Lazard International Equity Select ADR – SMA 3Q14

Lazard
International Equity Select ADR – SMA
3Q14
Factsheet
Performance
(%; gross of fees; through 30 September 2014)
Annualized
3 Months
YTD
1 Year
3 Years
5 Years
10 Years
Lazard International Equity Select ADR – SMA
-5.91
-2.29
6.76
16.29
8.55
7.30
MSCI EAFE Index
-5.88
-1.38
4.25
13.65
6.56
6.32
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 International Equity Select ADR seeks to generate strong relative returns over a full market cycle by investing in companies
with strong and/or improving financial productivity at attractive valuations. The strategy typically invests in 40–60 US-listed securities
of non-US developed-market companies with a market capitalization generally of $5 billion or greater. The benchmark is the MSCI
EAFE Index.
Allocations (%)2
Investment Characteristics1
Lazard
MSCI EAFE
Index
Lazard
MSCI EAFE
Lazard
Index
Underweight/Overweight
52
901
Continental Europe
42.7
45.1
Weighted Average Market Cap ($B)
66.6
60.9
United Kingdom
27.3
21.3
Forward Price/Earnings
14.8
14.8
Japan
19.3
21.0
Forward Return on Equity (%)
14.6
11.2
Middle East
2.9
0.6
Assets Under Management ($B)*
4.0
N/A
Number of Securities
* As of 30 June 2014. AUM is indicative of total assets in the International
Equity Select strategy and includes International Equity Select and
International Equity Select ADR assets.
Asia-Pacific ex-Japan
2.3
12.1
North America
1.5
0.0
Cash & Equivalents
4.0
0.0
-10
-5
0
5
10
-6
-3
0
3
6
Sector
Top Ten Holdings (%)2
Lazard
SF22999
Region
Financials
19.9
Industrials
17.3
25.7
12.5
Health Care
15.9
11.2
Novartis (ADR)
4.9
Anheuser-Busch InBev
4.1
Consumer Staples
13.5
10.9
Prudential (ADR)
3.4
Consumer Discretionary
11.3
11.6
Bayer
3.4
Telecom Services
5.8
4.9
Novo Nordisk (ADR)
3.3
Energy
4.9
6.9
Teva Pharmaceutical Industries (ADR)
2.9
Materials
3.5
7.7
British American Tobacco (ADR)
2.8
Information Technology
2.8
4.7
SMFG
2.6
Utilities
1.1
3.9
Lloyds Banking Group (ADR)
2.5
Cash & Equivalents
4.0
0.0
Royal Dutch Shell (ADR)
2.4
Holdings (%)2
Equity
Cash and Equivalents
96.0
4.0
Japan
Daikin Industries (ADR)
Daiwa House Industry (ADR)
KDDI (ADR)
Komatsu (ADR)
LIXIL
Makita Group (ADR)
Ryohin Keikaku
Seven & I Holdings (ADR)
Softbank (ADR)
Sumitomo Mitsui Financial Group (ADR)
Sumitomo Mitsui Trust Holdings (ADR)
19.3
Australia
BHP (ADR)
1.6
Belgium
Anheuser-Busch InBev
4.1
Canada
Rogers Communications
1.5
Denmark
Carlsberg (ADR)
Novo Nordisk (ADR)
4.2
1.8
Netherlands
NXP Semiconductors
1.0
Finland
Sampo (ADR)
5.0
Spain
Red Electrica (ADR)
1.1
France
Airbus Group (ADR)
BNP Paribas (ADR)
Valeo (ADR)
4.1
Germany
Bayer (ADR)
Bayerische Motoren Werke (ADR)
Fresenius SE (ADR)
SAP (ADR)
9.1
Sweden
Assa Abloy (ADR)
Swedbank (ADR)
Switzerland
Compagnie Financiere Richemont (ADR)
Novartis (ADR)
Swatch Group (ADR)
7.0
Hong Kong
Sands China (ADR)
0.6
Ireland
Ryanair Holdings (ADR)
1.5
Israel
Teva Pharmaceutical Industries (ADR)
2.9
Italy
Atlantia (ADR)
ENI (ADR)
Mediolanum (ADR)
3.9
United Kingdom
Ashtead Group (ADR)
Associated British Foods (ADR)
BG Group (ADR)
British American Tobacco (ADR)
HSBC Holdings (ADR)
Informa (ADR)
Ladbroke Group (ADR)
Lloyds Banking Group (ADR)
Prudential (ADR)
Rexam (ADR)
Rolls Royce (ADR)
Royal Dutch Shell (ADR)
Signet Jewelers
Unilever (ADR)
Wolseley (ADR)
27.3
Notes
1 Investment characteristics are based upon a portfolio that represents the proposed investment for a fully discretionary account. “Forward” 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 and Forward Return on Equity as Return
on Equity NTM. Source: Lazard, MSCI, IBES
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, MSCI
GIPS Composite Information
Composite Name
Benchmark
Reporting Date
Composite Inception Date
Reporting Currency
period market values. Additional information regarding policies for valuing portfolios, calculating
performance, and preparing compliant presentations are available upon request. Composite
returns are shown before the deduction of taxes and custody fees (except for mutual funds
which includes all fees). The composite and benchmark returns are reported net of foreign withholding taxes on dividends, interest and capital gains. The composite returns presented represent
past performance and is not a reliable indicator of future results, which may vary. Lazard’s
International Equity Select ADR – SMA 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. As of January 1, 2007, this composite was renamed International Equity Select ADR – SMA
from International Equity Select SMA.
Lazard International Equity Select ADR – SMA
MSCI EAFE Index
30 June 2014
1 January 1994
US Dollar
Composite Description
The composite returns represent the total returns of all fully discretionary, fee-paying, separately
managed account (SMA) portfolios with an International Equity Select ADR – SMA 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 International
Equity Select GIPS compliant composite. This prior performance is considered supplemental for
this separately managed account composite and also excludes accounts that Lazard historically
considered to be non-discretionary. Historical and prospective net of fee composite performance
returns are calculated using a 3.0% total fee assumption and is presented before taxes. 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. Lazard’s International Equity Select
ADR – SMA strategy seeks to generate strong relative returns over a market cycle by investing in
companies with strong and/or improving financial productivity at attractive valuations. The strategy typically invests in securities of non-US companies with a market capitalization generally of
$5 billion or greater. There is no emerging markets exposure. The product may invest in issuers’
US denominated equity securities and ordinary shares, but only if these issuers have US denominated equity securities.
Fee Schedule
The standard fee schedule for direct contracted relationships for Lazard’s International Equity
Select ADR – SMA accounts is 0.75%. 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 MSCI Europe, Australasia, Far East Index (EAFE) is an arithmetic, market value-weighted
average return net of dividends taxation which is derived from over 900 securities listed on the
stock exchanges of countries in Europe, Australasia and the Far East.
GIPS Compliance and Verification Status
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.
Calculation of Performance Returns
Lazard’s account inclusion policy is the first full month or the end of the month in which the
account is fully invested. The International Equity Select ADR – SMA composite includes
accounts that invest in US denominated equity securities of non-US companies. Previously,
the International Equity Select ADR – SMA composite included accounts that invested in issuers’ ordinary shares, without regard to whether these issuers have US denominated securities.
The returns of the individual portfolios within the composite are time-weighted, 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
Calendar
Annualized
QTD
YTD
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
1 YR
3 YR
5 YR
10 YR
Since
Inception
Lazard Rate of Return (%; Gross of Fees)
3.29
3.85
22.81
22.43
-4.76
6.58
19.42
-33.20
8.99
23.54
9.71
17.16
24.41
11.36
13.29
7.93
8.04
Lazard Rate of Return (%; Net of Fees)
2.51
2.28
19.13
18.76
-7.63
3.39
15.84
-35.20
5.73
19.84
6.52
13.75
20.68
8.02
9.89
4.70
4.85
Benchmark (%; Rate of Return)
4.09
4.78
22.78
17.32
-12.14
7.75
31.78
-43.38
11.17
26.34
13.54
20.25
23.57
8.10
11.77
6.93
5.78
Composite Standard Deviation (3-yr. Ann.)
15.40
15.24
18.15
20.30
22.11
19.30
15.59
8.47
8.93
11.05
14.77
Benchmark Standard Deviation (3-yr. Ann.)
16.11
16.25
19.37
22.43
26.23
23.58
19.24
9.43
9.33
11.39
15.43
# of Portfolios
3551
3299
3666
4212
5533
7823
13006
18039
17674
828
868
Composite Dispersion (Asset Wtd. Std. Dev.)
0.36
0.43
0.34
0.30
0.35
0.61
0.62
0.56
0.71
0.67
0.42
Composite Assets (USD Millions)
1435.1 1229.9 1107.1 1060.2 1528.5 2047.2 2872.4 6332.7 6180.8 2058.9 2258.9
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 International Equity Select ADR – SMA
Important Information
Published on 24 October 2014.
Equity securities will fluctuate in price; the value of your investment will thus fluctuate, and this may result in a loss. Securities in certain non-domestic countries may be less liquid, more volatile,
and less subject to governmental supervision than in one’s home market. The values of these securities may be affected by changes in currency rates, application of a country’s specific tax laws,
changes in government administration, and economic and monetary policy. Small- and mid-capitalization stocks may be subject to higher degrees of risk, their earnings may be less predictable,
their prices more volatile, and their liquidity less than that of large-capitalization or more established companies’ securities.
Certain information included herein is derived by Lazard in part from an MSCI index or indices (the ‘‘Index Data’’). However, MSCI has not reviewed this product or report, and does not endorse
or express any opinion regarding this product or report or any analysis or other information contained herein or the author or source of any such information or analysis. MSCI makes no express
or implied warranties or representations and shall have no liability whatsoever with respect to any Index Data or data derived therefrom. The MSCI Index Data may not be further redistributed or
used as a basis for other indices or any securities or financial products.
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.
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