Lazard International Equity Select with Emerging Markets ADR – SMA

Lazard International Equity Select
with Emerging Markets ADR – SMA
4Q14
Factsheet
Performance
(%; gross of fees; through 31 December 2014)
Annualized
3 Months
1 Year
3 Years
5 Years
Since Inception
(1 January 2005)
Lazard International Equity Select with Emerging Markets ADR – SMA
-3.81
-3.91
11.73
6.87
5.75
MSCI ACWI ex-US
-3.87
-3.87
8.99
4.43
5.13
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 with Emerging Markets 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
40–70 securities of non-US companies, including those from emerging markets, with a market capitalization generally of $5 billion or
greater. The benchmark is the MSCI ACWI ex-US.
Investment Characteristics1
Number of Securities
Allocations (%)2
Lazard
MSCI ACWI
ex-US
Lazard
MSCI ACWI
Lazard
ex-US
Underweight/Overweight
68
1,839
Continental Europe
30.0
31.7
Weighted Average Market Cap ($B)
55.3
51.2
Emerging Markets
23.0
21.7
Forward Price/Earnings
15.1
14.4
United Kingdom
20.3
14.9
Forward Return on Equity (%)
15.3
11.4
Japan
15.9
15.0
Turnover – Trailing 12 Months (%)
27.6
N/A
Middle East
2.5
0.4
Assets Under Management ($B)*
5.9
N/A
Asia-Pacific ex-Japan
2.1
8.7
North America
2.1
7.5
Cash & Equivalents
4.2
0.0
* As of 30 September 2014. AUM is indicative of total assets in the
International Equity Select with Emerging Markets strategy and includes
International Equity Select with Emerging Markets, International Equity
Select with Emerging Markets ADR, International Equity Select Plus
ADR, and International Equity Select Plus ADR (ACW ex-US) assets.
Top Ten Holdings (%)2
Lazard
SF23003
Region
-8
-4
0
4
8
Sector
Financials
18.7
27.6
Industrials
15.4
11.0
Health Care
14.5
8.6
Novartis AG
4.2
Consumer Discretionary
11.6
11.2
Taiwan Semiconductor Manufacturing
(ADR)
3.3
Consumer Staples
11.0
9.9
Anheuser-Busch InBev (ADR)
2.9
Telecom Services
8.2
5.4
Prudential (ADR)
2.8
Information Technology
6.7
7.5
Bayer (ADR)
2.7
Materials
4.1
7.7
Teva Pharmaceutical Industries (ADR)
2.5
Energy
4.0
7.5
British American Tobacco (ADR)
2.2
Utilities
1.7
3.6
KDDI (ADR)
2.1
Cash & Equivalents
4.2
0.0
Turkcell Iletisim Hizmetleri (ADR)
2.0
BNP Paribas (ADR)
2.0
-12
-6
0
6
Holdings (%)2
Equity
Cash & Equivalents
95.8
4.2
Australia
BHP (ADR)
1.1
Belgium
Anheuser-Busch InBev (ADR)
2.9
Brazil
Ambev SA
BB Seguridade Participacoes (ADR)
Cielo (ADR)
Companhia de Saneamento Basico do
Estado de Sao Paulo SABESP
Estacio Participacoes (ADR)
5.5
China
Baidu Inc (ADR)
China Shenhua Energy (ADR)
2.9
Denmark
Novo Nordisk (ADR)
1.7
Finland
Sampo (ADR)
1.6
France
Airbus Group (ADR)
BNP Paribas (ADR)
Valeo (ADR)
4.4
Germany
Bayer (ADR)
Bayerische Motoren Werke (ADR)
3.5
Greece
Piraeus Bank (ADR)
0.6
Hong Kong
Sands China (ADR)
1.0
Indonesia
PT Telekomunikasi Indonesia (ADR)
1.6
Ireland
Ryanair Holdings Plc
1.6
Israel
Teva Pharmaceutical Industries (ADR)
2.5
Italy
Atlantia (ADR)
Mediolanum (ADR)
2.1
Japan
Daikin Industries (ADR)
Daiwa House Industry (ADR)
Japan Tobacco (ADR)
KDDI (ADR)
Komatsu (ADR)
Makita Corporation (ADR)
Ryohin Keikaku (ADR)
Seven & I Holdings (ADR)
SoftBank (ADR)
Sumitomo Mitsui Financial Group (ADR)
Sumitomo Mitsui Trust Holdings (ADR)
15.9
Netherlands
NXP Semiconductors NV
Wolters Kluwer (ADR)
1.8
Philippines
Alliance Global Group (ADR)
1.2
Russia
Mobile TeleSystems (ADR)
Sberbank Russia (ADR)
0.8
South Africa
Mediclinic International (ADR)
Mr Price Group (ADR)
Nampak Limited
3.2
Spain
Red Electrica (ADR)
0.9
Sweden
Assa Abloy (ADR)
Swedbank (ADR)
3.7
Switzerland
Actelion (ADR)
Compagnie Financiere Richemont (ADR)
Novartis AG
Swatch Group
6.8
Taiwan
Taiwan Semiconductor Manufacturing (ADR)
3.3
Thailand
Kasikornbank (ADR)
1.0
Turkey
Koc Holding (ADR)
Turkcell Iletisim Hizmetleri (ADR)
2.8
United Kingdom
Anglo American (ADR)
Ashtead Group (ADR)
Associated British Foods (ADR)
BG Group (ADR)
British American Tobacco (ADR)
Informa (ADR)
Lloyds Banking Group (ADR)
Prudential (ADR)
Rexam (ADR)
Rolls-Royce Holdings (ADR)
Royal Dutch Shell (ADR)
Shire (ADR)
Signet Jewelers
Unilever (ADR)
Wolseley (ADR)
21.4
Notes
1 Investment 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 defined as Forward Price/Earnings FY1 and Forward Return on Equity as
Forward Return on Equity NTM. Source: Lazard, MSCI
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
Lazard International Equity Select with Emerging Markets
ADR – SMA
MSCI All Country World ex-US Index
30 September 2014
1 January 2005
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 with Emerging Markets
ADR - SMA investment mandate and a minimum of $25,000 in assets under management.
Performance presented prior to April 1, 2006 represents the historical track record of Lazard’s
existing International Equity Select with Emerging Markets 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. 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 April 1, 2006 and forward contain
all accounts with bundled fees. Gross of fee results from April 1, 2006 and forward are presented supplemental to compliant net of fee results, as no trading costs are included. Lazard
International Equity Select with Emerging Markets ADR – SMA 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,
including those from emerging markets, with a market capitalization generally of $5 billion or
greater. The emerging markets equity allocation is implemented by investing in individual securities. The product may invest in issuers’ US denominated equity securities and ordinary shares,
but only if these issuers have US denominated equity securities.
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 with Emerging Markets ADR - SMA
composite includes accounts that invest in US denominated equity securities of non-US companies. 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 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. As of
January 1, 2007, this composite was renamed International Equity Select with Emerging Markets
ADR - SMA from International Equity Select with Emerging Markets SMA. Prior to March 2006,
the composite had been named AC International Equity Select - SMA.
Fee Schedule
The standard fee schedule for direct contracted relationships for Lazard’s International Equity
Select with Emerging Markets 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 All Country World Index (ACWI) is a free float-adjusted market capitalization index that
is designed to measure equity market performance in the global developed and emerging markets. This composite’s index is a subset of the official MSCI ACWI, with the exclusion of the US.
The Index is compiled by Morgan Stanley Capital International.
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.
Calendar
QTD
YTD
2013
2012
Lazard Rate of Return (%; Gross of Fees)
-6.07
-0.11
17.27
Lazard Rate of Return (%; Net of Fees)
-6.78
-2.36
13.75
Benchmark (%; Rate of Return)
-5.27
0.00
Composite Standard Deviation (3-yr. Ann.)
Benchmark Standard Deviation (3-yr. Ann.)
Annualized
2011
2010
2009
2008
2007
2006
23.77
-7.23
7.74
20.33
-36.19
10.05
26.48
20.05
-10.02
4.51
16.72
-38.09
6.84
23.15
15.29
16.83
-13.71
11.15
41.45
-45.53
16.65
26.65
14.29
15.92
18.83
20.82
23.03
20.32
16.83
9.20
—
2005
3 YR
5 YR
10 YR
Since
Inception
7.03
15.79
7.94
—
6.32
3.82
12.32
4.70
—
3.19
4.77
11.79
6.03
—
5.69
2004
1 YR
17.37
—
13.95
—
16.62
—
—
—
14.15
16.23
19.26
22.71
27.29
25.24
20.88
10.63
—
—
—
# of Portfolios
904
690
747
703
532
611
1152
761
71
19
—
Composite Dispersion (Asset Wtd. Std. Dev.)
0.33
0.26
0.39
0.31
0.53
0.77
0.84
0.67
N/A
0.38
—
Composite Assets (USD Millions)
448.0
315.1
309.1
238.2
218.9
210.4
266.6
277.6
35.9
51.3
—
Total Firm Assets (USD Billions)
172.2
161.6
148.3
124.4
140.6
116.5
79.8
126.9
97.7
77.6
—
Lazard International Equity Select with Emerging Markets ADR – SMA
Important Information
Published on 22 January 2015.
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. Emerging-market securities carry special risks, such as less developed
or less efficient trading markets, a lack of company information, and differing auditing and legal standards. The securities markets of emerging-market countries can be extremely volatile; performance can also be influenced by political, social, and economic factors affecting companies in emerging-market countries.
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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