Lazard US Equity Concentrated Portfolio
Transcription
Lazard US Equity Concentrated Portfolio
Lazard US Equity Concentrated Portfolio Institutional Open Ticker LEVIX LEVOX Benchmark S&P 500 Index1 4Q 2013 2014 The Lazard US Equity Concentrated Portfolio is designed to leverage the best collection of ideas from the firm’s US Equity platform. The portfolio management team employs intensive fundamental analysis and accounting validation to construct a high-conviction, all-capitalization portfolio with the aim of outperforming any broad-based market benchmark.2 Proven, Established Approach 1 Concentrated portfolios have historically outperformed more diversified peers, and by their nature result in high active share. Stable Experienced Stewardship Moderated Volatility 2 Investments with diverse cash flow streams are selected in an effort to mitigate much of the inherent risk of a concentrated portfolio. 3 US Equity platform comprising 24 investment professionals, averaging 18 years of industry experience and 12 years at Lazard. Concentrated Managers Outperformed Diversified Managers over the Last 15 Years (%) 9 Average 3-Year Rolling Returns Average 5-Year Rolling Returns 6 3 0 Concentrated Managers Diversified Managers S&P 500 For the 15 years ended December 2013 Past performance does not guarantee future results. Data comprise 22 concentrated managers, defined as those with 30 holdings or less, and 267 diversified, defined as those with more than 30 holdings. This information is for illustrative purposes only and does not represent any product managed by Lazard, including the Portfolio. Source: eVestment, Lazard Morningstar Category3 Large Blend L L M M Morningstar S 3 V Style B G L S V B M S Benchmark 1 S&P 500 Index V B G G Performance Review1 (%; net of fees. L 2014.) L As of December 31, 24 V 16 B L M M M S S S G V B G V B Minimum Initial Investment Institutional: $100,000 Open: $2,500 G Net Assets Institutional: $330.0 million Open: $8.0 million Total: $338.0 million 8 0 L L L M M M Total Annual Operating Expense Ratio Institutional: 0.85% Open: 1.87% S Equity Concentrated Portfolio S S Lazard US Equity Concentrated Portfolio (Institutional) Lazard US (Open) V B Annualized G V B G V 3 Months 1 Year 3 Years 5 Years Since Inception 9/30/2005 Institutional 8.66 18.88 21.64 14.71 7.91 Open 8.49 18.28 21.21 14.32 7.59 Benchmark 4.93 13.69 19.68 14.73 6.92 B Net Expense Ratio G Institutional: 0.85% Open: 1.25% The performance quoted represents past performance. Past performance does not guarantee future results. The current performance may be lower or higher than the performance data quoted. An investor may obtain performance data current to the most recent month-end online at www.LazardNet.com. The investment return and principal value of the Portfolio will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns reflect reimbursement of expenses as described in the prospectus. Had expenses not been reimbursed, returns would have been lower, and the expense ratio would have been higher. Characteristics Sector Allocationa 36 Lazard (%) Benchmark (%) Consumer Discretionary 32.5 12.1 Information Technology 22.3 19.7 Health Care 17.5 14.2 Consumer Staples 8.6 9.8 Financials 1.9 16.7 Energy 0.0 8.4 Industrials 0.0 10.4 Materials 0.0 3.2 Telecom Services 0.0 2.3 Utilities 0.0 3.2 17.2 0.0 Cash & Equivalents Source: Lazard, Standard & Poor’s a Allocations and security selection are subject to change. The information provided 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. b As of December 31, 2014. The value added analysis is provided for illustrative purposes only, as values are calculated based on returns gross of fees. Performance would have been lower if fees and expenses were included. Sector breakdowns may not sum to total due to rounding. “Stock Selection” represents the value added by the ability of the manager to select better performing stocks. “Sector Allocation” represents the value added by the manager’s underweight and overweight positions to the various sectors. “Total” is the sum of the “Stock Selection” and “Sector Allocation” effects. The performance shown represents past performance. Past performance does not guarantee future results. Allocations are subject to change. 2 The net expenses reflect a contractual agreement by Lazard to waive its fee and, if necessary, to reimburse the Portfolio through April 30, 2015, to the extent the Total Annual Operating Expense Ratio exceeds 0.95% and 1.25% of the average daily net assets of the Portfolio’s Institutional and Open Shares, respectively and from May 1, 2015 through April 30, 2024, to the extent Total Annual Portfolio Operating Expenses exceed 1.10% and 1.40% of the average daily net assets of the Portfolio’s Institutional Shares and Open Shares, respectively. Lazard Benchmark 29.7 27 18.7 18 14.6 11.1 11.3 10.6 9 3.1 2.7 0 Price/Book Price/ Cash Flow Price/ Earnings ROE (%) Lazard Benchmark 20 502 Weighted Average Market Cap ($B) 71.5 132.0 Active Share (%) 93.5 N/A Number of Holdings Beta (3-year) Standard Deviation (%; 3-year) Institutional 1.02 Open 1.03 Institutional 9.78 Open 9.80 Turnover Rate (%; 1-year) 56.1 N/A 8.92 N/A Source: Lazard, Standard & Poor’s, I/B/E/S Beta is a relative measure of the sensitivity of a fund’s return to changes in the benchmark’s return. The beta of the fund versus its benchmark is the amount (and direction) the fund has historically moved when the benchmark moved by one unit. Standard deviation measures the dispersion or “spread” of individual observations around their mean. Standard deviation of returns measures a fund’s historical volatility, where a higher number is evidence of greater volatility (i.e., higher risk). Lazard US Equity Concentrated Portfolio Top Ten Holdingsa Lazard (%) Sector Advance Auto Parts 9.2 Consumer Discretionary Pfizer 6.4 Health Care Houghton Mifflin Harcourt 6.2 Consumer Discretionary Zoetis 5.6 Health Care Cisco Systems 5.6 Information Technology Baxter International 5.1 Health Care Orbitz Worldwide 5.1 Consumer Discretionary Sysco 4.9 Consumer Staples EMC 4.7 Information Technology Xerox 4.7 Information Technology For a complete list of holdings, please visit www.LazardNet.com. Value Added Analysisb (October 1 to December 31, 2014) (%) 2 1 0 -1 Consumer Discretionary Health Care Energy Information Technology Materials Telecom Services Industrials Financials Utilities Consumer Staples Cash Total -0.20 -0.31 -0.24 0.03 -0.51 1.46 Sector Allocation (%) 0.75 0.22 1.20 0.08 0.20 0.23 Stock Selection (%) 1.24 1.57 -0.50 0.51 0.15 0.00 0.00 0.08 0.00 -0.47 Total (%) 1.98 1.79 0.69 0.59 0.35 0.23 -0.20 -0.22 -0.24 -0.44 2.57 -0.51 4.02 Stock Highlights by Sectora,b Consumer Discretionary Health Care Consumer Staples 1.98% Attribution Effect 1.79% Attribution Effect -0.44% Attribution Effect Stock selection and an overweight position in the consumer discretionary sector contributed to performance. Shares of Advance Auto Parts (9.2% of the Portfolio) rose after several competitors posted strong store sales. Additionally, investors anticipated deal synergies from the company’s acquisition of General Parts to help 2015 results. Stock selection in the health care sector also helped returns. Shares of medicaldevice maker CareFusion (which was sold during the period) rose after Becton Dickinson announced plans to acquire the company for $12.2 billion. We sold our position after the announcement as the stock approached our target valuation. In contrast, stock selection in the consumer staples sector detracted from performance. Following strong year-to-date performance, shares of brewer Molson Coors (3.8% of the Portfolio) lagged peers after the company reported quarterly earnings that were below expectations, as weak demand in Europe hurt results. 3 Lazard US Equity Concentrated Portfolio US Equity Concentrated Portfolio Management Team Christopher H. Blake Portfolio Manager/Analyst 19 Years of Investment Experience Martin Flood Andrew D. Lacey Portfolio Manager/ Analyst 21 Years of Investment Experience Deputy Chairman 19 Years of Investment Experience As Deputy Chairman of the Investment Manager, Mr. Lacey is ultimately responsible for overseeing this portfolio. In addition to his oversight responsibility, Mr. Lacey is a member of the portfolio management team. Understanding Investment Risk The Portfolio invests in stocks believed by Lazard to be undervalued, but that may not realize their perceived value for extended periods of time or may never realize their perceived value. The stocks in which the Portfolio invests may respond differently to market and other developments than other types of stocks. Equity securities will fluctuate in price; the value of your investment will thus fluctuate, and this may result in a loss. 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. Because the Portfolio may invest in a smaller number of issuers than other, more diversified investment portfolios, 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. Notes 1 As of May 31, 2012, the Portfolio changed its name from “Lazard US Equity Value Portfolio” to “Lazard US Equity Concentrated Portfolio,” adopted the Portfolio’s current investment strategies, and compares its performance to the S&P 500 Index. Prior to May 31, 2012, the Portfolio was a “diversified” fund, as such term is defined in the Investment Company Act of 1940, as amended. As such, the Portfolio compares its past performance to a linked index, (“Linked Index”), composed of the Russell 1000 Value Index through May 30, 2012 and the S&P 500 Index from May 31, 2012 to the present. 2 Such as the S&P 500 Index, Russell 1000 Index, or Russell 3000 Index. 3 As of December 31, 2014. © 2015 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar not its content providers are responsible for any damages or losses arising from any use of this information. Important Information Published on January 21, 2015. Information and opinions presented have been obtained or derived from sources believed by Lazard to be reliable. Lazard makes no representation as to their accuracy or completeness. All opinions expressed herein are as of December 31, 2014 and are subject to change. Indices are unmanaged and have no fees. One cannot invest directly in an index. 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 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 1,000 of the largest securities based on a combination of their market cap and current index membership.) Not a deposit. May lose value. Not guaranteed by any bank. Not FDIC insured. Not insured by any government agency. Please consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. For more complete information about The Lazard Funds, Inc. and current performance, you may obtain a prospectus or summary prospectus by calling 800-823-6300 or going to www.LazardNet.com. Read the prospectus or summary prospectus carefully before you invest. The prospectus and summary prospectus contain investment objectives, risks, charges, expenses, and other information about the Portfolio and The Lazard Funds that may not be detailed in this document. The Lazard Funds are distributed by Lazard Asset Management Securities LLC. Lazard Asset Management LLC • 30 Rockefeller Plaza • New York, NY 10112 • www.lazardnet.com MF23598