UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-04739
The Zweig Fund, Inc.
(Exact name of registrant as specified in charter)
900 Third Ave, 31st Floor
New York, NY 10022-4728
(Address of principal executive offices) (Zip code)
Kevin J. Carr, Esq.
Vice President, Chief Legal Officer,
Counsel and Secretary for Registrant
100 Pearl Street
Hartford, CT 06103-4506
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-272-2700
Date of fiscal year end: December 31
Date of reporting period: September 30, 2009
Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 ((S)(S) 239.24 and 274.5
of this chapter), to file reports with the Commission, not later than 60 days
after the close of the first and third fiscal quarters, pursuant to rule 30b1-5
under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission
may use the information provided on Form N-Q in its regulatory, disclosure
review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q 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 the
Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549. The OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. (S) 3507.
Item 1. Schedule of Investments.
The Schedule(s) of Investments is attached herewith.
Key Investment Terms
American Depositary Receipt (ADR): Represents shares of foreign companies
traded in U.S. dollars on U.S. exchanges that are held by a U.S. bank or a
trust. Foreign companies use ADRs in order to make it easier for Americans to
buy their shares.
Sponsored ADR (American Depositary Receipt) An ADR which is issued with the
cooperation of the company whose stock will underlie the ADR. Sponsored ADRs
generally carry the same rights normally given to stockholders, such as voting
rights. ADRs must be sponsored to be able to trade on a major U.S. exchange
such as the NYSE.
1
THE ZWEIG FUND, INC.
SCHEDULE OF INVESTMENTS
September 30, 2009
(Unaudited)
Number of
Shares Value
($ reported in thousands) --------- -------
INVESTMENTS
COMMON STOCKS 76.5%
CONSUMER DISCRETIONARY -- 6.1%
McDonald's Corp.............................. 105,000 $ 5,992
NIKE, Inc. Class B........................... 120,000 7,764
Under Armour, Inc. Class A/(2)/.............. 265,000 7,375
-------
21,131
-------
CONSUMER STAPLES -- 9.1%
Altria Group, Inc............................ 310,000 5,521
Bunge Ltd.................................... 88,000 5,510
Costco Wholesale Corp........................ 115,000 6,493
PepsiCo, Inc................................. 110,000 6,452
Philip Morris International, Inc............. 150,000 7,311
-------
31,287
-------
ENERGY -- 9.2%
ConocoPhillips............................... 115,000 5,193
Halliburton Co............................... 215,000 5,831
Massey Energy Co............................. 128,000 3,570
Occidental Petroleum Corp.................... 81,000 6,350
Petroleo Brasileiro SA ADR................... 130,000 5,967
Valero Energy Corp........................... 245,000 4,751
-------
31,662
-------
FINANCIALS -- 5.6%
Allstate Corp. (The)......................... 120,000 3,674
Goldman Sachs Group, Inc. (The).............. 34,000 6,268
Hudson City Bancorp, Inc..................... 360,000 4,734
Reinsurance Group of America, Inc............ 104,000 4,639
-------
19,315
-------
HEALTH CARE -- 9.9%
Biogen Idec, Inc./(2)/....................... 124,000 6,264
Gilead Sciences, Inc./(2)/................... 129,000 6,009
Johnson & Johnson............................ 103,000 6,272
Merck & Co., Inc............................. 144,000 4,555
Shire plc ADR................................ 14,360 751
See Notes to Schedule of Investments
2
Number of
Shares Value
($ reported in thousands) --------- --------
HEALTH CARE (CONTINUED)
St. Jude Medical, Inc./(2)/............... 142,000 $ 5,539
UnitedHealth Group, Inc................... 195,000 4,883
--------
34,273
--------
INDUSTRIALS -- 10.2%
Boeing Co. (The).......................... 115,000 6,227
Caterpillar, Inc.......................... 88,000 4,517
Continental Airlines, Inc. Class B/(2)/... 480,000 7,891
Foster Wheeler AG/(2)/.................... 160,000 5,106
L-3 Communications Holdings, Inc.......... 65,000 5,221
Union Pacific Corp........................ 110,000 6,418
--------
35,380
--------
INFORMATION TECHNOLOGY -- 14.7%
Cisco Systems, Inc./(2)/.................. 330,000 7,768
Corning, Inc.............................. 380,000 5,818
Hewlett-Packard Co........................ 129,000 6,090
International Business Machines Corp...... 50,000 5,981
Microsoft Corp............................ 250,000 6,472
Nokia Oyj Sponsored ADR................... 345,000 5,044
QUALCOMM, Inc............................. 170,000 7,647
Research In Motion Ltd./(2)/.............. 91,000 6,147
--------
50,967
--------
MATERIALS -- 6.6%
Alcoa, Inc................................ 335,000 4,395
Freeport-McMoRan Copper & Gold, Inc....... 95,000 6,518
NuCor Corp................................ 135,000 6,346
Potash Corp. of Saskatchewan, Inc......... 60,000 5,421
--------
22,680
--------
TELECOMMUNICATION SERVICES -- 3.4%
AT&T, Inc................................. 220,000 5,942
Verizon Communications, Inc............... 192,000 5,812
--------
11,754
--------
UTILITIES -- 1.7%
Exelon Corp............................... 119,000 5,905
--------
5,905
--------
Total Common Stocks (Identified Cost $270,344) 264,354
--------
See Notes to Schedule of Investments
3
Number of
Shares Value
($ reported in thousands) ---------- --------
EXCHANGE TRADED FUNDS 3.9%
PowerShares Deutsche Bank Agriculture Fund/(2)/. 206,000 $ 5,245
Proshares Ultrashort S&P 500.................... 100,000 4,044
Templeton Dragon Fund, Inc...................... 160,000 4,064
--------
Total Exchange Traded Funds (Identified Cost $14,119) 13,353
--------
Total Long Term Investments -- 80.4% (Identified cost
$284,463)......................................... 277,707
--------
SHORT-TERM INVESTMENTS 20.0%
MONEY MARKET MUTUAL FUNDS -- 1.4%
State Street Institutional Liquid Reserves
Fund--Institutional Shares (seven-day
effective yield 0.260%)....................... 4,987,801 4,988
--------
Par
----------
U.S. TREASURY BILL/(3)/ -- 18.6%
U.S. Treasury Bill
0.136%, 2/11/10............................. $ 44,000 43,980
0.455%, 4/1/10.............................. 20,000 19,982
--------
63,962
--------
Total Short-Term Investments (Identified Cost $68,901) 68,950
--------
Total Investments (Identified Cost $353,364) -- 100.4% 346,657/(1)/
Other assets and liabilities, net -- (0.4)%......... (1,234)
--------
Net Assets -- 100.0%................................ $345,423
========
--------
(1) For Federal Income Tax Information see Note 2 in the Notes to Schedule of
Investments.
(2) Non-income producing.
(3) The rate shown is the discount rate.
See Notes to Schedule of Investments
4
The following table provides a summary of inputs used to value the Fund's
net assets as of September 30, 2009 (see Security Valuation Note 1A in the
Notes to Schedule of Investments):
Level 2
Total Level 1 Significant
Value at Quoted Observable
September 30, 2009 Price Input
------------------ -------- -----------
Investments in Securities:
Equity Securities:
Common Stocks................. $264,354 $264,354 $ --
Exchange Traded Funds......... 13,353 13,353 --
Short-Term Investments........ 4,988 4,988 --
Debt Securities:
U.S. Treasury Obligations..... 63,962 -- 63,962
-------- -------- -------
Total...................... $346,657 $282,695 $63,962
======== ======== =======
There are no Level 3 (significant unobservable inputs) priced securities.
See Notes to Schedule of Investments
5
THE ZWEIG FUND, INC.
NOTES TO SCHEDULE OF INVESTMENTS
September 30, 2009
(Unaudited)
NOTE 1 -- 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 conformity with accounting principals
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 financial statements and the reported amount of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates and those differences could be significant.
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. Due
to continued volatility in the current market, valuations developed through
pricing techniques may materially vary from the actual amounts realized upon
sale of the securities.
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.
Investments in underlying funds are valued at each fund's closing net asset
value determined as of the close of business of the New York Stock Exchange
(generally 4:00 p.m. Eastern time).
Short-term investments having a remaining maturity of 60 days or less are
valued at amortized cost, which approximates market.
6
The Fund utilizes a fair value hierarchy which prioritizes the inputs to
valuation techniques used to measure fair value into three broad levels:
. Level 1 -- quoted prices in active markets for identical securities
. Level 2 -- prices determined using other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risk, etc.)
. Level 3 -- prices determined using significant unobservable inputs
(including the Fund's own assumptions in determining the fair value of
investments)
A summary of the inputs used to value the Fund's net assets by each major
security type is disclosed at the end of the Schedule of Investments.
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
7
NOTE 2 -- FEDERAL INCOME TAX INFORMATION
($ reported in thousands)
At September 30, 2009, federal tax cost and aggregate gross unrealized
appreciation (depreciation) of securities held by the Fund were as follows:
Net Unrealized
Federal Unrealized Unrealized Appreciation
Tax Cost Appreciation Depreciation (Depreciation)
-------- ------------ ------------ --------------
$355,812 $25,687 $(34,842) $(9,155)
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Item 2. 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 the 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 Securities
Exchange Act of 1934, as amended (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 quarter that have materially affected, or are reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
Item 3. Exhibits.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 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/ George R. Aylward
-----------------------------
George R. Aylward, President
(principal executive officer)
Date November 24, 2009
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/ George R. Aylward
-----------------------------
George R. Aylward, President
(principal executive officer)
Date November 24, 2009
By (Signature and Title)* /s/ Nancy G. Curtiss
-----------------------------
Nancy G. Curtiss, Treasurer
(principal financial officer)
Date November 23, 2009
* Print the name and title of each signing officer under his or her signature.