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 811-06312
The Lazard Funds, 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: 12/31/19
ITEM 1. REPORTS TO STOCKHOLDERS.
Lazard Funds
Annual Report
December 31, 2019
Alternatives Funds
Lazard Enhanced Opportunities Portfolio
Important Information on Paperless Delivery
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Shareholders who hold accounts directly with the Fund may elect to receive shareholder reports and other communications from the Fund electronically by signing up for paperless delivery at www.icsdelivery.com/lazardassetmanagement. If you own these shares through a financial intermediary, you may contact your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by following the instructions included with this disclosure and visiting www.fundreports.com. If you own these shares through a financial intermediary, you may contact your financial intermediary or follow instructions included with this disclosure to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the fund complex or your financial intermediary.
PRIVACY NOTICE
WHAT DOES LAZARD DO WITH YOUR PERSONAL INFORMATION?
Financial companies choose how they share your personal information. U.S. federal law gives our clients the right to limit some but not all sharing. U.S. federal and other applicable law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
We do not disclose nonpublic personal information about our clients or former clients to third parties other than as described below.
Personal information we collect.We collect personal information about you in connection with our providing advisory services to you. The legal basis for our collection of your personal information is our contract with you and our legitimate business interest to provide contractual services to you. The collection of this information is necessary for us to be able to provide advisory services to you and the failure to provide such information will result in our inability to provide our services. This information includes your social security number (for U.S. persons) and may include other information such as your:
· | Assets and income; | |
· | Investment experience; | |
· | Transaction history; | |
· | Credit history; and | |
· | Wire transfer instructions. |
How we collect this information.We collect this information from you through various means. For example, when you give us your contact information, enter into an investment advisory contract with us, buy securities (i.e., interests in a fund) from us, direct us to buy or sell securities for your account, tell us where to send money, or make a wire transfer. We also may collect your personal information from other sources, such as our affiliates1 or other non-affiliated companies (such as credit bureaus).
1 | Our affiliates are companiesrelated to us by common ownership or control and can include both financial and nonfinancial companies. Non-affiliates are companiesnot related to us by common ownership or control and can include both financial and nonfinancial companies. |
How we use this information.All financial companies need to share customers’ personal information to run their everyday business and we use the personal information we collect from you for our everyday business purposes. These purposes may include for example:
· | To provide advisory services to you; | |
· | To open an account for you; | |
· | To process a transaction for your account; | |
· | To market products and services to you; and/or | |
· | To respond to court orders and legal investigations. |
If you are an investor located within a European Union country, please note that personal information may be collected, shared and/or stored outside of the European Union.
Disclosure to others.We may provide your personal information to our affiliates and to firms that assist us in servicing your account and have a need for such information, such as a broker, counterparty, fund administrator or third party service provider that aggregates data in a central repository for access by a broker, counterparty or fund administrator to provide its services. We may also disclose such information to service providers and financial institutions with which we have a formal agreement to provide services relating to our arrangements with you. We require third party service providers and financial institutions with which we have a formal agreement to provide services relating to our arrangements with you to protect the confidentiality of your information and to use the information only for the purposes for which we disclose the information to them. These sharing practices are consistent with applicable privacy and related laws, and in general, you may not limit our use of your personal information for these purposes under such laws. We note that the U.S. federal privacy laws only give you the right to limit the certain types of information sharing that we do not engage in (e.g., sharing with our affiliates certain information relating to your transaction history or creditworthiness for their use in marketing to you, or sharing any personal information with non-affiliates for them to market to you). We may also share your personal information with non-affiliates (such as a government agency or regulatory authority) as required by applicable law.
How we protect your personal information.To protect your personal information from unauthorized access and use, we use security measures that comply with applicable law. These measures include computer safeguards and secured files and buildings.
How long we keep your personal information.We retain your personal information for the duration of your advisory relationship with us and for a period of time thereafter as required by applicable law.
Your rights with respect to this information.If you are an investor located within a European Union country, you have the following rights with respect to your personal information:
· | The right to request and obtain a copy of your personal information that we maintain; | |
· | The right to correct your personal information that we maintain; | |
· | The right to request the erasure of your personal information from our systems, subject to applicable recordkeeping requirements applicable to us; and | |
· | The right to lodge a complaint with a supervisory authority. |
Who is providing this Privacy Notice.This Privacy Notice relates to the following entities:
· | Lazard Asset Management LLC | |
· | Lazard Asset Management (Canada), Inc.2 | |
· | Lazard Asset Management Securities LLC |
Who to contact with questions.If you have any questions about this Privacy Notice, please call (800) 823-6300 or visit our website at http://www.lazardassetmanagement.com.
2 | Lazard Asset Management (Canada), Inc. does not disclose any non-public personal information about its customers to any third party, except as permitted by or required by any applicable law, including the laws of the United States and Canada. |
The Lazard Funds, Inc.Table of Contents
Please consider a Portfolio’s investment objective, risks, charges and expenses carefully before investing. For more complete information about The Lazard Funds, 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 Portfolio’s summary prospectus carefully before you invest. The prospectus and Portfolio’s summary prospectus contain the investment objective, risks, charges, expenses and other information about Portfolio of the Fund, which are not detailed in this report.
Distributed by Lazard Asset Management Securities LLC.
Annual Report 1
The Lazard Funds, Inc.A Message from Lazard (unaudited)
Dear Shareholder,
In 2019, equity markets rallied while debt yields around the world declined. The US equity market outperformed most of its peers, with the S&P 500®Index rising by 31.5% over the year, hitting an all-time high in December. Equities rallied strongly in Europe (+27.5%), but other markets were less ebullient. Uncertainty over Brexit kept UK equities in a range for most of the year, while political unrest and declining oil prices weighed on a number of emerging markets. Faced with US-China trade tensions, a decelerating industrial economy, and clear messaging from key central banks that rates will stay lower for longer, investors reached for yield.
US equity markets began 2019 on uncertain footing after tightening monetary policy and trade tensions led to a sharp sell-off at the end of 2018. However, the US Federal Reserve (Fed) made an abrupt monetary policy U-turn after the market mayhem. Perhaps concluding that monetary policy would be even looser for even longer than previously expected, investors drove the S&P 500 up to record highs, while pushing the US 10-Year Treasury yield down to within 10 basis points of the all-time low set in 2016. We believe the US economy appears to have averted recession and could continue to grow at a modest pace through 2020.
Emerging markets equities ended a tumultuous year on a positive note, with the MSCI Emerging Markets®Index up 18.4%. It was a near-perfect reversal of 2018’s dismal 14.6% decline. Trade was the biggest driver of emerging markets equities’ performance. A strong rally in the fourth quarter, for instance, came after two major trade developments. Looking ahead to 2020, we expect trade tensions to continue to influence the path of emerging markets equities, despite the accord on a long-awaited “Phase 1” deal between the US and China.
In Europe, the European Central Bank (ECB) took rates further into negative territory with the first rate cut since 2016. Germany’s economy contracted in the second quarter after years of powering the euro zone economy. The rest of the euro zone has proven more resilient—France and Spain, for example, depend less than
2 Annual Report
Germany does on industrial activity and exports to drive growth. In the United Kingdom, the Conservative Party’s landslide win in a December election has helped dissipate some of the uncertainty that has weighed on UK markets since the Brexit vote in 2016.
Despite potential market challenges, we are optimistic for 2020 and believe that fundamental analysis and stock selection will be crucial drivers for performance. We are privileged that you have turned to Lazard for your investment needs and value your continued confidence in our investment management capabilities. We continue to strive for the long-term patterns of performance that are consistent with your expectations.
Sincerely,
Lazard Asset Management LLC
Annual Report 3
The Lazard Funds, Inc.Investment Overview (unaudited)
Enhanced Opportunities
After a significant rise in equity volatility in the latter half of 2018, equity volatility throughout 2019 was relatively subdued, except for brief, periodic spikes in May, August and October. Equity volatility ended the year near multi-quarter lows, while many global equity indexes reached new record highs. In the United States, the S&P 500 Index gained 31.2% in 2019, with a gain of 18.6% in the second half of the year. High yield credit spreads, as measured by the ICE BofA US Cash Pay High Yield®Index, traded in a relatively tight range for most of the second half of 2019, before falling to year-to-date lows of approximately 350 basis points in December. In the second half of 2019, the yield on the benchmark 10-year US Treasury note traded in a relatively wide range between 1.46% and 2.00% before ending the year at 1.93%.
Lazard Enhanced Opportunities Portfolio
For the year ended December 31, 2019, the Lazard Enhanced Opportunities Portfolio’s Institutional Shares posted a total return of 7.44%, while Open Shares posted a total return of 7.20%, as compared with the 22.78% return for the ICE BofAML U.S. Convertible ex Mandatory®Index and the 8.68% return for the HFRX Global Hedge Fund®Index.
The buying opportunity for convertibles was attractive throughout July and August, but declined from September to November, before improving in December. Throughout this period, we felt balanced and/or credit sensitive paper provided better buying opportunities, while volatility-sensitive profiles were better to sell, due to the broad-based decline in equity volatility. Both long-only (directional) and hedge fund investors were active throughout the third and fourth quarters, as were non-traditional investors, particularly during periods in which risk was for sale.
Corporate events, specifically bond-for-bond exchanges, directional biases, new issues and basis improvement in select bond profiles, paced gains in 2019. As equity markets rebounded, numerous directional biases benefited, as did the basis of those bonds with attractive yield and delta profiles. Offsetting these gains to some
4 Annual Report
extent was a weakening in the basis in volatility-sensitive profiles and softness in selected sub-industries.
The Portfolio uses derivatives, including currency forwards and options, both opportunistically and defensively, for hedging purposes. For the year, the use of derivatives detracted marginally from performance.
Annual Report 5
The Lazard Funds, Inc.Performance Overviews (unaudited)
Lazard Enhanced Opportunities Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Enhanced Opportunities Portfolio, ICE BofAML U.S. Convertible ex Mandatory®Index and HFRX Global Hedge Fund®Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 7.44% | 2.63% | 2.63% | ||||
Open Shares** | 7.20% | 2.37% | 2.37% | ||||
ICE BofAML U.S. Convertible ex Mandatory Index | 22.78% | 9.21% | 9.21% | ||||
HFRX Global Hedge Fund Index | 8.68% | 1.20% | 1.20% |
† | The inception date for the Portfolio was December 31, 2014. |
Notes to Performance Overviews:
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the 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 distributing agent (“DST”); without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. |
Performance results do not include adjustments made for financial reporting purposes in accordance with US Generally Accepted Accounting Principles, if any, and may differ from amounts reported in the financial highlights. For Institutional Shares and Open Shares, a one-time voluntary reimbursement by the administrator increased the total return ratio by 0.49% for year ended December 31, 2017. | |
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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. |
6 Annual Report
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 indices are unmanaged, have no fees or costs and are not available for investment. | |
The ICE BofAML U.S. Convertible ex Mandatory Index measures the performance of convertible securities of all corporate sectors with a par amount of $25 million or more and a maturity of at least one year and excludes preferred equity redemption stocks and converted securities. | |
The HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible hedge fund strategies, including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event-driven, macro, merger arbitrage, and relative value arbitrage. The strategies are asset weighted based on the distribution of assets in the hedge fund industry. | |
** | The performance of Institutional Shares and Open Shares may vary, primarily based on the differences in fees borne by shareholders investing in different classes. |
Annual Report 7
Information About Your Portfolio’s Expenses (unaudited)
Expense Example
As a shareholder in the Portfolio, you incur ongoing costs, including management fees, distribution and service (12b-1) fees (Open Shares only), and other expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the 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 July 1, 2019 through December 31, 2019 and held for the entire period.
Actual Expenses
For each Share class of the Portfolio, the first line of the accompanying table 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 Portfolio, the second line of the accompanying table 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 shareholder reports of other mutual funds.
8 Annual Report
Expenses | Annualized | ||||||||||||||||
Beginning | Ending | Paid During | Expense Ratio | ||||||||||||||
Account | Account | Period | * | During Period | |||||||||||||
Value | Value | 7/1/19 - | 7/1/19 - | ||||||||||||||
Portfolio | 7/1/19 | 12/31/19 | 12/31/19 | 12/31/19 | |||||||||||||
Enhanced Opportunities† | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,014.60 | $ | 12.34 | 2.43% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,012.96 | $ | 12.33 | 2.43% | ||||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,013.50 | $ | 12.59 | 2.48% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,012.70 | $ | 12.58 | 2.48% |
* | 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 184/365 (to reflect one-half year period). |
† | The expense ratios include broker expense and dividend expense on securities sold short. |
Annual Report 9
The Lazard Funds, Inc.Portfolio Holdings Presented by
Asset Class/Sector December 31, 2019
Lazard Enhanced | |||||||||
Opportunities Portfolio | |||||||||
Asset Class/Sector | Long | * | Short | † | |||||
Convertible Corporate Bonds | |||||||||
Communication Services | 7.2 | % | — | % | |||||
Consumer Discretionary | 3.5 | — | |||||||
Consumer Staples | 2.3 | — | |||||||
Energy | 1.1 | — | |||||||
Financials | 9.7 | — | |||||||
Health Care | 18.9 | — | |||||||
Industrials | 3.9 | — | |||||||
Information Technology | 23.0 | — | |||||||
Materials | 2.7 | — | |||||||
Real Estate | 1.3 | — | |||||||
Utilities | 0.7 | — | |||||||
Equity | |||||||||
Communication Services | — | –9.5 | |||||||
Consumer Discretionary | — | –5.2 | |||||||
Consumer Staples | — | –3.0 | |||||||
Energy | 0.0 | # | –1.5 | ||||||
Financials | — | –7.0 | |||||||
Health Care | 0.0 | # | –25.0 | ||||||
Industrials | — | –4.3 | |||||||
Information Technology | — | –36.5 | |||||||
Materials | — | –2.9 | |||||||
Real Estate | — | –4.2 | |||||||
Utilities | — | –0.9 | |||||||
Short-Term Investments | 25.7 | — | |||||||
Total Investments | 100.0 | % | –100.0 | % |
* | Represents percentage of total investments excluding securities sold short. |
† | Represents percentage of total securities sold short. |
# | Amount is less than 0.05%. |
10 Annual Report
The Lazard Funds, Inc.Portfolio of Investments
December 31, 2019
Description | Shares | Fair Value | ||||||||
Lazard Enhanced Opportunities Portfolio | ||||||||||
Common Stocks | 0.1% | ||||||||||
United States | 0.1% | ||||||||||
Alder Biopharmaceuticals, Inc. (‡) | 3,247 | $ | 2,857 | |||||||
Valaris PLC (*), (±) | 565 | 3,707 | ||||||||
Total Common Stocks (Cost $5,610) | 6,564 | |||||||||
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Convertible Corporate Bonds | 106.2% | ||||||||||
Canada | 7.1% | ||||||||||
Aphria, Inc., 5.250%, 06/01/24 (±) | USD | 113 | $ | 74,933 | ||||||
Aurora Cannabis, Inc., 5.500%, 02/28/24 (±), (#) | USD | 165 | 102,300 | |||||||
Canopy Growth Corp., 4.250%, 07/15/23 (±), (#) | CAD | 186 | 127,839 | |||||||
Element Fleet Management Corp.: | ||||||||||
4.250%, 06/30/20 (±) | CAD | 43 | 33,269 | |||||||
4.250%, 06/30/24 (±) | CAD | 72 | 63,675 | |||||||
First Majestic Silver Corp., 1.875%, 03/01/23 (±) | USD | 114 | 161,390 | |||||||
Tilray, Inc., 5.000%, 10/01/23 (±) | USD | 198 | 102,960 | |||||||
666,366 | ||||||||||
Chile | 1.0% | ||||||||||
Liberty Latin America, Ltd., 2.000%, 07/15/24 (±) | USD | 91 | 96,801 | |||||||
Mexico | 2.1% | ||||||||||
Cemex SAB de CV, 3.720%, 03/15/20 (±) | USD | 193 | 193,557 |
The accompanying notes are an integral part of these financial statements.
Annual Report 11
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||||
Norway | 1.5% | ||||||||||
SFL Corp., Ltd., 5.750%, 10/15/21 (±) | USD | 131 | $ | 139,237 | ||||||
Taiwan | 0.8% | ||||||||||
Sea, Ltd., 1.000%, 12/01/24 (±), (#) | USD | 66 | 71,993 | |||||||
United States | 93.7% | ||||||||||
8x8, Inc., 0.500%, 02/01/24 (±) | USD | 113 | 112,502 | |||||||
Aerie Pharmaceuticals, Inc., 1.500%, 10/01/24 (±) | USD | 86 | 102,787 | |||||||
Air Transport Services Group, Inc., 1.125%, 10/15/24 (±) | USD | 136 | 132,330 | |||||||
Akamai Technologies, Inc., 0.375%, 09/01/27 (±) | USD | 33 | 32,582 | |||||||
Allscripts Healthcare Solutions, Inc., 1.250%, 07/01/20 (±) | USD | 238 | 235,635 | |||||||
Altair Engineering, Inc., 0.250%, 06/01/24 (±) | USD | 33 | 33,825 | |||||||
Alteryx, Inc., 0.500%, 08/01/24 (±) | USD | 10 | 9,552 | |||||||
Arbor Realty Trust, Inc., 4.750%, 11/01/22 (±) | USD | 113 | 112,544 | |||||||
Atlas Air Worldwide Holdings, Inc., 1.875%, 06/01/24 (±) | USD | 139 | 117,191 | |||||||
Benefitfocus, Inc., 1.250%, 12/15/23 | USD | 113 | 97,463 | |||||||
Cardtronics, Inc., 1.000%, 12/01/20 (±) | USD | 180 | 191,597 | |||||||
Chegg, Inc., 0.125%, 03/15/25 (±) | USD | 56 | 57,596 | |||||||
Coupa Software, Inc., 0.125%, 06/15/25 (±) | USD | 135 | 159,619 | |||||||
Cree, Inc., 0.875%, 09/01/23 (±) | USD | 67 | 70,944 |
The accompanying notes are an integral part of these financial statements.
12 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||||
CSG Systems International, Inc., 4.250%, 03/15/36 (±) | USD | 136 | $ | 155,210 | ||||||
Cytokinetics, Inc., 4.000%, 11/15/26 (±) | USD | 26 | 31,056 | |||||||
DexCom, Inc., 0.750%, 12/01/23 (±) | USD | 114 | 168,856 | |||||||
Encore Capital Group, Inc.: | ||||||||||
3.250%, 03/15/22 (±) | USD | 204 | 210,608 | |||||||
3.250%, 10/01/25 (±) | USD | 52 | 56,047 | |||||||
Enphase Energy, Inc., 1.000%, 06/01/24 (±) | USD | 46 | 69,833 | |||||||
Everbridge, Inc., 0.125%, 12/15/24 (±) | USD | 72 | 71,154 | |||||||
Evolent Health, Inc., 1.500%, 10/15/25 (±) | USD | 17 | 11,858 | |||||||
EZCORP, Inc., 2.375%, 05/01/25 (±) | USD | 38 | 30,780 | |||||||
Halozyme Therapeutics, Inc., 1.250%, 12/01/24 (±) | USD | 82 | 81,720 | |||||||
Herbalife Nutrition, Ltd., 2.625%, 03/15/24 (±) | USD | 135 | 140,040 | |||||||
Hope Bancorp, Inc., 2.000%, 05/15/38 (±) | USD | 148 | 139,228 | |||||||
Horizon Pharma Investment, Ltd., 2.500%, 03/15/22 (±) | USD | 135 | 178,284 | |||||||
II-VI, Inc., 0.250%, 09/01/22 (±) | USD | 96 | 97,800 | |||||||
IIP Operating Partnership LP, 3.750%, 02/21/24 (±) | USD | 123 | 155,903 | |||||||
Impinj, Inc., 2.000%, 12/15/26 (±) | USD | 40 | 39,176 | |||||||
Infinera Corp., 2.125%, 09/01/24 (±) | USD | 26 | 27,446 | |||||||
Innoviva, Inc., 2.125%, 01/15/23 (±) | USD | 135 | 135,294 | |||||||
Inphi Corp., 0.750%, 09/01/21 (±) | USD | 33 | 46,641 |
The accompanying notes are an integral part of these financial statements.
Annual Report 13
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||||
Insmed, Inc., 1.750%, 01/15/25 (±) | USD | 53 | $ | 51,055 | ||||||
Intercept Pharmaceuticals, Inc.: | ||||||||||
3.250%, 07/01/23 (±) | USD | 45 | 45,375 | |||||||
2.000%, 05/15/26 (±) | USD | 68 | 89,971 | |||||||
Ironwood Pharmaceuticals, Inc.: | ||||||||||
2.250%, 06/15/22 (±) | USD | 92 | 107,083 | |||||||
1.500%, 06/15/26 (±) | USD | 109 | 130,655 | |||||||
Kaman Corp., 3.250%, 05/01/24 (±) | USD | 45 | 53,865 | |||||||
Karyopharm Therapeutics, Inc., 3.000%, 10/15/25 (±) | USD | 53 | 75,492 | |||||||
KBR, Inc., 2.500%, 11/01/23 (±) | USD | 102 | 135,150 | |||||||
Knowles Corp., 3.250%, 11/01/21 (±) | USD | 106 | 137,496 | |||||||
Liberty Interactive LLC: | ||||||||||
4.000%, 11/15/29 (±) | USD | 160 | 111,606 | |||||||
3.750%, 02/15/30 (±) | USD | 36 | 24,709 | |||||||
Liberty Media Corp.: | ||||||||||
2.250%, 12/01/48 (±) | USD | 160 | 189,900 | |||||||
2.750%, 12/01/49 (±) | USD | 182 | 190,645 | |||||||
Ligand Pharmaceuticals, Inc., 0.750%, 05/15/23 (±) | USD | 135 | 116,510 | |||||||
LivePerson, Inc., 0.750%, 03/01/24 (±) | USD | 33 | 39,532 | |||||||
Lumentum Holdings, Inc., 0.500%, 12/15/26 (±) | USD | 20 | 21,700 | |||||||
Marriott Vacations Worldwide Corp., 1.500%, 09/15/22 (±) | USD | 147 | 156,759 | |||||||
Microchip Technology, Inc., 1.625%, 02/15/27 (±) | USD | 135 | 192,375 | |||||||
Neurocrine Biosciences, Inc., 2.250%, 05/15/24 (±) | USD | 100 | 153,129 | |||||||
New Relic, Inc., 0.500%, 05/01/23 (±) | USD | 16 | 15,549 |
The accompanying notes are an integral part of these financial statements.
14 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||||
NRG Energy, Inc., 2.750%, 06/01/48 (±) | USD | 84 | $ | 95,235 | ||||||
Nuance Communications, Inc., 1.000%, 12/15/35 (±) | USD | 149 | 149,838 | |||||||
Nutanix, Inc., 0.000%, 01/15/23 (±) | USD | 104 | 103,445 | |||||||
Okta, Inc., 0.125%, 09/01/25 (±) | USD | 96 | 92,963 | |||||||
OSI Systems, Inc., 1.250%, 09/01/22 (±) | USD | 90 | 98,149 | |||||||
Pacira BioSciences, Inc., 2.375%, 04/01/22 (±) | USD | 112 | 116,425 | |||||||
Patrick Industries, Inc., 1.000%, 02/01/23 (±) | USD | 101 | 97,023 | |||||||
PennyMac Corp., 5.500%, 11/01/24 (±) | USD | 113 | 112,118 | |||||||
Perficient, Inc., 2.375%, 09/15/23 (±) | USD | 52 | 70,413 | |||||||
Pluralsight, Inc., 0.375%, 03/01/24 (±), (#) | USD | 169 | 146,679 | |||||||
PRA Group, Inc.: | ||||||||||
3.000%, 08/01/20 (±) | USD | 112 | 111,726 | |||||||
3.500%, 06/01/23 (±) | USD | 136 | 141,675 | |||||||
PROS Holdings, Inc., 1.000%, 05/15/24 (±) | USD | 36 | 40,866 | |||||||
Pure Storage, Inc., 0.125%, 04/15/23 (±) | USD | 27 | 26,775 | |||||||
Rapid7, Inc., 1.250%, 08/01/23 (±) | USD | 104 | 154,964 | |||||||
Redfin Corp., 1.750%, 07/15/23 (±) | USD | 171 | 169,009 | |||||||
Redwood Trust, Inc., 4.750%, 08/15/23 (±) | USD | 130 | 132,854 | |||||||
RH, 0.000%, 09/15/24 (±) | USD | 66 | 78,259 | |||||||
SailPoint Technologies Holding, Inc., 0.125%, 09/15/24 (±) | USD | 91 | 97,892 |
The accompanying notes are an integral part of these financial statements.
Annual Report 15
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||||
Silicon Laboratories, Inc., 1.375%, 03/01/22 (±) | USD | 20 | $ | 26,556 | ||||||
Synaptics, Inc., 0.500%, 06/15/22 (±) | USD | 99 | 109,770 | |||||||
Tabula Rasa HealthCare, Inc., 1.750%, 02/15/26 (±) | USD | 74 | 73,954 | |||||||
Team, Inc., 5.000%, 08/01/23 (±) | USD | 115 | 120,109 | |||||||
TerraVia Holdings, Inc., 5.000%, 10/01/19 («) | USD | 216 | 821 | |||||||
The Chefs’ Warehouse, Inc., 1.875%, 12/01/24 (±) | USD | 51 | 56,116 | |||||||
TTM Technologies, Inc., 1.750%, 12/15/20 (±) | USD | 32 | 50,417 | |||||||
Turning Point Brands, Inc., 2.500%, 07/15/24 (±) | USD | 125 | 110,311 | |||||||
Vishay Intertechnology, Inc., 2.250%, 06/15/25 (±) | USD | 130 | 130,233 | |||||||
Wayfair, Inc., 0.375%, 09/01/22 (±) | USD | 91 | 98,859 | |||||||
Winnebago Industries, Inc., 1.500%, 04/01/25 (±) | USD | 76 | 81,364 | |||||||
Workiva, Inc., 1.125%, 08/15/26 (±) | USD | 16 | 14,348 | |||||||
Wright Medical Group NV, 2.250%, 11/15/21 (±) | USD | 119 | 172,496 | |||||||
Wright Medical Group, Inc., 1.625%, 06/15/23 (±) | USD | 40 | 42,251 | |||||||
Zillow Group, Inc.: | ||||||||||
2.000%, 12/01/21 (±) | USD | 113 | 126,408 | |||||||
1.500%, 07/01/23 (±) | USD | 68 | 65,105 | |||||||
0.750%, 09/01/24 (±) | USD | 70 | 85,168 | |||||||
8,752,251 | ||||||||||
Total Convertible Corporate Bonds (Cost $9,668,708) | 9,920,205 |
The accompanying notes are an integral part of these financial statements.
16 Annual Report
Description | Counterparty | Number of Contracts | Exercise Price | Notional Amount | Fair Value | |||||||||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||||||||||||
Purchased Options | 0.0% | ||||||||||||||||||
Call | ||||||||||||||||||
Aurora Cannabis, Inc. Expires 01/17/20 | RBS | 10 | $ | 5.00 | $ | 1,000 | $ | 10 | ||||||||||
Cemex SAB de CV Expires 01/17/20 | RBS | 7 | 3.50 | 700 | 210 | |||||||||||||
Cemex SAB de CV Expires 04/17/20 | RBS | 5 | 4.00 | 500 | 100 | |||||||||||||
Horizon Therapeutics PLC Expires 01/17/20 | RBS | 2 | 37.00 | 200 | 140 | |||||||||||||
Nuance Communications, Inc. Expires 04/17/20 | RBS | 7 | 20.00 | 700 | 245 | |||||||||||||
Pluralsight, Inc. Expires 04/17/20 | RBS | 2 | 22.50 | 200 | 90 | |||||||||||||
VanEck Vectors Oil Services ETF Expires 02/21/20 | RBS | 47 | 15.00 | 4,700 | 564 | |||||||||||||
Put | ||||||||||||||||||
First Majestic Silver Corp. Expires 04/17/20 | RBS | 7 | 9.00 | 700 | 140 | |||||||||||||
Infinera Corp. Expires 04/17/20 | RBS | 6 | 6.00 | 600 | 162 | |||||||||||||
Pluralsight, Inc. Expires 04/17/20 | RBS | 2 | 15.00 | 200 | 150 | |||||||||||||
Total Purchased Options (Cost $3,204) | 1,811 |
The accompanying notes are an integral part of these financial statements.
Annual Report 17
Description | Shares | Fair Value | ||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||
Short-Term Investments | 36.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $3,442,084) | 3,442,084 | $ | 3,442,084 | |||||
Total Investments excluding Securities Sold Short | 143.1% (Cost $13,119,606) | $ | 13,370,664 | ||||||
Securities Sold Short | (43.5)% | ||||||||
Common Stocks | (43.5)% | ||||||||
Canada | (1.6)% | ||||||||
Aphria, Inc. | (842 | ) | (4,395 | ) | ||||
Aurora Cannabis, Inc. | (477 | ) | (1,030 | ) | ||||
Canopy Growth Corp. | (95 | ) | (1,998 | ) | ||||
Element Fleet Management Corp. | (3,348 | ) | (28,593 | ) | ||||
First Majestic Silver Corp. | (9,557 | ) | (117,169 | ) | ||||
(153,185 | ) | |||||||
Chile | (0.6)% | ||||||||
Liberty Latin America, Ltd., Class C | (2,845 | ) | (55,364 | ) | ||||
Norway | (0.7)% | ||||||||
SFL Corp., Ltd. | (4,153 | ) | (60,385 | ) | ||||
Thailand | (0.4)% | ||||||||
Sea, Ltd. ADR | (827 | ) | (33,262 | ) | ||||
United States | (40.2)% | ||||||||
8x8, Inc. | (2,345 | ) | (42,913 | ) | ||||
Aerie Pharmaceuticals, Inc. | (2,587 | ) | (62,528 | ) | ||||
Air Transport Services Group, Inc. | (2,220 | ) | (52,081 | ) | ||||
Akamai Technologies, Inc. | (151 | ) | (13,043 | ) | ||||
Altair Engineering, Inc., Class A | (461 | ) | (16,555 | ) | ||||
Alteryx, Inc., Class A | (30 | ) | (3,002 | ) | ||||
Arbor Realty Trust, Inc. REIT | (1,043 | ) | (14,967 | ) | ||||
Atlas Air Worldwide Holdings, Inc. | (814 | ) | (22,442 | ) | ||||
Benefitfocus, Inc. | (262 | ) | (5,748 | ) |
The accompanying notes are an integral part of these financial statements.
18 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||
Cardtronics PLC, Class A | (1,176 | ) | $ | (52,508 | ) | |||
Chegg, Inc. | (516 | ) | (19,562 | ) | ||||
Coupa Software, Inc. | (618 | ) | (90,383 | ) | ||||
Cree, Inc. | (624 | ) | (28,798 | ) | ||||
CSG Systems International, Inc. | (1,085 | ) | (56,181 | ) | ||||
Cytokinetics, Inc. | (1,984 | ) | (21,050 | ) | ||||
DexCom, Inc. | (544 | ) | (118,995 | ) | ||||
Encore Capital Group, Inc. | (3,166 | ) | (111,950 | ) | ||||
Enphase Energy, Inc. | (1,869 | ) | (48,837 | ) | ||||
Everbridge, Inc. | (382 | ) | (29,827 | ) | ||||
Evolent Health, Inc., Class A | (204 | ) | (1,846 | ) | ||||
EZCORP, Inc. Class A | (1,167 | ) | (7,959 | ) | ||||
Halozyme Therapeutics, Inc. | (1,965 | ) | (34,839 | ) | ||||
Herbalife Nutrition, Ltd. | (1,280 | ) | (61,018 | ) | ||||
Hope Bancorp, Inc. | (813 | ) | (12,081 | ) | ||||
Horizon Therapeutics PLC | (2,828 | ) | (102,374 | ) | ||||
II-VI, Inc. | (1,057 | ) | (35,589 | ) | ||||
Impinj, Inc. | (868 | ) | (22,446 | ) | ||||
Infinera Corp. | (1,711 | ) | (13,585 | ) | ||||
Innovative Industrial Properties, Inc. REIT | (1,416 | ) | (107,432 | ) | ||||
Innoviva, Inc. | (3,128 | ) | (44,292 | ) | ||||
Inphi Corp. | (458 | ) | (33,901 | ) | ||||
Insmed, Inc. | (679 | ) | (16,215 | ) | ||||
Intercept Pharmaceuticals, Inc. | (654 | ) | (81,044 | ) | ||||
Ironwood Pharmaceuticals, Inc. | (10,556 | ) | (140,500 | ) | ||||
Kaman Corp. | (373 | ) | (24,588 | ) | ||||
Karyopharm Therapeutics, Inc. | (2,894 | ) | (55,478 | ) | ||||
KBR, Inc. | (3,179 | ) | (96,960 | ) | ||||
Knowles Corp. | (4,289 | ) | (90,712 | ) | ||||
Ligand Pharmaceuticals, Inc. | (182 | ) | (18,981 | ) | ||||
Live Nation Entertainment, Inc. | (1,647 | ) | (117,711 | ) | ||||
LivePerson, Inc. | (618 | ) | (22,866 | ) | ||||
Lumentum Holdings, Inc. | (40 | ) | (3,172 | ) | ||||
Marriott Vacations Worldwide Corp. | (364 | ) | (46,869 | ) | ||||
Microchip Technology, Inc. | (1,633 | ) | (171,008 | ) | ||||
Neurocrine Biosciences, Inc. | (1,041 | ) | (111,897 | ) |
The accompanying notes are an integral part of these financial statements.
Annual Report 19
Description | Shares | Fair Value | ||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||
New Relic, Inc. | (29 | ) | $ | (1,906 | ) | |||
NRG Energy, Inc. | (986 | ) | (39,193 | ) | ||||
Nuance Communications, Inc. | (2,478 | ) | (44,183 | ) | ||||
Nutanix, Inc., Class A | (1,092 | ) | (34,136 | ) | ||||
Okta, Inc. | (295 | ) | (34,034 | ) | ||||
OSI Systems, Inc. | (562 | ) | (56,616 | ) | ||||
Pacira BioSciences, Inc. | (663 | ) | (30,034 | ) | ||||
Patrick Industries, Inc. | (438 | ) | (22,964 | ) | ||||
PennyMac Mortgage Investment Trust | (227 | ) | (5,060 | ) | ||||
Perficient, Inc. | (1,140 | ) | (52,520 | ) | ||||
Pluralsight, Inc., Class A | (1,358 | ) | (23,371 | ) | ||||
PRA Group, Inc. | (1,768 | ) | (64,178 | ) | ||||
PROS Holdings, Inc. | (392 | ) | (23,489 | ) | ||||
Pure Storage, Inc., Class A | (413 | ) | (7,066 | ) | ||||
Rapid7, Inc. | (2,047 | ) | (114,673 | ) | ||||
Redfin Corp. | (3,008 | ) | (63,589 | ) | ||||
Redwood Trust, Inc. REIT | (2,327 | ) | (38,489 | ) | ||||
RH | (235 | ) | (50,172 | ) | ||||
SailPoint Technologies Holding, Inc. | (2,248 | ) | (53,053 | ) | ||||
Silicon Laboratories, Inc. | (156 | ) | (18,093 | ) | ||||
Sirius XM Holdings, Inc. | (8,527 | ) | (60,968 | ) | ||||
Synaptics, Inc. | (743 | ) | (48,867 | ) | ||||
Tabula Rasa HealthCare, Inc. | (788 | ) | (38,360 | ) | ||||
Team, Inc. | (3,425 | ) | (54,697 | ) | ||||
The Chefs’ Warehouse, Inc. | (714 | ) | (27,211 | ) | ||||
TTM Technologies, Inc. | (3,059 | ) | (46,038 | ) | ||||
Turning Point Brands, Inc. | (1,137 | ) | (32,518 | ) | ||||
Vishay Intertechnology, Inc. | (2,012 | ) | (42,835 | ) | ||||
Wayfair, Inc., Class A | (563 | ) | (50,878 | ) | ||||
Winnebago Industries, Inc. | (805 | ) | (42,649 | ) | ||||
Workiva, Inc. | (70 | ) | (2,943 | ) | ||||
Wright Medical Group NV | (4,214 | ) | (128,443 | ) | ||||
Zillow Group, Inc. Class C | (2,621 | ) | (120,409 | ) | ||||
(3,760,368 | ) |
The accompanying notes are an integral part of these financial statements.
20 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Enhanced Opportunities Portfolio (continued) | ||||||||
Total Securities Sold Short (Proceeds $3,697,361) | $ | (4,062,564 | ) | |||||
Total Investments | 99.6% (Cost and short proceeds $9,422,245) (») | $ | 9,308,100 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.4% | 37,550 | |||||||
Net Assets | 100.0% | $ | 9,345,650 |
Forward Currency Contracts open at December 31, 2019:
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Depreciation | ||||||||||
USD | 153,773 | CAD | 202,000 | SSB | 02/12/20 | $ | 1,814 |
Written Options open at December 31, 2019:
Description | Counterparty | Number of Contracts | Strike Price | Expiration Date | Notional Amount | Premiums | Fair Value | ||||||||||||||||||
Put | |||||||||||||||||||||||||
Cardtronics PLC | RBS | 2 | $ | 35.00 | 01/17/20 | $ | 200 | $ | 125 | $ | (50 | ) | |||||||||||||
Horizon Therapeutics PLC | RBS | 2 | 35.00 | 01/17/20 | 200 | 123 | (120 | ) | |||||||||||||||||
VanEck Vectors Oil Services ETF | RBS | 47 | 12.00 | 02/21/20 | 4,700 | 688 | (987 | ) | |||||||||||||||||
Total Written Options | 51 | $ | 936 | $ | (1,157 | ) |
The accompanying notes are an integral part of these financial statements.
Annual Report 21
The Lazard Funds, Inc.Notes to Portfolio of Investments
December 31, 2019
(‡) | 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 9 in the Notes to Financial Statements. |
(*) | Non-income producing security. |
(±) | Some or all of this security position has been pledged to cover collateral requirements on securities sold short. |
(#) | Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.” At December 31, 2019, these securities amounted to 4.8% of net assets. |
(«) | Issue in default. |
(») | 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 |
ETF | — | Exchange-Traded Fund |
REIT | — | Real Estate Investment Trust |
Currency Abbreviations: | ||||||
CAD | — | Canadian Dollar | USD | — | United States Dollar | |
Counterparty Abbreviations: | ||||||
RBS | — | RBS Securities, Inc. | SSB | — | State Street Bank and Trust Co. |
Portfolio holdings by industry (as a percentage of net assets), for the Portfolio previously presented by country:
Industry† | Long | Short | |||||||
Common Stocks and Convertible Corporate Bonds | |||||||||
Air Freight & Logistics | 2.7 | % | –0.8 | % | |||||
Automobiles | 0.9 | –0.5 | |||||||
Banks | 1.5 | –0.1 | |||||||
Biotechnology | 9.5 | –5.1 | |||||||
Building Products | 1.0 | –0.3 | |||||||
Commercial Services & Suppliers | 1.3 | –0.6 | |||||||
Communications Equipment | 0.5 | –0.2 | |||||||
Construction Materials | 2.1 | — | |||||||
Consumer Finance | 5.9 | –2.0 | |||||||
Diversified Consumer Services | 0.6 | –0.2 | |||||||
Diversified Financial Services | 1.0 | –0.3 | |||||||
Electronic Equipment, Instruments & Components | 5.5 | –2.9 | |||||||
Entertainment | 0.8 | –1.6 | |||||||
Equity Real Estate Investment Trusts (REITs) | 1.7 | –1.2 | |||||||
Food & Staples Retailing | 0.6 | –0.3 | |||||||
Health Care Equipment & Supplies | 4.1 | –2.6 | |||||||
Health Care Technology | 3.4 | –0.4 | |||||||
Hotels, Restaurants & Leisure | 1.7 | –0.5 |
The accompanying notes are an integral part of these financial statements.
22 Annual Report
Industry† | Long | Short | |||||||
Common Stocks and Convertible Corporate Bonds (continued) | |||||||||
Independent Power & Renewable Electricity Producers | 1.0 | % | –0.4 | % | |||||
Interactive Media & Services | 3.0 | –1.3 | |||||||
Internet & Direct Marketing Retail | 1.1 | –0.5 | |||||||
IT Services | 7.3 | –3.3 | |||||||
Media | 6.6 | –1.2 | |||||||
Metals & Mining | 1.7 | –1.3 | |||||||
Mortgage Real Estate Investment Trusts (REITs) | 3.8 | –0.6 | |||||||
Oil, Gas & Consumable Fuels | 1.5 | –0.7 | |||||||
Personal Products | 1.5 | –0.7 | |||||||
Pharmaceuticals | 10.1 | –2.6 | |||||||
Real Estate Management & Development | 1.8 | –0.7 | |||||||
Semiconductors & Semiconductor Equipment | 5.9 | –4.0 | |||||||
Software | 13.3 | –5.4 | |||||||
Specialty Retail | 0.8 | –0.5 | |||||||
Technology Hardware, Storage & Peripherals | 0.3 | –0.1 | |||||||
Tobacco | 1.2 | –0.3 | |||||||
Trading Companies & Distributors | 0.6 | –0.3 | |||||||
Subtotal | 106.3 | –43.5 | |||||||
Short-Term Investments | 36.8 | — | |||||||
Total Investments | 143.1 | % | –43.5 | % |
† | Industry classifications may be different than those used for compliance monitoring purposes. |
The accompanying notes are an integral part of these financial statements.
Annual Report 23
The Lazard Funds, Inc.Statement of Assets and Liabilities
December 31, 2019 | Lazard Enhanced Opportunities Portfolio | |||
ASSETS | ||||
Investments in securities, at fair value | $ | 13,370,664 | ||
Cash | 56,400 | |||
Cash collateral due from broker on options | 85,202 | |||
Foreign currency, at fair value | 2,471 | |||
Receivables for: | ||||
Dividends and interest | 55,700 | |||
Amount due from Investment Manager (Note 3) | 26,876 | |||
Investments sold | 24,730 | |||
Prepaid expenses | 1,501 | |||
Total assets | 13,623,544 | |||
LIABILITIES | ||||
Securities sold short, at fair value | 4,062,564 | |||
Cash collateral due to broker on options | 63,400 | |||
Payables for: | ||||
Accrued custodian fees | 74,992 | |||
Accrued professional services | 26,335 | |||
Investments purchased | 40,152 | |||
Dividends on securities sold short | 2,318 | |||
Gross unrealized depreciation on forward currency contracts | 1,814 | |||
Written options, at fair value | 1,157 | |||
Other accrued expenses and payables | 5,162 | |||
Total liabilities | 4,277,894 | |||
Net assets | $ | 9,345,650 | ||
NET ASSETS | ||||
Paid in capital | $ | 10,025,653 | ||
Distributable earnings (Accumulated loss) | (680,003 | ) | ||
Net assets | $ | 9,345,650 | ||
Institutional Shares | ||||
Net assets | $ | 9,222,926 | ||
Shares of capital stock outstanding* | 1,043,282 | |||
Net asset value, offering and redemption price per share | $ | 8.84 | ||
Open Shares | ||||
Net assets | $ | 122,724 | ||
Shares of capital stock outstanding* | 13,910 | |||
Net asset value, offering and redemption price per share | $ | 8.82 | ||
Cost of investments in securities | $ | 13,119,606 | ||
Proceeds received from securities sold short | $ | 3,697,361 | ||
Proceeds received from written options | $ | 936 | ||
Cost of foreign currency | $ | 2,457 |
* | $0.001 par value, 6,900,000,000 shares authorized for the Portfolios in total. |
The accompanying notes are an integral part of these financial statements.
24 Annual Report
The Lazard Funds, Inc.Statement of Operations
For the Year Ended December 31, 2019 | Lazard Enhanced Opportunities Portfolio | |||
Investment Income (Loss) | ||||
Income | ||||
Interest | $ | 403,925 | ||
Dividends | 709 | |||
Total investment income* | 404,634 | |||
Expenses | ||||
Custodian fees | 191,609 | |||
Management fees (Note 3) | 98,414 | |||
Professional services | 47,140 | |||
Registration fees | 34,713 | |||
Shareholders’ services | 20,568 | |||
Administration fees | 16,143 | |||
Shareholders’ reports | 10,513 | |||
Directors’ fees and expenses | 5,583 | |||
Distribution fees (Open Shares) | 311 | |||
Other | 5,417 | |||
Total gross expenses before expenses on securities sold short | 430,411 | |||
Broker expense on securities sold short | 113,375 | |||
Dividend expense on securities sold short | 37,976 | |||
Total gross expenses | 581,762 | |||
Management fees waived and expenses reimbursed | (300,530 | ) | ||
Total net expenses | 281,232 | |||
Net investment income (loss) | 123,402 | |||
Net Realized and Unrealized Gain (Loss) on Investments, Securities Sold Short, Foreign Currency Transactions, Forward Currency Contracts and Options | ||||
Net realized gain (loss) on: | ||||
Investments | 572,719 | |||
Securities sold short | (379,202 | ) | ||
Foreign currency transactions | (5 | ) | ||
Forward currency contracts | (8,172 | ) | ||
Written options | 20,196 | |||
Total net realized gain (loss) on investments, securities sold short, foreign currency transactions, forward currency contracts and options | 205,536 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 1,515,055 | |||
Securities sold short | (1,045,890 | ) | ||
Foreign currency translations | 233 | |||
Forward currency contracts | 4,727 | |||
Written options | (495 | ) | ||
Total net change in unrealized appreciation (depreciation) on investments, securities sold short, foreign currency translations, forward currency contracts and options | 473,630 | |||
Net realized and unrealized gain (loss) on investments, securities sold short, foreign currency transactions, forward currency contracts and options | 679,166 | |||
Net increase (decrease) in net assets resulting from operations | $ | 802,568 | ||
* Net of foreign withholding taxes of | $ | (234 | ) |
The accompanying notes are an integral part of these financial statements.
Annual Report 25
The Lazard Funds, Inc.Statement of Changes in Net Assets
Lazard Enhanced Opportunities Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 123,402 | $ | 129,042 | ||||||
Net realized gain (loss) on investments, securities sold short, foreign currency transactions, forward currency contracts and options | 205,536 | 414,280 | ||||||||
Net change in unrealized appreciation (depreciation) on investments, securities sold short, foreign currency translations, forward currency contracts and options | 473,630 | (826,012 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 802,568 | (282,690 | ) | |||||||
Distributions to shareholders (Note 2(g)) | ||||||||||
Net investment income and net realized gains | ||||||||||
Institutional Shares | (90,507 | ) | (425,197 | ) | ||||||
Open Shares | (1,247 | ) | (2,387 | ) | ||||||
Net decrease in net assets resulting from distributions | (91,754 | ) | (427,584 | ) | ||||||
Capital stock transactions | ||||||||||
Net proceeds from sales | ||||||||||
Institutional Shares | 1,320,608 | 4,469,209 | ||||||||
Open Shares | 42,717 | 7 | ||||||||
Net proceeds from reinvestment of distributions | ||||||||||
Institutional Shares | 90,507 | 415,898 | ||||||||
Open Shares | 1,247 | 2,387 | ||||||||
Cost of shares redeemed | ||||||||||
Institutional Shares | (9,075,438 | ) | (3,201,293 | ) | ||||||
Open Shares | (33,358 | ) | (10,796 | ) | ||||||
Net increase (decrease) in net assets from capital stock transactions | (7,653,717 | ) | 1,675,412 | |||||||
Total increase (decrease) in net assets | (6,942,903 | ) | 965,138 | |||||||
Net assets at beginning of period | 16,288,553 | 15,323,415 | ||||||||
Net assets at end of period | $ | 9,345,650 | $ | 16,288,553 |
The accompanying notes are an integral part of these financial statements.
26 Annual Report
Lazard Enhanced Opportunities Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Shares issued and redeemed | ||||||||||
Institutional Shares | ||||||||||
Shares outstanding at beginning of period | 1,948,553 | 1,754,786 | ||||||||
Shares sold | 155,988 | 512,981 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 10,308 | 51,342 | ||||||||
Shares redeemed | (1,071,567 | ) | (370,556 | ) | ||||||
Net increase (decrease) | (905,271 | ) | 193,767 | |||||||
Shares outstanding at end of period | 1,043,282 | 1,948,553 | ||||||||
Open Shares | ||||||||||
Shares outstanding at beginning of period | 12,624 | 13,575 | ||||||||
Shares sold | 4,922 | 1 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 142 | 289 | ||||||||
Shares redeemed | (3,778 | ) | (1,241 | ) | ||||||
Net increase (decrease) | 1,286 | (951 | ) | |||||||
Shares outstanding at end of period | 13,910 | 12,624 |
The accompanying notes are an integral part of these financial statements.
Annual Report 27
The Lazard Funds, Inc.Financial Highlights
LAZARD ENHANCED OPPORTUNITIES PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | |||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | |||||||||||||||
Institutional Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 8.31 | $ | 8.67 | $ | 9.16 | $ | 8.89 | $ | 10.00 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.10 | 0.06 | 0.11 | ^ | 0.05 | (0.02 | ) | |||||||||||||
Net realized and unrealized gain (loss) | 0.52 | (0.20 | ) | 0.40 | 0.35 | (0.21 | ) | |||||||||||||
Total from investment operations | 0.62 | (0.14 | ) | 0.51 | 0.40 | (0.23 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | — | (0.10 | ) | (0.17 | ) | (0.08 | ) | (0.14 | ) | |||||||||||
Net realized gains | (0.09 | ) | (0.12 | ) | (0.83 | ) | (0.05 | ) | (0.35 | ) | ||||||||||
Return of capital | — | — | — | — | (0.39 | ) | ||||||||||||||
Total distributions | (0.09 | ) | (0.22 | ) | (1.00 | ) | (0.13 | ) | (0.88 | ) | ||||||||||
Net asset value, end of period | $ | 8.84 | $ | 8.31 | $ | 8.67 | $ | 9.16 | $ | 8.89 | ||||||||||
Total Return (b) | 7.44 | % | –1.66 | % | 5.56 | %^ | 4.50 | % | –2.32 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 9,223 | $ | 16,184 | $ | 15,206 | $ | 14,077 | $ | 4,823 | ||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net expenses | 2.71 | % | 2.36 | % | 2.78 | %^ | 1.79 | % | 1.70 | % | ||||||||||
Gross expenses | 5.52 | % | 3.80 | % | 5.02 | %^ | 3.60 | % | 13.45 | % | ||||||||||
Gross expenses, excluding expenses on securities sold short | 4.06 | % | 2.71 | % | 3.45 | % | 3.51 | % | 13.45 | % | ||||||||||
Net investment income (loss) | 1.19 | % | 0.73 | % | 1.20 | % | 0.57 | % | –0.22 | % | ||||||||||
Portfolio turnover rate: | ||||||||||||||||||||
Excluding securities sold short | 272 | % | 312 | % | 210 | % | 247 | % | 639 | % | ||||||||||
Including securities sold short | 354 | % | 409 | % | 310 | % | 340 | % | N/A |
The accompanying notes are an integral part of these financial statements.
28 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 8.30 | $ | 8.65 | $ | 9.15 | $ | 8.89 | $ | 10.00 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.10 | 0.04 | 0.10 | ^ | 0.04 | (0.05 | ) | ||||||||||||||
Net realized and unrealized gain (loss) | 0.51 | (0.19 | ) | 0.37 | 0.33 | (0.21 | ) | ||||||||||||||
Total from investment operations | 0.61 | (0.15 | ) | 0.47 | 0.37 | (0.26 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | — | (0.08 | ) | (0.14 | ) | (0.06 | ) | (0.11 | ) | ||||||||||||
Net realized gains | (0.09 | ) | (0.12 | ) | (0.83 | ) | (0.05 | ) | (0.35 | ) | |||||||||||
Return of capital | — | — | — | — | (0.39 | ) | |||||||||||||||
Total distributions | (0.09 | ) | (0.20 | ) | (0.97 | ) | (0.11 | ) | $ | (0.85 | ) | ||||||||||
Net asset value, end of period | $ | 8.82 | $ | 8.30 | $ | 8.65 | $ | 9.15 | $ | 8.89 | |||||||||||
Total Return (b) | 7.33 | % | –1.80 | % | 5.16 | %^ | 4.13 | % | –2.57 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 123 | $ | 105 | $ | 117 | $ | 112 | $ | 110 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 2.83 | % | 2.60 | % | 3.01 | %^ | 2.07 | % | 1.95 | % | |||||||||||
Gross expenses | 13.76 | % | 14.49 | % | 16.40 | %^ | 15.58 | % | 26.46 | % | |||||||||||
Gross expenses, excluding expenses on securities sold short | 12.30 | % | 13.40 | % | 14.85 | % | 15.46 | % | 26.46 | % | |||||||||||
Net investment income (loss) | 1.10 | % | 0.48 | % | 1.06 | % | 0.45 | % | –0.46 | % | |||||||||||
Portfolio turnover rate: | |||||||||||||||||||||
Excluding securities sold short | 272 | % | 312 | % | 210 | % | 247 | % | 639 | % | |||||||||||
Including securities sold short | 354 | % | 409 | % | 310 | % | 340 | % | N/A |
^ | A one-time voluntary reimbursement by the administrator increased the net investment income per share amount of $0.04 per share. For Institutional Shares and Open Shares, the one-time voluntary reimbursement by the administrator increased the total return ratio by 0.49%, decreased the gross expense and net expense ratios by 0.44% and increased the net investment income (loss) ratio by 0.44%. |
(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. 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. |
The accompanying notes are an integral part of these financial statements.
Annual Report 29
The Lazard Funds, Inc.Notes to Financial Statements
December 31, 2019
1. Organization
The Lazard Funds, Inc. was incorporated in Maryland on May 17, 1991 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. As of December 31, 2019, the Fund was comprised of thirty no-load portfolios (each referred to as a “Portfolio”). This report includes only the financial statements of Enhanced Opportunities Portfolio. The financial statements of the other twenty-nine Portfolios are presented separately.
The Portfolio is operated as a “non-diversified” fund, as defined in the 1940 Act.
The Portfolio currently offers Institutional Shares and Open Shares. Each share class is identical except as to minimum investment requirements; the services offered to, and expenses borne by, each class; and the availability of Service Payments (as defined in the Portfolio’s Prospectus).
2. Significant Accounting Policies
The accompanying financial statements are presented in conformity with US Generally Accepted Accounting Principles (“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. Exchange-traded futures
30 Annual Report
contracts are valued at the settlement price on the exchange on which the contract is principally traded. Swap agreements, such as credit default, interest rate and total return swap agreements, generally are valued by an independent pricing service. 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 the Portfolio’s NAV may not take place contemporaneously with the determination of the prices of portfolio assets used in such calculation. Trading on non-US securities exchanges and in over-the-counter markets ordinarily may be completed before or after 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, non-US 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 the 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 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 the Portfolio’s NAV is calculated, or when current market quotations otherwise
Annual Report 31
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 American Depositary Receipts (“ADRs”) or futures contracts. Non-US securities may trade on days when the 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 the 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 and dividend expenses on short sales are 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 the Portfolio. Interest income, if any, is accrued daily. The Portfolio amortizes premiums and accretes discounts on fixed-income securities using the effective yield method.
The 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
32 Annual Report
with the recognition of income earned or capital gains (realized and/or unrealized) from the applicable portfolio securities.
(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 Portfolio does 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 Portfolio’s 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, the Portfolio records a realized
Annual Report 33
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 year ended December 31, 2019, the Portfolio traded in forward currency contracts.
(d) Options Transactions—For hedging and investment purposes, the Portfolio may purchase and write (sell) put and call options. Such options may be traded on US or non-US securities exchanges or on over-the-counter markets.
The risk associated with purchasing an option is that the Portfolio pays a premium whether or not the option is exercised. Additionally, the Portfolio will not benefit from exercise of an option should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities and other assets.
The risk involved in writing an option is that the Portfolio bears the market risk of an unfavorable change in the price of the security or currency underlying the written option. The Portfolio as a writer of an option has no control over whether the underlying instrument may be sold (“call”) or purchased (“put”) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk the Portfolio may not be able to enter into a closing transaction because of an illiquid market. Certain options may be written with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. When the Portfolio writes an option, the premium received by the Portfolio is recorded as a liability and is subsequently adjusted to the current market value of the option written.
During the year ended December 31, 2019, the Portfolio traded in options.
(e) Short Sales—A short sale is a transaction in which the Portfolio sells securities it does not own but has borrowed in anticipation of a decline in the market price of the securities. The initial amount of a short sale is recorded as a liability which is marked-to-market daily.
34 Annual Report
Fluctuations in the value of the short liability are recorded as unrealized gains or losses. The Portfolio realizes a gain or loss upon closing of the short sale (returning the security to the counterparty by way of purchase or delivery of a long position owned). Short sales by the Portfolio involve certain risks and special considerations. Possible losses from short sales differ from losses that could be incurred from a purchase of a security because losses from short sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested. The Portfolio may have to pay a fee to borrow the particular security and is liable to the buyer for any dividends or interest payable on securities while those securities are in a short position. These dividends and interest amounts are an expense of the Portfolio. The Portfolio designates collateral consisting of cash, US government securities or other liquid assets sufficient to collateralize the market value of short positions.
Proceeds from short sales are generally retained in cash accounts or invested in securities that are cash equivalents. With regard to securities borrowed as of December 31, 2019, pursuant to short sale arrangements, the Portfolio has a right to set off any assets held (including the borrowed securities) or obligations owed to the lender (State Street), in the event of the lender’s default, against any obligations owed by the lender to the Portfolio under any agreement or collateral document, including the collateral value of the Securities Loan Collateral, as that term is defined in the Securities Lending and Services Agreement between the Portfolio and State Street. At December 31, 2019, the Portfolio had pledged $9,815,545 of long securities as collateral under such arrangements.
For the year ended December 31, 2019, proceeds from securities sold short and purchases to cover short positions for the Portfolio were $28,108,299 and $29,567,807, respectively.
(f) Federal Income Taxes—The Fund’s policy is to 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.
Annual Report 35
At December 31, 2019, the 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:
Short-Term | Long-Term | |||||||
$9,319 | $96,863 |
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, 2019, the Portfolio 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) | ||||||||||||
Enhanced Opportunities | $10,013,039 | $672,791 | $1,308,488 | $(635,697 | ) |
Management has analyzed the Portfolio’s 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 Portfolio 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.
(g) Dividends and Distributions—Dividends from net investment income, if any, for the Portfolio 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 Portfolio, if not distributed. The Portfolio intends to declare and distribute these amounts, at least annually, to shareholders; however, to avoid taxation, a second distribution
36 Annual Report
may be required. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
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, passive foreign investment company gains and losses, 305c deemed dividends, wash sales, distribution re-designations, certain expenses and straddles. The book/tax differences relating to shareholder distributions resulted in reclassifications among capital accounts as follows:
Portfolio | Paid in Capital | Total Distributable Earnings (Accumulated Loss) | ||||||
Enhanced Opportunities | $4,625 | $(4,625 | ) |
The tax character of dividends and distributions paid during the years ended December 31, were as follows:
Ordinary Income | Long-Term Capital Gain | ||||||||||||||||
Portfolio | 2019 | 2018 | 2019 | 2018 | |||||||||||||
Enhanced Opportunities | $91,754 | $399,185 | $ | — | $28,399 |
At December 31, 2019, the components of distributable earnings (accumulated loss), on a tax basis, were as follows:
Portfolio | Undistributed Ordinary Income (Deferred Ordinary Losses) | Undistributed Long-Term Capital Gain (Deferred Capital Losses) | Net Unrealized Appreciation (Depreciation) Including Foreign Currency | |||||||||
Enhanced Opportunities | $110,408 | $(106,182 | ) | $(684,229 | ) |
(h) Allocation of Expenses—Expenses common to the Fund, Lazard Retirement Series, Inc., and Lazard Global Total Return and 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
Annual Report 37
of the Fund not directly chargeable to one or more Portfolios are similarly allocated among the Portfolios on the basis of relative net assets. The Portfolio accrues distribution and service (12b-1) fees to Open Shares. The Portfolio’s income, expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated proportionally each day between the classes based upon the relative net assets of each class.
(i) Redemption Fee—Until August 15, 2016, the Portfolio imposed a 1.00% redemption fee (short-term trading fee) on Portfolio shares redeemed less than 30 days after such shares were acquired. The fees were retained by the Portfolio and are included as paid in capital on the Statement of Assets and Liabilities. As of August 15, 2016, redemption fees no longer apply to transactions in Portfolio shares.
(j) 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.
(k) Net Asset Value—NAV per share for each class of the 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 Portfolio, has entered into a management agreement (the “Management Agreement”) with the Investment Manager. Pursuant to the Management Agreement, the Investment Manager regularly provides the Portfolio with investment research, advice and supervision and furnishes continuously
38 Annual Report
an investment program for the Portfolio consistent with its investment objective and policies, including the purchase, retention and disposition of securities, and provides the Portfolio with administrative, operational and compliance assistance services. For its services provided to the Portfolio, the Investment Manager earns a management fee, accrued daily as a percentage of each Portfolio’s average daily net assets and payable by the Portfolio monthly, at the annual rate set forth below:
Portfolio | Annual Rate | ||||
Enhanced Opportunities | 0.95 | % |
The Investment Manager has voluntarily agreed to waive its fees and, if necessary, reimburse the Portfolio until May 1, 2020 if the aggregate direct expenses of the Portfolio, exclusive of taxes, brokerage, interest on borrowings, dividend and interest expenses on securities sold short, fees and expenses of “Acquired Funds” (as defined in Form N-1A) and extraordinary expenses, including, for the purposes of the expense limitation agreement only, fees related to filing foreign tax reclaims, on behalf of the Portfolio, exceed the percentages of the value of the Portfolio’s average daily net assets set forth opposite the Portfolio’s name on table below. The Fund, on behalf of the Portfolio, may deduct from the payment to be made to the Investment Manager under the Management Agreement, or the Investment Manager will bear, such excess expense.
Portfolio | Institutional Shares | Open Shares | |||||||
Enhanced Opportunities | 1.25 | % | 1.50 | % |
During the year ended December 31, 2019, the Investment Manager waived its management fees and reimbursed the following Portfolio for other expenses as follows:
Institutional Shares | Open Shares | ||||||||||||||||
Portfolio | Management Fees Waived | Expenses Reimbursed | Management Fees Waived | Expenses Reimbursed | |||||||||||||
Enhanced Opportunities | $97,231 | $189,693 | $1,183 | $12,423 |
The aforementioned waivers and/or reimbursements are not subject to recoupment by the Investment Manager.
Annual Report 39
State Street provides the Fund with custody and certain fund administration and accounting services.
The Fund has a distribution agreement with Lazard Asset Management Securities LLC (the “Distributor”), a wholly-owned subsidiary of the Investment Manager, to serve as the distributor for shares of the 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, the Portfolio pays a monthly fee to the Distributor, at an annual rate of 0.25% of the average daily net assets of its Open Shares, for distribution and servicing of accounts. The Distributor may make payments to certain financial institutions, securities dealers and other industry professionals for providing these services.
DST is the Fund’s transfer and dividend disbursing agent.
4. Directors’ Compensation
Certain Directors of the Fund are officers of the Investment Manager. For the year ended December 31, 2019, each Director who is not an affiliated person of the Investment Manager or any of its affiliates was paid by all of the funds in the Lazard Fund Complex: (1) an annual retainer of $232,000, (2) an additional annual fee of $33,000 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 $23,000 to the Audit Committee Chair. Effective January 1, 2020, the aggregate compensation for Independent Directors for the Lazard Fund Complex is comprised of: (1) an annual retainer of $237,000, (2) an additional annual fee of $33,700 to the lead Independent Director, and (3) an additional annual fee of $23,500 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 meet-
40 Annual Report
ings. 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 a rate of $5,000 per active Portfolio with the remainder allocated based upon each active Portfolio’s proportionate share of combined net assets. The Statement of Operations shows the Independent Directors’ fees and expenses paid by the Portfolio.
5. Securities Transactions and Transactions with Affiliates
Purchases and sales of portfolio securities (excluding short-term investments and short sales) for the year ended December 31, 2019 were as follows:
Portfolio | Purchases | Sales | ||||||
Enhanced Opportunities | $33,411,451 | $42,267,105 |
For the year ended December 31, 2019, the Portfolio 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.
At December 31, 2019, the Investment Manager owned 60.84% of the outstanding shares of the Portfolio.
6. Line of Credit
The Fund has a Line of Credit Agreement (the “Agreement”) with State Street, primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. From January 1, 2019 through December 12, 2019, the Agreement provided for a $50 million commitment; effective December 13, 2019, the commitment was increased to $100 million. Interest on borrowings is payable at the higher of the Federal Funds rate or One-Month LIBOR rate plus 1.00%, on an annualized basis. Under the Agreement, the Fund has agreed to pay a 0.20% per annum fee on the unused portion of the commitment, payable quarterly in arrears. The Fund has also agreed to pay an upfront fee of 0.05% of the committed line amount. During the year ended December 31, 2019, the Portfolio had no borrowings under the Agreement.
Annual Report 41
Management believes that the fair value of the liabilities under the line of credit is equivalent to the recorded amount based on its short-term maturity and interest rate, which fluctuates with LIBOR. The Portfolio’s outstanding balance on the line of credit, if any, would be categorized as Level 2.
7. Investment Risks
(a) Non-US Securities Risk—The 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) Convertible Securities Risk—The market value of convertible securities may perform like that of non-convertible fixed income securities; that is, their prices move inversely with changes in interest rates (i.e., as interest rates go up, prices go down). In addition, convertible securities are subject to the risk that the issuer will not make interest or principal payments, or will not make payments on a timely basis. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security also is subject to the same types of market and issuer risks that apply to the underlying common stock.
(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. The 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 Portfolio’s 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
42 Annual Report
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 the 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 Portfolio may have to liquidate portfolio securities at disadvantageous prices. During periods of reduced market liquidity, the 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 a single large request for a significant percentage of the 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, and/or Portfolio expenses. Economic and other developments can adversely affect debt securities markets.
The 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 the 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
Annual Report 43
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 the 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 the 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. Certain fixed-income securities may be issued at a discount from their face value (such as zero coupon securities) or purchased at a price less than their stated face amount or at a price less than their issue price plus the portion of “original issue discount” previously accrued thereon,i.e., purchased at a “market discount.”The amount of original issue discount and/or market discount on certain obligations may be significant, and accretion of market discount together with original issue discount will cause the Portfolio to realize income prior to the receipt of cash payments with respect to these securities.
(e) Preferred Securities Risk—There are various risks associated with investing in preferred securities. In addition, unlike common stock, participation in the growth of an issuer may be limited.
· | Credit risk is the risk that a security held by the Portfolio will decline in price or the issuer of the security will fail to make dividend, interest or principal payments when due because the issuer experiences a decline in its financial status. |
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· | Interest rate risk is the risk that securities will decline in value because of changes in market interest rates. When market interest rates rise, the market value of such securities generally will fall. |
· | Preferred securities may include provisions that permit the issuer, at its discretion, to defer or omit distributions for a stated period without any adverse consequences to the issuer. |
· | Preferred securities are generally subordinated to bonds and other debt instruments in an issuer’s capital structure in terms of having priority to corporate income, claims to corporate assets and liquidation payments, and therefore will be subject to greater credit risk than more senior debt instruments. |
· | During periods of declining interest rates, an issuer may be able to exercise an option to call, or redeem its issue at par earlier than the scheduled maturity. If this occurs during a time of lower or declining interest rates, the Portfolio may have to reinvest the proceeds in lower yielding securities (and the Portfolio may not benefit from any increase in the value of its portfolio holdings as a result of declining interest rates). |
· | Certain preferred securities may be substantially less liquid than many other securities, such as common stocks or US Government securities. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by the Portfolio or at prices approximating the value at which the Portfolio is carrying the securities on its books. |
Securities and instruments of infrastructure companies are more susceptible to adverse economic or regulatory occurrences affecting their industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Infrastructure companies also may be
Annual Report 45
affected by or subject to, among other factors, regulation by various government authorities, including rate regulation, and service interruption due to environmental, operational or other mishaps.
(f) Short Position Risk—Short sales or positions may involve substantial risks. If a short position appreciates in value during a period of the Portfolio’s investment, there will be a loss to the Portfolio that could be substantial. Short positions involve more risk than long positions because the maximum sustainable loss on a security purchased is limited to the amount paid for the security plus the transaction costs. However, the Portfolio’s potential loss on a short position is unlimited because, theoretically, there is no limit to the potential price increase of a security.
Short sales of securities also may involve additional transaction-related costs such as those in connection with borrowing the securities sold short.
There is a risk that the Portfolio may be unable to fully implement its investment strategies due to a lack of available securities to borrow to effect short sales or for some other reason.
When seeking to effect short sales of securities, the Portfolio may not always be able to borrow a security the Portfolio seeks to sell short at a particular time or at an acceptable price. In addition, the Portfolio may not always be able to close out a short sale position at a particular time or at an acceptable price. If the lender of a borrowed security requires the Portfolio to return the security to it on short notice, and the Portfolio is unable to borrow the security from another lender, the Portfolio may have to buy the borrowed security at an unfavorable price, resulting in a loss. In addition, there is a risk that the collateral pledged to the Portfolio’s custodian to secure securities borrowings in connection with short sales of securities may not be returned to the Portfolio or may not be returned in a timely manner.
It is possible that the market value of the securities the Portfolio holds in long positions will decline at the same time that the market value of the securities to which the Portfolio has short exposure increases, thereby increasing the Portfolio’s potential volatility.
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(g) 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, over-the-counter options on securities (including options on ETFs), 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 the Portfolio may invest, are subject to many of the risks of, and can be highly sensitive to changes in the value of the related security, interest rate, index, commodity, currency or other reference asset. As such, a small investment could have a potentially large impact on the Portfolio’s performance. 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 transactions 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 if entered into for hedging purposes, may cause the Portfolio to experience losses greater than if the Portfolio had not engaged in such transactions.
8. Contractual Obligations
The Fund enters into contracts in the normal course of business that contain a variety of indemnification provisions. The 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.
Annual Report 47
9. Fair Value Measurements
Fair value is defined as the price that the 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.
48 Annual Report
The following table summarizes the valuation of the Portfolio’s assets and liabilities by each fair value hierarchy level as of December 31, 2019:
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 December 31, 2019 | |||||||||||||
Enhanced Opportunities Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Common Stocks* | $ | 3,707 | $ | 2,857 | $ | — | $ | 6,564 | |||||||||
Convertible Corporate Bonds* | — | 9,920,205 | — | 9,920,205 | |||||||||||||
Purchased Options | 1,811 | — | — | 1,811 | |||||||||||||
Short-Term Investments | 3,442,084 | — | — | 3,442,084 | |||||||||||||
Total | $ | 3,447,602 | $ | 9,923,062 | $ | — | $ | 13,370,664 | |||||||||
Liabilities: | |||||||||||||||||
Securities Sold Short | |||||||||||||||||
Common Stocks* | $ | (4,062,564 | ) | $ | — | $ | — | $ | (4,062,564 | ) | |||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | — | (1,814 | ) | — | (1,814 | ) | |||||||||||
Written Options | (1,157 | ) | — | — | (1,157 | ) | |||||||||||
Total | $ | (4,063,721 | ) | $ | (1,814 | ) | $ | — | $ | (4,065,535 | ) |
* | Please refer to Portfolio of Investments and Notes to Portfolio of Investments for portfolio holdings by country and industry. |
† | Other financial instruments are derivative instruments which are valued at their respective unrealized appreciation (depreciation). |
10. Derivative Instruments
Forward currency contracts may be used for hedging purposes or to seek to increase returns.
The Portfolio may write or purchase a call or put option to seek to realize, through the receipt of premiums or changes in market value, a greater return than would be realized on the underlying securities alone, or to seek to protect the Portfolio from losses.
During the year ended December 31, 2019, the approximate average monthly notional exposure for derivative instruments was as follows:
Forward currency contracts: | |
Average amounts purchased | $100,000# |
Average amounts sold | $400,000 |
# | Represents average monthly notional exposure for the seven months the derivative instrument was open during the period. |
Annual Report 49
The Portfolio also traded in purchased options having an average monthly notional exposure of less than $50,000.
The Portfolio also traded in written options having an average monthly notional exposure of less than $50,000.
The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of December 31, 2019:
Assets – Derivative Financial Instruments | Total | |||||
Purchased options | Investments in securities, at fair value | $ | 1,811 | |||
Liabilities – Derivative Financial Instruments | Total | |||||
Forward currency contracts | Gross unrealized depreciation on forward currency contracts | $ | 1,814 | |||
Written options | Written options, at fair value | 1,157 | ||||
Total | $ | 2,971 |
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2019 was:
Net Realized Gain (Loss) from: | Equity Contracts | Foreign Currency Exchange Contracts | Total | |||||||||
Forward currency contracts | $ | — | $ | (8,172 | ) | $ | (8,172 | ) | ||||
Purchased options | (114,967 | ) | — | (114,967 | ) | |||||||
Written options | 20,196 | — | 20,196 | |||||||||
Total | $ | (94,771 | ) | $ | (8,172 | ) | $ | (102,943 | ) | |||
Net Change in Unrealized Appreciation (Depreciation) on: | Equity Contracts | Foreign Currency Exchange Contracts | Total | |||||||||
Forward currency contracts | $ | — | $ | 4,727 | $ | 4,727 | ||||||
Purchased options | 9,175 | — | 9,175 | |||||||||
Written options | (495 | ) | — | (495 | ) | |||||||
Total | $ | 8,680 | $ | 4,727 | $ | 13,407 |
As of December 31, 2019, the 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
50 Annual Report
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.
The required information for the Portfolio is presented in the below table, as of December 31, 2019:
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 | $1,814 | $ | — | $ | 1,814 |
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 Received | Net Amounts of Derivative Liabilities | ||||||||||||||||
State Street Bank and Trust Co. | $ | 1,814 | $ | — | $ | — | $ | 1,814 |
11. Accounting Pronouncements
In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017–08,Nonrefundable Fees and Other Costs (Subtopic 310–20): Premium Amortization on Purchased Callable Debt Securities, which amends the amortization period for certain purchased callable debt securities.
Management has adopted the amendments and incorporated the changes in the current financial statements and related disclosures. For public business entities, the amendments in this ASU became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.
12. Subsequent Events
Management has evaluated subsequent events affecting the Portfolio through the issuance of the financial statements and has determined that there were no subsequent events that required adjustment or disclosure.
Annual Report 51
The Lazard Funds, Inc.
Report of Independent Registered Public Accounting Firm
To the Board of Directors of The Lazard Funds, Inc. and Shareholders of Lazard Enhanced Opportunities Portfolio:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of Lazard Enhanced Opportunities Portfolio, including the portfolio of investments (the “Portfolio”), one of the portfolios constituting The Lazard Funds, Inc. (the “Fund”), as of December 31, 2019, the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes to the financial statements. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Portfolio listed above, as of December 31, 2019, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on the Portfolio’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Portfolio in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Portfolio is not
52 Annual Report
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Portfolio’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 25, 2020
We have served as the auditor of one or more of the investment companies in the Lazard Fund Complex since 2004.
Annual Report 53
Board of Directors and Officers Information (unaudited)
Name (Year of Birth) 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 (1953) | Director (August 2014) | Debevoise & Plimpton LLP, a law firm,Of Counsel(2013 – present) | ||
Cornell Law School,AdjunctProfessor(2013 – present) | ||||
The Buchmann Faculty of Law, Tel Aviv University,Visiting Professor(2019) | ||||
University of California, Berkeley School of Law,Adjunct Professor(Spring 2017) | ||||
Kenneth S. Davidson (1945) | Director (August 1995) | Davidson Capital Management Corporation, an investment manager,President(1978 – present) | ||
Nancy A. Eckl (1962) | Director (April 2007) | College Retirement Equities Fund (eight accounts),Trustee (2007 – present) | ||
TIAA-CREF Funds (69 funds) and TIAA-CREF Life Funds (11 funds),Trustee(2007–present) | ||||
TIAA Separate Account VA-1,Member of the ManagementCommittee(2007 – present) | ||||
Trevor W. Morrison (1971) | Director (April 2014) | New York University School of Law,DeanandEric M. and Laurie B.Roth Professor of Law (2013 – present) | ||
Richard Reiss, Jr. (1944) | Director (May 1991) | Georgica Advisors LLC, an investment manager,Chairman (1997 – present) | ||
Osprey Technology Acquisition Corp., a special purpose acquisition company,Director (2019 – present) | ||||
Resource America, Inc., a real estate asset management company,Director(2016 – 2018) |
54 Annual Report
Name (Year of Birth) 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) | ||
Robert M. Solmson (1947) | Director (September 2004) | Fairwood Capital, LLC, a private investment corporation engaged primarily in real estate and hotel investments,Co-Managing Partnerand Managing Director (2008 – present) | ||
Interested Directors(4): | ||||
Ashish Bhutani (1960) | Director (July 2005) | Investment Manager,ChiefExecutive Officer(2004 – present) | ||
Lazard Ltd,Vice Chairman andDirector(2010 – present) | ||||
Nathan A. Paul (1973) | Director (October 2017), Chief Executive Officer and President (February 2017; previously, Vice President and Secretary since April 2002) | Investment Manager,ChiefBusiness Officer (April 2017 – present) andManaging 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 January 31, 2020, 35 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.
Annual Report 55
Name (Year of Birth) Address(1) | Position(s) with the Fund (Since) and Term(2) | Principal Occupation(s) During the Past Five Years | ||
Officers(3): | ||||
Mark R. Anderson (1970) | 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 | ||
Christopher Snively (1984) | Chief Financial Officer (March 2016) and Treasurer (September 2019) | Senior Vice President of the Investment Manager (since November 2015) | ||
Assurance Manager at PricewaterhouseCoopers LLP (2008 – November 2015) | ||||
Shari L. Soloway (1981) | Assistant Secretary (November 2015) | Head of Legal, North America (since January 2019, previously Senior Vice President, Legal and Compliance (since September 2015)) of the Investment Manager | ||
Vice President and Associate General Counsel of GE Asset Management (July 2011 – September 2015) | ||||
Jessica A. Falzone (1989) | Assistant Secretary (January 2019) | Vice President, Legal and Compliance, of the Investment Manager (since March 2018) | ||
Associate at Schulte Roth & Zabel LLP (2014 – March 2018) | ||||
Cesar A. Trelles (1975) | 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. |
56 Annual Report
The Lazard Funds, Inc.Tax and Other Information (unaudited)
Tax Information
Year Ended December 31, 2019
The following tax information represents year end disclosures of the tax benefits passed through to shareholders for 2019:
Of the dividends paid by the Portfolio, the corresponding percentage shown below is qualified dividend income.
Portfolio | Percentage | ||
Enhanced Opportunities | 0.15 | % |
Of the dividends paid by the Portfolio, no dividends qualify for the dividends received deduction available to corporate shareholders.
Portfolio | Percentage | |||
Enhanced Opportunities | 2.88 | % |
Pursuant to Section 871 of the Code, the Portfolio has no designated qualified short-term gains for purposes of exempting withholding of tax on such distributions to US nonresident shareholders.
Proxy Voting
A description of the policies and procedures used to determine how proxies relating to Fund portfolio securities are voted is available (1) without charge, upon request, by calling (800) 823–6300 or (2) on the Securities and Exchange Commission’s 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.
Schedule of Portfolio Holdings
The Fund files its complete schedule of the Portfolio’s holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the SEC’s website at https://www.sec.gov.
Annual Report 57
The Lazard Funds, 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
Lazard Asset Management LLC • 30 Rockefeller Plaza • New York, NY 10112 • www.lazardassetmanagement.com
Performance information as of the most recent month end is available online at www.lazardassetmanagement.com. LZDPS031 |
Lazard Funds
Annual Report
December 31, 2019
Equity Funds
Lazard Developing Markets Equity Portfolio | Lazard International Equity Portfolio |
Lazard Emerging Markets Core Equity Portfolio | Lazard International Equity Select Portfolio |
Lazard Emerging Markets Equity Advantage Portfolio | Lazard International Equity Value Portfolio |
Lazard Emerging Markets Equity Blend Portfolio | Lazard International Quality Growth Portfolio |
Lazard Emerging Markets Equity Portfolio | Lazard International Small Cap Equity Portfolio |
Lazard Equity Franchise Portfolio | Lazard International Strategic Equity Portfolio |
Lazard Global Equity Select Portfolio | Lazard Managed Equity Volatility Portfolio |
Lazard Global Listed Infrastructure Portfolio | Lazard US Equity Concentrated Portfolio |
Lazard Global Strategic Equity Portfolio | Lazard US Equity Focus Portfolio |
Lazard International Equity Advantage Portfolio | Lazard US Realty Equity Portfolio |
Lazard International Equity Concentrated Portfolio | Lazard US Small-Mid Cap Equity Portfolio |
Important Information on Paperless Delivery
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Shareholders who hold accounts directly with the Fund may elect to receive shareholder reports and other communications from the Fund electronically by signing up for paperless delivery at www.icsdelivery.com/lazardassetmanagement. If you own these shares through a financial intermediary, you may contact your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by following the instructions included with this disclosure and visiting www.fundreports.com. If you own these shares through a financial intermediary, you may contact your financial intermediary or follow instructions included with this disclosure to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the fund complex or your financial intermediary.
PRIVACY NOTICE
WHAT DOES LAZARD DO WITH YOUR PERSONAL INFORMATION?
Financial companies choose how they share your personal information. U.S. federal law gives our clients the right to limit some but not all sharing. U.S. federal and other applicable law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
We do not disclose nonpublic personal information about our clients or former clients to third parties other than as described below.
Personal information we collect.We collect personal information about you in connection with our providing advisory services to you. The legal basis for our collection of your personal information is our contract with you and our legitimate business interest to provide contractual services to you. The collection of this information is necessary for us to be able to provide advisory services to you and the failure to provide such information will result in our inability to provide our services. This information includes your social security number (for U.S. persons) and may include other information such as your:
• | Assets and income; | |
• | Investment experience; | |
• | Transaction history; | |
• | Credit history; and | |
• | Wire transfer instructions. |
How we collect this information.We collect this information from you through various means. For example, when you give us your contact information, enter into an investment advisory contract with us, buy securities (i.e., interests in a fund) from us, direct us to buy or sell securities for your account, tell us where to send money, or make a wire transfer. We also may collect your personal information from other sources, such as our affiliates1 or other non-affiliated companies (such as credit bureaus).
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The Lazard Funds, Inc.Table of Contents
Please consider a Portfolio’s investment objectives, risks, charges and expenses carefully before investing. For more complete information about The Lazard Funds, 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.
Annual Report 1
The Lazard Funds, Inc.A Message from Lazard (unaudited)
Dear Shareholder,
In 2019, equity markets rallied while debt yields around the world declined. The US equity market outperformed most of its peers, with the S&P 500®Index rising by 31.5% over the year, hitting an all-time high in December. Equities rallied strongly in Europe (+27.5%), but other markets were less ebullient. Uncertainty over Brexit kept UK equities in a range for most of the year, while political unrest and declining oil prices weighed on a number of emerging markets. Faced with US-China trade tensions, a decelerating industrial economy, and clear messaging from key central banks that rates will stay lower for longer, investors reached for yield.
US equity markets began 2019 on uncertain footing after tightening monetary policy and trade tensions led to a sharp sell-off at the end of 2018. However, the US Federal Reserve (Fed) made an abrupt monetary policy U-turn after the market mayhem. Perhaps concluding that monetary policy would be even looser for even longer than previously expected, investors drove the S&P 500 up to record highs, while pushing the US 10-Year Treasury yield down to within 10 basis points (bps) of the all-time low set in 2016. We believe the US economy appears to have averted recession and could continue to grow at a modest pace through 2020.
Emerging markets equities ended a tumultuous year on a positive note, with the MSCI Emerging Markets®Index up 18.4%. It was a near-perfect reversal of 2018’s dismal 14.6% decline. Trade was the biggest driver of emerging markets equities’ performance. A strong rally in the fourth quarter, for instance, came after two major trade developments. Looking ahead to 2020, we expect trade tensions to continue to influence the path of emerging markets equities, despite the accord on a long-awaited “Phase 1” deal between the US and China.
In Europe, the European Central Bank (ECB) took rates further into negative territory with the first rate cut since 2016. Germany’s economy contracted in the second quarter after years of powering the euro zone economy. The rest of the euro zone has proven more resilient-France and Spain, for example, depend less than Germany
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does on industrial activity and exports to drive growth. In the United Kingdom, the Conservative Party’s landslide win in a December election has helped dissipate some of the uncertainty that has weighed on UK markets since the Brexit vote in 2016.
Despite potential market challenges, we are optimistic for 2020 and believe that fundamental analysis and stock selection will be crucial drivers for performance. We are privileged that you have turned to Lazard for your investment needs and value your continued confidence in our investment management capabilities. We continue to strive for the long-term patterns of performance that are consistent with your expectations.
Sincerely,
Lazard Asset Management LLC
Annual Report 3
Lazard Retirement Series, Inc.Investment Overviews (unaudited)
Emerging Markets Equities
Emerging markets equities joined global capital markets in performing strongly in 2019. However, share prices in the developing world could not keep up with the very strong returns generated in the United States or global developed markets over the year, mostly due to ongoing trade tensions. The MSCI Emerging Markets Index rose by 18.4%, in US dollar terms, in 2019, underperforming the MSCI World®Index, which increased 27.7%. Eastern Europe, supported by strong returns in Russia and Greece, was the strongest performing region. Asian stock prices, aided by high returns in both information technology and consumer discretionary, rose marginally more than the index, while Latin American stocks experienced more varied returns and lagged modestly.
Share prices in Brazil and Colombia finished the year sharply higher on successful pension reform in the former and decent economic performance in the latter. Civil demonstrations proved to be a major social problem in Chile and contributed to it being the worst performing emerging market country in 2019. Mexican shares were laggards, as investors expressed unease with the unorthodox style of President Andrés Manuel López Obrador.
All Asian markets finished the year higher, with Chinese equity prices, despite the severe ongoing tensions over trade, recording a return of more than 23%. Taiwanese shares, which were helped by strong technology demand, experienced an even better year, rising by more than 36%. These export-oriented markets, including South Korea, were helped towards year-end by a “Phase 1” trade agreement between China and the United States. China possesses a prodigious consumer market and its economy was adversely impacted by the country’s trade war with the United States. The preliminary agreement removed a major barrier to China’s economic growth, thereby facilitating greater trade with export-dependent countries. Elsewhere in emerging Asia, markets were more restrained, with stocks prices rising by pedestrian amounts in Indonesia and India despite re-elections by incumbents.
Most markets in the region encompassing emerging Europe, the Middle East and Africa (EMEA) finished higher in 2019. However,
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Polish equities, which had performed well in 2018, were adversely impacted by an economic slowdown in neighboring Germany and ended the year almost 6% lower. Shares in both South Africa and Turkey were affected by weak macroeconomic trends, although both managed to generate positive, but relatively unexciting, gains. Investors were drawn to Greek equities, which were bolstered when a new government assumed power, and Russian stocks, where strong economic fundamentals underpinned a more shareholder-friendly attitude toward many companies. Saudi Arabian equities joined the emerging markets universe in 2019 and the initial public offering of Saudi Aramco was completed.
From a sector perspective, information technology and consumer discretionary companies performed particularly well. Although all sectors finished the year higher, health care, materials, and industrial stocks were the major underperformers.
International Equities
The year 2019 was a big one for equities and international equities were no exception. The MSCI EAFE®Index rose 22.0% over the course of the year, while the MSCI ACWI ex US®Index, rose 21.5%. The fourth quarter was particularly strong, as markets anticipated a cyclical upturn in both the global economy and corporate profits. However, the nature of the gains was as important as the raw numbers. We entered the year feeling cautious about corporate fundamentals and that stance turned out to be justified. Equity returns were driven more by multiple expansion rather than earnings, which came in much lower than expected across regions. In the first three quarters of the year, the shift in policy from monetary tightening to easing from the Fed, as well as the ECB’s return to quantitative easing, drove asset prices higher. Equities owed their strong rise in the fourth quarter, equivalent to 40% on an annualized basis, to an upturn in risk sentiment, perhaps thanks to a preliminary agreement on a trade deal between the United States and China and a decisive election in the United Kingdom. A market that reacted with a loud, long sigh of relief at every sign of stabilization and largely ignored fundamentals posed challenges for stock pickers, even as stocks overall enjoyed good returns.
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Behind the impressive performance stocks enjoyed in most regions, the prevailing mood for 2019 was one of anxiety. Trade tensions, a global manufacturing slowdown, and pessimism around global growth prospects were all at the top of investors’ minds.
We believe it’s telling that the three major developments that boosted international equities in 2019 all helped make an uncertain world feel a bit more certain. The Fed’s about-face on monetary tightening, which was followed by easing from the ECB and many emerging markets central banks, reduced fears of rising interest rates. British voters ushered in some clarity around Brexit by delivering a decisive victory to Prime Minister Boris Johnson’s Conservative Party in the fourth quarter. And finally, the United States and China announced in December that they had reached an agreement on a Phase 1 trade deal.
Given the market’s uncertainty, it is not surprising that high-quality stocks (top-quintile EAFE stocks measured by return on equity) fared particularly well in 2019. Within the high-quality world, those with the highest growth prospects and valuations climbed nearly 41% in the year and were particularly strong in the fourth quarter. As we enter 2020, the expectations for this group are high, with a nearly nine-point valuation premium versus the MSCI EAFE benchmark (24.8x vs. 15.8x on a price-to-earnings basis).
That is not to say that value did not have its moments in 2019. For a short period of time, global value stocks started to outpace global growth stocks late in the third quarter, as fears of a recession began to subside, a trade deal began to seem more possible, sentiment improved, and investors hoped weak global manufacturing activity would bottom. Armed with renewed confidence, we believe investors felt comfortable, at least for a short period of time, taking advantage of an unusually wide valuation gap between value and growth stocks. The appetite for value began to flag as the third-quarter earnings season got underway, however, and was not ultimately strong enough to compete with the demand for growth stocks.
The growth versus value paradigm held right down to the sector and region level. Technology stocks, a classic growth sector, soared
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during the period. Energy stocks lagged, as investors worried about the potential for depressed prices in the face of abundant oil supplies and a global manufacturing slowdown. For the full year, the MSCI EAFE Growth®Index outperformed the MSCI EAFE Value®Index by 12.0%. Meanwhile, the MSCI EM Growth®Index outperformed the MSCI EM Value®Index by 13.0% in the same period.
US Equities
The S&P 500 Index rose 31.5% in the period. Stocks rallied early in 2019, as solid economic data and expectations for progress in trade talks encouraged investors. Corporate earnings and other indicators of economic health were largely positive, as the majority of companies reported quarterly earnings above expectations, the economy continued to add jobs at a strong rate, with unemployment reaching a 50-year low toward the end of the year, and GDP growth broadly came in above expectations, despite weakness abroad. The Fed cut its benchmark rate three times in 2019 in an attempt to keep the US economy on its solid growth trajectory. In December, the United States and China announced a preliminary agreement on certain points of contention, eliminating some of the uncertainty surrounding the ongoing trade spat between the two countries.
Global Securities
Although uncertainty continued to hang over many of the world’s economies, encouraging macro developments boosted risk sentiment during the year. The most significant news coming out of the period was that the United States and China had reached an initial deal in their protracted trade war. Investors were still awaiting the details of the “Phase 1” agreement as of the end of December, but optimism about a potential truce between the world’s two largest economies appeared to ease fears of a global recession and led to a rally in global stock markets.
While investors remained nervous about the rest of the world, the United States continued to be a bright spot. Positive domestic economic data in the areas of employment and consumer spending eased fears that the American economy was slowing. These upbeat figures, combined with the Fed’s three interest rate cuts during the year, continued to benefit the US equity market. Across the Atlantic,
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the UK stock market advanced after the country’s general election in December resulted in a resounding victory for the Conservative Party majority, thereby providing additional clarity on the future of Brexit. Meanwhile in Asia, Japan’s equity market climbed higher on news in December that the Japanese government was set to announce a stimulus package to boost the country’s economy.
Equity markets in the developing world outperformed their developed market counterparts in the fourth quarter, as world equity markets rose on improved investor confidence in the global economic outlook. Stock markets in China, which benefitted from easing trade tensions with the United States, and Russia, where investors bid up shares on hopes that the country’s struggling economy was improving, were among the top performers.
Information technology was the best performing sector, as semiconductor companies with significant exposure to the Chinese market gained on news of a US-China initial trade agreement. Utilities underperformed the broader market index, as risk-on trading led investors to rotate out of defensive stocks.
Global Infrastructure
Global equity markets continued to rally in 2019. We believe that the market’s optimism was founded on the continuation of stimulative central bank fiscal policies, the de-escalation of trade tensions between the United States and China, and the resilience of the US economy. In our view, these factors, among others, helped drive share prices upward in 2019, including those of infrastructure companies. This strong level of performance has resulted in a dearth of, what we believe to be sensibly priced investment opportunities in infrastructure assets. In the United Kingdom, the path to Brexit caused significant volatility in the share prices of UK infrastructure stocks, providing us with attractive opportunities to invest, and in the United States the continued drop in market interest rates meant that the valuations of US utilities became further stretched.
Real Estate Equities
The MSCI USA IMI Core REIT Index outpaced the S&P 500 for most of the year, but a modest decline in the fourth quarter resulted in the REIT-specific index trailing the broader market index for the
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entire year. However, in absolute return terms, REIT performance was strong compared to historical results as the US REIT market continued to benefit from stable economic growth, healthy real estate fundamentals, access to equity and debt, a benign interest rate environment, and modesty positive earnings expectations. From a year-to-date perspective, Industrial and Residential REITs delivered the best total returns of the major sectors in 2019, while Retail and Lodging REITs were the worst performers.
Lazard Developing Markets Equity Portfolio
For the year ended December 31, 2019, the Lazard Developing Markets Equity Portfolio’s Institutional Shares posted a total return of 28.17%, while Open Shares posted a total return of 27.79%, as compared with the 18.44% return for the MSCI Emerging Markets Index.
Stock selection within the communication services, consumer discretionary, consumer staples, financials, health care, industrials, information technology and materials sectors as well as in Brazil, Colombia, South Africa, China, India, Indonesia, South Korea and Taiwan all helped performance. Higher-than-index exposure to Colombia and Russia, and lower-than-index exposure to the consumer staples and materials sectors, as well as to Chile, Poland, Saudi Arabia, Korea, Malaysia, and Thailand added value. Notre Dame Intermedica, a Brazilian vertically integrated health care operator, outperformed on strong results, continued healthy net new adds and improvement in medical loss ratios. Alibaba, a leading Chinese e-commerce company, outperformed on optimism around continued healthy core commerce revenues and continued narrowing of losses from investments, as well as on strong China e-commerce growth. Samsung Electronics, a South Korean technology company, rose after reporting a positive outlook on pricing for both DRAM and NAND memory. New Oriental Education & Technology Group, an English learning service provider in China, outperformed, driven by strong results that were supported by improving margins. Yandex, a Russian search engine, outperformed on strong results and as concerns eased regarding limiting foreign ownership in Russian internet companies
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In contrast, stock selection in Russia detracted from performance, as did underweight exposure to the consumer discretionary sector and to Taiwan. The overweight exposure to the industrials sector, as well as to Peru and India, also hurt performance. NMC Health, a hospital operator in the UAE, underperformed following several allegations about the company’s business practices that were made in a short seller report. Focused Photonics, a Chinese environmental monitoring and process control company, did poorly following weak results and guidance that suggested a softer outlook. Baidu, a Chinese search engine, underperformed after ad revenue growth slowed, profit margins decreased, and management initiated another health-care vertical restructuring. Zhuzhou CRRC, a Chinese manufacturer of electrical systems for railways, struggled with weak growth and disappointing margins.
Lazard Emerging Markets Core Equity Portfolio
For the year ended December 31, 2019, the Lazard Emerging Markets Core Equity Portfolio’s Institutional Shares posted a total return of 21.59%, while Open Shares posted a total return of 21.08%, and R6 Shares posted a total return of 21.69%, as compared with the 18.44% return for the MSCI Emerging Markets Index.
Security selection in the financials, industrials, information technology, and communication services sectors, as well as in China and South Korea, helped performance during the period. The overweight to Russia further helped relative performance. Taiwan Semiconductor Manufacturing Company, the world’s largest semiconductor foundry, benefitted from expectations of rising 5G demand for both smartphones and network infrastructure. New Oriental Education & Technology Group, the largest provider of private educational services in China, ended higher as its online subsidiary Koolearn reported stronger revenue growth in its fiscal year 2019 results. The share price of Lukoil, a Russian integrated oil company, continued to benefit from management’s announcement of a new and more transparent dividend policy, with at least 100% of free cash flow to be paid out in dividends. Sberbank, a Russian state-owned bank, reported stronger earnings and higher capital ratios over the period. China National Building Material Group, a
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Chinese building materials company, outperformed on better-than-expected cement prices and housing data.
In contrast, security selection in the materials sector, as well as in India, detracted from returns, as did overweight exposure to the materials sector. Braskem, a Brazilian petrochemical company, reported disappointing second quarter results, driven by weak petrochemical spreads (the difference between product prices and the cost of raw materials) and low demand in Brazil, Mexico, and Europe. Ternium, a steel manufacturer with operations across Latin America, declined as rising input costs weighed on the stock’s performance. Additionally, a slowdown in the domestic auto industry weighed on its share price. DB Insurance, a South Korean insurance company, underperformed as the outlook for its long-term loss ratio deteriorated following a rise in medical indemnity claims. Indian securities Hindalco Industries, an integrated aluminum producer, and Hindustan Zinc, a long reserve life zinc company, underperformed due to uncertainties surrounding the country’s general election, and due to weaker aluminum prices.
Lazard Emerging Markets Equity Advantage Portfolio
For the year ended December 31, 2019, the Lazard Emerging Markets Equity Advantage Portfolio’s Institutional Shares posted a total return of 20.44%, while Open Shares posted a total return of 19.97%, as compared with the 18.44% return for the MSCI Emerging Markets Index.
Stock selection accounted for most of the year’s relative gain with particular strength in the financials and materials sectors. Greater-than-benchmark exposure to the information technology sector also helped. This was partially offset by poor stock selection in the consumer staples and utilities sectors. Less than-benchmark exposure to the consumer discretionary sector also detracted. Regionally, stock selection was particularly favorable in China and Taiwan but lagged in South Korea, Argentina and India.
Stocks that helped performance in the year included Taiwan Semiconductor, which continued to appreciate on strong demand for faster mobile chips and new high-end smartphones. The world’s top contract chipmaker eased investor fears of a global tech slow-
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down with a bullish forecast for 2020 and they continue to make the technological advances necessary to maintain their leadership position. Anglo American Platinum enjoyed a very strong year as palladium and rhodium prices continue to appreciate. Production remains in line with the company’s guidance of 70–80% annual increase. They negotiated a 3-year contract with the miner’s union, averting a potential strike and business disruption. They remain the world leader in platinum production accounting for nearly 40% of the world’s supply. Samsung also benefitted performance, as optimism of a trade deal between the United States and China and with Japan helped to boost the stock. Improved DRAM pricing and US consumer spending also provided a lift to the stock.
Detractors for the year included LG Uplus, one of the companies at the center of the Japan-South Korea trade war. In July, citing national security concerns, Japan placed restrictions on exports to South Korea of three chemical materials crucial for the manufacture of semiconductors and screens used in smartphones and televisions. That affected companies like LG Uplus, which relies heavily on Japan, the most important source for the chemicals globally. The company reported solid growth in the operating profit with over a 10% increase in annual earnings. However, higher labor costs concerned investors. Petronas Chemicals continues to struggle as the lack of growth catalysts has weighed on the stock. Both ethylene and methanol prices remain weak reflecting the tensions of the US-China trade war, depressing Petronas’ earnings. We sold our position during the period. Banco Macro, the Argentine bank, which caters to middle class retail and small and mid-sized companies, fell over 60% in August, despite reporting results that were better than forecast. Concerns that their client base would be especially hard hit by the currency controls caused a nearly 70% decline in the stock and with a modest recovery in price, we exited the position.
Lazard Emerging Markets Equity Blend Portfolio
For the year ended December 31, 2019, the Lazard Emerging Markets Equity Blend Portfolio’s Institutional Shares posted a total return of 24.21%, while Open Shares posted a total return of 24.21%, as compared with the 18.44% return for the MSCI Emerging Markets Index.
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The Portfolio benefited from stock selection in the communication services, financials, industrials, and information technology sectors, as well as from higher-than-index exposure to the information technology sector. Performance was also helped by stock selection in Indonesia, South Korea, Russia, and Taiwan, as well as by overweight exposure to Russia.
In contrast, performance was hurt by the Portfolio’s allocation to small cap stocks. Other detractors included stock selection in the health care and utilities sectors as well as lower-than-index exposure to the consumer discretionary sector. By country, stock selection in Brazil and China, as well as lower-than-index exposure to Taiwan hurt performance. Finally, off-benchmark exposure to UK-listed stocks NMC Health (a hospital operator in the UAE) and Petra Diamonds (a diamond miner with assets in Africa) lowered returns.
Lazard Emerging Markets Equity Portfolio
For the year ended December 31, 2019, the Lazard Emerging Markets Equity Portfolio’s Institutional Shares posted a total return of 18.04%, while Open Shares posted a total return of 17.73%, and R6 Shares posted a total return of 17.98%, as compared with the 18.44% return for the MSCI Emerging Markets Index.
During the period, shares of South Korean companies Samsung Electronics and SK Hynix, a manufacturer of electronic good and a semiconductor manufacturer, respectively, rose as the market started to see signs that the DRAM market was near the bottom and the NAND market continued to see strength. Sberbank, a Russian bank, reported strong May profits with supportive net interest margin trends. Taiwan Semiconductor Manufacturing, a Taiwanese semiconductor manufacturer, provided upbeat guidance including expectations for rising 5G smartphone demand translating into demand for higher-end components. Shares of Weichai Power, a Chinese manufacturer of large diesel engines, gained on expectations for stability in the heavy-duty truck market in 2020. Shares of Gazprom, a Russian gas company, surged after the company announced a sharp rise in the dividend payout. Security selection within the industrials and financials sectors added value. Stock selection in South Korea and a higher-than-index exposure to Russia helped performance.
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In contrast, shares of YPF, an Argentine energy company, dipped sharply along with the broader Argentine market after the country’s surprising primary election result that indicated a strong likelihood that the leftist ticket of Fernandez/Kirchner was going to win the October elections; and was followed by the announcement of 90-day price freezes by President Macri. BAT Malaysia, a Malaysian tobacco company, experienced volume contractions as customers continued to convert to e-cigarette and/or illicit cigarette alternatives. Shoprite, a South Africa retail chain, was negatively impacted by its Sub-Saharan businesses due to currency depreciations in those countries. Hero Motocorp, an Indian manufacturer of two wheelers, lagged on continued sales weakness. Baidu, a Chinese search engine, reported disappointing second quarter results and indicated a weak outlook for the Chinese digital advertising market. Security selection within the consumer discretionary, consumer staples, and information technology sectors, and within South Africa detracted from performance. A lower-than-benchmark exposure to Taiwan also hurt returns.
Lazard Equity Franchise Portfolio
For the year ended December 31, 2019, the Lazard Equity Franchise Portfolio’s Institutional Shares posted a total return of 21.70%, while Open Shares posted a total return of 21.40%, as compared with the 27.67% return for the MSCI World®Index.
A detractor in the period was Pacific Gas & Electric (PG&E) over concerns that the utility equipment of the company may have contributed to the spate of wildfires in northern California that occurred in early November 2018. On January 29, 2019, PG&E filed for Chapter 11 bankruptcy protection. Whilst there may still be value in PG&E once the 2017 and 2018 wildfire liabilities are resolved, we believe the Chapter 11 process changes the risk profile of the company and we exited our position.
Leading satellite operator SES also detracted from performance during the year. November 2019 saw a radical change in approach by the US Federal Communication Commission (FCC) towards the sale method of C-band spectrum in which FCC Chairman Ajit Pai has decided to utilize a public auction. Simultaneously, a bill introducing the 5G Spectrum Act which requires that “at least 50% of
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the value of the auction revenues be reserved for the American people”, was introduced in the Senate. These actions mean that the timeline for a sale is now very uncertain and the ultimate share of proceeds will also be the subject of debate. However, we believe SES still offers a reasonable valuation opportunity and is worthy of a position in the strategy, even after excluding any proceeds from the reuse of US C-Band.
US medical waste and document destruction business, Stericycle, contributed to performance for the year indicating that its “consolidate to regulated medical waste (RMW) and document destruction (DD)” strategy is on track. DD has shown increasing sales momentum and appears now firmly in a 4%–6% per annum organic growth range, whilst RMW showed recent years’ price compression has all but stopped. In October, the company announced progress on its portfolio rationalization after it divested from non-core operations in Mexico and two service lines within Communication and Related Services.
The world’s largest brewer, Anheuser-Busch Inbev (ABI), contributed to performance during the year. Although price competition has increased in ABI’s markets resulting in the company adjusting its prices to maintain market share, we believe its economies of scale benefits as the world’s largest brewer, resulting in improved profit performance above market expectations. Mid-year, ABI also announced the sale of its Australian operations to Asahi Group Holdings Ltd, for AUD16 billion (US$11.3 billion), well above of both the market and our expectations. In our view, the company still offers compelling value at the current share price.
Lazard Global Equity Select Portfolio
For the year ended December 31, 2019, the Lazard Global Equity Select Portfolio’s Institutional Shares posted a total return of 25.20%, while Open Shares posted a total return of 24.82%, as compared with the 26.60% return for the MSCI All Country World®Index (“ACWI”).
Stock selection in the industrials sector contributed to performance. Shares of engineering recruiter Technopro rose after the com-
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pany reported strong results, driven by solid organic growth. An underweight position in energy also helped returns. The sector was among the year’s worst performers in the benchmark index.
In contrast, stock selection in the financials sector detracted from performance. Shares of lender Indiabulls fell amid questions about the company’s funding capabilities. We sold our position in August, as our thesis was broken. Stock selection in the communication services sector also hurt returns. Shares of videogame maker Ubisoft fell after management issued disappointing 2019 guidance in May, as well as a profit warning for its third quarter. We sold our position in November, as our thesis was broken.
Lazard Global Listed Infrastructure Portfolio
For the year ended December 31, 2019, the Lazard Global Listed Infrastructure Portfolio’s Institutional Shares posted a total return of 22.26%, while Open Shares posted a total return of 21.94%, as compared with the 27.13% return for the MSCI World Core Infrastructure (USD Hedged) Index and 27.67% return for the MSCI World Index.
UK regulated utility National Grid rose following the commanding win of the Conservative party at the UK general elections. Importantly, the defeat of the Labour party may eliminate nationalization fears that had been plaguing the stock over the last few years. While our investment was not predicated on the specific political outcome, we believe this reduces risk and volatility considerably. We believe there is substantial upside and the stock could regain the premium at which it was trading prior to the emergence of the nationalization threat.
French motorway and airports operator Vinci also strongly contributed to performance during the year after the company continued to deliver solid results. In the first half of 2019, for instance, the company noted a 180 basis point increase in motorway margins leading to 5% EBITDA growth, despite muted traffic development. Airports also continued their growth, with total passengers increasing 6.7% in the first half, leading to 8.1% organic growth. Gatwick airport was integrated into the group’s perimeter in May 2019, following the acquisition of a majority stake. We believe that the price
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paid for the asset is quite high, and difficult to justify without transforming the emergency runway into a second runway which could provide a much needed boost to capacity at the airport. Moreover, the company appears resilient to the social unrest in France, and the contracting division is ahead of our profitability expectations.
A major detractor during the period was Pacific Gas & Electric (PG&E) over concerns that the company’s utility equipment may have contributed to the spate of wildfires in northern California that occurred in early November 2018. In January, PG&E filed for Chapter 11 bankruptcy protection. Having investigated the potential risks of the Chapter 11 process, we determined that PG&E no longer fit the risk profile of a Preferred Infrastructure Investment. Whilst there may still be value in PG&E once the 2017 and 2018 wildfire liabilities are resolved, we believe the Chapter 11 process changes the risk profile of the company and we exited our position.
Leading satellite operator SES also detracted from performance during the year. The last weeks of November 2019 saw a radical change in approach by the US Federal Communication Commission (FCC) towards the sale method of C-band spectrum. The C-Band Association’s (CBA) private market solution was rejected and instead, FCC Chairman Ajit Pai has decided to utilize a public auction. Simultaneously, a bill introducing the 5G Spectrum Act which requires that “at least 50% of the value of the auction revenues be reserved for the American people”, was introduced in the Senate. These actions mean that the timeline for a sale is now very uncertain. Although the FCC has said it wants to act ‘quickly’ we believe there are likely to be issues that slow the process well into 2020. The major timing obstacle may now be the CBA seeking a better deal and the ultimate share of proceeds will also be the subject of debate. The US Treasury may look for more than 50% of the total proceeds of sale and some leading senators appear to support this. With so much uncertainty surrounding the ultimate C-Band outcome, we have considered it appropriate to remove any value for the potential C-Band sale proceeds from our core valuation of SES. That said, we continue to believe SES still offers a reasonable valuation opportunity and is worthy of a position in the strategy, even after excluding any proceeds from the reuse of US C-Band.
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Lazard Global Strategic Equity Portfolio
For the year ended December 31, 2019, the Lazard Global Strategic Equity Portfolio’s Institutional Shares posted a total return of 29.19%, while Open Shares posted a total return of 29.01%, as compared with the 26.60% return for the MSCI ACWI.
Contributors included Worldpay, the global merchant acquirer, which was acquired at a premium by Fidelity National Information Services. S&P Global rose steadily based on its consistently profitable ratings and index businesses. TechnoPro Holdings, a Japanese engineering recruitment firm, showed steady growth in engineer placements. Visa, the provider of digital payment services, continued to see earnings growth, thanks to higher payment volumes and higher pricing. The company benefits from the trend from cash to card, while the company expands its addressable market to increase additional payment flows, in areas such as e-commerce, and B2B payments. Digital Garage, the Japanese provider of online payments and online advertising, reported strong operating performance-revenue growth with increasing margin.
On the negative side, Apple was not held in the Portfolio, but the shares appreciated with improving iPhone results and progress in trade negotiations between the United States and China. Biogen fell after the company stopped its trial of aducanumab in addressing Alzheimer’s. South Korean internet services provider Café 24 was hurt by aggressive plans to expand into Japan. Elanco Animal Health pulled back after it announced its intention to purchase Bayer’s pet business. Halliburton, the oil services firm, declined slightly over the year, declining as oil prices fell with economic uncertainty and rebounding as tensions flared in the Middle East towards the end of the year.
Lazard International Equity Advantage Portfolio
For the year ended December 31, 2019, the Lazard International Equity Advantage Portfolio’s Institutional Shares posted a total return of 17.37%, while Open Shares posted a total return of 17.03%, as compared with the 22.01% return for the MSCI EAFE Index.
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With the concentrated leadership in the market, stock selection proved difficult, especially given the valuation premiums associated with many of the market leaders in the year. Leadership was concentrated in large cap stocks, and of those large caps, the 37 largest stocks in the MSCI EAFE index provided the only source of value during the period. Nestle, Diageo, and GlaxoSmithKline were some of the stocks that hurt performance due to lack of exposure. In addition to stock selection, minor sector weighting differences also accounted for some of the underperformance including underweights to information technology and materials and an overweight in energy.
Stock selection was favorable in five of eleven sectors but overshadowed by underperformance in industrials, materials and consumer staples. Geographically, stock selection in Japan contributed disproportionately to the underperformance. The protests in Hong Kong also adversely impacted the Portfolio, as we held a large retail and real estate concern (Swire Pacific) which was adversely impacted. European holdings also lagged the benchmark with French utility Electricité de France the largest detractor as it surprised investors by cutting its dividend. Performance in the United Kingdom was flat for the year despite a strong pick-up in the fourth quarter as the positioning in domestically oriented concerns benefitted with the election results and the sharp rally in the pound.
Lazard International Equity Concentrated Portfolio
For the year ended December 31, 2019, the Lazard International Equity Concentrated Portfolio’s Institutional Shares posted a total return of 25.56%, while Open Shares posted a total return of 25.28%, as compared with the 21.51% return for the MSCI ACWI ex-US.
Outperformance of the Portfolio was driven entirely by stock selection anchored by our insight in stock-specific situations and inflections.
Top contributors included Aon, which benefited from its US dollar exposure and also greater awareness of its capital light earnings growth. Being a ‘big data’ company, Aon benefited from a thematic tailwind, although, critically, it was not just a story but registered in earnings growth also. National Bank of Canada continued to prove
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Canadian housing bears incorrect as this high-return franchise continued to enjoy its high but sustainable return in the Canadian banking oligopoly. Safran, despite a mixed fourth quarter due to Boeing’s woes, continued its long period of strong performance as the market got a greater understanding of the margin uplift coming from the transition in business mix from lower margin original equipment business to higher margin aftermarket business. SAP appreciated as the market enjoyed the rapid organic growth and defensive qualities, with the entrance of an activist investor and the exit of the CEO also suggesting a bright future ahead. Samsung performed well. We added significant capital to the stock in early second half of 2019, after company visits to multiple industry participants in South Korea confirmed the memory cycle was turning positive. Digital Garage performed well, driven principally by the payment division, which is enjoying 15%–20% organic growth as Japan transitions to a cashless society from its anachronistic current position.
The top detractor was Dutch lender ABN AMRO, which fell as part of a larger decline in the European banking industry due to pressure on net interest margins stemming from the ultralow interest rate environment in the Continent. ABN faced additional headwinds due to the ongoing uncertainty about solvency requirements. ABN was regarded as having a very strong balance sheet with capital surplus. However, complex new regulation relating to the individual risk weightings of Dutch mortgages threatened to erode this surplus capital, with management’s reticence to increase the dividend a clear sign that it viewed European excess capital as challenging. We exited the Portfolio’s position in ABN after determining that our investment thesis was no longer valid.
Canadian telco operator Rogers Communications fell on concerns that a new government in Canada could regulate the industry more stringently. A scenario analysis led us to observe the higher probability of a material downgrade in earnings and we exited the position as a result. Arca, the Mexican Coca-Cola bottler, also declined, with most of the fall in US dollar value being a result of the depreciation of the Mexican peso. The company actually has executed well, we regard our investment thesis and conviction levels as strong, and we have added capital to the position as the shares have declined.
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The Portfolio lost over 1% of performance against the benchmark as a result of its cash position. This cash level of 3%–5% has been consistent since the inception of the Portfolio, but is inevitably a large detraction in the volatile bull market we have seen in 2019.
Lazard International Equity Portfolio
For the year ended December 31, 2019, the Lazard International Equity Portfolio’s Institutional Shares posted a total return of 21.19%, while Open Shares posted a total return of 20.89%, and R6 Shares posted a total return of 21.17%, as compared with the 22.01% return for the MSCI EAFE Index.
Stock selection in the financials sector helped relative returns as Aon, the global insurance broker domiciled in the United Kingdom, continued to drive positive performance in the period. A strong balance sheet, a growing roster of new clients, growth in new business segments such as cyber, a share repurchasing program, and a pipeline for mergers and acquisitions were all factors that drove Aon’s stock price up almost 45%. Stock selection in the materials sector has also driven positive relative returns, as shares of Koninklijke DSM N.V. (“DSM”), rose more than 60% on bullish sentiment about the company’s strong execution and the EUR 1 billion buyback program, representing approximately 7% of the company’s market capitalization, announced in February 2019. Lastly, positioning in emerging markets was additive to relative returns.
In contrast, a lower-than-benchmark weight and stock selection in the consumer discretionary sector detracted from relative returns as shares of Japanese auto manufacturer Suzuki declined 16% in the year. In India, Suzuki’s largely important Maruti division, an automobile manufacturer in India, released a negative June sales report, and was further hurt by the government’s new budget, which included a fuel tax increase. However, the stock recovered slightly following the announcement that the Indian government is reconsidering the planned hike in auto registration charges. Also in the sector, shares of Japanese discount retailer Pan Pacific, formerly Don Quijote, lagged in the period, despite rising almost 8%. The stock was a strong performer last year, but pulled back from its peak in January after report-
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ing a slow-down in same store sales. Elsewhere, returns were also hurt by stock selection in the real estate sector.
Lastly, cash was the largest detractor from performance. The Portfolio’s modestly elevated level of cash, which was a result of our investment process rather than a strategic allocation, weighed on relative performance.
Lazard International Equity Select Portfolio
For the year ended December 31, 2019, the Lazard International Equity Select Portfolio’s Institutional Shares posted a total return of 20.32%, while Open Shares posted a total return of 19.97%, as compared with the 21.51% return for the MSCI ACWI ex-US.
Stock selection in the financials sector helped relative returns as Aon, the global insurance broker domiciled in the United Kingdom, continued to drive positive performance during the period, rising almost 45%. This long-term holding has demonstrated the ability to generate strong free cash flow from operating leverage derived from continued strong organic revenue growth and disciplined spending and capital allocation. The company has reported four straight quarters of 6% organic revenue growth while leveraging the cost structure to drive margins 190 basis points higher. Results continue to show momentum on new client wins and growth in newer products such as cyber. Return on invested capital remains above 20%, driven by operating income growth and a reduction in the capital base. Management continues to view share buybacks as offering the highest return to shareholders but also sees the M&A pipeline as particularly attractive. We continue to own the stock given the compounding nature of their high financial productivity. Stock selection in the industrials sector also contributed to relative returns as shares of Safran rose nearly 30%. Safran is a French tier-1 supplier of systems and equipment in aerospace, defense, and security and is a lead partner in the world’s propulsion business. The stock has outperformed the benchmark significantly since we have owned it and again in the period after reporting better-than-expected results. Organic sales grew 14%, led by the company’s propulsion segment, which grew 19%. Critical to our thesis, margins also grew, with higher margin aftermarket sales growth of 10% combined with con-
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tinued restructuring benefits from the acquired Zodiac business. Given that we have seen margin improvement from higher aftermarket sales, management raised operating income growth guidance to above 20%. Lastly, stock selection in the materials sector and emerging markets were additive to relative returns.
In contrast, stock selection in the consumer discretionary sector detracted from relative returns as shares of Japanese auto manufacturer Suzuki declined 16% during the year. In India, Suzuki’s largely important Maruti division, an automobile manufacturer in India, released a negative June sales report, and was further hurt by the government’s new budget, which included a fuel tax increase. However, the stock recovered slightly following the announcement that the Indian government is reconsidering the planned hike in auto registration charges. We continue to believe the slowdown in auto demand in India is temporary and the medium to long-term story remains unchanged. Stock selection in the communication services sector also detracted from relative returns, as shares of French video game company Ubisoft declined after management decided to delay a number of new titles and restructure their development organization. This decision follows poor sales of recent product launches. The delay of new titles and write down of new launches has led to material negative revisions to near term estimates and a de-rating of the shares. We still have a favorable view on the structural improvement of the video game industry, but weak execution undermined our conviction in the Ubisoft investment case, so we sold the stock.
Lastly, cash was a large detractor from performance. The Portfolio’s modestly elevated level of cash, which was a result of our investment process rather than a strategic allocation, weighed on relative.
Lazard International Equity Value Portfolio
Since inception on October 31, 2019, the Lazard International Equity Value Portfolio’s Institutional Shares posted a total return of 14.14%, while Open Shares posted a total return of 13.98%, as compared with the 22.01% return for the MSCI EAFE Index.
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On a sector basis, the allocation impact was negative due largely to the Portfolio’s lack of health care positions and relatively high levels of cash. On a regional basis, the allocation impact was negative due primarily to positions held in emerging markets. Stock selection impact was also negative. On a sector basis this result was due primarily to holdings in consumer discretionary, while on a regional basis, it was due primarily to holdings in the United Kingdom. The Portfolio’s value bias also served as a headwind in 2019, as value stocks significantly lagged their growth counterparts. The MSCI EAFE Value Index underperformed the MSCI EAFE Growth Index by nearly 1,200 bps, the most in at least 45 years.
The top detractor in the year was Glencore, a UK-listed mining company. Following a perfect storm of bad news including regulatory uncertainty in the Democratic Republic of Congo, legal disputes with a key partner in the region, a related US Department of Justice investigation and falling production in key materials, we felt investor sentiment had reached a nadir. As these overhangs faded and free-cash-flow generation continued, we believed the company would be well positioned to return significant capital to shareholders. We felt such actions would work to alleviate investor skepticism and drive the share price higher. Despite aggressively buying back shares, Glencore’s share price suffered during 2019. The company reported weaker than expected results, uncertainty surrounding US investigations increased, copper and thermal coal prices fell, and the company experienced production setbacks at key mines. Against this backdrop, and with the capital return largely complete, we decided to exit the position.
The top contributor during the year was DSM, a Dutch-listed manufacturer of nutritional ingredients and industrial materials. We invested in DSM because we believed the company’s transformation into a focused nutrition company from a cyclical, commodity driven, chemical company would pave the way for operational improvement, capital returns, and a share price re-rating. Our expectations played out on all fronts. The nutritional business grew strongly, fundamentals improved further, and the company initiated a EUR1 billion buyback program. With around 75% of the business now in nutrition and a strong product pipeline set to begin
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commercialization in 2020, we continue to view the investment favorably. As of year-end, DSM was 2.9% of the Portfolio.
Lazard International Quality Growth Portfolio
For the year ended December 31, 2019, the Lazard International Quality Growth Portfolio’s Institutional Shares posted a total return of 30.06%, while Open Shares posted a total return of 29.66%, as compared with the 21.5% return for the MSCI ACW ex-US Index.
Stock selection in the financials sector contributed to performance. Shares of London Stock Exchange rose after quarterly results beat expectations, driven by strong performance across all its businesses. We expect LSE’s merger with data provider Refinitiv will result in significant accretion by broadening the combined companies’ portfolio of offerings. Among industrials, shares of French electrical company Legrand also rose after the company reported solid results, driven by strong organic sales growth.
In contrast, stock selection in the consumer staples sector detracted from performance. Shares of Pigeon Corporation, a manufacturer of childcare products, fell in response to ongoing concerns of slowing economic growth in China. In the communication services sector, shares of videogame maker Ubisoft Entertainment fell after management issued disappointing 2019 guidance in May, as well as a profit warning for its third quarter. We sold our position in November, as our thesis was broken.
Lazard International Small Cap Equity Portfolio
For the year ended December 31, 2019, the Lazard International Small Cap Equity Portfolio’s Institutional Shares posted a total return of 26.01%, while Open Shares posted a total return of 25.76%, as compared with the 24.96% return for the MSCI EAFE Small Cap®Index.
Stock selection in Japan and Continental Europe contributed to the outperformance but stock picking in the United Kingdom detracted. Stock selection in industrials and consumer staples was particularly robust while stock selection in consumer discretionary and
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utilities was not. Some of the names that impacted the Portfolio in 2019 include the following:
Barco NV is a Belgium-based provider of visualization solutions for entertainment, enterprise software, and health care. The stock did well in the first and second quarters of the year after the company posted positive second-half 2018 results early in February, along with promising qualitative guidance. We remain shareholders.
Polypipe Group, the largest manufacturer of plastic piping systems in the UK, contributed to the portfolio in the fourth quarter. The company benefited from the ongoing substitution of metal and ceramic piping with plastic and its revenues should outpace overall construction growth. Polypipe acquired the Alderburgh Group, a manufacturer of below-ground water and stormwater management products, in early October. This bolt-on acquisition (i.e., when the bought company is added to a division of the acquiring company in order to enhance market share) further strengthened the company as a one-stop shop for plastic piping needs. We retained our position.
Burford, a UK-listed company which provides litigation financing, detracted in the year. The company was the subject of a shortseller’s report in August that questioned its accounting practices. Burford strongly disagreed and responded by clarifying the nature of its investments, hiring a new CFO, and laying out possible plans for a new US listing. Despite these reassurances, we determined the stock price would not recoup its losses and exited the stock.
Huntsworth Plc, an international health care communications and public relations company, also cost performance in 2019. Although the company is growing, its growth did not live up to market expectations. Huntsworth is now trading at a discount to its competitors. We see no justification for this discount and expect a re-rating next year on easier comparisons. Accordingly, we maintained our holding.
Lazard International Strategic Equity Portfolio
For the year ended December 31, 2019, the Lazard International Strategic Equity Portfolio’s Institutional Shares posted a total return
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of 21.55%, while Open Shares posted a total return of 21.21%, and R6 Shares posted a total return of 21.54%, as compared with the 22.01% return for the MSCI EAFE Index.
The Portfolio was slightly behind of the market for the year, driven by stock selection. Consistent delivery from Danish brewer Carlsberg and Informa, a UK-based media company, was rewarded by investors, while Irish-domiciled technology services leader Accenture had another very good year. Anglo-Australian miner Rio Tinto benefited from tight iron ore supply. In the financials sector, Canadian lender National Bank of Canada and insurance broker Aon did well, while Swiss bank Julius Baer was helped by strong markets. Chinese A shares-listed bank Ping An continued its impressive transformation. This offset weakness in European holdings ABN and Sampo, and disappointing results from consumer credit company Aeon Financial of Japan.
In industrials, the market applauded Swiss engineering company ABB’s choice of a new CEO, and aerospace companies Safran (based in France) and CAE (based in Canada) performed strongly. However, this was offset by weakness in Japanese power tools company Makita, which suffered a mis-step in the United States when a sales campaign performed poorly, leaving excess inventory that needed to be marked down and saw pressure on margins, and in UK-based distributor Bunzl, which was hurt by slowing organic growth.
On the negative side, the surprisingly weak Indian economy has delayed a recovery in auto sales for Suzuki, while in Japanese real estate there are signs the cycle may have turned for Daiwa House. Spanish utility Red Electrica made a surprising satellite diversification with its acquisition of Hispasat, the operating company for a number of Spanish communications satelites that cover the Americas, Europe, and North Africa, while in healthcare, Swiss optical specialist Alcon pushed out its margin targets. Philippine conglomerate GT Capital was hurt by a weak auto market at the start of 2019, and regulatory pressure on one of its utility investments.
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Lazard Managed Equity Volatility Portfolio
For the year ended December 31, 2019, the Lazard Managed Equity Volatility Portfolio’s Institutional Shares posted a total return of 21.69%, while Open Shares posted a total return of 21.36%, as compared with the 27.67% return for the MSCI World Index.
Unfavorable stock selection, sector allocations, and the residual cash position accounted for the shortfall during the year. Stock selection was favorable in only two of eleven sectors — financials and consumer discretionary. Holdings in real estate and communication services sectors detracted the most. The underweight to energy and overweight to health care provided the greatest value in terms of sector positioning, however this was more than offset by the underweight to information technology and overweight to utilities. Regional selection added most in the Middle East and Italy and least in the United States and Asia including Japan.
Stocks that contributed to the Portfolio’s 2019 return included Estée Lauder, which projected strong growth for 2020 after the company reported sales increases in Asia and higher demand for its premium skin care brands, sending shares to an all-time high. The company continues to enjoy strong price momentum, as it has revamped its portfolio targeting more bespoke regional products. The company enjoys a 14% market share in the profitable prestige beauty market. Aon, a provider of professional services, climbed on strong quarterly results, driven by organic growth in the company’s reinsurance and commercial risk businesses. Roche rose on news that it plans to complete its USD 4.3 billion takeover of gene therapy specialist Spark Therapeutics after US and British authorities ruled the deal would not hurt competition in hemophilia A treatment. Roche is buying US-based Spark to expand in gene therapy and boost its hemophilia A portfolio, where the Swiss pharma giant’s existing drug Hemlibra is expected to surpass USD 1 billion sales for 2019.
Detractors for the year included Swire Pacific, which has been impacted by the protests in Hong Kong as it had a direct effect on their retail operations as they have exposure to a number of shopping malls through their ownership positions in Swire Properties and Cathay Pacific. The protests caused a number of downgrades to
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the stock. Shares of US oil company Occidental Petroleum fell on the news that it can’t secure a takeover deal of Anardarko Petroleum Corp., even with the support of Warren Buffet, who has committed USD 10 billion of the USD 38 billion cash-and-stock bid. F5 Networks declined in the first quarter after it announced the acquisition of NGINX, a cloud native offerer, for 26x 2018 sales. This valuation was viewed as extreme and caused a number of downgrades to the stock. It rebounded in the second quarter, but it continued to slide in the last quarter. We reduced our position.
Lazard US Equity Concentrated Portfolio
For the year ended December 31, 2019, the Lazard US Equity Concentrated Portfolio’s Institutional Shares posted a total return of 31.72%, while Open Shares posted a total return of 31.42%, and R6 Shares posted a total return of 31.79%, as compared with the 31.49% return for the S&P 500 Index.
A position in chipmaker Skyworks contributed to performance, as shares rallied in the fourth quarter after results pointed to growing consumer demand in 5G. A position in building materials maker Armstrong also helped returns, as shares rose after the company reported results broadly above expectations, driven by strong pricing. The Portfolio was also helped by its position in financial data and ratings provider S&P Global, as results benefitted from a high recurring revenue base, margin improvement, and strong free cash flow generation.
In contrast, a position in Coca-Cola detracted from performance, as shares pulled back amid a rotation out of defensive names. The Portfolio was also hurt by its position in networking equipment maker Cisco, as the company announced late in the year that emerging challenges, particularly related to China, would depress the company’s growth, which also raised concerns around global demand. A position in animal health company Elanco also hurt returns, as shares fell after the company announced plans to acquire Bayer’s animal health unit, sparking concerns about significant leverage on the combined company’s balance sheet. The company’s third-quarter results also disappointed, as the business was hurt by weakness in the Chinese pork industry and a drought in Australia.
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Lazard US Equity Focus Portfolio
For the year ended December 31, 2019, the Lazard US Equity Focus Portfolio’s Institutional Shares posted a total return of 31.67%, while Open Shares posted a total return of 31.25%, and R6 Shares posted a total return of 31.55%, as compared with the 31.49% return for the S&P 500 Index.
Stock selection in the consumer discretionary sector contributed to performance. Shares of discount retailer Dollar General rose as quarterly results pointed to continued progress in the company’s strategic initiatives. Stock selection in the real estate sector also helped returns. Shares of warehouse REIT Prologis rose as quarterly earnings showed continued strong operating results, and management raised its guidance in July. We sold our position in September, as the stock approached our target valuation.
In contrast, an overweight position in energy detracted from returns, as the sector was among the worst performers in the index during the period. An overweight position in the consumer staples sector also hurt performance. Shares of Coca-Cola pulled back amid a rotation out of defensive names.
Lazard US Realty Equity Portfolio
For the year ended December 31, 2019, the Lazard US Realty Equity Portfolio’s Institutional Shares posted a total return of 29.73%, while Open Shares posted a total return of 29.42%, as compared with the 24.33% return for the MSCI USA IMI Core Real Estate Index.
Portfolio outperformance was fairly balanced between sector allocations and stock selection. From a sector perspective, the Portfolio’s continued less-than-benchmark exposure to Retail real estate investment trusts (REITs) was beneficial to performance, while its less-than-benchmark exposure to Diversified REITs detracted slightly from performance.
On a stock selection basis, the Portfolio’s greater-than-benchmark exposure to data center REIT Equinix contributed most to the outperformance, as the company benefits from data transmission and cloud services growth. Greater-than-benchmark exposure to Essen-
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tial Properties, a smaller Triple Net REIT, and Industrial REIT Prologis also helped drive outperformance due to strong execution from both companies, and specifically sector tailwinds for the industrial sector driven by changing logistics patterns due to ecommerce, which helped drive tenant demand for Prologis facilities. While the Portfolio held less-than-benchmark exposure to Retail REITs generally, holdings in Regional Mall REITs Simon Property Group and Macerich detracted the most from performance, as the changing retail landscape impacted physical store demand.
Lazard US Small-Mid Cap Equity Portfolio
For the year ended December 31, 2019, the Lazard US Small-Mid Cap Equity Portfolio’s Institutional Shares posted a total return of 30.00%, while Open Shares posted a total return of 29.51%, as compared with the 27.77% return for the Russell 2500®Index.
Stock selection in the materials sector contributed to performance. Shares of life sciences company Cambrex rose after the company announced that it would be acquired by Permira Funds for $2.4 billion. We sold our position in December when the deal closed. Stock selection in the consumer discretionary sector also helped returns. Shares of engineered components maker Leggett & Platt rose after the company reported strong third-quarter results, which included better-than-expected sales.
In contrast, stock selection in the health care sector detracted from performance. Shares of medical device maker Angiodynamics fell after the company announced the acquisition of Eximo Medical in October. We sold our position after the announcement, as our thesis was broken. In the communication services sector, shares of book publisher and media company Scholastic fell after the company announced quarterly results in May that showed a greater-than-anticipated deceleration in its core business. We sold our position after the announcement, as our thesis was broken.
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The Lazard Funds, Inc.Performance Overviews (unaudited)
Lazard Developing Markets Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Developing Markets Equity Portfolio and MSCI Emerging Markets®Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | |||||
Year | Years | Years | |||||
Institutional Shares** | 28.17% | 7.53% | 3.27% | ||||
Open Shares** | 27.79% | 7.15% | 2.93% | ||||
MSCI Emerging Markets Index | 18.44% | 5.61% | 3.68% |
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Lazard Emerging Markets Core Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Emerging Markets Core Equity Portfolio and MSCI Emerging Markets Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 21.59% | 5.32% | 3.79% | ||||
Open Shares** | 21.08% | 4.90% | 3.40% | ||||
R6 Shares** | 21.69% | N/A | 0.21% | ||||
MSCI Emerging Markets Index | 18.44% | 5.61% | 3.66% | ||||
(Institutional and Open Shares) 0.06% | |||||||
(R6 Shares) |
† | The inception date for the Institutional and Open Shares was October 31, 2013 and for the R6 Shares was April 6, 2018. |
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Lazard Emerging Markets Equity Advantage Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Emerging Markets Equity Advantage Portfolio and MSCI Emerging Markets Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 20.44% | 5.80% | |||
Open Shares** | 19.97% | 5.48% | |||
MSCI Emerging Markets Index | 18.44% | 4.85% |
† | The inception date for the Portfolio was May 29, 2015. |
Lazard Emerging Markets Equity Blend Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Emerging Markets Equity Blend Portfolio and MSCI Emerging Markets Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 24.21% | 5.65% | 3.52% | ||||
Open Shares** | 24.21% | 5.39% | 3.23% | ||||
MSCI Emerging Markets Index | 18.44% | 5.61% | 4.45% |
† | The inception date for the Portfolio was May 28, 2010. |
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Lazard Emerging Markets Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Emerging Markets Equity Portfolio and MSCI Emerging Markets Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | Since | ||||||
Year | Years | Years | Inception | † | |||||
Institutional Shares** | 18.04% | 3.56% | 3.42% | 6.64% | |||||
Open Shares** | 17.73% | 3.29% | 3.13% | 6.37% | |||||
R6 Shares** | 17.98% | N/A | N/A | 3.49% | |||||
MSCI Emerging Markets Index | 18.44% | 5.61% | 3.68% | 5.63% | |||||
(Institutional Shares) 6.17% | |||||||||
(Open Shares) 5.63% | |||||||||
(R6 Shares) |
† | The inception date for the Institutional Shares was July 15, 1994, for the Open Shares was January 8, 1997 and for the R6 Shares was January 19, 2015. |
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Lazard Equity Franchise Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Equity Franchise Portfolio and MSCI World®Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 21.70% | 8.57% | |||
Open Shares** | 21.40% | 8.30% | |||
MSCI World Index | 27.67% | 9.62% |
† | The inception date for the Portfolio was September 29, 2017. |
Lazard Global Equity Select Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Global Equity Select Portfolio and MSCI ACWI®*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 25.20% | 9.04% | 8.15% | ||||
Open Shares** | 24.82% | 8.72% | 7.84% | ||||
MSCI ACWI | 26.60% | 8.41% | 7.69% |
† | The inception date for the Portfolio was December 31, 2013. |
36 Annual Report
Lazard Global Listed Infrastructure Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Global Listed Infrastructure Portfolio, MSCI World Core Infrastructure (USD Hedged) Index and MSCI World Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | |||||
Year | Years | Years | |||||
Institutional Shares** | 22.26% | 11.18% | 12.13% | ||||
Open Shares** | 21.94% | 10.89% | 11.80% | ||||
MSCI World Core Infrastructure (USD Hedged) Index | 27.13% | 9.27% | 10.97% | ||||
MSCI World Index | 27.67% | 8.74% | 10.22% |
Annual Report 37
Lazard Global Strategic Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Global Strategic Equity Portfolio and MSCI ACWI*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 29.19% | 7.39% | 6.83% | ||||
Open Shares** | 29.01% | 7.09% | 6.53% | ||||
MSCI ACWI | 26.60% | 8.41% | 7.28% |
† | The inception date for the Portfolio was August 29, 2014. |
38 Annual Report
Lazard International Equity Advantage Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Equity Advantage Portfolio and MSCI EAFE®Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 17.37% | 2.77% | |||
Open Shares** | 17.03% | 2.47% | |||
MSCI EAFE Index | 22.01% | 4.29% |
† | The inception date for the Portfolio was May 29, 2015. |
Lazard International Equity Concentrated Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Equity Concentrated Portfolio and MSCI ACWI ex-US*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 25.56% | 3.62% | 2.48% | ||||
Open Shares** | 25.28% | 3.35% | 2.21% | ||||
MSCI ACWI ex-US | 21.51% | 5.51% | 3.41% |
† | The inception date for the Portfolio was August 29, 2014. |
Annual Report 39
Lazard International Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Equity Portfolio and MSCI EAFE Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | Since | ||||||
Year | Years | Years | Inception | † | |||||
Institutional Shares** | 21.19% | 4.60% | 5.95% | 5.94% | |||||
Open Shares** | 20.89% | 4.33% | 5.65% | 4.82% | |||||
R6 Shares** | 21.17% | N/A | N/A | 3.57% | |||||
MSCI EAFE Index | 22.01% | 5.67% | 5.50% | 5.41% | |||||
(Institutional Shares) 5.02% | |||||||||
(Open Shares) 4.89% | |||||||||
(R6 Shares) |
† | The inception date for the Institutional Shares was October 29, 1991, for the Open Shares was January 23, 1997 and for the R6 Shares was April 1, 2015. |
40 Annual Report
Lazard International Equity Select Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Equity Select Portfolio, MSCI ACWI ex-US and MSCI EAFE/ACWI ex-US Linked Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | |||||
Year | Years | Years | |||||
Institutional Shares** | 20.32% | 4.70% | 5.42% | ||||
Open Shares** | 19.97% | 4.37% | 5.08% | ||||
MSCI ACWI ex-US | 21.51% | 5.51% | 4.97% | ||||
MSCI EAFE/ACWI ex-US Linked Index | 21.51% | 5.51% | 4.71% |
Lazard International Equity Value Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Equity Value Portfolio and MSCI EAFE Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 14.14% | 3.80% | |||
Open Shares** | 13.98% | 3.54% | |||
MSCI EAFE Index | 22.01% | 13.52% |
† | The inception date for the Portfolio was October 31, 2018. |
Annual Report 41
Lazard International Quality Growth Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Quality Growth Portfolio and MSCI ACWI*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 30.06% | 30.06% | |||
Open Shares** | 29.66% | 29.66% | |||
MSCI ACWI ex-US | 21.51% | 21.51% |
† | The inception date for the Portfolio was December 31, 2018. |
Lazard International Small Cap Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Small Cap Equity Portfolio and MSCI EAFE Small Cap®Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | |||||
Year | Years | Years | |||||
Institutional Shares** | 26.01% | 6.22% | 8.31% | ||||
Open Shares** | 25.76% | 5.95% | 8.00% | ||||
MSCI EAFE Small Cap Index | 24.96% | 8.85% | 8.74% |
42 Annual Report
Lazard International Strategic Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard International Strategic Equity Portfolio and MSCI EAFE Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | Since | ||||||
Year | Years | Years | Inception | † | |||||
Institutional Shares** | 21.55% | 5.37% | 7.53% | 6.48% | |||||
Open Shares** | 21.21% | 5.11% | 7.24% | 5.23% | |||||
R6 Shares** | 21.54% | N/A | N/A | 5.41% | |||||
MSCI EAFE Index | 22.01% | 5.67% | 5.50% | 4.71% | |||||
(Institutional Shares) 3.83% | |||||||||
(Open Shares) 6.12% | |||||||||
(R6 Shares) |
† | The inception date for the Institutional Shares was October 31, 2005, for the Open Shares was February 3, 2006 and for the R6 Shares was January 19, 2015. |
Annual Report 43
Lazard Managed Equity Volatility Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Managed Equity Volatility Portfolio and MSCI World Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 21.69% | 7.83% | |||
Open Shares** | 21.36% | 7.50% | |||
MSCI World Index | 27.67% | 8.37% |
† | The inception date for the Portfolio was May 29, 2015. |
44 Annual Report
Lazard US Equity Concentrated Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard US Equity Concentrated Portfolio, S&P 500®Index and Russell 1000 Value/S&P 500 Linked Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | Since | ||||||
Year | Years | Years | Inception | † | |||||
Institutional Shares** | 31.72% | 10.42% | 12.55% | 8.79% | |||||
Open Shares** | 31.42% | 10.12% | 12.20% | 8.47% | |||||
R6 Shares** | 31.79% | N/A | N/A | 12.17% | |||||
S&P 500 Index | 31.49% | 11.70% | 13.56% | 9.28% | |||||
(Institutional and Open Shares) 15.69% | |||||||||
(R6 Shares) | |||||||||
Russell 1000 Value/S&P 500 Linked Index | 31.49% | 11.70% | 13.20% | 8.57% | |||||
(Institutional and Open Shares) N/A | |||||||||
(R6 Shares) |
† | The inception date for the Institutional and Open Shares was September 30, 2005 and for the R6 Shares was November 15, 2016. |
Annual Report 45
Lazard US Equity Focus Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard US Equity Select Portfolio and S&P 500 Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | Since | ||||||
Year | Years | Years | Inception | † | |||||
Institutional Shares** | 31.67% | 9.51% | 11.85% | 7.91% | |||||
Open Shares** | 31.25% | 9.17% | 11.52% | 7.60% | |||||
R6 Shares** | 31.55% | 9.50% | N/A | 10.66% | |||||
S&P 500 Index | 31.49% | 11.70% | 13.56% | 8.98% | |||||
(Institutional and Open Shares) 12.39% | |||||||||
(R6 Shares) |
† | The inception date for the Institutional and Open Shares was December 30, 2004 and for the R6 Shares was May 19, 2014. |
46 Annual Report
Lazard US Realty Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Open Shares of Lazard US Realty Equity Portfolio, MSCI US REIT®Index*, and MSCI USA IMI Core Real Estate®Index
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | Since | ||||||
Year | Years | Years | Inception | † | |||||
Institutional Shares** | 29.73% | 7.31% | N/A | 12.55% | |||||
Open Shares** | 29.42% | 7.02% | 12.37% | 16.00% | |||||
MSCI US REIT Index | 24.33% | 5.68% | 10.58% | 10.39% | |||||
(Institutional Shares) 11.92% | |||||||||
(Open Shares) | |||||||||
MSCI USA IMI Core Real Estate®Index | 25.53% | 7.48% | 12.09% | 12.07% | |||||
(Institutional Shares) 13.45% | |||||||||
(Open Shares) |
† | The inception date for the Institutional Shares was September 26, 2011. |
Annual Report 47
Lazard US Small-Mid Cap Equity Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard US Small-Mid Cap Equity Portfolio and Russell 2500® Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | |||||
Year | Years | Years | |||||
Institutional Shares** | 30.00% | 7.93% | 11.05% | ||||
Open Shares** | 29.51% | 7.59% | 10.70% | ||||
Russell 2500 Index | 27.77% | 8.93% | 12.58% |
Notes to Performance Overviews: |
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the 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 distributing agent (“DST”); without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Returns for a period of less than one year are not annualized. |
Performance results do not include adjustments made for financial reporting purposes in accordance with US Generally Accepted Accounting Principles (“GAAP”), if any, and also exclude one-time adjustments related to reimbursed custodian out-of-pocket expenses (Note 3 in the Notes to Financial Statements) for Lazard International Small Cap Equity and Lazard US Small-Mid Cap Equity Portfolios and settlement proceeds received from class action lawsuits by the Lazard International Equity, Lazard International Small Cap Equity Portfolios, as well as by the Lazard Developing Markets Equity Portfolio. For the Lazard Developing Markets Equity Portfolio, these proceeds impacted the total return of Open Shares but did not impact that of Institutional Shares; amounts 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. |
48 Annual Report
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 indices are unmanaged, have no fees or costs and are not available for investment. | |
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 26 emerging markets country indices. | |
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 MSCI ACWI is a free-float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 49 country indices comprising 23 developed and 26 emerging markets country indices. | |
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 MSCI ACWI ex-US is a free-float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the United States. The MSCI ACWI ex-US consists of 48 country indices comprising 22 developed and 26 emerging markets country indices. | |
The MSCI EAFE/ACWI ex-US Linked Index is an unmanaged index created by the Investment Manager, which links the performance of the MSCI EAFE Index for all periods through June 30, 2010 (when Lazard International Equity Select Portfolio’s benchmark index changed) and the MSCI ACWI ex-US for all periods thereafter. | |
The MSCI EAFE Small Cap Index targets all companies with market capitalizations below that of the companies in the MSCI EAFE Index and up to 99% coverage of the free-float-adjusted market capitalization in each market (subject to minimum investability criteria and a universal minimum size range). The MSCI EAFE Small Cap Index consists of 21 developed markets country indices. | |
The S&P 500 Index is a market capitalization-weighted index of 500 companies in leading industries of the US economy. | |
The Russell 1000 Value/S&P 500 Linked Index is an unmanaged index created by the Investment Manager, which links the performance of the Russell 1000®Value Index for all periods through May 30, 2012 (when Lazard US Equity Concentrated Portfolio’s investment strategy changed) and the S&P 500 Index for all periods thereafter. | |
The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 Index measures the performance of the large-cap segment of the US equity universe. It includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership. | |
The MSCI US REIT Index is a free-float-adjusted market capitalization index that is comprised of equity REITs. The index is based on its parent index, the MSCI USA IMI®, which captures large, mid and small caps securities. With 151 constituents, the MSCI US REIT Index represents about 99% of the US REIT universe and securities are classified in the Equity REITs Industry (under the Real Estate sector) according to |
Annual Report 49
the GICS. It however excludes Mortgage REITs and selected Specialized REITs. | |
The MSCI USA IMI Core Real Estate Index is a free-float-adjusted market capitalization index that consists of large, mid and small cap stocks engaged in the ownership, development and management of specific core property type real estate. The index excludes companies, such as real estate services and real estate financing companies that do not own properties. | |
The MSCI World Core Infrastructure “(USD Hedged)” Index (the “Infrastructure Index”) captures large and mid-cap securities across the 23 developed market countries. The Infrastructure Index is designed to represent the performance of listed companies within the developed markets that are engaged in core industrial infrastructure activities. Note that Lazard Infrastructure invests in a range of companies globally, not specifically developed markets countries. | |
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 3000 US companies, representing approximately 98% of the investable US equity market. The Russell 2500 Index includes approximately 2500 of the smallest securities based on a combination of their market cap and current index membership. | |
** | The performance of Institutional Shares, Open Shares and R6 Shares may vary, primarily based on the differences in fees borne by shareholders investing in different classes. |
50 Annual Report
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 (Open 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 July 1, 2019 through December 31, 2019 and held for the entire period.
Actual Expenses
For each Share class of the Portfolios, the first line of the accompanying table 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 accompanying table 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 shareholder reports of other mutual funds.
Annual Report 51
Portfolio | Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period* 7/1/19 - 12/31/19 | Annualized Expense Ratio During Period 7/1/19 - 12/31/19 | |||||||||||||
Developing Markets Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,097.20 | $ | 6.24 | 1.18 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.26 | $ | 6.01 | 1.18 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,096.50 | $ | 7.82 | 1.48 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,017.74 | $ | 7.53 | 1.48 | % | |||||||||
Emerging Markets Core Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,082.40 | $ | 6.25 | 1.19 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.21 | $ | 6.06 | 1.19 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,080.50 | $ | 8.13 | 1.55 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,017.39 | $ | 7.88 | 1.55 | % | |||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,082.30 | $ | 6.19 | 1.18 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.26 | $ | 6.01 | 1.18 | % | |||||||||
Emerging Markets Equity Advantage | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,076.60 | $ | 5.76 | 1.10 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.66 | $ | 5.60 | 1.10 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,074.50 | $ | 7.16 | 1.37 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.30 | $ | 6.97 | 1.37 | % |
52 Annual Report
Portfolio | Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period* 7/1/19 - 12/31/19 | Annualized Expense Ratio During Period 7/1/19 - 12/31/19 | |||||||||||||
Emerging Markets Equity Blend | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,081.30 | $ | 8.39 | 1.60 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,017.14 | $ | 8.13 | 1.60 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,081.50 | $ | 8.50 | 1.62 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,017.04 | $ | 8.24 | 1.62 | % | |||||||||
Emerging Markets Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,069.20 | $ | 5.68 | 1.09 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.71 | $ | 5.55 | 1.09 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,067.50 | $ | 6.98 | 1.34 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.45 | $ | 6.82 | 1.34 | % | |||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,068.70 | $ | 5.68 | 1.09 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.71 | $ | 5.55 | 1.09 | % | |||||||||
Equity Franchise | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,078.00 | $ | 4.98 | 0.95 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.42 | $ | 4.84 | 0.95 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,077.50 | $ | 6.07 | 1.16 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.36 | $ | 5.90 | 1.16 | % |
Annual Report 53
Portfolio | Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period* 7/1/19 - 12/31/19 | Annualized Expense Ratio During Period 7/1/19 - 12/31/19 | |||||||||||||
Global Equity Select | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,054.90 | $ | 5.02 | 0.97 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.32 | $ | 4.94 | 0.97 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,053.40 | $ | 6.47 | 1.25 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.90 | $ | 6.36 | 1.25 | % | |||||||||
Global Listed Infrastructure | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,068.90 | $ | 5.01 | 0.96 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.37 | $ | 4.89 | 0.96 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,066.80 | $ | 6.30 | 1.21 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.11 | $ | 6.16 | 1.21 | % | |||||||||
Global Strategic Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,086.50 | $ | 5.26 | 1.00 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.16 | $ | 5.09 | 1.00 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,084.00 | $ | 6.67 | 1.27 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.80 | $ | 6.46 | 1.27 | % | |||||||||
International Equity Advantage | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,052.70 | $ | 4.66 | 0.90 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.67 | $ | 4.58 | 0.90 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,050.70 | $ | 6.05 | 1.17 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.31 | $ | 5.96 | 1.17 | % |
54 Annual Report
Portfolio | Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period* 7/1/19 - 12/31/19 | Annualized Expense Ratio During Period 7/1/19 - 12/31/19 | |||||||||||||
International Equity Concentrated | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,064.20 | $ | 4.94 | 0.95 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.42 | $ | 4.84 | 0.95 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,063.10 | $ | 6.34 | 1.22 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.06 | $ | 6.21 | 1.22 | % | |||||||||
International Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,048.70 | $ | 4.23 | 0.82 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.07 | $ | 4.18 | 0.82 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,047.80 | $ | 5.52 | 1.07 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.81 | $ | 5.45 | 1.07 | % | |||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,048.90 | $ | 4.13 | 0.80 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.17 | $ | 4.08 | 0.80 | % | |||||||||
International Equity Select | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,045.20 | $ | 4.85 | 0.94 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.47 | $ | 4.79 | 0.94 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,043.70 | $ | 6.34 | 1.23 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.00 | $ | 6.26 | 1.23 | % |
Annual Report 55
Portfolio | Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period* 7/1/19 - 12/31/19 | Annualized Expense Ratio During Period 7/1/19 - 12/31/19 | |||||||||||||
International Equity Value | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,050.60 | $ | 4.91 | 0.95 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.42 | $ | 4.84 | 0.95 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,050.10 | $ | 5.63 | 1.09 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.71 | $ | 5.55 | 1.09 | % | |||||||||
International Quality Growth | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,081.10 | $ | 4.46 | 0.85 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.92 | $ | 4.33 | 0.85 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,080.50 | $ | 5.77 | 1.10 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.66 | $ | 5.60 | 1.10 | % | |||||||||
International Small Cap Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,102.80 | $ | 6.15 | 1.16 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.36 | $ | 5.90 | 1.16 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,101.80 | $ | 7.42 | 1.40 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.15 | $ | 7.12 | 1.40 | % |
56 Annual Report
Portfolio | Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period* 7/1/19 - 12/31/19 | Annualized Expense Ratio During Period 7/1/19 - 12/31/19 | |||||||||||||
International Strategic Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,053.00 | $ | 4.19 | 0.81 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | 0.81 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,051.30 | $ | 5.48 | 1.06 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.86 | $ | 5.40 | 1.06 | % | |||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,052.20 | $ | 4.19 | 0.81 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | 0.81 | % | |||||||||
Managed Equity Volatility | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,058.40 | $ | 3.89 | 0.75 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.42 | $ | 3.82 | 0.75 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,056.30 | $ | 5.29 | 1.02 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.06 | $ | 5.19 | 1.02 | % | |||||||||
US Equity Concentrated | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,082.80 | $ | 3.99 | 0.76 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.37 | $ | 3.87 | 0.76 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,081.80 | $ | 5.46 | 1.04 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.96 | $ | 5.30 | 1.04 | % | |||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,083.20 | $ | 3.99 | 0.76 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.37 | $ | 3.87 | 0.76 | % |
Annual Report 57
Portfolio | Beginning Account Value 7/1/19 | Ending Account Value 12/31/19 | Expenses Paid During Period* 7/1/19 - 12/31/19 | Annualized Expense Ratio During Period 7/1/19 - 12/31/19 | |||||||||||||
US Equity Focus | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,110.50 | $ | 3.94 | 0.74 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.48 | $ | 3.77 | 0.74 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,108.70 | $ | 5.32 | 1.00 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.16 | $ | 5.09 | 1.00 | % | |||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,108.50 | $ | 3.88 | 0.73 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.53 | $ | 3.72 | 0.73 | % | |||||||||
US Realty Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,075.60 | $ | 5.28 | 1.01 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.11 | $ | 5.14 | 1.01 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,074.50 | $ | 6.59 | 1.26 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.85 | $ | 6.41 | 1.26 | % | |||||||||
US Small-Mid Cap Equity | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,069.80 | $ | 5.01 | 0.96 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.37 | $ | 4.89 | 0.96 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,067.40 | $ | 6.93 | 1.33 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,018.50 | $ | 6.77 | 1.33 | % |
* | 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 184/365 (to reflect one-half year period). |
58 Annual Report
Portfolio Holdings Presented by Asset Class/Sector December 31, 2019
Asset Class/Sector* | Lazard Developing Markets Equity Portfolio | Lazard Emerging Markets Core Equity Portfolio | Lazard Emerging Markets Equity Advantage Portfolio | Lazard Emerging Markets Equity Blend Portfolio | |||||||||||||
Equity | |||||||||||||||||
Communication Services | 14.8 | % | 12.5 | % | 12.0 | % | 14.2 | % | |||||||||
Consumer Discretionary | 10.2 | 14.9 | 13.3 | 7.9 | |||||||||||||
Consumer Staples | 1.1 | 4.1 | 5.7 | 4.1 | |||||||||||||
Energy | 7.6 | 6.8 | 7.5 | 5.5 | |||||||||||||
Financials | 27.3 | 26.4 | 22.2 | 27.5 | |||||||||||||
Health Care | 2.3 | 1.0 | 2.3 | 1.4 | |||||||||||||
Industrials | 11.0 | 6.4 | 6.0 | 9.1 | |||||||||||||
Information Technology | 16.2 | 15.2 | 18.7 | 19.2 | |||||||||||||
Materials | 6.0 | 9.3 | 6.7 | 3.9 | |||||||||||||
Real Estate | — | 1.8 | 3.1 | 0.1 | |||||||||||||
Utilities | 1.7 | 0.8 | 2.1 | 1.3 | |||||||||||||
Short-Term Investments | 1.8 | 0.8 | 0.4 | 5.8 | |||||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||
Asset Class/Sector* | Lazard Emerging Markets Equity Portfolio | Lazard Equity Franchise Portfolio | Lazard Global Equity Select Portfolio | Lazard Global Listed Infrastructure Portfolio | |||||||||||||
Equity | |||||||||||||||||
Communication Services | 12.0 | % | 8.1 | % | 5.8 | % | 5.5 | % | |||||||||
Consumer Discretionary | 5.6 | 18.8 | 8.4 | — | |||||||||||||
Consumer Staples | 6.2 | 6.0 | 14.1 | — | |||||||||||||
Energy | 9.3 | — | — | — | |||||||||||||
Financials | 28.7 | — | 16.4 | — | |||||||||||||
Health Care | 1.0 | 22.6 | 15.1 | — | |||||||||||||
Industrials | 6.0 | 21.2 | 16.8 | 43.9 | |||||||||||||
Information Technology | 20.0 | 16.4 | 18.4 | — | |||||||||||||
Materials | 7.2 | — | 2.1 | — | |||||||||||||
Real Estate | — | — | 0.1 | — | |||||||||||||
Utilities | 0.7 | 6.1 | — | 43.6 | |||||||||||||
Short-Term Investments | 3.3 | 0.8 | 2.8 | 7.0 | |||||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
* | Represents percentage of total investments. |
Annual Report 59
Asset Class/Sector* | Lazard Global Strategic Equity Portfolio | Lazard International Equity Advantage Portfolio | Lazard International Equity Concentrated Portfolio | Lazard International Equity Portfolio | |||||||||||||
Equity | |||||||||||||||||
Communication Services | 14.8 | % | 5.0 | % | 3.3 | % | 8.5 | % | |||||||||
Consumer Discretionary | 5.0 | 10.6 | 4.3 | 6.3 | |||||||||||||
Consumer Staples | 6.2 | 11.9 | 11.2 | 8.4 | |||||||||||||
Energy | 1.3 | 4.8 | 6.3 | 6.1 | |||||||||||||
Financials | 20.8 | 17.3 | 18.2 | 18.1 | |||||||||||||
Health Care | 13.5 | 12.5 | 10.7 | 10.3 | |||||||||||||
Industrials | 15.4 | 15.0 | 14.6 | 19.0 | |||||||||||||
Information Technology | 18.2 | 6.9 | 17.2 | 8.3 | |||||||||||||
Materials | 2.3 | 6.6 | 1.2 | 6.7 | |||||||||||||
Real Estate | — | 3.3 | 5.4 | 2.9 | |||||||||||||
Utilities | 1.5 | 4.5 | 3.6 | 2.9 | |||||||||||||
Short-Term Investments | 1.0 | 1.6 | 4.0 | 2.5 | |||||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||
Asset Class/Sector* | Lazard International Equity Select Portfolio | Lazard International Equity Value Portfolio | Lazard International Quality Growth Portfolio | Lazard International Small Cap Equity Portfolio | |||||||||||||
Equity | |||||||||||||||||
Communication Services | 9.0 | % | 11.6 | % | 8.0 | % | 10.2 | % | |||||||||
Consumer Discretionary | 5.7 | 23.6 | 11.5 | 11.3 | |||||||||||||
Consumer Staples | 7.9 | 6.3 | 8.1 | 5.9 | |||||||||||||
Energy | 5.8 | 4.3 | — | 2.6 | |||||||||||||
Financials | 21.4 | 16.9 | 21.0 | 10.7 | |||||||||||||
Health Care | 10.5 | — | 9.2 | 8.3 | |||||||||||||
Industrials | 17.1 | 17.4 | 26.3 | 22.5 | |||||||||||||
Information Technology | 10.7 | 10.4 | 12.4 | 11.9 | |||||||||||||
Materials | 4.5 | 2.9 | 2.1 | 1.7 | |||||||||||||
Real Estate | 1.8 | — | — | 12.2 | |||||||||||||
Utilities | 4.2 | 4.6 | — | 1.9 | |||||||||||||
Short-Term Investments | 1.4 | 2.0 | 1.4 | 0.8 | |||||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
* | Represents percentage of total investments. |
60 Annual Report
Asset Class/Sector* | Lazard International Strategic Equity Portfolio | Lazard Managed Equity Volatility Portfolio | Lazard US Equity Concentrated Portfolio | Lazard US Equity Focus Portfolio | |||||||||||||
Equity | |||||||||||||||||
Communication Services | 9.4 | % | 5.7 | % | 10.0 | % | 7.6 | % | |||||||||
Consumer Discretionary | 7.1 | 12.0 | 11.8 | 12.0 | |||||||||||||
Consumer Staples | 10.5 | 12.5 | 6.0 | 8.8 | |||||||||||||
Energy | 3.6 | 1.7 | — | 2.3 | |||||||||||||
Financials | 24.1 | 13.9 | 9.4 | 15.1 | |||||||||||||
Health Care | 11.0 | 14.6 | 23.2 | 18.2 | |||||||||||||
Industrials | 19.1 | 12.6 | 4.8 | 10.8 | |||||||||||||
Information Technology | 6.4 | 6.4 | 25.5 | 20.9 | |||||||||||||
Materials | 1.6 | 5.0 | 4.9 | — | |||||||||||||
Real Estate | 2.2 | 7.2 | — | — | |||||||||||||
Utilities | 3.3 | 7.5 | — | — | |||||||||||||
Short-Term Investments | 1.7 | 0.9 | 4.4 | 4.3 | |||||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||
Asset Class/Sector* | Lazard US Realty Equity Portfolio | Lazard US Small-Mid Cap Equity Portfolio | |||||||||||||||
Equity | |||||||||||||||||
Communication Services | — | % | 2.9 | % | |||||||||||||
Consumer Discretionary | 2.4 | 10.6 | |||||||||||||||
Consumer Staples | — | 1.4 | |||||||||||||||
Energy | — | 2.8 | |||||||||||||||
Financials | — | 16.6 | |||||||||||||||
Health Care | — | 11.8 | |||||||||||||||
Industrials | — | 17.7 | |||||||||||||||
Information Technology | — | 16.0 | |||||||||||||||
Materials | — | 5.4 | |||||||||||||||
Real Estate | 96.2 | 11.8 | |||||||||||||||
Utilities | — | 3.0 | |||||||||||||||
Short-Term Investments | 1.4 | — | |||||||||||||||
Total Investments | 100.0 | % | 100.0 | % |
* | Represents percentage of total investments. |
Annual Report 61
The Lazard Funds, Inc.Portfolios of Investments
December 31, 2019
The accompanying notes are an integral part of these financial statements.
62 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Developing Markets Equity Portfolio (continued) | ||||||||
Hong Kong | 2.0% | ||||||||
China Gas Holdings, Ltd. | 545,600 | $ | 2,045,202 | |||||
Techtronic Industries Co., Ltd. | 315,502 | 2,581,689 | ||||||
4,626,891 | ||||||||
India | 9.8% | ||||||||
HDFC Bank, Ltd. ADR | 100,570 | 6,373,121 | ||||||
ICICI Bank, Ltd. Sponsored ADR | 478,601 | 7,222,089 | ||||||
Mphasis, Ltd. | 73,933 | 955,020 | ||||||
Reliance Industries, Ltd. | 190,343 | 4,043,114 | ||||||
Shriram Transport Finance Co., Ltd. | 169,879 | 2,787,193 | ||||||
UPL, Ltd. | 210,799 | 1,726,806 | ||||||
23,107,343 | ||||||||
Indonesia | 1.9% | ||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 14,132,300 | 4,460,128 | ||||||
Macau | 0.7% | ||||||||
SJM Holdings, Ltd. | 1,412,000 | 1,611,794 | ||||||
Mexico | 1.5% | ||||||||
Grupo Financiero Banorte SAB de CV, Class O | 627,457 | 3,506,060 | ||||||
Peru | 2.4% | ||||||||
Credicorp, Ltd. | 26,255 | 5,595,728 | ||||||
Philippines | 2.0% | ||||||||
BDO Unibank, Inc. | 1,251,065 | 3,900,101 | ||||||
International Container Terminal Services, Inc. | 289,050 | 733,112 | ||||||
4,633,213 | ||||||||
Portugal | 2.0% | ||||||||
Galp Energia SGPS SA | 279,445 | 4,673,819 | ||||||
Russia | 8.3% | ||||||||
Mail.Ru Group, Ltd. GDR (*) | 121,780 | 2,719,797 | ||||||
Novatek OAO Sponsored GDR | 15,097 | 3,065,761 | ||||||
Sberbank of Russia PJSC (‡) | 1,508,088 | 6,190,167 | ||||||
Yandex NV Class A (*) | 172,535 | 7,503,547 | ||||||
19,479,272 |
The accompanying notes are an integral part of these financial statements.
Annual Report 63
Description | Shares | Fair Value | ||||||
Lazard Developing Markets Equity Portfolio (continued) | ||||||||
South Africa | 3.9% | ||||||||
Capitec Bank Holdings, Ltd. | 50,265 | $ | 5,194,407 | |||||
Petra Diamonds, Ltd. (*) | 1,604,633 | 188,368 | ||||||
Standard Bank Group, Ltd. | 324,215 | 3,901,900 | ||||||
9,284,675 | ||||||||
South Korea | 11.5% | ||||||||
Doosan Bobcat, Inc. | 55,184 | 1,633,997 | ||||||
NCSoft Corp. | 9,805 | 4,571,754 | ||||||
Partron Co., Ltd. | 107,298 | 1,220,013 | ||||||
S-Oil Corp. | 31,692 | 2,595,141 | ||||||
Samsung Biologics Co., Ltd. (*) | 6,021 | 2,245,441 | ||||||
Samsung Electronics Co., Ltd. | 226,022 | 10,890,719 | ||||||
WONIK IPS Co., Ltd. | 129,631 | 4,001,130 | ||||||
27,158,195 | ||||||||
Taiwan | 10.1% | ||||||||
Airtac International Group | 211,000 | 3,294,163 | ||||||
ASE Technology Holding Co., Ltd. | 779,289 | 2,168,242 | ||||||
Bizlink Holding, Inc. | 463,000 | 3,488,627 | ||||||
Catcher Technology Co., Ltd. | 386,670 | 2,930,270 | ||||||
Largan Precision Co., Ltd. | 14,860 | 2,482,952 | ||||||
MediaTek, Inc. | 190,000 | 2,812,158 | ||||||
Silicon Motion Technology Corp. ADR | 59,500 | 3,017,245 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 336,000 | 3,721,022 | ||||||
23,914,679 | ||||||||
United Kingdom | 1.7% | ||||||||
KAZ Minerals PLC | 586,224 | 4,140,246 | ||||||
Total Common Stocks (Cost $186,608,102) | 226,992,962 | |||||||
Preferred Stocks | 1.9% | ||||||||
Brazil | 1.9% | ||||||||
Banco Bradesco SA ADR (Cost $4,224,223) | 514,863 | 4,608,024 |
The accompanying notes are an integral part of these financial statements.
64 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Developing Markets Equity Portfolio (concluded) | ||||||||
Short-Term Investments | 1.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $4,155,970) | 4,155,970 | $ | 4,155,970 | |||||
Total Investments | 100.1% (Cost $194,988,295) | $ | 235,756,956 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.1)% | (349,439 | ) | ||||||
Net Assets | 100.0% | $ | 235,407,517 |
The accompanying notes are an integral part of these financial statements.
Annual Report 65
The accompanying notes are an integral part of these financial statements.
66 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Core Equity Portfolio (continued) | ||||||||
Colombia | 1.1% | ||||||||
Bancolombia SA Sponsored ADR | 41,220 | $ | 2,258,444 | |||||
Hong Kong | 2.0% | ||||||||
China Gas Holdings, Ltd. | 456,200 | 1,710,082 | ||||||
Techtronic Industries Co., Ltd. | 291,000 | 2,381,195 | ||||||
4,091,277 | ||||||||
Hungary | 0.8% | ||||||||
MOL Hungarian Oil & Gas PLC | 158,580 | 1,583,935 | ||||||
India | 9.4% | ||||||||
HDFC Bank, Ltd. ADR | 109,163 | 6,917,659 | ||||||
Hindalco Industries, Ltd. | 822,313 | 2,494,353 | ||||||
Hindustan Zinc, Ltd. (*) | 460,795 | 1,355,204 | ||||||
Infosys, Ltd. Sponsored ADR | 210,215 | 2,169,419 | ||||||
Maruti Suzuki India, Ltd. | 20,213 | 2,087,478 | ||||||
Motherson Sumi Systems, Ltd. | 580,596 | 1,194,583 | ||||||
UPL, Ltd. | 320,564 | 2,625,971 | ||||||
18,844,667 | ||||||||
Indonesia | 2.0% | ||||||||
PT Bank Mandiri (Persero) Tbk | 4,542,700 | 2,504,356 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR | 55,415 | 1,579,328 | ||||||
4,083,684 | ||||||||
Luxembourg | 1.4% | ||||||||
Tenaris SA ADR | 39,195 | 887,375 | ||||||
Ternium SA Sponsored ADR | 87,565 | 1,926,430 | ||||||
2,813,805 | ||||||||
Mexico | 3.0% | ||||||||
Arca Continental SAB de CV | 285,145 | 1,507,804 | ||||||
Gruma SAB de CV, Class B | 140,158 | 1,439,052 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV ADR | 12,020 | 1,425,692 | ||||||
Grupo Financiero Banorte SAB de CV, Class O | 296,800 | 1,658,438 | ||||||
6,030,986 |
The accompanying notes are an integral part of these financial statements.
Annual Report 67
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Core Equity Portfolio (continued) | ||||||||
Peru | 1.0% | ||||||||
Credicorp, Ltd. | 8,945 | $ | 1,906,448 | |||||
Philippines | 2.2% | ||||||||
Ayala Land, Inc. | 1,395,700 | 1,251,667 | ||||||
BDO Unibank, Inc. | 985,511 | 3,072,256 | ||||||
4,323,923 | ||||||||
Poland | 0.7% | ||||||||
CD Projekt SA | 18,331 | 1,349,619 | ||||||
Portugal | 0.9% | ||||||||
Galp Energia SGPS SA | 111,848 | 1,870,698 | ||||||
Russia | 5.6% | ||||||||
LUKOIL PJSC Sponsored ADR | 61,297 | 6,089,382 | ||||||
Sberbank of Russia PJSC Sponsored ADR (London) | 252,920 | 4,161,539 | ||||||
Sberbank of Russia PJSC Sponsored ADR (United States) | 53,682 | 880,385 | ||||||
11,131,306 | ||||||||
South Africa | 3.5% | ||||||||
Barloworld, Ltd. | 112,396 | 905,520 | ||||||
Mondi PLC | 111,091 | 2,622,476 | ||||||
Naspers, Ltd., N Shares | 10,341 | 1,690,257 | ||||||
The Bidvest Group, Ltd. | 121,373 | 1,776,889 | ||||||
6,995,142 | ||||||||
South Korea | 10.9% | ||||||||
DB Insurance Co., Ltd. | 28,647 | 1,293,649 | ||||||
Fila Korea, Ltd. | 19,972 | 913,266 | ||||||
NCSoft Corp. | 4,855 | 2,263,729 | ||||||
S-Oil Corp. | 15,422 | 1,262,851 | ||||||
Samsung Electronics Co., Ltd. | 231,581 | 11,158,576 | ||||||
SK Hynix, Inc. (*) | 42,928 | 3,488,819 | ||||||
Woongjin Coway Co., Ltd. | 17,714 | 1,423,216 | ||||||
21,804,106 |
The accompanying notes are an integral part of these financial statements.
68 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Core Equity Portfolio (concluded) | ||||||||
Taiwan | 9.2% | ||||||||
Far EasTone Telecommunications Co., Ltd. | 693,000 | $ | 1,667,250 | |||||
Formosa Plastics Corp. | 866,000 | 2,886,390 | ||||||
Largan Precision Co., Ltd. | 15,000 | 2,506,344 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR | 196,438 | 11,413,048 | ||||||
18,473,032 | ||||||||
Thailand | 1.0% | ||||||||
Bangkok Bank Public Co. Ltd. (‡) | 181,500 | 969,421 | ||||||
Kasikornbank Public Co. Ltd. (‡) | 217,200 | 1,090,502 | ||||||
2,059,923 | ||||||||
United Kingdom | 1.5% | ||||||||
Unilever NV NY Shares | 53,445 | 3,070,950 | ||||||
Total Common Stocks (Cost $166,119,305) | 199,482,794 | |||||||
Preferred Stocks | 0.7% | ||||||||
Brazil | 0.7% | ||||||||
Itau Unibanco Holding SA Sponsored ADR (Cost $1,292,208) | 158,548 | 1,450,714 | ||||||
Short-Term Investments | 0.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $1,565,143) | 1,565,143 | 1,565,143 | ||||||
Total Investments | 101.1% (Cost $168,976,656) | $ | 202,498,651 | ||||||
Liabilities in Excess of Cash and Other Assets | (1.1)% | (2,263,977 | ) | ||||||
Net Assets | 100.0% | $ | 200,234,674 |
The accompanying notes are an integral part of these financial statements.
Annual Report 69
The accompanying notes are an integral part of these financial statements.
70 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Advantage Portfolio (continued) | ||||||||
China Lesso Group Holdings, Ltd. | 40,000 | $ | 51,352 | |||||
China Mengniu Dairy Co., Ltd. | 8,000 | 32,419 | ||||||
China Merchants Bank Co., Ltd., Class H | 19,500 | 100,509 | ||||||
China Mobile, Ltd. | 6,000 | 50,663 | ||||||
China Pacific Insurance Group Co., Ltd., Class A | 5,800 | 31,521 | ||||||
China Resources Cement Holdings, Ltd. | 28,000 | 35,668 | ||||||
China Resources Gas Group, Ltd. | 4,000 | 21,986 | ||||||
China Resources Land, Ltd. | 10,000 | 49,827 | ||||||
China Telecom Corp., Ltd., Class H | 180,000 | 73,875 | ||||||
China Unicom Hong Kong, Ltd. | 78,000 | 73,631 | ||||||
China Vanke Co., Ltd., Class H | 8,100 | 34,578 | ||||||
China Yuhua Education Corp., Ltd. | 30,000 | 20,335 | ||||||
CITIC, Ltd. | 33,000 | 44,232 | ||||||
CNOOC, Ltd. | 100,000 | 166,668 | ||||||
Country Garden Holdings Co., Ltd. | 67,000 | 107,661 | ||||||
Country Garden Services Holdings Co., Ltd. | 6,000 | 20,243 | ||||||
CSPC Pharmaceutical Group, Ltd. | 34,000 | 81,155 | ||||||
ENN Energy Holdings, Ltd. | 2,700 | 29,521 | ||||||
Foshan Haitian Flavouring & Food Co., Ltd., Class A | 1,000 | 15,439 | ||||||
Fujian Sunner Development Co., Ltd., Class A (*) | 8,900 | 30,785 | ||||||
Hualan Biological Engineering, Inc., Class A | 2,800 | 14,136 | ||||||
Huaxin Cement Co., Ltd., Class A | 6,580 | 25,004 | ||||||
Industrial & Commercial Bank of China, Ltd., Class H | 103,000 | 79,506 | ||||||
JD.com, Inc. ADR (*) | 738 | 26,000 | ||||||
Jiangsu Hengrui Medicine Co., Ltd., Class A | 1,800 | 22,635 | ||||||
JOYY, Inc. ADR (*) | 219 | 11,561 | ||||||
Kunlun Energy Co., Ltd. | 22,000 | 19,415 | ||||||
LexinFintech Holdings, Ltd. ADR (*) | 1,560 | 21,668 | ||||||
Li Ning Co., Ltd. | 14,000 | 41,964 | ||||||
Longfor Group Holdings, Ltd. | 6,500 | 30,527 | ||||||
Luxshare Precision Industry Co., Ltd., Class A | 5,100 | 26,716 | ||||||
Luzhou Laojiao Co., Ltd., Class A | 1,700 | 21,155 | ||||||
Momo, Inc. Sponsored ADR | 417 | 13,970 | ||||||
NetEase, Inc. ADR | 109 | 33,424 | ||||||
New Oriental Education & Technology Group, Inc. Sponsored ADR (*) | 498 | 60,383 |
The accompanying notes are an integral part of these financial statements.
Annual Report 71
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Advantage Portfolio (continued) | ||||||||
PetroChina Co., Ltd., Class H | 94,000 | $ | 47,189 | |||||
PICC Property & Casualty Co., Ltd., Class H | 24,000 | 28,938 | ||||||
Ping An Bank Co., Ltd., Class A | 5,100 | 12,049 | ||||||
Ping An Insurance (Group) Co. of China, Ltd., Class H | 19,500 | 231,002 | ||||||
Postal Savings Bank of China Co., Ltd., Class H | 44,000 | 29,937 | ||||||
Sany Heavy Industry Co., Ltd., Class A | 11,200 | 27,441 | ||||||
Shandong Hualu Hengsheng Chemical Co., Ltd., Class A | 7,300 | 20,839 | ||||||
Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | 700 | 18,239 | ||||||
Sunac China Holdings, Ltd. | 5,000 | 29,964 | ||||||
Sunny Optical Technology Group Co., Ltd. | 1,200 | 20,823 | ||||||
Tangshan Jidong Cement Co., Ltd., Class A | 8,500 | 20,764 | ||||||
Tencent Holdings, Ltd. | 9,500 | 458,266 | ||||||
Tencent Music Entertainment Group ADR (*) | 2,600 | 30,524 | ||||||
Vipshop Holdings, Ltd. ADR (*) | 2,575 | 36,488 | ||||||
Weichai Power Co., Ltd., Class A | 25,700 | 58,617 | ||||||
Wens Foodstuffs Group Co., Ltd., Class A | 4,400 | 21,227 | ||||||
West China Cement, Ltd. | 108,000 | 17,768 | ||||||
WUS Printed Circuit Kunshan Co., Ltd., Class A | 4,800 | 15,320 | ||||||
Zhengzhou Coal Mining Machinery Group Co., Ltd., Class A | 23,000 | 21,382 | ||||||
Zhongsheng Group Holdings, Ltd. | 5,500 | 22,368 | ||||||
3,735,085 | ||||||||
Colombia | 0.4% | ||||||||
Ecopetrol SA Sponsored ADR | 1,900 | 37,924 | ||||||
Greece | 0.4% | ||||||||
Hellenic Telecommunications Organization SA | 1,759 | 28,136 | ||||||
JUMBO SA | 922 | 19,191 | ||||||
47,327 | ||||||||
Hong Kong | 0.6% | ||||||||
Shimao Property Holdings, Ltd. | 6,000 | 23,300 | ||||||
Sino Biopharmaceutical, Ltd. | 28,500 | 39,924 | ||||||
63,224 | ||||||||
Hungary | 0.2% | ||||||||
MOL Hungarian Oil & Gas PLC | 1,734 | 17,320 |
The accompanying notes are an integral part of these financial statements.
72 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Advantage Portfolio (continued) | ||||||||
India | 8.0% | ||||||||
Axis Bank, Ltd. GDR | 921 | $ | 48,994 | |||||
Dr Reddy’s Laboratories, Ltd. ADR | 508 | 20,615 | ||||||
GAIL India, Ltd. GDR | 4,663 | 45,698 | ||||||
HDFC Bank, Ltd. ADR | 2,995 | 189,793 | ||||||
ICICI Bank, Ltd. Sponsored ADR | 6,803 | 102,657 | ||||||
Infosys, Ltd. Sponsored ADR | 13,329 | 137,555 | ||||||
Reliance Industries, Ltd. Sponsored GDR (#) | 1,959 | 83,199 | ||||||
State Bank of India GDR (*) | 1,036 | 48,653 | ||||||
Tata Motors, Ltd. Sponsored ADR (*) | 1,504 | 19,447 | ||||||
Vedanta, Ltd. ADR | 2,069 | 17,855 | ||||||
Wipro, Ltd. ADR | 11,270 | 42,263 | ||||||
WNS Holdings, Ltd. ADR (*) | 1,030 | 68,135 | ||||||
824,864 | ||||||||
Indonesia | 3.1% | ||||||||
PT Bank Central Asia Tbk | 27,300 | 65,585 | ||||||
PT Bank Mandiri (Persero) Tbk | 107,800 | 59,429 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 230,800 | 72,840 | ||||||
PT Gudang Garam Tbk | 4,700 | 17,901 | ||||||
PT Media Nusantara Citra Tbk | 200,300 | 23,471 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR | 2,186 | 62,301 | ||||||
PT Unilever Indonesia Tbk | 7,100 | 21,468 | ||||||
322,995 | ||||||||
Malaysia | 1.2% | ||||||||
Genting Malaysia Berhad | 19,300 | 15,527 | ||||||
MISC Berhad | 10,100 | 20,686 | ||||||
Nestle Malaysia Berhad | 800 | 28,749 | ||||||
RHB Bank Bhd | 45,400 | 64,154 | ||||||
129,116 | ||||||||
Mexico | 2.6% | ||||||||
Alfa SAB de CV, Class A | 29,000 | 24,050 | ||||||
America Movil SAB de CV, Class L Sponsored ADR | 5,220 | 83,520 | ||||||
Grupo Aeroportuario del Centro Norte SAB de CV | 7,600 | 57,009 | ||||||
Qualitas Controladora SAB de CV | 8,800 | 36,955 | ||||||
Wal-Mart de Mexico SAB de CV | 23,700 | 67,875 | ||||||
269,409 |
The accompanying notes are an integral part of these financial statements.
Annual Report 73
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Advantage Portfolio (continued) | ||||||||
Philippines | 2.0% | ||||||||
Cebu Air, Inc. | 21,780 | $ | 38,426 | |||||
DMCI Holdings, Inc. | 118,000 | 15,312 | ||||||
International Container Terminal Services, Inc. | 15,150 | 38,425 | ||||||
JG Summit Holdings, Inc. | 15,020 | 23,984 | ||||||
Metropolitan Bank & Trust Co. | 18,700 | 24,405 | ||||||
SM Investments Corp. | 2,260 | 46,520 | ||||||
SM Prime Holdings, Inc. | 27,200 | 22,560 | ||||||
209,632 | ||||||||
Poland | 1.6% | ||||||||
CD Projekt SA | 320 | 23,560 | ||||||
Dino Polska SA (*) | 770 | 29,213 | ||||||
Enea SA (*) | 8,276 | 17,321 | ||||||
PLAY Communications SA | 2,663 | 24,573 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 5,199 | 47,262 | ||||||
Tauron Polska Energia SA (*) | 48,163 | 20,803 | ||||||
162,732 | ||||||||
Russia | 5.5% | ||||||||
Gazprom Neft PJSC Sponsored ADR | 442 | 14,830 | ||||||
Gazprom PJSC Sponsored ADR | 8,493 | 69,940 | ||||||
LUKOIL PJSC Sponsored ADR | 1,301 | 129,244 | ||||||
MMC Norilsk Nickel PJSC ADR | 2,215 | 67,746 | ||||||
Novatek OAO Sponsored GDR | 91 | 18,480 | ||||||
Novolipetsk Steel PJSC GDR | 1,381 | 31,902 | ||||||
PhosAgro PJSC GDR | 1,451 | 18,446 | ||||||
RusHydro PJSC ADR | 23,996 | 20,322 | ||||||
Sberbank of Russia PJSC Sponsored ADR | 6,269 | 103,150 | ||||||
Tatneft PJSC Sponsored ADR | 875 | 64,685 | ||||||
VTB Bank PJSC GDR | 18,850 | 27,676 | ||||||
566,421 | ||||||||
South Africa | 3.4% | ||||||||
Anglo American Platinum, Ltd. | 1,153 | 107,664 | ||||||
Capitec Bank Holdings, Ltd. | 197 | 20,358 | ||||||
Clicks Group, Ltd. | 1,330 | 24,389 | ||||||
Exxaro Resources, Ltd. | 1,773 | 16,592 | ||||||
FirstRand, Ltd. | 7,635 | 34,338 |
The accompanying notes are an integral part of these financial statements.
74 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Advantage Portfolio (continued) | ||||||||
Harmony Gold Mining Co., Ltd. Sponsored ADR (*) | 5,286 | $ | 19,188 | |||||
Impala Platinum Holdings, Ltd. (*) | 2,988 | 30,655 | ||||||
Naspers, Ltd., N Shares | 638 | 104,282 | ||||||
357,466 | ||||||||
South Korea | 13.6% | ||||||||
AfreecaTV Co., Ltd. (*) | 384 | 22,830 | ||||||
Daelim Industrial Co., Ltd. (*) | 489 | 38,142 | ||||||
Dongjin Semichem Co., Ltd. (*) | 1,425 | 20,572 | ||||||
Hana Financial Group, Inc. | 2,496 | 79,228 | ||||||
Hanwha Aerospace Co., Ltd. (*) | 505 | 15,276 | ||||||
Hyundai Mobis Co., Ltd. | 161 | 35,603 | ||||||
KB Financial Group, Inc. ADR | 982 | 40,625 | ||||||
Kia Motors Corp. (*) | 2,214 | 84,334 | ||||||
KT&G Corp. | 1,301 | 105,467 | ||||||
LG Electronics, Inc. | 341 | 21,147 | ||||||
LG Household & Health Care, Ltd. (*) | 51 | 55,557 | ||||||
LG Uplus Corp. (*) | 4,139 | 50,776 | ||||||
NCSoft Corp. (*) | 48 | 22,381 | ||||||
Samsung Electro-Mechanics Co., Ltd. (*) | 258 | 27,776 | ||||||
Samsung Electronics Co., Ltd. GDR | 474 | 568,918 | ||||||
Samsung SDS Co., Ltd. (*) | 202 | 33,921 | ||||||
SK Hynix, Inc. | 1,177 | 95,656 | ||||||
Soulbrain Co., Ltd. (*) | 522 | 38,083 | ||||||
Woongjin Coway Co., Ltd. | 617 | 49,572 | ||||||
1,405,864 | ||||||||
Taiwan | 13.0% | ||||||||
Accton Technology Corp. | 6,000 | 33,638 | ||||||
Advantech Co., Ltd. | 7,000 | 70,631 | ||||||
Asia Cement Corp. | 37,000 | 59,228 | ||||||
Chailease Holding Co., Ltd. | 8,240 | 37,994 | ||||||
Chicony Electronics Co., Ltd. | 10,000 | 29,722 | ||||||
Eva Airways Corp. | 61,790 | 28,363 | ||||||
Feng TAY Enterprise Co., Ltd. | 8,900 | 57,917 | ||||||
Hotai Motor Co., Ltd. | 2,000 | 45,593 | ||||||
International Games System Co., Ltd. | 3,000 | 39,068 | ||||||
Nanya Technology Corp. | 9,000 | 24,993 |
The accompanying notes are an integral part of these financial statements.
Annual Report 75
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Advantage Portfolio (continued) | ||||||||
President Chain Store Corp. | 2,000 | $ | 20,304 | |||||
Rexon Industrial Corp., Ltd. | 7,000 | 16,680 | ||||||
Sitronix Technology Corp. | 3,000 | 16,796 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR | 11,526 | 669,660 | ||||||
Wistron Corp. | 20,000 | 18,923 | ||||||
Yuanta Financial Holding Co., Ltd. | 177,000 | 119,304 | ||||||
Zhen Ding Technology Holding, Ltd. | 11,000 | 52,602 | ||||||
1,341,416 | ||||||||
Thailand | 2.4% | ||||||||
Advanced Info Service Public Co. Ltd. (‡) | 5,800 | 41,244 | ||||||
Com7 Public Co., Ltd NVDR | 43,300 | 38,115 | ||||||
CP ALL Public Co. Ltd. (‡) | 12,400 | 29,909 | ||||||
Home Product Center Public Co. Ltd. (‡) | 39,800 | 21,259 | ||||||
PTG Energy Public Co. Ltd. NVDR | 26,100 | 13,961 | ||||||
PTT Exploration & Production Public Co. Ltd. (‡) | 12,500 | 51,955 | ||||||
Thanachart Capital Public Co., Ltd. NVDR | 16,500 | 29,385 | ||||||
TMB Bank Public Co., Ltd NVDR | 381,000 | 21,223 | ||||||
247,051 | ||||||||
Turkey | 0.9% | ||||||||
BIM Birlesik Magazalar AS | 2,584 | 20,280 | ||||||
Haci Omer Sabanci Holding AS | 9,844 | 15,796 | ||||||
Turk Telekomunikasyon AS (*) | 22,575 | 27,995 | ||||||
Turkiye Garanti Bankasi AS ADR (*) | 19,375 | 35,069 | ||||||
99,140 | ||||||||
United States | 0.2% | ||||||||
Yum China Holdings, Inc. | 540 | 25,925 | ||||||
Total Common Stocks (Cost $9,031,396) | 10,386,038 | |||||||
Preferred Stocks | 0.9% | ||||||||
Brazil | 0.9% | ||||||||
Banco Bradesco SA ADR | 5,917 | 52,957 | ||||||
Itau Unibanco Holding SA Sponsored ADR | 3,913 | 35,804 |
The accompanying notes are an integral part of these financial statements.
76 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Advantage Portfolio (concluded) | ||||||||
Total Preferred Stocks (Cost $91,714) | $ | 88,761 | ||||||
Short-Term Investments | 0.4% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $46,564) | 46,564 | 46,564 | ||||||
Total Investments | 101.6% (Cost $9,169,674) | $ | 10,521,363 | ||||||
Liabilities in Excess of Cash and Other Assets | (1.6)% | (169,348 | ) | ||||||
Net Assets | 100.0% | $ | 10,352,015 |
The accompanying notes are an integral part of these financial statements.
Annual Report 77
The accompanying notes are an integral part of these financial statements.
78 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Blend Portfolio (continued) | ||||||||
China Tian Lun Gas Holdings, Ltd. | 274,000 | $ | 245,082 | |||||
CNOOC, Ltd. | 596,800 | 994,673 | ||||||
Focused Photonics Hangzhou, Inc., Class A | 321,438 | 771,318 | ||||||
Huami Corp. ADR (*) | 21,048 | 252,997 | ||||||
JNBY Design, Ltd. | 316,000 | 424,627 | ||||||
Luye Pharma Group, Ltd. | 379,000 | 284,646 | ||||||
NetEase, Inc. ADR | 9,114 | 2,794,717 | ||||||
Ping An Insurance (Group) Co. of China, Ltd., Class H | 205,500 | 2,434,407 | ||||||
Precision Tsugami China Corp., Ltd. | 220,000 | 188,607 | ||||||
Sinopharm Group Co., Ltd., Class H | 33,600 | 122,896 | ||||||
Tencent Holdings, Ltd. | 46,100 | 2,223,797 | ||||||
Tianyun International Holdings, Ltd. | 1,582,000 | 202,991 | ||||||
West China Cement, Ltd. | 1,458,000 | 239,875 | ||||||
Wuliangye Yibin Co., Ltd. Class A | 52,100 | 995,005 | ||||||
ZTO Express Cayman, Inc. ADR | 57,126 | 1,333,892 | ||||||
25,978,500 | ||||||||
Colombia | 2.2% | ||||||||
Bancolombia SA Sponsored ADR | 40,892 | 2,240,473 | ||||||
Egypt | 1.1% | ||||||||
Commercial International Bank Egypt SAE GDR | 157,906 | 803,230 | ||||||
Credit Agricole Egypt SAE | 69,032 | 187,698 | ||||||
Dice Sport & Casual Wear (*) | 1,208,623 | 131,933 | ||||||
1,122,861 | ||||||||
Estonia | 0.1% | ||||||||
Tallinna Sadam AS | 48,954 | 108,976 | ||||||
Georgia | 0.5% | ||||||||
Bank of Georgia Group PLC | 16,825 | 362,941 | ||||||
TBC Bank Group PLC | 9,763 | 168,019 | ||||||
530,960 | ||||||||
Greece | 0.4% | ||||||||
JUMBO SA | 9,515 | 198,051 | ||||||
OPAP SA | 14,842 | 193,085 | ||||||
391,136 |
The accompanying notes are an integral part of these financial statements.
Annual Report 79
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Blend Portfolio (continued) | ||||||||
Hong Kong | 1.7% | ||||||||
China Water Affairs Group, Ltd. | 396,000 | $ | 296,486 | |||||
NewOcean Energy Holdings, Ltd. (*) | 496,000 | 75,128 | ||||||
Techtronic Industries Co., Ltd. | 142,782 | 1,168,356 | ||||||
TK Group Holdings, Ltd. | 308,000 | 153,751 | ||||||
1,693,721 | ||||||||
Hungary | 1.1% | ||||||||
OTP Bank Nyrt. | 22,132 | 1,158,316 | ||||||
India | 10.3% | ||||||||
Axis Bank, Ltd. | 174,468 | 1,844,787 | ||||||
Bajaj Auto, Ltd. | 19,236 | 858,447 | ||||||
Escorts, Ltd. | 26,319 | 232,184 | ||||||
Graphite India, Ltd. | 24,700 | 105,035 | ||||||
HCL Technologies, Ltd. | 59,680 | 475,181 | ||||||
ICICI Bank, Ltd. Sponsored ADR | 157,600 | 2,378,184 | ||||||
Infosys, Ltd. Sponsored ADR | 47,490 | 490,097 | ||||||
Jubilant Life Sciences, Ltd. | 48,408 | 364,250 | ||||||
Kiri Industries, Ltd. | 29,310 | 165,092 | ||||||
Petronet LNG, Ltd. | 76,241 | 286,488 | ||||||
Reliance Industries, Ltd. | 67,255 | 1,428,577 | ||||||
Shriram Transport Finance Co., Ltd. | 18,423 | 302,265 | ||||||
Tata Consultancy Services, Ltd. | 36,030 | 1,090,756 | ||||||
The South Indian Bank, Ltd. | 379,265 | 53,780 | ||||||
Uflex, Ltd. | 47,212 | 133,711 | ||||||
UPL, Ltd. | 42,138 | 345,183 | ||||||
10,554,017 | ||||||||
Indonesia | 4.4% | ||||||||
PT Bank Mandiri (Persero) Tbk | 2,160,600 | 1,191,123 | ||||||
PT Bank Pembangunan Daerah Jawa Timur Tbk | 2,963,500 | 146,215 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 5,167,090 | 1,630,724 | ||||||
PT Bekasi Fajar Industrial Estate Tbk | 9,411,600 | 146,779 | ||||||
PT Erajaya Swasembada Tbk | 968,200 | 124,349 | ||||||
PT Media Nusantara Citra Tbk | 3,308,800 | 387,726 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR | 29,780 | 848,730 | ||||||
4,475,646 |
The accompanying notes are an integral part of these financial statements.
80 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Blend Portfolio (continued) | ||||||||
Kenya | 0.2% | ||||||||
KCB Group, Ltd. | 442,400 | $ | 236,278 | |||||
Kuwait | 0.2% | ||||||||
Human Soft Holding Co. KSC | 22,392 | 222,570 | ||||||
Malaysia | 0.3% | ||||||||
Hibiscus Petroleum Berhad (*) | 1,073,300 | 247,785 | ||||||
Malaysia Airports Holdings Berhad | 15,500 | 28,799 | ||||||
276,584 | ||||||||
Mexico | 3.5% | ||||||||
America Movil SAB de CV, Class L Sponsored ADR | 66,070 | 1,057,120 | ||||||
Credito Real SAB de CV | 101,900 | 128,645 | ||||||
Grupo Aeroportuario del Centro Norte SAB de CV | 35,800 | 268,545 | ||||||
Grupo Cementos de Chihuahua SAB de CV | 65,400 | 348,869 | ||||||
Grupo Financiero Banorte SAB de CV, Class O | 126,790 | 708,468 | ||||||
Grupo Mexico SAB de CV, Series B | 208,501 | 571,882 | ||||||
Kimberly-Clark de Mexico SAB de CV, Series A | 264,600 | 524,792 | ||||||
3,608,321 | ||||||||
Oman | 0.2% | ||||||||
Ooredoo | 160,160 | 217,892 | ||||||
Pakistan | 0.2% | ||||||||
Bank Alfalah, Ltd. | 739,500 | 218,262 | ||||||
Philippines | 0.7% | ||||||||
Alliance Global Group, Inc. | 903,500 | 207,824 | ||||||
Bloomberry Resorts Corp. | 1,288,600 | 287,329 | ||||||
International Container Terminal Services, Inc. | 97,150 | 246,400 | ||||||
741,553 | ||||||||
Poland | 0.1% | ||||||||
Eurocash SA | 24,650 | 141,963 |
The accompanying notes are an integral part of these financial statements.
Annual Report 81
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Blend Portfolio (continued) | ||||||||
Russia | 8.0% | ||||||||
Detsky Mir PJSC | 260,200 | $ | 419,229 | |||||
Gazprom PJSC Sponsored ADR | 50,403 | 415,068 | ||||||
LUKOIL PJSC Sponsored ADR | 10,898 | 1,075,742 | ||||||
Mobile TeleSystems PJSC Sponsored ADR | 82,105 | 833,366 | ||||||
Sberbank of Russia PJSC (‡) | 381,984 | 1,567,909 | ||||||
Sberbank of Russia PJSC Sponsored ADR | 94,252 | 1,545,733 | ||||||
TCS Group Holding PLC GDR | 14,610 | 314,669 | ||||||
Yandex NV Class A (*) | 46,000 | 2,000,540 | ||||||
8,172,256 | ||||||||
South Africa | 0.8% | ||||||||
Standard Bank Group, Ltd. | 69,589 | 837,498 | ||||||
South Korea | 13.8% | ||||||||
BGF retail Co., Ltd. | 1,589 | 232,031 | ||||||
ELP Corp. | 8,031 | 82,832 | ||||||
Eugene Technology Co., Ltd. | 18,962 | 267,914 | ||||||
HS Industries Co., Ltd. | 41,073 | 421,935 | ||||||
Hyundai Mobis Co., Ltd. | 4,614 | 1,020,314 | ||||||
InBody Co., Ltd. | 12,353 | 252,441 | ||||||
Innocean Worldwide, Inc. | 5,633 | 344,791 | ||||||
KT&G Corp. (*) | 5,971 | 484,045 | ||||||
NCSoft Corp. | 3,529 | 1,645,459 | ||||||
Nice Information & Telecommunication, Inc. | 8,438 | 208,704 | ||||||
NICE Information Service Co., Ltd. | 17,615 | 212,485 | ||||||
Samjin Pharmaceutical Co., Ltd. | 4,746 | 102,278 | ||||||
Samsung Electronics Co., Ltd. | 103,998 | 5,011,074 | ||||||
SFA Engineering Corp. | 9,482 | 378,267 | ||||||
Shinhan Financial Group Co., Ltd. (*) | 25,597 | 957,321 | ||||||
SK Hynix, Inc. (*) | 27,419 | 2,228,381 | ||||||
Tokai Carbon Korea Co., Ltd. | 4,609 | 261,739 | ||||||
14,112,011 | ||||||||
Taiwan | 8.4% | ||||||||
Bizlink Holding, Inc. | 27,000 | 203,440 | ||||||
Fusheng Precision Co., Ltd. | 32,000 | 191,427 | ||||||
Hon Hai Precision Industry Co., Ltd. | 222,136 | 673,193 |
The accompanying notes are an integral part of these financial statements.
82 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Blend Portfolio (continued) | ||||||||
Largan Precision Co., Ltd. | 8,614 | $ | 1,439,310 | |||||
Lotes Co., Ltd. | 25,000 | 269,101 | ||||||
MediaTek, Inc. | 101,000 | 1,494,884 | ||||||
Nien Made Enterprise Co., Ltd. | 20,000 | 185,043 | ||||||
Powertech Technology, Inc. | 78,000 | 260,139 | ||||||
Silicon Motion Technology Corp. ADR | 22,524 | 1,142,192 | ||||||
TaiDoc Technology Corp. | 59,000 | 256,933 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 169,720 | 1,879,559 | ||||||
TCI Co., Ltd. | 22,979 | 218,852 | ||||||
Tripod Technology Corp. | 61,000 | 255,870 | ||||||
TSC Auto ID Technology Co., Ltd. | 18,700 | 152,253 | ||||||
8,622,196 | ||||||||
Turkey | 0.9% | ||||||||
KOC Holding AS ADR | 51,822 | 883,565 | ||||||
Ukraine | 0.2% | ||||||||
Kernel Holding SA | 15,235 | 181,692 | ||||||
United Kingdom | 0.5% | ||||||||
Unilever NV | 8,269 | 475,766 | ||||||
Total Common Stocks | ||||||||
(Cost $86,197,449) | 94,815,770 | |||||||
Preferred Stocks | 1.6% | ||||||||
Brazil | 1.6% | ||||||||
Banco Bradesco SA ADR (Cost $1,589,814) | 177,508 | 1,588,697 | ||||||
Short-Term Investments | 5.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $5,970,705) | 5,970,705 | 5,970,705 |
The accompanying notes are an integral part of these financial statements.
Annual Report 83
Description | Fair Value | |||
Lazard Emerging Markets Equity Blend Portfolio (concluded) | ||||
Total Investments | 100.0% (Cost $93,757,968) | $ | 102,375,172 | ||
Cash and Other Assets in Excess of Liabilities | 0.0% | 966 | |||
Net Assets | 100.0% | $ | 102,376,138 |
The accompanying notes are an integral part of these financial statements.
84 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 85
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Portfolio (continued) | ||||||||
Bajaj Auto, Ltd. | 1,506,068 | $ | 67,211,478 | |||||
Bharat Petroleum Corp., Ltd. | 6,960,961 | 48,052,564 | ||||||
Bharti Infratel, Ltd. | 12,310,667 | 43,626,945 | ||||||
Coal India, Ltd. | 20,297,011 | 60,150,755 | ||||||
HCL Technologies, Ltd. | 11,500,004 | 91,564,713 | ||||||
Hero MotoCorp, Ltd. | 2,271,305 | 77,796,079 | ||||||
Infosys, Ltd. Sponsored ADR | 7,007,852 | 72,321,033 | ||||||
Oil and Natural Gas Corp., Ltd. | 30,254,720 | 54,710,134 | ||||||
Tata Consultancy Services, Ltd. | 4,374,489 | 132,431,306 | ||||||
UPL, Ltd. | 7,410,816 | 60,707,331 | ||||||
811,225,636 | ||||||||
Indonesia | 4.6% | ||||||||
PT Astra International Tbk | 176,810,900 | 87,814,117 | ||||||
PT Bank Mandiri (Persero) Tbk | 265,129,842 | 146,164,093 | ||||||
PT Semen Indonesia (Persero) Tbk | 6,203,797 | 5,352,632 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR | 4,149,310 | 118,255,335 | ||||||
357,586,177 | ||||||||
Luxembourg | 0.8% | ||||||||
Ternium SA Sponsored ADR | 2,748,544 | 60,467,968 | ||||||
Malaysia | 0.3% | ||||||||
British American Tobacco Malaysia Berhad | 6,455,300 | 23,817,421 | ||||||
Mexico | 3.7% | ||||||||
America Movil SAB de CV, Class L Sponsored ADR | 10,706,385 | 171,302,160 | ||||||
Grupo Mexico SAB de CV, Series B | 24,325,547 | 66,720,765 | ||||||
Kimberly-Clark de Mexico SAB de CV, Series A | 26,234,395 | 52,031,724 | ||||||
290,054,649 | ||||||||
Pakistan | 0.7% | ||||||||
Habib Bank, Ltd. | 18,062,280 | 18,358,476 | ||||||
Pakistan Petroleum, Ltd. | 45,459,282 | 40,310,487 | ||||||
58,668,963 | ||||||||
Portugal | 0.8% | ||||||||
Galp Energia SGPS SA | 3,773,898 | 63,119,814 |
The accompanying notes are an integral part of these financial statements.
86 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Portfolio (continued) | ||||||||
Russia | 9.3% | ||||||||
ALROSA PAO (*), (‡) | 83,112,660 | $ | 112,845,632 | |||||
Gazprom PJSC Sponsored ADR | 9,689,854 | 79,795,802 | ||||||
LUKOIL PJSC Sponsored ADR | 1,312,738 | 130,410,357 | ||||||
Magnit PJSC Sponsored GDR | 4,801,902 | 58,041,425 | ||||||
Mobile TeleSystems PJSC Sponsored ADR | 9,921,743 | 100,705,692 | ||||||
Sberbank of Russia PJSC (‡) | 59,207,950 | 243,027,675 | ||||||
724,826,583 | ||||||||
South Africa | 6.8% | ||||||||
Life Healthcare Group Holdings, Ltd. | 34,686,676 | 60,860,113 | ||||||
Mondi PLC | 2,836,774 | 66,966,474 | ||||||
Nedbank Group, Ltd. | 3,766,635 | 57,686,067 | ||||||
PPC, Ltd. (*) | 25,733,648 | 4,596,128 | ||||||
Sanlam, Ltd. | 11,789,949 | 66,661,315 | ||||||
Shoprite Holdings, Ltd. | 7,368,020 | 66,331,246 | ||||||
Standard Bank Group, Ltd. | 5,697,390 | 68,567,610 | ||||||
The Bidvest Group, Ltd. | 4,545,390 | 66,544,055 | ||||||
Vodacom Group, Ltd. | 8,961,241 | 73,880,080 | ||||||
532,093,088 | ||||||||
South Korea | 15.2% | ||||||||
Hyundai Mobis Co., Ltd. | 507,283 | 112,177,752 | ||||||
KB Financial Group, Inc. (*) | 3,022,007 | 124,782,421 | ||||||
KT&G Corp. (*) | 778,589 | 63,117,039 | ||||||
Samsung Electronics Co., Ltd. | 7,969,398 | 384,000,133 | ||||||
Shinhan Financial Group Co., Ltd. (*) | 3,818,506 | 142,811,041 | ||||||
SK Hynix, Inc. (*) | 3,267,281 | 265,536,548 | ||||||
Woongjin Coway Co., Ltd. | 1,113,589 | 89,470,356 | ||||||
1,181,895,290 | ||||||||
Taiwan | 4.6% | ||||||||
Catcher Technology Co., Ltd. | 6,524,000 | 49,440,305 | ||||||
Hon Hai Precision Industry Co., Ltd. | 33,975,425 | 102,963,978 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 18,901,284 | 209,321,729 | ||||||
361,726,012 | ||||||||
Thailand | 1.5% | ||||||||
Kasikornbank Public Co. Ltd. (‡) | 11,991,654 | 60,206,844 | ||||||
The Siam Cement Public Co. Ltd. (‡) | 4,055,600 | 53,074,997 | ||||||
113,281,841 |
The accompanying notes are an integral part of these financial statements.
Annual Report 87
Description | Shares | Fair Value | ||||||
Lazard Emerging Markets Equity Portfolio (concluded) | ||||||||
Turkey | 2.6% | ||||||||
KOC Holding AS | 26,563,179 | $ | 90,786,199 | |||||
Tupras Turkiye Petrol Rafinerileri AS | 5,150,555 | 109,831,708 | ||||||
200,617,907 | ||||||||
United Kingdom | 1.2% | ||||||||
Unilever NV | 1,595,764 | 91,814,063 | ||||||
Total Common Stocks (Cost $6,354,436,015) | 7,563,327,065 | |||||||
Short-Term Investments | 3.4% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $261,824,062) | 261,824,062 | 261,824,062 | ||||||
Total Investments | 100.3% (Cost $6,616,260,077) | $ | 7,825,151,127 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.3)% | (26,039,009 | ) | ||||||
Net Assets | 100.0% | $ | 7,799,112,118 |
The accompanying notes are an integral part of these financial statements.
88 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 89
Description | Shares | Fair Value | ||||||
Lazard Equity Franchise Portfolio (concluded) | ||||||||
IPG Photonics Corp. (*) | 12,838 | $ | 1,860,483 | |||||
MEDNAX, Inc. (*) | 103,604 | 2,879,155 | ||||||
Medtronic PLC | 3,780 | 428,841 | ||||||
Nielsen Holdings PLC | 121,863 | 2,473,819 | ||||||
Norfolk Southern Corp. | 6,117 | 1,187,493 | ||||||
Omnicom Group, Inc. | 20,356 | 1,649,243 | ||||||
Oracle Corp. | 29,265 | 1,550,460 | ||||||
Stericycle, Inc. (*) | 44,188 | 2,819,636 | ||||||
Tapestry, Inc. | 68,487 | 1,847,094 | ||||||
29,282,862 | ||||||||
Total Common Stocks (Cost $38,708,600) | 39,806,881 | |||||||
Short-Term Investments | 0.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $332,313) | 332,313 | $ | 332,313 | |||||
Total Investments | 99.9% (Cost $39,040,913) | $ | 40,139,194 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.1% | 50,084 | |||||||
Net Assets | 100.0% | $ | 40,189,278 |
The accompanying notes are an integral part of these financial statements.
90 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 91
Description | Shares | Fair Value | ||||||
Lazard Global Equity Select Portfolio (continued) | ||||||||
Netherlands | 3.6% | ||||||||
NXP Semiconductors NV | 7,325 | $ | 932,180 | |||||
Wolters Kluwer NV | 28,574 | 2,088,564 | ||||||
3,020,744 | ||||||||
Singapore | 1.4% | ||||||||
Oversea-Chinese Banking Corp., Ltd. | 138,424 | 1,131,853 | ||||||
South Africa | 1.5% | ||||||||
Distell Group Holdings, Ltd. | 75,143 | 712,306 | ||||||
Sanlam, Ltd. | 92,022 | 520,300 | ||||||
1,232,606 | ||||||||
Sweden | 3.2% | ||||||||
Assa Abloy AB, Class B | 28,046 | 655,375 | ||||||
Epiroc AB, Class A | 87,775 | 1,072,706 | ||||||
Hexagon AB, B Shares | 16,118 | 903,068 | ||||||
2,631,149 | ||||||||
Switzerland | 4.4% | ||||||||
ABB, Ltd. | 43,717 | 1,055,367 | ||||||
Alcon, Inc. (*) | 8,889 | 503,559 | ||||||
Novartis AG | 12,308 | 1,166,089 | ||||||
Partners Group Holding AG | 1,035 | 948,545 | ||||||
3,673,560 | ||||||||
Taiwan | 1.3% | ||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR | 18,876 | 1,096,696 | ||||||
United Kingdom | 11.7% | ||||||||
Bunzl PLC | 19,611 | 536,567 | ||||||
Coca-Cola European Partners PLC | 20,759 | 1,056,218 | ||||||
Compass Group PLC | 43,138 | 1,080,644 | ||||||
Diageo PLC | 42,524 | 1,791,947 | ||||||
Prudential PLC | 55,040 | 1,059,048 | ||||||
RELX PLC | 63,852 | 1,612,103 | ||||||
The Weir Group PLC | 23,534 | 470,915 | ||||||
Unilever PLC | 36,964 | 2,116,162 | ||||||
9,723,604 |
The accompanying notes are an integral part of these financial statements.
92 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Global Equity Select Portfolio (continued) | ||||||||
United States | 50.2% | ||||||||
Accenture PLC, Class A | 8,081 | $ | 1,701,616 | |||||
Alphabet, Inc., Class A (*) | 1,848 | 2,475,193 | ||||||
Aon PLC | 10,474 | 2,181,629 | ||||||
Boston Scientific Corp. (*) | 28,673 | 1,296,593 | ||||||
Cisco Systems, Inc. | 19,782 | 948,745 | ||||||
Dollar General Corp. | 6,542 | 1,020,421 | ||||||
Envista Holdings Corp.(*) | 27,480 | 814,507 | ||||||
Honeywell International, Inc. | 8,960 | 1,585,920 | ||||||
Intercontinental Exchange, Inc. | 16,782 | 1,553,174 | ||||||
IQVIA Holdings, Inc. (*) | 13,243 | 2,046,176 | ||||||
Johnson & Johnson | 13,462 | 1,963,702 | ||||||
Kimberly-Clark Corp. | 7,530 | 1,035,752 | ||||||
Lowe’s Cos., Inc. | 6,653 | 796,763 | ||||||
McDonald’s Corp. | 6,667 | 1,317,466 | ||||||
Microsoft Corp. | 18,233 | 2,875,344 | ||||||
Motorola Solutions, Inc. | 9,154 | 1,475,076 | ||||||
Palo Alto Networks, Inc. (*) | 3,450 | 797,813 | ||||||
PTC, Inc. (*) | 19,730 | 1,477,580 | ||||||
Rockwell Automation, Inc. | 7,418 | 1,503,406 | ||||||
S&P Global, Inc. | 5,682 | 1,551,470 | ||||||
Texas Instruments, Inc. | 9,441 | 1,211,186 | ||||||
The Coca-Cola Co. | 37,202 | 2,059,131 | ||||||
The Procter & Gamble Co. | 10,935 | 1,365,781 | ||||||
Thermo Fisher Scientific, Inc. | 7,831 | 2,544,057 | ||||||
Visa, Inc., Class A | 9,915 | 1,863,028 | ||||||
Zoetis, Inc. | 16,430 | 2,174,510 | ||||||
41,636,039 | ||||||||
Total Common Stocks (Cost $62,472,082) | 80,562,777 | |||||||
Short-Term Investments | 2.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $2,317,403) | 2,317,403 | 2,317,403 |
The accompanying notes are an integral part of these financial statements.
Annual Report 93
Description | Fair Value | |||
Lazard Global Equity Select Portfolio (concluded) | ||||
Total Investments | 99.9% (Cost $64,789,485) | $ | 82,880,180 | ||
Cash and Other Assets in Excess of Liabilities | 0.1% | 109,263 | |||
Net Assets | 100.0% | $ | 82,989,443 |
The accompanying notes are an integral part of these financial statements.
94 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 95
Description | Shares | Fair Value | ||||||
Lazard Global Listed Infrastructure Portfolio (continued) | ||||||||
Spain | 4.8% | ||||||||
Ferrovial SA | 12,175,503 | $ | 369,367,308 | |||||
United Kingdom | 21.7% | ||||||||
National Grid PLC | 53,882,482 | 677,137,596 | ||||||
Pennon Group PLC | 18,257,009 | 248,515,390 | ||||||
Severn Trent PLC | 11,104,400 | 370,593,606 | ||||||
United Utilities Group PLC | 30,337,049 | 381,053,580 | ||||||
1,677,300,172 | ||||||||
United States | 20.1% | ||||||||
CSX Corp. | 5,039,411 | 364,651,780 | ||||||
Kansas City Southern | 1,152,848 | 176,570,200 | ||||||
Norfolk Southern Corp. | 3,251,990 | 631,308,819 | ||||||
Union Pacific Corp. | 2,086,036 | 377,134,448 | ||||||
1,549,665,247 | ||||||||
Total Common Stocks (Cost $6,506,434,944) | 7,193,347,436 | |||||||
Short-Term Investments | 7.0% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $543,684,541) | 543,684,541 | 543,684,541 | ||||||
Total Investments | 100.1% (Cost $7,050,119,485) (») | $ | 7,737,031,977 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.1)% | (11,133,519 | ) | ||||||
Net Assets | 100.0% | $ | 7,725,898,458 |
The accompanying notes are an integral part of these financial statements.
96 Annual Report
Lazard Global Listed Infrastructure Portfolio (concluded)
Forward Currency Contracts open at December 31, 2019:
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
AUD | 24,667,654 | USD | 16,935,084 | HSB | 03/27/20 | $ | 411,406 | $ | — | ||||||||||||||
USD | 66,047,477 | AUD | 96,207,736 | BNP | 03/27/20 | — | 1,606,568 | ||||||||||||||||
USD | 22,627,719 | AUD | 32,957,067 | CIT | 03/27/20 | — | 547,952 | ||||||||||||||||
USD | 96,533,237 | AUD | 140,610,369 | HSB | 03/27/20 | — | 2,345,092 | ||||||||||||||||
USD | 64,047,464 | AUD | 93,298,369 | SCB | 03/27/20 | — | 1,560,690 | ||||||||||||||||
USD | 83,869,077 | AUD | 122,165,527 | SSB | 03/27/20 | — | 2,038,692 | ||||||||||||||||
USD | 22,374,532 | CAD | 29,336,480 | BNP | 03/27/20 | — | 223,780 | ||||||||||||||||
USD | 19,596,693 | CAD | 25,694,498 | HSB | 03/27/20 | — | 196,148 | ||||||||||||||||
USD | 5,983,931 | CAD | 7,845,801 | RBC | 03/27/20 | — | 59,802 | ||||||||||||||||
USD | 20,912,780 | CAD | 27,421,046 | SCB | 03/27/20 | — | 210,046 | ||||||||||||||||
USD | 819,912,467 | EUR | 733,037,941 | BNP | 03/27/20 | — | 6,668,569 | ||||||||||||||||
USD | 335,504,600 | EUR | 299,974,160 | CAN | 03/27/20 | — | 2,749,313 | ||||||||||||||||
USD | 400,258,699 | EUR | 357,965,120 | CIT | 03/27/20 | — | 3,386,410 | ||||||||||||||||
USD | 401,849,012 | EUR | 359,204,280 | HSB | 03/27/20 | — | 3,193,386 | ||||||||||||||||
USD | 406,917,571 | EUR | 363,977,344 | MEL | 03/27/20 | — | 3,506,983 | ||||||||||||||||
USD | 377,463,499 | EUR | 337,195,600 | RBC | 03/27/20 | — | 2,761,689 | ||||||||||||||||
USD | 586,191,737 | EUR | 523,839,162 | SSB | 03/27/20 | — | 4,494,628 | ||||||||||||||||
USD | 336,825,565 | GBP | 257,409,566 | CAN | 03/27/20 | — | 4,924,569 | ||||||||||||||||
USD | 681,050,337 | GBP | 520,525,483 | HSB | 03/27/20 | — | 10,025,976 | ||||||||||||||||
USD | 149,809,941 | GBP | 113,868,404 | RBC | 03/27/20 | — | 1,367,589 | ||||||||||||||||
USD | 234,382,443 | GBP | 179,153,804 | RBC | 03/27/20 | — | 3,471,330 | ||||||||||||||||
USD | 270,699,909 | GBP | 206,908,079 | SSB | 03/27/20 | — | 4,001,863 | ||||||||||||||||
USD | 19,441,861 | HKD | 151,528,832 | BNP | 03/27/20 | 8,268 | — | ||||||||||||||||
USD | 65,708,691 | HKD | 512,933,365 | BNP | 03/27/20 | — | 75,081 | ||||||||||||||||
USD | 114,462,242 | HKD | 893,480,815 | HSB | 03/27/20 | — | 126,791 | ||||||||||||||||
USD | 102,058,164 | HKD | 796,737,469 | SSB | 03/27/20 | — | 123,522 | ||||||||||||||||
Total gross unrealized appreciation/depreciation on Forward Currency Contracts | $ | 419,674 | $ | 59,666,469 |
The accompanying notes are an integral part of these financial statements.
Annual Report 97
The accompanying notes are an integral part of these financial statements.
98 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Global Strategic Equity Portfolio (continued) | ||||||||
Japan | 6.2% | ||||||||
Digital Garage, Inc. | 900 | $ | 37,824 | |||||
Kobe Bussan Co., Ltd. | 1,100 | 37,791 | ||||||
Nintendo Co., Ltd. | 100 | 40,364 | ||||||
Suzuki Motor Corp. | 600 | 25,132 | ||||||
TechnoPro Holdings, Inc. | 500 | 35,095 | ||||||
Toei Animation Co., Ltd. | 600 | 30,930 | ||||||
207,136 | ||||||||
Netherlands | 1.5% | ||||||||
Koninklijke DSM NV | 373 | 48,690 | ||||||
New Zealand | 1.0% | ||||||||
Mainfreight, Ltd. | 1,211 | 34,660 | ||||||
South Africa | 0.7% | ||||||||
Sanlam, Ltd. | 4,412 | 24,946 | ||||||
South Korea | 1.6% | ||||||||
SK Hynix, Inc. | 664 | 53,964 | ||||||
Spain | 0.8% | ||||||||
Siemens Gamesa Renewable Energy SA | 1,501 | 26,376 | ||||||
Switzerland | 3.3% | ||||||||
Novartis AG | 592 | 56,088 | ||||||
Partners Group Holding AG | 58 | 53,155 | ||||||
109,243 | ||||||||
Taiwan | 0.9% | ||||||||
Merida Industry Co., Ltd. | 5,000 | 29,452 | ||||||
United Kingdom | 7.1% | ||||||||
Coca-Cola European Partners PLC | 909 | 45,628 | ||||||
Informa PLC | 4,245 | 48,254 | ||||||
Lloyds Banking Group PLC | 60,732 | 50,689 | ||||||
RELX PLC | 2,524 | 63,725 | ||||||
Rio Tinto PLC | 488 | 28,995 | ||||||
237,291 |
The accompanying notes are an integral part of these financial statements.
Annual Report 99
Description | Shares | Fair Value | ||||||
Lazard Global Strategic Equity Portfolio (concluded) | ||||||||
United States | 48.4% | ||||||||
Accenture PLC, Class A | 316 | $ | 66,540 | |||||
Adobe, Inc. (*) | 187 | 61,675 | ||||||
Alphabet, Inc., Class A (*) | 108 | 144,654 | ||||||
Aon PLC | 414 | 86,232 | ||||||
Bank of America Corp. | 1,815 | 63,924 | ||||||
Baxter International, Inc. | 570 | 47,663 | ||||||
Danaher Corp. | 365 | 56,020 | ||||||
Dollar General Corp. | 318 | 49,602 | ||||||
Elanco Animal Health, Inc. (*) | 1,899 | 55,926 | ||||||
Electronic Arts, Inc. (*) | 624 | 67,086 | ||||||
Envista Holdings Corp. (*) | 1,174 | 34,803 | ||||||
Fidelity National Information Services, Inc. | 263 | 36,581 | ||||||
Intercontinental Exchange, Inc. | 1,129 | 104,489 | ||||||
IPG Photonics Corp. (*) | 109 | 15,796 | ||||||
IQVIA Holdings, Inc. (*) | 578 | 89,307 | ||||||
Medtronic PLC | 576 | 65,347 | ||||||
Microsoft Corp. | 799 | 126,002 | ||||||
Palo Alto Networks, Inc. (*) | 230 | 53,188 | ||||||
Raytheon Co. | 295 | 64,823 | ||||||
S&P Global, Inc. | 314 | 85,738 | ||||||
The Coca-Cola Co. | 1,524 | 84,353 | ||||||
The Progressive Corp. | 449 | 32,503 | ||||||
Union Pacific Corp. | 173 | 31,277 | ||||||
Visa, Inc., Class A | 470 | 88,313 | ||||||
1,611,842 | ||||||||
Total Common Stocks (Cost $2,603,379) | 3,309,448 | |||||||
Short-Term Investments | 1.0% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $32,032) | 32,032 | 32,032 | ||||||
Total Investments | 100.4% (Cost $2,635,411) | $ | 3,341,480 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.4)% | (13,022 | ) | ||||||
Net Assets | 100.0% | $ | 3,328,458 |
The accompanying notes are an integral part of these financial statements.
100 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 101
Description | Shares | Fair Value | ||||||
Lazard International Equity Advantage Portfolio (continued) | ||||||||
Finland | 0.1% | ||||||||
Fortum Oyj | 74 | $ | 1,826 | |||||
France | 9.7% | ||||||||
Air France-KLM (*) | 947 | 10,542 | ||||||
BNP Paribas SA | 229 | 13,632 | ||||||
Elis SA | 125 | 2,596 | ||||||
Faurecia SA | 261 | 14,151 | ||||||
Hermes International | 38 | 28,437 | ||||||
Kering SA | 15 | 9,882 | ||||||
L’Oreal SA | 82 | 24,352 | ||||||
Orange SA | 746 | 10,962 | ||||||
Peugeot SA | 1,402 | 33,577 | ||||||
Schneider Electric SE | 335 | 34,461 | ||||||
Total SA | 1,112 | 61,452 | ||||||
244,044 | ||||||||
Germany | 7.3% | ||||||||
Adidas AG | 70 | 22,751 | ||||||
Allianz SE | 265 | 64,981 | ||||||
Continental AG | 77 | 9,999 | ||||||
CTS Eventim AG & Co. KGaA | 121 | 7,607 | ||||||
MTU Aero Engines AG | 146 | 41,691 | ||||||
Rheinmetall AG | 136 | 15,639 | ||||||
SAP SE | 72 | 9,703 | ||||||
Schaeffler AG (Preference Shares) | 409 | 4,441 | ||||||
Siemens Healthineers AG | 141 | 6,771 | ||||||
183,583 | ||||||||
Hong Kong | 2.7% | ||||||||
CK Asset Holdings, Ltd. | 500 | 3,624 | ||||||
CK Hutchison Holdings, Ltd. | 1,000 | 9,555 | ||||||
Jardine Matheson Holdings, Ltd. | 1 | 56 | ||||||
Kerry Properties, Ltd. | 1,500 | 4,780 | ||||||
Sands China, Ltd. | 4,400 | 23,595 | ||||||
WH Group, Ltd. | 26,000 | 26,940 | ||||||
68,550 |
The accompanying notes are an integral part of these financial statements.
102 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Equity Advantage Portfolio (continued) | ||||||||
Ireland | 0.4% | ||||||||
Experian PLC | 154 | $ | 5,209 | |||||
Fly Leasing, Ltd. ADR (*) | 240 | 4,704 | ||||||
9,913 | ||||||||
Israel | 1.0% | ||||||||
CyberArk Software, Ltd. (*) | 117 | 13,640 | ||||||
Israel Discount Bank, Ltd., Class A | 2,501 | 11,607 | ||||||
25,247 | ||||||||
Italy | 3.1% | ||||||||
Banca Generali SpA | 78 | 2,533 | ||||||
Enel SpA | 7,941 | 63,174 | ||||||
Poste Italiane SpA | 1,075 | 12,201 | ||||||
77,908 | ||||||||
Japan | 24.7% | ||||||||
Advantest Corp. | 200 | 11,316 | ||||||
Chugai Pharmaceutical Co., Ltd. | 100 | 9,210 | ||||||
Daito Trust Construction Co., Ltd. Sponsored ADR | 581 | 17,895 | ||||||
Daiwa House Industry Co., Ltd. | 1,500 | 46,472 | ||||||
Daiwa Office Investment Corp. REIT | 1 | 7,682 | ||||||
Dip Corp. | 100 | 2,955 | ||||||
DMG Mori Co., Ltd. | 300 | 4,592 | ||||||
East Japan Railway Co. ADR | 2,054 | 30,790 | ||||||
FUJIFILM Holdings Corp. | 300 | 14,305 | ||||||
Fukuoka Financial Group, Inc. | 500 | 9,544 | ||||||
FULLCAST Holdings Co., Ltd. | 100 | 2,280 | ||||||
Goldcrest Co., Ltd. | 100 | 1,906 | ||||||
GS Yuasa Corp. | 200 | 4,311 | ||||||
Hitachi, Ltd. | 400 | 16,849 | ||||||
Hoya Corp. | 100 | 9,548 | ||||||
Japan Post Holdings Co., Ltd. | 3,200 | 30,054 | ||||||
Japan Tobacco, Inc. | 700 | 15,605 | ||||||
KDDI Corp. | 400 | 11,900 | ||||||
Kureha Corp. | 100 | 5,998 | ||||||
Mitsubishi Heavy Industries, Ltd. | 1,023 | 39,565 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 3,500 | 18,916 | ||||||
Nikkiso Co., Ltd. | 200 | 2,622 | ||||||
The accompanying notes are an integral part of these financial statements.
Annual Report 103
Description | Shares | Fair Value | ||||||
Lazard International Equity Advantage Portfolio (continued) | ||||||||
Nintendo Co., Ltd. Sponsored ADR | 147 | $ | 7,335 | |||||
Nomura Real Estate Holdings, Inc. | 100 | 2,406 | ||||||
NS Solutions Corp. | 100 | 3,287 | ||||||
NTT DOCOMO, Inc. | 1,818 | 50,805 | ||||||
Oracle Corp. Japan | 100 | 9,092 | ||||||
ORIX Corp. | 1,700 | 28,297 | ||||||
Otsuka Corp. | 100 | 3,994 | ||||||
Seino Holdings Co., Ltd. | 200 | 2,697 | ||||||
Seven & I Holdings Co., Ltd. | 700 | 25,612 | ||||||
Shin-Etsu Chemical Co., Ltd. | 433 | 47,472 | ||||||
Shionogi & Co., Ltd. | 100 | 6,178 | ||||||
Showa Denko KK | 300 | 7,902 | ||||||
SoftBank Group Corp. | 200 | 8,707 | ||||||
Sumitomo Heavy Industries, Ltd. | 100 | 2,835 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 300 | 11,044 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 200 | 7,892 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 2,100 | 34,585 | ||||||
Tokio Marine Holdings, Inc. | 100 | 5,584 | ||||||
Tokyo Electron, Ltd. | 100 | 21,975 | ||||||
Tokyu Construction Co., Ltd. | 700 | 4,988 | ||||||
Tri Chemical Laboratories, Inc. | 100 | 7,869 | ||||||
West Japan Railway Co. | 100 | 8,635 | ||||||
623,506 | ||||||||
Luxembourg | 0.1% | ||||||||
ArcelorMittal SA | 130 | 2,296 | ||||||
Macau | 0.4% | ||||||||
Galaxy Entertainment Group, Ltd. | 1,000 | 7,371 | ||||||
Wynn Macau, Ltd. | 1,200 | 2,968 | ||||||
10,339 | ||||||||
Netherlands | 3.4% | ||||||||
EXOR NV | 209 | 16,208 | ||||||
ING Groep NV | 1,232 | 14,806 | ||||||
Koninklijke Ahold Delhaize NV | 588 | 14,736 | ||||||
Royal Dutch Shell PLC, A Shares | 408 | 12,128 | ||||||
Signify NV | 80 | 2,502 |
The accompanying notes are an integral part of these financial statements.
104 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Equity Advantage Portfolio (continued) | ||||||||
Wolters Kluwer NV | 339 | $ | 24,779 | |||||
85,159 | ||||||||
Norway | 0.5% | ||||||||
Aker BP ASA | 271 | 8,891 | ||||||
TGS NOPEC Geophysical Co. ASA | 122 | 3,712 | ||||||
12,603 | ||||||||
Russia | 0.1% | ||||||||
Evraz PLC | 682 | 3,660 | ||||||
Singapore | 0.4% | ||||||||
DBS Group Holdings, Ltd. | 300 | 5,783 | ||||||
Jardine Cycle & Carriage, Ltd. | 100 | 2,238 | ||||||
United Overseas Bank, Ltd. | 100 | 1,967 | ||||||
9,988 | ||||||||
Spain | 3.8% | ||||||||
Amadeus IT Group SA | 127 | 10,406 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 3,069 | 17,295 | ||||||
Iberdrola SA | 4,782 | 49,250 | ||||||
Industria de Diseno Textil SA | 536 | 18,987 | ||||||
95,938 | ||||||||
Sweden | 2.2% | ||||||||
Axfood AB | 111 | 2,470 | ||||||
Evolution Gaming Group AB | 241 | 7,252 | ||||||
Skandinaviska Enskilda Banken AB, Class A | 1,589 | 14,948 | ||||||
SKF AB, Class B | 602 | 12,196 | ||||||
Volvo AB, Class B | 1,068 | 17,923 | ||||||
54,789 | ||||||||
Switzerland | 9.9% | ||||||||
Geberit AG | 12 | 6,737 | ||||||
Nestle SA | 352 | 38,134 | ||||||
Novartis AG | 857 | 81,194 | ||||||
Partners Group Holding AG | 16 | 14,663 | ||||||
Roche Holding AG | 298 | 96,629 | ||||||
STMicroelectronics NV | 309 | 8,340 | ||||||
Wizz Air Holdings PLC (*) | 79 | 4,079 | ||||||
249,776 |
The accompanying notes are an integral part of these financial statements.
Annual Report 105
Description | Shares | Fair Value | ||||||
Lazard International Equity Advantage Portfolio (continued) | ||||||||
United Kingdom | 16.6% | ||||||||
Anglo American PLC | 569 | $ | 16,422 | |||||
Associated British Foods PLC | 752 | 26,051 | ||||||
Auto Trader Group PLC | 1,394 | 11,017 | ||||||
Avast PLC | 990 | 5,952 | ||||||
Britvic PLC | 811 | 9,733 | ||||||
Burberry Group PLC | 303 | 8,867 | ||||||
Compass Group PLC | 897 | 22,471 | ||||||
Dialog Semiconductor PLC (*) | 224 | 11,350 | ||||||
Dunelm Group PLC | 333 | 5,109 | ||||||
Fiat Chrysler Automobiles NV | 470 | 6,961 | ||||||
Games Workshop Group PLC | 82 | 6,636 | ||||||
Greggs PLC | 174 | 5,301 | ||||||
Halma PLC | 277 | 7,776 | ||||||
Howden Joinery Group PLC | 1,121 | 10,047 | ||||||
Imperial Brands PLC | 900 | 22,301 | ||||||
International Consolidated Airlines Group SA | 2,423 | 19,810 | ||||||
JD Sports Fashion PLC | 309 | 3,451 | ||||||
KAZ Minerals PLC | 407 | 2,874 | ||||||
Lloyds Banking Group PLC | 21,173 | 17,672 | ||||||
M&G PLC (*) | 1,114 | 3,505 | ||||||
Melrose Industries PLC | 4,077 | 13,032 | ||||||
Moneysupermarket.com Group PLC | 715 | 3,139 | ||||||
Prudential PLC | 225 | 4,329 | ||||||
RELX PLC | 328 | 8,274 | ||||||
Rio Tinto PLC | 547 | 32,501 | ||||||
Royal Bank of Scotland Group PLC | 7,896 | 25,308 | ||||||
Standard Chartered PLC | 699 | 6,602 | ||||||
Tate & Lyle PLC | 1,797 | 18,112 | ||||||
Unilever NV | 1,281 | 73,704 | ||||||
Vodafone Group PLC | 5,684 | 11,035 | ||||||
419,342 | ||||||||
United States | 0.2% | ||||||||
Ferguson PLC | 56 | 5,088 |
The accompanying notes are an integral part of these financial statements.
106 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Equity Advantage Portfolio (concluded) | ||||||||
Total Common Stocks (Cost $2,276,301) | $ | 2,481,051 | ||||||
Preferred Stocks | 0.6% | ||||||||
Germany | 0.6% | ||||||||
Porsche Automobil Holding SE | 128 | 9,575 | ||||||
Volkswagen AG | 27 | 5,338 | ||||||
Total Preferred Stocks (Cost $14,136) | 14,913 | |||||||
Short-Term Investments | 1.6% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $40,102) | 40,102 | 40,102 | ||||||
Total Investments | 100.6% (Cost $2,330,539) | $ | 2,536,066 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.6)% | (14,859 | ) | ||||||
Net Assets | 100.0% | $ | 2,521,207 |
The accompanying notes are an integral part of these financial statements.
Annual Report 107
The accompanying notes are an integral part of these financial statements.
108 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Equity Concentrated Portfolio (continued) | ||||||||
Mexico | 7.3% | ||||||||
Arca Continental SAB de CV | 922,600 | $ | 4,878,570 | |||||
Grupo Financiero Banorte SAB de CV, Class O | 405,600 | 2,266,383 | ||||||
7,144,953 | ||||||||
Norway | 3.3% | ||||||||
Mowi ASA | 125,237 | 3,257,250 | ||||||
South Korea | 4.9% | ||||||||
Samsung Electronics Co., Ltd. | 99,738 | 4,805,809 | ||||||
Switzerland | 3.9% | ||||||||
ABB, Ltd. | 156,613 | 3,780,777 | ||||||
United Kingdom | 6.4% | ||||||||
BP PLC | 441,856 | 2,773,683 | ||||||
Prudential PLC | 184,366 | 3,547,466 | ||||||
6,321,149 | ||||||||
United States | 6.9% | ||||||||
Aon PLC | 15,465 | 3,221,205 | ||||||
Medtronic PLC | 31,407 | 3,563,124 | ||||||
6,784,329 | ||||||||
Total Common Stocks (Cost $81,084,973) | 89,911,027 | |||||||
Preferred Stocks | 4.3% | ||||||||
Germany | 4.3% | ||||||||
Volkswagen AG (Cost $3,813,024) | 21,448 | 4,239,881 | ||||||
Short-Term Investments | 4.0% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $3,882,452) | 3,882,452 | 3,882,452 |
The accompanying notes are an integral part of these financial statements.
Annual Report 109
Description | Fair Value | |||
Lazard International Equity Concentrated Portfolio (concluded) | ||||
Total Investments | 99.8% (Cost $88,780,449) | $ | 98,033,360 | ||
Cash and Other Assets in Excess of Liabilities | 0.2% | 212,519 | |||
Net Assets | 100.0% | $ | 98,245,879 |
The accompanying notes are an integral part of these financial statements.
110 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 111
Description | Shares | Fair Value | ||||||
Lazard International Equity Portfolio (continued) | ||||||||
SAP SE | 675,469 | $ | 91,032,827 | |||||
Vonovia SE | 363,400 | 19,564,041 | ||||||
150,459,262 | ||||||||
Hong Kong | 0.4% | ||||||||
ESR Cayman, Ltd. (*) | 4,898,600 | 11,064,174 | ||||||
Indonesia | 0.4% | ||||||||
PT Bank Mandiri (Persero) Tbk | 19,842,600 | 10,939,076 | ||||||
Ireland | 1.4% | ||||||||
Ryanair Holdings PLC Sponsored ADR (*) | 463,739 | 40,628,174 | ||||||
Israel | 1.1% | ||||||||
Bank Leumi Le-Israel BM | 4,475,536 | 32,616,799 | ||||||
Japan | 16.2% | ||||||||
Asahi Group Holdings, Ltd. | 592,200 | 27,051,515 | ||||||
Daiwa House Industry Co., Ltd. | 1,647,378 | 51,038,276 | ||||||
Hitachi, Ltd. | 1,401,100 | 59,017,188 | ||||||
Kao Corp. | 525,780 | 43,365,270 | ||||||
Makita Corp. | 928,400 | 32,140,327 | ||||||
Nexon Co., Ltd. (*) | 2,585,600 | 34,199,614 | ||||||
Nintendo Co., Ltd. | 130,200 | 52,554,743 | ||||||
Pan Pacific International Holdings Corp. | 1,591,056 | 26,408,210 | ||||||
Shin-Etsu Chemical Co., Ltd. | 355,500 | 38,975,501 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 1,189,600 | 43,791,784 | ||||||
Suzuki Motor Corp. | 591,800 | 24,788,518 | ||||||
Yamaha Corp. | 521,800 | 28,763,591 | ||||||
462,094,537 | ||||||||
Luxembourg | 0.7% | ||||||||
ArcelorMittal SA | 1,104,681 | 19,513,465 | ||||||
Mexico | 0.4% | ||||||||
Arca Continental SAB de CV | 2,301,212 | 12,168,461 |
The accompanying notes are an integral part of these financial statements.
112 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Equity Portfolio (continued) | ||||||||
Netherlands | 6.6% | ||||||||
ABN AMRO Group NV | 1,481,857 | $ | 27,066,310 | |||||
Koninklijke DSM NV | 360,988 | 47,122,090 | ||||||
Royal Dutch Shell PLC, A Shares | 2,818,591 | 83,781,202 | ||||||
Wolters Kluwer NV | 428,278 | 31,304,194 | ||||||
189,273,796 | ||||||||
Norway | 3.6% | ||||||||
Equinor ASA | 1,682,569 | 33,648,857 | ||||||
Mowi ASA | 1,371,908 | 35,681,525 | ||||||
Telenor ASA | 1,813,010 | 32,517,282 | ||||||
101,847,664 | ||||||||
Singapore | 2.6% | ||||||||
DBS Group Holdings, Ltd. | 2,644,120 | 50,966,087 | ||||||
NetLink NBN Trust | 34,335,300 | 24,126,870 | ||||||
75,092,957 | ||||||||
South Korea | 2.6% | ||||||||
Samsung Electronics Co., Ltd. | 1,517,279 | 73,109,078 | ||||||
Spain | 0.8% | ||||||||
Red Electrica Corporacion SA | 1,189,201 | 23,921,037 | ||||||
Sweden | 3.7% | ||||||||
Assa Abloy AB, Class B | 2,676,374 | 62,541,102 | ||||||
Epiroc AB, Class A | 3,535,500 | 43,207,654 | ||||||
105,748,756 | ||||||||
Switzerland | 5.2% | ||||||||
ABB, Ltd. | 2,470,075 | 59,629,798 | ||||||
Novartis AG | 948,179 | 89,832,722 | ||||||
149,462,520 | ||||||||
United Arab Emirates | 0.5% | ||||||||
Network International Holdings PLC (*) | 1,868,585 | 15,859,519 | ||||||
United Kingdom | 11.9% | ||||||||
Compass Group PLC | 1,015,787 | 25,446,336 | ||||||
Howden Joinery Group PLC | 1,970,254 | 17,659,191 | ||||||
Informa PLC | 3,465,681 | 39,395,604 |
The accompanying notes are an integral part of these financial statements.
Annual Report 113
Description | Shares | Fair Value | ||||||
Lazard International Equity Portfolio (concluded) | ||||||||
Prudential PLC | 2,973,237 | $ | 57,209,346 | |||||
RELX PLC | 2,936,780 | 74,086,660 | ||||||
RSA Insurance Group PLC | 3,695,847 | 27,897,933 | ||||||
Tesco PLC | 14,458,921 | 48,979,840 | ||||||
The Weir Group PLC | 903,247 | 18,073,964 | ||||||
Unilever PLC | 529,240 | 30,298,598 | ||||||
339,047,472 | ||||||||
United States | 6.1% | ||||||||
Aon PLC | 258,855 | 53,916,908 | ||||||
Ferguson PLC | 383,988 | 34,887,837 | ||||||
Medtronic PLC | 766,210 | 86,926,524 | ||||||
175,731,269 | ||||||||
Total Common Stocks (Cost $2,328,377,992) | 2,717,643,739 | |||||||
Preferred Stocks | 2.6% | ||||||||
Germany | 2.6% | ||||||||
Volkswagen AG (Cost $68,311,150) | 372,840 | 73,703,711 | ||||||
Short-Term Investments | 2.5% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $71,553,323) | 71,553,323 | 71,553,323 | ||||||
Total Investments | 100.1% (Cost $2,468,242,465) | $ | 2,862,900,773 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.1)% | (2,997,532 | ) | ||||||
Net Assets | 100.0% | $ | 2,859,903,241 |
The accompanying notes are an integral part of these financial statements.
114 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 115
Description | Shares | Fair Value | ||||||
Lazard International Equity Select Portfolio (continued) | ||||||||
Vinci SA | 8,616 | $ | 957,198 | |||||
Vivendi SA | 63,760 | 1,848,089 | ||||||
10,904,561 | ||||||||
Germany | 4.5% | ||||||||
Beiersdorf AG | 9,610 | 1,149,916 | ||||||
Knorr-Bremse AG | 986 | 100,362 | ||||||
SAP SE | 22,948 | 3,092,697 | ||||||
4,342,975 | ||||||||
Hong Kong | 0.4% | ||||||||
ESR Cayman, Ltd. (*) | 166,000 | 374,934 | ||||||
India | 1.3% | ||||||||
ICICI Bank, Ltd. Sponsored ADR | 79,770 | 1,203,729 | ||||||
Indonesia | 1.3% | ||||||||
PT Bank Mandiri (Persero) Tbk | 875,100 | 482,436 | ||||||
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR | 28,558 | 813,903 | ||||||
1,296,339 | ||||||||
Ireland | 1.2% | ||||||||
Ryanair Holdings PLC Sponsored ADR (*) | 12,997 | 1,138,667 | ||||||
Japan | 12.7% | ||||||||
Daiwa House Industry Co., Ltd. | 43,600 | 1,350,794 | ||||||
Hitachi, Ltd. | 28,600 | 1,204,690 | ||||||
Kao Corp. | 18,800 | 1,550,586 | ||||||
Komatsu, Ltd. | 49,400 | 1,184,383 | ||||||
Makita Corp. | 27,800 | 962,410 | ||||||
Nintendo Co., Ltd. | 3,600 | 1,453,127 | ||||||
Ryohin Keikaku Co., Ltd. | 46,600 | 1,086,908 | ||||||
Shin-Etsu Chemical Co., Ltd. | 11,500 | 1,260,811 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 35,876 | 1,320,674 | ||||||
Suzuki Motor Corp. | 19,100 | 800,035 | ||||||
12,174,418 | ||||||||
Mexico | 1.2% | ||||||||
Grupo Financiero Banorte SAB de CV, Class O | 202,900 | 1,133,750 |
The accompanying notes are an integral part of these financial statements.
116 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Equity Select Portfolio (continued) | ||||||||
Netherlands | 5.3% | ||||||||
Koninklijke DSM NV | 8,486 | $ | 1,107,732 | |||||
Royal Dutch Shell PLC, A Shares | 87,573 | 2,579,833 | ||||||
Wolters Kluwer NV | 19,512 | 1,426,194 | ||||||
5,113,759 | ||||||||
Norway | 3.3% | ||||||||
Equinor ASA | 48,836 | 976,646 | ||||||
Mowi ASA | 36,714 | 954,883 | ||||||
Telenor ASA | 66,693 | 1,196,174 | ||||||
3,127,703 | ||||||||
Singapore | 1.8% | ||||||||
DBS Group Holdings, Ltd. | 88,400 | 1,703,933 | ||||||
South Africa | 1.2% | ||||||||
Mr Price Group, Ltd. | 35,774 | 466,684 | ||||||
Sanlam, Ltd. | 129,707 | 733,374 | ||||||
1,200,058 | ||||||||
South Korea | 2.3% | ||||||||
Samsung Electronics Co., Ltd. | 45,153 | 2,175,667 | ||||||
Spain | 0.7% | ||||||||
Red Electrica Corporacion SA | 33,293 | 669,696 | ||||||
Sweden | 1.5% | ||||||||
Assa Abloy AB, Class B | 61,345 | 1,433,501 | ||||||
Switzerland | 6.2% | ||||||||
ABB, Ltd. | 76,448 | 1,845,523 | ||||||
Alcon, Inc. (*) | 5,995 | 339,615 | ||||||
Lonza Group AG | 2,704 | 986,189 | ||||||
Novartis AG | 29,798 | 2,823,133 | ||||||
5,994,460 | ||||||||
Taiwan | 1.6% | ||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 138,141 | 1,529,839 |
The accompanying notes are an integral part of these financial statements.
Annual Report 117
Description | Shares | Fair Value | ||||||
Lazard International Equity Select Portfolio (concluded) | ||||||||
Thailand | 0.5% | ||||||||
Kasikornbank Public Co. Ltd.(‡) | 103,600 | $ | 520,148 | |||||
United Kingdom | 8.0% | ||||||||
Compass Group PLC | 37,556 | 940,810 | ||||||
Prudential PLC | 114,956 | 2,211,918 | ||||||
RELX PLC | 78,171 | 1,972,034 | ||||||
Tesco PLC | 401,529 | 1,360,186 | ||||||
Unilever PLC | 20,854 | 1,193,876 | ||||||
7,678,824 | ||||||||
United States | 7.9% | ||||||||
Accenture PLC, Class A | 9,650 | 2,032,001 | ||||||
Aon PLC | 8,955 | 1,865,237 | ||||||
Ferguson PLC | 10,379 | 943,000 | ||||||
Medtronic PLC | 24,625 | 2,793,706 | ||||||
7,633,944 | ||||||||
Total Common Stocks (Cost $81,282,888) | 90,513,568 | |||||||
Preferred Stocks | 2.2% | ||||||||
Germany | 2.2% | ||||||||
Volkswagen AG (Cost $1,823,889) | 10,526 | 2,080,799 | ||||||
Short-Term Investments | 1.4% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $1,346,372) | 1,346,372 | 1,346,372 | ||||||
Total Investments | 97.8% (Cost $84,453,149) | $ | 93,940,739 | ||||||
Cash and Other Assets in Excess of Liabilities | 2.2% | 2,147,082 | |||||||
Net Assets | 100.0% | $ | 96,087,821 |
The accompanying notes are an integral part of these financial statements.
118 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 119
Description | Shares | Fair Value | ||||||
Lazard International Equity Value Portfolio (continued) | ||||||||
South Korea | 4.8% | ||||||||
Kangwon Land, Inc. | 25,065 | $ | 640,601 | |||||
Spain | 4.3% | ||||||||
Banco Santander SA | 66,210 | 279,567 | ||||||
Indra Sistemas SA (*) | 25,089 | 288,671 | ||||||
568,238 | ||||||||
Switzerland | 3.0% | ||||||||
Coca-Cola HBC AG | 11,547 | 393,830 | ||||||
United Kingdom | 18.9% | ||||||||
BP PLC | 90,056 | 565,313 | ||||||
Cineworld Group PLC | 164,083 | 476,470 | ||||||
M&G PLC (*) | 122,311 | 384,837 | ||||||
Prudential PLC | 25,972 | 499,739 | ||||||
Vodafone Group PLC | 299,626 | 581,685 | ||||||
2,508,044 | ||||||||
United States | 6.0% | ||||||||
International Game Technology PLC | 29,048 | 434,848 | ||||||
Samsonite International SA | 152,712 | 365,853 | ||||||
800,701 | ||||||||
Total Common Stocks (Cost $11,866,362) | 12,469,330 | |||||||
Preferred Stocks | 4.1% | ||||||||
Germany | 4.1% | ||||||||
Volkswagen AG (Cost $462,892) | 2,742 | 542,044 | ||||||
Short-Term Investments | 2.0% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $271,480) | 271,480 | 271,480 |
The accompanying notes are an integral part of these financial statements.
120 Annual Report
Description | Fair Value | |||
Lazard International Equity Value Portfolio (concluded) | ||||
Total Investments | 100.1% (Cost $12,600,734) | $ | 13,282,854 | ||
Liabilities in Excess of Cash and Other Assets | (0.1)% | (9,351 | ) | ||
Net Assets | 100.0% | $ | 13,273,503 |
The accompanying notes are an integral part of these financial statements.
Annual Report 121
The accompanying notes are an integral part of these financial statements.
122 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Quality Growth Portfolio (continued) | ||||||||
Toei Animation Co., Ltd. | 1,700 | $ | 87,635 | |||||
311,520 | ||||||||
Netherlands | 4.5% | ||||||||
ASML Holding NV | 350 | 104,233 | ||||||
Wolters Kluwer NV | 1,008 | 73,678 | ||||||
177,911 | ||||||||
Norway | 1.9% | ||||||||
Gjensidige Forsikring ASA | 3,513 | 73,818 | ||||||
Philippines | 0.7% | ||||||||
Universal Robina Corp. | 10,390 | 29,782 | ||||||
South Africa | 3.9% | ||||||||
Clicks Group, Ltd. | 6,011 | 110,227 | ||||||
Sanlam, Ltd. | 7,839 | 44,322 | ||||||
154,549 | ||||||||
Spain | 1.6% | ||||||||
Industria de Diseno Textil SA | 1,848 | 65,462 | ||||||
Sweden | 6.1% | ||||||||
Assa Abloy AB, Class B | 4,712 | 110,109 | ||||||
Avanza Bank Holding AB | 5,580 | 58,311 | ||||||
Hexagon AB, B Shares | 1,288 | 72,165 | ||||||
240,585 | ||||||||
Switzerland | 6.3% | ||||||||
Cie Financiere Richemont SA | 537 | 42,153 | ||||||
Geberit AG | 148 | 83,085 | ||||||
Partners Group Holding AG | 134 | 122,807 | ||||||
248,045 | ||||||||
Taiwan | 3.3% | ||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR | 2,269 | 131,829 | ||||||
United Kingdom | 16.2% | ||||||||
Bunzl PLC | 2,394 | 65,501 | ||||||
Compass Group PLC | 3,323 | 83,244 |
The accompanying notes are an integral part of these financial statements.
Annual Report 123
Description | Shares | Fair Value | ||||||
Lazard International Quality Growth Portfolio (concluded) | ||||||||
Dechra Pharmaceuticals PLC | 1,199 | $ | 46,135 | |||||
Diageo PLC | 2,824 | 119,002 | ||||||
Intertek Group PLC | 1,084 | 84,132 | ||||||
London Stock Exchange Group PLC | 1,057 | 109,180 | ||||||
Prudential PLC | 2,126 | 40,907 | ||||||
RELX PLC | 3,796 | 95,840 | ||||||
643,941 | ||||||||
United States | 4.9% | ||||||||
Aon PLC | 639 | 133,097 | ||||||
QIAGEN NV (*) | 1,746 | 59,688 | ||||||
192,785 | ||||||||
Total Common Stocks (Cost $2,973,821) | 3,857,663 | |||||||
Short-Term Investments | 1.4% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $54,310) | 54,310 | 54,310 | ||||||
Total Investments | 98.6% (Cost $3,028,131) | $ | 3,911,973 | ||||||
Cash and Other Assets in Excess of Liabilities | 1.4% | 55,734 | |||||||
Net Assets | 100.0% | $ | 3,967,707 |
The accompanying notes are an integral part of these financial statements.
124 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 125
Description | Shares | Fair Value | ||||||
Lazard International Small Cap Equity Portfolio (continued) | ||||||||
Germany | 10.3% | ||||||||
Aroundtown SA | 112,564 | $ | 1,008,032 | |||||
CompuGroup Medical SE | 7,820 | 559,424 | ||||||
Dermapharm Holding SE | 18,694 | 833,410 | ||||||
Flatex AG (*) | 26,032 | 718,337 | ||||||
JOST Werke AG | 17,709 | 744,336 | ||||||
LEG Immobilien AG | 5,269 | 624,048 | ||||||
Norma Group SE | 10,322 | 439,936 | ||||||
PATRIZIA AG | 23,901 | 532,540 | ||||||
Teamviewer AG (*) | 12,820 | 458,806 | ||||||
5,918,869 | ||||||||
Greece | 0.8% | ||||||||
JUMBO SA | 22,182 | 461,710 | ||||||
India | 0.5% | ||||||||
Jubilant Life Sciences, Ltd. | 41,055 | 308,922 | ||||||
Ireland | 3.2% | ||||||||
Dalata Hotel Group PLC | 109,498 | 634,039 | ||||||
Glenveagh Properties PLC (*) | 510,327 | 505,443 | ||||||
Total Produce PLC | 445,392 | 708,509 | ||||||
1,847,991 | ||||||||
Israel | 1.0% | ||||||||
Israel Discount Bank, Ltd., Class A | 127,317 | 590,886 | ||||||
Italy | 3.7% | ||||||||
Banca Generali SpA | 21,252 | 690,232 | ||||||
Carel Industries SpA | 22,014 | 342,461 | ||||||
Cerved Group SpA | 64,337 | 627,755 | ||||||
Italgas SpA | 78,268 | 478,710 | ||||||
2,139,158 | ||||||||
Japan | 27.0% | ||||||||
Ariake Japan Co., Ltd. | 6,700 | 498,962 | ||||||
ARTERIA Networks Corp. | 59,100 | 956,465 | ||||||
Daiseki Co., Ltd. | 20,700 | 594,666 | ||||||
Digital Garage, Inc. | 25,000 | 1,050,657 |
The accompanying notes are an integral part of these financial statements.
126 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Small Cap Equity Portfolio (continued) | ||||||||
en-japan, Inc. | 16,900 | $ | 739,396 | |||||
Financial Products Group Co., Ltd. | 78,937 | 763,403 | ||||||
GMO internet, Inc. | 41,500 | 792,531 | ||||||
Industrial & Infrastructure Fund Investment Corp. REIT | 439 | 669,824 | ||||||
Jafco Co., Ltd. | 18,700 | 732,592 | ||||||
Japan Lifeline Co., Ltd. | 39,100 | 535,143 | ||||||
KOMEDA Holdings Co., Ltd. | 43,100 | 840,148 | ||||||
Koshidaka Holdings Co., Ltd. | 49,100 | 743,672 | ||||||
Nippon Shinyaku Co., Ltd. | 8,500 | 739,169 | ||||||
Open House Co., Ltd. | 30,300 | 867,201 | ||||||
Persol Holdings Co., Ltd. | 28,200 | 530,052 | ||||||
Sanwa Holdings Corp. | 57,500 | 644,180 | ||||||
TechnoPro Holdings, Inc. | 13,045 | 915,636 | ||||||
Trusco Nakayama Corp. | 22,100 | 565,525 | ||||||
Tsuruha Holdings, Inc. | 5,900 | 756,955 | ||||||
USS Co., Ltd. | 36,700 | 693,041 | ||||||
Zenkoku Hosho Co., Ltd. | 21,042 | 899,156 | ||||||
15,528,374 | ||||||||
Jersey | 1.6% | ||||||||
JTC PLC | 162,453 | 889,413 | ||||||
Luxembourg | 1.1% | ||||||||
Stabilus SA | 8,893 | 604,962 | ||||||
Netherlands | 2.8% | ||||||||
Aalberts NV | 14,132 | 635,769 | ||||||
ASM International NV 516529906 | 3,511 | 396,822 | ||||||
Van Lanschot Kempen NV | 26,358 | 594,611 | ||||||
1,627,202 | ||||||||
New Zealand | 1.9% | ||||||||
Freightways, Ltd. | 100,937 | 577,683 | ||||||
Mainfreight, Ltd. | 17,145 | 490,708 | ||||||
1,068,391 | ||||||||
Norway | 0.8% | ||||||||
TGS NOPEC Geophysical Co. ASA | 15,300 | 465,548 |
The accompanying notes are an integral part of these financial statements.
Annual Report 127
Description | Shares | Fair Value | ||||||
Lazard International Small Cap Equity Portfolio (continued) | ||||||||
Singapore | 1.0% | ||||||||
XP Power, Ltd. | 14,668 | $ | 601,684 | |||||
Spain | 1.1% | ||||||||
Merlin Properties Socimi SA REIT | 44,558 | 640,341 | ||||||
Sweden | 7.2% | ||||||||
Dometic Group AB | 68,618 | 691,963 | ||||||
Granges AB | 52,207 | 552,151 | ||||||
Karnov Group AB (*) | 186,001 | 1,050,077 | ||||||
Lifco AB, B Shares | 10,063 | 615,192 | ||||||
Lindab International AB | 47,282 | 603,999 | ||||||
Loomis AB, B Shares | 14,487 | 600,138 | ||||||
4,113,520 | ||||||||
Switzerland | 1.0% | ||||||||
Kardex AG | 3,462 | 583,727 | ||||||
United Kingdom | 14.1% | ||||||||
Ascential PLC | 127,117 | 661,092 | ||||||
Auto Trader Group PLC | 92,701 | 732,621 | ||||||
Clinigen Healthcare, Ltd. (*) | 64,655 | 792,589 | ||||||
Electrocomponents PLC | 68,819 | 618,577 | ||||||
Equiniti Group PLC | 37,020 | 101,774 | ||||||
GB Group PLC | 41,996 | 436,108 | ||||||
Hunting PLC | 85,998 | 477,843 | ||||||
Huntsworth PLC | 463,893 | 500,154 | ||||||
Pennon Group PLC | 45,727 | 622,438 | ||||||
Polypipe Group PLC | 124,169 | 888,746 | ||||||
Rentokil Initial PLC | 106,205 | 639,353 | ||||||
Rightmove PLC | 65,649 | 552,070 | ||||||
Smart Metering Systems PLC | 75,256 | 562,465 | ||||||
Subsea 7 SA | 43,046 | 516,103 | ||||||
8,101,933 | ||||||||
Total Common Stocks (Cost $49,736,165) | 56,929,128 |
The accompanying notes are an integral part of these financial statements.
128 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Small Cap Equity Portfolio (concluded) | ||||||||
Short-Term Investments | 0.8% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $487,114) | 487,114 | $ | 487,114 | |||||
Total Investments | 99.9% (Cost $50,223,279) | $ | 57,416,242 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.1% | 41,457 | |||||||
Net Assets | 100.0% | $ | 57,457,699 |
The accompanying notes are an integral part of these financial statements.
Annual Report 129
The accompanying notes are an integral part of these financial statements.
130 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Strategic Equity Portfolio (continued) | ||||||||
Hong Kong | 2.6% | ||||||||
AIA Group, Ltd. | 12,627,263 | $ | 132,859,708 | |||||
ESR Cayman, Ltd. (*) | 12,937,400 | 29,220,928 | ||||||
162,080,636 | ||||||||
India | 1.1% | ||||||||
Housing Development Finance Corp., Ltd. | 1,984,916 | 67,217,493 | ||||||
Ireland | 2.0% | ||||||||
Ryanair Holdings PLC Sponsored ADR (*) | 1,477,436 | 129,438,168 | ||||||
Israel | 1.6% | ||||||||
Bank Leumi Le-Israel BM | 13,935,804 | 101,561,313 | ||||||
Italy | 1.0% | ||||||||
Enel SpA | 7,634,886 | 60,738,607 | ||||||
Japan | 12.5% | ||||||||
AEON Financial Service Co., Ltd. | 3,742,875 | 58,871,308 | ||||||
Daiwa House Industry Co., Ltd. | 551,907 | 17,098,918 | ||||||
en-japan, Inc. | 782,797 | 34,248,328 | ||||||
Kao Corp. | 1,394,853 | 115,044,653 | ||||||
Komatsu, Ltd. | 4,076,837 | 97,743,671 | ||||||
Makita Corp. | 2,787,291 | 96,493,369 | ||||||
Nexon Co., Ltd. (*) | 4,618,635 | 61,090,475 | ||||||
Nintendo Co., Ltd. | 319,350 | 128,904,433 | ||||||
Pan Pacific International Holdings Corp. | 2,845,072 | 47,222,260 | ||||||
Suzuki Motor Corp. | 1,560,872 | 65,379,694 | ||||||
Yamaha Corp. | 1,236,472 | 68,159,017 | ||||||
790,256,126 | ||||||||
Mexico | 0.8% | ||||||||
Arca Continental SAB de CV | 9,317,500 | 49,269,531 | ||||||
Norway | 1.7% | ||||||||
Equinor ASA | 5,445,232 | 108,896,473 |
The accompanying notes are an integral part of these financial statements.
Annual Report 131
Description | Shares | Fair Value | ||||||
Lazard International Strategic Equity Portfolio (continued) | ||||||||
Philippines | 0.7% | ||||||||
GT Capital Holdings, Inc. | 2,622,585 | $ | 43,899,515 | |||||
Singapore | 2.0% | ||||||||
DBS Group Holdings, Ltd. | 6,676,071 | 128,682,970 | ||||||
South Korea | 1.2% | ||||||||
SK Hynix, Inc. (*) | 901,492 | 73,265,530 | ||||||
Spain | 0.5% | ||||||||
Siemens Gamesa Renewable Energy SA | 1,943,591 | 34,153,487 | ||||||
Sweden | 1.2% | ||||||||
Assa Abloy AB, Class B | 355,295 | 8,302,479 | ||||||
Hexagon AB, B Shares | 1,185,280 | 66,409,541 | ||||||
74,712,020 | ||||||||
Switzerland | 9.2% | ||||||||
ABB, Ltd. | 6,576,021 | 158,750,970 | ||||||
Alcon, Inc. (*) | 1,032,530 | 58,492,527 | ||||||
Julius Baer Group, Ltd. | 2,034,113 | 105,050,391 | ||||||
Novartis AG | 1,630,288 | 154,457,343 | ||||||
Partners Group Holding AG | 114,991 | 105,385,613 | ||||||
582,136,844 | ||||||||
United Kingdom | 13.7% | ||||||||
Coca-Cola European Partners PLC | 2,200,744 | 110,467,862 | ||||||
Diageo PLC | 3,547,215 | 149,478,455 | ||||||
Informa PLC | 14,510,557 | 164,946,560 | ||||||
Lloyds Banking Group PLC | 117,615,803 | 98,165,250 | ||||||
Prudential PLC | 4,895,114 | 94,189,017 | ||||||
RELX PLC | 4,978,406 | 125,591,115 | ||||||
Rio Tinto PLC | 1,748,608 | 103,896,988 | ||||||
Tesco PLC | 4,636,863 | 15,707,452 | ||||||
862,442,699 | ||||||||
United States | 8.3% | ||||||||
Accenture PLC, Class A | 759,908 | 160,013,827 | ||||||
Aon PLC | 886,540 | 184,657,417 |
The accompanying notes are an integral part of these financial statements.
132 Annual Report
Description | Shares | Fair Value | ||||||
Lazard International Strategic Equity Portfolio (concluded) | ||||||||
Medtronic PLC | 1,558,023 | $ | 176,757,709 | |||||
521,428,953 | ||||||||
Total Common Stocks (Cost $4,925,204,367) | 6,012,075,723 | |||||||
Preferred Stocks | 3.1% | ||||||||
Germany | 3.1% | ||||||||
Volkswagen AG (Cost $182,419,119) | 983,357 | 194,391,858 | ||||||
Short-Term Investments | 1.7% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $105,152,719) | 105,152,719 | 105,152,719 | ||||||
Total Investments | 100.1% (Cost $5,212,776,205) | $ | 6,311,620,300 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.1)% | (4,196,708 | ) | ||||||
Net Assets | 100.0% | $ | 6,307,423,592 |
The accompanying notes are an integral part of these financial statements.
Annual Report 133
The accompanying notes are an integral part of these financial statements.
134 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Managed Equity Volatility Portfolio (continued) | ||||||||
Northland Power, Inc. | 12,643 | $ | 264,826 | |||||
Teck Resources, Ltd., Class B | 7,504 | 130,137 | ||||||
The Toronto-Dominion Bank | 3,781 | 212,060 | ||||||
Tourmaline Oil Corp. | 11,482 | 134,578 | ||||||
Whitecap Resources, Inc. | 23,916 | 102,217 | ||||||
3,021,748 | ||||||||
Denmark | 0.7% | ||||||||
Coloplast A/S, Class B | 1,409 | 175,171 | ||||||
SimCorp A/S | 684 | 77,722 | ||||||
252,893 | ||||||||
France | 1.1% | ||||||||
Orange SA | 7,583 | 111,427 | ||||||
Total SA | 4,639 | 256,362 | ||||||
367,789 | ||||||||
Germany | 1.3% | ||||||||
Allianz SE | 707 | 173,364 | ||||||
Muenchener Rueckversicherungs AG | 977 | 288,229 | ||||||
461,593 | ||||||||
Hong Kong | 0.2% | ||||||||
Jardine Matheson Holdings, Ltd. | 1,400 | 77,848 | ||||||
Israel | 0.9% | ||||||||
Bank Leumi Le-Israel BM | 13,702 | 99,857 | ||||||
Israel Discount Bank, Ltd., Class A | 46,234 | 214,575 | ||||||
314,432 | ||||||||
Italy | 1.3% | ||||||||
Enel SpA | 35,888 | 285,504 | ||||||
Poste Italiane SpA | 15,842 | 179,801 | ||||||
465,305 | ||||||||
Japan | 13.5% | ||||||||
Alfresa Holdings Corp. | 3,600 | 73,500 | ||||||
ANA Holdings, Inc. | 3,900 | 130,484 | ||||||
Azbil Corp. | 2,800 | 78,817 | ||||||
Daito Trust Construction Co., Ltd. | 2,400 | 297,242 | ||||||
Daiwa House Industry Co., Ltd. | 6,700 | 207,576 |
The accompanying notes are an integral part of these financial statements.
Annual Report 135
Description | Shares | Fair Value | ||||||
Lazard Managed Equity Volatility Portfolio (continued) | ||||||||
East Japan Railway Co. | 2,800 | $ | 252,739 | |||||
Fuji Media Holdings, Inc. | 4,700 | 66,709 | ||||||
FUJIFILM Holdings Corp. | 1,800 | 85,828 | ||||||
Japan Airlines Co., Ltd. | 4,300 | 134,183 | ||||||
Japan Logistics Fund, Inc. REIT | 21 | 53,567 | ||||||
Japan Post Holdings Co., Ltd. | 17,000 | 159,663 | ||||||
Japan Prime Realty Investment Corp. REIT | 18 | 79,056 | ||||||
Japan Real Estate Investment Corp. | 7 | 46,440 | ||||||
Kandenko Co., Ltd. | 11,400 | 109,105 | ||||||
KDDI Corp. | 2,800 | 83,299 | ||||||
Kewpie Corp. | 3,600 | 81,065 | ||||||
LaSalle Logiport REIT | 67 | 99,536 | ||||||
Lawson, Inc. | 2,800 | 158,571 | ||||||
Marui Group Co., Ltd. | 3,400 | 82,762 | ||||||
McDonald’s Holdings Co. Japan, Ltd. | 4,600 | 221,680 | ||||||
MCUBS MidCity Investment Corp. REIT | 58 | 62,990 | ||||||
Mitsubishi Heavy Industries, Ltd. | 3,400 | 131,496 | ||||||
Nissan Chemical Corp. | 2,400 | 100,333 | ||||||
NTT DOCOMO, Inc. | 11,300 | 315,782 | ||||||
Seven & I Holdings Co., Ltd. | 10,700 | 391,500 | ||||||
Shionogi & Co., Ltd. | 2,000 | 123,566 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 2,300 | 90,763 | ||||||
The Chiba Bank, Ltd. | 18,100 | 104,071 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 9,000 | 148,221 | ||||||
The Gunma Bank, Ltd. | 22,400 | 78,583 | ||||||
The Hachijuni Bank, Ltd. | 20,000 | 87,093 | ||||||
The Shizuoka Bank, Ltd. | 11,600 | 86,357 | ||||||
Tokio Marine Holdings, Inc. | 1,500 | 83,754 | ||||||
United Arrows, Ltd. | 2,700 | 76,466 | ||||||
West Japan Railway Co. | 3,100 | 267,688 | ||||||
4,650,485 | ||||||||
Netherlands | 1.0% | ||||||||
Koninklijke Ahold Delhaize NV | 6,551 | 164,180 | ||||||
NN Group NV | 2,191 | 83,313 | ||||||
Royal Dutch Shell PLC, A Shares | 3,315 | 98,537 | ||||||
346,030 |
The accompanying notes are an integral part of these financial statements.
136 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Managed Equity Volatility Portfolio (continued) | ||||||||
Norway | 1.0% | ||||||||
Leroy Seafood Group ASA | 14,977 | $ | 99,586 | |||||
Orkla ASA | 8,854 | 89,735 | ||||||
Salmar ASA | 1,750 | 89,698 | ||||||
Telenor ASA | 3,822 | 68,549 | ||||||
347,568 | ||||||||
Puerto Rico | 0.2% | ||||||||
EVERTEC, Inc. | 2,482 | 84,487 | ||||||
Singapore | 0.3% | ||||||||
Jardine Cycle & Carriage, Ltd. | 4,400 | 98,475 | ||||||
Spain | 1.3% | ||||||||
Corporacion Financiera Alba SA | 552 | 30,051 | ||||||
Iberdrola SA | 41,922 | 431,756 | ||||||
461,807 | ||||||||
Sweden | 0.7% | ||||||||
Axfood AB | 3,196 | 71,119 | ||||||
Evolution Gaming Group AB | 3,046 | 91,663 | ||||||
Swedish Match AB | 1,752 | 90,322 | ||||||
253,104 | ||||||||
Switzerland | 4.7% | ||||||||
Helvetia Holding AG | 627 | 88,594 | ||||||
Novartis AG | 4,638 | 439,415 | ||||||
Roche Holding AG | 1,992 | 645,922 | ||||||
SIG Combibloc Group AG | 5,671 | 90,552 | ||||||
Swisscom AG | 144 | 76,260 | ||||||
The Swatch Group AG | 1,434 | 75,718 | ||||||
Zurich Insurance Group AG | 476 | 195,227 | ||||||
1,611,688 | ||||||||
United Kingdom | 3.7% | ||||||||
Admiral Group PLC | 2,444 | 74,846 | ||||||
Anglo American PLC | 4,146 | 119,661 | ||||||
Auto Trader Group PLC | 9,320 | 73,657 | ||||||
Compass Group PLC | 8,049 | 201,634 | ||||||
Dunelm Group PLC | 5,903 | 90,564 |
The accompanying notes are an integral part of these financial statements.
Annual Report 137
Description | Shares | Fair Value | ||||||
Lazard Managed Equity Volatility Portfolio (continued) | ||||||||
International Consolidated Airlines Group SA | 6,485 | $ | 53,853 | |||||
RELX PLC | 5,461 | 137,766 | ||||||
Rio Tinto PLC | 1,934 | 114,912 | ||||||
Rio Tinto, Ltd. | 2,501 | 176,876 | ||||||
SSP Group PLC | 8,186 | 70,548 | ||||||
Unilever NV | 2,655 | 152,758 | ||||||
1,267,075 | ||||||||
United States | 53.0% | ||||||||
3M Co. | 924 | 163,012 | ||||||
AbbVie, Inc. | 1,536 | 135,997 | ||||||
ACI Worldwide, Inc. (*) | 2,399 | 90,886 | ||||||
Aflac, Inc. | 5,644 | 298,568 | ||||||
Akamai Technologies, Inc. (*) | 1,211 | 104,606 | ||||||
American States Water Co. | 1,467 | 127,101 | ||||||
American Tower Corp. REIT | 758 | 174,204 | ||||||
AmerisourceBergen Corp. | 933 | 79,324 | ||||||
Amgen, Inc. | 699 | 168,508 | ||||||
Aon PLC | 2,007 | 418,038 | ||||||
AutoZone, Inc. (*) | 79 | 94,113 | ||||||
Avangrid, Inc. | 1,684 | 86,153 | ||||||
AXA Equitable Holdings, Inc. | 4,973 | 123,231 | ||||||
Best Buy Co., Inc. | 1,485 | 130,383 | ||||||
Blackline, Inc. (*) | 1,597 | 82,341 | ||||||
Booz Allen Hamilton Holding Corp. | 1,129 | 80,306 | ||||||
BorgWarner, Inc. | 1,906 | 82,682 | ||||||
Bristol-Myers Squibb Co. | 4,370 | 280,510 | ||||||
Burlington Stores, Inc. (*) | 635 | 144,799 | ||||||
Cable One, Inc. | 76 | 113,124 | ||||||
Cadence Design Systems, Inc. (*) | 1,941 | 134,628 | ||||||
Cboe Global Markets, Inc. | 1,152 | 138,240 | ||||||
CDW Corp. | 972 | 138,840 | ||||||
Church & Dwight Co., Inc. | 979 | 68,863 | ||||||
Cigna Corp. (*) | 838 | 171,363 | ||||||
Colgate-Palmolive Co. | 1,004 | 69,115 | ||||||
Comcast Corp., Class A | 2,076 | 93,358 | ||||||
Comerica, Inc. | 1,435 | 102,961 |
The accompanying notes are an integral part of these financial statements.
138 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Managed Equity Volatility Portfolio (continued) | ||||||||
Copart, Inc. (*) | 979 | $ | 89,030 | |||||
Crown Castle International Corp. REIT | 709 | 100,784 | ||||||
Darden Restaurants, Inc. | 2,735 | 298,142 | ||||||
Dillard’s, Inc. Class A | 1,176 | 86,412 | ||||||
Edison International | 3,005 | 226,607 | ||||||
Eli Lilly & Co. | 1,155 | 151,802 | ||||||
Encompass Health Corp. | 2,871 | 198,874 | ||||||
F5 Networks, Inc. (*) | 1,546 | 215,899 | ||||||
Hanesbrands, Inc. | 11,101 | 164,850 | ||||||
HCA Healthcare, Inc. | 1,176 | 173,825 | ||||||
HEICO Corp., Class A | 1,852 | 165,810 | ||||||
Intel Corp. | 3,627 | 217,076 | ||||||
Intercontinental Exchange, Inc. | 2,574 | 238,224 | ||||||
Intuit, Inc. | 683 | 178,898 | ||||||
Johnson & Johnson | 3,789 | 552,701 | ||||||
KAR Auction Services, Inc. | 12,840 | 279,784 | ||||||
Kimberly-Clark Corp. | 1,297 | 178,402 | ||||||
Life Storage, Inc. REIT | 1,240 | 134,267 | ||||||
Lockheed Martin Corp. | 1,021 | 397,557 | ||||||
Lululemon Athletica, Inc. (*) | 498 | 115,372 | ||||||
MasTec, Inc. (*) | 1,393 | 89,375 | ||||||
McGrath RentCorp | 1,314 | 100,574 | ||||||
Mellanox Technologies, Ltd. (*) | 840 | 98,431 | ||||||
Merck & Co., Inc. | 4,831 | 439,379 | ||||||
Morgan Stanley | 3,298 | 168,594 | ||||||
Morningstar, Inc. | 538 | 81,405 | ||||||
Nasdaq, Inc. | 1,040 | 111,384 | ||||||
National Fuel Gas Co. | 4,554 | 211,943 | ||||||
National Retail Properties, Inc. REIT | 6,009 | 322,203 | ||||||
NIKE, Inc., Class B | 4,393 | 445,055 | ||||||
Nordstrom, Inc. | 2,338 | 95,694 | ||||||
Northrop Grumman Corp. | 805 | 276,896 | ||||||
O-I Glass, Inc. | 8,689 | 103,660 | ||||||
PennyMac Financial Services, Inc. | 2,201 | 74,922 | ||||||
PepsiCo, Inc. | 3,835 | 524,129 | ||||||
Pfizer, Inc. | 3,205 | 125,572 |
The accompanying notes are an integral part of these financial statements.
Annual Report 139
Description | Shares | Fair Value | ||||||
Lazard Managed Equity Volatility Portfolio (continued) | ||||||||
Premier, Inc., Class A (*) | 8,090 | $ | 306,449 | |||||
Public Service Enterprise Group, Inc. | 5,254 | 310,249 | ||||||
PulteGroup, Inc. | 2,145 | 83,226 | ||||||
QUALCOMM, Inc. | 1,104 | 97,406 | ||||||
Rambus, Inc. (*) | 5,955 | 82,030 | ||||||
Raytheon Co. | 353 | 77,568 | ||||||
Realty Income Corp. REIT | 1,069 | 78,710 | ||||||
Regions Financial Corp. | 5,127 | 87,979 | ||||||
Republic Services, Inc. | 4,901 | 439,277 | ||||||
Ross Stores, Inc. | 1,587 | 184,759 | ||||||
Simon Property Group, Inc. REIT | 3,162 | 471,012 | ||||||
Synchrony Financial | 1,829 | 65,862 | ||||||
T-Mobile US, Inc. (*) | 854 | 66,971 | ||||||
Take-Two Interactive Software, Inc. (*) | 646 | 79,090 | ||||||
Target Corp. | 1,683 | 215,777 | ||||||
TD Ameritrade Holding Corp. | 1,951 | 96,965 | ||||||
TE Connectivity, Ltd. | 752 | 72,072 | ||||||
The Coca-Cola Co. | 2,517 | 139,316 | ||||||
The Estee Lauder Cos., Inc., Class A | 1,245 | 257,142 | ||||||
The Hershey Co. | 3,605 | 529,863 | ||||||
The Procter & Gamble Co. | 4,584 | 572,542 | ||||||
The TJX Cos., Inc. | 8,885 | 542,518 | ||||||
UnitedHealth Group, Inc. | 833 | 244,885 | ||||||
Urban Outfitters, Inc. (*) | 3,190 | 88,586 | ||||||
Verizon Communications, Inc. | 8,532 | 523,865 | ||||||
Vulcan Materials Co. | 593 | 85,386 | ||||||
Walmart, Inc. | 1,384 | 164,475 | ||||||
Warrior Met Coal, Inc. | 4,438 | 93,775 | ||||||
Waste Management, Inc. | 4,379 | 499,031 | ||||||
Williams-Sonoma, Inc. | 1,149 | 84,383 | ||||||
WW Grainger, Inc. | 447 | 151,318 | ||||||
Zoetis, Inc. | 1,506 | 199,319 | ||||||
18,320,592 | ||||||||
Total Common Stocks (Cost $31,626,706) | 34,282,903 |
The accompanying notes are an integral part of these financial statements.
140 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Managed Equity Volatility Portfolio (concluded) | ||||||||
Short-Term Investments | 0.9% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $296,401) | 296,401 | $ | 296,401 | |||||
Total Investments | 100.0% (Cost $31,923,107) | $ | 34,579,304 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.0% | 6,604 | |||||||
Net Assets | 100.0% | $ | 34,585,908 |
The accompanying notes are an integral part of these financial statements.
Annual Report 141
The accompanying notes are an integral part of these financial statements.
142 Annual Report
Description | Shares | Fair Value | ||||||
Lazard US Equity Concentrated Portfolio (concluded) | ||||||||
IT Services | 5.1% | ||||||||
Fiserv, Inc. (*) | 384,357 | $ | 44,443,200 | |||||
Sabre Corp. | 1,008,800 | 22,637,472 | ||||||
67,080,672 | ||||||||
Leisure Products | 1.8% | ||||||||
Brunswick Corp. | 390,200 | 23,404,196 | ||||||
Pharmaceuticals | 3.3% | ||||||||
Elanco Animal Health, Inc. (*) | 1,463,953 | 43,113,416 | ||||||
Semiconductors & Semiconductor Equipment | 11.7% | ||||||||
Analog Devices, Inc. | 545,663 | 64,846,591 | ||||||
Skyworks Solutions, Inc. | 742,849 | 89,795,587 | ||||||
154,642,178 | ||||||||
Specialty Retail | 3.9% | ||||||||
Lowe’s Cos., Inc. | 433,954 | 51,970,331 | ||||||
Total Common Stocks (Cost $977,915,943) | 1,268,858,540 | |||||||
Short-Term Investments | 4.4% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $58,612,549) | 58,612,549 | 58,612,549 | ||||||
Total Investments | 100.5% (Cost $1,036,528,492) | $ | 1,327,471,089 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.5)% | (7,031,126 | ) | ||||||
Net Assets | 100.0% | $ | 1,320,439,963 |
The accompanying notes are an integral part of these financial statements.
Annual Report 143
The accompanying notes are an integral part of these financial statements.
144 Annual Report
Description | Shares | Fair Value | ||||||
Lazard US Equity Focus Portfolio (continued) | ||||||||
Industrial Conglomerates | 4.1% | ||||||||
Honeywell International, Inc. | 10,413 | $ | 1,843,101 | |||||
Insurance | 3.1% | ||||||||
Aon PLC | 6,655 | 1,386,170 | ||||||
Interactive Media & Services | 5.9% | ||||||||
Alphabet, Inc., Class A (*) | 1,947 | 2,607,792 | ||||||
IT Services | 3.9% | ||||||||
Visa, Inc., Class A | 9,315 | 1,750,289 | ||||||
Machinery | 1.2% | ||||||||
Caterpillar, Inc. | 3,510 | 518,357 | ||||||
Oil, Gas & Consumable Fuels | 2.3% | ||||||||
ConocoPhillips | 15,605 | 1,014,793 | ||||||
Pharmaceuticals | 7.7% | ||||||||
Elanco Animal Health, Inc. (*) | 22,405 | 659,827 | ||||||
Johnson & Johnson | 18,875 | 2,753,296 | ||||||
3,413,123 | ||||||||
Road & Rail | 3.2% | ||||||||
Norfolk Southern Corp. | 7,219 | 1,401,424 | ||||||
Semiconductors & Semiconductor Equipment | 3.8% | ||||||||
Analog Devices, Inc. | 14,278 | 1,696,798 | ||||||
Software | 4.9% | ||||||||
Microsoft Corp. | 13,820 | 2,179,414 | ||||||
Specialty Retail | 6.5% | ||||||||
Lowe’s Cos., Inc. | 13,785 | 1,650,891 | ||||||
Ross Stores, Inc. | 10,509 | 1,223,458 | ||||||
2,874,349 |
The accompanying notes are an integral part of these financial statements.
Annual Report 145
Description | Shares | Fair Value | ||||||
Lazard US Equity Focus Portfolio (concluded) | ||||||||
Technology Hardware, Storage & Peripherals | 5.4% | ||||||||
Apple, Inc. | 8,111 | $ | 2,381,795 | |||||
Total Common Stocks (Cost $30,391,241) | 42,471,671 | |||||||
Short-Term Investments | 4.3% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $1,920,052) | 1,920,052 | 1,920,052 | ||||||
Total Investments | 100.0% (Cost $32,311,293) | $ | 44,391,723 | ||||||
Liabilities in Excess of Cash and Other Assets | 0.0% | (5,030 | ) | ||||||
Net Assets | 100.0% | $ | 44,386,693 |
The accompanying notes are an integral part of these financial statements.
146 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 147
Description | Shares | Fair Value | ||||||
Lazard US Realty Equity Portfolio (concluded) | ||||||||
Vornado Realty Trust | 15,467 | $ | 1,028,555 | |||||
Weyerhaeuser Co. | 42,594 | 1,286,339 | ||||||
Total Real Estate Investment Trusts (Cost $35,475,205) | 42,361,550 | |||||||
Short-Term Investments | 1.4% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $600,821) | 600,821 | 600,821 | ||||||
Total Investments | 99.8% (Cost $36,725,443) | $ | 44,021,229 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.2% | 98,582 | |||||||
Net Assets | 100.0% | $ | 44,119,811 |
The accompanying notes are an integral part of these financial statements.
148 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 149
Description | Shares | Fair Value | ||||||
Lazard US Small-Mid Cap Equity Portfolio (continued) | ||||||||
Chemicals | 2.5% | ||||||||
Ingevity Corp. (*) | 18,390 | $ | 1,606,918 | |||||
Innospec, Inc. | 14,630 | 1,513,327 | ||||||
3,120,245 | ||||||||
Commercial Services & Supplies | 1.0% | ||||||||
The Brink’s Co. | 13,830 | 1,254,104 | ||||||
Communications Equipment | 3.1% | ||||||||
Ciena Corp. (*) | 45,005 | 1,921,263 | ||||||
F5 Networks, Inc. (*) | 13,680 | 1,910,412 | ||||||
3,831,675 | ||||||||
Construction & Engineering | 2.7% | ||||||||
Comfort Systems USA, Inc. | 29,335 | 1,462,350 | ||||||
Valmont Industries, Inc. | 12,240 | 1,833,307 | ||||||
3,295,657 | ||||||||
Construction Materials | 1.2% | ||||||||
Eagle Materials, Inc. | 16,805 | 1,523,541 | ||||||
Containers & Packaging | 1.5% | ||||||||
Graphic Packaging Holding Co. | 111,230 | 1,851,980 | ||||||
Electric Utilities | 2.9% | ||||||||
OGE Energy Corp. | 36,465 | 1,621,599 | ||||||
PNM Resources, Inc. | 38,430 | 1,948,785 | ||||||
3,570,384 | ||||||||
Electrical Equipment | 2.6% | ||||||||
Atkore International Group, Inc. (*) | 41,210 | 1,667,356 | ||||||
EnerSys | 20,855 | 1,560,580 | ||||||
3,227,936 | ||||||||
Electronic Equipment, Instruments & Components | 1.1% | ||||||||
FLIR Systems, Inc. | 26,485 | 1,379,074 | ||||||
Energy Equipment & Services | 1.1% | ||||||||
Cactus, Inc., Class A | 38,540 | 1,322,693 |
The accompanying notes are an integral part of these financial statements.
150 Annual Report
Description | Shares | Fair Value | ||||||
Lazard US Small-Mid Cap Equity Portfolio (continued) | ||||||||
Entertainment | 2.1% | ||||||||
Take-Two Interactive Software, Inc. (*) | 9,255 | $ | 1,133,089 | |||||
The Marcus Corp. | 46,675 | 1,482,865 | ||||||
2,615,954 | ||||||||
Equity Real Estate Investment Trusts (REITs) | 11.6% | ||||||||
Alexandria Real Estate Equities, Inc. | 13,225 | 2,136,895 | ||||||
Brixmor Property Group, Inc. | 80,680 | 1,743,495 | ||||||
Camden Property Trust | 22,830 | 2,422,263 | ||||||
Healthcare Realty Trust, Inc. | 41,240 | 1,376,179 | ||||||
Hudson Pacific Properties, Inc. | 49,455 | 1,861,981 | ||||||
Kilroy Realty Corp. | 24,330 | 2,041,287 | ||||||
PS Business Parks, Inc. | 16,360 | 2,697,273 | ||||||
14,279,373 | ||||||||
Food Products | 1.4% | ||||||||
The Simply Good Foods Co. (*) | 60,025 | 1,713,114 | ||||||
Health Care Equipment & Supplies | 3.2% | ||||||||
Envista Holdings Corp.(*) | 67,860 | 2,011,371 | ||||||
STERIS PLC | 12,565 | 1,915,157 | ||||||
3,926,528 | ||||||||
Health Care Providers & Services | 2.9% | ||||||||
Henry Schein, Inc. (*) | 24,075 | 1,606,284 | ||||||
Laboratory Corp. of America Holdings (*) | 11,545 | 1,953,068 | ||||||
3,559,352 | ||||||||
Hotels, Restaurants & Leisure | 2.4% | ||||||||
Penn National Gaming, Inc. (*) | 67,035 | 1,713,414 | ||||||
The Cheesecake Factory, Inc. | 32,645 | 1,268,585 | ||||||
2,981,999 | ||||||||
Household Durables | 0.9% | ||||||||
Leggett & Platt, Inc. | 22,140 | 1,125,376 | ||||||
Insurance | 5.0% | ||||||||
Arch Capital Group, Ltd. (*) | 46,160 | 1,979,802 | ||||||
Brown & Brown, Inc. | 46,945 | 1,853,389 | ||||||
Reinsurance Group of America, Inc. | 14,020 | 2,286,101 | ||||||
6,119,292 |
The accompanying notes are an integral part of these financial statements.
Annual Report 151
Description | Shares | Fair Value | ||||||
Lazard US Small-Mid Cap Equity Portfolio (continued) | ||||||||
Interactive Media & Services | 0.7% | ||||||||
Cars.com, Inc. (*) | 69,500 | $ | 849,290 | |||||
IT Services | 3.1% | ||||||||
Leidos Holdings, Inc. | 24,355 | 2,384,111 | ||||||
Sabre Corp. | 61,555 | 1,381,294 | ||||||
3,765,405 | ||||||||
Leisure Products | 1.5% | ||||||||
Brunswick Corp. | 30,045 | 1,802,099 | ||||||
Life Sciences Tools & Services | 1.7% | ||||||||
Adaptive Biotechnologies Corp. (*) | 20,350 | 608,872 | ||||||
Charles River Laboratories International, Inc. (*) | 9,355 | 1,429,070 | ||||||
2,037,942 | ||||||||
Machinery | 2.4% | ||||||||
Gardner Denver Holdings, Inc. (*) | 39,590 | 1,452,161 | ||||||
TriMas Corp. (*) | 46,925 | 1,473,914 | ||||||
2,926,075 | ||||||||
Oil, Gas & Consumable Fuels | 1.8% | ||||||||
Parsley Energy, Inc., Class A | 113,700 | 2,150,067 | ||||||
Pharmaceuticals | 1.4% | ||||||||
Catalent, Inc. (*) | 29,505 | 1,661,132 | ||||||
Professional Services | 1.1% | ||||||||
FTI Consulting, Inc. (*) | 12,360 | 1,367,758 | ||||||
Semiconductors & Semiconductor Equipment | 3.5% | ||||||||
Cabot Microelectronics Corp. | 7,750 | 1,118,480 | ||||||
Maxim Integrated Products, Inc. | 32,010 | 1,968,935 | ||||||
MKS Instruments, Inc. | 11,465 | 1,261,265 | ||||||
4,348,680 | ||||||||
Software | 4.9% | ||||||||
j2 Global, Inc. | 18,245 | 1,709,739 | ||||||
PTC, Inc. (*) | 14,160 | 1,060,442 | ||||||
RealPage, Inc. (*) | 31,045 | 1,668,669 |
The accompanying notes are an integral part of these financial statements.
152 Annual Report
Description | Shares | Fair Value | ||||||
Lazard US Small-Mid Cap Equity Portfolio (concluded) | ||||||||
SolarWinds Corp. (*) | 81,660 | $ | 1,514,793 | |||||
5,953,643 | ||||||||
Specialty Retail | 2.5% | ||||||||
Floor & Decor Holdings, Inc., Class A (*) | 33,790 | 1,716,870 | ||||||
The Children’s Place, Inc. | 21,000 | 1,312,920 | ||||||
3,029,790 | ||||||||
Textiles, Apparel & Luxury Goods | 2.4% | ||||||||
Carter’s, Inc. | 12,330 | 1,348,162 | ||||||
Tapestry, Inc. | 60,170 | 1,622,785 | ||||||
2,970,947 | ||||||||
Trading Companies & Distributors | 1.5% | ||||||||
Air Lease Corp. | 38,595 | 1,834,034 | ||||||
Total Common Stocks (Cost $105,472,903) | 120,727,428 | |||||||
Total Investments | 98.3% (Cost $105,472,903) | $ | 120,727,428 | ||||||
Cash and Other Assets in Excess of Liabilities | 1.7% | 2,026,884 | |||||||
Net Assets | 100.0% | $ | 122,754,312 |
The accompanying notes are an integral part of these financial statements.
Annual Report 153
The Lazard Funds, Inc.Notes to Portfolios of Investments
December 31, 2019
(*) | 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 9 in the Notes to Financial Statements. |
(#) | Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.” At December 31, 2019, these securities amounted to 0.8% of net assets of Emerging Markets Equity Advantage Portfolio. |
(») | The portfolio, at all times, maintains portfolio securities in sufficient amount to cover its obligations related to investments in forward currency contracts. |
Security Abbreviations:
ADR | — | American Depositary Receipt |
GDR | — | Global Depositary Receipt |
NVDR | — | Non- Voting Depository Receipt |
PJSC | — | Public Joint Stock Company |
REIT | — | Real Estate Investment Trust |
Currency Abbreviations:
AUD | — | Australian Dollar | GBP | — | British Pound Sterling |
CAD | — | Canadian Dollar | HKD | — | Hong Kong Dollar |
EUR | — | Euro | USD | — | United States Dollar |
Counterparty Abbreviations:
BNP | — | BNP Paribas SA | MEL | — | The Bank of New York Mellon Corp. |
CAN | — | Canadian Imperial | RBC | — | Royal Bank of Canada |
Bank of Commerce | SCB | — | Standard Chartered Bank | ||
CIT | — | Citibank NA | SSB | — | State Street Bank and Trust Co. |
HSB | — | HSBC Bank USA NA |
The accompanying notes are an integral part of these financial statements.
154 Annual Report
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Annual Report 155
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country:
Industry† | Lazard Developing Markets Equity Portfolio | Lazard Emerging Markets Core Equity Portfolio | Lazard Emerging Markets Equity Advantage Portfolio | Lazard Emerging Markets Equity Blend Portfolio | |||||||||||||
Common & Preferred Stocks | |||||||||||||||||
Aerospace & Defense | — | % | — | % | 0.2 | % | — | % | |||||||||
Air Freight & Logistics | 1.1 | — | — | 1.3 | |||||||||||||
Airlines | — | 1.1 | 0.6 | — | |||||||||||||
Auto Components | — | 0.6 | 0.3 | 1.0 | |||||||||||||
Automobiles | — | 1.0 | 1.0 | 0.8 | |||||||||||||
Banks | 24.4 | 19.7 | 16.5 | 24.7 | |||||||||||||
Beverages | 1.2 | 1.9 | 0.2 | 1.4 | |||||||||||||
Biotechnology | — | — | 0.1 | — | |||||||||||||
Building Products | — | — | 0.5 | — | |||||||||||||
Capital Markets | — | 1.3 | — | — | |||||||||||||
Chemicals | 0.7 | 3.4 | 0.9 | 0.5 | |||||||||||||
Commercial Services & Suppliers | 0.8 | — | 0.2 | 0.8 | |||||||||||||
Communications Equipment | — | — | 0.3 | — | |||||||||||||
Construction & Engineering | 1.1 | — | 0.4 | 1.1 | |||||||||||||
Construction Materials | 0.8 | 1.7 | 2.2 | 1.5 | |||||||||||||
Consumer Finance | 1.2 | — | 0.2 | 0.4 | |||||||||||||
Containers & Packaging | — | — | — | 0.1 | |||||||||||||
Distributors | — | — | — | — | |||||||||||||
Diversified Consumer Services | 2.0 | 1.8 | 1.1 | 0.2 | |||||||||||||
Diversified Financial Services | — | — | 2.0 | — | |||||||||||||
Diversified Telecommunication Services | — | 1.9 | 3.1 | 0.8 | |||||||||||||
Electric Utilities | — | — | 0.8 | — | |||||||||||||
Electrical Equipment | 1.5 | — | — | 0.3 | |||||||||||||
Electronic Equipment, Instruments & Components | 1.6 | 1.2 | 1.4 | 3.3 | |||||||||||||
Energy Equipment & Services | — | 0.4 | — | — | |||||||||||||
Entertainment | 4.0 | 3.1 | 1.4 | 4.3 | |||||||||||||
Equity Real Estate Investment Trusts (REITs) | — | — | — | — | |||||||||||||
Food & Staples Retailing | — | — | 1.9 | 0.4 | |||||||||||||
Food Products | — | 0.7 | 1.7 | 0.7 | |||||||||||||
Gas Utilities | 0.9 | 0.9 | 1.4 | 0.2 | |||||||||||||
Health Care Equipment & Supplies | — | — | 0.2 | 0.5 | |||||||||||||
Health Care Providers & Services | 1.4 | 0.5 | 0.2 | 0.1 | |||||||||||||
Health Care Technology | — | — | — | — | |||||||||||||
Hotels, Restaurants & Leisure | 0.7 | — | 0.4 | 0.5 | |||||||||||||
Household Durables | — | 1.3 | 0.7 | 0.2 | |||||||||||||
Household Products | — | — | 0.2 | 0.5 | |||||||||||||
Independent Power & Renewable Electricity Producers | — | — | — | — |
The accompanying notes are an integral part of these financial statements.
156 Annual Report
Lazard Emerging Markets Equity Portfolio | Lazard Equity Franchise Portfolio | Lazard Global Equity Select Portfolio | Lazard Global Listed Infrastructure Portfolio | Lazard Global Strategic Equity Portfolio | |||||||||||||||
— | % | — | % | 1.1 | % | — | % | 6.9 | % | ||||||||||
— | — | — | — | 1.0 | |||||||||||||||
— | — | — | — | 1.5 | |||||||||||||||
1.4 | — | — | — | — | |||||||||||||||
3.0 | — | — | — | 0.8 | |||||||||||||||
25.3 | — | 5.2 | — | 6.2 | |||||||||||||||
0.6 | 6.0 | 7.5 | — | 3.9 | |||||||||||||||
— | — | — | — | 1.4 | |||||||||||||||
— | — | 0.8 | — | — | |||||||||||||||
— | — | 4.9 | — | 8.4 | |||||||||||||||
0.8 | — | 2.1 | — | 1.5 | |||||||||||||||
— | 7.0 | — | — | — | |||||||||||||||
— | 3.1 | 2.9 | — | — | |||||||||||||||
— | — | — | 9.7 | — | |||||||||||||||
2.5 | — | — | — | — | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | 6.0 | — | — | — | |||||||||||||||
— | — | — | — | — | |||||||||||||||
2.1 | — | — | — | — | |||||||||||||||
— | 1.6 | — | 10.4 | — | |||||||||||||||
— | — | 3.1 | — | 0.8 | |||||||||||||||
2.5 | 4.6 | 1.1 | — | 0.5 | |||||||||||||||
— | — | — | — | — | |||||||||||||||
1.6 | — | 1.1 | — | 6.3 | |||||||||||||||
— | — | — | — | — | |||||||||||||||
1.6 | — | — | — | 1.1 | |||||||||||||||
— | — | — | — | — | |||||||||||||||
0.7 | — | — | 7.4 | — | |||||||||||||||
— | 1.1 | 3.1 | — | 6.1 | |||||||||||||||
1.0 | 21.5 | — | — | — | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | 7.2 | 2.9 | — | — | |||||||||||||||
1.1 | — | — | — | — | |||||||||||||||
0.7 | — | 2.9 | — | — | |||||||||||||||
— | — | — | — | — |
Annual Report 157
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country (continued):
Industry† | Lazard Developing Markets Equity Portfolio | Lazard Emerging Markets Core Equity Portfolio | Lazard Emerging Markets Equity Advantage Portfolio | Lazard Emerging Markets Equity Blend Portfolio | |||||||||||||
Industrial Conglomerates | — | % | 0.9 | % | 1.5 | % | 1.1 | % | |||||||||
Insurance | 1.7 | 5.7 | 3.9 | 2.4 | |||||||||||||
Interactive Media & Services | 10.9 | 6.8 | 5.5 | 5.0 | |||||||||||||
Internet & Direct Marketing Retail | 6.0 | 7.6 | 6.8 | 3.1 | |||||||||||||
IT Services | 2.1 | 1.1 | 2.7 | 3.4 | |||||||||||||
Leisure Products | — | — | — | 0.2 | |||||||||||||
Life Sciences Tools & Services | 0.9 | 0.5 | — | — | |||||||||||||
Machinery | 4.0 | 1.2 | 1.2 | 2.0 | |||||||||||||
Marine | — | — | 0.2 | 0.3 | |||||||||||||
Media | — | — | 0.2 | 0.7 | |||||||||||||
Metals & Mining | 3.4 | 2.9 | 3.7 | 1.7 | |||||||||||||
Multiline Retail | — | — | 0.2 | — | |||||||||||||
Multi-Utilities | — | — | — | — | |||||||||||||
Oil, Gas & Consumable Fuels | 7.6 | 6.5 | 7.7 | 5.5 | |||||||||||||
Paper & Forest Products | 1.0 | 1.3 | — | — | |||||||||||||
Personal Products | — | 1.5 | 0.5 | 0.7 | |||||||||||||
Pharmaceuticals | — | — | 1.8 | 0.7 | |||||||||||||
Professional Services | — | — | — | 0.2 | |||||||||||||
Real Estate Management & Development | — | 1.9 | 3.2 | 0.2 | |||||||||||||
Road & Rail | 2.2 | 1.3 | — | 0.4 | |||||||||||||
Semiconductors & Semiconductor Equipment | 6.7 | 7.4 | 7.8 | 7.4 | |||||||||||||
Software | — | — | 0.2 | — | |||||||||||||
Specialty Retail | 1.4 | 1.0 | 1.8 | 0.9 | |||||||||||||
Technology Hardware, Storage & Peripherals | 5.9 | 5.6 | 6.7 | 5.1 | |||||||||||||
Textiles, Apparel & Luxury Goods | — | 1.8 | 1.1 | 1.0 | |||||||||||||
Thrifts & Mortgage Finance | — | — | — | — | |||||||||||||
Tobacco | — | — | 1.2 | 0.5 | |||||||||||||
Trading Companies & Distributors | — | 0.4 | — | — | |||||||||||||
Transportation Infrastructure | 0.3 | 1.6 | 1.3 | 1.7 | |||||||||||||
Water Utilities | 0.8 | — | — | 1.1 | |||||||||||||
Wireless Telecommunication Services | — | 0.8 | 1.9 | 3.3 | |||||||||||||
Subtotal | 98.3 | 100.3 | 101.2 | 94.2 | |||||||||||||
Short-Term Investments | 1.8 | 0.8 | 0.4 | 5.8 | |||||||||||||
Total Investments | 100.1 | % | 101.1 | % | 101.6 | % | 100.0 | % |
† | Industry classifications may be different than those used for compliance monitoring purposes. |
The accompanying notes are an integral part of these financial statements.
158 Annual Report
Lazard Emerging Markets Equity Portfolio | Lazard Equity Franchise Portfolio | Lazard Global Equity Select Portfolio | Lazard Global Listed Infrastructure Portfolio | Lazard Global Strategic Equity Portfolio | |||||||||||||||
2.0 | % | — | % | 1.9 | % | — | % | — | % | ||||||||||
3.4 | — | 6.3 | — | 6.2 | |||||||||||||||
1.0 | 1.0 | 4.7 | — | 7.0 | |||||||||||||||
— | — | 0.9 | — | 1.9 | |||||||||||||||
4.6 | 4.8 | 4.3 | — | 6.9 | |||||||||||||||
— | — | 1.3 | — | 0.9 | |||||||||||||||
— | — | 5.5 | — | 2.7 | |||||||||||||||
2.2 | — | 1.9 | — | — | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | 7.1 | — | 5.5 | 1.4 | |||||||||||||||
3.1 | — | — | — | 0.9 | |||||||||||||||
— | — | 2.3 | — | 1.5 | |||||||||||||||
— | 1.0 | — | 12.9 | 1.5 | |||||||||||||||
9.4 | — | — | — | 1.3 | |||||||||||||||
0.9 | — | — | — | — | |||||||||||||||
2.2 | — | 3.7 | — | 1.2 | |||||||||||||||
— | — | 6.4 | — | 3.4 | |||||||||||||||
— | 7.2 | 5.8 | — | 3.0 | |||||||||||||||
— | — | 0.1 | — | — | |||||||||||||||
— | 3.0 | 1.6 | 20.1 | 0.9 | |||||||||||||||
7.4 | — | 3.9 | — | 2.8 | |||||||||||||||
— | 3.9 | 6.2 | — | 8.1 | |||||||||||||||
— | 1.0 | 1.0 | — | — | |||||||||||||||
5.6 | — | — | — | — | |||||||||||||||
— | 4.6 | — | — | — | |||||||||||||||
— | — | — | — | — | |||||||||||||||
1.1 | — | — | — | — | |||||||||||||||
— | — | 0.6 | — | 1.4 | |||||||||||||||
1.8 | 4.0 | — | 14.2 | — | |||||||||||||||
— | 3.4 | — | 12.9 | — | |||||||||||||||
7.3 | — | — | — | — | |||||||||||||||
96.9 | 99.1 | 97.1 | 93.1 | 99.4 | |||||||||||||||
3.4 | 0.8 | 2.8 | 7.0 | 1.0 | |||||||||||||||
100.3 | % | 99.9 | % | 99.9 | % | 100.1 | % | 100.4 | % |
Annual Report 159
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country (continued):
Industry† | Lazard International Equity Advantage Portfolio | Lazard International Equity Concentrated Portfolio | Lazard International Equity Portfolio | Lazard International Equity Select Portfolio | |||||||||||||
Common & Preferred Stocks | |||||||||||||||||
Aerospace & Defense | 1.7 | % | 4.8 | % | 2.4 | % | 2.7 | % | |||||||||
Air Freight & Logistics | — | — | — | — | |||||||||||||
Airlines | 2.2 | 2.5 | 1.4 | 1.2 | |||||||||||||
Auto Components | 1.1 | — | — | — | |||||||||||||
Automobiles | 2.2 | 4.3 | 3.4 | 3.0 | |||||||||||||
Banks | 7.6 | 4.9 | 9.3 | 9.9 | |||||||||||||
Beverages | 0.4 | 5.0 | 2.9 | 1.2 | |||||||||||||
Biotechnology | 1.0 | — | — | 0.7 | |||||||||||||
Building Products | 0.3 | — | 2.2 | 1.5 | |||||||||||||
Capital Markets | 1.8 | — | 1.1 | — | |||||||||||||
Chemicals | 2.5 | — | 4.7 | 3.2 | |||||||||||||
Commercial Services & Suppliers | 0.1 | — | — | — | |||||||||||||
Communications Equipment | — | — | — | — | |||||||||||||
Construction & Engineering | 0.2 | — | 1.1 | 1.0 | |||||||||||||
Construction Materials | — | — | — | — | |||||||||||||
Consumer Finance | — | — | — | — | |||||||||||||
Containers & Packaging | — | — | — | — | |||||||||||||
Distributors | 0.1 | — | — | — | |||||||||||||
Diversified Consumer Services | 0.2 | — | — | — | |||||||||||||
Diversified Financial Services | 1.9 | — | — | — | |||||||||||||
Diversified Telecommunication Services | 0.6 | — | 2.0 | 2.1 | |||||||||||||
Electric Utilities | 4.5 | — | 0.8 | 0.7 | |||||||||||||
Electrical Equipment | 2.2 | 3.9 | 2.1 | 2.6 | |||||||||||||
Electronic Equipment, Instruments & Components | 1.0 | 5.3 | 2.1 | 1.3 | |||||||||||||
Energy Equipment & Services | 0.1 | — | — | — | |||||||||||||
Entertainment | 0.6 | — | 5.2 | 3.4 | |||||||||||||
Equity Real Estate Investment Trusts (REITs) | 0.3 | — | — | — | |||||||||||||
Food & Staples Retailing | 1.9 | — | 1.7 | 1.4 | |||||||||||||
Food Products | 4.3 | 3.3 | 1.2 | 1.0 | |||||||||||||
Gas Utilities | — | — | — | 1.2 | |||||||||||||
Health Care Equipment & Supplies | 1.7 | 3.6 | 3.0 | 3.3 | |||||||||||||
Health Care Providers & Services | — | 2.5 | �� | 1.4 | — | ||||||||||||
Health Care Technology | — | — | — | — | |||||||||||||
Hotels, Restaurants & Leisure | 2.7 | — | 0.9 | 1.0 | |||||||||||||
Household Durables | — | — | — | — | |||||||||||||
Household Products | — | — | — | — | |||||||||||||
Independent Power & Renewable Electricity Producers | — | — | — | — |
The accompanying notes are an integral part of these financial statements.
160 Annual Report
Lazard International Equity Value Portfolio | Lazard International Quality Growth Portfolio | Lazard International Small Cap Equity Portfolio | Lazard International Strategic Equity Portfolio | Lazard Managed Equity Volatility Portfolio | |||||||||||||||
3.1 | % | 2.4 | % | — | % | 7.2 | % | 2.7 | % | ||||||||||
4.0 | — | 1.9 | — | — | |||||||||||||||
5.2 | — | — | 2.4 | 1.9 | |||||||||||||||
— | — | 1.2 | — | 0.5 | |||||||||||||||
6.2 | — | — | 4.1 | — | |||||||||||||||
8.2 | 6.1 | 2.1 | 8.1 | 4.0 | |||||||||||||||
6.3 | 3.0 | 2.5 | 6.5 | 1.9 | |||||||||||||||
— | 2.2 | — | 1.4 | 1.8 | |||||||||||||||
3.1 | 4.9 | 3.7 | 0.1 | — | |||||||||||||||
2.0 | 7.3 | 4.7 | 4.9 | 2.4 | |||||||||||||||
2.9 | 2.1 | — | — | 0.3 | |||||||||||||||
— | — | 3.2 | — | 4.1 | |||||||||||||||
— | — | — | — | 0.6 | |||||||||||||||
— | — | — | — | 0.6 | |||||||||||||||
— | — | — | — | 0.2 | |||||||||||||||
— | — | — | 0.9 | 0.2 | |||||||||||||||
— | — | — | — | 0.6 | |||||||||||||||
— | — | — | — | 0.3 | |||||||||||||||
— | — | — | — | — | |||||||||||||||
2.9 | — | 4.0 | — | 0.4 | |||||||||||||||
— | — | 1.7 | — | 2.7 | |||||||||||||||
— | — | — | 1.0 | 3.0 | |||||||||||||||
— | 2.2 | 1.0 | 3.1 | — | |||||||||||||||
5.4 | 1.8 | 4.0 | 1.1 | 0.8 | |||||||||||||||
— | — | 2.5 | — | — | |||||||||||||||
7.2 | 2.2 | 1.5 | 5.8 | 0.2 | |||||||||||||||
— | — | 2.3 | — | 5.4 | |||||||||||||||
— | 2.8 | 2.5 | 0.3 | 4.0 | |||||||||||||||
— | 0.7 | 0.9 | — | 2.6 | |||||||||||||||
— | — | 0.8 | — | 0.6 | |||||||||||||||
— | 4.2 | — | 3.7 | 0.7 | |||||||||||||||
— | — | 2.0 | — | 3.6 | |||||||||||||||
— | — | 1.0 | — | — | |||||||||||||||
8.1 | 2.1 | 4.7 | — | 2.6 | |||||||||||||||
3.7 | — | 1.9 | — | 0.2 | |||||||||||||||
— | 1.5 | — | — | 2.6 | |||||||||||||||
— | — | — | — | 0.8 |
Annual Report 161
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country (continued):
Industry† | Lazard International Equity Advantage Portfolio | Lazard International Equity Concentrated Portfolio | Lazard International Equity Portfolio | Lazard International Equity Select Portfolio | |||||||||||||
Industrial Conglomerates | 1.0 | % | — | % | — | % | — | % | |||||||||
Insurance | 6.0 | 13.3 | 7.7 | 11.0 | |||||||||||||
Interactive Media & Services | 0.6 | 3.3 | — | 3.3 | |||||||||||||
Internet & Direct Marketing Retail | 0.1 | — | — | — | |||||||||||||
IT Services | 0.9 | 2.1 | 0.5 | 2.1 | |||||||||||||
Leisure Products | 0.3 | — | 1.0 | — | |||||||||||||
Life Sciences Tools & Services | — | — | — | 1.0 | |||||||||||||
Machinery | 3.5 | 3.4 | 3.3 | 2.3 | |||||||||||||
Marine | — | — | — | — | |||||||||||||
Media | — | — | 1.4 | — | |||||||||||||
Metals & Mining | 4.0 | 1.2 | 2.0 | 1.2 | |||||||||||||
Multiline Retail | — | — | 0.9 | 1.1 | |||||||||||||
Multi-Utilities | — | 3.5 | 2.1 | 1.6 | |||||||||||||
Oil, Gas & Consumable Fuels | 4.7 | 6.3 | 6.1 | 5.6 | |||||||||||||
Paper & Forest Products | — | — | — | — | |||||||||||||
Personal Products | 3.9 | 2.9 | 2.6 | 4.0 | |||||||||||||
Pharmaceuticals | 9.8 | 4.5 | 5.9 | 5.3 | |||||||||||||
Professional Services | 1.6 | — | 3.7 | 3.5 | |||||||||||||
Real Estate Management & Development | 3.1 | 5.4 | 2.8 | 1.8 | |||||||||||||
Road & Rail | 1.7 | — | 1.1 | 0.9 | |||||||||||||
Semiconductors & Semiconductor Equipment | 2.4 | — | — | 1.6 | |||||||||||||
Software | 2.0 | 4.9 | 3.2 | 3.2 | |||||||||||||
Specialty Retail | 1.2 | — | — | 0.5 | |||||||||||||
Technology Hardware, Storage & Peripherals | 0.6 | 4.9 | 2.6 | 2.3 | |||||||||||||
Textiles, Apparel & Luxury Goods | 2.8 | — | — | — | |||||||||||||
Thrifts & Mortgage Finance | — | — | — | — | |||||||||||||
Tobacco | 1.5 | — | — | — | |||||||||||||
Trading Companies & Distributors | 0.8 | — | 1.8 | 1.0 | |||||||||||||
Transportation Infrastructure | — | — | — | — | |||||||||||||
Water Utilities | — | — | — | 0.7 | |||||||||||||
Wireless Telecommunication Services | 3.3 | — | — | — | |||||||||||||
Subtotal | 99.0 | 95.8 | 97.6 | 96.4 | |||||||||||||
Short-Term Investments | 1.6 | 4.0 | 2.5 | 1.4 | |||||||||||||
Total Investments | 100.6 | % | 99.8 | % | 100.1 | % | 97.8 | % |
† | Industry classifications may be different than those used for compliance monitoring purposes. |
The accompanying notes are an integral part of these financial statements.
162 Annual Report
Lazard International Equity Value Portfolio | Lazard International Quality Growth Portfolio | Lazard International Small Cap Equity Portfolio | Lazard International Strategic Equity Portfolio | Lazard Managed Equity Volatility Portfolio | |||||||||||||||
— | % | — | % | 1.1 | % | 0.7 | % | 0.7 | % | ||||||||||
3.8 | 7.4 | — | 9.1 | 6.6 | |||||||||||||||
— | 5.7 | 5.0 | 1.0 | 0.2 | |||||||||||||||
— | 2.2 | — | 1.1 | — | |||||||||||||||
5.0 | — | 3.4 | 2.5 | 1.3 | |||||||||||||||
2.9 | 1.2 | — | 1.1 | 0.3 | |||||||||||||||
— | 1.5 | 1.4 | — | — | |||||||||||||||
— | — | 5.2 | 3.1 | 0.4 | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | — | 2.0 | 2.6 | 1.2 | |||||||||||||||
— | — | 1.7 | 1.6 | 3.8 | |||||||||||||||
— | 3.0 | — | 0.8 | 1.4 | |||||||||||||||
4.6 | — | — | 2.3 | 2.8 | |||||||||||||||
4.3 | — | — | 3.6 | 1.7 | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | — | — | 3.8 | 1.2 | |||||||||||||||
— | 1.2 | 3.9 | 5.9 | 8.6 | |||||||||||||||
1.9 | 9.3 | 5.4 | 2.5 | 0.4 | |||||||||||||||
— | — | 9.9 | 2.2 | 1.7 | |||||||||||||||
— | 2.7 | — | — | 1.5 | |||||||||||||||
— | 5.9 | 0.7 | 1.2 | 1.4 | |||||||||||||||
— | 4.4 | 3.8 | 1.6 | 1.9 | |||||||||||||||
— | 1.6 | 2.0 | — | 4.6 | |||||||||||||||
— | — | — | — | 0.2 | |||||||||||||||
2.8 | 1.1 | 1.4 | — | 2.3 | |||||||||||||||
— | — | — | 1.1 | 0.2 | |||||||||||||||
— | — | — | — | 0.3 | |||||||||||||||
— | 4.5 | 1.0 | — | 0.4 | |||||||||||||||
— | — | — | — | — | |||||||||||||||
— | — | 1.1 | — | 0.4 | |||||||||||||||
4.4 | — | — | — | 1.3 | |||||||||||||||
98.0 | 97.2 | 99.1 | 98.4 | 99.1 | |||||||||||||||
2.1 | 1.4 | 0.8 | 1.7 | 0.9 | |||||||||||||||
100.1 | % | 98.6 | % | 99.9 | % | 100.1 | % | 100.0 | % |
Annual Report 163
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country (concluded):
Industry† | Lazard US Equity Concentrated Portfolio | Lazard US Equity Focus Portfolio | Lazard US Realty Equity Portfolio | Lazard US Small- Mid Cap Equity Portfolio | |||||||||||||
Common & Preferred Stocks | |||||||||||||||||
Aerospace & Defense | — | % | 2.3 | % | — | % | 1.3 | % | |||||||||
Air Freight & Logistics | — | — | — | 1.1 | |||||||||||||
Airlines | — | — | — | 1.4 | |||||||||||||
Auto Components | 2.1 | 1.2 | — | 0.7 | |||||||||||||
Automobiles | — | — | — | — | |||||||||||||
Banks | — | 7.5 | — | 8.0 | |||||||||||||
Beverages | 6.1 | 4.9 | — | — | |||||||||||||
Biotechnology | — | — | — | 2.5 | |||||||||||||
Building Products | 4.8 | — | — | 2.3 | |||||||||||||
Capital Markets | 9.4 | 4.5 | — | 3.3 | |||||||||||||
Chemicals | — | — | — | 2.5 | |||||||||||||
Commercial Services & Suppliers | — | — | — | 1.0 | |||||||||||||
Communications Equipment | 8.8 | 2.8 | — | 3.1 | |||||||||||||
Construction & Engineering | — | — | — | 2.7 | |||||||||||||
Construction Materials | 5.0 | — | — | 1.2 | |||||||||||||
Consumer Finance | — | — | — | — | |||||||||||||
Containers & Packaging | — | — | — | 1.5 | |||||||||||||
Distributors | — | — | — | — | |||||||||||||
Diversified Consumer Services | — | — | — | — | |||||||||||||
Diversified Financial Services | — | — | — | — | |||||||||||||
Diversified Telecommunication Services | — | — | — | — | |||||||||||||
Electric Utilities | — | — | — | 2.9 | |||||||||||||
Electrical Equipment | — | — | — | 2.6 | |||||||||||||
Electronic Equipment, Instruments & Components | — | — | — | 1.1 | |||||||||||||
Energy Equipment & Services | — | — | — | 1.1 | |||||||||||||
Entertainment | 2.8 | 1.7 | — | 2.1 | |||||||||||||
Equity Real Estate Investment Trusts (REITs) | — | — | 96.0 | 11.6 | |||||||||||||
Food & Staples Retailing | — | — | — | — | |||||||||||||
Food Products | — | — | — | 1.4 | |||||||||||||
Gas Utilities | — | — | — | — | |||||||||||||
Health Care Equipment & Supplies | 20.0 | 10.5 | — | 3.2 | |||||||||||||
Health Care Providers & Services | — | — | — | 2.9 | |||||||||||||
Health Care Technology | — | — | — | — | |||||||||||||
Hotels, Restaurants & Leisure | 4.1 | 4.4 | 2.4 | 2.4 | |||||||||||||
Household Durables | — | — | — | 0.9 | |||||||||||||
Household Products | — | 3.9 | — | — | |||||||||||||
Independent Power & Renewable Electricity Producers | — | — | — | — |
The accompanying notes are an integral part of these financial statements.
164 Annual Report
Industry† | Lazard US Equity Concentrated Portfolio | Lazard US Equity Focus Portfolio | Lazard US Realty Equity Portfolio | Lazard US Small- Mid Cap Equity Portfolio | |||||||||||||
Industrial Conglomerates | — | % | 4.1 | % | — | % | — | % | |||||||||
Insurance | — | 3.1 | — | 5.0 | |||||||||||||
Interactive Media & Services | 7.2 | 5.9 | — | 0.7 | |||||||||||||
Internet & Direct Marketing Retail | — | — | — | — | |||||||||||||
IT Services | 5.1 | 3.9 | — | 3.1 | |||||||||||||
Leisure Products | 1.8 | — | — | 1.5 | |||||||||||||
Life Sciences Tools & Services | — | — | — | 1.7 | |||||||||||||
Machinery | — | 1.2 | — | 2.4 | |||||||||||||
Marine | — | — | — | — | |||||||||||||
Media | — | — | — | — | |||||||||||||
Metals & Mining | — | — | — | — | |||||||||||||
Multiline Retail | — | — | — | — | |||||||||||||
Multi-Utilities | — | — | — | — | |||||||||||||
Oil, Gas & Consumable Fuels | — | 2.3 | — | 1.8 | |||||||||||||
Paper & Forest Products | — | — | — | — | |||||||||||||
Personal Products | — | — | — | — | |||||||||||||
Pharmaceuticals | 3.3 | 7.7 | — | 1.4 | |||||||||||||
Professional Services | — | — | — | 1.1 | |||||||||||||
Real Estate Management & Development | — | — | — | — | |||||||||||||
Road & Rail | — | 3.2 | — | — | |||||||||||||
Semiconductors & Semiconductor Equipment | 11.7 | 3.8 | — | 3.5 | |||||||||||||
Software | — | 4.9 | — | 4.9 | |||||||||||||
Specialty Retail | 3.9 | 6.5 | — | 2.5 | |||||||||||||
Technology Hardware, Storage & Peripherals | — | 5.4 | — | — | |||||||||||||
Textiles, Apparel & Luxury Goods | — | — | — | 2.4 | |||||||||||||
Thrifts & Mortgage Finance | — | — | — | — | |||||||||||||
Tobacco | — | — | — | — | |||||||||||||
Trading Companies & Distributors | — | — | — | 1.5 | |||||||||||||
Transportation Infrastructure | — | — | — | — | |||||||||||||
Water Utilities | — | — | — | — | |||||||||||||
Wireless Telecommunication Services | — | — | — | — | |||||||||||||
Subtotal | 96.1 | 95.7 | 98.4 | 98.3 | |||||||||||||
Short-Term Investments | 4.4 | 4.3 | 1.4 | — | |||||||||||||
Total Investments | 100.5 | % | 100.0 | % | 99.8 | % | 98.3 | % |
† | Industry classifications may be different than those used for compliance monitoring purposes. |
The accompanying notes are an integral part of these financial statements.
Annual Report 165
The Lazard Funds, Inc.Statements of Assets and Liabilities
December 31, 2019 | Lazard Developing Markets Equity Portfolio | Lazard Emerging Markets Core Equity Portfolio | ||||||||
ASSETS | ||||||||||
Investments in securities, at fair value | $ | 235,756,956 | $ | 202,498,651 | ||||||
Foreign currency, at fair value | 6,371 | 57,919 | ||||||||
Receivables for: | ||||||||||
Dividends | 297,299 | 346,856 | ||||||||
Capital stock sold | 124,033 | 281,673 | ||||||||
Investments sold | 81 | 1,340,104 | ||||||||
Amount due from Investment Manager (Note 3) | — | — | ||||||||
Prepaid expenses | — | 1,127 | ||||||||
Total assets | 236,184,740 | 204,526,330 | ||||||||
LIABILITIES | ||||||||||
Due to custodian | — | 50,067 | ||||||||
Payables for: | ||||||||||
Foreign capital gains taxes | 79,376 | 136,881 | ||||||||
Management fees | 187,027 | 155,077 | ||||||||
Accrued custodian fees | 28,051 | 35,512 | ||||||||
Accrued shareholders’ reports | 11,782 | 6,245 | ||||||||
Accrued distribution fees | 1,925 | 486 | ||||||||
Accrued professional services | 34,874 | 30,846 | ||||||||
Accrued registration fees | 3,555 | 4,424 | ||||||||
Capital stock redeemed | 236,825 | 3,864,530 | ||||||||
Investments purchased | 183,424 | 263 | ||||||||
Other accrued expenses and payables | 10,384 | 7,325 | ||||||||
Total liabilities | 777,223 | 4,291,656 | ||||||||
Net assets | $ | 235,407,517 | $ | 200,234,674 | ||||||
NET ASSETS | ||||||||||
Paid in capital | $ | 311,091,580 | $ | 178,545,398 | ||||||
Distributable earnings (Accumulated loss) | (75,684,063 | ) | 21,689,276 | |||||||
Net assets | $ | 235,407,517 | $ | 200,234,674 | ||||||
Institutional Shares | ||||||||||
Net assets | $ | 226,066,920 | $ | 197,212,812 | ||||||
Shares of capital stock outstanding* | 15,534,848 | 16,728,969 | ||||||||
Net asset value, offering and redemption price per share | $ | 14.55 | $ | 11.79 | ||||||
Open Shares | ||||||||||
Net assets | $ | 9,340,597 | $ | 2,425,122 | ||||||
Shares of capital stock outstanding* | 643,853 | 206,183 | ||||||||
Net asset value, offering and redemption price per share | $ | 14.51 | $ | 11.76 | ||||||
R6 Shares | ||||||||||
Net assets | — | $ | 596,740 | |||||||
Shares of capital stock outstanding* | — | 50,582 | ||||||||
Net asset value, offering and redemption price per share | — | $ | 11.80 | |||||||
Cost of investments in securities | $ | 194,988,295 | $ | 168,976,656 | ||||||
Cost of foreign currency | $ | 44,398 | $ | 57,591 |
* | $0.001 par value, 6,900,000,000 shares authorized for the Portfolios in total. |
The accompanying notes are an integral part of these financial statements.
166 Annual Report
Lazard Emerging Markets Equity Advantage Portfolio | Lazard Emerging Markets Equity Blend Portfolio | Lazard Emerging Markets Equity Portfolio | Lazard Equity Franchise Portfolio | Lazard Global Equity Select Portfolio | ||||||||||||||||||||
$ | 10,521,363 | $ | 102,375,172 | $ | 7,825,151,127 | $ | 40,139,194 | $ | 82,880,180 | |||||||||||||||
600 | 7,054 | 720,125 | 18 | 2,546 | ||||||||||||||||||||
18,937 | 179,952 | 7,378,215 | 91,074 | 74,195 | ||||||||||||||||||||
56,366 | 90,882 | 4,821,954 | — | 92,665 | ||||||||||||||||||||
26,415 | 37,552 | 235,354 | — | 12,573 | ||||||||||||||||||||
32,931 | — | — | — | 7,481 | ||||||||||||||||||||
487 | — | — | 166 | — | ||||||||||||||||||||
10,657,099 | 102,690,612 | 7,838,306,775 | 40,230,452 | 83,069,640 | ||||||||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
— | 70,765 | 11,059,616 | — | — | ||||||||||||||||||||
— | 68,530 | 6,479,664 | 4,542 | — | ||||||||||||||||||||
18,605 | 33,554 | 1,017,099 | 9,958 | 13,049 | ||||||||||||||||||||
— | 27,582 | 259,712 | 1,482 | 533 | ||||||||||||||||||||
225 | 1,275 | 205,512 | 62 | 195 | ||||||||||||||||||||
41,228 | 39,518 | 131,957 | 22,242 | 26,198 | ||||||||||||||||||||
633 | 5,268 | 87,656 | 1,133 | 22,429 | ||||||||||||||||||||
240,874 | 49,561 | 18,248,849 | — | 15,134 | ||||||||||||||||||||
167 | 9,315 | 1,379,309 | — | 88 | ||||||||||||||||||||
3,352 | 9,106 | 325,283 | 1,755 | 2,571 | ||||||||||||||||||||
305,084 | 314,474 | 39,194,657 | 41,174 | 80,197 | ||||||||||||||||||||
$ | 10,352,015 | $ | 102,376,138 | $ | 7,799,112,118 | $ | 40,189,278 | $ | 82,989,443 | |||||||||||||||
$ | 9,215,391 | $ | 147,002,831 | $ | 7,616,187,994 | $ | 39,618,017 | $ | 66,436,721 | |||||||||||||||
1,136,624 | (44,626,693 | ) | 182,924,124 | 571,261 | 16,552,722 | |||||||||||||||||||
$ | 10,352,015 | $ | 102,376,138 | $ | 7,799,112,118 | $ | 40,189,278 | $ | 82,989,443 | |||||||||||||||
$ | 9,189,958 | $ | 96,399,246 | $ | 6,645,428,555 | $ | 39,877,733 | $ | 82,056,637 | |||||||||||||||
775,852 | 7,913,478 | 359,649,575 | 3,919,193 | 5,634,353 | ||||||||||||||||||||
$ | 11.84 | $ | 12.18 | $ | 18.48 | $ | 10.17 | $ | 14.56 | |||||||||||||||
$ | 1,162,057 | $ | 5,976,892 | $ | 969,346,931 | $ | 311,545 | $ | 932,806 | |||||||||||||||
98,083 | 488,799 | 50,941,578 | 30,624 | 64,021 | ||||||||||||||||||||
$ | 11.85 | $ | 12.23 | $ | 19.03 | $ | 10.17 | $ | 14.57 | |||||||||||||||
— | — | $ | 184,336,632 | — | — | |||||||||||||||||||
— | — | 9,977,898 | — | — | ||||||||||||||||||||
— | — | $ | 18.47 | — | — | |||||||||||||||||||
$ | 9,169,674 | $ | 93,757,968 | $ | 6,616,260,077 | $ | 39,040,913 | $ | 64,789,485 | |||||||||||||||
$ | 593 | $ | 7,030 | $ | 715,919 | $ | 18 | $ | 2,531 |
Annual Report 167
December 31, 2019 | Lazard Global Listed Infrastructure Portfolio | Lazard Global Strategic Equity Portfolio | ||||||||
ASSETS | ||||||||||
Investments in securities, at fair value | $ | 7,737,031,977 | $ | 3,341,480 | ||||||
Foreign currency, at fair value | 505,250 | 265 | ||||||||
Receivables for: | ||||||||||
Dividends | 27,409,086 | 4,967 | ||||||||
Capital stock sold | 31,194,689 | — | ||||||||
Investments sold | — | — | ||||||||
Amount due from Investment Manager (Note 3) | — | 20,696 | ||||||||
Gross unrealized appreciation on forward currency contracts | 419,674 | — | ||||||||
Prepaid expenses | — | 562 | ||||||||
Total assets | 7,796,560,676 | 3,367,970 | ||||||||
LIABILITIES | ||||||||||
Payables for: | ||||||||||
Management fees | 5,772,223 | — | ||||||||
Accrued custodian fees | 280,349 | 10,056 | ||||||||
Accrued shareholders’ reports | 49,278 | 1,257 | ||||||||
Accrued distribution fees | 95,402 | 30 | ||||||||
Accrued professional services | 29,953 | 25,612 | ||||||||
Accrued registration fees | — | 583 | ||||||||
Capital stock redeemed | 4,664,318 | — | ||||||||
Investments purchased | 209 | — | ||||||||
Gross unrealized depreciation on forward currency contracts | 59,666,469 | — | ||||||||
Other accrued expenses and payables | 104,017 | 1,974 | ||||||||
Total liabilities | 70,662,218 | 39,512 | ||||||||
Net assets | $ | 7,725,898,458 | $ | 3,328,458 | ||||||
NET ASSETS | ||||||||||
Paid in capital | $ | 7,071,207,243 | $ | 2,635,743 | ||||||
Distributable earnings (Accumulated loss) | 654,691,215 | 692,715 | ||||||||
Net assets | $ | 7,725,898,458 | $ | 3,328,458 | ||||||
Institutional Shares | ||||||||||
Net assets | $ | 7,277,511,822 | $ | 3,184,624 | ||||||
Shares of capital stock outstanding* | 461,276,357 | 1,545,113 | ||||||||
Net asset value, offering and redemption price per share | $ | 15.78 | $ | 2.06 | ||||||
Open Shares | ||||||||||
Net assets | $ | 448,386,636 | $ | 143,834 | ||||||
Shares of capital stock outstanding* | 28,396,647 | 70,230 | ||||||||
Net asset value, offering and redemption price per share | $ | 15.79 | $ | 2.05 | ||||||
R6 Shares | ||||||||||
Net assets | — | — | ||||||||
Shares of capital stock outstanding* | — | — | ||||||||
Net asset value, offering and redemption price per share | — | — | ||||||||
Cost of investments in securities | $ | 7,050,119,485 | $ | 2,635,411 | ||||||
Cost of foreign currency | $ | 502,372 | $ | 264 |
* | $0.001 par value, 6,900,000,000 shares authorized for the Portfolios in total. |
The accompanying notes are an integral part of these financial statements.
168 Annual Report
Lazard International Equity Advantage Portfolio | Lazard International Equity Concentrated Portfolio | Lazard International Equity Portfolio | Lazard International Equity Select Portfolio | Lazard International Equity Value Portfolio | ||||||||||||||||||||
$ | 2,536,066 | $ | 98,033,360 | $ | 2,862,900,773 | $ | 93,940,739 | $ | 13,282,854 | |||||||||||||||
946 | 1 | 5,093,034 | 485,015 | 4,535 | ||||||||||||||||||||
6,254 | 89,742 | 5,257,060 | 140,009 | 31,268 | ||||||||||||||||||||
— | 206,791 | 5,393,370 | 2,197,915 | — | ||||||||||||||||||||
— | — | 385,705 | 168 | — | ||||||||||||||||||||
26,649 | — | — | — | 4,270 | ||||||||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
571 | — | — | — | 466 | ||||||||||||||||||||
2,570,486 | 98,329,894 | 2,879,029,942 | 96,763,846 | 13,323,393 | ||||||||||||||||||||
— | 34,968 | 1,790,659 | 21,784 | — | ||||||||||||||||||||
10,844 | 12,636 | 132,592 | 18,156 | 19,155 | ||||||||||||||||||||
1,991 | 2,193 | 83,486 | 2,408 | 1,766 | ||||||||||||||||||||
23 | 91 | 53,628 | 512 | 25 | ||||||||||||||||||||
34,019 | 27,813 | 43,192 | 36,187 | 23,878 | ||||||||||||||||||||
632 | 3,125 | 5,202 | 1,573 | 1,620 | ||||||||||||||||||||
— | — | 1,047,240 | 46,385 | — | ||||||||||||||||||||
— | — | 15,844,020 | 545,317 | — | ||||||||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
1,770 | 3,189 | 126,682 | 3,703 | 3,446 | ||||||||||||||||||||
49,279 | 84,015 | 19,126,701 | 676,025 | 49,890 | ||||||||||||||||||||
$ | 2,521,207 | $ | 98,245,879 | $ | 2,859,903,241 | $ | 96,087,821 | $ | 13,273,503 | |||||||||||||||
$ | 2,466,022 | $ | 91,263,005 | $ | 2,501,249,304 | $ | 88,695,280 | $ | 13,635,670 | |||||||||||||||
55,185 | 6,982,874 | 358,653,937 | 7,392,541 | (362,167 | ) | |||||||||||||||||||
$ | 2,521,207 | $ | 98,245,879 | $ | 2,859,903,241 | $ | 96,087,821 | $ | 13,273,503 | |||||||||||||||
$ | 2,408,151 | $ | 97,815,488 | $ | 2,495,020,716 | �� | $ | 93,586,166 | $ | 13,132,349 | ||||||||||||||
241,125 | 9,493,019 | 134,082,503 | 8,707,246 | 1,319,964 | ||||||||||||||||||||
$ | 9.99 | $ | 10.30 | $ | 18.61 | $ | 10.75 | $ | 9.95 | |||||||||||||||
$ | 113,056 | $ | 430,391 | $ | 257,308,243 | $ | 2,501,655 | $ | 141,154 | |||||||||||||||
11,318 | 41,695 | 13,658,790 | 231,629 | 14,189 | ||||||||||||||||||||
$ | 9.99 | $ | 10.32 | $ | 18.84 | $ | 10.80 | $ | 9.95 | |||||||||||||||
— | — | $ | 107,574,282 | — | — | |||||||||||||||||||
— | — | 5,788,801 | — | — | ||||||||||||||||||||
— | — | $ | 18.58 | — | — | |||||||||||||||||||
$ | 2,330,539 | $ | 88,780,449 | $ | 2,468,242,465 | $ | 84,453,149 | $ | 12,600,734 | |||||||||||||||
$ | 934 | $ | 1 | $ | 5,077,671 | $ | 482,507 | $ | 4,483 |
Annual Report 169
December 31, 2019 | Lazard International Quality Growth Portfolio | Lazard International Small Cap Equity Portfolio | ||||||||
ASSETS | ||||||||||
Investments in securities, at fair value | $ | 3,911,973 | $ | 57,416,242 | ||||||
Foreign currency, at fair value | 257 | 9 | ||||||||
Receivables for: | ||||||||||
Dividends | 4,695 | 105,635 | ||||||||
Capital stock sold | — | 31,029 | ||||||||
Investments sold | — | 6,413 | ||||||||
Amount due from Investment Manager (Note 3) | 87,119 | — | ||||||||
Prepaid expenses | 4,510 | 3 | ||||||||
Total assets | 4,008,554 | 57,559,331 | ||||||||
LIABILITIES | ||||||||||
Due to custodian | — | — | ||||||||
Payables for: | ||||||||||
Foreign capital gains taxes | — | — | ||||||||
Management fees | — | 24,842 | ||||||||
Accrued custodian fees | 15,875 | 20,660 | ||||||||
Accrued shareholders’ reports | — | 5,511 | ||||||||
Accrued distribution fees | — | 4,201 | ||||||||
Accrued professional services | 22,734 | 36,987 | ||||||||
Accrued registration fees | 1,486 | 1,392 | ||||||||
Capital stock redeemed | — | 4,464 | ||||||||
Investments purchased | 2 | 53 | ||||||||
Other accrued expenses and payables | 750 | 3,522 | ||||||||
Total liabilities | 40,847 | 101,632 | ||||||||
Net assets | $ | 3,967,707 | $ | 57,457,699 | ||||||
NET ASSETS | ||||||||||
Paid in capital | $ | 3,155,945 | $ | 51,500,675 | ||||||
Distributable earnings (Accumulated loss) | 811,762 | 5,957,024 | ||||||||
Net assets | $ | 3,967,707 | $ | 57,457,699 | ||||||
Institutional Shares | ||||||||||
Net assets | $ | 3,957,956 | $ | 37,677,252 | ||||||
Shares of capital stock outstanding* | 311,939 | 3,090,617 | ||||||||
Net asset value, offering and redemption price per share | $ | 12.69 | $ | 12.19 | ||||||
Open Shares | ||||||||||
Net assets | $ | 9,751 | $ | 19,780,447 | ||||||
Shares of capital stock outstanding* | 771 | 1,622,591 | ||||||||
Net asset value, offering and redemption price per share | $ | 12.65 | $ | 12.19 | ||||||
R6 Shares | ||||||||||
Net assets | — | — | ||||||||
Shares of capital stock outstanding* | — | — | ||||||||
Net asset value, offering and redemption price per share | — | — | ||||||||
Cost of investments in securities | $ | 3,028,131 | $ | 50,223,279 | ||||||
Cost of foreign currency | $ | 256 | $ | 9 |
* | $0.001 par value, 6,900,000,000 shares authorized for the Portfolios in total. |
The accompanying notes are an integral part of these financial statements.
170 Annual Report
Lazard International Strategic Equity Portfolio | Lazard Managed Equity Volatility Portfolio | Lazard US Equity Concentrated Portfolio | Lazard US Equity Focus Portfolio | Lazard US Realty Equity Portfolio | ||||||||||||||||||||
$ | 6,311,620,300 | $ | 34,579,304 | $ | 1,327,471,089 | $ | 44,391,723 | $ | 44,021,229 | |||||||||||||||
578,210 | 2,911 | — | — | — | ||||||||||||||||||||
9,194,871 | 43,307 | 1,304,713 | 17,330 | 179,861 | ||||||||||||||||||||
11,708,750 | — | 1,511,860 | — | 308 | ||||||||||||||||||||
5,240,795 | — | — | — | — | ||||||||||||||||||||
— | 10,569 | — | 22,794 | 44,115 | ||||||||||||||||||||
— | 232 | — | — | 133 | ||||||||||||||||||||
6,338,342,926 | 34,636,323 | 1,330,287,662 | 44,431,847 | 44,245,646 | ||||||||||||||||||||
63 | — | — | — | — | ||||||||||||||||||||
1,314,644 | — | — | — | — | ||||||||||||||||||||
3,968,262 | — | 772,781 | — | — | ||||||||||||||||||||
286,296 | 16,206 | 42,177 | 12,326 | 8,595 | ||||||||||||||||||||
143,306 | 1,606 | 26,722 | 4,153 | 6,170 | ||||||||||||||||||||
144,214 | 52 | 10,245 | 233 | 7,382 | ||||||||||||||||||||
— | 29,774 | — | 22,527 | 43,889 | ||||||||||||||||||||
15,833 | 633 | 5,273 | 2,675 | — | ||||||||||||||||||||
6,217,498 | — | 8,910,251 | 1 | 55,539 | ||||||||||||||||||||
18,539,683 | — | — | — | — | ||||||||||||||||||||
289,535 | 2,144 | 80,250 | 3,239 | 4,260 | ||||||||||||||||||||
30,919,334 | 50,415 | 9,847,699 | 45,154 | 125,835 | ||||||||||||||||||||
$ | 6,307,423,592 | $ | 34,585,908 | $ | 1,320,439,963 | $ | 44,386,693 | $ | 44,119,811 | |||||||||||||||
$ | 5,265,830,188 | $ | 31,601,199 | $ | 1,032,819,695 | $ | 31,768,900 | $ | 35,308,559 | |||||||||||||||
1,041,593,404 | 2,984,709 | 287,620,268 | 12,617,793 | 8,811,252 | ||||||||||||||||||||
$ | 6,307,423,592 | $ | 34,585,908 | $ | 1,320,439,963 | $ | 44,386,693 | $ | 44,119,811 | |||||||||||||||
$ | 5,505,270,588 | $ | 34,354,427 | $ | 1,271,508,979 | $ | 32,660,568 | $ | 11,255,455 | |||||||||||||||
357,911,733 | 2,714,105 | 75,485,283 | 2,714,562 | 593,203 | ||||||||||||||||||||
$ | 15.38 | $ | 12.66 | $ | 16.84 | $ | 12.03 | $ | 18.97 | |||||||||||||||
$ | 682,035,428 | $ | 231,481 | $ | 46,839,640 | $ | 1,117,045 | $ | 32,864,356 | |||||||||||||||
43,939,513 | 18,298 | 2,759,073 | 92,372 | 1,722,372 | ||||||||||||||||||||
$ | 15.52 | $ | 12.65 | $ | 16.98 | $ | 12.09 | $ | 19.08 | |||||||||||||||
$ | 120,117,576 | — | $ | 2,091,344 | $ | 10,609,080 | — | |||||||||||||||||
7,802,421 | — | 123,837 | 881,361 | — | ||||||||||||||||||||
$ | 15.39 | — | $ | 16.89 | $ | 12.04 | — | |||||||||||||||||
$ | 5,212,776,205 | $ | 31,923,107 | $ | 1,036,528,492 | $ | 32,311,293 | $ | 36,725,443 | |||||||||||||||
$ | 575,221 | $ | 2,895 | $ | — | $ | — | $ | — |
Annual Report 171
December 31, 2019 | Lazard US Small-Mid Cap Equity Portfolio | ||||
ASSETS | |||||
Investments in securities, at fair value | $ | 120,727,428 | |||
Cash | 1,805,698 | ||||
Receivables for: | |||||
Dividends | 91,248 | ||||
Capital stock sold | 110,591 | ||||
Investments sold | 740,325 | ||||
Total assets | 123,475,290 | ||||
LIABILITIES | |||||
Payables for: | |||||
Management fees | 77,204 | ||||
Accrued custodian fees | 16,830 | ||||
Accrued shareholders’ reports | 4,795 | ||||
Accrued distribution fees | 3,166 | ||||
Accrued professional services | 23,152 | ||||
Accrued registration fees | 294 | ||||
Capital stock redeemed | 224,913 | ||||
Investments purchased | 365,427 | ||||
Other accrued expenses and payables | 5,197 | ||||
Total liabilities | 720,978 | ||||
Net assets | $ | 122,754,312 | |||
NET ASSETS | |||||
Paid in capital | $ | 107,378,796 | |||
Distributable earnings (Accumulated loss) | 15,375,516 | ||||
Net assets | $ | 122,754,312 | |||
Institutional Shares | |||||
Net assets | $ | 108,111,531 | |||
Shares of capital stock outstanding* | 7,925,745 | ||||
Net asset value, offering and redemption price per share | $ | 13.64 | |||
Open Shares | |||||
Net assets | $ | 14,642,781 | |||
Shares of capital stock outstanding* | 1,164,098 | ||||
Net asset value, offering and redemption price per share | $ | 12.58 | |||
R6 Shares | |||||
Net assets | — | ||||
Shares of capital stock outstanding* | — | ||||
Net asset value, offering and redemption price per share | — | ||||
Cost of investments in securities | $ | 105,472,903 | |||
Cost of foreign currency | $ | — |
* | $0.001 par value, 6,900,000,000 shares authorized for the Portfolios in total. |
The accompanying notes are an integral part of these financial statements.
172 Annual Report
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Annual Report 173
The Lazard Funds, Inc.Statements of Operations
For the Year Ended December 31, 2019 | Lazard Developing Markets Equity Portfolio | Lazard Emerging Markets Core Equity Portfolio | ||||||||||
Investment Income (Loss) | ||||||||||||
Income | ||||||||||||
Dividends | ||||||||||||
Unaffiliated issuers | $ | 4,254,383 | $ | 6,582,439 | ||||||||
Non-controlled affiliated issuers (a) | — | — | ||||||||||
Total investment income* | 4,254,383 | 6,582,439 | ||||||||||
Expenses | ||||||||||||
Management fees (Note 3) | 2,377,675 | 2,189,410 | ||||||||||
Custodian fees | 147,092 | 154,520 | ||||||||||
Distribution fees (Open Shares) | 21,608 | 5,252 | ||||||||||
Administration fees | 44,569 | 45,216 | ||||||||||
Shareholders’ reports | 30,023 | 20,506 | ||||||||||
Professional services | 61,399 | 59,209 | ||||||||||
Directors’ fees and expenses | 16,288 | 15,545 | ||||||||||
Shareholders’ services | 32,194 | 32,846 | ||||||||||
Registration fees | 43,171 | 57,897 | ||||||||||
Amortization of offering costs (Note 2(f)) | — | 1,602 | ||||||||||
Other^ | 15,094 | 18,281 | ||||||||||
Total gross expenses | 2,789,113 | 2,600,284 | ||||||||||
Management fees waived and expenses reimbursed | (7,647 | ) | (18,268 | ) | ||||||||
Total net expenses | 2,781,466 | 2,582,016 | ||||||||||
Net investment income (loss) | 1,472,917 | 4,000,423 | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments, Non-Controlled Affiliated Issuers and Foreign Currency Transactions | ||||||||||||
Net realized gain (loss) on: | ||||||||||||
Investments**, # | 10,882,564 | (7,631,576 | ) | |||||||||
Non-controlled affiliated issuers (a) | — | — | ||||||||||
Foreign currency transactions | (182,663 | ) | (42,376 | ) | ||||||||
Total net realized gain (loss) on investments, non-controlled affiliated issuers and foreign currency transactions | 10,699,901 | (7,673,952 | ) | |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments†, | 46,754,106 | 42,879,047 | ||||||||||
Non-controlled affiliated issuers (a) | — | — | ||||||||||
Foreign currency translations | (26,114 | ) | 184 | |||||||||
Total net change in unrealized appreciation (depreciation) on investments, non-controlled affiliated issuers and foreign currency translations | 46,727,992 | 42,879,231 | ||||||||||
Net realized and unrealized gain (loss) on investments, non-controlled affiliated issuers and foreign currency transactions | 57,427,893 | 35,205,279 | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 58,900,810 | $ | 39,205,702 | ||||||||
* | Net of foreign withholding taxes of | $ | 404,503 | $ | 709,913 | |||||||
** | Net of foreign capital gains taxes of | $ | (4,350 | ) | $ | — | ||||||
† | Includes net change in unrealized appreciation (depreciation) of foreign capital gains taxes of | $ | (79,376 | ) | $ | (136,881 | ) | |||||
^ | Includes interest on line of credit of | $ | 2,283 | $ | 6,604 | |||||||
(a) | See Note 5 for information on affiliated issuers. | |||||||||||
# | On April 24, 2019, the Global Equity Select Portfolio had redemptions-in-kind with total proceeds in the amount of $7,186,378. The net realized gain on associated investments of $1,760,136 will not be realized for tax purposes. |
The accompanying notes are an integral part of these financial statements.
174 Annual Report
Lazard Emerging Markets Equity Advantage Portfolio | Lazard Emerging Markets Equity Blend Portfolio | Lazard Emerging Markets Equity Portfolio | Lazard Equity Franchise Portfolio | Lazard Global Equity Select Portfolio | ||||||||||||||||||||
$ | 291,346 | $ | 4,699,931 | $ | 291,879,812 | $ | 825,665 | $ | 1,377,070 | |||||||||||||||
— | — | 5,771,167 | — | — | ||||||||||||||||||||
291,346 | 4,699,931 | 297,650,979 | 825,665 | 1,377,070 | ||||||||||||||||||||
76,139 | 1,928,710 | 85,027,550 | 227,964 | 561,854 | ||||||||||||||||||||
82,698 | 184,644 | 3,843,717 | 41,309 | 56,956 | ||||||||||||||||||||
2,508 | 15,653 | 2,527,575 | 574 | 2,302 | ||||||||||||||||||||
15,968 | 38,957 | 783,069 | 18,410 | 24,106 | ||||||||||||||||||||
3,906 | 116,545 | 741,136 | 3,687 | 6,039 | ||||||||||||||||||||
48,181 | 70,230 | 543,270 | 39,234 | 44,986 | ||||||||||||||||||||
5,309 | 17,834 | 428,033 | 5,728 | 8,148 | ||||||||||||||||||||
21,194 | 27,295 | 420,889 | 19,891 | 21,803 | ||||||||||||||||||||
36,294 | 43,865 | 163,873 | 34,667 | 78,280 | ||||||||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
5,083 | 25,139 | 282,753 | 5,281 | 6,682 | ||||||||||||||||||||
297,280 | 2,468,872 | 94,761,865 | 396,745 | 811,156 | ||||||||||||||||||||
(195,859 | ) | (18,483 | ) | — | (124,924 | ) | (59,963 | ) | ||||||||||||||||
101,421 | 2,450,389 | 94,761,865 | 271,821 | 751,193 | ||||||||||||||||||||
189,925 | 2,249,542 | 202,889,114 | 553,844 | 625,877 | ||||||||||||||||||||
(134,880 | ) | 4,092,871 | (248,405,875 | ) | 1,131,428 | 586,137 | ||||||||||||||||||
— | — | 2,404,757 | — | — | ||||||||||||||||||||
(1,949 | ) | (180,266 | ) | (3,751,670 | ) | (1,791 | ) | (3,517 | ) | |||||||||||||||
(136,829 | ) | 3,912,605 | (249,752,788 | ) | 1,129,637 | 582,620 | ||||||||||||||||||
1,227,437 | 35,773,938 | 1,349,437,006 | 2,183,408 | 15,259,480 | ||||||||||||||||||||
— | — | 91,460,408 | — | — | ||||||||||||||||||||
(52 | ) | (644 | ) | 73,700 | 793 | 599 | ||||||||||||||||||
1,227,385 | 35,773,294 | 1,440,971,114 | 2,184,201 | 15,260,079 | ||||||||||||||||||||
1,090,556 | 39,685,899 | 1,191,218,326 | 3,313,838 | 15,842,699 | ||||||||||||||||||||
$ | 1,280,481 | $ | 41,935,441 | $ | 1,394,107,440 | $ | 3,867,682 | $ | 16,468,576 | |||||||||||||||
$ | 35,840 | $ | 553,524 | $ | 38,181,339 | $ | 29,776 | $ | 93,262 | |||||||||||||||
$ | — | $ | 592,781 | $ | 13,107,394 | $ | — | $ | — | |||||||||||||||
$ | — | $ | 316,445 | $ | 26,558,751 | $ | — | $ | — | |||||||||||||||
$ | 8 | $ | 11,103 | $ | — | $ | 41 | $ | — |
Annual Report 175
For the Year Ended December 31, 2019 | Lazard Global Listed Infrastructure Portfolio | Lazard Global Strategic Equity Portfolio | ||||||||||
Investment Income (Loss) | ||||||||||||
Income | ||||||||||||
Dividends* | $ | 238,598,322 | $ | 60,724 | ||||||||
Expenses | ||||||||||||
Management fees (Note 3) | 59,986,280 | 22,651 | ||||||||||
Custodian fees | 1,060,681 | 42,022 | ||||||||||
Distribution fees (Open Shares) | 1,180,577 | 347 | ||||||||||
Administration fees | 633,060 | 15,226 | ||||||||||
Shareholders’ reports | 426,017 | 4,433 | ||||||||||
Professional services | 379,815 | 40,737 | ||||||||||
Directors’ fees and expenses | — | 5,130 | ||||||||||
Shareholders’ services | 292,629 | 20,168 | ||||||||||
Registration fees | 147,336 | 41,473 | ||||||||||
Amortization of offering costs (Note 2(f)) | 255,283 | — | ||||||||||
Other^ | 157,964 | 1,180 | ||||||||||
Total gross expenses | 64,519,642 | 193,367 | ||||||||||
Management fees waived and expenses reimbursed | — | (162,756 | ) | |||||||||
Shareholders’ services fees waived | — | — | ||||||||||
Total net expenses | 64,519,642 | 30,611 | ||||||||||
Net investment income (loss) | 174,078,680 | 30,113 | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions and Forward Currency Contracts | ||||||||||||
Net realized gain (loss) on: | ||||||||||||
Investments# | 3,151,379 | 71,004 | ||||||||||
Foreign currency transactions | (1,806,823 | ) | (312 | ) | ||||||||
Forward currency contracts | 165,043,810 | — | ||||||||||
Total net realized gain (loss) on investments, foreign currency transactions and forward currency contracts | 166,388,366 | 70,692 | ||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments | 1,005,754,802 | 666,116 | ||||||||||
Foreign currency translations | 543,063 | 72 | ||||||||||
Forward currency contracts | (60,182,524 | ) | — | |||||||||
Total net change in unrealized appreciation (depreciation) on investments, foreign currency translations and forward currency contracts | 946,115,341 | 666,188 | ||||||||||
Net realized and unrealized gain (loss) on investments, foreign currency transactions and forward currency contracts | 1,112,503,707 | 736,880 | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 1,286,582,387 | $ | 766,993 | ||||||||
* | Net of foreign withholding taxes of | $ | 16,494,458 | $ | 3,168 | |||||||
^ | Includes interest on line of credit of | $ | — | $ | — | |||||||
# | On April 24, 2019, the Global Listed Infrastructure Portfolio had redemptions-in-kind with total proceeds in the amount of $7,089,596. The net realized gain on associated investments of $315,565 will not be realized for tax purposes. |
The accompanying notes are an integral part of these financial statements.
176 Annual Report
Lazard International Equity Advantage Portfolio | Lazard International Equity Concentrated Portfolio | Lazard International Equity Portfolio | Lazard International Equity Select Portfolio | Lazard International Equity Value Portfolio | ||||||||||||||||||||
$ | 75,288 | $ | 2,382,604 | $ | 80,640,721 | $ | 2,895,605 | $ | 825,597 | |||||||||||||||
15,297 | 644,991 | 20,516,587 | 643,439 | 172,799 | ||||||||||||||||||||
62,710 | 55,481 | 539,213 | 76,917 | 51,721 | ||||||||||||||||||||
264 | 1,053 | 612,635 | 5,083 | 211 | ||||||||||||||||||||
15,142 | 24,926 | 316,403 | 25,969 | 17,548 | ||||||||||||||||||||
3,824 | 6,243 | 279,042 | 13,805 | 4,015 | ||||||||||||||||||||
44,813 | 48,219 | 220,194 | 53,140 | 40,890 | ||||||||||||||||||||
5,105 | 8,136 | 127,258 | 8,600 | 6,061 | ||||||||||||||||||||
20,087 | 21,705 | 146,158 | 24,275 | 23,150 | ||||||||||||||||||||
39,074 | 40,660 | 91,776 | 41,063 | 33,217 | ||||||||||||||||||||
— | — | — | — | 91,804 | ||||||||||||||||||||
1,164 | 6,631 | 92,115 | 6,917 | 5,450 | ||||||||||||||||||||
207,480 | 858,045 | 22,941,381 | 899,208 | 446,866 | ||||||||||||||||||||
(185,988 | ) | (90,543 | ) | (23,045 | ) | (30,204 | ) | (229,143 | ) | |||||||||||||||
— | — | — | — | (12,199 | ) | |||||||||||||||||||
21,492 | 767,502 | 22,918,336 | 869,004 | 205,524 | ||||||||||||||||||||
53,796 | 1,615,102 | 57,722,385 | 2,026,601 | 620,073 | ||||||||||||||||||||
(114,418 | ) | 422,412 | 10,963,481 | (1,231,583 | ) | (319,476 | ) | |||||||||||||||||
174 | (13,048 | ) | 101,542 | (17,457 | ) | (13,462 | ) | |||||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
(114,244 | ) | 409,364 | 11,065,023 | (1,249,040 | ) | (332,938 | ) | |||||||||||||||||
433,488 | 14,998,686 | 444,134,196 | 15,190,500 | 2,144,848 | ||||||||||||||||||||
105 | (1,421 | ) | (56,237 | ) | 1,886 | 178 | ||||||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
433,593 | 14,997,265 | 444,077,959 | 15,192,386 | 2,145,026 | ||||||||||||||||||||
319,349 | 15,406,629 | 455,142,982 | 13,943,346 | 1,812,088 | ||||||||||||||||||||
$ | 373,145 | $ | 17,021,731 | $ | 512,865,367 | $ | 15,969,947 | $ | 2,432,161 | |||||||||||||||
$ | 9,336 | $ | 221,980 | $ | 9,483,457 | $ | 304,214 | $ | 57,621 | |||||||||||||||
$ | — | $ | 32 | $ | — | $ | — | $ | — |
Annual Report 177
For the Year Ended December 31, 2019 | Lazard International Quality Growth Portfolio | Lazard International Small Cap Equity Portfolio | ||||||||||
Investment Income (Loss) | ||||||||||||
Income | ||||||||||||
Dividends* | $ | 52,012 | $ | 1,299,648 | ||||||||
Expenses | ||||||||||||
Management fees (Note 3) | 26,029 | 429,653 | ||||||||||
Custodian fees | 44,976 | 67,928 | ||||||||||
Distribution fees (Open Shares) | 18 | 49,661 | ||||||||||
Administration fees | 15,282 | 22,009 | ||||||||||
Shareholders’ reports | 21,179 | 11,019 | ||||||||||
Professional services | 55,194 | 56,468 | ||||||||||
Directors’ fees and expenses | 5,114 | 7,746 | ||||||||||
Shareholders’ services | 18,918 | 26,147 | ||||||||||
Registration fees | 31,780 | 36,876 | ||||||||||
Amortization of offering costs (Note 2(f)) | 73,616 | — | ||||||||||
Other^ | 598 | 6,948 | ||||||||||
Total gross expenses | 292,704 | 714,455 | ||||||||||
Management fees waived | (250,978 | ) | (12,067 | ) | ||||||||
Shareholders’ services fees waived | (12,195 | ) | — | |||||||||
Total net expenses | 29,531 | 702,388 | ||||||||||
Net investment income (loss) | 22,481 | 597,260 | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions | ||||||||||||
Net realized gain (loss) on: | ||||||||||||
Investments**,# | 3,174 | (1,219,612 | ) | |||||||||
Foreign currency transactions | (2,266 | ) | (14,211 | ) | ||||||||
Total net realized gain (loss) on investments and foreign currency transactions | 908 | (1,233,823 | ) | |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments† | 884,137 | 13,644,628 | ||||||||||
Foreign currency translations | 76 | 350 | ||||||||||
Total net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 884,213 | 13,644,978 | ||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency transactions | 885,121 | 12,411,155 | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 907,602 | $ | 13,008,415 | ||||||||
* | Net of foreign withholding taxes of | $ | 7,367 | $ | 127,121 | |||||||
** | Net of foreign capital gains taxes of | $ | — | $ | 3,938 | |||||||
† | Includes net change in unrealized appreciation (depreciation) of foreign capital gains taxes of | $ | — | $ | — | |||||||
^ | Includes interest on line of credit of | $ | — | $ | 341 | |||||||
# | On April 24, 2019, the International Strategic Equity and US Equity Concentrated Portfolios had redemptions-in-kind with total proceeds in the amount of $5,840,598 and $14,745,759, respectively. The net realized gain on associated investments of $878,071 and $2,551,597 will not be realized for tax purposes. |
The accompanying notes are an integral part of these financial statements.
178 Annual Report
Lazard International Strategic Equity Portfolio | Lazard Managed Equity Volatility Portfolio | Lazard US Equity Concentrated Portfolio | Lazard US Equity Focus Portfolio | Lazard US Realty Equity Portfolio | ||||||||||||||||||||
$ | 152,975,130 | $ | 639,972 | $ | 20,585,910 | $ | 1,317,550 | $ | 1,539,427 | |||||||||||||||
46,352,331 | 155,606 | 8,944,805 | 463,104 | 464,725 | ||||||||||||||||||||
1,186,851 | 72,741 | 172,201 | 48,548 | 32,594 | ||||||||||||||||||||
2,091,928 | 529 | 117,525 | 2,535 | 109,746 | ||||||||||||||||||||
597,273 | 18,090 | 170,631 | 26,895 | 22,594 | ||||||||||||||||||||
410,651 | 3,991 | 80,893 | 9,875 | 13,769 | ||||||||||||||||||||
398,900 | 43,750 | 100,052 | 52,262 | 96,781 | ||||||||||||||||||||
267,193 | 6,011 | 60,250 | 8,289 | 7,819 | ||||||||||||||||||||
256,538 | 19,584 | 77,922 | 31,946 | 27,781 | ||||||||||||||||||||
101,895 | 36,413 | 83,281 | 39,381 | 35,609 | ||||||||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
175,437 | 5,448 | 41,565 | 7,638 | 8,560 | ||||||||||||||||||||
51,838,997 | 362,163 | 9,849,125 | 690,473 | 819,978 | ||||||||||||||||||||
(10,414 | ) | (166,950 | ) | (9,633 | ) | (148,105 | ) | (82,582 | ) | |||||||||||||||
— | — | — | — | — | ||||||||||||||||||||
51,828,583 | 195,213 | 9,839,492 | 542,368 | 737,396 | ||||||||||||||||||||
101,146,547 | 444,759 | 10,746,418 | 775,182 | 802,031 | ||||||||||||||||||||
(30,800,495 | ) | 722,133 | 16,675,749 | 9,274,046 | 7,866,962 | |||||||||||||||||||
(595,102 | ) | (5,785 | ) | — | — | — | ||||||||||||||||||
(31,395,597 | ) | 716,348 | 16,675,749 | 9,274,046 | 7,866,962 | |||||||||||||||||||
1,109,489,524 | 3,731,955 | 316,438,020 | 8,829,523 | 7,944,841 | ||||||||||||||||||||
62,038 | 350 | — | — | — | ||||||||||||||||||||
1,109,551,562 | 3,732,305 | 316,438,020 | 8,829,523 | 7,944,841 | ||||||||||||||||||||
1,078,155,965 | 4,448,653 | 333,113,769 | 18,103,569 | 15,811,803 | ||||||||||||||||||||
$ | 1,179,302,512 | $ | 4,893,412 | $ | 343,860,187 | $ | 18,878,751 | $ | 16,613,834 | |||||||||||||||
$ | 14,762,472 | $ | 38,527 | $ | — | $ | — | $ | — | |||||||||||||||
$ | 92,355 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
$ | (1,272,796 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
$ | 1,781 | $ | — | $ | — | $ | 26 | $ | 1,779 |
Annual Report 179
For the Year Ended December 31, 2019 | Lazard US Small-Mid Cap Equity Portfolio | ||||
Investment Income (Loss) | |||||
Income | |||||
Dividends | $ | 1,735,067 | |||
Expenses | |||||
Management fees (Note 3) | 941,152 | ||||
Custodian fees | 51,929 | ||||
Distribution fees (Open Shares) | 36,252 | ||||
Administration fees | 30,534 | ||||
Shareholders’ reports | 16,120 | ||||
Professional services | 44,832 | ||||
Directors’ fees and expenses | 11,486 | ||||
Shareholders’ services | 26,170 | ||||
Registration fees | 38,851 | ||||
Other | 8,850 | ||||
Total net expenses | 1,206,176 | ||||
Net investment income (loss) | 528,891 | ||||
Net Realized and Unrealized Gain (Loss) on Investments | |||||
Net realized gain (loss) on Investments | 9,996,563 | ||||
Net change in unrealized appreciation (depreciation) on Investments | 24,785,901 | ||||
Net realized and unrealized gain (loss) on investments | 34,782,464 | ||||
Net increase (decrease) in net assets resulting from operations | $ | 35,311,355 |
The accompanying notes are an integral part of these financial statements.
180 Annual Report
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Annual Report 181
The Lazard Funds, Inc.Statements of Changes in Net Assets
Lazard Developing Markets Equity Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Increase (Decrease) in Net Assets | |||||||||
Operations | |||||||||
Net investment income (loss) | $ | 1,472,917 | $ | 2,230,118 | |||||
Net realized gain (loss) on investments and foreign currency transactions | 10,699,901 | 11,062,804 | |||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 46,727,992 | (76,316,938 | ) | ||||||
Net increase (decrease) in net assets resulting from operations | 58,900,810 | (63,024,016 | ) | ||||||
Distributions to shareholders (Note 2(e)) | |||||||||
Net investment income and net realized gains | |||||||||
Institutional Shares | (1,268,157 | ) | (1,769,297 | ) | |||||
Open Shares | (3,920 | ) | (72,262 | ) | |||||
R6 Shares | — | — | |||||||
Return of capital | |||||||||
Institutional Shares | — | — | |||||||
Open Shares | — | — | |||||||
Net decrease in net assets resulting from distributions | (1,272,077 | ) | (1,841,559 | ) | |||||
Capital stock transactions | |||||||||
Net proceeds from sales | |||||||||
Institutional Shares | 60,661,677 | 109,622,584 | |||||||
Open Shares | 4,243,002 | 4,292,325 | |||||||
R6 Shares | — | — | |||||||
Net proceeds from reinvestment of distributions | |||||||||
Institutional Shares | 871,419 | 1,162,422 | |||||||
Open Shares | 3,642 | 69,269 | |||||||
R6 Shares | — | — | |||||||
Cost of shares redeemed | |||||||||
Institutional Shares | (106,223,710 | ) | (102,082,155 | ) | |||||
Open Shares | (4,159,882 | ) | (7,115,548 | ) | |||||
R6 Shares | — | — | |||||||
Net increase (decrease) in net assets from capital stock transactions | (44,603,852 | ) | 5,948,897 | ||||||
Total increase (decrease) in net assets | 13,024,881 | (58,916,678 | ) | ||||||
Net assets at beginning of period | 222,382,636 | 281,299,314 | |||||||
Net assets at end of period | $ | 235,407,517 | $ | 222,382,636 |
The accompanying notes are an integral part of these financial statements.
182 Annual Report
Lazard Emerging Markets Core Equity Portfolio | Lazard Emerging Markets Equity Advantage Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 4,000,423 | $ | 3,782,203 | $ | 189,925 | $ | 67,358 | |||||||||
(7,673,952 | ) | 8,124,073 | (136,829 | ) | 168,585 | |||||||||||
42,879,231 | (67,542,603 | ) | 1,227,385 | (998,827 | ) | |||||||||||
39,205,702 | (55,636,327 | ) | 1,280,481 | (762,884 | ) | |||||||||||
(3,951,746 | ) | (3,760,098 | ) | (180,292 | ) | (69,604 | ) | |||||||||
(38,801 | ) | (23,933 | ) | (18,695 | ) | (9,266 | ) | |||||||||
(11,560 | ) | (6,411 | ) | — | — | |||||||||||
— | — | — | (4,975 | ) | ||||||||||||
— | — | — | (662 | ) | ||||||||||||
(4,002,107 | ) | (3,790,442 | ) | (198,987 | ) | (84,507 | ) | |||||||||
52,118,039 | 139,344,970 | 5,720,662 | 682,689 | |||||||||||||
1,564,146 | 1,474,772 | 702,687 | 410,412 | |||||||||||||
29,966 | 620,586 | — | — | |||||||||||||
3,771,010 | 3,136,183 | 180,292 | 74,579 | |||||||||||||
37,924 | 23,781 | 18,695 | 9,928 | |||||||||||||
11,560 | 6,411 | — | — | |||||||||||||
(101,386,896 | ) | (105,969,725 | ) | (784,072 | ) | (1,100,816 | ) | |||||||||
(1,384,619 | ) | (1,017,541 | ) | (149,975 | ) | (194,160 | ) | |||||||||
(32,195 | ) | (60,674 | ) | — | — | |||||||||||
(45,271,065 | ) | 37,558,763 | 5,688,289 | (117,368 | ) | |||||||||||
(10,067,470 | ) | (21,868,006 | ) | 6,769,783 | (964,759 | ) | ||||||||||
210,302,144 | 232,170,150 | 3,582,232 | 4,546,991 | |||||||||||||
$ | 200,234,674 | $ | 210,302,144 | $ | 10,352,015 | $ | 3,582,232 |
Annual Report 183
Lazard Developing Markets Equity Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Shares issued and redeemed | |||||||||
Institutional Shares | |||||||||
Shares outstanding at beginning of period | 18,836,550 | 18,562,591 | |||||||
Shares sold | 4,748,515 | 8,208,714 | |||||||
Shares issued to shareholders from reinvestment of distributions | 65,429 | 92,256 | |||||||
Shares redeemed | (8,115,646 | ) | (8,027,011 | ) | |||||
Net increase (decrease) | (3,301,702 | ) | 273,959 | ||||||
Shares outstanding at end of period | 15,534,848 | 18,836,550 | |||||||
Open Shares | |||||||||
Shares outstanding at beginning of period | 639,563 | 869,884 | |||||||
Shares sold | 327,824 | 308,910 | |||||||
Shares issued to shareholders from reinvestment of distributions | 293 | 5,519 | |||||||
Shares redeemed | (323,827 | ) | (544,750 | ) | |||||
Net increase (decrease) | 4,290 | (230,321 | ) | ||||||
Shares outstanding at end of period | 643,853 | 639,563 | |||||||
R6 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 inception date for the Emerging Markets Core Equity Portfolio R6 Shares was April 6, 2018. |
The accompanying notes are an integral part of these financial statements.
184 Annual Report
Lazard Emerging Markets Core Equity Portfolio | Lazard Emerging Markets Equity Advantage Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
21,031,193 | 18,723,561 | 309,610 | 341,687 | |||||||||||||
4,828,636 | 11,637,703 | 519,700 | 61,001 | |||||||||||||
322,340 | 323,559 | 15,331 | 7,564 | |||||||||||||
(9,453,200 | ) | (9,653,630 | ) | (68,789 | ) | (100,642 | ) | |||||||||
(4,302,224 | ) | 2,307,632 | 466,242 | (32,077 | ) | |||||||||||
16,728,969 | 21,031,193 | 775,852 | 309,610 | |||||||||||||
187,835 | 148,907 | 47,382 | 29,020 | |||||||||||||
143,185 | 129,653 | 63,649 | 33,843 | |||||||||||||
3,247 | 2,458 | 1,588 | 1,007 | |||||||||||||
(128,084 | ) | (93,183 | ) | (14,536 | ) | (16,488 | ) | |||||||||
18,348 | 38,928 | 50,701 | 18,362 | |||||||||||||
206,183 | 187,835 | 98,083 | 47,382 | |||||||||||||
49,941 | — | — | — | |||||||||||||
2,722 | 54,318 | — | — | |||||||||||||
987 | 661 | — | — | |||||||||||||
(3,068 | ) | (5,038 | ) | — | — | |||||||||||
641 | 49,941 | — | — | |||||||||||||
50,582 | 49,941 | — | — |
Annual Report 185
Lazard Emerging Markets Equity Blend Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Increase (Decrease) in Net Assets | |||||||||
Operations | |||||||||
Net investment income (loss) | $ | 2,249,542 | $ | 5,014,573 | |||||
Net realized gain (loss) on investments, non-controlled affiliated issuers and foreign currency transactions | 3,912,605 | 7,815,785 | |||||||
Net change in unrealized appreciation (depreciation) on investments, non-controlled affiliated issuers and foreign currency translations | 35,773,294 | (95,667,829 | ) | ||||||
Net increase (decrease) in net assets resulting from operations | 41,935,441 | (82,837,471 | ) | ||||||
Distributions to shareholders (Note 2(e)) | |||||||||
Net investment income and net realized gains | |||||||||
Institutional Shares | (2,027,625 | ) | (5,376,473 | ) | |||||
Open Shares | (109,850 | ) | (90,707 | ) | |||||
R6 Shares | — | — | |||||||
Net decrease in net assets resulting from distributions | (2,137,475 | ) | (5,467,180 | ) | |||||
Capital stock transactions | |||||||||
Net proceeds from sales | |||||||||
Institutional Shares | 18,596,727 | 61,509,551 | |||||||
Open Shares | 671,088 | 2,180,238 | |||||||
R6 Shares | — | — | |||||||
Net proceeds from reinvestment of distributions | |||||||||
Institutional Shares | 1,963,352 | 5,295,445 | |||||||
Open Shares | 108,503 | 89,138 | |||||||
R6 Shares | — | — | |||||||
Cost of shares redeemed | |||||||||
Institutional Shares | (254,171,213 | ) | (74,641,893 | ) | |||||
Open Shares | (2,194,573 | ) | (3,743,056 | ) | |||||
R6 Shares | — | — | |||||||
Net increase (decrease) in net assets from capital stock transactions | (235,026,116 | ) | (9,310,577 | ) | |||||
Total increase (decrease) in net assets | (195,228,150 | ) | (97,615,228 | ) | |||||
Net assets at beginning of period | 297,604,288 | 395,219,516 | |||||||
Net assets at end of period | $ | 102,376,138 | $ | 297,604,288 |
The accompanying notes are an integral part of these financial statements.
186 Annual Report
Lazard Emerging Markets Equity Portfolio | Lazard Equity Franchise Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 202,889,114 | $ | 240,361,347 | $ | 553,844 | $ | 156,813 | |||||||||
(249,752,788 | ) | 83,373,211 | 1,129,637 | 655,895 | ||||||||||||
1,440,971,114 | (2,584,037,244 | ) | 2,184,201 | (1,249,640 | ) | |||||||||||
1,394,107,440 | (2,260,302,686 | ) | 3,867,682 | (436,932 | ) | |||||||||||
(169,041,662 | ) | (161,807,179 | ) | (2,185,328 | ) | (840,278 | ) | |||||||||
(21,287,659 | ) | (18,476,071 | ) | (16,362 | ) | (17,593 | ) | |||||||||
(4,559,729 | ) | (5,115,396 | ) | — | — | |||||||||||
(194,889,050 | ) | (185,398,646 | ) | (2,201,690 | ) | (857,871 | ) | |||||||||
1,241,319,671 | 1,966,180,706 | 32,121,208 | 3,799,029 | |||||||||||||
184,190,310 | 306,879,204 | 81,131 | 133,054 | |||||||||||||
23,433,026 | 31,823,654 | — | — | |||||||||||||
158,855,659 | 151,836,697 | 2,185,328 | 840,278 | |||||||||||||
21,088,746 | 18,130,779 | 16,362 | 17,593 | |||||||||||||
4,399,954 | 3,561,076 | — | — | |||||||||||||
(3,359,204,875 | ) | (3,712,443,436 | ) | (4,408,143 | ) | (598,862 | ) | |||||||||
(381,266,772 | ) | (575,821,409 | ) | (3,489 | ) | (41,913 | ) | |||||||||
(103,858,799 | ) | (107,150,726 | ) | — | — | |||||||||||
(2,211,043,080 | ) | (1,917,003,455 | ) | 29,992,397 | 4,149,179 | |||||||||||
(1,011,824,690 | ) | (4,362,704,787 | ) | 31,658,389 | 2,854,376 | |||||||||||
8,810,936,808 | 13,173,641,595 | 8,530,889 | 5,676,513 | |||||||||||||
$ | 7,799,112,118 | $ | 8,810,936,808 | $ | 40,189,278 | $ | 8,530,889 |
Annual Report 187
Lazard Emerging Markets Equity Blend Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Shares issued and redeemed | |||||||||
Institutional Shares | |||||||||
Shares outstanding at beginning of period | 29,084,201 | 29,825,093 | |||||||
Shares sold | 1,644,397 | 5,068,945 | |||||||
Shares issued to shareholders from reinvestment of distributions | 162,664 | 536,388 | |||||||
Shares redeemed | (22,977,784 | ) | (6,346,225 | ) | |||||
Net increase (decrease) | (21,170,723 | ) | (740,892 | ) | |||||
Shares outstanding at end of period | 7,913,478 | 29,084,201 | |||||||
Open Shares | |||||||||
Shares outstanding at beginning of period | 617,871 | 751,456 | |||||||
Shares sold | 59,566 | 174,662 | |||||||
Shares issued to shareholders from reinvestment of distributions | 8,960 | 9,005 | |||||||
Shares redeemed | (197,598 | ) | (317,252 | ) | |||||
Net increase (decrease) | (129,072 | ) | (133,585 | ) | |||||
Shares outstanding at end of period | 488,799 | 617,871 | |||||||
R6 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.
188 Annual Report
Lazard Emerging Markets Equity Portfolio | Lazard Equity Franchise Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
471,588,782 | 563,580,657 | 943,047 | 536,277 | |||||||||||||
72,409,703 | 104,450,860 | 3,186,958 | 366,709 | |||||||||||||
9,054,452 | 9,444,619 | 214,812 | 96,662 | |||||||||||||
(193,403,362 | ) | (205,887,354 | ) | (425,624 | ) | (56,601 | ) | |||||||||
(111,939,207 | ) | (91,991,875 | ) | 2,976,146 | 406,770 | |||||||||||
359,649,575 | 471,588,782 | 3,919,193 | 943,047 | |||||||||||||
60,776,573 | 73,583,131 | 21,455 | 10,687 | |||||||||||||
10,411,216 | 16,934,111 | 7,904 | 12,698 | |||||||||||||
1,171,555 | 1,095,146 | 1,608 | 2,021 | |||||||||||||
(21,417,766 | ) | (30,835,815 | ) | (343 | ) | (3,951 | ) | |||||||||
(9,834,995 | ) | (12,806,558 | ) | 9,169 | 10,768 | |||||||||||
50,941,578 | 60,776,573 | 30,624 | 21,455 | |||||||||||||
14,479,168 | 18,608,156 | — | — | |||||||||||||
1,342,114 | 1,671,090 | — | — | |||||||||||||
250,131 | 221,226 | — | — | |||||||||||||
(6,093,515 | ) | (6,021,304 | ) | — | — | |||||||||||
(4,501,270 | ) | (4,128,988 | ) | — | — | |||||||||||
9,977,898 | 14,479,168 | — | — |
Annual Report 189
Lazard Global Equity Select Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Increase (Decrease) in Net Assets | |||||||||
Operations | |||||||||
Net investment income (loss) | $ | 625,877 | $ | 472,082 | |||||
Net realized gain (loss) on investments, foreign currency transactions and forward currency contracts | 582,620 | 1,129,110 | |||||||
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and forward currency contracts | 15,260,079 | (6,721,129 | ) | ||||||
Net increase (decrease) in net assets resulting from operations | 16,468,576 | (5,119,937 | ) | ||||||
Distributions to shareholders (Note 2(e)) | |||||||||
Net investment income and net realized gains Institutional Shares | (591,542 | ) | (2,021,764 | ) | |||||
Open Shares | (4,254 | ) | (21,670 | ) | |||||
Return of capital Institutional Shares | (41,874 | ) | (55,115 | ) | |||||
Open Shares | (301 | ) | (591 | ) | |||||
Net decrease in net assets resulting from distributions | (637,971 | ) | (2,099,140 | ) | |||||
Capital stock transactions | |||||||||
Net proceeds from sales Institutional Shares | 23,902,011 | 27,026,953 | |||||||
Open Shares | 300,952 | 183,864 | |||||||
Net proceeds from reinvestment of distributions Institutional Shares | 632,600 | 2,076,864 | |||||||
Open Shares | 4,555 | 22,261 | |||||||
Cost of shares redeemed Institutional Shares | (23,506,223 | ) | (14,792,583 | ) | |||||
Open Shares | (319,957 | ) | (65,826 | ) | |||||
Net increase (decrease) in net assets from capital stock transactions | 1,013,938 | 14,451,533 | |||||||
Total increase (decrease) in net assets | 16,844,543 | 7,232,456 | |||||||
Net assets at beginning of period | 66,144,900 | 58,912,444 | |||||||
Net assets at end of period | $ | 82,989,443 | $ | 66,144,900 |
The accompanying notes are an integral part of these financial statements.
190 Annual Report
Lazard Global | Lazard Global | |||||||||||||||
Listed Infrastructure Portfolio | Strategic Equity Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 174,078,680 | $ | 138,893,718 | $ | 30,113 | $ | 16,927 | |||||||||
166,388,366 | 474,528,611 | 70,692 | 108,933 | |||||||||||||
946,115,341 | (836,415,967 | ) | 666,188 | (397,832 | ) | |||||||||||
1,286,582,387 | (222,993,638 | ) | 766,993 | (271,972 | ) | |||||||||||
(297,455,372 | ) | (630,234,998 | ) | (86,901 | ) | (620,429 | ) | |||||||||
(20,318,540 | ) | (56,258,605 | ) | (3,549 | ) | (33,292 | ) | |||||||||
— | — | — | — | |||||||||||||
— | — | — | — | |||||||||||||
(317,773,912 | ) | (686,493,603 | ) | (90,450 | ) | (653,721 | ) | |||||||||
2,399,951,864 | 2,344,513,648 | 10,597 | 97,922 | |||||||||||||
148,379,347 | 148,282,804 | 3,345 | 6,946 | |||||||||||||
231,028,647 | 504,145,256 | 86,901 | 620,429 | |||||||||||||
20,099,034 | 55,689,132 | 3,549 | 33,292 | |||||||||||||
(1,175,735,705 | ) | (1,871,789,545 | ) | (62,241 | ) | (85,002 | ) | |||||||||
(217,741,894 | ) | (331,531,149 | ) | (26,927 | ) | (10,368 | ) | |||||||||
1,405,981,293 | 849,310,146 | 15,224 | 663,219 | |||||||||||||
2,374,789,768 | (60,177,095 | ) | 691,767 | (262,474 | ) | |||||||||||
5,351,108,690 | 5,411,285,785 | 2,636,691 | 2,899,165 | |||||||||||||
$ | 7,725,898,458 | $ | 5,351,108,690 | $ | 3,328,458 | $ | 2,636,691 |
Annual Report 191
Lazard Global Equity Select Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Shares issued and redeemed | |||||||||
Institutional Shares | |||||||||
Shares outstanding at beginning of period | 5,577,806 | 4,464,645 | |||||||
Shares sold | 1,750,065 | 2,056,703 | |||||||
Shares issued to shareholders from reinvestment of distributions | 43,567 | 179,116 | |||||||
Shares redeemed | (1,737,085 | ) | (1,122,658 | ) | |||||
Net increase (decrease) | 56,547 | 1,113,161 | |||||||
Shares outstanding at end of period | 5,634,353 | 5,577,806 | |||||||
Open Shares | |||||||||
Shares outstanding at beginning of period | 65,049 | 54,514 | |||||||
Shares sold | 22,134 | 13,747 | |||||||
Shares issued to shareholders from reinvestment of distributions | 314 | 1,916 | |||||||
Shares redeemed | (23,476 | ) | (5,128 | ) | |||||
Net increase (decrease) | (1,028 | ) | 10,535 | ||||||
Shares outstanding at end of period | 64,021 | 65,049 |
The accompanying notes are an integral part of these financial statements.
192 Annual Report
Lazard Global | Lazard Global | |||||||||||||||
Listed Infrastructure Portfolio | Strategic Equity Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
364,507,349 | 298,732,092 | 1,530,838 | 1,190,583 | |||||||||||||
160,154,321 | 154,668,026 | 6,239 | 43,028 | |||||||||||||
15,108,909 | 35,491,935 | 42,820 | 334,204 | |||||||||||||
(78,494,222 | ) | (124,384,704 | ) | (34,784 | ) | (36,977 | ) | |||||||||
96,769,008 | 65,775,257 | 14,275 | 340,255 | |||||||||||||
461,276,357 | 364,507,349 | 1,545,113 | 1,530,838 | |||||||||||||
31,560,099 | 39,560,407 | 80,778 | 64,619 | |||||||||||||
9,940,665 | 9,614,733 | 1,725 | 2,964 | |||||||||||||
1,315,681 | 3,911,178 | 1,769 | 18,057 | |||||||||||||
(14,419,798 | ) | (21,526,219 | ) | (14,042 | ) | (4,862 | ) | |||||||||
(3,163,452 | ) | (8,000,308 | ) | (10,548 | ) | 16,159 | ||||||||||
28,396,647 | 31,560,099 | 70,230 | 80,778 |
The accompanying notes are an integral part of these financial statements.
Annual Report 193
Lazard International Equity Advantage Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 53,796 | $ | 57,409 | ||||||
Net realized gain (loss) on investments and foreign currency transactions | (114,244 | ) | 76,385 | |||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 433,593 | (562,157 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 373,145 | (428,363 | ) | |||||||
Distributions to shareholders (Note 2(e)) | ||||||||||
Net investment income and net realized gains | ||||||||||
Institutional Shares | (51,885 | ) | (102,427 | ) | ||||||
Open Shares | (2,117 | ) | (4,439 | ) | ||||||
R6 Shares | — | — | ||||||||
Net decrease in net assets resulting from distributions | (54,002 | ) | (106,866 | ) | ||||||
Capital stock transactions | ||||||||||
Net proceeds from sales | ||||||||||
Institutional Shares | — | 500 | ||||||||
Open Shares | — | 11 | ||||||||
R6 Shares | — | — | ||||||||
Net proceeds from reinvestment of distributions Institutional Shares | 51,885 | 102,427 | ||||||||
Open Shares | 2,117 | 4,439 | ||||||||
R6 Shares | — | — | ||||||||
Cost of shares redeemed | ||||||||||
Institutional Shares | — | (47,991 | ) | |||||||
Open Shares | — | (11 | ) | |||||||
R6 Shares | — | — | ||||||||
Net increase (decrease) in net assets from capital stock transactions | 54,002 | 59,375 | ||||||||
Total increase (decrease) in net assets | 373,145 | (475,854 | ) | |||||||
Net assets at beginning of period | 2,148,062 | 2,623,916 | ||||||||
Net assets at end of period | $ | 2,521,207 | $ | 2,148,062 |
The accompanying notes are an integral part of these financial statements.
194 Annual Report
Lazard International Equity Concentrated Portfolio | Lazard International Equity Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 1,615,102 | $ | 1,030,116 | $ | 57,722,385 | $ | 62,190,848 | |||||||||
409,364 | (539,632 | ) | 11,065,023 | 132,220,543 | ||||||||||||
14,997,265 | (12,702,020 | ) | 444,077,959 | (625,076,980 | ) | |||||||||||
17,021,731 | (12,211,536 | ) | 512,865,367 | (430,665,589 | ) | |||||||||||
(1,603,404 | ) | (2,385,665 | ) | (51,130,885 | ) | (162,037,288 | ) | |||||||||
(5,862 | ) | (17,538 | ) | (4,599,789 | ) | (16,140,086 | ) | |||||||||
— | — | (2,207,785 | ) | (9,585,071 | ) | |||||||||||
(1,609,266 | ) | (2,403,203 | ) | (57,938,459 | ) | (187,762,445 | ) | |||||||||
39,506,689 | 15,603,350 | 624,890,241 | 692,426,011 | |||||||||||||
650 | 267,250 | 59,304,312 | 71,811,533 | |||||||||||||
— | — | 39,351,180 | 51,158,456 | |||||||||||||
1,554,391 | 2,339,572 | 45,137,028 | 135,295,299 | |||||||||||||
5,862 | 17,538 | 4,082,937 | 14,706,387 | |||||||||||||
— | — | 2,202,815 | 9,585,071 | |||||||||||||
(7,673,168 | ) | (23,748,931 | ) | (673,719,289 | ) | (1,024,041,994 | ) | |||||||||
(65,223 | ) | (19,451 | ) | (74,619,091 | ) | (80,776,096 | ) | |||||||||
— | — | (58,387,031 | ) | (619,023,756 | ) | |||||||||||
33,329,201 | (5,540,672 | ) | (31,756,898 | ) | (748,859,089 | ) | ||||||||||
48,741,666 | (20,155,411 | ) | 423,170,010 | (1,367,287,123 | ) | |||||||||||
49,504,213 | 69,659,624 | 2,436,733,231 | 3,804,020,354 | |||||||||||||
$ | 98,245,879 | $ | 49,504,213 | $ | 2,859,903,241 | $ | 2,436,733,231 |
Annual Report 195
Lazard International Equity Advantage Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Shares issued and redeemed | ||||||||||
Institutional Shares | ||||||||||
Shares outstanding at beginning of period | 235,905 | 229,680 | ||||||||
Shares sold | — | 45 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 5,220 | 11,722 | ||||||||
Shares redeemed | — | (5,542 | ) | |||||||
Net increase (decrease) | 5,220 | 6,225 | ||||||||
Shares outstanding at end of period | 241,125 | 235,905 | ||||||||
Open Shares | ||||||||||
Shares outstanding at beginning of period | 11,106 | 10,599 | ||||||||
Shares sold | — | 1 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 212 | 507 | ||||||||
Shares redeemed | — | (1 | ) | |||||||
Net increase (decrease) | 212 | 507 | ||||||||
Shares outstanding at end of period | 11,318 | 11,106 | ||||||||
R6 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.
196 Annual Report
Lazard International Equity Concentrated Portfolio | Lazard International Equity Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
5,888,251 | 6,658,885 | 134,128,473 | 144,593,511 | |||||||||||||
4,243,583 | 1,557,217 | 35,978,227 | 36,738,628 | |||||||||||||
151,058 | 286,268 | 2,468,167 | 8,719,524 | |||||||||||||
(789,873 | ) | (2,614,119 | ) | (38,492,364 | ) | (55,923,190 | ) | |||||||||
3,604,768 | (770,634 | ) | (45,970 | ) | (10,465,038 | ) | ||||||||||
9,493,019 | 5,888,251 | 134,082,503 | 134,128,473 | |||||||||||||
47,769 | 21,011 | 14,336,300 | 13,869,285 | |||||||||||||
67 | 26,848 | 3,324,184 | 3,733,499 | |||||||||||||
569 | 2,144 | 221,021 | 936,334 | |||||||||||||
(6,710 | ) | (2,234 | ) | (4,222,715 | ) | (4,202,818 | ) | |||||||||
(6,074 | ) | 26,758 | (677,510 | ) | 467,015 | |||||||||||
41,695 | 47,769 | 13,658,790 | 14,336,300 | |||||||||||||
— | — | 6,803,382 | 35,418,952 | |||||||||||||
— | — | 2,243,161 | 2,684,577 | |||||||||||||
— | — | 120,673 | 618,559 | |||||||||||||
— | — | (3,378,415 | ) | (31,918,706 | ) | |||||||||||
— | — | (1,014,581 | ) | (28,615,570 | ) | |||||||||||
— | — | 5,788,801 | 6,803,382 |
The accompanying notes are an integral part of these financial statements.
Annual Report 197
Lazard International Equity Select Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 2,026,601 | $ | 1,333,945 | ||||||
Net realized gain (loss) on investments and foreign currency transactions | (1,249,040 | ) | 338,398 | |||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 15,192,386 | (14,665,490 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 15,969,947 | (12,993,147 | ) | |||||||
Distributions to shareholders (Note 2(e)) | ||||||||||
Net investment income and net realized gains | ||||||||||
Institutional Shares | (1,961,509 | ) | (1,895,320 | ) | ||||||
Open Shares | (45,672 | ) | (30,210 | ) | ||||||
Net decrease in net assets resulting from distributions | (2,007,181 | ) | (1,925,530 | ) | ||||||
Capital stock transactions | ||||||||||
Net proceeds from sales | ||||||||||
Institutional Shares | 27,372,157 | 65,277,340 | ||||||||
Open Shares | 2,220,101 | 1,202,007 | ||||||||
Net proceeds from reinvestment of distributions | ||||||||||
Institutional Shares | 1,894,543 | 1,746,591 | ||||||||
Open Shares | 45,594 | 30,210 | ||||||||
Cost of shares redeemed | ||||||||||
Institutional Shares | (23,919,475 | ) | (31,783,405 | ) | ||||||
Open Shares | (1,572,183 | ) | (2,229,497 | ) | ||||||
Net increase (decrease) in net assets from capital stock transactions | 6,040,737 | 34,243,246 | ||||||||
Total increase (decrease) in net assets | 20,003,503 | 19,324,569 | ||||||||
Net assets at beginning of period | 76,084,318 | 56,759,749 | ||||||||
Net assets at end of period | $ | 96,087,821 | $ | 76,084,318 | ||||||
Shares issued and redeemed | ||||||||||
Institutional Shares | ||||||||||
Shares outstanding at beginning of period | 8,172,571 | 4,895,525 | ||||||||
Shares sold | 2,702,352 | 6,149,590 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 177,060 | 187,099 | ||||||||
Shares redeemed | (2,344,737 | ) | (3,059,643 | ) | ||||||
Net increase (decrease) | 534,675 | 3,277,046 | ||||||||
Shares outstanding at end of period | 8,707,246 | 8,172,571 | ||||||||
Open Shares | ||||||||||
Shares outstanding at beginning of period | 163,761 | 256,624 | ||||||||
Shares sold | 216,058 | 113,077 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 4,241 | 3,261 | ||||||||
Shares redeemed | (152,431 | ) | (209,201 | ) | ||||||
Net increase (decrease) | 67,868 | (92,863 | ) | |||||||
Shares outstanding at end of period | 231,629 | 163,761 |
(a) | The Portfolio commenced operations on October 31, 2018. |
(b) | The Portfolio commenced operations on December 31, 2018. |
The accompanying notes are an integral part of these financial statements.
198 Annual Report
Lazard International Equity Value Portfolio | Lazard International Quality Growth Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018(a) | Year Ended December 31, 2019 | Year Ended December 31, 2018(b) | |||||||||||||
$ | 620,073 | $ | 28,960 | $ | 22,481 | $ | — | |||||||||
(332,938 | ) | (696,490 | ) | 908 | — | |||||||||||
2,145,026 | (1,462,526 | ) | 884,213 | (295 | ) | |||||||||||
2,432,161 | (2,130,056 | ) | 907,602 | (295 | ) | |||||||||||
(632,861 | ) | (26,179 | ) | (95,391 | ) | — | ||||||||||
(6,391 | ) | (36 | ) | (236 | ) | — | ||||||||||
(639,252 | ) | (26,215 | ) | (95,627 | ) | — | ||||||||||
386,965 | 25,094,341 | 2,920,464 | 149,000 | |||||||||||||
111,790 | 94,078 | 18,500 | 1,000 | |||||||||||||
632,861 | 26,179 | 95,391 | — | |||||||||||||
6,262 | 36 | 236 | — | |||||||||||||
(12,619,880 | ) | (26,571 | ) | (17,321 | ) | — | ||||||||||
(21,311 | ) | (47,885 | ) | (11,243 | ) | — | ||||||||||
(11,503,313 | ) | 25,140,178 | 3,006,027 | 150,000 | ||||||||||||
(9,710,404 | ) | 22,983,907 | 3,818,002 | 149,705 | ||||||||||||
22,983,907 | — | 149,705 | — | |||||||||||||
$ | 13,273,503 | $ | 22,983,907 | $ | 3,967,707 | $ | 149,705 | |||||||||
2,509,997 | — | 14,900 | — | |||||||||||||
39,472 | 2,509,986 | 290,807 | 14,900 | |||||||||||||
63,925 | 2,928 | 7,589 | — | |||||||||||||
(1,293,430 | ) | (2,917 | ) | (1,357 | ) | — | ||||||||||
(1,190,033 | ) | 2,509,997 | 297,039 | 14,900 | ||||||||||||
1,319,964 | 2,509,997 | 311,939 | 14,900 | |||||||||||||
4,211 | — | 100 | — | |||||||||||||
11,500 | 9,423 | 1,613 | 100 | |||||||||||||
633 | 4 | 19 | — | |||||||||||||
(2,155 | ) | (5,216 | ) | (961 | ) | — | ||||||||||
9,978 | 4,211 | 671 | 100 | |||||||||||||
14,189 | 4,211 | 771 | 100 |
Annual Report 199
Lazard International Small Cap Equity Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 597,260 | $ | 676,876 | ||||||
Net realized gain (loss) on investments and foreign currency transactions | (1,233,823 | ) | 7,560,083 | |||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 13,644,978 | (27,323,558 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 13,008,415 | (19,086,599 | ) | |||||||
Distributions to shareholders (Note 2(e)) | ||||||||||
Net investment income and net realized gains | ||||||||||
Institutional Shares | (993,572 | ) | (1,675,001 | ) | ||||||
Open Shares | (532,378 | ) | (844,717 | ) | ||||||
R6 Shares | — | — | ||||||||
Net decrease in net assets resulting from distributions | (1,525,950 | ) | (2,519,718 | ) | ||||||
Capital stock transactions | ||||||||||
Net proceeds from sales | ||||||||||
Institutional Shares | 5,735,020 | 22,184,618 | ||||||||
Open Shares | 2,821,054 | 5,161,365 | ||||||||
R6 Shares | — | — | ||||||||
Net proceeds from reinvestment of distributions | ||||||||||
Institutional Shares | 985,401 | 1,671,063 | ||||||||
Open Shares | 525,950 | 765,533 | ||||||||
R6 Shares | — | — | ||||||||
Cost of shares redeemed | ||||||||||
Institutional Shares | (11,597,241 | ) | (16,237,337 | ) | ||||||
Open Shares | (7,881,149 | ) | (20,181,718 | ) | ||||||
R6 Shares | — | — | ||||||||
Net increase (decrease) in net assets from capital stock transactions | (9,410,965 | ) | (6,636,476 | ) | ||||||
Total increase (decrease) in net assets | 2,071,500 | (28,242,793 | ) | |||||||
Net assets at beginning of period | 55,386,199 | 83,628,992 | ||||||||
Net assets at end of period | $ | 57,457,699 | $ | 55,386,199 |
The accompanying notes are an integral part of these financial statements.
200 Annual Report
Lazard International Strategic Equity Portfolio | Lazard Managed Equity Volatility Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 101,146,547 | $ | 89,333,071 | $ | 444,759 | $ | 315,398 | |||||||||
(31,395,597 | ) | 555,754,186 | 716,348 | (294,609 | ) | |||||||||||
1,109,551,562 | (1,299,655,438 | ) | 3,732,305 | (1,538,663 | ) | |||||||||||
1,179,302,512 | (654,568,181 | ) | 4,893,412 | (1,517,874 | ) | |||||||||||
(100,719,323 | ) | (390,962,878 | ) | (480,167 | ) | (381,378 | ) | |||||||||
(11,005,478 | ) | (67,997,086 | ) | (2,562 | ) | (4,224 | ) | |||||||||
(2,219,743 | ) | (8,298,386 | ) | — | — | |||||||||||
(113,944,544 | ) | (467,258,350 | ) | (482,729 | ) | (385,602 | ) | |||||||||
792,681,193 | 1,191,814,486 | 9,905,800 | 20,348,996 | |||||||||||||
124,036,050 | 220,196,653 | 9,000 | 30,826 | |||||||||||||
21,028,905 | 25,261,981 | — | — | |||||||||||||
94,513,926 | 377,793,204 | 439,293 | 346,406 | |||||||||||||
10,047,508 | 62,572,751 | 2,562 | 2,739 | |||||||||||||
2,174,455 | 8,184,877 | — | — | |||||||||||||
(911,120,127 | ) | (1,912,545,919 | ) | (1,072,923 | ) | (2,294,274 | ) | |||||||||
(431,740,280 | ) | (503,144,624 | ) | (574 | ) | (134,055 | ) | |||||||||
(19,831,488 | ) | (26,460,064 | ) | — | — | |||||||||||
(318,209,858 | ) | (556,326,655 | ) | 9,283,158 | 18,300,638 | |||||||||||
747,148,110 | (1,678,153,186 | ) | 13,693,841 | 16,397,162 | ||||||||||||
5,560,275,482 | 7,238,428,668 | 20,892,067 | 4,494,905 | |||||||||||||
$ | 6,307,423,592 | $ | 5,560,275,482 | $ | 34,585,908 | $ | 20,892,067 |
Annual Report 201
Lazard International Small Cap Equity Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Shares issued and redeemed Institutional Shares | |||||||||
Shares outstanding at beginning of period | 3,529,666 | 2,993,040 | |||||||
Shares sold | 514,178 | 1,656,082 | |||||||
Shares issued to shareholders from reinvestment of distributions | 92,962 | 146,870 | |||||||
Shares redeemed | (1,046,189 | ) | (1,266,326 | ) | |||||
Net increase (decrease) | (439,049 | ) | 536,626 | ||||||
Shares outstanding at end of period | 3,090,617 | 3,529,666 | |||||||
Open Shares | |||||||||
Shares outstanding at beginning of period | 2,031,598 | 3,064,171 | |||||||
Shares sold | 254,632 | 401,822 | |||||||
Shares issued to shareholders from reinvestment of distributions | 49,571 | 68,202 | |||||||
Shares redeemed | (713,210 | ) | (1,502,597 | ) | |||||
Net increase (decrease) | (409,007 | ) | (1,032,573 | ) | |||||
Shares outstanding at end of period | 1,622,591 | 2,031,598 | |||||||
R6 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.
202 Annual Report
Lazard International Strategic Equity Portfolio | Lazard Managed Equity Volatility Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
359,227,186 | 376,589,551 | 1,963,386 | 361,300 | |||||||||||||
55,219,621 | 76,867,462 | 804,074 | 1,790,614 | |||||||||||||
6,217,811 | 29,898,424 | 34,782 | 33,373 | |||||||||||||
(62,752,885 | ) | (124,128,251 | ) | (88,137 | ) | (221,901 | ) | |||||||||
(1,315,453 | ) | (17,362,365 | ) | 750,719 | 1,602,086 | |||||||||||
357,911,733 | 359,227,186 | 2,714,105 | 1,963,386 | |||||||||||||
64,009,753 | 76,885,738 | 17,404 | 27,255 | |||||||||||||
8,545,569 | 14,094,427 | 736 | 2,695 | |||||||||||||
656,801 | 4,909,122 | 203 | 262 | |||||||||||||
(29,272,610 | ) | (31,879,534 | ) | (45 | ) | (12,808 | ) | |||||||||
(20,070,240 | ) | (12,875,985 | ) | 894 | (9,851 | ) | ||||||||||
43,939,513 | 64,009,753 | 18,298 | 17,404 | |||||||||||||
7,549,275 | 7,026,668 | — | — | |||||||||||||
1,459,355 | 1,599,586 | — | — | |||||||||||||
142,878 | 647,215 | — | — | |||||||||||||
(1,349,087 | ) | (1,724,194 | ) | — | — | |||||||||||
253,146 | 522,607 | — | — | |||||||||||||
7,802,421 | 7,549,275 | — | — |
Annual Report 203
Lazard US Equity Concentrated Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 10,746,418 | $ | 17,196,730 | ||||||
Net realized gain (loss) on investments and foreign currency transactions | 16,675,749 | 74,632,752 | ||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 316,438,020 | (172,165,758 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 343,860,187 | (80,336,276 | ) | |||||||
Distributions to shareholders (Note 2(e)) | ||||||||||
Net investment income and net realized gains Institutional Shares | (10,474,453 | ) | (126,901,740 | ) | ||||||
Open Shares | (251,259 | ) | (5,585,479 | ) | ||||||
R6 Shares | (16,815 | ) | (158,630 | ) | ||||||
Net decrease in net assets resulting from distributions | (10,742,527 | ) | (132,645,849 | ) | ||||||
Capital stock transactions | ||||||||||
Net proceeds from sales Institutional Shares | 239,444,709 | 231,478,214 | ||||||||
Open Shares | 10,485,661 | 15,671,466 | ||||||||
R6 Shares | 52,111 | 2,047,701 | ||||||||
Issued in connection with acquisition of US Realty Institutional Shares | — | — | ||||||||
Open Shares | — | — | ||||||||
Net proceeds from reinvestment of distributions Institutional Shares | 9,489,994 | 114,753,886 | ||||||||
Open Shares | 245,698 | 5,517,497 | ||||||||
R6 Shares | 16,815 | 158,630 | ||||||||
Cost of shares redeemed Institutional Shares | (337,781,398 | ) | (609,674,559 | ) | ||||||
Open Shares | (27,918,973 | ) | (49,537,525 | ) | ||||||
R6 Shares | (444,560 | ) | (245,106 | ) | ||||||
Net increase (decrease) in net assets from capital stock transactions | (106,409,943 | ) | (289,829,796 | ) | ||||||
Total increase (decrease) in net assets | 226,707,717 | (502,811,921 | ) | |||||||
Net assets at beginning of period | 1,093,732,246 | 1,596,544,167 | ||||||||
Net assets at end of period | $ | 1,320,439,963 | $ | 1,093,732,246 |
The accompanying notes are an integral part of these financial statements.
204 Annual Report
Lazard US Equity Focus Portfolio | Lazard US Realty Equity Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 775,182 | $ | 915,707 | $ | 802,031 | $ | 805,208 | |||||||||
9,274,046 | 7,992,281 | 7,866,962 | 2,480,557 | |||||||||||||
8,829,523 | (10,904,671 | ) | 7,944,841 | (9,938,039 | ) | |||||||||||
18,878,751 | (1,996,683 | ) | 16,613,834 | (6,652,274 | ) | |||||||||||
(3,507,462 | ) | (9,488,347 | ) | (1,608,571 | ) | (695,484 | ) | |||||||||
(115,921 | ) | (132,836 | ) | (4,289,259 | ) | (1,716,582 | ) | |||||||||
(1,131,458 | ) | (1,527,040 | ) | — | — | |||||||||||
(4,754,841 | ) | (11,148,223 | ) | (5,897,830 | ) | (2,412,066 | ) | |||||||||
2,432,592 | 2,797,366 | 5,198,049 | 1,624,667 | |||||||||||||
24,674 | 54,694 | 2,162,844 | 3,032,454 | |||||||||||||
5,577,813 | 3,687,551 | — | — | |||||||||||||
— | — | — | 10,788,800 | |||||||||||||
— | — | — | 11,850,795 | |||||||||||||
3,507,279 | 9,486,106 | 1,556,998 | 690,667 | |||||||||||||
115,887 | 132,621 | 4,239,121 | 1,661,053 | |||||||||||||
1,131,458 | 1,527,040 | — | — | |||||||||||||
(46,017,010 | ) | (13,412,997 | ) | (14,307,586 | ) | (13,277,642 | ) | |||||||||
(61,182 | ) | (159,494 | ) | (25,107,133 | ) | (14,180,850 | ) | |||||||||
(8,015,687 | ) | (4,765,670 | ) | — | — | |||||||||||
(41,304,176 | ) | (652,783 | ) | (26,257,707 | ) | 2,189,944 | ||||||||||
(27,180,266 | ) | (13,797,689 | ) | (15,541,703 | ) | (6,874,396 | ) | |||||||||
71,566,959 | 85,364,648 | 59,661,514 | 66,535,910 | |||||||||||||
$ | 44,386,693 | $ | 71,566,959 | $ | 44,119,811 | $ | 59,661,514 |
Annual Report 205
Lazard US Equity Concentrated Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Shares issued and redeemed | |||||||||
Institutional Shares | |||||||||
Shares outstanding at beginning of period | 80,772,130 | 98,527,318 | |||||||
Shares sold | 16,233,590 | 14,982,089 | |||||||
Shares issued in connection with acquisition of US Realty Income Portfolio | — | — | |||||||
Shares issued to shareholders from reinvestment of distributions | 564,545 | 8,686,899 | |||||||
Shares redeemed | (22,084,982 | ) | (41,424,176 | ) | |||||
Net increase (decrease) | (5,286,847 | ) | (17,755,188 | ) | |||||
Shares outstanding at end of period | 75,485,283 | 80,772,130 | |||||||
Open Shares | |||||||||
Shares outstanding at beginning of period | 3,925,727 | 5,681,791 | |||||||
Shares sold | 683,831 | 991,563 | |||||||
Shares issued in connection with acquisition of US Realty Income Portfolio | — | — | |||||||
Shares issued to shareholders from reinvestment of distributions | 14,504 | 413,698 | |||||||
Shares redeemed | (1,864,989 | ) | (3,161,325 | ) | |||||
Net increase (decrease) | (1,166,654 | ) | (1,756,064 | ) | |||||
Shares outstanding at end of period | 2,759,073 | 3,925,727 | |||||||
R6 Shares | |||||||||
Shares outstanding at beginning of period | 147,098 | 23,498 | |||||||
Shares sold | 3,494 | 126,703 | |||||||
Shares issued to shareholders from reinvestment of distributions | 998 | 12,595 | |||||||
Shares redeemed | (27,753 | ) | (15,698 | ) | |||||
Net increase (decrease) | (23,261 | ) | 123,600 | ||||||
Shares outstanding at end of period | 123,837 | 147,098 |
The accompanying notes are an integral part of these financial statements.
206 Annual Report
Lazard US Equity Focus Portfolio | Lazard US Realty Equity Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
5,927,072 | 5,870,874 | 941,829 | 993,322 | |||||||||||||
202,537 | 229,810 | 261,810 | 91,997 | |||||||||||||
— | — | — | 562,426 | |||||||||||||
292,273 | 915,948 | 81,398 | 40,649 | |||||||||||||
(3,707,320 | ) | (1,089,560 | ) | (691,834 | ) | (746,565 | ) | |||||||||
(3,212,510 | ) | 56,198 | (348,626 | ) | (51,493 | ) | ||||||||||
2,714,562 | 5,927,072 | 593,203 | 941,829 | |||||||||||||
85,762 | 81,216 | 2,621,072 | 2,524,879 | |||||||||||||
2,053 | 4,222 | 109,900 | 167,884 | |||||||||||||
— | — | — | 616,099 | |||||||||||||
9,609 | 12,734 | 221,447 | 97,455 | |||||||||||||
(5,052 | ) | (12,410 | ) | (1,230,047 | ) | (785,245 | ) | |||||||||
6,610 | 4,546 | (898,700 | ) | 96,193 | ||||||||||||
92,372 | 85,762 | 1,722,372 | 2,621,072 | |||||||||||||
982,747 | 916,579 | — | — | |||||||||||||
474,198 | 291,908 | — | — | |||||||||||||
94,367 | 147,820 | — | — | |||||||||||||
(669,951 | ) | (373,560 | ) | — | — | |||||||||||
(101,386 | ) | 66,168 | — | — | ||||||||||||
881,361 | 982,747 | — | — |
Annual Report 207
Lazard US Small-Mid Cap Equity Portfolio | |||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||
Increase (Decrease) in Net Assets | |||||||||
Operations | |||||||||
Net investment income (loss) | $ | 528,891 | $ | 597,923 | |||||
Net realized gain (loss) on investments | 9,996,563 | 15,587,339 | |||||||
Net change in unrealized appreciation (depreciation) on investments | 24,785,901 | (36,201,275 | ) | ||||||
Net increase (decrease) in net assets resulting from operations | 35,311,355 | (20,016,013 | ) | ||||||
Distributions to shareholders (Note 2(e)) | |||||||||
Net investment income and net realized gains | |||||||||
Institutional Shares | (3,405,960 | ) | (17,695,195 | ) | |||||
Open Shares | (467,265 | ) | (2,222,866 | ) | |||||
Net decrease in net assets resulting from distributions | (3,873,225 | ) | (19,918,061 | ) | |||||
Capital stock transactions | |||||||||
Net proceeds from sales | |||||||||
Institutional Shares | 43,497,892 | 21,485,449 | |||||||
Open Shares | 1,907,057 | 2,442,537 | |||||||
Net proceeds from reinvestment of distributions | |||||||||
Institutional Shares | 3,376,123 | 17,320,681 | |||||||
Open Shares | 439,046 | 2,058,605 | |||||||
Cost of shares redeemed | |||||||||
Institutional Shares | (80,591,007 | ) | (66,434,776 | ) | |||||
Open Shares | (4,715,661 | ) | (12,483,878 | ) | |||||
Net increase (decrease) in net assets from capital stock transactions | (36,086,550 | ) | (35,611,382 | ) | |||||
Total increase (decrease) in net assets | (4,648,420 | ) | (75,545,456 | ) | |||||
Net assets at beginning of period | 127,402,732 | 202,948,188 | |||||||
Net assets at end of period | $ | 122,754,312 | $ | 127,402,732 | |||||
Shares issued and redeemed | |||||||||
Institutional Shares | |||||||||
Shares outstanding at beginning of period | 10,493,688 | 12,081,329 | |||||||
Shares sold | 3,337,117 | 1,436,712 | |||||||
Shares issued to shareholders from reinvestment of distributions | 247,154 | 1,572,044 | |||||||
Shares redeemed | (6,152,214 | ) | (4,596,397 | ) | |||||
Net increase (decrease) | (2,567,943 | ) | (1,587,641 | ) | |||||
Shares outstanding at end of period | 7,925,745 | 10,493,688 | |||||||
Open Shares | |||||||||
Shares outstanding at beginning of period | 1,368,812 | 1,893,205 | |||||||
Shares sold | 159,368 | 183,177 | |||||||
Shares issued to shareholders from reinvestment of distributions | 34,845 | 201,850 | |||||||
Shares redeemed | (398,927 | ) | (909,420 | ) | |||||
Net increase (decrease) | (204,714 | ) | (524,393 | ) | |||||
Shares outstanding at end of period | 1,164,098 | 1,368,812 |
The accompanying notes are an integral part of these financial statements.
208 Annual Report
The Lazard Funds, Inc.Financial Highlights
LAZARD DEVELOPING MARKETS EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 11.42 | $ | 14.48 | $ | 10.28 | $ | 9.04 | $ | 10.43 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.08 | 0.11 | 0.03 | 0.05 | ^ | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.13 | (3.08 | ) | 4.20 | 1.29 | (1.40 | ) | ||||||||||||||
Total from investment operations | 3.21 | (2.97 | ) | 4.23 | 1.34 | (1.34 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.08 | ) | (0.09 | ) | (0.03 | ) | (0.10 | ) | (0.05 | ) | |||||||||||
Total distributions | (0.08 | ) | (0.09 | ) | (0.03 | ) | (0.10 | ) | (0.05 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 14.55 | $ | 11.42 | $ | 14.48 | $ | 10.28 | $ | 9.04 | |||||||||||
Total Return (c) | 28.17 | % | –20.58 | % | 41.15 | % | 14.81 | %^ | –12.84 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 226,067 | $ | 215,120 | $ | 268,730 | $ | 189,035 | $ | 343,788 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.16 | % | 1.14 | % | 1.18 | % | 1.21 | %^ | 1.20 | % | |||||||||||
Gross expenses | 1.16 | % | 1.14 | % | 1.18 | % | 1.23 | % | 1.20 | % | |||||||||||
Net investment income (loss) | 0.63 | % | 0.83 | % | 0.24 | % | 0.48 | %^ | 0.55 | % | |||||||||||
Portfolio turnover rate | 55 | % | 63 | % | 46 | % | 56 | % | 66 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 209
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 11.36 | $ | 14.45 | $ | 10.28 | $ | 9.05 | $ | 10.43 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.05 | 0.06 | (0.02 | ) | 0.01 | ^ | 0.01 | ||||||||||||||
Net realized and unrealized gain (loss) | 3.11 | (3.06 | ) | 4.19 | 1.28 | (1.38 | ) | ||||||||||||||
Total from investment operations | 3.16 | (3.00 | ) | 4.17 | 1.29 | (1.37 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.01 | ) | (0.09 | ) | — | (0.06 | ) | (0.01 | ) | ||||||||||||
Total distributions | (0.01 | ) | (0.09 | ) | — | (0.06 | ) | (0.01 | ) | ||||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 14.51 | $ | 11.36 | $ | 14.45 | $ | 10.28 | $ | 9.05 | |||||||||||
Total Return (c) | 27.79 | % | –20.83 | %# | 40.56 | % | 14.31 | %^ | –13.11 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 9,341 | $ | 7,263 | $ | 12,569 | $ | 7,272 | $ | 10,903 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.46 | % | 1.51 | % | 1.58 | % | 1.60 | %^ | 1.57 | % | |||||||||||
Gross expenses | 1.55 | % | 1.51 | % | 1.58 | % | 1.65 | % | 1.57 | % | |||||||||||
Net investment income (loss) | 0.36 | % | 0.42 | % | –0.17 | % | 0.06 | %^ | 0.13 | % | |||||||||||
Portfolio turnover rate | 55 | % | 63 | % | 46 | % | 56 | % | 66 | % |
^ | 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. For Institutional Shares, the impact on net expenses and net investment income (loss) ratios of the Portfolio was less than 0.005%. For Open Shares, 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). |
# | The Portfolio received settlement proceeds from a foreign exchange trading class action lawsuit. The proceeds from the settlement represented a realized gain and were recorded in the period received. There was a 0.07% impact on the total return of the Portfolio’s Open Shares. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
210 Annual Report
LAZARD EMERGING MARKETS CORE EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.89 | $ | 12.30 | $ | 8.83 | $ | 8.60 | $ | 9.62 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.20 | 0.16 | 0.11 | 0.08 | 0.03 | ||||||||||||||||
Net realized and unrealized gain (loss) | 1.93 | (2.39 | ) | 3.45 | 0.22 | (1.03 | ) | ||||||||||||||
Total from investment operations | 2.13 | (2.23 | ) | 3.56 | 0.30 | (1.00 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.23 | ) | (0.18 | ) | (0.09 | ) | (0.07 | ) | (0.01 | ) | |||||||||||
Return of capital | — | — | — | — | (0.01 | ) | |||||||||||||||
Total distributions | (0.23 | ) | (0.18 | ) | (0.09 | ) | (0.07 | ) | (0.02 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 11.79 | $ | 9.89 | $ | 12.30 | $ | 8.83 | $ | 8.60 | |||||||||||
Total Return (c) | 21.59 | % | –18.12 | % | 40.35 | % | 3.47 | % | –10.36 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 197,213 | $ | 207,955 | $ | 230,343 | $ | 122,995 | $ | 102,421 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.18 | % | 1.18 | % | 1.20 | % | 1.30 | % | 1.30 | % | |||||||||||
Gross expenses | 1.18 | % | 1.18 | % | 1.20 | % | 1.31 | % | 1.52 | % | |||||||||||
Net investment income (loss) | 1.83 | % | 1.44 | % | 0.98 | % | 0.89 | % | 0.32 | % | |||||||||||
Portfolio turnover rate | 19 | % | 30 | % | 15 | % | 62 | % | 46 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 211
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.87 | $ | 12.27 | $ | 8.81 | $ | 8.58 | $ | 9.62 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.16 | 0.11 | 0.06 | 0.07 | — | (b) | |||||||||||||||
Net realized and unrealized gain (loss) | 1.92 | (2.37 | ) | 3.45 | 0.20 | (1.04 | ) | ||||||||||||||
Total from investment operations | 2.08 | (2.26 | ) | 3.51 | 0.27 | (1.04 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.19 | ) | (0.14 | ) | (0.05 | ) | (0.04 | ) | — | ||||||||||||
Total distributions | (0.19 | ) | (0.14 | ) | (0.05 | ) | (0.04 | ) | — | ||||||||||||
Net asset value, end of period | $ | 11.76 | $ | 9.87 | $ | 12.27 | $ | 8.81 | $ | 8.58 | |||||||||||
Total Return (c) | 21.08 | % | –18.43 | % | 39.80 | % | 3.17 | % | –10.81 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,425 | $ | 1,853 | $ | 1,828 | $ | 729 | $ | 2,344 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.55 | % | 1.58 | % | 1.60 | % | 1.60 | % | 1.60 | % | |||||||||||
Gross expenses | 1.90 | % | 2.00 | % | 2.45 | % | 2.14 | % | 2.35 | % | |||||||||||
Net investment income (loss) | 1.48 | % | 1.00 | % | 0.56 | % | 0.85 | % | –0.04 | % | |||||||||||
Portfolio turnover rate | 19 | % | 30 | % | 15 | % | 62 | % | 46 | % |
The accompanying notes are an integral part of these financial statements.
212 Annual Report
Selected data for a share of capital stock outstanding throughout each period | Year Ended 12/31/19 | For the Period 4/6/18* to 12/31/18 | ||||||||
R6 Shares | ||||||||||
Net asset value, beginning of period | $ | 9.89 | $ | 12.21 | ||||||
Income (Loss) from investment operations: | ||||||||||
Net investment income (loss) (a) | 0.20 | 0.14 | ||||||||
Net realized and unrealized gain (loss) | 1.94 | (2.28 | ) | |||||||
Total from investment operations | 2.14 | (2.14 | ) | |||||||
Less distributions from: | ||||||||||
Net investment income | (0.23 | ) | (0.18 | ) | ||||||
Total distributions | (0.23 | ) | (0.18 | ) | ||||||
Net asset value, end of period | $ | 11.80 | $ | 9.89 | ||||||
Total Return (c) | 21.69 | % | –17.52 | % | ||||||
Ratios and Supplemental Data: | ||||||||||
Net assets, end of period (in thousands) | $ | 597 | $ | 494 | ||||||
Ratios to average net assets (d): | ||||||||||
Net expenses | 1.18 | % | 1.16 | % | ||||||
Gross expenses | 3.23 | % | 7.68 | % | ||||||
Net investment income (loss) | 1.80 | % | 1.71 | % | ||||||
Portfolio turnover rate | 19 | % | 30 | % |
* | The inception date for the R6 Shares was April 6, 2018. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year except for non-recurring expenses. |
The accompanying notes are an integral part of these financial statements.
Annual Report 213
LAZARD EMERGING MARKETS EQUITY ADVANTAGE PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/29/15* to | ||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | |||||||||||||||
Institutional Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.03 | $ | 12.27 | $ | 8.71 | $ | 8.06 | $ | 10.00 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.24 | 0.19 | 0.12 | 0.12 | 0.08 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.80 | (2.19 | ) | 3.58 | 0.67 | (1.88 | ) | |||||||||||||
Total from investment operations | 2.04 | (2.00 | ) | 3.70 | 0.79 | (1.80 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.23 | ) | (0.22 | ) | (0.13 | ) | (0.13 | ) | (0.14 | ) | ||||||||||
Net realized gains | — | — | (b) | — | — | — | ||||||||||||||
Return of capital | — | (0.02 | ) | (0.01 | ) | (0.01 | ) | — | ||||||||||||
Total distributions | (0.23 | ) | (0.24 | ) | (0.14 | ) | (0.14 | ) | (0.14 | ) | ||||||||||
Net asset value, end of period | $ | 11.84 | $ | 10.03 | $ | 12.27 | $ | 8.71 | $ | 8.06 | ||||||||||
Total Return (c) | 20.34 | % | –16.23 | % | 42.52 | % | 9.83 | % | –17.97 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 9,190 | $ | 3,107 | $ | 4,191 | $ | 2,896 | $ | 2,618 | ||||||||||
Ratios to average net assets (d): | ||||||||||||||||||||
Net expenses | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | ||||||||||
Gross expenses | 3.19 | % | 5.60 | % | 6.29 | % | 9.57 | % | 11.47 | % | ||||||||||
Net investment income (loss) | 2.15 | % | 1.59 | % | 1.15 | % | 1.41 | % | 1.54 | % | ||||||||||
Portfolio turnover rate | 59 | % | 61 | % | 52 | % | 57 | % | 38 | % |
The accompanying notes are an integral part of these financial statements.
214 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/29/15* to | ||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | |||||||||||||||
Open Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.04 | $ | 12.27 | $ | 8.71 | $ | 8.06 | $ | 10.00 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.21 | 0.16 | 0.08 | 0.09 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.79 | (2.18 | ) | 3.58 | 0.68 | (1.87 | ) | |||||||||||||
Total from investment operations | 2.00 | (2.02 | ) | 3.66 | 0.77 | (1.81 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.19 | ) | (0.19 | ) | (0.09 | ) | (0.11 | ) | (0.13 | ) | ||||||||||
Net realized gains | — | — | (b) | — | — | — | ||||||||||||||
Return of capital | — | (0.02 | ) | (0.01 | ) | (0.01 | ) | — | ||||||||||||
Total distributions | (0.19 | ) | (0.21 | ) | (0.10 | ) | (0.12 | ) | (0.13 | ) | ||||||||||
Net asset value, end of period | $ | 11.85 | $ | 10.04 | $ | 12.27 | $ | 8.71 | $ | 8.06 | ||||||||||
Total Return (c) | 19.97 | % | –16.40 | % | 42.09 | % | 9.51 | % | –18.13 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,162 | $ | 476 | $ | 356 | $ | 120 | $ | 95 | ||||||||||
Ratios to average net assets (d): | ||||||||||||||||||||
Net expenses | 1.38 | % | 1.40 | % | 1.40 | % | 1.40 | % | 1.40 | % | ||||||||||
Gross expenses | 4.32 | % | 8.09 | % | 12.17 | % | 20.02 | % | 26.37 | % | ||||||||||
Net investment income (loss) | 1.87 | % | 1.35 | % | 0.72 | % | 1.06 | % | 1.18 | % | ||||||||||
Portfolio turnover rate | 59 | % | 61 | % | 52 | % | 57 | % | 38 | % |
* | The Portfolio commenced operations on May 29, 2015. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
Annual Report 215
LAZARD EMERGING MARKETS EQUITY BLEND PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.02 | $ | 12.93 | $ | 9.60 | $ | 8.53 | $ | 10.00 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.13 | 0.17 | 0.10 | 0.08 | ^ | 0.12 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.29 | (2.89 | ) | 3.35 | 1.04 | (1.39 | ) | ||||||||||||||
Total from investment operations | 2.42 | (2.72 | ) | 3.45 | 1.12 | (1.27 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.26 | ) | (0.19 | ) | (0.12 | ) | (0.05 | ) | (0.19 | ) | |||||||||||
Return of capital | — | — | — | — | (0.01 | ) | |||||||||||||||
Total distributions | (0.26 | ) | (0.19 | ) | (0.12 | ) | (0.05 | ) | (0.20 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 12.18 | $ | 10.02 | $ | 12.93 | $ | 9.60 | $ | 8.53 | |||||||||||
Total Return (c) | 24.21 | % | –21.05 | % | 35.98 | % | 13.12 | %^ | –12.74 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 96,399 | $ | 291,404 | $ | 385,492 | $ | 282,473 | $ | 287,857 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.26 | % | 1.15 | % | 1.21 | % | 1.25 | %^ | 1.20 | % | |||||||||||
Gross expenses | 1.26 | % | 1.15 | % | 1.21 | % | 1.26 | % | 1.20 | % | |||||||||||
Net investment income (loss) | 1.16 | % | 1.39 | % | 0.90 | % | 0.88 | %^ | 1.22 | % | |||||||||||
Portfolio turnover rate | 56 | % | 61 | % | 57 | % | 47 | % | 38 | % |
The accompanying notes are an integral part of these financial statements.
216 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.03 | $ | 12.95 | $ | 9.62 | $ | 8.55 | $ | 9.99 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.14 | 0.12 | 0.06 | 0.05 | ^ | 0.11 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.29 | (2.89 | ) | 3.34 | 1.04 | (1.38 | ) | ||||||||||||||
Total from investment operations | 2.43 | (2.77 | ) | 3.40 | 1.09 | (1.27 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.23 | ) | (0.15 | ) | (0.07 | ) | (0.02 | ) | (0.17 | ) | |||||||||||
Return of capital | — | — | — | — | (b) | — | (b) | ||||||||||||||
Total distributions | (0.23 | ) | (0.15 | ) | (0.07 | ) | (0.02 | ) | (0.17 | ) | |||||||||||
Redemption fees | — | — | — | (b) | — | (b) | — | (b) | |||||||||||||
Net asset value, end of period | $ | 12.23 | $ | 10.03 | $ | 12.95 | $ | 9.62 | $ | 8.55 | |||||||||||
Total Return (c) | 24.21 | % | –21.39 | % | 35.38 | % | 12.74 | %^ | –12.77 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 5,977 | $ | 6,200 | $ | 9,728 | $ | 6,804 | $ | 7,107 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.52 | % | 1.53 | % | 1.60 | % | 1.60 | %^ | 1.54 | % | |||||||||||
Gross expenses | 1.77 | % | 1.53 | % | 1.61 | % | 1.89 | % | 1.54 | % | |||||||||||
Net investment income (loss) | 1.27 | % | 1.01 | % | 0.50 | % | 0.54 | %^ | 1.10 | % | |||||||||||
Portfolio turnover rate | 56 | % | 61 | % | 57 | % | 47 | % | 38 | % |
^ | 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 impact on net expenses and net investment income (loss) ratios of the Portfolio was less than 0.005%. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
Annual Report 217
LAZARD EMERGING MARKETS EQUITY PORTFOLIO
Selected data for a share | |||||||||||||||||||||
of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 16.06 | $ | 20.02 | $ | 15.96 | $ | 13.44 | $ | 17.19 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.42 | 0.39 | 0.33 | 0.24 | ^ | 0.30 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.45 | (4.01 | ) | 4.13 | 2.52 | (3.76 | ) | ||||||||||||||
Total from investment operations | 2.87 | (3.62 | ) | 4.46 | 2.76 | (3.46 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.45 | ) | (0.34 | ) | (0.40 | ) | (0.24 | ) | (0.23 | ) | |||||||||||
Net realized gains | — | — | — | — | (0.06 | ) | |||||||||||||||
Total distributions | (0.45 | ) | (0.34 | ) | (0.40 | ) | (0.24 | ) | (0.29 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 18.48 | $ | 16.06 | $ | 20.02 | $ | 15.96 | $ | 13.44 | |||||||||||
Total Return (c) | 18.04 | % | –18.09 | % | 28.02 | % | 20.52 | %^ | –20.16 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 6,645,429 | $ | 7,573,861 | $ | 11,285,358 | $ | 9,311,693 | $ | 8,238,638 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.08 | % | 1.07 | % | 1.08 | % | 1.09 | %^ | 1.10 | % | |||||||||||
Gross expenses | 1.08 | % | 1.07 | % | 1.08 | % | 1.09 | % | 1.10 | % | |||||||||||
Net investment income (loss) | 2.42 | % | 2.12 | % | 1.82 | % | 1.59 | %^ | 1.83 | % | |||||||||||
Portfolio turnover rate | 20 | % | 16 | % | 14 | % | 12 | % | 14 | % |
The accompanying notes are an integral part of these financial statements.
218 Annual Report
Selected data for a share | |||||||||||||||||||||
of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 16.53 | $ | 20.60 | $ | 16.41 | $ | 13.82 | $ | 17.65 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.39 | 0.35 | 0.29 | 0.21 | ^ | 0.26 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.52 | (4.12 | ) | 4.25 | 2.58 | (3.84 | ) | ||||||||||||||
Total from investment operations | 2.91 | (3.77 | ) | 4.54 | 2.79 | (3.58 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.41 | ) | (0.30 | ) | (0.35 | ) | (0.20 | ) | (0.19 | ) | |||||||||||
Net realized gains | — | — | — | — | (0.06 | ) | |||||||||||||||
Total distributions | (0.41 | ) | (0.30 | ) | (0.35 | ) | (0.20 | ) | (0.25 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 19.03 | $ | 16.53 | $ | 20.60 | $ | 16.41 | $ | 13.82 | |||||||||||
Total Return (c) | 17.73 | % | –18.32 | % | 27.73 | % | 20.17 | %^ | –20.33 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 969,347 | $ | 1,004,569 | $ | 1,515,715 | $ | 1,287,552 | $ | 832,706 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.34 | % | 1.32 | % | 1.34 | % | 1.35 | %^ | 1.37 | % | |||||||||||
Gross expenses | 1.34 | % | 1.32 | % | 1.34 | % | 1.35 | % | 1.37 | % | |||||||||||
Net investment income (loss) | 2.19 | % | 1.85 | % | 1.55 | % | 1.35 | %^ | 1.58 | % | |||||||||||
Portfolio turnover rate | 20 | % | 16 | % | 14 | % | 12 | % | 14 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 219
Selected data for a share | For the Period | ||||||||||||||||||||
of capital stock outstanding | Year Ended | 1/19/15* | |||||||||||||||||||
throughout the period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | to 12/31/15 | ||||||||||||||||
R6 Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 16.06 | $ | 20.02 | $ | 15.96 | $ | 13.44 | $ | 17.26 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.40 | 0.40 | 0.35 | 0.23 | ^ | 0.27 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.46 | (4.02 | ) | 4.11 | 2.53 | (3.80 | ) | ||||||||||||||
Total from investment operations | 2.86 | (3.62 | ) | 4.46 | 2.76 | (3.53 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.45 | ) | (0.34 | ) | (0.40 | ) | (0.24 | ) | (0.23 | ) | |||||||||||
Net realized gains | — | — | — | — | (0.06 | ) | |||||||||||||||
Total distributions | (0.45 | ) | (0.34 | ) | (0.40 | ) | (0.24 | ) | (0.29 | ) | |||||||||||
Net asset value, end of period | $ | 18.47 | $ | 16.06 | $ | 20.02 | $ | 15.96 | $ | 13.44 | |||||||||||
Total Return (c) | 17.98 | % | –18.09 | % | 28.02 | % | 20.52 | %^ | –20.50 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 184,337 | $ | 232,507 | $ | 372,568 | $ | 197,959 | $ | 144,626 | |||||||||||
Ratios to average net assets (d): | |||||||||||||||||||||
Net expenses | 1.08 | % | 1.07 | % | 1.08 | % | 1.09 | %^ | 1.12 | % | |||||||||||
Gross expenses | 1.08 | % | 1.07 | % | 1.08 | % | 1.10 | % | 1.13 | % | |||||||||||
Net investment income (loss) | 2.30 | % | 2.15 | % | 1.91 | % | 1.54 | %^ | 1.79 | % | |||||||||||
Portfolio turnover rate | 20 | % | 16 | % | 14 | % | 12 | % | 14 | % |
* | The inception date for the R6 Shares was January 19, 2015. |
^ | 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 impact on net expenses and net investment income (loss) ratios of the Portfolio was less than 0.005%. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
220 Annual Report
LAZARD EQUITY FRANCHISE PORTFOLIO
Selected data for a share | For the Period | ||||||||||||
of capital stock outstanding | Year Ended | 9/29/17* to | |||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | ||||||||||
Institutional Shares | |||||||||||||
Net asset value, beginning of period | $ | 8.84 | $ | 10.38 | $ | 10.00 | |||||||
Income (Loss) from investment operations: | |||||||||||||
Net investment income (loss) (a) | 0.19 | 0.20 | 0.03 | ||||||||||
Net realized and unrealized gain (loss) | 1.73 | (0.75 | ) | 0.40 | |||||||||
Total from investment operations | 1.92 | (0.55 | ) | 0.43 | |||||||||
Less distributions from: | |||||||||||||
Net investment income | (0.15 | ) | (0.21 | ) | (0.03 | ) | |||||||
Net realized gains | (0.44 | ) | (0.78 | ) | (0.02 | ) | |||||||
Total distributions | (0.59 | ) | (0.99 | ) | (0.05 | ) | |||||||
Net asset value, end of period | $ | 10.17 | $ | 8.84 | $ | 10.38 | |||||||
Total Return (b) | 21.70 | % | –5.10 | % | 4.25 | % | |||||||
Ratios and Supplemental Data: | |||||||||||||
Net assets, end of period (in thousands) | $ | 39,878 | $ | 8,341 | $ | 5,566 | |||||||
Ratios to average net assets (c): | |||||||||||||
Net expenses | 0.95 | % | 0.95 | % | 0.95 | % | |||||||
Gross expenses | 1.36 | % | 3.42 | % | 3.21 | % | |||||||
Net investment income (loss) | 1.95 | % | 1.94 | % | 1.26 | % | |||||||
Portfolio turnover rate | 95 | % | 97 | % | 10 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 221
Selected data for a share | For the Period | ||||||||||||
of capital stock outstanding | Year Ended | 9/29/17* to | |||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | ||||||||||
Open Shares | |||||||||||||
Net asset value, beginning of period | $ | 8.84 | $ | 10.38 | $ | 10.00 | |||||||
Income (Loss) from investment operations: | |||||||||||||
Net investment income (loss) (a) | 0.16 | 0.19 | 0.03 | ||||||||||
Net realized and unrealized gain (loss) | 1.73 | (0.77 | ) | 0.39 | |||||||||
Total from investment operations | 1.89 | (0.58 | ) | 0.42 | |||||||||
Less distributions from: | |||||||||||||
Net investment income | (0.12 | ) | (0.18 | ) | (0.02 | ) | |||||||
Net realized gains | (0.44 | ) | (0.78 | ) | (0.02 | ) | |||||||
Total distributions | (0.56 | ) | (0.96 | ) | (0.04 | ) | |||||||
Net asset value, end of period | $ | 10.17 | $ | 8.84 | $ | 10.38 | |||||||
Total Return (b) | 21.40 | % | –5.34 | % | 4.18 | % | |||||||
Ratios and Supplemental Data: | |||||||||||||
Net assets, end of period (in thousands) | $ | 312 | $ | 190 | $ | 111 | |||||||
Ratios to average net assets (c): | |||||||||||||
Net expenses | 1.18 | % | 1.20 | % | 1.20 | % | |||||||
Gross expenses | 5.78 | % | 10.19 | % | 23.62 | % | |||||||
Net investment income (loss) | 1.64 | % | 1.75 | % | 1.14 | % | |||||||
Portfolio turnover rate | 95 | % | 97 | % | 10 | % |
* | The Portfolio commenced operations on September 29, 2017. |
(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. 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. Returns for a period of less than one year are not annualized. |
(c) | Annualized for a period of less than one year except for non-recurring expenses. |
The accompanying notes are an integral part of these financial statements.
222 Annual Report
LAZARD GLOBAL EQUITY SELECT PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 11.72 | $ | 13.04 | $ | 10.53 | $ | 10.33 | $ | 10.32 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.11 | 0.09 | 0.07 | 0.09 | 0.04 | ||||||||||||||||
Net realized and unrealized gain (loss) | 2.84 | (1.02 | ) | 2.93 | 0.18 | 0.01 | |||||||||||||||
Total from investment operations | 2.95 | (0.93 | ) | 3.00 | 0.27 | 0.05 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.10 | ) | (0.06 | ) | (0.10 | ) | (0.07 | ) | (0.04 | ) | |||||||||||
Net realized gains | — | (0.32 | ) | (0.39 | ) | — | — | ||||||||||||||
Return of capital | (0.01 | ) | (0.01 | ) | — | — | — | ||||||||||||||
Total distributions | (0.11 | ) | (0.39 | ) | (0.49 | ) | (0.07 | ) | (0.04 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 14.56 | $ | 11.72 | $ | 13.04 | $ | 10.53 | $ | 10.33 | |||||||||||
Total Return (c) | 25.20 | % | –7.12 | % | 28.52 | % | 2.66 | % | 0.46 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 82,057 | $ | 65,382 | $ | 58,201 | $ | 31,197 | $ | 20,624 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.01 | % | 1.05 | % | 1.05 | % | 1.07 | % | 1.10 | % | |||||||||||
Gross expenses | 1.08 | % | 1.08 | % | 1.30 | % | 1.75 | % | 2.27 | % | |||||||||||
Net investment income (loss) | 0.85 | % | 0.70 | % | 0.60 | % | 0.86 | % | 0.41 | % | |||||||||||
Portfolio turnover rate | 25 | % | 34 | % | 34 | % | 40 | % | 55 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report | 223 |
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 11.73 | $ | 13.04 | $ | 10.54 | $ | 10.34 | $ | 10.32 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.08 | 0.05 | 0.04 | 0.06 | 0.01 | ||||||||||||||||
Net realized and unrealized gain (loss) | 2.83 | (1.01 | ) | 2.91 | 0.18 | 0.02 | |||||||||||||||
Total from investment operations | 2.91 | (0.96 | ) | 2.95 | 0.24 | 0.03 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.07 | ) | (0.02 | ) | (0.06 | ) | (0.04 | ) | (0.01 | ) | |||||||||||
Net realized gains | — | (0.32 | ) | (0.39 | ) | — | — | ||||||||||||||
Return of capital | — | (b) | (0.01 | ) | — | — | — | ||||||||||||||
Total distributions | (0.07 | ) | (0.35 | ) | (0.45 | ) | (0.04 | ) | (0.01 | ) | |||||||||||
Net asset value, end of period | $ | 14.57 | $ | 11.73 | $ | 13.04 | $ | 10.54 | $ | 10.34 | |||||||||||
Total Return (c) | 24.82 | % | –7.33 | % | 28.01 | % | 2.35 | % | 0.24 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 933 | $ | 763 | $ | 711 | $ | 515 | $ | 290 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.30 | % | 1.35 | % | 1.35 | % | 1.37 | % | 1.40 | % | |||||||||||
Gross expenses | 2.36 | % | 2.80 | % | 3.70 | % | 5.38 | % | 7.42 | % | |||||||||||
Net investment income (loss) | 0.56 | % | 0.41 | % | 0.32 | % | 0.56 | % | 0.09 | % | |||||||||||
Portfolio turnover rate | 25 | % | 34 | % | 34 | % | 40 | % | 55 | % |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
The accompanying notes are an integral part of these financial statements.
224 | Annual Report |
LAZARD GLOBAL LISTED INFRASTRUCTURE PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 13.51 | $ | 15.99 | $ | 14.17 | $ | 13.42 | $ | 13.72 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.40 | 0.41 | 0.39 | 0.31 | ^ | 0.33 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.57 | (0.96 | ) | 2.54 | 0.92 | 0.89 | |||||||||||||||
Total from investment operations | 2.97 | (0.55 | ) | 2.93 | 1.23 | 1.22 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.70 | ) | (0.72 | ) | (0.29 | ) | (0.34 | ) | (1.17 | ) | |||||||||||
Net realized gains | — | (1.21 | ) | (0.82 | ) | (0.14 | ) | (0.35 | ) | ||||||||||||
Total distributions | (0.70 | ) | (1.93 | ) | (1.11 | ) | (0.48 | ) | (1.52 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 15.78 | $ | 13.51 | $ | 15.99 | $ | 14.17 | $ | 13.42 | |||||||||||
Total Return (c) | 22.26 | % | –3.68 | % | 20.73 | % | 9.30 | %^ | 9.30 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 7,277,512 | $ | 4,924,359 | $ | 4,778,042 | $ | 2,931,161 | $ | 2,156,325 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.95 | % | 0.95 | % | 0.95 | % | 0.96 | %^ | 0.96 | % | |||||||||||
Gross expenses | 0.95 | % | 0.95 | % | 0.95 | % | 0.96 | % | 0.96 | % | |||||||||||
Net investment income (loss) | 2.63 | % | 2.65 | % | 2.44 | % | 2.29 | %^ | 2.32 | % | |||||||||||
Portfolio turnover rate | 33 | % | 49 | % | 33 | % | 35 | % | 34 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report | 225 |
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 13.52 | $ | 16.01 | $ | 14.20 | $ | 13.45 | $ | 13.74 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.36 | 0.37 | 0.35 | 0.29 | ^ | 0.31 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.57 | (0.97 | ) | 2.55 | 0.91 | 0.88 | |||||||||||||||
Total from investment operations | 2.93 | (0.60 | ) | 2.90 | 1.20 | 1.19 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.66 | ) | (0.68 | ) | (0.27 | ) | (0.31 | ) | (1.13 | ) | |||||||||||
Net realized gains | — | (1.21 | ) | (0.82 | ) | (0.14 | ) | (0.35 | ) | ||||||||||||
Total distributions | (0.66 | ) | (1.89 | ) | (1.09 | ) | (0.45 | ) | (1.48 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 15.79 | $ | 13.52 | $ | 16.01 | $ | 14.20 | $ | 13.45 | |||||||||||
Total Return (c) | 21.94 | % | –3.98 | % | 20.47 | % | 9.01 | %^ | 9.06 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 448,387 | $ | 426,749 | $ | 633,243 | $ | 462,613 | $ | 393,786 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.20 | % | 1.20 | % | 1.21 | % | 1.22 | %^ | 1.23 | % | |||||||||||
Gross expenses | 1.20 | % | 1.20 | % | 1.21 | % | 1.22 | % | 1.23 | % | |||||||||||
Net investment income (loss) | 2.39 | % | 2.36 | % | 2.16 | % | 2.09 | %^ | 2.19 | % | |||||||||||
Portfolio turnover rate | 33 | % | 49 | % | 33 | % | 35 | % | 34 | % |
^ | 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 impact on net expenses and net investment income (loss) ratios of the Portfolio was less than 0.005%. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | Total returns reflect reinvestment of all dividends and distributions, if any. |
The accompanying notes are an integral part of these financial statements.
226 | Annual Report |
LAZARD GLOBAL STRATEGIC EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 1.64 | $ | 2.31 | $ | 9.59 | $ | 9.67 | $ | 9.94 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.02 | 0.01 | 0.08 | 0.07 | 0.06 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.46 | (0.18 | ) | 2.24 | (0.08 | ) | (0.25 | ) | |||||||||||||
Total from investment operations | 0.48 | (0.17 | ) | 2.32 | (0.01 | ) | (0.19 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.02 | ) | (0.01 | ) | (0.20 | ) | (0.07 | ) | (0.08 | ) | |||||||||||
Net realized gains | (0.04 | ) | (0.49 | ) | (9.40 | ) | — | — | |||||||||||||
Total distributions | (0.06 | ) | (0.50 | ) | (9.60 | ) | (0.07 | ) | (0.08 | ) | |||||||||||
Net asset value, end of period | $ | 2.06 | $ | 1.64 | $ | 2.31 | $ | 9.59 | $ | 9.67 | |||||||||||
Total Return (b) | 29.19 | % | –9.16 | % | 24.20 | % | –0.15 | % | –1.85 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 3,185 | $ | 2,505 | $ | 2,750 | $ | 19,816 | $ | 9,254 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.00 | % | 1.05 | % | 1.10 | % | 1.10 | % | 1.10 | % | |||||||||||
Gross expenses | 6.07 | % | 6.41 | % | 2.06 | % | 2.03 | % | 3.83 | % | |||||||||||
Net investment income (loss) | 1.01 | % | 0.60 | % | 0.76 | % | 0.76 | % | 0.63 | % | |||||||||||
Portfolio turnover rate | 49 | % | 46 | % | 65 | % | 67 | % | 65 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report | 227 |
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 1.63 | $ | 2.30 | $ | 9.59 | $ | 9.67 | $ | 9.94 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.01 | 0.01 | 0.03 | 0.04 | 0.03 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.46 | (0.19 | ) | 2.25 | (0.08 | ) | (0.25 | ) | |||||||||||||
Total from investment operations | 0.47 | (0.18 | ) | 2.28 | (0.04 | ) | (0.22 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.01 | ) | — | (c) | (0.17 | ) | (0.04 | ) | (0.05 | ) | |||||||||||
Net realized gains | (0.04 | ) | (0.49 | ) | (9.40 | ) | — | — | |||||||||||||
Total distributions | (0.05 | ) | (0.49 | ) | (9.57 | ) | (0.04 | ) | (0.05 | ) | |||||||||||
Net asset value, end of period | $ | 2.05 | $ | 1.63 | $ | 2.30 | $ | 9.59 | $ | 9.67 | |||||||||||
Total Return (b) | 29.01 | % | –9.39 | % | 23.72 | % | –0.45 | % | –2.16 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 144 | $ | 131 | $ | 149 | $ | 114 | $ | 114 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.29 | % | 1.35 | % | 1.41 | % | 1.40 | % | 1.40 | % | |||||||||||
Gross expenses | 13.26 | % | 14.05 | % | 12.33 | % | 13.31 | % | 14.12 | % | |||||||||||
Net investment income (loss) | 0.72 | % | 0.29 | % | 0.34 | % | 0.39 | % | 0.30 | % | |||||||||||
Portfolio turnover rate | 49 | % | 46 | % | 65 | % | 67 | % | 65 | % |
(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. 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. |
(c) | Amount is less than $0.01 per share. |
The accompanying notes are an integral part of these financial statements.
228 Annual Report
LAZARD INTERNATIONAL EQUITY ADVANTAGE PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/29/15* | ||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | to 12/31/15 | |||||||||||||||
Institutional Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 8.70 | $ | 10.92 | $ | 8.91 | $ | 9.21 | $ | 10.00 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.22 | 0.24 | 0.19 | 0.18 | 0.04 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.29 | (2.01 | ) | 2.03 | (0.28 | ) | (0.70 | ) | ||||||||||||
Total from investment operations | 1.51 | (1.77 | ) | 2.22 | (0.10 | ) | (0.66 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.22 | ) | (0.33 | ) | (0.21 | ) | (0.20 | ) | (0.13 | ) | ||||||||||
Net realized gains | — | (0.12 | ) | — | — | — | ||||||||||||||
Total distributions | (0.22 | ) | (0.45 | ) | (0.21 | ) | (0.20 | ) | (0.13 | ) | ||||||||||
Net asset value, end of period | $ | 9.99 | $ | 8.70 | $ | 10.92 | $ | 8.91 | $ | 9.21 | ||||||||||
Total Return (b) | 17.37 | % | –16.26 | % | 24.98 | % | –1.13 | % | –6.63 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,408 | $ | 2,051 | $ | 2,508 | $ | 1,969 | $ | 1,797 | ||||||||||
Ratios to average net assets (c): | ||||||||||||||||||||
Net expenses | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | ||||||||||
Gross expenses | 8.40 | % | 7.60 | % | 8.91 | % | 13.12 | % | 14.93 | % | ||||||||||
Net investment income (loss) | 2.30 | % | 2.29 | % | 1.89 | % | 2.08 | % | 0.77 | % | ||||||||||
Portfolio turnover rate | 66 | % | 72 | % | 88 | % | 92 | % | 58 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 229
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/29/15* | ||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | to 12/31/15 | |||||||||||||||
Open Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 8.70 | $ | 10.92 | $ | 8.91 | $ | 9.21 | $ | 10.00 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.19 | 0.21 | 0.16 | 0.15 | 0.03 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.29 | (2.01 | ) | 2.03 | (0.28 | ) | (0.71 | ) | ||||||||||||
Total from investment operations | 1.48 | (1.80 | ) | 2.19 | (0.13 | ) | (0.68 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.19 | ) | (0.30 | ) | (0.18 | ) | (0.17 | ) | (0.11 | ) | ||||||||||
Net realized gains | — | (0.12 | ) | — | — | — | ||||||||||||||
Total distributions | (0.19 | ) | (0.42 | ) | (0.18 | ) | (0.17 | ) | (0.11 | ) | ||||||||||
Net asset value, end of period | $ | 9.99 | $ | 8.70 | $ | 10.92 | $ | 8.91 | $ | 9.21 | ||||||||||
Total Return (b) | 17.03 | % | –16.52 | % | 24.60 | % | –1.42 | % | –6.80 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 113 | $ | 97 | $ | 116 | $ | 93 | $ | 93 | ||||||||||
Ratios to average net assets (c): | ||||||||||||||||||||
Net expenses | 1.18 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | ||||||||||
Gross expenses | 17.72 | % | 17.67 | % | 20.85 | % | 25.85 | % | 30.10 | % | ||||||||||
Net investment income (loss) | 2.02 | % | 1.99 | % | 1.58 | % | 1.74 | % | 0.47 | % | ||||||||||
Portfolio turnover rate | 66 | % | 72 | % | 88 | % | 92 | % | 58 | % |
* | The Portfolio commenced operations on May 29, 2015. |
(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. 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. 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.
230 Annual Report
LAZARD INTERNATIONAL EQUITY CONCENTRATED PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 8.34 | $ | 10.43 | $ | 8.54 | $ | 8.27 | $ | 9.53 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.19 | 0.14 | 0.13 | 0.14 | 0.10 | ||||||||||||||||
Net realized and unrealized gain (loss) | 1.94 | (1.84 | ) | 1.86 | 0.25 | (1.25 | ) | ||||||||||||||
Total from investment operations | 2.13 | (1.70 | ) | 1.99 | 0.39 | (1.15 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.17 | ) | (0.17 | ) | (0.10 | ) | (0.12 | ) | (0.11 | ) | |||||||||||
Net realized gains | — | (0.22 | ) | — | — | — | |||||||||||||||
Total distributions | (0.17 | ) | (0.39 | ) | (0.10 | ) | (0.12 | ) | (0.11 | ) | |||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||
Net asset value, end of period | $ | 10.30 | $ | 8.34 | $ | 10.43 | $ | 8.54 | $ | 8.27 | |||||||||||
Total Return (c) | 25.56 | % | –16.20 | % | 23.29 | % | 4.74 | % | –12.06 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 97,815 | $ | 49,105 | $ | 69,440 | $ | 15,473 | $ | 13,753 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.95 | % | 1.00 | % | 1.05 | % | 1.05 | % | 1.06 | % | |||||||||||
Gross expenses | 1.05 | % | 1.13 | % | 1.34 | % | 2.29 | % | 2.96 | % | |||||||||||
Net investment income (loss) | 2.00 | % | 1.45 | % | 1.35 | % | 1.64 | % | 1.13 | % | |||||||||||
Portfolio turnover rate | 72 | % | 76 | % | 81 | % | 92 | % | 91 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 231
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 8.35 | $ | 10.45 | $ | 8.56 | $ | 8.29 | $ | 9.53 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.18 | 0.09 | 0.10 | 0.11 | 0.06 | ||||||||||||||||
Net realized and unrealized gain (loss) | 1.93 | (1.82 | ) | 1.86 | 0.26 | (1.22 | ) | ||||||||||||||
Total from investment operations | 2.11 | (1.73 | ) | 1.96 | 0.37 | (1.16 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.14 | ) | (0.15 | ) | (0.07 | ) | (0.10 | ) | (0.08 | ) | |||||||||||
Net realized gains | — | (0.22 | ) | — | — | — | |||||||||||||||
Total distributions | (0.14 | ) | (0.37 | ) | (0.07 | ) | (0.10 | ) | (0.08 | ) | |||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||
Net asset value, end of period | $ | 10.32 | $ | 8.35 | $ | 10.45 | $ | 8.56 | $ | 8.29 | |||||||||||
Total Return (c) | 25.28 | % | –16.47 | % | 22.87 | % | 4.41 | % | –12.18 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 430 | $ | 399 | $ | 220 | $ | 114 | $ | 55 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.24 | % | 1.29 | % | 1.35 | % | 1.35 | % | 1.39 | % | |||||||||||
Gross expenses | 3.67 | % | 5.24 | % | 8.15 | % | 11.98 | % | 9.93 | % | |||||||||||
Net investment income (loss) | 1.87 | % | 0.96 | % | 1.04 | % | 1.32 | % | 0.60 | % | |||||||||||
Portfolio turnover rate | 72 | % | 76 | % | 81 | % | 92 | % | 91 | % |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
232 Annual Report
LAZARD INTERNATIONAL EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 15.68 | $ | 19.61 | $ | 16.20 | $ | 17.08 | $ | 16.93 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.37 | 0.37 | 0.26 | 0.27 | ^ | 0.27 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.95 | (3.06 | ) | 3.43 | (0.98 | ) | — | ||||||||||||||
Total from investment operations | 3.32 | (2.69 | ) | 3.69 | (0.71 | ) | 0.27 | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.39 | ) | (0.42 | ) | (0.28 | ) | (0.17 | ) | (0.12 | ) | |||||||||||
Net realized gains | — | (0.82 | ) | — | — | — | |||||||||||||||
Total distributions | (0.39 | ) | (1.24 | ) | (0.28 | ) | (0.17 | ) | (0.12 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 18.61 | $ | 15.68 | $ | 19.61 | $ | 16.20 | $ | 17.08 | |||||||||||
Total Return (c) | 21.19 | % | –13.61 | %# | 22.81 | % | –4.18 | %^ | 1.62 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,495,021 | $ | 2,102,735 | $ | 2,835,262 | $ | 1,511,516 | $ | 736,272 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.82 | % | 0.81 | % | 0.81 | % | 0.82 | %^ | 0.86 | % | |||||||||||
Gross expenses | 0.82 | % | 0.81 | % | 0.81 | % | 0.84 | % | 0.87 | % | |||||||||||
Net investment income (loss) | 2.13 | % | 1.94 | % | 1.44 | % | 1.62 | %^ | 1.50 | % | |||||||||||
Portfolio turnover rate | 37 | % | 36 | % | 31 | % | 25 | % | 30 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 233
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 15.87 | $ | 19.83 | $ | 16.38 | $ | 17.23 | $ | 17.07 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.33 | 0.32 | 0.30 | 0.13 | ^ | 0.23 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.98 | (3.08 | ) | 3.38 | (0.90 | ) | — | ||||||||||||||
Total from investment operations | 3.31 | (2.76 | ) | 3.68 | (0.77 | ) | 0.23 | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.34 | ) | (0.38 | ) | (0.23 | ) | (0.08 | ) | (0.07 | ) | |||||||||||
Net realized gains | — | (0.82 | ) | — | — | — | |||||||||||||||
Total distributions | (0.34 | ) | (1.20 | ) | (0.23 | ) | (0.08 | ) | (0.07 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 18.84 | $ | 15.87 | $ | 19.83 | $ | 16.38 | $ | 17.23 | |||||||||||
Total Return (c) | 20.89 | % | –13.83 | %# | 22.50 | % | –4.46 | %^ | 1.36 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 257,308 | $ | 227,483 | $ | 275,014 | $ | 1,073,486 | $ | 80,221 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.07 | % | 1.06 | % | 1.06 | % | 1.07 | %^ | 1.14 | % | |||||||||||
Gross expenses | 1.07 | % | 1.06 | % | 1.06 | % | 1.10 | % | 1.14 | % | |||||||||||
Net investment income (loss) | 1.84 | % | 1.67 | % | 1.69 | % | 0.80 | %^ | 1.29 | % | |||||||||||
Portfolio turnover rate | 37 | % | 36 | % | 31 | % | 25 | % | 30 | % |
The accompanying notes are an integral part of these financial statements.
234 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | For the Period 4/1/15* | |||||||||||||||||||
throughout the period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | to 12/31/15 | ||||||||||||||||
R6 Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 15.66 | $ | 19.59 | $ | 16.18 | $ | 17.07 | $ | 17.94 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.38 | 0.36 | 0.31 | 0.31 | ^ | 0.21 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.93 | (3.05 | ) | 3.38 | (1.02 | ) | (0.95 | ) | |||||||||||||
Total from investment operations | 3.31 | (2.69 | ) | 3.69 | (0.71 | ) | (0.74 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.39 | ) | (0.42 | ) | (0.28 | ) | (0.18 | ) | (0.13 | ) | |||||||||||
Net realized gains | — | (0.82 | ) | — | — | — | |||||||||||||||
Total distributions | (0.39 | ) | (1.24 | ) | (0.28 | ) | (0.18 | ) | (0.13 | ) | |||||||||||
Net asset value, end of period | $ | 18.58 | $ | 15.66 | $ | 19.59 | $ | 16.18 | $ | 17.07 | |||||||||||
Total Return (c) | 21.17 | % | –13.62 | %# | 22.85 | % | –4.17 | %^ | –4.10 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 107,574 | $ | 106,516 | $ | 693,744 | $ | 79,119 | $ | 49,387 | |||||||||||
Ratios to average net assets (d): | |||||||||||||||||||||
Net expenses | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | %^ | 0.80 | % | |||||||||||
Gross expenses | 0.82 | % | 0.81 | % | 0.81 | % | 0.86 | % | 0.92 | % | |||||||||||
Net investment income (loss) | 2.19 | % | 1.84 | % | 1.68 | % | 1.88 | %^ | 1.55 | % | |||||||||||
Portfolio turnover rate | 37 | % | 36 | % | 31 | % | 25 | % | 30 | % |
* | The inception date for the R6 Shares was April 1, 2015. |
^ | 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 0.02%, 0.03% and 0.02% impact on the net expenses and net investment income (loss) ratios of the Portfolio’s Institutional, Open and R6 Shares, respectively. |
# | The Portfolio received settlement proceeds from a foreign exchange trading class action lawsuit. The proceeds from the settlement represent a realized gain and were recorded in the period received. There was a 0.16%, 0.16% and 0.33% impact on the total return of the Portfolio’s Institutional, Open and R6 Shares, respectively. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
Annual Report 235
LAZARD INTERNATIONAL EQUITY SELECT PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.13 | $ | 11.02 | $ | 8.65 | $ | 8.80 | $ | 9.24 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.23 | 0.18 | 0.13 | 0.12 | 0.12 | ||||||||||||||||
Net realized and unrealized gain (loss) | 1.62 | (1.82 | ) | 2.31 | (0.17 | ) | (0.46 | ) | |||||||||||||
Total from investment operations | 1.85 | (1.64 | ) | 2.44 | (0.05 | ) | (0.34 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.23 | ) | (0.25 | ) | (0.07 | ) | (0.10 | ) | (0.10 | ) | |||||||||||
Total distributions | (0.23 | ) | (0.25 | ) | (0.07 | ) | (0.10 | ) | (0.10 | ) | |||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||
Net asset value, end of period | $ | 10.75 | $ | 9.13 | $ | 11.02 | $ | 8.65 | $ | 8.80 | |||||||||||
Total Return (c) | 20.32 | % | –14.90 | % | 28.31 | % | –0.63 | % | –3.63 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 93,586 | $ | 74,582 | $ | 53,929 | $ | 28,299 | $ | 18,757 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.97 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.06 | % | |||||||||||
Gross expenses | �� | 0.99 | % | 1.05 | % | 1.31 | % | 1.79 | % | 2.13 | % | ||||||||||
Net investment income (loss) | 2.29 | % | 1.73 | % | 1.27 | % | 1.36 | % | 1.25 | % | |||||||||||
Portfolio turnover rate | 42 | % | 32 | % | 30 | % | 42 | % | 51 | % |
The accompanying notes are an integral part of these financial statements.
236 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.17 | $ | 11.03 | $ | 8.66 | $ | 8.82 | $ | 9.25 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.19 | 0.15 | 0.10 | 0.10 | 0.11 | ||||||||||||||||
Net realized and unrealized gain (loss) | 1.64 | (1.82 | ) | 2.31 | (0.19 | ) | (0.47 | ) | |||||||||||||
Total from investment operations | 1.83 | (1.67 | ) | 2.41 | (0.09 | ) | (0.36 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.20 | ) | (0.19 | ) | (0.04 | ) | (0.07 | ) | (0.07 | ) | |||||||||||
Total distributions | (0.20 | ) | (0.19 | ) | (0.04 | ) | (0.07 | ) | (0.07 | ) | |||||||||||
Net asset value, end of period | $ | 10.80 | $ | 9.17 | $ | 11.03 | $ | 8.66 | $ | 8.82 | |||||||||||
Total Return (c) | 19.97 | % | –15.16 | % | 27.89 | % | –1.03 | % | –3.85 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,502 | $ | 1,502 | $ | 2,831 | $ | 2,092 | $ | 2,184 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.28 | % | 1.35 | % | 1.35 | % | 1.35 | % | 1.37 | % | |||||||||||
Gross expenses | 1.74 | % | 1.83 | % | 2.07 | % | 2.59 | % | 2.75 | % | |||||||||||
Net investment income (loss) | 1.87 | % | 1.42 | % | 1.01 | % | 1.13 | % | 1.15 | % | |||||||||||
Portfolio turnover rate | 42 | % | 32 | % | 30 | % | 42 | % | 51 | % |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
Annual Report 237
LAZARD INTERNATIONAL EQUITY VALUE PORTFOLIO
Selected data for a share | For the Period | ||||||||||
of capital stock outstanding | Year Ended | 10/31/18* | |||||||||
throughout each period | 12/31/19 | to 12/31/18 | |||||||||
Institutional Shares | |||||||||||
Net asset value, beginning of period | $ | 9.14 | $ | 10.00 | |||||||
Income (Loss) from investment operations: | |||||||||||
Net investment income (loss) (a) | 0.28 | 0.01 | |||||||||
Net realized and unrealized gain (loss) | 1.01 | (0.86 | ) | ||||||||
Total from investment operations | 1.29 | (0.85 | ) | ||||||||
Less distributions from: | |||||||||||
Net investment income | (0.48 | ) | (0.01 | ) | |||||||
Total distributions | (0.48 | ) | (0.01 | ) | |||||||
Net asset value, end of period | $ | 9.95 | $ | 9.14 | |||||||
Total Return (b) | 14.14 | % | –8.49 | % | |||||||
Ratios and Supplemental Data: | |||||||||||
Net assets, end of period (in thousands) | $ | 13,132 | $ | 22,945 | |||||||
Ratios to average net assets (c): | |||||||||||
Net expenses | 0.95 | % | 0.95 | % | |||||||
Gross expenses | 2.01 | % | 1.34 | % | |||||||
Net investment income (loss) | 2.87 | % | 0.72 | % | |||||||
Portfolio turnover rate | 104 | % | 37 | % |
The accompanying notes are an integral part of these financial statements.
238 Annual Report
Selected data for a share | For the Period | ||||||||||
of capital stock outstanding | Year Ended | 10/31/18* | |||||||||
throughout each period | 12/31/19 | to 12/31/18 | |||||||||
Open Shares | |||||||||||
Net asset value, beginning of period | $ | 9.13 | $ | 10.00 | |||||||
Income (Loss) from investment operations: | |||||||||||
Net investment income (loss) (a) | 0.21 | — | (d) | ||||||||
Net realized and unrealized gain (loss) | 1.06 | (0.86 | ) | ||||||||
Total from investment operations | 1.27 | (0.86 | ) | ||||||||
Less distributions from: | |||||||||||
Net investment income | (0.45 | ) | (0.01 | ) | |||||||
Total distributions | (0.45 | ) | (0.01 | ) | |||||||
Net asset value, end of period | $ | 9.95 | $ | 9.13 | |||||||
Total Return (b) | 13.98 | % | –8.63 | % | |||||||
Ratios and Supplemental Data: | |||||||||||
Net assets, end of period (in thousands) | $ | 141 | $ | 38 | |||||||
Ratios to average net assets (c): | |||||||||||
Net expenses | 1.13 | % | 1.20 | % | |||||||
Gross expenses | 15.82 | % | 7.91 | % | |||||||
Net investment income (loss) | 2.15 | % | 0.03 | % | |||||||
Portfolio turnover rate | 104 | % | 37 | % |
* | The Portfolio commenced operations on October 31, 2018. |
(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. 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. Returns for a period of less than one year are not annualized. |
(c) | Annualized for a period of less than one year except for non-recurring expenses. |
(d) | Amount is less than $0.01 per share. |
The accompanying notes are an integral part of these financial statements.
Annual Report 239
LAZARD INTERNATIONAL QUALITY GROWTH PORTFOLIO
Selected data for a share | |||||||||||
of capital stock outstanding | Year Ended | Period Ended | |||||||||
throughout each period | 12/31/19 | 12/31/18* | |||||||||
Institutional Shares | |||||||||||
Net asset value, beginning of period | $ | 9.98 | $ | 10.00 | |||||||
Income (Loss) from investment operations: | |||||||||||
Net investment income (loss) (a) | 0.08 | — | |||||||||
Net realized and unrealized gain (loss) | 2.95 | (0.02 | ) | ||||||||
Total from investment operations | 3.03 | (0.02 | ) | ||||||||
Less distributions from: | |||||||||||
Net investment income | (0.27 | ) | — | ||||||||
Net realized gains | (0.05 | ) | — | ||||||||
Total distributions | (0.32 | ) | — | ||||||||
Net asset value, end of period | $ | 12.69 | $ | 9.98 | |||||||
Total Return (b) | 30.32 | % | –0.20 | % | |||||||
Ratios and Supplemental Data: | |||||||||||
Net assets, end of period (in thousands) | $ | 3,958 | $ | 149 | |||||||
Ratios to average net assets (c): | |||||||||||
Net expenses | 0.85 | % | 0.00 | % | |||||||
Gross expenses | 8.16 | % | 8.45 | % | |||||||
Net investment income (loss) | 0.65 | % | 0.00 | % | |||||||
Portfolio turnover rate | 20 | % | 0 | % |
The accompanying notes are an integral part of these financial statements.
240 Annual Report
Selected data for a share | |||||||||||
of capital stock outstanding | Year Ended | Period Ended | |||||||||
throughout each period | 12/31/19 | 12/31/18* | |||||||||
Open Shares | |||||||||||
Net asset value, beginning of period | $ | 10.00 | $ | 10.00 | |||||||
Income (Loss) from investment operations: | |||||||||||
Net investment income (loss) (a) | 0.07 | — | |||||||||
Net realized and unrealized gain (loss) | 2.90 | — | (d) | ||||||||
Total from investment operations | 2.97 | — | (d) | ||||||||
Less distributions from: | |||||||||||
Net investment income | (0.27 | ) | — | ||||||||
Net realized gains | (0.05 | ) | — | ||||||||
Total distributions | (0.32 | ) | — | ||||||||
Net asset value, end of period | $ | 12.65 | $ | 10.00 | |||||||
Total Return (b) | 29.66 | % | 0.00 | % | |||||||
Ratios and Supplemental Data: | |||||||||||
Net assets, end of period (in thousands) | $ | 10 | $ | 1 | |||||||
Ratios to average net assets (c): | |||||||||||
Net expenses | 1.10 | % | 0.00 | % | |||||||
Gross expenses | 142.50 | % | 0.40 | % | |||||||
Net investment income (loss) | 0.60 | % | 0.00 | % | |||||||
Portfolio turnover rate | 20 | % | 0 | % |
* | The Portfolio commenced operations on December 31, 2018. |
(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. 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. Returns for a period of less than one year are not annualized. |
(c) | Annualized for a period of less than one year except for non-recurring expenses. |
(d) | Amount is less than $0.01 per share. |
The accompanying notes are an integral part of these financial statements.
Annual Report 241
LAZARD INTERNATIONAL SMALL CAP EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.95 | $ | 13.79 | $ | 10.10 | $ | 10.90 | $ | 10.01 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.13 | 0.12 | 0.10 | 0.12 | ^ | 0.10 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.42 | (3.51 | ) | 3.59 | (0.62 | ) | 0.87 | ||||||||||||||
Total from investment operations | 2.55 | (3.39 | ) | 3.69 | (0.50 | ) | 0.97 | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.05 | ) | (0.27 | ) | — | (0.30 | ) | (0.08 | ) | ||||||||||||
Net realized gains | (0.26 | ) | (0.18 | ) | — | — | — | ||||||||||||||
Total distributions | (0.31 | ) | (0.45 | ) | — | (0.30 | ) | (0.08 | ) | ||||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||
Net asset value, end of period | $ | 12.19 | $ | 9.95 | $ | 13.79 | $ | 10.10 | $ | 10.90 | |||||||||||
Total Return (c) | 26.01 | % | –24.88 | %# | 36.53 | % | –4.64 | %^ | 9.71 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 37,677 | $ | 35,121 | $ | 41,267 | $ | 37,049 | $ | 51,828 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.14 | % | 1.08 | % | 1.09 | % | 0.96 | %^ | 1.11 | % | |||||||||||
Gross expenses | 1.15 | % | 1.08 | % | 1.09 | % | 1.06 | % | 1.11 | % | |||||||||||
Net investment income (loss) | 1.14 | % | 0.96 | % | 0.85 | % | 1.14 | %^ | 0.91 | % | |||||||||||
Portfolio turnover rate | 37 | % | 59 | % | 35 | % | 63 | % | 48 | % |
The accompanying notes are an integral part of these financial statements.
242 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.97 | $ | 13.82 | $ | 10.15 | $ | 10.93 | $ | 10.03 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.10 | 0.11 | 0.07 | 0.10 | ^ | 0.07 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.43 | (3.54 | ) | 3.60 | (0.63 | ) | 0.88 | ||||||||||||||
Total from investment operations | 2.53 | (3.43 | ) | 3.67 | (0.53 | ) | 0.95 | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.05 | ) | (0.24 | ) | — | (0.25 | ) | (0.05 | ) | ||||||||||||
Net realized gains | (0.26 | ) | (0.18 | ) | — | — | — | ||||||||||||||
Total distributions | (0.31 | ) | (0.42 | ) | — | (0.25 | ) | (0.05 | ) | ||||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 12.19 | $ | 9.97 | $ | 13.82 | $ | 10.15 | $ | 10.93 | |||||||||||
Total Return (c) | 25.76 | % | –25.09 | %# | 36.16 | % | –4.92 | %^ | 9.49 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 19,780 | $ | 20,265 | $ | 42,362 | $ | 44,523 | $ | 55,776 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.39 | % | 1.34 | % | 1.34 | % | 1.21 | %^ | 1.38 | % | |||||||||||
Gross expenses | 1.43 | % | 1.34 | % | 1.34 | % | 1.30 | % | 1.38 | % | |||||||||||
Net investment income (loss) | 0.86 | % | 0.83 | % | 0.61 | % | 0.91 | %^ | 0.63 | % | |||||||||||
Portfolio turnover rate | 37 | % | 59 | % | 35 | % | 63 | % | 48 | % |
^ | 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 impact on the net investment income per share amount was $0.01 per share. There was a 0.10% and 0.09% impact on the total return of the Institutional and Open Shares classes, respectively, of the Portfolio. There was a 0.10% and 0.09% impact on the net expenses and net investment income (loss) ratios of the Portfolio’s Institutional and Open Shares, respectively. |
# | The Portfolio received settlement proceeds from a foreign exchange trading class action lawsuit. The proceeds from the settlement represented a realized gain and were recorded in the period received. There was a 0.46% and 0.53% impact on the total return of the Portfolio’s Institutional and Open Shares, respectively. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
Annual Report 243
LAZARD INTERNATIONAL STRATEGIC EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 12.89 | $ | 15.70 | $ | 12.44 | $ | 13.33 | $ | 13.72 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.24 | 0.21 | 0.17 | 0.20^ | 0.16 | ||||||||||||||||
Net realized and unrealized gain (loss) | 2.53 | (1.85 | ) | 3.29 | (0.89 | ) | (0.40 | ) | |||||||||||||
Total from investment operations | 2.77 | (1.64 | ) | 3.46 | (0.69 | ) | (0.24 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.28 | ) | (0.21 | ) | (0.20 | ) | (0.20 | ) | (0.14 | ) | |||||||||||
Net realized gains | — | (0.96 | ) | — | — | (0.01 | ) | ||||||||||||||
Total distributions | (0.28 | ) | (1.17 | ) | (0.20 | ) | (0.20 | ) | (0.15 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 15.38 | $ | 12.89 | $ | 15.70 | $ | 12.44 | $ | 13.33 | |||||||||||
Total Return (c) | 21.55 | % | –10.35 | % | 27.85 | % | –5.17 | %^ | –1.70 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 5,505,271 | $ | 4,630,334 | $ | 5,911,184 | $ | 5,114,357 | $ | 4,923,328 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.80 | % | 0.80 | % | 0.80 | % | 0.81 | %^ | 0.82 | % | |||||||||||
Gross expenses | 0.80 | % | 0.80 | % | 0.80 | % | 0.81 | % | 0.82 | % | |||||||||||
Net investment income (loss) | 1.66 | % | 1.36 | % | 1.20 | % | 1.56 | %^ | 1.15 | % | |||||||||||
Portfolio turnover rate | 36 | % | 40 | % | 44 | % | 47 | % | 37 | % |
The accompanying notes are an integral part of these financial statements.
244 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 13.01 | $ | 15.83 | $ | 12.55 | $ | 13.44 | $ | 13.82 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.21 | 0.17 | 0.14 | 0.18 | ^ | 0.13 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.55 | (1.86 | ) | 3.30 | (0.90 | ) | (0.40 | ) | |||||||||||||
Total from investment operations | 2.76 | (1.69 | ) | 3.44 | (0.72 | ) | (0.27 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.25 | ) | (0.17 | ) | (0.16 | ) | (0.17 | ) | (0.10 | ) | |||||||||||
Net realized gains | — | (0.96 | ) | — | — | (0.01 | ) | ||||||||||||||
Total distributions | (0.25 | ) | (1.13 | ) | (0.16 | ) | (0.17 | ) | (0.11 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 15.52 | $ | 13.01 | $ | 15.83 | $ | 12.55 | $ | 13.44 | |||||||||||
Total Return (c) | 21.21 | % | –10.55 | % | 27.44 | % | –5.37 | %^ | –1.89 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 682,035 | $ | 832,548 | $ | 1,216,861 | $ | 1,591,016 | $ | 1,783,529 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.06 | % | 1.05 | % | 1.06 | % | 1.06 | %^ | 1.08 | % | |||||||||||
Gross expenses | 1.06 | % | 1.05 | % | 1.06 | % | 1.06 | % | 1.08 | % | |||||||||||
Net investment income (loss) | 1.47 | % | 1.10 | % | 0.97 | % | 1.34 | %^ | 0.94 | % | |||||||||||
Portfolio turnover rate | 36 | % | 40 | % | 44 | % | 47 | % | 37 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 245
Selected data for a share of capital stock outstanding | Year Ended | For the Period 1/19/15* | ||||||||||||||||||
throughout the period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | to 12/31/15 | |||||||||||||||
R6 Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 12.90 | $ | 15.71 | $ | 12.45 | $ | 13.34 | $ | 13.70 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.23 | 0.21 | 0.16 | 0.19 | ^ | (0.03 | ) | |||||||||||||
Net realized and unrealized gain (loss) | 2.54 | (1.85 | ) | 3.30 | (0.88 | ) | (0.21 | ) | ||||||||||||
Total from investment operations | 2.77 | (1.64 | ) | 3.46 | (0.69 | ) | (0.24 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.28 | ) | (0.21 | ) | (0.20 | ) | (0.20 | ) | (0.11 | ) | ||||||||||
Net realized gains | — | (0.96 | ) | — | — | (0.01 | ) | |||||||||||||
Total distributions | (0.28 | ) | (1.17 | ) | (0.20 | ) | (0.20 | ) | (0.12 | ) | ||||||||||
Redemption fees | — | — | — | — | (b) | — | ||||||||||||||
Net asset value, end of period | $ | 15.39 | $ | 12.90 | $ | 15.71 | $ | 12.45 | $ | 13.34 | ||||||||||
Total Return (c) | 21.54 | % | –10.35 | % | 27.82 | % | –5.17 | %^ | –1.73 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 120,118 | $ | 97,394 | $ | 110,383 | $ | 96,284 | $ | 72,362 | ||||||||||
Ratios to average net assets (d): | ||||||||||||||||||||
Net expenses | 0.80 | % | 0.80 | % | 0.80 | % | 0.81 | %^ | 1.03 | % | ||||||||||
Gross expenses | 0.81 | % | 0.81 | % | 0.82 | % | 0.82 | % | 1.09 | % | ||||||||||
Net investment income (loss) | 1.61 | % | 1.34 | % | 1.15 | % | 1.46 | %^ | –0.22 | % | ||||||||||
Portfolio turnover rate | 36 | % | 40 | % | 44 | % | 47 | % | 37 | % |
* | The inception date for the R6 Shares was January 19, 2015. |
^ | 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 impact on net expenses and net investment income (loss) ratios of the Portfolio was less than 0.005%. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
246 Annual Report
LAZARD MANAGED EQUITY VOLATILITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/29/15* | ||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | to 12/31/15 | |||||||||||||||
Institutional Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.55 | $ | 11.57 | $ | 9.99 | $ | 9.59 | $ | 10.00 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.21 | 0.19 | 0.19 | 0.18 | 0.09 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.08 | (1.03 | ) | 1.87 | 0.44 | (0.33 | ) | |||||||||||||
Total from investment operations | 2.29 | (0.84 | ) | 2.06 | 0.62 | (0.24 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.18 | ) | (0.16 | ) | (0.17 | ) | (0.22 | ) | (0.17 | ) | ||||||||||
Net realized gains | — | (b) | (0.02 | ) | (0.31 | ) | — | — | ||||||||||||
Total distributions | (0.18 | ) | (0.18 | ) | (0.48 | ) | (0.22 | ) | (0.17 | ) | ||||||||||
Net asset value, end of period | $ | 12.66 | $ | 10.55 | $ | 11.57 | $ | 9.99 | $ | 9.59 | ||||||||||
Total Return (c) | 21.69 | % | –7.21 | % | 20.57 | % | 6.45 | % | –2.42 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 34,354 | $ | 20,709 | $ | 4,180 | $ | 2,431 | $ | 2,206 | ||||||||||
Ratios to average net assets (d): | ||||||||||||||||||||
Net expenses | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||
Gross expenses | 1.36 | % | 1.64 | % | 6.51 | % | 10.42 | % | 13.51 | % | ||||||||||
Net investment income (loss) | 1.72 | % | 1.66 | % | 1.71 | % | 1.82 | % | 1.64 | % | ||||||||||
Portfolio turnover rate | 103 | % | 122 | % | 87 | % | 91 | % | 56 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 247
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/29/15 | ||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | to 12/31/15* | |||||||||||||||
Open Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.54 | $ | 11.56 | $ | 9.99 | $ | 9.59 | $ | 10.00 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.17 | 0.15 | 0.16 | 0.15 | 0.08 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.08 | (1.02 | ) | 1.85 | 0.44 | (0.34 | ) | |||||||||||||
Total from investment operations | 2.25 | (0.87 | ) | 2.01 | 0.59 | (0.26 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.14 | ) | (0.13 | ) | (0.13 | ) | (0.19 | ) | (0.15 | ) | ||||||||||
Net realized gains | — | (b) | (0.02 | ) | (0.31 | ) | — | — | ||||||||||||
Total distributions | (0.14 | ) | (0.15 | ) | (0.44 | ) | (0.19 | ) | (0.15 | ) | ||||||||||
Net asset value, end of period | $ | 12.65 | $ | 10.54 | $ | 11.56 | $ | 9.99 | $ | 9.59 | ||||||||||
Total Return (c) | 21.36 | % | –7.50 | % | 20.11 | % | 6.14 | % | –2.60 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 231 | $ | 183 | $ | 315 | $ | 172 | $ | 175 | ||||||||||
Ratios to average net assets (d): | ||||||||||||||||||||
Net expenses | 1.03 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | ||||||||||
Gross expenses | 5.81 | % | 5.86 | % | 12.07 | % | 17.27 | % | 23.94 | % | ||||||||||
Net investment income (loss) | 1.46 | % | 1.28 | % | 1.42 | % | 1.52 | % | 1.33 | % | ||||||||||
Portfolio turnover rate | 103 | % | 122 | % | 87 | % | 91 | % | 56 | % |
* | The Portfolio commenced operations on May 29, 2015. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year. |
The accompanying notes are an integral part of these financial statements.
248 Annual Report
LAZARD US EQUITY CONCENTRATED PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 12.89 | $ | 15.31 | $ | 14.16 | $ | 13.83 | $ | 13.41 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.13 | 0.18 | 0.14 | 0.06 | ^ | 0.05 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.96 | (1.11 | ) | 2.05 | 0.97 | 0.88 | |||||||||||||||
Total from investment operations | 4.09 | (0.93 | ) | 2.19 | 1.03 | 0.93 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.14 | ) | (0.20 | ) | (0.14 | ) | (0.05 | ) | (0.04 | ) | |||||||||||
Net realized gains | — | (1.29 | ) | (0.90 | ) | (0.65 | ) | (0.47 | ) | ||||||||||||
Total distributions | (0.14 | ) | (1.49 | ) | (1.04 | ) | (0.70 | ) | (0.51 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 16.84 | $ | 12.89 | $ | 15.31 | $ | 14.16 | $ | 13.83 | |||||||||||
Total Return (c) | 31.72 | % | –6.07 | % | 15.49 | % | 7.37 | %^ | 7.00 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,271,509 | $ | 1,040,851 | $ | 1,508,581 | $ | 1,230,377 | $ | 715,766 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.76 | % | 0.75 | % | 0.75 | % | 0.77 | %^ | 0.79 | % | |||||||||||
Gross expenses | 0.76 | % | 0.75 | % | 0.75 | % | 0.77 | % | 0.79 | % | |||||||||||
Net investment income (loss) | 0.85 | % | 1.14 | % | 0.90 | % | 0.39 | %^ | 0.36 | % | |||||||||||
Portfolio turnover rate | 33 | % | 69 | % | 86 | % | 84 | % | 74 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 249
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 12.99 | $ | 15.42 | $ | 14.25 | $ | 13.92 | $ | 13.50 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.09 | 0.13 | 0.10 | 0.02 | ^ | 0.01 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.99 | (1.11 | ) | 2.07 | 0.97 | 0.88 | |||||||||||||||
Total from investment operations | 4.08 | (0.98 | ) | 2.17 | 0.99 | 0.89 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.09 | ) | (0.16 | ) | (0.10 | ) | (0.01 | ) | — | (b) | |||||||||||
Net realized gains | — | (1.29 | ) | (0.90 | ) | (0.65 | ) | (0.47 | ) | ||||||||||||
Total distributions | (0.09 | ) | (1.45 | ) | (1.00 | ) | (0.66 | ) | (0.47 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 16.98 | $ | 12.99 | $ | 15.42 | $ | 14.25 | $ | 13.92 | |||||||||||
Total Return (c) | 31.42 | % | –6.35 | % | 15.22 | % | 7.06 | %^ | 6.67 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 46,840 | $ | 50,981 | $ | 87,603 | $ | 105,619 | $ | 114,348 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.04 | % | 1.03 | % | 1.03 | % | 1.03 | %^ | 1.07 | % | |||||||||||
Gross expenses | 1.04 | % | 1.03 | % | 1.03 | % | 1.03 | % | 1.07 | % | |||||||||||
Net investment income (loss) | 0.55 | % | 0.85 | % | 0.62 | % | 0.17 | %^ | 0.08 | % | |||||||||||
Portfolio turnover rate | 33 | % | 69 | % | 86 | % | 84 | % | 74 | % |
The accompanying notes are an integral part of these financial statements.
250 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | For the Period 11/15/16* to | |||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | |||||||||||||
R6 Shares | |||||||||||||||||
Net asset value, beginning of period | $ | 12.92 | $ | 15.34 | $ | 14.18 | $ | 14.77 | |||||||||
Income (Loss) from investment operations: | |||||||||||||||||
Net investment income (loss) (a) | 0.13 | 0.17 | 0.14 | — | ^(b) | ||||||||||||
Net realized and unrealized gain (loss) | 3.98 | (1.10 | ) | 2.06 | 0.03 | ||||||||||||
Total from investment operations | 4.11 | (0.93 | ) | 2.20 | 0.03 | ||||||||||||
Less distributions from: | |||||||||||||||||
Net investment income | (0.14 | ) | (0.20 | ) | (0.14 | ) | (0.03 | ) | |||||||||
Net realized gains | — | (1.29 | ) | (0.90 | ) | (0.59 | ) | ||||||||||
Total distributions | (0.14 | ) | (1.49 | ) | (1.04 | ) | (0.62 | ) | |||||||||
Net asset value, end of period | $ | 16.89 | $ | 12.92 | $ | 15.34 | $ | 14.18 | |||||||||
Total Return (c) | 31.79 | % | –6.08 | % | 15.52 | % | 0.17 | %^ | |||||||||
Ratios and Supplemental Data: | |||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,091 | $ | 1,900 | $ | 361 | $ | 140 | |||||||||
Ratios to average net assets (d): | |||||||||||||||||
Net expenses | 0.76 | % | 0.75 | % | 0.75 | % | 0.77 | %^ | |||||||||
Gross expenses | 1.20 | % | 2.16 | % | 8.34 | % | 15.38 | % | |||||||||
Net investment income (loss) | 0.83 | % | 1.15 | % | 0.91 | % | 0.19 | %^ | |||||||||
Portfolio turnover rate | 33 | % | 69 | % | 86 | % | 84 | % |
* | The inception date for the R6 Shares was November 15, 2016. |
^ | 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 impact on net expenses and net investment income (loss) ratios of the Portfolio was less than 0.005%. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year except for non-recurring expenses. |
The accompanying notes are an integral part of these financial statements.
Annual Report 251
LAZARD US EQUITY FOCUS PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.23 | $ | 12.43 | $ | 11.63 | $ | 10.97 | $ | 12.43 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.13 | 0.14 | 0.14 | 0.12 | 0.09 | ||||||||||||||||
Net realized and unrealized gain (loss) | 3.11 | (0.55 | ) | 1.94 | 0.94 | (0.69 | ) | ||||||||||||||
Total from investment operations | 3.24 | (0.41 | ) | 2.08 | 1.06 | (0.60 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.23 | ) | (0.29 | ) | (0.21 | ) | (0.10 | ) | (0.10 | ) | |||||||||||
Net realized gains | (1.21 | ) | (1.50 | ) | (1.07 | ) | (0.30 | ) | (0.76 | ) | |||||||||||
Total distributions | (1.44 | ) | (1.79 | ) | (1.28 | ) | (0.40 | ) | (0.86 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 12.03 | $ | 10.23 | $ | 12.43 | $ | 11.63 | $ | 10.97 | |||||||||||
Total Return (c) | 31.67 | % | –3.12 | % | 18.17 | % | 9.70 | % | –4.75 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 32,661 | $ | 60,629 | $ | 72,958 | $ | 72,151 | $ | 110,243 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | |||||||||||
Gross expenses | 0.92 | % | 0.92 | % | 0.95 | % | 0.94 | % | 0.90 | % | |||||||||||
Net investment income (loss) | 1.07 | % | 1.10 | % | 1.10 | % | 1.08 | % | 0.77 | % | |||||||||||
Portfolio turnover rate | 45 | % | 62 | % | 74 | % | 68 | % | 75 | % |
The accompanying notes are an integral part of these financial statements.
252 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.28 | $ | 12.48 | $ | 11.68 | $ | 11.01 | $ | 12.48 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.10 | 0.10 | 0.10 | 0.09 | 0.06 | ||||||||||||||||
Net realized and unrealized gain (loss) | 3.11 | (0.54 | ) | 1.94 | 0.94 | (0.71 | ) | ||||||||||||||
Total from investment operations | 3.21 | (0.44 | ) | 2.04 | 1.03 | (0.65 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.19 | ) | (0.26 | ) | (0.17 | ) | (0.06 | ) | (0.06 | ) | |||||||||||
Net realized gains | (1.21 | ) | (1.50 | ) | (1.07 | ) | (0.30 | ) | (0.76 | ) | |||||||||||
Total distributions | (1.40 | ) | (1.76 | ) | (1.24 | ) | (0.36 | ) | (0.82 | ) | |||||||||||
Net asset value, end of period | $ | 12.09 | $ | 10.28 | $ | 12.48 | $ | 11.68 | $ | 11.01 | |||||||||||
Total Return (c) | 31.25 | % | –3.40 | % | 17.75 | % | 9.46 | % | –5.11 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,117 | $ | 881 | $ | 1,013 | $ | 1,376 | $ | 1,536 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.03 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | |||||||||||
Gross expenses | 2.14 | % | 2.33 | % | 2.30 | % | 2.13 | % | 1.51 | % | |||||||||||
Net investment income (loss) | 0.79 | % | 0.80 | % | 0.79 | % | 0.80 | % | 0.50 | % | |||||||||||
Portfolio turnover rate | 45 | % | 62 | % | 74 | % | 68 | % | 75 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 253
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
R6 Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.23 | $ | 12.43 | $ | 11.63 | $ | 10.96 | $ | 12.43 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.13 | 0.14 | 0.14 | 0.14 | 0.10 | ||||||||||||||||
Net realized and unrealized gain (loss) | 3.12 | (0.55 | ) | 1.94 | 0.93 | (0.71 | ) | ||||||||||||||
Total from investment operations | 3.25 | (0.41 | ) | 2.08 | 1.07 | (0.61 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.23 | ) | (0.29 | ) | (0.21 | ) | (0.10 | ) | (0.10 | ) | |||||||||||
Net realized gains | (1.21 | ) | (1.50 | ) | (1.07 | ) | (0.30 | ) | (0.76 | ) | |||||||||||
Total distributions | (1.44 | ) | (1.79 | ) | (1.28 | ) | (0.40 | ) | (0.86 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 12.04 | $ | 10.23 | $ | 12.43 | $ | 11.63 | $ | 10.96 | |||||||||||
Total Return (c) | 31.76 | % | –3.13 | % | 18.16 | % | 9.81 | % | –4.78 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 10,609 | $ | 10,056 | $ | 11,394 | $ | 13,297 | $ | 12,359 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.74 | % | 0.75 | % | 0.75 | % | 0.74 | % | 0.70 | % | |||||||||||
Gross expenses | 1.00 | % | 1.01 | % | 1.05 | % | 1.02 | % | 1.00 | % | |||||||||||
Net investment income (loss) | 1.09 | % | 1.10 | % | 1.12 | % | 1.27 | % | 0.82 | % | |||||||||||
Portfolio turnover rate | 45 | % | 62 | % | 74 | % | 68 | % | 75 | % |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
254 Annual Report
LAZARD US REALTY EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 16.69 | $ | 18.85 | $ | 19.37 | $ | 18.93 | $ | 19.71 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.29 | 0.28 | 0.31 | 0.29 | 0.33 | ||||||||||||||||
Net realized and unrealized gain (loss) | 4.62 | (1.74 | ) | 1.18 | 0.72 | 0.55 | |||||||||||||||
Total from investment operations | 4.91 | (1.46 | ) | 1.49 | 1.01 | 0.88 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.47 | ) | (0.32 | ) | (0.37 | ) | (0.31 | ) | (0.38 | ) | |||||||||||
Net realized gains | (2.16 | ) | (0.38 | ) | (1.64 | ) | (0.26 | ) | (1.28 | ) | |||||||||||
Total distributions | (2.63 | ) | (0.70 | ) | (2.01 | ) | (0.57 | ) | (1.66 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 18.97 | $ | 16.69 | $ | 18.85 | $ | 19.37 | $ | 18.93 | |||||||||||
Total Return (c) | 29.73 | % | –7.77 | % | 7.93 | % | 5.31 | % | 4.63 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 11,255 | $ | 15,715 | $ | 18,724 | $ | 19,625 | $ | 21,143 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.00 | % | 1.00 | % | 1.02 | % | 1.05 | % | 1.05 | % | |||||||||||
Gross expenses | 1.18 | % | 1.09 | % | 1.09 | % | 1.12 | % | 1.09 | % | |||||||||||
Net investment income (loss) | 1.46 | % | 1.56 | % | 1.55 | % | 1.50 | % | 1.64 | % | |||||||||||
Portfolio turnover rate | 19 | % | 52 | % | 32 | % | 41 | % | 51 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 255
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 16.77 | $ | 18.94 | $ | 19.44 | $ | 19.00 | $ | 19.78 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.24 | 0.23 | 0.25 | 0.23 | 0.26 | ||||||||||||||||
Net realized and unrealized gain (loss) | 4.65 | (1.75 | ) | 1.20 | 0.72 | 0.56 | |||||||||||||||
Total from investment operations | 4.89 | (1.52 | ) | 1.45 | 0.95 | 0.82 | |||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.42 | ) | (0.27 | ) | (0.31 | ) | (0.25 | ) | (0.32 | ) | |||||||||||
Net realized gains | (2.16 | ) | (0.38 | ) | (1.64 | ) | (0.26 | ) | (1.28 | ) | |||||||||||
Total distributions | (2.58 | ) | (0.65 | ) | (1.95 | ) | (0.51 | ) | (1.60 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 19.08 | $ | 16.77 | $ | 18.94 | $ | 19.44 | $ | 19.00 | |||||||||||
Total Return (c) | 29.42 | % | –8.06 | % | 7.69 | % | 4.99 | % | 4.34 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 32,864 | $ | 43,946 | $ | 47,811 | $ | 59,307 | $ | 75,907 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.27 | % | 1.29 | % | 1.30 | % | 1.34 | % | 1.32 | % | |||||||||||
Gross expenses | 1.38 | % | 1.29 | % | 1.30 | % | 1.34 | % | 1.32 | % | |||||||||||
Net investment income (loss) | 1.23 | % | 1.27 | % | 1.24 | % | 1.17 | % | 1.32 | % | |||||||||||
Portfolio turnover rate | 19 | % | 52 | % | 32 | % | 41 | % | 51 | % |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
256 Annual Report
LAZARD US SMALL-MID CAP EQUITY PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.83 | $ | 14.65 | $ | 14.50 | $ | 12.86 | $ | 14.05 | |||||||||||
Income (Loss) from | |||||||||||||||||||||
investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.06 | 0.05 | 0.06 | 0.11 | ^ | 0.02 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.19 | (2.00 | ) | 1.95 | 1.96 | (0.34 | ) | ||||||||||||||
Total from investment operations | 3.25 | (1.95 | ) | 2.01 | 2.07 | (0.32 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.03 | ) | (0.04 | ) | (0.09 | ) | (0.09 | ) | — | (b) | |||||||||||
Net realized gains | (0.41 | ) | (1.83 | ) | (1.77 | ) | (0.34 | ) | (0.87 | ) | |||||||||||
Total distributions | (0.44 | ) | (1.87 | ) | (1.86 | ) | (0.43 | ) | (0.87 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 13.64 | $ | 10.83 | $ | 14.65 | $ | 14.50 | $ | 12.86 | |||||||||||
Total Return (c) | 30.00 | % | –13.27 | % | 14.12 | % | 16.28 | %^ | –2.14 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 108,112 | $ | 113,677 | $ | 176,975 | $ | 189,593 | $ | 171,152 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.92 | % | 0.87 | % | 0.87 | % | 0.86 | %^ | 0.91 | % | |||||||||||
Gross expenses | 0.92 | % | 0.87 | % | 0.87 | % | 0.90 | % | 0.91 | % | |||||||||||
Net investment income (loss) | 0.46 | % | 0.35 | % | 0.39 | % | 0.84 | %^ | 0.13 | % | |||||||||||
Portfolio turnover rate | 90 | % | 81 | % | 79 | % | 91 | % | 91 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 257
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.03 | $ | 13.72 | $ | 13.68 | $ | 12.16 | $ | 13.38 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.01 | 0.01 | 0.01 | 0.06 | ^ | (0.02 | ) | ||||||||||||||
Net realized and unrealized gain (loss) | 2.95 | (1.87 | ) | 1.84 | 1.85 | (0.33 | ) | ||||||||||||||
Total from investment operations | 2.96 | (1.86 | ) | 1.85 | 1.91 | (0.35 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | — | — | (b) | (0.04 | ) | (0.05 | ) | — | (b) | ||||||||||||
Net realized gains | (0.41 | ) | (1.83 | ) | (1.77 | ) | (0.34 | ) | (0.87 | ) | |||||||||||
Total distributions | (0.41 | ) | (1.83 | ) | (1.81 | ) | (0.39 | ) | (0.87 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 12.58 | $ | 10.03 | $ | 13.72 | $ | 13.68 | $ | 12.16 | |||||||||||
Total Return (c) | 29.51 | % | –13.49 | % | 13.82 | % | 15.92 | %^ | –2.47 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 14,643 | $ | 13,726 | $ | 25,973 | $ | 30,332 | $ | 36,860 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 1.25 | % | 1.18 | % | 1.17 | % | 1.16 | %^ | 1.20 | % | |||||||||||
Gross expenses | 1.25 | % | 1.18 | % | 1.17 | % | 1.20 | % | 1.20 | % | |||||||||||
Net investment income (loss) | 0.11 | % | 0.04 | % | 0.09 | % | 0.51 | %^ | –0.13 | % | |||||||||||
Portfolio turnover rate | 90 | % | 81 | % | 79 | % | 91 | % | 91 | % |
^ | 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 impact on the net investment income per share amount was $0.01 per share. There was a 0.08% impact on the total return of the Institutional Shares class of the Portfolio. There was a 0.04% 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) | Amount is less than $0.01 per share. |
(c) | Total returns reflect reinvestment of all dividends and distributions, if any. |
The accompanying notes are an integral part of these financial statements.
258 Annual Report
The Lazard Funds, Inc.Notes to Financial Statements
December 31, 2019
1. Organization
The Lazard Funds, Inc. was incorporated in Maryland on May 17, 1991 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. As of December 31, 2019, the Fund was comprised of thirty no-load portfolios (each referred to as a “Portfolio”). This report includes only the financial statements of Developing Markets Equity, Emerging Markets Core Equity, Emerging Markets Equity Advantage, Emerging Markets Equity Blend, Emerging Markets Equity, Equity Franchise, Global Equity Select, Global Listed Infrastructure, Global Strategic Equity, International Equity Advantage, International Equity Concentrated, International Equity, International Equity Select, International Equity Value, International Small Cap Equity, International Strategic Equity, International Quality Growth (formerly International Compounders), Managed Equity Volatility, US Equity Concentrated, US Equity Focus (formerly US Equity Select), US Realty Equity and US Small-Mid Cap Equity Portfolios. The financial statements of the other eight Portfolios are presented separately.
The Portfolios, other than Equity Franchise, International Equity Concentrated, International Equity Value, US Equity Concentrated and US Realty Equity Portfolios, are operated as “diversified” funds, as defined in the 1940 Act.
Each Portfolio currently offers Institutional Shares and Open Shares, and certain Portfolios offer R6 Shares. Each share class is identical except as to minimum investment requirements; eligibility requirements for R6 Shares; the services offered to, and expenses borne by, each class; and the availability of Service Payments (as defined in the Portfolios’ Prospectus).
2. Significant Accounting Policies
The accompanying financial statements are presented in conformity with US Generally Accepted Accounting Principles (“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:
Annual Report 259
(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.
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 non-US securities exchanges and in over-the-counter markets ordinarily may be completed before or after 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, non-US 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 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
260 Annual Report
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 Portfolios 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 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 previ-
Annual Report 261
ously withheld taxes on dividends earned in certain European Union 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 Portfolios’ 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
262 Annual Report
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 year ended December 31, 2019, the Global Listed Infrastructure 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, 2019, the following Portfolios 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 | ||||||
Developing Markets Equity | $ | 42,647,194 | $ | 71,112,306 | ||||
Emerging Markets Core Equity | 4,850,360 | 5,833,798 | ||||||
Emerging Markets Equity Advantage | 184,175 | — | ||||||
Emerging Markets Equity Blend | 8,976,008 | 42,678,261 | ||||||
Emerging Markets Equity | 105,373,683 | 931,069,125 | ||||||
Global Equity Select | 467,956 | 969,329 | ||||||
Global Listed Infrastructure | 9,760,289 | — | ||||||
International Equity Advantage | 75,577 | 68,530 | ||||||
International Equity Concentrated | 782,038 | 1,021,466 | ||||||
International Equity | 37,949,244 | — | ||||||
International Equity Select | 533,184 | 1,238,834 | ||||||
International Equity Value | 871,484 | 32,024 | ||||||
International Small Cap Equity | 622,537 | 899,809 | ||||||
International Strategic Equity | 39,848,058 | — | ||||||
US Equity Concentrated | 1,193,025 | — |
Annual Report 263
During the year ended December 31, 2019, the following Portfolios utilized realized capital loss carryovers from previous years as follows:
Portfolio | Amounts | |||
Developing Markets Equity | $ | 10,048,391 | ||
US Realty Equity | 520,440 |
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, 2019, the following Portfolios elected to defer such losses as follows:
Post-October | Late-Year | ||||||||
Capital Loss | Ordinary Loss | ||||||||
Portfolio | Deferral | Deferral | |||||||
International Equity Select | $ | — | $ | 706 | |||||
International Quality Growth | 10,692 | 369 |
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:
Aggregate | Aggregate | Net | ||||||||||||||
Gross | Gross | Unrealized | ||||||||||||||
Aggregate | Unrealized | Unrealized | Appreciation | |||||||||||||
Portfolio | Cost | Appreciation | Depreciation | (Depreciation) | ||||||||||||
Developing Markets Equity | $ | 198,078,067 | $ | 44,490,073 | $ | 6,811,184 | $ | 37,678,889 | ||||||||
Emerging Markets Core Equity | 170,047,526 | 41,474,596 | 9,023,309 | 32,451,287 | ||||||||||||
Emerging Markets Equity Advantage | 9,216,062 | 1,601,909 | 296,608 | 1,305,301 | ||||||||||||
Emerging Markets Equity Blend | 95,261,953 | 11,380,257 | 4,267,038 | 7,113,219 | ||||||||||||
Emerging Markets Equity | 6,657,772,944 | 1,657,940,457 | 490,562,104 | 1,167,378,353 | ||||||||||||
Equity Franchise | 39,566,578 | 1,750,927 | 1,178,311 | 572,616 | ||||||||||||
Global Equity Select | 64,880,543 | 18,478,275 | 478,639 | 17,999,636 | ||||||||||||
Global Listed Infrastructure | 7,107,306,395 | 865,335,602 | 235,927,146 | 629,408,456 | ||||||||||||
Global Strategic Equity | 2,639,719 | 721,170 | 19,409 | 701,761 | ||||||||||||
International Equity Advantage | 2,337,096 | 273,783 | 74,813 | 198,970 | ||||||||||||
International Equity Concentrated | 89,216,316 | 9,729,740 | 912,696 | 8,817,044 |
264 Annual Report
Aggregate | Aggregate | Net | ||||||||||||||
Gross | Gross | Unrealized | ||||||||||||||
Aggregate | Unrealized | Unrealized | Appreciation | |||||||||||||
Portfolio | Cost | Appreciation | Depreciation | (Depreciation) | ||||||||||||
International Equity | $ | 2,477,022,770 | $ | 445,159,954 | $ | 59,296,786 | $ | 385,863,168 | ||||||||
International Equity Select | 84,774,286 | 11,425,355 | 2,259,067 | 9,166,288 | ||||||||||||
International Equity Value | 12,702,269 | 848,533 | 267,948 | 580,585 | ||||||||||||
International Quality Growth | 3,028,131 | 898,926 | 15,084 | 883,842 | ||||||||||||
International Small Cap Equity | 50,939,267 | 8,951,089 | 2,474,114 | 6,476,975 | ||||||||||||
International Strategic Equity | 5,237,146,202 | 1,142,911,829 | 68,419,366 | 1,074,492,463 | ||||||||||||
Managed Equity Volatility | 31,968,276 | 3,045,818 | 434,790 | 2,611,028 | ||||||||||||
US Equity Concentrated | 1,038,658,758 | 290,635,728 | 1,823,397 | 288,812,331 | ||||||||||||
US Equity Focus | 32,367,031 | 12,107,755 | 83,062 | 12,024,693 | ||||||||||||
US Realty Equity | 36,837,447 | 8,018,789 | 835,007 | 7,183,782 | ||||||||||||
US Small-Mid Cap Equity | 106,129,775 | 16,177,372 | 1,579,719 | 14,597,653 |
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. Each Portfolio 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, except that the Global Listed Infrastructure Portfolio’s dividends from net investment income (if any), will be declared and paid quarterly. 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
Annual Report 265
required. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
The US Equity Focus, US Realty Equity and US Small-Mid Cap Equity Portfolios intend, on their 2019 tax returns, to treat as a distribution of investment company taxable income and net capital gain the portion of redemption proceeds paid to redeeming shareholders that represents the redeeming shareholders’ portion of the Portfolios’ undistributed investment company taxable income and net capital gain. This practice, which involves the use of equalization accounting, will have the effect of reducing the amount of income and gains that the Portfolios would otherwise be required to distribute as dividends to shareholders in order for the Portfolios to avoid federal income and excise taxes. This practice reduces the amount of distributions required to be made to nonredeeming shareholders and defers the recognition of taxable income by such shareholders. However, since the amount of any undistributed income will be reflected in the value of the Portfolios’ shares, the total return on a shareholder’s investment is not affected by the Portfolios’ use of equalization.
REIT distributions received by a Portfolio are generally comprised of ordinary income, long-term capital gains and a return of REIT capital. However, as the actual character of such distributions received are not known until after the calendar year end, distributions made by a Portfolio during the year are subject to re-characterization that may result in some portion of the distributions being reclassified as a return of capital distribution to Portfolio shareholders.
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, expiring capital loss carryovers, certain expenses, foreign capital gains taxes, distributions in excess of current earnings, equalization, non-REIT non-taxable dividend adjustment to income, distributions redesignations, adjustments in relation to merger, return of capital distributions and distribu-
266 Annual Report
tions from real estate investment trusts and partnerships. The book/tax differences relating to shareholder distributions resulted in reclassifications among certain capital accounts as follows:
Distributable | |||||||||
Earnings | |||||||||
Paid in | (Accumulated | ||||||||
Portfolio | Capital | Loss) | |||||||
Developing Markets Equity | $ | (48,905 | ) | $ | 48,905 | ||||
Emerging Markets Core Equity | (773 | ) | 773 | ||||||
Emerging Markets Equity Blend | (29,367 | ) | 29,367 | ||||||
Emerging Markets Equity | 4,786,725 | (4,786,725 | ) | ||||||
Global Equity Select | 1,716,364 | (1,716,364 | ) | ||||||
Global Listed Infrastructure | (1,043,784 | ) | 1,043,784 | ||||||
International Equity Advantage | (66 | ) | 66 | ||||||
International Equity Concentrated | 2 | (2 | ) | ||||||
International Equity Select | (11,002 | ) | 11,002 | ||||||
International Equity Value | (985 | ) | 985 | ||||||
International Quality Growth | (82 | ) | 82 | ||||||
International Small Cap Equity | (101 | ) | 101 | ||||||
International Strategic Equity | 874,743 | (874,743 | ) | ||||||
US Equity Concentrated | 2,551,596 | (2,551,596 | ) | ||||||
US Equity Focus | 4,466,573 | (4,466,573 | ) | ||||||
US Realty Equity | 2,343,015 | (2,343,015 | ) | ||||||
US Small-Mid Cap Equity | 3,659,433 | (3,659,433 | ) |
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The tax character of dividends and distributions paid during the years ended December 31, were as follows:
Ordinary Income | Long-Term Capital Gain | |||||||||||||||
Portfolio | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Developing Markets Equity | $ | 1,272,077 | $ | 1,841,559 | $ | — | $ | — | ||||||||
Emerging Markets Core Equity | 4,002,107 | 3,790,442 | — | — | ||||||||||||
Emerging Markets Equity Advantage* | 198,987 | 78,382 | — | 488 | ||||||||||||
Emerging Markets Equity Blend | 2,137,475 | 5,413,386 | — | — | ||||||||||||
Emerging Markets Equity | 194,889,049 | 185,398,646 | — | — | ||||||||||||
Equity Franchise | 2,037,956 | 809,383 | 163,734 | 48,488 | ||||||||||||
Global Equity Select* | 595,796 | 670,326 | — | 1,373,108 | ||||||||||||
Global Listed Infrastructure | 317,773,912 | 273,617,078 | — | 412,876,525 | ||||||||||||
Global Strategic Equity | 27,142 | 223,006 | 63,308 | 430,715 | ||||||||||||
International Equity Advantage | 54,002 | 78,886 | — | 27,980 | ||||||||||||
International Equity Concentrated | 1,609,266 | 1,942,491 | — | 460,712 | ||||||||||||
International Equity | 57,938,459 | 63,804,495 | — | 123,957,950 | ||||||||||||
International Equity Select | 2,007,181 | 1,887,553 | — | 37,977 | ||||||||||||
International Equity Value | 639,252 | 26,215 | — | — | ||||||||||||
International Quality Growth | 95,627 | NA | — | NA | ||||||||||||
International Small Cap Equity | 234,028 | 1,519,694 | 1,291,922 | 1,000,024 | ||||||||||||
International Strategic Equity | 113,944,544 | 80,890,347 | — | 386,368,003 | ||||||||||||
Managed Equity Volatility | 480,591 | 360,900 | 2,138 | 24,702 | ||||||||||||
US Equity Concentrated | 10,742,527 | 42,768,127 | — | 89,877,722 | ||||||||||||
US Equity Focus | 1,621,108 | 1,529,090 | 3,133,733 | 9,619,133 | ||||||||||||
US Realty Equity | 815,048 | 827,749 | 5,082,782 | 1,584,317 | ||||||||||||
US Small-Mid Cap Equity | 225,556 | 5,545,244 | 3,647,669 | 14,372,817 |
* | Emerging Markets Equity Advantage and Global Equity Select Portfolios had return of capital distributions of $0 and $42,175 in 2019 and $5,637 and $55,706 in 2018, respectively. |
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At December 31, 2019, the components of distributable earnings (accumulated loss), on a tax basis, were as follows:
Portfolio | Undistributed Ordinary Income (Deferred Ordinary Losses) | Undistributed Long-Term Capital Gain (Deferred Capital Losses) | Net Unrealized Appreciation (Depreciation) Including Foreign Currency | |||||||||
Developing Markets Equity | $ | 524,233 | $ | (113,759,500 | ) | $ | 37,551,204 | |||||
Emerging Markets Core Equity | 115,804 | (10,684,158 | ) | 32,257,630 | ||||||||
Emerging Markets Equity Advantage | 15,377 | (184,175 | ) | 1,305,422 | ||||||||
Emerging Markets Equity Blend | — | (51,654,269 | ) | 7,027,576 | ||||||||
Emerging Markets Equity | 63,032,095 | (1,036,442,808 | ) | 1,156,334,837 | ||||||||
Equity Franchise | 18,161 | — | 553,100 | |||||||||
Global Equity Select | — | (1,437,285 | ) | 17,990,007 | ||||||||
Global Listed Infrastructure | 34,527,483 | (9,760,289 | ) | 629,924,021 | ||||||||
Global Strategic Equity | 82 | 20,609 | 672,024 | |||||||||
International Equity Advantage | 255 | (144,107 | ) | 199,037 | ||||||||
International Equity Concentrated | 4,302 | (1,803,504 | ) | 8,782,076 | ||||||||
International Equity | 10,757,266 | (37,949,244 | ) | 385,845,915 | ||||||||
International Equity Select | (706 | ) | (1,772,018 | ) | 9,165,265 | |||||||
International Equity Value | 12,903 | (903,508 | ) | 528,438 | ||||||||
International Quality Growth | — | (11,061 | ) | 822,823 | ||||||||
International Small Cap Equity | 1,002,756 | (1,522,346 | ) | 6,476,614 | ||||||||
International Strategic Equity | 8,245,789 | (39,848,058 | ) | 1,073,195,673 | ||||||||
Managed Equity Volatility | — | 373,551 | 2,611,158 | |||||||||
US Equity Concentrated | 2,133 | (1,193,025 | ) | 288,811,160 | ||||||||
US Equity Focus | 90,153 | 502,947 | 12,024,693 | |||||||||
US Realty Equity | — | 1,627,469 | 7,183,783 | |||||||||
US Small-Mid Cap Equity | 229,483 | 548,380 | 14,597,653 |
(f) Offering and Organizational Costs—Costs incurred by the Fund in connection with the offering of shares of a new Portfolio or share class of a Portfolio are deferred and amortized on a straight line basis over a twelve-month period from the date of commencement of operations of the Portfolio or share class. Organizational costs are expensed as incurred.
(g) Allocation of Expenses—Expenses common to the Fund, Lazard Retirement Series, Inc., and Lazard Global Total Return and 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
Annual Report 269
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 Open 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.
(h) Redemption Fee—Until August 15, 2016, the Portfolios imposed a 1.00% redemption fee (short-term trading fee) on Portfolio shares redeemed less than 30 days after such shares were acquired. The fees were retained by the Portfolios and are included as paid in capital on the Statements of Assets and Liabilities. As of August 15, 2016, redemption fees no longer apply to transactions in Portfolio shares.
(i) 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.
(j) 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.
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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 each Portfolio’s average daily net assets and payable by each Portfolio monthly, at the annual rate set forth below:
Portfolio | Annual Rate | ||||
Developing Markets Equity | 1.00 | % | |||
Emerging Markets Core Equity | 1.00 | ||||
Emerging Markets Equity Advantage | 0.85 | ||||
Emerging Markets Equity Blend | 1.00 | ||||
Emerging Markets Equity | 1.00 | ||||
Equity Franchise | 0.80 | ||||
Global Equity Select | 0.65 | (a) | |||
Global Listed Infrastructure | 0.90 | ||||
Global Strategic Equity | 0.75 | ||||
International Equity Advantage | 0.65 | ||||
International Equity Concentrated | 0.80 | ||||
International Equity | 0.75 | ||||
International Equity Select | 0.65 | (b) | |||
International Equity Value | 0.80 | ||||
International Quality Growth | 0.75 | ||||
International Small Cap Equity | 0.75 | ||||
International Strategic Equity | 0.75 | ||||
Managed Equity Volatility | 0.60 | ||||
US Equity Concentrated | 0.70 | ||||
US Equity Focus | 0.55 | (c) | |||
US Realty Equity | 0.75 | ||||
US Small-Mid Cap Equity | 0.75 |
(a) | From January 1, 2019 to September 26, 2019, the annual rate was 0.80%. |
(b) | From January 1, 2019 to September 26, 2019, the annual rate was 0.75%. |
(c) | From January 1, 2019 to October 31, 2019, the annual rate was 0.65%. |
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The Investment Manager has voluntarily agreed, until May 1 of the year shown below (except as noted), to waive its fees and, if necessary, reimburse the Portfolios 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 table below. The Fund, on behalf of the Portfolio, may deduct from the payment to be made to the Investment Manager under the Management Agreement, or the Investment Manager will bear, such excess expense.
Portfolio | Institutional Shares | Open Shares | R6 Shares | Year | |||||||||||||
Developing Markets Equity | 1.25 | % | 1.50 | % | N/A | % | 2020 | (a) | |||||||||
Emerging Markets Core Equity | 1.25 | 1.50 | 1.20 | 2020 | (b) | ||||||||||||
Emerging Markets Equity Advantage | 1.10 | 1.35 | N/A | 2020 | (c) | ||||||||||||
Emerging Markets Equity Blend | 1.25 | 1.50 | N/A | 2020 | (a) | ||||||||||||
Emerging Markets Equity | 1.20 | 1.45 | 1.15 | 2020 | (d) | ||||||||||||
Equity Franchise | 0.95 | 1.20 | N/A | 2020 | |||||||||||||
Global Equity Select | 0.90 | 1.15 | N/A | 2020 | (e) | ||||||||||||
Global Listed Infrastructure | 1.20 | 1.45 | N/A | 2029 | (f) | ||||||||||||
Global Strategic Equity | 1.00 | 1.25 | N/A | 2020 | (g) | ||||||||||||
International Equity Advantage | 0.90 | 1.15 | N/A | 2020 | (h) | ||||||||||||
International Equity Concentrated | 0.95 | 1.20 | N/A | 2020 | (i) | ||||||||||||
International Equity | 0.85 | 1.10 | 0.80 | 2020 | (j) | ||||||||||||
International Equity Select | 0.90 | 1.15 | N/A | 2020 | (e), | (t) | |||||||||||
International Equity Value | 0.95 | 1.20 | N/A | 2020 | (k) | ||||||||||||
International Quality Growth | 0.85 | 1.10 | N/A | 2020 | (l) | ||||||||||||
International Small Cap Equity | 1.13 | 1.38 | N/A | 2020 | (m) | ||||||||||||
International Strategic Equity | 1.05 | 1.30 | 1.00 | 2020 | (n) | ||||||||||||
Managed Equity Volatility | 0.75 | 1.00 | N/A | 2020 | (o) | ||||||||||||
US Equity Concentrated | 0.90 | 1.15 | 0.85 | 2020 | (p), | (u) | |||||||||||
US Equity Focus | 0.70 | 0.95 | 0.70 | 2020 | (q) | ||||||||||||
US Realty Equity | 1.00 | 1.25 | N/A | 2029 | (r) | ||||||||||||
US Small-Mid Cap Equity | 1.15 | 1.40 | N/A | 2020 | (s) |
(a) | From January 1, 2019 to September 9, 2019, annual rates were 1.25% and 1.55%, respectively. |
(b) | From January 1, 2019 to September 9, 2019, annual rates were 1.25%, 1.55% and 1.20%, respectively. |
(c) | From January 1, 2019 to September 9, 2019, annual rates were 1.10% and 1.40%, respectively. |
(d) | From January 1, 2019 to September 9, 2019, annual rates were 1.20%, 1.50% and 1.15% respectively. |
(e) | From January 1, 2019 to September 9, 2019, annual rates were 1.05% and 1.35%, respectively, and from September 9, 2019 to September 26, 2019, annual rates were 1.05% and 1.30%, respectively. |
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(f) | From January 1, 2019 to September 9, 2019, annual rates were 1.20% and 1.50%, respectively. Agreement is until May 1, 2029. |
(g) | From January 1, 2019 to September 9, 2019 annual rates were 1.00% and 1.30%, respectively. |
(h) | From January 1, 2019 to September 9, 2019, annual rates were 0.90% and 1.20%, respectively. |
(i) | From January 1, 2019 to September 9, 2019, annual rates were 0.95% and 1.25%, respectively. |
(j) | From January 1, 2019 to September 9, 2019, annual rates were 0.85%, 1.15% and 0.80%, respectively. |
(k) | Agreement is until October 31, 2020. |
(l) | Agreement is until December 31, 2020. |
(m) | From January 1, 2019 to September 9, 2019, annual rates were 1.13%, 1.43%, respectively. |
(n) | From January 1, 2019 to September 9, 2019, annual rates were 1.05%, 1.35% and 1.00%, respectively. |
(o) | From January 1, 2019 to September 9, 2019, annual rates were 0.75%, 1.05%, respectively. |
(p) | From January 1, 2019 to September 9, 2019, annual rates were 0.90%, 1.20% and 0.85%, respectively. |
(q) | From January 1, 2019 to September 9, 2019, annual rates were 0.75%, 1.05% and 0.75%, respectively, and from September 9, 2019 to October 31, 2019, annual rates were 0.75%, 1.00% and 0.75%. |
(r) | From January 1, 2019 to September 9, 2019, annual rates were 1.00% and 1.30%, respectively. Agreement is until May 1, 2029. |
(s) | From January 1, 2019 to September 9, 2019, annual rates were 1.15% and 1.45%, respectively. |
(t) | Agreement extends from May 1, 2020 through May 1, 2029 at levels of 1.15%, 1.40% and 1.10% respectively. |
(u) | Agreement extends from May 1, 2020 through May 1, 2029 at levels of 1.10%, 1.35% and 1.05% respectively. |
In addition, until May 1, 2020, to the extent the “Total Annual Fund Operating Expenses” (as used in Form N-1A) of the R6 Shares of a Portfolio exceed the Total Annual Fund Operating Expenses of the Portfolio’s Institutional Shares (in each case, not including management fees, custodial fees or other expenses related to the management of the Portfolio’s assets), the Investment Manager will bear the expenses of the R6 Shares in the amount of such excess.
During the year ended December 31, 2019, the Investment Manager waived its management fees and reimbursed the following Portfolios for other expenses as follows:
Institutional Shares | Open Shares | |||||||||||||||||
Portfolio | Management Fees Waived | Expenses Reimbursed | Management Fees Waived | Expenses Reimbursed | ||||||||||||||
Developing Markets Equity | $ | — | $ | — | $ | 7,647 | $ | — | ||||||||||
Emerging Markets Core Equity | — | — | 7,227 | — | ||||||||||||||
Emerging Markets Equity Advantage | 67,612 | 98,832 | 8,527 | 20,888 | ||||||||||||||
Emerging Markets Equity Blend | 3,065 | — | 15,418 | — | ||||||||||||||
Equity Franchise | 114,357 | — | 1,838 | 8,729 | ||||||||||||||
Global Equity Select | 50,192 | — | 7,014 | 2,757 | ||||||||||||||
Global Strategic Equity | 21,608 | 124,504 | 1,043 | 15,601 | ||||||||||||||
International Equity Advantage | 14,610 | 153,910 | 687 | 16,781 | ||||||||||||||
International Equity Concentrated | 80,268 | — | 3,370 | 6,905 | ||||||||||||||
International Equity Select | 20,748 | — | 9,456 | — |
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Institutional Shares | Open Shares | |||||||||||||||||
Portfolio | Management Fees Waived | Expenses Reimbursed | Management Fees Waived | Expenses Reimbursed | ||||||||||||||
International Equity Value | $ | 172,123 | $ | 50,712 | $ | 676 | $ | 5,632 | ||||||||||
International Quality Growth | 25,977 | 221,218 | 52 | 3,731 | ||||||||||||||
International Small Cap Equity | 4,842 | — | 7,225 | — | ||||||||||||||
Managed Equity Volatility | 154,337 | 2,512 | 1,269 | 8,832 | ||||||||||||||
US Equity Focus | 107,112 | — | 6,408 | 4,949 | ||||||||||||||
US Realty Equity | 31,410 | — | 51,172 | — |
R6 Shares | ||||||||||
Portfolio | Management Fees Waived | Expenses Reimbursed | ||||||||
Emerging Markets Core Equity | $ | 5,377 | $ | 5,664 | ||||||
International Equity | 23,045 | — | ||||||||
International Strategic Equity | 10,414 | — | ||||||||
US Equity Concentrated | 9,633 | — | ||||||||
US Equity Focus | 29,636 | — |
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 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 Manager, to serve as the distributor for shares of each Portfolio. The Distributor bears the cost of printing and
274 Annual Report
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 Open Shares, for distribution and servicing of accounts. The Distributor may make payments to certain financial institutions, securities dealers and other industry professionals for providing these services.
DST is the Fund’s transfer and dividend disbursing agent. During the year ended December 31, 2019, DST waived $12,199 and $12,195 of its fees for the International Equity Value Portfolio and International Quality Growth Portfolio, respectively.
4. Directors’ Compensation
Certain Directors of the Fund are officers of the Investment Manager. For the year ended December 31, 2019, each Director who is not an affiliated person of the Investment Manager or any of its affiliates was paid by all of the funds in the Lazard Fund Complex: (1) an annual retainer of $232,000, (2) an additional annual fee of $33,000 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 $23,000 to the Audit Committee Chair. Effective January 1, 2020, the aggregate compensation for Independent Directors for the Lazard Fund Complex is comprised of: (1) an annual retainer of $237,000, (2) an additional annual fee of $33,700 to the lead Independent Director, and (3) an additional annual fee of $23,500 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 active Portfolios in the Lazard Fund Complex at a rate of $5,000 per fund with the remainder allocated
Annual Report 275
based upon each active Portfolio’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 year ended December 31, 2019 were as follows:
Portfolio | Purchases | Sales | |||||||
Developing Markets Equity | $ | 127,825,091 | $ | 169,311,966 | |||||
Emerging Markets Core Equity | 40,864,904 | 84,911,189 | |||||||
Emerging Markets Equity Advantage | 11,134,687 | 5,119,799 | |||||||
Emerging Markets Equity Blend | 108,761,682 | 343,579,202 | |||||||
Emerging Markets Equity | 1,658,561,483 | 3,906,245,291 | |||||||
Equity Franchise | 53,471,988 | 25,316,440 | |||||||
Global Equity Select | 26,210,886 | 17,686,374 | |||||||
Global Listed Infrastructure | 3,078,774,484 | 2,035,837,947 | |||||||
Global Strategic Equity | 1,440,897 | 1,428,313 | |||||||
International Equity Advantage | 1,542,437 | 1,554,345 | |||||||
International Equity Concentrated | 84,366,485 | 55,024,387 | |||||||
International Equity | 978,680,482 | 966,052,853 | |||||||
International Equity Select | 41,434,881 | 35,571,741 | |||||||
International Equity Value | 20,494,440 | 29,936,987 | |||||||
International Quality Growth | 3,467,144 | 625,551 | |||||||
International Small Cap Equity | 20,676,272 | 30,184,136 | |||||||
International Strategic Equity | 2,145,404,622 | 2,444,412,574 | |||||||
Managed Equity Volatility | 35,856,089 | 26,354,220 | |||||||
US Equity Concentrated | 396,980,058 | 508,854,364 | |||||||
US Equity Focus | 30,721,101 | 77,934,290 | |||||||
US Realty Equity | 11,513,493 | 42,731,827 | |||||||
US Small-Mid Cap Equity | 106,423,634 | 146,952,347 |
For the year ended December 31, 2019, 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.
At December 31, 2019, the Investment Manager owned 26.10%, 94.71%, 89.89% and 93.87% of the outstanding shares of the Emerging Markets Equity Advantage, Global Strategic Equity,
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International Equity Advantage and International Quality Growth Portfolios, respectively.
Holdings of 5% Voting Securities of Portfolio Companies
The 1940 Act defines “affiliated persons” to include a portfolio company in which a Portfolio owns 5% or more of the outstanding voting securities. Investments in “affiliated persons” for the Emerging Markets Equity Portfolio for the year ended December 31, 2019 were as follows:
Value at | Purchase | Sales | Realized | ||||||||||||||
Issue | December 31, 2018 | cost | proceeds | gain (loss) | |||||||||||||
Emerging Markets Equity | |||||||||||||||||
Imperial Logistics, Ltd.* | $ | 34,041,858 | $ | 116,679 | $ | (29,354,163 | ) | $ | (13,312,722 | ) | |||||||
Weichai Power Co., Ltd., Class H* | 134,116,483 | 2,666,123 | (61,244,988 | ) | 15,717,479 | ||||||||||||
Total Securities | $ | 168,158,341 | $ | 2,782,802 | $ | (90,599,151 | ) | $ | 2,404,757 |
Change in unrealized | Shares at | Values at | |||||||||||||||
Issue | appreciation (depreciation) | Dividend income | December 31, 2019 | December 31, 2019 | |||||||||||||
Emerging Markets Equity | |||||||||||||||||
Imperial Logistics, Ltd.* | $ | 8,508,348 | $ | 485,533 | — | $ | — | ||||||||||
Weichai Power Co., Ltd., Class H* | 82,952,060 | 5,285,634 | 82,336,288 | 174,207,157 | |||||||||||||
Total Securities | $ | 91,460,408 | $ | 5,771,167 | 82,336,288 | $ | 174,207,157 |
* | This security was deemed to no longer meet the criteria of an affiliated company at the reporting date. |
6. Line of Credit
The Fund has a Line of Credit Agreement (the “Agreement”) with State Street, primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. From January 1, 2019 through December 12, 2019, the Agreement provided for a $50 million commitment; effective December 13, 2019, the commitment was increased to $100 million. Interest on borrowings is payable at the higher of the Federal Funds rate or One-Month LIBOR rate plus 1.00%, on an annualized basis. Under the Agreement, the Fund has agreed to pay a 0.20% per annum fee on the unused portion of the commitment, payable quarterly in arrears.
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The Fund has also agreed to pay an upfront fee of 0.05% of the committed line amount. During the year ended December 31, 2019, the following Portfolios had borrowings under the Agreement as follows:
Weighted | Number | ||||||||||||||||
Average | Maximum | Average | of Days | ||||||||||||||
Daily Loan | Daily Loan | Interest | Borrowings | ||||||||||||||
Portfolio | Balance* | Outstanding | Rate | were Outstanding | |||||||||||||
Developing Markets Equity | $ | 4,776,000 | $ | 13,375,000 | 3.44 | % | 5 | ||||||||||
Emerging Markets Core Equity | 5,790,385 | 16,160,000 | 3.16 | 13 | |||||||||||||
Emerging Markets Equity Advantage | 32,625 | 62,000 | 2.93 | 8 | |||||||||||||
Emerging Markets Equity Blend | 19,499,743 | 47,672,499 | 3.42 | 6 | |||||||||||||
Equity Franchise | 100,000 | 105,000 | 3.36 | 5 | |||||||||||||
International Equity Concentrated | 330,000 | 330,000 | 3.51 | 1 | |||||||||||||
International Equity Value | 5,200,000 | 5,200,000 | 4 | 1 | |||||||||||||
International Small Cap Equity | 319,154 | 1,230,000 | 3.17 | 13 | |||||||||||||
International Strategic Equity | 23,535,000 | 23,535,000 | 2.72 | % | 1 | ||||||||||||
US Equity Focus | 255,000 | 255,000 | 3.48 | 1 | |||||||||||||
US Realty Equity | 608,667 | 3,105,000 | 2.96 | 36 |
* | For days borrowings were outstanding. |
Management believes that the fair value of the liabilities under the line of credit is equivalent to the recorded amount based on its short-term maturity and interest rate, which fluctuates with LIBOR. A Portfolio’s outstanding balance on the line of credit, if any, would be categorized as Level 2.
7. 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
278 Annual Report
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. For Portfolios other than the Global Listed Infrastructure Portfolio, the Investment Manager generally does not intend to actively hedge the Portfolios’ foreign currency exposure.
(d) Infrastructure Companies Risk—Securities and instruments of infrastructure companies are more susceptible to adverse economic or regulatory occurrences affecting their industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Infrastructure companies also may be affected by or subject to: regula-
Annual Report 279
tion by various government authorities, including rate regulation; service interruption due to environmental, operational or other mishaps; the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards; general changes in market sentiment towards infrastructure and utilities assets; difficulty in raising capital in adequate amounts on reasonable terms in periods of high inflation and unsettled capital markets; inexperience with and potential losses resulting from a developing deregulatory environment; and technological innovations that may render existing plants, equipment or products obsolete.
(e) Sector Risk—Implementation of the Portfolio’s investment strategy may, during certain periods, result in the investment of a significant portion of the Portfolio’s assets in a particular market sector, such as information technology companies or companies in the financials sector, and the Portfolio would be expected to be affected by developments in that sector. Information technology companies generally operate in intensely competitive markets on a worldwide basis. This level of competition can put pressure on the prices of their products and services which could adversely affect their profitability. Also, because technological development in many areas increases at a rapid rate, these companies often produce products with very short life cycles and face the risk of product obsolescence. Other risks include changes in consumer preferences, competition for qualified personnel, the effects of economic slowdowns, dependence on intellectual property rights and the impact of government regulation.
Companies in the financials sector can be significantly affected by, among other things: government regulation; changes in interest rates and/or monetary policy and general economic conditions; the availability and cost of capital; capital requirements; decreased liquidity in credit markets; and the rate of defaults on corporate, consumer and government debt. Deterioration of the credit markets generally may cause an adverse impact in a broad range of markets, including the US and international credit and interbank markets generally, which could affect a wide range of financial institutions and markets. In addition, companies in the financials sector are often more highly leveraged than other companies,
280 Annual Report
making them inherently riskier.
(f) Realty Companies, Real Estate Investments and REITs Risk—Portfolios that invest in Realty Companies (as defined in the Fund’s prospectus), Real Estate Investments and/or REITs could lose money due to the performance of real estate-related securities even if securities markets generally are experiencing positive results. The performance of investments made by a Portfolio may be determined to a great extent by the current status of the real estate industry in general, or by other factors (such as interest rates and the availability of loan capital) that may affect the real estate industry, even if other industries would not be so affected. Consequently, the investment strategies of a Portfolio could lead to securities investment results that may be significantly different from investments in securities of other industries or sectors or in a more broad-based portfolio generally.
The risks related to investments in Realty Companies and Real Estate Investments include, but are not limited to: adverse changes in general economic and local market conditions; adverse developments in employment; changes in supply or demand for similar or competing properties; unfavorable changes in applicable taxes, governmental regulations and interest rates; operating or development expenses; and lack of available financing.
REITs are subject to similar risks as Real Estate Investments and Realty Companies. The risks related to investments in Real Estate Investments and Realty Companies include, but are not limited to: adverse changes in general economic and local market conditions; adverse developments in employment; changes in supply or demand for similar or competing properties; unfavorable changes in applicable taxes, governmental regulations and interest rates; operating or development expenses; and lack of available financing. Due to certain special considerations that apply to REITs, investments in REITs may carry additional risks not necessarily present in investments in other securities. REIT securities (including those trading on national exchanges) typically have trading volumes that are less than those of common stocks of other stocks traded on national exchanges, which may affect a Portfolio’s ability
Annual Report 281
to trade or liquidate those securities. An investment in REITs may be adversely affected if the REIT fails to comply with applicable laws and regulations. Failure to qualify with any of these requirements could jeopardize a company’s status as a REIT. A Portfolio generally will have no control over the operations and policies of a REIT, and they generally will have no ability to cause a REIT to take the actions necessary to qualify as a REIT.
(g) Non-Diversification Risk—A Portfolio’s NAV may be more vulnerable to changes in the market value of a single issuer or group of issuers and may be relatively more susceptible to adverse effects from any single corporate, industry, economic, market, political or regulatory occurrence than if the Portfolio’s investments consisted of securities issued by a larger number of issuers.
(h) Forward Currency Contracts Risk—Forward currency contracts may increase volatility or reduce returns, perhaps substantially, particularly since most derivatives have a leverage component that provides investment exposure in excess of the amount invested. Forward currency contracts are subject to the risk of default by the counterparty to the contracts and can be illiquid. These contracts are subject to many of the risks of, and can be highly sensitive to changes in the value of, the related currency. As such, a small investment could have a potentially large impact on the Portfolio’s performance. Derivatives transactions incur costs, either explicitly or implicitly, which reduce return. Successful use of derivatives is subject to the Investment Manager’s ability to predict correctly movements in the direction of the relevant reference asset or market. Use of forward currency contracts, even when entered into for hedging purposes, may cause the Portfolio to experience losses greater than if the Portfolio had not engaged in such transactions.
8. 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.
282 Annual Report
9. 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.
Annual Report 283
The following table summarizes the valuation of the Portfolios’ assets and liabilities by each fair value hierarchy level as of December 31, 2019:
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 December 31, 2019 | |||||||||||||
Developing Markets Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Brazil | $ | 3,966,083 | $ | 14,361,248 | $ | — | $ | 18,327,331 | |||||||||
Canada | 3,619,253 | — | — | 3,619,253 | |||||||||||||
China | 29,659,557 | 32,699,588 | — | 62,359,145 | |||||||||||||
Colombia | 6,495,190 | — | — | 6,495,190 | |||||||||||||
Hong Kong | — | 4,626,891 | — | 4,626,891 | |||||||||||||
India | 13,595,210 | 9,512,133 | — | 23,107,343 | |||||||||||||
Indonesia | — | 4,460,128 | — | 4,460,128 | |||||||||||||
Macau | — | 1,611,794 | — | 1,611,794 | |||||||||||||
Mexico | 3,506,060 | — | — | 3,506,060 | |||||||||||||
Peru | 5,595,728 | — | — | 5,595,728 | |||||||||||||
Philippines | — | 4,633,213 | — | 4,633,213 | |||||||||||||
Portugal | — | 4,673,819 | — | 4,673,819 | |||||||||||||
Russia | 7,503,547 | 11,975,725 | — | 19,479,272 | |||||||||||||
South Africa | — | 9,284,675 | — | 9,284,675 | |||||||||||||
South Korea | — | 27,158,195 | — | 27,158,195 | |||||||||||||
Taiwan | 3,017,245 | 20,897,434 | — | 23,914,679 | |||||||||||||
United Kingdom | — | 4,140,246 | — | 4,140,246 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Brazil | 4,608,024 | — | — | 4,608,024 | |||||||||||||
Short-Term Investments | 4,155,970 | — | — | 4,155,970 | |||||||||||||
Total | $ | 85,721,867 | $ | 150,035,089 | $ | — | $ | 235,756,956 |
284 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 December 31, 2019 | |||||||||||||
Emerging Markets Core Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Brazil | $ | 4,440,557 | $ | 17,506,516 | $ | — | $ | 21,947,073 | |||||||||
Canada | 2,140,591 | — | — | 2,140,591 | |||||||||||||
China | 20,664,418 | 42,038,767 | — | 62,703,185 | |||||||||||||
Colombia | 2,258,444 | — | — | 2,258,444 | |||||||||||||
Hong Kong | — | 4,091,277 | — | 4,091,277 | |||||||||||||
Hungary | — | 1,583,935 | — | 1,583,935 | |||||||||||||
India | 9,087,078 | 9,757,589 | — | 18,844,667 | |||||||||||||
Indonesia | 1,579,328 | 2,504,356 | — | 4,083,684 | |||||||||||||
Luxembourg | 2,813,805 | — | — | 2,813,805 | |||||||||||||
Mexico | 6,030,986 | — | — | 6,030,986 | |||||||||||||
Peru | 1,906,448 | — | — | 1,906,448 | |||||||||||||
Philippines | — | 4,323,923 | — | 4,323,923 | |||||||||||||
Poland | — | 1,349,619 | — | 1,349,619 | |||||||||||||
Portugal | — | 1,870,698 | — | 1,870,698 | |||||||||||||
Russia | 880,385 | 10,250,921 | — | 11,131,306 | |||||||||||||
South Africa | — | 6,995,142 | — | 6,995,142 | |||||||||||||
South Korea | — | 21,804,106 | — | 21,804,106 | |||||||||||||
Taiwan | 11,413,048 | 7,059,984 | — | 18,473,032 | |||||||||||||
Thailand | — | 2,059,923 | — | 2,059,923 | |||||||||||||
United Kingdom | 3,070,950 | — | — | 3,070,950 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Brazil | 1,450,714 | — | — | 1,450,714 | |||||||||||||
Short-Term Investments | 1,565,143 | — | — | 1,565,143 | |||||||||||||
Total | $ | 69,301,895 | $ | 133,196,756 | $ | — | $ | 202,498,651 |
Annual Report 285
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 December 31, 2019 | |||||||||||||
Emerging Markets Equity Advantage Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Argentina | $ | 18,453 | $ | — | $ | — | $ | 18,453 | |||||||||
Brazil | — | 504,674 | — | 504,674 | |||||||||||||
China | 828,868 | 2,906,217 | — | 3,735,085 | |||||||||||||
Colombia | 37,924 | — | — | 37,924 | |||||||||||||
Greece | — | 47,327 | — | 47,327 | |||||||||||||
Hong Kong | — | 63,224 | — | 63,224 | |||||||||||||
Hungary | — | 17,320 | — | 17,320 | |||||||||||||
India | 598,320 | 226,544 | — | 824,864 | |||||||||||||
Indonesia | 62,301 | 260,694 | — | 322,995 | |||||||||||||
Malaysia | — | 129,116 | — | 129,116 | |||||||||||||
Mexico | 269,409 | — | — | 269,409 | |||||||||||||
Philippines | — | 209,632 | — | 209,632 | |||||||||||||
Poland | — | 162,732 | — | 162,732 | |||||||||||||
Russia | — | 566,421 | — | 566,421 | |||||||||||||
South Africa | 19,188 | 338,278 | — | 357,466 | |||||||||||||
South Korea | 40,625 | 1,365,239 | — | 1,405,864 | |||||||||||||
Taiwan | 669,660 | 671,756 | — | 1,341,416 | |||||||||||||
Thailand | — | 247,051 | — | 247,051 | |||||||||||||
Turkey | 35,069 | 64,071 | — | 99,140 | |||||||||||||
United States | 25,925 | — | — | 25,925 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Brazil | 88,761 | — | — | 88,761 | |||||||||||||
Short-Term Investments | 46,564 | — | — | 46,564 | |||||||||||||
Total | $ | 2,741,067 | $ | 7,780,296 | $ | — | $ | 10,521,363 |
286 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 December 31, 2019 | |||||||||||||
Emerging Markets Equity Blend Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Brazil | $ | 2,036,583 | $ | 4,162,832 | $ | — | $ | 6,199,415 | |||||||||
Canada | 1,178,662 | — | — | 1,178,662 | |||||||||||||
Chile | 234,680 | — | — | 234,680 | |||||||||||||
China | 9,694,622 | 16,283,878 | — | 25,978,500 | |||||||||||||
Colombia | 2,240,473 | — | — | 2,240,473 | |||||||||||||
Egypt | — | 1,122,861 | — | 1,122,861 | |||||||||||||
Estonia | — | 108,976 | — | 108,976 | |||||||||||||
Georgia | — | 530,960 | — | 530,960 | |||||||||||||
Greece | — | 391,136 | — | 391,136 | |||||||||||||
Hong Kong | — | 1,693,721 | — | 1,693,721 | |||||||||||||
Hungary | — | 1,158,316 | — | 1,158,316 | |||||||||||||
India | 2,868,281 | 7,685,736 | — | 10,554,017 | |||||||||||||
Indonesia | 848,730 | 3,626,916 | — | 4,475,646 | |||||||||||||
Kenya | — | 236,278 | — | 236,278 | |||||||||||||
Kuwait | — | 222,570 | — | 222,570 | |||||||||||||
Malaysia | — | 276,584 | — | 276,584 | |||||||||||||
Mexico | 3,608,321 | — | — | 3,608,321 | |||||||||||||
Oman | — | 217,892 | — | 217,892 | |||||||||||||
Pakistan | — | 218,262 | — | 218,262 | |||||||||||||
Philippines | — | 741,553 | — | 741,553 | |||||||||||||
Poland | — | 141,963 | — | 141,963 | |||||||||||||
Russia | 5,874,610 | 2,297,646 | — | 8,172,256 | |||||||||||||
South Africa | — | 837,498 | — | 837,498 | |||||||||||||
South Korea | — | 14,112,011 | — | 14,112,011 | |||||||||||||
Taiwan | 1,142,192 | 7,480,004 | — | 8,622,196 | |||||||||||||
Turkey | 883,565 | — | — | 883,565 | |||||||||||||
Ukraine | — | 181,692 | — | 181,692 | |||||||||||||
United Kingdom | — | 475,766 | — | 475,766 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Brazil | 1,588,697 | — | — | 1,588,697 | |||||||||||||
Short-Term Investments | 5,970,705 | — | — | 5,970,705 | |||||||||||||
Total | $ | 38,170,121 | $ | 64,205,051 | $ | — | $ | 102,375,172 |
Annual Report 287
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 December 31, 2019 | |||||||||||||
Emerging Markets Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Brazil | $ | 49,194,040 | $ | 658,597,144 | $ | — | $ | 707,791,184 | |||||||||
China | 434,431,120 | 1,175,790,120 | — | 1,610,221,240 | |||||||||||||
Egypt | — | 94,784,875 | — | 94,784,875 | |||||||||||||
Hong Kong | — | 104,112,528 | — | 104,112,528 | |||||||||||||
Hungary | — | 175,221,826 | — | 175,221,826 | |||||||||||||
India | 72,321,033 | 738,904,603 | — | 811,225,636 | |||||||||||||
Indonesia | 118,255,335 | 239,330,842 | — | 357,586,177 | |||||||||||||
Luxembourg | 60,467,968 | — | — | 60,467,968 | |||||||||||||
Malaysia | — | 23,817,421 | — | 23,817,421 | |||||||||||||
Mexico | 290,054,649 | — | — | 290,054,649 | |||||||||||||
Pakistan | — | 58,668,963 | — | 58,668,963 | |||||||||||||
Portugal | — | 63,119,814 | — | 63,119,814 | |||||||||||||
Russia | 100,705,692 | 624,120,891 | — | 724,826,583 | |||||||||||||
South Africa | — | 532,093,088 | — | 532,093,088 | |||||||||||||
South Korea | — | 1,181,895,290 | — | 1,181,895,290 | |||||||||||||
Taiwan | — | 361,726,012 | — | 361,726,012 | |||||||||||||
Thailand | — | 113,281,841 | — | 113,281,841 | |||||||||||||
Turkey | — | 200,617,907 | — | 200,617,907 | |||||||||||||
United Kingdom | — | 91,814,063 | — | 91,814,063 | |||||||||||||
Short-Term Investments | 261,824,062 | — | — | 261,824,062 | |||||||||||||
Total | $ | 1,387,253,899 | $ | 6,437,897,228 | $ | — | $ | 7,825,151,127 | |||||||||
Lazard Equity Franchise Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Belgium | $ | — | $ | 2,406,088 | $ | — | $ | 2,406,088 | |||||||||
France | 155,002 | 418,564 | — | 573,566 | |||||||||||||
Germany | — | 1,882,753 | — | 1,882,753 | |||||||||||||
Hong Kong | — | 660,981 | — | 660,981 | |||||||||||||
Italy | — | 1,600,332 | — | 1,600,332 | |||||||||||||
Luxembourg | — | 1,208,427 | — | 1,208,427 | |||||||||||||
Spain | — | 415,228 | — | 415,228 | |||||||||||||
United Kingdom | — | 1,776,644 | — | 1,776,644 | |||||||||||||
United States | 29,282,862 | — | — | 29,282,862 | |||||||||||||
Short-Term Investments | 332,313 | — | — | 332,313 | |||||||||||||
Total | $ | 29,770,177 | $ | 10,369,017 | $ | — | $ | 40,139,194 |
288 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 December 31, 2019 | |||||||||||||
Global Equity Select Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Belgium | $ | — | $ | 638,792 | $ | — | $ | 638,792 | |||||||||
Canada | 4,408,755 | — | — | 4,408,755 | |||||||||||||
China | 760,378 | 1,419,323 | — | 2,179,701 | |||||||||||||
Germany | — | 990,704 | — | 990,704 | |||||||||||||
Hong Kong | — | 2,385,324 | — | 2,385,324 | |||||||||||||
Israel | — | 983,692 | — | 983,692 | |||||||||||||
Japan | — | 4,829,558 | — | 4,829,558 | |||||||||||||
Netherlands | 932,180 | 2,088,564 | — | 3,020,744 | |||||||||||||
Singapore | — | 1,131,853 | — | 1,131,853 | |||||||||||||
South Africa | — | 1,232,606 | — | 1,232,606 | |||||||||||||
Sweden | — | 2,631,149 | — | 2,631,149 | |||||||||||||
Switzerland | — | 3,673,560 | — | 3,673,560 | |||||||||||||
Taiwan | 1,096,696 | — | — | 1,096,696 | |||||||||||||
United Kingdom | 1,056,218 | 8,667,386 | — | 9,723,604 | |||||||||||||
United States | 41,636,039 | — | — | 41,636,039 | |||||||||||||
Short-Term Investments | 2,317,403 | — | — | 2,317,403 | |||||||||||||
Total | $ | 52,207,669 | $ | 30,672,511 | $ | — | $ | 82,880,180 | |||||||||
Global Listed Infrastructure Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 333,040,725 | $ | — | $ | 333,040,725 | |||||||||
Canada | 72,764,081 | — | — | 72,764,081 | |||||||||||||
France | — | 551,516,543 | — | 551,516,543 | |||||||||||||
Germany | — | 205,801,095 | — | 205,801,095 | |||||||||||||
Hong Kong | — | 299,364,264 | — | 299,364,264 | |||||||||||||
Italy | — | 1,813,141,789 | — | 1,813,141,789 | |||||||||||||
Luxembourg | — | 255,862,642 | — | 255,862,642 | |||||||||||||
Portugal | — | 65,523,570 | — | 65,523,570 | |||||||||||||
Spain | — | 369,367,308 | — | 369,367,308 | |||||||||||||
United Kingdom | — | 1,677,300,172 | — | 1,677,300,172 | |||||||||||||
United States | 1,549,665,247 | — | — | 1,549,665,247 | |||||||||||||
Short-Term Investments | 543,684,541 | — | — | 543,684,541 | |||||||||||||
Other Financial | |||||||||||||||||
Instruments† | |||||||||||||||||
Forward Currency Contracts | — | 419,674 | — | 419,674 | |||||||||||||
Total | $ | 2,166,113,869 | $ | 5,571,337,782 | $ | — | $ | 7,737,451,651 | |||||||||
Liabilities: | |||||||||||||||||
Other Financial | |||||||||||||||||
Instruments† | |||||||||||||||||
Forward Currency Contracts | $ | — | $ | (59,666,469 | ) | $ | — | $ | (59,666,469 | ) |
Annual Report 289
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 December 31, 2019 | |||||||||||||
Global Strategic Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Canada | $ | 212,141 | $ | — | $ | — | $ | 212,141 | |||||||||
China | 63,842 | 43,415 | — | 107,257 | |||||||||||||
Denmark | — | 45,184 | — | 45,184 | |||||||||||||
France | — | 200,403 | — | 200,403 | |||||||||||||
Germany | — | 155,635 | — | 155,635 | |||||||||||||
Hong Kong | — | 63,130 | — | 63,130 | |||||||||||||
India | 47,211 | — | — | 47,211 | |||||||||||||
Ireland | 48,974 | — | — | 48,974 | |||||||||||||
Israel | — | 45,913 | — | 45,913 | |||||||||||||
Japan | — | 207,136 | — | 207,136 | |||||||||||||
Netherlands | — | 48,690 | — | 48,690 | |||||||||||||
New Zealand | — | 34,660 | — | 34,660 | |||||||||||||
South Africa | — | 24,946 | — | 24,946 | |||||||||||||
South Korea | — | 53,964 | — | 53,964 | |||||||||||||
Spain | — | 26,376 | — | 26,376 | |||||||||||||
Switzerland | — | 109,243 | — | 109,243 | |||||||||||||
Taiwan | — | 29,452 | — | 29,452 | |||||||||||||
United Kingdom | — | 237,291 | — | 237,291 | |||||||||||||
United States | 1,611,842 | — | — | 1,611,842 | |||||||||||||
Short-Term Investments | 32,032 | — | — | 32,032 | |||||||||||||
Total | $ | 2,016,042 | $ | 1,325,438 | $ | — | $ | 3,341,480 |
290 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 December 31, 2019 | |||||||||||||
International Equity Advantage Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 170,592 | $ | — | $ | 170,592 | |||||||||
Austria | — | 25,404 | — | 25,404 | |||||||||||||
Belgium | — | 4,754 | — | 4,754 | |||||||||||||
China | — | 14,034 | — | 14,034 | |||||||||||||
Denmark | — | 82,712 | — | 82,712 | |||||||||||||
Finland | — | 1,826 | — | 1,826 | |||||||||||||
France | — | 244,044 | — | 244,044 | |||||||||||||
Germany | — | 183,583 | — | 183,583 | |||||||||||||
Hong Kong | — | 68,550 | — | 68,550 | |||||||||||||
Ireland | 4,704 | 5,209 | — | 9,913 | |||||||||||||
Israel | 13,640 | 11,607 | — | 25,247 | |||||||||||||
Italy | — | 77,908 | — | 77,908 | |||||||||||||
Japan | 56,020 | 567,486 | — | 623,506 | |||||||||||||
Luxembourg | — | 2,296 | — | 2,296 | |||||||||||||
Macau | — | 10,339 | — | 10,339 | |||||||||||||
Netherlands | — | 85,159 | — | 85,159 | |||||||||||||
Norway | — | 12,603 | — | 12,603 | |||||||||||||
Russia | — | 3,660 | — | 3,660 | |||||||||||||
Singapore | — | 9,988 | — | 9,988 | |||||||||||||
Spain | — | 95,938 | — | 95,938 | |||||||||||||
Sweden | — | 54,789 | — | 54,789 | |||||||||||||
Switzerland | — | 249,776 | — | 249,776 | |||||||||||||
United Kingdom | — | 419,342 | — | 419,342 | |||||||||||||
United States | — | 5,088 | — | 5,088 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Germany | — | 14,913 | — | 14,913 | |||||||||||||
Short-Term Investments | 40,102 | — | — | 40,102 | |||||||||||||
Total | $ | 114,466 | $ | 2,421,600 | $ | — | $ | 2,536,066 |
Annual Report 291
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 December 31, 2019 | |||||||||||||
International Equity Concentrated Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Brazil | $ | — | $ | 2,104,545 | $ | — | $ | 2,104,545 | |||||||||
Canada | 5,932,314 | — | — | 5,932,314 | |||||||||||||
China | — | 7,488,711 | — | 7,488,711 | |||||||||||||
France | — | 12,602,628 | — | 12,602,628 | |||||||||||||
Germany | — | 15,373,002 | — | 15,373,002 | |||||||||||||
Ireland | 2,481,553 | — | — | 2,481,553 | |||||||||||||
Japan | — | 10,648,553 | — | 10,648,553 | |||||||||||||
Luxembourg | — | 1,185,454 | — | 1,185,454 | |||||||||||||
Mexico | 7,144,953 | — | — | 7,144,953 | |||||||||||||
Norway | — | 3,257,250 | — | 3,257,250 | |||||||||||||
South Korea | — | 4,805,809 | — | 4,805,809 | |||||||||||||
Switzerland | — | 3,780,777 | — | 3,780,777 | |||||||||||||
United Kingdom | — | 6,321,149 | — | 6,321,149 | |||||||||||||
United States | 6,784,329 | — | — | 6,784,329 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Germany | — | 4,239,881 | — | 4,239,881 | |||||||||||||
Short-Term Investments | 3,882,452 | — | — | 3,882,452 | |||||||||||||
Total | $ | 26,225,601 | $ | 71,807,759 | $ | — | $ | 98,033,360 |
292 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 December 31, 2019 | |||||||||||||
International Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 37,205,765 | $ | — | $ | 37,205,765 | |||||||||
Canada | 157,059,058 | — | — | 157,059,058 | |||||||||||||
China | — | 45,548,873 | — | 45,548,873 | |||||||||||||
Denmark | — | 43,224,893 | — | 43,224,893 | |||||||||||||
Finland | — | 68,734,038 | — | 68,734,038 | |||||||||||||
France | — | 377,293,096 | — | 377,293,096 | |||||||||||||
Germany | — | 150,459,262 | — | 150,459,262 | |||||||||||||
Hong Kong | 11,064,174 | — | — | 11,064,174 | |||||||||||||
Indonesia | — | 10,939,076 | — | 10,939,076 | |||||||||||||
Ireland | 40,628,174 | — | — | 40,628,174 | |||||||||||||
Israel | — | 32,616,799 | — | 32,616,799 | |||||||||||||
Japan | — | 462,094,537 | — | 462,094,537 | |||||||||||||
Luxembourg | — | 19,513,465 | — | 19,513,465 | |||||||||||||
Mexico | 12,168,461 | — | — | 12,168,461 | |||||||||||||
Netherlands | — | 189,273,796 | — | 189,273,796 | |||||||||||||
Norway | — | 101,847,664 | — | 101,847,664 | |||||||||||||
Singapore | — | 75,092,957 | — | 75,092,957 | |||||||||||||
South Korea | — | 73,109,078 | — | 73,109,078 | |||||||||||||
Spain | — | 23,921,037 | — | 23,921,037 | |||||||||||||
Sweden | — | 105,748,756 | — | 105,748,756 | |||||||||||||
Switzerland | — | 149,462,520 | — | 149,462,520 | |||||||||||||
United Arab Emirates | — | 15,859,519 | — | 15,859,519 | |||||||||||||
United Kingdom | — | 339,047,472 | — | 339,047,472 | |||||||||||||
United States | 140,843,432 | 34,887,837 | — | 175,731,269 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Germany | — | 73,703,711 | — | 73,703,711 | |||||||||||||
Short-Term Investments | 71,553,323 | — | — | 71,553,323 | |||||||||||||
Total | $ | 433,316,622 | $ | 2,429,584,151 | $ | — | $ | 2,862,900,773 |
Annual Report 293
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 December 31, 2019 | |||||||||||||
International Equity Select Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 1,112,681 | $ | — | $ | 1,112,681 | |||||||||
Brazil | — | 2,600,911 | — | 2,600,911 | |||||||||||||
Canada | 3,565,220 | — | — | 3,565,220 | |||||||||||||
China | 936,643 | 5,612,846 | — | 6,549,489 | |||||||||||||
Denmark | — | 2,491,890 | — | 2,491,890 | |||||||||||||
Finland | — | 2,842,472 | — | 2,842,472 | |||||||||||||
France | — | 10,904,561 | — | 10,904,561 | |||||||||||||
Germany | — | 4,342,975 | — | 4,342,975 | |||||||||||||
Hong Kong | 374,934 | — | — | 374,934 | |||||||||||||
India | 1,203,729 | — | — | 1,203,729 | |||||||||||||
Indonesia | 813,903 | 482,436 | — | 1,296,339 | |||||||||||||
Ireland | 1,138,667 | — | — | 1,138,667 | |||||||||||||
Japan | — | 12,174,418 | — | 12,174,418 | |||||||||||||
Mexico | 1,133,750 | — | — | 1,133,750 | |||||||||||||
Netherlands | — | 5,113,759 | — | 5,113,759 | |||||||||||||
Norway | — | 3,127,703 | — | 3,127,703 | |||||||||||||
Singapore | — | 1,703,933 | — | 1,703,933 | |||||||||||||
South Africa | — | 1,200,058 | — | 1,200,058 | |||||||||||||
South Korea | — | 2,175,667 | — | 2,175,667 | |||||||||||||
Spain | — | 669,696 | — | 669,696 | |||||||||||||
Sweden | — | 1,433,501 | — | 1,433,501 | |||||||||||||
Switzerland | — | 5,994,460 | — | 5,994,460 | |||||||||||||
Taiwan | — | 1,529,839 | — | 1,529,839 | |||||||||||||
Thailand | — | 520,148 | — | 520,148 | |||||||||||||
United Kingdom | — | 7,678,824 | — | 7,678,824 | |||||||||||||
United States | 6,690,944 | 943,000 | — | 7,633,944 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Germany | — | 2,080,799 | — | 2,080,799 | |||||||||||||
Short-Term Investments | 1,346,372 | — | — | 1,346,372 | |||||||||||||
Total | $ | 17,204,162 | $ | 76,736,577 | $ | — | $ | 93,940,739 |
294 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 December 31, 2019 | |||||||||||||
International Equity Value Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Austria | $ | — | $ | 378,427 | $ | — | $ | 378,427 | |||||||||
France | — | 2,243,885 | — | 2,243,885 | |||||||||||||
Ireland | 376,197 | — | — | 376,197 | |||||||||||||
Italy | — | 845,730 | — | 845,730 | |||||||||||||
Japan | 491,436 | 1,868,634 | — | 2,360,070 | |||||||||||||
Mexico | 442,043 | — | — | 442,043 | |||||||||||||
Netherlands | — | 911,564 | — | 911,564 | |||||||||||||
South Korea | — | 640,601 | — | 640,601 | |||||||||||||
Spain | — | 568,238 | — | 568,238 | |||||||||||||
Switzerland | — | 393,830 | — | 393,830 | |||||||||||||
United Kingdom | — | 2,508,044 | — | 2,508,044 | |||||||||||||
United States | 434,848 | 365,853 | — | 800,701 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Germany | — | 542,044 | — | 542,044 | |||||||||||||
Short-Term Investments | 271,480 | — | — | 271,480 | |||||||||||||
Total | $ | 2,016,004 | $ | 11,266,850 | $ | — | $ | 13,282,854 | |||||||||
Lazard International Quality Growth Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Canada | $ | 520,028 | $ | — | $ | — | $ | 520,028 | |||||||||
China | 86,749 | 120,596 | — | 207,345 | |||||||||||||
Denmark | — | 252,641 | — | 252,641 | |||||||||||||
France | — | 85,836 | — | 85,836 | |||||||||||||
Germany | — | 294,903 | — | 294,903 | |||||||||||||
India | 155,890 | — | — | 155,890 | |||||||||||||
Israel | 70,793 | — | — | 70,793 | |||||||||||||
Japan | — | 311,520 | — | 311,520 | |||||||||||||
Netherlands | — | 177,911 | — | 177,911 | |||||||||||||
Norway | — | 73,818 | — | 73,818 | |||||||||||||
Philippines | — | 29,782 | — | 29,782 | |||||||||||||
South Africa | — | 154,549 | — | 154,549 | |||||||||||||
Spain | — | 65,462 | — | 65,462 | |||||||||||||
Sweden | — | 240,585 | — | 240,585 | |||||||||||||
Switzerland | — | 248,045 | — | 248,045 | |||||||||||||
Taiwan | 131,829 | — | — | 131,829 | |||||||||||||
United Kingdom | — | 643,941 | — | 643,941 | |||||||||||||
United States | 133,097 | 59,688 | — | 192,785 | |||||||||||||
Short-Term Investments | 54,310 | — | — | 54,310 | |||||||||||||
Total | $ | 1,152,696 | $ | 2,759,277 | $ | — | $ | 3,911,973 |
Annual Report 295
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 December 31, 2019 | |||||||||||||
International Small Cap Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 1,724,185 | $ | — | $ | 1,724,185 | |||||||||
Belgium | — | 2,905,652 | — | 2,905,652 | |||||||||||||
Canada | 2,794,089 | — | — | 2,794,089 | |||||||||||||
China | — | 666,009 | — | 666,009 | |||||||||||||
Denmark | — | 753,198 | — | 753,198 | |||||||||||||
Finland | — | 1,454,353 | — | 1,454,353 | |||||||||||||
France | — | 1,139,011 | — | 1,139,011 | |||||||||||||
Germany | — | 5,918,869 | — | 5,918,869 | |||||||||||||
Greece | — | 461,710 | — | 461,710 | |||||||||||||
India | — | 308,922 | — | 308,922 | |||||||||||||
Ireland | — | 1,847,991 | — | 1,847,991 | |||||||||||||
Israel | — | 590,886 | — | 590,886 | |||||||||||||
Italy | — | 2,139,158 | — | 2,139,158 | |||||||||||||
Japan | — | 15,528,374 | — | 15,528,374 | |||||||||||||
Jersey | — | 889,413 | — | 889,413 | |||||||||||||
Luxembourg | — | 604,962 | — | 604,962 | |||||||||||||
Netherlands | — | 1,627,202 | — | 1,627,202 | |||||||||||||
New Zealand | — | 1,068,391 | — | 1,068,391 | |||||||||||||
Norway | — | 465,548 | — | 465,548 | |||||||||||||
Singapore | — | 601,684 | — | 601,684 | |||||||||||||
Spain | — | 640,341 | — | 640,341 | |||||||||||||
Sweden | — | 4,113,520 | — | 4,113,520 | |||||||||||||
Switzerland | — | 583,727 | — | 583,727 | |||||||||||||
United Kingdom | — | 8,101,933 | — | 8,101,933 | |||||||||||||
Short-Term Investments | 487,114 | — | — | 487,114 | |||||||||||||
Total | $ | 3,281,203 | $ | 54,135,039 | $ | — | $ | 57,416,242 |
296 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 December 31, 2019 | |||||||||||||
International Strategic Equity Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Canada | $ | 545,360,383 | $ | — | $ | — | $ | 545,360,383 | |||||||||
China | 71,595,203 | 180,367,344 | — | 251,962,547 | |||||||||||||
Denmark | — | 188,002,410 | — | 188,002,410 | |||||||||||||
Finland | — | 104,191,034 | — | 104,191,034 | |||||||||||||
France | — | 812,820,276 | — | 812,820,276 | |||||||||||||
Germany | — | 319,558,708 | — | 319,558,708 | |||||||||||||
Hong Kong | 29,220,928 | 132,859,708 | — | 162,080,636 | |||||||||||||
India | — | 67,217,493 | — | 67,217,493 | |||||||||||||
Ireland | 129,438,168 | — | — | 129,438,168 | |||||||||||||
Israel | — | 101,561,313 | — | 101,561,313 | |||||||||||||
Italy | — | 60,738,607 | — | 60,738,607 | |||||||||||||
Japan | — | 790,256,126 | — | 790,256,126 | |||||||||||||
Mexico | 49,269,531 | — | — | 49,269,531 | |||||||||||||
Norway | — | 108,896,473 | — | 108,896,473 | |||||||||||||
Philippines | — | 43,899,515 | — | 43,899,515 | |||||||||||||
Singapore | — | 128,682,970 | — | 128,682,970 | |||||||||||||
South Korea | — | 73,265,530 | — | 73,265,530 | |||||||||||||
Spain | — | 34,153,487 | — | 34,153,487 | |||||||||||||
Sweden | — | 74,712,020 | — | 74,712,020 | |||||||||||||
Switzerland | — | 582,136,844 | — | 582,136,844 | |||||||||||||
United Kingdom | — | 862,442,699 | — | 862,442,699 | |||||||||||||
United States | 521,428,953 | — | — | 521,428,953 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Germany | — | 194,391,858 | — | 194,391,858 | |||||||||||||
Short-Term Investments | 105,152,719 | — | — | 105,152,719 | |||||||||||||
Total | $ | 1,451,465,885 | $ | 4,860,154,415 | $ | — | $ | 6,311,620,300 |
Annual Report 297
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 December 31, 2019 | |||||||||||||
Managed Equity Volatility Portfolio | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 1,722,138 | $ | — | $ | 1,722,138 | |||||||||
Belgium | — | 157,846 | — | 157,846 | |||||||||||||
Canada | 3,021,748 | — | — | 3,021,748 | |||||||||||||
Denmark | — | 252,893 | — | 252,893 | |||||||||||||
France | — | 367,789 | — | 367,789 | |||||||||||||
Germany | — | 461,593 | — | 461,593 | |||||||||||||
Hong Kong | — | 77,848 | — | 77,848 | |||||||||||||
Israel | — | 314,432 | — | 314,432 | |||||||||||||
Italy | — | 465,305 | — | 465,305 | |||||||||||||
Japan | — | 4,650,485 | — | 4,650,485 | |||||||||||||
Netherlands | — | 346,030 | — | 346,030 | |||||||||||||
Norway | — | 347,568 | — | 347,568 | |||||||||||||
Puerto Rico | 84,487 | — | — | 84,487 | |||||||||||||
Singapore | — | 98,475 | — | 98,475 | |||||||||||||
Spain | — | 461,807 | — | 461,807 | |||||||||||||
Sweden | — | 253,104 | — | 253,104 | |||||||||||||
Switzerland | — | 1,611,688 | — | 1,611,688 | |||||||||||||
United Kingdom | — | 1,267,075 | — | 1,267,075 | |||||||||||||
United States | 18,320,592 | — | — | 18,320,592 | |||||||||||||
Short-Term Investments | 296,401 | — | — | 296,401 | |||||||||||||
Total | $ | 21,723,228 | $ | 12,856,076 | $ | — | $ | 34,579,304 | |||||||||
US Equity Concentrated Portfolio | |||||||||||||||||
Common Stocks* | $ | 1,268,858,540 | $ | — | $ | — | $ | 1,268,858,540 | |||||||||
Short-Term Investments | 58,612,549 | — | — | 58,612,549 | |||||||||||||
Total | $ | 1,327,471,089 | $ | — | $ | — | $ | 1,327,471,089 | |||||||||
US Equity Focus Portfolio | |||||||||||||||||
Common Stocks* | $ | 42,471,671 | $ | — | $ | — | $ | 42,471,671 | |||||||||
Short-Term Investments | 1,920,052 | — | — | 1,920,052 | |||||||||||||
Total | $ | 44,391,723 | $ | — | $ | — | $ | 44,391,723 | |||||||||
US Realty Equity Portfolio | |||||||||||||||||
Common Stocks* | $ | 1,058,858 | $ | — | $ | — | $ | 1,058,858 | |||||||||
Real Estate Investment Trusts* | 42,361,550 | — | — | 42,361,550 | |||||||||||||
Short-Term Investments | 600,821 | — | — | 600,821 | |||||||||||||
Total | $ | 44,021,229 | $ | — | $ | — | $ | 44,021,229 | |||||||||
US Small-Mid Cap Equity Portfolio | |||||||||||||||||
Common Stocks* | $ | 120,727,428 | $ | — | $ | — | $ | 120,727,428 |
* | Please refer to Portfolios of Investments and Notes to Portfolios of Investments for portfolio holdings by industry. |
† | Other financial instruments are derivative instruments which are valued at their respective unrealized appreciation (depreciation). |
298 Annual Report
10. Derivative Instruments
The Global Listed Infrastructure 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 year ended December 31, 2019, the approximate average monthly notional exposure for derivative instruments was as follows:
Forward currency contracts: | ||||
Average amounts purchased | $ | 112,000,000 | # | |
Average amounts sold | 4,968,200,000 |
# | Represents average monthly notional exposure for the eleven months the derivative instrument was open during the period. |
The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of December 31, 2019:
Assets – Derivative Financial Instruments | Total | |||||
Forward currency contracts | Unrealized appreciation on forward currency contracts | $ | 419,674 | |||
Liabilities – Derivative Financial Instruments | Total | |||||
Forward currency contracts | Unrealized depreciation on forward currency contracts | $ | 59,666,469 |
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2019 was:
Net Realized Gain – (Loss) from: | Total | |||
Forward currency contracts | $ | 165,043,810 | ||
Net Change in Unrealized Appreciation (Depreciation) on: | Total | |||
Forward currency contracts | $ | (60,182,524 | ) |
None of the other Portfolios presented traded in derivative instruments during the year ended December 31, 2019.
Annual Report 299
As of December 31, 2019, the Global Listed Infrastructure 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.
The required information for the affected Portfolio is presented in the below table, as of December 31, 2019:
Global Listed Infrastructure Portfolio
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 | $ | 419,674 | $ | — | $419,674 |
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 | ||||||||||||
BNP Paribas SA | $ | 8,268 | $ | (8,268 | ) | $ | — | $ | — | |||||||
HSBC Bank USA NA | 411,406 | (411,406 | ) | — | — | |||||||||||
Total | $ | 419,674 | $ | (419,674 | ) | $ | — | $ | — |
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 | $ | 59,666,469 | $ | — | $ | 59,666,469 |
300 Annual Report
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 | ||||||||||||
BNP Paribas SA | $ | 8,573,998 | $ | (8,268 | ) | $ | — | $ | 8,565,730 | |||||||
Canadian Imperial Bank of Commerce | 7,673,882 | — | — | 7,673,882 | ||||||||||||
Citibank NA | 3,934,362 | — | — | 3,934,362 | ||||||||||||
HSBC Bank USA NA | 15,887,393 | (411,406 | ) | — | 15,475,987 | |||||||||||
Royal Bank of Canada | 7,660,410 | — | — | 7,660,410 | ||||||||||||
Standard Chartered Bank | 1,770,736 | — | — | 1,770,736 | ||||||||||||
State Street Bank and Trust Co. | 10,658,705 | — | — | 10,658,705 | ||||||||||||
The Bank of New York Mellon Corp. | 3,506,983 | — | — | 3,506,983 | ||||||||||||
Total | $ | 59,666,469 | $ | (419,674 | ) | $ | — | $ | 59,246,795 |
11. Subsequent Events
Management has evaluated subsequent events affecting the Portfolios through the issuance of the financial statements and has determined that there were no subsequent events that required adjustment or disclosure.
For the period from January 1, 2020 to February 25, 2020, there were additional net capital redemptions of $10,154,365 from Lazard International Equity Value Portfolio and of $51,711,186 from Lazard Global Equity Select Portfolio.
Annual Report 301
The Lazard Funds, Inc.
Report of Independent Registered Public Accounting Firm
To the Board of Directors of The Lazard Funds, Inc. and Shareholders of Lazard Developing Markets Equity Portfolio, Lazard Emerging Markets Core Equity Portfolio, Lazard Emerging Markets Equity Advantage Portfolio, Lazard Emerging Markets Equity Blend Portfolio, Lazard Emerging Markets Equity Portfolio, Lazard Equity Franchise Portfolio, Lazard Global Equity Select Portfolio, Lazard Global Listed Infrastructure Portfolio, Lazard Global Strategic Equity Portfolio, Lazard International Quality Growth Portfolio, Lazard International Equity Advantage Portfolio, Lazard International Equity Concentrated Portfolio, Lazard International Equity Portfolio, Lazard International Equity Select Portfolio, Lazard International Equity Value Portfolio, Lazard International Small Cap Equity Portfolio, Lazard International Strategic Equity Portfolio, Lazard Managed Equity Volatility Portfolio, Lazard US Equity Concentrated Portfolio, Lazard US Equity Focus Portfolio, Lazard US Realty Equity Portfolio, and Lazard US Small-Mid Cap Equity Portfolio:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of Lazard Developing Markets Equity Portfolio, Lazard Emerging Markets Core Equity Portfolio, Lazard Emerging Markets Equity Advantage Portfolio, Lazard Emerging Markets Equity Blend Portfolio, Lazard Emerging Markets Equity Portfolio, Lazard Equity Franchise Portfolio, Lazard Global Equity Select Portfolio, Lazard Global Listed Infrastructure Portfolio, Lazard Global Strategic Equity Portfolio, Lazard International Quality Growth Portfolio (formerly Lazard International Compounders Portfolio), Lazard International Equity Advantage Portfolio, Lazard International Equity Concentrated Portfolio, Lazard International Equity Portfolio, Lazard International Equity Select Portfolio, Lazard International Equity Value Portfolio, Lazard International Small Cap Equity Portfolio, Lazard International Strategic Equity Portfolio, Lazard Managed Equity Volatility Portfolio, Lazard US Equity Concentrated Portfolio, Lazard US Equity Focus Portfolio (formerly Lazard US Equity Select Portfolio), Lazard US Realty Equity Portfolio, and Lazard US Small-Mid Cap Equity Portfolio, including the portfolios of investments, (collectively the
302 Annual Report
“Portfolios”), twenty-two of the portfolios constituting The Lazard Funds, Inc. (the “Fund”), as of December 31, 2019, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended for the Portfolios except for Lazard International Quality Growth Portfolio, Lazard International Equity Value Portfolio, Lazard Equity Franchise Portfolio, Lazard Emerging Markets Equity Advantage Portfolio, Lazard International Equity Advantage Portfolio, and Lazard Managed Equity Volatility Portfolio which are indicated in the table below, and the related notes to the financial statements. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Portfolios listed above, as of December 31, 2019, and the results of their operations for the year then ended (or for the period listed in the table below), the changes in their net assets for each of the two years in the period then ended (or for the period listed in the table below), and the financial highlights for each of the five years in the period then ended (or for the period listed in the table below), in conformity with accounting principles generally accepted in the United States of America.
Annual Report 303
Portfolio Name | Statements of Changes in Net Assets | Financial Highlights |
Lazard International Quality Growth Portfolio (formerly Lazard International Compounders Portfolio) | For the year ended December 31, 2019 and for the period from December 31, 2018 (commencement of operations) through December 31, 2018 | For the year ended December 31, 2019 and for the period from December 31, 2018 (commencement of operations) through December 31, 2018 |
Lazard International Equity Value Portfolio | For the year ended December 31, 2019 and for the period from October 31, 2018 (commencement of operations) through December 31, 2018 | For the year ended December 31, 2019 and for the period from October 31, 2018 (commencement of operations) through December 31, 2018 |
Lazard Equity Franchise Portfolio | For the years ended December 31, 2019, and 2018 | For the years ended December 31, 2019, 2018 and for the period from September 29, 2017 (commencement of operations) through December 31, 2017 |
Lazard Emerging Markets Equity Advantage Portfolio Lazard International Equity Advantage Portfolio Lazard Managed Equity Volatility Portfolio | For the years ended December 31, 2019, and 2018 | For the years ended December 31, 2019, 2018, 2017 and 2016 and for the period from May 29, 2015 (commencement of operations) through December 31, 2015 |
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Portfolios’ management. Our responsibility is to express an opinion on the Portfolios’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Portfolios in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
304 Annual Report
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Portfolios are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Portfolios’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 25, 2020
We have served as the auditor of one or more of the investment companies in the Lazard Fund Complex since 2004.
Annual Report 305
The Lazard Funds, Inc.
Board of Directors and Officers Information (unaudited)
Name (Year of Birth) 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 (1953) | Director (August 2014) | Debevoise & Plimpton LLP, a law firm,Of Counsel(2013 – present)
Cornell Law School,Adjunct Professor(2013 – present)
The Buchmann Faculty of Law, Tel Aviv University,Visiting Professor(2019)
University of California, Berkeley School of Law,Adjunct Professor(Spring 2017) | ||
Kenneth S. Davidson (1945) | Director (August 1995) | Davidson Capital Management Corporation, an investment manager,President(1978 – present) | ||
Nancy A. Eckl (1962) | Director (April 2007) | College Retirement Equities Fund (eight accounts),Trustee (2007 – present)
TIAA-CREF Funds (69 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 (1971) | Director (April 2014) | New York University School of Law,DeanandEric M. and Laurie B. Roth Professor of Law (2013 – present) | ||
Richard Reiss, Jr. (1944) | Director (May 1991) | Georgica Advisors LLC, an investment manager,Chairman (1997 – present)
Osprey Technology Acquisition Corp., a special purpose acquisition company,Director(2019 – present)
Resource America, Inc., a real estate asset management company,Director(2016 – 2018) |
306 Annual Report
Name (Year of Birth) 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) | ||
Robert M. Solmson (1947) | 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) | ||
Interested Directors(4): | ||||
Ashish Bhutani (1960) | Director (July 2005) | Investment Manager,Chief Executive Officer(2004 – present)
Lazard Ltd,Vice Chairman and Director(2010 – present) | ||
Nathan A. Paul (1973) | 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) andManaging 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 January 31, 2020, 35 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. |
Annual Report 307
Name (Year of Birth) Address(1) | Position(s) with the Fund (Since) and Term(2) | Principal Occupation(s) During the Past Five Years | ||
Officers(3): | ||||
Mark R. Anderson (1970) | 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 | ||
Christopher Snively (1984) | Chief Financial Officer (March 2016) and Treasurer (September 2019) | Senior Vice President of the Investment Manager (since November 2015)
Assurance Manager at PricewaterhouseCoopers LLP (2008 – November 2015) | ||
Shari L. Soloway (1981) | Assistant Secretary (November 2015) | Head of Legal, North America (since January 2019, previously Senior Vice President, Legal and Compliance (since September 2015)) of the Investment Manager
Vice President and Associate General Counsel of GE Asset Management (July 2011 – September 2015) | ||
Jessica A. Falzone (1989) | Assistant Secretary (January 2019) | Vice President, Legal and Compliance, of the Investment Manager (since March 2018)
Associate at Schulte Roth & Zabel LLP (2014 – March 2018) | ||
Cesar A. Trelles (1975) | 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. |
308 Annual Report
The Lazard Funds, Inc.Tax and Other Information (unaudited)
Tax Information
Year Ended December 31, 2019
The following tax information represents year end disclosures of the tax benefits passed through to shareholders for 2019:
Of the dividends paid by the Portfolios, the corresponding percentage shown below is qualified dividend income.
Portfolio | Percentage | ||||
Developing Markets Equity | 100.00 | % | |||
Emerging Markets Core Equity | — | ||||
Emerging Markets Equity Advantage | 100.00 | ||||
Emerging Markets Equity Blend | 100.00 | ||||
Emerging Markets Equity | 100.00 | ||||
Equity Franchise | 41.58 | ||||
Global Equity Select | 100.00 | ||||
Global Listed Infrastructure | 93.96 | ||||
Global Strategic Equity | 100.00 | ||||
International Equity Advantage | 100.00 | ||||
International Equity Concentrated | 100.00 | ||||
International Equity | 13.60 | ||||
International Equity Select | 100.00 | ||||
International Equity Value | 100.00 | ||||
International Quality Growth | 54.28 | ||||
International Small Cap Equity | 100.00 | ||||
International Strategic Equity | 100.00 | ||||
Managed Equity Volatility | — | ||||
US Equity Concentrated | 100.00 | ||||
US Equity Focus | 78.36 | ||||
US Realty Equity | 2.16 | ||||
US Small-Mid Cap Equity | 100.00 |
Annual Report 309
Of the dividends paid by the Portfolios, the corresponding percentage represents the amount of each dividend that qualifies for the dividends received deduction available to corporate shareholders.
Portfolio | Percentage | ||||
Developing Markets Equity | — | % | |||
Emerging Markets Core Equity | — | ||||
Emerging Markets Equity Advantage | 0.22 | ||||
Emerging Markets Equity Blend | — | ||||
Emerging Markets Equity | — | ||||
Equity Franchise | 13.79 | ||||
Global Equity Select | 62.40 | ||||
Global Listed Infrastructure | 8.46 | ||||
Global Strategic Equity | 42.9 | ||||
International Equity Advantage | — | ||||
International Equity Concentrated | — | ||||
International Equity | — | ||||
International Equity Select | — | ||||
International Equity Value | — | ||||
International Quality Growth | — | ||||
International Small Cap Equity | — | ||||
International Strategic Equity | — | ||||
Managed Equity Volatility | 55.46 | ||||
US Equity Concentrated | 100 | ||||
US Equity Focus | 66.54 | ||||
US Realty Equity | 1.2 | ||||
US Small-Mid Cap Equity | 100 |
Pursuant to Section 871 of the Code, the Portfolios have no designated qualified short-term gains for purposes of exempting withholding of tax on such distributions to US nonresident shareholders.
310 Annual Report
The Portfolios intend to pass through to shareholders foreign source income and foreign taxes paid, or up to the maximum amount allowable, as a foreign tax credit.
Portfolio | Foreign Source Income | Foreign Tax Paid/Credit | ||||||
Developing Markets Equity | $ | 4,562,825 | $ | 400,152 | ||||
Emerging Markets Core Equity | 7,228,614 | 709,914 | ||||||
Emerging Markets Equity Advantage | 322,369 | 35,840 | ||||||
Emerging Markets Equity Blend | 5,131,634 | 1,146,306 | ||||||
Emerging Markets Equity | 330,349,039 | 51,288,733 | ||||||
Equity Franchise | — | — | ||||||
Global Equity Select | 1,411,082 | 93,262 | ||||||
Global Listed Infrastructure | 220,919,078 | 16,494,458 | ||||||
Global Strategic Equity | 49,848 | 3,168 | ||||||
International Equity Advantage | 84,060 | 9,336 | ||||||
International Equity Concentrated | 2,518,083 | 221,980 | ||||||
International Equity | 88,173,627 | 9,483,457 | ||||||
International Equity Select | 3,133,022 | 304,124 | ||||||
International Equity Value | 851,083 | 57,621 | ||||||
International Quality Growth | 56,261 | 7,367 | ||||||
International Small Cap Equity | 1,406,886 | 131,049 | ||||||
International Strategic Equity | 164,241,434 | 14,762,472 | ||||||
Managed Equity Volatility | — | — | ||||||
US Equity Concentrated | — | — | ||||||
US Equity Focus | — | — | ||||||
US Realty Equity | — | — | ||||||
US Small-Mid Cap Equity | — | — |
Of the dividends paid by the Portfolios, the corresponding amount represents the long-term capital gains paid to shareholders.
Portfolio | Long-Term Capital Gains | |||
Developing Markets Equity | $ | — | ||
Emerging Markets Core Equity | — | |||
Emerging Markets Equity Advantage | — | |||
Emerging Markets Equity Blend | — | |||
Emerging Markets Equity | — | |||
Equity Franchise | 163,734 | |||
Global Equity Select | — | |||
Global Listed Infrastructure | — |
Annual Report 311
Portfolio | Long-Term Capital Gains | |||
Global Strategic Equity | $ | 63,308 | ||
International Equity Advantage | — | |||
International Equity Concentrated | — | |||
International Equity | — | |||
International Equity Select | — | |||
International Equity Value | — | |||
International Quality Growth | — | |||
International Small Cap Equity | 1,291,922 | |||
International Strategic Equity | — | |||
Managed Equity Volatility | 2,138 | |||
US Equity Concentrated | — | |||
US Equity Focus | 7,600,307 | |||
US Realty Equity | 6,905,359 | |||
US Small-Mid Cap Equity | 7,079,750 |
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 SEC’s 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.
Schedule of Portfolio Holdings
The Fund files its complete schedule of each Portfolio’s holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the SEC’s website at https://www.sec.gov.
312 Annual Report
The Lazard Funds, 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
Lazard Asset Management LLC•30 Rockefeller Plaza•New York, NY 10112•www.lazardassetmanagement.com | ||
Performance information as of the most recent month end is available online at www.lazardassetmanagement.com. LZDPS020 |
Lazard Funds
Annual Report
December 31, 2019
Fixed Income Funds
Lazard Emerging Markets Debt Portfolio
Lazard Global Fixed Income Portfolio
Lazard US Corporate Income Portfolio
Lazard US Short Duration Fixed Income Portfolio
Important Information on Paperless Delivery
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Shareholders who hold accounts directly with the Fund may elect to receive shareholder reports and other communications from the Fund electronically by signing up for paperless delivery at www.icsdelivery.com/lazardassetmanagement. If you own these shares through a financial intermediary, you may contact your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by following the instructions included with this disclosure and visiting www.fundreports.com. If you own these shares through a financial intermediary, you may contact your financial intermediary or follow instructions included with this disclosure to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the fund complex or your financial intermediary.
PRIVACY NOTICE
WHAT DOES LAZARD DO WITH YOUR PERSONAL INFORMATION?
Financial companies choose how they share your personal information. U.S. federal law gives our clients the right to limit some but not all sharing. U.S. federal and other applicable law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
We do not disclose nonpublic personal information about our clients or former clients to third parties other than as described below.
Personal information we collect.We collect personal information about you in connection with our providing advisory services to you. The legal basis for our collection of your personal information is our contract with you and our legitimate business interest to provide contractual services to you. The collection of this information is necessary for us to be able to provide advisory services to you and the failure to provide such information will result in our inability to provide our services. This information includes your social security number (for U.S. persons) and may include other information such as your:
· | Assets and income; | |
· | Investment experience; | |
· | Transaction history; | |
· | Credit history; and | |
· | Wire transfer instructions. |
How we collect this information.We collect this information from you through various means. For example, when you give us your contact information, enter into an investment advisory contract with us, buy securities (i.e., interests in a fund) from us, direct us to buy or sell securities for your account, tell us where to send money, or make a wire transfer. We also may collect your personal information from other sources, such as our affiliates1 or other non-affiliated companies (such as credit bureaus).
1 | Our affiliates are companiesrelated to us by common ownership or control and can include both financial and nonfinancial companies. Non-affiliates are companiesnot related to us by common ownership or control and can include both financial and nonfinancial companies. |
How we use this information.All financial companies need to share customers’ personal information to run their everyday business and we use the personal information we collect from you for our everyday business purposes. These purposes may include for example:
· | To provide advisory services to you; | |
· | To open an account for you; | |
· | To process a transaction for your account; | |
· | To market products and services to you; and/or | |
· | To respond to court orders and legal investigations. |
If you are an investor located within a European Union country, please note that personal information may be collected, shared and/or stored outside of the European Union.
Disclosure to others.We may provide your personal information to our affiliates and to firms that assist us in servicing your account and have a need for such information, such as a broker, counterparty, fund administrator or third party service provider that aggregates data in a central repository for access by a broker, counterparty or fund administrator to provide its services. We may also disclose such information to service providers and financial institutions with which we have a formal agreement to provide services relating to our arrangements with you. We require third party service providers and financial institutions with which we have a formal agreement to provide services relating to our arrangements with you to protect the confidentiality of your information and to use the information only for the purposes for which we disclose the information to them. These sharing practices are consistent with applicable privacy and related laws, and in general, you may not limit our use of your personal information for these purposes under such laws. We note that the U.S. federal privacy laws only give you the right to limit the certain types of information sharing that we do not engage in (e.g., sharing with our affiliates certain information relating to your transaction history or creditworthiness for their use in marketing to you, or sharing any personal information with non-affiliates for them to market to you). We may also share your personal information with non-affiliates (such as a government agency or regulatory authority) as required by applicable law.
How we protect your personal information.To protect your personal information from unauthorized access and use, we use security measures that comply with applicable law. These measures include computer safeguards and secured files and buildings.
How long we keep your personal information.We retain your personal information for the duration of your advisory relationship with us and for a period of time thereafter as required by applicable law.
Your rights with respect to this information.If you are an investor located within a European Union country, you have the following rights with respect to your personal information:
· | The right to request and obtain a copy of your personal information that we maintain; | |
· | The right to correct your personal information that we maintain; | |
· | The right to request the erasure of your personal information from our systems, subject to applicable recordkeeping requirements applicable to us; and | |
· | The right to lodge a complaint with a supervisory authority. |
Who is providing this Privacy Notice.This Privacy Notice relates to the following entities:
· | Lazard Asset Management LLC | |
· | Lazard Asset Management (Canada), Inc.2 | |
· | Lazard Asset Management Securities LLC |
Who to contact with questions.If you have any questions about this Privacy Notice, please call (800) 823-6300 or visit our website at http://www.lazardassetmanagement.com.
2 | Lazard Asset Management (Canada), Inc. does not disclose any non-public personal information about its customers to any third party, except as permitted by or required by any applicable law, including the laws of the United States and Canada. |
The Lazard Funds, Inc. Table of Contents
Please consider a Portfolio’s investment objectives, risks, charges and expenses carefully before investing. For more complete information about The Lazard Funds, 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.
Annual Report 1
The Lazard Funds, Inc. A Message from Lazard (unaudited)
Dear Shareholder,
In 2019, equity markets rallied while debt yields around the world declined. The US equity market outperformed most of its peers, with the S&P 500 Index rising by 31.5% over the year, hitting an all-time high in December. Equities rallied strongly in Europe (+27.5%), but other markets were less ebullient. Uncertainty over Brexit kept UK equities in a range for most of the year, while political unrest and declining oil prices weighed on a number of emerging markets. Faced with US-China trade tensions, a decelerating industrial economy, and clear messaging from key central banks that rates will stay lower for longer, investors reached for yield.
US equity markets began 2019 on uncertain footing after tightening monetary policy and trade tensions led to a sharp sell-off at the end of 2018. However, the US Federal Reserve (Fed) made an abrupt monetary policy U-turn after the market mayhem. Perhaps concluding that monetary policy would be even looser for even longer than previously expected, investors drove the S&P 500 up to record highs, while pushing the US 10-Year Treasury yield down to within 10 basis points of the all-time low of 2016. We believe the US economy appears to have averted recession and could continue to grow at a modest pace through 2020.
Emerging markets equities ended a tumultuous year on a positive note, with the MSCI Emerging Markets Index up 18.4%. It was a near-perfect reversal of 2018’s dismal 14.6% decline. Trade was the biggest driver of emerging markets equities’ performance. A strong rally in the fourth quarter, for instance, came after two major trade developments. Looking ahead to 2020, we expect trade tensions to continue to influence the path of emerging markets equities, despite the accord on a long-awaited “Phase 1” deal between the United States and China.
In Europe, the European Central Bank took rates further into negative territory with the first rate cut since 2016. Germany’s economy contracted in the second quarter after years of powering the euro zone economy. The rest of the euro zone has proven more resilient —France and Spain, for example, depend less than Germany does
2 Annual Report
on industrial activity and exports to drive growth. In the United Kingdom, the Conservative Party’s landslide win in a December election has helped dissipate some of the uncertainty that has weighed on UK markets since the Brexit vote in 2016.
Despite potential market challenges, we are optimistic for 2020 and believe that fundamental analysis and stock selection will be crucial drivers for performance. We are privileged that you have turned to Lazard for your investment needs and value your continued confidence in our investment management capabilities. We continue to strive for the long-term patterns of performance that are consistent with your expectations.
Sincerely,
Lazard Asset Management LLC
Annual Report 3
The Lazard Funds, Inc. Investment Overviews (unaudited)
Emerging Markets Debt
Emerging markets debt (as represented by the 50% JPMorgan EMBI Global Diversified® Index/50% JPMorgan GBI-EM Global Diversified® Index) (the “Global Diversified Index”) surged 14.31% in 2019, in US dollar terms, marking the best calendar year performance for the asset class since 2012. Emerging markets currencies were roughly flat compared to 2018 on a spot basis and hard currency debt outperformed by around 150 basis points (bps). Hard currency debt returns were driven by both tighter credit spreads and meaningfully lower US Treasury yields compared to 2018. Index-level spreads compressed nearly 125 bps in the year to 291 bps over US Treasuries, their lowest level since March 2018. Meanwhile, the yield on the benchmark 10-year US Treasury note ended the year at 1.91%, about 130 bps lower than recent peaks in October 2018. Returns in local currency debt were driven mainly by a large rally in local yields, with the index beginning 2019 at a yield to maturity of nearly 6.5% and subsequently falling to an all-time low in November before inching higher into year end.
Global Fixed Income
Global interest rates in most regions staged a strong rally in the first quarter, despite a powerful rebound in equity and credit markets. Investors began the year reacting to the uncertainty of the US government shutdown, ongoing trade/tariff dynamics, Brexit ambiguity, softer global growth prospects, plus additional confirmation of dovish monetary policy from the Federal Reserve (Fed), including its intention to curtail some quantitative tightening later in the year. This led to a consolidation in April after the volatile first quarter across rates, credit, and currencies. However, escalating global trade tensions and concerns over growth prospects translated into a strong bond market rally for most of the second and third quarters, especially for higher quality government bonds around the world. Retracing some of the aggressive rally during the previous periods, global interest rates rose inconsistently in the fourth quarter across regions and countries on the back of improving economic data around the world, avoidance of a hard Brexit, and fading trade policy uncertainty. Regionally, countries such as France, China, and Japan showed signs of economic recovery, while the downturn in manufacturing, especially anything related
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to the automobile sector, weighed heavily on Germany’s economy. In the United States, Fed Chair Jerome Powell signaled a pause in interest rate cuts for the time being, suggesting that the monetary policy stimulus delivered this year has benefitted the economy and helped to create a positive feedback loop. Indeed, we believe Fed fund futures markets appear reasonably priced for this scenario, with no further cuts expected during most of 2020.
Credit spreads narrowed in the first quarter and recouped most of the late-2018 sell off. Part of the improvement was improved liquidity and favorable flows, but fundamentals are also still generally constructive. For the most part, this trend continued for the year, but more so for high yield corporates and hard currency emerging markets. Robust equity markets likely helped to underpin the resilient credit sentiment, especially combined with brisk flows from retail and institutional investors. Issuance continued to be strong, with 2019 volumes much higher compared to last year as issuers were keen to take advantage of these favorable interest rate levels in a variety of currencies. Massive issuance in euros caused some underperformance relative to other regions when the lure of raising capital at ultralow or negative rates proved to be too attractive to resist. For instance, Apple Corp Inc raised EUR 2 billion in a new green bond issue at a yield just above zero. We did not participate because we found better valuations for owning Apple securities in US dollars.
Foreign exchange markets were very active in the first quarter. The US dollar initially weakened against certain currencies in January, reflecting positive risk sentiment, but it traded slightly stronger towards the end of March, despite the more dovish Fed stance. In the second quarter, markets were mixed, with most currencies trading in a +/-3% range versus the US dollar. A surge in expectations regarding the likelihood of Fed easing weighed on the dollar, and the Japanese yen and Swiss franc lived up to their safe-haven status by staging an impressive rally. US dollar strength prevailed in the third quarter, with the euro and pound losing about 4% and 3% for the period, respectively, given the weaker economic data and political noise in both areas. A variety of other currencies also lost ground, including the Chinese renminbi, which declined by
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4%, and many others that declined between 2%-8% (all against the US dollar). The Argentinian peso fell by over 26% during the first quarter, (down 37% for the year), pulling down most of the Latin American currency complex. The year ended with a mixed fourth quarter, with a notable bias towards a weaker US dollar. The Swedish krona and New Zealand dollar were slightly stronger versus the US dollar, perhaps reflecting a shift away from looser monetary policy from the central banks of both countries. Even the euro gained almost 3% (although still down over 2% for the year), with the recent moves consistent with higher bond yields and significant negative news priced in. The British pound gained over 7%, pushing its annual change to a positive 4%, with traders likely closing some short positions as the worst case, hard Brexit scenario was avoided. The Japanese yen lost a half percent against the US dollar in the fourth quarter, which was consistent or correlated with the rise in bond yields across Japan and the US during that period, and ended the year up 1%.
US Corporate Income
The high-yield bond market had a strong year following 2018’s lackluster performance. To start the year, the Fed pivoted from its previously perceived hawkish stance and committed to being “patient” on further interest rate hikes and “flexible” on the unwinding of its balance sheet. By year end, the Fed ended up cutting the benchmark Fed Funds rate three times after having hiked it four times in 2018. Additionally, the Fed indicated it was on pause mode from initiating any Fed Fund hikes or other actions that would tighten monetary policy. In fact, in response to the persistent supply-demand imbalance in short term funding markets, which resulted in a spiking of repurchase agreement (repo) rates in the third quarter, the Fed committed to buying $60 billion a month of US Treasury bills through the spring of 2020 and providing the system with reserves in the form of term repo facilities. However, the Fed will have to determine what reserves are needed in the system to prevent the technical imbalances experienced of late. The result may be the Fed maintaining a larger balance sheet than it had expected. Global yields generally retreated and the US yield curve inverted when measured by the difference between the 2- and 10- year yields. However, by the fourth quarter, the US yield
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curve had steepened and longer term rates had moved back higher albeit lower than 2018’s highs. Economic growth remained solid, if not spectacular, as real US GDP growth hovered around 2% and inflation, as measured by the Core PCE (Personal Consumption Expenditures, excluding food and energy) remained contained, below the Fed’s 2% target. Late in the year, the US-China trade impasse appeared to take a positive trajectory amidst an agreement, in principle, on “Phase 1” of a broader trade deal. Though elements of a broader deal remain to be agreed upon, this development provided a further lift to the market to finish the year.
High yield issuance for 2019 showed a marked improvement over 2018. Gross new issuance totaled $286.6 billion and $93.3 billion excluding refinancings versus 2018’s $187.4 billion and $73.3 billion, a 53% and 27% increase, respectively. Once again, refinancings accounted for the bulk of the activity at 68%, with mergers and acquisition and general corporate purposes (“GCP”) accounting for 20% and 12% of the use of proceeds, respectively.
Full year fund flows for 2019 were positive, reaching $19.5 billion overall, including $14.1 billion in exchange-traded funds (ETFs). This was a marked reversal from 2018’s outflow of $46.9 billion, of which $11.8 billion was from ETFs.
Overall, defaults continued to be low, though 2019’s activity was higher than 2018’s and the yearly volume was the seventh highest of all time. Nonetheless, about 50% of the default activity was in the commodity sector (metals and energy). At year-end, the par weighted high yield bond default rate ex-commodities was only 1.26% versus 2.86% overall.
US Short Duration Fixed Income
US yields fell with the most pronounced downward shifts at the front-end part of the curve. This drop in yields was catalyzed by the Fed’s three, 25 bps cuts in the benchmark overnight Fed Funds rate during the year. The Fed’s dovish pivot came after they raised rates four times in 2018. Concurrent with this dovish pivot was the Fed’s commitment to buying $60 billion a month of US Treasury bills through the Spring of 2020 in response to stress in the repurchase
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agreement (repo) market. Also, by year end US and China came to an agreement on “Phase 1” of a broader trade deal. The dovish monetary policy and risk-on sentiment that ensued allowed the US yield curve to re-steepen after it had flattened and inverted during the year. This was especially the case for the 1-3 year area of the curve, which had started the year inverted as the market priced in the expectations of future rate cuts. Additionally, credit spreads narrowed allowing both corporate credit and asset-backed securities (ABS) to participate in the broad-based rally.
The United States economy remained a bright spot in the world. The headline U-3 unemployment rate has fallen to a multi-decade low of 3.5%. Corporate leverage has grown, but so have corporate earnings. As a result, default rates are running below their long-term average. Nominal GDP growth and inflation have provided a steady tailwind, and we expect trends in both measures to stay on course.
Demand from China and exports from Europe, two of the most important engines of global prosperity, have slowed, leaving unsettled conditions in their wake. In Germany, Europe’s largest economy, real GDP, a measure of purchasing power, has fallen to zero; the German manufacturing Purchasing Managers’ Index has dropped below 50, signaling contraction and raising the prospects of a recession; inflation is stagnating around 1.4%, below the European Central Bank’s 2% target; and inflation expectations have turned negative.
With rates for the 10-year German bund at approximately -20 bps and the 10-year Japanese government bond at -2 bps, there was little room to go lower. The negative yields are evidence of real distress in their economies, but we believe the greater threat lies in the fact that the ECB and Bank of Japan (BoJ) have few, if any, monetary tools left to revive growth.
Traditionally, investors have sought protection insurance against severe economic distress by purchasing developed market sovereign debt—in effect, the long-term securities issued by the three large sovereigns—the United States, Germany, and Japan. The
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negative interest rates in Germany and Japan have another implication, however; they virtually foreclose the upside possibility of investing in long-term government debt in those countries. Thus, the 10-year US Treasury note has arguably become, in effect, the developed world’s sole portfolio insurance policy.
We interpret the Fed’s recent round of rate cuts as an effort to balance a functioning American economy against the dysfunction elsewhere in the world. Despite the fact that the United States derives a comparatively small fraction of its GDP—14%—from global trade, its exposure to global supply chains warrants concern. In our view, the rate cuts acknowledge that risk, much as rate cuts in 2000 reflected a sensitivity to the potential for systemic risk that Y2K posed to the world’s internet connectivity.
Then as now, we believe that by cutting rates when the US economy is doing well, the Fed has compromised some of its ability to stimulate the domestic economy in the event of a future US-driven downturn in order to demonstrate that it is willing to protect the US economy against a severe global downturn. However, the Fed must temper this willingness against the risk of overheating a healthy US economy. In our minds, the key metric to watch to gauge the Fed’s likely future actions is business confidence. With consumer metrics healthy, a break in business confidence is the only catalyst we currently see to a potential recession.
As long as central banks in the developed economies attempt to stimulate their economies by intervening to hold down yields, and as long as local investors support that policy by keeping long-term sovereign rates negative, we believe that global demand for US Treasury debt will pin down US long rates. In these circumstances, the US yield curve has lost its predictive value.
Lazard Emerging Markets Debt Portfolio
For the year ended December 31, 2019, the Lazard Emerging Markets Debt Portfolio’s Institutional Shares posted a total return of 15.03%, while Open Shares posted a total return of 14.85%, and R6 Shares posted a total return of 15.22%, as compared with the 14.31% blended return for the Global Diversified Index.
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For the first three quarters of 2019, risk was focused primarily on bottom-up alpha opportunities before building a greater-than-benchmark position in local currency debt in the final quarter. Thus, outperformance was driven almost entirely by bottom-up positioning. Both bottom-up sovereign credit selection and local duration positioning were key contributors to relative performance for the year. In sovereign credit, the largest contributor to relative performance was the Portfolio’s large and long-standing underweight position in Lebanon, which significantly underperformed amid an escalating economic and political crisis. The Portfolio also benefited from a greater-than-benchmark position in Mozambique after the country’s bond restructuring was finalized on favorable terms to creditors. This was a highly profitable position that we built following the default in 2017. These gains were partly offset by the Portfolio’s small greater-than-benchmark exposure in Venezuela. Despite a significant rally in early 2019 on hopes of regime change, Venezuela suffered as optimism quickly faded and sanctions led to forced selling that finally abated during the fourth quarter. The top contributors in local rates were greater-than-benchmark exposures positions in Peru, Mexico, and Brazil.
The Portfolio management team uses currency forwards and interest rates swaps, both opportunistically, for direct currency and rates exposure, and defensively, for hedging purposes. For the year, the use of derivatives did not materially impact the Portfolio’s relative performance.
Lazard Global Fixed Income Portfolio
For the year ended December 31, 2019, the Lazard Global Fixed Income Portfolio’s Institutional Shares posted a total return of 7.25%, while Open Shares posted a total return of 6.98%, as compared with the 6.84% return for the Bloomberg Barclays Global Aggregate® Index.
The Portfolio’s performance was helped by country allocation, with its diversified positioning and duration and greater-than-benchmark exposures to the United States, Australia, New Zealand, Canada, Eastern Europe, and Singapore. (We sold the Portfolio’s Singapore bond exposure in October.) The Portfolio’s greater-than-
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benchmark exposure to the Australian dollar and New Zealand dollar, as well as benchmark underweights to the Korean won, Chinese renminbi, and Swedish krona, also added value. Security selection contributed positively in many global regions, including the United States, Australia, and Norway. However, in the euro zone, security selection detracted from performance given the underweight exposure to peripheral debt and spread product in that region. The Portfolio’s underweight exposure to Japanese government bonds (zero market value) detracted from performance, along with tactical changes in the Japanese yen exposure throughout the year.
The Portfolio’s total exposure to sovereign, supranational, and corporate labeled “Green, Social, and Sustainable” bonds is approximately 20%.
The Portfolio’s currency positioning is relatively neutral at the moment, with greater-than-benchmark exposures to the New Zealand dollar and Australian dollar, neutral positioning for the Japanese yen, and underweight positioning (relative to the index) for the Chinese renminbi. The Portfolio remains fully hedged on the its Chilean bonds and has greater-than-benchmark exposure to the Mexican peso. Its proxy hedges versus the euro have added value, with hedge cost reductions related to the Czech krona, Norwegian krone, and Romanian leu. (All positioning and figures are as of December 31, 2019.)
The Portfolio management team utilizes forward currency contracts, both opportunistically and defensively, for hedging purposes. In aggregate, currency positioning (defined as the net currency exposure of underlying bonds plus currency hedges) produced a modest positive contribution to the relative performance.
Lazard US Corporate Income Portfolio
For the year ended December 31, 2019, the Lazard US Corporate Income Portfolio’s Institutional Shares posted a total return of 13.34%, while Open Shares posted a total return of 12.74%, and R6 Shares posted a total return of 10.67%, as compared with the
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15.31% return for the ICE BofAML BB-B US Cash Pay Non-Distressed High Yield® Index (the “Cash Pay Index”).
Performance was strong across most sectors and individual names. Underweights to the healthcare, telecommunications, and banking sectors detracted from performance. In contrast, greater-than-benchmark exposure to the media, leisure, services, and automotive sectors, and underweight exposures to the energy sector contributed to performance. Nonetheless, among the few individual positions that were a marginal headwind to performance were Gulfport Energy 6% due 2024 and Mallinckrodt Pharmaceuticals 5.75% due 2022. Gulfport Energy and other upstream energy companies continue to struggle with realizing the full potential of their assets and managing their capital structure. Mallinckrodt Pharmaceuticals was negatively affected by potential liability from opioid litigation. These positions were cut from the Portfolio because the risk return trade-off no longer aligned with the Portfolio’s objective. Contributors included Hertz Global Holdings, Inc. 5.5% due 2024. This issue continued to be an outsized positive contributor after the parent company of car rental and leasing company The Hertz Corporation completed a rights offering and reported good earnings. Western Digital 4.75% due 2026 performed well after the memory market reached a cyclical trough and the US and China agreed upon “Phase 1” of a trade deal in principle. Another issue that was boosted by positive trade developments was Freeport-McMoRan 4.55% due 2024. Hughes Satellite Systems 5.25% due 2026% was a top performer for the year after being upgraded to Ba1 from Ba2 by Moody’s.
Given the Portfolio’s bias towards quality, it remains overweight in BBB and BB credits, with a material underweight to B credits versus the index. The Portfolio option-adjusted spread (OAS) of 196 bps continues to be tighter versus the index’s 252 bp OAS. Yields fell in the year and the Portfolio now has an effective yield of 3.60% versus 4.26% for the index. The Portfolio’s 2.57 effective duration remains below the index’s 3.36. (All positioning and figures are as of December 31, 2019.)
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Lazard US Short Duration Fixed Income Portfolio
For the year ended December 31, 2019, the Lazard US Short Duration Fixed Income Portfolio’s Institutional Shares posted a total return of 2.93%, while Open Shares posted a total return of 2.64%, as compared with the 3.55% return for the ICE BofAML 1-3 Year US Treasury® Index.
Although exposure to US corporate credit and consumer asset-backed securities helped performance, an underweight to duration, mainly in the 2-3 year area of the yield curve, was the main detractor for the year.
The Portfolio maintains a duration positioning that is relatively short relative to the index. Additionally, the Portfolio maintains a significant allocation to credit positions, particularly in BBB corporates. Among industry sectors, US financials and US industrials remain a significant portion of the credit positioning. The Portfolio remains underweight US Treasuries, but has been increasing its exposure in recent months, while having decreased exposure to US agency mortgage-backed securities. (All positioning as of December 31, 2019.)
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The Lazard Funds, Inc. Performance Overviews (unaudited)
Lazard Emerging Markets Debt Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard E merging Markets Debt Portfolio, JPMorgan EMBI Global Diversified® Index, JPMorgan GBI-EM Global Diversified® Index and Global Diversified Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 15.03% | 3.57% | 3.11% | ||||
Open Shares** | 14.85% | 3.32% | 2.82% | ||||
R6 Shares** | 15.22% | N/A | 4.64% | ||||
JPMorgan EMBI Global Diversified Index | 15.04% | 6.24% | 6.49% (Institutional and Open Shares) 5.26% (R6 Shares) | ||||
JPMorgan GBI-EM Global Diversified Index | 13.47% | 2.78% | 1.39% (Institutional and Open Shares) 5.12% (R6 Shares) | ||||
Global Diversified Index | 14.31% | 4.57% | 3.98% (Institutional and Open Shares) 5.25% (R6 Shares) |
† | The inception date for the Institutional and Open Shares was February 28, 2011 and for the R6 Shares was July 28, 2016. |
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Lazard Global Fixed Income Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Global Fixed Income Portfolio and Bloomberg Barclays Global Aggregate® Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 7.25% | 1.74% | 1.00% | ||||
Open Shares** | 6.98% | 1.45% | 0.71% | ||||
Bloomberg Barclays Global Aggregate Index | 6.84% | 2.31% | 1.65% |
† | The inception date for the Portfolio was March 30, 2012. |
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Lazard US Corporate Income Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard US Corporate Income Portfolio and Cash Pay Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | Since | ||||||
Year | Years | Years | Inception | † | |||||
Institutional Shares** | 13.34% | 4.84% | 6.23% | 4.44% | |||||
Open Shares** | 12.74% | 4.53% | 5.89% | 3.94% | |||||
R6 Shares** | 10.67% | N/A | N/A | 4.53% | |||||
Cash Pay Index | 15.31% | 6.20% | 7.43% | 6.52% (Institutional Shares) 6.48% (Open Shares) 6.81% (R6 Shares) |
† | The inception date for the Institutional Shares was January 2, 1998, for the Open Shares was February 24, 1998 and for the R6 Shares was November 3, 2016. |
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Lazard US Short Duration Fixed Income Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard US Short Duration Fixed Income Portfolio and ICE BofAML 1-3 Year US Treasury® Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Since | |||||
Year | Years | Inception | † | ||||
Institutional Shares** | 2.93% | 1.15% | 1.33% | ||||
Open Shares** | 2.64% | 1.06% | 1.16% | ||||
ICE BofAML 1-3 Year US Treasury Index | 3.55% | 1.39% | 1.11% |
† | The inception date for the Portfolio was February 28, 2011. |
Notes to Performance Overviews:
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the 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 distributing agent (“DST”); without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. |
Performance results do not include adjustments made for financial reporting purposes in accordance with US Generally Accepted Accounting Principles (“GAAP”), if any, and also exclude one-time adjustments related to reimbursed custodian out-of-pocket expenses (Note 3 in the Notes to Financial Statements) for Lazard Emerging Markets Debt Portfolio and settlement proceeds received from a class action lawsuit by Lazard US Corporate Income Portfolio which impacted the total return of R6 Shares but did not impact that of Institutional or Open; amounts 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. |
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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 indices are unmanaged, have no fees or costs and are not available for investment. | |
The JPMorgan EMBI Global Diversified Index is a uniquely weighted version of the EMBI Global. Risks associated with the securities comprising this index include fixed income and emerging markets. The JPMorgan GBI- EM Global Diversified Index is a uniquely weighted version of the GBI-EM Global. Risks include fixed income, emerging markets and derivatives. These indices limit the weights of those index countries with larger debt stocks by only including specified portions of these countries’ eligible current face amounts of debt outstanding. The countries covered in both indices are identical. | |
The Global Diversified Index is an unmanaged index created by the Investment Manager and is a 50/50 blend of the JPMorgan EMBI Global Diversified Index and the JPMorgan GBI-EM Global Diversified Index. | |
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 Cash Pay Index is the ICE BofAML BB-B US Cash Pay Non-Distressed High Yield® Index. It is constructed to mirror the BB-B non-distressed sector of the public high yield corporate debt market and is a subset of the ICE Bank of America Merrill Lynch High Yield Cash Pay® Index. | |
The ICE BofAML 1-3 Year US Treasury Index tracks the performance of the direct sovereign debt of the US Government having a maturity of at least one year and less than three years. | |
** | The performance of Institutional Shares, Open Shares and R6 Shares may vary, primarily based on the differences in fees borne by shareholders investing in different classes. |
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The Lazard Funds, 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 (Open 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 July 1, 2019 through December 31, 2019 and held for the entire period.
Actual Expenses
For each Share class of the Portfolios, the first line of the accompanying table 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 accompanying table 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 shareholder reports of other mutual funds.
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Expenses | Annualized | ||||||||||||||||
Beginning | Ending | Paid During | Expense Ratio | ||||||||||||||
Account | Account | Period* | During Period | ||||||||||||||
Value | Value | 7/1/19 - | 7/1/19 - | ||||||||||||||
Portfolio | 7/1/19 | 12/31/19 | 12/31/19 | 12/31/19 | |||||||||||||
Emerging Markets Debt | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,037.80 | $ | 5.03 | 0.98% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.27 | $ | 4.99 | 0.98% | ||||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,036.60 | $ | 6.11 | 1.19% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.21 | $ | 6.06 | 1.19% | ||||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,039.60 | $ | 4.78 | 0.93% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.52 | $ | 4.74 | 0.93% | ||||||||||
Global Fixed Income | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,013.60 | $ | 3.55 | 0.70% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.68 | $ | 3.57 | 0.70% | ||||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,011.20 | $ | 4.82 | 0.95% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.42 | $ | 4.84 | 0.95% | ||||||||||
US Corporate Income | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,034.60 | $ | 2.82 | 0.55% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,022.43 | $ | 2.80 | 0.55% | ||||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,033.10 | $ | 4.20 | 0.82% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.07 | $ | 4.18 | 0.82% | ||||||||||
R6 Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,036.80 | $ | 2.72 | 0.53% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,022.53 | $ | 2.70 | 0.53% |
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Expenses | Annualized | ||||||||||||||||
Beginning | Ending | Paid During | Expense Ratio | ||||||||||||||
Account | Account | Period* | During Period | ||||||||||||||
Value | Value | 7/1/19 - | 7/1/19 - | ||||||||||||||
Portfolio | 7/1/19 | 12/31/19 | 12/31/19 | 12/31/19 | |||||||||||||
US Short Duration Fixed Income | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,010.10 | $ | 2.03 | 0.40% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,023.19 | $ | 2.04 | 0.40% | ||||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,009.80 | $ | 3.39 | 0.67% | ||||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,021.83 | $ | 3.41 | 0.67% |
* | 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 184/365 (to reflect one-half year period). |
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The Lazard Funds, Inc. Portfolio Holdings Presented by
Asset Class/Credit Rating and Region December 31, 2019
Lazard | Lazard US | Lazard US | |||||||||||
Global Fixed | Corporate | Short Duration | |||||||||||
Income | Income | Fixed Income | |||||||||||
Asset Class/S&P Credit Rating* | Portfolio | Portfolio | Portfolio | ||||||||||
Fixed Income | |||||||||||||
AAA | 22.8 | % | — | % | 65.7 | % | |||||||
AA+ | 3.1 | — | — | ||||||||||
AA- | 5.4 | — | — | ||||||||||
A+ | 7.8 | — | — | ||||||||||
A | 4.8 | — | — | ||||||||||
A- | 3.6 | — | 10.7 | ||||||||||
BBB+ | 8.8 | — | 17.0 | ||||||||||
BBB | 4.6 | 1.2 | 5.4 | ||||||||||
BBB- | 4.2 | 7.8 | — | ||||||||||
BB+ | 2.6 | 14.6 | — | ||||||||||
BB | 0.5 | 23.2 | — | ||||||||||
BB- | 0.5 | 23.1 | — | ||||||||||
B+ | 0.5 | 12.3 | — | ||||||||||
B | — | 3.3 | — | ||||||||||
B- | — | 4.4 | — | ||||||||||
CCC+ | — | 0.6 | — | ||||||||||
CCC | — | 0.5 | — | ||||||||||
Not Applicable | 29.2 | 3.3 | 1.2 | ||||||||||
No Rating | 1.1 | 0.3 | — | ||||||||||
Short-Term Investments | 0.5 | 5.4 | — | ||||||||||
Total Investments | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Lazard | |||||||||||||
Emerging | |||||||||||||
Markets Debt | |||||||||||||
Asset Class/Region* | Portfolio | ||||||||||||
Fixed Income | |||||||||||||
Africa | 11.4 | % | |||||||||||
Asia | 25.7 | ||||||||||||
Europe | 23.5 | ||||||||||||
North America | 13.9 | ||||||||||||
South America | 21.7 | ||||||||||||
Short-Term Investments | 3.8 | ||||||||||||
Total Investments | 100.0 | % | |||||||||||
* | Represents percentage of total investments. |
22 Annual Report
The Lazard Funds, Inc. Portfolios of Investments
December 31, 2019
The accompanying notes are an integral part of these financial statements.
Annual Report 23
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Peru | 0.6% | ||||||||||
Fondo MIVIVIENDA SA, 7.000%, 02/14/24 | PEN | 960 | $ | 320,773 | ||||||
Hunt Oil Co. of Peru LLC Sucursal Del Peru, 6.375%, 06/01/28 (#) | USD | 250 | 274,531 | |||||||
595,304 | ||||||||||
Ukraine | 0.2% | ||||||||||
NAK Naftogaz Ukraine via Kondor Finance PLC, 7.625%, 11/08/26 (#) | USD | 200 | 203,999 | |||||||
Zambia | 0.4% | ||||||||||
First Quantum Minerals, Ltd., 7.250%, 05/15/22 (#) | USD | 400 | 401,880 | |||||||
Total Corporate Bonds (Cost $3,665,932) | 3,830,588 | |||||||||
Foreign Government Obligations | 87.8% | ||||||||||
Angola | 0.4% | ||||||||||
Republic of Angola: | ||||||||||
9.500%, 11/12/25 | USD | 102 | 119,181 | |||||||
9.375%, 05/08/48 | USD | 200 | 219,437 | |||||||
338,618 | ||||||||||
Argentina | 2.7% | ||||||||||
Republic of Argentina: | ||||||||||
6.875%, 04/22/21 | USD | 100 | 53,594 | |||||||
5.625%, 01/26/22 | USD | 565 | 293,623 | |||||||
4.625%, 01/11/23 | USD | 538 | 267,319 | |||||||
7.500%, 04/22/26 | USD | 480 | 247,950 | |||||||
6.875%, 01/26/27 | USD | 385 | 191,056 | |||||||
5.875%, 01/11/28 | USD | 535 | 250,614 | |||||||
6.625%, 07/06/28 | USD | 425 | 201,477 | |||||||
8.280%, 12/31/33 | USD | 456 | 277,669 | |||||||
7.125%, 07/06/36 | USD | 315 | 150,413 |
The accompanying notes are an integral part of these financial statements.
24 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
7.625%, 04/22/46 | USD | 340 | $ | 169,469 | ||||||
6.875%, 01/11/48 | USD | 440 | 210,237 | |||||||
7.125%, 06/28/2117 | USD | 380 | 190,475 | |||||||
2,503,896 | ||||||||||
Bahrain | 0.7% | ||||||||||
Kingdom of Bahrain: | ||||||||||
6.125%, 07/05/22 | USD | 170 | 182,910 | |||||||
7.000%, 10/12/28 | USD | 410 | 484,056 | |||||||
666,966 | ||||||||||
Barbados | 0.1% | ||||||||||
Barbados Government International Bonds, 6.500%, 10/01/29 (#) | USD | 50 | 48,859 | |||||||
Belarus | 0.3% | ||||||||||
Republic of Belarus, 7.625%, 06/29/27 | USD | 225 | 255,375 | |||||||
Belize | 0.0% | ||||||||||
Republic of Belize, 4.938%, 02/20/34 (Ø) | USD | 55 | 33,275 | |||||||
Brazil | 3.3% | ||||||||||
Brazil Letras do Tesouro Nacional, 0.000%, 07/01/23 | BRL | 4,250 | 861,354 | |||||||
Brazil NTN-B, 6.000%, 08/15/50 | BRL | 215 | 256,143 | |||||||
Brazil NTN-F: | ||||||||||
10.000%, 01/01/25 | BRL | 4,020 | 1,148,752 | |||||||
10.000%, 01/01/27 | BRL | 1,835 | 537,897 | |||||||
Federal Republic of Brazil, 5.625%, 02/21/47 | USD | 195 | 220,716 | |||||||
3,024,862 |
The accompanying notes are an integral part of these financial statements.
Annual Report 25
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Chile | 1.6% | ||||||||||
Bonos de la Tesoreria de la Republica en pesos: | ||||||||||
4.500%, 03/01/26 | CLP | 315,000 | $ | 461,618 | ||||||
6.000%, 01/01/43 | CLP | 160,000 | 289,776 | |||||||
5.100%, 07/15/50 | CLP | 185,000 | 297,003 | |||||||
Republic of Chile: | ||||||||||
3.240%, 02/06/28 | USD | 45 | 47,447 | |||||||
3.500%, 01/25/50 | USD | 325 | 340,234 | |||||||
1,436,078 | ||||||||||
Colombia | 4.3% | ||||||||||
Colombian Titulos De Tesoreria: | ||||||||||
10.000%, 07/24/24 | COP | 1,125,000 | 404,982 | |||||||
6.250%, 11/26/25 | COP | 3,070,000 | 959,394 | |||||||
7.500%, 08/26/26 | COP | 2,653,000 | 879,295 | |||||||
6.000%, 04/28/28 | COP | 741,000 | 223,747 | |||||||
7.000%, 06/30/32 | COP | 1,396,000 | 442,051 | |||||||
Republic of Colombia: | ||||||||||
4.500%, 03/15/29 | USD | 360 | 398,925 | |||||||
7.375%, 09/18/37 | USD | 105 | 149,100 | |||||||
5.000%, 06/15/45 | USD | 395 | 459,311 | |||||||
3,916,805 | ||||||||||
Costa Rica | 0.9% | ||||||||||
Republic of Costa Rica: | ||||||||||
9.200%, 02/23/22 | USD | 70 | 75,872 | |||||||
5.520%, 08/17/22 | USD | 100 | 101,445 | |||||||
5.520%, 08/23/23 | USD | 480 | 486,456 | |||||||
7.158%, 03/12/45 | USD | 105 | 112,055 | |||||||
775,828 | ||||||||||
Czech Republic | 1.3% | ||||||||||
Czech Republic: | ||||||||||
3.750%, 09/12/20 | CZK | 3,590 | 160,095 | |||||||
2.500%, 08/25/28 | CZK | 9,170 | 434,516 | |||||||
4.200%, 12/04/36 | CZK | 9,380 | 559,290 | |||||||
1,153,901 |
The accompanying notes are an integral part of these financial statements.
26 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Dominican Republic | 1.2% | ||||||||||
Dominican Republic: | ||||||||||
8.900%, 02/15/23 | DOP | 15,550 | $ | 291,326 | ||||||
6.875%, 01/29/26 | USD | 125 | 143,086 | |||||||
5.950%, 01/25/27 | USD | 290 | 319,997 | |||||||
6.850%, 01/27/45 | USD | 60 | 68,475 | |||||||
6.500%, 02/15/48 (#) | USD | 75 | 82,570 | |||||||
6.400%, 06/05/49 | USD | 210 | 229,950 | |||||||
1,135,404 | ||||||||||
Ecuador | 1.4% | ||||||||||
Republic of Ecuador: | ||||||||||
7.950%, 06/20/24 | USD | 430 | 407,425 | |||||||
9.650%, 12/13/26 | USD | 440 | 418,137 | |||||||
8.875%, 10/23/27 (#) | USD | 260 | 238,794 | |||||||
8.875%, 10/23/27 | USD | 265 | 243,386 | |||||||
1,307,742 | ||||||||||
Egypt | 1.7% | ||||||||||
Arab Republic of Egypt: | ||||||||||
6.125%, 01/31/22 | USD | 285 | 296,044 | |||||||
5.577%, 02/21/23 (#) | USD | 270 | 282,082 | |||||||
5.577%, 02/21/23 | USD | 200 | 208,950 | |||||||
4.550%, 11/20/23 (#) | USD | 200 | 204,250 | |||||||
6.200%, 03/01/24 (#) | USD | 190 | 204,725 | |||||||
8.500%, 01/31/47 (#) | USD | 335 | 371,955 | |||||||
1,568,006 | ||||||||||
El Salvador | 0.4% | ||||||||||
Republic of El Salvador: | ||||||||||
5.875%, 01/30/25 | USD | 31 | 32,715 | |||||||
8.625%, 02/28/29 | USD | 80 | 96,200 | |||||||
7.650%, 06/15/35 | USD | 65 | 74,079 | |||||||
7.625%, 02/01/41 | USD | 150 | 171,047 | |||||||
374,041 | ||||||||||
Gabon | 0.3% | ||||||||||
Gabonese Republic, | ||||||||||
6.375%, 12/12/24 | USD | 220 | 229,969 |
The accompanying notes are an integral part of these financial statements.
Annual Report 27
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Ghana | 0.7% | ||||||||||
Republic of Ghana: | ||||||||||
7.875%, 08/07/23 | USD | 130 | $ | 142,716 | ||||||
7.625%, 05/16/29 | USD | 280 | 284,900 | |||||||
8.627%, 06/16/49 | USD | 255 | 254,761 | |||||||
682,377 | ||||||||||
Guatemala | 0.3% | ||||||||||
Guatemala Government Bonds, 4.900%, 06/01/30 (#) | USD | 235 | 252,184 | |||||||
Honduras | 0.3% | ||||||||||
Honduras Government Bonds, 7.500%, 03/15/24 | USD | 245 | 272,180 | |||||||
Hungary | 3.4% | ||||||||||
Hungary, 7.625%, 03/29/41 | USD | 404 | 664,580 | |||||||
Hungary Government Bonds: | ||||||||||
1.500%, 08/24/22 | HUF | 232,510 | 812,151 | |||||||
2.500%, 10/24/24 | HUF | 446,140 | 1,622,353 | |||||||
3,099,084 | ||||||||||
Indonesia | 8.5% | ||||||||||
Indonesia Government Bonds: | ||||||||||
8.375%, 03/15/24 | IDR | 7,060,000 | 544,153 | |||||||
8.125%, 05/15/24 | IDR | 17,562,000 | 1,349,804 | |||||||
8.375%, 09/15/26 | IDR | 10,081,000 | 779,147 | |||||||
7.000%, 05/15/27 | IDR | 2,666,000 | 192,904 | |||||||
9.000%, 03/15/29 | IDR | 5,492,000 | 443,607 | |||||||
8.250%, 05/15/29 | IDR | 5,759,000 | 450,930 | |||||||
8.750%, 05/15/31 | IDR | 17,205,000 | 1,381,233 | |||||||
7.500%, 08/15/32 | IDR | 3,395,000 | 245,408 | |||||||
8.375%, 03/15/34 | IDR | 1,165,000 | 90,380 | |||||||
8.250%, 05/15/36 | IDR | 8,467,000 | 645,279 | |||||||
8.375%, 04/15/39 | IDR | 920,000 | 71,158 |
The accompanying notes are an integral part of these financial statements.
28 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Republic of Indonesia: | ||||||||||
4.750%, 02/11/29 | USD | 225 | $ | 257,625 | ||||||
5.125%, 01/15/45 | USD | 285 | 340,308 | |||||||
5.250%, 01/08/47 | USD | 180 | 221,175 | |||||||
4.750%, 07/18/47 | USD | 220 | 254,375 | |||||||
4.350%, 01/11/48 | USD | 215 | 237,105 | |||||||
3.700%, 10/30/49 | USD | 260 | 267,313 | |||||||
7,771,904 | ||||||||||
Iraq | 0.3% | ||||||||||
Republic of Iraq, 5.800%, 01/15/28 | USD | 305 | 299,281 | |||||||
Ivory Coast | 0.4% | ||||||||||
Ivory Coast, 6.125%, 06/15/33 | USD | 325 | 327,336 | |||||||
Jamaica | 0.4% | ||||||||||
Government of Jamaica: | ||||||||||
6.750%, 04/28/28 | USD | 60 | 71,213 | |||||||
8.000%, 03/15/39 | USD | 95 | 129,289 | |||||||
7.875%, 07/28/45 | USD | 120 | 162,300 | |||||||
362,802 | ||||||||||
Kazakhstan | 0.8% | ||||||||||
Republic of Kazakhstan: | ||||||||||
5.125%, 07/21/25 | USD | 200 | 229,500 | |||||||
4.875%, 10/14/44 | USD | 395 | 487,702 | |||||||
717,202 | ||||||||||
Kenya | 0.4% | ||||||||||
Republic of Kenya, 6.875%, 06/24/24 | USD | 365 | 394,314 | |||||||
Lebanon | 0.2% | ||||||||||
Lebanese Republic: | ||||||||||
6.375%, 03/09/20 | USD | 101 | 87,491 | |||||||
6.650%, 02/26/30 | USD | 127 | 56,396 | |||||||
143,887 |
The accompanying notes are an integral part of these financial statements.
Annual Report 29
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Malaysia | 4.0% | ||||||||||
Malaysia Government Bonds: | ||||||||||
3.882%, 03/10/22 | MYR | 1,070 | $ | 266,322 | ||||||
3.418%, 08/15/22 | MYR | 3,460 | 852,891 | |||||||
3.800%, 08/17/23 | MYR | 1,450 | 361,742 | |||||||
3.478%, 06/14/24 | MYR | 2,680 | 662,343 | |||||||
3.955%, 09/15/25 | MYR | 1,720 | 434,993 | |||||||
4.893%, 06/08/38 | MYR | 3,610 | 1,010,072 | |||||||
Malaysia Sovereign Sukuk Berhad, 4.236%, 04/22/45 | USD | 50 | 60,562 | |||||||
3,648,925 | ||||||||||
Mexico | 7.4% | ||||||||||
Mexican Bonos: | ||||||||||
10.000%, 12/05/24 | MXN | 13,477 | 809,235 | |||||||
5.750%, 03/05/26 | MXN | 64,700 | 3,245,480 | |||||||
8.500%, 05/31/29 | MXN | 10,310 | 607,483 | |||||||
7.750%, 05/29/31 | MXN | 6,500 | 367,091 | |||||||
10.000%, 11/20/36 | MXN | 10,180 | 695,559 | |||||||
7.750%, 11/13/42 | MXN | 2,790 | 156,460 | |||||||
United Mexican States: | ||||||||||
4.150%, 03/28/27 | USD | 85 | 91,030 | |||||||
4.500%, 04/22/29 | USD | 315 | 346,598 | |||||||
4.600%, 02/10/48 | USD | 225 | 245,813 | |||||||
5.750%, 10/12/2110 | USD | 192 | 227,040 | |||||||
6,791,789 | ||||||||||
Mongolia | 0.3% | ||||||||||
Mongolia International Bonds: | ||||||||||
10.875%, 04/06/21 | USD | 45 | 49,064 | |||||||
5.125%, 12/05/22 | USD | 110 | 112,509 | |||||||
8.750%, 03/09/24 (#) | USD | 115 | 130,885 | |||||||
292,458 | ||||||||||
Morocco | 0.3% | ||||||||||
Kingdom of Morocco, 5.500%, 12/11/42 | USD | 240 | 293,625 |
The accompanying notes are an integral part of these financial statements.
30 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Mozambique | 0.2% | ||||||||||
Mozambique International Bonds, 5.000%, 09/15/31 (#) | USD | 200 | $ | 186,750 | ||||||
Namibia | 0.1% | ||||||||||
Republic of Namibia, 5.250%, 10/29/25 | USD | 95 | 98,681 | |||||||
Nigeria | 0.7% | ||||||||||
Republic of Nigeria: | ||||||||||
7.875%, 02/16/32 | USD | 200 | 207,313 | |||||||
7.625%, 11/28/47 (#) | USD | 435 | 423,853 | |||||||
631,166 | ||||||||||
Oman | 0.5% | ||||||||||
Oman Government International Bonds: | ||||||||||
4.125%, 01/17/23 | USD | 200 | 205,125 | |||||||
4.875%, 02/01/25 (#) | USD | 270 | 279,113 | |||||||
484,238 | ||||||||||
Pakistan | 0.5% | ||||||||||
Islamic Republic of Pakistan: | ||||||||||
8.250%, 09/30/25 | USD | 200 | 223,437 | |||||||
6.875%, 12/05/27 | USD | 200 | 207,863 | |||||||
431,300 | ||||||||||
Panama | 0.8% | ||||||||||
Republic of Panama: | ||||||||||
3.875%, 03/17/28 | USD | 195 | 212,733 | |||||||
9.375%, 04/01/29 | USD | 55 | 83,858 | |||||||
4.500%, 04/16/50 | USD | 215 | 254,976 | |||||||
3.870%, 07/23/60 | USD | 155 | 167,303 | |||||||
718,870 | ||||||||||
Peru | 4.1% | ||||||||||
Banco de Credito del Peru, 4.850%, 10/30/20 (#) | PEN | 108 | 32,631 | |||||||
Republic of Peru: | ||||||||||
8.200%, 08/12/26 | PEN | 5,910 | 2,263,887 | |||||||
2.844%, 06/20/30 | USD | 220 | 227,081 |
The accompanying notes are an integral part of these financial statements.
Annual Report 31
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
6.900%, 08/12/37 | PEN | 2,020 | $ | 731,786 | ||||||
5.625%, 11/18/50 | USD | 320 | 467,900 | |||||||
3,723,285 | ||||||||||
Philippines | 1.4% | ||||||||||
Republic of Philippines: | ||||||||||
3.625%, 09/09/25 | PHP | 7,150 | 135,734 | |||||||
3.750%, 01/14/29 | USD | 115 | 127,039 | |||||||
7.750%, 01/14/31 | USD | 170 | 251,175 | |||||||
6.375%, 10/23/34 | USD | 255 | 361,861 | |||||||
3.700%, 03/01/41 | USD | 85 | 96,209 | |||||||
3.700%, 02/02/42 | USD | 270 | 305,691 | |||||||
1,277,709 | ||||||||||
Qatar | 2.3% | ||||||||||
State of Qatar: | ||||||||||
4.000%, 03/14/29 | USD | 635 | 709,811 | |||||||
5.103%, 04/23/48 | USD | 325 | 417,625 | |||||||
4.817%, 03/14/49 | USD | 775 | 958,578 | |||||||
2,086,014 | ||||||||||
Romania | 1.7% | ||||||||||
Romanian Government Bonds: | ||||||||||
4.250%, 06/28/23 | RON | 4,595 | 1,088,091 | |||||||
4.850%, 04/22/26 | RON | 860 | 209,045 | |||||||
6.125%, 01/22/44 | USD | 102 | 132,090 | |||||||
5.125%, 06/15/48 | USD | 116 | 133,110 | |||||||
1,562,336 | ||||||||||
Russia | 5.1% | ||||||||||
Russia Government Bonds - OFZ: | ||||||||||
7.950%, 10/07/26 | RUB | 113,080 | 2,004,481 | |||||||
7.050%, 01/19/28 | RUB | 27,760 | 472,378 | |||||||
8.500%, 09/17/31 | RUB | 48,980 | 930,652 | |||||||
Russian Foreign Bond - Eurobond: | ||||||||||
4.375%, 03/21/29 | USD | 200 | 222,600 | |||||||
5.250%, 06/23/47 | USD | 800 | 1,000,000 | |||||||
4,630,111 |
The accompanying notes are an integral part of these financial statements.
32 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Saudi Arabia | 0.4% | ||||||||||
Saudi Government International Bonds, 4.375%, 04/16/29 (#) | USD | 310 | $ | 346,425 | ||||||
Senegal | 0.4% | ||||||||||
Republic of Senegal, 6.250%, 05/23/33 | USD | 360 | 378,675 | |||||||
South Africa | 4.8% | ||||||||||
Republic of South Africa: | ||||||||||
10.500%, 12/21/26 | ZAR | 8,480 | 676,322 | |||||||
8.000%, 01/31/30 | ZAR | 10,720 | 713,713 | |||||||
8.250%, 03/31/32 | ZAR | 20,000 | 1,309,246 | |||||||
8.500%, 01/31/37 | ZAR | 21,440 | 1,354,232 | |||||||
8.750%, 02/28/48 | ZAR | 5,970 | 373,232 | |||||||
4,426,745 | ||||||||||
South Korea | 0.4% | ||||||||||
Export-Import Bank of Korea: | ||||||||||
6.360%, 02/14/23 | IDR | 3,200,000 | 227,496 | |||||||
6.650%, 05/15/23 | IDR | 2,100,000 | 151,088 | |||||||
378,584 | ||||||||||
Sri Lanka | 1.0% | ||||||||||
Republic of Sri Lanka: | ||||||||||
6.250%, 10/04/20 | USD | 200 | 202,625 | |||||||
5.750%, 01/18/22 | USD | 60 | 60,075 | |||||||
5.875%, 07/25/22 | USD | 200 | 200,313 | |||||||
6.850%, 11/03/25 | USD | 150 | 150,094 | |||||||
6.825%, 07/18/26 | USD | 25 | 24,548 | |||||||
6.750%, 04/18/28 (#) | USD | 300 | 286,125 | |||||||
923,780 | ||||||||||
Thailand | 3.1% | ||||||||||
Thailand Government Bonds: | ||||||||||
3.625%, 06/16/23 | THB | 4,210 | 151,816 | |||||||
3.850%, 12/12/25 | THB | 14,113 | 539,092 | |||||||
3.650%, 06/20/31 | THB | 17,770 | 716,559 | |||||||
3.775%, 06/25/32 | THB | 10,140 | 417,963 |
The accompanying notes are an integral part of these financial statements.
Annual Report 33
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
3.400%, 06/17/36 | THB | 15,930 | $ | 648,478 | ||||||
3.300%, 06/17/38 | THB | 8,260 | 337,123 | |||||||
2,811,031 | ||||||||||
Turkey | 5.5% | ||||||||||
Republic of Turkey: | ||||||||||
6.250%, 09/26/22 | USD | 775 | 809,633 | |||||||
7.250%, 12/23/23 | USD | 230 | 248,472 | |||||||
5.750%, 03/22/24 | USD | 125 | 127,969 | |||||||
5.600%, 11/14/24 | USD | 450 | 458,325 | |||||||
7.375%, 02/05/25 | USD | 240 | 262,275 | |||||||
6.000%, 03/25/27 | USD | 185 | 187,139 | |||||||
6.000%, 01/14/41 | USD | 190 | 176,997 | |||||||
Turkey Government Bonds: | ||||||||||
10.700%, 02/17/21 | TRY | 10,475 | 1,744,072 | |||||||
11.000%, 03/02/22 | TRY | 990 | 164,834 | |||||||
8.800%, 09/27/23 | TRY | 1,080 | 166,838 | |||||||
10.400%, 03/20/24 | TRY | 1,710 | 278,245 | |||||||
8.000%, 03/12/25 | TRY | 3,020 | 434,547 | |||||||
5,059,346 | ||||||||||
Ukraine | 3.9% | ||||||||||
Ukraine Government Bonds: | ||||||||||
7.750%, 09/01/20 | USD | 280 | 287,700 | |||||||
7.750%, 09/01/21 | USD | 145 | 153,338 | |||||||
7.750%, 09/01/23 | USD | 235 | 254,681 | |||||||
8.994%, 02/01/24 | USD | 200 | 224,500 | |||||||
7.750%, 09/01/24 | USD | 355 | 386,418 | |||||||
15.840%, 02/26/25 | UAH | 12,650 | 630,879 | |||||||
7.750%, 09/01/25 | USD | 966 | 1,052,457 | |||||||
9.750%, 11/01/28 | USD | 490 | 595,962 | |||||||
3,585,935 | ||||||||||
United Arab Emirates | 0.8% | ||||||||||
Abu Dhabi Government International Bonds: | ||||||||||
4.125%, 10/11/47 | USD | 210 | 244,256 | |||||||
3.125%, 09/30/49 (#) | USD | 125 | 121,914 |
The accompanying notes are an integral part of these financial statements.
34 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Emirate of Dubai Government International Bonds, 5.250%, 01/30/43 | USD | 310 | $ | 354,466 | ||||||
720,636 | ||||||||||
Uruguay | 1.0% | ||||||||||
Republica Orient Uruguay: | ||||||||||
4.375%, 01/23/31 | USD | 155 | 173,261 | |||||||
4.975%, 04/20/55 | USD | 605 | 714,845 | |||||||
888,106 | ||||||||||
Venezuela | 0.8% | ||||||||||
Republic of Venezuela: | ||||||||||
7.750%, 10/13/19 («) | USD | 245 | 28,175 | |||||||
6.000%, 12/09/20 («) | USD | 121 | 13,915 | |||||||
12.750%, 08/23/22 («) | USD | 1,064 | 122,360 | |||||||
9.000%, 05/07/23 («) | USD | 1,212 | 139,380 | |||||||
8.250%, 10/13/24 («) | USD | 2,218 | 255,070 | |||||||
7.650%, 04/21/25 («) | USD | 112 | 12,880 | |||||||
9.250%, 09/15/27 («) | USD | 1,012 | 116,380 | |||||||
9.250%, 05/07/28 («) | USD | 57 | 6,555 | |||||||
11.950%, 08/05/31 | USD | 52 | 5,980 | |||||||
9.375%, 01/13/34 («) | USD | 580 | 66,700 | |||||||
7.000%, 03/31/38 («) | USD | 58 | 6,670 | |||||||
774,065 | ||||||||||
Total Foreign Government Obligations (Cost $78,059,895) | 80,242,761 | |||||||||
Quasi Government Bonds | 1.7% | ||||||||||
Mexico | 0.7% | ||||||||||
Petroleos Mexicanos: | ||||||||||
4.875%, 01/24/22 | USD | 205 | 212,495 | |||||||
3.500%, 01/30/23 | USD | 215 | 216,277 | |||||||
6.500%, 03/13/27 | USD | 225 | 238,382 | |||||||
667,154 |
The accompanying notes are an integral part of these financial statements.
Annual Report 35
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
South Africa | 0.4% | ||||||||||
Eskom Holdings SOC, Ltd., 5.750%, 01/26/21 | USD | 397 | $ | 397,496 | ||||||
Turkey | 0.1% | ||||||||||
Export Credit Bank of Turkey, 5.375%, 02/08/21 | USD | 105 | 106,509 | |||||||
Ukraine | 0.3% | ||||||||||
Ukreximbank Via Biz Finance PLC, 9.750%, 01/22/25 | USD | 250 | 266,250 | |||||||
Venezuela | 0.2% | ||||||||||
Petroleos de Venezuela SA: | ||||||||||
8.500%, 10/27/20 («) | USD | 135 | 24,210 | |||||||
9.000%, 11/17/21 («) | USD | 251 | 19,453 | |||||||
12.750%, 02/17/22 («) | USD | 273 | 21,158 | |||||||
6.000%, 05/16/24 | USD | 346 | 26,815 | |||||||
6.000%, 11/15/26 («) | USD | 414 | 32,085 | |||||||
5.375%, 04/12/27 («) | USD | 292 | 22,630 | |||||||
9.750%, 05/17/35 («) | USD | 295 | 22,862 | |||||||
5.500%, 04/12/37 («) | USD | 100 | 7,750 | |||||||
176,963 | ||||||||||
Total Quasi Government Bonds (Cost $2,380,574) | 1,614,372 | |||||||||
Supranational Bonds | 0.1% | ||||||||||
European Bank for Reconstruction & Development, 7.500%, 05/15/22 | IDR | 1,223,000 | 90,740 | |||||||
International Finance Corp., 8.000%, 10/09/23 | IDR | 200,000 | 15,316 | |||||||
Total Supranational Bonds (Cost $100,999) | 106,056 |
The accompanying notes are an integral part of these financial statements.
36 Annual Report
Description | Shares | Fair Value | ||||||||
Lazard Emerging Markets Debt Portfolio (continued) | ||||||||||
Short-Term Investments | 3.7% | ||||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $3,352,431) | 3,352,431 | $ | 3,352,431 | |||||||
Total Investments | 97.5% (Cost $87,559,831) (») | $ | 89,146,208 | ||||||||
Cash and Other Assets in Excess of Liabilities | 2.5% | 2,245,259 | |||||||||
Net Assets | 100.0% | $ | 91,391,467 |
The accompanying notes are an integral part of these financial statements.
Annual Report 37
Lazard Emerging Markets Debt Portfolio (continued)
Forward Currency Contracts open at December 31, 2019:
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||
BRL | 1,784,414 | USD | 422,887 | BRC | 02/04/20 | $ | 20,292 | $ | — | |||||||||||||||||
BRL | 1,784,414 | USD | 422,587 | HSB | 02/04/20 | 20,593 | — | |||||||||||||||||||
BRL | 3,568,828 | USD | 846,175 | SCB | 02/04/20 | 40,184 | — | |||||||||||||||||||
BRL | 3,616,412 | USD | 857,457 | SCB | 02/04/20 | 40,720 | — | |||||||||||||||||||
BRL | 1,808,206 | USD | 427,704 | UBS | 02/04/20 | 21,384 | — | |||||||||||||||||||
CLP | 330,294,644 | USD | 412,662 | BOA | 01/21/20 | 26,704 | — | |||||||||||||||||||
CLP | 330,294,644 | USD | 411,633 | BRC | 01/21/20 | 27,732 | — | |||||||||||||||||||
COP | 918,840,000 | USD | 260,000 | UBS | 01/21/20 | 19,327 | — | |||||||||||||||||||
CZK | 442,680 | USD | 19,344 | BRC | 01/21/20 | 183 | — | |||||||||||||||||||
CZK | 9,516,523 | USD | 411,441 | BRC | 01/21/20 | 8,348 | — | |||||||||||||||||||
CZK | 1,665,391 | USD | 71,994 | SCB | 01/21/20 | 1,469 | — | |||||||||||||||||||
CZK | 7,137,392 | USD | 308,717 | SCB | 01/21/20 | 6,124 | — | |||||||||||||||||||
HUF | 10,232,904 | USD | 33,822 | SCB | 01/21/20 | 890 | — | |||||||||||||||||||
IDR | 1,812,850,000 | USD | 130,000 | BRC | 02/04/20 | 207 | — | |||||||||||||||||||
IDR | 5,661,731,557 | USD | 375,945 | JPM | 08/26/20 | 23,491 | — | |||||||||||||||||||
INR | 36,317,100 | USD | 510,000 | BOA | 01/06/20 | — | 1,339 | |||||||||||||||||||
INR | 16,028,850 | USD | 224,872 | CIT | 02/06/20 | — | 1,080 | |||||||||||||||||||
INR | 16,028,850 | USD | 224,840 | UBS | 02/06/20 | — | 1,049 | |||||||||||||||||||
MXN | 1,992,018 | USD | 104,689 | HSB | 01/21/20 | 392 | — | |||||||||||||||||||
MXN | 2,356,140 | USD | 120,000 | SCB | 01/21/20 | 4,289 | — | |||||||||||||||||||
MYR | 205,775 | USD | 50,000 | SCB | 01/29/20 | 265 | — | |||||||||||||||||||
MYR | 370,395 | USD | 90,000 | SCB | 01/29/20 | 476 | — | |||||||||||||||||||
PEN | 308,842 | USD | 90,822 | BRC | 02/24/20 | 2,231 | — | |||||||||||||||||||
PEN | 195,574 | USD | 57,468 | CIT | 02/24/20 | 1,459 | — | |||||||||||||||||||
PEN | 277,854 | USD | 81,710 | UBS | 02/24/20 | 2,007 | — | |||||||||||||||||||
PLN | 1,010,565 | USD | 263,154 | BOA | 06/29/20 | 3,273 | — | |||||||||||||||||||
PLN | 2,074,118 | USD | 535,827 | BRC | 01/21/20 | 10,899 | — | |||||||||||||||||||
PLN | 3,202,074 | USD | 819,767 | BRC | 01/21/20 | 24,281 | — | |||||||||||||||||||
PLN | 1,246,353 | USD | 325,249 | BRC | 06/29/20 | 3,342 | — | |||||||||||||||||||
PLN | 986,518 | USD | 255,216 | CIT | 02/21/20 | 4,847 | — | |||||||||||||||||||
PLN | 1,881,390 | USD | 488,654 | JPM | 06/29/20 | 7,360 | — | |||||||||||||||||||
PLN | 469,324 | USD | 120,000 | SCB | 01/21/20 | 3,711 | — | |||||||||||||||||||
PLN | 6,943,786 | USD | 1,793,831 | SCB | 01/21/20 | 36,510 | — | |||||||||||||||||||
PLN | 340,778 | USD | 90,000 | SCB | 02/21/20 | — | 165 | |||||||||||||||||||
PLN | 770,718 | USD | 199,208 | SCB | 02/21/20 | 3,966 | — | |||||||||||||||||||
RON | 859,971 | USD | 198,125 | BRC | 01/10/20 | 3,316 | — | |||||||||||||||||||
RUB | 12,100,644 | USD | 187,863 | BOA | 01/15/20 | 6,959 | — |
The accompanying notes are an integral part of these financial statements.
38 Annual Report
Lazard Emerging Markets Debt Portfolio (continued)
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||
RUB | 3,738,600 | USD | 60,000 | BRC | 02/21/20 | $ | — | $ | 76 | |||||||||||||||||
RUB | 12,981,160 | USD | 200,000 | BRC | 02/21/20 | 8,069 | — | |||||||||||||||||||
RUB | 26,064,095 | USD | 402,265 | BRC | 02/21/20 | 15,505 | — | |||||||||||||||||||
RUB | 12,100,644 | USD | 187,889 | HSB | 01/15/20 | 6,933 | — | |||||||||||||||||||
RUB | 7,260,387 | USD | 112,716 | UBS | 01/15/20 | 4,177 | — | |||||||||||||||||||
RUB | 16,744,000 | USD | 260,000 | UBS | 01/15/20 | 9,581 | — | |||||||||||||||||||
THB | 3,766,125 | USD | 125,000 | BRC | 01/17/20 | 775 | — | |||||||||||||||||||
THB | 7,497,375 | USD | 247,995 | BRC | 01/17/20 | 2,391 | — | |||||||||||||||||||
THB | 864,138 | USD | 28,620 | BRC | 03/17/20 | 279 | — | |||||||||||||||||||
THB | 1,906,431 | USD | 63,150 | BRC | 03/17/20 | 608 | — | |||||||||||||||||||
THB | 38,199,867 | USD | 1,257,692 | HSB | 01/17/20 | 18,049 | — | |||||||||||||||||||
THB | 863,973 | USD | 28,613 | HSB | 03/17/20 | 281 | — | |||||||||||||||||||
THB | 1,486,500 | USD | 50,000 | SCB | 01/17/20 | — | 356 | |||||||||||||||||||
THB | 3,324,915 | USD | 110,000 | SCB | 01/17/20 | 1,040 | — | |||||||||||||||||||
USD | 30,151 | BRL | 121,449 | BOA | 02/04/20 | — | 12 | |||||||||||||||||||
USD | 181,778 | BRL | 741,889 | BOA | 02/04/20 | — | 2,479 | |||||||||||||||||||
USD | 29,849 | BRL | 120,231 | BRC | 02/04/20 | — | 12 | |||||||||||||||||||
USD | 60,000 | BRL | 253,920 | BRC | 02/04/20 | — | 3,064 | |||||||||||||||||||
USD | 190,000 | BRL | 807,310 | BRC | 02/04/20 | — | 10,505 | |||||||||||||||||||
USD | 220,000 | BRL | 937,486 | BRC | 02/04/20 | — | 12,835 | |||||||||||||||||||
USD | 20,000 | CLP | 15,018,000 | BOA | 01/21/20 | 23 | — | |||||||||||||||||||
USD | 48,000 | CLP | 36,926,400 | BOA | 01/21/20 | — | 1,120 | |||||||||||||||||||
USD | 50,000 | CLP | 38,387,500 | BOA | 01/21/20 | — | 1,064 | |||||||||||||||||||
USD | 33,820 | CLP | 27,238,700 | BRC | 01/21/20 | — | 2,413 | |||||||||||||||||||
USD | 48,000 | CLP | 36,988,800 | BRC | 01/21/20 | — | 1,203 | |||||||||||||||||||
USD | 48,000 | CLP | 36,979,200 | BRC | 01/21/20 | — | 1,191 | |||||||||||||||||||
USD | 48,000 | CLP | 37,356,000 | BRC | 01/21/20 | — | 1,692 | |||||||||||||||||||
USD | 48,000 | CLP | 37,344,000 | BRC | 01/21/20 | — | 1,676 | |||||||||||||||||||
USD | 48,000 | CLP | 37,128,000 | BRC | 01/21/20 | — | 1,389 | |||||||||||||||||||
USD | 48,000 | CLP | 36,811,200 | BRC | 01/21/20 | — | 967 | |||||||||||||||||||
USD | 48,000 | CLP | 36,912,000 | BRC | 01/21/20 | — | 1,101 | |||||||||||||||||||
USD | 50,000 | CLP | 38,270,000 | BRC | 01/21/20 | — | 908 | |||||||||||||||||||
USD | 136,415 | COP | 471,858,821 | UBS | 01/21/20 | — | 7,030 | |||||||||||||||||||
USD | 79,287 | CZK | 1,836,675 | BRC | 01/21/20 | — | 1,732 | |||||||||||||||||||
USD | 40,000 | CZK | 925,596 | SCB | 01/21/20 | — | 829 | |||||||||||||||||||
USD | 159,084 | HUF | 48,204,850 | BRC | 01/21/20 | — | 4,434 | |||||||||||||||||||
USD | 212,973 | HUF | 64,251,885 | BRC | 01/21/20 | — | 4,979 |
The accompanying notes are an integral part of these financial statements.
Annual Report 39
Lazard Emerging Markets Debt Portfolio (continued)
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||
USD | 80,000 | HUF | 24,197,064 | SCB | 01/21/20 | $ | — | $ | 2,080 | |||||||||||||||||
USD | 90,000 | HUF | 26,495,924 | SCB | 01/21/20 | 122 | — | |||||||||||||||||||
USD | 433,131 | IDR | 6,134,860,660 | BOA | 02/04/20 | — | 7,502 | |||||||||||||||||||
USD | 455,684 | IDR | 6,442,007,530 | BOA | 02/04/20 | — | 7,009 | |||||||||||||||||||
USD | 182,404 | IDR | 2,579,192,721 | BRC | 02/04/20 | — | 2,845 | |||||||||||||||||||
USD | 433,069 | IDR | 6,134,860,660 | BRC | 02/04/20 | — | 7,563 | |||||||||||||||||||
USD | 148,250 | IDR | 2,132,276,440 | JPM | 08/26/20 | — | 2,183 | |||||||||||||||||||
USD | 152,772 | IDR | 2,197,777,711 | JPM | 08/26/20 | — | 2,282 | |||||||||||||||||||
USD | 90,000 | IDR | 1,272,420,000 | SCB | 02/04/20 | — | 1,391 | |||||||||||||||||||
USD | 372,308 | IDR | 5,275,980,168 | SCB | 02/04/20 | — | 6,635 | |||||||||||||||||||
USD | 225,568 | INR | 16,028,850 | CIT | 01/06/20 | 1,066 | — | |||||||||||||||||||
USD | 60,000 | INR | 4,259,400 | SCB | 01/06/20 | 342 | — | |||||||||||||||||||
USD | 225,521 | INR | 16,028,850 | UBS | 01/06/20 | 1,019 | — | |||||||||||||||||||
USD | 130,000 | MXN | 2,461,654 | SCB | 01/21/20 | 145 | — | |||||||||||||||||||
USD | 138,250 | MXN | 2,684,461 | UBS | 01/21/20 | — | 3,358 | |||||||||||||||||||
USD | 17,809 | MYR | 74,060 | SCB | 01/29/20 | — | 281 | |||||||||||||||||||
USD | 100,000 | PEN | 332,200 | BOA | 02/24/20 | — | 92 | |||||||||||||||||||
USD | 677,404 | PEN | 2,301,549 | BRC | 02/24/20 | — | 16,050 | |||||||||||||||||||
USD | 470,478 | PEN | 1,599,437 | CIT | 02/24/20 | — | 11,431 | |||||||||||||||||||
USD | 395,882 | PEN | 1,345,168 | UBS | 02/24/20 | — | 9,416 | |||||||||||||||||||
USD | 40,000 | PHP | 2,035,000 | BRC | 01/21/20 | — | 162 | |||||||||||||||||||
USD | 138,642 | RON | 603,883 | BRC | 01/10/20 | — | 2,812 | |||||||||||||||||||
USD | 50,000 | RON | 213,230 | SCB | 01/10/20 | 53 | — | |||||||||||||||||||
USD | 157,241 | TRY | 919,201 | BRC | 01/21/20 | 3,473 | — | |||||||||||||||||||
USD | 786,390 | TRY | 4,596,004 | CIT | 01/21/20 | 17,548 | — | |||||||||||||||||||
USD | 70,000 | TRY | 418,600 | SCB | 01/21/20 | — | 25 | |||||||||||||||||||
USD | 130,000 | UAH | 3,139,500 | CIT | 03/27/20 | 856 | — | |||||||||||||||||||
USD | 329,088 | ZAR | 4,912,780 | BRC | 01/21/20 | — | 20,845 | |||||||||||||||||||
USD | 72,140 | ZAR | 1,030,571 | SCB | 01/21/20 | — | 1,266 | |||||||||||||||||||
UYU | 4,330,130 | USD | 112,556 | CIT | 03/13/20 | 2,381 | — | |||||||||||||||||||
ZAR | 396,900 | USD | 27,981 | BRC | 01/21/20 | 289 | — | |||||||||||||||||||
ZAR | 700,695 | USD | 50,000 | SCB | 01/21/20 | — | 90 | |||||||||||||||||||
ZAR | 885,138 | USD | 60,000 | SCB | 01/21/20 | 3,048 | — | |||||||||||||||||||
Total gross unrealized appreciation/depreciation on Forward Currency Contracts | $ | 475,284 | $ | 172,018 |
The accompanying notes are an integral part of these financial statements.
40 Annual Report
Lazard Emerging Markets Debt Portfolio (concluded)
Interest Rate Swap Agreements open at December 31, 2019:
Currency | Counterparty | Notional Amount | Expiration Date | Receive/ (Pay) Rate | Payment Frequency Paid/Received | Variable Rate | Unrealized Appreciation | ||||||||||||
BRL | BRC | $ | 1,617,661 | 01/02/23 | 6.58% | Maturity | 1 month Brazilian Interbank Deposit Average | $ | 4,527 |
Centrally Cleared Interest Rate Swap Agreements open at December 31, 2019:
Currency | Notional Amount | Expiration Date | Receive/ (Pay) Rate | Payment Frequency Paid/Received | Variable Rate | Unrealized Appreciation | |||||||||||
BRL | $ | 6,581,595 | 01/02/23 | 6.14% | Maturity | 1 month Brazilian Interbank Deposit Average | $ | 24,195 |
The accompanying notes are an integral part of these financial statements.
Annual Report 41
The accompanying notes are an integral part of these financial statements.
42 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Fixed Income Portfolio (continued) | ||||||||||
United States | 18.2% | ||||||||||
American Express Co., 3.000%, 10/30/24 | USD | 60 | $ | 61,978 | ||||||
Apple, Inc., 3.850%, 05/04/43 | USD | 90 | 100,743 | |||||||
Bank of America Corp., 3.499% (USD LIBOR 3 Month + 0.630%), 05/17/22 (§) | USD | 60 | 61,192 | |||||||
Citigroup, Inc., 2.477% (BBSW 3 Month + 1.550%), 05/04/21 (§) | AUD | 110 | 78,033 | |||||||
Constellation Brands, Inc., 4.250%, 05/01/23 | USD | 65 | 69,048 | |||||||
DaVita, Inc., 5.125%, 07/15/24 | USD | 30 | 30,750 | |||||||
HCA, Inc., 5.000%, 03/15/24 | USD | 45 | 49,154 | |||||||
John Deere Canada Funding, Inc., 2.050%, 09/17/20 | CAD | 85 | 65,478 | |||||||
Johnson & Johnson, 3.625%, 03/03/37 | USD | 30 | 33,055 | |||||||
JPMorgan Chase & Co., 4.500%, 01/24/22 | USD | 45 | 47,235 | |||||||
McDonald’s Corp., 3.125%, 03/04/25 | CAD | 80 | 63,170 | |||||||
Microsoft Corp., 4.450%, 11/03/45 | USD | 75 | 93,627 | |||||||
Morgan Stanley, 3.625%, 01/20/27 | USD | 60 | 63,818 | |||||||
PepsiCo, Inc., 2.875%, 10/15/49 | USD | 65 | 62,637 | |||||||
Sealed Air Corp., 4.875%, 12/01/22 | USD | 30 | 31,763 | |||||||
Service Corp. International, 4.625%, 12/15/27 | USD | 30 | 31,275 | |||||||
Starbucks Corp., 4.450%, 08/15/49 | USD | 60 | 69,374 |
The accompanying notes are an integral part of these financial statements.
Annual Report 43
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Fixed Income Portfolio (continued) | ||||||||||
The Goldman Sachs Group, Inc., 3.625%, 01/22/23 | USD | 60 | $ | 62,461 | ||||||
United Rentals North America, Inc., 4.875%, 01/15/28 | USD | 30 | 31,237 | |||||||
Verizon Communications, Inc., 3.875%, 02/08/29 | USD | 75 | 82,706 | |||||||
1,188,734 | ||||||||||
Total Corporate Bonds (Cost $1,840,733) | 1,905,474 | |||||||||
Foreign Government Obligations | 43.3% | ||||||||||
Australia | 0.5% | ||||||||||
Queensland Treasury Corp., 3.000%, 03/22/24 | AUD | 44 | 33,060 | |||||||
Bahamas | 2.1% | ||||||||||
Commonwealth of Bahamas, 6.950%, 11/20/29 | USD | 118 | 135,700 | |||||||
Bermuda | 3.2% | ||||||||||
Government of Bermuda, 3.717%, 01/25/27 | USD | 200 | 210,625 | |||||||
Canada | 3.2% | ||||||||||
City of Vancouver, 2.900%, 11/20/25 | CAD | 60 | 47,924 | |||||||
Province of Quebec: | ||||||||||
1.650%, 03/03/22 | CAD | 130 | 99,733 | |||||||
2.500%, 04/20/26 | USD | 60 | 61,531 | |||||||
209,188 | ||||||||||
Chile | 2.0% | ||||||||||
Bonos de la Tesoreria de la Republica en pesos, 4.500%, 03/01/26 | CLP | 90,000 | 131,891 |
The accompanying notes are an integral part of these financial statements.
44 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Fixed Income Portfolio (continued) | ||||||||||
Colombia | 0.9% | ||||||||||
Republic of Colombia, 9.850%, 06/28/27 | COP | 148,000 | $ | 56,152 | ||||||
Croatia | 1.6% | ||||||||||
Croatia Government International Bonds, 6.625%, 07/14/20 | USD | 100 | 102,300 | |||||||
Czech Republic | 3.1% | ||||||||||
Czech Republic, 2.130% (PRIBOR 6 Month - 0.100%), 11/19/27 (§) | CZK | 4,430 | 199,294 | |||||||
France | 1.9% | ||||||||||
Government of France, 1.750%, 06/25/39 | EUR | 94 | 127,591 | |||||||
Hungary | 4.0% | ||||||||||
Hungary, 6.375%, 03/29/21 | USD | 60 | 63,300 | |||||||
Hungary Government Bonds: | ||||||||||
2.500%, 10/24/24 | HUF | 17,870 | 64,983 | |||||||
2.750%, 12/22/26 | HUF | 16,530 | 60,971 | |||||||
3.000%, 10/27/27 | HUF | 19,650 | 73,239 | |||||||
262,493 | ||||||||||
Ireland | 1.0% | ||||||||||
Ireland Government Bonds, 1.350%, 03/18/31 | EUR | 50 | 62,817 | |||||||
Italy | 1.0% | ||||||||||
Italy Government International Bonds, 6.875%, 09/27/23 | USD | 60 | 68,786 | |||||||
Mexico | 3.0% | ||||||||||
Mexico Cetes, 0.000%, 04/23/20 | MXN | 26,716 | 137,095 |
The accompanying notes are an integral part of these financial statements.
Annual Report 45
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Fixed Income Portfolio (continued) | ||||||||||
United Mexican States, 6.750%, 02/06/24 | GBP | 35 | $ | 55,714 | ||||||
192,809 | ||||||||||
New Zealand | 1.0% | ||||||||||
New Zealand Government Bonds, 6.000%, 05/15/21 | NZD | 90 | 64,288 | |||||||
Norway | 3.5% | ||||||||||
Oslo Kommune: | ||||||||||
2.300%, 03/14/24 | NOK | 1,000 | 114,585 | |||||||
2.350%, 09/04/24 | NOK | 1,000 | 114,684 | |||||||
229,269 | ||||||||||
Peru | 1.0% | ||||||||||
Peru Government Bonds, 6.150%, 08/12/32 (#) | PEN | 190 | 64,755 | |||||||
Philippines | 1.6% | ||||||||||
Philippine Government Bonds, 4.250%, 04/11/20 | PHP | 5,460 | 107,942 | |||||||
Poland | 2.9% | ||||||||||
Poland Government Bonds, 1.790%, 05/25/28 (§) | PLN | 740 | 189,989 | |||||||
Romania | 3.8% | ||||||||||
Romanian Government Bonds: | ||||||||||
4.000%, 10/27/21 | RON | 255 | 60,116 | |||||||
4.750%, 02/24/25 | RON | 505 | 121,982 | |||||||
2.375%, 04/19/27 | EUR | 52 | 63,815 | |||||||
245,913 | ||||||||||
United Kingdom | 2.0% | ||||||||||
United Kingdom Gilt: | ||||||||||
1.750%, 09/07/37 | GBP | 47 | 67,249 | |||||||
1.500%, 07/22/47 | GBP | 45 | 61,755 | |||||||
129,004 | ||||||||||
Total Foreign Government Obligations (Cost $2,790,945) | 2,823,866 |
The accompanying notes are an integral part of these financial statements.
46 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Fixed Income Portfolio (continued) | ||||||||||
Quasi Government Bonds | 4.6% | ||||||||||
Canada | 1.5% | ||||||||||
Export Development Canada, 1.800%, 09/01/22 | CAD | 125 | $ | 96,165 | ||||||
Germany | 3.1% | ||||||||||
KFW, 2.750%, 04/16/20 | AUD | 285 | 200,939 | |||||||
Total Quasi Government Bonds (Cost $292,458) | 297,104 | |||||||||
Supranational Bonds | 10.3% | ||||||||||
Asian Development Bank: | ||||||||||
1.000%, 12/15/22 | GBP | 55 | 73,146 | |||||||
2.125%, 03/19/25 | USD | 77 | 78,285 | |||||||
European Bank for Reconstruction & Development, 1.625%, 09/27/24 | USD | 35 | 34,725 | |||||||
European Investment Bank, 1.125%, 09/16/21 (#) | CAD | 90 | 68,478 | |||||||
International Bank for Reconstruction & Development: | ||||||||||
3.500%, 01/22/21 | NZD | 50 | 34,378 | |||||||
2.500%, 08/03/23 | CAD | 135 | 105,991 | |||||||
2.900%, 11/26/25 | AUD | 40 | 30,193 | |||||||
International Finance Corp.: | ||||||||||
3.625%, 05/20/20 | NZD | 85 | 57,690 | |||||||
2.700%, 03/15/23 | AUD | 85 | 62,195 | |||||||
2.125%, 04/07/26 | USD | 125 | 126,421 | |||||||
Total Supranational Bonds (Cost $663,548) | 671,502 |
The accompanying notes are an integral part of these financial statements.
Annual Report 47
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Fixed Income Portfolio (continued) | ||||||||||
US Municipal Bonds | 1.9% | ||||||||||
California | 1.9% | ||||||||||
State of California, 4.500%, 04/01/33 | USD | 45 | $ | 50,618 | ||||||
California State Build America Bonds, 7.500%, 04/01/34 | USD | 50 | 75,292 | |||||||
Total US Municipal Bonds (Cost $119,933) | 125,910 | |||||||||
US Treasury Securities | 9.4% | ||||||||||
Treasury Inflation Protected Security, 0.125%, 04/15/20 (††) | USD | 66 | 65,851 | |||||||
US Treasury Bonds, 2.250%, 08/15/49 | USD | 125 | 121,113 | |||||||
US Treasury Notes: | ||||||||||
2.125%, 05/15/25 | USD | 180 | 183,525 | |||||||
2.875%, 08/15/28 | USD | 106 | 114,168 | |||||||
3.125%, 11/15/41 | USD | 113 | 128,019 | |||||||
Total US Treasury Securities (Cost $604,055) | 612,676 | |||||||||
Description | Shares | Fair Value | ||||||||
Short-Term Investments | 0.5% | ||||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $35,730) | 35,730 | $ | 35,730 | |||||||
Total Investments | 99.3% (Cost $6,347,402) (») | $ | 6,472,262 | ||||||||
Cash and Other Assets in Excess of Liabilities | 0.7% | 42,498 | |||||||||
Net Assets | 100.0% | $ | 6,514,760 |
The accompanying notes are an integral part of these financial statements.
48 Annual Report
Lazard Global Fixed Income Portfolio (continued)
Forward Currency Contracts open at December 31, 2019:
Currency | Currency | Settlement | Unrealized | Unrealized | ||||||||||||||||||
Purchased | Quantity | Sold | Quantity | Counterparty | Date | Appreciation | Depreciation | |||||||||||||||
CHF | 33,880 | USD | 34,381 | HSB | 02/12/20 | $ | 718 | $ | — | |||||||||||||
CLP | 55,255,519 | USD | 75,014 | CIT | 01/16/20 | — | 1,516 | |||||||||||||||
CZK | 291,279 | USD | 12,692 | JPM | 01/24/20 | 156 | — | |||||||||||||||
EUR | 32,787 | USD | 36,146 | CIT | 01/15/20 | 658 | — | |||||||||||||||
EUR | 38,487 | USD | 43,000 | CIT | 01/15/20 | 204 | — | |||||||||||||||
EUR | 6,366 | USD | 7,065 | HSB | 01/15/20 | 81 | — | |||||||||||||||
EUR | 13,169 | USD | 14,640 | HSB | 01/15/20 | 143 | — | |||||||||||||||
EUR | 60,687 | USD | 67,182 | HSB | 01/15/20 | 942 | — | |||||||||||||||
EUR | 723,004 | USD | 797,156 | HSB | 01/15/20 | 14,444 | — | |||||||||||||||
EUR | 2,671 | USD | 2,988 | JPM | 01/15/20 | 9 | — | |||||||||||||||
EUR | 37,666 | USD | 42,000 | JPM | 01/15/20 | 281 | — | |||||||||||||||
EUR | 44,395 | USD | 49,800 | JPM | 01/15/20 | 36 | — | |||||||||||||||
EUR | 55,144 | USD | 60,791 | JPM | 01/15/20 | 1,110 | — | |||||||||||||||
GBP | 42,019 | USD | 54,026 | JPM | 02/12/20 | 1,696 | — | |||||||||||||||
IDR | 257,849,500 | USD | 17,850 | HSB | 02/12/20 | 655 | — | |||||||||||||||
JPY | 47,178,416 | USD | 434,874 | CIT | 02/12/20 | 186 | — | |||||||||||||||
JPY | 48,061,637 | USD | 443,017 | HSB | 02/12/20 | 187 | — | |||||||||||||||
JPY | 15,457,285 | USD | 142,475 | JPM | 02/12/20 | 65 | — | |||||||||||||||
KRW | 87,059,800 | USD | 73,000 | HSB | 02/10/20 | 2,347 | — | |||||||||||||||
MXN | 595,725 | USD | 31,000 | HSB | 02/12/20 | 321 | — | |||||||||||||||
NOK | 183,166 | USD | 20,108 | JPM | 02/12/20 | 759 | — | |||||||||||||||
SEK | 250,376 | USD | 26,158 | JPM | 02/12/20 | 625 | — | |||||||||||||||
SGD | 74,618 | USD | 54,979 | JPM | 02/12/20 | 519 | — | |||||||||||||||
USD | 132,928 | AUD | 192,839 | CIT | 02/12/20 | — | 2,533 | |||||||||||||||
USD | 34,530 | AUD | 50,103 | HSB | 02/12/20 | — | 665 | |||||||||||||||
USD | 158,164 | AUD | 229,460 | JPM | 02/12/20 | — | 3,020 | |||||||||||||||
USD | 81,606 | CAD | 107,484 | CIT | 02/12/20 | — | 1,181 | |||||||||||||||
USD | 272,317 | CAD | 358,644 | HSB | 02/12/20 | — | 3,921 | |||||||||||||||
USD | 105,602 | CAD | 139,106 | JPM | 02/12/20 | — | 1,541 | |||||||||||||||
USD | 13,229 | CAD | 17,422 | MSC | 02/12/20 | — | 190 | |||||||||||||||
USD | 208,960 | CLP | 149,578,041 | CIT | 01/16/20 | 9,999 | — | |||||||||||||||
USD | 56,590 | COP | 194,179,641 | CIT | 02/06/20 | — | 2,408 | |||||||||||||||
USD | 12,058 | CZK | 277,383 | JPM | 01/24/20 | — | 178 | |||||||||||||||
USD | 66,293 | EUR | 59,632 | HSB | 01/15/20 | — | 646 | |||||||||||||||
USD | 60,932 | EUR | 54,400 | JPM | 01/15/20 | — | 134 |
The accompanying notes are an integral part of these financial statements.
Annual Report 49
Lazard Global Fixed Income Portfolio (concluded)
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||
USD | 32,572 | GBP | 25,333 | JPM | 02/12/20 | $ | — | $ | 1,022 | |||||||||||||
USD | 36,000 | GBP | 27,287 | JPM | 02/12/20 | — | 186 | |||||||||||||||
USD | 7,297 | HUF | 2,146,576 | JPM | 01/24/20 | 14 | — | |||||||||||||||
USD | 188,475 | HUF | 55,391,352 | JPM | 01/24/20 | 552 | — | |||||||||||||||
USD | 55,463 | MXN | 1,077,675 | HSB | 02/12/20 | — | 1,196 | |||||||||||||||
USD | 25,420 | MXN | 494,031 | JPM | 02/12/20 | — | 554 | |||||||||||||||
USD | 108,180 | NOK | 985,417 | JPM | 02/12/20 | — | 4,081 | |||||||||||||||
USD | 48,242 | NZD | 75,646 | CIT | 02/12/20 | — | 2,710 | |||||||||||||||
USD | 69,657 | NZD | 109,222 | HSB | 02/12/20 | — | 3,911 | |||||||||||||||
USD | 14,856 | NZD | 23,294 | JPM | 02/12/20 | — | 834 | |||||||||||||||
USD | 48,239 | PEN | 165,000 | JPM | 02/19/20 | — | 1,485 | |||||||||||||||
USD | 105,507 | PHP | 5,468,451 | HSB | 01/16/20 | — | 2,435 | |||||||||||||||
USD | 171,129 | PLN | 658,530 | HSB | 02/12/20 | — | 2,468 | |||||||||||||||
USD | 116,295 | RON | 502,272 | HSB | 02/12/20 | — | 1,179 | |||||||||||||||
USD | 41,931 | SGD | 56,910 | JPM | 02/12/20 | — | 396 | |||||||||||||||
Total gross unrealized appreciation/depreciation on Forward Currency Contracts | $ | 36,707 | $ | 40,390 |
The accompanying notes are an integral part of these financial statements.
50 Annual Report
The accompanying notes are an integral part of these financial statements.
Annual Report 51
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
Mosaic Global Holdings, Inc., 7.300%, 01/15/28 | $ | 775 | $ | 945,131 | ||||
NOVA Chemicals Corp., 5.250%, 08/01/23 (#) | 1,550 | 1,583,000 | ||||||
Valvoline, Inc., 4.375%, 08/15/25 | 1,500 | 1,547,820 | ||||||
WR Grace & Co-Conn, 5.125%, 10/01/21 (#) | 1,700 | 1,771,706 | ||||||
7,622,820 | ||||||||
Commercial Services & Supplies | 3.8% | ||||||||
ACCO Brands Corp., 5.250%, 12/15/24 (#) | 1,800 | 1,874,250 | ||||||
Aramark Services, Inc., 5.000%, 04/01/25 (#) | 2,000 | 2,085,000 | ||||||
Ashtead Capital, Inc., 4.375%, 08/15/27 (#) | 1,900 | 1,968,875 | ||||||
Clean Harbors, Inc., 4.875%, 07/15/27 (#) | 1,600 | 1,684,000 | ||||||
KAR Auction Services, Inc., 5.125%, 06/01/25 (#) | 1,800 | 1,872,000 | ||||||
The ADT Security Corp.: | ||||||||
6.250%, 10/15/21 | 1,400 | 1,477,000 | ||||||
4.125%, 06/15/23 | 500 | 515,625 | ||||||
11,476,750 | ||||||||
Communications Equipment | 0.7% | ||||||||
CommScope, Inc., 5.000%, 06/15/21 (#) | 346 | 346,173 | ||||||
Plantronics, Inc., 5.500%, 05/31/23 (#) | 1,750 | 1,710,625 | ||||||
2,056,798 | ||||||||
Construction Materials | 1.2% | ||||||||
James Hardie International Finance DAC, 5.000%, 01/15/28 (#) | 1,760 | 1,848,000 | ||||||
Standard Industries, Inc., 5.375%, 11/15/24 (#) | 1,750 | 1,798,125 | ||||||
3,646,125 |
The accompanying notes are an integral part of these financial statements.
52 Annual Report
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
Containers & Packaging | 4.0% | ||||||||
Ardagh Packaging Finance PLC, 4.125%, 08/15/26 (#) | $ | 1,200 | $ | 1,230,000 | ||||
Ball Corp., 4.000%, 11/15/23 | 2,100 | 2,205,000 | ||||||
Crown Americas LLC: | ||||||||
4.500%, 01/15/23 | 1,550 | 1,629,437 | ||||||
4.250%, 09/30/26 | 500 | 524,375 | ||||||
Owens-Brockway Glass Container, Inc., 5.000%, 01/15/22 (#) | 2,092 | 2,171,475 | ||||||
Reynolds Group Issuer, Inc., 5.750%, 10/15/20 | 1,454 | 1,455,479 | ||||||
Sealed Air Corp., 4.875%, 12/01/22 (#) | 1,700 | 1,799,875 | ||||||
Smurfit Kappa Treasury Funding DAC, 7.500%, 11/20/25 | 750 | 921,563 | ||||||
11,937,204 | ||||||||
Diversified Consumer Services | 1.2% | ||||||||
Service Corp. International, 4.625%, 12/15/27 | 1,750 | 1,824,375 | ||||||
The ServiceMaster Co. LLC, 5.125%, 11/15/24 (#) | 1,800 | 1,867,500 | ||||||
3,691,875 | ||||||||
Diversified Financial Services | 1.1% | ||||||||
INEOS Group Holdings SA, 5.625%, 08/01/24 (#) | 1,700 | 1,740,375 | ||||||
Level 3 Financing, Inc., 5.125%, 05/01/23 | 1,550 | 1,559,688 | ||||||
3,300,063 | ||||||||
Diversified Telecommunication Services | 2.8% | ||||||||
CenturyLink, Inc., 5.625%, 04/01/20 | 1,550 | 1,559,688 | ||||||
Connect Finco Sarl, 6.750%, 10/01/26 (#) | 500 | 532,500 | ||||||
Hughes Satellite Systems Corp., 5.250%, 08/01/26 | 2,091 | 2,294,872 |
The accompanying notes are an integral part of these financial statements.
Annual Report 53
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
SBA Communications Corp., 4.875%, 09/01/24 | $ | 2,000 | $ | 2,075,000 | ||||
Zayo Group LLC, 5.750%, 01/15/27 (#) | 1,950 | 1,981,687 | ||||||
8,443,747 | ||||||||
Electrical Equipment | 0.4% | ||||||||
Sensata Tech, Inc., 4.375%, 02/15/30 | 1,100 | 1,121,362 | ||||||
Energy Equipment & Services | 0.8% | ||||||||
Precision Drilling Corp., 5.250%, 11/15/24 | 1,000 | 917,500 | ||||||
Transocean, Inc., 9.000%, 07/15/23 (#) | 1,500 | 1,584,375 | ||||||
2,501,875 | ||||||||
Entertainment | 1.2% | ||||||||
Live Nation Entertainment, Inc., 4.875%, 11/01/24 (#) | 1,550 | 1,604,250 | ||||||
Netflix, Inc.: | ||||||||
5.375%, 02/01/21 | 1,550 | 1,598,438 | ||||||
4.375%, 11/15/26 | 500 | 512,500 | ||||||
3,715,188 | ||||||||
Equity Real Estate Investment Trusts (REITs) | 4.3% | ||||||||
Equinix, Inc., 5.375%, 05/15/27 | 2,200 | 2,389,266 | ||||||
ESH Hospitality, Inc., 5.250%, 05/01/25 (#) | 2,000 | 2,067,500 | ||||||
Iron Mountain, Inc.: | ||||||||
6.000%, 08/15/23 | 1,450 | 1,480,812 | ||||||
4.875%, 09/15/29 (#) | 500 | 507,900 | ||||||
MGM Growth Properties Operating Partnership LP, 4.500%, 09/01/26 | 1,800 | 1,894,500 | ||||||
RHP Hotel Properties LP, 5.000%, 04/15/23 | 1,525 | 1,555,500 | ||||||
Uniti Group LP, 6.000%, 04/15/23 (#) | 1,700 | 1,632,000 |
The accompanying notes are an integral part of these financial statements.
54 Annual Report
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
VICI Properties LP, 4.250%, 12/01/26 (#) | $ | 1,500 | $ | 1,545,000 | ||||
13,072,478 | ||||||||
Food & Staples Retailing | 1.6% | ||||||||
Albertsons Cos. LLC, 6.625%, 06/15/24 | 1,750 | 1,831,655 | ||||||
Ingles Markets, Inc., 5.750%, 06/15/23 | 1,168 | 1,189,900 | ||||||
Performance Food Group, Inc., 5.500%, 06/01/24 (#) | 1,805 | 1,850,125 | ||||||
4,871,680 | ||||||||
Food Products | 2.3% | ||||||||
B&G Foods, Inc., 5.250%, 04/01/25 | 1,500 | 1,542,495 | ||||||
Lamb Weston Holdings, Inc., 4.625%, 11/01/24 (#) | 2,000 | 2,122,500 | ||||||
Post Holdings, Inc., 5.000%, 08/15/26 (#) | 1,800 | 1,901,250 | ||||||
TreeHouse Foods, Inc., 4.875%, 03/15/22 | 1,500 | 1,505,625 | ||||||
7,071,870 | ||||||||
Gas Utilities | 1.2% | ||||||||
AmeriGas Partners LP, 5.625%, 05/20/24 | 1,550 | 1,674,000 | ||||||
Suburban Propane Partners LP, 5.500%, 06/01/24 | 1,800 | 1,849,500 | ||||||
3,523,500 | ||||||||
Health Care Equipment & Supplies | 1.3% | ||||||||
Hill-Rom Holdings, Inc., 4.375%, 09/15/27 (#) | 1,800 | 1,851,750 | ||||||
Hologic, Inc., 4.625%, 02/01/28 (#) | 2,000 | 2,120,000 | ||||||
3,971,750 |
The accompanying notes are an integral part of these financial statements.
Annual Report 55
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
Health Care Providers & Services | 3.1% | ||||||||
Centene Corp.: | ||||||||
6.125%, 02/15/24 | $ | 1,500 | $ | 1,556,250 | ||||
4.750%, 01/15/25 | 500 | 519,365 | ||||||
DaVita, Inc., 5.125%, 07/15/24 | 2,000 | 2,050,000 | ||||||
Encompass Health Corp., 5.125%, 03/15/23 | 1,551 | 1,578,142 | ||||||
Molina Healthcare, Inc., 5.375%, 11/15/22 | 1,700 | 1,807,066 | ||||||
Tenet Healthcare Corp.: | ||||||||
4.625%, 07/15/24 | 750 | 767,813 | ||||||
4.875%, 01/01/26 (#) | 1,000 | 1,047,400 | ||||||
9,326,036 | ||||||||
Hotels, Restaurants & Leisure | 8.8% | ||||||||
1011778 BC ULC, 3.875%, 01/15/28 (#) | 1,000 | 1,002,500 | ||||||
Boyd Gaming Corp.: | ||||||||
6.375%, 04/01/26 | 750 | 806,953 | ||||||
4.750%, 12/01/27 (#) | 100 | 103,875 | ||||||
Brinker International, Inc., 5.000%, 10/01/24 (#) | 2,000 | 2,115,000 | ||||||
Cedar Fair LP, 5.375%, 04/15/27 | 1,550 | 1,667,924 | ||||||
Cinemark USA, Inc., 4.875%, 06/01/23 | 1,550 | 1,575,188 | ||||||
Diamond Resorts International, Inc., 7.750%, 09/01/23 (#) | 1,500 | 1,542,840 | ||||||
GLP Capital LP, 4.875%, 11/01/20 | 1,500 | 1,522,560 | ||||||
Golden Nugget, Inc., 6.750%, 10/15/24 (#) | 1,622 | 1,678,770 | ||||||
Hilton Worldwide Finance LLC, 4.625%, 04/01/25 | 2,015 | 2,070,412 | ||||||
International Game Technology PLC, 6.250%, 02/15/22 (#) | 1,450 | 1,529,750 |
The accompanying notes are an integral part of these financial statements.
56 Annual Report
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
KFC Holding Co., 5.250%, 06/01/26 (#) | $ | 2,400 | $ | 2,532,000 | ||||
MGM Resorts International, 4.625%, 09/01/26 | 800 | 848,000 | ||||||
Scientific Games International, Inc., 5.000%, 10/15/25 (#) | 1,750 | 1,833,125 | ||||||
Six Flags Entertainment Corp., 4.875%, 07/31/24 (#) | 1,850 | 1,917,063 | ||||||
Station Casinos LLC, 5.000%, 10/01/25 (#) | 1,700 | 1,729,750 | ||||||
Wynn Las Vegas LLC, 5.500%, 03/01/25 (#) | 2,000 | 2,142,500 | ||||||
26,618,210 | ||||||||
Household Durables | 0.6% | ||||||||
Tempur Sealy International, Inc., 5.625%, 10/15/23 | 1,750 | 1,800,313 | ||||||
Household Products | 1.2% | ||||||||
Energizer Holdings, Inc., 5.500%, 06/15/25 (#) | 1,750 | 1,815,625 | ||||||
Spectrum Brands, Inc., 5.750%, 07/15/25 | 1,800 | 1,878,786 | ||||||
3,694,411 | ||||||||
Independent Power & Renewable Electricity Producers | 1.7% | ||||||||
AES Corp., 5.125%, 09/01/27 | 1,700 | 1,814,750 | ||||||
Calpine Corp., 4.500%, 02/15/28 (#) | 1,500 | 1,513,305 | ||||||
NextEra Energy Operating Partners LP, 4.500%, 09/15/27 (#) | 1,750 | 1,824,375 | ||||||
5,152,430 | ||||||||
Interactive Media & Services | 0.4% | ||||||||
Twitter, Inc., 3.875%, 12/15/27 (#) | 1,250 | 1,249,350 |
The accompanying notes are an integral part of these financial statements.
Annual Report 57
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
IT Services | 0.5% | ||||||||
VeriSign, Inc., 4.625%, 05/01/23 | $ | 1,550 | $ | 1,574,800 | ||||
Machinery | 3.6% | ||||||||
Allison Transmission, Inc., 4.750%, 10/01/27 (#) | 1,795 | 1,862,312 | ||||||
Amsted Industries, Inc.: | ||||||||
5.625%, 07/01/27 (#) | 750 | 795,000 | ||||||
4.625%, 05/15/30 (#) | 1,000 | 1,007,230 | ||||||
Meritor, Inc., 6.250%, 02/15/24 | 1,700 | 1,741,990 | ||||||
Mueller Water Products, Inc., 5.500%, 06/15/26 (#) | 1,750 | 1,844,062 | ||||||
SPX FLOW, Inc., 5.625%, 08/15/24 (#) | 1,750 | 1,822,188 | ||||||
Terex Corp., 5.625%, 02/01/25 (#) | 1,790 | 1,848,175 | ||||||
10,920,957 | ||||||||
Media | 12.0% | ||||||||
AMC Networks, Inc., 4.750%, 12/15/22 | 1,500 | 1,513,125 | ||||||
CCO Holdings LLC: | ||||||||
5.125%, 05/01/27 (#) | 500 | 527,500 | ||||||
4.750%, 03/01/30 (#) | 1,500 | 1,530,045 | ||||||
Clear Channel Worldwide Holdings, Inc., 5.125%, 08/15/27 (#) | 1,750 | 1,822,275 | ||||||
CSC Holdings LLC: | ||||||||
5.500%, 05/15/26 (#) | 1,000 | 1,058,740 | ||||||
7.500%, 04/01/28 (#) | 1,690 | 1,909,700 | ||||||
Diamond Sports Group LLC, 5.375%, 08/15/26 (#) | 1,500 | 1,517,328 | ||||||
DISH DBS Corp., 5.125%, 05/01/20 | 1,600 | 1,610,000 | ||||||
Entercom Media Corp., 7.250%, 11/01/24 (#) | 1,500 | 1,578,750 |
The accompanying notes are an integral part of these financial statements.
58 Annual Report
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
Lamar Media Corp., 5.750%, 02/01/26 | $ | 1,726 | $ | 1,829,387 | ||||
Meredith Corp., 6.875%, 02/01/26 | 1,700 | 1,767,490 | ||||||
Nexstar Broadcasting, Inc., 5.625%, 07/15/27 (#) | 1,500 | 1,580,700 | ||||||
Outfront Media Capital LLC, 5.000%, 08/15/27 (#) | 2,300 | 2,409,250 | ||||||
Sinclair Television Group, Inc., 5.125%, 02/15/27 (#) | 1,750 | 1,798,125 | ||||||
Sirius XM Radio, Inc.: | ||||||||
5.375%, 04/15/25 (#) | 400 | 413,312 | ||||||
5.000%, 08/01/27 (#) | 1,750 | 1,846,250 | ||||||
TEGNA, Inc.: | ||||||||
6.375%, 10/15/23 | 1,650 | 1,699,500 | ||||||
5.000%, 09/15/29 (#) | 250 | 254,375 | ||||||
The EW Scripps Co., 5.125%, 05/15/25 (#) | 1,800 | 1,840,500 | ||||||
Univision Communications, Inc., 5.125%, 02/15/25 (#) | 2,000 | 1,977,500 | ||||||
Videotron, Ltd.: | ||||||||
5.000%, 07/15/22 | 1,558 | 1,643,690 | ||||||
5.125%, 04/15/27 (#) | 500 | 535,000 | ||||||
Virgin Media Secured Finance PLC, 5.500%, 08/15/26 (#) | 1,750 | 1,837,500 | ||||||
WMG Acquisition Corp., 4.875%, 11/01/24 (#) | 1,600 | 1,656,000 | ||||||
36,156,042 | ||||||||
Metals & Mining | 3.3% | ||||||||
Alcoa Nederland Holding BV, 6.750%, 09/30/24 (#) | 1,800 | 1,893,762 | ||||||
Anglo American Capital PLC, 4.875%, 05/14/25 (#) | 1,650 | 1,811,354 | ||||||
FMG Resources August 2006 Pty, Ltd., 4.500%, 09/15/27 (#) | 1,750 | 1,793,750 | ||||||
Freeport-McMoRan, Inc., 4.550%, 11/14/24 | 2,200 | 2,325,576 |
The accompanying notes are an integral part of these financial statements.
Annual Report 59
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
Steel Dynamics, Inc.: | ||||||||
4.125%, 09/15/25 | $ | 500 | $ | 513,682 | ||||
5.000%, 12/15/26 | 1,550 | 1,647,924 | ||||||
9,986,048 | ||||||||
Oil, Gas & Consumable Fuels | 8.1% | ||||||||
Antero Resources Corp., 5.125%, 12/01/22 | 1,600 | 1,428,000 | ||||||
Cheniere Energy Partners LP, 5.250%, 10/01/25 | 1,250 | 1,302,613 | ||||||
Energy Transfer Operating LP: | ||||||||
7.500%, 10/15/20 | 1,250 | 1,298,976 | ||||||
5.875%, 01/15/24 | 750 | 829,750 | ||||||
Holly Energy Partners LP, 6.000%, 08/01/24 (#) | 2,040 | 2,126,700 | ||||||
Murphy Oil Corp., 6.875%, 08/15/24 | 1,500 | 1,582,500 | ||||||
Newfield Exploration Co., 5.625%, 07/01/24 | 1,600 | 1,756,756 | ||||||
Parsley Energy LLC, 5.625%, 10/15/27 (#) | 1,700 | 1,797,750 | ||||||
PBF Holding Co. LLC, 7.000%, 11/15/23 | 1,400 | 1,452,500 | ||||||
Range Resources Corp., 5.000%, 08/15/22 | 1,700 | 1,666,000 | ||||||
Southwestern Energy Co., 6.200%, 01/23/25 | 1,800 | 1,650,960 | ||||||
Sunoco LP, 5.500%, 02/15/26 | 1,700 | 1,763,750 | ||||||
Tallgrass Energy Partners LP, 5.500%, 01/15/28 (#) | 1,250 | 1,225,000 | ||||||
Targa Resources Partners LP, 5.250%, 05/01/23 | 1,550 | 1,565,500 | ||||||
Whiting Petroleum Corp., 5.750%, 03/15/21 | 900 | 851,400 | ||||||
WPX Energy, Inc.: 6.000%, 01/15/22 | 900 | 931,500 |
The accompanying notes are an integral part of these financial statements.
60 Annual Report
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
5.750%, 06/01/26 | $ | 1,000 | $ | 1,067,500 | ||||
5.250%, 10/15/27 | 100 | 105,500 | ||||||
24,402,655 | ||||||||
Professional Services | 1.1% | ||||||||
IHS Markit, Ltd., 5.000%, 11/01/22 (#) | 1,500 | 1,598,160 | ||||||
Nielsen Finance LLC, 5.000%, 04/15/22 (#) | 1,550 | 1,555,812 | ||||||
3,153,972 | ||||||||
Road & Rail | 0.6% | ||||||||
The Hertz Corp., 5.500%, 10/15/24 (#) | 1,800 | 1,845,000 | ||||||
Semiconductors & Semiconductor Equipment | 0.4% | ||||||||
Qorvo, Inc., 5.500%, 07/15/26 | 1,000 | 1,065,000 | ||||||
Software | 1.4% | ||||||||
j2 Cloud Services LLC, 6.000%, 07/15/25 (#) | 1,550 | 1,643,000 | ||||||
Nuance Communications, Inc., 5.625%, 12/15/26 | 1,500 | 1,598,602 | ||||||
Rackspace Hosting, Inc., 8.625%, 11/15/24 (#) | 1,000 | 977,500 | ||||||
4,219,102 | ||||||||
Specialty Retail | 1.2% | ||||||||
Group 1 Automotive, Inc., 5.000%, 06/01/22 | 1,662 | 1,684,853 | ||||||
Penske Automotive Group, Inc., 5.500%, 05/15/26 | 1,800 | 1,885,500 | ||||||
3,570,353 | ||||||||
Technology Hardware, Storage & Peripherals | 2.3% | ||||||||
Dell International LLC, 7.125%, 06/15/24 (#) | 1,525 | 1,608,875 | ||||||
NCR Corp., 5.750%, 09/01/27 (#) | 1,000 | 1,065,000 |
The accompanying notes are an integral part of these financial statements.
Annual Report 61
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Corporate Income Portfolio (continued) | ||||||||
Seagate HDD Cayman, 4.750%, 01/01/25 | $ | 1,900 | $ | 2,035,683 | ||||
Western Digital Corp., 4.750%, 02/15/26 | 2,000 | 2,085,000 | ||||||
6,794,558 | ||||||||
Textiles, Apparel & Luxury Goods | 0.6% | ||||||||
Hanesbrands, Inc., 4.625%, 05/15/24 (#) | 1,750 | 1,845,515 | ||||||
Trading Companies & Distributors | 2.9% | ||||||||
American Builders & Contractors Supply Co., Inc., 4.000%, 01/15/28 (#) | 100 | 101,500 | ||||||
Avis Budget Car Rental LLC, 5.750%, 07/15/27 (#) | 1,500 | 1,560,000 | ||||||
HD Supply, Inc., 5.375%, 10/15/26 (#) | 1,700 | 1,802,000 | ||||||
Herc Holdings, Inc., 5.500%, 07/15/27 (#) | 1,500 | 1,578,750 | ||||||
United Rentals North America, Inc.: | ||||||||
5.500%, 05/15/27 | 1,000 | 1,071,270 | ||||||
3.875%, 11/15/27 | 1,100 | 1,123,045 | ||||||
WESCO Distribution, Inc., 5.375%, 12/15/21 | 1,600 | 1,604,000 | ||||||
8,840,565 | ||||||||
Wireless Telecommunication Services | 1.5% | ||||||||
Inmarsat Finance PLC, 4.875%, 05/15/22 (#) | 1,750 | 1,771,875 | ||||||
Sprint Corp., 7.125%, 06/15/24 | 500 | 539,375 | ||||||
T-Mobile USA, Inc., 6.500%, 01/15/26 | 2,000 | 2,144,420 | ||||||
4,455,670 | ||||||||
Total Corporate Bonds (Cost $267,459,943) | 274,665,201 |
The accompanying notes are an integral part of these financial statements.
62 Annual Report
Description | Shares | Fair Value | ||||||
Lazard US Corporate Income Portfolio (concluded) | ||||||||
Exchange-Traded Funds | 2.0% | ||||||||
Invesco Fundamental High Yield Corporate Bond ETF (Cost $6,043,973) | 317,604 | $ | 6,117,053 | |||||
Short-Term Investments | 5.4% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $16,203,013) | 16,203,013 | 16,203,013 | ||||||
Total Investments | 98.5% (Cost $289,706,929) | $ | 296,985,267 | ||||||
Cash and Other Assets in Excess of Liabilities | 1.5% | 4,404,519 | |||||||
Net Assets | 100.0% | $ | 301,389,786 |
The accompanying notes are an integral part of these financial statements.
Annual Report 63
The accompanying notes are an integral part of these financial statements.
64 Annual Report
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Short Duration Fixed Income Portfolio (continued) | ||||||||
Capital Markets | 8.9% | ||||||||
Morgan Stanley: | ||||||||
5.500%, 01/26/20 | $ | 3,700 | $ | 3,707,859 | ||||
5.500%, 07/28/21 | 425 | 447,693 | ||||||
The Goldman Sachs Group, Inc.: | ||||||||
5.375%, 03/15/20 | 3,730 | 3,755,870 | ||||||
5.250%, 07/27/21 | 647 | 678,856 | ||||||
8,590,278 | ||||||||
Electronic Equipment, Instruments & Components | 1.2% | ||||||||
Amphenol Corp., 2.200%, 04/01/20 | 1,115 | 1,115,142 | ||||||
Food & Staples Retailing | 2.6% | ||||||||
The Kroger Co.: | ||||||||
6.150%, 01/15/20 | 1,989 | 1,991,703 | ||||||
3.300%, 01/15/21 | 489 | 495,252 | ||||||
2,486,955 | ||||||||
Internet & Direct Marketing Retail | 1.2% | ||||||||
eBay, Inc., 3.250%, 10/15/20 | 1,129 | 1,136,224 | ||||||
IT Services | 2.8% | ||||||||
Fiserv, Inc., 2.700%, 06/01/20 | 2,685 | 2,691,647 | ||||||
Oil, Gas & Consumable Fuels | 1.8% | ||||||||
Enterprise Products Operating LLC, 5.200%, 09/01/20 | 1,721 | 1,756,729 | ||||||
Total Corporate Bonds (Cost $31,523,337) | 31,594,658 |
The accompanying notes are an integral part of these financial statements.
Annual Report 65
Description | Principal Amount (000) | Fair Value | ||||||
Lazard US Short Duration Fixed Income Portfolio (concluded) | ||||||||
US Government Securities | 1.3% | ||||||||
Mortgage-Backed Securities | 1.3% | ||||||||
Federal National Mortgage Association: | ||||||||
Pool# AE0315, 4.500%, 02/01/21 | $ | 1 | $ | 675 | ||||
Pool# FM1033, 4.500%, 01/01/27 | 1,144 | 1,192,199 | ||||||
Total US Government Securities (Cost $1,186,694) | 1,192,874 | |||||||
US Treasury Securities | 57.1% | ||||||||
U.S. Treasury Notes: | ||||||||
1.125%, 08/31/21 | 31,085 | 30,838,368 | ||||||
1.125%, 09/30/21 | 9,775 | 9,693,798 | ||||||
2.000%, 10/31/21 | 14,255 | 14,357,615 | ||||||
Total US Treasury Securities (Cost $54,844,456) | 54,889,781 | |||||||
Description | Shares | Fair Value | ||||||
Short-Term Investments | 0.0% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $24,900) | 24,900 | $ | 24,900 | |||||
Total Investments | 99.5% (Cost $95,447,708) | $ | 95,616,716 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.5% | 494,497 | |||||||
Net Assets | 100.0% | $ | 96,111,213 |
The accompanying notes are an integral part of these financial statements.
66 Annual Report
The Lazard Funds, Inc.Notes to Portfolios of Investments
December 31, 2019
(#) | Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.” At December 31, 2019, the percentage of net assets for each Portfolio was as follows: |
Portfolio | Percentage of Net Assets | ||||
Emerging Markets Debt | 5.5 | % | |||
Global Fixed Income | 2.0 | % | |||
US Corporate Income | 47.2 | % |
(Ø) | Step up bonds are securities which increase the interest payment rate at a specified point in time. Rate shown reflects rate in effect at December 31, 2019 which may step up at a future date. |
(«) | Issue in default. |
(») | The portfolio, at all times, maintains portfolio securities in sufficient amount to cover its obligations related to investments in forward currency contracts. |
(§) | 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 December 31, 2019. |
(††) | A note or bond that offers protection from inflation by paying a fixed rate of interest on the principal amount that is adjusted for inflation, in the applicable region, based on the Consumer Price Index or other equivalent regional benchmarks for measuring inflation. |
Security Abbreviations:
BBSW | — | Bank Bill Swap Reference Rate |
LIBOR | — | London Interbank Offered Rate |
NTN- B | — | Brazil Sovereign “Nota do Tesouro Nacional” Series B |
NTN- F | — | Brazil Sovereign “Nota do Tesouro Nacional” Series F |
PRIBOR | — | Prague Interbank Offered Rate |
Currency Abbreviations:
AUD | — | Australian Dollar | MYR | — | Malaysian Ringgit |
BRL | — | Brazilian Real | NOK | — | Norwegian Krone |
CAD | — | Canadian Dollar | NZD | — | New Zealand Dollar |
CHF | — | Swiss Franc | PEN | — | Peruvian Nuevo Sol |
CLP | — | Chilean Peso | PHP | — | Philippine Peso |
COP | — | Colombian Peso | PLN | — | Polish Zloty |
CZK | — | Czech Koruna | RON | — | New Romanian Leu |
DOP | — | Dominican Republic Peso | RUB | — | Russian Ruble |
EUR | — | Euro | SEK | — | Swedish Krona |
GBP | — | British Pound Sterling | SGD | — | Singapore Dollar |
HUF | — | Hungarian Forint | THB | — | Thai Baht |
IDR | — | Indonesian Rupiah | TRY | — | New Turkish Lira |
INR | — | Indian Rupee | UAH | — | Ukrainian Hryvnia |
JPY | — | Japanese Yen | USD | — | United States Dollar |
KRW | — | South Korean Won | UYU | — | Uruguayan Peso |
MXN | — | Mexican New Peso | ZAR | — | South African Rand |
Counterparty Abbreviations:
BOA | — | Bank of America NA | JPM | — | JPMorgan Chase Bank NA |
BRC | — | Barclays Bank PLC | MSC | — | Morgan Stanley Capital Services LLC |
CIT | — | Citibank NA | SCB | — | Standard Chartered Bank |
HSB | — | HSBC Bank USA NA | UBS | — | UBS AG |
The accompanying notes are an integral part of these financial statements.
Annual Report 67
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country:
Industry† | Lazard Emerging Markets Debt Portfolio | Lazard Global Fixed Income Portfolio | ||||||||
Corporate & Quasi Government Bonds | ||||||||||
Automobiles | — | % | 0.9 | % | ||||||
Banks | 0.4 | 10.8 | ||||||||
Beverages | — | 2.0 | ||||||||
Capital Markets | — | 1.9 | ||||||||
Consumer Finance | — | 1.0 | ||||||||
Containers & Packaging | — | 0.5 | ||||||||
Diversified Consumer Services | — | 0.5 | ||||||||
Diversified Financial Services | — | 2.4 | ||||||||
Diversified Telecommunication Services | — | 2.1 | ||||||||
Electrical Equipment | — | 1.1 | ||||||||
Electrical Utility | 1.3 | — | ||||||||
Health Care Providers & Services | — | 1.6 | ||||||||
Hotels, Restaurants & Leisure | — | 2.0 | ||||||||
Machinery | — | 1.0 | ||||||||
Metals & Mining | 0.7 | — | ||||||||
Oil, Gas & Consumable Fuels | 2.9 | — | ||||||||
Personal Products | — | 1.6 | ||||||||
Pharmaceuticals | — | 0.5 | ||||||||
Software | — | 1.4 | ||||||||
Technology Hardware, Storage & Peripherals | — | 1.6 | ||||||||
Thrifts & Mortgage Finance | 0.3 | — | ||||||||
Trading Companies & Distributors | — | 0.5 | ||||||||
Wireless Telecommunication Services | 0.3 | 0.5 | ||||||||
Subtotal | 5.9 | 33.9 | ||||||||
Foreign Government Obligations | 87.8 | 43.3 | ||||||||
Supranational Bonds | 0.1 | 10.3 | ||||||||
US Municipal Bonds | — | 1.9 | ||||||||
US Treasury Securities | — | 9.4 | ||||||||
Short-Term Investments | 3.7 | 0.5 | ||||||||
Total Investments | 97.5 | % | 99.3 | % |
† | Industry classifications may be different than those used for compliance monitoring purposes. |
The accompanying notes are an integral part of these financial statements.
68 Annual Report
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The Lazard Funds, Inc.Statements of Assets and Liabilities
December 31, 2019 | Lazard Emerging Markets Debt Portfolio | Lazard Global Fixed Income Portfolio | |||||||||
ASSETS | |||||||||||
Investments in securities, at fair value | $ | 89,146,208 | $ | 6,472,262 | |||||||
Cash | 22,071 | — | |||||||||
Cash collateral due from broker on swaps | 65,660 | — | |||||||||
Foreign currency, at fair value | 150,625 | 10 | |||||||||
Receivables for: | |||||||||||
Dividends and interest | 1,468,253 | 60,490 | |||||||||
Investments sold | 545,262 | — | |||||||||
Capital stock sold | 12,220 | — | |||||||||
Amount due from Investment Manager (Note 3) | — | 31,570 | |||||||||
Gross unrealized appreciation on: | |||||||||||
Forward currency contracts | 475,284 | 36,707 | |||||||||
Swap agreements | 4,527 | — | |||||||||
Prepaid expenses | 411 | 1,528 | |||||||||
Total assets | 91,890,521 | 6,602,567 | |||||||||
LIABILITIES | |||||||||||
Payables for: | |||||||||||
Accrued custodian fees | 55,540 | 12,762 | |||||||||
Foreign capital gains taxes | 49,995 | — | |||||||||
Accrued professional services | 32,086 | 25,343 | |||||||||
Accrued shareholders’ reports | 12,267 | 2,685 | |||||||||
Accrued registration fee | 1,133 | 4,631 | |||||||||
Management fees | 746 | — | |||||||||
Accrued distribution fees | 115 | — | |||||||||
Investments purchased | 101,729 | — | |||||||||
Capital stock redeemed | 63,418 | 8 | |||||||||
Dividends | 3,223 | — | |||||||||
Variation margin payable on centrally cleared swaps | 784 | — | |||||||||
Gross unrealized depreciation on forward currency contracts | 172,018 | 40,390 | |||||||||
Other accrued expenses and payables | 6,000 | 1,988 | |||||||||
Total liabilities | 499,054 | 87,807 | |||||||||
Net assets | $ | 91,391,467 | $ | 6,514,760 | |||||||
NET ASSETS | |||||||||||
Paid in capital | $ | 131,397,869 | $ | 6,431,693 | |||||||
Distributable earnings (Accumulated loss) | (40,006,402 | ) | 83,067 | ||||||||
Net assets | $ | 91,391,467 | $ | 6,514,760 |
The accompanying notes are an integral part of these financial statements.
70 Annual Report
Lazard US Corporate Income Portfolio | Lazard US Short Duration Fixed Income Portfolio | |||||||||
$ | 296,985,267 | $ | 95,616,716 | |||||||
— | — | |||||||||
— | — | |||||||||
— | — | |||||||||
3,761,989 | 578,298 | |||||||||
— | — | |||||||||
894,925 | — | |||||||||
— | 5,874 | |||||||||
— | — | |||||||||
— | — | |||||||||
— | 577 | |||||||||
301,642,181 | 96,201,465 | |||||||||
28,082 | 11,215 | |||||||||
— | — | |||||||||
29,525 | 24,334 | |||||||||
12,786 | 4,020 | |||||||||
2,545 | 633 | |||||||||
81,157 | — | |||||||||
907 | — | |||||||||
— | — | |||||||||
58,811 | 37,927 | |||||||||
27,664 | 7,571 | |||||||||
— | — | |||||||||
— | — | |||||||||
10,918 | 4,552 | |||||||||
252,395 | 90,252 | |||||||||
$ | 301,389,786 | $ | 96,111,213 | |||||||
$ | 301,965,062 | $ | 97,109,564 | |||||||
(575,276 | ) | (998,351 | ) | |||||||
$ | 301,389,786 | $ | 96,111,213 |
Annual Report 71
December 31, 2019 | Lazard Emerging Markets Debt Portfolio | Lazard Global Fixed Income Portfolio | |||||||||
Institutional Shares | |||||||||||
Net assets | $ | 90,858,460 | $ | 6,455,567 | |||||||
Shares of capital stock outstanding* | 11,283,061 | 710,971 | |||||||||
Net asset value, offering and redemption price per share | $ | 8.05 | $ | 9.08 | |||||||
Open Shares | |||||||||||
Net assets | $ | 531,820 | $ | 59,193 | |||||||
Shares of capital stock outstanding* | 65,403 | 6,518 | |||||||||
Net asset value, offering and redemption price per share | $ | 8.13 | $ | 9.08 | |||||||
R6 Shares | |||||||||||
Net assets | $ | 1,187 | — | ||||||||
Shares of capital stock outstanding* | 137 | † | — | ||||||||
Net asset value, offering and redemption price per share* | $ | 8.64 | — | ||||||||
Cost of investments in securities | $ | 87,559,831 | $ | 6,347,402 | |||||||
Cost of foreign currency | $ | 146,969 | $ | 10 |
* | $0.001 par value, 6,900,000,000 shares authorized for the Portfolios in total. |
† | Shares values are rounded for presentation purposes. |
The accompanying notes are an integral part of these financial statements.
72 Annual Report
Lazard US Corporate Income Portfolio | Lazard US Short Duration Fixed Income Portfolio | |||||||||
$ | 297,218,722 | $ | 96,095,688 | |||||||
60,413,135 | 9,832,361 | |||||||||
$ | 4.92 | $ | 9.77 | |||||||
$ | 4,169,914 | $ | 15,525 | |||||||
843,620 | 1,587 | |||||||||
$ | 4.94 | $ | 9.78 | |||||||
$ | 1,150 | — | ||||||||
233 | — | |||||||||
$ | 4.94 | — | ||||||||
$ | 289,706,929 | $ | 95,447,708 | |||||||
$ | — | $ | — |
Annual Report 73
The Lazard Funds, Inc.Statements of Operations
For the Year Ended December 31, 2019 | Lazard Emerging Markets Debt Portfolio | Lazard Global Fixed Income Portfolio | ||||||||||
Investment Income (Loss) | ||||||||||||
Income | ||||||||||||
Interest | $ | 9,279,453 | $ | 171,809 | ||||||||
Dividends | — | — | ||||||||||
Total investment income* | 9,279,453 | 171,809 | ||||||||||
Expenses | ||||||||||||
Management fees (Note 3) | 1,136,232 | 30,222 | ||||||||||
Custodian fees | 224,276 | 51,475 | ||||||||||
Professional services | 66,059 | 44,557 | ||||||||||
Registration fees | 47,269 | 47,075 | ||||||||||
Administration fees | 36,786 | 15,604 | ||||||||||
Shareholders’ services | 33,021 | 21,069 | ||||||||||
Shareholders’ reports | 32,742 | 5,814 | ||||||||||
Directors’ fees and expenses | 15,175 | 5,253 | ||||||||||
Distribution fees (Open Shares) | 1,543 | 105 | ||||||||||
Other^ | 54,233 | 1,253 | ||||||||||
Total gross expenses | 1,647,336 | 222,427 | ||||||||||
Management fees waived and expenses reimbursed | (184,240 | ) | (179,983 | ) | ||||||||
Total net expenses | 1,463,096 | 42,444 | ||||||||||
Net investment income (loss) | 7,816,357 | 129,365 | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions, Forward Currency Contracts and Swap Agreements | ||||||||||||
Net realized gain (loss) on: | ||||||||||||
Investments** | (1,042,152 | ) | 92 | |||||||||
Foreign currency transactions | 40,447 | (3,072 | ) | |||||||||
Forward currency contracts | (462,715 | ) | (23,340 | ) | ||||||||
Swap agreements | 228,700 | — | ||||||||||
Total net realized gain (loss) on investments, foreign currency transactions, forward currency contracts and swap agreements | (1,235,720 | ) | (26,320 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments† | 19,784,484 | 346,295 | ||||||||||
Foreign currency translations | 13,530 | 1,339 | ||||||||||
Forward currency contracts | (404,050 | ) | (35,786 | ) | ||||||||
Swap agreements | 28,722 | — | ||||||||||
Total net change in unrealized appreciation (depreciation) on investments, foreign currency translations, forward currency contracts and swap agreements | 19,422,686 | 311,848 | ||||||||||
Net realized and unrealized gain (loss) on investments, foreign currency transactions, forward currency contracts and swap agreements | 18,186,966 | 285,528 | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 26,003,323 | $ | 414,893 | ||||||||
* | Net of foreign withholding taxes of | $ | 51,140 | $ | 1,204 | |||||||
** | Net of foreign capital gains taxes of | $ | 31,751 | $ | — | |||||||
† | Includes net change in unrealized appreciation (depreciation) of foreign capital gains taxes of | $ | (33,388 | ) | $ | — | ||||||
^ | Includes interest on line of credit of | $ | 41,911 | $ | — |
The accompanying notes are an integral part of these financial statements.
74 Annual Report
Lazard US Corporate Income Portfolio | Lazard US Short Duration Fixed Income Portfolio | |||||||||
$ | 14,744,250 | $ | 2,648,708 | |||||||
301,559 | — | |||||||||
15,045,809 | 2,648,708 | |||||||||
1,648,988 | 256,962 | |||||||||
105,333 | 44,150 | |||||||||
61,508 | 46,693 | |||||||||
42,409 | 41,076 | |||||||||
55,325 | 27,696 | |||||||||
36,498 | 22,533 | |||||||||
35,042 | 13,988 | |||||||||
18,800 | 9,870 | |||||||||
9,748 | 50 | |||||||||
14,666 | 8,088 | |||||||||
2,028,317 | 471,106 | |||||||||
(366,677 | ) | (59,369 | ) | |||||||
1,661,640 | 411,737 | |||||||||
13,384,169 | 2,236,971 | |||||||||
(1,270,563 | ) | 357,354 | ||||||||
— | — | |||||||||
— | — | |||||||||
— | — | |||||||||
(1,270,563 | ) | 357,354 | ||||||||
25,490,941 | 397,651 | |||||||||
— | — | |||||||||
— | — | |||||||||
— | — | |||||||||
25,490,941 | 397,651 | |||||||||
24,220,378 | 755,005 | |||||||||
$ | 37,604,547 | $ | 2,991,976 | |||||||
$ | — | $ | — | |||||||
$ | — | $ | — | |||||||
$ | — | $ | — | |||||||
$ | 134 | $ | — |
Annual Report 75
The Lazard Funds, Inc.Statements of Changes in Net Assets
Lazard Emerging Markets Debt Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 7,816,357 | $ | 14,539,447 | ||||||
Net realized gain (loss) on investments, foreign currency transactions, forward currency contracts and swap agreements | (1,235,720 | ) | (11,020,379 | ) | ||||||
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations, forward currency contracts and swap agreements | 19,422,686 | (21,451,917 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 26,003,323 | (17,932,849 | ) | |||||||
Distributions to shareholders (Note 2(e)) | ||||||||||
Net investment income | ||||||||||
Institutional Shares | (2,820,563 | ) | (4,701,379 | ) | ||||||
Open Shares | (15,060 | ) | (68,347 | ) | ||||||
R6 Shares | (1,054,209 | ) | (2,107,177 | ) | ||||||
Return of capital | ||||||||||
Institutional Shares | (2,828,484 | ) | (5,201,496 | ) | ||||||
Open Shares | (15,103 | ) | (75,617 | ) | ||||||
R6 Shares | (1,057,170 | ) | (2,331,332 | ) | ||||||
Net decrease in net assets resulting from distributions | (7,790,589 | ) | (14,485,348 | ) | ||||||
Capital stock transactions | ||||||||||
Net proceeds from sales | ||||||||||
Institutional Shares | 5,519,820 | 53,729,663 | ||||||||
Open Shares | 25,565 | 2,519,684 | ||||||||
R6 Shares | 3,000,000 | 110,381,409 | ||||||||
Net proceeds from reinvestment of distributions | ||||||||||
Institutional Shares | 5,597,352 | 9,761,506 | ||||||||
Open Shares | 27,508 | 142,468 | ||||||||
R6 Shares | 1,895,822 | 4,438,509 | ||||||||
Cost of shares redeemed | ||||||||||
Institutional Shares | (74,178,361 | ) | (183,928,083 | ) | ||||||
Open Shares | (249,403 | ) | (8,319,029 | ) | ||||||
R6 Shares | (112,096,412 | ) | — | |||||||
Net increase (decrease) in net assets from capital stock transactions | (170,458,109 | ) | (11,273,873 | ) | ||||||
Total increase (decrease) in net assets | (152,245,375 | ) | (43,692,070 | ) | ||||||
Net assets at beginning of period | 243,636,842 | 287,328,912 | ||||||||
Net assets at end of period | $ | 91,391,467 | $ | 243,636,842 |
The accompanying notes are an integral part of these financial statements.
76 Annual Report
Lazard Global Fixed Income Portfolio | Lazard US Corporate Income Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 129,365 | $ | 127,326 | $ | 13,384,169 | $ | 16,087,868 | |||||||||
(26,320 | ) | (81,191 | ) | (1,270,563 | ) | 588,674 | ||||||||||
311,848 | (188,780 | ) | 25,490,941 | (25,354,375 | ) | |||||||||||
414,893 | (142,645 | ) | 37,604,547 | (8,677,833 | ) | |||||||||||
(41,983 | ) | (59,363 | ) | (13,329,897 | ) | (15,821,900 | ) | |||||||||
(258 | ) | (319 | ) | (164,448 | ) | (253,454 | ) | |||||||||
— | — | (50 | ) | (13,162 | ) | |||||||||||
(86,802 | ) | (67,280 | ) | — | — | |||||||||||
(534 | ) | (362 | ) | — | — | |||||||||||
— | — | — | — | |||||||||||||
(129,577 | ) | (127,324 | ) | (13,494,395 | ) | (16,088,516 | ) | |||||||||
1,731,974 | 2,654,185 | 43,405,036 | 49,765,025 | |||||||||||||
28,292 | — | 793,277 | 2,569,673 | |||||||||||||
— | — | — | 24,665 | |||||||||||||
128,783 | 126,631 | 12,992,902 | 14,673,547 | |||||||||||||
792 | 681 | 123,455 | 120,865 | |||||||||||||
— | — | 50 | 6,762 | |||||||||||||
(1,183,895 | ) | (1,722,437 | ) | (91,253,438 | ) | (76,329,156 | ) | |||||||||
(4,575 | ) | (9 | ) | (1,381,443 | ) | (3,681,834 | ) | |||||||||
— | — | — | (1,782,867 | ) | ||||||||||||
701,371 | 1,059,051 | (35,320,161 | ) | (14,633,320 | ) | |||||||||||
986,687 | 789,082 | (11,210,009 | ) | (39,399,669 | ) | |||||||||||
5,528,073 | 4,738,991 | 312,599,795 | 351,999,464 | |||||||||||||
$ | 6,514,760 | $ | 5,528,073 | $ | 301,389,786 | $ | 312,599,795 |
Annual Report 77
Lazard Emerging Markets Debt Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Shares issued and redeemed | ||||||||||
Institutional Shares | ||||||||||
Shares outstanding at beginning of period | 19,428,100 | 33,323,876 | ||||||||
Shares sold | 708,856 | 6,920,539 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 717,798 | 1,230,443 | ||||||||
Shares redeemed | (9,571,693 | ) | (22,046,758 | ) | ||||||
Net increase (decrease) | (8,145,039 | ) | (13,895,776 | ) | ||||||
Shares outstanding at end of period | 11,283,061 | 19,428,100 | ||||||||
Open Shares | ||||||||||
Shares outstanding at beginning of period | 90,147 | 766,577 | ||||||||
Shares sold | 3,264 | 298,747 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 3,493 | 17,024 | ||||||||
Shares redeemed | (31,501 | ) | (992,201 | ) | ||||||
Net increase (decrease) | (24,744 | ) | �� | (676,430 | ) | |||||
Shares outstanding at end of period | 65,403 | 90,147 | ||||||||
R6 Shares | ||||||||||
Shares outstanding at beginning of period | 12,683,587 | 125 | ||||||||
Shares sold | 380,227 | 12,137,545 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 228,635 | 545,917 | ||||||||
Shares redeemed | (13,292,312 | ) | — | |||||||
Net increase (decrease) | (12,683,450 | ) | 12,683,462 | |||||||
Shares outstanding at end of period | 137 | 12,683,587 |
The accompanying notes are an integral part of these financial statements.
78 Annual Report
Lazard Global Fixed Income Portfolio | Lazard US Corporate Income Portfolio | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
635,449 | 520,489 | 67,838,982 | 70,514,409 | |||||||||||||
194,459 | 294,722 | 9,039,016 | 10,487,599 | |||||||||||||
14,404 | 14,452 | 2,687,353 | 3,108,656 | |||||||||||||
(133,341 | ) | (194,214 | ) | (19,152,216 | ) | (16,271,682 | ) | |||||||||
75,522 | 114,960 | (7,425,847 | ) | (2,675,427 | ) | |||||||||||
710,971 | 635,449 | 60,413,135 | 67,838,982 | |||||||||||||
3,789 | 3,712 | 944,746 | 1,162,735 | |||||||||||||
3,164 | — | 163,011 | 539,630 | |||||||||||||
88 | 78 | 25,394 | 25,492 | |||||||||||||
(523 | ) | (1 | ) | (289,531 | ) | (783,111 | ) | |||||||||
2,729 | 77 | (101,126 | ) | (217,989 | ) | |||||||||||
6,518 | 3,789 | 843,620 | 944,746 | |||||||||||||
— | — | 223 | 364,469 | |||||||||||||
— | — | — | 5,023 | |||||||||||||
— | — | 10 | 1,389 | |||||||||||||
— | — | — | (370,658 | ) | ||||||||||||
— | — | 10 | (364,246 | ) | ||||||||||||
— | — | 233 | 223 |
Annual Report 79
Lazard US Short Duration Fixed Income Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 2,236,971 | $ | 2,205,642 | ||||||
Net realized gain (loss) on investments | 357,354 | (1,149,097 | ) | |||||||
Net change in unrealized appreciation (depreciation) on investments | 397,651 | 237,332 | ||||||||
Net increase (decrease) in net assets resulting from operations | 2,991,976 | 1,293,877 | ||||||||
Distributions to shareholders (Note 2(e)) | ||||||||||
Institutional Shares | (2,093,618 | ) | (1,976,743 | ) | ||||||
Open Shares | (356 | ) | (464 | ) | ||||||
R6 Shares | — | — | ||||||||
Return of capital | ||||||||||
Institutional Shares | (144,024 | ) | (228,383 | ) | ||||||
Open Shares | (25 | ) | (54 | ) | ||||||
R6 Shares | — | — | ||||||||
Net decrease in net assets resulting from distributions | (2,238,023 | ) | (2,205,644 | ) | ||||||
Capital stock transactions | ||||||||||
Net proceeds from sales | ||||||||||
Institutional Shares | 10,221,674 | 40,433,005 | ||||||||
Open Shares | 71 | 47,508 | ||||||||
R6 Shares | — | — | ||||||||
Net proceeds from reinvestment of distributions | ||||||||||
Institutional Shares | 2,113,226 | 2,000,809 | ||||||||
Open Shares | 381 | 514 | ||||||||
R6 Shares | — | — | ||||||||
Cost of shares redeemed | ||||||||||
Institutional Shares | (33,268,726 | ) | (25,637,022 | ) | ||||||
Open Shares | (21,871 | ) | (35,952 | ) | ||||||
R6 Shares | — | — | ||||||||
Net increase (decrease) in net assets from capital stock transactions | (20,955,245 | ) | 16,808,862 | |||||||
Total increase (decrease) in net assets | (20,201,292 | ) | 15,897,095 | |||||||
Net assets at beginning of period | 116,312,505 | 100,415,410 | ||||||||
Net assets at end of period | $ | 96,111,213 | $ | 116,312,505 |
The accompanying notes are an integral part of these financial statements.
80 Annual Report
Lazard US Short Duration Fixed Income Portfolio | ||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||
Shares issued and redeemed | ||||||||||
Institutional Shares | ||||||||||
Shares outstanding at beginning of period | 11,984,211 | 10,259,235 | ||||||||
Shares sold | 1,048,374 | 4,157,165 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 216,771 | 206,126 | ||||||||
Shares redeemed | (3,416,995 | ) | (2,638,315 | ) | ||||||
Net increase (decrease) | (2,151,850 | ) | 1,724,976 | |||||||
Shares outstanding at end of period | 9,832,361 | 11,984,211 | ||||||||
Open Shares | ||||||||||
Shares outstanding at beginning of period | 3,789 | 2,561 | ||||||||
Shares sold | 7 | 4,869 | ||||||||
Shares issued to shareholders from reinvestment of distributions | 39 | 53 | ||||||||
Shares redeemed | (2,248 | ) | (3,694 | ) | ||||||
Net increase (decrease) | (2,202 | ) | 1,228 | |||||||
Shares outstanding at end of period | 1,587 | 3,789 |
Annual Report 81
The Lazard Funds, Inc.Financial Highlights
LAZARD EMERGING MARKETS DEBT PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 7.36 | $ | 8.43 | $ | 7.90 | $ | 7.71 | $ | 8.84 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.40 | 0.46 | 0.46 | 0.48 | ^ | 0.39 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.68 | (1.07 | ) | 0.53 | 0.19 | (1.13 | ) | ||||||||||||||
Total from investment operations | 1.08 | (0.61 | ) | 0.99 | 0.67 | (0.74 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.19 | ) | (0.22 | ) | (0.43 | ) | (0.19 | ) | — | (b) | |||||||||||
Return of capital | (0.20 | ) | (0.24 | ) | (0.03 | ) | (0.29 | ) | (0.39 | ) | |||||||||||
Total distributions | (0.39 | ) | (0.46 | ) | (0.46 | ) | (0.48 | ) | (0.39 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 8.05 | $ | 7.36 | $ | 8.43 | $ | 7.90 | $ | 7.71 | |||||||||||
Total Return (c) | 15.03 | % | –7.45 | % | 12.69 | % | 8.64 | %^ | –8.55 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 90,858 | $ | 143,015 | $ | 280,808 | $ | 240,833 | $ | 258,517 | |||||||||||
Ratios to average net assets : | |||||||||||||||||||||
Net expenses | 0.98 | % | 0.93 | % | 0.93 | % | 0.96 | %^ | 0.96 | % | |||||||||||
Gross expenses | 1.08 | % | 0.93 | % | 0.93 | % | 0.96 | % | 0.96 | % | |||||||||||
Net investment income (loss) | 5.15 | % | 5.78 | % | 5.52 | % | 5.90 | %^ | 4.69 | % | |||||||||||
Portfolio turnover rate | 106 | % | 97 | % | 88 | % | 118 | % | 162 | % |
The accompanying notes are an integral part of these financial statements.
82 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||||||
Open Shares | |||||||||||||||||||||||||
Net asset value, beginning of period | $ | 7.43 | $ | 8.50 | $ | 7.98 | $ | 7.79 | $ | 8.91 | |||||||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) (a) | 0.39 | 0.47 | 0.44 | 0.46 | ^ | 0.36 | |||||||||||||||||||
Net realized and unrealized gain (loss) | 0.69 | (1.10 | ) | 0.51 | 0.19 | (1.11 | ) | ||||||||||||||||||
Total from investment operations | 1.08 | (0.63 | ) | 0.95 | 0.65 | (0.75 | ) | ||||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.20 | ) | (0.40 | ) | (0.18 | ) | — | (b) | |||||||||||||||
Return of capital | (0.19 | ) | (0.24 | ) | (0.03 | ) | (0.28 | ) | (0.37 | ) | |||||||||||||||
Total distributions | (0.38 | ) | (0.44 | ) | (0.43 | ) | (0.46 | ) | (0.37 | ) | |||||||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||||||
Net asset value, end of period | $ | 8.13 | $ | 7.43 | $ | 8.50 | $ | 7.98 | $ | 7.79 | |||||||||||||||
Total Return (c) | 14.85 | % | –7.59 | % | 12.16 | % | 8.27 | %^ | –8.64 | % | |||||||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 532 | $ | 670 | $ | 6,520 | $ | 6,801 | $ | 6,910 | |||||||||||||||
Ratios to average net assets : | |||||||||||||||||||||||||
Net expenses | 1.18 | % | 1.20 | % | 1.22 | % | 1.28 | %^ | 1.30 | % | |||||||||||||||
Gross expenses | 2.91 | % | 1.62 | % | 1.36 | % | 1.40 | % | 1.75 | % | |||||||||||||||
Net investment income (loss) | 4.91 | % | 5.49 | % | 5.21 | % | 5.59 | %^ | 4.54 | % | |||||||||||||||
Portfolio turnover rate | 106 | % | 97 | % | 88 | % | 118 | % | 162 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 83
Selected data for a share of capital stock outstanding | Year Ended | For the Period 7/28/16* to | ||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | * | |||||||||||||||
R6 Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 7.88 | $ | 8.88 | $ | 7.90 | $ | 8.34 | ||||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.43 | 0.48 | 0.45 | 0.20 | ^ | |||||||||||||||
Net realized and unrealized gain (loss) | 0.75 | (1.12 | ) | 0.54 | (0.44 | ) | ||||||||||||||
Total from investment operations | 1.18 | (0.64 | ) | 0.99 | (0.24 | ) | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.20 | ) | (0.11 | ) | (0.01 | ) | (0.08 | ) | ||||||||||||
Return of capital | (0.22 | ) | (0.25 | ) | — | (b) | (0.12 | ) | ||||||||||||
Total distributions | (0.42 | ) | (0.36 | ) | (0.01 | ) | (0.20 | ) | ||||||||||||
Net asset value, end of period | $ | 8.64 | $ | 7.88 | $ | 8.88 | $ | 7.90 | ||||||||||||
Total Return (c) | 15.22 | % | –7.24 | % | 12.61 | % | –2.93 | %^ | ||||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1 | $ | 99,952 | $ | 1 | $ | 1,145 | ||||||||||||
Ratios to average net assets (d): | ||||||||||||||||||||
Net expenses | 0.93 | % | 0.90 | % | 0.90 | % | 0.90 | %^ | ||||||||||||
Gross expenses | 1.09 | % | 0.94 | % | 43.88 | % | 2.21 | % | ||||||||||||
Net investment income (loss) | 5.18 | % | 5.97 | % | 5.71 | % | 5.73 | %^ | ||||||||||||
Portfolio turnover rate | 106 | % | 97 | % | 88 | % | 118 | % |
^ | 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. For Institutional Shares, there was a 0.14% impact on the total return and the impact on net expenses and net investment income (loss) ratios of the Portfolio was less than 0.005%. For Open and R6 Shares, there was no impact on the total return and 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). |
* | The inception date for the R6 Shares was July 28, 2016. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year except for non-recurring expenses. |
The accompanying notes are an integral part of these financial statements.
84 Annual Report
LAZARD GLOBAL FIXED INCOME PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 8.65 | $ | 9.04 | $ | 8.57 | $ | 8.74 | $ | 9.30 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.19 | 0.20 | 0.20 | 0.20 | 0.19 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.43 | (0.38 | ) | 0.47 | (0.17 | ) | (0.56 | ) | |||||||||||||
Total from investment operations | 0.62 | (0.18 | ) | 0.67 | 0.03 | (0.37 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.06 | ) | (0.10 | ) | — | (0.12 | ) | — | |||||||||||||
Return of capital | (0.13 | ) | (0.11 | ) | (0.20 | ) | (0.08 | ) | (0.19 | ) | |||||||||||
Total distributions | (0.19 | ) | (0.21 | ) | (0.20 | ) | (0.20 | ) | (0.19 | ) | |||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||
Net asset value, end of period | $ | 9.08 | $ | 8.65 | $ | 9.04 | $ | 8.57 | $ | 8.74 | |||||||||||
Total Return (c) | 7.25 | % | –2.06 | % | 7.87 | % | 0.22 | % | –4.03 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 6,456 | $ | 5,495 | $ | 4,705 | $ | 4,266 | $ | 5,795 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.70 | % | 0.70 | % | 0.72 | % | 0.75 | % | 0.76 | % | |||||||||||
Gross expenses | 3.51 | % | 3.61 | % | 4.39 | % | 4.70 | % | 4.26 | % | |||||||||||
Net investment income (loss) | 2.14 | % | 2.33 | % | 2.23 | % | 2.18 | % | 2.08 | % | |||||||||||
Portfolio turnover rate | 65 | % | 60 | % | 42 | % | 47 | % | 60 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 85
Selected data for a share of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 8.65 | $ | 9.04 | $ | 8.57 | $ | 8.74 | $ | 9.30 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.17 | 0.18 | 0.17 | 0.17 | 0.16 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.43 | (0.39 | ) | 0.47 | (0.17 | ) | (0.56 | ) | |||||||||||||
Total from investment operations | 0.60 | (0.21 | ) | 0.64 | — | (b) | (0.40 | ) | |||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.06 | ) | (0.08 | ) | — | (0.10 | ) | — | |||||||||||||
Return of capital | (0.11 | ) | (0.10 | ) | (0.17 | ) | (0.07 | ) | (0.16 | ) | |||||||||||
Total distributions | (0.17 | ) | (0.18 | ) | (0.17 | ) | (0.17 | ) | (0.16 | ) | |||||||||||
Net asset value, end of period | $ | 9.08 | $ | 8.65 | $ | 9.04 | $ | 8.57 | $ | 8.74 | |||||||||||
Total Return (c) | 6.98 | % | –2.31 | % | 7.55 | % | –0.07 | % | –4.31 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 59 | $ | 33 | $ | 34 | $ | 34 | $ | 56 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.95 | % | 0.98 | % | 1.02 | % | 1.05 | % | 1.06 | % | |||||||||||
Gross expenses | 27.52 | % | 38.42 | % | 42.88 | % | 27.52 | % | 27.72 | % | |||||||||||
Net investment income (loss) | 1.88 | % | 2.08 | % | 1.95 | % | 1.88 | % | 1.80 | % | |||||||||||
Portfolio turnover rate | 65 | % | 60 | % | 42 | % | 47 | % | 60 | % |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
86 Annual Report
LAZARD US CORPORATE INCOME PORTFOLIO
Selected data for a share | |||||||||||||||||||||
of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 4.54 | $ | 4.89 | $ | 4.87 | $ | 4.64 | $ | 4.91 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.22 | 0.22 | 0.22 | 0.23 | 0.24 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.38 | (0.35 | ) | 0.02 | 0.23 | (0.27 | ) | ||||||||||||||
Total from investment operations | 0.60 | (0.13 | ) | 0.24 | 0.46 | (0.03 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.22 | ) | (0.22 | ) | (0.22 | ) | (0.23 | ) | (0.24 | ) | |||||||||||
Return of capital | — | — | — | — | — | (b) | |||||||||||||||
Total distributions | (0.22 | ) | (0.22 | ) | (0.22 | ) | (0.23 | ) | (0.24 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 4.92 | $ | 4.54 | $ | 4.89 | $ | 4.87 | $ | 4.64 | |||||||||||
Total Return (c) | 13.34 | % | –2.73 | % | 5.09 | % | 10.09 | % | –0.71 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 297,219 | $ | 308,285 | $ | 344,508 | $ | 302,997 | $ | 243,712 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | |||||||||||
Gross expenses | 0.67 | % | 0.64 | % | 0.67 | % | 0.69 | % | 0.69 | % | |||||||||||
Net investment income (loss) | 4.47 | % | 4.65 | % | 4.57 | % | 4.78 | % | 4.94 | % | |||||||||||
Portfolio turnover rate | 21 | % | 16 | % | 21 | % | 14 | % | 17 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 87
Selected data for a share | |||||||||||||||||||||
of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 4.57 | $ | 4.91 | $ | 4.89 | $ | 4.66 | $ | 4.93 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.20 | 0.21 | 0.21 | 0.21 | 0.23 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.37 | (0.34 | ) | 0.02 | 0.24 | (0.27 | ) | ||||||||||||||
Total from investment operations | 0.57 | (0.13 | ) | 0.23 | 0.45 | (0.04 | ) | ||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.20 | ) | (0.21 | ) | (0.21 | ) | (0.22 | ) | (0.23 | ) | |||||||||||
Return of capital | — | — | — | — | — | (b) | |||||||||||||||
Total distributions | (0.20 | ) | (0.21 | ) | (0.21 | ) | (0.22 | ) | (0.23 | ) | |||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | ||||||||||||||
Net asset value, end of period | $ | 4.94 | $ | 4.57 | $ | 4.91 | $ | 4.89 | $ | 4.66 | |||||||||||
Total Return (c) | 12.74 | % | –2.78 | % | 4.77 | % | 9.74 | % | –0.98 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,170 | $ | 4,314 | $ | 5,708 | $ | 7,618 | $ | 1,968 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.83 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | |||||||||||
Gross expenses | 1.19 | % | 1.11 | % | 1.13 | % | 1.18 | % | 1.69 | % | |||||||||||
Net investment income (loss) | 4.18 | % | 4.34 | % | 4.28 | % | 4.44 | % | 4.65 | % | |||||||||||
Portfolio turnover rate | 21 | % | 16 | % | 21 | % | 14 | % | 17 | % |
The accompanying notes are an integral part of these financial statements.
88 Annual Report
Selected data for a share | For the Period | |||||||||||||||
of capital stock outstanding | Year Ended | 11/3/16 | ||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | to 12/31/16* | ||||||||||||
R6 Shares | ||||||||||||||||
Net asset value, beginning of period | $ | 4.67 | $ | 4.89 | $ | 4.87 | $ | 4.84 | ||||||||
Income (Loss) from investment operations: | ||||||||||||||||
Net investment income (loss) (a) | 0.23 | 0.23 | 0.22 | 0.04 | ||||||||||||
Net realized and unrealized gain (loss) | 0.26 | (0.35 | ) | 0.02 | 0.03 | |||||||||||
Total from investment operations | 0.49 | (0.12 | ) | 0.24 | 0.07 | |||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.22 | ) | (0.10 | ) | (0.22 | ) | (0.04 | ) | ||||||||
Total distributions | (0.22 | ) | (0.10 | ) | (0.22 | ) | (0.04 | ) | ||||||||
Net asset value, end of period | $ | 4.94 | $ | 4.67 | $ | 4.89 | $ | 4.87 | ||||||||
Total Return (c) | 10.67 | % | –2.43 | %(d) | 5.09 | % | 1.37 | % | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 1 | $ | 1 | $ | 1,783 | $ | 1,697 | ||||||||
Ratios to average net assets(e): | ||||||||||||||||
Net expenses | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | ||||||||
Gross expenses | 858.55 | % | 4.62 | % | 1.69 | % | 1.73 | % | ||||||||
Net investment income (loss) | 4.55 | % | 4.61 | % | 4.58 | % | 4.71 | % | ||||||||
Portfolio turnover rate | 21 | % | 16 | % | 21 | % | 14 | % |
* | The inception date for the R6 Shares was November 3, 2016. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | The Portfolio received settlement proceeds from a foreign exchange trading class action lawsuit. The proceeds from the settlement represented a realized gain and were recorded in the period received. There was a 0.62% impact on the total return of the Portfolio’s R6 Shares. |
(e) | Annualized for a period of less than one year except for non-recurring expenses. |
The accompanying notes are an integral part of these financial statements.
Annual Report 89
LAZARD US SHORT DURATION FIXED INCOME PORTFOLIO
Selected data for a share | |||||||||||||||||||||
of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.70 | $ | 9.79 | $ | 9.86 | $ | 9.89 | $ | 9.99 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.21 | 0.19 | 0.14 | 0.13 | 0.10 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.07 | (0.09 | ) | (0.07 | ) | (0.03 | ) | (0.09 | ) | ||||||||||||
Total from investment operations | 0.28 | 0.10 | 0.07 | 0.10 | 0.01 | ||||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.20 | ) | (0.17 | ) | (0.11 | ) | (0.09 | ) | (0.06 | ) | |||||||||||
Return of capital | (0.01 | ) | (0.02 | ) | (0.03 | ) | (0.04 | ) | (0.05 | ) | |||||||||||
Total distributions | (0.21 | ) | (0.19 | ) | (0.14 | ) | (0.13 | ) | (0.11 | ) | |||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||
Net asset value, end of period | $ | 9.77 | $ | 9.70 | $ | 9.79 | $ | 9.86 | $ | 9.89 | |||||||||||
Total Return (c) | 2.93 | % | 1.08 | % | 0.72 | % | 1.00 | % | 0.05 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 96,096 | $ | 116,276 | $ | 100,390 | $ | 103,175 | $ | 103,150 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.40 | % | 0.40 | % | 0.40 | % | 0.40 | % | 0.40 | % | |||||||||||
Gross expenses | 0.45 | % | 0.43 | % | 0.43 | % | 0.50 | % | 0.48 | % | |||||||||||
Net investment income (loss) | 2.18 | % | 2.00 | % | 1.43 | % | 1.30 | % | 1.05 | % | |||||||||||
Portfolio turnover rate | 175 | % | 170 | % | 108 | % | 157 | % | 57 | % |
The accompanying notes are an integral part of these financial statements.
90 Annual Report
Selected data for a share | |||||||||||||||||||||
of capital stock outstanding | Year Ended | ||||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | ||||||||||||||||
Open Shares | |||||||||||||||||||||
Net asset value, beginning of period | $ | 9.71 | $ | 9.79 | $ | 9.87 | $ | 9.90 | $ | 10.01 | |||||||||||
Income (Loss) from investment operations: | |||||||||||||||||||||
Net investment income (loss) (a) | 0.19 | 0.16 | 0.11 | 0.10 | 0.17 | ||||||||||||||||
Net realized and unrealized gain (loss) | 0.06 | (0.08 | ) | (0.08 | ) | (0.03 | ) | (0.09 | ) | ||||||||||||
Total from investment operations | 0.25 | 0.08 | 0.03 | 0.07 | 0.08 | ||||||||||||||||
Less distributions from: | |||||||||||||||||||||
Net investment income | (0.17 | ) | (0.14 | ) | (0.09 | ) | (0.07 | ) | (0.14 | ) | |||||||||||
Return of capital | (0.01 | ) | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.05 | ) | |||||||||||
Total distributions | (0.18 | ) | (0.16 | ) | (0.11 | ) | (0.10 | ) | (0.19 | ) | |||||||||||
Redemption fees | — | — | — | — | — | (b) | |||||||||||||||
Net asset value, end of period | $ | 9.78 | $ | 9.71 | $ | 9.79 | $ | 9.87 | $ | 9.90 | |||||||||||
Total Return (c) | 2.64 | % | 0.88 | % | 0.32 | % | 0.70 | % | 0.77 | % | |||||||||||
Ratios and Supplemental Data: | |||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 16 | $ | 37 | $ | 25 | $ | 44 | $ | 27 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||||
Net expenses | 0.69 | % | 0.70 | % | 0.70 | % | 0.70 | % | 0.70 | % | |||||||||||
Gross expenses | 51.53 | % | 38.00 | % | 33.88 | % | 31.22 | % | 42.51 | % | |||||||||||
Net investment income (loss) | 1.91 | % | 1.68 | % | 1.13 | % | 1.00 | % | 1.68 | % | |||||||||||
Portfolio turnover rate | 175 | % | 170 | % | 108 | % | 157 | % | 57 | % |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
The accompanying notes are an integral part of these financial statements.
Annual Report 91
The Lazard Funds, Inc.Notes to Financial Statements
December 31, 2019
1. Organization
The Lazard Funds, Inc. was incorporated in Maryland on May 17, 1991 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. As of December 31, 2019, the Fund was comprised of thirty no-load portfolios (each referred to as a “Portfolio”). This report includes only the financial statements of Emerging Markets Debt, Global Fixed Income, US Corporate Income and US Short Duration Fixed Income Portfolios. The financial statements of the other twenty-six Portfolios are presented separately.
The Portfolios, other than Emerging Markets Debt Portfolio, are operated as “diversified” funds, as defined in the 1940 Act.
Each Portfolio currently offers Institutional Shares and Open Shares, and certain Portfolios offer R6 Shares. Each share class is identical except as to minimum investment requirements; eligibility requirements for R6 Shares; the services offered to, and expenses borne by, each class; and the availability of Service Payments (as defined in the Portfolios’ Prospectus).
2. Significant Accounting Policies
The accompanying financial statements are presented in conformity with US Generally Accepted Accounting Principles (“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—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. Swap agreements, such as credit default, interest rate and total return swap agreements, generally are valued by an independent pricing service. Forward currency contracts generally are valued using quotations from an independent pricing service. Invest-
92 Annual Report
ments in money market funds are valued at the fund’s net asset value (“NAV”) per share.
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 non-US securities exchanges and in over-the-counter markets may be completed before or after 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, non-US 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 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. 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
Annual Report 93
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. Interest income is accrued daily. A Portfolio amortizes premiums and accretes discounts on fixed-income securities using the effective yield method and mortgage-backed securities using the level 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.
(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 interest and foreign withholding taxes recorded on the Portfolios’ 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
94 Annual Report
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 year ended December 31, 2019, the Emerging Markets Debt and Global Fixed Income Portfolios traded in forward currency contracts.
(d) Swap Agreements—Interest rate swap agreements involve the exchange by a Portfolio with another party of their respective commitments to pay or receive interest with respect to the notional amount of principal. Certain forms of interest rate swap agreements may include: (i) interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates exceed a specified rate, or “cap,” (ii) interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified rate, or “floor,” (iii) interest rate collars, under which a party sells a cap and purchases a floor or vice versa in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels, (iv) callable interest rate swaps, under which the counterparty may terminate the swap transaction in whole at zero cost by a predetermined date and time prior to the maturity date, (v) spread locks, which allow the interest rate swap users to lock in the forward differential (or spread) between the interest rate swap rate and specified bench-
Annual Report 95
mark, or (vi) basis swaps, under which two parties can exchange variable interest rates based on different money markets. Swap agreements generally are valued by an independent pricing service, and the change in value, if any, is recorded as unrealized appreciation (depreciation) on swap agreements in a Portfolio’s accompanying Statement of Assets and Liabilities. Once the interim payments are settled in cash, the net amount is recorded as realized gain (loss) on swap agreements in a Portfolio’s accompanying Statement of Operations, in addition to any realized gain (loss) recorded upon the termination of swap agreements.
During the year ended December 31, 2019, the Emerging Markets Debt Portfolio traded in swap agreements.
(e) 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, 2019, the following Portfolios 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 Debt | $ | 19,781,338 | $ | 17,527,559 | ||||
US Corporate Income | 3,297,379 | 4,414,322 | ||||||
US Short Duration Fixed Income | 765,108 | 370,521 |
During the year ended December 31, 2019, the following Portfolios utilized realized capital loss carryovers from previous years:
Portfolio | Amount | |||
Emerging Markets Debt | $3,412,297 | |||
Global Fixed Income | 41,663 | |||
US Short Duration Fixed Income | 407,782 |
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
96 Annual Report
the following tax year. For the tax year ended December 31, 2019, 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) | ||||||||||||
Emerging Markets Debt | $ | 89,841,073 | $ | 233,789 | $ | 2,950,628 | $ | (2,716,839 | ) | |||||||
Global Fixed Income | 6,348,960 | 151,185 | 60,612 | 90,573 | ||||||||||||
US Corporate Income | 289,858,407 | 8,414,540 | 1,287,680 | 7,126,860 | ||||||||||||
US Short Duration Fixed Income | 95,450,836 | 166,312 | 432 | 165,880 |
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. Each Portfolio 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.
(f) Dividends and Distributions—Emerging Markets Debt Portfolio intends to declare dividends from net investment income, if any, daily and to pay such dividends monthly. Dividends from net investment income, if any, on the other Portfolios will be declared and paid monthly. 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.
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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 and fixed-income transactions, distribution redesignations, certain fixed-income securities and expenses, derivatives, wash sales, return of capital distributions, currency straddles and pay-down gain/loss. The book/tax differences relating to shareholder distributions resulted in reclassifications among certain capital accounts as follows:
Portfolio | Paid in Capital | Distributable Earnings (Accumulated Loss) | ||||||
Emerging Markets Debt | $ | (3,900,757 | ) | $ | 3,900,757 | |||
Global Fixed Income | (87,336 | ) | 87,336 | |||||
US Short Duration Fixed Income | (144,049 | ) | 144,049 |
The tax character of dividends and distributions paid during the years ended December 31, were as follows:
Ordinary Income | Long-Term Capital Gain | |||||||||||||||
Portfolio | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Emerging Markets Debt* | $ | 3,889,832 | $ | 6,876,903 | $ | — | $ | — | ||||||||
Global Fixed Income* | 29,864 | 59,682 | 12,377 | — | ||||||||||||
US Corporate Income | 13,494,395 | 16,088,516 | — | — | ||||||||||||
US Short Duration Fixed Income* | 2,093,974 | 1,977,207 | — | — |
* | Emerging Markets Debt, Global Fixed Income and US Short Duration Fixed Income Portfolios had return of capital distributions of $3,900,757, $87,336 and $144,049 in 2019, and $7,608,445, $67,642, and $228,437 in 2018, respectively. |
At December 31, 2019, the components of distributable earnings (accumulated loss), on a tax basis, were as follows:
Portfolio | Undistributed Ordinary Income (Deferred Ordinary Losses) | Undistributed Long-Term Capital Gain (Deferred Capital Losses) | Net Unrealized Appreciation (Depreciation) Including Foreign Currency | |||||||||
Emerging Markets Debt | $ | — | $ | (37,308,897 | ) | $ | (2,697,505 | ) | ||||
Global Fixed Income | — | — | 83,067 | |||||||||
US Corporate Income | 37,229 | (7,711,701 | ) | 7,099,196 | ||||||||
US Short Duration Fixed Income | — | (1,135,629 | ) | 137,278 |
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(g) Allocation of Expenses—Expenses common to the Fund, Lazard Retirement Series, Inc., and Lazard Global Total Return and 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 Open 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.
(h) Redemption Fee—Until August 15, 2016, the Portfolios, other than the US Short Duration Fixed Income Portfolio, imposed a 1.00% redemption fee (short-term trading fee) on Portfolio shares redeemed less than 30 days after such shares were acquired. The fees were retained by the Portfolios and are included as paid in capital on the Statements of Assets and Liabilities. As of August 15, 2016, redemption fees no longer apply to transactions in Portfolio shares.
(i) 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.
(j) 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.
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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 each Portfolio’s average daily net assets and payable by each Portfolio monthly, at the annual rate set forth below:
Portfolio | Annual Rate | |||
Emerging Markets Debt | 0.75 | % | ||
Global Fixed Income | 0.50 | |||
US Corporate Income | 0.55 | |||
US Short Duration Fixed Income | 0.25 |
The Investment Manager has voluntarily agreed to waive its fees and, if necessary, reimburse the Portfolios until May 1, 2020, 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, including, for the purposes of the expense limitation agreement only, fees related to filing foreign tax reclaims, exceed the percentages of the value of the Portfolio’s average daily net assets set forth opposite the Portfolio’s name in the table below. The Fund, on behalf of the Portfolios, may deduct from the payment to be made to the Investment Manager under the Management Agreement, or the Investment Manager will bear, such excess expense.
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Portfolio | Institutional Shares | Open Shares | R6 Shares | |||||||||
Emerging Markets Debt (a) | 0.95 | % | 1.15 | % | 0.90 | % | ||||||
Global Fixed Income | 0.70 | 0.95 | N/A | |||||||||
US Corporate Income | 0.55 | 0.80 | (b) | 0.55 | ||||||||
US Short Duration Fixed Income | 0.40 | 0.65 | (c) | N/A |
(a) | Agreement extends from May 1, 2020 to May 1, 2029, at levels of 1.10%, 1.35%, and 1.05%, respectively. |
(b) | From January 1, 2019 to September 9, 2019, percentage was 0.85%. |
(c) | From January 1, 2019 to September 9, 2019, percentage was 0.70%. |
In addition, until May 1, 2020, to the extent the “Total Annual Fund Operating Expenses” (as used in Form N-1A) of the R6 Shares of a Portfolio exceed the Total Annual Fund Operating Expenses of the Portfolio’s Institutional Shares (in each case, not including management fees, custodial fees or other expenses related to the management of the Portfolio’s assets), the Investment Manager will bear the expenses of the R6 Shares in the amount of such excess.
During the year ended December 31, 2019, the Investment Manager waived its management fees and reimbursed the following Portfolios for other expenses as follows:
Institutional Shares | Open Shares | ||||||||||||||||
Portfolio | Management Fees Waived | Expenses Reimbursed | Management Fees Waived | Expenses Reimbursed | |||||||||||||
Emerging Markets Debt | $ | 108,472 | $ | — | $ | 4,628 | $ | 6,047 | |||||||||
Global Fixed Income | 30,011 | 138,779 | 210 | 10,983 | |||||||||||||
US Corporate Income | 343,199 | — | 14,040 | — | |||||||||||||
US Short Duration Fixed Income | 49,274 | — | 50 | 10,045 |
R6 Shares | |||||||||
Portfolio | Management Fees Waived | Expenses Reimbursed | |||||||
Emerging Markets Debt | $ | 65,093 | $ | — | |||||
US Corporate Income | 7 | 9,431 |
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.
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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 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, the Lazard US Short Duration Fixed Income Portfolio 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 Manager, 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 Open Shares, for distribution and servicing of accounts. The Distributor may make payments to certain financial institutions, securities dealers and other industry professionals for providing these services.
DST is the Fund’s transfer and dividend disbursing agent.
4. Directors’ Compensation
Certain Directors of the Fund are officers of the Investment Manager. For the year ended December 31, 2019, each Director who is not an affiliated person of the Investment Manager or any of its affiliates was paid by all of the funds in the Lazard Fund Complex: (1) an annual retainer of $232,000, (2) an additional annual fee of $33,000 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 $23,000 to the Audit Committee Chair. Effective January 1, 2020, the aggregate compensation for Independent Directors for the
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Lazard Fund Complex is comprised of: (1) an annual retainer of $237,000, (2) an additional annual fee of $33,700 to the lead Independent Director, and (3) an additional annual fee of $23,500 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 a rate of $5,000 per active Portfolio with the remainder allocated based upon each active Portfolio’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 year ended December 31, 2019 were as follows:
Portfolio | Purchases | Sales | ||||||
Emerging Markets Debt | $ | 160,458,808 | $ | 320,516,776 | ||||
Global Fixed Income | 3,336,381 | 2,995,414 | ||||||
US Corporate Income | 61,981,498 | 113,698,927 | ||||||
US Short Duration Fixed Income | 21,953,450 | 32,745,208 |
US Government and Treasury Securities | ||||||||
Portfolio | Purchases | Sales | ||||||
Global Fixed Income | $ | 630,771 | $ | 746,636 | ||||
US Short Duration Fixed Income | 148,585,232 | 156,845,678 |
For the year ended December 31, 2019, 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. Line of Credit
The Fund has a Line of Credit Agreement (the “Agreement”) with State Street, primarily for temporary or emergency purposes,
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including the meeting of redemption requests that otherwise might require the untimely disposition of securities. From January 1, 2019 through December 12, 2019, the Agreement provided for a $50 million commitment; effective December 13, 2019, the commitment was increased to $100 million. Interest on borrowings is payable at the higher of the Federal Funds rate or One-Month LIBOR rate plus 1.00%, on an annualized basis. Under the Agreement, the Fund has agreed to pay a 0.20% per annum fee on the unused portion of the commitment, payable quarterly in arrears. The Fund has also agreed to pay an upfront fee of 0.05% of the committed line amount. During the year ended December 31, 2019, the following Portfolios had borrowings under the Agreement as follows:
Portfolio | Average Daily Loan Balance | * | Maximum Daily Loan Outstanding | Weighted Average Interest Rate | Number of Days Borrowings were Outstanding | |||||||||||
Emerging Markets Debt | $8,006,325 | $43,802,780 | 3.37 | % | 56 | |||||||||||
US Corporate Income | 687,500 | 790,000 | 3.51 | 2 |
* | For days borrowings were outstanding. |
Management believes that the fair value of the liabilities under the line of credit is equivalent to the recorded amount based on its short-term maturity and interest rate, which fluctuates with LIBOR. A Portfolio’s outstanding balance on the line of credit, if any, would be categorized as Level 2.
7. 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
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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,
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decreased liquidity and increased redemptions, and, as a result, the Portfolio may have to liquidate portfolio securities at disadvantageous prices. 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 a single large request for 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, and/or Portfolio expenses. 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
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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. Certain fixed-income securities may be issued at a discount from their face value (such as zero coupon securities) or purchased at a price less than their stated face amount or at a price less than their issue price plus the portion of “original issue discount” previously accrued thereon, i.e., purchased at a “market discount.” The amount of original issue discount and/or market discount on certain obligations may be significant, and accretion of market discount together with original issue discount will cause a Portfolio to realize income prior to the receipt of cash payments with respect to these securities.
(e) Mortgage-Related and Asset-Backed Securities Risk—Mortgage-related securities are complex instruments, subject to both credit and prepayment risk, and may be more volatile and less liquid, and more difficult to price accurately, than more traditional debt securities. Although certain mortgage-related securities are guaranteed by a third party (such as a US Government agency or instrumentality with respect to government-related mortgage-backed securities) or otherwise similarly secured, the market value of the security, which may fluctuate, is not secured. Mortgage-related securities generally are subject to credit risks associated with the performance of the underlying mortgage properties. Prepayment risk can lead to fluctuations in value of the mortgage-related security which may be pronounced. As with other interest-bearing securities, the prices of certain mortgage-related securities are inversely affected by changes in interest rates. However, although the value of a mortgage-related security may decline when interest rates rise, the converse is not necessarily
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true, since during periods of declining interest rates the mortgages underlying the security are more likely to be prepaid.
The risks of asset-backed securities are similar to those of mortgage-related securities. However, asset-backed securities present certain risks that are not presented by mortgage-related securities. Primarily, these securities may provide a Portfolio with a less effective security interest in the related collateral than do mortgage-related securities.
(f) 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 transactions 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
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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.
(g) Non-Diversification Risk—The Portfolio’s net asset value may be more vulnerable to changes in the market value of a single issuer or group of issuers and may be relatively more susceptible to adverse effects from any single corporate, industry, economic, market, political or regulatory occurrence than if the Portfolio’s investments consisted of securities issued by a larger number of issuers.
(h) Structured Products Risk—Structured notes and other structured products are privately negotiated debt instruments where the principal and/or interest is determined by reference to a specified asset, market or rate, or the differential performance of two assets or markets. Structured products can have risks of both fixed-income securities and derivatives transactions. Derivatives transactions may increase volatility or reduce returns, perhaps substantially, particularly since most derivatives have a leverage component that provides investment exposure in excess of the amount invested, and they are subject to many of the risks of, and can be highly sensitive to changes in the value of, the related reference assets, markets or rates. As such, a small investment could have a potentially large impact on the Portfolio’s performance. Use of derivatives transactions may cause the Portfolio to experience losses greater than if the Portfolio had not engaged in such transactions.
8. 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.
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9. 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.
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The following table summarizes the valuation of the Portfolios’ assets and liabilities by each fair value hierarchy level as of December 31, 2019:
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 December 31, 2019 | |||||||||||||
Emerging Markets Debt Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Corporate Bonds* | $ | — | $ | 3,830,588 | $ | — | $ | 3,830,588 | |||||||||
Foreign Government Obligations* | — | 80,242,761 | — | 80,242,761 | |||||||||||||
Quasi Government Bonds* | — | 1,614,372 | — | 1,614,372 | |||||||||||||
Supranational Bonds | — | 106,056 | — | 106,056 | |||||||||||||
Short-Term Investments | 3,352,431 | — | — | 3,352,431 | |||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | — | 475,284 | — | 475,284 | |||||||||||||
Interest Rate Swap Agreements | — | 28,722 | — | 28,722 | |||||||||||||
Total | $ | 3,352,431 | $ | 86,297,783 | $ | — | $ | 89,650,214 | |||||||||
Liabilities: | |||||||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | $ | — | $ | (172,018 | ) | $ | — | $ | (172,018 | ) |
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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 December 31, 2019 | |||||||||||||
Global Fixed Income Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Corporate Bonds* | $ | — | $ | 1,905,474 | $ | — | $ | 1,905,474 | |||||||||
Foreign Government Obligations* | — | 2,823,866 | — | 2,823,866 | |||||||||||||
Quasi Government Bonds* | — | 297,104 | — | 297,104 | |||||||||||||
Supranational Bonds | — | 671,502 | — | 671,502 | |||||||||||||
US Municipal Bonds | — | 125,910 | — | 125,910 | |||||||||||||
US Treasury Securities | — | 612,676 | — | 612,676 | |||||||||||||
Short-Term Investments | 35,730 | — | — | 35,730 | |||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | — | 36,707 | — | 36,707 | |||||||||||||
Total | $ | 35,730 | $ | 6,473,239 | $ | — | $ | 6,508,969 | |||||||||
Liabilities: | |||||||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | $ | — | $ | (40,390 | ) | $ | — | $ | (40,390 | ) | |||||||
US Corporate Income Portfolio | |||||||||||||||||
Corporate Bonds* | $ | — | $ | 274,665,201 | $ | — | $ | 274,665,201 | |||||||||
Exchange-Traded Funds | 6,117,053 | — | — | 6,117,053 | |||||||||||||
Short-Term Investments | 16,203,013 | — | — | 16,203,013 | |||||||||||||
Total | $ | 22,320,066 | $ | 274,665,201 | $ | — | $ | 296,985,267 | |||||||||
US Short Duration Fixed Income Portfolio | |||||||||||||||||
Asset-Backed Securities | $ | — | $ | 7,914,503 | $ | — | $ | 7,914,503 | |||||||||
Corporate Bonds* | — | 31,594,658 | — | 31,594,658 | |||||||||||||
US Government Securities | — | 1,192,874 | — | 1,192,874 | |||||||||||||
US Treasury Securities | — | 54,889,781 | — | 54,889,781 | |||||||||||||
Short-Term Investments | 24,900 | — | — | 24,900 | |||||||||||||
Total | $ | 24,900 | $ | 95,591,816 | $ | — | $ | 95,616,716 | |||||||||
* | 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). |
10. Derivative Instruments
Certain Portfolios may use derivative instruments, including forward currency contracts or swap agreements.
Forward currency contracts may be used for hedging purposes or to seek to increase returns.
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A Portfolio enters into swap agreements in an attempt to obtain a particular exposure when it is considered desirable to do so, possibly at a lower cost to such Portfolio than if it had invested directly in the asset that yielded the desired exposure.
During the year ended December 31, 2019, the approximate average monthly notional exposure for derivative instruments was as follows:
Derivative Instruments | Emerging Markets Debt Portfolio | Global Fixed Income Portfolio | ||||||
Forward currency contracts: | ||||||||
Average amounts purchased | $ | 46,300,000 | $ | 2,600,000 | ||||
Average amounts sold | 43,100,000 | 2,500,000 | ||||||
Interest rate swap agreements: | ||||||||
Average notional value – receives fixed rate on centrally cleared | 2,800,000# | — | ||||||
Average notional value – receives fixed rate on OTC | 2,100,000* | — |
# | Represents average monthly notional exposure for the eight months the derivative instrument was open during the period. |
* | Represents average monthly notional exposure for the ten months the derivative instrument was open during the period. |
The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of December 31, 2019:
Emerging Markets Debt Portfolio
Assets – Derivative Financial Instruments | Foreign Currency Contracts | Interest Rate Contracts | Total | |||||||||
Forward currency contracts | ||||||||||||
Unrealized appreciation on forward currency contracts | $ | 475,284 | $ | — | $ | 475,284 | ||||||
Swap agreements | ||||||||||||
Unrealized appreciation on swap agreements | — | 4,527 | 4,527 | |||||||||
Total | $ | 475,284 | $ | 4,527 | $ | 479,811 |
Annual Report 113
Foreign | Interest | |||||||||||
Currency | Rate | |||||||||||
Liabilities – Derivative Financial Instruments | Contracts | Contracts | Total | |||||||||
Forward currency contracts | ||||||||||||
Unrealized depreciation on forward currency contracts | $ | 172,018 | $ | — | $ | 172,018 | ||||||
Swap agreements | ||||||||||||
Variation margin payable on centrally cleared swaps(a) | — | 784 | 784 | |||||||||
Total | $ | 172,018 | $ | 784 | $ | 172,802 |
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swap agreements, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
Global Fixed Income Portfolio
Assets – Derivative Financial Instruments | Total | |||||
Forward currency contracts | Unrealized appreciation on forward currency contracts | $ | 36,707 | |||
Liabilities – Derivative Financial Instruments | ||||||
Forward currency contracts | Unrealized depreciation on forward currency contracts | $ | 40,390 |
Emerging Markets Debt Portfolio
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2019 was:
Foreign | Interest | |||||||||||
Currency | Rate | |||||||||||
Net Realized Gain (Loss) from: | Contracts | Contracts | Total | |||||||||
Forward currency contracts | $ | (462,715 | ) | $ | — | $ | (462,715 | ) | ||||
Swap agreements | — | 228,700 | 228,700 | |||||||||
Total | $ | (462,715 | ) | $ | 228,700 | $ | (234,015 | ) |
Foreign | Interest | |||||||||||
Net Change in Unrealized Appreciation | Currency | Rate | ||||||||||
(Depreciation) on: | Contracts | Contracts | Total | |||||||||
Forward currency contracts | $ | (404,050 | ) | $ | — | $ | (404,050 | ) | ||||
Swap agreements | — | 28,722 | 28,722 | |||||||||
Total | $ | (404,050 | ) | $ | 28,722 | $ | (375,328 | ) |
114 Annual Report
Global Fixed Income Portfolio
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2019 was:
Net Realized Gain (Loss) from: | Total | |||
Forward currency contracts | $ | (23,340 | ) | |
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Forward currency contracts | $ | (35,786 | ) |
None of the other Portfolios presented traded in derivative instruments during the year ended December 31, 2019.
As of December 31, 2019, the Emerging Markets Debt and Global Fixed Income Portfolios held derivative instruments that are eligible for offset in the Statements 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.
The required information for the affected Portfolios are presented in the below table, as of December 31, 2019:
Emerging Markets Debt Portfolio
Net Amounts of | ||||||||||||||||
Gross Amounts Offset | Assets Presented | |||||||||||||||
Gross Amounts of | in the Statement of | in the Statement of | ||||||||||||||
Description | Recognized Assets | Assets and Liabilities | Assets and Liabilities | |||||||||||||
Forward Currency Contracts | $ | 475,284 | $ | — | $ | 475,284 | ||||||||||
Interest Rate Swap Agreements | 4,527 | — | 4,527 | |||||||||||||
Total | $ | 479,811 | $ | — | $ | 479,811 |
Annual Report 115
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 | Net Amounts of Derivative Assets | ||||||||||||||||
Bank of America NA | $ | 36,959 | $ | (20,617 | ) | $ | — | $ | 16,342 | |||||||||||
Barclays Bank PLC | 136,747 | (100,454 | ) | — | 36,293 | |||||||||||||||
Citibank NA | 28,157 | (12,511 | ) | — | 15,646 | |||||||||||||||
HSBC Bank USA NA | 46,248 | — | — | 46,248 | ||||||||||||||||
JPMorgan Chase Bank NA | 30,851 | (4,465 | ) | — | 26,386 | |||||||||||||||
Standard Chartered Bank | 143,354 | (13,118 | ) | — | 130,236 | |||||||||||||||
UBS AG | 57,495 | (20,853 | ) | — | 36,642 | |||||||||||||||
Total | $ | 479,811 | $ | (172,018 | ) | $ | — | $ | 307,793 |
Net Amounts of | |||||||||||||||
Gross Amounts Offset | Liabilities Presented | ||||||||||||||
Gross Amounts of | in the Statement of | in the Statement of | |||||||||||||
Description | Recognized Liabilities | Assets and Liabilities | Assets and Liabilities | ||||||||||||
Forward Currency Contracts | $ | 172,018 | $ | — | $ | 172,018 |
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 | Net Amounts of Derivative Liabilities | ||||||||||||||||
Bank of America NA | $ | 20,617 | $ | (20,617 | ) | $ | — | $ | — | |||||||||||
Barclays Bank PLC | 100,454 | (100,454 | ) | — | — | |||||||||||||||
Citibank NA | 12,511 | (12,511 | ) | — | — | |||||||||||||||
JPMorgan Chase Bank NA | 4,465 | (4,465 | ) | — | — | |||||||||||||||
Standard Chartered Bank | 13,118 | (13,118 | ) | — | — | |||||||||||||||
UBS AG | 20,853 | (20,853 | ) | — | — | |||||||||||||||
Total | $ | 172,018 | $ | (172,018 | ) | $ | — | $ | — |
116 Annual Report
Global Fixed Income Portfolio
Net Amounts of | |||||||||||||||
Gross Amounts Offset | Assets Presented | ||||||||||||||
Gross Amounts of | in the Statement of | in the Statement of | |||||||||||||
Description | Recognized Assets | Assets and Liabilities | Assets and Liabilities | ||||||||||||
Forward Currency Contracts | $ | 36,707 | $ | — | $ | 36,707 |
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 | Net Amounts of Derivative Assets | ||||||||||||||||
Citibank NA | $ | 11,047 | $ | (10,348 | ) | $ | — | $ | 699 | |||||||||||
HSBC Bank USA NA | 19,838 | (16,421 | ) | — | 3,417 | |||||||||||||||
JPMorgan Chase Bank NA | 5,822 | (5,822 | ) | — | — | |||||||||||||||
Total | $ | 36,707 | $ | (32,591 | ) | $ | — | $ | 4,116 |
Net Amounts of | |||||||||||||||
Gross Amounts Offset | Liabilities Presented | ||||||||||||||
Gross Amounts of | in the Statement of | in the Statement of | |||||||||||||
Description | Recognized Liabilities | Assets and Liabilities | Assets and Liabilities | ||||||||||||
Forward Currency Contracts | $ | 40,390 | $ | — | $ | 40,390 |
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 | Net Amounts of Derivative Liabilities | ||||||||||||||||
Citibank NA | $ | 10,348 | $ | (10,348 | ) | $ | — | $ | — | |||||||||||
HSBC Bank USA NA | 16,421 | (16,421 | ) | — | — | |||||||||||||||
JPMorgan Chase Bank NA | 13,431 | (5,822 | ) | — | 7,609 | |||||||||||||||
Morgan Stanley Capital Services LLC | 190 | — | 190 | — | ||||||||||||||||
Total | $ | 40,390 | $ | (32,591 | ) | $ | 190 | $ | 7,609 |
(a) | Collateral amounts disclosed in the table above may be adjusted due to the requirement to limit collateral amounts to avoid the effect of over-collateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein. |
Annual Report 117
11. Accounting Pronouncements
In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-08,Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which amends the amortization period for certain purchased callable debt securities. Management has adopted the amendments and incorporated the changes in the current financial statements and related disclosures. For public business entities, the amendments in this ASU became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.
12. Subsequent Events
Management has evaluated subsequent events affecting the Portfolios through the issuance of the financial statements and has determined that there were no subsequent events that required adjustment or disclosure.
118 Annual Report
The Lazard Funds, Inc.
Report of Independent Registered Public Accounting Firm
To the Board of Directors of The Lazard Funds, Inc. and Shareholders of Lazard Emerging Markets Debt Portfolio, Lazard Global Fixed Income Portfolio, Lazard US Corporate Income Portfolio and Lazard US Short Duration Fixed Income Portfolio:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Lazard Emerging Markets Debt Portfolio, Lazard Global Fixed Income Portfolio, Lazard US Corporate Income Portfolio and Lazard US Short Duration Fixed Income Portfolio (collectively the “Portfolios”), four of the portfolios constituting The Lazard Funds, Inc. (the “Fund”) as of December 31, 2019, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Portfolios listed above, as of December 31, 2019, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Portfolios’ management. Our responsibility is to express an opinion on the Portfolios’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Portfolios in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
Annual Report 119
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Portfolios are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Portfolios’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 25, 2020
We have served as the auditor of one or more of the investment companies in the Lazard Fund Complex since 2004.
120 Annual Report
The Lazard Funds, Inc.
Board of Directors and Officers Information (unaudited)
Name (Year of Birth) 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 (1953) | Director (August 2014) | Debevoise & Plimpton LLP, a law firm,Of Counsel(2013 – present) | ||
Cornell Law School,Adjunct Professor (2013 – present) | ||||
The Buchmann Faculty of Law, Tel Aviv University,Visiting Professor (2019) | ||||
University of California, Berkeley School of Law,Adjunct Professor (Spring 2017) | ||||
Kenneth S. Davidson (1945) | Director (August 1995) | Davidson Capital Management Corporation, an investment manager,President (1978 – present) | ||
Nancy A. Eckl (1962) | Director (April 2007) | College Retirement Equities Fund (eight accounts),Trustee (2007 – present) | ||
TIAA-CREF Funds (69 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 (1971) | Director (April 2014) | New York University School of Law,Dean and Eric M. and Laurie B. Roth Professor of Law (2013 – present) | ||
Richard Reiss, Jr. (1944) | Director (May 1991) | Georgica Advisors LLC, an investment manager,Chairman(1997 – present) | ||
Resource America, Inc., a real estate asset management company,Director (2016 – 2018) | ||||
Osprey Technology Acquisition Corp, a special purpose acquisition company,Director (2019 – present) |
Annual Report 121
Name (Year of Birth) 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) | ||
Robert M. Solmson (1947) | 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) | ||
Interested Directors(4): | ||||
Ashish Bhutani (1960) | Director (July 2005) | Investment Manager,Chief Executive Officer (2004 – present) | ||
Lazard Ltd,Vice Chairman and Director (2010 – present) | ||||
Nathan A. Paul (1973) | 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) andManaging 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 January 31, 2020, 35 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. |
122 Annual Report
Name (Year of Birth) Address(1) | Position(s) with the Fund (Since) and Term(2) | Principal Occupation(s) During the Past Five Years | ||
Officers(3): | ||||
Mark R. Anderson (1970) | 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 | ||
Christopher Snively (1984) | Chief Financial Officer (March 2016) and Treasurer (September 2019) | Senior Vice President of the Investment Manager (since November 2015) | ||
Assurance Manager at PricewaterhouseCoopers LLP (2008 – November 2015) | ||||
Shari L. Soloway (1981) | Assistant Secretary (November 2015) | Head of Legal, North America (since January 2019, previously Senior Vice President, Legal and Compliance (since September 2015)) of the Investment Manager | ||
Vice President and Associate General Counsel of GE Asset Management (July 2011 – September 2015) | ||||
Jessica A. Falzone (1989) | Assistant Secretary (January 2019) | Vice President, Legal and Compliance, of the Investment Manager (since March 2018) | ||
Associate at Schulte Roth & Zabel LLP (2014 – March 2018) | ||||
Cesar A. Trelles (1975) | 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. |
Annual Report 123
The Lazard Funds, Inc. Tax and Other Information (unaudited)
Tax Information
Year Ended December 31, 2019
The following tax information represents year end disclosures of the tax benefits passed through to shareholders for 2019:
Of the dividends paid by the Portfolios, none are qualified dividend income.
Of the dividends paid by the Portfolios, no dividends qualify for the dividends received deduction available to corporate shareholders.
Of the dividends paid by the Portfolios, the corresponding percentage represents the long-term capital gains paid to shareholders.
Portfolio | Long-Term Capital Gains | |||
Emerging Markets Debt | $ — | |||
Global Fixed Income | 12,377 | |||
US Corporate Income | — | |||
US Short Duration Fixed Income | — |
Pursuant to Section 871 of the Code, the Portfolios have no designated qualified short-term gains for purposes of exempting withholding of tax on such distributions to US nonresident shareholders.
Proxy Voting
A description of the policies and procedures used to determine how proxies relating to Fund portfolio securities are voted is available (1) without charge, upon request, by calling (800) 823-6300 or (2) on the Securities and Exchange Commission (the “SEC”) website at 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.
124 Annual Report
Schedule of Portfolio Holdings
The Fund files its complete schedule of each Portfolio’s holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the SEC’s website at https://www.sec.gov.
Annual Report 125
The Lazard Funds, 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
Lazard Asset Management LLC • 30 Rockefeller Plaza • New York, NY 10112 • www.lazardassetmanagement.Com | |
Performance information as of the most recent month end is available online at www.lazardassetmanagement.com. LZDPS026 |
Lazard Funds
Annual Report
December 31, 2019
Multi-Asset Funds
Lazard Global Dynamic Multi-Asset Portfolio
Lazard Opportunistic Strategies Portfolio
Lazard Real Assets and Pricing Opportunities Portfolio
Important Information on Paperless Delivery
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Shareholders who hold accounts directly with the Fund may elect to receive shareholder reports and other communications from the Fund electronically by signing up for paperless delivery at www.icsdelivery.com/lazardassetmanagement. If you own these shares through a financial intermediary, you may contact your financial intermediary.
You may elect to receive all future reports in paper free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by following the instructions included with this disclosure and visiting www.fundreports.com. If you own these shares through a financial intermediary, you may contact your financial intermediary or follow instructions included with this disclosure to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the fund complex or your financial intermediary.
PRIVACY NOTICE
WHAT DOES LAZARD DO WITH YOUR PERSONAL INFORMATION?
Financial companies choose how they share your personal information. U.S. federal law gives our clients the right to limit some but not all sharing. U.S. federal and other applicable law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
We do not disclose nonpublic personal information about our clients or former clients to third parties other than as described below.
Personal information we collect.We collect personal information about you in connection with our providing advisory services to you. The legal basis for our collection of your personal information is our contract with you and our legitimate business interest to provide contractual services to you. The collection of this information is necessary for us to be able to provide advisory services to you and the failure to provide such information will result in our inability to provide our services. This information includes your social security number (for U.S. persons) and may include other information such as your:
• | Assets and income; | |
• | Investment experience; | |
• | Transaction history; | |
• | Credit history; and | |
• | Wire transfer instructions. |
How we collect this information.We collect this information from you through various means. For example, when you give us your contact information, enter into an investment advisory contract with us, buy securities (i.e., interests in a fund) from us, direct us to buy or sell securities for your account, tell us where to send money, or make a wire transfer. We also may collect your personal information from other sources, such as our affiliates1 or other non-affiliated companies (such as credit bureaus).
1 | Our affiliates are companies related to us by common ownership or control and can include both financial and nonfinancial companies. Non-affiliates are companiesnot related to us by common ownership or control and can include both financial and nonfinancial companies. |
How we use this information.All financial companies need to share customers’ personal information to run their everyday business and we use the personal information we collect from you for our everyday business purposes. These purposes may include for example:
• | To provide advisory services to you; | |
• | To open an account for you; | |
• | To process a transaction for your account; | |
• | To market products and services to you; and/or | |
• | To respond to court orders and legal investigations. |
If you are an investor located within a European Union country, please note that personal information may be collected, shared and/or stored outside of the European Union.
Disclosure to others.We may provide your personal information to our affiliates and to firms that assist us in servicing your account and have a need for such information, such as a broker, counterparty, fund administrator or third party service provider that aggregates data in a central repository for access by a broker, counterparty or fund administrator to provide its services. We may also disclose such information to service providers and financial institutions with which we have a formal agreement to provide services relating to our arrangements with you. We require third party service providers and financial institutions with which we have a formal agreement to provide services relating to our arrangements with you to protect the confidentiality of your information and to use the information only for the purposes for which we disclose the information to them. These sharing practices are consistent with applicable privacy and related laws, and in general, you may not limit our use of your personal information for these purposes under such laws. We note that the U.S. federal privacy laws only give you the right to limit the certain types of information sharing that we do not engage in (e.g., sharing with our affiliates certain information relating to your transaction history or creditworthiness for their use in marketing to you, or sharing any personal information with non-affiliates for them to market to you). We may also share your personal information with non affiliates (such as a government agency or regulatory authority) as required by applicable law.
How we protect your personal information.To protect your personal information from unauthorized access and use, we use security measures that comply with applicable law. These measures include computer safeguards and secured files and buildings.
How long we keep your personal information.We retain your personal information for the duration of your advisory relationship with us and for a period of time thereafter as required by applicable law.
Your rights with respect to this information.If you are an investor located within a European Union country, you have the following rights with respect to your personal information:
• | The right to request and obtain a copy of your personal information that we maintain; | |
• | The right to correct your personal information that we maintain; | |
• | The right to request the erasure of your personal information from our systems, subject to applicable recordkeeping requirements applicable to us; and | |
• | The right to lodge a complaint with a supervisory authority. |
Who is providing this Privacy Notice.This Privacy Notice relates to the following entities:
• | Lazard Asset Management LLC | |
• | Lazard Asset Management (Canada), Inc.2 | |
• | Lazard Asset Management Securities LLC |
Who to contact with questions.If you have any questions about this Privacy Notice, please call (800) 823-6300 or visit our website at http://www.lazardassetmanagement.com.
2 | Lazard Asset Management (Canada), Inc. does not disclose any non-public personal information about its customers to any third party, except as permitted by or required by any applicable law, including the laws of the United States and Canada. |
The Lazard Funds, Inc.Table of Contents
Please consider a Portfolio’s investment objectives, risks, charges and expenses carefully before investing. For more complete information about The Lazard Funds, 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.
Annual Report 1
The Lazard Funds, Inc.A Message from Lazard (unaudited)
Dear Shareholder,
In 2019, equity markets rallied while debt yields around the world declined. The US equity market outperformed most of its peers, with the S&P 500®Index rising by 31.5% over the year, hitting an all-time high in December. Equities rallied strongly in Europe (+27.5%), but other markets were less ebullient. Uncertainty over Brexit kept UK equities in a range for most of the year, while political unrest and declining oil prices weighed on a number of emerging markets. Faced with US-China trade tensions, a decelerating industrial economy, and clear messaging from key central banks that rates will stay lower for longer, investors reached for yield.
US equity markets began 2019 on uncertain footing after tightening monetary policy and trade tensions led to a sharp sell-off at the end of 2018. However, the US Federal Reserve (Fed) made an abrupt monetary policy U-turn after the market mayhem. Perhaps concluding that monetary policy would be even looser for even longer than previously expected, investors drove the S&P 500 up to record highs, while pushing the US 10-year Treasury yield down to within 10 basis points of the all-time low set in 2016. We believe the US economy appears to have averted recession and could continue to grow at a modest pace through 2020.
Emerging markets equities ended a tumultuous year on a positive note, with the MSCI Emerging Markets®Index up 18.4%. It was a near-perfect reversal of 2018’s dismal 14.6% decline. Trade was the biggest driver of emerging markets equities’ performance. A strong rally in the fourth quarter, for instance, came after two major trade developments. Looking ahead to 2020, we expect trade tensions to continue to influence the path of emerging markets equities, despite the accord on a long-awaited “Phase 1” deal between the United States and China.
In Europe, the European Central Bank (ECB) took rates further into negative territory with the first rate cut since 2016. Germany’s economy contracted in the second quarter after years of powering the euro zone economy. The rest of the euro zone has proven more resilient—France and Spain, for example, depend less than Ger-
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many does on industrial activity and exports to drive growth. In the United Kingdom, the Conservative Party’s landslide win in a December election has helped dissipate some of the uncertainty that has weighed on UK markets since the Brexit vote in 2016.
Despite potential market challenges, we are optimistic for 2020 and believe that fundamental analysis and stock selection will be crucial drivers for performance. We are privileged that you have turned to Lazard for your investment needs and value your continued confidence in our investment management capabilities. We continue to strive for the long-term patterns of performance that are consistent with your expectations.
Sincerely,
Lazard Asset Management LLC
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The Lazard Funds, Inc.Investment Overviews (unaudited)
Multi-Asset
Global developed equities advanced significantly in the year as the MSCI World®Index gained 28%, in US dollar terms. The US-China trade war was a constant theme in the period, as threats of escalation brought markets down in May and August. However, as the year was drawing to a close, several developments boosted investor sentiment. Most notably, the United States and China appeared to be on a more constructive path as the so-called “Phase 1” agreement was announced in late December. In the United Kingdom, the future of Brexit gained clarity following the Conservative Party’s electoral victory. In 2019, the Fed cut rates three times which provided support for risk assets—especially in the fourth quarter. In this environment, US stocks led performance among the major regions. Europe and the United Kingdom lagged, but the latter market was a standout performer late in the year as Brexit fears were attenuated. Asian stocks lagged as a region—Japan was a laggard and Hong Kong markets were impacted by civil unrest. Emerging markets equities could not keep up with the developed world, but the MSCI Emerging Markets Index posted favorable returns for the year at 18%. Here again, as macro clouds cleared somewhat in the fourth quarter, emerging markets stocks gained ground on developed markets driven by strength in China.
In fixed income, interest rates generally declined until early September, including a particularly sharp downward move in August, as the first three quarters of the year were marked by escalating trade war tensions and concerns over global growth. However, as investor sentiment turned positive and some economic data showed signs of improvement, rates rose in the fourth quarter. The 10-year US Treasury hit a low of 1.45%—levels last seen in 2016—in early September and closed the year at 1.92%. German rates made headlines, around the third quarter as the entire sovereign yield curve traded at negative yields for the first time ever—the yield on the 10-year German bund finished the year at –0.18%. Credit spreads tightened in both high yield and investment grade as robust equity markets likely helped underpin credit sentiment. Currency markets were mixed in 2019 but reflected US dollar weakness toward year-end. This was in contrast to foreign exchange moves earlier in the year where most major currencies lost value
4 Annual Report
against the US dollar, as global economic and political uncertainty dominated investor sentiment. Commodity performance was positive in 2019, as the Bloomberg Commodity®Index Total Return gained almost 8% driven in part by energy and precious metals. Brent oil was volatile with drawdowns somewhat mirroring those in equities during May and August and a sharp spike in September on the back of an attack on Saudi Arabia’s oil infrastructure. Gold rallied sharply in the summer as trade war rhetoric and uncertainty filled the headlines.
Lazard Global Dynamic Multi-Asset Portfolio
For the year ended December 31, 2019, the Lazard Global Dynamic Multi-Asset Portfolio’s Institutional Shares posted a total return of 17.80%, while Open Shares posted a total return of 17.46%, as compared with the 27.67% return for the MSCI World Index and 17.06% return of its blended benchmark, which is a 50/50 blend of the MSCI World Index and Bloomberg Barclays Global Aggregate®Index (the “GDMA Index”).
In terms of asset allocation, the Portfolio’s average overweight to equities versus fixed income helped performance for the year.
Within equities, stock selection in the consumer discretionary and financials sectors added value, as did underweight exposure to the energy sector. By country, stock selection in Israel and Italy helped performance. In contrast, stock selection in the communication services, information technology, and real estate sectors hurt performance, as did underweight exposure to the information technology sector. Country detractors were driven by stock selection in France, Japan, and the United States, as well as by underweight exposure to the United States.
Within fixed income, overweight exposure to bonds and duration in Australia, Canada, Czech Republic, Hungary, New Zealand, Poland, Singapore, and the United States helped the Portfolio, as did security selection in the United States. In terms of currency management, overweight exposure to the Australian dollar and New Zealand dollar, underweight exposure to the Korean won, Chinese yuan, and Swedish krona added value, as did positioning in euro
Annual Report 5
proxies (i.e., underweight euro with overweight in the Czech koruna). In contrast, underweight exposure to bonds and duration in Japan and the euro zone hurt performance, as did security selection through underweight exposure to euro-denominated spread product and peripheral Europe. Currency management detracted through overweight exposure to the Japanese yen, as well as underweight exposure to the Thai baht and the Russian ruble.
The Portfolio uses currency forwards opportunistically and for hedging purposes. The contribution impact of these instruments was slightly negative over the period.
Lazard Opportunistic Strategies Portfolio
For the year ended December 31, 2019, the Lazard Opportunistic Strategies Portfolio’s Institutional Shares posted a total return of 15.16%, while Open Shares posted a total return of 14.91%, as compared with the 27.67% return for the MSCI World Index and 19.93% return for the Global Asset Allocation Blended Index.[1]
Trending investments, which represented 34% of the Portfolio at the end of the period, outperformed both indices. Exposure to US large cap, US technology and software, and global mobile payments were among the top contributors.
Diversifying investments, which represented 33% of the Portfolio at year-end, slightly lagged the Bloomberg Barclays US Aggregate Index, but underperformed both indices mentioned above. Positions in US corporate bonds and US health care contributed positively, while exposure to long-term US Treasuries detracted.
Contrarian investments, which represented 15% of the Portfolio at the end of the period, outperformed the Global Asset Allocation Blended Index but underperformed the MSCI World Index. Exposure to Japanese equities and to a US small-cap closed end fund added value. In contrast, exposure to Brazilian equities detracted from returns.
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Lazard Real Assets and Pricing Opportunities Portfolio
For the year ended December 31, 2019, the Lazard Real Assets and Pricing Opportunities Portfolio’s Institutional Shares posted a total return of 16.07%, while Open Shares posted a total return of 15.80%, as compared with the 19.08% return for the blended Real Assets Custom Index and 27.67% return for the MSCI World Index.
Infrastructure returns were held back by US utility PG&E and French satellite operator SES. Global real estate stocks benefited from US positions, including data center REIT Equinix, industrial REIT Prologis, and hotel operator Hilton Worldwide. Detractors within real estate included US retail REIT Macerich and Luxembourg-based real estate operator (which focuses on German real estate) ADO Properties.
In contrast, equity allocations were additive amid strong global stock market performance in the year. Pricing-power stocks were the top contributors through value added from financials and health care stocks, which included names such as Aon, Master-card, Thermo Fisher Scientific, and Roche. Listed infrastructure equities were lifted by US railroad operator Kansas City Southern and UK water utility United Utilities.
Duration underweight to the US dollar curve and currency exposure to the pound sterling detracted.
Conversely, global inflation-linked bonds contributed positively to performance. Overweight exposure to bonds in New Zealand and Canada added value, as did currency exposure to the Australian dollar, the New Zealand dollar and the Swedish krona.
Commodities exposure added value in the period. Within futures, exposures to gold (mainly via a gold ETF) and crude oil helped performance, while exposure to livestock held back returns. Commodity-related equities added value. In similar fashion to the Portfolio’s futures exposure, oil stocks (e.g., BP and EOG Resources) and gold miners (e.g., Kirkland Lake Gold and Agnico Eagle Mines) were additive to returns.
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The Portfolio uses forward currency contracts opportunistically and for hedging purposes. The impact of these instruments was positive during the period. Within commodities, the Portfolio uses futures and total return swaps to gain exposure to these assets. The impact of these instruments was slightly positive during the period.
Notes to Investment Overviews:
1 | The Global Asset Allocation Blended Index is a blended index constructed by the Investment Manager that is comprised of 60% MSCI World Index and 40% Bloomberg Barclays US Aggregate Index and is rebalanced quarterly. |
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The Lazard Funds, Inc.Performance Overviews (unaudited)
Lazard Global Dynamic Multi-Asset Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Global Dynamic Multi-Asset Portfolio, MSCI®World Index and GDMA Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 17.80% | 8.44% | |||
Open Shares** | 17.46% | 8.11% | |||
MSCI World Index | 27.67% | 12.02% | |||
GDMA Index | 17.06% | 7.34% |
† | The inception date for the Portfolio was May 27, 2016. |
Lazard Opportunistic Strategies Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Opportunistic Strategies Portfolio, MSCI World Index and Global Asset Allocation Blended Index*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Five | Ten | |||||
Year | Years | Years | |||||
Institutional Shares** | 15.16% | 3.70% | 5.45% | ||||
Open Shares** | 14.91% | 3.31% | 5.09% | ||||
MSCI World Index | 27.67% | 8.74% | 10.22% | ||||
Global Asset Allocation Blended Index | 19.93% | 6.61% | 7.42% |
Annual Report 9
Lazard Real Assets and Pricing Opportunities Portfolio
Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of Lazard Real Assets and Pricing Opportunities Portfolio, MSCI World Index, 70% MSCI World (USD Hedged) Index | 30% Barclays World Inflation-Linked Bond (USD Hedged) Index and Real Assets Custom Index (USD Hedged)*
Average Annual Total Returns*
Periods Ended December 31, 2019
One | Since | ||||
Year | Inception | † | |||
Institutional Shares** | 16.07% | 5.64% | |||
Open Shares** | 15.80% | 5.32% | |||
MSCI World Index | 27.67% | 12.57% | |||
(Institutional | |||||
Shares) | |||||
12.12% | |||||
(Open Shares) | |||||
70% MSCI World (US Hedged) Index | 30% Barclays | 23.51% | 10.56% | |||
World Inflation-Linked Bond (USD Hedged) Index | (Institutional | ||||
Shares) | |||||
10.29% | |||||
(Open Shares) | |||||
Real Assets Custom Index | 19.08% | 7.98% | |||
(Institutional | |||||
Shares) | |||||
7.89% | |||||
(Open Shares) |
† | The inception date for the Institutional Shares was December 30, 2016 and for the Open Shares was January 9, 2017. |
Notes to Performance Overviews:
* | Total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of the 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 distributing agent (“DST”); without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. |
Performance results do not include adjustments made for financial reporting purposes in accordance with US Generally Accepted Accounting Principles, if any, and may differ from amounts reported in the financial highlights. |
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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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. | |
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 indices are unmanaged, have no fees or costs and are not available for investment. | |
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% 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 Global Asset Allocation Blended Index is a blended index constructed by the Investment Manager that is comprised of 60% MSCI World Index and 40% Bloomberg Barclays US Aggregate Index and is rebalanced quarterly. The Bloomberg Barclays US Aggregate Index covers the investment-grade, US dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities, and commercial mortgage-backed securities, with maturities of no less than one year. | |
The 70% MSCI World (USD Hedged) Index | 30% Barclays World Inflation-Linked Bond (USD Hedged) Index, formerly referred to as the Real Assets Index, (USD Hedged), is an unmanaged index created by the Investment Manager, which is the performance of the 70% MSCI World Index (USD Hedged) and the 30% Bloomberg Barclays World Government Inflation-Linked Bond®Index (USD Hedged). The Bloomberg Barclays World Government Inflation-Linked Bond Index (USD Hedged) measures the performance of investment grade, government inflation-linked debt from 12 different developed markets countries. | |
The Real Assets Custom Index is an unmanaged index created by the Investment Manager, and is comprised of 20% MSCI World Index, 20% MSCI World Core Infrastructure USD Hedged Index (the “Infrastructure Index”), 20% MSCI ACWI IMI Core Real Estate Index, 20% Bloomberg Commodity Total Return Index and 20% Bloomberg Barclays World Government Inflation-Linked 1–10 Year USD Hedged Index. The Infrastructure Index captures large and mid-cap securities across the 23 developed market countries and is designed to represent the performance of listed companies within the developed markets that are engaged in core industrial infrastructure activities. Note that Lazard invests in a range of companies globally, not specifically developed markets countries. The MSCI ACWI IMI Core Real Estate Index is a free float-adjusted market capitalization index that consists of large, mid and small-cap stocks across 23 developed markets and 26 emerging markets countries engaged in the ownership, development and management of specific core property type real estate. The index excludes companies, such as real estate services and real |
Annual Report 11
estate financing companies, that do not own properties. The Bloomberg Commodity Total Return index is composed of futures contracts and reflects the returns on a fully collateralized investment in the Bloomberg Commodity Indices (BCOM). This combines the returns of the BCOM with the returns on cash collateral invested in 13 week (3 Month) U.S. Treasury Bills. The Bloomberg Barclays World Government Inflation-Linked Bond 1–10 Year Index measures the performance of investment grade, government inflation-linked debt from 12 different developed market countries. The indices are unmanaged and have no fees. One cannot invest directly in an index. The Portfolio considers the Real Assets Custom Index to be a more suitable benchmark to compare the Portfolio’s performance given the Portfolio’s investment policies than the 70% MSCI World (USD Hedged) Index | 30% Barclays World Inflation-Linked Bond (USD Hedged) Index. | |
** | The performance of Institutional Shares and Open Shares may vary, primarily based on the differences in fees borne by shareholders investing in different classes. |
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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 (Open 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 July 1, 2019 through December 31, 2019 and held for the entire period.
Actual Expenses
For each Share class of the Portfolios, the first line of the accompanying table 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 accompanying table 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 shareholder reports of other mutual funds.
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Expenses | Annualized | ||||||||||||||||
Beginning | Ending | Paid During | Expense Ratio | ||||||||||||||
Account | Account | Period | * | During Period | |||||||||||||
Value | Value | 7/1/19 - | 7/1/19- | ||||||||||||||
Portfolio | 7/1/19 | 12/31/19 | 12/31/19 | 12/31/19 | |||||||||||||
Global Dynamic Multi-Asset | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,052.00 | $ | 4.65 | 0.90 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.67 | $ | 4.58 | 0.90 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,050.00 | $ | 5.99 | 1.16 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.36 | $ | 5.90 | 1.16 | % | |||||||||
Opportunistic Strategies† | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,036.50 | $ | 6.16 | 1.20 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.16 | $ | 6.11 | 1.20 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,034.80 | $ | 7.49 | 1.46 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,017.85 | $ | 7.43 | 1.46 | % | |||||||||
Real Assets and Pricing Opportunities | |||||||||||||||||
Institutional Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,046.30 | $ | 4.64 | 0.90 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,020.67 | $ | 4.58 | 0.90 | % | |||||||||
Open Shares | |||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,046.00 | $ | 5.47 | 1.06 | % | |||||||||
Hypothetical (5% Return Before Expenses) | $ | 1,000.00 | $ | 1,019.86 | $ | 5.40 | 1.06 | % |
* | 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 184/365 (to reflect one-half year period). |
† | The expense ratios include broker expense and dividend expense on securities sold short. |
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Portfolio Holdings Presented by Asset Class/Sector December 31, 2019
Lazard | Lazard | ||||||||
Global | Real Assets | ||||||||
Dynamic | and Pricing | ||||||||
Multi-Asset | Opportunities | ||||||||
Asset Class/Sector* | Portfolio | Portfolio | |||||||
Equity | |||||||||
Communication Services | 6.0 | % | 2.1 | % | |||||
Consumer Discretionary | 9.5 | 2.9 | |||||||
Consumer Staples | 8.5 | 4.2 | |||||||
Energy | 2.5 | 0.3 | |||||||
Financials | 14.5 | 4.2 | |||||||
Health Care | 12.5 | 4.5 | |||||||
Industrials | 11.6 | 12.8 | |||||||
Information Technology | 13.2 | 1.0 | |||||||
Materials | 3.3 | 0.6 | |||||||
Real Estate | 2.9 | 16.9 | |||||||
Utilities | 3.2 | 11.2 | |||||||
Exchange-Traded Funds | — | 2.6 | |||||||
Sovereign Debt | 8.8 | 8.0 | |||||||
US Municipal Bonds | 0.6 | — | |||||||
US Treasury Securities | 1.2 | 14.3 | |||||||
Short-Term Investments | 1.7 | 14.4 | |||||||
Total Investments | 100.0 | % | 100.0 | % | |||||
Lazard Opportunistic | |||||||||
Strategies Portfolio | |||||||||
Asset Class/Sector* | Long | * | Short† | ||||||
Equity** | |||||||||
Communication Services | 3.4 | % | –6.6 | % | |||||
Consumer Discretionary | 4.6 | –8.9 | |||||||
Consumer Staples | 2.9 | –5.6 | |||||||
Energy | 1.7 | –3.3 | |||||||
Financials | 6.6 | –12.8 | |||||||
Health Care | 4.5 | –8.7 | |||||||
Industrials | 10.8 | –21.2 | |||||||
Information Technology | 10.3 | –20.1 | |||||||
Materials | 2.3 | –4.4 | |||||||
Real Estate | 1.9 | –3.8 | |||||||
Utilities | 2.4 | –4.6 | |||||||
Fixed Income | 31.8 | — | |||||||
Short-Term Investments | 16.8 | — | |||||||
Total Investments | 100.0 | % | –100.0 | % |
* | Represents percentage of total investments excluding securities sold short. |
† | Represents percentage of total securities sold short. |
** | Equity sector breakdown is based upon the underlying holdings of exchange- traded funds and closed-end management investment companies held by the Portfolio. |
Annual Report 15
The Lazard Funds, Inc.Portfolios of Investments
December 31, 2019
The accompanying notes are an integral part of these financial statements.
16 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Canadian National Railway Co. | 2,725 | $ | 246,476 | |||||
Canadian Utilities, Ltd., Class A | 2,170 | 65,457 | ||||||
Centerra Gold, Inc. (*) | 3,035 | 24,144 | ||||||
CGI, Inc. (*) | 665 | 55,651 | ||||||
Cogeco Communications, Inc. | 619 | 53,961 | ||||||
Colliers International Group, Inc. | 373 | 29,040 | ||||||
Constellation Software, Inc. | 75 | 72,840 | ||||||
Fairfax Financial Holdings, Ltd. | 77 | 36,156 | ||||||
Granite Real Estate Investment Trust | 778 | 39,531 | ||||||
H&R Real Estate Investment Trust | 2,837 | 46,098 | ||||||
Kirkland Lake Gold, Ltd. | 2,163 | 95,345 | ||||||
Magna International, Inc. | 523 | 28,676 | ||||||
Northland Power, Inc. | 7,188 | 150,563 | ||||||
Restaurant Brands International, Inc. | 326 | 20,782 | ||||||
Teck Resources, Ltd., Class B | 4,163 | 72,196 | ||||||
The Toronto-Dominion Bank | 4,475 | 251,125 | ||||||
Tourmaline Oil Corp. | 3,911 | 45,840 | ||||||
Whitecap Resources, Inc. | 15,718 | 67,179 | ||||||
1,900,676 | ||||||||
Denmark | 0.4% | ||||||||
Coloplast A/S, Class B | 812 | 100,950 | ||||||
Novo Nordisk A/S, Class B | 725 | 42,050 | ||||||
SimCorp A/S | 231 | 26,248 | ||||||
169,248 | ||||||||
France | 1.0% | ||||||||
Air France-KLM (*) | 2,683 | 29,869 | ||||||
BNP Paribas SA | 512 | 30,478 | ||||||
Engie SA | 984 | 15,901 | ||||||
Faurecia SA | 383 | 20,766 | ||||||
Orange SA | 2,586 | 38,000 | ||||||
Peugeot SA | 4,965 | 118,908 | ||||||
Total SA | 3,319 | 183,415 | ||||||
Veolia Environnement SA | 822 | 21,896 | ||||||
459,233 | ||||||||
Germany | 1.3% | ||||||||
Allianz SE | 647 | 158,651 |
The accompanying notes are an integral part of these financial statements.
Annual Report 17
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
CTS Eventim AG & Co. KGaA | 582 | $ | 36,588 | |||||
Deutsche Telekom AG | 1,207 | 19,724 | ||||||
Muenchener Rueckversicherungs AG | 319 | 94,110 | ||||||
Rheinmetall AG | 181 | 20,814 | ||||||
RWE AG | 766 | 23,535 | ||||||
SAP SE | 150 | 20,215 | ||||||
Schaeffler AG (Preference Shares) | 2,524 | 27,405 | ||||||
Siltronic AG | 256 | 25,772 | ||||||
Symrise AG ADR | 6,125 | 160,169 | ||||||
Wirecard AG | 187 | 22,594 | ||||||
609,577 | ||||||||
Hong Kong | 0.9% | ||||||||
AIA Group, Ltd. Sponsored ADR | 5,600 | 235,704 | ||||||
Hang Seng Bank, Ltd. Sponsored ADR | 7,550 | 155,681 | ||||||
Henderson Land Development Co., Ltd. | 5,000 | 24,554 | ||||||
Jardine Matheson Holdings, Ltd. | 490 | 27,246 | ||||||
443,185 | ||||||||
Israel | 0.6% | ||||||||
Bank Leumi Le-Israel BM | 4,619 | 33,662 | ||||||
Israel Discount Bank, Ltd., ADR | 3,400 | 159,792 | ||||||
Israel Discount Bank, Ltd., Class A | 15,587 | 72,340 | ||||||
265,794 | ||||||||
Italy | 1.2% | ||||||||
Assicurazioni Generali SpA | 998 | 20,602 | ||||||
Enel SpA | 51,287 | 408,009 | ||||||
Poste Italiane SpA | 12,230 | 138,806 | ||||||
Terna SpA | 4,403 | 29,460 | ||||||
596,877 | ||||||||
Japan | 7.9% | ||||||||
Alfresa Holdings Corp. | 3,000 | 61,250 | ||||||
ANA Holdings, Inc. | 1,300 | 43,495 | ||||||
Azbil Corp. | 900 | 25,334 | ||||||
Canon, Inc. | 800 | 21,817 | ||||||
Capcom Co., Ltd. | 1,000 | 27,774 | ||||||
Daito Trust Construction Co., Ltd. | 755 | 93,507 | ||||||
Daiwa House Industry Co., Ltd. | 6,100 | 188,987 |
The accompanying notes are an integral part of these financial statements.
18 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Dip Corp. | 1,500 | $ | 44,323 | |||||
East Japan Railway Co. | 1,800 | 162,475 | ||||||
Fuji Media Holdings, Inc. | 2,000 | 28,387 | ||||||
FUJIFILM Holdings Corp. | 600 | 28,609 | ||||||
Fukuoka Financial Group, Inc. | 3,900 | 74,444 | ||||||
Inpex Corp. | 2,900 | 30,251 | ||||||
Japan Airlines Co., Ltd. | 2,500 | 78,014 | ||||||
Japan Logistics Fund, Inc. REIT | 7 | 17,856 | ||||||
Japan Post Holdings Co., Ltd. | 5,500 | 51,656 | ||||||
Japan Prime Realty Investment Corp. REIT | 6 | 26,352 | ||||||
Japan Real Estate Investment Corp. | 3 | 19,903 | ||||||
Kandenko Co., Ltd. | 3,800 | 36,368 | ||||||
Kao Corp., ADR | 9,115 | 151,127 | ||||||
KDDI Corp. | 900 | 26,775 | ||||||
Kewpie Corp. | 1,200 | 27,022 | ||||||
Kureha Corp. | 600 | 35,990 | ||||||
Kyushu Electric Power Co., Inc. | 2,100 | 18,141 | ||||||
LaSalle Logiport REIT | 23 | 34,169 | ||||||
Lawson, Inc. | 900 | 50,969 | ||||||
Marui Group Co., Ltd. | 1,100 | 26,776 | ||||||
McDonald’s Holdings Co. Japan, Ltd. | 1,500 | 72,287 | ||||||
MCUBS MidCity Investment Corp. REIT | 20 | 21,721 | ||||||
Mitsubishi Heavy Industries, Ltd. | 2,500 | 96,688 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 15,677 | 84,728 | ||||||
Nintendo Co., Ltd. Sponsored ADR | 2,965 | 147,953 | ||||||
Nissan Chemical Corp. | 800 | 33,444 | ||||||
Nomura Holdings, Inc. | 6,000 | 30,820 | ||||||
NTT DOCOMO, Inc. | 7,018 | 196,120 | ||||||
ORIX Corp. | 2,213 | 36,836 | ||||||
SAMTY Co., Ltd. | 1,800 | 37,022 | ||||||
Seino Holdings Co., Ltd. | 2,900 | 39,111 | ||||||
Seven & I Holdings Co., Ltd. | 5,300 | 193,920 | ||||||
Shikoku Electric Power Co., Inc. | 1,800 | 17,891 | ||||||
Shin-Etsu Chemical Co., Ltd. | 1,300 | 142,526 | ||||||
Shionogi & Co., Ltd. | 700 | 43,248 | ||||||
Showa Denko KK | 800 | 21,073 |
The accompanying notes are an integral part of these financial statements.
Annual Report 19
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
SoftBank Group Corp. | 600 | $ | 26,122 | |||||
Sumitomo Mitsui Trust Holdings, Inc. | 1,900 | 74,978 | ||||||
Sumitomo Realty & Development Co., Ltd. | 1,500 | 52,319 | ||||||
Suzuken Co., Ltd. | 500 | 20,347 | ||||||
TechnoPro Holdings, Inc. Sponsored ADR | 13,805 | 194,029 | ||||||
The Chiba Bank, Ltd. | 14,700 | 84,522 | ||||||
The Chugoku Electric Power Co., Inc. | 1,431 | 18,871 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 9,800 | 161,396 | ||||||
The Gunma Bank, Ltd. | 11,900 | 41,747 | ||||||
The Hachijuni Bank, Ltd. | 6,800 | 29,612 | ||||||
The Shizuoka Bank, Ltd. | 4,000 | 29,778 | ||||||
Tokio Marine Holdings, Inc. | 500 | 27,918 | ||||||
Tosoh Corp. | 1,700 | 26,162 | ||||||
United Arrows, Ltd. | 900 | 25,489 | ||||||
West Japan Railway Co. | 1,000 | 86,351 | ||||||
Yamaha Corp. Sponsored ADR | 4,365 | 248,227 | ||||||
3,795,027 | ||||||||
Luxembourg | 0.2% | ||||||||
ArcelorMittal SA | 4,812 | 85,001 | ||||||
Netherlands | 1.4% | ||||||||
EXOR NV | 368 | 28,539 | ||||||
Koninklijke Ahold Delhaize NV | 3,150 | 78,945 | ||||||
NN Group NV | 739 | 28,100 | ||||||
NXP Semiconductors NV | 1,210 | 153,985 | ||||||
Royal Dutch Shell PLC, A Shares | 1,118 | 33,232 | ||||||
Wolters Kluwer NV | 192 | 14,034 | ||||||
Wolters Kluwer NV Sponsored ADR | 4,565 | 332,364 | ||||||
669,199 | ||||||||
Norway | 0.4% | ||||||||
Aker BP ASA | 792 | 25,984 | ||||||
DNO ASA | 35,630 | 46,980 | ||||||
Leroy Seafood Group ASA | 5,049 | 33,572 | ||||||
Orkla ASA | 3,016 | 30,567 | ||||||
Salmar ASA | 591 | 30,292 | ||||||
Telenor ASA | 1,289 | 23,119 |
The accompanying notes are an integral part of these financial statements.
20 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
TGS NOPEC Geophysical Co. ASA | 669 | $ | 20,357 | |||||
210,871 | ||||||||
Puerto Rico | 0.1% | ||||||||
EVERTEC, Inc. | 846 | 28,798 | ||||||
Singapore | 0.5% | ||||||||
Jardine Cycle & Carriage, Ltd. | 1,410 | 31,557 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 2,359 | 19,289 | ||||||
Oversea-Chinese Banking Corp., Ltd. ADR | 11,145 | 180,549 | ||||||
231,395 | ||||||||
Spain | 0.8% | ||||||||
Amadeus IT Group SA | 266 | 21,795 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 2,523 | 14,218 | ||||||
CIE Automotive SA | 874 | 20,704 | ||||||
Corporacion Financiera Alba SA | 178 | 9,690 | ||||||
Iberdrola SA | 30,770 | 316,902 | ||||||
383,309 | ||||||||
Sweden | 1.1% | ||||||||
Assa Abloy AB ADR | 10,335 | 120,351 | ||||||
Axfood AB | 1,089 | 24,233 | ||||||
Boliden AB | 646 | 17,183 | ||||||
Epiroc AB ADR | 14,580 | 177,293 | ||||||
Evolution Gaming Group AB | 1,027 | 30,905 | ||||||
Hexagon AB ADR | 2,675 | 149,051 | ||||||
Swedish Match AB | 591 | 30,468 | ||||||
549,484 | ||||||||
Switzerland | 2.9% | ||||||||
ABB, Ltd. Sponsored ADR | 6,945 | 167,305 | ||||||
Alcon, Inc. (*) | 1,378 | 77,953 | ||||||
Helvetia Holding AG | 215 | 30,379 | ||||||
Novartis AG | 1,516 | 143,629 | ||||||
Novartis AG Sponsored ADR | 2,650 | 250,929 | ||||||
Partners Group Holding AG | 33 | 30,243 | ||||||
Roche Holding AG | 1,492 | 483,793 | ||||||
SIG Combibloc Group AG | 1,912 | 30,530 | ||||||
STMicroelectronics NV | 2,288 | 61,752 |
The accompanying notes are an integral part of these financial statements.
Annual Report 21
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Swisscom AG | 49 | $ | 25,950 | |||||
The Swatch Group AG | 501 | 26,454 | ||||||
Zurich Insurance Group AG | 156 | 63,982 | ||||||
1,392,899 | ||||||||
United Kingdom | 5.1% | ||||||||
Admiral Group PLC | 824 | 25,235 | ||||||
Anglo American PLC | 1,412 | 40,753 | ||||||
Auto Trader Group PLC | 3,142 | 24,831 | ||||||
Bunzl PLC Sponsored ADR | 5,215 | 144,951 | ||||||
Coca-Cola European Partners PLC | 3,330 | 169,430 | ||||||
Compass Group PLC | 2,631 | 65,909 | ||||||
Compass Group PLC Sponsored ADR | 7,077 | 178,694 | ||||||
Diageo PLC Sponsored ADR | 2,175 | 366,314 | ||||||
Dunelm Group PLC | 4,286 | 65,756 | ||||||
Fiat Chrysler Automobiles NV | 3,140 | 46,504 | ||||||
Imperial Brands PLC | 716 | 17,741 | ||||||
International Consolidated Airlines Group SA | 7,006 | 57,650 | ||||||
Lloyds Banking Group PLC | 74,378 | 62,078 | ||||||
Prudential PLC ADR | 4,375 | 166,644 | ||||||
RELX PLC | 1,785 | 45,031 | ||||||
RELX PLC Sponsored ADR | 10,290 | 260,028 | ||||||
Rio Tinto PLC | 650 | 38,621 | ||||||
Rio Tinto, Ltd. | 1,561 | 110,397 | ||||||
Royal Bank of Scotland Group PLC | 6,875 | 22,035 | ||||||
SSP Group PLC | 5,080 | 43,780 | ||||||
Standard Chartered PLC | 3,086 | 29,146 | ||||||
The Weir Group PLC Sponsored ADR | 7,440 | 75,181 | ||||||
Unilever NV | 868 | 49,941 | ||||||
Unilever PLC Sponsored ADR | 5,625 | 321,581 | ||||||
Vodafone Group PLC | 11,872 | 23,048 | ||||||
2,451,279 | ||||||||
United States | 50.2% | ||||||||
3M Co. | 635 | 112,027 | ||||||
AbbVie, Inc. | 1,822 | 161,320 | ||||||
Accenture PLC, Class A | 1,440 | 303,221 | ||||||
ACI Worldwide, Inc. (*) | 810 | 30,687 |
The accompanying notes are an integral part of these financial statements.
22 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Aflac, Inc. | 1,845 | $ | 97,601 | |||||
Akamai Technologies, Inc. (*) | 1,506 | 130,088 | ||||||
Allegion PLC | 123 | 15,318 | ||||||
Alphabet, Inc., Class A (*) | 280 | 375,029 | ||||||
Alphabet, Inc., Class C (*) | 36 | 48,133 | ||||||
Amazon.com, Inc. (*) | 181 | 334,459 | ||||||
American Express Co. | 2,005 | 249,602 | ||||||
American States Water Co. | 479 | 41,501 | ||||||
American Tower Corp. REIT | 248 | 56,995 | ||||||
Ameriprise Financial, Inc. | 179 | 29,818 | ||||||
AmerisourceBergen Corp. | 1,212 | 103,044 | ||||||
Amgen, Inc. | 483 | 116,437 | ||||||
Aon PLC | 2,331 | 485,524 | ||||||
Apple, Inc. | 2,993 | 878,894 | ||||||
Applied Materials, Inc. | 549 | 33,511 | ||||||
AutoZone, Inc. (*) | 128 | 152,488 | ||||||
Avangrid, Inc. | 568 | 29,059 | ||||||
AXA Equitable Holdings, Inc. | 3,075 | 76,199 | ||||||
Bank of America Corp. | 8,790 | 309,584 | ||||||
Baxter International, Inc. | 274 | 22,912 | ||||||
Best Buy Co., Inc. | 1,171 | 102,814 | ||||||
Biogen, Inc. (*) | 145 | 43,026 | ||||||
Blackline, Inc. (*) | 538 | 27,739 | ||||||
Booz Allen Hamilton Holding Corp. | 770 | 54,770 | ||||||
BorgWarner, Inc. | 2,995 | 129,923 | ||||||
Boston Scientific Corp. (*) | 4,755 | 215,021 | ||||||
Bristol-Myers Squibb Co. | 3,638 | 233,523 | ||||||
Burlington Stores, Inc. (*) | 427 | 97,369 | ||||||
Cable One, Inc. | 25 | 37,212 | ||||||
Cadence Design Systems, Inc. (*) | 1,212 | 84,064 | ||||||
Cardinal Health, Inc. | 1,142 | 57,762 | ||||||
Cboe Global Markets, Inc. | 377 | 45,240 | ||||||
CBRE Group, Inc., Class A (*) | 240 | 14,710 | ||||||
CDW Corp. | 652 | 93,132 | ||||||
Chevron Corp. | 858 | 103,398 | ||||||
Church & Dwight Co., Inc. | 330 | 23,212 |
The accompanying notes are an integral part of these financial statements.
Annual Report 23
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Cigna Corp. | 929 | $ | 189,971 | |||||
Cisco Systems, Inc. | 3,400 | 163,064 | ||||||
Citigroup, Inc. | 1,026 | 81,967 | ||||||
Citizens Financial Group, Inc. | 1,982 | 80,489 | ||||||
Colgate-Palmolive Co. | 338 | 23,268 | ||||||
Comcast Corp., Class A | 5,249 | 236,048 | ||||||
Comerica, Inc. | 486 | 34,871 | ||||||
ConocoPhillips | 3,333 | 216,745 | ||||||
Copart, Inc. (*) | 333 | 30,283 | ||||||
Corteva, Inc. | 2,119 | 62,638 | ||||||
Costco Wholesale Corp. | 225 | 66,132 | ||||||
Crown Castle International Corp. REIT | 243 | 34,542 | ||||||
Cummins, Inc. | 428 | 76,595 | ||||||
CVS Health Corp. | 927 | 68,867 | ||||||
Darden Restaurants, Inc. | 1,102 | 120,129 | ||||||
Delta Air Lines, Inc. | 1,029 | 60,176 | ||||||
Devon Energy Corp. | 961 | 24,957 | ||||||
Dillard’s, Inc. Class A | 397 | 29,172 | ||||||
Discover Financial Services | 854 | 72,436 | ||||||
Dollar General Corp. | 1,080 | 168,458 | ||||||
Edison International | 982 | 74,053 | ||||||
Edwards Lifesciences Corp. (*) | 108 | 25,195 | ||||||
Eli Lilly & Co. | 1,012 | 133,007 | ||||||
Encompass Health Corp. | 1,583 | 109,654 | ||||||
Envista Holdings Corp. | 4,505 | 133,528 | ||||||
F5 Networks, Inc. (*) | 614 | 85,745 | ||||||
Facebook, Inc., Class A (*) | 1,477 | 303,154 | ||||||
Hanesbrands, Inc. | 5,544 | 82,328 | ||||||
HCA Healthcare, Inc. | 915 | 135,246 | ||||||
HEICO Corp., Class A | 605 | 54,166 | ||||||
HollyFrontier Corp. | 781 | 39,605 | ||||||
Honeywell International, Inc. | 1,821 | 322,317 | ||||||
Host Hotels & Resorts, Inc. REIT | 1,469 | 27,250 | ||||||
Humana, Inc. | 133 | 48,747 | ||||||
IDEXX Laboratories, Inc. (*) | 157 | 40,997 | ||||||
Intel Corp. | 5,837 | 349,344 |
The accompanying notes are an integral part of these financial statements.
24 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Intercontinental Exchange, Inc. | 3,871 | $ | 358,261 | |||||
International Business Machines Corp. | 647 | 86,724 | ||||||
Intuit, Inc. | 1,107 | 289,957 | ||||||
IQVIA Holdings, Inc. (*) | 2,120 | 327,561 | ||||||
JetBlue Airways Corp. (*) | 2,218 | 41,521 | ||||||
Johnson & Johnson | 5,246 | 765,234 | ||||||
JPMorgan Chase & Co. | 166 | 23,140 | ||||||
KAR Auction Services, Inc. | 4,197 | 91,453 | ||||||
Keysight Technologies, Inc. (*) | 388 | 39,820 | ||||||
Kimberly-Clark Corp. | 1,679 | 230,946 | ||||||
Kohl’s Corp. | 384 | 19,565 | ||||||
Lam Research Corp. | 145 | 42,398 | ||||||
Life Storage, Inc. REIT | 418 | 45,261 | ||||||
Lockheed Martin Corp. | 1,259 | 490,229 | ||||||
Lowe’s Cos., Inc. | 1,625 | 194,610 | ||||||
Lululemon Athletica, Inc. (*) | 603 | 139,697 | ||||||
MasTec, Inc. (*) | 860 | 55,178 | ||||||
MasterCard, Inc., Class A | 493 | 147,205 | ||||||
McDonald’s Corp. | 1,275 | 251,953 | ||||||
McGrath RentCorp | 430 | 32,912 | ||||||
McKesson Corp. | 484 | 66,947 | ||||||
Mellanox Technologies, Ltd. (*) | 318 | 37,263 | ||||||
Merck & Co., Inc. | 4,136 | 376,169 | ||||||
MetLife, Inc. | 917 | 46,739 | ||||||
Micron Technology, Inc. (*) | 1,016 | 54,640 | ||||||
Microsoft Corp. | 4,806 | 757,906 | ||||||
Morgan Stanley | 1,701 | 86,955 | ||||||
Morningstar, Inc. | 181 | 27,387 | ||||||
Motorola Solutions, Inc. | 1,745 | 281,189 | ||||||
Nasdaq, Inc. | 340 | 36,414 | ||||||
National Fuel Gas Co. | 1,535 | 71,439 | ||||||
National Retail Properties, Inc. REIT | 1,964 | 105,310 | ||||||
Nexstar Media Group, Inc., Class A | 534 | 62,612 | ||||||
NIKE, Inc., Class B | 3,797 | 384,674 | ||||||
Nordstrom, Inc. | 789 | 32,294 | ||||||
Northrop Grumman Corp. | 903 | 310,605 |
The accompanying notes are an integral part of these financial statements.
Annual Report 25
Description | Shares | Fair Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
NVIDIA Corp. | 454 | $ | 106,826 | |||||
O-I Glass, Inc. | 2,932 | 34,979 | ||||||
Palo Alto Networks, Inc. (*) | 565 | 130,656 | ||||||
Parsley Energy, Inc., Class A | 3,264 | 61,722 | ||||||
PayPal Holdings, Inc. (*) | 233 | 25,204 | ||||||
PDC Energy, Inc. (*) | 816 | 21,355 | ||||||
PennyMac Financial Services, Inc. | 738 | 25,122 | ||||||
PepsiCo, Inc. | 2,654 | 362,722 | ||||||
Pfizer, Inc. | 1,080 | 42,314 | ||||||
Pioneer Natural Resources Co. | 349 | 52,828 | ||||||
PotlatchDeltic Corp. REIT | 462 | 19,991 | ||||||
Premier, Inc., Class A (*) | 2,644 | 100,155 | ||||||
PTC, Inc. (*) | 2,860 | 214,185 | ||||||
Public Service Enterprise Group, Inc. | 1,717 | 101,389 | ||||||
PulteGroup, Inc. | 731 | 28,363 | ||||||
QUALCOMM, Inc. | 1,774 | 156,520 | ||||||
Radian Group, Inc. | 2,165 | 54,471 | ||||||
Rambus, Inc. (*) | 2,028 | 27,936 | ||||||
Raytheon Co. | 123 | 27,028 | ||||||
Realty Income Corp. REIT | 361 | 26,580 | ||||||
Regions Financial Corp. | 17,709 | 303,886 | ||||||
Republic Services, Inc. | 1,602 | 143,587 | ||||||
Rockwell Automation, Inc. | 1,255 | 254,351 | ||||||
Ross Stores, Inc. | 1,283 | 149,367 | ||||||
S&P Global, Inc. | 930 | 253,937 | ||||||
Simon Property Group, Inc. REIT | 2,859 | 425,877 | ||||||
Skyworks Solutions, Inc. | 248 | 29,978 | ||||||
Southwest Airlines Co. | 464 | 25,047 | ||||||
Starbucks Corp. | 137 | 12,045 | ||||||
Synchrony Financial | 1,383 | 49,802 | ||||||
T-Mobile US, Inc. (*) | 290 | 22,742 | ||||||
Take-Two Interactive Software, Inc. (*) | 775 | 94,883 | ||||||
Target Corp. | 1,065 | 136,544 | ||||||
TD Ameritrade Holding Corp. | 680 | 33,796 | ||||||
TE Connectivity, Ltd. | 253 | 24,248 | ||||||
Texas Instruments, Inc. | 1,515 | 194,359 |
The accompanying notes are an integral part of these financial statements.
26 Annual Report
Description | Shares | Fair Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
The Coca-Cola Co. | 6,675 | $ | 369,461 | |||||
The Estee Lauder Cos., Inc., Class A | 480 | 99,139 | ||||||
The Hershey Co. | 1,578 | 231,934 | ||||||
The Procter & Gamble Co. | 3,818 | 476,868 | ||||||
The TJX Cos., Inc. | 6,681 | 407,942 | ||||||
Thermo Fisher Scientific, Inc. | 1,280 | 415,834 | ||||||
Ulta Salon Cosmetics & Fragrance, Inc. (*) | 83 | 21,011 | ||||||
United Airlines Holdings, Inc. (*) | 613 | 53,999 | ||||||
United Rentals, Inc. (*) | 720 | 120,074 | ||||||
UnitedHealth Group, Inc. | 777 | 228,422 | ||||||
Urban Outfitters, Inc. (*) | 1,077 | 29,908 | ||||||
Verizon Communications, Inc. | 9,789 | 601,045 | ||||||
ViacomCBS, Inc., Class B | 445 | 18,677 | ||||||
Visa, Inc., Class A | 1,817 | 341,414 | ||||||
VMware, Inc., Class A (*) | 170 | 25,804 | ||||||
Vulcan Materials Co. | 518 | 74,587 | ||||||
W&T Offshore, Inc. (*) | 5,983 | 33,265 | ||||||
Walmart, Inc. | 452 | 53,716 | ||||||
Warrior Met Coal, Inc. | 1,498 | 31,653 | ||||||
Waste Management, Inc. | 1,431 | 163,077 | ||||||
Western Alliance Bancorp | 511 | 29,127 | ||||||
Williams-Sonoma, Inc. | 388 | 28,495 | ||||||
WW Grainger, Inc. | 151 | 51,117 | ||||||
Zebra Technologies Corp., Class A (*) | 301 | 76,887 | ||||||
Zions BanCorp. | 447 | 23,208 | ||||||
Zoetis, Inc. | 3,142 | 415,844 | ||||||
23,970,981 | ||||||||
Total Common Stocks (Cost $34,400,856) | 39,609,564 | |||||||
Preferred Stocks | 0.1% | ||||||||
Germany | 0.1% | ||||||||
Porsche Automobil Holding SE (Cost $24,275) | 372 | 27,828 |
The accompanying notes are an integral part of these financial statements.
Annual Report 27
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
Corporate Bonds | 4.6% | ||||||||||
Australia | 0.1% | ||||||||||
Telstra Corp., Ltd., 4.000%, 09/16/22 | AUD | 70 | $ | 52,085 | ||||||
Canada | 0.3% | ||||||||||
Canadian Imperial Bank of Commerce, 2.900%, 09/14/21 | CAD | 140 | 109,204 | |||||||
Rogers Communications, Inc., 3.250%, 05/01/29 | CAD | 55 | 42,950 | |||||||
152,154 | ||||||||||
France | 0.2% | ||||||||||
Schneider Electric SE, 2.950%, 09/27/22 | USD | 85 | 86,953 | |||||||
Germany | 0.2% | ||||||||||
BMW Finance NV, 0.875%, 08/16/22 | GBP | 55 | 72,285 | |||||||
Netherlands | 0.6% | ||||||||||
BNG Bank NV, 5.000%, 09/16/20 | NZD | 111 | 76,435 | |||||||
Nederlandse Waterschapsbank NV, 3.125%, 12/05/22 (#) | USD | 200 | 207,497 | |||||||
283,932 | ||||||||||
Switzerland | 0.2% | ||||||||||
ABB Finance USA, Inc., 3.375%, 04/03/23 | USD | 77 | 79,999 | |||||||
United Kingdom | 0.4% | ||||||||||
Unilever Capital Corp., 3.250%, 03/07/24 | USD | 200 | 209,407 |
The accompanying notes are an integral part of these financial statements.
28 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
United States | 2.6% | ||||||||||
American Express Co., 3.000%, 10/30/24 | USD | 75 | $ | 77,472 | ||||||
Apple, Inc., 3.850%, 05/04/43 | USD | 120 | 134,324 | |||||||
Bank of America Corp., 3.499% (USD LIBOR 3 Month + 0.630%), 05/17/22 (§) | USD | 84 | 85,669 | |||||||
Citigroup, Inc., 2.477% (BBSW 3 Month + 1.550%), 05/04/21 (§) | AUD | 143 | 101,443 | |||||||
John Deere Canada Funding, Inc., 2.050%, 09/17/20 | CAD | 140 | 107,846 | |||||||
Johnson & Johnson, 3.625%, 03/03/37 | USD | 22 | 24,240 | |||||||
JPMorgan Chase & Co., 4.500%, 01/24/22 | USD | 76 | 79,776 | |||||||
McDonald’s Corp., 3.125%, 03/04/25 | CAD | 140 | 110,548 | |||||||
Microsoft Corp., 4.450%, 11/03/45 | USD | 89 | 111,104 | |||||||
Morgan Stanley, 3.625%, 01/20/27 | USD | 75 | 79,772 | |||||||
PepsiCo, Inc., 2.875%, 10/15/49 | USD | 80 | 77,092 | |||||||
Starbucks Corp., 4.450%, 08/15/49 | USD | 65 | 75,155 | |||||||
The Goldman Sachs Group, Inc., 3.625%, 01/22/23 | USD | 73 | 75,995 | |||||||
Verizon Communications, Inc., 3.875%, 02/08/29 | USD | 104 | 114,686 | |||||||
1,255,122 | ||||||||||
Total Corporate Bonds (Cost $2,081,851) | 2,191,937 |
The accompanying notes are an integral part of these financial statements.
Annual Report 29
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
Foreign Government Obligations | 6.3% | ||||||||||
Australia | 0.1% | ||||||||||
Queensland Treasury Corp., 3.000%, 03/22/24 | AUD | 55 | $ | 41,325 | ||||||
Bermuda | 0.5% | ||||||||||
Government of Bermuda, 4.854%, 02/06/24 | USD | 200 | 218,750 | |||||||
Canada | 0.6% | ||||||||||
City of Vancouver, 2.900%, 11/20/25 | CAD | 58 | 46,327 | |||||||
Province of Quebec: | ||||||||||
1.650%, 03/03/22 | CAD | 145 | 111,241 | |||||||
2.500%, 04/20/26 | USD | 115 | 117,933 | |||||||
275,501 | ||||||||||
Chile | 0.6% | ||||||||||
Bonos de la Tesoreria de la Republica en pesos, 4.500%, 03/01/26 | CLP | 55,000 | 80,600 | |||||||
Republic of Chile, 3.125%, 01/21/26 | USD | 200 | 208,375 | |||||||
288,975 | ||||||||||
Czech Republic | 0.5% | ||||||||||
Czech Republic, 2.130% (PRIBOR 6 Month - 0.100%), 11/19/27 (§) | CZK | 4,910 | 220,888 | |||||||
France | 0.3% | ||||||||||
Government of France, 1.750%, 06/25/39 | EUR | 111 | 150,665 | |||||||
Hungary | 0.7% | ||||||||||
Hungary, 6.375%, 03/29/21 | USD | 94 | 99,170 | |||||||
Hungary Government Bonds: 2.500%, 10/24/24 | HUF | 22,220 | 80,801 |
The accompanying notes are an integral part of these financial statements.
30 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
2.750%, 12/22/26 | HUF | 22,330 | $ | 82,365 | ||||||
3.000%, 10/27/27 | HUF | 22,860 | 85,203 | |||||||
347,539 | ||||||||||
Ireland | 0.2% | ||||||||||
Ireland Government Bonds, 1.350%, 03/18/31 | EUR | 58 | 72,868 | |||||||
Italy | 0.1% | ||||||||||
Italy Government International Bonds, 6.875%, 09/27/23 | USD | 60 | 68,786 | |||||||
Japan | 0.4% | ||||||||||
Japan International Cooperation Agency, 2.125%, 10/20/26 | USD | 200 | 198,234 | |||||||
Mexico | 0.4% | ||||||||||
Mexico Cetes, 0.000%, 04/23/20 | MXN | 31,336 | 160,803 | |||||||
United Mexican States, 6.750%, 02/06/24 | GBP | 30 | 47,755 | |||||||
208,558 | ||||||||||
New Zealand | 0.2% | ||||||||||
New Zealand Government Bonds, 6.000%, 05/15/21 | NZD | 115 | 82,146 | |||||||
Norway | 0.5% | ||||||||||
Oslo Kommune: | ||||||||||
2.350%, 09/04/24 | NOK | 1,000 | 114,683 | |||||||
2.310% (NIBOR 3 Month + 0.460%), 05/06/26 (§) | NOK | 1,000 | 115,009 | |||||||
229,692 | ||||||||||
Panama | 0.4% | ||||||||||
Republic of Panama, 4.000%, 09/22/24 | USD | 200 | 213,875 | |||||||
Poland | 0.5% | ||||||||||
Poland Government Bonds, 1.790%, 05/25/28 (§) | PLN | 970 | 249,039 |
The accompanying notes are an integral part of these financial statements.
Annual Report 31
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
United Kingdom | 0.3% | ||||||||||
United Kingdom Gilt: | ||||||||||
1.750%, 09/07/37 | GBP | 60 | $ | 85,850 | ||||||
1.500%, 07/22/47 | GBP | 55 | 75,479 | |||||||
161,329 | ||||||||||
Total Foreign Government Obligations (Cost $2,931,596) | 3,028,170 | |||||||||
Quasi Government Bonds | 0.9% | ||||||||||
Canada | 0.4% | ||||||||||
Export Development Canada, 1.800%, 09/01/22 | CAD | 220 | 169,250 | |||||||
Germany | 0.5% | ||||||||||
KFW, 2.750%, 04/16/20 | AUD | 330 | 232,667 | |||||||
Total Quasi Government Bonds (Cost $390,939) | 401,917 | |||||||||
Supranational Bonds | 1.6% | ||||||||||
Asian Development Bank: | ||||||||||
1.000%, 12/15/22 | GBP | 70 | 93,095 | |||||||
2.125%, 03/19/25 | USD | 128 | 130,135 | |||||||
European Bank for Reconstruction & Development, 1.625%, 09/27/24 | USD | 35 | 34,725 | |||||||
European Investment Bank, 1.125%, 09/16/21 (#) | CAD | 150 | 114,131 | |||||||
International Bank for Reconstruction & Development: | ||||||||||
3.500%, 01/22/21 | NZD | 75 | 51,566 | |||||||
2.500%, 08/03/23 | CAD | 220 | 172,727 | |||||||
2.900%, 11/26/25 | AUD | 60 | 45,289 |
The accompanying notes are an integral part of these financial statements.
32Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||||
International Finance Corp.: | ||||||||||
3.625%, 05/20/20 | NZD | 115 | $ | 78,051 | ||||||
2.700%, 03/15/23 | AUD | 72 | 52,683 | |||||||
Total Supranational Bonds (Cost $753,084) | 772,402 | |||||||||
US Municipal Bonds | 0.6% | ||||||||||
California | 0.5% | ||||||||||
California State Build America Bonds, 7.500%, 04/01/34 | USD | 95 | 143,055 | |||||||
State of California, 4.500%, 04/01/33 | USD | 100 | 112,485 | |||||||
255,540 | ||||||||||
New York | 0.1% | ||||||||||
New York State Urban Development Corp., Series B, 3.900%, 03/15/33 | USD | 40 | 42,983 | |||||||
Total US Municipal Bonds (Cost $286,003) | 298,523 | |||||||||
US Treasury Securities | 1.2% | ||||||||||
US Treasury Bonds, 2.250%, 08/15/49 | USD | 152 | 147,274 | |||||||
US Treasury Notes: | ||||||||||
2.125%, 05/15/25 | USD | 75 | 76,469 | |||||||
2.875%, 08/15/28 | USD | 190 | 204,641 | |||||||
3.125%, 11/15/41 | USD | 133 | 150,677 | |||||||
Total US Treasury Securities (Cost $570,464) | 579,061 |
The accompanying notes are an integral part of these financial statements.
Annual Report 33
Description | Shares | Fair Value | ||||||
Lazard Global Dynamic Multi-Asset Portfolio (continued) | ||||||||
Short-Term Investments | 1.7% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (Cost $816,577) | 816,577 | $ | 816,577 | |||||
Total Investments | 99.9% (Cost $42,255,645) (») | $ | 47,725,979 | ||||||
Cash and Other Assets in Excess of Liabilities | 0.1% | 48,530 | |||||||
Net Assets | 100.0% | $ | 47,774,509 |
The accompanying notes are an integral part of these financial statements.
34 Annual Report
Lazard Global Dynamic Multi-Asset Portfolio (continued)
Forward Currency Contracts open at December 31, 2019:
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||
AUD | 216,722 | USD | 149,082 | HSB | 02/12/20 | $ | 3,155 | $ | — | |||||||||||||
AUD | 232,681 | USD | 158,931 | HSB | 02/12/20 | 4,517 | — | |||||||||||||||
CAD | 67,360 | USD | 50,724 | HSB | 02/12/20 | 1,159 | — | |||||||||||||||
CAD | 216,950 | USD | 164,074 | HSB | 02/12/20 | 3,027 | — | |||||||||||||||
CAD | 334,276 | USD | 251,718 | HSB | 02/12/20 | 5,752 | — | |||||||||||||||
CAD | 371,469 | USD | 280,994 | HSB | 02/12/20 | 5,122 | — | |||||||||||||||
CHF | 88,241 | USD | 89,546 | HSB | 02/12/20 | 1,870 | — | |||||||||||||||
CLP | 16,580,293 | USD | 21,189 | CIT | 01/16/20 | 865 | — | |||||||||||||||
CLP | 20,298,884 | USD | 27,455 | CIT | 01/16/20 | — | 454 | |||||||||||||||
CZK | 525,454 | USD | 22,900 | JPM | 01/24/20 | 279 | — | |||||||||||||||
CZK | 1,751,242 | USD | 76,094 | JPM | 01/24/20 | 1,156 | — | |||||||||||||||
CZK | 2,057,070 | USD | 89,319 | JPM | 01/24/20 | 1,421 | — | |||||||||||||||
EUR | 74,469 | USD | 83,200 | CIT | 01/15/20 | 394 | — | |||||||||||||||
EUR | 558,130 | USD | 615,321 | CIT | 01/15/20 | 11,201 | — | |||||||||||||||
EUR | 67,957 | USD | 75,415 | HSB | 01/15/20 | 870 | — | |||||||||||||||
EUR | 68,496 | USD | 76,546 | HSB | 01/15/20 | 342 | — | |||||||||||||||
EUR | 115,305 | USD | 127,645 | HSB | 01/15/20 | 1,789 | — | |||||||||||||||
EUR | 772,387 | USD | 851,603 | HSB | 01/15/20 | 15,430 | — | |||||||||||||||
EUR | 3,363 | USD | 3,763 | JPM | 01/15/20 | 12 | — | |||||||||||||||
EUR | 13,731 | USD | 15,137 | JPM | 01/15/20 | 276 | — | |||||||||||||||
EUR | 65,466 | USD | 73,000 | JPM | 01/15/20 | 489 | — | |||||||||||||||
EUR | 76,622 | USD | 84,931 | JPM | 01/15/20 | 1,080 | — | |||||||||||||||
EUR | 88,390 | USD | 98,221 | JPM | 01/15/20 | 1,000 | — | |||||||||||||||
EUR | 227,474 | USD | 254,788 | JPM | 01/15/20 | 560 | — | |||||||||||||||
EUR | 333,290 | USD | 372,784 | SSB | 03/18/20 | 2,822 | — | |||||||||||||||
GBP | 6,698 | USD | 8,612 | JPM | 02/12/20 | 270 | — | |||||||||||||||
GBP | 19,087 | USD | 24,795 | JPM | 02/12/20 | 516 | — | |||||||||||||||
GBP | 84,703 | USD | 108,810 | JPM | 02/12/20 | 3,514 | — | |||||||||||||||
GBP | 88,346 | USD | 114,453 | JPM | 02/12/20 | 2,702 | — | |||||||||||||||
GBP | 183,167 | USD | 238,990 | SSB | 03/18/20 | 4,134 | — | |||||||||||||||
HKD | 935,190 | USD | 119,888 | SSB | 03/18/20 | 55 | — | |||||||||||||||
HUF | 22,541,475 | USD | 75,116 | HSB | 01/24/20 | 1,359 | — | |||||||||||||||
HUF | 21,265,204 | USD | 70,675 | JPM | 01/24/20 | 1,471 | — | |||||||||||||||
IDR | 599,248,000 | USD | 41,485 | HSB | 02/12/20 | 1,696 | — | |||||||||||||||
JPY | 51,841,497 | USD | 477,857 | CIT | 02/12/20 | 204 | — | |||||||||||||||
JPY | 126,122,178 | USD | 1,162,556 | HSB | 02/12/20 | 492 | — |
The accompanying notes are an integral part of these financial statements.
Annual Report 35
Lazard Global Dynamic Multi-Asset Portfolio (continued)
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||
JPY | 30,109,076 | USD | 277,526 | JPM | 02/12/20 | $ | 127 | $ | — | |||||||||||||
KRW | 206,319,800 | USD | 173,000 | HSB | 02/10/20 | 5,653 | — | |||||||||||||||
MXN | 868,442 | USD | 44,693 | HSB | 02/12/20 | 966 | — | |||||||||||||||
MXN | 923,021 | USD | 46,859 | HSB | 02/12/20 | 1,670 | — | |||||||||||||||
NOK | 1,015,822 | USD | 111,338 | JPM | 02/12/20 | 4,387 | — | |||||||||||||||
NZD | 130,124 | USD | 82,548 | CIT | 02/12/20 | 5,098 | — | |||||||||||||||
NZD | 135,064 | USD | 86,881 | JPM | 02/12/20 | 4,093 | — | |||||||||||||||
PLN | 272,927 | USD | 70,765 | HSB | 02/12/20 | 1,182 | — | |||||||||||||||
PLN | 289,321 | USD | 74,575 | HSB | 02/12/20 | 1,694 | — | |||||||||||||||
SEK | 577,791 | USD | 60,366 | JPM | 02/12/20 | 1,442 | — | |||||||||||||||
SGD | 57,652 | USD | 42,482 | HSB | 02/12/20 | 398 | — | |||||||||||||||
USD | 66,689 | AUD | 96,746 | CIT | 02/12/20 | — | 1,271 | |||||||||||||||
USD | 43,900 | AUD | 64,184 | HSB | 02/12/20 | — | 1,186 | |||||||||||||||
USD | 211,408 | AUD | 306,748 | HSB | 02/12/20 | — | 4,068 | |||||||||||||||
USD | 41,400 | AUD | 59,884 | JPM | 02/12/20 | — | 666 | |||||||||||||||
USD | 123,845 | AUD | 179,671 | JPM | 02/12/20 | — | 2,365 | |||||||||||||||
USD | 192,510 | AUD | 279,308 | MSC | 02/12/20 | — | 3,690 | |||||||||||||||
USD | 357,702 | AUD | 518,536 | SSB | 03/18/20 | — | 6,856 | |||||||||||||||
USD | 84,480 | CAD | 111,269 | CIT | 02/12/20 | — | 1,223 | |||||||||||||||
USD | 1,052,391 | CAD | 1,386,006 | HSB | 02/12/20 | — | 15,152 | |||||||||||||||
USD | 11,068 | CAD | 14,579 | JPM | 02/12/20 | — | 162 | |||||||||||||||
USD | 56,700 | CAD | 74,688 | JPM | 02/12/20 | — | 827 | |||||||||||||||
USD | 60,100 | CAD | 79,726 | JPM | 02/12/20 | — | 1,307 | |||||||||||||||
USD | 265,876 | CAD | 350,158 | MSC | 02/12/20 | — | 3,826 | |||||||||||||||
USD | 627,619 | CAD | 823,436 | SSB | 03/18/20 | — | 6,670 | |||||||||||||||
USD | 20,800 | CHF | 20,476 | HSB | 02/12/20 | — | 413 | |||||||||||||||
USD | 140,580 | CHF | 136,672 | SSB | 03/18/20 | — | 1,361 | |||||||||||||||
USD | 129,542 | CLP | 92,728,633 | CIT | 01/16/20 | 6,199 | — | |||||||||||||||
USD | 13,065 | CZK | 299,830 | JPM | 01/24/20 | — | 161 | |||||||||||||||
USD | 21,307 | CZK | 490,868 | JPM | 01/24/20 | — | 346 | |||||||||||||||
USD | 67,600 | CZK | 1,558,110 | JPM | 01/24/20 | — | 1,130 | |||||||||||||||
USD | 71,700 | CZK | 1,653,183 | JPM | 01/24/20 | — | 1,224 | |||||||||||||||
USD | 50,000 | EUR | 44,681 | CIT | 02/12/20 | — | 243 | |||||||||||||||
USD | 151,005 | EUR | 135,833 | HSB | 01/15/20 | — | 1,472 | |||||||||||||||
USD | 451,200 | EUR | 405,785 | HSB | 01/15/20 | — | 4,308 | |||||||||||||||
USD | 427,400 | EUR | 385,362 | JPM | 01/15/20 | — | 5,184 | |||||||||||||||
USD | 5,621 | GBP | 4,372 | JPM | 02/12/20 | — | 176 |
The accompanying notes are an integral part of these financial statements.
36 Annual Report
Lazard Global Dynamic Multi-Asset Portfolio (concluded)
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||
USD | 17,000 | GBP | 12,922 | JPM | 02/12/20 | $ | — | $ | 136 | |||||||||||||
USD | 37,000 | GBP | 28,045 | JPM | 02/12/20 | — | 191 | |||||||||||||||
USD | 111,200 | GBP | 86,534 | JPM | 02/12/20 | — | 3,552 | |||||||||||||||
USD | 118,000 | GBP | 91,055 | JPM | 02/12/20 | — | 2,747 | |||||||||||||||
USD | 270,127 | HUF | 79,344,074 | HSB | 01/24/20 | 940 | — | |||||||||||||||
USD | 127,425 | HUF | 37,449,248 | JPM | 01/24/20 | 373 | — | |||||||||||||||
USD | 63,484 | ILS | 219,857 | SSB | 03/18/20 | — | 440 | |||||||||||||||
USD | 39,000 | JPY | 4,255,219 | CIT | 02/12/20 | — | 240 | |||||||||||||||
USD | 367,900 | JPY | 39,725,216 | HSB | 02/12/20 | 1,570 | — | |||||||||||||||
USD | 342,400 | JPY | 37,200,287 | JPM | 02/12/20 | — | 646 | |||||||||||||||
USD | 638,482 | JPY | 69,457,259 | SSB | 03/18/20 | — | 3,292 | |||||||||||||||
USD | 26,100 | KRW | 30,098,520 | HSB | 02/10/20 | 38 | — | |||||||||||||||
USD | 27,700 | KRW | 32,312,050 | HSB | 02/10/20 | — | 279 | |||||||||||||||
USD | 31,100 | KRW | 37,018,330 | HSB | 02/10/20 | — | 954 | |||||||||||||||
USD | 18,500 | MXN | 363,032 | HSB | 02/12/20 | — | 587 | |||||||||||||||
USD | 143,448 | MXN | 2,787,258 | HSB | 02/12/20 | — | 3,093 | |||||||||||||||
USD | 17,400 | MXN | 337,670 | JPM | 02/12/20 | — | 353 | |||||||||||||||
USD | 46,200 | NOK | 421,596 | HSB | 02/12/20 | — | 1,829 | |||||||||||||||
USD | 85,685 | NOK | 780,383 | HSB | 02/12/20 | — | 3,219 | |||||||||||||||
USD | 43,600 | NOK | 397,070 | JPM | 02/12/20 | — | 1,635 | |||||||||||||||
USD | 157,177 | NOK | 1,408,949 | SSB | 03/18/20 | — | 3,345 | |||||||||||||||
USD | 156,564 | NZD | 245,498 | CIT | 02/12/20 | — | 8,794 | |||||||||||||||
USD | 17,400 | NZD | 27,281 | JPM | 02/12/20 | — | 976 | |||||||||||||||
USD | 18,500 | NZD | 28,765 | JPM | 02/12/20 | — | 875 | |||||||||||||||
USD | 195,582 | NZD | 306,678 | JPM | 02/12/20 | — | 10,984 | |||||||||||||||
USD | 376,156 | PLN | 1,447,505 | HSB | 02/12/20 | — | 5,425 | |||||||||||||||
USD | 29,000 | SEK | 271,217 | JPM | 02/12/20 | — | 12 | |||||||||||||||
USD | 25,880 | SGD | 35,122 | HSB | 02/12/20 | — | 242 | |||||||||||||||
USD | 56,255 | SGD | 76,163 | SSB | 03/18/20 | — | 415 | |||||||||||||||
Total gross unrealized appreciation/depreciation on Forward Currency Contracts | $ | 116,831 | $ | 120,002 |
The accompanying notes are an integral part of these financial statements.
Annual Report 37
The accompanying notes are an integral part of these financial statements.
38 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Opportunistic Strategies Portfolio (concluded) | ||||||||
Securities Sold Short | (5.9)% | ||||||||
Exchange-Traded Funds | (5.9)% | ||||||||
iShares MSCI ACWI ETF | (22,600 | ) | $ | (1,791,050 | ) | |||
SPDR S&P 500 ETF Trust | (9,890 | ) | (3,183,195 | ) | ||||
Total Securities Sold Short (Proceeds ($4,501,212)) | (4,974,245 | ) | ||||||
Total Investments | 100.1% (Cost and short proceeds $78,439,216) | $ | 83,774,719 | ||||||
Liabilities in Excess of Cash and Other Assets | (0.1)% | (58,196 | ) | ||||||
Net Assets | 100.0% | $ | 83,716,523 |
The accompanying notes are an integral part of these financial statements.
Annual Report 39
The accompanying notes are an integral part of these financial statements.
40 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Northland Power, Inc. | 3,269 | $ | 68,474 | |||||
Nutrien, Ltd. | 300 | 14,373 | ||||||
Power Financial Corp. | 978 | 26,315 | ||||||
Rogers Communications, Inc., Class B | 327 | 16,237 | ||||||
Royal Bank of Canada | 887 | 70,185 | ||||||
Sun Life Financial, Inc. | 229 | 10,442 | ||||||
Teck Resources, Ltd., Class B | 910 | 15,782 | ||||||
TELUS Corp. (*) | 176 | 6,815 | ||||||
The North West Co., Inc. | 310 | 6,524 | ||||||
The Toronto-Dominion Bank | 1,123 | 62,984 | ||||||
TransAlta Corp. | 1,429 | 10,212 | ||||||
723,574 | ||||||||
China | 1.1% | ||||||||
Agile Group Holdings, Ltd. | 10,000 | 15,064 | ||||||
China Aoyuan Group, Ltd. | 7,000 | 11,441 | ||||||
China Vanke Co., Ltd., Class H | 1,900 | 8,111 | ||||||
CIFI Holdings Group Co., Ltd. | 24,000 | 20,309 | ||||||
Country Garden Holdings Co., Ltd. | 9,000 | 14,462 | ||||||
KWG Group Holdings, Ltd. | 8,500 | 11,936 | ||||||
Logan Property Holdings Co., Ltd. | 14,000 | 23,552 | ||||||
Longfor Group Holdings, Ltd. | 5,500 | 25,831 | ||||||
Powerlong Real Estate Holdings, Ltd. | 30,000 | 20,040 | ||||||
Shenzhen Investment, Ltd. | 40,000 | 16,024 | ||||||
Sunac China Holdings, Ltd. | 3,000 | 17,978 | ||||||
Times China Holdings, Ltd. | 4,000 | 8,001 | ||||||
Yuexiu Property Co., Ltd. | 34,000 | 7,867 | ||||||
200,616 | ||||||||
Denmark | 0.1% | ||||||||
Novo Nordisk A/S, Class B | 177 | 10,266 | ||||||
Scandinavian Tobacco Group A/S | 747 | 9,116 | ||||||
19,382 | ||||||||
Finland | 0.1% | ||||||||
Citycon Oyj | 833 | 8,749 | ||||||
Cramo Oyj | 838 | 12,446 | ||||||
21,195 |
The accompanying notes are an integral part of these financial statements.
Annual Report 41
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
France | 2.0% | ||||||||
Eutelsat Communications SA | 6,123 | $ | 99,597 | |||||
Gecina SA REIT | 158 | 28,321 | ||||||
Klepierre SA REIT | 195 | 7,412 | ||||||
Unibail-Rodamco-Westfield REIT | 264 | 41,710 | ||||||
Vinci SA | 1,536 | 170,643 | ||||||
347,683 | ||||||||
Germany | 1.4% | ||||||||
Allianz SE | 59 | 14,467 | ||||||
Aroundtown SA | 2,836 | 25,397 | ||||||
Deutsche EuroShop AG | 1,083 | 32,097 | ||||||
Deutsche Lufthansa AG | 656 | 12,072 | ||||||
Fraport AG | 1,238 | 105,224 | ||||||
Sirius Real Estate, Ltd. | 7,012 | 8,249 | ||||||
Vonovia SE | 843 | 45,384 | ||||||
242,890 | ||||||||
Hong Kong | 1.9% | ||||||||
CK Asset Holdings, Ltd. | 1,000 | 7,247 | ||||||
Henderson Land Development Co., Ltd. | 4,000 | 19,643 | ||||||
Jardine Matheson Holdings, Ltd. | 72 | 4,003 | ||||||
Link Real Estate Investment Trust | 8,500 | 90,240 | ||||||
Power Assets Holdings, Ltd. | 19,500 | 142,579 | ||||||
Shimao Property Holdings, Ltd. | 6,500 | 25,242 | ||||||
WH Group, Ltd. | 39,000 | 40,410 | ||||||
329,364 | ||||||||
Ireland | 0.1% | ||||||||
Cimpress PLC (*) | 81 | 10,187 | ||||||
Israel | 0.4% | ||||||||
Azrieli Group, Ltd. | 498 | 36,430 | ||||||
Industrial Buildings Corp., Ltd. (*) | 3,014 | 8,235 | ||||||
Reit 1, Ltd. REIT | 1,433 | 8,570 | ||||||
Sella Capital Real Estate, Ltd. REIT | 5,602 | 16,440 | ||||||
69,675 | ||||||||
Italy | 4.8% | ||||||||
ASTM SpA | 1,505 | 45,536 |
The accompanying notes are an integral part of these financial statements.
42 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Atlantia SpA | 7,354 | $ | 171,548 | |||||
Enel SpA | 5,018 | 39,920 | ||||||
Hera SpA | 19,548 | 85,698 | ||||||
Italgas SpA | 15,962 | 97,628 | ||||||
Poste Italiane SpA | 1,493 | 16,945 | ||||||
Snam SpA | 33,750 | 177,831 | ||||||
Societa Iniziative Autostradali e Servizi SpA | 1,831 | 30,689 | ||||||
Terna SpA | 27,722 | 185,487 | ||||||
851,282 | ||||||||
Japan | 3.0% | ||||||||
Advance Residence Investment Corp. REIT | 8 | 25,360 | ||||||
Daiwa House Industry Co., Ltd. | 700 | 21,687 | ||||||
East Japan Railway Co. | 200 | 18,053 | ||||||
GLP J-Reit | 7 | 8,710 | ||||||
Invesco Office J-Reit, Inc. REIT | 105 | 21,770 | ||||||
Invincible Investment Corp. REIT | 68 | 38,737 | ||||||
Japan Prime Realty Investment Corp. REIT | 2 | 8,784 | ||||||
Japan Real Estate Investment Corp. | 2 | 13,268 | ||||||
KDDI Corp. | 400 | 11,900 | ||||||
Keihanshin Building Co., Ltd. | 1,100 | 14,412 | ||||||
MCUBS MidCity Investment Corp. REIT | 27 | 29,323 | ||||||
Mitsubishi Estate Co., Ltd. | 2,900 | 55,440 | ||||||
Mitsui Fudosan Co., Ltd. | 1,000 | 24,424 | ||||||
Nippon Accommodations Fund, Inc. REIT | 4 | 25,276 | ||||||
Nippon Building Fund, Inc. | 3 | 21,983 | ||||||
Nippon Prologis REIT, Inc. | 8 | 20,380 | ||||||
NIPPON REIT Investment Corp. | 3 | 13,212 | ||||||
NTT DOCOMO, Inc. | 1,100 | 30,740 | ||||||
Orix JREIT, Inc. | 7 | 15,178 | ||||||
Premier Investment Corp. REIT | 11 | 15,564 | ||||||
Seven & I Holdings Co., Ltd. | 400 | 14,636 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 500 | 8,234 | ||||||
Tokio Marine Holdings, Inc. | 300 | 16,751 | ||||||
United Urban Investment Corp. REIT | 15 | 28,147 | ||||||
West Japan Railway Co. | 300 | 25,905 | ||||||
527,874 |
The accompanying notes are an integral part of these financial statements.
Annual Report 43
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Luxembourg | 0.8% | ||||||||
ArcelorMittal SA | 1,270 | $ | 22,434 | |||||
SES SA | 8,499 | 119,497 | ||||||
141,931 | ||||||||
Mexico | 0.1% | ||||||||
Corp Inmobiliaria Vesta SAB de CV | 8,600 | 15,465 | ||||||
Netherlands | 0.1% | ||||||||
NN Group NV | 266 | 10,115 | ||||||
New Zealand | 0.0% | ||||||||
Spark New Zealand, Ltd. | 2,743 | 8,001 | ||||||
Norway | 0.1% | ||||||||
Salmar ASA | 192 | 9,841 | ||||||
Romania | 0.1% | ||||||||
NEPI Rockcastle PLC | 948 | 8,379 | ||||||
Singapore | 0.8% | ||||||||
DBS Group Holdings, Ltd. | 659 | 12,702 | ||||||
Jardine Cycle & Carriage, Ltd. | 1,000 | 22,381 | ||||||
Keppel DC REIT | 6,500 | 10,053 | ||||||
Manulife US Real Estate Investment Trust | 25,700 | 25,709 | ||||||
Mapletree Commercial Trust REIT | 5,700 | 10,130 | ||||||
Mapletree Industrial Trust REIT | 28,200 | 54,534 | ||||||
135,509 | ||||||||
South Africa | 0.1% | ||||||||
Fortress REIT, Ltd., Class A | 13,487 | 18,573 | ||||||
South Korea | 0.1% | ||||||||
S-Oil Corp. | 267 | 21,864 | ||||||
Spain | 1.2% | ||||||||
Ferrovial SA | 5,677 | 172,223 | ||||||
Iberdrola SA | 2,974 | 30,629 |
The accompanying notes are an integral part of these financial statements.
44 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Merlin Properties Socimi SA REIT | 1,036 | $ | 14,888 | |||||
217,740 | ||||||||
Sweden | 0.3% | ||||||||
Catena AB | 100 | 4,416 | ||||||
Hufvudstaden AB, Class A | 404 | 7,987 | ||||||
Nobina AB | 1,329 | 9,145 | ||||||
Nyfosa AB (*) | 2,469 | 21,354 | ||||||
Swedish Match AB | 264 | 13,610 | ||||||
56,512 | ||||||||
Switzerland | 1.0% | ||||||||
Allreal Holding AG | 224 | 44,523 | ||||||
Novartis AG | 447 | 42,349 | ||||||
Roche Holding AG | 259 | 83,983 | ||||||
170,855 | ||||||||
United Arab Emirates | 0.1% | ||||||||
Aldar Properties PJSC | 37,312 | 21,948 | ||||||
United Kingdom | 5.5% | ||||||||
Admiral Group PLC | 1,205 | 36,902 | ||||||
Ashtead Group PLC | 245 | 7,840 | ||||||
Auto Trader Group PLC | 1,682 | 13,293 | ||||||
Derwent London PLC REIT | 295 | 15,757 | ||||||
FirstGroup PLC (*) | 5,268 | 8,752 | ||||||
Great Portland Estates PLC REIT | 3,049 | 34,775 | ||||||
Howden Joinery Group PLC | 1,242 | 11,132 | ||||||
Imperial Brands PLC | 1,442 | 35,731 | ||||||
International Consolidated Airlines Group SA | 1,659 | 13,777 | ||||||
LondonMetric Property PLC REIT | 4,720 | 14,851 | ||||||
National Grid PLC | 13,680 | 171,916 | ||||||
Pennon Group PLC | 12,176 | 165,740 | ||||||
Segro PLC REIT | 5,029 | 60,030 | ||||||
Severn Trent PLC | 5,369 | 179,183 | ||||||
Unilever NV | 403 | 23,187 | ||||||
United Utilities Group PLC | 14,198 | 178,336 | ||||||
971,202 |
The accompanying notes are an integral part of these financial statements.
Annual Report 45
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
United States | 27.3% | ||||||||
AbbVie, Inc. | 225 | $ | 19,921 | |||||
Aflac, Inc. | 422 | 22,324 | ||||||
Agilent Technologies, Inc. | 137 | 11,687 | ||||||
Agree Realty Corp. REIT | 200 | 14,034 | ||||||
American Electric Power Co., Inc. | 1,119 | 105,757 | ||||||
American Express Co. | 180 | 22,408 | ||||||
American Homes 4 Rent, Class A REIT | 1,191 | 31,216 | ||||||
American Tower Corp. REIT | 292 | 67,107 | ||||||
Americold Realty Trust REIT | 517 | 18,126 | ||||||
Amgen, Inc. | 42 | 10,125 | ||||||
Aon PLC | 396 | 82,483 | ||||||
Apple, Inc. | 160 | 46,984 | ||||||
AutoZone, Inc. (*) | 26 | 30,974 | ||||||
Bank of America Corp. | 430 | 15,145 | ||||||
Best Buy Co., Inc. | 167 | 14,663 | ||||||
Biogen, Inc. (*) | 43 | 12,759 | ||||||
Boston Properties, Inc. REIT | 570 | 78,580 | ||||||
Bristol-Myers Squibb Co. | 219 | 14,058 | ||||||
Brixmor Property Group, Inc. | 1,000 | 21,610 | ||||||
Brookfield Property REIT, Inc., Class A | 400 | 7,378 | ||||||
Burlington Stores, Inc. (*) | 50 | 11,401 | ||||||
Camden Property Trust | 200 | 21,220 | ||||||
Campbell Soup Co. | 359 | 17,742 | ||||||
Cboe Global Markets, Inc. | 115 | 13,800 | ||||||
Centene Corp. (*) | 221 | 13,894 | ||||||
CF Industries Holdings, Inc. | 385 | 18,380 | ||||||
Charles River Laboratories International, Inc. (*) | 111 | 16,956 | ||||||
Church & Dwight Co., Inc. | 190 | 13,365 | ||||||
Cigna Corp. (*) | 180 | 36,808 | ||||||
Cisco Systems, Inc. | 243 | 11,654 | ||||||
City Office REIT, Inc. | 1,300 | 17,576 | ||||||
Colgate-Palmolive Co. | 219 | 15,076 | ||||||
Community Healthcare Trust, Inc. REIT | 200 | 8,572 | ||||||
Consolidated Edison, Inc. | 1,163 | 105,217 | ||||||
Copart, Inc. (*) | 369 | 33,557 |
The accompanying notes are an integral part of these financial statements.
46 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Costco Wholesale Corp. | 117 | $ | 34,389 | |||||
Cracker Barrel Old Country Store, Inc. | 67 | 10,301 | ||||||
CSX Corp. | 2,355 | 170,408 | ||||||
Darden Restaurants, Inc. | 196 | 21,366 | ||||||
Digital Realty Trust, Inc. REIT | 300 | 35,922 | ||||||
Dillard’s, Inc. Class A | 146 | 10,728 | ||||||
Douglas Emmett, Inc. REIT | 400 | 17,560 | ||||||
Edison International | 140 | 10,557 | ||||||
Eli Lilly & Co. | 383 | 50,338 | ||||||
Equinix, Inc. REIT | 96 | 56,035 | ||||||
Equity Lifestyle Properties, Inc. REIT | 1,226 | 86,298 | ||||||
Equity Residential REIT | 400 | 32,368 | ||||||
Essential Properties Realty Trust, Inc. REIT | 1,072 | 26,596 | ||||||
Essex Property Trust, Inc. REIT | 218 | 65,587 | ||||||
Exelon Corp. | 349 | 15,911 | ||||||
Extra Space Storage, Inc. REIT | 447 | 47,212 | ||||||
F5 Networks, Inc. (*) | 153 | 21,366 | ||||||
Fastenal Co. | 374 | 13,819 | ||||||
Ferguson PLC | 99 | 8,995 | ||||||
Gaming and Leisure Properties, Inc. REIT | 300 | 12,915 | ||||||
Global Net Lease, Inc. REIT | 700 | 14,196 | ||||||
Hanesbrands, Inc. | 607 | 9,014 | ||||||
HD Supply Holdings, Inc. (*) | 319 | 12,830 | ||||||
Healthpeak Properties, Inc. REIT | 385 | 13,271 | ||||||
Hilton Worldwide Holdings, Inc. | 702 | 77,859 | ||||||
Honeywell International, Inc. | 72 | 12,744 | ||||||
Hormel Foods Corp. | 226 | 10,195 | ||||||
Hudson Pacific Properties, Inc. REIT | 233 | 8,772 | ||||||
Humana, Inc. | 76 | 27,856 | ||||||
Intel Corp. | 593 | 35,491 | ||||||
Intercontinental Exchange, Inc. | 418 | 38,686 | ||||||
IQVIA Holdings, Inc. (*) | 98 | 15,142 | ||||||
Iron Mountain, Inc. REIT | 400 | 12,748 | ||||||
Johnson & Johnson | 509 | 74,248 | ||||||
JPMorgan Chase & Co. | 218 | 30,389 | ||||||
Kansas City Southern | 1,043 | 159,746 |
The accompanying notes are an integral part of these financial statements.
Annual Report 47
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
KAR Auction Services, Inc. | 1,688 | $ | 36,782 | |||||
Kimberly-Clark Corp. | 318 | 43,741 | ||||||
Kohl’s Corp. | 136 | 6,929 | ||||||
Lamb Weston Holdings, Inc. | 225 | 19,357 | ||||||
Life Storage, Inc. REIT | 100 | 10,828 | ||||||
Lockheed Martin Corp. | 106 | 41,274 | ||||||
Lowe’s Cos., Inc. | 76 | 9,102 | ||||||
Marathon Petroleum Corp. | 545 | 32,836 | ||||||
MasTec, Inc. (*) | 302 | 19,376 | ||||||
McCormick & Co., Inc. | 86 | 14,597 | ||||||
McDonald’s Corp. | 86 | 16,994 | ||||||
McGrath RentCorp | 139 | 10,639 | ||||||
Medical Properties Trust, Inc. REIT | 1,100 | 23,221 | ||||||
Merck & Co., Inc. | 576 | 52,387 | ||||||
MetLife, Inc. | 179 | 9,124 | ||||||
Mettler-Toledo International, Inc. (*) | 30 | 23,798 | ||||||
Mid-America Apartment Communities, Inc. REIT | 400 | 52,744 | ||||||
Nasdaq, Inc. | 98 | 10,496 | ||||||
National Retail Properties, Inc. REIT | 800 | 42,896 | ||||||
NIKE, Inc., Class B | 305 | 30,900 | ||||||
Nordstrom, Inc. | 491 | 20,097 | ||||||
Norfolk Southern Corp. | 864 | 167,728 | ||||||
Northrop Grumman Corp. | 131 | 45,060 | ||||||
Omega Healthcare Investors, Inc. | 600 | 25,410 | ||||||
Outfront Media, Inc. REIT | 900 | 24,138 | ||||||
Park Hotels & Resorts, Inc. REIT | 952 | 24,628 | ||||||
Pennsylvania Real Estate Investment Trust | 1,400 | 7,462 | ||||||
PepsiCo, Inc. | 142 | 19,407 | ||||||
Pfizer, Inc. | 875 | 34,282 | ||||||
Pinnacle West Capital Corp. | 91 | 8,184 | ||||||
Prologis, Inc. REIT | 891 | 79,424 | ||||||
PS Business Parks, Inc. | 100 | 16,487 | ||||||
Raytheon Co. | 147 | 32,302 | ||||||
Realty Income Corp. REIT | 600 | 44,178 | ||||||
Regency Centers Corp. REIT | 300 | 18,927 | ||||||
Regions Financial Corp. | 547 | 9,387 |
The accompanying notes are an integral part of these financial statements.
48 Annual Report
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Republic Services, Inc. | 828 | $ | 74,214 | |||||
Retail Value, Inc. REIT | 200 | 7,360 | ||||||
Ross Stores, Inc. | 285 | 33,180 | ||||||
Ryman Hospitality Properties, Inc. REIT | 200 | 17,332 | ||||||
Sabra Health Care REIT, Inc. | 400 | 8,536 | ||||||
Simon Property Group, Inc. REIT | 736 | 109,635 | ||||||
Starbucks Corp. | 434 | 38,157 | ||||||
STORE Capital Corp. REIT | 200 | 7,448 | ||||||
Synchrony Financial | 298 | 10,731 | ||||||
Sysco Corp. | 472 | 40,375 | ||||||
Target Corp. | 202 | 25,898 | ||||||
Texas Instruments, Inc. | 61 | 7,826 | ||||||
The Allstate Corp. | 284 | 31,936 | ||||||
The Boeing Co. | 19 | 6,189 | ||||||
The Coca-Cola Co. | 267 | 14,778 | ||||||
The Estee Lauder Cos., Inc., Class A | 57 | 11,773 | ||||||
The Hershey Co. | 387 | 56,881 | ||||||
The Home Depot, Inc. | 117 | 25,550 | ||||||
The Macerich Co. REIT | 326 | 8,776 | ||||||
The Procter & Gamble Co. | 749 | 93,550 | ||||||
The TJX Cos., Inc. | 1,100 | 67,166 | ||||||
The Toro Co. | 161 | 12,827 | ||||||
Thermo Fisher Scientific, Inc. | 214 | 69,522 | ||||||
Tupperware Brands Corp. | 1,129 | 9,687 | ||||||
Tyson Foods, Inc., Class A | 125 | 11,380 | ||||||
Union Pacific Corp. | 928 | 167,773 | ||||||
United Parcel Service, Inc., Class B | 121 | 14,164 | ||||||
UnitedHealth Group, Inc. | 190 | 55,856 | ||||||
Universal Health Realty Income Trust REIT | 200 | 23,472 | ||||||
Ventas, Inc. REIT | 700 | 40,418 | ||||||
Verizon Communications, Inc. | 199 | 12,219 | ||||||
Visa, Inc., Class A | 270 | 50,733 | ||||||
Vulcan Materials Co. | 150 | 21,598 | ||||||
Walmart, Inc. | 358 | 42,545 | ||||||
Waste Connections, Inc. | 144 | 13,074 | ||||||
Waste Management, Inc. | 659 | 75,100 |
The accompanying notes are an integral part of these financial statements.
Annual Report 49
Fair | ||||||||
Description | Shares | Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Waters Corp. (*) | 66 | $ | 15,421 | |||||
Welltower, Inc. REIT | 300 | 24,534 | ||||||
Weyerhaeuser Co. REIT | 799 | 24,130 | ||||||
WW Grainger, Inc. | 55 | 18,619 | ||||||
Zoetis, Inc. | 95 | 12,573 | ||||||
4,802,473 | ||||||||
Total Common Stocks (Cost $9,166,540) | 10,472,350 | |||||||
Exchange-Traded Funds | 2.5% | ||||||||
SPDR Gold Shares (*),(∆) (Cost $382,304) | 3,096 | 442,418 |
Principal | ||||||||||
Security | Amount | Fair | ||||||||
Description | Currency | (000) | Value | |||||||
Foreign Government Obligations | 7.8% | ||||||||||
Australia | 0.4% | ||||||||||
Australia Government Bonds, 3.000%, 09/20/25 | AUD | 66 | $ | 68,058 | ||||||
Canada | 0.7% | ||||||||||
Canadian Government Real Return Bonds: | ||||||||||
4.250%, 12/01/26 | CAD | 42 | 41,024 | |||||||
2.000%, 12/01/41 | CAD | 76 | 77,978 | |||||||
119,002 | ||||||||||
Denmark | 0.5% | ||||||||||
Denmark Inflation Linked Government Bonds††, 0.100%, 11/15/23 | DKK | 559 | 89,483 | |||||||
France | 1.2% | ||||||||||
Government of France, 1.850%, 07/25/27 | EUR | 149 | 206,164 |
The accompanying notes are an integral part of these financial statements.
50 Annual Report
Description | Security Currency | Principal Amount (000) | Fair Value | |||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||||
Italy | 1.4% | ||||||||||
Italy Buoni Poliennali Del Tesoro: | ||||||||||
0.100%, 05/15/22 | EUR | 127 | $ | 144,060 | ||||||
2.350%, 09/15/24 | EUR | 89 | 111,544 | |||||||
255,604 | ||||||||||
New Zealand | 0.9% | ||||||||||
New Zealand Government Bonds, 3.000%, 09/20/30 | NZD | 170 | 154,660 | |||||||
Spain | 1.3% | ||||||||||
Spain Government Inflation Linked Bonds (††): | ||||||||||
0.300%, 11/30/21 | EUR | 115 | 132,862 | |||||||
1.800%, 11/30/24 | EUR | 70 | 89,709 | |||||||
222,571 | ||||||||||
Sweden | 0.2% | ||||||||||
Sweden Inflation Linked Bonds (††), 3.500%, 12/01/28 | SEK | 185 | 39,023 | |||||||
United Kingdom | 1.2% | ||||||||||
United Kingdom Gilt Inflation Linked (††): | ||||||||||
1.875%, 11/22/22 | GBP | 71 | 105,348 | |||||||
0.750%, 03/22/34 | GBP | 54 | 106,673 | |||||||
212,021 | ||||||||||
Total Foreign Government Obligations (Cost $1,291,772) | 1,366,586 | |||||||||
US Treasury Securities | 13.9% | ||||||||||
Treasury Inflation Protected Securities (††): | ||||||||||
0.125%, 04/15/20 | USD | 710 | 709,540 | |||||||
1.125%, 01/15/21 | USD | 873 | 880,914 | |||||||
2.375%, 01/15/25 | USD | 253 | 281,449 | |||||||
2.500%, 01/15/29 | USD | 482 | 580,602 | |||||||
Total US Treasury Securities (Cost $2,423,272) | 2,452,505 |
The accompanying notes are an integral part of these financial statements.
Annual Report 51
Description | Shares | Fair Value | ||||||
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued) | ||||||||
Rights | 0.0% | ||||||||
Australia | 0.0% | ||||||||
Charter Hall Long Wale REIT (Expires 01/08/2020) (Cost $0) | 122 | $ | 13 | |||||
Short-Term Investments | 14.1% | ||||||||
State Street Institutional Treasury Money Market Fund, Premier Class, 1.52% (7 day yield) (∆) (Cost $2,470,533) | 2,470,533 | 2,470,533 | ||||||
Total Investments | 97.9% (Cost $15,734,421) (») | $ | 17,204,405 | ||||||
Cash and Other Assets in Excess of Liabilities | 2.1% | 375,554 | |||||||
Net Assets | 100.0% | $ | 17,579,959 |
The accompanying notes are an integral part of these financial statements.
52 Annual Report
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued)
Forward Currency Contracts open at December 31, 2019:
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||
AUD | 14,572 | USD | 10,043 | HSB | 02/12/20 | $ | 211 | $ | — | |||||||||||||
AUD | 14,899 | USD | 10,177 | HSB | 02/12/20 | 308 | — | |||||||||||||||
CAD | 5,823 | USD | 4,421 | HSB | 02/12/20 | 71 | — | |||||||||||||||
CAD | 26,882 | USD | 20,243 | HSB | 02/12/20 | 496 | — | |||||||||||||||
DKK | 91,455 | USD | 13,633 | CIT | 02/12/20 | 145 | — | |||||||||||||||
EUR | 100,768 | USD | 111,971 | HSB | 01/15/20 | 1,241 | — | |||||||||||||||
GBP | 16,076 | USD | 20,671 | CIT | 02/12/20 | 684 | — | |||||||||||||||
GBP | 25,361 | USD | 32,853 | HSB | 02/12/20 | 837 | — | |||||||||||||||
JPY | 64,603 | USD | 595 | JPM | 02/12/20 | 0 | — | |||||||||||||||
NZD | 13,959 | USD | 8,902 | CIT | 02/12/20 | 517 | — | |||||||||||||||
NZD | 27,764 | USD | 17,858 | HSB | 02/12/20 | 877 | — | |||||||||||||||
SEK | 61,671 | USD | 6,426 | HSB | 02/12/20 | 187 | — | |||||||||||||||
USD | 207,190 | AUD | 301,770 | CIT | 03/27/20 | — | 5,390 | |||||||||||||||
USD | 4,000 | AUD | 5,848 | HSB | 02/12/20 | — | 115 | |||||||||||||||
USD | 20,589 | AUD | 29,737 | HSB | 02/12/20 | — | 336 | |||||||||||||||
USD | 33,829 | AUD | 49,085 | HSB | 02/12/20 | — | 712 | |||||||||||||||
USD | 24,472 | CAD | 32,232 | CIT | 02/12/20 | — | 394 | |||||||||||||||
USD | 36,729 | CAD | 48,162 | CIT | 03/27/20 | — | 430 | |||||||||||||||
USD | 39,710 | CAD | 51,869 | CIT | 03/27/20 | — | 309 | |||||||||||||||
USD | 108,982 | CAD | 143,530 | HSB | 02/12/20 | — | 1,746 | |||||||||||||||
USD | 6,614 | CAD | 8,711 | MSC | 02/12/20 | — | 106 | |||||||||||||||
USD | 103,824 | DKK | 696,109 | CIT | 02/12/20 | — | 1,047 | |||||||||||||||
USD | 805,746 | EUR | 720,606 | CIT | 03/27/20 | — | 7,504 | |||||||||||||||
USD | 1,700 | EUR | 1,529 | HSB | 01/15/20 | — | 18 | |||||||||||||||
USD | 780,686 | EUR | 708,066 | HSB | 01/15/20 | — | 14,826 | |||||||||||||||
USD | 642,682 | EUR | 574,321 | SSB | 03/27/20 | — | 5,476 | |||||||||||||||
USD | 87,516 | GBP | 68,061 | CIT | 02/12/20 | — | 2,896 | |||||||||||||||
USD | 2,300 | GBP | 1,774 | HSB | 02/12/20 | — | 57 | |||||||||||||||
USD | 17,000 | GBP | 12,885 | HSB | 02/12/20 | — | 116 | |||||||||||||||
USD | 154,285 | GBP | 120,012 | HSB | 02/12/20 | — | 5,139 | |||||||||||||||
USD | 28,844 | GBP | 21,918 | SSB | 03/27/20 | — | 306 | |||||||||||||||
USD | 663,585 | GBP | 507,208 | SSB | 03/27/20 | — | 10,981 | |||||||||||||||
USD | 13,305 | HKD | 103,685 | CIT | 03/27/20 | 1 | — | |||||||||||||||
USD | 20,524 | HKD | 160,198 | CIT | 03/27/20 | — | 30 | |||||||||||||||
USD | 109,862 | HKD | 857,663 | SSB | 03/27/20 | — | 182 | |||||||||||||||
USD | 736 | MXN | 14,304 | HSB | 02/12/20 | — | 18 |
The accompanying notes are an integral part of these financial statements.
Annual Report 53
Lazard Real Assets and Pricing Opportunities Portfolio (•) (continued)
Currency Purchased | Quantity | Currency Sold | Quantity | Counterparty | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||
USD | 83,146 | NZD | 130,377 | CIT | 02/12/20 | $ | — | $ | 4,832 | |||||||||||||
USD | 4,000 | NZD | 6,217 | HSB | 02/12/20 | — | 195 | |||||||||||||||
USD | 18,217 | NZD | 27,490 | HSB | 02/12/20 | — | 333 | |||||||||||||||
USD | 44,678 | NZD | 70,055 | HSB | 02/12/20 | — | 2,595 | |||||||||||||||
USD | 40,762 | SEK | 389,996 | HSB | 02/12/20 | — | 1,056 | |||||||||||||||
USD | 5,409 | SEK | 51,768 | JPM | 02/12/20 | — | 142 | |||||||||||||||
Total gross unrealized appreciation/depreciation on Forward Currency Contracts | $ | 5,575 | $ | 67,287 |
Futures Contracts open at December 31, 2019 (Δ):
Type | Number of Contracts | Notional Amount | Expiration Date | Notional Cost | Fair Value | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||
Natural Gas | 5 | $ | 50,000 | 02/26/2020 | $ | 113,618 | $ | 107,900 | $ | — | $ | 5,718 | ||||||||||||
Sugar 11 | 2 | 224,000 | 02/28/2020 | 29,487 | 30,061 | 574 | — | |||||||||||||||||
Cotton No. 2 | 1 | 50,000 | 03/09/2020 | 32,609 | 34,525 | 1,916 | — | |||||||||||||||||
Low Sulphur Gasoil | 1 | 100 | 03/12/2020 | 60,653 | 61,125 | 472 | — | |||||||||||||||||
Soybean Oil | 1 | 60,000 | 03/13/2020 | 20,434 | 20,862 | 428 | — | |||||||||||||||||
Total gross unrealized appreciation/depreciation on Futures Contracts | $ | 3,390 | $ | 5,718 |
Total Return Swap Agreements open at December 31, 2019 (Δ):
Currency | Counterparty | Notional Amount | Expiration Date | Receive | Pay | Payable | Payment Frequency | Unrealized Appreciation | ||||||||||||||
USD | GSC | $ | 1,891,743 | 10/23/20 | Appreciation, | 0.00 | % | Depreciation, | Upon | $ | 13,401 | |||||||||||
and dividends paid, on commodities in a custom momentum basket | and dividend expense (if applicable), on commodities in a custom momentum basket | Maturity(a) |
(a) | For swap agreements, the net settlement will occur on the expiration date. |
The accompanying notes are an integral part of these financial statements.
54 Annual Report
Lazard Real Assets and Pricing Opportunities Portfolio (•) (concluded)
The following table represents the commodity exposure expressed as a percentage of the notional amount of the individual commodity underlying the custom total return basket swap agreements with GSC, as of December 31, 2019:
Commodity | Commodity Index Ticker Symbol | Commodity Exposure Expressed as a Percentage of Notional Amount | |||||
Aluminum | BCOMAL | 3.34 | % | ||||
Bean Oil | BCOMBO | 2.84 | |||||
Brent Crude | BCOMCO | 12.05 | |||||
Coffee | BCOMKC | 2.92 | |||||
Copper | BCOMHG | 11.71 | |||||
Corn | BCOMCN | 8.28 | |||||
Cotton | BCOMCT | 0.12 | |||||
Crude Oil | BCOMCO | 12.54 | |||||
Gasoline (RBOB) | BCOMRB | 1.76 | |||||
Gold | BCOMGC | 0.01 | |||||
Heating Oil | BCOMHO | 6.16 | |||||
Kansas Wheat | BCOMKW | 1.47 | |||||
Lean Hogs | BCOMLH | 2.07 | |||||
Live Cattle | BCOMLC | 3.76 | |||||
Natural Gas | BCOMNG | 2.18 | |||||
Nickel | BCOMNI | 3.47 | |||||
Silver | BCOMSI | 5.83 | |||||
Soy Meal | BCOMSM | 2.05 | |||||
Soybeans | BCOMSY | 6.62 | |||||
Sugar | BCOMSB | 4.12 | |||||
Wheat | BCOMWH | 4.30 | |||||
Zinc | BCOMZS | 2.40 | |||||
Total | 100.00 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 55
The Lazard Funds, Inc.Notes to Portfolios of Investments
December 31, 2019
(*) | Non-income producing security. |
(#) | Pursuant to Rule 144A under the Securities Act of 1933, these securities may only betraded among “qualified institutional buyers.” At December 31, 2019, these securitiesamounted to 0.7% of net assets of Lazard Global Dynamic Multi-Asset Portfolio. |
(§) | Variable and floating rate securities are securities for which interest rate changesare based on changes in a designated base rate. The rates shown are those in effecton December 31, 2019. |
(») | The portfolio, at all times, maintains portfolio securities in sufficient amount to coverits obligations related to investments in forward currency contracts. |
(±) | Some or all of this security position has been pledged to cover collateral requirements on securities sold short. |
(•) | Lazard Real Assets and Pricing Opportunities Portfolio’s Portfolio of Investments andaccompanying notes are presented on a consolidated basis. |
(Δ) | The security is owned by Lazard Real Assets and Pricing Opportunities Portfolio, Ltd., a wholly-owned subsidiary of Lazard Real Assets and Pricing Opportunities Portfolio. See Note 1 in the Notes to Financial Statements. |
(††) | A note or bond that offers protection from inflation by paying a fixed rate of interest on the principal amount that is adjusted for inflation, in the applicable region, based on the Consumer Price Index or other equivalent regional benchmarks for measuring inflation. |
Security Abbreviations: | |||||
ADR | — | American Depositary Receipt | PRIBOR | — | Prague Interbank Offered Rate |
BBSW | — | Bank Bill Swap Reference Rate | NIBOR | — | Norway Interbank Offered Rate |
ETF | — | Exchange-Traded Fund | REIT | — | Real Estate Investment Trust |
PJSC | — | Public Joint Stock Company | LIBOR | — | London Interbank Offered Rate |
Currency Abbreviations: | |||||
AUD | — | Australian Dollar | ILS | — | Israeli Shekel |
CAD | — | Canadian Dollar | JPY | — | Japanese Yen |
CHF | — | Swiss Franc | KRW | — | South Korean Won |
CLP | — | Chilean Peso | MXN | — | Mexican New Peso |
CZK | — | Czech Koruna | NOK | — | Norwegian Krone |
DKK | — | Danish Krone | NZD | — | New Zealand Dollar |
EUR | — | Euro | PLN | — | Polish Zloty |
GBP | — | British Pound Sterling | SEK | — | Swedish Krona |
HKD | — | Hong Kong Dollar | SGD | — | Singapore Dollar |
HUF | — | Hungarian Forint | USD | — | United States Dollar |
IDR | — | Indonesian Rupiah | |||
Counterparty Abbreviations: | |||||
CIT | — | Citibank NA | JPM | — | JPMorgan Chase Bank NA |
GSC | — | Goldman Sachs International | MSC | — | Morgan Stanley & Co. |
HSB | — | HSBC Bank USA NA | SSB | — | State Street Bank and Trust Co. |
The accompanying notes are an integral part of these financial statements.
56 Annual Report
Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country:
Industry† | Lazard Global Dynamic Multi-Asset Portfolio | Lazard Real Assets and Pricing Opportunities Portfolio | |||||||
Common Stocks and Corporate & Quasi Government Bonds | |||||||||
Aerospace & Defense | 2.2 | % | 0.7 | % | |||||
Air Freight & Logistics | — | 0.1 | |||||||
Airlines | 1.2 | 0.2 | |||||||
Auto Components | 0.5 | — | |||||||
Automobiles | 0.6 | — | |||||||
Banks | 7.1 | 1.3 | |||||||
Beverages | 3.0 | 0.2 | |||||||
Biotechnology | 0.9 | 0.6 | |||||||
Building Products | 0.3 | — | |||||||
Capital Markets | 2.4 | 0.6 | |||||||
Chemicals | 1.0 | 0.2 | |||||||
Commercial Services & Suppliers | 1.0 | 1.4 | |||||||
Communications Equipment | 1.1 | 0.2 | |||||||
Construction & Engineering | 0.2 | 2.1 | |||||||
Construction Materials | 0.2 | 0.1 | |||||||
Consumer Finance | 0.9 | 0.2 | |||||||
Containers & Packaging | 0.1 | — | |||||||
Distributors | 0.1 | 0.1 | |||||||
Diversified Consumer Services | — | 0.1 | |||||||
Diversified Financial Services | 0.8 | — | |||||||
Diversified Telecommunication Services | 1.9 | 0.4 | |||||||
Electric Utilities | 1.9 | 3.1 | |||||||
Electrical Equipment | 1.1 | — | |||||||
Electronic Equipment, Instruments & Components | 0.8 | — | |||||||
Entertainment | 0.6 | — | |||||||
Equity Real Estate Investment Trusts (REITs) | 2.0 | 12.6 | |||||||
Food & Staples Retailing | 1.3 | 1.4 | |||||||
Food Products | 0.7 | 1.0 | |||||||
Gas Utilities | 0.1 | 1.6 | |||||||
Health Care Equipment & Supplies | 1.3 | — | |||||||
Health Care Providers & Services | 2.5 | 0.8 | |||||||
Hotels, Restaurants & Leisure | 2.1 | 0.9 | |||||||
Household Durables | 0.1 | 0.1 | |||||||
Household Products | 1.6 | 0.9 | |||||||
Independent Power & Renewable Electricity Producers | 0.3 | 0.5 | |||||||
Industrial Conglomerates | 1.0 | 0.1 | |||||||
Insurance | 3.9 | 2.1 |
The accompanying notes are an integral part of these financial statements.
Annual Report 57
Industry† | Lazard Global Dynamic Multi-Asset Portfolio | Lazard Real Assets and Pricing Opportunities Portfolio | |||||||
Interactive Media & Services | 1.7 | % | 0.1 | % | |||||
Internet & Direct Marketing Retail | 0.7 | — | |||||||
IT Services | 2.5 | 0.3 | |||||||
Leisure Products | 0.7 | — | |||||||
Life Sciences Tools & Services | 1.6 | 0.9 | |||||||
Machinery | 1.1 | 0.1 | |||||||
Media | 1.0 | 1.2 | |||||||
Metals & Mining | 2.0 | 0.3 | |||||||
Multiline Retail | 0.9 | 0.4 | |||||||
Multi-Utilities | 0.8 | 2.8 | |||||||
Oil, Gas & Consumable Fuels | 2.5 | 0.3 | |||||||
Personal Products | 1.7 | 0.2 | |||||||
Pharmaceuticals | 6.2 | 2.1 | |||||||
Professional Services | 1.8 | — | |||||||
Real Estate Management & Development | 0.9 | 3.9 | |||||||
Road & Rail | 1.1 | 4.3 | |||||||
Semiconductors & Semiconductor Equipment | 2.7 | 0.2 | |||||||
Software | 3.7 | — | |||||||
Specialty Retail | 2.8 | 1.1 | |||||||
Technology Hardware, Storage & Peripherals | 2.2 | 0.3 | |||||||
Textiles, Apparel & Luxury Goods | 1.3 | 0.2 | |||||||
Thrifts & Mortgage Finance | 0.2 | — | |||||||
Tobacco | 0.1 | 0.3 | |||||||
Trading Companies & Distributors | 0.7 | 0.5 | |||||||
Transportation Infrastructure | — | 3.2 | |||||||
Water Utilities | 0.1 | 3.0 | |||||||
Wireless Telecommunication Services | 0.7 | 0.3 | |||||||
Subtotal | 88.5 | 59.6 | |||||||
Exchange-Traded Funds | — | 2.5 | |||||||
Foreign Government Obligations | 6.3 | 7.8 | |||||||
Supranational Bonds | 1.6 | — | |||||||
US Municipal Bonds | 0.6 | — | |||||||
US Treasury Securities | 1.2 | 13.9 | |||||||
Short-Term Investments | 1.7 | 14.1 | |||||||
Total Investments | 99.9 | % | 97.9 | % |
† | Industry classifications may be different than those used for compliance monitoring purposes. |
The accompanying notes are an integral part of these financial statements.
58 Annual Report
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Annual Report59
The Lazard Funds, Inc.Statements of Assets and Liabilities
December 31, 2019 | Lazard Global Dynamic Multi-Asset Portfolio | Lazard Opportunistic Strategies Portfolio | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at fair value | $ | 47,725,979 | $ | 88,748,964 | ||||||||
Cash | 479 | — | ||||||||||
Cash collateral due from broker on futures contracts swap agreements | — | — | ||||||||||
Foreign currency, at fair value | 6,593 | — | ||||||||||
Receivables for: | ||||||||||||
Dividends and interest | 109,430 | 31,413 | ||||||||||
Capital stock sold | 250 | 202 | ||||||||||
Investments sold | — | — | ||||||||||
Amount due from Investment Manager (Note 3) | 25,941 | — | ||||||||||
Gross unrealized appreciation on: | ||||||||||||
Forward currency contracts | 116,831 | — | ||||||||||
Swap agreements | — | — | ||||||||||
Prepaid expenses | 95 | 4,168 | ||||||||||
Total assets | 47,985,598 | 88,784,747 | ||||||||||
LIABILITIES | ||||||||||||
Securities sold short, at fair value | — | 4,974,245 | ||||||||||
Payables for: | ||||||||||||
Accrued professional services | 35,921 | 25,494 | ||||||||||
Management fees | — | 24,343 | ||||||||||
Accrued shareholders’ reports | 5,347 | 12,383 | ||||||||||
Accrued custodian fees | 46,861 | 12,349 | ||||||||||
Accrued distribution fees | 61 | 47 | ||||||||||
Dividends on securities sold short | — | 15,527 | ||||||||||
Capital stock redeemed | — | 101 | ||||||||||
Investments purchased | — | — | ||||||||||
Variation margin on open futures contracts | — | — | ||||||||||
Gross unrealized depreciation on forward currency contracts | 120,002 | — | ||||||||||
Other accrued expenses and payables | 2,897 | 3,735 | ||||||||||
Total liabilities | 211,089 | 5,068,224 | ||||||||||
Net assets | $ | 47,774,509 | $ | 83,716,523 | ||||||||
NET ASSETS | ||||||||||||
Paid in capital | $ | 42,807,433 | $ | 78,337,766 | ||||||||
Distributable earnings (Accumulated loss) | 4,967,076 | 5,378,757 | ||||||||||
Net assets | $ | 47,774,509 | $ | 83,716,523 | ||||||||
Institutional Shares | ||||||||||||
Net assets | $ | 47,481,062 | $ | 83,508,624 | ||||||||
Shares of capital stock outstanding* | 4,403,915 | 8,460,555 | ||||||||||
Net asset value, offering and redemption price per share | $ | 10.78 | $ | 9.87 | ||||||||
Open Shares | ||||||||||||
Net assets | $ | 293,447 | $ | 207,899 | ||||||||
Shares of capital stock outstanding* | 27,210 | 21,180 | ||||||||||
Net asset value, offering and redemption price per share | $ | 10.78 | $ | 9.82 | ||||||||
Cost of investments in securities | $ | 42,255,645 | $ | 82,940,428 | ||||||||
Proceeds received from securities sold short | $ | — | $ | 4,501,212 | ||||||||
Cost of foreign currency | $ | 6,543 | $ | — |
* | $0.001 par value, 6,900,000,000 shares authorized for the Portfolios in total. |
(a) | Consolidated Statement of Assets and Liabilities. |
The accompanying notes are an integral part of these financial statements.
60 Annual Report
Lazard Real Assets and Pricing Opportunities Portfolio (a) | |||||
$ | 17,204,405 | ||||
— | |||||
372,401 | |||||
3,725 | |||||
50,981 | |||||
— | |||||
4,862 | |||||
50,057 | |||||
5,575 | |||||
13,401 | |||||
10,198 | |||||
17,715,605 | |||||
— | |||||
38,665 | |||||
— | |||||
1,814 | |||||
25,539 | |||||
13 | |||||
— | |||||
— | |||||
12 | |||||
1,689 | |||||
67,287 | |||||
627 | |||||
135,646 | |||||
$ | 17,579,959 | ||||
$ | 16,181,891 | ||||
1,398,068 | |||||
$ | 17,579,959 | ||||
$ | 17,515,383 | ||||
1,639,120 | |||||
$ | 10.69 | ||||
$ | 64,574 | ||||
6,050 | |||||
$ | 10.67 | ||||
$ | 15,734,421 | ||||
$ | — | ||||
$ | 3,698 |
Annual Report 61
The Lazard Funds, Inc.Statements of Operations
For the Period Ended December 31, 2019 | Lazard Global Dynamic Multi-Asset Portfolio | Lazard Opportunistic Strategies Portfolio | ||||||||||
Investment Income (Loss) | ||||||||||||
Income | ||||||||||||
Dividends | $ | 739,076 | $ | 1,738,469 | ||||||||
Interest | 336,501 | 390,511 | ||||||||||
Total investment income* | 1,075,577 | 2,128,980 | ||||||||||
Expenses | ||||||||||||
Management fees (Note 3) | 379,790 | 924,989 | ||||||||||
Professional services | 49,451 | 47,580 | ||||||||||
Shareholders’ reports | 14,902 | 38,979 | ||||||||||
Registration fees | 34,983 | 35,558 | ||||||||||
Custodian fees | 166,441 | 33,322 | ||||||||||
Administration fees | 20,782 | 26,410 | ||||||||||
Shareholders’ services | 20,822 | 16,804 | ||||||||||
Directors’ fees and expenses | 7,012 | 9,647 | ||||||||||
Distribution fees (Open Shares) | 673 | 603 | ||||||||||
Other^ | 6,480 | 7,989 | ||||||||||
Total gross expenses before interest and dividend expense | 701,336 | 1,141,881 | ||||||||||
Interest expense | — | 56,902 | ||||||||||
Dividend expense | — | 131,408 | ||||||||||
Total gross expenses | 701,336 | 1,330,191 | ||||||||||
Management fees waived and expenses reimbursed | (272,884 | ) | (197,241 | ) | ||||||||
Total net expenses | 428,452 | 1,132,950 | ||||||||||
Net investment income (loss) | 647,125 | 996,030 | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments, Securities Sold Short, Foreign Currency Transactions, Forward Currency Contracts, Futures Contracts and Swap Agreements | ||||||||||||
Net realized gain (loss) on: | ||||||||||||
Investments | 58,107 | 4,071,561 | ||||||||||
Securities sold short | — | (143,398 | ) | |||||||||
Foreign currency transactions | (28,953 | ) | (4 | ) | ||||||||
Forward currency contracts | (63,564 | ) | — | |||||||||
Futures contracts | — | — | ||||||||||
Swap agreements | — | — | ||||||||||
Total net realized gain (loss) on investments, securities sold short, foreign currency transactions, forward currency contracts, futures contracts and swap agreements | (34,410 | ) | 3,928,159 |
The accompanying notes are an integral part of these financial statements.
62 Annual Report
Lazard Real Assets and Pricing Opportunities Portfolio (a) | |||||
$ | 296,907 | ||||
133,981 | |||||
430,888 | |||||
121,119 | |||||
54,894 | |||||
6,175 | |||||
44,759 | |||||
103,563 | |||||
17,011 | |||||
20,981 | |||||
15,773 | |||||
122 | |||||
5,982 | |||||
390,379 | |||||
— | |||||
— | |||||
390,379 | |||||
(234,204 | ) | ||||
156,175 | |||||
274,713 | |||||
162,755 | |||||
— | |||||
(3,323 | ) | ||||
169,958 | |||||
(93,715 | ) | ||||
(265,323 | ) | ||||
(29,648 | ) |
Annual Report 63
For the Period Ended December 31, 2019 | Lazard Global Dynamic Multi-Asset Portfolio | Lazard Opportunistic Strategies Portfolio | ||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments | $ | 7,067,487 | $ | 9,637,244 | ||||||||
Securities sold short | — | (473,033 | ) | |||||||||
Foreign currency translations | 632 | (3 | ) | |||||||||
Forward currency contracts | (120,256 | ) | — | |||||||||
Futures contracts | — | — | ||||||||||
Swap agreements | — | — | ||||||||||
Total net change in unrealized appreciation (depreciation) on investments, securities sold short, foreign currency translations, forward currency contracts, future contracts and swap agreements | 6,947,863 | 9,164,208 | ||||||||||
Net realized and unrealized gain (loss) on investments, securities sold short, foreign currency transactions, forward currency contracts, future contracts and swap agreements | 6,913,453 | 13,092,367 | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 7,560,578 | $ | 14,088,397 | ||||||||
* Net of foreign withholding taxes of | $ | 40,664 | $ | — | ||||||||
^ Includes interest on line of credit of | $ | 210 | $ | — | ||||||||
(a) Consolidated Statement of Operations. |
The accompanying notes are an integral part of these financial statements.
64 Annual Report
Lazard Real Assets and Pricing Opportunities Portfolio (a) | |||||
$ | 2,061,080 | ||||
— | |||||
210 | |||||
(70,774 | ) | ||||
19,098 | |||||
296,056 | |||||
2,305,670 | |||||
2,276,022 | |||||
$ | 2,550,735 | ||||
$ | 19,916 | ||||
$ | 252 |
The accompanying notes are an integral part of these financial statements.
Annual Report 65
The Lazard Funds, Inc.Statements of Changes in Net Assets
Lazard Global Dynamic Multi-Asset Portfolio | ||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||
Increase (Decrease) in Net Assets | ||||||||||||
Operations | ||||||||||||
Net investment income (loss) | $ | 647,125 | $ | 734,002 | ||||||||
Net realized gain (loss) on investments, securities sold short, foreign currency transactions, forward currency contracts, futures contracts and swaps agreements | (34,410 | ) | 5,372,312 | |||||||||
Net change in unrealized appreciation (depreciation) on investments, securities sold short, foreign currency translations, forward currency contracts, futures contracts and swaps agreements | 6,947,863 | (9,026,128 | ) | |||||||||
Net increase (decrease) in net assets resulting from operations | 7,560,578 | (2,919,814 | ) | |||||||||
Distributions to shareholders (Note 2(h)) | ||||||||||||
Net investment Income and net realized gains | ||||||||||||
Institutional Shares | (607,408 | ) | (5,801,393 | ) | ||||||||
Open Shares | (2,851 | ) | (57,021 | ) | ||||||||
Return of capital | ||||||||||||
Institutional Shares | — | — | ||||||||||
Open Shares | — | — | ||||||||||
Net decrease in net assets resulting from distributions | (610,259 | ) | (5,858,414 | ) | ||||||||
Capital stock transactions | ||||||||||||
Net proceeds from sales | ||||||||||||
Institutional Shares | 3,315,020 | 4,837,074 | ||||||||||
Open Shares | 101,513 | 64,758 | ||||||||||
Net proceeds from reinvestment of distributions | ||||||||||||
Institutional Shares | 607,408 | 5,801,393 | ||||||||||
Open Shares | 2,851 | 57,021 | ||||||||||
Cost of shares redeemed | ||||||||||||
Institutional Shares | (5,930,367 | ) | (28,135,810 | ) | ||||||||
Open Shares | (74,979 | ) | (218,269 | ) | ||||||||
Net increase (decrease) in net assets from capital stock transactions | (1,978,554 | ) | (17,593,833 | ) | ||||||||
Total increase (decrease) in net assets | 4,971,765 | (26,372,061 | ) | |||||||||
Net assets at beginning of period | 42,802,744 | 69,174,805 | ||||||||||
Net assets at end of period | $ | 47,774,509 | $ | 42,802,744 |
The accompanying notes are an integral part of these financial statements.
66 Annual Report
Lazard Opportunistic Strategies Portfolio | Lazard Real Assets and Pricing Opportunities Portfolio (a) | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
$ | 996,030 | $ | 1,726,796 | $ | 274,713 | $ | 272,790 | |||||||||
3,928,159 | (572,649 | ) | (29,648 | ) | 541,686 | |||||||||||
9,164,208 | (16,944,250 | ) | 2,305,670 | (2,134,963 | ) | |||||||||||
14,088,397 | (15,790,103 | ) | 2,550,735 | (1,320,487 | ) | |||||||||||
(1,640,929 | ) | (6,028,662 | ) | (392,070 | ) | (831,453 | ) | |||||||||
(3,453 | ) | (17,872 | ) | (1,189 | ) | (2,339 | ) | |||||||||
— | (262,110 | ) | — | — | ||||||||||||
— | (777 | ) | — | — | ||||||||||||
(1,644,382 | ) | (6,309,421 | ) | (393,259 | ) | (833,792 | ) | |||||||||
7,393,394 | 18,043,749 | 246,555 | 439,718 | |||||||||||||
6,169 | 96,400 | 15,632 | 3,168 | |||||||||||||
1,534,238 | 5,917,185 | 392,070 | 831,453 | |||||||||||||
3,285 | 18,147 | 1,189 | 2,339 | |||||||||||||
(40,611,931 | ) | (50,917,387 | ) | (1,438,693 | ) | (771,616 | ) | |||||||||
(121,466 | ) | (184,943 | ) | (653 | ) | (91,095 | ) | |||||||||
(31,796,311 | ) | (27,026,849 | ) | (783,900 | ) | 413,967 | ||||||||||
(19,352,296 | ) | (49,126,373 | ) | 1,373,576 | (1,740,312 | ) | ||||||||||
103,068,819 | 152,195,192 | 16,206,383 | 17,946,695 | |||||||||||||
$ | 83,716,523 | $ | 103,068,819 | $ | 17,579,959 | $ | 16,206,383 |
Annual Report 67
Lazard Global Dynamic Multi-Asset Portfolio | ||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||
Shares issued and redeemed | ||||||||||||
Institutional Shares | ||||||||||||
Shares outstanding at beginning of period | 4,593,006 | 5,986,168 | ||||||||||
Shares sold | 324,728 | 419,838 | ||||||||||
Shares issued to shareholders from reinvestment of distributions | 56,451 | 636,322 | ||||||||||
Shares redeemed | (570,270 | ) | (2,449,322 | ) | ||||||||
Net increase (decrease) | (189,091 | ) | (1,393,162 | ) | ||||||||
Shares outstanding at end of period | 4,403,915 | 4,593,006 | ||||||||||
Open Shares | ||||||||||||
Shares outstanding at beginning of period | 24,305 | 36,012 | ||||||||||
Shares sold | 9,879 | 5,633 | ||||||||||
Shares issued to shareholders from reinvestment of distributions | 265 | 6,247 | ||||||||||
Shares redeemed | (7,239 | ) | (23,587 | ) | ||||||||
Net increase (decrease) | 2,905 | (11,707 | ) | |||||||||
Shares outstanding at end of period | 27,210 | 24,305 |
(a) | Consolidated Statements of Changes in Net Assets. |
The accompanying notes are an integral part of these financial statements.
68 Annual Report
Lazard Opportunistic Strategies Portfolio | Lazard Real Assets and Pricing Opportunities Portfolio (a) | |||||||||||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||
11,766,647 | 14,316,598 | 1,715,687 | 1,662,975 | |||||||||||||
781,937 | 1,734,091 | 23,075 | 42,171 | |||||||||||||
155,602 | 648,666 | 37,072 | 86,381 | |||||||||||||
(4,243,631 | ) | (4,932,708 | ) | (136,714 | ) | (75,840 | ) | |||||||||
(3,306,092 | ) | (2,549,951 | ) | (76,567 | ) | 52,712 | ||||||||||
8,460,555 | 11,766,647 | 1,639,120 | 1,715,687 | |||||||||||||
32,902 | 40,563 | 4,528 | 12,627 | |||||||||||||
648 | 9,206 | 1,474 | 299 | |||||||||||||
335 | 1,980 | 112 | 242 | |||||||||||||
(12,705 | ) | (18,847 | ) | (64 | ) | (8,640 | ) | |||||||||
(11,722 | ) | (7,661 | ) | 1,522 | (8,099 | ) | ||||||||||
21,180 | 32,902 | 6,050 | 4,528 |
Annual Report 69
The Lazard Funds, Inc.Financial Highlights
LAZARD GLOBAL DYNAMIC MULTI-ASSET PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/27/16* to | |||||||||||||||
throughout the period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | |||||||||||||
Institutional Shares | |||||||||||||||||
Net asset value, beginning of period | $ | 9.27 | $ | 11.49 | $ | 10.00 | $ | 10.00 | |||||||||
Income (Loss) from investment operations: | |||||||||||||||||
Net investment income (loss) (a) | 0.14 | 0.16 | 0.15 | 0.06 | |||||||||||||
Net realized and unrealized gain (loss) | 1.51 | (0.92 | ) | 1.92 | (0.01 | ) | |||||||||||
Total from investment operations | 1.65 | (0.76 | ) | 2.07 | 0.05 | ||||||||||||
Less distributions from: | |||||||||||||||||
Net investment income | (0.14 | ) | (0.20 | ) | (0.14 | ) | (0.05 | ) | |||||||||
Net realized gains | — | (1.26 | ) | (0.44 | ) | — | (b) | ||||||||||
Total distributions | (0.14 | ) | (1.46 | ) | (0.58 | ) | (0.05 | ) | |||||||||
Net asset value, end of period | $ | 10.78 | $ | 9.27 | $ | 11.49 | $ | 10.00 | |||||||||
Total Return (c) | 17.80 | % | –6.35 | % | 20.69 | % | 0.53 | % | |||||||||
Ratios and Supplemental Data: | |||||||||||||||||
Net assets, end of period (in thousands) | $ | 47,481 | $ | 42,577 | $ | 68,761 | $ | 48,544 | |||||||||
Ratios to average net assets (d): | |||||||||||||||||
Net expenses | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | |||||||||
Gross expenses | 1.45 | % | 1.34 | % | 1.42 | % | 2.14 | % | |||||||||
Net investment income (loss) | 1.36 | % | 1.36 | % | 1.40 | % | 0.95 | % | |||||||||
Portfolio turnover rate | 125 | % | 120 | % | 102 | % | 67 | % |
The accompanying notes are an integral part of these financial statements.
70 Annual Report
Selected data for a share of capital stock outstanding | Year Ended | For the Period 5/27/16* to | |||||||||||||||
throughout the period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | |||||||||||||
Open Shares | |||||||||||||||||
Net asset value, beginning of period | $ | 9.27 | $ | 11.49 | $ | 10.00 | $ | 10.00 | |||||||||
Income (Loss) from investment operations: | |||||||||||||||||
Net investment income (loss) (a) | 0.11 | 0.12 | 0.12 | 0.04 | |||||||||||||
Net realized and unrealized gain (loss) | 1.51 | (0.91 | ) | 1.91 | (0.01 | ) | |||||||||||
Total from investment operations | 1.62 | (0.79 | ) | 2.03 | 0.03 | ||||||||||||
Less distributions from: | |||||||||||||||||
Net investment income | (0.11 | ) | (0.17 | ) | (0.10 | ) | (0.03 | ) | |||||||||
Net realized gains | — | (1.26 | ) | (0.44 | ) | — | (b) | ||||||||||
Total distributions | (0.11 | ) | (1.43 | ) | (0.54 | ) | (0.03 | ) | |||||||||
Net asset value, end of period | $ | 10.78 | $ | 9.27 | $ | 11.49 | $ | 10.00 | |||||||||
Total Return (c) | 17.46 | % | –6.64 | % | 20.33 | % | 0.35 | % | |||||||||
Ratios and Supplemental Data: | |||||||||||||||||
Net assets, end of period (in thousands) | $ | 293 | $ | 225 | $ | 414 | $ | 210 | |||||||||
Ratios to average net assets (d): | |||||||||||||||||
Net expenses | 1.18 | % | 1.20 | % | 1.20 | % | 1.20 | % | |||||||||
Gross expenses | 5.45 | % | 4.20 | % | 5.79 | % | 9.43 | % | |||||||||
Net investment income (loss) | 1.10 | % | 1.07 | % | 1.09 | % | 0.72 | % | |||||||||
Portfolio turnover rate | 125 | % | 120 | % | 102 | % | 67 | % |
* | The Portfolio commenced operations on May 27, 2016. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Return for a period of less than one year is not annualized. |
(d) | Annualized for a period of less than one year except for non-recurring expenses. |
The accompanying notes are an integral part of these financial statements. |
Annual Report 71
LAZARD OPPORTUNISTIC STRATEGIES PORTFOLIO
Selected data for a share of capital stock outstanding | Year Ended | |||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | |||||||||||||||
Institutional Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 8.74 | $ | 10.60 | $ | 9.70 | $ | 9.36 | $ | 10.02 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.10 | 0.14 | 0.10 | 0.16 | ^ | 0.07 | ||||||||||||||
Net realized and unrealized gain (loss) | 1.23 | (1.48 | ) | 1.62 | 0.34 | (0.46 | ) | |||||||||||||
Total from investment operations | 1.33 | (1.34 | ) | 1.72 | 0.50 | (0.39 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.12 | ) | (0.02 | ) | (0.14 | ) | (0.14 | ) | (0.03 | ) | ||||||||||
Net realized gains | (0.08 | ) | (0.48 | ) | (0.68 | ) | — | (0.24 | ) | |||||||||||
Return of capital | — | (0.02 | ) | — | (0.02 | ) | — | (b) | ||||||||||||
Total distributions | (0.20 | ) | (0.52 | ) | (0.82 | ) | (0.16 | ) | (0.27 | ) | ||||||||||
Redemption fees | — | — | — | — | (b) | — | (b) | |||||||||||||
Net asset value, end of period | $ | 9.87 | $ | 8.74 | $ | 10.60 | $ | 9.70 | $ | 9.36 | ||||||||||
Total Return (c) | 15.16 | % | –12.72 | % | 17.74 | % | 5.36 | %^ | –3.80 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 83,509 | $ | 102,783 | $ | 151,767 | $ | 141,494 | $ | 170,626 | ||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net expenses | 1.22 | % | 1.02 | % | 1.05 | % | 1.02 | %^ | 1.02 | % | ||||||||||
Gross expenses | 1.43 | % | 1.15 | % | 1.18 | % | 1.19 | % | 1.18 | % | ||||||||||
Gross expenses, excluding expenses on securities sold short | 1.23 | % | 1.15 | %† | 1.15 | % | 1.19 | % | 1.18 | % | ||||||||||
Net investment income (loss) | 1.08 | % | 1.32 | % | 0.99 | % | 1.72 | %^ | 0.66 | % | ||||||||||
Portfolio turnover rate: | ||||||||||||||||||||
Excluding securities sold short | 82 | % | 227 | % | 142 | % | 238 | % | 255 | % | ||||||||||
Including securities sold short | 99 | % | N/A | † | 153 | % | N/A | † | N/A | † |
The accompanying notes are an integral part of these financial statements.
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Selected data for a share of capital stock outstanding | Year Ended | |||||||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | 12/31/15 | |||||||||||||||
Open Shares | ||||||||||||||||||||
Net asset value, beginning of period | $ | 8.69 | $ | 10.55 | $ | 9.65 | $ | 9.32 | $ | 10.02 | ||||||||||
Income (Loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) (a) | 0.07 | 0.10 | 0.05 | 0.13 | ^ | 0.01 | ||||||||||||||
Net realized and unrealized gain (loss) | 1.23 | (1.46 | ) | 1.64 | 0.33 | (0.47 | ) | |||||||||||||
Total from investment operations | 1.30 | (1.36 | ) | 1.69 | 0.46 | (0.46 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.09 | ) | — | (0.11 | ) | (0.11 | ) | — | (b) | |||||||||||
Net realized gains | (0.08 | ) | (0.48 | ) | (0.68 | ) | — | (0.24 | ) | |||||||||||
Return of capital | — | (0.02 | ) | — | (0.02 | ) | — | (b) | ||||||||||||
Total distributions | (0.17 | ) | (0.50 | ) | (0.79 | ) | (0.13 | ) | (0.24 | ) | ||||||||||
Net asset value, end of period | $ | 9.82 | $ | 8.69 | $ | 10.55 | $ | 9.65 | $ | 9.32 | ||||||||||
Total Return (c) | 14.91 | % | –13.05 | % | 17.48 | % | 4.97 | %^ | –4.51 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 208 | $ | 286 | $ | 428 | $ | 823 | $ | 725 | ||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net expenses | 1.51 | % | 1.32 | % | 1.34 | % | 1.32 | %^ | 1.32 | % | ||||||||||
Gross expenses | 3.78 | % | 4.22 | % | 3.87 | % | 3.31 | % | 1.66 | % | ||||||||||
Gross expenses, excluding expenses on securities sold short | 3.58 | % | 4.22 | %† | 3.85 | % | 3.31 | %† | 1.66 | %† | ||||||||||
Net investment income (loss) | 0.76 | % | 1.00 | % | 0.53 | % | 1.43 | %^ | 0.15 | % | ||||||||||
Portfolio turnover rate: | ||||||||||||||||||||
Excluding securities sold short | 82 | % | 227 | % | 142 | % | 238 | % | 255 | % | ||||||||||
Including securities sold short | 99 | % | N/A | † | 153 | % | N/A | † | N/A | † |
The accompanying notes are an integral part of these financial statements.
Annual Report 73
^ | 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 period custodian fees was offset against current period expense waivers/reimbursements with no impact to net expenses or net investment income (loss). |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. |
† | No securities sold short during the year. |
The accompanying notes are an integral part of these financial statements.
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LAZARD REAL ASSETS AND PRICING OPPORTUNITIES PORTFOLIO^
Selected data for a share of capital stock outstanding | Year Ended | For the Period 12/30/16* to | |||||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | 12/31/16 | |||||||||||||
Institutional Shares | |||||||||||||||||
Net asset value, beginning of period | $ | 9.42 | $ | 10.71 | $ | 10.00 | $ | 10.00 | |||||||||
Income (Loss) from investment operations: | |||||||||||||||||
Net investment income (loss) (a) | 0.16 | 0.16 | 0.19 | — | |||||||||||||
Net realized and unrealized gain (loss) | 1.35 | (0.96 | ) | 0.78 | — | (b) | |||||||||||
Total from investment operations | 1.51 | (0.80 | ) | 0.97 | — | (b) | |||||||||||
Less distributions from: | |||||||||||||||||
Net investment income | (0.24 | ) | (0.25 | ) | (0.13 | ) | — | ||||||||||
Net realized gains | — | (b) | (0.24 | ) | (0.13 | ) | — | ||||||||||
Total distributions | (0.24 | ) | (0.49 | ) | (0.26 | ) | — | ||||||||||
Net asset value, end of period | $ | 10.69 | $ | 9.42 | $ | 10.71 | $ | 10.00 | |||||||||
Total Return (c) | 16.07 | % | –7.47 | % | 9.80 | % | 0.00 | % | |||||||||
Ratios and Supplemental Data: | |||||||||||||||||
Net assets, end of period (in thousands) | $ | 17,515 | $ | 16,164 | $ | 17,812 | $ | 13,090 | |||||||||
Ratios to average net assets (d): | |||||||||||||||||
Net expenses | 0.90 | % | 0.90 | % | 0.90 | % | 0.00 | % | |||||||||
Gross expenses | 2.20 | % | 2.04 | % | 3.13 | % | 3.49 | % | |||||||||
Net investment income (loss) | 1.59 | % | 1.53 | % | 1.79 | % | 0.00 | % | |||||||||
Portfolio turnover rate | 44 | % | 72 | % | 76 | % | 0 | % |
The accompanying notes are an integral part of these financial statements.
Annual Report 75
Selected data for a share of capital stock outstanding | Year Ended | For the Period 1/9/17* to | ||||||||||||
throughout each period | 12/31/19 | 12/31/18 | 12/31/17 | |||||||||||
Open Shares | ||||||||||||||
Net asset value, beginning of period | $ | 9.41 | $ | 10.70 | $ | 10.03 | ||||||||
Income (Loss) from investment operations: | ||||||||||||||
Net investment income (loss) (a) | 0.14 | 0.14 | 0.18 | |||||||||||
Net realized and unrealized gain (loss) | 1.33 | (0.96 | ) | 0.74 | ||||||||||
Total from investment operations | 1.47 | (0.82 | ) | 0.92 | ||||||||||
Less distributions from: | ||||||||||||||
Net investment income | (0.21 | ) | (0.23 | ) | (0.12 | ) | ||||||||
Net realized gains | — | (b) | (0.24 | ) | (0.13 | ) | ||||||||
Total distributions | (0.21 | ) | (0.47 | ) | (0.25 | ) | ||||||||
Net asset value, end of period | $ | 10.67 | $ | 9.41 | $ | 10.70 | ||||||||
Total Return (c) | 15.70 | % | –7.70 | % | 9.17 | % | ||||||||
Ratios and Supplemental Data: | ||||||||||||||
Net assets, end of period (in thousands) | $ | 65 | $ | 43 | $ | 135 | ||||||||
Ratios to average net assets (d): | ||||||||||||||
Net expenses | 1.10 | % | 1.15 | % | 1.15 | % | ||||||||
Gross expenses | 23.75 | % | 13.72 | % | 20.65 | % | ||||||||
Net investment income (loss) | 1.39 | % | 1.29 | % | 1.69 | % | ||||||||
Portfolio turnover rate | 44 | % | 72 | % | 76 | % |
^ | Consolidated Financial Highlights. |
* | The inception date for the Institutional Shares was December 30, 2016 and for the Open Shares was January 9, 2017. |
(a) | Net investment income (loss) has been computed using the average shares method. |
(b) | Amount is less than $0.01 per share. |
(c) | 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. Returns for a period of less than one year are not annualized. |
(d) | Annualized for a period of less than one year except for non-recurring expenses. |
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The Lazard Funds, Inc.Notes to Financial Statements
December 31, 2019
1. Organization
The Lazard Funds, Inc. was incorporated in Maryland on May 17, 1991 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. As of December 31, 2019, the Fund was comprised of thirty no-load portfolios (each referred to as a “Portfolio”). This report includes only the financial statements of Global Dynamic Multi-Asset, Opportunistic Strategies and Real Assets and Pricing Opportunities Portfolios. The financial statements of the other twenty-seven Portfolios are presented separately.
The Portfolios are operated as “diversified” funds, as defined in the 1940 Act.
Each Portfolio currently offers Institutional Shares and Open Shares, and certain Portfolios offer R6 Shares. Each share class is identical except as to minimum investment requirements; eligibility requirements for R6 Shares; the services offered to, and expenses borne by, each class; and the availability of Service Payments (as defined in the Portfolios’ Prospectus).
Lazard Real Assets and Pricing Opportunities Portfolio commenced investment operations and issued Institutional Shares on December 30, 2016. Lazard Real Assets and Pricing Opportunities Portfolio, Ltd. (the “Subsidiary”), organized under the laws of the Cayman Islands, was incorporated on October 7, 2016 and commenced operations on December 30, 2016. The Subsidiary acts as an investment vehicle for the Portfolio in order to effect certain investments on behalf of the Portfolio, consistent with its investment objectives and policies as described in its prospectus. The Portfolio expects that it will achieve a significant portion of its exposure to commodities and commodities-related investments through investment in the Subsidiary. The Portfolio may invest up to 25% of its total assets in the Subsidiary. The financial statements of the Portfolio have been consolidated and include the accounts of both the Portfolio and the Subsidiary. All inter-company balances and transactions have been eliminated in consolidation. As of December 31, 2019, net assets of the Portfolio were $17,579,959, of which $2,872,729, or 16.34%, represented the Portfolio’s ownership of all issued shares and voting rights of the Subsidiary.
Annual Report 77
2. Significant Accounting Policies
The accompanying financial statements are presented in conformity with US Generally Accepted Accounting Principles (“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. Exchange-traded futures contracts are valued at the settlement price on the exchange on which the contract is principally traded. Swap agreements, such as credit default, interest rate and total return swap agreements, generally are valued by an independent pricing service. 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 non-US securities exchanges and in over-the-counter markets may be completed before or after the
78 Annual Report
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, non-US 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 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
Annual Report 79
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.
(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 withhold-
80 Annual Report
ing taxes recorded on the Portfolios’ 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 year ended December 31, 2019, the Global Dynamic Multi-Asset and Real Assets and Pricing Opportunities Portfolios traded in forward currency contracts.
(d) Futures Contracts—For hedging and investment purposes, certain Portfolios may enter into futures contracts in US domestic markets, or exchanges located outside the United States.
Foreign markets may offer advantages such as trading opportunities or arbitrage possibilities not available in the United States. Foreign markets, however, may have greater risk potential than domestic markets. For example, some foreign exchanges are principal markets so that no common clearing facility exists and an investor may look only to the broker for performance of the contract. In addition, any profits a Portfolio might realize in trading could be eliminated by adverse changes in the currency exchange rate, or the Portfolio could incur losses as a result of those changes. Transactions on foreign exchanges may include both
Annual Report 81
commodities which are traded on domestic exchanges and those which are not. Unlike trading on domestic commodity exchanges, trading on foreign commodity exchanges is not regulated by the Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to the Portfolio which could adversely affect the value of the Portfolio’s net assets. Although each of these Portfolios intends to purchase or sell futures contracts only if there is an active market for such contracts, no assurance can be given that a liquid market will exist for any particular contract at any particular time. Many futures exchanges and boards of trade limit the amount of fluctuation permitted in futures contract prices during a single trading day. Once the daily limit has been reached in a particular contract, no trades may be made that day at a price beyond that limit or trading may be suspended for specified periods during the trading day. Futures contract prices could move to the limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and potentially subjecting the Portfolio to substantial losses.
During the year ended December 31, 2019, the Real Assets and Pricing Opportunities Portfolio traded in futures contracts.
(e) Swap Agreements—Swap agreements on equity securities involve commitments to pay interest in exchange for a market linked return based on a notional amount. The counterparty pays out the total return of the equity security or basket of equity securities and, in return, receives a regular stream of payments, based on an agreed-upon interest rate. To the extent the total return of the security or basket of securities underlying the transaction exceeds (or falls short of) the offsetting interest rate obligation, a Portfolio will receive a payment from (or make a payment to) the counterparty.
Commodity-linked swap agreements involve commitments to pay interest in exchange for a commodity-linked return based on a notional amount. To the extent the return of the reference commodity or commodity index or basket of reference commodities or commodity indexes underlying the transaction exceeds (or falls
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short of) the offsetting interest rate obligation, a Portfolio will receive a payment from (or make a payment to) the counterparty.
Swap agreements generally are valued by an independent pricing service, and the change in value, if any, is recorded as unrealized appreciation (depreciation) on swap agreements in a Portfolio’s accompanying Statement of Assets and Liabilities. Once the interim payments are settled in cash, the net amount is recorded as realized gain (loss) on swap agreements in a Portfolio’s accompanying Statement of Operations, in addition to any realized gain (loss) recorded upon the termination of swap agreements.
During the year ended December 31, 2019, the Real Assets and Pricing Opportunities Portfolios traded in swap agreements.
(f) Short Sales—A short sale is a transaction in which a Portfolio sells securities it does not own but has borrowed in anticipation of a decline in the market price of the securities. The initial amount of a short sale is recorded as a liability which is marked-to-market daily. Fluctuations in the value of the short liability are recorded as unrealized gains or losses. A Portfolio realizes a gain or loss upon closing of the short sale (returning the security to the counterparty by way of purchase or delivery of a long position owned). Short sales by a Portfolio involve certain risks and special considerations. Possible losses from short sales differ from losses that could be incurred from a purchase of a security because losses from short sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested. The Portfolio may have to pay a fee to borrow the particular security and is liable to the buyer for any dividends or interest payable on securities while those securities are in a short position. These dividends and interest amounts are an expense of the Portfolio. The Portfolio designates collateral consisting of cash, US government securities or other liquid assets sufficient to collateralize the market value of short positions.
Proceeds from short sales are generally retained in cash accounts or invested in securities that are cash equivalents. With regard to securities borrowed as of December 31, 2019 pursuant to short sale arrangements, the Portfolios have a right to set off any assets held (including the borrowed securities) or obligations owed to
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the lender (State Street), in the event of the lender’s default, against any obligations owed by the lender to the Portfolios under any agreement or collateral document, including the collateral value of the Securities Loan Collateral, as that term is defined in the Securities Lending and Services Agreement between the Portfolios and State Street. At December 31, 2019, the Opportunistic Strategies Portfolio had pledged $6,462,963 of long securities as collateral under such arrangements.
For the year ended December 31, 2019, proceeds from securities sold short and purchases to cover short positions for the Opportunistic Strategies Portfolio were $23,792,903 and $19,435,089, respectively.
(g) 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, 2019, the Portfolios had no unused realized capital loss carryovers which, for federal income tax purposes, could be used to offset future realized capital gains.
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, 2019, the following Portfolios elected to defer such losses as follows:
Portfolio | Post-October Capital Loss Deferral | Late-Year Ordinary Loss Deferral | |||
Global Dynamic Multi-Asset | $— | $136,947 | |||
Real Assets and Pricing Opportunities | — | 24,110 |
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:
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Portfolio | Aggregate Cost | Aggregate Gross Unrealized Appreciation | Aggregate Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | |||||
Global Dynamic Multi-Asset | $42,515,474 | $5,517,431 | $370,329 | $5,147,102 | |||||
Opportunistic Strategies | 78,459,722 | 5,789,942 | 474,945 | 5,314,997 | |||||
Real Assets and Pricing Opportunities | 15,798,839 | 1,579,983 | 234,885 | 1,345,098 |
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. Each Portfolio 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.
(h) Dividends and Distributions—Dividends from net investment income, if any, will be declared and paid annually, except that the Real Assets and Pricing Opportunities Portfolio’s dividends from net investment income (if any), will be declared and paid quarterly. 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.
Net income and realized gains from investments held by the Subsidiary are treated as ordinary income for tax purposes. If a net loss is realized by the Subsidiary in any taxable year, the loss will generally not be available to offset the Real Assets and Pricing Opportunities Portfolio’s ordinary income and/or capital gains for that year, or any future tax year.
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The Opportunistic Strategies Portfolio intend, on their 2019 tax returns, to treat as a distribution of investment company taxable income and net capital gain the portion of redemption proceeds paid to redeeming shareholders that represents the redeeming shareholders’ portion of the Portfolio's undistributed investment company taxable income and net capital gain. This practice, which involves the use of equalization accounting, will have the effect of reducing the amount of income and gains that the Portfolio would otherwise be required to distribute as dividends to shareholders in order for the Portfolio to avoid federal income and excise taxes. This practice reduces the amount of distributions required to be made to nonredeeming shareholders and defers the recognition of taxable income by such shareholders. However, since the amount of any undistributed income will be reflected in the value of the Portfolio’s shares, the total return on a shareholder’s investment is not affected by the Portfolio's use of equalization.
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, distributions redesignations, distributions in excess of current earnings, equalization,Treasury Inflation-Protected Securities, currency straddles, passive foreign investment companies, certain fixed-income securities, expenses, derivatives and distributions from real estate investment trusts. The book/tax differences relating to shareholder distributions resulted in reclassifications among certain capital accounts as follows:
Portfolio | Paid in Capital | Distributable Earnings (Accumulated Loss) | |||||||
Global Dynamic Multi-Asset | $ | 141,828 | $ | (141,828 | ) | ||||
Opportunistic Strategies | 310,407 | (310,407 | ) | ||||||
Real Assets and Pricing Opportunities | (292,369 | ) | 292,369 |
The tax character of dividends and distributions paid during the years ended December 31, were as follows:
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Ordinary Income | Long-Term Capital Gain | ||||||||||||||||
Portfolio | 2019 | 2018 | 2019 | 2018 | |||||||||||||
Global Dynamic Multi-Asset | $ | 486,191 | $ | 2,449,223 | $ | 124,068 | $ | 3,409,191 | |||||||||
Opportunistic Strategies* | 998,829 | 1,243,851 | 645,553 | 4,802,683 | |||||||||||||
Real Assets and Pricing Opportunities | 388,282 | 429,050 | 4,977 | 404,742 |
* | Opportunistic Strategies Portfolio had return of capital distribution of $262,887 in 2018. |
At December 31, 2019, the components of distributable earnings (accumulated loss), on a tax basis, were as follows:
Undistributed | Undistributed | Net Unrealized | |||||||||
Ordinary Income | Long-Term | Appreciation | |||||||||
(Deferred | Capital Gain | (Depreciation) | |||||||||
Ordinary | (Deferred | Including | |||||||||
Portfolio | Losses) | Capital Losses) | Foreign Currency | ||||||||
Global Dynamic Multi-Asset | $ | (136,947 | ) | $ | — | $ | 5,104,023 | ||||
Opportunistic Strategies | 8,593 | 64,494 | 5,305,670 | ||||||||
Real Assets and Pricing Opportunities | (24,110 | ) | 104,582 | 1,317,596 |
(i) Allocation of Expenses—Expenses common to the Fund, Lazard Retirement Series, and Lazard Global Total Return and 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 Open 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.
(j) Redemption Fee—Until August 15, 2016, the Portfolios imposed a 1.00% redemption fee (short-term trading fee) on Portfolio shares redeemed less than 30 days after such shares were acquired. The fees were retained by the Portfolios and are included as paid in capital on the Statements of Assets and Liabilities. As of August 15, 2016, redemption fees no longer apply to transactions in Portfolio shares.
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(k) 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.
(l) 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 each Portfolio’s average daily net assets and payable by each Portfolio monthly, at the annual rate set forth below:
Portfolio | Annual Rate | ||||
Global Dynamic Multi-Asset | 0.80 | % | |||
Opportunistic Strategies | 1.00 | ||||
Real Assets and Pricing Opportunities | 0.70 |
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The Investment Manager provides investment management and other services to the Subsidiary. The Investment Manager does not receive separate compensation from the Subsidiary for providing such services. However, the Real Assets and Pricing Opportunities Portfolio pays the Investment Manager based on its net assets, which include the assets of the Subsidiary.
The Investment Manager has voluntarily agreed to waive its fees and, if necessary, reimburse the Portfolios until May 1, 2020 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, including, for the purposes of the expense limitation agreement only, fees related to filing foreign tax reclaims, exceed the percentages of the value of the Portfolio’s average daily net assets set forth opposite the Portfolio’s name on table below. The Fund, on behalf of the Portfolio, may deduct from the payment to be made to the Investment Manager under the Management Agreement, or the Investment Manager will bear, such excess expense.
Institutional | Open | |||||||
Portfolio | Shares | Shares | ||||||
Global Dynamic Multi-Asset (a) | 0.90 | % | 1.15 | % | ||||
Opportunistic Strategies (b) | 1.02 | 1.27 | ||||||
Real Assets and Pricing Opportunities | 0.90 | 1.15 |
(a) | From January 1, 2019 to September 9, 2019, the rates were 0.90% and 1.20% respectively. |
(b) | From January 1, 2019 to September 9, 2019, the rates were 1.02% and 1.32% respectively. |
During the year ended December 31, 2019, the Investment Manager waived its management fees and reimbursed the following Portfolios for other expenses as follows:
Institutional Shares | Open Shares | ||||||||||||||||
Management | Expenses | Management | Expenses | ||||||||||||||
Portfolio | Fees Waived | Reimbursed | Fees Waived | Reimbursed | |||||||||||||
Global Dynamic Multi-Asset | $ | 261,411 | $ | — | $ | 2,153 | $ | 9,320 | |||||||||
Opportunistic Strategies | 191,762 | — | 2,414 | 3,065 | |||||||||||||
Real Assets and Pricing Opportunities | 120,777 | 102,368 | 342 | 10,717 |
The aforementioned waivers and/or reimbursements are not subject to recoupment by the Investment Manager.
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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 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, the Lazard Opportunistic Strategies Portfolio 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 Manager, 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 Open Shares, for distribution and servicing of accounts. The Distributor may make payments to certain financial institutions, securities dealers and other industry professionals for providing these services.
DST is the Fund’s transfer and dividend disbursing agent.
4. Directors’ Compensation
Certain Directors of the Fund are officers of the Investment Manager. For the year ended December 31, 2019, each Director who is not an affiliated person of the Investment Manager or any of its affiliates was paid by all of the funds in the Lazard Fund Complex: (1) an annual retainer of $232,000, (2) an additional annual fee of $33,000 to the lead Independent Director (an “Independent Director” is a Director who is not an “interested person” (as defined in
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the 1940 Act) of the Fund), and (3) an additional annual fee of $23,000 to the Audit Committee Chair. Effective January 1, 2020, the aggregate compensation for Independent Directors for the Lazard Fund Complex is comprised of: (1) an annual retainer of $237,000, (2) an additional annual fee of $33,700 to the lead Independent Director, and (3) an additional annual fee of $23,500 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 active Portfolios in the Lazard Fund Complex at a rate of $5,000 per fund with the remainder allocated based upon each active Portfolio’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 and short sales) for the year ended December 31, 2019 were as follows:
Portfolio | Purchases | Sales | ||||||
Global Dynamic Multi-Asset | $ | 53,415,778 | $ | 53,728,665 | ||||
Opportunistic Strategies | 66,630,265 | 101,366,646 | ||||||
Real Assets and Pricing Opportunities | 6,015,436 | 6,902,151 | ||||||
US Treasury Securities | ||||||||
Portfolio | Purchases | Sales | ||||||
Global Dynamic Multi-Asset | $ | 3,773,554 | $ | 5,230,332 | ||||
Real Assets and Pricing Opportunities | 267,393 | 462,624 |
For the year ended December 31, 2019, 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.
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At December 31, 2019, the Investment Manager owned 10.83% of the outstanding shares of the Global Dynamic Multi-Asset Portfolio.
6. Line of Credit
The Fund has a Line of Credit Agreement (the “Agreement”) with State Street, primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. From January 1, 2019 through December 12, 2019, the Agreement provided for a $50 million commitment; effective December 13, 2019, the commitment was increased to $100 million. Interest on borrowings is payable at the higher of the Federal Funds rate or One-Month LIBOR rate plus 1.00%, on an annualized basis. Under the Agreement, the Fund has agreed to pay a 0.20% per annum fee on the unused portion of the commitment, payable quarterly in arrears. The Fund has also agreed to pay an upfront fee of 0.05% of the committed line amount. During the year ended December 31, 2019, the following Portfolios had borrowings under the Agreement as follows:
Weighted | Number | |||||||||||||
Average | Maximum | Average | of Days | |||||||||||
Daily Loan | Daily Loan | Interest | Borrowings | |||||||||||
Portfolio | Balance* | Outstanding | Rate | were Outstanding | ||||||||||
Global Dynamic Multi-Asset | $ | 1,200,000 | $ | 1,200,000 | 3.15 | % | 2 | |||||||
Real Assets and Pricing Opportunities | 530,000 | 631,000 | 3.42 | 5 |
* | For days borrowings were outstanding. |
Management believes that the fair value of the liabilities under the line of credit is equivalent to the recorded amount based on its short-term maturity and interest rate, which fluctuates with LIBOR. A Portfolio’s outstanding balance on the line of credit, if any, would be categorized as Level 2.
7. 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 com-
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pany 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) Realty Companies, Real Estate Investments and REITs Risk—Portfolios that invest in Realty Companies (as defined in the Fund’s prospectus), Real Estate Investments and/or REITs could lose money due to the performance of real estate-related securities even if securities markets generally are experiencing positive results. The performance of investments made by a Portfolio may be determined to a great extent by the current status of the real estate industry in general, or by other factors (such as interest rates and the availability of loan capital) that may affect the real
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estate industry, even if other industries would not be so affected. Consequently, the investment strategies of a Portfolio could lead to securities investment results that may be significantly different from investments in securities of other industries or sectors or in a more broad-based portfolio generally.
The risks related to investments in Realty Companies and Real Estate Investments include, but are not limited to: adverse changes in general economic and local market conditions; adverse developments in employment; changes in supply or demand for similar or competing properties; unfavorable changes in applicable taxes, governmental regulations and interest rates; operating or development expenses; and lack of available financing.
REITs are subject to similar risks as Real Estate Investments and Realty Companies. The risks related to investments in Real Estate Investments and Realty Companies include, but are not limited to: adverse changes in general economic and local market conditions; adverse developments in employment; changes in supply or demand for similar or competing properties; unfavorable changes in applicable taxes, governmental regulations and interest rates; operating or development expenses; and lack of available financing. Due to certain special considerations that apply to REITs, investments in REITs may carry additional risks not necessarily present in investments in other securities. REIT securities (including those trading on national exchanges) typically have trading volumes that are less than those of common stocks or other stocks traded on national exchanges, which may affect a Portfolio’s ability to trade or liquidate those securities. An investment in REITs may be adversely affected if the REIT fails to comply with applicable laws and regulations. Failure to qualify with any of these requirements could jeopardize a company’s status as a REIT. A Portfolio generally will have no control over the operations and policies of a REIT, and they generally will have no ability to cause a REIT to take the actions necessary to qualify as a REIT.
(e) Subsidiary Risk—The Real Assets and Pricing Opportunities Portfolio invests in the Subsidiary, which is not registered as an investment company under the 1940 Act. A regulatory change in the US or the Cayman Islands, under which the Portfolio and the
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Subsidiary, respectively, are organized, that impacts the Subsidiary or how the Portfolio invests in the Subsidiary, such as a change in tax law, could adversely affect the Portfolio. By investing in the Subsidiary, the Portfolio is exposed to the risks associated with the Subsidiary’s investments, which generally include the risks of investing in commodity-related derivative instruments.
(f) Tax Status Risk—Income and gains from commodities or certain commodity-linked derivative instruments do not constitute “qualifying income” to the Real Assets and Pricing Opportunities Portfolio for purposes of qualification as a “regulated investment company” for federal income tax purposes. Without such qualification, the Portfolio could be subject to tax. The tax treatment of some of the Portfolio’s investments in the Subsidiary and commodity-linked derivatives may be adversely affected by future legislation, regulations of the US Treasury Department or guidance issued by the Internal Revenue Service, or otherwise affect the character, timing and/or amount of the Portfolio’s taxable income or any gains and distributions made by the Portfolio.
(g) 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 Portfolio may have to liquidate portfolio securities at disadvantageous prices. During periods of reduced market liquidity, a Portfo-
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lio 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 a single large request for 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, and/or Portfolio expenses. 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 securi-
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ties 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. Certain fixed-income securities may be issued at a discount from their face value (such as zero coupon securities) or purchased at a price less than their stated face amount or at a price less than their issue price plus the portion of “original issue discount” previously accrued thereon, i.e., purchased at a “market discount.”The amount of original issue discount and/or market discount on certain obligations may be significant, and accretion of market discount together with original issue discount will cause a Portfolio to realize income prior to the receipt of cash payments with respect to these securities.
(h) Underlying Funds Risk—Shares of ETFs, closed-end funds and exchange-traded notes (“ETNs” and collectively with ETFs and closed-end funds, “Underlying Funds”) in which certain Portfolios invest may trade at prices that vary from their NAVs, sometimes significantly. The shares of ETFs and closed-end funds may trade at prices at, below or above their most recent NAV. Shares of closed-end funds, in particular, frequently trade at persistent discounts to their NAV. In addition, the performance of an ETF pursuing a passive index-based strategy may diverge from the performance of the index. ETNs may not trade in the secondary market, but typically are redeemable by the issuer. A Portfolio’s investments in Underlying Funds are subject to the risks of Underlying Funds’ investments, as well as to the general risks of investing in Underlying Funds. Portfolio shares will bear not only the Portfolio’s management fees and operating expenses, but also their proportional share of the management fees and operating expenses of the ETFs and closed-end funds in which the Portfolio invests. While ETNs do not have management fees, they are subject to certain investor fees. ETNs are debt securities that, like ETFs, typically are listed on exchanges and their terms generally provide for a return that tracks specified market indexes. However, unlike ETFs and closed-end funds, ETNs are not registered investment companies and thus are not registered under the 1940 Act. In
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addition, as debt securities, ETNs are subject to the additional risk of the creditworthiness of the issuer. ETNs typically do not make periodic interest payments.
These Portfolios may be limited by the 1940 Act in the amount of their assets that may be invested in ETFs and closed-end funds unless an ETF or a closed-end fund has received an exemptive order from the US Securities and Exchange Commission (the “SEC”) on which the Portfolios may rely or an exemption is available.
Many ETFs have received an exemptive order from the SEC providing an exemption from the 1940 Act limits on the amount of assets that may be invested in ETFs and closed-end funds, and a Portfolio’s reliance on an order is conditioned on compliance with certain conditions of the order. If an exemptive order has not been received and an exemption is not available under the 1940 Act, the Portfolio will be limited in the amount it can invest in Underlying Funds that are registered investment companies to: (1) 3% or less of an Underlying Fund’s voting shares, (2) an Underlying Fund’s shares in value equal to or less than 5% of the Portfolio’s assets and (3) shares of Underlying Funds in the aggregate in value equal to or less than 10% of the Portfolio’s total assets.
(i) Short Position Risk—Short sales or positions may involve substantial risks. If a short position appreciates in value during a period of the Portfolio’s investment, there will be a loss to the Portfolio that could be substantial. Short positions involve more risk than long positions because the maximum sustainable loss on a security purchased is limited to the amount paid for the security plus the transaction costs. However, a Portfolio’s potential loss on a short position is unlimited because, theoretically, there is no limit to the potential price increase of a security.
Short sales of securities also may involve additional transaction-related costs such as those in connection with borrowing the securities sold short.
There is a risk that certain Portfolios may be unable to fully implement their investment strategies due to a lack of available securities to borrow to effect short sales or for some other reason.
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When seeking to effect short sales of securities, a Portfolio may not always be able to borrow a security the Portfolio seeks to sell short at a particular time or at an acceptable price. In addition, a Portfolio may not always be able to close out a short sale position at a particular time or at an acceptable price. If the lender of a borrowed security requires a Portfolio to return the security to it on short notice, and the Portfolio is unable to borrow the security from another lender, the Portfolio may have to buy the borrowed security at an unfavorable price, resulting in a loss. In addition, there is a risk that the collateral pledged to the Portfolio’s custodian to secure securities borrowings in connection with short sales of securities may not be returned to the Portfolio or may not be returned in a timely manner.
It is possible that the market value of the securities a Portfolio holds in long positions will decline at the same time that the market value of the securities to which the Portfolio has short exposure increases, thereby increasing the Portfolio’s potential volatility.
(j) Natural Resources Risk—Investments related to natural resources may be affected by numerous factors, including events occurring in nature, inflationary pressures and domestic and international politics. For example, events occurring in nature (such as earthquakes or fires in prime natural resource areas) and political events (such as coups or military confrontations) can affect the overall supply of a natural resource and the value of companies involved in such natural resource. Political risks and other risks to which non-US companies are subject also may affect US companies if they have significant operations or investments in non-US countries. In addition, interest rates, prices of raw materials and other commodities, international economic developments, energy conservation, tax and other government regulations (both US and non-US) may affect the supply of and demand for natural resources, which can affect the profitability and value of securities issued by companies in the natural resources category. Securities of companies within specific natural resources sub-categories can perform differently than the overall market. This may be due to changes in such things as the regulatory or competitive environment or to changes in investor perceptions.
Annual Report 99
(k) Commodities-Related Investments Risk—Exposure to the commodities markets may subject the Real Assets and Pricing Opportunities Portfolio and the Subsidiary to greater volatility than other types of investments. The values of commodities and commodity-linked derivative instruments are affected by events that may have less impact on the values of equity and fixed income securities. Investments linked to the prices of commodities are considered speculative. Because the value of a commodity-linked derivative instrument, such as a futures contract on a physical commodity, typically is based upon the price movements of the underlying reference asset, index or rate, the value of these instruments will rise or fall in response to changes in the underlying reference asset, index or rate. Prices of commodities and commodity-linked investments may fluctuate significantly over short periods for a variety of factors, including: changes in supply and demand relationships; weather; agricultural or livestock markets; agricultural or livestock disease or pestilence; trade relationships; fiscal, monetary and exchange control programs; and embargoes, tariffs, terrorism and international economic, political, military and regulatory developments. The commodity markets are subject to temporary distortions or other disruptions due to a variety of factors, including the lack of liquidity in the markets, the participation of speculators and government regulation and intervention. United States futures exchanges and some foreign exchanges have regulations that limit the amount of fluctuation in futures contract prices, which may occur during a single business day. These limits are generally referred to as “daily price fluctuation limits” and the maximum or minimum price of a contract on any given day as a result of these limits is referred to as a “limit price.” Once the limit price has been reached in a particular contract, no trades may be made at a different price. Limit prices have the effect of precluding trading in a particular contract or forcing the liquidation of contracts at disadvantageous times or prices. These circumstances could adversely affect the value of the commodity-linked investments.
(l) Inflation-Indexed Security Risk—Interest payments on inflation-indexed securities can be unpredictable and will vary as the principal and/or interest is periodically adjusted based on the rate of inflation. If the index measuring inflation falls, the interest payable
100 Annual Report
on these securities will be reduced. The US Treasury has guaranteed that, in the event of a drop in prices, it would repay the par amount of its inflation-indexed securities. Inflation-indexed securities issued by corporations generally do not guarantee repayment of principal. Any increase in the principal amount of an inflation-indexed security will be considered taxable ordinary income, even though investors do not receive their principal until maturity. As a result, a Portfolio may be required to make annual distributions to shareholders that exceed the cash the Portfolio received, which may cause the Portfolio to liquidate certain investments when it is not advantageous to do so. Also, if the principal value of an inflation-indexed security is adjusted downward due to deflation, amounts previously distributed may be characterized in some circumstances as a return of capital.
(m) 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 ETFs and ETNs), 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
Annual Report 101
in such transactions 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.
(n) Allocation Risk—The Portfolio’s ability to achieve its investment objective depends in part on the Investment Manager’s skill in determining the Portfolio’s allocation among real assets categories. The Investment Manager’s evaluations and assumptions underlying its allocation decisions may differ from actual market conditions.
(o) Infrastructure Companies Risk—Securities and instruments of infrastructure companies are more susceptible to adverse economic or regulatory occurrences affecting their industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Infrastructure companies also may be affected by or subject to, among other factors, regulation by various government authorities, including rate regulation, and service interruption due to environmental, operational or other mishaps.
8. 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.
102 Annual Report
9. 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.
Annual Report 103
The following table summarizes the valuation of the Portfolios’ assets and liabilities by each fair value hierarchy level as of December 31, 2019:
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 December 31, 2019 | |||||||||||||
Global Dynamic Multi-Asset Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 1,119,833 | $ | — | $ | 1,119,833 | |||||||||
Austria | — | 98,223 | — | 98,223 | |||||||||||||
Belgium | 91,065 | 87,610 | — | 178,675 | |||||||||||||
Canada | 1,900,676 | — | — | 1,900,676 | |||||||||||||
Denmark | — | 169,248 | — | 169,248 | |||||||||||||
France | — | 459,233 | — | 459,233 | |||||||||||||
Germany | 160,169 | 449,408 | — | 609,577 | |||||||||||||
Hong Kong | 391,385 | 51,800 | — | 443,185 | |||||||||||||
Israel | 159,792 | 106,002 | — | 265,794 | |||||||||||||
Italy | — | 596,877 | — | 596,877 | |||||||||||||
Japan | 741,336 | 3,053,691 | — | 3,795,027 | |||||||||||||
Luxembourg | — | 85,001 | — | 85,001 | |||||||||||||
Netherlands | 486,349 | 182,850 | — | 669,199 | |||||||||||||
Norway | — | 210,871 | — | 210,871 | |||||||||||||
Puerto Rico | 28,798 | — | — | 28,798 | |||||||||||||
Singapore | 180,549 | 50,846 | — | 231,395 | |||||||||||||
Spain | — | 383,309 | — | 383,309 | |||||||||||||
Sweden | 446,695 | 102,789 | — | 549,484 | |||||||||||||
Switzerland | 496,187 | 896,712 | — | 1,392,899 | |||||||||||||
United Kingdom | 1,682,823 | 768,456 | — | 2,451,279 | |||||||||||||
United States | 23,970,981 | — | — | 23,970,981 | |||||||||||||
Preferred Stocks* | |||||||||||||||||
Germany | — | 27,828 | — | 27,828 | |||||||||||||
Corporate Bonds* | — | 2,191,937 | — | 2,191,937 | |||||||||||||
Foreign Government Obligations* | — | 3,028,170 | — | 3,028,170 | |||||||||||||
Quasi Government Bonds* | — | 401,917 | — | 401,917 | |||||||||||||
Supranational Bonds | — | 772,402 | — | 772,402 | |||||||||||||
US Municipal Bonds | — | 298,523 | — | 298,523 | |||||||||||||
US Treasury Securities | — | 579,061 | — | 579,061 | |||||||||||||
Short-Term Investments | 816,577 | — | — | 816,577 | |||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | — | 116,831 | — | 116,831 | |||||||||||||
Total | $ | 31,553,382 | $ | 16,289,428 | $ | — | $ | 47,842,810 | |||||||||
Liabilities: | |||||||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | $ | — | $ | (120,002 | ) | $ | — | $ | (120,002 | ) |
104 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 December 31, 2019 | |||||||||||||
Opportunistic Strategies Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Exchange-Traded Funds | $ | 73,857,931 | $ | — | $ | — | $ | 73,857,931 | |||||||||
Short-Term Investments | 14,891,033 | — | — | 14,891,033 | |||||||||||||
Total | $ | 88,748,964 | $ | — | $ | — | $ | 88,748,964 | |||||||||
Liabilities: | |||||||||||||||||
Securities Sold Short | |||||||||||||||||
Exchange-Traded Funds | $ | (4,974,245 | ) | $ | — | $ | — | $ | (4,974,245 | ) | |||||||
Real Assets and Pricing Opportunities Portfolio | |||||||||||||||||
Assets: | |||||||||||||||||
Common Stocks* | |||||||||||||||||
Australia | $ | — | $ | 508,813 | $ | — | $ | 508,813 | |||||||||
Brazil | — | 9,407 | — | 9,407 | |||||||||||||
Canada | 723,574 | — | — | 723,574 | |||||||||||||
China | — | 200,616 | — | 200,616 | |||||||||||||
Denmark | — | 19,382 | — | 19,382 | |||||||||||||
Finland | — | 21,195 | — | 21,195 | |||||||||||||
France | — | 347,683 | — | 347,683 | |||||||||||||
Germany | — | 242,890 | — | 242,890 | |||||||||||||
Hong Kong | — | 329,364 | — | 329,364 | |||||||||||||
Ireland | 10,187 | — | — | 10,187 | |||||||||||||
Israel | — | 69,675 | — | 69,675 | |||||||||||||
Italy | — | 851,282 | — | 851,282 | |||||||||||||
Japan | — | 527,874 | — | 527,874 | |||||||||||||
Luxembourg | — | 141,931 | — | 141,931 | |||||||||||||
Mexico | 15,465 | — | — | 15,465 | |||||||||||||
Netherlands | — | 10,115 | — | 10,115 | |||||||||||||
New Zealand | — | 8,001 | — | 8,001 | |||||||||||||
Norway | — | 9,841 | — | 9,841 | |||||||||||||
Romania | — | 8,379 | — | 8,379 | |||||||||||||
Singapore | — | 135,509 | — | 135,509 | |||||||||||||
South Africa | — | 18,573 | — | 18,573 | |||||||||||||
South Korea | — | 21,864 | — | 21,864 | |||||||||||||
Spain | — | 217,740 | — | 217,740 | |||||||||||||
Sweden | — | 56,512 | — | 56,512 | |||||||||||||
Switzerland | — | 170,855 | — | 170,855 | |||||||||||||
United Arab Emirates | — | 21,948 | — | 21,948 | |||||||||||||
United Kingdom | — | 971,202 | — | 971,202 | |||||||||||||
United States | 4,793,478 | 8,995 | — | 4,802,473 | |||||||||||||
Exchange-Traded Funds | 442,418 | — | — | 442,418 | |||||||||||||
Foreign Government Obligations* | — | 1,366,586 | — | 1,366,586 | |||||||||||||
US Treasury Securities | — | 2,452,505 | — | 2,452,505 | |||||||||||||
Rights | 13 | — | — | 13 | |||||||||||||
Short-Term Investments | 2,470,533 | — | — | 2,470,533 |
Annual Report 105
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 December 31, 2019 | |||||||||||||
Real Assets and Pricing Opportunities Portfolio (continued) | |||||||||||||||||
Assets: (continued) | |||||||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | $ | — | $ | 5,575 | $ | — | $ | 5,575 | |||||||||
Futures Contracts | 3,390 | — | — | 3,390 | |||||||||||||
Total Return Swap Agreements | — | 13,401 | — | 13,401 | |||||||||||||
Total | $ | 8,459,058 | $ | 8,767,713 | $ | — | $ | 17,226,771 | |||||||||
Liabilities: | |||||||||||||||||
Other Financial Instruments† | |||||||||||||||||
Forward Currency Contracts | $ | — | $ | (67,287 | ) | $ | — | $ | (67,287 | ) | |||||||
Futures Contracts | (5,718 | ) | — | — | (5,718 | ) | |||||||||||
Total | $ | (5,718 | ) | $ | (67,287 | ) | $ | — | $ | (73,005 | ) |
* | 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). |
10. Derivative Instruments
Certain Portfolios may use derivative instruments, including forward currency contracts, futures contracts or swap agreements.
Forward currency contracts may be used for hedging purposes or to seek to increase returns.
A Portfolio may enter into futures transactions to hedge against changes in interest rates, securities prices, and/or currency exchange rates, to increase total return, or to otherwise gain access or attain exposure to certain markets or other underliers.
A Portfolio enters into swap agreements in an attempt to obtain a particular exposure when it is considered desirable to do so, possibly at a lower cost to such Portfolio than if it had invested directly in the asset that yielded the desired exposure.
106 Annual Report
During the year ended December 31, 2019, the approximate average monthly notional exposure for derivative instruments was as follows:
Derivative Instruments | Global Dynamic Multi-Asset Portfolio | Real Assets and Pricing Opportunities Portfolio | ||||||
Forward currency contracts: | ||||||||
Average amounts purchased | $ | 8,000,000 | $ | 300,000 | ||||
Average amounts sold | 7,900,000 | 4,100,000 | ||||||
Futures contracts: | ||||||||
Average notional value of contracts – long | 200,000 | |||||||
Total return swap agreements: | ||||||||
Average notional value | 2,400,000 |
Global Dynamic Multi-Asset Portfolio
The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of December 31, 2019:
Assets – Derivative Financial Instruments | Total | |||||
Forward currency contracts | Unrealized appreciation on forward currency contracts | $ | 116,831 | |||
Liabilities – Derivative Financial Instruments | Total | |||||
Forward currency contracts | Unrealized depreciation on forward currency contracts | $ | 120,002 |
Real Assets and Pricing Opportunities Portfolio
The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of December 31, 2019:
Assets – Derivative Financial Instruments | Commodity Contracts | Foreign Currency Exchange Contracts | Total | ||||||||||
Forward currency contracts | |||||||||||||
Unrealized appreciation on forward currency contracts | $ | — | $ | 5,575 | $ | 5,575 | |||||||
Swap agreements | |||||||||||||
Unrealized appreciation on swap agreements | 13,401 | — | 13,401 | ||||||||||
Futures Contracts | |||||||||||||
Variation margin on open futures contracts (a) | 1,689 | — | 1,689 | ||||||||||
Total | $ | 15,090 | $ | 5,575 | $ | 20,665 |
Annual Report 107
Liabilities – Derivative Financial Instruments | Commodity Contracts | Foreign Currency Exchange Contracts | Total | ||||||||||
Forward currency contracts | |||||||||||||
Unrealized depreciation on forward currency contracts | $ | — | $ | 67,287 | $ | 67,287 |
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
Global Dynamic Multi-Asset Portfolio
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2019 was:
Net Realized Gain (Loss) from: | Total | |||
Forward currency contracts | $ | (63,564) | ||
Net Change in Unrealized Appreciation (Depreciation) on: | Total | |||
Forward currency contracts | $ | (120,256) |
Real Assets and Pricing Opportunities Portfolio
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2019 was:
Net Realized Gain (Loss) from: | Commodity Contracts | Credit Contracts | Foreign Currency Exchange Contracts | Total | ||||||||||||
Forward currency contracts | $ | — | $ | — | $ | 169,958 | $ | 169,958 | ||||||||
Futures Contracts | (93,715 | ) | — | — | (93,715 | ) | ||||||||||
Swap agreements | — | (265,323 | ) | — | (265,323 | ) | ||||||||||
Total | $ | (93,715 | ) | $ | (265,323 | ) | $ | 169,958 | $ | (189,080 | ) | |||||
Net Change in Unrealized Appreciation (Depreciation) on: | Commodity Contracts | Credit Contracts | Foreign Currency Exchange Contracts | Total | ||||||||||||
Forward currency contracts | $ | — | $ | — | $ | (70,774 | ) | $ | (70,774 | ) | ||||||
Futures Contracts | 19,098 | — | — | 19,098 | ||||||||||||
Swap agreements | — | 296,056 | — | 296,056 | ||||||||||||
Total | $ | 19,098 | $ | 296,056 | $ | (70,774 | ) | $ | 244,380 |
108 Annual Report
As of December 31, 2019, the Global Dynamic Multi-Asset and Real Assets and Pricing Opportunities Portfolios held derivative instruments that are eligible for offset in the Statements 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.
The required information for the affected Portfolios are presented in the below table, as of December 31, 2019:
Global Dynamic Multi-Asset Portfolio
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 | $ | 116,831 | $ | — | $ | 116,831 |
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 | $ | 23,961 | $ | (12,225 | ) | $ | — | $ | 11,736 | ||||||||||
HSBC Bank USA NA | 60,691 | (42,227 | ) | — | 18,464 | ||||||||||||||
JPMorgan Chase Bank NA | 25,168 | (25,168 | ) | — | — | ||||||||||||||
State Street Bank and Trust Co. | 7,011 | (7,011 | ) | — | — | ||||||||||||||
Total | $ | 116,831 | $ | (86,631 | ) | $ | — | $ | 30,200 |
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 | $ | 120,002 | $ | — | $ | 120,002 |
Annual Report 109
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 | $ | 12,225 | $ | (12,225 | ) | $ | — | $ | — | ||||||||||
HSBC Bank USA NA | 42,227 | (42,227 | ) | — | — | ||||||||||||||
JPMorgan Chase Bank NA | 35,655 | (25,168 | ) | — | 10,487 | ||||||||||||||
Morgan Stanley Capital Services LLC. | 7,516 | — | — | 7,516 | |||||||||||||||
State Street Bank and Trust Co. | 22,379 | (7,011 | ) | — | 15,368 | ||||||||||||||
Total | $ | 120,002 | $ | (86,631 | ) | $ | — | $ | 33,371 |
Lazard Real Assets and Pricing Opportunities Portfolio
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 | $ | 5,575 | $ | — | $ | 5,575 | |||||||||
Total Return Swap Agreements | 13,401 | — | 13,401 | ||||||||||||
Total | $ | 18,976 | $ | — | $ | 18,976 |
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 | $ | 1,347 | $ | (1,347 | ) | $ | — | $ | — | ||||||||||
Goldman Sachs International | 13,401 | — | — | 13,401 | |||||||||||||||
HSBC Bank USA NA | 4,228 | (4,228 | ) | — | — | ||||||||||||||
Total | $ | 18,976 | $ | (5,575 | ) | $ | — | $ | 13,401 |
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 | $ | 67,287 | $ | — | $ | 67,287 |
110 Annual Report
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 | $ | 22,832 | $ | (1,347 | ) | $ | — | $ | 21,485 | ||||||||||
HSBC Bank USA NA | 27,262 | (4,228 | ) | — | 23,034 | ||||||||||||||
JPMorgan Chase Bank NA | 142 | — | — | 142 | |||||||||||||||
Morgan Stanley Capital Services LLC. | 106 | — | — | 106 | |||||||||||||||
State Street Bank and Trust Co. | 16,945 | — | — | 16,945 | |||||||||||||||
Total | $ | 67,287 | $ | (5,575 | ) | $ | — | $ | 61,712 |
11. Accounting Pronouncements
In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017–08,Nonrefundable Fees and Other Costs (Subtopic 310–20): Premium Amortization on Purchased Callable Debt Securities, which amends the amortization period for certain purchased callable debt securities. Management has adopted the amendments and incorporated the changes in the current financial statements and related disclosures. For public business entities, the amendments in this ASU became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.
12. Subsequent Events
Management has evaluated subsequent events affecting the Portfolios through the issuance of the financial statements and has determined that there were no subsequent events that required adjustment or disclosure.
Annual Report 111
Report of Independent Registered Public Accounting Firm
To the Board of Directors of The Lazard Funds, Inc. and Shareholders of Lazard Global Dynamic Multi-Asset Portfolio, Lazard Opportunistic Strategies Portfolio and Lazard Real Assets and Pricing Opportunities Portfolio:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Lazard Global Dynamic Multi-Asset Portfolio and Lazard Opportunistic Strategies Portfolio (collectively the “Portfolios”), two of the portfolios constituting The Lazard Funds, Inc. (the “Fund”) as of December 31, 2019, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended for Lazard Opportunistic Strategies Portfolio and for the periods indicated in the table below for Lazard Global Dynamic Multi-Asset Portfolio, and the related notes. We have also audited the accompanying consolidated statement of assets and liabilities, including the consolidated portfolio of investments, of Lazard Real Assets and Pricing Opportunities Portfolio (collectively, with the Portfolios mentioned above, the “Portfolios”), one of the portfolios constituting the Fund, as of December 31, 2019, the related consolidated statement of operations for the year then ended, the consolidated statements of changes in net assets for each of the two years in the period then ended, the consolidated financial highlights for the periods indicated in the table below, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of Lazard Global Dynamic Multi-Asset Portfolio and Lazard Opportunistic Strategies Portfolio, as of December 31, 2019, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended (or for the periods listed in the table below), and the consolidated financial position of Lazard Real Assets and Pricing Opportunities Portfolio, as of December 31, 2019, and the consolidated results of its operations for the year
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then ended, the consolidated changes in its net assets for each of the two years in the period then ended, and the consolidated financial highlights for periods listed in the table below, in conformity with accounting principles generally accepted in the United States of America.
Portfolio Name | Financial Highlights |
Lazard Global Dynamic Multi-Asset Portfolio | For the years ended December 31, 2019, 2018, 2017 and for the period from May 27, 2016 (commencement of operations) through December 31, 2016 |
Lazard Real Assets and Pricing Opportunities Portfolio | For the years ended December 31, 2019, 2018, 2017 and for the period from December 30, 2016 (commencement of operations) through December 31, 2016 |
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Portfolios’ management. Our responsibility is to express an opinion on the Portfolios’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Portfolios in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Portfolios are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Portfolios’ internal control over financial reporting. Accordingly, we express no such opinion.
Annual Report 113
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 25, 2020
We have served as the auditor of one or more of the investment companies in the Lazard Fund Complex since 2004.
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The Lazard Funds, Inc.
Board of Directors and Officers Information (unaudited)
Name (Year of Birth) 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 (1953) | Director (August 2014) | Debevoise & Plimpton LLP, a law firm,Of Counsel(2013 – present)
Cornell Law School,AdjunctProfessor(2013 – present)
The Buchmann Faculty of Law, Tel Aviv University,Visiting Professor(2019)
University of California, Berkeley School of Law,Adjunct Professor(Spring 2017) | ||
Kenneth S. Davidson (1945) | Director (August 1995) | Davidson Capital Management Corporation, an investment manager,President (1978 – present) | ||
Nancy A. Eckl (1962) | Director (April 2007) | College Retirement Equities Fund (eight accounts),Trustee (2007 – present)
TIAA-CREF Funds (69 funds) and TIAA-CREF Life Funds (11 funds),Trustee(2007–present)
TIAA Separate Account VA-1,Member of the ManagementCommittee(2007 – present) | ||
Trevor W. Morrison (1971) | Director (April 2014) | New York University School of Law,DeanandEric M. and Laurie B.Roth Professor of Law (2013 – present) | ||
Richard Reiss, Jr. (1944) | Director (May 1991) | Georgica Advisors LLC, an investment manager,Chairman (1997 – present)
Osprey Technology Acquisition Corp., a special purpose acquisition company,Director (2019 – present)
Resource America, Inc., a real estate asset management company,Director(2016 – 2018) |
Annual Report 115
Name (Year of Birth) 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) | ||
Robert M. Solmson (1947) | Director (September 2004) | Fairwood Capital, LLC, a private investment corporation engaged primarily in real estate and hotel investments,Co-Managing Partner andManaging Director (2008 – present) | ||
Interested Directors(4): | ||||
Ashish Bhutani (1960) | Director (July 2005) | Investment Manager,ChiefExecutive Officer(2004 – present)
Lazard Ltd,Vice Chairman andDirector(2010 – present) | ||
Nathan A. Paul (1973) | Director (October 2017), Chief Executive Officer and President (February 2017; previously, Vice President and Secretary since April 2002) | Investment Manager,ChiefBusiness Officer (April 2017 – present) andManaging 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 January 31, 2020, 35 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.lazar dassetmanagement.com.
116 Annual Report
Name (Year of Birth) Address(1) | Position(s) with the Fund (Since) and Term(2) | Principal Occupation(s) During the Past Five Years | ||
Officers(3): | ||||
Mark R. Anderson (1970) | 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 | ||
Christopher Snively (1984) | Chief Financial Officer (March 2016) and Treasurer (September 2019) | Senior Vice President of the Investment Manager (since November 2015)
Assurance Manager at PricewaterhouseCoopers LLP (2008 – November 2015) | ||
Shari L. Soloway (1981) | Assistant Secretary (November 2015) | Head of Legal, North America (since January 2019, previously Senior Vice President, Legal and Compliance (since September 2015)) of the Investment Manager
Vice President and Associate General Counsel of GE Asset Management (July 2011 – September 2015) | ||
Jessica A. Falzone (1989) | Assistant Secretary (January 2019) | Vice President, Legal and Compliance, of the Investment Manager (since March 2018)
Associate at Schulte Roth & Zabel LLP (2014 – March 2018) | ||
Cesar A. Trelles (1975) | 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. |
Annual Report 117
The Lazard Funds, Inc.Tax and Other Information (unaudited)
Tax Information
Year Ended December 31, 2019
The following tax information represents year end disclosures of the tax benefits passed through to shareholders for 2019:
Of the dividends paid by the Portfolios, the corresponding percentage shown below is qualified dividend income.
Portfolio | Percentage | |||
Global Dynamic Multi-Asset | 100.00 | % | ||
Opportunistic Strategies | — | |||
Real Assets and Pricing Opportunities | 65.32 |
Of the dividends paid by the Portfolios, the corresponding percentage represents the amount of each dividend that qualifies for the dividends received deduction available to corporate shareholders.
Portfolio | Percentage | |||
Global Dynamic Multi-Asset | 69.82 | % | ||
Opportunistic Strategies | — | |||
Real Assets and Pricing Opportunities | 15.69 |
Pursuant to Section 871 of the Code, the Portfolios have no designated qualified short-term gains for purposes of exempting withholding of tax on such distributions to US nonresident shareholders.
Real Assets and Pricing Opportunities Fund intends to pass through to shareholders foreign source income of $316,823 and foreign taxes paid of $19,207, or up to the maximum amount allowable, as a foreign tax credit.
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Of the dividends paid by the Portfolios, the corresponding amount represents the long-term capital gains paid to shareholders.
Portfolio | Long-Term Capital Gains | ||||
Global Dynamic Multi-Asset | $124,068 | ||||
Opportunistic Strategies | 731,564 | ||||
Real Assets and Pricing Opportunities | 4,977 |
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 SEC’s 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.
Schedule of Portfolio Holdings
The Fund files its complete schedule of each Portfolio’s holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the SEC’s website at https://www.sec.gov.
Annual Report 119
The Lazard Funds, 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
Lazard Asset Management LLC • 30 Rockefeller Plaza • New York, NY 10112 • www.lazardassetmanagement.com
Performance information as of the most recent month end is available online at www.lazardassetmanagement.com. LZDPS030 |
ITEM 2. CODE OF ETHICS.
The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant’s Board of Directors (the “Board”) has determined that Robert M. Solmson and Nancy A. Eckl, members of the Audit Committee of the Board, are audit committee financial experts as defined by the Securities and Exchange Commission (the “SEC”). Mr. Solmson and Ms. Eckl are “independent” as defined by the SEC for purposes of audit committee financial expert determinations.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $1,623,737 in 2018 and $1,079,470 in 2019 (plus expenses in each case).
(b) Audit-Related Fees. There were no fees billed in the Reporting Periods by the Auditor to the Registrant for assurance and related services that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4.
The aggregate fees billed in the Reporting Periods for non-audit assurance and related services provided by the Auditor to Lazard Asset Management LLC, the Registrant’s investment manager (“Lazard”) and any entity controlling, controlled by or under common control with Lazard that provides ongoing services to the Registrant (“Service Affiliates”) that were reasonably related to the performance of the annual audit of the Service Affiliate which required pre-approval by the Audit Committee were $267,330 in 2018 and $267,330 in 2019.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods by the Auditor to the Registrant for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $372,793 in 2018 and $325,581 in 2019. These Tax Services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments; and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held. Additionally, the aggregate fees billed related to European Union tax reclaim filing services rendered by the Auditor were $123,718 in 2018 and $90,000 in 2019.
The aggregate fees billed in the Reporting Periods for Tax Services provided by the Auditor to Service Affiliates which required pre-approval by the Audit Committee were $0 in 2018 and $0 in 2019.
(d) All Other Fees. There were no fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) above.
There were no fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) above, which required pre-approval by the Audit Committee.
(e) Audit Committee Pre-Approval Policies and Procedures. The Registrant’s Audit Committee has established policies and procedures (the “Policy”) for pre-approval of the Auditor’s engagements for services to the Registrant and Service Affiliates. The Policy states that the Registrant’s Audit Committee or the Chair of the Audit Committee (pursuant to delegated authority from the Audit Committee) pre-approves the Auditor’s engagements for audit and non-audit services to the Registrant and, as required, non-audit services to Service Affiliates on a case by-case basis. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor’s independence. The Audit Committee Chair must report any pre-approval decisions he or she makes at the next scheduled Audit Committee meeting. There were no services provided by the Auditor to either the Registrant or Service Affiliates that were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X during the Reporting Periods.
(f) None.
(g) Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant and Service Affiliates for the Reporting Periods were $1,234,762 in 2018 and $1,128,439 in 2019.
(h) Auditor Independence. The Audit Committee considered whether provision of non-audit services to Service Affiliates that were not required to be pre-approved is compatible with maintaining the Auditor’s independence.
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 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 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) Code of Ethics referred to in Item 2.
(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.
The Lazard Funds, Inc.
By /s/ Nathan A. Paul
Nathan A. Paul
Chief Executive Officer
Date March 3, 2020
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 March 3, 2020
By /s/ Christopher Snively
Christopher Snively
Chief Financial Officer
Date March 3, 2020