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Lazard
US Equity Select – SMA
3Q14
Factsheet
Performance
(%; gross of fees; through 30 September 2014)
Annualized
3 Months
YTD
1 Year
3 Years
5 Years
10 Years
Lazard US Equity Select – SMA
0.34
5.50
16.82
21.93
14.67
8.96
S&P 500 Index
1.13
8.34
19.73
22.99
15.70
8.11
Performance is preliminary, presented gross of fees, and reported in US dollars. Please refer to “GIPS® Composite Information” for the most recent final performance and additional information, including net-of-fees results. The performance quoted represents past performance. Past performance is not a reliable indicator
of future results.
Strategy Description
Lazard US Equity Select offers a diversified, mega-/large-cap portfolio that invests in financially productive companies (i.e., high return
on equity, free cash flow, return on assets, cash flow return on investment), employing intensive fundamental analysis and accounting
validation to identify investment opportunities. It seeks to outperform the S&P 500 Index with less volatility (standard deviation) over
a full market cycle by investing in companies that compound earnings and capital and by taking advantage of valuation anomalies. The
strategy typically invests in 35–55 companies with market capitalizations generally over $5 billion.
Investment Characteristics1
Lazard
Allocations (%)2
S&P 500
Index
Lazard
S&P 500
Index
56
502
Information Technology
28.6
19.5
Weighted Average Market Cap ($B)
117.5
130.5
Health Care
17.3
13.9
Price/Earnings
18.9
18.3
Financials
16.1
16.3
Forward Price/Earnings
16.7
16.8
Industrials
11.3
10.3
Return on Equity (%)
14.4
14.4
Consumer Discretionary
9.9
11.8
Free Cash Flow Yield (%)
5.6
5.7
Energy
6.8
9.8
Assets Under Management ($B)*
4.1
N/A
Consumer Staples
4.2
9.6
Number of Securities
* As of 30 June 2014. AUM is indicative of total assets in the US Equity
Select strategy and includes US Equity Select, US Equity Select (PCG)
and US balanced assets.
Top Ten Holdings (%)2
Materials
3.5
3.5
Telecom Services
0.0
2.4
Utilities
0.0
3.0
Cash & Equivalents
2.4
0.0
Lazard
Underweight/Overweight
-6
Lazard
SF23000
Sector
Apple
5.2
Citigroup
4.1
American Express
4.0
Microsoft
3.7
Schlumberger
3.0
UnitedHealth Group
2.8
United Technologies
2.7
EMC
2.5
Honeywell International
2.4
Zoetis
2.3
0
6
12
Holdings (%)2
Equity
Cash and Equivalents
97.6
2.4
Consumer Discretionary
Advance Auto Parts
AutoZone
Comcast
Hasbro
Kohl’s
Macy’s
Ross Stores
Viacom
9.9
Consumer Staples
CVS Health Corporation
Molson Coors Brewing
Sysco
4.2
Energy
EOG Resources
Halliburton
Occidental Petroleum
Schlumberger
6.8
Financials
American Express
Charles Schwab
Citigroup
Hartford Financial
Intercontinental Exchange
Realogy Holdings
Signature Bank
Voya Financial
16.1
Health Care
Amgen
Bristol-Myers Squibb
McKesson
Mylan
Pfizer
Quintiles Transnational
Thermo Fisher Scientific
UnitedHealth Group
Vertex Pharmaceuticals
Zoetis
17.3
Industrials
American Airlines
Eaton
Honeywell International
Joy Global
Parker-Hannifin
Tyco International
United Technologies
11.3
Information Technology
Apple
Cisco Systems
EMC
Google
Intel
MasterCard
Microsoft
NXP Semiconductors
QUALCOMM
Red Hat
Texas Instruments
Visa
Xerox
28.6
Materials
Eastman Chemical
Monsanto
3.5
Notes
1 The characteristics are based upon a portfolio that represents the proposed investment for a fully discretionary account. Forward looking figures represent expected returns. Expected returns
do not represent a promise or guarantee of future results and are subject to change. Forward Price/Earnings is defined as Price/Earnings FY1. Source: Lazard, Standard and Poor’s
2 The allocations and specific securities mentioned are based upon a portfolio that represents the proposed investment for a fully discretionary account. Allocations and security selection
are subject to change. The securities mentioned are not necessarily held by Lazard for all client portfolios, and their mention should not be considered a recommendation or solicitation to
purchase or sell these securities. It should not be assumed that any investment in these securities was, or will prove to be, profitable, or that the investment decisions we make in the future
will be profitable or equal to the investment performance of securities referenced herein. There is no assurance that any securities referenced herein are currently held in the portfolio or that
securities sold have not been repurchased. The securities mentioned may not represent the entire portfolio. Source: Lazard, Standard and Poor’s
GIPS Composite Information
Composite Name
Benchmark
Reporting Date
Composite Inception Date
Reporting Currency
Select SMA strategy. Composite returns are shown before taxes and the deduction of custody
fees (except for mutual funds which includes all fees). The composite returns presented represent past performance and is not a reliable indicator of future results, which may vary. Lazard’s
US Equity Select product invests in a relatively small number of securities. Should any individual
security held in this portfolio decline in value or underperform relative to the market, it may have
a greater impact on the account’s performance than if the account held a larger number of securities. An account invested using this strategy may experience more volatility.
Lazard US Equity Select – SMA
S&P 500 Index
30 June 2014
1 October 1993
US Dollar
Composite Description
Fee Schedule
The composite represents the returns of all fully discretionary, fee-paying, separately managed account (SMA) portfolios with a US Equity Select investment mandate and a minimum of
$25,000 in assets under management. Performance presented prior to January 1, 2006, represents the historical track record of Lazard’s existing US Equity Select GIPS compliant composite.
This prior performance is considered supplemental for this separately managed account composite and also excludes non-discretionary accounts. Historical and prospective net of fee composite
performance returns are calculated using a 3.0% total fee assumption and is presented before
tax. Actual SMA composite results from January 1, 2006 and forward contain all accounts with
bundled fees. Gross of fee results from January 1, 2006 and forward are presented supplemental
to compliant net of fee results, as no trading costs are included.
The standard fee schedule for direct contracted relationships for Lazard’s US Equity Select–SMA
accounts is 0.6%. All-inclusive SMA fee schedules for each plan sponsor vary and are available
through the plan sponsor. A complete list and description of all Lazard composites is available
upon request.
Benchmark Information
The S&P 500 Index is an index of 500 industrial, utility, transportation and financial companies of
the US markets (mostly NYSE issues). It is a capitalization-weighted index calculated on a total
return basis with dividends reinvested.
GIPS Compliance and Verification Status
Calculation of Performance Returns
Lazard Asset Management claims compliance with the Global Investment Performance Standards
(GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Lazard
Asset Management has been independently verified for the period of January 1, 1993 through
December 31, 2013. The verification reports are available upon request. Verification assesses
whether (1) the firm has complied with all the composite construction requirements of the GIPS
standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate
and present performance in compliance with the GIPS standards. Verification does not ensure the
accuracy of any specific composite presentation. Lazard Asset Management is the “Firm” to which
the GIPS Standards apply (Frankfurt office included in Firm definition as of January 1, 2003). GIPS
is a registered trademark of CFA Institute. CFA Institute has not been involved in the preparation or
review of this presentation. The composite creation date is January 2006.
Lazard’s account inclusion policy is the first full month or the end of the month in which the
account is fully invested. The returns of the individual portfolios within the composite are timeweighted, use trade date accounting, are based upon monthly portfolio valuations and include the
reinvestment of all earnings as of the payment date. The composite returns are asset-weighted
based upon beginning period market values. Additional information regarding policies for valuing
portfolios, calculating performance, and preparing compliant presentations are available upon
request. The percentage of composite non fee paying accounts for each annual period end are as
follows: 2012 - 2010, 0.0%; 2009, 2.6%; 2008, 2.2%; 2007, 1.5%; 2006–2002, 0.0%. For the current period, 0.0% of this composite comprises non fee paying accounts. For these accounts, net
of fee performance has been calculated using the standard fee schedule for the Lazard US Equity
Calendar
Annualized
2005
2004
1 YR
3 YR
5 YR
10 YR
Since
Inception
20.12
2.71
10.62
23.67
16.60
17.89
8.87
10.30
16.51
-0.28
7.40
19.96
13.10
14.35
5.62
7.05
5.49
15.79
4.91
10.88
24.61
16.58
18.83
7.78
9.36
14.33
7.83
6.14
7.61
12.61
14.86
QTD
YTD
2013
2012
2011
2010
2009
2008
2007
2006
Lazard Rate of Return (%; Gross of Fees)
4.52
5.14
31.74
15.83
3.25
12.75
30.05
-32.43
7.05
Lazard Rate of Return (%; Net of Fees)
3.73
3.55
27.78
12.36
0.15
9.37
26.15
-34.45
3.84
Benchmark (%; Rate of Return)
5.23
7.14
32.39
16.00
2.11
15.06
26.46
-37.00
Composite Standard Deviation (3-yr. Ann.)
11.88
11.57
15.08
17.32
20.03
17.59
Benchmark Standard Deviation (3-yr. Ann.)
12.09
11.94
15.09
18.71
21.85
19.63
15.08
7.68
6.82
9.04
# of Portfolios
170
175
240
250
283
320
371
434
483
85
118
Composite Dispersion (Asset Wtd. Std. Dev.)
0.11
0.40
0.20
0.21
0.20
0.40
0.41
0.44
0.46
0.16
0.22
Composite Assets (USD Millions)
52.1
52.8
63.0
57.8
64.8
70.5
61.5
136.7
148.3
110.0
186.0
Total Firm Assets (USD Billions)
177.4
161.6
148.3
124.4
140.6
116.5
79.8
126.9
97.7
77.6
76.5
Lazard US Equity Select – SMA
Important Information
Published on 23 October 2014.
Equity securities will fluctuate in price; the value of your investment will thus fluctuate, and this may result in a loss.
This material is for informational purposes only. It is not intended to, and does not constitute financial advice, fund management services, an offer of financial products or to enter into any contract or investment agreement in respect of any product offered by Lazard Asset Management and shall not be considered as an offer or solicitation with respect to any product, security, or
service in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or unauthorized or otherwise restricted or prohibited.
Australia: FOR WHOLESALE INVESTORS ONLY. Issued by Lazard Asset Management Pacific Co., ABN 13 064 523 619, AFS License 238432, Level 39 Gateway, 1 Macquarie Place,
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Registered in Dubai International Financial Centre 0467. Authorised and regulated by the Dubai Financial Services Authority to deal with Professional Clients only. Germany: Issued by Lazard
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Akasaka, Minato-ku, Tokyo 107-0052. Korea: Issued by Lazard Korea Asset Management Co. Ltd., 10F Seoul Finance Center, 136 Sejong-daero, Jung-gu, Seoul, 100-768. United Kingdom:
FOR PROFESSIONAL INVESTORS ONLY. Issued by Lazard Asset Management Ltd., 50 Stratton Street, London W1J 8LL. Registered in England Number 525667. Authorised and regulated
by the Financial Conduct Authority (FCA). Singapore: Issued by Lazard Asset Management (Singapore) Pte. Ltd., 1 Raffles Place, #15-02 One Raffles Place Tower 1, Singapore 048616.
Company Registration Number 201135005W. This document is for “institutional investors” or “accredited investors” as defined under the Securities and Futures Act, Chapter 289 of
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