Edgar Filing: ZWEIG FUND INC /MD/

November 1, 2007

MESSAGE TO SHAREHOLDERS

Dear Fellow ZF Shareholder;

Following is the manager's report and commentary for The Zweig Fund, Inc.
for the quarter ended September 30, 2007.

The Zweig Fund's net asset value increased 2.05% for the quarter ended
September 30, 2007, including reinvested distributions. During the same period,
the S&P 500(R) Index gained 2.03%, including reinvested dividends. The Fund's
average equity exposure for the quarter was approximately 89%.

For the nine months ended September 30, 2007, the Fund's net asset value
rose 8.39%, including reinvested distributions. During the same period, the S&P
500 Index increased 9.13%, including reinvested dividends. The Fund's average
equity exposure for the nine months was approximately 90%.

Sincerely,

/s/ George R. Aylward
George R. Aylward
President, Chairman and Chief Executive Officer
The Zweig Fund, Inc.

MARKET REVIEW AND OUTLOOK

The stock market experienced extreme turbulence in the third quarter, with
the Dow Jones Industrial Average/SM/ surging and slipping by triple digits,
sometimes during a single day. It saw a new record high, a drop of nearly 10
percent, and a recovery. When the dust settled, the Dow closed the quarter at
13,895.63, up 3.6%/(1)/, and 11.5%/(1)/ higher for the first nine months.
Similar ups and downs were shared by the NASDAQ Composite(R) Index (NASDAQ) and
the S&P 500 Index. The NASDAQ ended at 2,701.50, up 3.8%/(1)/ for the quarter
and 11.8%/(1)/ for the nine months. Showing smaller gains, the S&P 500 finished
at 1,526.75, rising 1.6%/(1)/ for the quarter and 7.6%/(1)/ for the nine-month
period.

Buffeted by such heavy winds as an unexpected drop in employment, a deep and
seemingly open-ended housing slump, concerns about earnings, and a severe
credit crunch fueled by complex financial instruments based on defaulting
sub-prime mortgages, the market reeled and then rallied when the Federal
Reserve (Fed) came to the rescue.

Citing the tighter credit conditions and the ongoing housing correction, the
Fed surprised many investors who had been anticipating a quarter-point cut by
lowering its benchmark interest rate by 50 basis points -- to 4.75% from 5.25%.
It also reduced the discount rate on direct loans to banks by the same amount,
to 5.25%. The Fed's move on its benchmark rate was its first reduction in four
years and its steepest cut in nearly five. Responding immediately to the Fed's
action, the Dow skyrocketed, jumping 2.51% on the day, while the S&P 500
climbed 2.92%. It was the largest single-day increase for both indexes since
early 2003. Similarly, the NASDAQ gained 2.71%.

/(1)/ Returns exclude reinvested dividends

Managed Distribution Plan: The Fund has a policy to distribute 10% of its net
asset value annually. Please see the inside back cover for more details.

Explaining its move, the Fed said that it "intended to help forestall some
of the adverse effects of the broader economy that might otherwise arise from
the disruption in financial markets and to promote moderate growth over time."
While reporting that "readings on core inflation have improved modestly this
year," it warned that "some inflation risks remain and it will continue to
monitor inflation developments carefully." Hinting that further interest rate
cuts may be possible, the Fed promised that it "will act as needed to foster
price stability and sustainable economic growth."

In our view, the Fed did exactly the right thing. A quarter-point reduction
would have been too little. We don't know what the Fed will do at its next
meeting, but there still is plenty of ammunition left in its arsenal.

It is questionable how much the Fed's action could bolster the bleak housing
market. Housing starts fell 2.6% in August, down 42% from their peak in January
2006, and at a 12-year low, according to the Commerce Department. The National
Association of Realtors reported that new home purchases in August dropped 8.3%
from July, the steepest decline since March and down nearly 13% over the past
12 months. Meanwhile, the rate of home foreclosures hit an all-time high in the
second quarter, according to the Mortgage Bankers Association. It was the third
consecutive month in which foreclosures rose to a record-setting pace.

We believe the housing situation has already taken 1% or so off the gross
domestic product (GDP), and it may go deeper. The housing market is in terrible
shape and is not going to improve quickly. It is going to take a very long time
to work ourselves out of this mess.

Following the Fed's interest rate cut, the euro rose to a record $1.4259 at
the quarter's end, with the dollar down 4.5% since last December. Against the
yen, the dollar dipped to 114.88 from 115.65 the previous day. The British
pound closed at $2.0461 from $2.0258. The Fed reported that, measured against a
broader group of currencies, the dollar was at its lowest level in a decade.
Although the weaker dollar raises the prices of imported goods, it makes U.S.
exports more competitive and shrinks the trade gap. The Commerce Department
reported that U.S. exports increased 2.7% in July, the fifth consecutive
monthly gain. Compared with 2006, exports for the first seven months are up
11.3%.

The currency structure is very complex. We have tested the dollar against
the stock market ad infinitum and found no straightforward relationship between
the two. Sometimes the market does well with a weak dollar; sometimes it does
poorly. It depends on numerous factors.

Mergers and acquisitions were casualties of the credit squeeze. With
financing much more difficult to obtain, deals slumped in August and September.
This brought U.S. transactions to $308.7 billion in the third quarter, a drop
of 49% from the second quarter, according to Dealogic. Global activity in the
third quarter totaled $992.1 billion, 43% below the previous three months.
Before the sharp downturn, global deals were running at a record pace. For the
first nine months, they came to $3.85 trillion, 42% higher than in 2006.

The crunch hit suddenly in July and August. No one wanted to lend money to
these activities and interest rates went up. There are several hundred billion
dollars of deals sitting at the moment, waiting for the financing to come
through.

Initial public offerings (IPOs) also suffered from the tight credit market.
Only four U.S. companies went public in September, raising a total of $882
million -- down from 15 deals and $3.13 billion last September, according to
Dealogic. September also recorded the lowest monthly figure since April 2005,
when $786.7 million was

raised. Despite the falloff, some IPOs have done well in recent weeks. It is
important to realize that IPOs are more a function of a bull market. If the
bull market is strong, you will get IPOs because you can sell them. Therefore,
we don't think the IPO slowdown is a serious problem for the market at this
time.

With foreign markets continuing to be strong, Americans are showing more
interest in investments abroad. In September, U.S. investors placed $1.1
billion into mutual funds specializing in foreign markets. In the same month,
they withdrew $3.2 billion from domestic funds, according to AMG Data Services.
Meanwhile, foreigners are reducing their investments in U.S. stocks. The
Treasury reported that in July, the most recent month for which figures are
available, net foreign purchase of U.S. equities totaled $21.2 billion, down
from $28.8 billion in the previous month.

This trend reduces the flow of money into our stock market. It also slows
speculation. We are always nervous when foreigners buy our stocks at a heavy
pace because they tend to be wrong. Small investors and mutual fund investors
have been pouring money into emerging and other foreign markets, and have been
somewhat ignoring our market. We actually like that at the moment, but there
comes a time when the cash flow into domestic mutual funds helps boost the
market.

During the quarter, the market responded quickly to every bit of economic
news, negative or positive. On the downside, the Conference Board reported that
its index of leading economic indicators declined 0.6% in August, the steepest
drop in six months. Also gloomy was the Commerce Department report that new
orders for durable goods slumped 4.9% in August, the sharpest drop since
January. Things looked up when the Commerce Department reported that consumer
spending grew by 0.6% in August, exceeding the estimates. Later the Institute
for Supply Management reported that manufacturing continued to expand in
September, with its index at 52.0 against 52.9 in August. A level above 50
indicates growth.

We don't know if we are facing a slowdown or a recession. It could go either
way. If you look at the leading indicators, they are probably predicting a
recession, but they are not always right. If we experience a slowdown or a
recession, the Fed would probably cut again.

Wall Street analysts expect aggregate earnings for companies in the S&P 500
to rise 6.1% for the third quarter, according to Thomson Financial data. Growth
for the fourth quarter is estimated at about 7%, compared with 8.1% attained in
the second quarter. We don't know how they arrive at these estimates. We do
know that financials is the largest sector in the S&P and their earnings
outlook is not very bullish right now.

At the end of the third quarter, S&P 500 companies were trading at 17.9
times earnings, little changed from the 18.1 rate on June 30 and the 18.2 level
at year-end 2006. The current figure is higher than the average of 15.7 since
1935, but significantly under the average of 22.8 since 1998. To put the
figures in perspective, during the bubbles of the 1920s and the 1990s, the
ratio topped 40. We don't think the valuations are cheap but, relative to
interest rates, they look favorable. It appears that the market is reasonably
priced.

Despite the recent volatility in the stock market, the most recent survey of
market advisors by Investors Intelligence shows remarkable consistency of
outlook. On September 30, bulls were at 55.6% and bears at 25.6% -- little
changed from the 53.8% bulls and 20.4% bears on June 30, and the 56.5% bulls
and 18.6% bears on December 31, 2006.

Much of the recent turmoil in the stock market has been attributed to the
activities of hedge funds and mutual funds that use a so-called quantitative
strategy based on customized computers to screen and pick stocks. There is
probably too large a crowd doing the quantitative analysis. When too many
investors are doing the same thing, ugliness can follow.

We did a lot of buying during all the chaos, and would like to hang in there
as long as possible. If we get a few more down ticks in our indicators, we will
cut back. We don't have a crystal ball and are just trying to follow our
indicators. It's that simple. As of September 30, 2007, we were about 92%
invested.

Sincerely,

/s/Martin E. Zweig, Ph.D.

Martin E. Zweig, Ph.D.
President
Zweig Consulting LLC
PORTFOLIO COMPOSITION

The Fund's leading stock market sectors on September 30, 2007, included
information technology, industrials, energy, financials, and materials. With
the exception of materials, which replaced health care, all of the areas named
were in our previous listing.

As of September 30, 2007, our leading individual positions included Alcoa,
Bunge Ltd., Cisco Systems, EMC, Foster Wheeler, Freeport-McMoRan, PowerShares
QQQ, Nokia, Nucor, and QUALCOMM. Except for Cisco Systems, EMC and PowerShares
QQQ, all of these names are new to this listing. Alcoa, Bunge Ltd., Foster
Wheeler and Freeport-McMoRan are new positions. During the quarter, we added to
our holdings of Nucor and QUALCOMM.

No longer among our top positions are Corning, where there were no changes
in shares held; Ford and Goldman Sachs, where we trimmed our positions; Nike
and Valero Energy, where we added to our holdings; and Morgan Stanley, which we
sold entirely.

Sincerely,

[SIGNATURE]

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

The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts will be realized.
For definitions of indexes cited and certain investment terms used in this
report see the glossary on page 6.

Glossary

American Depositary Receipt (ADR): Represents shares of foreign companies
traded in U.S. dollars on U.S. exchanges that are held by a bank or a trust.
Foreign companies use ADRs in order to make it easier for Americans to buy
their shares.

Basis Point (bp): One-hundredth of a percentage point (0.01%). Basis points are
often used to measure changes in or differences between yields on fixed income
securities, since these often change by very small amounts.

Consumer Price Index (CPI): Measures the change in consumer prices of goods and
services, including housing, electricity, food, and transportation, as
determined by a monthly survey of the U.S. Bureau of Labor Statistics. Also
called the cost-of-living index.

Dow Jones Industrial Average/SM/ (the "Dow"): A price-weighted average of 30
blue chip stocks. The index is calculated on a total return basis with
dividends reinvested.

Federal funds rate: The interest rate charged on overnight loans of reserves by
one financial institution to another in the United States. The federal funds
rate is the most sensitive indicator of the direction of interest rates since
it is set daily by the market.

Federal Reserve (the "Fed"): The central bank of the United States, responsible
for controlling the money supply, interest rates and credit with the goal of
keeping the U.S. economy and currency stable. Governed by a seven-member board,
the system includes 12 regional Federal Reserve Banks, 25 branches and all
national and state banks that are part of the system.

Gross domestic product (GDP): An important measure of the United States'
economic performance, GDP is the total market value of all final goods and
services produced in the U.S. during any quarter or year.

Inflation: Rise in the prices of goods and services resulting from increased
spending relative to the supply of goods on the market.

Initial public offering (IPO): A company's first sale of stock to the public.

NASDAQ Composite(R) Index: A market capitalization-weighted index of all issues
listed in the NASDAQ (National Association Of Securities Dealers Automated
Quotation System) Stock Market, except for closed-end funds, convertible
debentures, exchange traded funds, preferred stocks, rights, warrants, units
and other derivative securities. The index is calculated on a total return
basis with dividends reinvested.

S&P 500(R) Index: A market capitalization-weighted index of 500 of the largest
U.S. companies. The index is calculated on a total return basis with dividends
reinvested.

Short Interest: The total number of shares of a security that have been sold
short by customers and securities firms that have not been repurchased to
settle short positions in the market.

Indexes cited are unmanaged and not available for direct investment; therefore
their performance does not reflect the expenses associated with the active
management of an actual portfolio.

THE ZWEIG FUND, INC.

SCHEDULE OF INVESTMENTS AND SECURITIES SOLD SHORT

September 30, 2007
(Unaudited)

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

INVESTMENTS
DOMESTIC COMMON STOCKS 83.82%
CONSUMER DISCRETIONARY -- 5.44%
Ford Motor Corp./(e)/......................... 770,000 $ 6,537,300
McDonald's Corp............................... 175,000 9,532,250
Newell Rubbermaid, Inc........................ 120,000 3,458,400
NIKE, Inc. Class B............................ 160,000 9,385,600
-----------
28,913,550
-----------
CONSUMER STAPLES -- 7.60%
Altria Group, Inc............................. 135,000 9,386,550
Bunge Ltd..................................... 95,000 10,207,750
Costco Wholesale Corp......................... 150,000 9,205,500
Kimberly-Clark Corp./(e)/..................... 30,000 2,107,800
PepsiCo, Inc.................................. 130,000 9,523,800
-----------
40,431,400
-----------
ENERGY -- 12.04%
Chesapeake Energy Corp........................ 255,000 8,991,300
ConocoPhillips................................ 110,000 9,654,700
Halliburton Co................................ 245,000 9,408,000
Massey Energy Co./(e)/........................ 390,000 8,509,800
Occidental Petroleum Corp..................... 145,000 9,291,600
St. Mary Land & Exploration Co./(e)/.......... 255,000 9,095,850
Valero Energy Corp............................ 135,000 9,069,300
-----------
64,020,550
-----------
FINANCIALS -- 7.34%
Allstate Corp................................. 165,000 9,436,350
American International Group, Inc............. 140,000 9,471,000
Goldman Sachs Group, Inc...................... 20,000 4,334,800
Merrill Lynch & Co., Inc...................... 90,000 6,415,200
Reinsurance Group of America, Inc............. 165,000 9,353,850
-----------
39,011,200
-----------
HEALTH CARE -- 6.90%
Bristol-Myers Squibb Co....................... 315,000 9,078,300
Gilead Sciences, Inc./(b)/.................... 235,000 9,604,450

See notes to schedule of investments and securities sold short

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

HEALTH CARE (CONTINUED)
Merck & Co., Inc................................................................. 180,000 $ 9,304,200
UnitedHealth Group, Inc.......................................................... 180,000 8,717,400
------------
36,704,350
------------
INDUSTRIALS -- 15.67%
3M Co............................................................................ 100,000 9,358,000
AMR Corp./(b)(e)/................................................................ 380,000 8,470,200
Boeing Co. (The)................................................................. 90,000 9,449,100
Caterpillar, Inc................................................................. 120,000 9,411,600
Continental Airlines, Inc. Class B/(b)(e)/....................................... 280,000 9,248,400
Foster Wheeler Ltd............................................................... 75,000 9,846,000
General Electric Co.............................................................. 225,000 9,315,000
L-3 Communications Holdings, Inc................................................. 90,000 9,192,600
Union Pacific Corp............................................................... 80,000 9,044,800
------------
83,335,700
------------
INFORMATION TECHNOLOGY -- 17.71%
Ciena Corp....................................................................... 245,000 9,329,600
Cisco Systems, Inc./(b)/......................................................... 295,000 9,767,450
Corning , Inc.................................................................... 380,000 9,367,000
Dell, Inc........................................................................ 335,000 9,246,000
EMC Corp./(b)/................................................................... 475,000 9,880,000
Hewlett-Packard Co............................................................... 180,000 8,962,200
International Business Machines Corp............................................. 75,000 8,835,000
Microsoft Corp................................................................... 310,000 9,132,600
National Semiconductor Corp./(e)/................................................ 350,000 9,492,000
QUALCOMM, Inc.................................................................... 240,000 10,142,400
------------
94,154,250
------------
MATERIALS -- 7.62%
Alcoa, Inc....................................................................... 265,000 10,366,800
Dow Chemical Co.................................................................. 215,000 9,257,900
Freeport-McMoRan Cooper & Gold, Inc. Class B..................................... 100,000 10,489,000
NuCor Corp....................................................................... 175,000 10,407,250
------------
40,520,950
------------
TELECOMMUNICATIONS SERVICES -- 3.50 %
AT&T Corp./(d)/.................................................................. 220,000 9,308,200
Verizon Communications, Inc./(d)/................................................ 210,000 9,298,800
------------
18,607,000
------------
Total Domestic Common Stocks (Identified Cost
$362,841,745)...................................................................... 445,698,950
------------

See notes to schedule of investments and securities sold short

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

FOREIGN COMMON STOCKS/(c)/ 6.24%
ENERGY -- 1.68%
Nabors Industries Ltd. (United States)/(b)(e)/... 290,000 $ 8,923,300
------------
8,923,300
------------
FINANCIALS -- 0.75%
Deutsche Bank AG (Germany)....................... 31,000 3,980,090
------------
3,980,090
------------
INFORMATION TECHNOLOGY -- 3.81%
Amdocs Ltd. (United States)/(b)/................. 255,000 9,483,450
Nokia Oyj ADR (Finland).......................... 285,000 10,810,050
------------
20,293,500
------------
Total Foreign Common Stocks (Identified Cost
$24,322,479)........................................ 33,196,890
------------
EXCHANGE TRADED FUNDS 3.82%
PowerShares QQQ/(e)/............................. 280,000 14,394,800
Regional Bank Holders Trust...................... 40,000 5,938,000
------------
Total Exchange Traded Funds (Identified Cost
$17,550,179)........................................ 20,332,800
------------

Par
(000's)
-----------
U.S. GOVERNMENT SECURITIES 4.72%
U.S. TREASURY NOTES -- 4.72%
U.S. Treasury Note 4.625%, 2/15/17/(d)/.......... $ 25,000 25,115,225
------------
Total U.S. Government Securities (Identified Cost
$25,105,631)........................................ 25,115,225
------------
Total Long Term Investments -- 98.60% (Identified Cost
$429,820,034)....................................... 524,343,865
------------

Number of
Shares
-----------
SHORT-TERM INVESTMENTS 5.26%
MONEY MARKET MUTUAL FUNDS -- 3.87%
State Street Navigator Prime Plus (5.338% seven
day effective yield)/(f) /(Identified Cost
$20,601,991)................................... 20,601,991 20,601,991
------------

See notes to schedule of investments and securities sold short

Par
(000's) Value
------- ------------

COMMERCIAL PAPER/(g)/ -- 1.39%
CAFCO LLC 5.20%, 10/3/07..................... $7,400 $ 7,397,862
------------
Total Commercial Paper (Identified Cost
$7,397,862)................................. 7,397,862
------------
Total Short-Term Investments (Identified Cost
$27,999,853)................................ 27,999,853
------------
Total Investments (Identified Cost
$457,819,887) -- 103.86%.................... 552,343,718/(a)/
Securities Sold Short (Proceeds $11,180,076) --
(1.77)%..................................... (9,405,400)
Other Assets Less Liabilities -- (2.09)%...... (11,202,387)
------------
Net Assets -- 100.00%......................... $531,735,931
============

--------
(a) Federal Tax information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $97,295,486 and gross
depreciation of $3,656,001 for federal tax purposes. At September 30,
2007, the aggregate cost of securities for federal income tax purposes was
$458,704,233.
(b) Non-income producing.
(c) A security is considered to be foreign if the security is issued in a
foreign country. The country of risk, noted parenthetically, is determined
based on criteria in Note 1D "Foreign security country determination" in
the Notes to Schedules of Investments and Securities Sold Short.
(d) Position, or a portion thereof, has been segregated as collateral for
securities sold short.
(e) All or a portion of security is on loan.
(f) Represents security purchased with cash collateral for securities on loan.
(g) The rate shown is the discount rate.

See notes to schedule of investments and securities sold short

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

SECURITIES SOLD SHORT
DOMESTIC COMMON STOCKS -- 1.77%
CONSUMER DISCRETIONARY -- 0.67%
Starbucks Corp............................... 135,000 $3,537,000
----------
CONSUMER STAPLES -- 0.23%
Whole Foods Market, Inc...................... 25,000 1,224,000
----------
INDUSTRIALS -- 0.87%
YRC Worldwide, Inc........................... 170,000 4,644,400
----------
Total Domestic Common Stocks (Proceeds
$11,180,076).................................. 9,405,400
----------
Total Securities Sold Short (Proceeds $11,180,076) $9,405,400
==========

--------
(h) Federal Tax information: Net unrealized appreciation of securities sold
short is comprised of gross appreciation of $1,872,876 and gross
depreciation of $98,200 for federal income tax purposes. At September 30,
2007, the aggregate proceeds of securities sold short for federal income
tax purposes was ($11,180,076).

See notes to schedule of investments and securities sold short

THE ZWEIG FUND, INC.

FINANCIAL HIGHLIGHTS

September 30, 2007
(Unaudited)

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

Beginning of period: December 31, 2006.................. $438,544,021 $ 5.99
Net investment income................................ $ 2,729,939 $ 0.04
Net realized and unrealized gain on investments...... 33,589,114 0.39
Dividends from net investment income and
distributions from net long-term and short-term
capital gains*..................................... (32,856,902) (0.45)
Net asset value of shares issued to shareholders in
reinvestment of dividends resulting in issuance of
common stock....................................... 1,870,759 --
Net proceeds from the sales of shares during rights
offering (net of expenses of $645,000)**........... 87,859,000 (0.19)
------------ ------
Net increase (decrease) in net assets/net asset
value.............................................. 93,191,910 (0.21)
------------ ------
End of period: September 30, 2007....................... $531,735,931 $ 5.78
============ ======

--------
*Please note that the tax status of our distributions is determined at the
end of the taxable year. However, based on interim data as of September 30,
2007, we estimate that 46% of distributions represent return of capital and
54% represent excess gain distributions which are taxable as ordinary income.
**Shares were sold at a 5% discount from a 5-day average market price.

See notes to schedule of investments and securities sold short

THE ZWEIG FUND, INC.

NOTES TO SCHEDULES OF INVESTMENTS AND SECURITIES SOLD SHORT

September 30, 2007 (Unaudited)

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Zweig Fund, Inc. (the "Fund") in the preparation of the
Schedule of Investments. The preparation of the Schedules of Investments in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, and disclosure of contingent
assets and liabilities at the date of the Schedules of Investments. Actual
results could differ from those estimates.

A. Security 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.

Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service, which utilizes information with respect to
recent sales, market transactions in comparable securities, quotations from
dealers, and various relationships between securities in determining value.

As required, some securities and other assets may be valued at fair value as
determined in good faith by or under the direction of the Directors.

Certain foreign common stocks may be fair valued in cases where closing
prices are not readily available or are deemed not reflective of readily
available market prices. For example, significant events (such as movement in
the U.S. securities market, or other regional and local developments) may occur
between the time that foreign markets close (where the security is principally
traded) and the time that the Fund calculates its net asset value (generally,
the close of the NYSE) that may impact the value of securities traded in these
foreign markets. In these cases, information from an external vendor may be
utilized to adjust closing market prices of certain foreign common stocks to
reflect their fair value. Because the frequency of significant events is not
predictable, fair valuation of certain foreign common stocks may occur on a
frequent basis.

Short-term investments having a remaining maturity of 60 days or less are
valued at amortized cost, which approximates market.

In September 2006, Statement of Financial Accounting Standards No. 157,
"Fair Value Measurements" ("SFAS 157"), was issued and is effective for fiscal
years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Funds' financial statement disclosures.

B. Security Transactions and Related Income:

Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date, or in the case of certain foreign securities,
as soon as the Fund is notified. Interest income is recorded on the accrual
basis. The Fund amortizes premiums and accretes discounts using the effective
interest method. Realized gains and losses are determined on the identified
cost basis.

C. Foreign Currency Translation:

Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at
the trade date.

D. Foreign Security Country Determination:

A combination of the following criteria is used to assign the countries of
risk listed in the Schedule of Investments and securities sold short: country
of incorporation, actual building address, primary exchange on which the
security is traded and country in which the greatest percentage of company
revenue is generated.

E. Security Lending:

The Fund may loan securities to qualified brokers through an agreement with
State Street Bank and Trust Company (the "Custodian"). Under the terns of
agreement, the Fund is required to maintain collateral with a market value not
less than 100% of the market value of loaned securities. Collateral is adjusted
daily in connection with changes in the market value of securities on loan.
Collateral may consist of cash, securities issued or guaranteed by the U.S.
Government or its agencies, sovereign debt of foreign countries and/or
irrevocable letters of credit issued by banks. Cash collateral is invested in a
short-term money market fund. Dividends earned on the collateral and premiums
paid by the broker are recorded as income by the Fund net of fees and rebates
charged by the Custodian for its services in connection with this securities
lending program. Lending portfolio securities involves a risk of delay in the
recovery of the loaned securities or in the foreclosure on collateral.

At September 30, 2007, the Fund had securities valued at $21,244,723 on
loan. For collateral the Fund received cash collateral of $20,601,991 and U.S.
Government securities valued at $1,193,652.

F. Short Sales:

A short sale is a transaction in which the Fund sells a security it does not
own in anticipation of a decline in market price. To sell a security short, the
Fund must borrow the security. The Fund's obligation to replace the security
borrowed and sold short will be fully collateralized at all times by the
proceeds from the short sale retained by the broker and by cash and securities
deposited in a segregated account with the Fund's custodian. If the price of
the security sold short increases between the time of the short sale and the
time the Fund replaces the borrowed security, the Fund will realize a loss, and
if the price declines during the period, the Fund will realize a gain. Any
realized gain will be decreased, and any realized loss increased, by the amount
of transaction costs. On ex-dividend date, dividends on short sales are
recorded as an expense to the Fund. At September 30, 2007, the value of
securities sold short amounted to $9,405,400 against which collateral of
$37,713,267 was held. The collateral includes the deposits with the broker for
securities held short and the value of the segregated investments held

long, as shown in the Schedule of Investments and Securities Sold Short. Short
selling used in the management of the Fund may accelerate the velocity of
potential losses if the prices of securities sold short appreciate quickly.
Stocks purchased may decline in value at the same time stocks sold short may
appreciate in value, thereby increasing potential losses.

NOTE 2 -- CREDIT RISK AND ASSET CONCENTRATIONS

In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as the Fund's ability to
repatriate such amounts.

The Fund may invest a high percentage of its assets in specific sectors of
the market in its pursuit of a greater investment return. Fluctuations in these
sectors of concentration may have a greater impact on the Fund, positive or
negative, than if the Fund did not concentrate its investments in such sectors.

NOTE 3 -- INDEMNIFICATIONS

Under the Fund's organizational documents, its directors and officers are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, the Fund enters into contracts that contain a
variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these arrangements.

KEY INFORMATION

Zweig Shareholder Relations: 1-800-272-2700
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.

REPURCHASE OF SECURITIES

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.

PROXY VOTING INFORMATION (FORM N-PX)

The Adviser and Sub-Adviser vote proxies relating to portfolio securities in
accordance with procedures that have been approved by the Fund's Board of
Directors. You may obtain a description of these

procedures, along with information regarding how the Fund voted proxies during
the most recent 12-month period ended June 30, 2007, free of charge, by calling
toll-free 1-800-243-1574. This information is also available through the
Securities and Exchange Commission's website at http://www.sec.gov.

FORM N-Q INFORMATION

The Fund files a complete schedule of portfolio holdings with the Securities
and Exchange Commission (the "SEC") for the first and third quarters of each
fiscal year on Form N-Q. Form N-Q is available on the SEC's website at
http://www.sec.gov. Form N-Q may be reviewed and copied at the SEC's Public
Reference Room. Information on the operation of the SEC's Public Reference Room
can be obtained by calling toll-free 1-800-SEC-0330.

FUND DISTRIBUTIONS AND MANAGED DISTRIBUTION PLAN

The Fund has a Managed Distribution Plan to pay 10% of the Fund's net asset
value on an annualized basis. Distributions may represent earnings from net
investment income, realized capital gains, or, if necessary, return of capital.
The board believes that regular, fixed quarterly cash payouts will enhance
shareholder value and serve the long-term interests of shareholders. You should
not draw any conclusions about the Fund's investment performance from the
amount of the distributions or from the terms of the Fund's Managed
Distribution Plan.

The Fund estimates that it has distributed more than its income and net
realized capital gains in the fiscal year to date; therefore, a portion of your
distributions may be a return of capital. A return of capital may occur when
some or all of the money that you invested in the Fund is paid back to you. A
return of capital does not necessarily reflect the Fund's investment
performance and should not be confused with "yield" or "income".

Please note that the characterization of Fund distributions for federal
income tax purposes is different from book accounting generally accepted
accounting principles ("GAAP"). The amounts and sources of distributions
reported in Section 19(a) notices of the 1940 Act are only estimates and are
not being provided for tax reporting purposes. The actual amounts and sources
of the amounts for tax reporting purposes will depend upon the Fund's
investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. It is only after December 31 that
we will know the exact source of our distributions. Shareholders should use
only the Form 1099-DIV that will be mailed by January 31, 2008 to determine the
taxability of our distributions.

The Board may amend, suspend or terminate the Managed Distribution Plan
without prior notice to shareholders if it deems such action to be in the best
interest of the Fund and its shareholders.

Information on the Zweig funds is available at http://www.PhoenixFunds.com.
Section 19(a) notices are posted on the website at:
http://www.phoenixinvestments.com/phxinv/PublicSite.jsp?Target=/Individual/
Products/Closed_End_Funds/Zweig/ZF_Fund.html.

OFFICERS AND DIRECTORS
George R. Aylward
President, Chairman and Chief Executive Officer

Carlton Neel
Executive Vice President

David Dickerson
Senior Vice President

Marc Baltuch
Chief Compliance Officer and Vice President

Moshe Luchins
Vice President

Kevin J. Carr
Chief Legal Officer and Secretary

Nancy Curtiss
Treasurer

Jacqueline Porter
Vice President and Assistant Treasurer

Charles H. Brunie
Director

Wendy Luscombe
Director

Alden C. Olson, Ph.D.
Director

James B. Rogers, Jr.
Director

R. Keith Walton
Director

Investment Adviser
Phoenix/Zweig Advisers LLC
900 Third Avenue, 31st Floor
New York, NY 10022-4793

Fund Administrator
Phoenix Equity Planning Corporation
One American Row
Hartford, CT 06103-2899

Custodian
State Street Bank and Trust Company
P.O. Box 5501
Boston, MA 02206-5501

Legal Counsel
Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022-2585

Transfer Agent
Computershare Trust Company, NA
P.O. Box 43010
Providence, RI 02940-3010

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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.

PXP4132 Q3-07

Quarterly Report

Zweig

The Zweig Fund, Inc.

September 30, 2007

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