things being equal, higher
energy prices can slow the economy on the margin because it is like a tax
increase. People must have energy. They might cut back a bit on gasoline use
and turn down their thermostats but they will continue to buy a lot of energy
at the higher prices. Consequently they would have less to spend on other
things, putting another burden on the economy. While it doesn't work all the
time, substantially higher energy prices also tend to hurt the stock market.

In the hope that it would reduce unemployment, the administration has
abandoned its strong dollar policy and is pressuring Asian countries to let
their currencies appreciate against the dollar. American manufacturers contend
that the strong dollar undercuts their competitive position by making foreign
imports cheap and their exports expensive. Right now more than half of the
manufactured goods that consumers buy is made abroad, up 31% from 1987. While
consumers would suffer from paying higher prices, I think the stock market
likes a weaker dollar because it would boost earnings for U.S. companies that
export. I am not sure whether the weak dollar actually helps the market.

Individual investors placed $21.38 billion in new money into mutual funds in
July, the highest sum since March 2002. That's quite a change from recent
history since investors withdrew money from mutual funds in six of the last
seven months of 2002 and in the first two months of this year. If the flows
into mutual funds rise at a moderate rate, that is bullish. If they get too
overheated, as at the beginning of 2000, then you have to watch out. At the
moment it is probably okay but if it gets too hot I would be concerned.

Insider sales are soaring. In August insiders sold $44 of stock for every
dollar of stock they bought. I have numbers that go back to 1971 and, off the
top of my head, I think this is the third worse reading since the mid 1980s.
Insiders tend to sell on strength and buy on weakness and we have had strength
in the market. Insiders have been selling very hard for the past four months or
so. Overall, I don't think it is a good sign. So we have an interesting
juxtaposition--the insiders are selling and the public is buying into mutual
funds.

Brokerage houses report that day trading volumes are climbing rapidly but
are still well

below the market peak of three years ago. Day traders are huge speculators and
when they are too active it usually has been terrible for the market. Some
analysts think we are seeing a second bubble but I don't know whether that's
true. But you would think people would be a little more conservative after what
happened in the market from 2000 on. I am surprised that speculation is coming
back so quickly.

There is growing interest in initial public offerings. In the third quarter
21 companies entered the market, raising $4.08 billion. There were only five
offerings in each of the first two quarters. A weak market makes it more
difficult to sell IPO'S. Because of the market strength in the second quarter,
they were able to underwrite more. And there is more on the horizon. Right now
the IPO'S are not a problem but the secondary distributions are huge and
getting up to record numbers. That's not a very good sign.

Merger and acquisition activities slowed in the third quarter. They totaled
nearly $120 billion, down 16% from the same quarter a year ago. However they
increased on a quarter-to-quarter basis from $70 billion in the first three
months to $102 billion in the second quarter. These numbers have little
significance unless they are cash deals. If companies just merge their stock,
it doesn't do much for the market one way or another. But if they are cash
takeovers it does reduce supply and adds cash to the marketplace. Despite cash
deals and stock buybacks, the supply has actually increased quite a bit in the
last quarter or two because of new issues of convertible bonds, new issues of
stock, and sales by insiders.

There are reports that hedge fund managers, who had been bearish, have
become more bullish and overall short interest on the NASDAQ has fallen to its
lowest level since last May.* The managers had probably been overly cautious.
They were forced to cover shorts and buy more stock, helping the market to go
up. If they get too bullish, the market probably will go back down.

Recently 365 companies of the S&P 500 were paying dividends, 14 more than at
the start of the year. The tax cut is encouraging companies to pay dividends or
increase their dividends. Microsoft is a good example. I think that we will see
more dividend increases but the problem is that the dividend yield is so low.
The yields averaged only 1.66% for the preceding twelve months.

The S&P 500 is now trading at about 28 times the companies' earnings for the
past twelve months. Historically the rate has been about 15 times earnings.
Consequently, I believe the market is significantly overvalued.

Summing up, the main positives for the market outlook include the improving
economy and company earnings. Incidentally, the market hasn't always done that
well when earnings are strong. The Fed of course has done its part by cutting a
lot and that is another positive. Over time there has been a downturn in
long-term interest rates but since the spring they have gone up some. The tape
action had been pretty good and the momentum has been strong.

The negatives include the valuations that I consider to be way out of line
and the fact that sentiment is showing a lot of exuberance. Also advisers are
extremely optimistic on the market--and they tend to be wrong.* There are a lot
of things I don't like in the sentiment area and my sentiment model is not
really good right now. Although the tape is strong and the market seems to want
to continue climbing, I think it is a high-risk period. Because of the
valuations and the sentiment, I think that we are going to have problems in the
market at some point. That's why we are cautious at this writing.

Sincerely,
[GRAPHIC]

Martin E. Zweig, Ph.D.
President
Zweig Consulting LLC
--------
* Source: Zweig Consulting LLC

PORTFOLIO COMPOSITION

Our leading industry groups at the end of the third quarter included
financials, health care, technology, consumer discretionary, and consumer
staples. The only change from our June 30 listing was the replacement of energy
by consumer staples. During the quarter we added to our positions in consumer
staples and trimmed our holdings in technology and consumer discretionary.

Our leading individual positions included Citigroup, Wells Fargo, Amgen,
Dell, Microsoft, Bank of America, Pfizer, Mylan Laboratories, Cisco Systems,
and Occidental Petroleum. General Electric, which we sold out, is no longer in
this listing.

Sincerely,

[SIGNATURE]

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

--------
/1/ The S&P 500(R) Index measures total-return stock market performance.
/2/ The Dow Jones Industrial Average measures large-cap stock performance.
/3/ NASDAQ indexes measure total return stock performance, weighted according
to market value.
These measurement tools are unmanaged, do not reflect management fees, and are
not available for direct investment.

THE ZWEIG FUND, INC.

INVESTMENTS AND SECURITIES HELD SHORT

September 30, 2003
(Unaudited)

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

INVESTMENTS 64.27%
COMMON STOCKS 61.17%
CONSUMER DISCRETIONARY 7.92%
AutoZone, Inc................................. 35,000(a) $ 3,133,550
Best Buy Co., Inc............................. 70,000(a) 3,326,400
GAP (The), Inc................................ 242,000 4,143,040
Home Depot, Inc............................... 139,000 4,427,150
Honda Motor Co., Ltd. ADR..................... 50,000 1,008,000
Liz Claiborne, Inc............................ 90,000 3,064,500
Lowe's Cos., Inc.............................. 70,500 3,658,950
Royal Caribbean Cruises Ltd................... 104,000 2,923,440
Tribune Co.................................... 80,500 3,694,950
Urban Outfitters, Inc......................... 80,000(a) 2,084,800
------------
31,464,780
------------
CONSUMER STAPLES 5.12%
Altria Group, Inc............................. 75,000 3,285,000
Coca-Cola Enterprises, Inc.................... 137,000 2,611,220
Kimberly-Clark Corp........................... 70,000 3,592,400
PepsiCo, Inc.................................. 58,900 2,699,387
Procter & Gamble Co........................... 56,600 5,253,612
Wal-Mart Stores, Inc.......................... 52,000 2,904,200
------------
20,345,819
------------
ENERGY 4.37%
ConocoPhillips................................ 76,000 4,161,000
Halliburton Co................................ 127,000 3,079,750
Occidental Petroleum Corp..................... 149,500 5,266,885
Talisman Energy, Inc.......................... 51,200 2,428,928
Total S.A., ADR............................... 32,000 2,425,600
------------
17,362,163
------------
FINANCIALS 13.76%
AFLAC, Inc.................................... 92,000 2,971,600
Allstate Corp................................. 69,400 2,535,182
American International Group, Inc............. 55,000 3,173,500
Aon Corp...................................... 135,000 2,814,750
Bank of America Corp.......................... 75,000 5,853,000

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

FINANCIALS (CONTINUED)
Capital One Financial Corp................... 62,000 $ 3,536,480
Citigroup, Inc............................... 189,800 8,637,798
Fannie Mae................................... 52,300 3,671,460
First Tennessee National Corp................ 85,000 3,609,100
Morgan Stanley............................... 50,000 2,523,000
National City Corp........................... 94,000 2,769,240
Wachovia Corp................................ 96,000 3,954,240
Washington Mutual, Inc....................... 35,000 1,377,950
Wells Fargo & Co............................. 140,200 7,220,300
------------
54,647,600
------------
HEALTH CARE 9.95%
Amgen, Inc................................... 100,000(a) 6,457,000
Angiotech Pharmaceuticals, Inc............... 75,000(a) 3,273,750
C. R. Bard, Inc.............................. 43,000 3,053,000
Caremark RX, Inc............................. 175,000(a) 3,955,000
Guidant Corp................................. 64,000 2,998,400
McKesson Corp................................ 88,000 2,929,520
Merck & Co., Inc............................. 40,000 2,024,800
Mylan Laboratories, Inc...................... 143,000 5,526,950
Pfizer, Inc.................................. 190,000 5,772,200
UnitedHealth Group, Inc...................... 69,600 3,502,272
------------
39,492,892
------------
INDUSTRIALS 3.45%
Boeing Co.................................... 52,100 1,788,593
Deere & Co................................... 55,000 2,932,050
L-3 Communications Holdings, Inc............. 75,000(a) 3,243,750
Lockheed Martin Corp......................... 70,000 3,230,500
Northrop Grumman Corp........................ 29,000 2,500,380
------------
13,695,273
------------
INFORMATION TECHNOLOGY 7.44%
Amdocs Ltd................................... 158,000(a) 2,970,400
Cisco Systems, Inc........................... 269,000(a) 5,256,260
Dell, Inc.................................... 186,000(a) 6,210,540
First Data Corp.............................. 69,300 2,769,228
Internet Security Systems, Inc............... 203,000(a) 2,537,500
Microsoft Corp............................... 212,000 5,891,480
Nokia Corp., ADR............................. 251,000 3,915,600
------------
29,551,008
------------

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

MATERIALS 5.98%
Alcoa, Inc....................................... 150,000 $ 3,924,000
BHP Billiton Ltd................................. 405,032 2,894,985
Freeport-McMoRan Copper & Gold, Inc., Class B.... 140,000(a) 4,634,000
Georgia-Pacific Corp............................. 140,000 3,393,600
International Paper Co........................... 54,700 2,134,394
Newcrest Mining Ltd.............................. 266,563 1,977,441
Rio Tinto Ltd.................................... 128,086 2,849,669
WMC Resources Ltd................................ 650,343(a) 1,945,619
------------
23,753,708
------------
TELECOMMUNICATION SERVICES 0.90%
CenturyTel, Inc.................................. 105,000 3,558,450
------------
UTILITIES 2.28%
Entergy Corp..................................... 52,900 2,864,535
Exelon Corp...................................... 65,000 4,127,500
PPL Corporation.................................. 50,000 2,047,500
------------
9,039,535
------------
Total Common Stocks (cost $234,608,996)................. 242,911,228
------------
PREFERRED STOCKS 3.05%
FINANCIALS 3.05%
ABN Amro North America, 144A, 8.75% Pfd. (cost
$12,259,173)................................... 11,500 (b) 12,125,313
------------

Contracts
----------
OPTIONS
OPTIONS -- PUTS & CALLS 0.05%
Canadian Dollar Put Option expiring 10/01/03 @
$1.45.......................................... 50,000,000(a) 250
Japanese Yen Call Option expiring 3/23/04 @
$0.0085........................................ 13,500,000(a) 175,784
------------
Total Options (cost $324,350)........................... 176,034
------------
Total Long Term Investments -- 64.27% (cost $247,192,519) 255,212,575
------------

Principal
Amount Value
----------- ------------

SHORT-TERM INVESTMENTS 35.93%
BMW US Capital LLC, 1.09%, 10/01/03......... $19,000,000 $ 19,000,000
Consolidated Edison Company of New
York, 1.11%, 10/01/03..................... 10,900,000 10,900,000
UBS Financial Corp., 1.11%, 10/01/03........ 19,000,000 19,000,000
Toyota Motor Credit Corp., 1.03%, 10/06/03.. 19,000,000 18,997,282
Govco, Inc., 1.06%, 10/08/03................ 18,800,000 18,796,125
Corporate Asset Funding Co., 1.05%,
10/16/03.................................. 19,000,000 18,991,687
New York Life Capital Corp., 1.02%,
10/17/03.................................. 19,000,000 18,991,387
DaimlerChrysler, 1.05%, 10/22/03............ 18,000,000 17,988,975
------------
Total Short-Term Investments (cost $142,665,456)...... 142,665,456
------------
Total Investments -- 100.20% (cost $389,857,975)...... 397,878,031
Securities Sold Short -- (7.42)% (proceeds $29,832,964) (29,448,850)
Other assets less liabilities -- 7.22%................ 28,668,813
------------
Net Assets -- 100.00%................................. $397,097,994
============

--------
(a) Non-income producing security.
(b) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions except from
registration, normally to qualified institutional buyers. At September 30,
these securities amounted to a value of $12,125,313 or 3.05% of net assets.

For Federal income tax purposes, the tax basis of investments owned at
September 30, 2003 was $391,957,628 and net unrealized appreciation of
investments consisted of:

Gross unrealized appreciation.. $ 19,725,926
Gross unrealized depreciation.. (13,805,523)
------------
Net unrealized appreciation.... $ 5,920,403
============

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

SECURITIES SOLD SHORT 7.42%
COMMON STOCK 7.42%
CONSUMER DISCRETIONARY 2.98%
Circuit City Stores, Inc..................... 275,000 $ 2,620,750
Ford Motor Co................................ 90,000 969,300
May Department Stores Co. (The).............. 80,000 1,970,400
Pacific Sunwear of California, Inc........... 140,000 2,892,400
Tiffany & Co................................. 90,000 3,359,700
-----------
11,812,550
-----------
CONSUMER STAPLES 0.58%
Albertson's, Inc............................. 110,000 2,262,700
-----------
FINANCIALS 0.73%
Bank of New York Co., Inc. (The)............. 100,000 2,911,000
-----------
HEALTH CARE 1.12%
Cephalon, Inc................................ 40,000 1,836,800
Eli Lilly & Co............................... 44,000 2,613,600
-----------
4,450,400
-----------
INDUSTRIALS 0.66%
Honeywell International, Inc................. 100,000 2,635,000
-----------
INFORMATION TECHNOLOGY 0.66%
Siebel Systems, Inc.......................... 270,000 2,624,400
-----------
MATERIALS 0.69%
Nucor Corp................................... 60,000 2,752,800
-----------
Total Securities Sold Short (proceeds $29,832,964) $29,448,850
===========

--------
For Federal income tax purposes, the tax basis of securities held short at
September 30, 2003 was $29,832,964 and net unrealized appreciation of
investments consisted of:

Gross unrealized appreciation $1,080,580
Gross unrealized depreciation (696,466)
----------
Net unrealized appreciation.. $ 384,114
==========

THE ZWEIG FUND, INC.

FINANCIAL HIGHLIGHTS

September 30, 2003
(Unaudited)

Net Asset Value
Total Net Assets per share+
-------------------------- --------------

Beginning of period: December 31, 2002.................. $400,162,779 $ 5.46
Net investment income................................ $ 508,054 $ 0.01
Net realized and unrealized gain on investments...... 26,233,019 0.36
Dividends from net investment income and
distributions from net long-term and short-term
capital gains...................................... (508,054) (0.01)
Tax return of capital................................ (29,297,804) (0.40)
Net asset value of shares issued to shareholders in
reinvestment of dividends resulting in issuance of
common stock....................................... -- --
------------ ------
Net decrease in net assets/net asset value........... (3,064,785) (0.04)
------------ ------
End of period: September 30, 2003....................... $397,097,994 $ 5.42
============ ======

--------
+ Per share data are being calculated based on average share method.

KEY INFORMATION
1-800-272-2700 Zweig Shareholder Relations:
For general information and literature, as well as 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 Curtiss
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.
PO 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 1375 4902-3Q-03

Quarterly Report

Zweig

The Zweig Fund, Inc.

September 30, 2003

[GRAPHIC]