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)
Mark R. Anderson, 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: 6/30/18
ITEM1. REPORTS TO STOCKHOLDERS.
Lazard Retirement Series
Semi-Annual Report
June 30, 2018
US Equity
Lazard Retirement US Strategic Equity Portfolio
Lazard Retirement US Small-Mid Cap Equity Portfolio
International Equity
Lazard Retirement International Equity Portfolio
Emerging Markets
Lazard Retirement Emerging Markets Equity Portfolio
Asset Allocation
Lazard Retirement Global Dynamic Multi-Asset 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 accounts permitting accumulation of assets on a tax-deferred basis.
Please consider a Portfolio’s investment objectives, 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.lazardassetmanagement.com. Read the prospectus or each Portfolio’s summary prospectus carefully before you invest. The prospectus and each Portfolio’s summary prospectus contain the investment objectives, risks, charges, expenses and other information about each Portfolio 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 equity and debt markets were mixed in the first half of 2018. While US markets gained, most other developed markets pulled back. In June, the Federal Reserve (Fed) raised interest rates for the seventh time since the global financial crisis, which contributed to broad-based US dollar strength and put pressure on emerging markets assets.
In February, the S&P 500® Index recorded its first 10% correction in two years. US equity markets, however, bounced back to end the first half in positive territory, thanks to strong corporate earnings growth and economic data. Fourth quarter 2017 and first quarter 2018 annualized US GDP growth exceeded expectations and the US unemployment rate reached an 18-year low in the second quarter. Accelerating inflation helped lift long-term interest rates, with the 10-year US Treasury yield rising above 3% in April for the first time in more than four years.
Political uncertainty has risen in Europe, but our Europe-based teams believe that the euro zone economy appears strong enough to withstand this turbulence. Italy has been the chief source of political concerns, but the populist coalition government has stepped back from some of its controversial proposals and softened its anti-euro rhetoric. Overall, European equity markets declined during the first six months of 2018, giving back some of their 2017 gains.
Emerging markets equity and debt were more volatile during the first half of 2018 and were weighed down by escalating US-China trade tensions, a stronger US dollar, and new, more severe US sanctions on Russia. However, emerging markets equity fundamentals remain strong, with stable-to-higher earnings growth estimates for 2018 and 2019 (as of June). A streak of weakness in emerging markets debt from February through June also appears to have created some attractive valuation opportunities in the asset class.
We remain focused on fundamental stock selection and will continue to seek to identify value opportunities for our Portfolios. We appreciate your confidence in Lazard and feel privileged that you have turned to us for your investment needs.
Sincerely,
Lazard Asset Management LLC
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Lazard Retirement Series, Inc. Investment Overviews
US Equities
The S&P 500 Index rose 2.7% during the six month period. Markets recovered and volatility subsided after the S&P 500 Index recorded its first 10% correction in two years in February, as increased investor comfort around the pace of economic growth and the outlook for US interest rates offset ongoing uncertainty about US trade policy. Economic data and corporate earnings continued to be strong, with fourth quarter 2017 and first quarter 2018 annualized GDP growth figures both exceeding expectations, and the unemployment rate hitting an 18-year low of 3.8% in the second quarter. Accelerating inflation helped boost long-term interest rates, with the 10-year US Treasury yield rising above 3% in April for the first time in over four years, signaling investor confidence in the US economy’s resilience.
International Equities
After a lackluster first quarter, non-US equity performance ended the six month period slightly down in local terms, but returns for US dollar–based investors were significantly lower due to the sharp rise of the US dollar during the latter part of the period. The US dollar’s appreciation was driven by political uncertainty—especially the surprise formation of a populist government in Italy—trade disputes, and evidence that US growth expectations had diverged from the rest of the world. The US economy was boosted by two short-term factors—the corporate tax cut and the depreciating US dollar over the preceding twelve months—which raised expectations for higher US interest rates. This was not unexpected, as indicators, such as the purchasing managers index, had reached elevated, unsustainable levels and, in our view, were likely to move down in the short term. The recent strength of the US dollar is based on the temporary trends explained above, and is not, in our view, a structural realignment.
The dollar’s strength had a significant impact on non-US equity returns. In local terms, the MSCI EAFE® Index fell 0.96% in the period, but fell 2.75% for US dollar-based investors. The sell-off in emerging markets equities was relatively modest in local currency terms, with the MSCI Emerging Markets® Index down 2.82%. For US-dollar investors, however, losses were amplified to 6.66%.This performance was historically
consistent, as US dollar strength has typically had an inverse relationship with emerging markets equity performance. The fundamental trends of the companies themselves, however, remained mostly unchanged.
Some individual emerging markets countries came under particular pressure in the six month period because they must pay off US dollar–denominated debt or finance large current account deficits. Turkish equities, for example, declined because of Turkey’s structural current account deficit and rising inflation, and investor concerns about increasingly autocratic Turkish President Recep Tayyip Erdogan. Another significant underperformer in emerging markets for the six month period was Brazil. Investors appeared to lose confidence after the government responded to a trucker’s strike in reaction to sharply rising crude oil and diesel prices by introducing fuel price controls. At the same time, candidates with extreme positions gained in polls for the October elections.
Energy stocks led performance in the year-to-date period as oil rose above $70/bbl. Higher oil prices have been supported by consistent demand from accelerating global growth as well as supply disruptions and several years of underinvestment in oil exploration and production. Countries with higher exposure to energy and commodities, such as Canada and Australia, outperformed (in local currencies) in this environment. Elsewhere, growth stocks continued to outperform value stocks during the period. This performance reflects the current stage of the economic cycle, where growth has continued but has become weaker. Investors in this environment typically bid up any companies that offer any growth, leading to outperformance over value.
Emerging Markets Equities
Emerging markets experienced a volatile period in the first half of 2018 driven by several political and macroeconomic factors. This included a classic “January effect,” a very strong initial market move, which was followed by consolidation in February, caused by investor concerns over the possibility of higher global inflation. The remaining months of the period were dominated by escalating trade tensions, a significantly stronger US dollar, which resulted in weak
Semi-Annual Report 3
emerging markets currencies and new, more severe sanctions on Russian companies and individuals, which caused marked volatility in Russia. The MSCI Emerging Markets Index fell by 6.7% during the first half of the year, as measured in US dollar terms, with equities in Asia performing better than those in Eastern Europe. Shares in Latin America, most affected by weak currencies, performed considerably worse than both regions. One unusual feature of the period was the strength of oil prices, a characteristic that rarely occurs in tandem with a strong US dollar.
Although Latin American stocks performed particularly well in the first quarter, they fell sharply in the subsequent three months. The US dollar strengthened markedly due mostly to recent tax changes, as expectations of US economic growth accelerated, and as consensus anticipated modestly decelerating growth elsewhere in other regions. This had a negative effect on many currencies but most obviously on the Argentine peso, where the country has a current account deficit and is going through a period of deregulation. The central bank had to raise interest rates by more than 12%, and the country ultimately negotiated a $50 billion standby agreement with the International Monetary Fund. Despite having a current account surplus and considerable currency reserves, the Brazilian real then weakened sharply as its debt was utilized by investors who needed to hedge their Argentine peso exposure. The situation was further magnified when more politically extreme presidential candidates began polling well and by a truckers’ strike in reaction to sharply rising crude oil and diesel prices. This latter factor helped Colombian shares perform well over the six month period. Stocks in Peru also held up well, aided by the resignation of President Pedro Pablo Kuczynski, following a corporate scandal. Although there was no solution to the North American Free Trade Agreement renegotiations, Mexican equities finished the period only modestly lower, as uncertainties fell following the election of populist candidate Andres Manuel Lopez Obrador as president.
Asian markets finished lower over the six month period. Currency weakness hit several markets including China, Indonesia, the Philippines, Thailand, and South Korea, despite an unprecedented meeting
between President Trump and North Korean leader Kim Jong Un. By May, the US government’s trade rhetoric was transitioning into real protectionist action with tariff increases on goods as diverse as electronics to aluminum. This was met mostly by retaliation and the G7 meeting in Canada represented an appropriately non-unified discourse between the United States and its major allies.
Shares of companies in Eastern Europe were some-what mixed over the six month period. Turkey President Erdogan’s unwillingness to combat inflation, combined with a Moody’s debt downgrade, pressured Turkey’s currency severely. Despite new President Cyril Ramaphosa, poor economic growth trends in South Africa had a similar effect on the South African rand. Geopolitical issues, such as the poisoning of a former Soviet spy in Great Britain and subsequent sanctions which included new, more restrictive terms, caused marked volatility in Russian share prices and were only mitigated by robust oil prices. Crude oil strength also helped support stock prices in Qatar.
Multi-Asset
Global developed equity markets closed the first six months of the year virtually flat, in US dollar terms. However, this result masked significant volatility—especially when compared to the historically low volatility environment markets experienced in 2017. Equities started the year with a surge that culminated with a sharp correction in early February, with many commentators attributing this move to a spike in US Treasury yields. Developed equity markets lost ground through the first quarter but recovered in the second quarter. In this environment, interest rate-sensitive sectors such as financials and telecom services performed poorly. On the other hand, the information technology sector continued to rally despite already strong returns in 2017. The energy sector also had strong performance as it was bolstered by rising oil prices. For the period, US stocks led among the major developed regions while Europe, the United Kingdom, and Japan had negative returns. Emerging markets shares suffered big losses in the first six months of the year, retreating almost 7% on the back of trade concerns and weakening currencies.
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Global bond markets were negative and volatile during the period. Slightly softer economic data (especially relative to the United States) across Europe and other regions, as well as a spike in Italian bond yields due to local politics, began to cast a shadow on an otherwise healthy economic picture. Investment grade and high yield bonds generally underperformed government bonds due in part to investor risk aversion.
The Fed tightened interest rates in March and June, setting a new 2% upper target for the federal funds rate. The 10-year US Treasury yield briefly broke above the closely watched 3.00% level in mid-April, and again in late-May, and closed the period at 2.86%. The European Central Bank signaled plans to end its bond-buying program but, along with the Bank of Japan and other central banks, it continues to postpone any rate normalization plans.
The US dollar strengthened significantly as it rallied in the second quarter following a generally weakening trend over the last 18 months. In this setting, currency markets were very active, where both major and minor currencies lost ground versus the US dollar. Year to date, among G10 currencies, only the Japanese yen and Norwegian krone gained against the US dollar. In emerging markets currencies, the Colombian peso went higher but some of its emerging markets peers suffered double-digit losses versus the US dollar.
Lazard Retirement US Strategic Equity Portfolio
For the six months ended June 30, 2018, the Lazard Retirement US Strategic Equity Portfolio’s Service Shares posted a total return of 2.85%, as compared with the 2.65% return for the S&P 500 Index.
Stock selection and an overweight position in the information technology sector contributed to performance. Shares of Motorola Solutions rose after quarterly results showed that the company was executing well on its evolution from a hardware company to one focused on providing a public safety platform, driving recurring software and services revenues. Stock selection in the health care sector also helped returns. Shares of Zoetis, a producer of medicine and vaccinations for pets and livestock, rose after the company reported quarterly results above expectations and
management issued encouraging guidance for the year, driven by strength in its livestock business.
In contrast, stock selection in the consumer discretionary sector detracted from performance. Shares of Starbucks fell after the company announced plans to close 150 underperforming stores in the US. Stock selection in the telecom services sector also hurt returns. Shares of AT&T fell, along with other high dividend-yielding stocks, amid expectations for higher interest rates, as well as uncertainty surrounding the company’s acquisition of Time Warner. We sold our position in April.
Lazard Retirement US Small-Mid Cap Equity Portfolio
For the six months ended June 30, 2018, the Lazard Retirement US Small-Mid Cap Equity Portfolio’s Service Shares posted a total return of 3.96%, as compared with the 5.46% return for the Russell 2500® Index.
Stock selection in the industrials sector contributed to performance. Shares of FTI Consulting rose after the company reported quarterly earnings above expectations, driven by strong performance across most of its businesses. Stock selection in the health care sector also helped performance. Shares of Evolent Health rose after the company reported strong quarterly results and several new contracts.
In contrast, stock selection in the consumer staples sector detracted from performance. Shares of J.M. Smucker fell after the company announced that it was exploring strategic alternatives for its US baking business. We sold our position in May. Stock selection and an overweight position in the energy sector also hurt returns. Shares of U.S. Silica Holdings fell after the company reported quarterly earnings below expectations, hurt by disappointing price and volume metrics in its oil & gas business.
Lazard Retirement International Equity Portfolio
For the six months ended June 30, 2018, the Lazard Retirement International Equity Portfolio’s Service Shares posted a total return of -2.95%, as compared with the -2.75% return for the MSCI EAFE Index.
Semi-Annual Report 5
After several quarters of derating, some of the Portfolio’s stocks in the health care sector outperformed. Shire, a UK-based specialty pharmaceuticals company that had negatively impacted our platform over the past year, received a takeout offer from Takeda Pharmaceuticals, based in Japan, which represented more than a 60% premium over the company’s last stock price. Medtronic, the Irish-domiciled global leader in medical devices, rose nearly 7% in the period. The stock had derated to a slight discount to the market, and management reiterated their financial guidance during the period. Stock selection, as well as a higher-than-benchmark weight in the energy sector, was also beneficial as Suncor, a Canadian integrated energy company with assets in the oil sands and refinery markets, rose over 11% during the period. Lastly, stock selection in the industrials sector was also additive to relative returns, driven by strong performance from Ferguson, a British distributor of heating and plumbing products to customers in Europe and the United States. The stock rose more than 13% during the period on results highlighted by improved margins and strong organic growth in the United States.
In contrast, returns were affected by emerging markets exposure, as well as by the continued outperformance of growth versus value. One emerging market stock that negatively impacted performance in the period is Turkcell, the largest mobile and fixed line data provider in Turkey, with 70 million subscribers in nine countries. Macro headwinds hurt the stock as fears regarding the Turkish lira and Turkey’s presidential election resulted in weak currency, equity, and bond markets. We believe the fundamentals of the business remain strong. Another stock that hurt relative performance was Cielo, a leading credit card processor in Brazil where card penetration remains low, thereby allowing for long-term secular growth. The company has been hurt by macro headwinds affecting the Brazilian equity market. Concerns over the 2018 presidential election, along with fears that the Brazilian economic recovery remains lackluster, were amplified by the weakening of the real amidst US dollar strength and the general emerging markets equity selloff. Lastly, British American Tobacco fell 24% during the period, hurting performance within the consumer staples sector. The stock initially declined in February
because investors sold high-dividend stocks as long-term interest rates rose. The stock continued to lag in the first quarter because their earnings announcement led to small consensus downgrades and on concerns of structural changes in the tobacco industry.
Lazard Retirement Emerging Markets Equity Portfolio
For the six months ended June 30, 2018, the Lazard Retirement Emerging Markets Equity Portfolio’s Investor Shares posted a total return of -11.97%, while Service Shares posted a total return of -12.08%, as compared with the -6.66% return for the MSCI Emerging Markets Index.
Stock selection in the financials and consumer discretionary sectors and within Brazil detracted from returns. A higher-than-index exposure to Turkey hurt relative performance. Shares of Cielo, a Brazilian credit card processor, fell due to concerns about increased competition and regulatory change. YPF, an Argentine energy company, fell as high inflation and a plunging currency in Argentina led to macroeconomic uncertainty and concerns that the government may institute price controls for gas and diesel. Shares of Banco do Brasil, a Brazilian bank, declined along with the Brazilian market after a protracted strike by Brazilian truck drivers severely halted economic activity, resulting in weakness in the real and in companies exposed to Brazil. Punjab National Bank, an Indian state bank, fell after bank fraud was uncovered. Shares of CCR, a Brazilian toll road operator, declined following allegations that CCR executives overpaid for sponsorship contracts during the 2009-2012 period to fund political campaigns.
In contrast, Tata Consultancy, an Indian information technology services company, benefited from improved sentiment regarding IT spending across the sector and on the back of an announced share buyback program. Lukoil, a Russian energy company, has benefited from the environment of higher oil prices, a weaker ruble, and robust gas demand from China. ENN Energy, a Chinese gas distribution company, continued to benefit from healthy volume growth and the government’s strong push to boost gas consumption. Weichai Power, a Chinese manufacturer of diesel engines for heavy-duty vehicles, announced robust
6 Semi-Annual Report
first quarter results and provided upbeat guidance for the year. Shares of Alrosa, a Russian diamond mining company, gained on the back of improvements in global diamond sales and after the company’s board of directors approved a more generous dividend policy.
Lazard Retirement Global Dynamic Multi-Asset Portfolio
For the six months ended June 30, 2018, the Lazard Retirement Global Dynamic Multi-Asset Portfolio’s Service Shares posted a total return of -0.59%, as compared with the 0.43% return for the MSCI World® Index and -0.46% return of its blended benchmark, which is a 50/50 blend of the MSCI World Index and the Bloomberg Barclays Global Aggregate® Index (the “GDMA Index”).
Performance was helped by the Portfolio’s overweight to equity versus fixed income and stock selection in the energy, financials, and health care sectors. Stock selection in Australia, Canada, and Norway was additive to returns, as was an underweight to bonds in peripheral Europe in the fixed income allocation. Security selection within fixed income, namely posi-
tions in Australia, New Zealand, Canada, and Norway, also contributed to returns. Finally, currency management within fixed income helped performance: underweight exposure to the Canadian dollar, the British pound, and the euro; and overweight exposure to the Australian dollar and New Zealand dollar.
The Portfolio’s performance was hurt by stock selection in the consumer discretionary and utilities sectors as well as stock selection in Germany and the United States. Country allocation within fixed income—underweight exposure to core Europe and Japan; and overweight exposure to Singapore, the United States, Czech Republic, and Hungary—detracted from performance. Term structure positioning within fixed income—an underweight to long maturity Canadian bonds—was detrimental to returns, as was currency management within fixed income: namely, an overweight exposure to the Mexican peso and Swedish krona.
The Portfolio uses currency forwards opportunistically and for hedging purposes. The impact of these instruments was slightly positive over the six month period.
Notes to Investment Overviews:
All Portfolios’ total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of a Portfolio may have been waived or reimbursed by Lazard Asset Management LLC, the Fund’s investment manager (the “Investment Manager”), State Street Bank and Trust Company, the Fund’s administrator (“State Street”), or DST Asset Manager Solutions, Inc., the Fund’s transfer and dividend disbursing agent (“DST”); without such waiver/reimbursement of expenses, such 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. Past performance is not indicative, or a guarantee, of future results. Returns for a period of less than one year are not annualized.
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, 2018; 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 a 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 a 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 any 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 objectives, strategies, risks and fees.
Semi-Annual Report 7
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, 2018
One Year | Five Years | Ten Years | |||||
Service Shares | 12.57% | 10.44% | 8.27% | ||||
S&P 500 Index | 14.37% | 13.42% | 10.17% |
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. |
Performance results do not include adjustments made for financial reporting purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”), if any, and may differ from amounts reported in the financial highlights. | |
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 companies in leading industries of the US economy. The index is unmanaged, has no fees or costs and is not available for investment. |
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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, 2018
One Year | Five Years | Ten Years | |||||
Service Shares | 13.68% | 11.94% | 10.26% | ||||
Russell 2500 Index | 16.24% | 12.29% | 10.74% | ||||
Russell 2000/2500 Linked Index | 16.24% | 12.29% | 10.96% |
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. |
Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, and may differ from amounts reported in the financial highlights. | |
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 Russell 2500 Index measures the performance of the small-to mid-cap segment of the US equity universe, commonly referred to as “smid” cap. The Russell 2500 Index is a subset of the Russell 3000® Index. The Russell 3000 Index measures the performance of the largest 3,000 US companies, representing approximately 98% of the investable US equity market. The Russell 2500 Index includes approximately 2,500 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000/2500 Linked Index is an unmanaged index created by the Investment Manager, which links the performance of the Russell 2000® Index for all periods through May 31, 2009 (when the Portfolio’s investment focus was changed from small cap companies to small-mid cap companies) and the Russell 2500 Index for all periods thereafter. The Russell 2000 Index includes approximately 2,000 of the smallest securities in the Russell 3000 Index, representing roughly 10% of the total market capitalization of Russell 3,000 companies. The indices are unmanaged, have no fees or costs and are not available for investment. |
Semi-Annual Report 9
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 MSCI EAFE® Index* |
Average Annual Total Returns*
Periods Ended June 30, 2018
One Year | Five Years | Ten Years | |||||
Service Shares | 6.15% | 5.41% | 3.46% | ||||
MSCI EAFE Index | 6.84% | 6.44% | 2.84% |
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. |
Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, and may differ from amounts reported in the financial highlights. | |
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 presentation is made as to its accuracy. The MSCI EAFE Index (Europe, Australasia, Far East) is a free-float-adjusted market capitalization index that is designed to measure developed markets equity performance, excluding the United States and Canada. The MSCI EAFE Index consists of 21 developed markets country indices. The index is unmanaged, has no fees or costs and is not available for investment. |
10 Semi-Annual Report
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 MSCI Emerging Markets® Index* |
Average Annual Total Returns*
Periods Ended June 30, 2018
One Year | Five Years | Ten Years | |||||
Service Shares** | –0.55% | 2.24% | 1.75% | ||||
Investor Shares** | –0.31% | 2.49% | 2.00% | ||||
MSCI Emerging Markets Index | 8.20% | 5.01% | 2.26% |
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. |
Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, also exclude one-time adjustments related to reimbursed custodian out-of-pocket expenses (Note 3 in the Notes to Financial Statements), and may differ from amounts reported in the financial highlights. | |
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 MSCI Emerging Markets Index is a free-float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The MSCI Emerging Markets Index consists of 24 emerging markets country indices. The index is unmanaged, has no fees or costs and is not available for investment. | |
** | The performance of Service Shares and Investor Shares may vary, primarily based on the differences in fees borne by shareholders investing in different classes. |
Semi-Annual Report 11
Lazard Retirement Global Dynamic Multi-Asset Portfolio
Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement Global Dynamic Multi-Asset Portfolio, MSCI World® Index and GDMA Index* |
Average Annual Total Returns*
Periods Ended June 30, 2018
One Year | Five Years | Since Inception | † | ||||
Service Shares | 9.10% | 7.44% | 7.90% | ||||
MSCI World Index | 11.09% | 9.94% | 10.28% | ||||
GDMA Index | 6.20% | 5.77% | 5.55% |
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. |
Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, and may differ from amounts reported in the financial highlights. | |
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 MSCI World Index is a free-float-adjusted market capitalization index that is designed to measure global developed markets equity performance. The MSCI World Index consists of 23 developed markets country indices. The GDMA Index is a blended index constructed by the Investment Manager that is comprised of 50% of MSCI World Index and 50% Bloomberg Barclays Global Aggregate® Index and is rebalanced monthly. The Bloomberg Barclays Global Aggregate 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. 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. |
12 Semi-Annual Report
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, 2018 through June 30, 2018 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 other mutual 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 participating insurance companies. Such charges will have the effect of reducing account value.
Semi-Annual Report 13
Portfolio | Beginning Account Value 1/1/18 | Ending Account Value 6/30/18 | Expenses Paid During Period* 1/1/18 - 6/30/18 | Annualized Expense Ratio During Period 1/1/18 - 6/30/18 | ||||||
US Strategic Equity | ||||||||||
Service Shares | ||||||||||
Actual | $1,000.00 | $ | 1,028.50 | $5.03 | 1.00% | |||||
Hypothetical (5% Return Before Expenses) | $1,000.00 | $ | 1,019.84 | $5.01 | 1.00% | |||||
US Small-Mid Cap Equity | ||||||||||
Service Shares | ||||||||||
Actual | $1,000.00 | $ | 1,039.60 | $5.82 | 1.15% | |||||
Hypothetical (5% Return Before Expenses) | $1,000.00 | $ | 1,019.09 | $5.76 | 1.15% | |||||
International Equity | ||||||||||
Service Shares | ||||||||||
Actual | $1,000.00 | $ | 970.50 | $5.42 | 1.11% | |||||
Hypothetical (5% Return Before Expenses) | $1,000.00 | $ | 1,019.29 | $5.56 | 1.11% | |||||
Emerging Markets Equity | ||||||||||
Service Shares | ||||||||||
Actual | $1,000.00 | $ | 879.20 | $6.29 | 1.35% | |||||
Hypothetical (5% Return Before Expenses) | $1,000.00 | $ | 1,018.10 | $6.76 | 1.35% | |||||
Investor Shares | ||||||||||
Actual | $1,000.00 | $ | 880.30 | $5.13 | 1.10% | |||||
Hypothetical (5% Return Before Expenses) | $1,000.00 | $ | 1,019.34 | $5.51 | 1.10% | |||||
Global Dynamic Multi-Asset | ||||||||||
Service Shares | ||||||||||
Actual | $1,000.00 | $ | 994.10 | $5.19 | 1.05% | |||||
Hypothetical (5% Return Before Expenses) | $1,000.00 | $ | 1,019.59 | $5.26 | 1.05% |
* | Expenses are equal to the annualized expense ratio, net of expenses waivers and reimbursements, of each Share class multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period). |
14 Semi-Annual Report
Lazard Retirement Series, Inc. Portfolio Holdings Presented by Sector June 30, 2018 (unaudited)
Sector* | Lazard Retirement US Strategic Equity Portfolio | Lazard Retirement US Small-Mid Cap Equity Portfolio | Lazard Retirement International Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | |||||||||||||
Consumer Discretionary | 10.7 | % | 10.7 | % | 13.0 | % | 8.3 | % | |||||||||
Consumer Staples | 6.5 | 2.3 | 9.4 | 6.7 | |||||||||||||
Energy | 7.6 | 4.1 | 7.6 | 8.2 | |||||||||||||
Financials | 14.2 | 18.1 | 17.6 | 27.8 | |||||||||||||
Health Care | 14.1 | 8.9 | 8.7 | 0.6 | |||||||||||||
Industrials | 11.2 | 18.9 | 18.9 | 4.6 | |||||||||||||
Information Technology | 28.9 | 13.1 | 7.7 | 24.0 | |||||||||||||
Materials | 2.6 | 8.2 | 4.9 | 4.7 | |||||||||||||
Real Estate | 1.7 | 10.5 | 2.4 | — | |||||||||||||
Telecommunication Services | — | — | 4.6 | 11.0 | |||||||||||||
Utilities | — | 2.6 | 1.4 | 1.9 | |||||||||||||
Short-Term Investments | 2.5 | 2.6 | 3.8 | 2.2 | |||||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Sector* | Lazard Retirement Global Dynamic Multi-Asset Portfolio | ||||||||||||||||
Consumer Discretionary | 9.9 | % | |||||||||||||||
Consumer Staples | 6.7 | ||||||||||||||||
Energy | 4.2 | ||||||||||||||||
Financials | 15.9 | ||||||||||||||||
Health Care | 9.0 | ||||||||||||||||
Industrials | 11.1 | ||||||||||||||||
Information Technology | 13.5 | ||||||||||||||||
Materials | 3.0 | ||||||||||||||||
Real Estate | 2.9 | ||||||||||||||||
Telecommunication Services | 2.4 | ||||||||||||||||
Utilities | 2.6 | ||||||||||||||||
Municipal | 0.4 | ||||||||||||||||
Sovereign Debt | 12.4 | ||||||||||||||||
US Government Securities | 0.2 | ||||||||||||||||
US Treasury Securities | 3.0 | ||||||||||||||||
Short-Term Investments | 2.8 | ||||||||||||||||
Total Investments | 100.0 | % |
* | Represents percentage of total investments. |
Semi-Annual Report 15
Lazard Retirement Series, Inc. Portfolios of Investments June 30, 2018 (unaudited)
Description | Shares | Fair Value | ||||||
Construction Materials | 0.8% | ||||||||
Vulcan Materials Co. | 550 | $ | 70,983 | |||||
Electrical Equipment | 2.0% | ||||||||
Eaton Corp. PLC | 1,925 | 143,874 | ||||||
Rockwell Automation, Inc. | 250 | 41,558 | ||||||
185,432 | ||||||||
Energy Equipment & Services | 1.8% | ||||||||
Schlumberger, Ltd. | 2,465 | 165,229 | ||||||
Equity Real Estate Investment Trusts (REITs) | 1.7% | ||||||||
Prologis, Inc. | 2,340 | 153,715 | ||||||
Health Care Equipment & Supplies | 5.0% | ||||||||
Danaher Corp. | 1,160 | 114,469 | ||||||
Medtronic PLC | 4,130 | 353,569 | ||||||
468,038 | ||||||||
Health Care Providers & Services | 1.0% | ||||||||
Humana, Inc. | 305 | 90,777 | ||||||
Hotels, Restaurants & Leisure | 3.2% | ||||||||
McDonald’s Corp. | 1,095 | 171,576 | ||||||
Starbucks Corp. | 2,550 | 124,567 | ||||||
296,143 | ||||||||
Household Durables | 0.8% | ||||||||
Whirlpool Corp. | 480 | 70,190 | ||||||
Industrial Conglomerates | 1.0% | ||||||||
Honeywell International, Inc. | 655 | 94,353 | ||||||
Insurance | 1.3% | ||||||||
Aon PLC | 895 | 122,767 | ||||||
Internet Software & Services | 7.2% | ||||||||
Alphabet, Inc., Class A (*) | 411 | 464,097 | ||||||
Alphabet, Inc., Class C (*) | 38 | 42,395 | ||||||
eBay, Inc. (*) | 4,445 | 161,175 | ||||||
667,667 | ||||||||
IT Services | 4.4% | ||||||||
CoreLogic, Inc. (*) | 1,040 | 53,976 | ||||||
DXC Technology Co. | 1,415 | 114,063 | ||||||
Visa, Inc., Class A | 1,295 | 171,523 | ||||||
Worldpay, Inc., Class A (*) | 840 | 68,695 | ||||||
408,257 |
The accompanying notes are an integral part of these financial statements.
16 Semi-Annual Report
Description | Shares | Fair Value | ||||||
Lazard Retirement US Strategic Equity Portfolio (concluded) | ||||||||
Machinery | 3.3% | ||||||||
Deere & Co. | 570 | $ | 79,686 | |||||
Gates Industrial Corp. PLC | 2,890 | 47,020 | ||||||
Kennametal, Inc. | 2,210 | 79,339 | ||||||
Wabtec Corp. | 1,000 | 98,580 | ||||||
304,625 | ||||||||
Media | 0.8% | ||||||||
The Madison Square Garden Co., Class A (*) | 230 | 71,344 | ||||||
Metals & Mining | 0.8% | ||||||||
Steel Dynamics, Inc. | 1,650 | 75,818 | ||||||
Multiline Retail | 1.1% | ||||||||
Dollar Tree, Inc. (*) | 1,205 | 102,425 | ||||||
Oil, Gas & Consumable Fuels | 5.8% | ||||||||
ConocoPhillips | 3,650 | 254,113 | ||||||
EOG Resources, Inc. | 1,485 | 184,778 | ||||||
Pioneer Natural Resources Co. | 540 | 102,190 | ||||||
541,081 | ||||||||
Pharmaceuticals | 6.8% | ||||||||
Johnson & Johnson | 1,695 | 205,672 | ||||||
Pfizer, Inc. | 7,550 | 273,914 | ||||||
Zoetis, Inc. | 1,738 | 148,060 | ||||||
627,646 | ||||||||
Road & Rail | 1.3% | ||||||||
Norfolk Southern Corp. | 810 | 122,205 | ||||||
Semiconductors & Semiconductor Equipment | 3.3% | ||||||||
Analog Devices, Inc. | 1,718 | 164,791 | ||||||
Skyworks Solutions, Inc. | 1,420 | 137,243 | ||||||
302,034 |
Description | Shares | Fair Value | ||||||
Software | 3.5% | ||||||||
Microsoft Corp. | 3,250 | $ | 320,482 | |||||
Specialty Retail | 3.7% | ||||||||
AutoZone, Inc. (*) | 120 | 80,512 | ||||||
Lowe’s Cos., Inc. | 2,735 | 261,384 | ||||||
341,896 | ||||||||
Technology Hardware, Storage & Peripherals | 4.3% | ||||||||
Apple, Inc. | 2,139 | 395,950 | ||||||
Total Common Stocks (Cost $7,571,268) | 9,003,590 | |||||||
Short-Term Investments | 2.5% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield) (Cost $234,296) | 234,296 | 234,296 | ||||||
Total Investments | 99.8% (Cost $7,805,564) | $ | 9,237,886 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.2% | 14,557 | |||||||
Net Assets | 100.0% | $ | 9,252,443 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 17
Description | Shares | Fair Value | ||||||
Construction & Engineering | 1.1% | ||||||||
Dycom Industries, Inc. (*) | 7,695 | $ | 727,254 | |||||
Construction Materials | 1.2% | ||||||||
Eagle Materials, Inc. | 7,725 | 810,893 | ||||||
Containers & Packaging | 1.8% | ||||||||
Graphic Packaging Holding Co. | 80,200 | 1,163,702 | ||||||
Electric Utilities | 1.5% | ||||||||
PNM Resources, Inc. | 25,390 | 987,671 | ||||||
Electrical Equipment | 5.6% | ||||||||
Atkore International Group, Inc. (*) | 49,860 | 1,035,592 | ||||||
EnerSys | 9,290 | 693,405 | ||||||
Generac Holdings, Inc. (*) | 14,005 | 724,479 | ||||||
Regal Beloit Corp. | 14,440 | 1,181,192 | ||||||
3,634,668 | ||||||||
Electronic Equipment, Instruments & Components | 2.1% | ||||||||
Belden, Inc. | 10,705 | 654,290 | ||||||
FLIR Systems, Inc. | 13,530 | 703,154 | ||||||
1,357,444 | ||||||||
Energy Equipment & Services | 4.1% | ||||||||
NCS Multistage Holdings, Inc. (*) | 37,910 | 550,832 | ||||||
Oceaneering International, Inc. | 27,595 | 702,569 | ||||||
Oil States International, Inc. (*) | 26,950 | 865,095 | ||||||
U.S. Silica Holdings, Inc. | 20,590 | 528,957 | ||||||
2,647,453 | ||||||||
Equity Real Estate Investment Trusts (REITs) | 10.5% | ||||||||
Alexandria Real Estate Equities, Inc. | 8,490 | 1,071,183 | ||||||
Brandywine Realty Trust | 60,295 | 1,017,780 | ||||||
Camden Property Trust | 11,740 | 1,069,866 | ||||||
DCT Industrial Trust, Inc. | 17,275 | 1,152,761 | ||||||
Hudson Pacific Properties, Inc. | 23,350 | 827,290 | ||||||
Invitation Homes, Inc. | 35,700 | 823,242 | ||||||
Kilroy Realty Corp. | 11,540 | 872,886 | ||||||
6,835,008 | ||||||||
Food & Staples Retailing | 1.0% | ||||||||
Sprouts Farmers Market, Inc. (*) | 30,855 | 680,970 | ||||||
Food Products | 1.3% | ||||||||
The Simply Good Foods Co. (*) | 57,895 | 836,004 |
The accompanying notes are an integral part of these financial statements.
18 Semi-Annual Report
Description | Shares | Fair Value | ||||||
Lazard Retirement US Small-Mid Cap Equity Portfolio (concluded) | ||||||||
Health Care Equipment & Supplies | 2.6% | ||||||||
Avanos Medical, Inc. (*) | 8,100 | $ | 463,725 | |||||
Lantheus Holdings, Inc. (*) | 24,915 | 362,513 | ||||||
STERIS PLC | 8,075 | 847,956 | ||||||
1,674,194 | ||||||||
Health Care Providers & Services | 0.8% | ||||||||
Molina Healthcare, Inc. (*) | 5,175 | 506,840 | ||||||
Health Care Technology | 1.8% | ||||||||
Cotiviti Holdings, Inc. (*) | 15,190 | 670,335 | ||||||
Evolent Health, Inc., Class A (*) | 23,765 | 500,253 | ||||||
1,170,588 | ||||||||
Hotels, Restaurants & Leisure | 2.0% | ||||||||
Penn National Gaming, Inc. (*) | 18,575 | 623,934 | ||||||
The Cheesecake Factory, Inc. | 12,410 | 683,295 | ||||||
1,307,229 | ||||||||
Household Durables | 2.9% | ||||||||
Leggett & Platt, Inc. | 25,005 | 1,116,223 | ||||||
Whirlpool Corp. | 5,450 | 796,954 | ||||||
1,913,177 | ||||||||
Independent Power & Renewable Electricity Producers | 1.1% | ||||||||
Pattern Energy Group, Inc., Class A | 37,990 | 712,313 | ||||||
Insurance | 3.3% | ||||||||
Arch Capital Group, Ltd. (*) | 39,675 | 1,049,801 | ||||||
Reinsurance Group of America, Inc. | 8,215 | 1,096,538 | ||||||
2,146,339 | ||||||||
Internet Software & Services | 1.5% | ||||||||
j2 Global, Inc. | 11,145 | 965,268 | ||||||
IT Services | 3.2% | ||||||||
CoreLogic, Inc. (*) | 21,084 | 1,094,260 | ||||||
Leidos Holdings, Inc. | 16,800 | 991,200 | ||||||
2,085,460 | ||||||||
Life Sciences Tools & Services | 1.2% | ||||||||
Cambrex Corp. (*) | 15,185 | 794,175 | ||||||
Machinery | 5.6% | ||||||||
Gates Industrial Corp. PLC | 63,105 | 1,026,718 | ||||||
Kennametal, Inc. | 26,415 | 948,299 | ||||||
TriMas Corp. (*) | 24,665 | 725,151 | ||||||
Wabtec Corp. | 9,615 | 947,847 | ||||||
3,648,015 |
Description | Shares | Fair Value | ||||||
Media | 2.9% | ||||||||
Emerald Expositions Events, Inc. | 35,750 | $ | 736,450 | |||||
Scholastic Corp. | 26,785 | 1,186,843 | ||||||
1,923,293 | ||||||||
Pharmaceuticals | 1.3% | ||||||||
Catalent, Inc. (*) | 21,010 | 880,109 | ||||||
Professional Services | 1.0% | ||||||||
FTI Consulting, Inc. (*) | 10,540 | 637,459 | ||||||
Semiconductors & Semiconductor Equipment | 2.7% | ||||||||
Cypress Semiconductor Corp. | 55,095 | 858,380 | ||||||
Versum Materials, Inc. | 23,665 | 879,155 | ||||||
1,737,535 | ||||||||
Software | 2.0% | ||||||||
Bottomline Technologies de, Inc. (*) | 15,990 | 796,781 | ||||||
CyberArk Software, Ltd. (*) | 8,280 | 521,309 | ||||||
1,318,090 | ||||||||
Specialty Retail | 1.1% | ||||||||
Floor & Decor Holdings, Inc., Class A (*) | 14,505 | 715,532 | ||||||
Textiles, Apparel & Luxury Goods | 0.7% | ||||||||
Steven Madden, Ltd. | 8,520 | 452,412 | ||||||
Trading Companies & Distributors | 0.9% | ||||||||
DXP Enterprises, Inc. (*) | 15,770 | 602,414 | ||||||
Total Common Stocks (Cost $56,332,267) | 63,225,147 | |||||||
Short-Term Investments | 2.6% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield) (Cost $1,678,801) | 1,678,801 | 1,678,801 | ||||||
Total Investments | 99.5% (Cost $58,011,068) | $ | 64,903,948 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.5% | 294,573 | |||||||
Net Assets | 100.0% | $ | 65,198,521 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 19
Description | Shares | Fair Value | ||||||
Israel | 0.0% | ||||||||
Bank Leumi Le-Israel BM | 11,989 | $ | 71,008 | |||||
Japan | 17.2% | ||||||||
Daiwa House Industry Co., Ltd. | 145,192 | 4,943,574 | ||||||
Don Quijote Holdings Co., Ltd. | 111,300 | 5,340,050 | ||||||
Isuzu Motors, Ltd. | 149,300 | 1,980,257 | ||||||
Kao Corp. | 33,920 | 2,585,288 | ||||||
KDDI Corp. | 95,700 | 2,616,493 | ||||||
Makita Corp. | 89,000 | 3,981,052 | ||||||
Nexon Co., Ltd. (*) | 184,100 | 2,670,345 | ||||||
Shin-Etsu Chemical Co., Ltd. | 25,700 | 2,279,843 | ||||||
Sony Corp. | 44,800 | 2,298,510 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 84,100 | 3,259,035 | ||||||
United Arrows, Ltd. | 5,900 | 220,034 | ||||||
Yamaha Corp. | 58,900 | 3,055,588 | ||||||
35,230,069 | ||||||||
Luxembourg | 0.8% | ||||||||
Tenaris SA | 88,656 | 1,616,742 | ||||||
Netherlands | 6.4% | ||||||||
ABN AMRO Group NV | 50,435 | 1,305,320 | ||||||
Royal Dutch Shell PLC, A Shares | 200,573 | 6,950,764 | ||||||
Wolters Kluwer NV | 88,794 | 4,998,074 | ||||||
13,254,158 | ||||||||
Norway | 2.8% | ||||||||
Equinor ASA | 94,444 | 2,499,594 | ||||||
Telenor ASA | 161,128 | 3,302,488 | ||||||
5,802,082 | ||||||||
Singapore | 2.1% | ||||||||
DBS Group Holdings, Ltd. | 149,460 | 2,902,167 | ||||||
NetLink NBN Trust | 2,457,100 | 1,335,447 | ||||||
4,237,614 | ||||||||
Spain | 1.4% | ||||||||
Red Electrica Corporacion SA | 139,005 | 2,828,128 | ||||||
Sweden | 3.6% | ||||||||
Assa Abloy AB, Class B | 186,912 | 3,977,883 | ||||||
Epiroc AB, Class A (*) | 64,431 | 676,124 | ||||||
Nordea Bank AB | 284,891 | 2,741,033 | ||||||
7,395,040 | ||||||||
Switzerland | 6.8% | ||||||||
Ferguson PLC | 62,363 | 5,060,381 | ||||||
Julius Baer Group, Ltd. | 43,860 | 2,576,650 | ||||||
Novartis AG | 84,049 | 6,366,253 | ||||||
14,003,284 |
The accompanying notes are an integral part of these financial statements.
20 Semi-Annual Report
Description | Shares | Fair Value | ||||||
Lazard Retirement International Equity Portfolio (concluded) | ||||||||
Taiwan | 0.9% | ||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR | 52,800 | $ | 1,930,368 | |||||
Turkey | 1.1% | ||||||||
Turkcell Iletisim Hizmetleri AS | 839,328 | 2,215,164 | ||||||
United Kingdom | 15.2% | ||||||||
British American Tobacco PLC | 88,901 | 4,489,850 | ||||||
Compass Group PLC | 194,072 | 4,134,552 | ||||||
Diageo PLC | 59,206 | 2,125,241 | ||||||
Howden Joinery Group PLC | 263,810 | 1,865,816 | ||||||
Informa PLC | 247,142 | 2,722,890 | ||||||
Melrose Industries PLC | 792,020 | 2,222,583 | ||||||
Prudential PLC | 292,139 | 6,674,996 | ||||||
RELX PLC | 38,921 | 833,240 | ||||||
RSA Insurance Group PLC | 236,762 | 2,122,470 | ||||||
Unilever PLC | 74,224 | 4,105,847 | ||||||
31,297,485 | ||||||||
United States | 4.4% | ||||||||
Aon PLC | 32,475 | 4,454,596 | ||||||
Medtronic PLC | 52,900 | 4,528,769 | ||||||
8,983,365 | ||||||||
Total Common Stocks (Cost $170,043,409) | 195,396,461 |
Description | Shares | Fair Value | ||||||
Preferred Stocks | 0.7% | ||||||||
Germany | 0.7% | ||||||||
Volkswagen AG (Cost $2,003,720) | 9,353 | $ | 1,553,112 | |||||
Short-Term Investments | 3.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield) (Cost $7,792,028) | 7,792,028 | 7,792,028 | ||||||
Total Investments | 99.7% (Cost $179,839,157) | $ | 204,741,601 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.3% | 569,848 | |||||||
Net Assets | 100.0% | $ | 205,311,449 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 21
Description | Shares | Fair Value | ||||||
India | 9.0% | ||||||||
Axis Bank, Ltd. | 2,369,138 | $ | 17,648,667 | |||||
Bajaj Auto, Ltd. | 210,031 | 8,610,148 | ||||||
HCL Technologies, Ltd. | 705,262 | 9,514,428 | ||||||
Hero MotoCorp, Ltd. | 308,534 | 15,632,466 | ||||||
Infosys, Ltd. Sponsored ADR | 196,700 | 3,821,881 | ||||||
Punjab National Bank (*) | 4,571,410 | 5,072,759 | ||||||
Tata Consultancy Services, Ltd. | 1,186,986 | 31,944,064 | ||||||
92,244,413 | ||||||||
Indonesia | 4.8% | ||||||||
PT Astra International Tbk | 20,971,700 | 9,636,661 | ||||||
PT Bank Mandiri (Persero) Tbk | 37,441,258 | 17,794,725 | ||||||
PT Semen Indonesia (Persero) Tbk | 10,217,400 | 5,073,448 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR | 618,500 | 16,087,185 | ||||||
48,592,019 | ||||||||
Malaysia | 0.6% | ||||||||
British American Tobacco Malaysia Berhad | 707,100 | 6,083,707 | ||||||
Mexico | 3.6% | ||||||||
America Movil SAB de CV, Class L Sponsored ADR | 1,320,432 | 21,998,397 | ||||||
Grupo Mexico SAB de CV, Series B | 2,596,897 | 7,373,474 | ||||||
Kimberly-Clark de Mexico SAB de CV, Series A | 4,141,762 | 6,996,695 | ||||||
36,368,566 | ||||||||
Pakistan | 1.5% | ||||||||
Habib Bank, Ltd. | 2,671,570 | 3,660,053 | ||||||
Oil & Gas Development Co., Ltd. | 3,007,000 | 3,852,234 | ||||||
Pakistan Petroleum, Ltd. | 4,532,002 | 8,016,660 | ||||||
15,528,947 | ||||||||
Philippines | 0.6% | ||||||||
PLDT, Inc. Sponsored ADR | 272,000 | 6,359,360 | ||||||
Russia | 10.6% | ||||||||
ALROSA PAO | 11,186,274 | 17,785,471 | ||||||
Gazprom PJSC Sponsored ADR | 2,462,570 | 10,812,571 | ||||||
LUKOIL PJSC Sponsored ADR | 261,247 | 17,830,664 | ||||||
Magnit PJSC Sponsored GDR (London) | 479,321 | 8,611,739 | ||||||
Magnit PJSC Sponsored GDR (United States) | 2,884 | 51,912 | ||||||
Mobile TeleSystems PJSC Sponsored ADR | 1,669,220 | 14,739,212 | ||||||
Sberbank of Russia PJSC | 11,087,621 | 38,389,236 | ||||||
108,220,805 |
The accompanying notes are an integral part of these financial statements.
22 Semi-Annual Report
Description | Shares | Fair Value | ||||||
Lazard Retirement Emerging Markets Equity Portfolio (concluded) | ||||||||
South Africa | 9.7% | ||||||||
Imperial Holdings, Ltd. | 741,806 | $ | 10,581,601 | |||||
Life Healthcare Group Holdings, Ltd. | 3,716,876 | 6,737,967 | ||||||
Nedbank Group, Ltd. | 550,622 | 10,009,995 | ||||||
PPC, Ltd. (*) | 7,743,992 | 4,081,800 | ||||||
Sanlam, Ltd. | 1,837,285 | 9,317,978 | ||||||
Shoprite Holdings, Ltd. | 1,098,098 | 17,607,416 | ||||||
Standard Bank Group, Ltd. | 849,394 | 11,832,872 | ||||||
The Bidvest Group, Ltd. | 761,606 | 10,925,128 | ||||||
Vodacom Group, Ltd. | 1,180,752 | 10,547,856 | ||||||
Woolworths Holdings, Ltd. | 1,781,958 | 7,191,932 | ||||||
98,834,545 | ||||||||
South Korea | 15.6% | ||||||||
Coway Co., Ltd. | 165,071 | 12,823,050 | ||||||
Hanwha Life Insurance Co., Ltd. | 1,456,114 | 6,908,188 | ||||||
Hyundai Mobis Co., Ltd. | 73,708 | 14,005,300 | ||||||
KB Financial Group, Inc. | 281,905 | 13,340,807 | ||||||
KT&G Corp. | 94,081 | 9,021,892 | ||||||
Samsung Electronics Co., Ltd. | 1,091,450 | 45,574,539 | ||||||
Shinhan Financial Group Co., Ltd. | 558,248 | 21,608,851 | ||||||
SK Hynix, Inc. | 473,662 | 36,308,059 | ||||||
159,590,686 | ||||||||
Taiwan | 5.0% | ||||||||
Hon Hai Precision Industry Co., Ltd. | 4,905,151 | 13,412,548 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 5,273,642 | 37,520,121 | ||||||
50,932,669 |
Description | Shares | Fair Value | ||||||
Thailand | 1.3% | ||||||||
Kasikornbank Public Co. Ltd. | 976,836 | $ | 5,883,124 | |||||
The Siam Cement Public Co. Ltd. (‡) | 570,050 | 7,119,271 | ||||||
13,002,395 | ||||||||
Turkey | 4.2% | ||||||||
Akbank Turk AS | 4,064,274 | 6,632,128 | ||||||
KOC Holding AS | 2,869,436 | 8,868,434 | ||||||
Tupras Turkiye Petrol Rafinerileri AS | 532,150 | 12,508,043 | ||||||
Turk Telekomunikasyon AS (*) | 7,491,295 | 8,132,105 | ||||||
Turkiye Is Bankasi AS, C Shares | 5,314,850 | 6,575,082 | ||||||
42,715,792 | ||||||||
Total Common Stocks (Cost $966,263,886) | 1,000,305,912 | |||||||
Short-Term Investments | 2.2% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield) (Cost $22,788,405) | 22,788,405 | 22,788,405 | ||||||
Total Investments | 100.1% (Cost $989,052,291) | $ | 1,023,094,317 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.1)% | (1,065,509 | ) | ||||||
Net Assets | 100.0% | $ | 1,022,028,808 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 23
Description | Shares | Fair Value | ||||||
Teck Resources, Ltd., Class B | 23,494 | $ | 598,497 | |||||
The Toronto-Dominion Bank | 38,518 | 2,228,968 | ||||||
14,744,526 | ||||||||
Denmark | 0.3% | ||||||||
Danske Bank A/S | 22,675 | 708,705 | ||||||
Dfds A/S | 2,438 | 155,567 | ||||||
H Lundbeck A/S | 4,129 | 289,922 | ||||||
1,154,194 | ||||||||
Faeroe Islands | 0.1% | ||||||||
Bakkafrost P/F | 5,353 | 297,147 | ||||||
Finland | 0.3% | ||||||||
Fortum OYJ | 20,905 | 498,637 | ||||||
Sampo Oyj, A Shares ADR | 34,975 | 847,619 | ||||||
1,346,256 | ||||||||
France | 2.4% | ||||||||
AXA SA | 43,100 | 1,055,917 | ||||||
Engie SA | 53,744 | 822,492 | ||||||
Faurecia SA | 3,470 | 246,927 | ||||||
Hermes International | 397 | 242,647 | ||||||
Ipsen SA | 1,494 | 234,158 | ||||||
Peugeot SA | 16,102 | 367,178 | ||||||
Schneider Electric SE | 7,445 | 619,265 | ||||||
Societe Generale SA | 2,526 | 106,364 | ||||||
Thales SA | 1,816 | 233,809 | ||||||
TOTAL SA | 70,128 | 4,264,578 | ||||||
Ubisoft Entertainment SA ADR (*) | 59,915 | 1,310,041 | ||||||
Veolia Environnement SA | 7,439 | 159,147 | ||||||
9,662,523 | ||||||||
Germany | 1.7% | ||||||||
Allianz SE | 3,268 | 675,294 | ||||||
Continental AG | 2,358 | 538,958 | ||||||
Continental AG Sponsored ADR | 21,015 | 956,813 | ||||||
Covestro AG | 16,584 | 1,478,739 | ||||||
Deutsche Lufthansa AG | 46,355 | 1,114,723 | ||||||
Deutsche Telekom AG | 10,929 | 169,611 | ||||||
Rheinmetall AG | 3,753 | 414,445 | ||||||
RWE AG | 6,937 | 158,109 | ||||||
SAP SE | 1,361 | 157,232 | ||||||
Schaeffler AG (Preference Shares) | 36,072 | 469,063 | ||||||
Siltronic AG | 887 | 126,822 | ||||||
Symrise AG ADR | 39,890 | 872,195 | ||||||
7,132,004 | ||||||||
Hong Kong | 1.3% | ||||||||
AIA Group, Ltd. Sponsored ADR | 37,190 | 1,302,579 | ||||||
CK Asset Holdings, Ltd. | 86,804 | 685,857 |
The accompanying notes are an integral part of these financial statements.
24 Semi-Annual Report
Description | Shares | Fair Value | ||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Hang Seng Bank, Ltd. Sponsored ADR | 49,290 | $ | 1,237,179 | |||||
Kerry Properties, Ltd. | 54,500 | 260,378 | ||||||
Swire Pacific, Ltd., Class A | 35,500 | 375,091 | ||||||
Swire Properties, Ltd. | 94,000 | 347,414 | ||||||
The Wharf Holdings, Ltd. | 76,000 | 243,435 | ||||||
Wharf Real Estate Investment Co., Ltd. | 25,875 | 183,745 | ||||||
Wheelock & Co., Ltd. | 125,765 | 874,174 | ||||||
5,509,852 | ||||||||
Ireland | 0.1% | ||||||||
Shire PLC ADR | 3,730 | 629,624 | ||||||
Israel | 0.5% | ||||||||
Bank Leumi Le-Israel BM | 61,252 | 362,783 | ||||||
Israel Discount Bank, Ltd., ADR | 27,965 | 842,026 | ||||||
Israel Discount Bank, Ltd., Class A | 132,643 | 387,948 | ||||||
Nice, Ltd. (*) | 2,553 | 264,968 | ||||||
1,857,725 | ||||||||
Italy | 1.0% | ||||||||
Assicurazioni Generali SpA | 9,033 | 151,253 | ||||||
Enel SpA | 337,100 | 1,867,578 | ||||||
Intesa Sanpaolo SpA | 415,472 | 1,233,899 | ||||||
Poste Italiane SpA | 27,228 | 227,330 | ||||||
Terna SpA | 37,694 | 203,398 | ||||||
UniCredit SpA | 18,949 | 315,151 | ||||||
3,998,609 | ||||||||
Japan | 5.9% | ||||||||
Amano Corp. | 10,300 | 243,252 | ||||||
Central Japan Railway Co. | 1,400 | 290,270 | ||||||
Daicel Corp. | 52,333 | 578,365 | ||||||
Daito Trust Construction Co., Ltd. | 1,900 | 308,776 | ||||||
Daiwa House Industry Co., Ltd. ADR | 31,750 | 1,082,675 | ||||||
Dexerials Corp. | 12,400 | 123,616 | ||||||
East Japan Railway Co. | 14,700 | 1,407,863 | ||||||
Haseko Corp. | 31,300 | 431,930 | ||||||
Japan Post Holdings Co., Ltd. | 84,800 | 928,401 | ||||||
Juki Corp. | 7,600 | 76,387 | ||||||
Kamigumi Co., Ltd. | 16,100 | 333,761 | ||||||
Kao Corp. | 2,900 | 221,030 | ||||||
Kao Corp. ADR | 60,350 | 922,812 | ||||||
KDDI Corp. | 20,090 | 549,272 | ||||||
Keyence Corp. | 300 | 169,196 | ||||||
Kinden Corp. | 9,100 | 148,556 | ||||||
Kobe Bussan Co., Ltd. | 2,700 | 132,997 | ||||||
Marvelous, Inc. | 17,800 | 146,499 |
Description | Shares | Fair Value | ||||||
Maxell Holdings, Ltd. | 7,100 | $ | 119,457 | |||||
Miraca Holdings, Inc. | 5,000 | 148,869 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 258,300 | 1,465,020 | ||||||
Mitsui Chemicals, Inc. | 4,100 | 108,837 | ||||||
MS&AD Insurance Group Holdings, Inc. | 34,246 | 1,063,732 | ||||||
Nikkiso Co., Ltd. | 18,200 | 184,343 | ||||||
Nishimatsu Construction Co., Ltd. | 5,100 | 146,214 | ||||||
Nissan Motor Co., Ltd. | 17,500 | 170,055 | ||||||
Nitto Denko Corp. | 1,700 | 128,436 | ||||||
Nomura Holdings, Inc. | 54,300 | 262,858 | ||||||
NTT DOCOMO, Inc. | 77,882 | 1,983,552 | ||||||
Okumura Corp. | 5,500 | 179,332 | ||||||
ORIX Corp. | 39,800 | 628,583 | ||||||
Ryohin Keikaku Co., Ltd. ADR | 18,665 | 1,308,043 | ||||||
Seven & I Holdings Co., Ltd. | 10,100 | 440,231 | ||||||
Shikoku Electric Power Co., Inc. | 33,300 | 445,328 | ||||||
Shin-Etsu Chemical Co., Ltd. | 2,100 | 186,291 | ||||||
Sompo Holdings, Inc. | 30,396 | 1,227,953 | ||||||
Start Today Co., Ltd. | 4,700 | 170,154 | ||||||
Subaru Corp. | 7,800 | 226,924 | ||||||
Sumitomo Heavy Industries, Ltd. | 4,100 | 137,957 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 9,800 | 388,215 | ||||||
Takeuchi Manufacturing Co., Ltd. | 6,600 | 138,530 | ||||||
Teijin, Ltd. | 10,700 | 196,074 | ||||||
The 77 Bank, Ltd. | 8,600 | 187,430 | ||||||
The Chiba Bank, Ltd. | 25,800 | 181,782 | ||||||
The Chugoku Electric Power Co., Inc. | 12,400 | 160,256 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 44,900 | 798,649 | ||||||
Tokyo Gas Co., Ltd. | 48,400 | 1,284,338 | ||||||
Tokyu Fudosan Holdings Corp. | 23,900 | 168,242 | ||||||
Topcon Corp. | 8,600 | 147,236 | ||||||
Toyobo Co., Ltd. | 12,600 | 209,507 | ||||||
V Technology Co., Ltd. | 800 | 147,664 | ||||||
Yamaha Corp. Sponsored ADR | 19,400 | 1,021,216 | ||||||
23,856,966 | ||||||||
Malta | 0.1% | ||||||||
Kindred Group PLC | 19,388 | 243,905 | ||||||
Netherlands | 0.9% | ||||||||
Euronext NV | 3,313 | 210,255 | ||||||
Koninklijke Ahold Delhaize NV | 15,688 | 375,322 | ||||||
Royal Dutch Shell PLC, A Shares | 33,832 | 1,172,432 | ||||||
Wolters Kluwer NV | 1,737 | 97,773 | ||||||
Wolters Kluwer NV Sponsored ADR | 30,365 | 1,705,299 | ||||||
3,561,081 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 25
Description | Shares | Fair Value | ||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
New Zealand | 0.0% | ||||||||
Spark New Zealand, Ltd. | 75,228 | $ | 189,907 | |||||
Norway | 1.8% | ||||||||
Aker BP ASA | 5,763 | 212,252 | ||||||
DNO ASA (*) | 232,455 | 427,757 | ||||||
Equinor ASA | 167,518 | 4,433,600 | ||||||
Leroy Seafood Group ASA | 63,237 | 425,991 | ||||||
Marine Harvest ASA | 16,665 | 331,822 | ||||||
Salmar ASA | 8,070 | 338,630 | ||||||
Telenor ASA | 54,113 | 1,109,103 | ||||||
7,279,155 | ||||||||
Portugal | 0.1% | ||||||||
Galp Energia SGPS SA | 12,687 | 241,243 | ||||||
Russia | 0.1% | ||||||||
Evraz PLC | 73,582 | 493,516 | ||||||
Singapore | 0.9% | ||||||||
Best World International, Ltd. | 153,100 | 139,356 | ||||||
City Developments, Ltd. | 24,400 | 196,202 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 77,900 | 663,395 | ||||||
Oversea-Chinese Banking Corp., Ltd. ADR | 54,715 | 935,353 | ||||||
Singapore Airlines, Ltd. | 56,100 | 439,130 | ||||||
Singapore Technologies Engineering, Ltd. | 183,800 | 442,857 | ||||||
UOL Group, Ltd. | 105,600 | 588,972 | ||||||
Venture Corp., Ltd. | 12,400 | 161,610 | ||||||
3,566,875 | ||||||||
Spain | 0.1% | ||||||||
Amadeus IT Group SA | 3,147 | 247,956 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 18,940 | 133,773 | ||||||
Corporacion Financiera Alba SA | 1,750 | 101,643 | ||||||
Mapfre SA | 39,803 | 119,779 | ||||||
603,151 | ||||||||
Sweden | 1.1% | ||||||||
Assa Abloy AB ADR | 69,565 | 733,911 | ||||||
Atlas Copco AB, Class B | 7,651 | 200,089 | ||||||
Axfood AB | 27,363 | 526,116 | ||||||
Boliden AB | 14,673 | 474,802 | ||||||
Electrolux AB, Series B | 21,700 | 493,839 | ||||||
Hexagon AB ADR | 16,140 | 908,521 | ||||||
Nordea Bank AB Sponsored ADR | 58,560 | 558,662 | ||||||
Swedish Orphan Biovitrum AB (*) | 10,225 | 222,845 | ||||||
Volvo AB, Class B | 14,843 | 236,429 | ||||||
4,355,214 |
Description | Shares | Fair Value | ||||||
Switzerland | 1.8% | ||||||||
Adecco Group AG | 2,171 | $ | 128,259 | |||||
Georg Fischer AG | 283 | 362,670 | ||||||
Julius Baer Group, Ltd. ADR | 56,955 | 662,386 | ||||||
Novartis AG | 27,520 | 2,084,490 | ||||||
Partners Group Holding AG | 1,618 | 1,186,818 | ||||||
Roche Holding AG | 13,936 | 3,100,972 | ||||||
7,525,595 | ||||||||
United Kingdom | 5.2% | ||||||||
Abcam PLC | 14,272 | 250,948 | ||||||
Admiral Group PLC | 14,456 | 363,616 | ||||||
Anglo American PLC | 9,945 | 220,856 | ||||||
Ashtead Group PLC ADR | 10,235 | 1,240,175 | ||||||
British American Tobacco PLC Sponsored ADR | 25,565 | 1,289,754 | ||||||
Bunzl PLC Sponsored ADR | 20,655 | 632,456 | ||||||
Cineworld Group PLC | 220,294 | 771,951 | ||||||
Coca-Cola European Partners PLC | 22,340 | 907,898 | ||||||
Compass Group PLC | 66,289 | 1,412,235 | ||||||
Compass Group PLC Sponsored ADR | 47,112 | 1,019,975 | ||||||
Crest Nicholson Holdings PLC | 20,111 | 103,361 | ||||||
CVS Group PLC | 7,342 | 109,949 | ||||||
Diageo PLC Sponsored ADR | 9,175 | 1,321,292 | ||||||
Electrocomponents PLC | 13,926 | 139,279 | ||||||
Fiat Chrysler Automobiles NV (*) | 8,965 | 170,657 | ||||||
Hargreaves Lansdown PLC | 21,980 | 571,713 | ||||||
Howden Joinery Group PLC | 81,260 | 574,717 | ||||||
International Consolidated Airlines Group SA | 106,540 | 933,303 | ||||||
Janus Henderson Group PLC | 7,333 | 225,343 | ||||||
Land Securities Group PLC REIT | 9,726 | 122,435 | ||||||
Lloyds Banking Group PLC | 172,969 | 143,897 | ||||||
National Grid PLC | 20,992 | 232,245 | ||||||
Persimmon PLC | 22,227 | 742,831 | ||||||
Prudential PLC ADR | 21,020 | 960,614 | ||||||
RELX NV Sponsored ADR | 66,745 | 1,423,671 | ||||||
Rio Tinto PLC Sponsored ADR | 12,080 | 670,198 | ||||||
Royal Bank of Scotland Group PLC (*) | 62,229 | 210,256 | ||||||
RSA Insurance Group PLC ADR | 93,790 | 858,179 | ||||||
SSE PLC | 57,099 | 1,020,143 | ||||||
SSP Group PLC | 22,120 | 185,014 | ||||||
Taylor Wimpey PLC | 117,522 | 277,409 | ||||||
Unilever PLC Sponsored ADR | 29,930 | 1,654,530 | ||||||
WH Smith PLC | 18,488 | 487,634 | ||||||
21,248,534 |
The accompanying notes are an integral part of these financial statements.
26 Semi-Annual Report
Description | Shares | Fair Value | ||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
United States | 42.2% | ||||||||
Accenture PLC, Class A | 11,966 | $ | 1,957,518 | |||||
Adobe Systems, Inc. (*) | 6,202 | 1,512,110 | ||||||
Air Lease Corp. | 3,500 | 146,895 | ||||||
Alaska Air Group, Inc. | 3,621 | 218,672 | ||||||
Align Technology, Inc. (*) | 1,637 | 560,083 | ||||||
Ally Financial, Inc. | 13,134 | 345,030 | ||||||
Alphabet, Inc., Class A (*) | 1,947 | 2,198,533 | ||||||
Alphabet, Inc., Class C (*) | 98 | 109,334 | ||||||
Amazon.com, Inc. (*) | 439 | 746,212 | ||||||
Amdocs, Ltd. | 4,382 | 290,045 | ||||||
Ameren Corp. | 7,137 | 434,286 | ||||||
American Express Co. | 23,418 | 2,294,964 | ||||||
Ameriprise Financial, Inc. | 2,174 | 304,099 | ||||||
Amgen, Inc. | 2,452 | 452,615 | ||||||
Anthem, Inc. | 6,093 | 1,450,317 | ||||||
Aon PLC | 21,373 | 2,931,734 | ||||||
Apple, Inc. | 23,773 | 4,400,620 | ||||||
Applied Materials, Inc. | 11,461 | 529,384 | ||||||
Aptiv PLC | 3,659 | 335,274 | ||||||
AT&T, Inc. | 4,695 | 150,756 | ||||||
Atmos Energy Corp. | 10,481 | 944,757 | ||||||
Automatic Data Processing, Inc. | 4,039 | 541,791 | ||||||
Avery Dennison Corp. | 13,747 | 1,403,569 | ||||||
Bank of America Corp. | 33,174 | 935,175 | ||||||
Baxter International, Inc. | 2,473 | 182,606 | ||||||
Best Buy Co., Inc. | 4,118 | 307,120 | ||||||
BGC Partners, Inc., Class A | 22,647 | 256,364 | ||||||
Biogen, Inc. (*) | 5,355 | 1,554,235 | ||||||
Booking Holdings, Inc. (*) | 745 | 1,510,182 | ||||||
BorgWarner, Inc. | 5,145 | 222,058 | ||||||
Box, Inc., Class A (*) | 10,123 | 252,974 | ||||||
Bristol-Myers Squibb Co. | 14,745 | 815,988 | ||||||
Broadridge Financial Solutions, Inc. | 7,170 | 825,267 | ||||||
Carnival Corp. | 17,449 | 1,000,002 | ||||||
Carnival PLC | 10,955 | 626,651 | ||||||
Caterpillar, Inc. | 1,724 | 233,895 | ||||||
CBRE Group, Inc., Class A (*) | 13,874 | 662,345 | ||||||
Celgene Corp. (*) | 5,995 | 476,123 | ||||||
Centene Corp. (*) | 3,157 | 388,974 | ||||||
Church & Dwight Co., Inc. | 4,048 | 215,192 | ||||||
Cigna Corp. | 10,373 | 1,762,891 | ||||||
Cisco Systems, Inc. | 23,035 | 991,196 | ||||||
Citigroup, Inc. | 9,592 | 641,897 | ||||||
Citizens Financial Group, Inc. | 7,990 | 310,811 | ||||||
Colgate-Palmolive Co. | 3,550 | 230,075 |
Description | Shares | Fair Value | ||||||
Comcast Corp., Class A | 64,196 | $ | 2,106,271 | |||||
Comerica, Inc. | 14,265 | 1,296,974 | ||||||
ConocoPhillips | 6,283 | 437,422 | ||||||
Costco Wholesale Corp. | 3,433 | 717,428 | ||||||
CVS Health Corp. | 6,479 | 416,924 | ||||||
Deckers Outdoor Corp. (*) | 4,634 | 523,132 | ||||||
Delta Air Lines, Inc. | 4,279 | 211,982 | ||||||
Diamondback Energy, Inc. | 1,612 | 212,091 | ||||||
DXC Technology Co. | 11,350 | 914,923 | ||||||
Eastman Chemical Co. | 17,733 | 1,772,591 | ||||||
Eaton Corp. PLC | 15,595 | 1,165,570 | ||||||
eBay, Inc. (*) | 19,855 | 719,942 | ||||||
EchoStar Corp., Class A (*) | 2,433 | 108,025 | ||||||
Edwards Lifesciences Corp. (*) | 1,740 | 253,292 | ||||||
Eli Lilly & Co. | 12,572 | 1,072,769 | ||||||
Encompass Health Corp. | 3,549 | 240,338 | ||||||
Exelon Corp. | 4,775 | 203,415 | ||||||
Express Scripts Holding Co. (*) | 6,873 | 530,664 | ||||||
F5 Networks, Inc. (*) | 5,901 | 1,017,627 | ||||||
Facebook, Inc., Class A (*) | 8,734 | 1,697,191 | ||||||
FactSet Research Systems, Inc. | 2,041 | 404,322 | ||||||
Fifth Third Bancorp | 5,506 | 158,022 | ||||||
Fiserv, Inc. (*) | 10,904 | 807,877 | ||||||
Five Below, Inc. (*) | 6,150 | 600,916 | ||||||
Graco, Inc. | 4,982 | 225,286 | ||||||
HCA Healthcare, Inc. | 1,938 | 198,839 | ||||||
HollyFrontier Corp. | 2,827 | 193,452 | ||||||
Honeywell International, Inc. | 17,831 | 2,568,556 | ||||||
HP, Inc. | 9,663 | 219,253 | ||||||
Humana, Inc. | 5,890 | 1,753,041 | ||||||
Huntsman Corp. | 6,502 | 189,858 | ||||||
IDEXX Laboratories, Inc. (*) | 1,991 | 433,919 | ||||||
Insperity, Inc. | 3,456 | 329,184 | ||||||
Intel Corp. | 67,975 | 3,379,037 | ||||||
Intercontinental Exchange, Inc. | 20,485 | 1,506,672 | ||||||
Intuit, Inc. | 4,370 | 892,813 | ||||||
IPG Photonics Corp. (*) | 1,743 | 384,558 | ||||||
IQVIA Holdings, Inc. (*) | 17,282 | 1,725,089 | ||||||
j2 Global, Inc. | 2,671 | 231,335 | ||||||
Jabil, Inc. | 8,315 | 229,993 | ||||||
Johnson & Johnson | 22,917 | 2,780,749 | ||||||
Jones Lang LaSalle, Inc. | 4,316 | 716,413 | ||||||
JPMorgan Chase & Co. | 22,998 | 2,396,392 | ||||||
Kimberly-Clark Corp. | 9,604 | 1,011,685 | ||||||
Kohl’s Corp. | 3,468 | 252,817 | ||||||
Koppers Holdings, Inc. (*) | 3,082 | 118,195 | ||||||
L Brands, Inc. | 3,074 | 113,369 | ||||||
Lam Research Corp. | 1,473 | 254,608 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 27
Description | Shares | Fair Value | ||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Lamb Weston Holdings, Inc. | 4,124 | $ | 282,535 | |||||
Las Vegas Sands Corp. | 5,810 | 443,652 | ||||||
Lear Corp. | 1,630 | 302,870 | ||||||
Lockheed Martin Corp. | 9,328 | 2,755,771 | ||||||
Lowe’s Cos., Inc. | 2,128 | 203,373 | ||||||
LPL Financial Holdings, Inc. | 6,698 | 438,987 | ||||||
Lululemon Athletica, Inc. (*) | 2,022 | 252,447 | ||||||
Marathon Petroleum Corp. | 2,588 | 181,574 | ||||||
Marsh & McLennan Cos., Inc. | 11,502 | 942,819 | ||||||
MasterCard, Inc., Class A | 15,013 | 2,950,355 | ||||||
Maxim Integrated Products, Inc. | 10,227 | 599,916 | ||||||
McGrath RentCorp | 4,214 | 266,620 | ||||||
Merck & Co., Inc. | 6,267 | 380,407 | ||||||
Micron Technology, Inc. (*) | 18,795 | 985,610 | ||||||
Microsoft Corp. | 35,355 | 3,486,357 | ||||||
Morgan Stanley | 4,841 | 229,463 | ||||||
Motorola Solutions, Inc. | 8,540 | 993,800 | ||||||
NetApp, Inc. | 3,394 | 266,531 | ||||||
Newfield Exploration Co. (*) | 18,495 | 559,474 | ||||||
Newmont Mining Corp. | 5,756 | 217,059 | ||||||
Nordstrom, Inc. | 4,769 | 246,939 | ||||||
Northrop Grumman Corp. | 7,345 | 2,260,056 | ||||||
NVIDIA Corp. | 4,087 | 968,210 | ||||||
NVR, Inc. (*) | 59 | 175,251 | ||||||
Omnicom Group, Inc. | 26,749 | 2,040,146 | ||||||
Oracle Corp. | 7,548 | 332,565 | ||||||
Palo Alto Networks, Inc. (*) | 4,661 | 957,696 | ||||||
Park Hotels & Resorts, Inc. REIT | 7,744 | 237,199 | ||||||
Paychex, Inc. | 10,768 | 735,993 | ||||||
PayPal Holdings, Inc. (*) | 2,106 | 175,367 | ||||||
PBF Energy, Inc. | 4,424 | 185,498 | ||||||
PepsiCo, Inc. | 5,757 | 626,765 | ||||||
Pfizer, Inc. | 7,971 | 289,188 | ||||||
PG&E Corp. | 7,137 | 303,751 | ||||||
Philip Morris International, Inc. | 18,355 | 1,481,983 | ||||||
Pinnacle West Capital Corp. | 5,064 | 407,956 | ||||||
PotlatchDeltic Corp. REIT | 3,593 | 182,704 | ||||||
Prudential Financial, Inc. | 3,149 | 294,463 | ||||||
Radian Group, Inc. | 8,422 | 136,605 | ||||||
Raytheon Co. | 4,867 | 940,207 | ||||||
Red Hat, Inc. (*) | 9,058 | 1,217,123 | ||||||
Regions Financial Corp. | 14,460 | 257,099 | ||||||
Republic Services, Inc. | 14,838 | 1,014,326 | ||||||
Rockwell Automation, Inc. | 4,800 | 797,904 | ||||||
Ross Stores, Inc. | 39,446 | 3,343,048 | ||||||
Royal Caribbean Cruises, Ltd. | 6,099 | 631,856 |
Description | Shares | Fair Value | ||||||
Ryman Hospitality Properties, Inc. REIT | 12,098 | $ | 1,005,949 | |||||
S&P Global, Inc. | 9,427 | 1,922,071 | ||||||
Sabra Health Care REIT, Inc. | 5,812 | 126,295 | ||||||
Schlumberger, Ltd. | 16,285 | 1,091,584 | ||||||
Seagate Technology PLC | 9,365 | 528,842 | ||||||
Simon Property Group, Inc. REIT | 19,162 | 3,261,181 | ||||||
Snap-on, Inc. | 4,980 | 800,386 | ||||||
Starbucks Corp. | 55,132 | 2,693,198 | ||||||
Sturm Ruger & Co., Inc. | 3,973 | 222,488 | ||||||
Sysco Corp. | 35,172 | 2,401,896 | ||||||
T-Mobile US, Inc. (*) | 1,838 | 109,820 | ||||||
TE Connectivity, Ltd. | 2,043 | 183,993 | ||||||
Teradyne, Inc. | 14,210 | 540,975 | ||||||
Texas Instruments, Inc. | 30,197 | 3,329,219 | ||||||
The Boeing Co. | 12,138 | 4,072,420 | ||||||
The Charles Schwab Corp. | 22,615 | 1,155,626 | ||||||
The Chemours Co. | 4,185 | 185,647 | ||||||
The Coca-Cola Co. | 39,620 | 1,737,733 | ||||||
The Estee Lauder Cos., Inc., Class A | 13,541 | 1,932,165 | ||||||
The Gap, Inc. | 6,186 | 200,365 | ||||||
The Home Depot, Inc. | 3,008 | 586,861 | ||||||
The Procter & Gamble Co. | 29,099 | 2,271,468 | ||||||
The TJX Cos., Inc. | 25,670 | 2,443,271 | ||||||
The Walt Disney Co. | 10,584 | 1,109,309 | ||||||
Thermo Fisher Scientific, Inc. | 7,120 | 1,474,837 | ||||||
U.S. Silica Holdings, Inc. | 5,765 | 148,103 | ||||||
United Continental Holdings, Inc. (*) | 4,843 | 337,702 | ||||||
United Rentals, Inc. (*) | 2,450 | 361,669 | ||||||
United Technologies Corp. | 7,305 | 913,344 | ||||||
UnitedHealth Group, Inc. | 11,199 | 2,747,563 | ||||||
Unum Group | 7,910 | 292,591 | ||||||
USANA Health Sciences, Inc. (*) | 2,167 | 249,855 | ||||||
Varian Medical Systems, Inc. (*) | 3,340 | 379,825 | ||||||
Verizon Communications, Inc. | 51,781 | 2,605,102 | ||||||
Vertex Pharmaceuticals, Inc. (*) | 1,153 | 195,964 | ||||||
Virtu Financial, Inc., Class A | 7,308 | 194,027 | ||||||
Visa, Inc., Class A | 23,594 | 3,125,025 | ||||||
Vistra Energy Corp. (*) | 9,114 | 215,637 | ||||||
Walgreens Boots Alliance, Inc. | 8,965 | 538,034 | ||||||
Waste Management, Inc. | 16,330 | 1,328,282 | ||||||
Welbilt, Inc. (*) | 57,660 | 1,286,395 | ||||||
Worldpay, Inc., Class A (*) | 22,255 | 1,820,014 | ||||||
WW Grainger, Inc. | 5,575 | 1,719,330 | ||||||
Xcel Energy, Inc. | 6,040 | 275,907 | ||||||
Zoetis, Inc. | 27,913 | 2,377,908 | ||||||
171,834,834 | ||||||||
Total Common Stocks (Cost $277,770,951) | 300,908,175 |
The accompanying notes are an integral part of these financial statements.
28 Semi-Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
Corporate Bonds | 6.3% | ||||||||||
Australia | 0.3% | ||||||||||
Telstra Corp., Ltd., 4.000%, 09/16/22 | AUD | 900 | $ | 684,439 | ||||||
Toyota Finance Australia, Ltd., 4.250%, 05/15/19 | AUD | 422 | 316,903 | |||||||
1,001,342 | ||||||||||
Belgium | 0.3% | ||||||||||
Anheuser-Busch InBev Finance, Inc., 2.650%, 02/01/21 | USD | 1,030 | 1,015,587 | |||||||
Canada | 0.3% | ||||||||||
The Toronto-Dominion Bank: | ||||||||||
2.250%, 11/05/19 | USD | 665 | 659,831 | |||||||
2.621%, 12/22/21 | CAD | 805 | 610,585 | |||||||
1,270,416 | ||||||||||
Denmark | 0.2% | ||||||||||
Carlsberg Breweries A/S, 2.500%, 05/28/24 | EUR | 755 | 960,636 | |||||||
France | 0.2% | ||||||||||
Orange SA, 5.375%, 07/08/19 | USD | 973 | 996,659 | |||||||
Germany | 0.2% | ||||||||||
BMW Finance NV, 0.875%, 08/16/22 | GBP | 680 | 867,743 | |||||||
Mexico | 0.2% | ||||||||||
America Movil SAB de CV, 6.450%, 12/05/22 | MXN | 15,300 | 706,399 | |||||||
Netherlands | 0.1% | ||||||||||
Bank Nederlandse Gemeenten NV, 5.000%, 09/16/20 | NZD | 647 | 460,440 | |||||||
New Zealand | 0.2% | ||||||||||
Fonterra Cooperative Group, Ltd., 5.500%, 02/26/24 | AUD | 1,000 | 816,490 |
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Spain | 0.2% | ||||||||||
Iberdrola International BV, 1.125%, 04/21/26 | EUR | 600 | $ | 692,193 | ||||||
Switzerland | 0.1% | ||||||||||
ABB Finance USA, Inc., 3.375%, 04/03/23 | USD | 545 | 542,079 | |||||||
United Kingdom | 0.3% | ||||||||||
Rolls-Royce PLC, 6.750%, 04/30/19 | GBP | 822 | 1,134,505 | |||||||
United States | 3.7% | ||||||||||
Amazon.com, Inc., 3.800%, 12/05/24 | USD | 780 | 795,492 | |||||||
Apple, Inc.: | ||||||||||
2.850%, 02/23/23 | USD | 162 | 159,419 | |||||||
3.850%, 05/04/43 | USD | 940 | 899,457 | |||||||
Bank of America Corp., 3.499%, 05/17/22 (§) | USD | 985 | 984,414 | |||||||
Caterpillar Financial Services Corp., 2.550%, 11/29/22 | USD | 1,475 | 1,424,151 | |||||||
Citigroup, Inc., 3.570% (BBSW 3 Month + 1.550%), 05/04/21 (§) | AUD | 1,053 | 789,777 | |||||||
John Deere Canada Funding, Inc., 2.050%, 09/17/20 | CAD | 1,205 | 905,237 | |||||||
John Deere Capital Corp., 2.300%, 09/16/19 | USD | 390 | 387,656 | |||||||
Johnson & Johnson, 3.625%, 03/03/37 | USD | 940 | 917,932 | |||||||
JPMorgan Chase & Co., 4.500%, 01/24/22 | USD | 665 | 687,711 | |||||||
Microsoft Corp., 4.450%, 11/03/45 | USD | 1,198 | 1,286,651 | |||||||
Morgan Stanley, 3.625%, 01/20/27 | USD | 830 | 798,520 | |||||||
NIKE, Inc., 2.375%, 11/01/26 | USD | 885 | 805,265 | |||||||
Starbucks Corp., 3.100%, 03/01/23 | USD | 480 | 470,421 | |||||||
The Goldman Sachs Group, Inc.: | ||||||||||
5.200%, 12/17/19 | NZD | 785 | 548,497 | |||||||
3.625%, 01/22/23 | USD | 845 | 839,177 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 29
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
The Home Depot, Inc., 3.750%, 02/15/24 | USD | 945 | $ | 965,076 | ||||||
United Parcel Service, Inc., 2.350%, 05/16/22 | USD | 480 | 465,573 | |||||||
Wells Fargo & Co., 3.365% (BBSW 3 Month + 1.320%), 07/27/21 (§) | AUD | 855 | 638,060 | |||||||
Wells Fargo Canada Corp., 3.040%, 01/29/21 | CAD | 585 | 448,131 | |||||||
15,216,617 | ||||||||||
Total Corporate Bonds (Cost $26,374,907) | 25,681,106 | |||||||||
Foreign Government Obligations | 11.0% | ||||||||||
Australia | 0.6% | ||||||||||
Queensland Treasury Corp.: | ||||||||||
5.500%, 06/21/21 | AUD | 1,070 | 864,155 | |||||||
3.000%, 03/22/24 | AUD | 1,195 | 900,300 | |||||||
Western Australian Treasury Corp., 6.000%, 10/16/23 | AUD | 1,030 | 889,021 | |||||||
2,653,476 | ||||||||||
Bermuda | 0.5% | ||||||||||
Government of Bermuda, 4.854%, 02/06/24 | USD | 1,890 | 1,939,509 | |||||||
Canada | 2.2% | ||||||||||
City of Vancouver, 2.900%, 11/20/25 | CAD | 415 | 317,043 | |||||||
Province of British Columbia, 4.700%, 06/18/37 | CAD | 945 | 907,190 | |||||||
Province of Ontario: | ||||||||||
2.450%, 06/29/22 | USD | 955 | 930,992 | |||||||
1.950%, 01/27/23 | CAD | 1,610 | 1,198,318 | |||||||
Province of Quebec: | ||||||||||
3.500%, 07/29/20 | USD | 1,625 | 1,647,783 | |||||||
1.650%, 03/03/22 | CAD | 540 | 401,415 | |||||||
3.000%, 09/01/23 | CAD | 2,400 | 1,866,127 | |||||||
2.500%, 04/20/26 | USD | 1,755 | 1,668,491 | |||||||
8,937,359 |
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Cayman Islands | 0.1% | ||||||||||
Cayman Islands Government Bonds, 5.950%, 11/24/19 | USD | 545 | $ | 559,988 | ||||||
Chile | 0.6% | ||||||||||
Bonos de la Tesoreria de la Republica en pesos, 4.500%, 03/01/26 | CLP | 610,000 | 928,688 | |||||||
Republic of Chile, 3.125%, 01/21/26 | USD | 1,415 | 1,354,863 | |||||||
2,283,551 | ||||||||||
Czech Republic | 0.6% | ||||||||||
Czech Republic: | ||||||||||
1.770% (PRIBOR 1Year + 0.650%), 04/18/23 (§) | CZK | 27,180 | 1,277,542 | |||||||
2.500%, 08/25/28 | CZK | 27,750 | 1,280,118 | |||||||
2,557,660 | ||||||||||
France | 0.5% | ||||||||||
Government of France, 1.750%, 06/25/39 | EUR | 1,480 | 1,874,655 | |||||||
Hungary | 0.4% | ||||||||||
Hungary, 6.375%, 03/29/21 | USD | 646 | 689,605 | |||||||
Hungary Government Bonds, 3.000%, 10/27/27 | HUF | 280,800 | 943,775 | |||||||
1,633,380 | ||||||||||
Japan | 0.3% | ||||||||||
Japan International Cooperation Agency: | ||||||||||
1.875%, 11/13/19 | USD | 820 | 808,250 | |||||||
2.125%, 10/20/26 | USD | 500 | 458,032 | |||||||
1,266,282 | ||||||||||
Mexico | 0.7% | ||||||||||
Mexican Bonos, 6.500%, 06/09/22 | MXN | 41,260 | 1,991,061 | |||||||
United Mexican States, 6.750%, 02/06/24 | GBP | 640 | 1,008,289 | |||||||
2,999,350 | ||||||||||
New Zealand | 0.5% | ||||||||||
New Zealand Government Bonds: | ||||||||||
6.000%, 05/15/21 | NZD | 1,865 | 1,387,936 | |||||||
4.500%, 04/15/27 | NZD | 1,090 | 791,904 | |||||||
2,179,840 |
The accompanying notes are an integral part of these financial statements.
30 Semi-Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
Norway | 0.9% | ||||||||||
City of Oslo Norway: | ||||||||||
4.600%, 06/22/20 | NOK | 3,000 | $ | 390,734 | ||||||
2.600%, 11/12/25 | NOK | 4,000 | 499,619 | |||||||
Kommunalbanken AS, 1.375%, 10/26/20 (#) | USD | 800 | 775,224 | |||||||
Oslo Kommune: | ||||||||||
3.550%, 02/12/21 | NOK | 3,000 | 386,661 | |||||||
3.650%, 11/08/23 | NOK | 3,000 | 396,875 | |||||||
2.350%, 09/04/24 | NOK | 9,000 | 1,111,304 | |||||||
3,560,417 | ||||||||||
Panama | 0.5% | ||||||||||
Republic of Panama, 4.000%, 09/22/24 | USD | 1,870 | 1,886,363 | |||||||
Poland | 0.7% | ||||||||||
Poland Government Bonds: | ||||||||||
1.810% (WIBOR 6 Month), 01/25/21 (§) | PLN | 3,780 | 1,015,135 | |||||||
2.500%, 07/25/26 | PLN | 7,367 | 1,882,753 | |||||||
2,897,888 | ||||||||||
Romania | 0.2% | ||||||||||
Romania Government Bonds, 2.875%, 10/28/24 | EUR | 687 | 878,495 | |||||||
Singapore | 0.8% | ||||||||||
Singapore Government Bonds, 3.000%, 09/01/24 | SGD | 4,085 | 3,106,099 | |||||||
Spain | 0.2% | ||||||||||
Spain Government Bonds, 1.600%, 04/30/25 | EUR | 738 | 908,860 | |||||||
Sweden | 0.2% | ||||||||||
Kommuninvest I Sverige AB, 1.500%, 04/23/19 (#) | USD | 700 | 694,335 | |||||||
United Kingdom | 0.5% | ||||||||||
United Kingdom Gilt: | ||||||||||
1.750%, 09/07/37 | GBP | 740 | 980,223 | |||||||
1.500%, 07/22/47 | GBP | 785 | 979,243 | |||||||
1,959,466 | ||||||||||
Total Foreign Government Obligations (Cost $46,157,227) | 44,776,973 |
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Quasi Government Bonds | 1.3% | ||||||||||
Canada | 0.4% | ||||||||||
Canada Housing Trust No. 1, 2.400%, 12/15/22 | CAD | 1,120 | $ | 853,812 | ||||||
Export Development Canada, 1.800%, 09/01/22 | CAD | 1,305 | 973,432 | |||||||
1,827,244 | ||||||||||
Germany | 0.5% | ||||||||||
KFW, 1.125%, 12/23/19 | GBP | 1,415 | 1,875,085 | |||||||
Mexico | 0.2% | ||||||||||
Nacional Financiera SNC, 3.375%, 11/05/20 | USD | 985 | 978,843 | |||||||
Singapore | 0.2% | ||||||||||
Temasek Financial I, Ltd., 4.300%, 10/25/19 | USD | 795 | 809,450 | |||||||
Total Quasi Government Bonds (Cost $5,617,723) | 5,490,622 | |||||||||
Supranational Bonds | 1.4% | ||||||||||
African Development Bank, 2.375%, 09/23/21 | USD | 955 | 940,074 | |||||||
Asian Development Bank: | ||||||||||
1.875%, 04/12/19 | USD | 780 | 776,972 | |||||||
1.000%, 12/15/22 | GBP | 800 | 1,047,966 | |||||||
2.125%, 03/19/25 | USD | 1,200 | 1,137,183 | |||||||
European Investment Bank, 1.125%, 09/16/21 (#) | CAD | 1,285 | 943,980 | |||||||
International Bank for Reconstruction & Development, 3.500%, 01/22/21 | NZD | 305 | 211,863 | |||||||
International Finance Corp., 3.625%, 05/20/20 | NZD | 845 | 585,962 | |||||||
Total Supranational Bonds (Cost $5,828,026) | 5,644,000 | |||||||||
US Government Securities | 0.2% | ||||||||||
Federal National Mortgage Association, 2.625%, 09/06/24 (Cost $847,479) | USD | 855 | 840,479 |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 31
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
US Municipal Bonds | 0.4% | ||||||||||
California | 0.3% | ||||||||||
California State Build America Bonds, 7.500%, 04/01/34 | USD | 940 | $ | 1,320,221 | ||||||
Georgia | 0.1% | ||||||||||
Georgia State Build America Bonds Series B, 2.380%, 02/01/27 | USD | 350 | 327,155 | |||||||
Pennsylvania | 0.0% | ||||||||||
Pennsylvania State Build America Bonds Third Series B, 5.850%, 07/15/30 | USD | 50 | 52,429 | |||||||
Wisconsin | 0.0% | ||||||||||
Wisconsin State Build America Bonds Series D, 5.400%, 05/01/28 | USD | 175 | 182,809 | |||||||
Total US Municipal Bonds (Cost $1,968,578) | 1,882,614 | |||||||||
US Treasury Securities | 3.0% | ||||||||||
US Treasury Notes: | ||||||||||
1.125%, 03/31/20 | USD | 990 | 966,449 | |||||||
1.750%, 05/15/23 | USD | 2,945 | 2,812,590 | |||||||
2.125%, 05/15/25 | USD | 3,100 | 2,965,949 | |||||||
1.625%, 05/15/26 | USD | 2,172 | 1,986,532 | |||||||
3.125%, 11/15/41 | USD | 3,368 | 3,456,410 | |||||||
Total US Treasury Securities (Cost $12,370,982) | 12,187,930 |
Description | Shares | Fair Value | ||||||
Rights | 0.0% | ||||||||
Italy | 0.0% | ||||||||
Intesa Sanpaolo SpA, Expires 07/17/18 (‡) (Cost $0) | 452,244 | $ | 0 | |||||
Short-Term Investments | 2.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield) (Cost $11,220,505) | 11,220,505 | 11,220,505 | ||||||
Total Investments | 100.3% (Cost $388,156,378) (¤) | $ | 408,632,404 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.3)% | (1,370,567 | ) | ||||||
Net Assets | 100.0% | $ | 407,261,837 |
The accompanying notes are an integral part of these financial statements.
32 Semi-Annual Report
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
Forward Currency Contracts open at June 30, 2018:
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||
AUD | 81,526 | USD | 60,300 | CIT | 08/23/18 | $ | 43 | $ | — | |||||||||||
AUD | 190,308 | USD | 140,000 | HSB | 08/23/18 | 861 | — | |||||||||||||
CAD | 1,118,331 | USD | 869,147 | HSB | 08/23/18 | — | 17,739 | |||||||||||||
CAD | 1,119,396 | USD | 844,700 | HSB | 08/23/18 | 7,518 | — | |||||||||||||
CHF | 531,939 | USD | 538,712 | HSB | 08/23/18 | 747 | — | |||||||||||||
EUR | 401,044 | USD | 464,300 | CIT | 07/19/18 | 4,576 | — | |||||||||||||
EUR | 1,838,322 | USD | 2,204,400 | CIT | 07/19/18 | — | 55,148 | |||||||||||||
EUR | 3,151,516 | USD | 3,916,705 | CIT | 07/19/18 | — | 232,147 | |||||||||||||
EUR | 492,256 | USD | 570,000 | HSB | 07/19/18 | 5,515 | — | |||||||||||||
EUR | 790,301 | USD | 979,246 | HSB | 07/19/18 | — | 55,275 | |||||||||||||
EUR | 1,669,939 | USD | 1,973,000 | HSB | 07/19/18 | — | 20,611 | |||||||||||||
EUR | 1,996,394 | USD | 2,359,857 | HSB | 07/19/18 | — | 25,798 | |||||||||||||
EUR | 10,067,697 | USD | 12,512,114 | HSB | 07/19/18 | — | 741,587 | |||||||||||||
EUR | 466,578 | USD | 553,900 | HSB | 08/23/18 | — | 6,991 | |||||||||||||
EUR | 3,660,280 | USD | 4,294,460 | HSB | 09/28/18 | 8,029 | — | |||||||||||||
GBP | 1,140,521 | USD | 1,535,700 | CIT | 08/23/18 | — | 27,093 | |||||||||||||
GBP | 93,688 | USD | 126,217 | HSB | 08/23/18 | — | 2,292 | |||||||||||||
GBP | 113,751 | USD | 153,400 | HSB | 08/23/18 | — | 2,938 | |||||||||||||
GBP | 285,237 | USD | 379,744 | SSB | 09/28/18 | — | 1,853 | |||||||||||||
JPY | 28,285,955 | USD | 256,800 | CIT | 07/19/18 | — | 1,046 | |||||||||||||
JPY | 128,595,880 | USD | 1,161,923 | CIT | 07/19/18 | 807 | — | |||||||||||||
JPY | 1,121,811,322 | USD | 10,537,892 | CIT | 07/19/18 | — | 394,765 | |||||||||||||
JPY | 18,803,697 | USD | 169,892 | HSB | 07/19/18 | 126 | — | |||||||||||||
JPY | 44,143,120 | USD | 400,000 | HSB | 07/19/18 | — | 869 | |||||||||||||
JPY | 78,159,825 | USD | 720,300 | HSB | 07/19/18 | — | 13,599 | |||||||||||||
JPY | 615,018,521 | USD | 5,776,612 | HSB | 07/19/18 | — | 215,774 | |||||||||||||
JPY | 49,400,266 | USD | 447,800 | HSB | 08/23/18 | — | 78 | |||||||||||||
JPY | 167,035,648 | USD | 1,529,897 | HSB | 09/28/18 | — | 12,020 | |||||||||||||
JPY | 66,588,262 | USD | 609,699 | SSB | 09/28/18 | — | 4,602 | |||||||||||||
KRW | 1,172,331,485 | USD | 1,089,527 | HSB | 09/04/18 | — | 35,746 | |||||||||||||
NZD | 148,509 | USD | 100,500 | CIT | 08/23/18 | 89 | — | |||||||||||||
NZD | 454,764 | USD | 314,492 | HSB | 08/23/18 | — | 6,469 | |||||||||||||
SEK | 4,990,792 | USD | 577,296 | CIT | 08/23/18 | — | 17,967 | |||||||||||||
SGD | 502,583 | USD | 374,981 | CIT | 08/23/18 | — | 5,732 | |||||||||||||
USD | 165,039 | AUD | 219,759 | CIT | 08/23/18 | 2,379 | — | |||||||||||||
USD | 2,725,571 | AUD | 3,627,908 | HSB | 08/23/18 | 40,289 | — | |||||||||||||
USD | 1,451,461 | AUD | 1,951,859 | HSB | 09/28/18 | 6,614 | — | |||||||||||||
USD | 1,063,988 | AUD | 1,416,180 | JPM | 08/23/18 | 15,768 | — | |||||||||||||
USD | 325,238 | AUD | 437,148 | SSB | 09/28/18 | 1,643 | — | |||||||||||||
USD | 707,303 | CAD | 939,581 | CIT | 08/23/18 | — | 8,019 | |||||||||||||
USD | 1,900,516 | CAD | 2,447,770 | HSB | 08/23/18 | 36,981 | — | |||||||||||||
USD | 4,026,020 | CAD | 5,180,280 | HSB | 08/23/18 | 82,171 | — | |||||||||||||
USD | 2,865,748 | CAD | 3,802,103 | HSB | 09/28/18 | — | 30,588 | |||||||||||||
USD | 1,398,250 | CAD | 1,798,494 | JPM | 08/23/18 | 29,022 | — |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 33
Lazard Retirement Global Dynamic Multi-Asset Portfolio (concluded)
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||
USD | 342,993 | CAD | 455,213 | SSB | 09/28/18 | $ | — | $ | 3,776 | |||||||||||
USD | 897,903 | CLP | 555,694,358 | CIT | 08/06/18 | 47,346 | — | |||||||||||||
USD | 388,302 | CZK | 8,528,246 | CIT | 08/29/18 | 3,676 | — | |||||||||||||
USD | 878,976 | CZK | 19,293,000 | HSB | 08/29/18 | 8,857 | — | |||||||||||||
USD | 1,293,441 | CZK | 28,407,783 | JPM | 08/29/18 | 12,242 | — | |||||||||||||
USD | 958,300 | EUR | 774,703 | CIT | 07/19/18 | 52,565 | — | |||||||||||||
USD | 939,859 | EUR | 777,000 | HSB | 07/19/18 | 31,439 | — | |||||||||||||
USD | 971,200 | EUR | 805,127 | HSB | 07/19/18 | 29,896 | — | |||||||||||||
USD | 1,698,172 | EUR | 1,436,621 | HSB | 07/19/18 | 18,564 | — | |||||||||||||
USD | 1,006,776 | GBP | 751,886 | CIT | 08/23/18 | 12,230 | — | |||||||||||||
USD | 411,398 | GBP | 286,495 | HSB | 07/19/18 | 33,025 | — | |||||||||||||
USD | 1,218,126 | GBP | 904,191 | HSB | 08/23/18 | 22,121 | — | |||||||||||||
USD | 2,076,750 | GBP | 1,552,339 | HSB | 08/23/18 | 23,417 | — | |||||||||||||
USD | 163,363 | GBP | 121,258 | JPM | 08/23/18 | 2,971 | — | |||||||||||||
USD | 1,622,376 | HKD | 12,715,543 | SSB | 09/28/18 | — | 666 | |||||||||||||
USD | 74,908 | HUF | 21,210,034 | JPM | 08/23/18 | — | 539 | |||||||||||||
USD | 103,061 | HUF | 28,990,427 | JPM | 08/23/18 | — | 61 | |||||||||||||
USD | 903,046 | HUF | 243,326,596 | JPM | 08/23/18 | 37,505 | — | |||||||||||||
USD | 680,816 | ILS | 2,434,120 | HSB | 09/28/18 | 11,382 | — | |||||||||||||
USD | 281,500 | KRW | 315,758,550 | HSB | 09/04/18 | — | 2,328 | |||||||||||||
USD | 369,101 | MXN | 7,451,159 | CIT | 08/23/18 | — | 3,103 | |||||||||||||
USD | 132,060 | MXN | 2,669,771 | HSB | 08/23/18 | — | 1,301 | |||||||||||||
USD | 234,891 | MXN | 4,739,873 | HSB | 08/23/18 | — | 1,877 | |||||||||||||
USD | 423,700 | MXN | 8,565,223 | HSB | 08/23/18 | — | 4,155 | |||||||||||||
USD | 826,900 | MXN | 16,801,781 | HSB | 08/23/18 | — | 12,391 | |||||||||||||
USD | 388,066 | MXN | 7,844,008 | JPM | 08/23/18 | — | 3,762 | |||||||||||||
USD | 916,804 | NOK | 7,376,503 | CIT | 08/23/18 | 9,264 | — | |||||||||||||
USD | 253,199 | NOK | 2,054,011 | HSB | 08/23/18 | 492 | — | |||||||||||||
USD | 1,681,267 | NOK | 13,518,985 | HSB | 08/23/18 | 18,011 | — | |||||||||||||
USD | 2,827,915 | NOK | 22,793,221 | HSB | 09/28/18 | 19,618 | — | |||||||||||||
USD | 2,908,171 | NZD | 4,205,294 | HSB | 08/23/18 | 59,816 | — | |||||||||||||
USD | 576,206 | NZD | 833,046 | JPM | 08/23/18 | 11,962 | — | |||||||||||||
USD | 270,598 | PLN | 994,387 | HSB | 08/23/18 | 4,922 | — | |||||||||||||
USD | 2,009,914 | PLN | 7,329,010 | HSB | 08/23/18 | 51,780 | — | |||||||||||||
USD | 557,911 | PLN | 2,035,365 | JPM | 08/23/18 | 14,111 | — | |||||||||||||
USD | 189,591 | SEK | 1,639,038 | CIT | 08/23/18 | 5,901 | — | |||||||||||||
USD | 708,107 | SEK | 6,208,094 | HSB | 09/28/18 | 10,381 | — | |||||||||||||
USD | 3,644,211 | SGD | 4,884,299 | CIT | 08/23/18 | 55,710 | — | |||||||||||||
USD | 1,192,917 | SGD | 1,616,677 | HSB | 09/28/18 | 4,149 | — | |||||||||||||
Total gross unrealized appreciation/depreciation on Forward Currency Contracts | $ | 856,531 | $ | 1,970,705 |
The accompanying notes are an integral part of these financial statements.
34 Semi-Annual Report
Lazard Retirement Series, Inc. Notes to Portfolios of Investments June 30, 2018 (unaudited)
(*) | Non-income producing security. |
(‡) | Security valued using Level 2 inputs, based on reference to a similar security which was trading on an active market, under GAAP hierarchy — see Note 8 in the Notes to Financial Statements. |
(§) | Variable and floating rate securities are securities for which interest rate changes are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2018. |
(#) | Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.” At June 30, 2018, the percentage of net assets for the following Portfolio was as follows: |
Portfolio | Percentage of Net Assets | |
Global Dynamic Multi-Asset | 0.6% | |
(¤) | 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 |
BBSW | — | Bank Bill Swap Reference Rate |
GDR | — | Global Depositary Receipt |
PJSC | — | Public Joint Stock Company |
PRIBOR | — | Prague Interbank Offered Rate |
REIT | — | Real Estate Investment Trust |
WIBOR | — | Warsaw Interbank Offered Rate |
Currency Abbreviations:
AUD | — | Australian Dollar | JPY | — | Japanese Yen | |
CAD | — | Canadian Dollar | KRW | — | South Korean Won | |
CHF | — | Swiss Franc | MXN | — | Mexican New Peso | |
CLP | — | Chilean Peso | NOK | — | Norwegian Krone | |
CZK | — | Czech Koruna | NZD | — | New Zealand Dollar | |
EUR | — | Euro | PLN | — | Polish Zloty | |
GBP | — | British Pound Sterling | SEK | — | Swedish Krone | |
HKD | — | Hong Kong Dollar | SGD | — | Singapore Dollar | |
HUF | — | Hungarian Forint | USD | — | United States Dollar | |
ILS | — | Israeli Shekel |
Counterparty Abbreviations:
CIT | — | Citibank NA |
HSB | — | HSBC Bank USA NA |
JPM | — | JPMorgan Chase Bank NA |
SSB | — | State Street Bank and Trust Co. |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 35
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 Global Dynamic Multi-Asset Portfolio | ||||||||||
Aerospace & Defense | 1.8 | % | — | % | 3.4 | % | |||||||
Air Freight & Logistics | — | — | 0.1 | ||||||||||
Airlines | 1.5 | — | 1.0 | ||||||||||
Auto Components | 2.6 | 1.4 | 0.8 | ||||||||||
Automobiles | 1.7 | 3.3 | 0.5 | ||||||||||
Banks | 8.4 | 24.9 | 7.0 | ||||||||||
Beverages | 3.9 | 1.2 | 1.9 | ||||||||||
Biotechnology | 2.0 | — | 1.9 | ||||||||||
Building Products | 2.9 | — | 0.2 | ||||||||||
Capital Markets | 1.3 | — | 3.1 | ||||||||||
Chemicals | 2.1 | — | 1.6 | ||||||||||
Commercial Services & Suppliers | — | — | 0.6 | ||||||||||
Communications Equipment | — | — | 1.0 | ||||||||||
Construction & Engineering | 2.0 | — | 0.1 | ||||||||||
Construction Materials | — | 2.2 | — | ||||||||||
Consumer Finance | — | — | 1.0 | ||||||||||
Containers & Packaging | — | — | 0.3 | ||||||||||
Distributors | — | 1.0 | — | ||||||||||
Diversified Financial Services | — | — | 0.7 | ||||||||||
Diversified Telecommunication Services | 2.3 | 2.4 | 1.5 | ||||||||||
Electric Utilities | 1.4 | — | 1.5 | ||||||||||
Electrical Equipment | 1.1 | — | 0.6 | ||||||||||
Electronic Equipment, Instruments & Components | — | 2.3 | 0.7 | ||||||||||
Energy Equipment & Services | 0.8 | — | 0.3 | ||||||||||
Equity Real Estate Investment Trusts (REITs) | — | — | 1.3 | ||||||||||
Food & Staples Retailing | — | 2.6 | 1.3 | ||||||||||
Food Products | — | — | 0.6 | ||||||||||
Gas Utilities | — | 1.3 | 0.6 | ||||||||||
Health Care Equipment & Supplies | 2.2 | — | 0.6 | ||||||||||
Health Care Providers & Services | 1.4 | 0.7 | 2.4 | ||||||||||
Hotels, Restaurants & Leisure | 2.0 | — | 2.3 | ||||||||||
Household Durables | 1.1 | 1.3 | 0.8 | ||||||||||
Household Products | — | 0.7 | 0.9 | ||||||||||
Independent Power & Renewable Electricity Producers | — | — | 0.1 | ||||||||||
Industrial Conglomerates | — | 1.9 | 0.7 | ||||||||||
Insurance | 7.8 | 2.9 | 3.7 | ||||||||||
Internet & Catalog Retail | — | — | 0.8 | ||||||||||
Internet Software & Services | — | 4.1 | 1.3 | ||||||||||
IT Services | 2.6 | 5.8 | 3.7 | ||||||||||
Leisure Products | 1.5 | — | 0.4 | ||||||||||
Life Sciences Tools & Services | — | — | 0.8 | ||||||||||
Machinery | 2.3 | 1.7 | 1.2 | ||||||||||
Media | 1.3 | — | 1.6 | ||||||||||
Metals & Mining | 2.8 | 2.5 | 0.9 |
The accompanying notes are an integral part of these financial statements.
36 Semi-Annual Report
Industry† | Lazard Retirement International Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | Lazard Retirement Global Dynamic Multi-Asset Portfolio | ||||||||||
Multiline Retail | 2.6 | % | 0.7 | % | 0.4 | % | |||||||
Multi-Utilities | — | — | 0.4 | ||||||||||
Oil, Gas & Consumable Fuels | 6.8 | 8.2 | 3.9 | ||||||||||
Paper & Forest Products | — | — | 0.2 | ||||||||||
Personal Products | 3.3 | 0.9 | 1.3 | ||||||||||
Pharmaceuticals | 3.1 | — | 3.5 | ||||||||||
Professional Services | 2.8 | — | 0.9 | ||||||||||
Real Estate Management & Development | 2.4 | — | 1.7 | ||||||||||
Road & Rail | 1.0 | — | 0.8 | ||||||||||
Semiconductors & Semiconductor Equipment | 0.9 | 7.3 | 2.6 | ||||||||||
Software | 4.1 | — | 2.7 | ||||||||||
Specialty Retail | 0.1 | 0.6 | 2.3 | ||||||||||
Technology Hardware, Storage & Peripherals | — | 4.5 | 1.6 | ||||||||||
Textiles, Apparel & Luxury Goods | — | — | 0.5 | ||||||||||
Tobacco | 2.2 | 1.5 | 0.7 | ||||||||||
Trading Companies & Distributors | 3.4 | — | 1.1 | ||||||||||
Transportation Infrastructure | — | 0.9 | 0.1 | ||||||||||
Water Utilities | — | 0.5 | — | ||||||||||
Wireless Telecommunication Services | 2.4 | 8.6 | 1.0 | ||||||||||
Subtotal | 95.9 | 97.9 | 81.5 | ||||||||||
Foreign Government Obligations | — | — | 11.0 | ||||||||||
Supranational Bonds | — | — | 1.4 | ||||||||||
US Government Securities | — | — | 0.2 | ||||||||||
US Municipal Bonds | — | — | 0.4 | ||||||||||
US Treasury Securities | — | — | 3.0 | ||||||||||
Short-Term Investments | 3.8 | 2.2 | 2.8 | ||||||||||
Total Investments | 99.7 | % | 100.1 | % | 100.3 | % |
† | Industry classifications may be different than those used for compliance monitoring purposes. |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 37
Lazard Retirement Series, Inc. Statements of Assets and Liabilities (unaudited)
June 30, 2018 | Lazard Retirement US Strategic Equity Portfolio | Lazard Retirement US Small-Mid Cap Equity Portfolio | |||||||||
ASSETS | |||||||||||
Investments in securities, at fair value | $ | 9,237,886 | $ | 64,903,948 | |||||||
Foreign currency, at fair value | — | — | |||||||||
Receivables for: | |||||||||||
Dividends and interest | 7,802 | 80,088 | |||||||||
Investments sold | 45,344 | 177,829 | |||||||||
Capital stock sold | 48,105 | 168,697 | |||||||||
Amount due from Investment Manager (Note 3) | 2,590 | — | |||||||||
Gross unrealized appreciation on forward currency contracts | — | — | |||||||||
Prepaid expenses | 3,353 | — | |||||||||
Total assets | 9,345,080 | 65,330,562 | |||||||||
LIABILITIES | |||||||||||
Due to custodian | — | — | |||||||||
Payables for: | |||||||||||
Management fees | — | 38,339 | |||||||||
Accrued custodian fees | 23,748 | 28,363 | |||||||||
Accrued distribution fees | 1,941 | 13,509 | |||||||||
Accrued professional services | 20,488 | 21,022 | |||||||||
Foreign capital gains taxes | — | — | |||||||||
Investments purchased | — | — | |||||||||
Capital stock redeemed | 43,164 | 23,914 | |||||||||
Gross unrealized depreciation on forward currency contracts | — | — | |||||||||
Other accrued expenses and payables | 3,296 | 6,894 | |||||||||
Total liabilities | 92,637 | 132,041 | |||||||||
Net assets | $ | 9,252,443 | $ | 65,198,521 | |||||||
NET ASSETS | |||||||||||
Paid in capital | $ | 6,994,714 | $ | 50,515,315 | |||||||
Undistributed (Distributions in excess of) net investment income (loss) | 45,491 | 38,900 | |||||||||
Accumulated net realized gain (loss) | 779,916 | 7,751,426 | |||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||
Investments | 1,432,322 | 6,892,880 | |||||||||
Foreign currency translations | — | — | |||||||||
Forward currency contracts | — | — | |||||||||
Net assets | $ | 9,252,443 | $ | 65,198,521 | |||||||
Service Shares | |||||||||||
Net assets | $ | 9,252,443 | $ | 65,198,521 | |||||||
Shares of capital stock outstanding* | 692,531 | 7,530,220 | |||||||||
Net asset value, offering and redemption price per share | $ | 13.36 | $ | 8.66 | |||||||
Investor Shares | |||||||||||
Net assets | — | — | |||||||||
Shares of capital stock outstanding* | — | — | |||||||||
Net asset value, offering and redemption price per share | — | — | |||||||||
Cost of investments in securities | $ | 7,805,564 | $ | 58,011,068 | |||||||
Cost of foreign currency | $ | — | $ | — | |||||||
* $0.001 par value, 2,450,000,000 shares authorized for the Portfolios in total. |
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 Global Dynamic Multi-Asset Portfolio | ||||||||||
$ | 204,741,601 | $ | 1,023,094,317 | $ | 408,632,404 | |||||||
446,708 | 1,284,371 | 77,004 | ||||||||||
1,373,993 | 5,542,009 | 1,327,946 | ||||||||||
648,462 | 1,117,830 | 3,720,761 | ||||||||||
280,153 | 831,568 | 464,990 | ||||||||||
— | — | — | ||||||||||
— | — | 856,531 | ||||||||||
21,596 | — | — | ||||||||||
207,512,513 | 1,031,870,095 | 415,079,636 | ||||||||||
302,177 | — | — | ||||||||||
126,108 | 865,650 | 233,852 | ||||||||||
55,288 | 453,687 | 149,306 | ||||||||||
41,500 | 173,866 | 82,956 | ||||||||||
25,998 | 42,339 | 38,470 | ||||||||||
— | 3,675,702 | — | ||||||||||
1,524,338 | 2,405,096 | 5,194,970 | ||||||||||
108,788 | 2,098,801 | 115,015 | ||||||||||
— | — | 1,970,705 | ||||||||||
16,867 | 126,146 | 32,525 | ||||||||||
2,201,064 | 9,841,287 | 7,817,799 | ||||||||||
$ | 205,311,449 | $ | 1,022,028,808 | $ | 407,261,837 | |||||||
$ | 171,751,051 | $ | 1,003,367,775 | $ | 365,035,930 | |||||||
3,053,424 | 11,297,926 | 2,791,152 | ||||||||||
5,612,033 | (22,934,314 | ) | 20,091,436 | |||||||||
24,902,444 | 30,366,324 | 20,476,026 | ||||||||||
(7,503 | ) | (68,903 | ) | (18,533 | ) | |||||||
— | — | (1,114,174 | ) | |||||||||
$ | 205,311,449 | $ | 1,022,028,808 | $ | 407,261,837 | |||||||
$ | 205,311,449 | $ | 825,147,145 | $ | 407,261,837 | |||||||
19,539,420 | 39,786,386 | 30,361,074 | ||||||||||
$ | 10.51 | $ | 20.74 | $ | 13.41 | |||||||
— | $ | 196,881,663 | — | |||||||||
— | 9,595,062 | — | ||||||||||
— | $ | 20.52 | — | |||||||||
$ | 179,839,157 | $ | 989,052,291 | $ | 388,156,378 | |||||||
$ | 446,865 | $ | 1,285,583 | $ | 77,100 |
Semi-Annual Report 39
Lazard Retirement Series, Inc. Statements of Operations (unaudited)
For the Six Months Ended June 30, 2018 | Lazard Retirement US Strategic Equity Portfolio | Lazard Retirement US Small-Mid Cap Equity Portfolio | |||||||||
Investment Income (Loss) | |||||||||||
Income | |||||||||||
Dividends | $ | 86,167 | $ | 417,609 | |||||||
Interest | — | — | |||||||||
Total investment income* | 86,167 | 417,609 | |||||||||
Expenses | |||||||||||
Management fees (Note 3) | 33,070 | 243,430 | |||||||||
Distribution fees (Service Shares) | 11,829 | 81,143 | |||||||||
Custodian fees | 14,275 | 17,182 | |||||||||
Professional services | 18,385 | 22,291 | |||||||||
Administration fees | 592 | 4,057 | |||||||||
Shareholders’ reports | 5,677 | 8,602 | |||||||||
Directors’ fees and expenses | 2,639 | 3,580 | |||||||||
Shareholders’ services | 6,401 | 6,557 | |||||||||
Other | 814 | 1,145 | |||||||||
Total gross expenses | 93,682 | 387,987 | |||||||||
Management fees waived and expenses reimbursed | (46,365 | ) | (14,727 | ) | |||||||
Total net expenses | 47,317 | 373,260 | |||||||||
Net investment income (loss) | 38,850 | 44,349 | |||||||||
Net Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions and Forward Currency Contracts | |||||||||||
Net realized gain (loss) on: | |||||||||||
Investments** | 500,032 | 4,686,102 | |||||||||
Foreign currency transactions | — | — | |||||||||
Forward currency contracts | — | — | |||||||||
Total net realized gain (loss) on investments, foreign currency transactions and forward currency contracts | 500,032 | 4,686,102 | |||||||||
Net change in unrealized appreciation (depreciation) on: | |||||||||||
Investments† | (257,432 | ) | (2,168,570 | ) | |||||||
Foreign currency translations | — | — | |||||||||
Forward currency contracts | — | — | |||||||||
Total net change in unrealized appreciation (depreciation) on investments, foreign currency translations and forward currency contracts | (257,432 | ) | (2,168,570 | ) | |||||||
Net realized and unrealized gain (loss) on investments, foreign currency transactions and forward currency contracts | 242,600 | 2,517,532 | |||||||||
Net increase (decrease) in net assets resulting from operations | $ | 281,450 | $ | 2,561,881 | |||||||
* Net of foreign withholding taxes of | $ | 116 | $ | — | |||||||
** Net of foreign capital gains taxes of | $ | — | $ | — | |||||||
† Includes net change in unrealized appreciation (depreciation) of foreign capital gains taxes of | $ | — | $ | — |
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 Global Dynamic Multi-Asset Portfolio | ||||||||||
$ | 3,907,450 | $ | 17,783,495 | $ | 3,729,827 | |||||||
— | — | 1,139,859 | ||||||||||
3,907,450 | 17,783,495 | 4,869,686 | ||||||||||
806,922 | 5,803,476 | 1,577,096 | ||||||||||
268,974 | 1,159,735 | 492,842 | ||||||||||
36,337 | 273,400 | 92,979 | ||||||||||
45,955 | 103,089 | 51,020 | ||||||||||
13,449 | 71,920 | 24,642 | ||||||||||
14,190 | 66,503 | 23,169 | ||||||||||
6,045 | 21,554 | 8,605 | ||||||||||
6,550 | 17,375 | 6,934 | ||||||||||
2,922 | 8,725 | 3,531 | ||||||||||
1,201,344 | 7,525,777 | 2,280,818 | ||||||||||
(6,004 | ) | — | (210,880 | ) | ||||||||
1,195,340 | 7,525,777 | 2,069,938 | ||||||||||
2,712,110 | 10,257,718 | 2,799,748 | ||||||||||
6,120,584 | 31,746,032 | 18,426,340 | ||||||||||
(18,048 | ) | (267,665 | ) | 32,354 | ||||||||
— | — | 1,241,052 | ||||||||||
6,102,536 | 31,478,367 | 19,699,746 | ||||||||||
(14,972,281 | ) | (181,709,372 | ) | (24,229,025 | ) | |||||||
(22,296 | ) | (62,584 | ) | (28,360 | ) | |||||||
— | — | (842,827 | ) | |||||||||
(14,994,577 | ) | (181,771,956 | ) | (25,100,212 | ) | |||||||
(8,892,041 | ) | (150,293,589 | ) | (5,400,466 | ) | |||||||
$ | (6,179,931 | ) | $ | (140,035,871 | ) | $ | (2,600,718 | ) | ||||
$ | 442,287 | $ | 2,619,222 | $ | 264,151 | |||||||
$ | — | $ | 7,772 | $ | — | |||||||
$ | — | $ | (3,548,084 | ) | $ | — |
Semi-Annual Report 41
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, 2018 (unaudited) | Year Ended December 31, 2017 | Six Months Ended June 30, 2018 (unaudited) | Year Ended December 31, 2017 | ||||||||||||||||
Increase (Decrease) in Net Assets | |||||||||||||||||||
Operations | |||||||||||||||||||
Net investment income (loss) | $ | 38,850 | $ | 82,899 | $ | 44,349 | $ | 60,436 | |||||||||||
Net realized gain (loss) on investments, foreign currency transactions and forward currency contracts | 500,032 | 1,078,806 | 4,686,102 | 7,517,861 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and forward currency contracts | (257,432 | ) | 458,571 | (2,168,570 | ) | 841,214 | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 281,450 | 1,620,276 | 2,561,881 | 8,419,511 | |||||||||||||||
Distributions to shareholders | |||||||||||||||||||
From net investment income | |||||||||||||||||||
Service Shares | — | (149,459 | ) | — | (230,504 | ) | |||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||
From net realized gains | |||||||||||||||||||
Service Shares | — | (284,563 | ) | — | (6,156,719 | ) | |||||||||||||
Net decrease in net assets resulting from distributions | — | (434,022 | ) | — | (6,387,223 | ) | |||||||||||||
Capital stock transactions | |||||||||||||||||||
Net proceeds from sales | |||||||||||||||||||
Service Shares | 983,814 | 1,999,390 | 3,565,066 | 9,107,568 | |||||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||
Net proceeds from reinvestment of distributions | |||||||||||||||||||
Service Shares | — | 434,022 | — | 6,387,223 | |||||||||||||||
Investor Shares | — | — | — | — | |||||||||||||||
Cost of shares redeemed | |||||||||||||||||||
Service Shares | (1,843,025 | ) | (4,227,255 | ) | (7,797,000 | ) | (16,136,589 | ) | |||||||||||
Investor Shares | — | — | — | — | |||||||||||||||
Net increase (decrease) in net assets from capital stock transactions | (859,211 | ) | (1,793,843 | ) | (4,231,934 | ) | (641,798 | ) | |||||||||||
Total increase (decrease) in net assets | (577,761 | ) | (607,589 | ) | (1,670,053 | ) | 1,390,490 | ||||||||||||
Net assets at beginning of period | 9,830,204 | 10,437,793 | 66,868,574 | 65,478,084 | |||||||||||||||
Net assets at end of period* | $ | 9,252,443 | $ | 9,830,204 | $ | 65,198,521 | $ | 66,868,574 | |||||||||||
* Includes undistributed (distributions in excess of) net investment income (loss) of | $ | 45,491 | $ | 6,641 | $ | 38,900 | $ | (5,449 | ) | ||||||||||
Shares issued and redeemed | |||||||||||||||||||
Service Shares | |||||||||||||||||||
Shares outstanding at beginning of period | 757,010 | 906,860 | 8,031,487 | 8,090,372 | |||||||||||||||
Shares sold | 73,959 | 160,592 | 421,455 | �� | 1,102,955 | ||||||||||||||
Shares issued to shareholders from reinvestment of distributions | — | 33,683 | — | 790,116 | |||||||||||||||
Shares redeemed | (138,438 | ) | (344,125 | ) | (922,722 | ) | (1,951,956 | ) | |||||||||||
Net increase (decrease) | (64,479 | ) | (149,850 | ) | (501,267 | ) | (58,885 | ) | |||||||||||
Shares outstanding at end of period | 692,531 | 757,010 | 7,530,220 | 8,031,487 | |||||||||||||||
Investor Shares | |||||||||||||||||||
Shares outstanding at beginning of period | — | — | — | — | |||||||||||||||
Shares sold | — | — | — | — | |||||||||||||||
Shares issued to shareholders from reinvestment of distributions | — | — | — | — | |||||||||||||||
Shares redeemed | — | — | — | — | |||||||||||||||
Net increase (decrease) | — | — | — | — | |||||||||||||||
Shares outstanding at end of period | — | — | — | — |
The accompanying notes are an integral part of these financial statements.
42 Semi-Annual Report
Lazard Retirement International Equity Portfolio | Lazard Retirement Emerging Markets Equity Portfolio | Lazard Retirement Global Dynamic Multi-Asset Portfolio | ||||||||||||||||||||||
Six Months Ended June 30, 2018 (unaudited) | Year Ended December 31, 2017 | Six Months Ended June 30, 2018 (unaudited) | Year Ended December 31, 2017 | Six Months Ended June 30, 2018 (unaudited) | Year Ended December 31, 2017 | |||||||||||||||||||
$ | 2,712,110 | $ | 3,377,495 | $ | 10,257,718 | $ | 16,629,612 | $ | 2,799,748 | $ | 4,238,978 | |||||||||||||
6,102,536 | 81,111,504 | 31,478,367 | 27,885,717 | 19,699,746 | 18,647,334 | |||||||||||||||||||
(14,994,577 | ) | (23,520,836 | ) | (181,771,956 | ) | 228,603,256 | (25,100,212 | ) | 38,581,654 | |||||||||||||||
(6,179,931 | ) | 60,968,163 | (140,035,871 | ) | 273,118,585 | (2,600,718 | ) | 61,467,966 | ||||||||||||||||
— | (5,235,528 | ) | — | (15,335,733 | ) | — | — | |||||||||||||||||
— | — | — | (4,580,560 | ) | — | — | ||||||||||||||||||
— | (46,926,172 | ) | — | — | — | (20,127,755 | ) | |||||||||||||||||
— | (52,161,700 | ) | — | (19,916,293 | ) | — | (20,127,755 | ) | ||||||||||||||||
13,947,186 | 73,001,825 | 85,313,263 | 168,980,904 | 58,916,852 | 86,194,773 | |||||||||||||||||||
— | — | 19,423,624 | 46,100,850 | — | — | |||||||||||||||||||
— | 52,161,700 | — | 15,335,733 | — | 20,127,755 | |||||||||||||||||||
— | — | — | 4,580,560 | — | — | |||||||||||||||||||
(23,762,403 | ) | (565,677,666 | ) | (90,368,918 | ) | (325,859,757 | ) | (33,262,052 | ) | (56,741,278 | ) | |||||||||||||
— | — | (33,532,077 | ) | (48,566,540 | ) | — | — | |||||||||||||||||
(9,815,217 | ) | (440,514,141 | ) | (19,164,108 | ) | (139,428,250 | ) | 25,654,800 | 49,581,250 | |||||||||||||||
(15,995,148 | ) | (431,707,678 | ) | (159,199,979 | ) | 113,774,042 | 23,054,082 | 90,921,461 | ||||||||||||||||
221,306,597 | 653,014,275 | 1,181,228,787 | 1,067,454,745 | 384,207,755 | 293,286,294 | |||||||||||||||||||
$ | 205,311,449 | $ | 221,306,597 | $ | 1,022,028,808 | $ | 1,181,228,787 | $ | 407,261,837 | $ | 384,207,755 | |||||||||||||
$ | 3,053,424 | $ | 341,314 | $ | 11,297,926 | $ | 1,040,208 | $ | 2,791,152 | $ | (8,596 | ) | ||||||||||||
20,441,925 | 56,443,790 | 39,964,765 | 46,868,834 | 28,474,543 | 24,807,688 | |||||||||||||||||||
1,279,737 | 5,964,005 | 3,651,336 | 7,889,712 | 4,333,392 | 6,565,631 | |||||||||||||||||||
— | 4,806,678 | — | 670,092 | — | 1,499,459 | |||||||||||||||||||
(2,182,242 | ) | (46,772,548 | ) | (3,829,715 | ) | (15,463,873 | ) | (2,446,861 | ) | (4,398,235 | ) | |||||||||||||
(902,505 | ) | (36,001,865 | ) | (178,379 | ) | (6,904,069 | ) | 1,886,531 | 3,666,855 | |||||||||||||||
19,539,420 | 20,441,925 | 39,786,386 | 39,964,765 | 30,361,074 | 28,474,543 | |||||||||||||||||||
— | — | 10,240,090 | 10,098,734 | — | — | |||||||||||||||||||
— | — | 817,781 | 2,190,292 | — | — | |||||||||||||||||||
— | — | — | 202,231 | — | — | |||||||||||||||||||
— | — | (1,462,809 | ) | (2,251,167 | ) | — | — | |||||||||||||||||
— | — | (645,028 | ) | 141,356 | — | — | ||||||||||||||||||
— | — | 9,595,062 | 10,240,090 | — | — |
Semi-Annual Report 43
Lazard Retirement Series, Inc. Financial Highlights
LAZARD RETIREMENT US STRATEGIC EQUITY PORTFOLIO
Six Months | |||||||||||||||||||||||||
Selected data for a share of capital | Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/18† | 12/31/17 | 12/31/16 | 12/31/15 | 12/31/14 | 12/31/13 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.99 | $ | 11.51 | $ | 10.64 | $ | 12.15 | $ | 12.02 | $ | 10.44 | |||||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) | 0.06 | 0.13 | 0.10 | 0.06 | 0.09 | 0.11 | |||||||||||||||||||
Net realized and unrealized gain (loss) | 0.31 | 1.94 | 0.90 | (0.73 | ) | 1.68 | 2.80 | ||||||||||||||||||
Total from investment operations | 0.37 | 2.07 | 1.00 | (0.67 | ) | 1.77 | 2.91 | ||||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | — | (0.20 | ) | (0.01 | ) | (0.05 | ) | (0.09 | ) | (0.11 | ) | ||||||||||||||
Net realized gains | — | (0.39 | ) | (0.12 | ) | (0.79 | ) | (1.55 | ) | (1.22 | ) | ||||||||||||||
Total distributions | — | (0.59 | ) | (0.13 | ) | (0.84 | ) | (1.64 | ) | (1.33 | ) | ||||||||||||||
Net asset value, end of period | $ | 13.36 | $ | 12.99 | $ | 11.51 | $ | 10.64 | $ | 12.15 | $ | 12.02 | |||||||||||||
Total Return (a) | 2.85 | % | 18.10 | % | 9.42 | % | –5.44 | % | 14.71 | % | 28.07 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 9,252 | $ | 9,830 | $ | 10,438 | $ | 11,529 | $ | 12,391 | $ | 8,944 | |||||||||||||
Ratios to average net assets (b): | |||||||||||||||||||||||||
Net expenses | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | |||||||||||||
Gross expenses | 1.98 | % | 2.14 | % | 2.48 | % | 2.31 | % | 2.59 | % | 2.88 | % | |||||||||||||
Net investment income (loss) | 0.82 | % | 0.84 | % | 0.86 | % | 0.53 | % | 0.79 | % | 0.97 | % | |||||||||||||
Portfolio turnover rate | 28 | % | 76 | % | 58 | % | 86 | % | 72 | % | 66 | % |
† | Unaudited. |
(a) | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. Returns for a period of less than one year are not annualized. |
(b) | 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 US SMALL-MID CAP EQUITY PORTFOLIO
Six Months | |||||||||||||||||||||||||
Selected data for a share of capital | Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/18† | 12/31/17 | 12/31/16 | 12/31/15 | 12/31/14 | 12/31/13 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.33 | $ | 8.09 | $ | 7.39 | $ | 8.18 | $ | 8.71 | $ | 7.30 | |||||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) | 0.01 | 0.01 | 0.03 | ^ | (0.02 | ) | (0.02 | ) | (0.03 | ) | |||||||||||||||
Net realized and unrealized gain (loss) | 0.32 | 1.07 | 1.09 | (0.19 | ) | 0.94 | 2.53 | ||||||||||||||||||
Total from investment operations | 0.33 | 1.08 | 1.12 | (0.21 | ) | 0.92 | 2.50 | ||||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | — | (0.03 | ) | — | — | — | — | ||||||||||||||||||
Net realized gains | — | (0.81 | ) | (0.42 | ) | (0.58 | ) | (1.45 | ) | (1.09 | ) | ||||||||||||||
Total distributions | — | (0.84 | ) | (0.42 | ) | (0.58 | ) | (1.45 | ) | (1.09 | ) | ||||||||||||||
Net asset value, end of period | $ | 8.66 | $ | 8.33 | $ | 8.09 | $ | 7.39 | $ | 8.18 | $ | 8.71 | |||||||||||||
Total Return (a) | 3.96 | % | 13.95 | % | 15.78 | %^ | –2.38 | % | 11.03 | % | 35.08 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 65,199 | $ | 66,869 | $ | 65,478 | $ | 59,499 | $ | 63,491 | $ | 58,923 | |||||||||||||
Ratios to average net assets (b): | |||||||||||||||||||||||||
Net expenses | 1.15 | % | 1.19 | % | 1.25 | %^ | 1.25 | % | 1.25 | % | 1.25 | % | |||||||||||||
Gross expenses | 1.20 | % | 1.25 | % | 1.32 | % | 1.35 | % | 1.32 | % | 1.35 | % | |||||||||||||
Net investment income (loss) | 0.14 | % | 0.09 | % | 0.46 | %^ | –0.22 | % | –0.20 | % | –0.33 | % | |||||||||||||
Portfolio turnover rate | 43 | % | 79 | % | 94 | % | 89 | % | 92 | % | 101 | % |
† | Unaudited. |
^ | Refer to Note 3 in the Notes to Financial Statements for discussion of prior period custodian out-of-pocket expenses that were reimbursed to the Portfolio in the period. The amount of the reimbursement was less than $0.005 per share. There was no impact on the total return of the Portfolio. The net expenses and net investment income (loss) ratios of the Portfolio would be unchanged as the change to the period custodian fees was offset against the period expense waivers/reimbursements with no impact to net expenses or net investment income (loss). |
(a) | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. Returns for a period of less than one year are 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 45
LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO
Six Months | |||||||||||||||||||||||||
Selected data for a share of capital | Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/18† | 12/31/17 | 12/31/16 | 12/31/15 | 12/31/14 | 12/31/13 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.83 | $ | 11.57 | $ | 12.28 | $ | 12.50 | $ | 13.26 | $ | 11.12 | |||||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) | 0.14 | 0.31 | 0.19 | ^ | 0.19 | 0.21 | 0.17 | ||||||||||||||||||
Net realized and unrealized gain (loss) | (0.46 | ) | 2.24 | (0.71 | ) | 0.02 | (0.76 | ) | 2.13 | ||||||||||||||||
Total from investment operations | (0.32 | ) | 2.55 | (0.52 | ) | 0.21 | (0.55 | ) | 2.30 | ||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | — | (0.33 | ) | (0.16 | ) | (0.21 | ) | (0.21 | ) | (0.16 | ) | ||||||||||||||
Net realized gains | — | (2.96 | ) | (0.03 | ) | (0.22 | ) | — | — | ||||||||||||||||
Total distributions | — | (3.29 | ) | (0.19 | ) | (0.43 | ) | (0.21 | ) | (0.16 | ) | ||||||||||||||
Net asset value, end of period | $ | 10.51 | $ | 10.83 | $ | 11.57 | $ | 12.28 | $ | 12.50 | $ | 13.26 | |||||||||||||
Total Return (a) | –2.95 | %* | 22.33 | % | –4.29 | %^ | 1.75 | % | –4.21 | % | 20.76 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 205,311 | $ | 221,307 | $ | 653,014 | $ | 682,012 | $ | 690,324 | $ | 689,512 | |||||||||||||
Ratios to average net assets (b): | |||||||||||||||||||||||||
Net expenses | 1.11 | % | 1.11 | % | 1.08 | %^ | 1.11 | % | 1.09 | % | 1.10 | % | |||||||||||||
Gross expenses | 1.12 | % | 1.12 | % | 1.09 | % | 1.11 | % | 1.09 | % | 1.10 | % | |||||||||||||
Net investment income (loss) | 2.52 | % | 1.11 | % | 1.59 | %^ | 1.42 | % | 1.59 | % | 1.41 | % | |||||||||||||
Portfolio turnover rate | 15 | % | 44 | % | 28 | % | 37 | % | 34 | % | 40 | % |
† | Unaudited. |
^ | Refer to Note 3 in the Notes to Financial Statements for discussion of prior period custodian out-of-pocket expenses that were reimbursed to the Portfolio in the period. The amount of the reimbursement was less than $0.005 per share. There was no impact on the total return of the Portfolio. There was a 0.01% impact on the net expenses and net investment income (loss) ratios of the Portfolio. |
* | The Portfolio received settlement proceeds from a foreign exchange trading class action lawsuit. The proceeds from the settlement represented a realized gain and was recorded in the period received. There was a 0.10% impact on the total return of the Portfolio. |
(a) | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. Returns for a period of less than one year are not annualized. |
(b) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
46 Semi-Annual Report
LAZARD RETIREMENT EMERGING MARKETS EQUITY PORTFOLIO
Six Months | |||||||||||||||||||||||||
Selected data for a share of capital | Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/18† | 12/31/17 | 12/31/16 | 12/31/15 | 12/31/14 | 12/31/13 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.59 | $ | 18.78 | $ | 15.70 | $ | 19.96 | $ | 21.51 | $ | 22.22 | |||||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) (a) | 0.20 | 0.31 | 0.23 | ^ | 0.27 | 0.37 | 0.31 | ||||||||||||||||||
Net realized and unrealized gain (loss) | (3.05 | ) | 4.89 | 3.04 | (4.27 | ) | (1.35 | ) | (0.58 | ) | |||||||||||||||
Total from investment operations | (2.85 | ) | 5.20 | 3.27 | (4.00 | ) | (0.98 | ) | (0.27 | ) | |||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | — | (0.39 | ) | (0.19 | ) | (0.21 | ) | (0.37 | ) | (0.31 | ) | ||||||||||||||
Net realized gains | — | — | — | (0.05 | ) | (0.20 | ) | (0.13 | ) | ||||||||||||||||
Total distributions | — | (0.39 | ) | (0.19 | ) | (0.26 | ) | (0.57 | ) | (0.44 | ) | ||||||||||||||
Net asset value, end of period | $ | 20.74 | $ | 23.59 | $ | 18.78 | $ | 15.70 | $ | 19.96 | $ | 21.51 | |||||||||||||
Total Return (b) | –12.08 | % | 27.76 | % | 20.84 | %^ | –20.05 | % | –4.64 | % | –1.24 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 825,147 | $ | 942,572 | $ | 880,047 | $ | 754,835 | $ | 859,747 | $ | 846,233 | |||||||||||||
Ratios to average net assets (c): | |||||||||||||||||||||||||
Net expenses | 1.35 | % | 1.38 | % | 1.37 | %^ | 1.39 | % | 1.38 | % | 1.38 | % | |||||||||||||
Gross expenses | 1.35 | % | 1.38 | % | 1.38 | % | 1.39 | % | 1.38 | % | 1.38 | % | |||||||||||||
Net investment income (loss) | 1.72 | % | 1.45 | % | 1.29 | %^ | 1.43 | % | 1.66 | % | 1.42 | % | |||||||||||||
Portfolio turnover rate | 8 | % | 10 | % | 12 | % | 9 | % | 12 | % | 14 | % |
Six Months | |||||||||||||||||||||||||
Selected data for a share of capital | Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/18† | 12/31/17 | 12/31/16 | 12/31/15 | 12/31/14 | 12/31/13 | |||||||||||||||||||
Investor Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.31 | $ | 18.56 | $ | 15.51 | $ | 19.74 | $ | 21.28 | $ | 21.99 | |||||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) (a) | 0.22 | 0.37 | 0.26 | ^ | 0.32 | 0.42 | 0.37 | ||||||||||||||||||
Net realized and unrealized gain (loss) | (3.01 | ) | 4.83 | 3.02 | (4.25 | ) | (1.34 | ) | (0.59 | ) | |||||||||||||||
Total from investment operations | (2.79 | ) | 5.20 | 3.28 | (3.93 | ) | (0.92 | ) | (0.22 | ) | |||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | — | (0.45 | ) | (0.23 | ) | (0.25 | ) | (0.42 | ) | (0.36 | ) | ||||||||||||||
Net realized gains | — | — | — | (0.05 | ) | (0.20 | ) | (0.13 | ) | ||||||||||||||||
Total distributions | — | (0.45 | ) | (0.23 | ) | (0.30 | ) | (0.62 | ) | (0.49 | ) | ||||||||||||||
Net asset value, end of period | $ | 20.52 | $ | 23.31 | $ | 18.56 | $ | 15.51 | $ | 19.74 | $ | 21.28 | |||||||||||||
Total Return (b) | –11.97 | % | 28.07 | % | 21.18 | %^ | –19.90 | % | –4.38 | % | –1.01 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 196,882 | $ | 238,656 | $ | 187,408 | $ | 158,018 | $ | 229,855 | $ | 260,330 | |||||||||||||
Ratios to average net assets (c): | |||||||||||||||||||||||||
Net expenses | 1.10 | % | 1.14 | % | 1.12 | %^ | 1.15 | % | 1.14 | % | 1.14 | % | |||||||||||||
Gross expenses | 1.10 | % | 1.14 | % | 1.14 | % | 1.15 | % | 1.14 | % | 1.14 | % | |||||||||||||
Net investment income (loss) | 1.95 | % | 1.74 | % | 1.52 | %^ | 1.71 | % | 1.91 | % | 1.71 | % | |||||||||||||
Portfolio turnover rate | 8 | % | 10 | % | 12 | % | 9 | % | 12 | % | 14 | % |
† | Unaudited. |
^ | Refer to Note 3 in the Notes to Financial Statements for discussion of prior period custodian out-of-pocket expenses that were reimbursed to the Portfolio in the period. The amount of the reimbursement was less than $0.005 per share. There was a 0.06% impact on the total return of the Portfolio. There was a 0.02% impact on the net expenses and net investment income (loss) ratios of the Portfolio. |
(a) | Net investment income (loss) 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. Returns for a period of less than one year are not annualized. |
(c) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
Semi-Annual Report 47
LAZARD RETIREMENT GLOBAL DYNAMIC MULTI-ASSET PORTFOLIO
Six Months | |||||||||||||||||||||||||
Selected data for a share of capital | Ended | Year Ended | |||||||||||||||||||||||
stock outstanding throughout each period | 6/30/18† | 12/31/17 | 12/31/16 | 12/31/15 | 12/31/14 | 12/31/13 | |||||||||||||||||||
Service Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.49 | $ | 11.82 | $ | 11.51 | $ | 11.86 | $ | 12.30 | $ | 10.54 | |||||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) | 0.09 | 0.17 | 0.14 | 0.13 | 0.11 | 0.06 | |||||||||||||||||||
Net realized and unrealized gain (loss) | (0.17 | ) | 2.25 | 0.24 | (0.19 | ) | 0.23 | 1.99 | |||||||||||||||||
Total from investment operations | (0.08 | ) | 2.42 | 0.38 | (0.06 | ) | 0.34 | 2.05 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | — | — | (0.03 | ) | — | (0.07 | ) | (0.04 | ) | ||||||||||||||||
Net realized gains | — | (0.75 | ) | (0.04 | ) | (0.29 | ) | (0.71 | ) | (0.25 | ) | ||||||||||||||
Total distributions | — | (0.75 | ) | (0.07 | ) | (0.29 | ) | (0.78 | ) | (0.29 | ) | ||||||||||||||
Net asset value, end of period | $ | 13.41 | $ | 13.49 | $ | 11.82 | $ | 11.51 | $ | 11.86 | $ | 12.30 | |||||||||||||
Total Return (a) | –0.59 | % | 20.53 | % | 3.30 | % | –0.44 | % | 2.70 | % | 19.49 | % | |||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 407,262 | $ | 384,208 | $ | 293,286 | $ | 222,666 | $ | 176,669 | $ | 99,760 | |||||||||||||
Ratios to average net assets (b): | |||||||||||||||||||||||||
Net expenses | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | |||||||||||||
Gross expenses | 1.16 | % | 1.19 | % | 1.25 | % | 1.31 | % | 1.33 | % | 1.70 | % | |||||||||||||
Net investment income (loss) | 1.42 | % | 1.28 | % | 1.23 | % | 1.18 | % | 1.19 | % | 1.01 | % | |||||||||||||
Portfolio turnover rate | 57 | % | 104 | % | 105 | % | 114 | % | 105 | % | 62 | % |
† | Unaudited. |
(a) | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio may have been waived or reimbursed by the Investment Manager, State Street or DST; 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. Returns for a period of less than one year are not annualized. |
(b) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
48 Semi-Annual Report
Lazard Retirement Series, Inc. Notes to Financial Statements June 30, 2018 (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 “1940 Act”), as an open-end management investment company. The Fund, comprised of twenty-three no-load portfolios (each referred to as a “Portfolio”), is 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 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. As of June 30, 2018, only Lazard Retirement Emerging Markets Equity Portfolio had issued Investor Shares. Currently, only the following five Portfolios, each of which is “diversified”, as defined in the 1940 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 Global Dynamic Multi-Asset Portfolio (“Global Dynamic Multi-Asset Portfolio”). Each of the other eighteen Portfolios had not commenced operations as of June 30, 2018.
2. Significant Accounting Policies
The accompanying financial statements are presented in conformity with GAAP. The Fund is an investment company and therefore applies specialized accounting guidance in accordance with Accounting Standards Codification Topic 946. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements:
(a) Valuation of Investments—Equity securities traded on a securities exchange or market, including exchange-traded option contracts, rights and warrants,
are valued at the last reported sales price (for domestic equity securities) or the closing price (for foreign equity securities) on the exchange or market on which the security is principally traded or, for securities trading on the NASDAQ National Market System (“NASDAQ”), the NASDAQ Official Closing Price. If there is no available closing price for a foreign equity security, the last reported sales price is used. If there are no reported sales of a security on the valuation date, the security is valued at the most recent quoted bid price on such date reported by such principal exchange or market. Forward currency contracts generally are valued using quotations from an independent pricing service. Investments in money market funds are valued at the fund’s net asset value (“NAV”) per share.
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 on, among other things, trading in securities with similar characteristics, brokers’ quotations and/or a matrix system which considers such factors as other security prices, yields and maturities.
Calculation of a Portfolio’s NAV may not take place contemporaneously with the determination of the prices of portfolio assets used in such calculation. Trading on Europe, Latin and South America and Far East securities exchanges and in over-the-counter markets ordinarily is completed well before the close of business on each business day in New York (i.e., a day on which the New York Stock Exchange (the “NYSE”) is open). In addition, European or Far Eastern securities trading generally, or in a particular country or countries, may not take place on all business days in New York and on which the NAV of a Portfolio is calculated.
The Valuation Committee of the Investment Manager, which meets periodically under the direction of the Board of Directors (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
Semi-Annual Report 49
Investment Manager’s portfolio managers/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 NAV 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 NAV of a Portfolio will reflect the affected securities’ values 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’ NAVs.
(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 except for certain dividends from non-US securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by a Portfolio. Interest income, if any, is accrued daily. A Portfolio amortizes premiums and accretes discounts on fixed-income securities using the effective yield method.
A Portfolio may be subject to taxes imposed by non-US countries in which it invests. Such taxes are generally based upon income earned or capital gains (realized and/or unrealized). An affected Portfolio accrues and applies such taxes to net investment income, net realized gains and net unrealized gains concurrent with the recognition of income earned or capital gains (realized and/or unrealized) from the applicable portfolio securities.
As a result of several court cases in certain countries across the European Union, some Portfolios have filed tax reclaims for previously withheld taxes on dividends earned in those countries. These filings are subject to various administrative proceedings by the local jurisdictions’ tax authorities within the European Union, as well as a number of related judicial proceedings. Uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these claims, and the potential timing of payment, and accordingly no amounts are reflected in the financial statements. Such amounts, if and when recorded, could result in an increase in a Portfolio’s NAV per share.
(c) Foreign Currency Translation and Forward Currency Contracts—The accounting records of the Fund 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 transactions and forward currency contracts represent 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 the Portfo-
50 Semi-Annual Report
lios’ accounting records and the US dollar equivalent amounts actually received or paid. Net change in unrealized appreciation (depreciation) on foreign currency translations 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, a 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.
During the period ended June 30, 2018, the Global Dynamic Multi-Asset Portfolio traded in forward currency contracts.
(d) Federal Income Taxes—The Fund’s policy is to have each Portfolio qualify as a regulated investment company under Subchapter M of the Internal Revenue Code (the “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, 2017, the following Portfolio had unused realized capital loss carryovers which, for federal income tax purposes, could be used to offset future realized capital gains with no expiration date as follows:
Portfolio | Short-Term | Long-Term | ||||||
Emerging Markets Equity | $ | (2,616,173 | ) | $ | (43,779,077 | ) |
Under current tax law, post-October capital losses or certain late-year ordinary losses, as defined by the
Code, 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 December 31, 2017, the Portfolios had no such losses to defer.
For federal income tax purposes, the aggregate cost, aggregate gross unrealized appreciation, aggregate gross unrealized depreciation and the net unrealized appreciation (depreciation) were as follows:
Portfolio | Aggregate Cost | Aggregate Gross Unrealized Appreciation | Aggregate Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
US Strategic Equity | $ | 7,805,564 | $ | 1,563,709 | $ | 131,387 | $ | 1,432,322 | ||||||||
US Small-Mid Cap Equity | 58,011,068 | 8,396,375 | 1,503,495 | 6,892,880 | ||||||||||||
International Equity | 179,839,157 | 32,625,385 | 7,722,941 | 24,902,444 | ||||||||||||
Emerging Markets Equity | 989,052,291 | 192,914,161 | 158,872,135 | 34,042,026 | ||||||||||||
Global Dynamic Multi-Asset | 388,156,378 | 32,519,757 | 13,157,905 | 19,361,852 |
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 tax returns filed for any open tax years (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction’s statute of limitations. The Fund files a US federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
(e) Dividends and Distributions—Dividends from net investment income, if any, will be declared and paid annually. 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. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
Semi-Annual Report 51
Income 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. The book/tax differences relating to shareholder distributions may result in reclassifications among certain capital accounts.
(f) Allocation of Expenses—Expenses common to the Fund, The Lazard Funds, Inc., Lazard Global Total Return and Income Fund, Inc. and Lazard World Dividend & Income Fund, Inc. (each a “Lazard Fund” and collectively, the “Lazard Fund Complex”), each a registered management investment company advised by the Investment Manager, not directly chargeable to one or more specific Lazard Funds are allocated to the Fund and among its Portfolios primarily on the basis of relative net assets. Expenses of the Fund not directly chargeable to one or more Portfolios are similarly allocated among the Portfolios on the basis of relative net assets. Portfolios accrue distribution and service (12b-1) fees to Service Shares. The Portfolios’ 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.
(g) Estimates—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets resulting from operations during the reporting period. Actual results could differ from those estimates.
(h) Net Asset Value—NAV per share for each class of each Portfolio is determined each day the NYSE is open for trading as of the close of regular trading on the NYSE (generally 4:00 p.m. Eastern time). The Fund will not treat an intraday unscheduled disruption in NYSE trading as a closure of the NYSE, and will price its shares as of 4:00 p.m., if the particular disruption
directly affects only the NYSE. NAV per share is determined by dividing the value of the total assets of the Portfolio represented by such class, less all liabilities, by the total number of Portfolio shares of such class outstanding.
3. Investment Management, Administration, Custody, Distribution and Transfer Agency Agreements
The Fund, on behalf of the Portfolios, has entered into a 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 objectives and policies, including the purchase, retention and disposition of securities, and provides the Portfolios with administrative, operational and compliance assistance services. For its services provided to the Portfolios, 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:
Portfolio | Annual Rate | ||||
US Strategic Equity (a) | 0.65 | % | |||
US Small-Mid Cap Equity | 0.75 | ||||
International Equity | 0.75 | ||||
Emerging Markets Equity | 1.00 | ||||
Global Dynamic Multi-Asset | 0.80 |
(a) From January 1, 2018 to June 26, 2018, percentage was 0.70%.
The Investment Manager has voluntarily agreed to waive its fees and, if necessary, reimburse the Portfolios until May 1, 2019 if the aggregate direct expenses of the Portfolios, exclusive of taxes, brokerage, interest on borrowings, fees and expenses of “Acquired Funds” (as defined in Form N-1A) and extraordinary expenses, but including the management fee stated in the Management Agreement between the Investment Manager and the Fund, on behalf of the Portfolios, exceed the percentages of the value of the Portfolio’s average daily net assets set forth opposite the Portfolio’s name on below table hereto, the Fund, on behalf of the Portfolio, may deduct from the payment to be made to the Investment Manager under the Manage-
52 Semi-Annual Report
ment Agreement, or the Investment Manager will bear, such excess expense.
Portfolio | Service Shares | Investor Shares | ||||||
US Strategic Equity | 1.00 | % | N/A | |||||
US Small-Mid Cap Equity | 1.15 | N/A | ||||||
International Equity | 1.10 | N/A | ||||||
Emerging Markets Equity (a) | 1.50 | 1.20 | % | |||||
Global Dynamic Multi-Asset | 1.05 | N/A |
(a) | From January 1, 2018 to June 26, 2018, percentages were 1.55% and 1.30%, respectively. |
During the period ended June 30, 2018, 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 | $ 33,070 | $13,295 | ||||||
US Small-Mid Cap Equity | 14,727 | — | ||||||
International Equity | 6,004 | — | ||||||
Global Dynamic Multi-Asset | 210,880 | — |
The aforementioned waivers and/or reimbursements are not subject to recoupment by the Investment Manager.
State Street provides the Fund with custody and certain fund administration and accounting services.
In December 2015, State Street announced that it had identified inconsistencies in the way in which clients were invoiced for custody out-of-pocket expenses from 1998 until 2015. The dollar amount difference between what was charged and what should have been charged, plus interest, was recorded as a reimbursement when determined in 2016. Pursuant to the expense limitations described above, certain Portfolios experienced management fee waivers during the year ended December 31, 2016. Accordingly, the reimbursement of out-of-pocket expenses resulted in the reduction in the waiver of management fees for certain Portfolios for the year ended December 31, 2016.
The Fund has a distribution agreement with Lazard Asset Management Securities LLC (the “Distributor”), a wholly-owned subsidiary of the Investment Man-
ager, to serve as the distributor for shares of each Portfolio. The Distributor bears the cost of printing and mailing prospectuses to potential investors and certain expenses in connection with the offering of Portfolio shares.
Under a distribution and servicing plan adopted pursuant to Rule 12b-1 under the 1940 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.
DST is the Fund’s transfer and dividend disbursing agent. For its services, DST receives a monthly fee computed on the basis of the number of shareholder accounts it maintains, subject to a minimum fee amount per share class in each Portfolio, and is reimbursed for certain out-of-pocket expenses. DST has agreed to waive the monthly minimum fee for the first six months after a new Portfolio or share class has commenced operations.
4. Directors’ Compensation
Certain Directors of the Fund are officers of the Investment Manager. Effective January 1, 2018, each Director who is not an affiliated person of the Investment Manager or any of its affiliates is paid by all of the funds in the Lazard Fund Complex: (1) an annual retainer of $225,000, (2) an additional annual fee of $32,500 to the lead Independent Director (an “Independent Director” is a Director who is not an “interested person” (as defined in the 1940 Act) of the Fund), and (3) an additional annual fee of $22,500 to the Audit Committee Chair. The Independent Directors may be paid additional compensation for participation on ad hoc committees or other work performed on behalf of the Board. The Independent Directors also are reimbursed for travel and other out-of-pocket expenses for attending Board and committee meetings. The Directors do not receive benefits from the Fund pursuant to any pension, retirement or similar arrangement. Independent Directors’ fees are allocated among the funds in the Lazard Fund Complex at
Semi-Annual Report 53
a rate of $5,000 per fund with the remainder allocated based upon each fund’s proportionate share of combined net assets. The Statements of Operations show the Independent Directors’ fees and expenses paid by each Portfolio.
5. Securities Transactions and Transactions with Affiliates
Purchases and sales of portfolio securities (excluding short-term investments) for the period ended June 30, 2018 were as follows:
Portfolio | Purchases | Sales | ||||||
US Strategic Equity | $ | 2,622,272 | $ | 3,323,605 | ||||
US Small-Mid Cap Equity | 27,256,175 | 31,397,499 | ||||||
International Equity | 30,951,601 | 41,416,522 | ||||||
Emerging Markets Equity | 93,040,083 | 89,237,530 | ||||||
Global Dynamic Multi-Asset | 247,067,064 | 215,470,189 |
US Treasury Securities | ||||||||
Portfolio | Purchases | Sales | ||||||
Global Dynamic Multi-Asset | $ | 8,737,061 | $ | 3,675,059 |
For the period ended June 30, 2018, the Portfolios did not engage in any cross-trades in accordance with Rule 17a-7 under the 1940 Act, and 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. Investment Risks
(a) Non-US Securities Risk—A Portfolio’s performance will be influenced by political, social and economic factors affecting the non-US countries and companies in which the Portfolio invests. Non-US securities carry special risks, such as less developed or less efficient trading markets, political instability, a lack of company information, differing auditing and legal standards, and, potentially, less liquidity.
(b) Emerging Market Risk—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. The economies of countries with emerging markets may be based predominantly on only a few industries, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme debt burdens
or volatile inflation rates. The securities markets of emerging market countries have historically been extremely volatile. These market conditions may continue or worsen. Investments in these countries may be subject to political, economic, legal, market and currency risks. The risks may include less protection of property rights and uncertain political and economic policies, the imposition of capital controls and/or foreign investment limitations by a country, nationalization of businesses and the imposition of sanctions by other countries, such as the US. Significant devaluation of emerging market currencies against the US dollar may occur subsequent to acquisition of investments denominated in emerging market currencies.
(c) Foreign Currency Risk—Investments denominated in currencies other than US dollars may experience a decline in value, in US dollar terms, due solely to fluctuations in currency exchange rates. A Portfolio’s currency investments could be adversely affected by delays in, or a refusal to grant, repatriation of funds or conversion of emerging market currencies. The Investment Manager generally does not intend to actively hedge the Portfolios’ foreign currency exposure.
(d) Fixed-Income and Debt Securities Risk—The market value of a debt security may decline due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. The debt securities market can be susceptible to increases in volatility and decreases in liquidity. Liquidity can decline unpredictably in response to overall economic conditions or credit tightening.
Prices of bonds and other debt securities tend to move inversely with changes in interest rates. Typically, a rise in rates will adversely affect debt securities and, accordingly, will cause the value of a Portfolio’s investments in these securities to decline. Interest rate risk is usually greater for fixed-income securities with longer maturities or durations. A rise in interest rates (or the expectation of a rise in interest rates) may result in periods of volatility, decreased liquidity and increased redemptions, and, as a result, the
54 Semi-Annual Report
Portfolio may have to liquidate portfolio securities at disadvantageous prices. Risks associated with rising interest rates are heightened given that interest rates in the US and other countries are at or near historic lows. During periods of reduced market liquidity, a Portfolio may not be able to readily sell debt securities at prices at or near their perceived value. An unexpected increase in Portfolio redemption requests, including requests from shareholders who may own a significant percentage of a Portfolio’s shares, which may be triggered by market turmoil or an increase in interest rates, could cause the Portfolio to sell its holdings at a loss or at undesirable prices and adversely affect the Portfolio’s share price and increase the Portfolio’s liquidity risk, Portfolio expenses and/or taxable distributions. Economic and other developments can adversely affect debt securities markets.
A Portfolio’s investments in lower-rated, higher-yielding securities (“junk bonds”) are subject to greater credit risk than its higher-rated investments. Credit risk is the risk that the issuer will not make interest or principal payments, or will not make payments on a timely basis. Non-investment grade securities tend to be more volatile, less liquid and are considered speculative. If there is a decline, or perceived decline, in the credit quality of a debt security (or any guarantor of payment on such security), the security’s value could fall, potentially lowering a Portfolio’s share price. The prices of non-investment grade securities, unlike investment grade debt securities, may fluctuate unpredictably and not necessarily inversely with changes in interest rates. The prices of high yield securities can fall in response to negative news about the issuer or its industry, or the economy in general to a greater extent than those of higher-rated securities. The market for these securities may be less liquid and therefore these securities may be harder to value or sell at an acceptable price, especially during times of market volatility or decline.
Some fixed-income securities may give the issuer the option to call, or redeem, the securities before their maturity. If securities held by a Portfolio are called during a time of declining interest rates (which is typically the case when issuers exercise options to call outstanding securities), the Portfolio may have to
reinvest the proceeds in an investment offering a lower yield (and the Portfolio may not fully benefit from any increase in the value of its portfolio holdings as a result of declining interest rates).
Adjustable rate securities provide a Portfolio with a certain degree of protection against rises in interest rates, although such securities will participate in any declines in interest rates as well. Certain adjustable rate securities, such as those with interest rates that fluctuate directly or indirectly based on multiples of a stated index, are designed to be highly sensitive to changes in interest rates and can subject the holders thereof to extreme reductions of yield and possibly loss of principal.
(e) Derivatives and Hedging Risk—Derivatives transactions, including those entered into for hedging purposes (i.e., seeking to protect Portfolio investments), may increase volatility, reduce returns, limit gains or magnify losses, perhaps substantially, particularly since most derivatives have a leverage component that provides investment exposure in excess of the amount invested. Over-the-counter swap agreements, forward currency contracts, writing or purchasing over-the-counter options on securities (including options on exchange-traded funds and exchange-traded notes), indexes and currencies and other over-the-counter derivatives transactions are subject to the risk of default by the counterparty and can be illiquid. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices for derivatives. These derivatives transactions, as well as the exchange-traded futures and options in which certain Portfolios may invest, are subject to many of the risks of, and can be highly sensitive to changes in the value of, the related index, commodity, interest rate, currency, security or other reference asset. As such, a small investment could have a potentially large impact on a Portfolio’s performance. Purchasing options will reduce returns by the amount of premiums paid for options that are not exercised. In fact, many derivatives may be subject to greater risks than those associated with investing directly in the underlying or other reference asset. Derivatives transactions incur costs, either explicitly or implicitly, which reduce returns, and costs of engaging in such transac-
Semi-Annual Report 55
tions may outweigh any gains or any losses averted from hedging activities. Successful use of derivatives, whether for hedging or for other investment purposes, is subject to the Investment Manager’s ability to predict correctly movements in the direction of the relevant reference asset or market and, for hedging activities, correlation of the derivative instruments used with the investments seeking to be hedged. Use of derivatives transactions, even when entered into for hedging purposes, may cause a Portfolio to experience losses greater than if the Portfolio had not engaged in such transactions.
7. Contractual Obligations
The Fund enters into contracts in the normal course of business that contain a variety of indemnification provisions. 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. The fair value measurement level within the fair value hierarchy for the assets and liabilities of the Fund 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 assets and liabilities |
• | Level 2 – other significant observable inputs (including unadjusted quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets and liabilities) |
Changes in valuation technique may result in transfers into or out of the current assigned level within the hierarchy.
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in these securities.
The following table summarizes the valuation of the Portfolios’ assets and liabilities by each fair value hierarchy level as of June 30, 2018:
Description | Unadjusted Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance as of June 30, 2018 | |||||||||||||
US Strategic Equity Portfolio | |||||||||||||||||
Common Stocks* | $ | 9,003,590 | $ | — | $ | — | $ | 9,003,590 | |||||||||
Short-Term Investments | 234,296 | — | — | 234,296 | |||||||||||||
Total | $ | 9,237,886 | $ | — | $ | — | $ | 9,237,886 |
56 Semi-Annual Report
Description | Unadjusted Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance as of June 30, 2018 | |||||||||||||
US Small-Mid Cap Equity Portfolio | |||||||||||||||||
Common Stocks* | $ | 63,225,147 | $ | — | $ | — | $ | 63,225,147 | |||||||||
Short-Term Investments | 1,678,801 | — | — | 1,678,801 | |||||||||||||
Total | $ | 64,903,948 | $ | — | $ | — | $ | 64,903,948 | |||||||||
International Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 5,782,540 | $ | — | $ | 5,782,540 | |||||||||
Belgium | — | 3,280,284 | — | 3,280,284 | |||||||||||||
Brazil | 2,044,247 | — | — | 2,044,247 | |||||||||||||
Canada | 9,794,574 | — | — | 9,794,574 | |||||||||||||
Denmark | — | 2,708,827 | — | 2,708,827 | |||||||||||||
Finland | — | 2,797,493 | — | 2,797,493 | |||||||||||||
France | — | 22,531,519 | — | 22,531,519 | |||||||||||||
Germany | — | 8,625,393 | — | 8,625,393 | |||||||||||||
India | 1,870,348 | — | — | 1,870,348 | |||||||||||||
Ireland | 3,056,110 | 4,040,619 | — | 7,096,729 | |||||||||||||
Israel | — | 71,008 | — | 71,008 | |||||||||||||
Japan | — | 35,230,069 | — | 35,230,069 | |||||||||||||
Luxembourg | — | 1,616,742 | — | 1,616,742 | |||||||||||||
Netherlands | — | 13,254,158 | — | 13,254,158 | |||||||||||||
Norway | — | 5,802,082 | — | 5,802,082 | |||||||||||||
Singapore | — | 4,237,614 | — | 4,237,614 | |||||||||||||
Spain | — | 2,828,128 | — | 2,828,128 | |||||||||||||
Sweden | 676,124 | 6,718,916 | — | 7,395,040 | |||||||||||||
Switzerland | — | 14,003,284 | — | 14,003,284 | |||||||||||||
Taiwan | 1,930,368 | — | — | 1,930,368 | |||||||||||||
Turkey | — | 2,215,164 | — | 2,215,164 | |||||||||||||
United Kingdom | — | 31,297,485 | — | 31,297,485 | |||||||||||||
United States | 8,983,365 | — | — | 8,983,365 | |||||||||||||
Preferred Stocks* | — | 1,553,112 | — | 1,553,112 | |||||||||||||
Short-Term Investments | 7,792,028 | — | — | 7,792,028 | |||||||||||||
Total | $ | 36,147,164 | $ | 168,594,437 | $ | — | $ | 204,741,601 | |||||||||
Emerging Markets Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Argentina | $ | 11,159,148 | $ | — | $ | — | $ | 11,159,148 | |||||||||
Brazil | 81,615,702 | — | — | 81,615,702 | |||||||||||||
China | 76,068,161 | 123,326,764 | — | 199,394,925 | |||||||||||||
Egypt | 715,430 | 10,048,783 | — | 10,764,213 | |||||||||||||
Hong Kong | — | 1,338,640 | — | 1,338,640 | |||||||||||||
Hungary | — | 17,559,380 | — | 17,559,380 | |||||||||||||
India | 3,821,881 | 88,422,532 | — | 92,244,413 | |||||||||||||
Indonesia | 16,087,185 | 32,504,834 | — | 48,592,019 | |||||||||||||
Malaysia | — | 6,083,707 | — | 6,083,707 | |||||||||||||
Mexico | 36,368,566 | — | — | 36,368,566 | |||||||||||||
Pakistan | — | 15,528,947 | — | 15,528,947 | |||||||||||||
Philippines | 6,359,360 | — | — | 6,359,360 | |||||||||||||
Russia | 14,791,124 | 93,429,681 | — | 108,220,805 | |||||||||||||
South Africa | — | 98,834,545 | — | 98,834,545 | |||||||||||||
South Korea | — | 159,590,686 | — | 159,590,686 | |||||||||||||
Taiwan | — | 50,932,669 | — | 50,932,669 | |||||||||||||
Thailand | — | 13,002,395 | — | 13,002,395 | |||||||||||||
Turkey | — | 42,715,792 | — | 42,715,792 | |||||||||||||
Short-Term Investments | 22,788,405 | — | — | 22,788,405 | |||||||||||||
Total | $ | 269,774,962 | $ | 753,319,355 | $ | — | $ | 1,023,094,317 |
Semi-Annual Report 57
Description | Unadjusted Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance as of June 30, 2018 | |||||||||||||
Global Dynamic Multi-Asset Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 7,689,932 | $ | — | $ | 7,689,932 | |||||||||
Austria | — | 648,640 | — | 648,640 | |||||||||||||
Belgium | 1,019,691 | 217,476 | — | 1,237,167 | |||||||||||||
Canada | 14,744,526 | — | — | 14,744,526 | |||||||||||||
Denmark | — | 1,154,194 | — | 1,154,194 | |||||||||||||
Faeroe Islands | — | 297,147 | — | 297,147 | |||||||||||||
Finland | 847,619 | 498,637 | — | 1,346,256 | |||||||||||||
France | 1,310,041 | 8,352,482 | — | 9,662,523 | |||||||||||||
Germany | 1,829,008 | 5,302,996 | — | 7,132,004 | |||||||||||||
Hong Kong | 2,539,758 | 2,970,094 | — | 5,509,852 | |||||||||||||
Ireland | 629,624 | — | — | 629,624 | |||||||||||||
Israel | 842,026 | 1,015,699 | — | 1,857,725 | |||||||||||||
Italy | — | 3,998,609 | — | 3,998,609 | |||||||||||||
Japan | 4,334,746 | 19,522,220 | — | 23,856,966 | |||||||||||||
Malta | — | 243,905 | — | 243,905 | |||||||||||||
Netherlands | 1,705,299 | 1,855,782 | — | 3,561,081 | |||||||||||||
New Zealand | — | 189,907 | — | 189,907 | |||||||||||||
Norway | — | 7,279,155 | — | 7,279,155 | |||||||||||||
Portugal | — | 241,243 | — | 241,243 | |||||||||||||
Russia | — | 493,516 | — | 493,516 | |||||||||||||
Singapore | 935,353 | 2,631,522 | — | 3,566,875 | |||||||||||||
Spain | — | 603,151 | — | 603,151 | |||||||||||||
Sweden | 2,201,094 | 2,154,120 | — | 4,355,214 | |||||||||||||
Switzerland | 662,386 | 6,863,209 | — | 7,525,595 | |||||||||||||
United Kingdom | 12,204,085 | 9,044,449 | — | 21,248,534 | |||||||||||||
United States | 171,208,183 | 626,651 | — | 171,834,834 | |||||||||||||
Corporate Bonds* | — | 25,681,106 | — | 25,681,106 | |||||||||||||
Foreign Government Obligations* | — | 44,776,973 | — | 44,776,973 | |||||||||||||
Quasi Government Bonds* | — | 5,490,622 | — | 5,490,622 | |||||||||||||
Supranational Bonds | — | 5,644,000 | — | 5,644,000 | |||||||||||||
US Government Securities | — | 840,479 | — | 840,479 | |||||||||||||
US Municipal Bonds | — | 1,882,614 | — | 1,882,614 | |||||||||||||
US Treasury Securities | — | 12,187,930 | — | 12,187,930 | |||||||||||||
Short-Term Investments | 11,220,505 | — | — | 11,220,505 | |||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | — | 856,531 | — | 856,531 | |||||||||||||
Total | $ | 228,233,944 | $ | 181,254,991 | $ | — | $ | 409,488,935 | |||||||||
Liabilities: | |||||||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | $ | — | $ | (1,970,705 | ) | $ | — | $ | (1,970,705 | ) |
* | Please refer to Portfolios of Investments and Notes to Portfolios of Investments for portfolio holdings by country and industry. |
† | Other financial instruments are derivative instruments which are valued at their respective unrealized appreciation (depreciation). |
58 Semi-Annual Report
Certain equity securities to which footnote (‡) in the Notes to Portfolios of Investments applies are included in Level 2 and were valued based on reference to similar securities that were trading on active markets.
In connection with the 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 (‡) in the Notes to Portfolios of Investments) in the International Equity, Emerging Markets Equity and Global Dynamic Multi-Asset Portfolios can transfer from Level 1 to Level 2 as a result of fair value pricing procedures and would revert to Level 1 when the fair value pricing procedures are no longer used. Accordingly, a significant portion of the Portfolios’ investments are categorized as Level 2 investments. A Portfolio recognizes all transfers between levels as though they were transferred at the beginning of the reporting period.
During the period ended June 30, 2018, securities valued at the following amounts were transferred from Level 2 to Level 1:
Portfolio | Amount | |||
International Equity | $ | 1,895,218 | ||
Emerging Markets Equity | 8,977,013 |
During the period ended June 30, 2018, securities valued at the following amounts were transferred from Level 1 to Level 2:
Portfolio | Amount | |||
Global Dynamic Multi-Asset | $ | 564,903 |
There were no other transfers into or out of Levels 1, 2 or 3 during the period ended June 30, 2018.
9. Derivative Instruments
The Global Dynamic Multi-Asset Portfolio may use derivative instruments, including forward currency contracts.
Forward currency contracts may be used for hedging purposes or to seek to increase returns.
During the period ended June 30, 2018, the approximate average monthly notional exposure for derivative instruments was as follows:
Forward currency contracts | $89,700,000 |
The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of June 30, 2018:
Fair Value | ||||
Asset Derivatives | ||||
Foreign Exchange Risk: | ||||
Gross unrealized appreciation on forward currency contracts | $ | 856,531 | ||
Liability Derivatives | ||||
Foreign Exchange Risk: | ||||
Gross unrealized depreciation on forward currency contracts | $ | 1,970,705 |
The effect of derivative instruments on the Statement of Operations for the period ended June 30, 2018 was:
Amount | ||||
Realized Gain (Loss) on Derivatives | ||||
Foreign Exchange Risk: | ||||
Net realized gain (loss) on forward currency contracts | $ | 1,241,052 | ||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives | ||||
Foreign Exchange Risk: | ||||
Net change in unrealized appreciation (depreciation) on forward currency contracts | $ | (842,827 | ) |
None of the other Portfolios presented traded in derivative instruments during the period ended June 30, 2018.
As of June 30, 2018, the Global Dynamic Multi-Asset Portfolio held derivative instruments that are eligible for offset in the Statement of Assets and Liabilities and are subject to master netting arrangements. A master netting arrangement is an agreement between two counterparties who have multiple contracts with each other that provides for the net settlement of all contracts, as well as any cash collateral, through a single payment in the event of default on, or termination of, any one contract.
Semi-Annual Report 59
The required information for the affected Portfolio is presented in the below table, as of June 30, 2018:
Description | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Statement of Assets and Liabilities | Net Amounts of Assets Presented in the Statement of Assets and Liabilities | ||||||||||
Forward Currency Contracts | $856,531 | $ — | $856,531 |
Amounts Not Offset in the Statement of Assets and Liabilities | |||||||||||||||||
Counterparty | Net Amounts of Assets Presented in the Statement of Assets and Liabilities | Financial Instruments | Collateral Received | Net Amounts of Derivative Assets | |||||||||||||
Citibank NA | $ | 194,586 | $ | (194,586 | ) | $ | — | $ | — | ||||||||
HSBC Bank USA NA | 536,721 | (536,721 | ) | — | — | ||||||||||||
JPMorgan Chase Bank NA | 123,581 | (4,362 | ) | — | 119,219 | ||||||||||||
State Street Bank and Trust Co. | 1,643 | (1,643 | ) | — | — | ||||||||||||
Total | $ | 856,531 | $ | (737,312 | ) | $ | — | $ | 119,219 |
Description | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Statement of Assets and Liabilities | Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities | ||||||||||
Forward Currency Contracts | $1,970,705 | $ — | $1,970,705 |
Amounts Not Offset in the Statement of Assets and Liabilities | |||||||||||||||||
Counterparty | Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities | Financial Instruments | Collateral Pledged | Net Amounts of Derivative Liabilities | |||||||||||||
Citibank NA | $ | 745,020 | $ | (194,586 | ) | $ | — | $ | 550,434 | ||||||||
HSBC Bank USA NA | 1,210,426 | (536,721 | ) | — | 673,705 | ||||||||||||
JPMorgan Chase Bank NA | 4,362 | (4,362 | ) | — | — | ||||||||||||
State Street Bank and Trust Co. | 10,897 | (1,643 | ) | — | 9,254 | ||||||||||||
Total | $ | 1,970,705 | $ | (737,312 | ) | $ | — | $ | 1,233,393 |
10. Subsequent Events
Management has evaluated subsequent events affecting the Fund through the issuance of the financial
statements and has determined that there were no subsequent events that required adjustment or disclosure.
60 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): | ||||
Franci J. Blassberg (64) | Director | Debevoise & Plimpton LLP, a law firm, Of Counsel (2013 – present) | ||
(August 2014) | ||||
University of California, Berkeley School of Law, Adjunct Professor (Spring 2017) | ||||
Cornell Law School, Adjunct Professor (2013 – 2016) | ||||
Kenneth S. Davidson (73) | Director (April 1997) | Davidson Capital Management Corporation, an investment manager, President (1978 – present) | ||
Landseer Advisors LLC, an investment manager, Senior Advisor (2012 – 2014) | ||||
Nancy A. Eckl (55) | Director (May 2007) | College Retirement Equities Fund (eight accounts), Trustee (2007 – present) | ||
TIAA-CREF Funds (67 funds) and TIAA-CREF Life Funds (11 funds), Trustee (2007 – present) | ||||
TIAA Separate Account VA-1, Member of the Management Committee (2007 – present) | ||||
Trevor W. Morrison (47) | Director (April 2014) | New York University School of Law, Dean and Eric M. and Laurie B. Roth Professor of Law (2013 – present) | ||
Columbia Law School, Professor of Law (2008 – 2013) | ||||
Richard Reiss, Jr. (74) | Director (April 1997) | Georgica Advisors LLC, an investment manager, Chairman (1997 – present) | ||
Resource America, Inc., a real estate asset management company, Director (2016 – present) | ||||
Robert M. Solmson (70) | Director (September 2004) | Fairwood Capital, LLC, a private investment corporation engaged primarily in real estate and hotel investments, Co-Managing Partner and Managing Director (2008 – present) |
Semi-Annual Report 61
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) | ||
Interested Directors(4): | ||||
Ashish Bhutani (58) | Director | Investment Manager, Chief Executive Officer (2004 – present) | ||
(July 2005) | ||||
Lazard Ltd, Vice Chairman and Director (2010 – present) | ||||
Nathan A. Paul (45) | Director (October 2017) Chief Executive Officer and President (February 2017; previously, Vice President and Secretary since April 2002) | Investment Manager, Chief Business Officer (April 2017 – present) and Managing Director (2003 – present)
Investment Manager, General Counsel (2002 – April 2017)
|
(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 funds in the Lazard Fund Complex (comprised of, as of July 31, 2018, 41 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 funds in the Lazard Fund Complex. |
(3) | “Independent Directors” are not “interested persons” (as defined in the 1940 Act) of the Fund. |
(4) | Messrs. Bhutani and Paul are “interested persons” (as defined in the 1940 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, or online, at www.lazardassetmanagement.com.
62 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): | ||||
Mark R. Anderson (48) | Chief Compliance Officer (September 2014), Vice President and Secretary (February 2017) | Managing Director (since February 2017, previously Director), Chief Compliance Officer (since September 2014) and General Counsel (since April 2017) of the Investment Manager | ||
Senior Vice President, Counsel and Deputy Chief Compliance Officer of AllianceBernstein L.P. (2004 – August 2014) | ||||
Christopher Snively (33) | Chief Financial Officer (March 2016) | Senior Vice President of the Investment Manager (since November 2015) | ||
Assurance Manager at PricewaterhouseCoopers LLP (2008 – November 2015) | ||||
Stephen St. Clair (59) | Treasurer (May 2003) | Vice President of the Investment Manager | ||
Tamar Goldstein (43) | Assistant Secretary (February 2009) | Director (since February 2016, previously Senior Vice President), and Director of Legal Affairs (since July 2015) of the Investment Manager | ||
Shari L. Soloway (36) | Assistant Secretary (November 2015) | Senior Vice President, Legal and Compliance, of the Investment Manager (since September 2015) | ||
Vice President and Associate General Counsel of GE Asset Management (July 2011 – September 2015) | ||||
Cesar A. Trelles (43) | Assistant Treasurer (December 2004) | Vice President 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 funds in the Lazard Fund Complex. |
(3) | In addition to Nathan A. Paul, Chief Executive Officer and President (since February 2017; previously, Vice President and Secretary since April 2002), whose information is included in the Interested Directors section above. |
Semi-Annual Report 63
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 U.S. Securities and Exchange Commission (the “SEC”) website at https://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 https://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 https://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
All Portfolios except Lazard Retirement Equity Franchise Portfolio
At a meeting of the Board held on June 26-27, 2018 the Board considered the approval, for an additional annual period, of the Management Agreement between the Fund, on behalf of the Portfolios, and the Investment Manager. The Independent Directors were assisted in their review by independent legal counsel, who advised the Board on relevant legal standards and met with the Independent Directors in executive sessions 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 41 active funds comprises approximately $36 billion of the approximately $252 billion of total assets under the management of the Investment Manager and its global affiliates as of March 31, 2018).
The Board considered the various services provided by the Investment Manager including the Investment Manager’s research, portfolio management and trading 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, as well as regular reporting to, and support of, the Board. The Investment Manager’s representatives stated that the Investment Manager believes that the Fund and its shareholders continue to be able to obtain significant benefits as a result of the resources and support of the Investment Manager’s global research, portfolio management, trading, operations, risk management, technology and legal and compliance infrastructure. The Board 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 and shareholder servicing activities on behalf of the Portfolios; and Portfolio asset flows and the growth or decline in asset levels. The Board accepted management’s assertion that the Fund benefits from the services and infrastructure provided by the Investment Manager and that such services and infrastructure are greater than those typically provided to a $36 billion fund complex not managed by a large, global firm such as the Investment Manager.
Comparative Fee, Expense Ratio and Performance Information
The Board reviewed information prepared by Strategic Insight, an independent provider of investment company data, comparing the fees and expense ratio(s) (each through December 31, 2017) of each Portfolio and performance (through March 31, 2018) of each active Portfolio to those of a group of comparison funds selected by Strategic Insight (each, a “Group”)
64 Semi-Annual Report
and the Portfolio’s broader Morningstar category (each, a “Category”). Strategic Insight’s analyses were for the Service Shares of each Portfolio except for the Emerging Markets Equity Portfolio, which has both Service Shares and Investor Shares outstanding. The Strategic Insight comparisons ranked each Portfolio in a quintile of the Portfolio’s Group and Category (with the first quintile being the most favorable quintile and the fifth quintile being the least favorable). Representatives of the Investment Manager discussed with the Board the methodology used by Strategic Insight in constructing the Groups, noting the limitations of the process and that, as a result, the Investment Manager believed that certain Groups were not comprised of funds the Investment Manager considered to be the most appropriate comparison funds.
Advisory Fees and Expense Ratios. The Board discussed the management fees paid to the Investment Manager (referred to in the Strategic Insight materials as “advisory fees”) and expense ratios (as limited by the Investment Manager (“net”)) for each Portfolio and the comparisons provided by Strategic Insight, which compared the contractual (gross) advisory fee and net expense ratio(s) for each Portfolio to their respective Group and Category medians. The Board considered that the Investment Manager continues to voluntarily enter into expense limitation agreements for all of the Portfolios (pursuant to which the Investment Manager was waiving advisory fees and/or reimbursing expenses for certain Portfolios) and that the Investment Manager proposed to lower the expense limitations for the Emerging Markets Equity Portfolio, as discussed below, as well as the expense limitations for certain inactive Portfolios.
For the inactive Portfolios (all Portfolios other than the Emerging Markets Equity, Global Dynamic Multi-Asset, International Equity, US Small-Mid Cap Equity and US Strategic Equity Portfolios), the Board determined to defer consideration of advisory fees in the Management Agreement (and review of expense ratios) until a Portfolio was to commence operations, at which time additional information regarding advisory fees and expense ratios would be provided and considered. Accordingly, discussion of advisory fees and expense ratios was limited to those of the five
active Portfolios. However, notwithstanding deferral of consideration of advisory fees, the advisory fees in the Management Agreement for two inactive Portfolios, the Global Strategic Equity and International Equity Concentrated Portfolios, were each proposed to be lowered 0.10% in connection with the lowering of advisory fees of corresponding similar portfolios that are series of The Lazard Funds, Inc., another open-end management investment company managed by the Investment Manager. In connection with this proposal, the Investment Manager represented that there would be no diminution in services provided pursuant to the Management Agreement.
Except for the Global Dynamic Multi-Asset Portfolio, the gross advisory fee of each active Portfolio ranked in one of the first three quintiles of the Portfolio’s Group, and the expense ratio of each of the Emerging Markets Equity (Investor Shares), International Equity and US Strategic Equity Portfolios ranked in one of the first three quintiles of the Portfolio’s Group (and that, although the expense ratio of the Global Dynamic Multi-Asset Portfolio was in the fourth quintile of the Portfolio’s Group, it was less than a basis point above the Group median). For each of the Emerging Markets Equity (Service Shares), Global Dynamic Multi-Asset and US Small-Mid Cap Equity Portfolios, the Investment Manager representatives discussed the reasons the Investment Manager believes that the Portfolio’s Group was not comprised of the most appropriate funds and presented for the Board’s consideration a supplemental fee and expense ratio comparison with a group of funds (each, a “Supplemental Group”) the Investment Manager believes are more appropriate than those comprising the Portfolio’s Group.
For the Emerging Markets Equity Portfolio (Service Shares), the expense ratio was at the median expense ratio of the funds in the Supplemental Group. In addition, the Investment Manager also proposed to lower the current expense limitation by 0.05% for Service Shares and 0.10% for Investor Shares.
For the Global Dynamic Multi-Asset Portfolio, the Portfolio’s advisory fee was two basis points above the median advisory fee of the funds in the Supplemental
Semi-Annual Report 65
Group, and the Portfolio’s expense ratio was at the median expense ratio of the funds in the Supplemental Group.
For the US Small-Mid Cap Equity Portfolio, the Portfolio’s expense ratio was three basis points above the median expense ratio of the funds in the Supplemental Group.
The Board also considered 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 the Investment Manager’s separately managed accounts with similar investment objectives, policies and strategies (for each Portfolio, collectively with such funds, “Similar Accounts”). The Board discussed the fees paid to the Investment Manager by the Portfolios compared to the fees paid to the Investment Manager by Similar Accounts. Representatives of the Investment Manager discussed the nature of the Similar Accounts and the significant differences in services provided by the Investment Manager to the different types of Similar Accounts as compared to the services provided to the Portfolios. The Board considered the relevance of the fee information provided for Similar Accounts, in light of the Investment Manager’s discussion of the significant differences in services provided, to evaluate the fees paid to the Investment Manager by the Portfolios.
Performance. When evaluating the performance of each active Portfolio, the Board considered Strategic Insight’s performance analysis along with other information provided by, and discussions with, the Investment Manager’s representatives. Strategic Insight’s analyses compared each active Portfolio’s performance to that of the funds in the relevant Group and Category over one-, three-, five- and ten-year periods ended March 31, 2018 (as applicable). The Board considered that each of the Global Dynamic Multi-Asset and US Small-Mid Cap Equity Portfolios ranked in one of the top three quintiles of its respective Group for each of these periods and that the performance of each of the Emerging Markets Equity, International Equity and US Strategic Equity Portfolios was in the fourth or fifth quintile of its Group for the three- and/or five-year periods.
For the Emerging Markets Equity Portfolio, the Board noted that the performance of the Portfolio’s Investor Shares was in the first and second quintile of the Group and Category, respectively, for the ten-year period, and was in third quintile of the Group for the three-year period, and that the performance of the Service Shares was in the third quintile of both the Group and Category for the ten-year period.
For the International Equity Portfolio, the Board noted that the performance of the Portfolio was in the third and second quintile of the Group in the five- and ten-year periods, respectively, and was in the third and first quintile of the Category in the one- and ten-year periods, respectively.
For the US Strategic Equity Portfolio, the Board noted that the Portfolio’s one-year performance relative to that of the funds in both the Group and Category (ranking in the fourth quintile) had shown some improvement from the three- and five-year Group and Category performance rankings. The Board also considered that the Investment Manager proposed to reduce the Portfolio’s advisory fee in the Management Agreement by 0.05%, with no diminution in services thereunder.
The Board also 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 Board reviewed information prepared by the Investment Manager for each active Portfolio concerning the estimated profitability percentage of the Management Agreement to the Investment Manager and its affiliates, calculated using the actual revenues received for the calendar year ended December 31, 2017 and the Investment Manager’s cost allocation methodology to compute an estimate of each Portfolio’s costs to the Investment Manager. 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 Investment Manager’s representatives stated that neither the Investment
66 Semi-Annual Report
Manager nor its affiliates receive any other significant indirect benefits from the Investment Manager acting as investment manager to the Portfolios. 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 record-keeping 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 estimated profitability percentages are not unreasonable in light of the services provided and other factors. The Board (1) considered the Investment Manager’s estimated profitability with respect to each Portfolio as part of their evaluation of the Portfolio’s fee under the Management Agreement, considered in relation to the mix of services provided by the Investment Manager (including the nature, extent and quality of such services), and (2) evaluated the 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 Board discussed ways economies of scale could be realized and how they could be shared, including the Investment Manager’s reinvestment of profits back into its business, waiving or reducing Portfolio management fees and/or reimbursing expenses, adding discounts to a Portfolio’s management fee schedule as a Portfolio’s assets increase or by instituting management fees at inception that account for future scale. It was noted that, for Portfolios with declining or stable assets or a low level of assets, the potential that 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 such information as may reasonably be necessary to make an informed business decision with respect to evaluation of the renewal of the Management Agreement. Based on its discussions and considerations as described above, with the assistance of independent legal counsel and in the exercise of its business judgment, 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 the significant services and infrastructure associated with an approximately $252 billion global asset management business. |
• | For the active Portfolios, the Board concluded that each Portfolio’s fee paid to the Investment Manager was appropriate under the circumstances and in light of the factors and the totality of the services provided (including the lowering of the fee for the US Strategic Equity Portfolio). |
• | For the performance of the active Portfolios, the Board generally was satisfied with the overall performance of most of the Portfolios, either because relative performance in the Group and/or Category was satisfactory or because the Board accepted the assertions of the Investment Manager representatives that performance was consistent with the investment approach employed for a Portfolio. For Portfolios that were not performing in accordance with expectations, the Board would continue to monitor performance. |
• | 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. |
In evaluating the Management Agreement, the Board relied on the information described above as well as other information provided by the Investment Manager, in addition to information received on a routine and regular basis throughout the year relating to the operations of the Fund and the investment management and other services provided under the Manage-
Semi-Annual Report 67
ment Agreement, including information on the investment performance of the Portfolios in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the Portfolios; and compliance reports. The Board also relied on its previous knowledge of the Fund, gained through meetings and other interactions with the Investment Manager, and the services provided to the Fund by the Investment Manager. The Board consid-
ered these conclusions and determinations in their totality and determined to approve the Fund’s Management Agreement (as proposed to be revised, as applicable) for each Portfolio. In deciding whether to vote to approve the Management Agreement for each Portfolio, each Director may have accorded different weights to different factors so that each Director may have had a different basis for his or her decision.
68 Semi-Annual Report
NOTES
NOTES
NOTES
NOTES
Lazard Retirement Series, Inc.
30 Rockefeller Plaza
New York, New York 10112-6300
Telephone: 800-823-6300
https://www.lazardassetmanagement.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 Iron Street
Boston, Massachusetts 02210
Transfer Agent and Dividend Disbursing Agent
DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169
Telephone: 617-483-7000
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
30 Rockefeller Plaza
New York, New York 10112-0015
Legal Counsel
Proskauer Rose LLP
Eleven Times Square
New York, New York 10036-8299
http://www.proskauer.com
Performance information as of the most recent month end is available online at www.lazardassetmanagement.com.
Lazard Asset Management LLC • 30 Rockefeller Plaza • New York NY 10112 • www.lazardassetmanagement.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. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. 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/ Nathan A. Paul |
Nathan A. Paul | |
Chief Executive Officer | |
Date | September 4, 2018 |
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/ Nathan A. Paul |
Nathan A. Paul | |
Chief Executive Officer | |
Date | September 4, 2018 |
By | /s/ Christopher Snively |
Christopher Snively | |
Chief Financial Officer | |
Date | September 4, 2018 |