UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-08071
Lazard Retirement Series, Inc.
(Exact name of registrant as specified in charter)
30 Rockefeller Plaza
New York, New York 10112
(Address of principal executive offices) (Zip code)
Nathan A. Paul, Esq.
Lazard Asset Management LLC
30 Rockefeller Plaza
New York, New York 10112
(Name and address of agent for service)
Registrant’s telephone number, including area code: (212) 632-6000
Date of fiscal year end: 12/31
Date of reporting period: 6/30/13
ITEM 1. REPORTS TO STOCKHOLDERS.
Lazard Retirement Series
Semi-Annual Report
June 30, 2013
US Equity | Emerging Markets | ||
Lazard Retirement US Strategic Equity Portfolio Lazard Retirement US Small-Mid Cap Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | ||
Targeted Volatility | |||
International Equity | Lazard Retirement Multi-Asset Targeted Volatility Portfolio | ||
Lazard Retirement International Equity Portfolio |
Lazard Retirement Series, Inc. Table of Contents
Shares of the Portfolios are currently offered only to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. Portfolio shares may also be offered to certain qualified pension and retirement plans and to accounts permitting accumulation of assets on a tax-deferred basis.
Please consider a Portfolio’s investment objective, risks, charges and expenses carefully before investing. For more complete information about Lazard Retirement Series, Inc. (the “Fund”), you may obtain a prospectus or summary prospectus by calling 800-823-6300, or online, at www.LazardNet.com. Read the prospectus or each Portfolio’s summary prospectus carefully before you invest. The prospectus and summary prospectus contain investment objective, risks, charges, expenses and other information about Portfolios of the Fund, which are not detailed in this report.
Distributed by Lazard Asset Management Securities LLC.
Semi-Annual Report | 1 |
Lazard Retirement Series, Inc. A Message from Lazard
Dear Shareholder,
Global equities rose in the first half of 2013, with gains in North America and Asia offsetting steep emerging-market equity declines. Elsewhere, European and Middle Eastern countries recorded more muted performance. Fixed-income markets were volatile during the period. Despite strong performance at the start of the year, political headlines and the Cyprus banking crisis negatively affected sentiment. Investors were encouraged by progress in the euro zone and stronger US economic data. However, comments from the US Federal Reserve (the Fed) Chairman Ben Bernanke regarding the “tapering” of liquidity measures caused a sharp sell-off in the emerging markets—particularly for emerging-market currencies. As a result, emerging-market equities underperformed their developed-market counterparts by a considerable margin during the first half of the year.
At Lazard Asset Management, we remain focused on fundamental, active management, particularly during these challenging financial times. Corporate profitability and cash generation remain robust, and valuations remain attractive by historical standards.
We believe that financial markets offer attractive opportunities, and that we possess and continually cultivate the skills, knowledge, and experience to take advantage of these opportunities. We are committed to leveraging our strengths to help you, a valued shareholder in Lazard Funds, achieve your financial goals.
We appreciate your continued confidence in our management capabilities, and feel privileged that you have turned to Lazard for your investment needs.
Sincerely,
Lazard Asset Management LLC
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Lazard Retirement Series, Inc. Investment Overviews
US Equities
The market rallied over the last six months as gathering momentum of the US recovery was evident on several fronts. Housing prices continued to rebound, household assets and net worth reached new record highs, and federal fiscal deficits declined. However, toward the end of May the market grew increasingly volatile amid uncertainty over US monetary policy. US Treasury yields rose and equity markets declined globally after the Fed Chairman Ben Bernanke suggested late in the second quarter that the Fed may start to scale back on its bond purchases, focusing investors on the fact that the exceptionally loose monetary policy created by the financial crisis must inevitably end.
International Equities
International markets rose during the first half of 2013 propelled by positive macroeconomic developments. In Europe, some financial institutions repaid a larger-than-expected €137 billion of central bank loans two years early, and Greece received another round of financial aid. In June, some European governments announced more balanced approaches between austerity and stimulus, for further efforts to improve the slow-growth environment. In Japan, the Bank of Japan (BoJ) announced a two percent inflation target, and committed to unlimited monetary easing, through an asset purchase program, until that target is met.
Investors also faced some headwinds. In the United States, continued encouraging data from the economy, led by housing, prompted the Fed Chairman to announce that the bank might reduce its monthly bond buying later in 2013, which resulted in rising US bond yields. Japanese markets rose into May before pulling back significantly amid concerns over the effectiveness of the government’s stimulus and restructuring programs. In emerging markets, China’s economy showed weakness suggesting the recent growth model is reaching its limits, which also pressured commodity prices. In addition, a cash shortage in China’s interbank lending market caused shares to decline in June.
Market leadership was mixed as consumer discretionary and health care performed well, while materials and utilities lagged, and emerging markets underperformed developed markets. Within currency markets, the US dollar appreciated relative to most currencies.
Emerging Markets Equities
Faced with a tacit confirmation by the Fed that quantitative easing would be increasingly tapered and short-term interest rates would be allowed to rise, shares and currencies in emerging markets significantly declined in the first six months of 2013. As the US economy performed better than expected, perceived risk in European markets declined and worries about Chinese shadow banking and a potential global commodity collapse ensued. Subsequently, emerging markets equities underperformed their counterparts in industrialized markets by a considerable margin. Commodities and economically-sensitive industries were especially weak as investors were concerned about the sustainability of Chinese, and therefore global, economic activity. The Morgan Stanley Capital International (MSCI®) Emerging Markets Index (the EM Index) declined by approximately 9.6% over the six-month period, in US dollar terms, as shares in Asia lost considerably less ground than those in eastern Europe and, especially, in Latin America.
Although there have been market concerns about a slowdown in Chinese economic activity, local equities were helped by a relatively stable currency and only slightly underperformed the broad EM Index. Stocks in countries with more openly-traded currencies, such as South Korea, were more negatively affected. On the other hand, Malaysian equities continued to perform relatively well as the economy continued its impressive growth. Pakistani shares rose sharply following the successful general election of the pro-business Pakistan Muslim League party.
Major Latin American markets markedly weakened over the six-month period. Within the region, Argentinean shares performed best, helped by relatively stable crude oil prices. The decline in Mexican equities was moderated by the trade relationship between Mexico and the United States in terms of its effect on the peso. Peruvian equities were the poorest performing in the region, as commodity prices fell. Brazilian equities were pressured by weak performance in mining and oil shares as well as widespread demonstrations over the rising cost of public services and their poor quality.
Shares across most of eastern Europe, the Middle East, and Africa registered poor returns. Share prices fell in both Poland and the Czech Republic as economic prospects
Semi-Annual Report | 3 |
appeared lackluster. Russian shares were weighed down by lower crude oil prices, lower dividend guidance by Gazprom, and uncertainty surrounding governance issues between Rosneft and TNK-BP minority shareholders. Markets were weak in Turkey and Egypt, undermined by large demonstrations against their respective governments. A bright spot was Hungary, where previously depressed shares rallied.
Lazard Retirement US Strategic Equity Portfolio
For the six months ended June 30, 2013, the Lazard Retirement US Strategic Equity Portfolio’s Service Shares posted a total return of 12.36%, as compared with the 13.82% return for the S&P 500® Index.
Stock selection in the information technology sector contributed to performance. The Portfolio was helped by an underweight position in Apple, as the stock fell due to uncertainty surrounding gross margin trajectory and iPhone demand. A position in networking technology provider Cisco Systems helped returns, as shares rose after the company reported strong earning, led by strength in its US and Emerging Markets segments. Gross margins were at the high end of management’s 61% to 62% guidance. An overweight position in the health care sector also helped returns. Shares of medical device maker CareFusion rose as investors were encouraged by the prospect that the company might seek to further deploy capital in the form of accretive acquisitions. CareFusion also reported strong earnings, driven by gross margin expansion.
In contrast, stock selection in the energy sector detracted from performance. Shares of thermal coal producer Consol Energy lagged in-line with peers as ongoing uncertainty in the global steel market put pressure on coal producers. Stock selection in the consumer discretionary sector also hurt returns. Shares of teen-focused clothing retailer American Eagle Outfitters fell after the company reported quarterly earnings. While results were largely as expected, same-store sales declined, which the company attributed to bad weather and macroeconomic headwinds. The Portfolio’s exposure to metallurgical (met) coal producer Walter Energy, which is in the materials sector, also fell due to the uncertainty in the steel markets. However, we sold our position in Walter as we do not expect the met coal market to improve in the near term.
Lazard Retirement US Small-Mid Cap Equity Portfolio
For the six months ended June 30, 2013, the Lazard Retirement US Small-Mid Cap Equity Portfolio’s Service Shares posted a total return of 14.40%, as compared with the 15.42% return for the Russell 2500® Index.
For the period, stock selection in the consumer discretionary and industrials sectors detracted from performance, while stock selection in the energy and materials sectors helped returns.
Vera Bradley and American Eagle Outfitters were the largest detractors in the consumer discretionary sector. Shares of Vera Bradley, a designer and retailer of fashion accessories for women, declined amid weaker-than-anticipated fourth-quarter 2012 store traffic, decreased full-year earnings guidance for 2013, and an announcement that the company’s CEO would be leaving. We sold our position in Vera Bradley during the period. American Eagle Outfitters, a teen-focused clothing retailer, posted solid 2012 holiday sales, but not strong enough for the high expectations of investors, which sent the company’s share price lower.
II-VI, a manufacturer of optical and optoelectronic devices for various uses, detracted from performance in the industrials sector after it missed earnings expectations and cut guidance for fiscal 2013. We exited our position in II-VI in April. Joy Global, a manufacturer of mining equipment, also weighed on returns in the sector. In June the company cut revenue and earnings estimates for the year, as excess commodity supply curbed demand for mining equipment from producers.
PDC Energy—which is engaged in the exploration, development, and production of crude oil and natural gas—helped returns in the energy sector following two consecutive quarterly earnings announcements that beat expectations.
Oil States International, a provider of products and services to the oil and natural gas industry, also outperformed after an activist investor disclosed a large stake in the company in April.
US Silica Holdings, a producer of commercial silica used in hydraulic fracturing, outperformed the materials sector. Shares of the company rallied due to better-than-expected
4 | Semi-Annual Report |
fourth-quarter earnings, and after management provided solid guidance for 2013 and 2014. Rock-Tenn, a manufacturer of packaging products, also added to performance for the period following a stronger-than-expected earnings report.
Lazard Retirement International Equity Portfolio
For the six months ended June 30, 2013, the Lazard Retirement International Equity Portfolio’s Service Shares posted a total return of 2.79%, as compared with the 4.10% return for the MSCI EAFE® (Europe, Australasia, Far East) Index (the EAFE Index).
Within the energy sector, French seismic surveyor CGG, which was sold during the period, underperformed as its equipment supply unit faced increased competition and higher research-and-development costs. Within the telecom services sector, Canadian wireless carrier Rogers Communications underperformed on concern over new competition from Verizon. Exposure to emerging markets negatively impacted the Portfolio as Hyundai Mobis and Samsung Electronics underperformed.
Positive relative returns were driven by stock selection in the financials sector. Japanese company Sumitomo Mitsui Financial Group performed well resulting from the BoJ’s stimulus efforts. In materials, low exposure to this underperforming sector contributed to relative returns. High exposure to the outperforming consumer discretionary sector also positively impacted the Portfolio.
Lazard Retirement Emerging Markets Equity Portfolio
For the six months ended June 30, 2013, the Lazard Retirement Emerging Markets Equity Portfolio’s Service Shares posted a total return of -8.51%, while Investor Shares posted a total return of -8.41%, as compared with the -9.57% return for the EM Index.
Shares of Telekomunikasi Indonesia, the incumbent telecommunications firm, increased following the announcement of strong earnings. Cielo, a Brazilian credit card processor, announced better than expected results with a recovery in margins. NetEase, a Chinese internet portal and online gaming company, reported strong first quarter results and provided an optimistic outlook amid recent price increases. Shares of Taiwan Semiconductor Manufacturing (TSMC), a Taiwanese manufacturer of integrated circuits, rose amid expectations for a stronger third quarter and mar-
ket anticipation that TSMC will be soon producing chips for Apple’s next-generation phone. Magnit, a Russian operator of discount supermarkets, performed well after announcing strong sales volume in May.
In contrast, shares of Banco do Brasil, a Brazilian bank, declined amid macroeconomic and political uncertainty given recent mass street protests. Shares of Samsung Electronics, a South Korean manufacturer of electronic equipment, declined due to concerns that profitability has peaked for the handset business. Shares of Jindal Steel & Power, an Indian steel manufacturer and power company, declined after the company announced weak (fiscal) fourth-quarter results. Shoprite Holdings, a South African supermarket chain operator, experienced profit taking due to negative sentiment for the South African retail sector driven by currency weakness and concerns over the health of the South African consumer.
Lazard Retirement Multi-Asset Targeted Volatility Portfolio
For the six months ended June 30, 2013, the Lazard Retirement Multi-Asset Targeted Volatility Portfolio’s Service Shares posted a total return of 5.60%, as compared with the 1.66% return of its benchmark, which is a 50/50 blend of the MSCI World® Index and the Barclays Capital Global Aggregate Bond® Index (the MATV Index).
The Portfolio’s assets are allocated among various of Lazard Asset Management LLC’s, the Fund’s investment manager (the “Investment Manager”), US and non-US equity and fixed-income strategies utilizing qualitative and quantitative analysis. The Investment Manager considers broad economic contexts pertinent to allocation decisions among the strategies.
Changes made to the weighting of these economic contexts during the period reflected a consideration of many factors. These included monetary policies of central banks around the globe; global macro data readings, particularly of the Purchasing Managers’ Index, a measure of economic activity in China, the United States, the euro zone, and Japan; fiscal policy in the developed and emerging markets; and equity valuations.
For the period, the Portfolio benefited from stock selection in the financials sector, stock selection and an underweight position in the materials sector, stock selection and an over-
Semi-Annual Report | 5 |
weight position in the health care sector, an underweight position in both Germany and Canada, and stock selection in Finland. Within fixed income, performance was helped by yield curve positioning in the United States, Australia, and the euro zone, and by currency management. By contrast, stock selection in the energy sector, stock selection and an
overweight exposure in the information technology sector, and stock selection in Japanese and French equities detracted from performance. Within fixed income, performance was hurt by security selection in the United States and the euro zone, along with an underweight exposure to the euro and an overweight exposure to the Australian dollar.
Notes to Investment Overviews:
All returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolios may have been waived or reimbursed by the Investment Manager and State Street Bank and Trust Company, the Fund’s Administrator (“State Street”); without such waiver/reimbursement of expenses, the Portfolios’ returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. Past performance is not indicative, or a guarantee, of future results.
The performance data of the indices and other market data have been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to their accuracy. These indices are unmanaged, have no fees or costs and are not available for investment.
The views of the Investment Manager and the securities described in this report are as of June 30, 2013; these views and portfolio holdings may have changed subsequent to this date. Nothing herein should be construed as a recommendation to buy, sell, or hold a particular security. There is no assurance that the securities discussed herein will remain in each Portfolio at the time you receive this report, or that securities sold will not have been repurchased. The specific securities discussed may, in aggregate, represent only a small percentage of each Portfolio’s holdings. It should not be assumed that securities identified and discussed were, or will be, profitable, or that the investment decisions made in the future will be profitable, or equal the investment performance of the securities discussed herein.
The views and opinions expressed are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendations for, any person. There can be no guarantee as to the accuracy of the outlooks for markets, sectors and securities as discussed herein. You should read the Fund’s prospectus or each Portfolio’s summary prospectus for a more detailed discussion of each Portfolio’s investment objective, strategies, risks and fees.
6 | Semi-Annual Report |
Lazard Retirement Series, Inc. Performance Overviews (unaudited)
Lazard Retirement US Strategic Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement US Strategic Equity Portfolio and S&P 500® Index*
Average Annual Total Returns*
Periods Ended June 30, 2013
One Year | Five Years | Ten Years | ||
Service Shares | 21.78% | 6.15% | 6.32% | |
S&P 500 Index | 20.60% | 7.01% | 7.30% |
* | All returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or State Street; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. |
The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, or a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that Portfolio shares, when redeemed, may be worth more or less than their original cost. Within the longer periods illustrated there may have been short-term fluctuations, counter to the overall trend of investment results, and no single period of any length may be taken as typical of what may be expected in future periods. | |
The performance data of the index has been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to its accuracy. The S&P 500 Index is a market capitalization-weighted index of 500 common stocks, designed to measure performance of the broad domestic economy through changes in the aggregate market value of these stocks, which represent all major industries. The index is unmanaged, has no fees or costs and is not available for investment. | |
Before May 1, 2007, the Portfolio was known as Lazard Retirement Equity Portfolio and had a different investment strategy. |
Semi-Annual Report | 7 |
Lazard Retirement US Small-Mid Cap Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement US Small-Mid Cap Equity Portfolio, Russell 2500® Index and Russell 2000/2500 Linked Index*
Average Annual Total Returns*
Periods Ended June 30, 2013
One Year | Five Years | Ten Years | ||
Service Shares | 18.07% | 8.60% | 8.08% | |
Russell 2500 Index | 25.61% | 9.21% | 10.34% | |
Russell 2000/2500 Linked Index | 25.61% | 9.64% | 9.97% |
* | All returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. |
The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, or a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that Portfolio shares, when redeemed, may be worth more or less than their original cost. Within the longer periods illustrated there may have been short-term fluctuations, counter to the overall trend of investment results, and no single period of any length may be taken as typical of what may be expected in future periods. | |
The Portfolio was previously known as Lazard Retirement US Small Cap Equity Portfolio. As of June 1, 2009, the Portfolio changed its name to Lazard US Small-Mid Cap Equity Portfolio and changed its investment strategy to invest in equity securities of small-mid cap US companies. | |
The performance data of the indices have been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to their accuracy. The Russell 2500 Index is comprised of the 2,500 smallest US companies included in the Russell 3000® Index (which consists of the 3,000 largest US companies by capitalization). The Russell 2000/2500 Linked Index is an index created by the Portfolio’s Investment Manager, which links the performance of the Russell 2000® Index for all periods through May 31, 2009 and the Russell 2500 Index for all periods thereafter. The Russell 2000 Index is comprised of the 2,000 smallest US companies included in the Russell 3000 Index. The indices are unmanaged, have no fees or costs and are not available for investment. |
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Lazard Retirement International Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement International Equity Portfolio and EAFE Index*
Average Annual Total Returns*
Periods Ended June 30, 2013
One Year | Five Years | Ten Years | ||
Service Shares | 17.67% | 1.55% | 6.83% | |
EAFE Index | 18.62% | -0.63% | 7.67% |
* | All returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. |
The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, or a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that Portfolio shares, when redeemed, may be worth more or less than their original cost. Within the longer periods illustrated there may have been short-term fluctuations, counter to the overall trend of investment results, and no single period of any length may be taken as typical of what may be expected in future periods. | |
The performance data of the index has been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to its accuracy. The EAFE Index is a broadly diversified international index comprised of equity securities of approximately 1,000 companies located in developed countries outside the United States. The index is unmanaged, has no fees or costs and is not available for investment. |
Semi-Annual Report | 9 |
Lazard Retirement Emerging Markets Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement Emerging Markets Equity Portfolio and EM Index*
Average Annual Total Returns*
Periods Ended June 30, 2013
Service Shares | Investor Shares | ||||||
One Year | Five Years | Ten Years | One Year | Five Years | Since Inception | † | |
Retirement Emerging Markets Equity Portfolio** | 3.38% | 1.26% | 15.51% | 3.60% | 1.51% | 5.49% | |
EM Index | 2.87% | -0.43% | 13.66% | 2.87% | -0.43% | 3.75% |
* | All returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or State Street; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. |
The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, or a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that Portfolio shares, when redeemed, may be worth more or less than their original cost. Within the longer periods illustrated there may have been short-term fluctuations, counter to the overall trend of investment results, and no single period of any length may be taken as typical of what may be expected in future periods. | |
The performance data of the index has been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to its accuracy. The EM Index is comprised of emerging market securities in countries open to non-local investors. The index is unmanaged, has no fees or costs and is not available for investment. | |
** | The performance of Service Shares may be greater than or less than the performance of Investor Shares, primarily based on the differences in fees borne by shareholders investing in different classes. |
† | The inception date for Investor Shares was May 1, 2006. |
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Lazard Retirement Multi-Asset Targeted Volatility Portfolio
Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement Multi-Asset Targeted Volatility Portfolio, MATV Index and MSCI World® Index*
Average Annual Total Returns*
Periods Ended June 30, 2013
One Year | Since Inception | † | |
Service Shares | 11.44% | 9.89% | |
MATV Index | 7.79% | 4.65% | |
MSCI World Index | 19.27% | 11.82% |
* | All returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager, State Street or Boston Financial Data Services, Inc., the Fund’s transfer and dividend disbursing agent (“BFDS”); without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. |
The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, or a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that Portfolio shares, when redeemed, may be worth more or less than their original cost. Within the longer periods illustrated there may have been short-term fluctuations, counter to the overall trend of investment results, and no single period of any length may be taken as typical of what may be expected in future periods. | |
The performance data of the indices have been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to their accuracy. The MATV Index is a 50/50 blend of the MSCI World Index and the Barclays Capital Global Aggregate Bond® Index. MSCI World Index is a market capitalization-weighted index of companies representative of the market structure of 24 developed market countries in North America, Europe, and the Asia/Pacific region. The Barclays Capital Global Aggregate Bond Index provides a broad-based measure of global investment-grade fixed-income debt markets, including government-related debt, corporate debt, securitized debt and global Treasury. It covers the investment-grade, US dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS, ABS, and CMBS, with maturities of no less than one year. The indices are unmanaged, have no fees or costs and are not available for investment. | |
† | The inception date for the Portfolio was April 30, 2012. |
Semi-Annual Report | 11 |
Lazard Retirement Series, Inc. Information About Your Portfolio’s Expenses (unaudited)
Expense Example
As a shareholder in a Portfolio of the Fund, you incur ongoing costs, including management fees, distribution and service (12b-1) fees (Service Shares only), and other expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the six month period from January 1, 2013 through June 30, 2013 and held for the entire period.
Actual Expenses
For each Share class of the Portfolios, the first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000=8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
For each Share class of the Portfolios, the second line of the table below provides information about hypothetical account values and hypothetical expenses based on the class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholders reports of the other funds.
Please note that you also bear fees and charges imposed by participating insurance companies at the separate account level, which are described in the separate prospectuses issued by the insurance companies. Such charges will have the effect of reducing account value.
12 | Semi-Annual Report |
Beginning | Ending | Expenses Paid | Annualized Expense | |||||||||||||
Account Value | Account Value | During Period* | Ratio During Period | |||||||||||||
Portfolio | 1/1/13 | 6/30/13 | 1/1/13 – 6/30/13 | 1/1/13 – 6/30/13 | ||||||||||||
Retirement US Strategic Equity | ||||||||||||||||
Service Shares | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,123.60 | $ | 5.27 | 1.00 | % | ||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.84 | $ | 5.01 | 1.00 | % | ||||||||
Retirement US Small-Mid Cap Equity | ||||||||||||||||
Service Shares | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,144.00 | $ | 6.64 | 1.25 | % | ||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.60 | $ | 6.26 | 1.25 | % | ||||||||
Retirement International Equity | ||||||||||||||||
Service Shares | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,027.90 | $ | 5.49 | 1.09 | % | ||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.38 | $ | 5.47 | 1.09 | % | ||||||||
Retirement Emerging Markets Equity | ||||||||||||||||
Service Shares | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 914.90 | $ | 6.57 | 1.38 | % | ||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,017.94 | $ | 6.92 | 1.38 | % | ||||||||
Investor Shares | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 915.90 | $ | 5.40 | 1.14 | % | ||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.16 | $ | 5.69 | 1.14 | % | ||||||||
Retirement Multi-Asset Targeted Volatility | ||||||||||||||||
Service Shares | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,056.00 | $ | 5.35 | 1.05 | % | ||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.91 | $ | 5.26 | 1.05 | % |
* | Expenses are equal to the annualized expense ratio of each Share class multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period). |
Semi-Annual Report | 13 |
Lazard Retirement Series, Inc. Portfolio Holdings Presented by Sector June 30, 2013 (unaudited)
Lazard | Lazard | Lazard | Lazard | ||||||||||||||
Retirement | Retirement | Retirement | Retirement | ||||||||||||||
US Strategic | US Small-Mid Cap | International | Emerging Markets | ||||||||||||||
Sector* | Equity Portfolio | Equity Portfolio | Equity Portfolio | Equity Portfolio | |||||||||||||
Consumer Discretionary | 14.8 | % | 13.7 | % | 16.5 | % | 7.8% | ||||||||||
Consumer Staples | 11.2 | 0.2 | 13.2 | 12.0 | |||||||||||||
Energy | 10.6 | 5.5 | 6.4 | 7.9 | |||||||||||||
Financials | 13.0 | 20.3 | 22.0 | 26.0 | |||||||||||||
Health Care | 18.3 | 9.9 | 13.4 | — | |||||||||||||
Industrials | 6.7 | 17.3 | 12.2 | 7.2 | |||||||||||||
Information Technology | 17.2 | 18.9 | 3.7 | 16.8 | |||||||||||||
Materials | 3.6 | 9.2 | 5.1 | 6.0 | |||||||||||||
Telecommunication Services | — | — | 3.0 | 12.9 | |||||||||||||
Utilities | — | 1.5 | 1.6 | — | |||||||||||||
Short-Term Investments | 4.6 | 3.5 | 2.9 | 3.4 | |||||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Lazard | |||||
Retirement | |||||
Multi-Asset Targeted | |||||
Sector* | Volatility Portfolio | ||||
Consumer Discretionary | 10.4 | % | |||
Consumer Staples | 8.0 | ||||
Energy | 6.1 | ||||
Financials | 15.8 | ||||
Health Care | 10.9 | ||||
Industrials | 9.4 | ||||
Information Technology | 11.6 | ||||
Materials | 2.0 | ||||
Telecommunication Services | 2.4 | ||||
Utilities | 2.5 | ||||
Municipal | 0.7 | ||||
Sovereign Debt | 13.1 | ||||
Short-Term Investment | 7.1 | ||||
Total Investments | 100.0 | % |
* | Represents percentage of total investments. |
14 | Semi-Annual Report |
Lazard Retirement Series, Inc. Portfolios of Investments June 30, 2013 (unaudited)
Description | Shares | Value | ||||||
Energy Integrated | 3.9% | ||||||||
Chevron Corp. | 950 | $ | 112,423 | |||||
Consol Energy, Inc. | 4,300 | 116,530 | ||||||
HollyFrontier Corp. | 1,800 | 77,004 | ||||||
305,957 | ||||||||
Energy Services | 1.6% | ||||||||
Transocean, Ltd. | 2,610 | 125,150 | ||||||
Financial Services | 6.7% | ||||||||
American Express Co. | 2,260 | 168,958 | ||||||
Citigroup, Inc. | 4,860 | 233,134 | ||||||
Morgan Stanley | 5,150 | 125,814 | ||||||
527,906 | ||||||||
Food & Beverages | 3.0% | ||||||||
Sysco Corp. | 6,895 | 235,533 | ||||||
Health Services | 1.2% | ||||||||
UnitedHealth Group, Inc. | 1,435 | 93,964 | ||||||
Insurance | 0.8% | ||||||||
The Hartford Financial Services Group, Inc. | 2,070 | 64,004 | ||||||
Leisure & Entertainment | 3.0% | ||||||||
Viacom, Inc., Class B | 3,465 | 235,793 | ||||||
Manufacturing | 5.7% | ||||||||
Carpenter Technology Corp. | 1,700 | 76,619 | ||||||
Honeywell International, Inc. | 1,240 | 98,381 | ||||||
Joy Global, Inc. | 1,200 | 58,236 | ||||||
Terex Corp. (a) | 2,200 | 57,860 | ||||||
Tyco International, Ltd. | 4,845 | 159,643 | ||||||
450,739 | ||||||||
Medical Products | 8.3% | ||||||||
Baxter International, Inc. | 2,710 | 187,722 | ||||||
CareFusion Corp. (a) | 6,610 | 243,578 | ||||||
McKesson Corp. | 1,895 | 216,978 | ||||||
648,278 | ||||||||
Pharmaceutical & Biotechnology | 9.0% | ||||||||
Gilead Sciences, Inc. (a) | 2,860 | 146,461 | ||||||
Johnson & Johnson | 830 | 71,264 | ||||||
Pfizer, Inc. | 11,350 | 317,913 | ||||||
Zoetis, Inc. | 5,349 | 165,226 | ||||||
700,864 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 15 |
Description | Shares | Value | ||||||
Lazard Retirement US Strategic Equity Portfolio (concluded) | ||||||||
Real Estate | 1.5% | ||||||||
Lexington Realty Trust REIT | 4,500 | $ | 52,560 | |||||
Vornado Realty Trust | 750 | 62,138 | ||||||
114,698 | ||||||||
Retail | 12.2% | ||||||||
Advance Auto Parts, Inc. | 2,430 | 197,243 | ||||||
American Eagle Outfitters, Inc. | 6,740 | 123,072 | ||||||
AutoZone, Inc. (a) | 184 | 77,959 | ||||||
Big Lots, Inc. (a) | 2,690 | 84,816 | ||||||
CVS Caremark Corp. | 2,845 | 162,677 | ||||||
Macy’s, Inc. | 2,000 | 96,000 | ||||||
Wal-Mart Stores, Inc. | 2,900 | 216,021 | ||||||
957,788 | ||||||||
Semiconductors & Components | 1.0% | ||||||||
Texas Instruments, Inc. | 2,150 | 74,971 | ||||||
Technology | 1.2% | ||||||||
Google, Inc., Class A (a) | 103 | 90,678 | ||||||
Technology Hardware | 11.2% | ||||||||
Apple, Inc. | 303 | 120,012 | ||||||
Cisco Systems, Inc. | 13,725 | 333,655 | ||||||
EMC Corp. | 7,500 | 177,150 | ||||||
Hewlett-Packard Co. | 3,300 | 81,840 | ||||||
Qualcomm, Inc. | 2,745 | 167,665 | ||||||
880,322 | ||||||||
Telecommunications | 0.6% | ||||||||
Juniper Networks, Inc. (a) | 2,300 | 44,413 | ||||||
Total Common Stocks (Identified cost $6,532,879) | 7,521,794 |
Description | Shares | Value | ||||||
Preferred Stock | 0.0% | ||||||||
Automotive | 0.0% | ||||||||
Better Place, Inc., Series B (Identified cost $31,701) (b) | 12,681 | $ | 0 | |||||
Short-Term Investment | 4.6% | ||||||||
State Street Institutional Treasury Money Market Fund (Identified cost $356,945) | 356,945 | 356,945 | ||||||
Total Investments | 100.6% | ||||||||
(Identified cost $6,921,525) (c) | $ | 7,878,739 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.6)% | (50,444 | ) | ||||||
Net Assets | 100.0% | $ | 7,828,295 |
The accompanying notes are an integral part of these financial statements.
16 | Semi-Annual Report |
Description | Shares | Value | ||||||
Energy Exploration & Production | 1.2% | ||||||||
PDC Energy, Inc. (a) | 12,100 | $ | 622,908 | |||||
Energy Services | 3.4% | ||||||||
Dresser-Rand Group, Inc. (a) | 10,100 | 605,798 | ||||||
Key Energy Services, Inc. (a) | 91,800 | 546,210 | ||||||
Oil States International, Inc. (a) | 6,055 | 560,935 | ||||||
1,712,943 | ||||||||
Financial Services | 2.8% | ||||||||
Raymond James Financial, Inc. | 21,515 | 924,715 | ||||||
Waddell & Reed Financial, Inc., Class A | 11,600 | 504,600 | ||||||
1,429,315 | ||||||||
Forest & Paper Products | 2.9% | ||||||||
KapStone Paper and Packaging Corp. | 10,900 | 437,962 | ||||||
Rock-Tenn Co., Class A | 5,000 | 499,400 | ||||||
Schweitzer-Mauduit International, Inc. | 11,350 | 566,138 | ||||||
1,503,500 | ||||||||
Health Services | 3.5% | ||||||||
Brookdale Senior Living, Inc. (a) | 20,400 | 539,376 | ||||||
Magellan Health Services, Inc. (a) | 12,305 | 690,064 | ||||||
Quintiles Transnational Holdings, Inc. | 13,000 | 553,280 | ||||||
1,782,720 | ||||||||
Housing | 1.3% | ||||||||
Taylor Morrison Home Corp., Class A | 26,700 | 650,946 | ||||||
Insurance | 3.8% | ||||||||
American Equity Investment Life Holding Co. | 44,100 | 692,370 | ||||||
Arch Capital Group, Ltd. (a) | 9,400 | 483,254 | ||||||
Brown & Brown, Inc. | 23,800 | 767,312 | ||||||
1,942,936 | ||||||||
Leisure & Entertainment | 2.9% | ||||||||
Bally Technologies, Inc. (a) | 9,515 | 536,837 | ||||||
Hyatt Hotels Corp. (a) | 12,470 | 503,289 | ||||||
Texas Roadhouse, Inc. | 18,610 | 465,622 | ||||||
1,505,748 | ||||||||
Manufacturing | 13.7% | ||||||||
ACCO Brands Corp. (a) | 86,525 | 550,299 | ||||||
Actuant Corp., Class A | 24,265 | 800,017 | ||||||
B/E Aerospace, Inc. (a) | 10,600 | 668,648 | ||||||
Carpenter Technology Corp. | 15,000 | 676,050 | ||||||
FLIR Systems, Inc. | 29,580 | 797,772 | ||||||
Joy Global, Inc. | 8,830 | 428,520 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 17 |
Description | Shares | Value | ||||||
Lazard Retirement US Small-Mid Cap Equity Portfolio (concluded) | ||||||||
Kennametal, Inc. | 11,800 | $ | 458,194 | |||||
Littelfuse, Inc. | 7,300 | 544,653 | ||||||
Terex Corp. (a) | 12,445 | 327,303 | ||||||
The Toro Co. | 11,100 | 504,051 | ||||||
TriMas Corp. (a) | 24,300 | 905,904 | ||||||
Woodward, Inc. | 8,800 | 352,000 | ||||||
7,013,411 | ||||||||
Medical Products | 4.0% | ||||||||
CareFusion Corp. (a) | 24,900 | 917,565 | ||||||
Haemonetics Corp. (a) | 15,980 | 660,773 | ||||||
Henry Schein, Inc. (a) | 4,900 | 469,175 | ||||||
2,047,513 | ||||||||
Metal & Glass Containers | 1.4% | ||||||||
Owens-Illinois, Inc. (a) | 25,100 | 697,529 | ||||||
Metals & Mining | 2.4% | ||||||||
CaesarStone Sdot Yam, Ltd. (a) | 21,200 | 577,276 | ||||||
US Silica Holdings, Inc. | 30,055 | 624,543 | ||||||
1,201,819 | ||||||||
Pharmaceutical & Biotechnology | 2.4% | ||||||||
Ariad Pharmaceuticals, Inc. (a) | 34,200 | 598,158 | ||||||
Vertex Pharmaceuticals, Inc. (a) | 7,655 | 611,405 | ||||||
1,209,563 | ||||||||
Real Estate | 5.5% | ||||||||
Extra Space Storage, Inc. REIT | 18,100 | 758,933 | ||||||
Kilroy Realty Corp. REIT | 14,760 | 782,428 | ||||||
Lexington Realty Trust REIT | 46,800 | 546,624 | ||||||
The Macerich Co. REIT | 11,822 | 720,787 | ||||||
2,808,772 | ||||||||
Retail | 4.7% | ||||||||
Advance Auto Parts, Inc. | 7,425 | 602,687 | ||||||
American Eagle Outfitters, Inc. | 34,390 | 627,962 | ||||||
Chico’s FAS, Inc. | 35,700 | 609,042 | ||||||
Iconix Brand Group, Inc. (a) | 18,820 | 553,496 | ||||||
Steven Madden, Ltd. (a) | 700 | 33,866 | ||||||
2,427,053 | ||||||||
Semiconductors & Components | 4.7% | ||||||||
LSI Corp. (a) | 96,200 | 686,868 | ||||||
Microsemi Corp. (a) | 22,600 | 514,150 | ||||||
ON Semiconductor Corp. (a) | 70,400 | 568,832 | ||||||
Xilinx, Inc. | 15,400 | 609,994 | ||||||
2,379,844 |
Description | Shares | Value | ||||||
Technology | 2.5% | ||||||||
NetScout Systems, Inc. (a) | 30,730 | $ | 717,238 | |||||
SS&C Technologies Holdings, Inc. (a) | 17,795 | 585,456 | ||||||
1,302,694 | ||||||||
Telecommunications | 0.8% | ||||||||
Juniper Networks, Inc. (a) | 20,600 | 397,786 | ||||||
Transportation | 2.9% | ||||||||
Alaska Air Group, Inc. | 7,285 | 378,820 | ||||||
Echo Global Logistics, Inc. (a) | 27,260 | 531,297 | ||||||
Hub Group, Inc., Class A (a) | 16,200 | 590,004 | ||||||
1,500,121 | ||||||||
Water | 1.5% | ||||||||
California Water Service Group | 38,800 | 756,988 | ||||||
Total Common Stocks (Identified cost $41,002,030) | 48,878,417 | |||||||
Preferred Stock | 0.0% | ||||||||
Automotive | 0.0% | ||||||||
Better Place, Inc., Series B (Identified cost $864,900) (b) | 345,960 | 0 | ||||||
Short-Term Investment | 3.4% | ||||||||
State Street Institutional Treasury Money Market Fund (Identified cost $1,749,894) | 1,749,894 | 1,749,894 | ||||||
Total Investments | 99.1% (Identified cost $43,616,824) (c) | $ | 50,628,311 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.9% | 476,124 | |||||||
Net Assets | 100.0% | $ | 51,104,435 |
The accompanying notes are an integral part of these financial statements.
18 | Semi-Annual Report |
Description | Shares | Value | ||||||
Indonesia | 0.8% | ||||||||
PT Bank Mandiri (Persero) Tbk ADR | 568,100 | $ | 5,084,495 | |||||
Ireland | 1.1% | ||||||||
Ryanair Holdings PLC Sponsored ADR | 134,272 | 6,919,036 | ||||||
Italy | 2.5% | ||||||||
Atlantia SpA | 413,800 | 6,748,940 | ||||||
Eni SpA | 397,645 | 8,167,640 | ||||||
14,916,580 | ||||||||
Japan | 18.4% | ||||||||
AEON Financial Service Co., Ltd. | 271,800 | 7,697,986 | ||||||
Asics Corp. | 556,660 | 8,817,432 | ||||||
Daikin Industries, Ltd. | 135,300 | 5,470,387 | ||||||
Daito Trust Construction Co., Ltd. | 59,700 | 5,628,101 | ||||||
Daiwa House Industry Co., Ltd. | 391,000 | 7,297,248 | ||||||
Don Quijote Co., Ltd. | 236,200 | 11,490,875 | ||||||
Japan Tobacco, Inc. | 270,200 | 9,548,810 | ||||||
Komatsu, Ltd. | 331,100 | 7,654,893 | ||||||
LIXIL Group Corp. | 410,400 | 10,001,379 | ||||||
Makita Corp. | 105,700 | 5,712,361 | ||||||
Seven & I Holdings Co., Ltd. | 270,100 | 9,872,076 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 333,900 | 15,318,058 | ||||||
Yahoo Japan Corp. | 15,604 | 7,693,442 | ||||||
112,203,048 | ||||||||
Netherlands | 0.5% | ||||||||
Koninklijke KPN NV | 1,446,238 | 3,006,344 | ||||||
New Zealand | 0.6% | ||||||||
Telecom Corp. of New Zealand, Ltd. | 2,193,811 | 3,825,211 | ||||||
Norway | 0.8% | ||||||||
Petroleum Geo-Services ASA | 406,574 | 4,953,036 | ||||||
Philippines | 1.3% | ||||||||
BDO Unibank, Inc. | 1,843,330 | 3,626,922 | ||||||
LT Group, Inc. | 7,695,800 | 4,026,044 | ||||||
7,652,966 | ||||||||
Russia | 0.9% | ||||||||
Sberbank of Russia (d) | 1,991,918 | 5,668,461 | ||||||
South Africa | 1.1% | ||||||||
Mediclinic International, Ltd. | 992,248 | 6,891,998 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 19 |
Description | Shares | Value | ||||||
Lazard Retirement International Equity Portfolio (concluded) | ||||||||
South Korea | 1.9% | ||||||||
Hyundai Mobis | 26,090 | $ | 6,236,653 | |||||
Samsung Electronics Co., Ltd. GDR | 8,938 | 5,210,854 | ||||||
11,447,507 | ||||||||
Spain | 2.6% | ||||||||
Mediaset Espana Comunicacion SA (a) | 679,774 | 5,919,496 | ||||||
Red Electrica Corporacion SA | 180,153 | 9,907,458 | ||||||
15,826,954 | ||||||||
Sweden | 4.3% | ||||||||
Assa Abloy AB, Class B | 250,378 | 9,811,864 | ||||||
Getinge AB, B Shares | 131,829 | 4,006,315 | ||||||
Swedbank AB, A Shares | 371,982 | 8,531,163 | ||||||
Volvo AB, B Shares | 288,471 | 3,862,855 | ||||||
26,212,197 | ||||||||
Switzerland | 6.9% | ||||||||
GAM Holding AG | 395,531 | 6,071,885 | ||||||
Glencore Xstrata PLC | 1,414,101 | 5,853,338 | ||||||
Novartis AG | 327,655 | 23,276,323 | ||||||
Swatch Group AG | 12,153 | 6,651,952 | ||||||
41,853,498 | ||||||||
Thailand | 0.8% | ||||||||
Krung Thai Bank Public Co. Ltd. (d) | 7,810,100 | 5,111,882 | ||||||
Turkey | 1.2% | ||||||||
Koc Holding AS | 709,501 | 3,406,429 | ||||||
Turkcell Iletisim Hizmetleri AS (a) | 707,258 | 4,107,061 | ||||||
7,513,490 |
Description | Shares | Value | ||||||
United Kingdom | 21.7% | ||||||||
BG Group PLC | 290,328 | $ | 4,939,008 | |||||
British American Tobacco PLC | 228,963 | 11,727,021 | ||||||
Direct Line Insurance Group PLC | 2,367,651 | 8,390,511 | ||||||
Informa PLC | 1,643,663 | 12,252,150 | ||||||
International Consolidated Airlines Group SA (a) | 637,400 | 2,558,387 | ||||||
Ladbrokes PLC | 283,018 | 860,482 | ||||||
Lloyds Banking Group PLC (a) | 11,211,477 | 10,770,101 | ||||||
Prudential PLC | 823,406 | 13,462,859 | ||||||
Reed Elsevier PLC | 651,633 | 7,403,524 | ||||||
Rexam PLC | 1,747,243 | 12,689,412 | ||||||
Royal Dutch Shell PLC, A Shares | 452,502 | 14,452,887 | ||||||
Standard Chartered PLC | 403,331 | 8,753,876 | ||||||
Taylor Wimpey PLC | 3,270,925 | 4,763,478 | ||||||
Unilever PLC | 467,480 | 18,927,179 | ||||||
131,950,875 | ||||||||
Total Common Stocks (Identified cost $498,854,076) | 592,661,595 | |||||||
Short-Term Investment | 2.9% | ||||||||
State Street Institutional Treasury Money Market Fund (Identified cost $17,450,449) | 17,450,449 | 17,450,449 | ||||||
Total Investments | 100.2% (Identified cost $516,304,525) (c) | $ | 610,112,044 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.2)% | (1,336,207 | ) | ||||||
Net Assets | 100.0% | $ | 608,775,837 |
The accompanying notes are an integral part of these financial statements.
20 | Semi-Annual Report |
Description | Shares | Value | ||||||
Indonesia | 6.4% | ||||||||
PT Astra International Tbk | 8,577,500 | $ | 6,049,622 | |||||
PT Bank Mandiri (Persero) Tbk | 17,546,429 | 15,911,120 | ||||||
PT Semen Indonesia (Persero) Tbk | 4,526,400 | 7,798,634 | ||||||
PT Tambang Batubara Bukit Asam (Persero) Tbk | 643,500 | 862,322 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR | 508,600 | 21,737,564 | ||||||
PT United Tractors Tbk | 5,244,040 | 9,616,275 | ||||||
61,975,537 | ||||||||
Macau | 1.2% | ||||||||
Wynn Macau, Ltd. | 4,226,800 | 11,471,579 | ||||||
Malaysia | 0.8% | ||||||||
British American Tobacco Malaysia Berhad | 392,100 | 7,396,474 | ||||||
Mexico | 3.4% | ||||||||
America Movil SAB de CV, Series L ADR | 375,000 | 8,156,250 | ||||||
Grupo Mexico SAB de CV, Series B | 2,685,997 | 7,773,512 | ||||||
Grupo Televisa SAB Sponsored ADR | 279,400 | 6,940,296 | ||||||
Kimberly-Clark de Mexico SAB de CV, Series A | 3,173,200 | 10,407,989 | ||||||
33,278,047 | ||||||||
Pakistan | 1.6% | ||||||||
Oil & Gas Development Co., Ltd. | 3,098,500 | 7,100,080 | ||||||
Pakistan Petroleum, Ltd. | 3,803,585 | 8,062,071 | ||||||
15,162,151 | ||||||||
Philippines | 1.9% | ||||||||
Philippine Long Distance Telephone Co. Sponsored ADR | 265,500 | 18,016,830 | ||||||
Russia | 10.1% | ||||||||
Gazprom OAO Sponsored ADR | 1,628,301 | 10,714,221 | ||||||
Lukoil OAO Sponsored ADR | 120,378 | 6,909,697 | ||||||
Magnit OJSC Sponsored GDR (d), (e) | 172,575 | 9,871,290 | ||||||
MegaFon OAO GDR (d), (e) | 351,600 | 10,987,500 | ||||||
Mobile TeleSystems OJSC Sponsored ADR | 1,133,400 | 21,466,596 | ||||||
Oriflame Cosmetics SA SDR | 155,985 | 4,938,133 | ||||||
Sberbank of Russia (d) | 10,132,039 | 28,833,047 | ||||||
TNK-BP Holding (a), (d) | 2,329,808 | 3,288,056 | ||||||
97,008,540 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 21 |
Description | Shares | Value | ||||||
Lazard Retirement Emerging Markets Equity Portfolio (concluded) | ||||||||
South Africa | 10.5% | ||||||||
Bidvest Group, Ltd. | 611,160 | $ | 15,144,450 | |||||
Imperial Holdings, Ltd. | 329,388 | 6,992,920 | ||||||
Murray & Roberts Holdings, Ltd. (a) | 86,712 | 220,441 | ||||||
Nedbank Group, Ltd. | 453,251 | 8,048,432 | ||||||
PPC, Ltd. | 1,957,075 | 5,897,923 | ||||||
Sanlam, Ltd. | 1,900,636 | 8,844,594 | ||||||
Shoprite Holdings, Ltd. | 1,052,145 | 19,744,250 | ||||||
Standard Bank Group, Ltd. | 601,197 | 6,780,081 | ||||||
Tiger Brands, Ltd. | 286,639 | 8,580,278 | ||||||
Truworths International, Ltd. | 668,077 | 5,876,480 | ||||||
Vodacom Group, Ltd. | 782,558 | 8,313,993 | ||||||
Woolworths Holdings, Ltd. | 1,053,876 | 6,866,951 | ||||||
101,310,793 | ||||||||
South Korea | 13.3% | ||||||||
Coway Co., Ltd. | 263,586 | 12,878,682 | ||||||
Hanwha Life Insurance Co., Ltd. | 1,925,742 | 11,095,296 | ||||||
Hyundai Mobis | 74,685 | 17,852,988 | ||||||
KB Financial Group, Inc. | 488,470 | 14,627,796 | ||||||
KT&G Corp. | 224,824 | 14,607,014 | ||||||
NHN Corp. | 29,832 | 7,588,281 | ||||||
Samsung Electronics Co., Ltd. | 23,040 | 27,073,841 | ||||||
Shinhan Financial Group Co., Ltd. | 677,251 | 22,297,305 | ||||||
128,021,203 | ||||||||
Taiwan | 5.0% | ||||||||
Hon Hai Precision Industry Co., Ltd. | 4,047,269 | 9,992,923 | ||||||
MediaTek, Inc. | 710,675 | 8,263,663 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 8,114,642 | 30,053,227 | ||||||
48,309,813 |
Description | Shares | Value | ||||||
Thailand | 2.6% | ||||||||
CP All Public Co. Ltd. (d) | 5,079,400 | $ | 6,387,123 | |||||
PTT Exploration & Production Public Co. Ltd. (d) | 1,680,335 | 8,587,235 | ||||||
The Siam Cement Public Co. Ltd. | 687,700 | 10,155,299 | ||||||
25,129,657 | ||||||||
Turkey | 5.1% | ||||||||
Akbank TAS | 2,566,808 | 10,460,471 | ||||||
Koc Holding AS | 2,552,415 | 12,254,556 | ||||||
Turkcell Iletisim Hizmetleri AS (a) | 1,973,810 | 11,461,955 | ||||||
Turkiye Is Bankasi AS, C Shares | 5,056,305 | 14,943,194 | ||||||
49,120,176 | ||||||||
Total Common Stocks (Identified cost $932,981,533) | 913,698,800 | |||||||
Preferred Stock | 1.2% | ||||||||
Brazil | 1.2% | ||||||||
Companhia de Bebidas das Americas SA Sponsored ADR (Identified cost $9,390,112) | 316,100 | 11,806,335 | ||||||
Short-Term Investment | 3.4% | ||||||||
State Street Institutional Treasury Money Market Fund (Identified cost $32,429,505) | 32,429,505 | 32,429,505 | ||||||
Total Investments | 99.3% (Identified cost $974,801,150) (c) | $ | 957,934,640 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.7% | 6,573,954 | |||||||
Net Assets | 100.0% | $ | 964,508,594 |
The accompanying notes are an integral part of these financial statements.
22 | Semi-Annual Report |
Description | Shares | Value | ||||||
Canadian Tire Corp., Ltd., Class A | 839 | $ | 63,166 | |||||
CI Financial Corp. | 2,862 | 82,374 | ||||||
Cineplex, Inc. | 662 | 23,214 | ||||||
Constellation Software, Inc. | 322 | 44,395 | ||||||
Eldorado Gold Corp. | 1,898 | 11,749 | ||||||
Empire Co., Ltd., Class A | 472 | 36,092 | ||||||
Imperial Oil, Ltd. | 3,038 | 115,979 | ||||||
Intact Financial Corp. | 2,015 | 113,520 | ||||||
Magna International, Inc. | 344 | 24,486 | ||||||
Metro, Inc. | 1,379 | 92,414 | ||||||
Progressive Waste Solutions, Ltd. | 2,009 | 43,286 | ||||||
Rogers Communications, Inc., Class B | 2,966 | 116,192 | ||||||
Royal Bank of Canada | 517 | 30,124 | ||||||
Tim Hortons, Inc. | 448 | 24,230 | ||||||
1,157,517 | ||||||||
Colombia | 0.0% | ||||||||
Pacific Rubiales Energy Corp. | 684 | 12,012 | ||||||
Denmark | 0.6% | ||||||||
Chr. Hansen Holding A/S | 431 | 14,757 | ||||||
Coloplast A/S, Class B | 2,428 | 136,143 | ||||||
Novo Nordisk A/S, Class B | 930 | 144,935 | ||||||
Novozymes AS, B Shares | 877 | 28,070 | ||||||
323,905 | ||||||||
Finland | 1.2% | ||||||||
Orion Oyj, Class B | 2,262 | 53,057 | ||||||
Sampo Oyj, A Shares ADR | 31,115 | 606,431 | ||||||
659,488 | ||||||||
France | 0.6% | ||||||||
Cie Generale des Etablissements Michelin | 141 | 12,609 | ||||||
Hermes International | 43 | 13,881 | ||||||
Technip SA ADR | 8,725 | 221,964 | ||||||
Teleperformance SA | 436 | 20,987 | ||||||
Total SA | 603 | 29,437 | ||||||
298,878 | ||||||||
Germany | 0.9% | ||||||||
Hannover Rueckversicherung AG | 559 | 40,252 | ||||||
Kabel Deutschland Holding AG | 377 | 41,407 | ||||||
Sky Deutschland AG ADR | 60,610 | 419,421 | ||||||
501,080 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 23 |
Description | Shares | Value | ||||||
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued) | ||||||||
Hong Kong | 0.5% | ||||||||
Cheung Kong Holdings, Ltd. | 4,000 | $ | 54,254 | |||||
CLP Holdings, Ltd. | 2,500 | 20,226 | ||||||
Hopewell Holdings, Ltd. | 5,000 | 16,632 | ||||||
Jardine Matheson Holdings, Ltd. | 400 | 24,200 | ||||||
Power Assets Holdings, Ltd. | 9,000 | 77,688 | ||||||
The Link REIT | 20,000 | 98,504 | ||||||
291,504 | ||||||||
Ireland | 1.7% | ||||||||
DCC PLC | 1,038 | 40,574 | ||||||
Experian PLC Sponsored ADR | 36,545 | 639,172 | ||||||
Paddy Power PLC | 828 | 71,046 | ||||||
Ryanair Holdings PLC Sponsored ADR | 3,077 | 158,558 | ||||||
909,350 | ||||||||
Isle Of Man | 0.0% | ||||||||
Playtech PLC | 1,789 | 16,380 | ||||||
Israel | 0.1% | ||||||||
Israel Discount Bank, Ltd., Class A (a) | 14,806 | 24,870 | ||||||
Italy | 1.1% | ||||||||
Eni SpA Sponsored ADR | 13,220 | 542,549 | ||||||
GTECH SpA | 559 | 13,992 | ||||||
Recordati SpA | 1,788 | 19,841 | ||||||
576,382 | ||||||||
Japan | 6.1% | ||||||||
Ain Pharmaciez, Inc. | 800 | 34,483 | ||||||
ANA Holdings Inc. | 35,000 | 72,696 | ||||||
AOKI Holdings, Inc. | 800 | 24,118 | ||||||
Avex Group Holdings, Inc. | 800 | 25,207 | ||||||
Bridgestone Corp. | 1,000 | 34,079 | ||||||
COMSYS Holdings Corp. | 1,500 | 19,162 | ||||||
Daito Trust Construction Co., Ltd. | 300 | 28,282 | ||||||
Daiwa House Industry Co., Ltd. | 1,000 | 18,663 | ||||||
Daiwa House Industry Co., Ltd. ADR | 1,520 | 283,989 | ||||||
East Japan Railway Co. | 200 | 15,547 | ||||||
Hogy Medical Co., Ltd. | 300 | 17,151 | ||||||
Japan Airlines Co., Ltd. | 500 | 25,711 |
Description | Shares | Value | ||||||
Kaken Pharmaceutical Co., Ltd. | 3,000 | $ | 44,495 | |||||
Kewpie Corp. | 2,400 | 35,426 | ||||||
Lawson, Inc. | 300 | 22,898 | ||||||
LIXIL Group Corp. ADR | 8,990 | 438,442 | ||||||
Mitsubishi Estate Co., Ltd. ADR | 26,142 | 698,253 | ||||||
Nagoya Railroad Co., Ltd. | 24,000 | 67,514 | ||||||
Nitori Holdings Co., Ltd. | 200 | 16,132 | ||||||
Otsuka Holdings Co., Ltd. | 400 | 13,208 | ||||||
Sawai Pharmaceutical Co., Ltd. | 500 | 59,740 | ||||||
Sumitomo Mitsui Financial Group, Inc. Sponsored ADR | 37,930 | 349,715 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. Sponsored ADR | 148,360 | 694,325 | ||||||
Sumitomo Osaka Cement Co., Ltd. | 5,000 | 15,931 | ||||||
The Chugoku Bank, Ltd. | 1,000 | 14,035 | ||||||
The Chugoku Electric Power Co., Inc. | 1,600 | 25,134 | ||||||
The Gunma Bank, Ltd. | 3,000 | 16,576 | ||||||
The Iyo Bank, Ltd. | 7,000 | 66,909 | ||||||
The Joyo Bank, Ltd. | 6,000 | 32,849 | ||||||
The Kagoshima Bank, Ltd. | 2,000 | 12,724 | ||||||
United Arrows, Ltd. | 700 | 29,255 | ||||||
3,252,649 | ||||||||
Luxembourg | 0.0% | ||||||||
SES SA | 429 | 12,285 | ||||||
Netherlands | 0.0% | ||||||||
Unilever NV | 409 | 16,107 | ||||||
New Zealand | 0.2% | ||||||||
Ryman Healthcare, Ltd. | 4,340 | 21,424 | ||||||
Sky Network Television, Ltd. | 17,327 | 72,912 | ||||||
Telecom Corp. of New Zealand, Ltd. | 15,176 | 26,461 | ||||||
120,797 | ||||||||
Norway | 0.2% | ||||||||
Statoil ASA | 3,907 | 80,593 | ||||||
Singapore | 0.1% | ||||||||
M1, Ltd. | 13,000 | 30,872 | ||||||
Mapletree Industrial Trust REIT | 15,000 | 15,621 | ||||||
46,493 |
The accompanying notes are an integral part of these financial statements.
24 | Semi-Annual Report |
Description | Shares | Value | ||||||
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued) | ||||||||
Spain | 0.3% | ||||||||
ACS Actividades de Construccion y Servicios SA | 555 | $ | 14,701 | |||||
Amadeus IT Holding SA, A Shares | 579 | 18,506 | ||||||
Corporacion Financiera Alba SA | 150 | 6,638 | ||||||
Enagas SA | 691 | 17,076 | ||||||
Grifols SA, Class B | 12 | 339 | ||||||
Inditex SA | 230 | 28,393 | ||||||
Red Electrica Corporacion SA | 1,035 | 56,920 | ||||||
Viscofan SA | 296 | 14,830 | ||||||
157,403 | ||||||||
Sweden | 0.8% | ||||||||
Assa Abloy AB ADR | 18,225 | 357,392 | ||||||
Elekta AB, B Shares | 2,961 | 45,037 | ||||||
Hennes & Mauritz AB, B Shares | 818 | 26,884 | ||||||
Loomis AB, B Shares | 670 | 12,863 | ||||||
442,176 | ||||||||
Switzerland | 3.0% | ||||||||
Nestle SA | 914 | 59,946 | ||||||
Novartis AG | 1,303 | 92,564 | ||||||
Novartis AG ADR | 9,630 | 680,937 | ||||||
Partners Group Holding AG | 62 | 16,788 | ||||||
Roche Holding AG | 420 | 104,494 | ||||||
Swatch Group AG ADR | 19,910 | 544,340 | ||||||
Swisscom AG | 226 | 98,961 | ||||||
1,598,030 | ||||||||
United Kingdom | 4.8% | ||||||||
Admiral Group PLC | 1,912 | 38,590 | ||||||
ARM Holdings PLC | 2,441 | 29,515 | ||||||
British American Tobacco PLC | 2,333 | 119,492 | ||||||
British Sky Broadcasting Group PLC | 8,901 | 107,221 | ||||||
Centrica PLC | 26,031 | 142,610 | ||||||
Croda International PLC | 438 | 16,501 | ||||||
Domino’s Pizza Group PLC | 5,193 | 52,958 | ||||||
easyJet PLC | 1,073 | 21,150 | ||||||
Essentra PLC | 1,344 | 14,340 | ||||||
GlaxoSmithKline PLC | 5,924 | 148,487 | ||||||
IG Group Holdings PLC | 2,974 | 26,235 | ||||||
Intertek Group PLC ADR | 8,990 | 398,976 | ||||||
National Grid PLC | 1,478 | 16,770 | ||||||
Description | Shares | Value | ||||||
Next PLC | 593 | $ | 41,110 | |||||
Pace PLC | 2,471 | 9,091 | ||||||
Provident Financial PLC | 1,907 | 43,188 | ||||||
Reckitt Benckiser Group PLC | 1,598 | 112,969 | ||||||
Rexam PLC Sponsored ADR | 10,548 | 385,107 | ||||||
Rightmove PLC | 965 | 30,587 | ||||||
Shire PLC | 2,444 | 77,504 | ||||||
SSE PLC | 553 | 12,810 | ||||||
TalkTalk Telecom Group PLC | 10,662 | 36,389 | ||||||
Unilever PLC | 1,341 | 54,294 | ||||||
Unilever PLC Sponsored ADR | 7,260 | 293,667 | ||||||
Vodafone Group PLC Sponsored ADR | 11,745 | 337,551 | ||||||
2,567,112 | ||||||||
United States | 43.0% | ||||||||
3M Co. | 147 | 16,074 | ||||||
Abbott Laboratories | 2,712 | 94,595 | ||||||
AES Corp. | 4,007 | 48,044 | ||||||
Alliant Techsystems, Inc. | 272 | 22,394 | ||||||
Amdocs, Ltd. | 442 | 16,394 | ||||||
American Express Co. | 11,195 | 836,938 | ||||||
American Water Works Co., Inc. | 308 | 12,699 | ||||||
Amgen, Inc. | 594 | 58,604 | ||||||
AmTrust Financial Services, Inc. | 562 | 20,063 | ||||||
Apple, Inc. | 2,176 | 861,870 | ||||||
AT&T, Inc. | 2,737 | 96,890 | ||||||
AutoZone, Inc. (a) | 1,010 | 427,927 | ||||||
Ball Corp. | 389 | 16,159 | ||||||
Bank of America Corp. | 19,500 | 250,770 | ||||||
Baxter International, Inc. | 1,342 | 92,960 | ||||||
Becton, Dickinson & Co. | 246 | 24,312 | ||||||
Campbell Soup Co. | 2,669 | 119,545 | ||||||
CBOE Holdings, Inc. | 1,071 | 49,951 | ||||||
Celgene Corp. (a) | 273 | 31,916 | ||||||
Chevron Corp. | 6,788 | 803,292 | ||||||
Cisco Systems, Inc. | 33,535 | 815,236 | ||||||
Citigroup, Inc. | 22,255 | 1,067,572 | ||||||
CMS Energy Corp. | 2,145 | 58,280 | ||||||
Colgate-Palmolive Co. | 2,508 | 143,683 | ||||||
Comcast Corp., Class A | 13,950 | 553,397 | ||||||
Consol Energy, Inc. | 10,095 | 273,575 | ||||||
CR Bard, Inc. | 644 | 69,990 | ||||||
Credit Acceptance Corp. (a) | 174 | 18,279 | ||||||
CVS Caremark Corp. | 9,610 | 549,500 | ||||||
Dollar Tree, Inc. (a) | 849 | 43,163 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 25 |
Description | Shares | Value | ||||||
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued) | ||||||||
Dr Pepper Snapple Group, Inc. | 382 | $ | 17,545 | |||||
Eastman Chemical Co. | 3,800 | 266,038 | ||||||
Eli Lilly & Co. | 999 | 49,071 | ||||||
EMC Corp. | 21,075 | 497,792 | ||||||
Exxon Mobil Corp. | 199 | 17,980 | ||||||
General Mills, Inc. | 2,528 | 122,684 | ||||||
Google, Inc., Class A (a) | 660 | 581,044 | ||||||
Hilltop Holdings, Inc. (a) | 756 | 12,398 | ||||||
Honeywell International, Inc. | 11,535 | 915,187 | ||||||
IntercontinentalExchange, Inc. (a) | 1,537 | 273,217 | ||||||
International Business Machines Corp. | 461 | 88,102 | ||||||
Intuit, Inc. | 527 | 32,163 | ||||||
Johnson & Johnson | 8,775 | 753,422 | ||||||
Joy Global, Inc. | 7,095 | 344,320 | ||||||
Kimberly-Clark Corp. | 1,466 | 142,407 | ||||||
Lockheed Martin Corp. | 1,166 | 126,464 | ||||||
Macy’s, Inc. | 8,080 | 387,840 | ||||||
MasterCard, Inc., Class A | 1,036 | 595,182 | ||||||
Mattel, Inc. | 578 | 26,189 | ||||||
McDonald’s Corp. | 917 | 90,783 | ||||||
McKesson Corp. | 7,200 | 824,400 | ||||||
Microsoft Corp. | 17,745 | 612,735 | ||||||
Molson Coors Brewing Co., Class B | 8,566 | 409,969 | ||||||
Morgan Stanley | 13,617 | 332,663 | ||||||
Mylan, Inc. (a) | 1,022 | 31,713 | ||||||
Newmont Mining Corp. | 2,699 | 80,835 | ||||||
NIKE, Inc. | 397 | 25,281 | ||||||
Peabody Energy Corp. | 21,015 | 307,660 | ||||||
PepsiCo, Inc. | 322 | 26,336 | ||||||
PetSmart, Inc. | 492 | 32,959 | ||||||
Pfizer, Inc. | 28,883 | 809,013 | ||||||
PG&E Corp. | 239 | 10,929 | ||||||
Portland General Electric Co. | 455 | 13,918 | ||||||
Qualcomm, Inc. | 15,442 | 943,197 | ||||||
Raytheon Co. | 672 | 44,433 | ||||||
Regal Entertainment Group, Class A | 896 | 16,038 | ||||||
Rockwell Collins, Inc. | 506 | 32,085 | ||||||
Ross Stores, Inc. | 6,937 | 449,587 | ||||||
Safeway, Inc. | 1,558 | 36,862 | ||||||
Schlumberger, Ltd. | 5,680 | 407,029 | ||||||
Synopsys, Inc. (a) | 3,915 | 139,961 |
Description | Shares | Value | ||||||
Sysco Corp. | 9,615 | $ | 328,448 | |||||
Taylor Morrison Home Corp. | 7,090 | 172,854 | ||||||
The Hershey Co. | 580 | 51,782 | ||||||
The Kroger Co. | 3,515 | 121,408 | ||||||
The Sherwin-Williams Co. | 394 | 69,580 | ||||||
The Southern Co. | 2,727 | 120,343 | ||||||
The TJX Cos., Inc. | 2,622 | 131,257 | ||||||
The Walt Disney Co. | 305 | 19,261 | ||||||
Two Harbors Investment Corp. REIT | 3,756 | 38,499 | ||||||
United Technologies Corp. | 6,315 | 586,916 | ||||||
UnitedHealth Group, Inc. | 6,480 | 424,310 | ||||||
Vantiv, Inc., Class A (a) | 2,161 | 59,644 | ||||||
Vertex Pharmaceuticals, Inc. (a) | 4,040 | 322,675 | ||||||
Viacom, Inc., Class B | 11,210 | 762,841 | ||||||
Visa, Inc., Class A | 3,553 | 649,311 | ||||||
Wal-Mart Stores, Inc. | 1,363 | 101,530 | ||||||
Westar Energy, Inc. | 624 | 19,943 | ||||||
Wisconsin Energy Corp. | 332 | 13,609 | ||||||
Xcel Energy, Inc. | 5,003 | 141,785 | ||||||
Zoetis, Inc. | 12,175 | 376,086 | ||||||
22,933,585 | ||||||||
Total Common Stocks (Identified cost $36,000,294) | 37,930,611 |
Description | Security Currency | Principal Amount (000) | Value | |||||||
Corporate Bonds | 5.8% | ||||||||||
Australia | 0.5% | ||||||||||
Commonwealth Bank of Australia: | ||||||||||
6.500%, 08/13/13 | AUD | 20 | $ | 18,344 | ||||||
5.750%, 09/23/13 | AUD | 40 | 36,746 | |||||||
Mercedes-Benz Australia/Pacific Property, Ltd., 4.500%, 05/18/15 | AUD | 58 | 54,024 | |||||||
Telstra Corp., Ltd., 6.250%, 04/15/15 | AUD | 100 | 95,660 | |||||||
Westpac Banking Corp., 6.375%, 12/10/13 | AUD | 70 | 64,770 | |||||||
269,544 | ||||||||||
Brazil | 0.2% | ||||||||||
Petrobras International Finance Co., 7.875%, 03/15/19 | USD | 88 | 101,760 |
The accompanying notes are an integral part of these financial statements.
26 | Semi-Annual Report |
Description | Security Currency | Principal Amount (000) | Value | |||||||
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued) | ||||||||||
Canada | 0.6% | ||||||||||
Shaw Communications, Inc., 5.650%, 10/01/19 | CAD | 95 | $ | 99,844 | ||||||
Suncor Energy, Inc., 6.100%, 06/01/18 | USD | 80 | 93,260 | |||||||
Wells Fargo Financial Canada Corp., 2.774%, 02/09/17 | CAD | 125 | 120,089 | |||||||
313,193 | ||||||||||
Chile | 0.2% | ||||||||||
Codelco, Inc., 3.750%, 11/04/20 | USD | 100 | 97,314 | |||||||
France | 0.3% | ||||||||||
Electricite de France SA, 5.000%, 02/05/18 | EUR | 50 | 75,135 | |||||||
Orange SA, 5.375%, 07/08/19 | USD | 100 | 110,017 | |||||||
185,152 | ||||||||||
Italy | 0.1% | ||||||||||
Atlantia SpA, 3.375%, 09/18/17 | EUR | 50 | 67,523 | |||||||
Netherlands | 0.2% | ||||||||||
BMW Finance NV, 3.375%, 12/14/18 | GBP | 65 | 103,991 | |||||||
Norway | 0.1% | ||||||||||
Statoil ASA, 3.125%, 08/17/17 | USD | 59 | 62,254 | |||||||
United Kingdom | 1.4% | ||||||||||
National Grid PLC, 6.125%, 04/15/14 | GBP | 100 | 157,918 | |||||||
Network Rail Infrastructure Finance PLC, 4.400%, 03/06/16 | CAD | 300 | 301,415 | |||||||
Rolls-Royce PLC, 6.750%, 04/30/19 | GBP | 50 | 93,523 | |||||||
SSE PLC, 5.000%, 10/01/18 | GBP | 50 | 85,547 | |||||||
Tesco PLC, 6.125%, 02/24/22 | GBP | 50 | 87,452 | |||||||
725,855 |
Description | Security Currency | Principal Amount (000) | Value | |||||||
United States | 2.2% | ||||||||||
American Express Credit Corp., 2.375%, 03/24/17 | USD | 115 | $ | 117,401 | ||||||
Apple, Inc., 2.400%, 05/03/23 | USD | 140 | 129,845 | |||||||
BMW US Capital LLC, 2.375%, 12/04/15 | NOK | 310 | 51,133 | |||||||
Energizer Holdings, Inc., 4.700%, 05/19/21 | USD | 55 | 55,836 | |||||||
General Electric Capital Corp., 5.500%, 02/01/17 | NZD | 160 | 128,418 | |||||||
Goldman Sachs Group, Inc., 6.250%, 09/01/17 | USD | 75 | 84,990 | |||||||
JPMorgan Chase & Co., 3.875%, 09/23/20 | EUR | 100 | 143,665 | |||||||
Marathon Oil Corp., 2.800%, 11/01/22 | USD | 80 | 74,013 | |||||||
McDonald’s Corp., 1.875%, 05/29/19 | USD | 115 | 113,300 | |||||||
Nestle Holdings, Inc., 2.500%, 07/10/17 | NOK | 350 | 58,072 | |||||||
Starbucks Corp., 6.250%, 08/15/17 | USD | 80 | 92,879 | |||||||
Valero Energy Corp., 6.125%, 02/01/20 | USD | 70 | 81,343 | |||||||
Yum! Brands, Inc., 3.750%, 11/01/21 | USD | 65 | 64,776 | |||||||
1,195,671 | ||||||||||
Total Corporate Bonds (Identified cost $3,290,429) | 3,122,257 | |||||||||
Foreign Government Obligations | 12.2% | ||||||||||
Australia | 0.9% | ||||||||||
New South Wales Treasury Corp., 5.000%, 02/25/39 | GBP | 50 | 89,006 | |||||||
Queensland Treasury Corp., 6.000%, 10/21/15 | AUD | 115 | 112,170 | |||||||
Treasury Corp. of Victoria, 4.750%, 10/15/14 | AUD | 90 | 84,502 | |||||||
Western Australian Treasury Corp., 3.000%, 06/08/16 | AUD | 235 | 214,002 | |||||||
499,680 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 27 |
Description | Security Currency | Principal Amount (000) | Value | |||||||
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued) | ||||||||||
Austria | 0.5% | ||||||||||
Republic of Austria, 3.900%, 07/15/20 | EUR | 170 | $ | 255,225 | ||||||
Bahamas | 0.3% | ||||||||||
Commonwealth of Bahamas, 6.950%, 11/20/29 | USD | 130 | 153,400 | |||||||
Belgium | 0.5% | ||||||||||
Belgium Kingdom, 4.250%, 09/28/22 | EUR | 170 | 253,733 | |||||||
Bermuda | 0.4% | ||||||||||
Government of Bermuda, 5.603%, 07/20/20 | USD | 200 | 217,000 | |||||||
Brazil | 0.3% | ||||||||||
Federal Republic of Brazil, 11.000%, 06/26/17 | EUR | 85 | 144,900 | |||||||
Canada | 2.3% | ||||||||||
Hydro-Quebec, 9.625%, 07/15/22 | CAD | 110 | 155,608 | |||||||
Province of Alberta, 4.000%, 12/01/19 | CAD | 75 | 77,267 | |||||||
Province of British Columbia, 3.700%, 12/18/20 | CAD | 350 | 353,138 | |||||||
Province of Ontario, 6.250%, 06/16/15 | NZD | 355 | 288,781 | |||||||
Province of Quebec: | ||||||||||
4.500%, 12/01/17 | CAD | 115 | 119,805 | |||||||
3.500%, 07/29/20 | USD | 245 | 257,764 | |||||||
1,252,363 | ||||||||||
Czech Republic | 0.4% | ||||||||||
Czech Republic, 5.000%, 06/11/18 | EUR | 135 | 204,313 | |||||||
Denmark | 0.2% | ||||||||||
Kommunekredit: | ||||||||||
4.000%, 01/01/16 | DKK | 230 | 43,479 | |||||||
2.000%, 01/01/18 | DKK | 430 | 77,372 | |||||||
120,851 |
Description | Security Currency | Principal Amount (000) | Value | |||||||
France | 0.6% | ||||||||||
Government of France, 4.250%, 10/25/23 | EUR | 200 | $ | 303,623 | ||||||
Israel | 0.2% | ||||||||||
Israel Fixed Bond, 5.500%, 01/31/22 | ILS | 350 | 112,066 | |||||||
Mexico | 1.0% | ||||||||||
Mexican Bonos: | ||||||||||
9.500%, 12/18/14 | MXN | 3,800 | 315,148 | |||||||
7.750%, 12/14/17 | MXN | 1,260 | 107,225 | |||||||
United Mexican States, 6.750%, 02/06/24 | GBP | 65 | 118,622 | |||||||
540,995 | ||||||||||
Netherlands | 1.0% | ||||||||||
Netherlands Government Bonds: | ||||||||||
3.750%, 01/15/23 | EUR | 165 | 247,525 | |||||||
2.500%, 01/15/33 | EUR | 210 | 268,557 | |||||||
516,082 | ||||||||||
Norway | 0.3% | ||||||||||
Oslo Kommune, 3.550%, 02/12/21 | NOK | 1,000 | 167,310 | |||||||
Panama | 0.5% | ||||||||||
Republic of Panama, 7.250%, 03/15/15 | USD | 220 | 240,350 | |||||||
Poland | 0.7% | ||||||||||
Poland Government Bond, 3.750%, 04/25/18 | PLN | 830 | 250,197 | |||||||
Republic of Poland, 6.375%, 07/15/19 | USD | 123 | 143,456 | |||||||
393,653 | ||||||||||
Qatar | 0.4% | ||||||||||
State of Qatar, 5.250%, 01/20/20 | USD | 200 | 224,000 | |||||||
Slovakia | 0.4% | ||||||||||
Slovak Republic, 4.375%, 05/21/22 | USD | 200 | 204,500 |
The accompanying notes are an integral part of these financial statements.
28 | Semi-Annual Report |
Description | Security Currency | Principal Amount (000) | Value | |||||||
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued) | ||||||||||
South Africa | 0.1% | ||||||||||
Republic of South Africa, 4.500%, 04/05/16 | EUR | 50 | $ | 69,345 | ||||||
Sweden | 0.7% | ||||||||||
Kommuninvest I Sverige AB, 2.750%, 08/12/15 | SEK | 1,130 | 172,514 | |||||||
Svensk Exportkredit AB, 7.625%, 06/30/14 | NZD | 225 | 181,676 | |||||||
354,190 | ||||||||||
United Kingdom | 0.5% | ||||||||||
United Kingdom Treasury, 4.250%, 12/07/27 | GBP | 150 | 262,213 | |||||||
Total Foreign Government Obligations (Identified cost $6,722,599) | 6,489,792 | |||||||||
Quasi Government Bonds | 1.3% | ||||||||||
Canada | 0.4% | ||||||||||
Export Development Canada, 5.100%, 06/02/14 | CAD | 85 | 83,673 | |||||||
Ontario Electricity Financial Corp., 10.125%, 10/15/21 | CAD | 95 | 136,315 | |||||||
219,988 | ||||||||||
Germany | 0.9% | ||||||||||
KfW: | ||||||||||
4.000%, 12/15/14 | NOK | 860 | 146,022 | |||||||
2.875%, 10/12/16 | NOK | 980 | 164,432 | |||||||
3.375%, 01/18/21 | EUR | 90 | 131,717 | |||||||
Landeskreditbank Baden- Wuerttemberg Foerderbank, 3.000%, 05/22/17 | NOK | 280 | 47,063 | |||||||
489,234 | ||||||||||
Total Quasi Government Bonds (Identified cost $736,359) | 709,222 |
Description | Security Currency | Principal Amount (000) | Value | |||||||
Supranationals | 0.8% | ||||||||||
Asian Development Bank, 3.375%, 05/20/14 | NOK | 850 | $ | 141,921 | ||||||
Corporacion Andina de Fomento, 8.125%, 06/04/19 | USD | 96 | 118,321 | |||||||
Inter-American Development Bank, 6.000%, 12/15/17 | NZD | 60 | 49,932 | |||||||
International Bank for Reconstruction & Development, 4.250%, 01/28/15 | CLP | 67,000 | 131,283 | |||||||
Total Supranationals (Identified cost $469,540) | 441,457 | |||||||||
US Municipal Bonds | 0.7% | ||||||||||
Pennsylvania | 0.2% | ||||||||||
Pennsylvania State Build America Bonds Third Series B, 5.850%, 07/15/30 | USD | 50 | 56,913 | |||||||
Pennsylvania State Public School Building Authority Qualified School Construction Bond Series A, 5.000%, 09/15/27 | USD | 80 | 84,840 | |||||||
141,753 | ||||||||||
Texas | 0.2% | ||||||||||
Texas State Build America Bonds Series A, 4.123%, 04/01/25 | USD | 100 | 97,196 | |||||||
Utah | 0.3% | ||||||||||
Utah State Build America Bonds Series B, 3.539%, 07/01/25 | USD | 150 | 150,093 | |||||||
Total US Municipal Bonds (Identified cost $411,525) | 389,042 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 29 |
Description | Shares | Value | ||||||
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued) | ||||||||
Short-Term Investment | 7.1% | ||||||||
State Street Institutional Treasury Money Market Fund (Identified cost $3,767,390) | 3,767,390 | $ | 3,767,390 |
Description | Value | |||
Total Investments | 99.0% (Identified cost $51,398,136) (c), (f) | $ | 52,849,771 | ||
Cash and Other Assets in Excess of Liabilities | 1.0% | 508,483 | |||
Net Assets | 100.0% | $ | 53,358,254 |
The accompanying notes are an integral part of these financial statements.
30 | Semi-Annual Report |
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (continued)
Forward Currency Contracts open at June 30, 2013:
Currency | Counterparty | Expiration Date | Foreign Currency Amount | U.S. $ Cost on Origination Date | U.S. $ Current Value | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||
Forward Currency Purchase Contracts | ||||||||||||||||||||||||||
AUD | CAN | 08/21/13 | 120,887 | $ | 119,000 | $ | 110,153 | $ | — | $ | 8,847 | |||||||||||||||
AUD | CAN | 08/21/13 | 143,078 | 132,100 | 130,374 | — | 1,726 | |||||||||||||||||||
CAD | RBC | 08/21/13 | 127,369 | 121,400 | 120,965 | — | 435 | |||||||||||||||||||
CAD | SSB | 07/24/13 | 41,373 | 39,446 | 39,319 | — | 127 | |||||||||||||||||||
CHF | CIT | 08/21/13 | 95,260 | 100,000 | 100,896 | 896 | — | |||||||||||||||||||
EUR | CIT | 08/21/13 | 135,898 | 175,000 | 176,929 | 1,929 | — | |||||||||||||||||||
EUR | CIT | 08/21/13 | 187,957 | 245,500 | 244,705 | — | 795 | |||||||||||||||||||
EUR | CIT | 08/21/13 | 191,998 | 250,000 | 249,967 | — | 33 | |||||||||||||||||||
EUR | SSB | 07/24/13 | 90,947 | 119,307 | 118,391 | — | 916 | |||||||||||||||||||
GBP | CIT | 08/21/13 | 68,358 | 105,298 | 103,934 | — | 1,364 | |||||||||||||||||||
GBP | HSB | 08/21/13 | 78,834 | 120,000 | 119,863 | — | 137 | |||||||||||||||||||
GBP | HSB | 08/21/13 | 171,441 | 268,287 | 260,668 | — | 7,619 | |||||||||||||||||||
JPY | CIT | 08/21/13 | 12,394,762 | 125,000 | 124,998 | — | 2 | |||||||||||||||||||
JPY | CIT | 08/21/13 | 22,871,586 | 239,200 | 230,654 | — | 8,546 | |||||||||||||||||||
JPY | CIT | 08/21/13 | 51,774,671 | 519,100 | 522,133 | 3,033 | — | |||||||||||||||||||
JPY | CIT | 08/21/13 | 69,057,200 | 692,428 | 696,423 | 3,995 | — | |||||||||||||||||||
JPY | CIT | 08/21/13 | 95,231,583 | 954,875 | 960,385 | 5,510 | — | |||||||||||||||||||
MXN | HSB | 08/21/13 | 1,776,718 | 134,200 | 136,513 | 2,313 | — | |||||||||||||||||||
MXN | HSB | 08/21/13 | 2,018,249 | 153,000 | 155,071 | 2,071 | — | |||||||||||||||||||
NOK | HSB | 08/21/13 | 810,168 | 132,900 | 133,144 | 244 | — | |||||||||||||||||||
PLN | HSB | 08/21/13 | 94,643 | 28,292 | 28,395 | 103 | — | |||||||||||||||||||
SGD | SSB | 08/21/13 | 9,125 | 7,404 | 7,199 | — | 205 | |||||||||||||||||||
Total Forward Currency Purchase Contracts | $ | 4,781,737 | $ | 4,771,079 | $ | 20,094 | $ | 30,752 | ||||||||||||||||||
Forward Currency Sale Contracts | ||||||||||||||||||||||||||
AUD | CAN | 08/21/13 | 86,394 | $ | 81,800 | $ | 78,724 | $ | 3,076 | $ | — | |||||||||||||||
AUD | CAN | 08/21/13 | 124,067 | 119,910 | 113,050 | 6,860 | — | |||||||||||||||||||
AUD | CAN | 08/21/13 | 126,762 | 118,100 | 115,506 | 2,594 | — | |||||||||||||||||||
AUD | CAN | 08/21/13 | 308,051 | 306,257 | 280,700 | 25,557 | — | |||||||||||||||||||
AUD | SSB | 07/24/13 | 821,592 | 754,295 | 750,173 | 4,122 | — | |||||||||||||||||||
CAD | CIT | 07/24/13 | 1,224,418 | 1,167,402 | 1,163,623 | 3,779 | — | |||||||||||||||||||
CAD | RBC | 08/21/13 | 4,301 | 4,137 | 4,085 | 52 | — | |||||||||||||||||||
CAD | RBC | 08/21/13 | 41,319 | 39,742 | 39,242 | 500 | — | |||||||||||||||||||
CAD | RBC | 08/21/13 | 148,026 | 146,081 | 140,582 | 5,499 | — | |||||||||||||||||||
CAD | RBC | 08/21/13 | 1,086,733 | 1,080,611 | 1,032,089 | 48,522 | — | |||||||||||||||||||
CHF | SSB | 07/24/13 | 362,244 | 387,125 | 383,582 | 3,543 | — | |||||||||||||||||||
CLP | CIT | 09/17/13 | 36,726,200 | 70,417 | 71,415 | — | 998 | |||||||||||||||||||
DKK | CSF | 08/21/13 | 518,718 | 90,783 | 90,573 | 210 | — | |||||||||||||||||||
DKK | SSB | 07/24/13 | 1,588,242 | 279,447 | 277,238 | 2,209 | — | |||||||||||||||||||
EUR | CIT | 07/24/13 | 565,967 | 742,402 | 736,755 | 5,647 | — | |||||||||||||||||||
EUR | CIT | 08/21/13 | 40,209 | 52,255 | 52,349 | — | 94 | |||||||||||||||||||
EUR | CIT | 08/21/13 | 123,498 | 160,292 | 160,785 | — | 493 | |||||||||||||||||||
GBP | CIT | 08/21/13 | 93,822 | 145,200 | 142,651 | 2,549 | — | |||||||||||||||||||
GBP | HSB | 08/21/13 | 5,556 | 8,494 | 8,448 | 46 | — |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 31 |
Lazard Retirement Multi-Asset Targeted Volatility Portfolio (concluded)
Forward Currency Contracts open at June 30, 2013 (concluded):
Currency | Counterparty | Expiration Date | Foreign Currency Amount | U.S. $ Cost on Origination Date | U.S. $ Current Value | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||
Forward Currency Sale Contracts (concluded) | ||||||||||||||||||||||||||
GBP | HSB | 08/21/13 | 18,518 | $ | 28,310 | $ | 28,156 | $ | 154 | $ | — | |||||||||||||||
GBP | HSB | 08/21/13 | 167,399 | 257,391 | 254,521 | 2,870 | — | |||||||||||||||||||
GBP | HSB | 08/21/13 | 173,385 | 264,233 | 263,623 | 610 | — | |||||||||||||||||||
GBP | SSB | 07/24/13 | 779,531 | 1,198,374 | 1,185,451 | 12,923 | — | |||||||||||||||||||
HKD | SSB | 07/24/13 | 1,337,359 | 172,414 | 172,441 | — | 27 | |||||||||||||||||||
JPY | CIT | 08/21/13 | 12,196,392 | 126,100 | 122,997 | 3,103 | — | |||||||||||||||||||
JPY | CIT | 08/21/13 | 24,124,628 | 236,000 | 243,290 | — | 7,290 | |||||||||||||||||||
JPY | HSB | 08/21/13 | 37,074,925 | 370,000 | 373,891 | — | 3,891 | |||||||||||||||||||
JPY | SSB | 07/24/13 | 109,435,919 | 1,123,042 | 1,103,497 | 19,545 | — | |||||||||||||||||||
MXN | HSB | 08/21/13 | 391,721 | 30,500 | 30,098 | 402 | — | |||||||||||||||||||
MXN | HSB | 08/21/13 | 4,761,106 | 388,919 | 365,816 | 23,103 | — | |||||||||||||||||||
NOK | HSB | 08/21/13 | 1,698,812 | 291,032 | 279,186 | 11,846 | — | |||||||||||||||||||
NOK | HSB | 08/21/13 | 3,111,906 | 533,116 | 511,416 | 21,700 | — | |||||||||||||||||||
NOK | SSB | 07/24/13 | 505,990 | 83,255 | 83,237 | 18 | — | |||||||||||||||||||
NZD | SSB | 07/24/13 | 125,660 | 96,828 | 97,227 | — | 399 | |||||||||||||||||||
NZD | SSB | 08/21/13 | 132,280 | 105,000 | 102,147 | 2,853 | — | |||||||||||||||||||
NZD | SSB | 08/21/13 | 709,276 | 583,961 | 547,704 | 36,257 | — | |||||||||||||||||||
PLN | HSB | 08/21/13 | 912,461 | 283,778 | 273,763 | 10,015 | — | |||||||||||||||||||
SEK | SSB | 07/24/13 | 273,382 | 40,886 | 40,745 | 141 | — | |||||||||||||||||||
SEK | SSB | 08/21/13 | 798,565 | 120,606 | 118,945 | 1,661 | — | |||||||||||||||||||
SGD | SSB | 07/24/13 | 72,789 | 57,027 | 57,430 | — | 403 | |||||||||||||||||||
Total Forward Currency Sale Contracts | $ | 12,145,522 | $ | 11,897,151 | 261,966 | 13,595 | ||||||||||||||||||||
Gross unrealized appreciation/depreciation on Forward Currency Purchase and Sale Contracts | $ | 282,060 | $ | 44,347 |
The accompanying notes are an integral part of these financial statements.
32 | Semi-Annual Report |
Lazard Retirement Series, Inc. Notes to Portfolios of Investments June 30, 2013 (unaudited)
(a) | Non-income producing security. |
(b) | Private placements. |
(c) | For federal income tax purposes, the aggregate cost, aggregate gross unrealized appreciation, aggregate gross unrealized depreciation and the net unrealized appreciation (depreciation) are as follows: |
Portfolio | Aggregate Cost | Aggregate Gross Unrealized Appreciation | Aggregate Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | |||||||||||||
US Strategic Equity | $ | 6,921,525 | $ | 1,156,019 | $ | 198,805 | $ | 957,214 | |||||||||
US Small-Mid Cap Equity | 43,616,824 | 8,576,018 | 1,564,531 | 7,011,487 | |||||||||||||
International Equity | 516,304,525 | 107,995,013 | 14,187,494 | 93,807,519 | |||||||||||||
Emerging Markets Equity | 974,801,150 | 119,821,171 | 136,687,681 | (16,866,510 | ) | ||||||||||||
Multi-Asset Targeted Volatility | 51,398,136 | 2,954,203 | 1,502,568 | 1,451,635 |
(d) | Security valued using Level 2 inputs, based on reference to a similar security from the same issuer which was trading on an active market, under accounting principles generally accepted in the United States of America (“GAAP”) hierarchy—see Note 8. |
(e) | Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.” At June 30, 2013, these securities amounted to 2.2% of net assets of Emerging Markets Equity Portfolio, and are considered to be liquid. |
(f) | The Portfolio, at all times, maintains portfolio securities in sufficient amount to cover its obligations related to investments in forward currency contracts. |
Security Abbreviations: | ||||||
ADR | — | American Depositary Receipt | ||||
GDR | — | Global Depositary Receipt | ||||
REIT | — | Real Estate Investment Trust | ||||
SDR | — | Swedish Depositary Receipt | ||||
Currency Abbreviations: | ||||||
AUD | — | Australian Dollar | JPY | — | Japanese Yen | |
CAD | — | Canadian Dollar | MXN | — | Mexican New Peso | |
CHF | — | Swiss Franc | NOK | — | Norwegian Krone | |
CLP | — | Chilean Peso | NZD | — | New Zealand Dollar | |
DKK | — | Danish Krone | PLN | — | Polish Zloty | |
EUR | — | Euro | SEK | — | Swedish Krona | |
GBP | — | British Pound Sterling | SGD | — | Singapore Dollar | |
HKD | — | Hong Kong Dollar | USD | — | United States Dollar | |
ILS | — | Israeli Shekel | ||||
Counterparty Abbreviations: | ||||||
CAN | — | Canadian Imperial Bank of Commerce | HSB | — | HSBC Bank USA | |
CIT | — | Citibank NA | RBC | — | Royal Bank of Canada | |
CSF | — | Credit Suisse Group AG | SSB | — | State Street Bank and Trust Co. |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 33 |
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country:
Industry | Lazard Retirement International Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | Lazard Retirement Multi- Asset Targeted Volatility Portfolio | ||||||||||
Aerospace & Defense | — | % | — | % | 0.4 | % | |||||||
Agriculture | 0.7 | — | — | ||||||||||
Alcohol & Tobacco | 8.5 | 4.5 | 2.4 | ||||||||||
Automotive | 2.8 | 0.6 | 0.5 | ||||||||||
Banking | 10.8 | 20.1 | 3.8 | ||||||||||
Cable Television | — | — | 2.4 | ||||||||||
Chemicals | — | 1.1 | 0.7 | ||||||||||
Commercial Services | — | 5.0 | 2.3 | ||||||||||
Computer Software | 1.6 | 3.9 | 1.2 | ||||||||||
Construction & Engineering | — | 0.9 | 0.1 | ||||||||||
Consumer Products | 2.0 | — | 1.2 | ||||||||||
Diversified | 0.6 | 1.3 | — | ||||||||||
Electric | 1.6 | — | 2.0 | ||||||||||
Electric Generation | — | — | 0.1 | ||||||||||
Energy Exploration & Production | — | 4.9 | 0.2 | ||||||||||
Energy Integrated | 4.5 | 2.9 | 4.5 | ||||||||||
Energy Services | 1.9 | — | 1.4 | ||||||||||
Financial Services | 4.0 | 3.2 | 9.2 | ||||||||||
Food & Beverages | — | 0.9 | 1.8 | ||||||||||
Forest & Paper Products | 2.1 | 1.1 | 1.1 | ||||||||||
Gas Utilities | — | — | 0.3 | ||||||||||
Health Services | 1.1 | — | 0.8 | ||||||||||
Household & Personal Products | 3.1 | 3.7 | 1.2 | ||||||||||
Housing | 5.9 | 1.4 | 1.8 | ||||||||||
Insurance | 5.1 | 2.4 | 2.2 | ||||||||||
Leisure & Entertainment | 6.3 | 1.9 | 2.6 | ||||||||||
Manufacturing | 7.2 | 4.0 | 4.5 | ||||||||||
Medical Products | 0.7 | — | 1.9 | ||||||||||
Metals & Mining | 1.0 | 2.9 | 0.4 | ||||||||||
Pharmaceutical & Biotechnology | 10.7 | — | 8.1 | ||||||||||
Real Estate | — | — | 2.1 | ||||||||||
Retail | 6.2 | 5.1 | 5.4 | ||||||||||
Semiconductors & Components | 0.9 | 6.8 | 0.1 | ||||||||||
Technology | 2.3 | 1.6 | 1.2 | ||||||||||
Technology Hardware | — | 1.0 | 6.5 | ||||||||||
Telecommunications | 3.0 | 12.8 | 2.2 | ||||||||||
Transportation | 2.7 | 1.9 | 1.6 | ||||||||||
Subtotal | 97.3 | 95.9 | 78.2 | ||||||||||
Foreign Government Obligations | — | — | 12.2 | ||||||||||
Supranationals | — | — | 0.8 | ||||||||||
US Municipal Bonds | — | — | 0.7 | ||||||||||
Short-Term Investments | 2.9 | 3.4 | 7.1 | ||||||||||
Total Investments | 100.2 | % | 99.3 | % | 99.0 | % |
The accompanying notes are an integral part of these financial statements.
34 | Semi-Annual Report |
[This Page Intentionally Left Blank.]
Lazard Retirement Series, Inc. Statements of Assets and Liabilities (unaudited)
June 30, 2013 | Lazard Retirement US Strategic Equity Portfolio | Lazard Retirement US Small-Mid Cap Equity Portfolio | ||||||
ASSETS | ||||||||
Investments in securities, at value | $ | 7,878,739 | $ | 50,628,311 | ||||
Cash | — | — | ||||||
Foreign currency | — | — | ||||||
Receivables for: | ||||||||
Dividends and interest | 7,434 | 33,410 | ||||||
Investments sold | 18,797 | 633,410 | ||||||
Capital stock sold | 1,630 | 23,704 | ||||||
Amount due from Investment Manager (Note 3) | 5,700 | — | ||||||
Gross unrealized appreciation on forward currency contracts | — | — | ||||||
Total assets | 7,912,300 | 51,318,835 | ||||||
LIABILITIES | ||||||||
Payables for: | ||||||||
Management fees | — | 27,949 | ||||||
Accrued distribution fees | 1,575 | 10,345 | ||||||
Accrued directors’ fees | 64 | 217 | ||||||
Investments purchased | 51,483 | 132,233 | ||||||
Capital stock redeemed | 1,738 | 7,620 | ||||||
Gross unrealized depreciation on forward currency contracts | — | — | ||||||
Other accrued expenses and payables | 29,145 | 36,036 | ||||||
Total liabilities | 84,005 | 214,400 | ||||||
Net assets | $ | 7,828,295 | $ | 51,104,435 | ||||
NET ASSETS | ||||||||
Paid in capital | $ | 6,404,365 | $ | 38,698,857 | ||||
Undistributed net investment income (loss) | 50,022 | (63,335 | ) | |||||
Accumulated net realized gain (loss) | 416,694 | 5,457,426 | ||||||
Net unrealized appreciation (depreciation) on: | ||||||||
Investments | 957,214 | 7,011,487 | ||||||
Foreign currency and forward currency contracts | — | — | ||||||
Net assets | $ | 7,828,295 | $ | 51,104,435 | ||||
Service Shares | ||||||||
Net assets | $ | 7,828,295 | $ | 51,104,435 | ||||
Shares of capital stock outstanding* | 667,503 | 6,126,581 | ||||||
Net asset value, offering and redemption price per share | $ | 11.73 | $ | 8.34 | ||||
Investor Shares | ||||||||
Net assets | — | — | ||||||
Shares of capital stock outstanding* | — | — | ||||||
Net asset value, offering and redemption price per share | — | — | ||||||
Cost of investments in securities | $ | 6,921,525 | $ | 43,616,824 | ||||
Cost of foreign currency | — | — |
* | $0.001 par value, 1,550,000,000 shares authorized for the Portfolios in total. |
The accompanying notes are an integral part of these financial statements.
36 | Semi-Annual Report |
Lazard Retirement International Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | Lazard Retirement Multi-Asset Targeted Volatility Portfolio | ||||||||
$ | 610,112,044 | $ | 957,934,640 | $ | 52,849,771 | |||||
— | — | 372 | ||||||||
272,464 | 509,976 | 5,602 | ||||||||
1,501,272 | 6,060,556 | 218,162 | ||||||||
2,613,120 | 96,699 | 6 | ||||||||
472,780 | 1,895,796 | 575,426 | ||||||||
— | — | — | ||||||||
— | — | 282,060 | ||||||||
614,971,680 | 966,497,667 | 53,931,399 | ||||||||
381,315 | 798,253 | 10,562 | ||||||||
126,635 | 146,702 | 10,123 | ||||||||
6,038 | 9,299 | 267 | ||||||||
5,312,844 | 49,708 | 429,496 | ||||||||
288,940 | 775,044 | 25,626 | ||||||||
— | — | 44,347 | ||||||||
80,071 | 210,067 | 52,724 | ||||||||
6,195,843 | 1,989,073 | 573,145 | ||||||||
$ | 608,775,837 | $ | 964,508,594 | $ | 53,358,254 | |||||
$ | 572,578,654 | $ | 975,083,124 | $ | 50,836,024 | |||||
9,959,305 | 11,788,763 | 364,903 | ||||||||
(67,547,581 | ) | (5,487,248 | ) | 471,205 | ||||||
93,807,519 | (16,866,510 | ) | 1,451,635 | |||||||
(22,060 | ) | (9,535 | ) | 234,487 | ||||||
$ | 608,775,837 | $ | 964,508,594 | $ | 53,358,254 | |||||
$ | 608,775,837 | $ | 717,623,626 | $ | 53,358,254 | |||||
53,247,440 | 35,297,539 | 4,794,107 | ||||||||
$ | 11.43 | $ | 20.33 | $ | 11.13 | |||||
— | $ | 246,884,968 | — | |||||||
— | 12,255,640 | — | ||||||||
— | $ | 20.14 | — | |||||||
$ | 516,304,525 | $ | 974,801,150 | $ | 51,398,136 | |||||
$ | 274,883 | $ | 513,783 | $ | 5,597 |
Semi-Annual Report | 37 |
Lazard Retirement Series, Inc. Statements of Operations (unaudited)
For the Six Months Ended June 30, 2013 | Lazard Retirement US Strategic Equity Portfolio | Lazard Retirement US Small-Mid Cap Equity Portfolio | ||||||
Investment Income | ||||||||
Income | ||||||||
Dividends | $ | 71,993 | $ | 247,727 | ||||
Interest | — | — | ||||||
Total investment income* | 71,993 | 247,727 | ||||||
�� | ||||||||
Expenses | ||||||||
Management fees (Note 3) | 25,382 | 186,637 | ||||||
Distribution fees (Service Shares) | 9,065 | 62,212 | ||||||
Custodian fees | 21,876 | 24,388 | ||||||
Administration fees | 21,878 | 26,053 | ||||||
Professional services | 16,492 | 17,803 | ||||||
Shareholders’ reports | 3,678 | 5,077 | ||||||
Shareholders’ services | 7,200 | 8,357 | ||||||
Amortization of offering costs (Note 2(f)) | — | — | ||||||
Directors’ fees and expenses | 118 | 596 | ||||||
Other | 1,191 | 2,295 | ||||||
Total gross expenses | 106,880 | 333,418 | ||||||
Management fees waived and expenses reimbursed | (61,245 | ) | (22,356 | ) | ||||
Administration fees waived | (9,375 | ) | — | |||||
Total net expenses | 36,260 | 311,062 | ||||||
Net investment income (loss) | 35,733 | (63,335 | ) | |||||
Net Realized and Unrealized Gain (Loss) on Investments, Foreign Currency and Forward Currency Contracts | ||||||||
Net realized gain (loss) on: | ||||||||
Investments | 581,652 | 3,702,015 | ||||||
Foreign currency and forward currency contracts | — | — | ||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments | 202,644 | 2,928,486 | ||||||
Foreign currency and forward currency contracts | — | — | ||||||
Net realized and unrealized gain (loss) on investments, foreign currency and forward currency contracts | 784,296 | 6,630,501 | ||||||
Net increase (decrease) in net assets resulting from operations | $ | 820,029 | $ | 6,567,166 | ||||
* Net of foreign withholding taxes of | $ | — | $ | — |
The accompanying notes are an integral part of these financial statements.
38 | Semi-Annual Report |
Lazard Retirement International Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | Lazard Retirement Multi-Asset Targeted Volatility Portfolio | ||||||||
$ | 11,818,383 | $ | 18,595,905 | $ | 377,261 | |||||
— | 98 | 122,941 | ||||||||
11,818,383 | 18,596,003 | 500,202 | ||||||||
2,305,310 | 5,156,132 | 174,408 | ||||||||
768,437 | 935,304 | 51,296 | ||||||||
97,753 | 399,346 | 82,918 | ||||||||
82,550 | 121,955 | 25,179 | ||||||||
45,565 | 63,822 | 17,639 | ||||||||
29,166 | 56,524 | 4,637 | ||||||||
9,456 | 18,967 | 6,196 | ||||||||
— | — | 32,267 | ||||||||
10,699 | 17,343 | 536 | ||||||||
7,079 | 12,906 | 1,340 | ||||||||
3,356,015 | 6,782,299 | 396,416 | ||||||||
— | — | (180,970 | ) | |||||||
— | — | — | ||||||||
3,356,015 | 6,782,299 | 215,446 | ||||||||
8,462,368 | 11,813,704 | 284,756 | ||||||||
10,658,351 | 11,379,295 | 827,804 | ||||||||
(265,238 | ) | (265,202 | ) | (319,767 | ) | |||||
(1,960,002 | ) | (112,681,049 | ) | 556,912 | ||||||
(19,978 | ) | (6,896 | ) | 366,600 | ||||||
8,413,133 | (101,573,852 | ) | 1,431,549 | |||||||
$ | 16,875,501 | $ | (89,760,148 | ) | $ | 1,716,305 | ||||
$ | 1,243,976 | $ | 2,627,395 | $ | 22,378 |
Semi-Annual Report | 39 |
Lazard Retirement Series, Inc. Statements of Changes in Net Assets
Lazard Retirement US Strategic Equity Portfolio | Lazard Retirement US Small-Mid Cap Equity Portfolio | ||||||||||||||||||||
Six Months Ended June 30, 2013 (unaudited) | Year Ended December 31, 2012 | Six Months Ended June 30, 2013 (unaudited) | Year Ended December 31, 2012 | ||||||||||||||||||
Increase (Decrease) in Net Assets | |||||||||||||||||||||
Operations | |||||||||||||||||||||
Net investment income (loss) | $ | 35,733 | $ | 74,398 | $ | (63,335 | ) | $ | (72,699 | ) | |||||||||||
Net realized gain on investments, foreign currency and forward currency contracts | 581,652 | 624,773 | 3,702,015 | 15,334,108 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments, foreign currency and forward currency contracts | 202,644 | 153,516 | 2,928,486 | (1,784,076 | ) | ||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 820,029 | 852,687 | 6,567,166 | 13,477,333 | |||||||||||||||||
Distributions to shareholders | |||||||||||||||||||||
From net investment income | |||||||||||||||||||||
Service Shares | — | (74,439 | ) | — | — | ||||||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||||
From net realized gains | |||||||||||||||||||||
Service Shares | — | — | — | (13,385,623 | ) | ||||||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||||
Net decrease in net assets resulting from distributions | — | (74,439 | ) | — | (13,385,623 | ) | |||||||||||||||
Capital stock transactions | |||||||||||||||||||||
Net proceeds from sales | |||||||||||||||||||||
Service Shares | 1,177,297 | 1,309,054 | 2,515,879 | 16,027,344 | |||||||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||||
Net proceeds from reinvestment of distributions | |||||||||||||||||||||
Service Shares | — | 74,439 | — | 13,385,623 | |||||||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||||
Cost of shares redeemed | |||||||||||||||||||||
Service Shares | (870,984 | ) | (1,468,248 | ) | (4,956,567 | ) | (163,050,420 | ) | |||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||||
Net increase (decrease) in net assets from capital stock transactions | 306,313 | (84,755 | ) | (2,440,688 | ) | (133,637,453 | ) | ||||||||||||||
Total increase (decrease) in net assets | 1,126,342 | 693,493 | 4,126,478 | (133,545,743 | ) | ||||||||||||||||
Net assets at beginning of period | 6,701,953 | 6,008,460 | 46,977,957 | 180,523,700 | |||||||||||||||||
Net assets at end of period* | $ | 7,828,295 | $ | 6,701,953 | $ | 51,104,435 | $ | 46,977,957 | |||||||||||||
* Includes undistributed (distributions in excess of) net investment income (loss) of | $ | 50,022 | $ | 14,289 | $ | (63,335 | ) | $ | — | ||||||||||||
Shares issued and redeemed | |||||||||||||||||||||
Service Shares | |||||||||||||||||||||
Shares outstanding at beginning of period | 642,085 | 649,088 | 6,431,142 | 19,491,128 | |||||||||||||||||
Shares sold | 100,652 | 132,214 | 312,894 | 1,614,498 | |||||||||||||||||
Shares issued to shareholders from reinvestment of distributions | — | 7,195 | — | 1,846,293 | |||||||||||||||||
Shares redeemed | (75,234 | ) | (146,412 | ) | (617,455 | ) | (16,520,777 | ) | |||||||||||||
Net increase (decrease) | 25,418 | (7,003 | ) | (304,561 | ) | (13,059,986 | ) | ||||||||||||||
Shares outstanding at end of period | 667,503 | 642,085 | 6,126,581 | 6,431,142 | |||||||||||||||||
Investor Shares | |||||||||||||||||||||
Shares outstanding at beginning of period Shares sold | |||||||||||||||||||||
Shares issued to shareholders from reinvestment of distributions | |||||||||||||||||||||
Shares redeemed | |||||||||||||||||||||
Net decrease | |||||||||||||||||||||
Shares outstanding at end of period |
(a) Portfolio commenced operations on April 30, 2012.
The accompanying notes are an integral part of these financial statements.
40 | Semi-Annual Report |
Lazard Retirement International Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | Lazard Retirement Multi-Asset Targeted Volatility Portfolio | |||||||||||||||||||||||||||||
Six Months Ended June 30, 2013 (unaudited) | Year Ended December 31, 2012 | Six Months Ended June 30, 2013 (unaudited) | Year Ended December 31, 2012 | Six Months Ended June 30, 2013 (unaudited) | Period Ended December 31, 2012 (a) | ||||||||||||||||||||||||||
$ | 8,462,368 | $ | 10,130,174 | $ | 11,813,704 | $ | 15,586,042 | $ | 284,756 | $ | 105,073 | ||||||||||||||||||||
10,393,113 | 10,598,203 | 11,114,093 | 17,956,514 | 508,037 | 36,300 | ||||||||||||||||||||||||||
(1,979,980 | ) | 87,463,837 | (112,687,945 | ) | 149,979,704 | 923,512 | 762,610 | ||||||||||||||||||||||||
16,875,501 | 108,192,214 | (89,760,148 | ) | 183,522,260 | 1,716,305 | 903,983 | |||||||||||||||||||||||||
— | (9,606,473 | ) | — | (11,326,475 | ) | — | (8,528 | ) | |||||||||||||||||||||||
— | — | — | (4,994,100 | ) | — | — | |||||||||||||||||||||||||
— | — | — | (8,223,171 | ) | — | (89,530 | ) | ||||||||||||||||||||||||
— | — | — | (3,170,007 | ) | — | — | |||||||||||||||||||||||||
— | (9,606,473 | ) | — | (27,713,753 | ) | — | (98,058 | ) | |||||||||||||||||||||||
36,488,905 | 87,375,966 | 121,678,506 | 173,094,228 | 27,186,596 | 33,033,489 | ||||||||||||||||||||||||||
— | — | 37,509,604 | 55,191,482 | — | — | ||||||||||||||||||||||||||
— | 9,606,473 | — | 19,549,646 | — | 98,074 | ||||||||||||||||||||||||||
— | — | — | 8,164,107 | — | — | ||||||||||||||||||||||||||
(37,025,263 | ) | (117,013,552 | ) | (72,417,464 | ) | (150,059,376 | ) | (5,806,165 | ) | (3,675,970 | ) | ||||||||||||||||||||
— | — | (49,796,290 | ) | (69,143,806 | ) | — | — | ||||||||||||||||||||||||
(536,358 | ) | (20,031,113 | ) | 36,974,356 | 36,796,281 | 21,380,431 | 29,455,593 | ||||||||||||||||||||||||
16,339,143 | 78,554,628 | (52,785,792 | ) | 192,604,788 | 23,096,736 | 30,261,518 | |||||||||||||||||||||||||
592,436,694 | 513,882,066 | 1,017,294,386 | 824,689,598 | 30,261,518 | — | ||||||||||||||||||||||||||
$ | 608,775,837 | $ | 592,436,694 | $ | 964,508,594 | $ | 1,017,294,386 | $ | 53,358,254 | $ | 30,261,518 | ||||||||||||||||||||
$ | 9,959,305 | $ | 1,496,937 | $ | 11,788,763 | $ | (24,941 | ) | $ | 364,903 | $ | 80,147 | |||||||||||||||||||
53,294,207 | 55,098,125 | 33,061,628 | 31,012,717 | 2,870,304 | — | ||||||||||||||||||||||||||
3,140,981 | 8,621,819 | 5,544,643 | 8,283,260 | 2,453,679 | 3,211,753 | ||||||||||||||||||||||||||
— | 877,788 | — | 898,421 | — | 9,305 | ||||||||||||||||||||||||||
(3,187,748 | ) | (11,303,525 | ) | (3,308,732 | ) | (7,132,770 | ) | (529,876 | ) | (350,754 | ) | ||||||||||||||||||||
(46,767 | ) | (1,803,918 | ) | 2,235,911 | 2,048,911 | 1,923,803 | 2,870,304 | ||||||||||||||||||||||||
53,247,440 | 53,294,207 | 35,297,539 | 33,061,628 | 4,794,107 | 2,870,304 | ||||||||||||||||||||||||||
12,850,144 | 13,191,140 | ||||||||||||||||||||||||||||||
1,697,298 | 2,612,839 | ||||||||||||||||||||||||||||||
— | 379,197 | ||||||||||||||||||||||||||||||
(2,291,802 | ) | (3,333,032 | ) | ||||||||||||||||||||||||||||
(594,504 | ) | (340,996 | ) | ||||||||||||||||||||||||||||
12,255,640 | 12,850,144 |
Semi-Annual Report | 41 |
Lazard Retirement Series, Inc. Financial Highlights
LAZARD RETIREMENT US STRATEGIC EQUITY PORTFOLIO
Selected data for a share of capital | Six Months Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/13† | 12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.44 | $ | 9.26 | $ | 9.18 | $ | 8.19 | $ | 6.51 | $ | 10.17 | |||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||
Net investment income | 0.05 | 0.12 | 0.10 | 0.06 | 0.06 | 0.10 | |||||||||||||||||||
Net realized and unrealized gain (loss) | 1.24 | 1.18 | 0.08 | 0.99 | 1.69 | (3.69 | ) | ||||||||||||||||||
Total from investment operations | 1.29 | 1.30 | 0.18 | 1.05 | 1.75 | (3.59 | ) | ||||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | – | (0.12 | ) | (0.10 | ) | (0.06 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||
Total distributions | – | (0.12 | ) | (0.10 | ) | (0.06 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||
Net asset value, end of period | $ | 11.73 | $ | 10.44 | $ | 9.26 | $ | 9.18 | $ | 8.19 | $ | 6.51 | |||||||||||||
Total Return (a) | 12.36 | % | 14.01 | % | 1.96 | % | 12.85 | % | 26.84 | % | –35.28 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 7,828 | $ | 6,702 | $ | 6,008 | $ | 6,172 | $ | 5,365 | $ | 3,312 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||||
Net expenses (b) | 1.00 | % | 1.00 | % | 1.00 | % | 1.22 | % | 1.25 | % | 1.25 | % | |||||||||||||
Gross expenses (b) | 2.95 | % | 3.23 | % | 3.37 | % | 3.84 | % | 4.67 | % | 4.88 | % | |||||||||||||
Net investment income (b) | 0.99 | % | 1.16 | % | 1.04 | % | 0.68 | % | 1.03 | % | 1.27 | % | |||||||||||||
Portfolio turnover rate | 38 | % | 59 | % | 50 | % | 55 | % | 79 | % | 86 | % |
LAZARD RETIREMENT US SMALL-MID CAP EQUITY PORTFOLIO
Selected data for a share of capital | Six Months Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/13† | 12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 7.30 | $ | 9.26 | $ | 11.04 | $ | 9.68 | $ | 6.34 | $ | 9.98 | |||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) | (0.01 | ) | (0.01 | ) | (0.01 | ) | 0.03 | (0.01 | ) | (0.01 | ) | ||||||||||||||
Net realized and unrealized gain (loss) | 1.05 | 0.95 | (1.01 | ) | 2.27 | 3.35 | (3.63 | ) | |||||||||||||||||
Total from investment operations | 1.04 | 0.94 | (1.02 | ) | 2.30 | 3.34 | (3.64 | ) | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | – | – | – | (0.03 | ) | – | – | ||||||||||||||||||
Net realized gains | – | (2.90 | ) | (0.76 | ) | (0.91 | ) | – | – | ||||||||||||||||
Total distributions | – | (2.90 | ) | (0.76 | ) | (0.94 | ) | – | – | ||||||||||||||||
Net asset value, end of period | $ | 8.34 | $ | 7.30 | $ | 9.26 | $ | 11.04 | $ | 9.68 | $ | 6.34 | |||||||||||||
Total Return (a) | 14.40 | % | 10.38 | % | –9.07 | % | 23.72 | % | 52.68 | % | –36.47 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 51,104 | $ | 46,978 | $ | 180,524 | $ | 146,644 | $ | 143,821 | $ | 34,969 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||||
Net expenses (b) | 1.25 | % | 1.20 | % | 1.15 | % | 1.18 | % | 1.25 | % | 1.25 | % | |||||||||||||
Gross expenses (b) | 1.34 | % | 1.20 | % | 1.15 | % | 1.18 | % | 1.31 | % | 1.41 | % | |||||||||||||
Net investment income (loss) (b) | –0.25 | % | –0.06 | % | –0.16 | % | 0.29 | % | –0.21 | % | –0.11 | % | |||||||||||||
Portfolio turnover rate | 54 | % | 74 | % | 98 | % | 122 | % | 171 | % | 139 | % |
† | Unaudited. |
(a) | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or State Street; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. A period of less than one year is not annualized. |
(b) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
42 | Semi-Annual Report |
LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO
Selected data for a share of capital | Six Months Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/13† | 12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 11.12 | $ | 9.33 | $ | 10.28 | $ | 9.76 | $ | 8.23 | $ | 13.35 | |||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||
Net investment income | 0.16 | 0.19 | 0.18 | 0.12 | 0.16 | 0.21 | |||||||||||||||||||
Net realized and unrealized gain (loss) | 0.15 | 1.78 | (0.93 | ) | 0.53 | 1.60 | (5.15 | ) | |||||||||||||||||
Total from investment operations | 0.31 | 1.97 | (0.75 | ) | 0.65 | 1.76 | (4.94 | ) | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | – | (0.18 | ) | (0.20 | ) | (0.13 | ) | (0.23 | ) | (0.14 | ) | ||||||||||||||
Net realized gains | – | – | – | – | – | (0.04 | ) | ||||||||||||||||||
Total distributions | – | (0.18 | ) | (0.20 | ) | (0.13 | ) | (0.23 | ) | (0.18 | ) | ||||||||||||||
Net asset value, end of period | $ | 11.43 | $ | 11.12 | $ | 9.33 | $ | 10.28 | $ | 9.76 | $ | 8.23 | |||||||||||||
Total Return (a) | 2.79 | % | 21.11 | % | –7.27 | % | 6.72 | % | 21.46 | % | –37.02 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 608,776 | $ | 592,437 | $ | 513,882 | $ | 471,030 | $ | 343,467 | $ | 284,140 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||||
Net expenses (b) | 1.09 | % | 1.10 | % | 1.12 | % | 1.14 | % | 1.17 | % | 1.17 | % | |||||||||||||
Gross expenses (b) | 1.09 | % | 1.10 | % | 1.12 | % | 1.14 | % | 1.17 | % | 1.17 | % | |||||||||||||
Net investment income (b) | 2.75 | % | 1.80 | % | 1.89 | % | 1.41 | % | 1.89 | % | 2.15 | % | |||||||||||||
Portfolio turnover rate | 22 | % | 43 | % | 39 | % | 53 | % | 104 | % | 43 | % |
† | Unaudited. |
(a) | Total returns reflect reinvestment of all dividends and distributions, if any. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. A period of less than one year is not annualized. |
(b) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 43 |
LAZARD RETIREMENT EMERGING MARKETS EQUITY PORTFOLIO
Selected data for a share of capital | Six Months Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/13† | 12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 22.22 | $ | 18.71 | $ | 23.33 | $ | 19.23 | $ | 11.59 | $ | 25.64 | |||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (a) | 0.24 | 0.33 | 0.44 | 0.34 | 0.29 | 0.58 | |||||||||||||||||||
Net realized and unrealized gain (loss) | (2.13 | ) | 3.78 | (4.64 | ) | 4.02 | 7.80 | (12.77 | ) | ||||||||||||||||
Total from investment operations | (1.89 | ) | 4.11 | (4.20 | ) | 4.36 | 8.09 | (12.19 | ) | ||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | – | (0.35 | ) | (0.42 | ) | (0.26 | ) | (0.45 | ) | (0.47 | ) | ||||||||||||||
Net realized gains | – | (0.25 | ) | – | – | – | (1.39 | ) | |||||||||||||||||
Total distributions | – | (0.60 | ) | (0.42 | ) | (0.26 | ) | (0.45 | ) | (1.86 | ) | ||||||||||||||
Net asset value, end of period | $ | 20.33 | $ | 22.22 | $ | 18.71 | $ | 23.33 | $ | 19.23 | $ | 11.59 | |||||||||||||
Total Return (b) | –8.51 | % | 22.05 | % | –18.00 | % | 22.69 | % | 69.85 | % | –48.72 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 717,624 | $ | 734,699 | $ | 580,370 | $ | 581,859 | $ | 367,260 | $ | 168,787 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||||
Net expenses (c) | 1.38 | % | 1.39 | % | 1.42 | % | 1.46 | % | 1.56 | % | 1.52 | % | |||||||||||||
Gross expenses (c) | 1.38 | % | 1.39 | % | 1.42 | % | 1.46 | % | 1.56 | % | 1.52 | % | |||||||||||||
Net investment income (c) | 2.24 | % | 1.57 | % | 2.04 | % | 1.66 | % | 1.86 | % | 2.81 | % | |||||||||||||
Portfolio turnover rate | 6 | % | 23 | % | 19 | % | 27 | % | 51 | % | 53 | % |
Selected data for a share of capital | Six Months Ended |
Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/13† | 12/31/12 | 12/31/11 | 12/31/10 | 12/31/09 | 12/31/08 | |||||||||||||||||||
Investor Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 21.99 | $ | 18.52 | $ | 23.17 | $ | 19.13 | $ | 11.55 | $ | 25.60 | |||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (a) | 0.26 | 0.38 | 0.50 | 0.38 | 0.32 | 0.64 | |||||||||||||||||||
Net realized and unrealized gain (loss) | (2.11 | ) | 3.74 | (4.62 | ) | 4.01 | 7.79 | (12.78 | ) | ||||||||||||||||
Total from investment operations | (1.85 | ) | 4.12 | (4.12 | ) | 4.39 | 8.11 | (12.14 | ) | ||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | – | (0.40 | ) | (0.53 | ) | (0.35 | ) | (0.53 | ) | (0.52 | ) | ||||||||||||||
Net realized gains | – | (0.25 | ) | – | – | – | (1.39 | ) | |||||||||||||||||
Total distributions | – | (0.65 | ) | (0.53 | ) | (0.35 | ) | (0.53 | ) | (1.91 | ) | ||||||||||||||
Net asset value, end of period | $ | 20.14 | $ | 21.99 | $ | 18.52 | $ | 23.17 | $ | 19.13 | $ | 11.55 | |||||||||||||
Total Return (b) | –8.41 | % | 22.34 | % | –17.79 | % | 23.05 | % | 70.23 | % | –48.59 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 246,885 | $ | 282,596 | $ | 244,320 | $ | 339,899 | $ | 170,217 | $ | 61,005 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||||
Net expenses (c) | 1.14 | % | 1.14 | % | 1.17 | % | 1.21 | % | 1.31 | % | 1.28 | % | |||||||||||||
Gross expenses (c) | 1.14 | % | 1.14 | % | 1.17 | % | 1.21 | % | 1.31 | % | 1.28 | % | |||||||||||||
Net investment income (c) | 2.43 | % | 1.85 | % | 2.31 | % | 1.83 | % | 2.03 | % | 3.02 | % | |||||||||||||
Portfolio turnover rate | 6 | % | 23 | % | 19 | % | 27 | % | 51 | % | 53 | % |
† | Unaudited. |
(a) | Net investment income has been computed using the average shares method. |
(b) | Total returns reflect reinvestment of all dividends and distributions, if any. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. A period of less than one year is not annualized. |
(c) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
44 | Semi-Annual Report |
LAZARD RETIREMENT MULTI-ASSET TARGETED VOLATILITY PORTFOLIO
Selected data for a share of capital stock outstanding throughout each period | Six Months Ended 6/30/13† | For the Period 4/30/12 * to 12/31/12 | |||||||
Service Shares | |||||||||
Net asset value, beginning of period | $ | 10.54 | $ | 10.00 | |||||
Income from investment operations: | |||||||||
Net investment income | 0.05 | 0.03 | |||||||
Net realized and unrealized gain | 0.54 | 0.54 | |||||||
Total from investment operations | 0.59 | 0.57 | |||||||
Less distributions from: | |||||||||
Net investment income | – | – | (c) | ||||||
Net realized gains | – | (0.03 | ) | ||||||
Total distributions | – | (0.03 | ) | ||||||
Net asset value, end of period | $ | 11.13 | $ | 10.54 | |||||
Total Return (a) | 5.60 | % | 5.74 | % | |||||
Ratios and Supplemental Data: | |||||||||
Net assets, end of period (in thousands) | $ | 53,358 | $ | 30,262 | |||||
Ratios to average net assets: | |||||||||
Net expenses (b) | 1.05 | % | 1.05 | % | |||||
Gross expenses (b) | 1.93 | % | 3.80 | % | |||||
Net investment income (b) | 1.39 | % | 1.03 | % | |||||
Portfolio turnover rate | 35 | % | 45 | % |
* | Portfolio commenced operations on April 30, 2012. |
† | Unaudited. |
(a) | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager, State Street or BFDS; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. A period of less than one year is not annualized. |
(b) | Annualized for a period of less than one year. |
(c) | Amount is less than $0.01 per share. |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report | 45 |
Lazard Retirement Series, Inc. Notes to Financial Statements June 30, 2013 (unaudited)
1. Organization
Lazard Retirement Series, Inc. (the “Fund”) was incorporated in Maryland on February 13, 1997 and is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Fund is comprised of thirteen no-load portfolios (each referred to as a “Portfolio”), which are currently offered only to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. Portfolio shares may also be offered to certain qualified pension and retirement plans and to accounts permitting accumulation of assets on a tax-deferred basis. Effective January 31, 2006, the Fund designated its existing class of shares as Service Shares and commenced offering Investor Shares. Investor Shares and Service Shares are identical, except as to the services offered to and expenses borne by each class of shares. Currently, only the following five Portfolios, each of which is “diversified,” as defined in the Act, are offered: Lazard Retirement US Strategic Equity Portfolio (“US Strategic Equity Portfolio”), Lazard Retirement US Small-Mid Cap Equity Portfolio (“US Small-Mid Cap Equity Portfolio”), Lazard Retirement International Equity Portfolio (“International Equity Portfolio”), Lazard Retirement Emerging Markets Equity Portfolio (“Emerging Markets Equity Portfolio”) and Lazard Retirement Multi-Asset Targeted Volatility Portfolio (“Multi-Asset Targeted Volatility Portfolio”). Multi-Asset Targeted Volatility Portfolio commenced investment operations on April 30, 2012. Each of the other eight Portfolios had not commenced operations as of June 30, 2013.
2. Significant Accounting Policies
The accompanying financial statements are presented in conformity with GAAP. The following is a summary of significant accounting policies:
(a) Valuation of Investments—Market values for securities listed on the New York Stock Exchange (“NYSE”), NASDAQ national market or other US or foreign exchanges or markets are generally based on the last reported sales price on the exchange or market on which the security is principally traded, generally as of the close of regular trading on the NYSE (normally 4:00 p.m. Eastern time) on each valuation date; securities not traded on the valuation date are valued at the most recent quoted bid price. The Fund values NASDAQ-traded securities at the NASDAQ Official Closing Price, which may not be the last reported sales price in certain instances. Forward currency con-
tracts are valued using quotations from an independent pricing service. Investments in money market funds are valued at the fund’s net asset value.
Bonds and other fixed-income securities that are not exchange-traded are valued on the basis of prices provided by independent pricing services which are based primarily on institutional trading in similar groups of securities, or by using brokers’ quotations or a matrix system which considers such factors as other security prices, yields and maturities. Debt securities maturing in 60 days or less are valued at amortized cost, except where to do so would not accurately reflect their fair value, in which case such securities are valued at fair value as determined by, or in accordance with procedures approved by, the Board of Directors (the “Board”).
The Valuation Committee of the Investment Manager, which meets periodically under the direction of the Board, may evaluate a variety of factors to determine the fair value of securities for which market quotations are determined not to be readily available or reliable. These factors include, but are not limited to, the type of security, the value of comparable securities, observations from financial institutions and relevant news events. Input from the Investment Manager’s analysts also will be considered.
If a significant event materially affecting the value of securities occurs between the close of the exchange or market on which the security is principally traded and the time when a Portfolio’s net asset value is calculated, or when current market quotations otherwise are determined not to be readily available or reliable (including restricted or other illiquid securities such as certain derivative instruments), such securities will be valued at their fair value as determined by, or in accordance with procedures approved by, the Board. The fair value of non-US securities may be determined with the assistance of an independent pricing service using correlations between the movement of prices of such securities and indices of US securities and other appropriate indicators, such as closing market prices of relevant ADRs or futures contracts. Non-US securities may trade on days when a Portfolio is not open for business, thus affecting the value of the Portfolio’s assets on days when Portfolio shareholders may not be able to buy or sell Portfolio shares.
The effect of using fair value pricing is that the net asset value of a Portfolio will reflect the affected securities’ values
46 | Semi-Annual Report |
as determined in the judgment of the Board or its designee instead of being determined by the market. Using a fair value pricing methodology to price securities may result in a value that is different from the most recent closing price of a security and from the prices used by other investment companies to calculate their portfolios’ net asset values.
(b) Portfolio Securities Transactions and Investment Income—Portfolio securities transactions are accounted for on trade date. Realized gain (loss) on sales of investments are recorded on a specific identification basis. Dividend income is recorded on the ex-dividend date and interest income is accrued daily. The Portfolios amortize premiums and accrete discounts on fixed-income securities using the effective yield method. For the period ended June 30, 2013, only Multi-Asset Targeted Volatility Portfolio traded in fixed-income securities.
The Portfolios may be subject to taxes imposed by foreign countries in which they invest. Such taxes are generally based upon income earned or capital gains (realized or unrealized). The Portfolios accrue and apply such taxes to net investment income, net realized gains and net unrealized gains concurrent with the recognition of income or capital gains (realized and unrealized) from the applicable portfolio securities.
(c) Foreign Currency Translation and Forward Currency Contracts—The accounting records of the Portfolios are maintained in US dollars. Portfolio securities and other assets and liabilities denominated in a foreign currency are translated daily into US dollars at the prevailing rates of exchange. Purchases and sales of securities, income receipts and expense payments are translated into US dollars at the prevailing exchange rates on the respective transaction dates.
The Portfolios do not isolate the portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in their market prices. Such fluctuations are included in net realized and unrealized gain (loss) on investments. Net realized gain (loss) on foreign currency and forward currency contracts represents net foreign currency gain (loss) from forward currency contracts, disposition of foreign currencies, currency gain (loss) realized between the trade and settlement dates on securities transactions, and the difference between the amount of dividends, interest and foreign withholding taxes
recorded on a Portfolio’s accounting records and the US dollar equivalent amounts actually received or paid. Net change in unrealized appreciation (depreciation) on foreign currency reflects the impact of changes in exchange rates on the value of assets and liabilities, other than investments in securities, during the period.
A forward currency contract is an agreement between two parties to buy or sell currency at a set price on a future date. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of the foreign currency relative to the US dollar.
The US dollar value of forward currency contracts is determined using quotations provided by an independent pricing service. Daily fluctuations in the value of such contracts are recorded as unrealized appreciation (depreciation) on forward currency contracts. When the contract is closed, the Portfolio records a realized gain (loss) equal to the difference between the value at the time it was opened and the value at the time it was closed.
For the period ended June 30, 2013, only Multi-Asset Targeted Volatility Portfolio traded in forward currency contracts.
(d) Federal Income Taxes—The Fund’s policy is to continue to have each Portfolio qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and to distribute all of its taxable income, including any net realized capital gains, to shareholders. Therefore, no federal income tax provision is required.
At December 31, 2012, the following Portfolios had available, for federal income tax purposes, unused realized capital losses which can be used to offset future realized capital gains as follows:
Portfolio | Expiring 2017 | Expiring 2018 | |||||||
US Strategic Equity | $ | – | $ | 127,978 | |||||
International Equity | 67,453,721 | 7,205,218 |
Under current tax law, certain capital and net foreign currency losses realized after October 31 within the taxable year may be deferred and treated as occurring on the first day of the following tax year. For the tax year ended
Semi-Annual Report | 47 |
December 31, 2012, Emerging Markets Equity Portfolio and Multi-Asset Targeted Volatility Portfolio elected to defer net capital and foreign currency losses of $10,521,224 and $36,336, respectively arising between November 1, 2012 and December 31, 2012.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “RIC Modernization Act”) was signed into law. The RIC Modernization Act includes numerous provisions that generally became effective for taxable years beginning after the date of enactment. Among the new provisions, net capital losses may be carried forward indefinitely, and their character is retained as short-term or long-term. Previously, net capital losses were carried forward for eight years and treated as short-term losses. The RIC Modernization Act also requires that post-enactment net capital losses be used before pre-enactment net capital losses. As a result, pre-enactment capital loss carryforwards may expire unused.
Management has analyzed the Portfolios’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years (2009–2011), or expected to be taken in the Portfolios’ 2012 tax returns.
(e) Dividends and Distributions—Each Portfolio intends to declare and to pay dividends annually from net investment income, if any. During any particular year, net realized gains from investment transactions in excess of available capital loss carryforwards would be taxable to the Portfolios, if not distributed. The Portfolios intend to declare and distribute these amounts, at least annually, to shareholders; however, to avoid taxation, a second distribution may be required.
Income dividends and capital gains distributions are determined in accordance with federal income tax regulations which may differ from GAAP. These book/tax differences, which may result in distribution reclassifications, are primarily due to differing treatments of foreign currency transactions, wash sales, passive foreign investment companies and distributions from real estate investment trusts and partnerships. The book/tax differences relating to shareholder distributions may result in reclassifications among certain capital accounts.
(f) Offering Costs—Costs incurred by the Fund in connection with the offering of shares of a new Portfolio are deferred and amortized on a straight line basis over a twelve-month period from the date of commencement of operations of the Portfolio.
(g) Allocation of Expenses—Expenses not directly chargeable to a specific Portfolio are allocated among the Portfolios primarily on the basis of relative net assets. A Portfolio accrues distribution and service (12b-1) fees to its Service Shares. Each Portfolio’s income, expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated proportionally each day between the classes based upon the relative net assets of each class.
(h) Expense Reductions—The Portfolios’ excess cash in demand deposit accounts, if any, may receive credits that are available to offset custody expenses. The Statements of Operations report gross custody expenses, and report the amount of any credits separately as an expense reduction.
(i) Estimates—The preparation of financial statements in conformity with GAAP requires the Fund 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 amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
3. Investment Management, Administration, Distribution and Transfer Agency Agreements
The Fund, on behalf of the Portfolios, has entered into an investment management agreement (the “Management Agreement”) with the Investment Manager. Pursuant to the Management Agreement, the Investment Manager regularly provides each Portfolio with investment research, advice and supervision and furnishes continuously an investment program for each Portfolio consistent with its investment objective and policies, including the purchase, retention and disposition of securities. For its services provided to the Fund, the Investment Manager earns a management fee, accrued daily as a percentage of its average daily net assets and payable by each Portfolio monthly, at the annual rate set forth below:
48 | Semi-Annual Report |
Portfolio | Annual Rate | ||||
US Strategic Equity | 0.70 | % | |||
US Small-Mid Cap Equity | 0.75 | ||||
International Equity | 0.75 | ||||
Emerging Markets Equity | 1.00 | ||||
Multi-Asset Targeted Volatility | 0.85 |
The Investment Manager has voluntarily agreed to reduce its fees and, if necessary, reimburse the Portfolios if annualized operating expenses exceed the following percentages of average daily net assets for the respective Shares:
Portfolio | Service Shares | Investor Shares | |||||||
US Strategic Equity | 1.00 | % | N/A | ||||||
US Small-Mid Cap Equity | 1.25 | N/A | |||||||
International Equity | 1.25 | N/A | |||||||
Emerging Markets Equity* | 1.55 | 1.30 | % | ||||||
Multi-Asset Targeted Volatility | 1.05 | N/A |
* | From January 1, 2013 to April 30, 2013, the expense caps were 1.60% and 1.35% for Service Shares and Investor Shares, respectively. |
During the period ended June 30, 2013, the Investment Manager waived its management fees and reimbursed the following Portfolios for other expenses as follows:
Service Shares | |||||||||
Portfolio | Management Fees waived | Expenses Reimbursed | |||||||
US Strategic Equity | $ | 25,382 | $ | 35,863 | |||||
US Small-Mid Cap Equity | 22,356 | – | |||||||
Multi-Asset Targeted Volatility | 174,408 | 6,562 |
The Fund has entered into an administration agreement with State Street to provide certain administrative services to the Portfolios. Each Portfolio bears the cost of such services at a fixed annual rate of $42,500, plus 0.02% of average daily net assets up to $1 billion and 0.01% of average daily net assets over $1 billion. State Street has agreed to waive $18,750 of the $42,500 annual fee for the US Strategic Equity Portfolio until the Portfolio’s net assets reach $25 million. During the period ended June 30, 2013, State Street waived its fees of $9,375 for the Portfolio.
The Fund has a distribution agreement with Lazard Asset Management Securities LLC (the “Distributor”), a wholly-owned subsidiary of the Investment Manager, to serve as the distributor for shares of each Portfolio. The Distributor bears the cost of printing and mailing prospectuses to poten-
tial investors and certain expenses in connection with the offering of Portfolio shares.
Under a Distribution and Servicing Plan in accordance with Rule 12b-1 under the Act, each Portfolio pays a monthly fee to the Distributor, at an annual rate of 0.25% of the average daily net assets of its Service Shares, for distribution and servicing of accounts. The Distributor may make payments to participating insurance companies, certain financial institutions, securities dealers and other industry professionals for providing these services.
BFDS is the Fund’s transfer and dividend disbursing agent. For its services, BFDS receives a monthly fee computed on the basis of the number of shareholder accounts it maintains for the Fund during the month, subject to a minimum fee amount per share class in each Portfolio, and is reimbursed for certain out-of-pocket expenses. BFDS has agreed to waive the monthly minimum fee for six months after a new Portfolio has commenced operations.
4. Directors’ Compensation
Certain Directors of the Fund are officers of the Investment Manager. Each Director who is not an affiliated person of the Investment Manager or any of its affiliates is paid by the Fund, The Lazard Funds, Inc., Lazard Global Total Return and Income Fund, Inc. and Lazard World Dividend & Income Fund, Inc. (collectively with the Fund, the “Lazard Funds”), each a registered management investment company advised by the Investment Manager: (1) an annual retainer of $100,000, (2) a per meeting in person regular or special meeting fee of $5,000 ($1,500 for telephonic participation), including Board, committee, subcommittee or other special meetings specifically authorized by the Board and held in connection with delegated Fund business, and (3) a telephone Audit Committee or special Board meeting fee of $1,500, with an additional annual fee for the Audit Committee Chairman of $5,000. Such Directors are also reimbursed for travel and other out-of-pocket expenses for attending Board and committee meetings. No additional compensation is provided in respect of committee meetings held in conjunction with a meeting of the Board. Compensation is divided among the Lazard Funds based on relative net assets. The Directors do not receive benefits from the Fund pursuant to any pension, retirement or similar arrangement.
Semi-Annual Report | 49 |
5. Securities Transactions and Transactions with Affiliates
Purchases and sales of portfolio securities (excluding short-term investments) for the period ended June 30, 2013 were as follows:
Portfolio | Purchases | Sales | |||||||
US Strategic Equity | $ | 2,790,159 | $ | 2,686,218 | |||||
US Small-Mid Cap Equity | 26,590,428 | 30,834,496 | |||||||
International Equity | 130,744,018 | 143,514,275 | |||||||
Emerging Markets Equity | 74,305,075 | 61,314,606 | |||||||
Multi-Asset Targeted Volatility | 32,375,761 | 13,539,793 |
For the period ended June 30, 2013, no brokerage commissions were paid to affiliates of the Investment Manager or other affiliates of the Fund for portfolio transactions executed on behalf of the Fund.
6. Non-US Securities Investment Risks
Certain Portfolios invest in securities of foreign entities and in instruments denominated in foreign currencies which involve risks not typically associated with investments in US securities. Non-US securities carry special risks, such as exposure to currency fluctuations, less developed or less efficient trading markets, political instability, a lack of company information, differing auditing and legal standards, and, potentially, less liquidity. In addition, investments denominated in currencies other than US dollars carry the risk that such currencies will decline in value relative to the US dollar and affect the value of these investments held in the Portfolios. A Portfolio’s investments in emerging market countries are exposed to additional risks. A Portfolio’s performance will be influenced by political, social and economic factors affecting companies in emerging market countries. Emerging market countries generally have economic structures that are less diverse and mature, and political systems that are less stable, than those of developed countries.
7. Contractual Obligations
The Fund enters into contracts in the normal course of business that contain a variety of indemnifications. A Portfolio’s
maximum exposure under these arrangements is unknown. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
8. Fair Value Measurements
Fair value is defined as the price that a Portfolio would receive to sell an asset, or would pay to transfer a liability, in an orderly transaction between market participants at the date of measurement. The Fair Value Measurements and Disclosures provisions of GAAP also establish a framework for measuring fair value, and a three-level hierarchy for fair value measurement that is based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer, broadly, to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. Each investment’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the overall fair value measurement. The three-level hierarchy of inputs is summarized below.
— | Level 1 – unadjusted quoted prices in active markets for identical investments |
— | Level 2 – other significant observable inputs (including unadjusted quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
— | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in these securities.
50 | Semi-Annual Report |
The following table summarizes the valuation of the Portolios’ investments by each fair value hierarchy level as of June 30, 2013:
Description | Unadjusted Quoted Prices in Active Markets for Identical Investments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance as of June 30, 2013 | |||||||||||||
US Strategic Equity Portfolio | |||||||||||||||||
Common Stocks | $ | 7,521,794 | $ | – | $ | – | $ | 7,521,794 | |||||||||
Preferred Stock* | – | – | – | – | |||||||||||||
Short-Term Investment | – | 356,945 | – | 356,945 | |||||||||||||
Total | $ | 7,521,794 | $ | 356,945 | $ | – | $ | 7,878,739 | |||||||||
US Small-Mid Cap Equity Portfolio | |||||||||||||||||
Common Stocks | $ | 48,878,417 | $ | – | $ | – | $ | 48,878,417 | |||||||||
Preferred Stock* | – | – | – | – | |||||||||||||
Short-Term Investment | – | 1,749,894 | – | 1,749,894 | |||||||||||||
Total | $ | 48,878,417 | $ | 1,749,894 | $ | – | $ | 50,628,311 | |||||||||
International Equity Portfolio | |||||||||||||||||
Common Stocks | |||||||||||||||||
Russia | $ | – | $ | 5,668,461 | $ | – | $ | 5,668,461 | |||||||||
Thailand | – | 5,111,882 | – | 5,111,882 | |||||||||||||
Other | 581,881,252 | – | – | 581,881,252 | |||||||||||||
Short-Term Investment | – | 17,450,449 | – | 17,450,449 | |||||||||||||
Total | $ | 581,881,252 | $ | 28,230,792 | $ | – | $ | 610,112,044 | |||||||||
Emerging Markets Equity Portfolio | |||||||||||||||||
Common Stocks | |||||||||||||||||
Russia | $ | 44,028,647 | $ | 52,979,893 | $ | – | $ | 97,008,540 | |||||||||
Thailand | 10,155,299 | 14,974,358 | – | 25,129,657 | |||||||||||||
Other | 791,560,603 | – | – | 791,560,603 | |||||||||||||
Preferred Stock | 11,806,335 | – | – | 11,806,335 | |||||||||||||
Short-Term Investment | – | 32,429,505 | – | 32,429,505 | |||||||||||||
Total | $ | 857,550,884 | $ | 100,383,756 | $ | – | $ | 957,934,640 | |||||||||
Multi-Asset Targeted Volatility Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Common Stocks | $ | 37,930,611 | $ | – | $ | – | $ | 37,930,611 | |||||||||
Corporate Bonds | – | 3,122,257 | – | 3,122,257 | |||||||||||||
Foreign Government Obligations | – | 6,489,792 | – | 6,489,792 | |||||||||||||
Quasi Government Bonds | – | 709,222 | – | 709,222 | |||||||||||||
Supranationals | – | 441,457 | – | 441,457 | |||||||||||||
US Municipal Bonds | – | 389,042 | – | 389,042 | |||||||||||||
Short-Term Investment | – | 3,767,390 | – | 3,767,390 | |||||||||||||
Other Financial Instruments** | |||||||||||||||||
Forward Currency Contracts | – | 282,060 | – | 282,060 | |||||||||||||
Total | $ | 37,930,611 | $ | 15,201,220 | $ | – | $ | 53,131,831 | |||||||||
Liabilities: | |||||||||||||||||
Other Financial Instruments** | |||||||||||||||||
Forward Currency Contracts | $ | – | $ | (44,347 | ) | $ | – | $ | (44,347 | ) |
* | The preferred stock was reported in the Portfolios of Investments at zero market value. |
** | Other financial instruments are derivative instruments which are valued at their unrealized appreciation/depreciation. |
Semi-Annual Report | 51 |
Certain common stocks (see footnote (d) in the Notes to Portfolios of Investments) included in Level 2 were valued based on reference to similar securities from the same issuers which were trading on active markets. The fixed-income securities included in Level 2 were valued on the basis of prices provided by independent pricing services. The forward currency contracts included in Level 2 were valued using quotations provided by an independent pricing service. The short-term investment included in Level 2 (a pooled investment fund) was valued at the fund’s net asset value.
The fair value measurement process for the Level 3 preferred stock of Better Place, Inc., a company that was working to build the infrastructure to deliver a range of services relating to the use of electric vehicles, including battery charging and swap stations, includes significant unobserv-
able inputs, including the recent bankruptcy filing of the company, which is reflected in its current valuation of zero.
In connection with the periodic implementation of fair value pricing procedures with respect to non-US securities (see Note 2(a)), certain equity securities (other than those securities described in footnote (d) in the Notes to Portfolios of Investments) in the International Equity, Emerging Markets Equity and Multi-Asset Targeted Volatility Portfolios were transferred from Level 1 to Level 2 as a result of fair value pricing procedure triggers being met and would revert to Level 1 when the fair value pricing procedure triggers are no longer met. There were no other transfers into or out of Levels 1, 2 or 3 during the period ended June 30, 2013.
For further information regarding security characteristics see Portfolios of Investments.
Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value during the period ended June 30, 2013:
Description | Balance as of December 31, 2012 | Accrued Discounts (Premiums) | Realized Gain (Loss) | Change in Unrealized Depreciation | Purchases | Sales | Transfers Into Level 3 | Transfers Out of Level 3 | Balance as of June 30, 2013 | Net Change in Unrealized Depreciation from Investments Still Held at June 30, 2013 | |||||||||||||||||||||||||||||||
US Strategic Equity Portfolio | |||||||||||||||||||||||||||||||||||||||||
Preferred Stock* | $ | 1,649 | $ | – | $ | – | $ | (1,649 | ) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | (1,649 | ) | |||||||||||||||||||
US Small-Mid Cap Equity Portfolio | |||||||||||||||||||||||||||||||||||||||||
Preferred Stock* | $ | 44,975 | $ | – | $ | – | $ | (44,975 | ) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | (44,975 | ) |
* | The preferred stock was reported in the Portfolios of Investments at zero market value. |
9. Derivative Instruments
Certain Portfolios may use derivative instruments, including forward currency contracts. Forward currency contracts may be used for hedging purposes or to seek to increase returns.
Multi-Asset Targeted Volatility Portfolio
During the period ended June 30, 2013, the notional amounts of purchases and sales of forward currency contracts were $4,781,737 and $12,145,522, respectively.
The following table summarizes the fair value of derivative instruments on its Statement of Assets and Liabilities as of June 30, 2013:
Fair Value | |||||
Asset Derivatives | |||||
Foreign Exchange Risk: | |||||
Gross unrealized appreciation on forward currency contracts | $ | 282,060 | |||
Liability Derivatives | |||||
Foreign Exchange Risk: | |||||
Gross unrealized depreciation on forward currency contracts | $ | 44,347 |
52 | Semi-Annual Report |
The effect of derivative instruments on its Statement of Operations for the period ended June 30, 2013 was:
Amount | |||||
Realized Gain (Loss) on Derivatives Recognized in Income | |||||
Foreign Exchange Risk: | |||||
Net realized loss on forward currency contracts | $ | (118,526 | ) | ||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | |||||
Foreign Exchange Risk: | |||||
Net change in unrealized appreciation on forward currency contracts | $ | 371,727 |
10. Accounting Standards Updates
On January 31, 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update
No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”). ASU 2013-01 limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement.
In December 2011, the FASB issued Accounting Standards Update No. 2011-11 (“ASU 2011-11”), Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU 2011-11 requires disclosure of both gross and net balances for certain investments and transactions entered into under master netting agreements, better aligning US GAAP requirements with International Financial Reporting Standards.
The required information for affected Portfolios is presented in the table below, as of June 30, 2013.
Multi-Asset Targeted Volatility Portfolio
Gross Amounts Not Offset in the Statement of Assets & Liabilities | |||||||||||||||||
Counterparty | Net Amounts of Assets Presented in Statement of Assets & Liabilities | Financial Instrument | Collateral Received | Net Amount (not less than $0) | |||||||||||||
Canadian Imperial Bank of Commerce | $ | 38,087 | $ | (10,572 | ) | $ | – | $ | 27,515 | ||||||||
Citibank NA | 30,440 | (19,616 | ) | – | 10,824 | ||||||||||||
Credit Suisse Group AG | 210 | – | – | 210 | |||||||||||||
HSBC Bank USA | 75,478 | (11,647 | ) | – | 63,831 | ||||||||||||
Royal Bank of Canada | 54,573 | (435 | ) | – | 54,138 | ||||||||||||
State Street Bank and Trust Co. | 83,272 | (2,077 | ) | – | 81,195 | ||||||||||||
Total | $ | 282,060 | $ | (44,347 | ) | $ | – | $ | 237,713 |
Gross Amounts Not Offset in the Statement of Assets & Liabilities | |||||||||||||||||
Counterparty | Net Amounts of Liabilities Presented in Statement of Assets & Liabilities | Financial Instrument | Collateral Pledged | Net Amount (not less than $0) | |||||||||||||
Canadian Imperial Bank of Commerce | $ | 10,572 | $ | (10,572 | ) | $ | – | $ | – | ||||||||
Citibank NA | 19,616 | (19,616 | ) | – | – | ||||||||||||
HSBC Bank USA | 11,647 | (11,647 | ) | – | – | ||||||||||||
Royal Bank of Canada | 435 | (435 | ) | – | – | ||||||||||||
State Street Bank and Trust Co. | 2,077 | (2,077 | ) | – | – | ||||||||||||
Total | $ | 44,347 | $ | (44,347 | ) | $ | – | $ | – |
Semi-Annual Report | 53 |
In June 2013, the FASB issued ASU No. 2013-08, Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. This ASU clarifies the characteristics of an investment company, provides comprehensive guidance to determine whether an entity is an investment company and sets certain measurement and disclosure requirements. This ASU is effective for interim and annual periods in the fiscal years that begin after December 15, 2013. The Investment Manager does not ex-
pect that the adoption of this standard will have a material impact on the financial statements.
11. Subsequent Events
Management has evaluated the possibility of subsequent events affecting the Fund’s financial statements and has determined that there are no such subsequent events that require disclosure.
54 | Semi-Annual Report |
Lazard Retirement Series, Inc. Board of Directors and Officers Information (unaudited)
Name (Age) Address(1) | Position(s) with the Fund (Since) and Term(2) | Principal Occupation(s) and Other Public Company Directorships Held During the Past Five Years(2) |
Independent Directors(3): | ||
Kenneth S. Davidson (68) | Director (April 1997) | Davidson Capital Management Corporation, an investment manager, President (1978 – present) |
Balestra Capital, Ltd., an investment manager and adviser, Senior Advisor (July 2012 – present) | ||
Aquiline Holdings LLC, an investment manager, Partner (2006 – June 2012) | ||
Nancy A. Eckl (50) | Director | College Retirement Equities Fund (eight accounts), Trustee (2007 – present) |
(May 2007) | ||
TIAA-CREF Funds (59 funds) and TIAA-CREF Life Funds (10 funds), Trustee (2007 – present) | ||
TIAA Separate Account VA-1, Member of the Management Committee (2007 – present) | ||
American Beacon Advisors, Inc. (“American Beacon”) and certain funds advised by American Beacon, Vice President (1990 – 2006) | ||
Lester Z. Lieberman (83) | Director (April 1997) | Private Investor |
Leon M. Pollack (72) | Director (August 2006) | Private Investor |
Richard Reiss, Jr. (69) | Director | Georgica Advisors LLC, an investment manager, Chairman (1997 – present) |
(April 1997) | ||
O’Charley’s, Inc., a restaurant chain, Director (1984 – 2012) | ||
Robert M. Solmson (65) | Director (September 2004) | Fairwood Capital, LLC, a private investment corporation engaged primarily in real estate and hotel investments, President (2008 – present) |
Interested Directors(4): | ||
Charles L. Carroll (52) | Chief Executive Officer, President and Director (June 2004) | Investment Manager, Deputy Chairman and Head of Global Marketing (2004 – present) |
Ashish Bhutani (53) | Director | Investment Manager, Chief Executive Officer (2004 – present) |
(July 2005) | ||
Lazard Ltd, Vice Chairman and Director (2010 – present) |
Semi-Annual Report | 55 |
(1) | The address of each Director of the Fund is Lazard Asset Management LLC, 30 Rockefeller Plaza, New York, New York 10112–6300. |
(2) | Each Director serves as a Director for each of the Lazard Funds (comprised of, as of July 31, 2013, 29 active investment portfolios). Each Director serves an indefinite term, until his or her successor is elected, and each Director serves in the same capacity for the other Lazard Funds. All of the Independent Directors (as defined below), except Mr. Lieberman, are also board members of Lazard Alternative Strategies Fund, L.L.C. and Lazard Alternative Strategies 1099 Fund, closed-end registered management investment companies advised by an affiliate of the Investment Manager. |
(3) | “Independent Directors” are not “interested persons” (as defined in the Act) of the Fund. |
(4) | Messrs. Bhutani and Carroll are “interested persons” (as defined in the Act) of the Fund because of their positions with the Investment Manager. |
The Fund’s Statement of Additional Information contains further information about the Directors and is available without charge by calling 800–823–6300.
56 | Semi-Annual Report |
Name (Age) Address(1) | Position(s) with the Fund (Since) and Term(2) | Principal Occupation(s) During the Past Five Years |
Officers(3): | ||
Nathan A. Paul (40) | Vice President and Secretary (April 2002) | Managing Director and General Counsel of the Investment Manager |
Stephen St. Clair (54) | Treasurer (May 2003) | Vice President of the Investment Manager |
Brian D. Simon (51) | Chief Compliance Officer (January 2009) and Assistant Secretary (November 2002) | Managing Director (since February 2011, previously Director) of the Investment Manager and Chief Compliance Officer (since January 2009) of the Investment Manager and the Fund |
Tamar Goldstein (38) | Assistant Secretary (February 2009) | Senior Vice President (since February 2012, previously Vice President and Counsel) of the Investment Manager |
Cesar A. Trelles (38) | Assistant Treasurer (December 2004) | Vice President (since February 2011, previously Fund Administration Manager) of the Investment Manager |
(1) | The address of each officer of the Fund is Lazard Asset Management LLC, 30 Rockefeller Plaza, New York, New York 10112–6300. |
(2) | Each officer serves for an indefinite term, until his or her successor is elected and qualifies or until his or her earlier resignation or removal. Each officer serves in the same capacity for the other Lazard Funds. |
(3) | In addition to Charles L. Carroll, President, whose information is included in the Interested Directors section. |
Semi-Annual Report | 57 |
Lazard Retirement Series, Inc. Other Information (unaudited)
Proxy Voting
A description of the policies and procedures used to determine how proxies relating to Fund portfolio securities are voted is available (1) without charge, upon request, by calling (800) 823-6300 or (2) on the Securities and Exchange Commission (the “SEC”) website at http://www.sec.gov.
The Fund’s proxy voting record for the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (800) 823-6300 or (2) on the SEC’s website at http://www.sec.gov. Information as of June 30 each year will generally be available by the following August 31.
Form N-Q
The Fund files a complete schedule of each Portfolio’s holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330.
Board Consideration of Management Agreement
At a meeting of the Board held on June 4-5, 2013, the Board considered the approval, for an additional annual period, of the Management Agreement between the Fund, on behalf of its Portfolios, and the Investment Manager. The Independent Directors were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Investment Manager.
Services Provided
Representatives of the Investment Manager discussed with the Board the Investment Manager’s written presentation provided in advance of the meeting addressing, among other matters, the nature, extent and quality of services that the Investment Manager provides the Fund, including a discussion of the Investment Manager and its clients (of which the Lazard Funds complex of 29 active funds comprised approximately $22 billion of the approximately $155.7 billion of total assets under the management of the Investment Manager and its global affiliates as of March 31, 2013). The representatives of the Investment Manager noted that the Investment Manager believes that the Fund continues to benefit significantly from the infrastructure and services
provided by the Investment Manager’s global investment management platform, technology, operational and legal and compliance support and significant marketing infrastructure across broad distribution channels. The Directors also considered information provided by the Investment Manager regarding its personnel, resources, financial condition and experience; the Fund’s distribution channels and the relationships with various intermediaries; marketing activities on behalf of the Portfolios; and Portfolio asset flows and the growth or decline in asset levels.
The Directors considered the various services provided by the Investment Manager including the Investment Manager’s research and portfolio management capabilities and oversight of day-to-day operations, including supervision of fund accounting and administration-related services and assistance in meeting legal and regulatory requirements. The Directors also considered the Investment Manager’s infrastructure and agreed that the Fund benefits from the services and infrastructure provided by the Investment Manager. The Directors accepted management’s assertion that such services and infrastructure are greater than those typically provided to a $22 billion fund complex not managed by a large, global firm such as the Investment Manager.
Comparative Management Fee, Expense Ratio and Performance Information
The Directors reviewed comparative contractual and actual management fee, expense ratio and performance (through March 31, 2013) information prepared by Lipper, Inc. (“Lipper”), noting the limitations of certain Lipper comparison groups (each, a “Group”) and broader universes (each, a “Universe”). For the Global Listed Infrastructure, Capital Allocator Opportunistic Strategies and Multi-Asset Targeted Volatility Portfolios, it was noted that the relevant Group and/or Universe may not provide the most appropriate comparison given the specialty nature of the Portfolios’ investment strategies. Lipper’s materials stated that Lipper’s reports are specifically designed to provide boards of directors the necessary fee, expense and investment performance information to assist in fulfilling their advisory contract renewal responsibilities under Section 15(c) of the Act.
Management Fees and Expense Ratios. The Directors discussed the actual and contractual management fees and expense ratios for each Portfolio. They noted the methodology and assumptions used by Lipper, including that management fee compar-
58 | Semi-Annual Report |
isons for the Portfolios and the rankings used therein include administrative fees (which, for the Portfolios, include a fixed dollar fee paid to the Fund’s third party administrator that is not affiliated with the Investment Manager). The Directors acknowledged that, for smaller Portfolios, the fixed dollar administrative fee may have a more significant impact on the contractual management fee.
In reviewing Lipper’s analysis (which was for the Service Shares class of all Portfolios except for the Emerging Markets Equity Portfolio, which has both Service and Investor Shares classes), it was noted that, except for the US Strategic Equity,1 US Small-Mid Cap Equity, Multi-Asset Targeted Volatility, Global Listed Infrastructure and Capital Allocator Opportunistic Strategies Portfolios (of which the Global Listed Infrastructure and Capital Allocator Opportunistic Strategies Portfolios are not active Portfolios), contractual management fees were at or lower than each Portfolio’s relevant Group median (with the US Strategic Equity Portfolio’s fee less than two basis points above the median) and that, for the active Portfolios, total expenses were below the median of the relevant Group, except for the US Small-Mid Cap Equity Portfolio. The Directors noted that, although the US Small-Mid Cap Equity Portfolio had the highest contractual management fee and total expenses in its Group, each was only modestly above the median because of the relatively narrow range of fees and total expenses in the Group. For the US Strategic Equity and Multi-Asset Targeted Volatility Portfolios, it was noted that the Investment Manager had waived receipt of all of its investment advisory fees for 2012. The Directors considered that the Investment Manager continues to voluntarily enter into fee waiver and expense reimbursement agreements for all of the active Portfolios and that for certain of these Portfolios the Investment Manager was waiving management fees and/or reimbursing expenses.
The Directors also considered management fees paid to the Investment Manager by funds advised or sub-advised by the Investment Manager utilizing the same investment strategies as the Portfolios, as well as, with respect to each Portfolio, the Investment Manager’s separately managed accounts with similar objectives, policies and strategies (for each Portfolio, collectively with such funds, “Similar Accounts”). The Directors discussed the fees paid to the Investment Manager by the Fund’s Portfolios compared to the fees paid to the Investment Manager by Similar Accounts. Representatives of the Invest-
ment Manager discussed the nature of the Similar Accounts and the extensive differences, from the Investment Manager’s perspective, in services provided to the different types of Similar Accounts as compared to the services provided to the Portfolios. The Directors considered the relevance of the fee information provided for Similar Accounts managed by the Investment Manager, in light of the significant differences in services provided, to evaluate the appropriateness and reasonableness of the Portfolios’ management fees.
Performance. Lipper’s performance analyses compared each Portfolio’s investment returns to those of the funds in the relevant Group and/or Universe over measurement periods up to ten years through March 31, 2013.
The Directors noted that performance of US Strategic Equity Portfolio was above the Group and Universe medians in all of the periods except the ten-year period; US Small-Mid Cap Equity Portfolio was variously above and below the Group medians and below the Universe medians in all of the periods except the five-year period; International Equity Portfolio was above the Group and Universe medians in all of the periods except the four- and ten-year periods; both share classes of Emerging Markets Equity Portfolio were in the first quintile of the Universe and Investor Shares were in the first quintile of the Group for all periods except the one-year period; and Multi-Asset Targeted Volatility Portfolio (which commenced operations on April 30, 2012) was in the first quintile of the Group and Universe since inception.
At the meeting, the Directors received and would continue to receive regular updates on the Investment Manager’s efforts in respect of underperforming Portfolios.
Investment Manager Profitability and Economies of Scale
The Directors reviewed information prepared by the Investment Manager for each Portfolio concerning profits realized by the Investment Manager and its affiliates resulting from the Management Agreement, calculated using the actual revenues received for the calendar year ended December 31, 2012 and the Investment Manager’s cost allocation methodology to compute an estimate of each Portfolio’s expenses. The Investment Manager’s representatives stated that neither the Investment Manager nor its affiliates receive any significant indirect benefits from the Investment Manager acting as investment adviser to the Portfolios. The Investment Manager’s representatives stated that the bro-
1The Portfolio had the lowest average net assets in its Group.
Semi-Annual Report | 59 |
ker-dealer that is treated as an affiliate of the Investment Manager did not effect trades for the Portfolios in the period under review, and the Investment Manager did not benefit from money flow (float) in connection with transactions in the Portfolios’ shares. The Investment Manager’s representatives reviewed with the Board information provided on the Investment Manager’s brokerage practices and the Portfolios’ brokerage allocation, commission payments and soft dollar commissions and benefits. The representatives of the Investment Manager reminded the Board that the Investment Manager is continuing to support distribution relationships through direct payments from its or its affiliates’ own resources to third parties in connection with distribution and shareholder servicing and/or administrative and recordkeeping services, and noted that the Fund does not bear any related costs other than the 0.25% 12b-1 fee pursuant to the Distribution and Servicing Plan adopted for the Portfolios’ Service Shares.
The profitability percentages were within ranges determined by relevant court cases not to be so disproportionately large that they bore no reasonable relationship to the services rendered. Representatives of the Investment Manager stated that the Investment Manager believed the profits are not unreasonable in light of the services provided and other factors. The Directors considered the Investment Manager’s estimated profitability with respect to each Portfolio as part of their evaluation of whether the Portfolio’s fee under the Management Agreement bears a reasonable relationship to the mix of services provided by the Investment Manager, including the nature, extent and quality of such services, and evaluated profitability in light of the relevant circumstances for each Portfolio, including the size of each Portfolio and the trend in asset growth or decline. Representatives of the Investment Manager and the Directors discussed ways economies of scale could be realized and how they could be shared, including the Investment Manager’s reinvestment of money back into its business, waiving or reimbursing Portfolio expenses, adding discounts to a Portfolio’s management fee schedule as a Portfolio’s assets
increase or by instituting relatively low management fees from inception. It was noted that, for Portfolios with declining or stable assets or a low level of assets, the extent to which the Investment Manager may have realized any economies of scale would be reduced.
At the conclusion of these discussions, each of the Directors expressed the opinion that he or she had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Management Agreement. Based on its discussions and considerations as described above, the Board made the following conclusions and determinations.
— | The Board concluded that the nature, extent and quality of the services provided by the Investment Manager are adequate and appropriate, noting the benefits of advisory and research services and other services and infrastructure (as discussed above) associated with an approximately $155.7 billion global asset management business. |
— | The Board was generally satisfied with the overall performance of most of the Portfolios, but would continue to monitor performance of the Portfolios that was not generally above or competitive with Group or Universe medians. |
— | The Board concluded that each Portfolio’s fee paid to the Investment Manager was reasonable in light of the considerations discussed above. |
— | The Board recognized that economies of scale may be realized as the assets of the Portfolios increase and determined that they would continue to consider potential material economies of scale. |
The Board considered these conclusions and determinations in their totality and, without any one factor being dispositive, determined that approval of the Management Agreement for the Fund, on behalf of each Portfolio, was in the best interests of the Portfolio and its shareholders.
60 | Semi-Annual Report |
NOTES
NOTES
NOTES
NOTES
Lazard Retirement Series, Inc.
30 Rockefeller Plaza
New York, New York 10112-6300
Telephone: 800-823-6300
http://www.LazardNet.com
Investment Manager
Lazard Asset Management LLC
30 Rockefeller Plaza
New York, New York 10112-6300
Telephone: 800-823-6300
Distributor
Lazard Asset Management Securities LLC
30 Rockefeller Plaza
New York, New York 10112-6300
Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111
Transfer Agent and Dividend Disbursing Agent
Boston Financial Data Services, Inc.
P.O. Box 8514
Boston, Massachusetts 02266-8514
Telephone: 800-986-3455
Independent Registered Public Accounting Firm
Anchin, Block & Anchin LLP
1375 Broadway
New York, New York 10018
http://www.anchin.com
Legal Counsel
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
http://www.stroock.com
Performance information as of the most recent month end is available online at www.LazardNet.com.
Lazard Asset Management LLC • 30 Rockefeller Plaza • New York NY 10112 • www.lazardnet.com |
LZDPS010
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors during the period covered by this report.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Registrant’s principal executive and principal financial officers have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certifications of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
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.
Lazard Retirement Series, Inc.
By | /s/ Charles L. Carroll | |
Charles L. Carroll | ||
Chief Executive Officer | ||
Date | September 6, 2013 |
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 | /s/ Charles L. Carroll | |
Charles L. Carroll | ||
Chief Executive Officer | ||
Date | September 6, 2013 | |
By | /s/ Stephen St. Clair | |
Stephen St. Clair | ||
Chief Financial Officer | ||
Date | September 6, 2013 |