Edgar Filing: ZWEIG TOTAL RETURN FUND INC

February 1, 2003

Dear Shareholder:

The Zweig Total Return Fund's net asset value increased l.18% for the
quarter ended Decem-
ber 31, 2002, including $0.147 in reinvested distributions. For the year
ended December 31, 2002, the Fund's net asset value declined 3.28%, including
$0.62 in distributions.

DISTRIBUTION DECLARED

In accordance with our policy of distributing 10% of net assets per year,
which equals 0.83% per month (10% divided by 12 months), the Fund declared a
distribution of $0.048 per share payable on January 10, 2003 to shareholders of
record on December 31, 2002. The amount of the distribution depends on the
exact net asset value at the time of the declaration. For the January
distribution, 0.83% of the Fund's net asset value was equivalent to $0.048 per
share. Including this distribution, the Fund's payout since its inception is
now $12.084.

Of the $0.613 considered to be distributed in 2002 for tax purposes,
$0.160749 is ordinary income and $0.452251 is return of capital. (The return of
capital distribution is a tax-free return of capital and therefore should not
be reported as income.)

Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
Chairman

MARKET OUTLOOK

Our bond exposure on December 31, 2002 was 40% with average duration of 4.5
years compared with 66% exposure and average duration of 6.0 years at the close
of the third quarter. If we were fully invested, we would be 62.5% in bonds and
37.5% in equities. Consequently, at 40% we are at about 64% of a full position
(40% divided by 62.5%).

Counter to the general downtrend in the first three quarters of this year,
bond yields rose slightly in the fourth quarter. (The prices of Treasury bonds
move in the opposite direction from yields.) Ten-year bond yields stood at
about 4% at year-end, up from 3.6% at the end of the third quarter and down
from 5.0% at the beginning of the year.

Despite this rise, additional uncertainty about the pace of economic
recovery and the recent rate cut by the Fed provided enough support to keep
bond yields from climbing higher. Our bond model was generally neutral for most
of the fourth quarter and closed in the neutral range at the end of the year.

Because I don't think we have seen the bottom, I reduced our stock exposure
during what I considered a rally phase in the bear market. Our equity exposure
was 23% on December 31, 2002 compared with 27% at the end of the third quarter.
At that figure we are at approximately 61% of a full position (23% divided by
37.5%).

While the overall market averages showed improvement in the final quarter,
performance for the year was dismal. For the quarter, the Dow was up 10.59%,
the S&P 500 Index, 8.44%, and the Nasdaq Composite Index, 14.07%. However, for
the full year, the Dow was down 15.01%, the S&P Index, 22.10%, and the Nasdaq,
a whopping 31.26%. This is the first time since 1939-41 that

the Dow and S&P fell for three consecutive years, while the Nasdaq, which was
introduced in 1971, fell three years in a row for the first time.

Although the market weakness has had a long run, I don't think there is any
limit on how many consecutive years the market can go up or down. From 1995 to
1999, we came off a string when the S&P 500 rose for five years in a row. We
were in a bubble, and the market went to ridiculous valuations. We have been
paying the piper ever since.

In an attempt to provide a boost for the economy and the stock market, the
Administration, which now controls both houses of Congress, has proposed an
extensive stimulus package that includes a proposal to eliminate the taxation
of dividends. Such action might provide some relief. The problem is that the
market is a discounting mechanism, and this package has been talked about for
some time. However, I believe that this expectation helped contribute to the
recent market strength.

As far as dividends are concerned, they might have difficulty eliminating
all of the double taxation because it would cost the Treasury too much revenue.
They might have to settle to cut the tax in half to roughly 20%, the same as
the capital gains tax. Even then they will have a problem because some people
will perceive it as a tax break for the rich.

However, I do believe they should end the double taxation of dividends.
Anything that eases the tax burden on dividends would help the stock market. It
would give the market some kind of cushion. At least the market would not go
down as far as I think it could. It would also encour-
age companies to pay more dividends. That would be good news because I
think many companies have not been judicious in handling their retained
earnings.

Too many companies bought in their own stock rather than issue dividends and
paid outrageous prices. I think that was an atrocious misallocation of capital.
If a company doesn't need retained earnings for its business, it should pay out
the dividends rather than purchase its own stock. If an investor can get these
dividends, especially without paying an extra tax, he could invest it where he
sees fit and help support the market. Incidentally, I have no problem with
companies buying back their own stock if prices are low enough.

I do have a problem with a recent comment by Fed chairman Alan Greenspan
that deflation is more of a threat to economic growth than inflation. As I see
it, neither inflation nor deflation is a problem. The problem is what causes
inflation or deflation. It's like saying that when the temperature outside
reads zero, the thermometer is at fault because it is registering cold, meaning
deflation. The thermometer is not the problem--it's the weather pattern.
Something in the atmo-
sphere is causing it.

If excess capacity and excess debt are causing deflation, that is the
problem. Obviously the solution is to get rid of the excesses. It's not easy to
do and it takes a long time. It has been suggested that the Fed could fight
deflation by printing money and flooding the system with reserves. That would
be horrible. If you doubled the money supply, you would roughly double the
price level. It would be easier for companies to pay off debt. The flip side is
that those who were owed money would suffer. The economy would not benefit.

As far as the economy is concerned, corporate leaders are more skeptical
than the Fed. That's because the Fed has an ax to grind. They don't want to say
everything is terrible or everything is great. They are always playing the
game, and then there is Greenspan speak. Half the time you're not supposed to
know what he is really saying. The people running the corporations have their
own ax to grind, if they are telling you prospects are great, they're usually
trying to pump up their stock. If they say business is lousy, they're probably
telling you the truth. At

least that's the way I see it. Regardless of either perspective, we have gone
through the worst Christmas season in 30 years. However, the economy is not a
disaster right now. It's just kind of limp. While it is on the plus side, it is
not growing very rapidly.

The state of the economy is reflected in the fact that for the first time
since 1988 net outflows from stock mutual funds topped inflows in 2002. When
the public sells mutual funds en masse for a long time, as it did in much of
1973 and 1974, the market tends to underperform. That's a problem now because
the market was boosted through the 1990s mainly by money pouring into the
mutual funds. To some extent it was a great con game. I'm not saying that the
mutual funds were creating a game--it was the whole bubble business.

People were buying technology stocks at any price and putting their IRAs,
Keoghs, and 401(k)s in the market because the market always does well in the
long run. However the long run may be 20 or 30 years down the road. If things
get too exuberant in the short run, you have a problem. The inflow was overdone
and helped propel the market higher.

Now I think people are scared. They look at their portfolios, which are down
a third or a half or something like that. Sick of losing money, they're buying
fewer mutual funds and even withdrawing money. This may continue for a long
time because the inflows poured in for years and years. After the 1987 crash,
we had outflows for most of 1988 and part of 1989. After that, except for an
occasional month, we had inflows for 10 or 11 years, and it was overdone. Now
we have had outflows for a year or so. However, the outflows, relative to
assets, are very small. If it does go on it will not help the markets.

Meanwhile, the flow of European funds into the U.S. is at a pace to reach
the lowest level since 1988, the last time Europe was a net seller of stock. In
September, the last month for which we have figures, the 12 euro countries were
net sellers of $2.8 billion of U.S. equities. In the long run, and I have data
back to 1940, it is usually not good for the market when foreigners are heavy
buyers, and it's good when they are heavy sellers. At the last 14 major market
bottoms, foreigners were sellers at 11 of them. On a quarterly basis, all
foreigners, including Europeans, haven't turned to the sell side. The one-month
result is encouraging, but I don't think we have seen enough of it.

Some analysts see a potential bright side for the markets in the so-called
cash on the sidelines. About $6.6 trillion is now in low return vehicles like
savings accounts and money market funds. With interest rates so low, they say,
where else can people put their money? Well, I think the public's holding of
cash is too low relative to people's own debt and needs. I don't know if much
of the cash is destined to go back into the market. I just don't think there is
so much idle cash available for investment.

The total value of U.S. mergers and acquisitions fell 41% to $447.8 billion
in 2002, the lowest level since 1994. From the peak in 2000, the value of deals
has dropped 74%. I think it is encouraging that mergers have slowed down.
During the bubble years, we had a feeding frenzy and corporations felt they had
to join the feast. Now we are in the cooling off period. These cycles have been
seen many times. I don't know when we will reach the bottom. It was almost like
death in 1974. There were very few mergers. I guess corporations have to go
through the hangover period.

We are also in the hangover mode as far as initial public offerings are
concerned. There were just 83 IPO deals in 2002, raising just $22.2 billion,
the lowest figure since the early 1990s. In the past too much money was raised
by too many low quality companies. The good news is that the better quality
companies have come into the market. That's because the weaker companies are
having a very hard time getting financing.

Again, going back to 1975, there were very few IPOs after the two-year bear
market. We may have to go to much lower levels before the current cycle is
over. I would like to see it go a lot lower relative to market capitalization.
We are nowhere near as low as this activity has gone in previous major bear
markets.

Similarly, the sentiment of investment advisors has not gotten to levels
generally seen at market bottoms. About half of all investment advisors
recently were bullish, more than twice the number at the October bottom.
Historically, going back 40 years, we have had about two bears for every bull
at market bottoms. Recently we have had perhaps three weeks when there were
slightly more bears than bulls. We just haven't seen the kind of pessimism we
had in 1970, 1974, and 1982. It hasn't happened. Given that we had the biggest
bubble of all time, I don't think that's a good sign.

On the positive side, the Fed has recently cut interest rates for the
twelfth time and that may be helpful. The money supply is growing and that's
O.K. Also, the recession of 2001 is over; last quarter saw the fifth
consecutive gain in gross domestic product. However, the recovery has been
anemic and there is a chance we will see a double-dip recession.

We should have had a much better stock market recovery than we've seen and
my sentiment indicators are just not very good. Although they were pretty
decent they didn't get to bear-killing levels in September and October and have
deteriorated since. I considered valuations too high the whole time, and the
recent rally only made them worse. Although the rally may carry further in the
short run, I am not convinced there are enough positives to overcome the
negatives in the long run. Right now I am cautious. We are at about 23%
invested in stocks, which is lower than our norm. I probably would go down
lower if it weren't the beginning of the year, which is a seasonally strong
period.

PORTFOLIO COMPOSITION

In accordance with our investment policy guidelines, all of our bonds are
U.S. Government and Agency obligations. As previously mentioned, the
portfolio's average duration (a measure of sensitivity to interest rates) was
4.5 years on December 31, 2002. This compares with 6.0 years on September 30.
Since these bonds are highly liquid, they provide the flexibility to respond
quickly to market conditions. Jeff Lazar, who has been primarily responsible
for the Fund's day-to-day stock selection for the last nine years, is now also
responsible for the implementation of the Fund's bond investment policy.

Except for small changes in percentages held, our leading industry groups at
year-end were basically unchanged from the close of the third quarter. They
included financial services, health care, technology, consumer products and
services, energy, and media.

Our largest individual holdings include Microsoft, Pfizer, IBM, Bank of
America, General Electric, Wells Fargo, Citigroup, American International
Group, Dell, and Johnson & Johnson. New to this grouping are IBM, Dell, and
AIG, where we added to our positions, and Citigroup. No longer in this listing
are Tenet Healthcare, which we sold out completely, and Procter & Gamble,
United Healthcare, and Wal-Mart, where we trimmed our holdings.

Sincerely,

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

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

THE ZWEIG TOTAL RETURN FUND, INC.

SCHEDULE OF INVESTMENTS

December 31, 2002

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

COMMON STOCKS 22.38%
AEROSPACE & AIR TRANSPORT 0.93%
Boeing Co..................................... 30,600 $ 1,009,494
L-3 Communications Holdings, Inc.............. 18,000 (a) 808,380
Northrop Grumman Corp......................... 9,000 873,000
Raytheon Co................................... 31,500 968,625
United Technologies Corp...................... 20,600 1,275,964
------------
4,935,463
------------
BUILDING & FOREST PRODUCTS 0.45%
International Paper Co........................ 25,300 884,741
Smurfit-Stone Container Corp.................. 54,600 (a) 840,349
Temple-Inland Inc............................. 15,000 672,150
------------
2,397,240
------------
CHEMICALS 0.22%
E. I. du Pont de Nemours & Co................. 27,100 1,149,040
------------
COMMERCIAL SERVICES 0.20%
First Data Corp............................... 30,700 1,087,087
------------
CONSUMER PRODUCTS & SERVICES 1.78%
Anheuser-Busch Cos., Inc...................... 30,600 1,481,040
Avon Products, Inc............................ 35,500 1,912,385
Black & Decker Corp........................... 22,200 952,158
Kimberly-Clark Corp........................... 22,500 1,068,075
PepsiCo, Inc.................................. 18,600 785,292
Procter & Gamble Co........................... 23,400 2,010,996
Unilever NV, ADR.............................. 21,000 1,295,910
------------
9,505,856
------------
EXCHANGE TRADED FUNDS 2.78%
iShares Dow Jones U.S. Consumer Non-Cyclical
Sector Index Fund........................... 30,000 1,219,500
Pharmaceutical HOLDRs Trust................... 28,500 2,114,415
S&P 500 Index Fund............................ 130,000 11,469,900
------------
14,803,815
------------
FINANCE -- FINANCIAL SERVICES 3.87%
Allstate Corp................................. 38,200 1,413,018
American International Group, Inc............. 46,900 2,713,165
Bank of America Corp.......................... 46,200 3,214,134

See notes to financial statements

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

FINANCE -- FINANCIAL SERVICES (CONTINUED)
Citigroup, Inc............................... 77,700 $ 2,734,263
Fannie Mae................................... 22,700 1,460,291
Freddie Mac.................................. 22,600 1,334,530
Lehman Brothers Holdings, Inc................ 25,900 1,380,211
Merrill Lynch & Co., Inc..................... 24,000 910,800
Morgan Stanley............................... 27,500 1,097,800
Washington Mutual, Inc....................... 45,000 1,553,850
Wells Fargo & Co............................. 59,800 2,802,826
------------
20,614,888
------------
FOOD, BEVERAGES, TOBACCO 0.23%
Kraft Foods, Inc., Class A................... 31,500 1,226,295
------------
HEALTH CARE 3.08%
AmerisourceBergen Corp....................... 14,600 792,926
Amgen, Inc................................... 31,500 (a) 1,522,710
Barr Laboratories, Inc....................... 12,000 (a) 781,080
Baxter International, Inc.................... 39,000 1,092,000
Johnson & Johnson............................ 48,700 2,615,677
MedImmune, Inc............................... 23,900 (a) 649,363
Medtronic, Inc............................... 22,500 1,026,000
Pfizer, Inc.................................. 123,900 3,787,623
St. Jude Medical, Inc........................ 30,000 (a) 1,191,600
UnitedHealth Group, Inc...................... 15,200 1,269,200
Wyeth........................................ 45,000 1,683,000
------------
16,411,179
------------
MANUFACTURING 0.78%
General Electric Co.......................... 124,200 3,024,270
Pitney Bowes Inc............................. 35,200 1,149,632
------------
4,173,902
------------
MEDIA 1.22%
Clear Channel Communications, Inc............ 39,300 (a) 1,465,497
Gannett Co., Inc............................. 15,000 1,077,000
Tribune Co................................... 34,500 1,568,370
Viacom Inc., Class B......................... 37,500 (a) 1,528,500
Walt Disney Co............................... 52,100 849,751
------------
6,489,118
------------
METALS 0.09%
Inco Ltd..................................... 24,000 (a) 509,280
------------

See notes to financial statements

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

OIL & OIL-GAS DRILLING 1.30%
Anadarko Petroleum Corp...................... 16,000 $ 766,400
ConocoPhillips............................... 16,000 774,240
Exxon Mobil Corp............................. 46,700 1,631,698
Occidental Petroleum Corp.................... 52,000 1,479,400
Talisman Energy, Inc......................... 31,800 1,150,206
Valero Energy Corp........................... 30,000 1,108,200
------------
6,910,144
------------
RAILROADS 0.17%
Union Pacific Corp........................... 15,000 898,050
------------
RESTAURANTS 0.15%
Wendy's International, Inc................... 30,000 812,100
------------
RETAILING 1.04%
Best Buy Co., Inc............................ 30,000 (a) 724,500
Kroger Co.................................... 45,000 (a) 695,250
Lowe's Cos., Inc............................. 29,500 1,106,250
Reebok International Ltd..................... 23,000 (a) 676,200
Wal-Mart Stores, Inc......................... 46,100 2,328,511
------------
5,530,711
------------
TECHNOLOGY 3.00%
Applied Materials, Inc....................... 29,300 (a) 381,779
Cisco Systems, Inc........................... 92,700 (a) 1,214,370
Dell Computer Corp........................... 97,900 (a) 2,617,846
Intel Corp................................... 130,600 2,033,442
International Business Machines Corp......... 46,500 3,603,750
Microsoft Corp............................... 88,800 (a) 4,590,960
Nokia Corp., ADR............................. 45,300 702,150
Texas Instruments, Inc....................... 54,500 818,045
------------
15,962,342
------------
TELECOMMUNICATIONS 0.57%
AT&T Corp.................................... 25,180 657,450
CenturyTel, Inc.............................. 37,500 1,101,750
SBC Communications, Inc...................... 46,600 1,263,326
------------
3,022,526
------------
UTILITIES -- ELECTRIC & GAS 0.52%
DTE Energy Co................................ 21,000 974,400
Entergy Corp................................. 22,100 1,007,539
Exelon Corp.................................. 15,000 791,550
------------
2,773,489
------------
Total Common Stocks (Cost $138,053,321).......... 119,212,525
------------

See notes to financial statements

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

UNITED STATES GOVERNMENT AND AGENCY 39.72%
OBLIGATIONS
United States Treasury Notes, 6.00%, 8/15/09...... $ 21,900,000 $ 25,469,021
United States Treasury Notes, 5.00%, 8/15/11...... 132,000,000 144,787,632
United States Treasury Bonds, 10.75%, 5/15/03..... 15,000,000 15,526,185
United States Treasury Bonds, 6.375%, 8/15/27..... 21,500,000 25,848,719
------------
Total United States Government and Agency
Obligations (Cost $196,219,075)....................... 211,631,557
------------
SHORT-TERM INVESTMENTS 37.18%
BMW US Capital LLC, 1.20%, 1/02/03................ 18,600,000 18,599,380
BP America Inc., 1.20%, 1/02/03................... 26,600,000 26,599,113
Diageo Capital PLC, 1.28%, 1/13/03................ 26,600,000 26,588,651
General RE Financial Products Corp., 1.28%,
1/07/03......................................... 26,600,000 26,594,325
Knight-Ridder Inc., 1.31%, 1/09/03................ 26,500,000 26,491,322
New York Life Cap. Corp., 1.34%, 1/06/03.......... 20,000,000 19,996,278
Toyota Motor Credit Corp., 1.31%, 1/06/03......... 26,600,000 26,595,160
UBS Financial Corp., 1.20%, 1/02/03............... 26,600,000 26,599,113
------------
Total Short-Term Investments (Cost $198,064,306)........ 198,063,342
------------
Total Investments (Cost $532,336,702) -- 99.28%......... 528,907,424
Other assets less liabilities -- 0.72%.................. 3,855,894
------------
Net Assets -- 100%...................................... $532,763,318
============

--------
(a) Non-income producing security.

For Federal income tax purposes, the tax basis of investments owned at
December 31, 2002 was $537,293,094 and net unrealized depreciation of
investments consisted of:

Gross unrealized appreciation............................ $ 18,124,459
Gross unrealized depreciation............................ (26,510,129)
------------
Net unrealized depreciation.............................. $ (8,385,670)
============

See notes to financial statements

THE ZWEIG TOTAL RETURN FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2002

ASSETS
Investments, at value (identified cost $532,336,702).......... $528,907,424
Cash.......................................................... 64,685
Dividends and interest receivable............................. 3,872,412
Receivable from transfer agent................................ 535,947
Prepaid expenses.............................................. 13,830
------------
Total Assets................................................ 533,394,298
------------
LIABILITIES
Dividend distribution payable................................. 4,481
Accrued advisory fees (Note 4)................................ 316,490
Accrued administration fees (Note 4).......................... 58,776
Other accrued expenses........................................ 251,233
------------
Total Liabilities........................................... 630,980
------------
NET ASSETS $532,763,318
============
NET ASSET VALUE, PER SHARE
($532,763,318 / 91,761,728 shares outstanding -- Note 5)...... $ 5.81
============

Net Assets consist of
Capital paid-in............................................... $579,100,703
Undistributed net investment income........................... 4,404,654
Accumulated net realized loss on investments.................. (47,312,761)
Net unrealized depreciation on investments.................... (3,429,278)
------------
$532,763,318
============

STATEMENT OF OPERATIONS

For the Year Ended December 31, 2002

INVESTMENT INCOME
Income
Interest................................................... $ 16,686,813
Dividends (net of foreign withholding taxes of $5,877)..... 2,125,494
------------
Total Income............................................ 18,812,307
------------
Expenses
Investment advisory fees................................... 3,917,702
Administrative fees........................................ 727,573
Transfer agent fees........................................ 269,800
Printing and postage expenses.............................. 244,320
Custodian fees............................................. 73,893
Directors' fees and expenses............................... 57,377
Professional fees.......................................... 8,189
Miscellaneous.............................................. 239,321
------------
Total Expenses.......................................... 5,538,175
------------
Net Investment Income................................ 13,274,132
------------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
Net realized loss on investments.............................. (46,196,296)
Decrease in unrealized depreciation on investments............ 14,187,264
------------
Net realized and unrealized loss on investments............ (32,009,032)
------------
Net decrease in net assets resulting from operations....... $(18,734,900)
============

See notes to financial statements

THE ZWEIG TOTAL RETURN FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS

For the Year Ended
December 31,
--------------------------
2002 2001
------------ ------------

INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income................................................ $ 13,274,132 $ 15,674,362
Net realized gain (loss) on investments.............................. (46,196,296) 542,036
Decrease (increase) in unrealized depreciation of investments........ 14,187,264 (29,147,637)
------------ ------------
Net decrease in net assets resulting from operations.............. (18,734,900) (12,931,239)
------------ ------------
Dividends and distributions to shareholders from
Net investment income................................................ (15,669,836) (19,408,418)
Net realized short-term gains on investments......................... -- (139,441)
Tax return of capital................................................ (40,926,499) (44,040,006)
------------ ------------
Total dividends and distributions to shareholders................. (56,596,335) (63,587,865)
------------ ------------
Capital share transactions
Net asset value of shares issued to shareholders in reinvestment
of distributions resulting in issuance of common stock............. 6,439,612 7,118,182
------------ ------------
Net increase in net assets derived from capital share
transactions....................................................... 6,439,612 7,118,182
------------ ------------
Net decrease in net assets........................................... (68,891,623) (69,400,922)
NET ASSETS
Beginning of year........................................................ 601,654,941 671,055,863
------------ ------------
End of year (including undistributed net investment income of
$4,404,614 and $4,991,892, respectively)............................... $532,763,318 $601,654,941
============ ============

See notes to financial statements

THE ZWEIG TOTAL RETURN FUND, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2002

NOTE 1 -- Organization

The Zweig Total Return 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 July 21, 1988.

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

Portfolio securities that are traded only on stock exchanges are valued at
the last sale price. Securities traded in the over-the-counter market which are
National Market System securities are valued at the last sale 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 December 31, 2002) and other assets, if any, are valued at
fair value as determined under procedures approved by the Board of Directors of
the Fund.

B. Security Transactions and Investment Income

Security transactions are recorded on trade date. Dividend income is
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. Prior to January 1, 2001, premium on securities was not
amortized.

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

C. 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.

D. 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 income tax
regulations that may differ from generally accepted accounting principles.
These differences include the treatment of premium amortization, losses
deferred due to wash sales 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. As of December 31,
2002, the Fund increased undistributed net investment income by $1,808,466
increased accumulated net realized loss by $429,940 and decreased paid in
capital by $1,378,526.

As of December 31, 2002, the components of distributable earnings on a tax
basis (excluding unrealized appreciation/(depreciation) which is disclosed in
the schedule of investments) were as follows:

Undistributed Ordinary Income........ $0
Undistributed Long-term Capital Gains $0
Capital Loss Carryovers.............. $46,558,126 expiring 2010

Capital loss carryovers may be used to offset future capital gains. The
differences between the book basis and tax basis components of distributable
earnings relate principally to the timing of recognition of income and gains
and distributions for federal income tax purposes. Short-term gain
distributions reported in the statement of changes in net assets are reported
as ordinary income for federal tax purposes.

NOTE 3 -- Portfolio Transactions

During the year ended December 31, 2002, purchases and sales transactions,
excluding short-term investments were:

United States
Government
Common and Agency
Stocks Obligations
------------ -------------

Purchases.............................. $171,192,721 $219,379,133
============ ============
Sales.................................. $211,191,486 $268,074,254
============ ============

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 0.70% of the Fund's average
daily net assets. During the year ended December 31, 2002, the Fund accrued
advisory fees of $3,917,702.

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.
The Administrator generally assists in all aspects of the Fund's operations,
other than providing investment advice, subject to the overall authority of the
Fund's Board of Directors. The Administrator determines the Fund's net asset
value daily, prepares such figures for publication on a weekly basis, maintains
certain of the Fund's books and records that are not maintained by the Adviser,
custodian or transfer agent, assists in the preparation of financial
information for the Fund's income tax returns, proxy statements, quarterly and
annual shareholder reports, and responds to shareholder inquiries. Under the
terms of the Agreement, the Fund pays the Administrator a monthly fee equal, on
an annual basis, to 0.13% of the Fund's average daily net assets. During the
year ended December 31, 2002, the Fund accrued administration fees of $727,573.

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 year ended December 31, 2002, the Fund
paid PXP Securities Corp., a wholly-owned subsidiary of PXP, brokerage
commissions of $14,904 in connection with portfolio transactions effected
through them. In addition, PXP Securities Corp. charged $27,567 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 December 31, 2002, the Fund had one class of common stock, par value
$.001 per share, of which 500,000,000 shares are authorized and 91,761,728
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 years ended
December 31, 2002 and 2001, 1,001,040 and 1,027,722 shares, respectively, were
issued pursuant to the Plan.

On December 16, 2002 the Board of Directors declared a distribution of the
greater of 0.83% of the Fund's net asset value on December 31, 2002 or all
available net investment income plus net short and long term gains. On January
2, 2003, the Fund announced a distribution of $0.048 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:

Year Ended December 31
-----------------------------------------------------
2002 2001 2000 1999 1998
-------- -------- -------- -------- --------

Per Share Data
Net asset value, beginning of period..................... $ 6.63 $ 7.48 $ 7.89 $ 8.43 $ 8.61
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income.................................... 0.15 0.18(a) 0.30 0.28 0.33
Net realized and unrealized gains (losses)............... (0.35) (0.32)(a) 0.02 (0.01) 0.39
-------- -------- -------- -------- --------
Total from investment operations......................... (0.20) (0.14) 0.32 0.27 0.72
-------- -------- -------- -------- --------
Dividends and Distributions
Anti-dilutive effect of share repurchase program......... -- -- 0.01 0.01 --
-------- -------- -------- -------- --------
Dividends from net investment income..................... (0.17) (0.22) (0.30) (0.28) (0.33)
Distributions from net realized gains.................... -- -- (0.25) (0.13) (0.46)
Tax return of capital.................................... (0.45) (0.49) (0.19) (0.41) (0.05)
-------- -------- -------- -------- --------
Total dividends and distributions........................ (0.62) (0.71) (0.74) (0.82) (0.84)
-------- -------- -------- -------- --------
Effect on net asset value as a result of rights offering* -- -- -- -- (0.06)
-------- -------- -------- -------- --------
Net asset value, end of period........................ $ 5.81 $ 6.63 $ 7.48 $ 7.89 $ 8.43
======== ======== ======== ======== ========
Market value, end of period**......................... $ 5.49 $ 7.05 $ 6.57 $ 6.50 $ 8.88
======== ======== ======== ======== ========
Total investment return***............................... (14.06)% 18.73 % 12.64 % (18.72)% 4.49%
======== ======== ======== ======== ========
Ratios/Supplemental Data
Net assets, end of period (in thousands)................. $532,763 $601,655 $671,056 $714,637 $757,212
Ratio of expenses to average net assets.................. 0.99% 1.04% 1.00% 0.97% 0.97%
Ratio of net investment income to average net assets..... 2.37% 2.51% 3.87% 3.50% 3.88%
Portfolio turnover rate.................................. 90.8% 86.3% 121.6% 172.3% 87.9%

--------
* 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 purposes 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.

(a) As required, effective January 1, 2001, the Fund adopted the provision of
the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. The effect of the change for the
year ended December 31, 2001 is shown below. Per share ratios and
supplemental data for periods prior to January 1, 2001, have not been
restated to reflect this change in presentation.

Decrease net investment income....................... $(.02)
Increase net realized and unrealized gains and losses $ .02
Decrease ratio of net investment income.............. (.23)%

TAX INFORMATION NOTICE
(UNAUDITED)

For federal income tax purposes, 12.97 of the ordinary income dividends
paid by the Fund qualify for the dividends received deduction for corporate
shareholders.

Report of Independent Accountants

To the Board of Directors and Shareholders of
The Zweig Total Return Fund, Inc.:

In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Zweig Total Return Fund, Inc.
(the "Fund") at December 31, 2002, the result of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 2002 by correspondence with the custodian,
provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP
New York, New York
February 13, 2003

FUND MANAGEMENT

Information pertaining to the Directors and officers of the Fund is set
forth below. The address of each individual, unless otherwise noted, is c/o
Phoenix/Zweig Advisers LLC, 900 Third Avenue, New York, NY 10022.

Number of
Term of Office and Portfolios in Fund
Name, (Age), Address and Length of Time Complex Overseen Principal Occupation(s)
Position(s) with Fund Served by Director During Past 5 Years and Other Directorships Held
--------------------- ------------------- ------------------ -------------------------------------------------------

INDEPENDENT DIRECTORS

Charles H. Brunie (72)... Term: Until 2003. 2 Chairman, Brunie Associates (investments) since April
Brunie Associates Served since: 1988. 2001; Chairman, Oppenheimer Capital (1969-2000);
600 Third Avenue, 17th Chairman Emeritus, Board of Trustees, Manhattan
Floor Institute (since 1990); Trustee, Milton and Rose D.
New York, NY 10016 Friedman Foundation for Vouchers (since 1999).
Trustee, Hudson Institute (since 2002). Trustee,
Director American Spectator (since 2002).

Elliot S. Jaffe (76)..... Term: Until 2005. 2 Chairman of The Dress Barn, Inc. (since 1963).
30 Dunnigan Drive Served since: 1988. Director, National Retail Federation (since 1994);
Suffern, NY 10901 Stamford Hospital Foundation (since 1997). Member,
Board of Overseers of The School of Arts and
Director Sciences, University of Pennsylvania (since 1998);
Trustee, Teachers College, Columbia University (since
1996). Director of Citigroup Funds (since 1990).

Wendy Luscombe (51)...... Term: Until 2005. 2 Principal, WKL Associates, Inc. (investment
c/o Phoenix/Zweig Served since: 2001. management) (since 1994). Fellow, Royal Institution of
Advisers LLC Chartered Surveyors. Member, Chartered Institute of
900 Third Avenue Arbitrators. Director, Amadeus Vision Capital, plc
New York, NY 10022 (since 1999). Director, Endeavour Real Estate
Securities, Ltd. (since 2000). Director, PXRE Corp.
Director (reinsurance) (since 1994).

Alden C. Olson Ph.D. (74) Term: Until 2004. 2 Currently retired. Chartered Financial Analyst (since
2711 Ramparte Path Served since: 1996. 1964). Professor of Financial Management,
Holt, MI 48842 Investments at Michigan State University (1959 to
1990).
Director

James B. Rogers, Jr. (60) Term: Until 2003. 2 Private investor (since 1980). Chairman, Beeland
352 Riverside Drive Served since: 1986. Interests (Media and Investments) (since 1980).
New York, NY 10025 Regular Commentator on CNBC (1998). Author of
"Investment Biker: On the Road with Jim Rogers"
Director (1994). Visiting Professor, Columbia University (1998).
Columnist, WORTH Magazine (since 1995). Director,
Emerging Markets Brewery Fund (1993-2002).
Director, Levco Series Trust 2 portfolios (since 1996).

INTERESTED DIRECTOR

Philip R. McLoughlin (56)... Term: Until 2003. 49 Director, PXRE Corporation (Delaware) (1985-
56 Prospect Street Served since: 2002. present), World Trust Fund (1991-present). Chairman
Hartford, CT 06115-0480 (1997-2002), Director (1995-2002), Vice Chairman
Chairman and President (1995-1997) and Chief Executive Officer (1995-2002),
Phoenix Investment Partners, Ltd. Director, Executive
Vice President and Chief Investment Officer, The
Phoenix Companies, Inc. (2001-2002). Director (1994-
2002) and Executive Vice President, Investments
(1988-2002), Phoenix Life Insurance Company.
Director (1983-2002) and Chairman (1995-2002),
Phoenix Investment Counsel, Inc. Director (1984-2002)
and President (1990-2000), Phoenix Equity Planning
Corporation. Chairman and Chief Executive Officer,
Phoenix/Zweig Advisers LLC (1999-2002). Director and
President, Phoenix Investment Management Company
(2001-2002). Director and Executive Vice President,
Phoenix Life and Annuity Company (1996-2002).
Director and Executive Vice President, PHL Variable
Insurance Company (1995-2002). Director, Phoenix
National Trust Company (1996-2002). Director and
Vice President, PM Holdings, Inc. (1985-2002).
Director, PHL Associates, Inc. (1995-2002). Director
(1992-2002) and President (1992-1994), WS Griffith
Securities, Inc.

OFFICERS WHO ARE NOT DIRECTORS

Jeffrey Lazar (43).......... Served since: 1988. Vice President, Phoenix/Zweig Advisers LLC (since
Executive Vice President and 1999). Director and Vice President, The Zweig Total
Treasurer Return Fund, Inc. (until 1999); Vice President and
Treasurer, The Zweig Total Return Advisors, Inc. (until
1999).

Christopher M. Capano (35).. Served since: 1996. Investment Professional, Phoenix/Zweig Advisers LLC
Vice President (since 1994).

Nancy J. Engberg (46)....... Served since: 1999. Vice President and Counsel, Phoenix Investment
56 Prospect Street Partners, Ltd. (since 1999). Counsel, Phoenix Home
Hartford, CT 06115 Life Mutual Insurance Company (1994 to 1999).
Secretary

THE ZWEIG TOTAL RETURN FUND, INC.

YEAR END RESULTS

Total Return
on Net Asset Net Asset NYSE Premium
Value Value Share Price (Discount)
------------ --------- ----------- ----------

Year ended 12/31/2002........... (3.3%) $5.81 $ 5.4900 (5.5%)
Year ended 12/31/2001........... (1.9%) 6.63 7.0500 6.3%
Year ended 12/31/2000........... 5.7% 7.48 6.5700 (12.2%)
Year ended 12/31/1999........... 3.9% 7.89 6.5000 (17.6%)
Year ended 12/31/1998........... 8.8% 8.43 8.8750 5.3%
Year ended 12/31/1997........... 14.6% 8.61 9.4375 9.6%
Year ended 12/31/1996........... 6.3% 8.29 8.0000 (3.5%)
Year ended 12/31/1995........... 17.7% 8.63 8.6250 (0.1%)
Year ended 12/31/1994........... (1.9%) 8.11 8.0000 (1.4%)
Year ended 12/31/1993........... 10.7% 9.11 10.7500 18.0%
Year ended 12/31/1992........... 2.1% 9.06 10.0000 10.4%
Year ended 12/31/1991........... 20.1% 9.79 10.6250 8.5%
Year ended 12/31/1990........... 4.2% 9.02 8.6250 (4.4%)
Year ended 12/31/1989........... 14.9% 9.59 9.7500 1.7%
Inception 9/30/88-12/31/88...... 1.1% 9.24 9.1250 (1.2%)

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

KEY INFORMATION

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

1-800-272-2700 The Zweig Total Return Fund Hot Line:
For updates on net asset value, share price, major industry
groups and other key information

REINVESTMENT PLAN

Many of you have questions about our reinvestment plan. We 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

Jeffrey Lazar
Executive Vice President and Treasurer

Nancy J. Engberg
Secretary

Christopher M. Capano
Vice President

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.
P.O. Box 150480
Hartford, CT 06115-0480

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

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

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

Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

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

This report is transmitted to the shareholders of The Zweig Total Return
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 1336
3206-ANN (12/02)

Annual Report

Zweig

The Zweig Total
Return Fund, Inc.

December 31, 2002

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