N-CSRS 1 c91411_ncsrs.htm

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 811-08071

 

Lazard Retirement Series, 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:     6/30/18

 

ITEM1. REPORTS TO STOCKHOLDERS.

 

 

Lazard Retirement Series
Semi-Annual Report
June 30, 2018

 

US Equity

Lazard Retirement US Strategic Equity Portfolio

Lazard Retirement US Small-Mid Cap Equity Portfolio

 

International Equity

Lazard Retirement International Equity Portfolio

Emerging Markets

Lazard Retirement Emerging Markets Equity Portfolio

 

Asset Allocation

Lazard Retirement Global Dynamic Multi-Asset Portfolio


 

 

Lazard Retirement Series, Inc. Table of Contents

 

 

2   A Message from Lazard
     
3   Investment Overviews
     
8   Performance Overviews
     
13   Information About Your Portfolio’s Expenses
     
15   Portfolio Holdings Presented by Sector
     
16   Portfolios of Investments
     
16   Lazard Retirement US Strategic Equity Portfolio
     
18   Lazard Retirement US Small-Mid Cap Equity Portfolio
     
20   Lazard Retirement International Equity Portfolio
     
22   Lazard Retirement Emerging Markets Equity Portfolio
     
24   Lazard Retirement Global Dynamic Multi-Asset Portfolio
     
35   Notes to Portfolios of Investments
     
38   Statements of Assets and Liabilities
     
40   Statements of Operations
     
42   Statements of Changes in Net Assets
     
44   Financial Highlights
     
49   Notes to Financial Statements
     
61   Board of Directors and Officers Information
     
64   Other Information

 

Shares of the Portfolios are currently offered only to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. Portfolio shares may also be offered to certain qualified pension and retirement plans and accounts permitting accumulation of assets on a tax-deferred basis.

 

Please consider a Portfolio’s investment objectives, risks, charges and expenses carefully before investing. For more complete information about Lazard Retirement Series, 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.

 

Semi-Annual Report  1

 

Lazard Retirement Series, Inc. A Message from Lazard

 

 

Dear Shareholder,

 

Global equity and debt markets were mixed in the first half of 2018. While US markets gained, most other developed markets pulled back. In June, the Federal Reserve (Fed) raised interest rates for the seventh time since the global financial crisis, which contributed to broad-based US dollar strength and put pressure on emerging markets assets.

 

In February, the S&P 500® Index recorded its first 10% correction in two years. US equity markets, however, bounced back to end the first half in positive territory, thanks to strong corporate earnings growth and economic data. Fourth quarter 2017 and first quarter 2018 annualized US GDP growth exceeded expectations and the US unemployment rate reached an 18-year low in the second quarter. Accelerating inflation helped lift long-term interest rates, with the 10-year US Treasury yield rising above 3% in April for the first time in more than four years.

 

Political uncertainty has risen in Europe, but our Europe-based teams believe that the euro zone economy appears strong enough to withstand this turbulence. Italy has been the chief source of political concerns, but the populist coalition government has stepped back from some of its controversial proposals and softened its anti-euro rhetoric. Overall, European equity markets declined during the first six months of 2018, giving back some of their 2017 gains.

 

Emerging markets equity and debt were more volatile during the first half of 2018 and were weighed down by escalating US-China trade tensions, a stronger US dollar, and new, more severe US sanctions on Russia. However, emerging markets equity fundamentals remain strong, with stable-to-higher earnings growth estimates for 2018 and 2019 (as of June). A streak of weakness in emerging markets debt from February through June also appears to have created some attractive valuation opportunities in the asset class.

 

We remain focused on fundamental stock selection and will continue to seek to identify value opportunities for our Portfolios. We appreciate your confidence in Lazard and feel privileged that you have turned to us for your investment needs.

 

Sincerely,

 

Lazard Asset Management LLC

 

2  Semi-Annual Report

 

Lazard Retirement Series, Inc. Investment Overviews

 

 

US Equities

The S&P 500 Index rose 2.7% during the six month period. Markets recovered and volatility subsided after the S&P 500 Index recorded its first 10% correction in two years in February, as increased investor comfort around the pace of economic growth and the outlook for US interest rates offset ongoing uncertainty about US trade policy. Economic data and corporate earnings continued to be strong, with fourth quarter 2017 and first quarter 2018 annualized GDP growth figures both exceeding expectations, and the unemployment rate hitting an 18-year low of 3.8% in the second quarter. Accelerating inflation helped boost long-term interest rates, with the 10-year US Treasury yield rising above 3% in April for the first time in over four years, signaling investor confidence in the US economy’s resilience.

 

International Equities

After a lackluster first quarter, non-US equity performance ended the six month period slightly down in local terms, but returns for US dollar–based investors were significantly lower due to the sharp rise of the US dollar during the latter part of the period. The US dollar’s appreciation was driven by political uncertainty—especially the surprise formation of a populist government in Italy—trade disputes, and evidence that US growth expectations had diverged from the rest of the world. The US economy was boosted by two short-term factors—the corporate tax cut and the depreciating US dollar over the preceding twelve months—which raised expectations for higher US interest rates. This was not unexpected, as indicators, such as the purchasing managers index, had reached elevated, unsustainable levels and, in our view, were likely to move down in the short term. The recent strength of the US dollar is based on the temporary trends explained above, and is not, in our view, a structural realignment.

 

The dollar’s strength had a significant impact on non-US equity returns. In local terms, the MSCI EAFE® Index fell 0.96% in the period, but fell 2.75% for US dollar-based investors. The sell-off in emerging markets equities was relatively modest in local currency terms, with the MSCI Emerging Markets® Index down 2.82%. For US-dollar investors, however, losses were amplified to 6.66%.This performance was historically

consistent, as US dollar strength has typically had an inverse relationship with emerging markets equity performance. The fundamental trends of the companies themselves, however, remained mostly unchanged.

 

Some individual emerging markets countries came under particular pressure in the six month period because they must pay off US dollar–denominated debt or finance large current account deficits. Turkish equities, for example, declined because of Turkey’s structural current account deficit and rising inflation, and investor concerns about increasingly autocratic Turkish President Recep Tayyip Erdogan. Another significant underperformer in emerging markets for the six month period was Brazil. Investors appeared to lose confidence after the government responded to a trucker’s strike in reaction to sharply rising crude oil and diesel prices by introducing fuel price controls. At the same time, candidates with extreme positions gained in polls for the October elections.

 

Energy stocks led performance in the year-to-date period as oil rose above $70/bbl. Higher oil prices have been supported by consistent demand from accelerating global growth as well as supply disruptions and several years of underinvestment in oil exploration and production. Countries with higher exposure to energy and commodities, such as Canada and Australia, outperformed (in local currencies) in this environment. Elsewhere, growth stocks continued to outperform value stocks during the period. This performance reflects the current stage of the economic cycle, where growth has continued but has become weaker. Investors in this environment typically bid up any companies that offer any growth, leading to outperformance over value.

 

Emerging Markets Equities

Emerging markets experienced a volatile period in the first half of 2018 driven by several political and macroeconomic factors. This included a classic “January effect,” a very strong initial market move, which was followed by consolidation in February, caused by investor concerns over the possibility of higher global inflation. The remaining months of the period were dominated by escalating trade tensions, a significantly stronger US dollar, which resulted in weak


 

Semi-Annual Report  3

 

 

 

 

emerging markets currencies and new, more severe sanctions on Russian companies and individuals, which caused marked volatility in Russia. The MSCI Emerging Markets Index fell by 6.7% during the first half of the year, as measured in US dollar terms, with equities in Asia performing better than those in Eastern Europe. Shares in Latin America, most affected by weak currencies, performed considerably worse than both regions. One unusual feature of the period was the strength of oil prices, a characteristic that rarely occurs in tandem with a strong US dollar.

 

Although Latin American stocks performed particularly well in the first quarter, they fell sharply in the subsequent three months. The US dollar strengthened markedly due mostly to recent tax changes, as expectations of US economic growth accelerated, and as consensus anticipated modestly decelerating growth elsewhere in other regions. This had a negative effect on many currencies but most obviously on the Argentine peso, where the country has a current account deficit and is going through a period of deregulation. The central bank had to raise interest rates by more than 12%, and the country ultimately negotiated a $50 billion standby agreement with the International Monetary Fund. Despite having a current account surplus and considerable currency reserves, the Brazilian real then weakened sharply as its debt was utilized by investors who needed to hedge their Argentine peso exposure. The situation was further magnified when more politically extreme presidential candidates began polling well and by a truckers’ strike in reaction to sharply rising crude oil and diesel prices. This latter factor helped Colombian shares perform well over the six month period. Stocks in Peru also held up well, aided by the resignation of President Pedro Pablo Kuczynski, following a corporate scandal. Although there was no solution to the North American Free Trade Agreement renegotiations, Mexican equities finished the period only modestly lower, as uncertainties fell following the election of populist candidate Andres Manuel Lopez Obrador as president.

 

Asian markets finished lower over the six month period. Currency weakness hit several markets including China, Indonesia, the Philippines, Thailand, and South Korea, despite an unprecedented meeting

between President Trump and North Korean leader Kim Jong Un. By May, the US government’s trade rhetoric was transitioning into real protectionist action with tariff increases on goods as diverse as electronics to aluminum. This was met mostly by retaliation and the G7 meeting in Canada represented an appropriately non-unified discourse between the United States and its major allies.

 

Shares of companies in Eastern Europe were some-what mixed over the six month period. Turkey President Erdogan’s unwillingness to combat inflation, combined with a Moody’s debt downgrade, pressured Turkey’s currency severely. Despite new President Cyril Ramaphosa, poor economic growth trends in South Africa had a similar effect on the South African rand. Geopolitical issues, such as the poisoning of a former Soviet spy in Great Britain and subsequent sanctions which included new, more restrictive terms, caused marked volatility in Russian share prices and were only mitigated by robust oil prices. Crude oil strength also helped support stock prices in Qatar.

 

Multi-Asset

Global developed equity markets closed the first six months of the year virtually flat, in US dollar terms. However, this result masked significant volatility—especially when compared to the historically low volatility environment markets experienced in 2017. Equities started the year with a surge that culminated with a sharp correction in early February, with many commentators attributing this move to a spike in US Treasury yields. Developed equity markets lost ground through the first quarter but recovered in the second quarter. In this environment, interest rate-sensitive sectors such as financials and telecom services performed poorly. On the other hand, the information technology sector continued to rally despite already strong returns in 2017. The energy sector also had strong performance as it was bolstered by rising oil prices. For the period, US stocks led among the major developed regions while Europe, the United Kingdom, and Japan had negative returns. Emerging markets shares suffered big losses in the first six months of the year, retreating almost 7% on the back of trade concerns and weakening currencies.


 

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Global bond markets were negative and volatile during the period. Slightly softer economic data (especially relative to the United States) across Europe and other regions, as well as a spike in Italian bond yields due to local politics, began to cast a shadow on an otherwise healthy economic picture. Investment grade and high yield bonds generally underperformed government bonds due in part to investor risk aversion.

 

The Fed tightened interest rates in March and June, setting a new 2% upper target for the federal funds rate. The 10-year US Treasury yield briefly broke above the closely watched 3.00% level in mid-April, and again in late-May, and closed the period at 2.86%. The European Central Bank signaled plans to end its bond-buying program but, along with the Bank of Japan and other central banks, it continues to postpone any rate normalization plans.

 

The US dollar strengthened significantly as it rallied in the second quarter following a generally weakening trend over the last 18 months. In this setting, currency markets were very active, where both major and minor currencies lost ground versus the US dollar. Year to date, among G10 currencies, only the Japanese yen and Norwegian krone gained against the US dollar. In emerging markets currencies, the Colombian peso went higher but some of its emerging markets peers suffered double-digit losses versus the US dollar.

 

Lazard Retirement US Strategic Equity Portfolio

For the six months ended June 30, 2018, the Lazard Retirement US Strategic Equity Portfolio’s Service Shares posted a total return of 2.85%, as compared with the 2.65% return for the S&P 500 Index.

 

Stock selection and an overweight position in the information technology sector contributed to performance. Shares of Motorola Solutions rose after quarterly results showed that the company was executing well on its evolution from a hardware company to one focused on providing a public safety platform, driving recurring software and services revenues. Stock selection in the health care sector also helped returns. Shares of Zoetis, a producer of medicine and vaccinations for pets and livestock, rose after the company reported quarterly results above expectations and

management issued encouraging guidance for the year, driven by strength in its livestock business.

 

In contrast, stock selection in the consumer discretionary sector detracted from performance. Shares of Starbucks fell after the company announced plans to close 150 underperforming stores in the US. Stock selection in the telecom services sector also hurt returns. Shares of AT&T fell, along with other high dividend-yielding stocks, amid expectations for higher interest rates, as well as uncertainty surrounding the company’s acquisition of Time Warner. We sold our position in April.

 

Lazard Retirement US Small-Mid Cap Equity Portfolio

For the six months ended June 30, 2018, the Lazard Retirement US Small-Mid Cap Equity Portfolio’s Service Shares posted a total return of 3.96%, as compared with the 5.46% return for the Russell 2500® Index.

 

Stock selection in the industrials sector contributed to performance. Shares of FTI Consulting rose after the company reported quarterly earnings above expectations, driven by strong performance across most of its businesses. Stock selection in the health care sector also helped performance. Shares of Evolent Health rose after the company reported strong quarterly results and several new contracts.

 

In contrast, stock selection in the consumer staples sector detracted from performance. Shares of J.M. Smucker fell after the company announced that it was exploring strategic alternatives for its US baking business. We sold our position in May. Stock selection and an overweight position in the energy sector also hurt returns. Shares of U.S. Silica Holdings fell after the company reported quarterly earnings below expectations, hurt by disappointing price and volume metrics in its oil & gas business.

 

Lazard Retirement International Equity Portfolio

For the six months ended June 30, 2018, the Lazard Retirement International Equity Portfolio’s Service Shares posted a total return of -2.95%, as compared with the -2.75% return for the MSCI EAFE Index.


 

Semi-Annual Report  5

 

 

 

 

After several quarters of derating, some of the Portfolio’s stocks in the health care sector outperformed. Shire, a UK-based specialty pharmaceuticals company that had negatively impacted our platform over the past year, received a takeout offer from Takeda Pharmaceuticals, based in Japan, which represented more than a 60% premium over the company’s last stock price. Medtronic, the Irish-domiciled global leader in medical devices, rose nearly 7% in the period. The stock had derated to a slight discount to the market, and management reiterated their financial guidance during the period. Stock selection, as well as a higher-than-benchmark weight in the energy sector, was also beneficial as Suncor, a Canadian integrated energy company with assets in the oil sands and refinery markets, rose over 11% during the period. Lastly, stock selection in the industrials sector was also additive to relative returns, driven by strong performance from Ferguson, a British distributor of heating and plumbing products to customers in Europe and the United States. The stock rose more than 13% during the period on results highlighted by improved margins and strong organic growth in the United States.

 

In contrast, returns were affected by emerging markets exposure, as well as by the continued outperformance of growth versus value. One emerging market stock that negatively impacted performance in the period is Turkcell, the largest mobile and fixed line data provider in Turkey, with 70 million subscribers in nine countries. Macro headwinds hurt the stock as fears regarding the Turkish lira and Turkey’s presidential election resulted in weak currency, equity, and bond markets. We believe the fundamentals of the business remain strong. Another stock that hurt relative performance was Cielo, a leading credit card processor in Brazil where card penetration remains low, thereby allowing for long-term secular growth. The company has been hurt by macro headwinds affecting the Brazilian equity market. Concerns over the 2018 presidential election, along with fears that the Brazilian economic recovery remains lackluster, were amplified by the weakening of the real amidst US dollar strength and the general emerging markets equity selloff. Lastly, British American Tobacco fell 24% during the period, hurting performance within the consumer staples sector. The stock initially declined in February

because investors sold high-dividend stocks as long-term interest rates rose. The stock continued to lag in the first quarter because their earnings announcement led to small consensus downgrades and on concerns of structural changes in the tobacco industry.

 

Lazard Retirement Emerging Markets Equity Portfolio

For the six months ended June 30, 2018, the Lazard Retirement Emerging Markets Equity Portfolio’s Investor Shares posted a total return of -11.97%, while Service Shares posted a total return of -12.08%, as compared with the -6.66% return for the MSCI Emerging Markets Index.

 

Stock selection in the financials and consumer discretionary sectors and within Brazil detracted from returns. A higher-than-index exposure to Turkey hurt relative performance. Shares of Cielo, a Brazilian credit card processor, fell due to concerns about increased competition and regulatory change. YPF, an Argentine energy company, fell as high inflation and a plunging currency in Argentina led to macroeconomic uncertainty and concerns that the government may institute price controls for gas and diesel. Shares of Banco do Brasil, a Brazilian bank, declined along with the Brazilian market after a protracted strike by Brazilian truck drivers severely halted economic activity, resulting in weakness in the real and in companies exposed to Brazil. Punjab National Bank, an Indian state bank, fell after bank fraud was uncovered. Shares of CCR, a Brazilian toll road operator, declined following allegations that CCR executives overpaid for sponsorship contracts during the 2009-2012 period to fund political campaigns.

 

In contrast, Tata Consultancy, an Indian information technology services company, benefited from improved sentiment regarding IT spending across the sector and on the back of an announced share buyback program. Lukoil, a Russian energy company, has benefited from the environment of higher oil prices, a weaker ruble, and robust gas demand from China. ENN Energy, a Chinese gas distribution company, continued to benefit from healthy volume growth and the government’s strong push to boost gas consumption. Weichai Power, a Chinese manufacturer of diesel engines for heavy-duty vehicles, announced robust


 

6  Semi-Annual Report

 

 

 

 

first quarter results and provided upbeat guidance for the year. Shares of Alrosa, a Russian diamond mining company, gained on the back of improvements in global diamond sales and after the company’s board of directors approved a more generous dividend policy.

 

Lazard Retirement Global Dynamic Multi-Asset Portfolio

For the six months ended June 30, 2018, the Lazard Retirement Global Dynamic Multi-Asset Portfolio’s Service Shares posted a total return of -0.59%, as compared with the 0.43% return for the MSCI World® Index and -0.46% return of its blended benchmark, which is a 50/50 blend of the MSCI World Index and the Bloomberg Barclays Global Aggregate® Index (the “GDMA Index”).

 

Performance was helped by the Portfolio’s overweight to equity versus fixed income and stock selection in the energy, financials, and health care sectors. Stock selection in Australia, Canada, and Norway was additive to returns, as was an underweight to bonds in peripheral Europe in the fixed income allocation. Security selection within fixed income, namely posi-

tions in Australia, New Zealand, Canada, and Norway, also contributed to returns. Finally, currency management within fixed income helped performance: underweight exposure to the Canadian dollar, the British pound, and the euro; and overweight exposure to the Australian dollar and New Zealand dollar.

 

The Portfolio’s performance was hurt by stock selection in the consumer discretionary and utilities sectors as well as stock selection in Germany and the United States. Country allocation within fixed income—underweight exposure to core Europe and Japan; and overweight exposure to Singapore, the United States, Czech Republic, and Hungary—detracted from performance. Term structure positioning within fixed income—an underweight to long maturity Canadian bonds—was detrimental to returns, as was currency management within fixed income: namely, an overweight exposure to the Mexican peso and Swedish krona.

 

The Portfolio uses currency forwards opportunistically and for hedging purposes. The impact of these instruments was slightly positive over the six month period.


 

 

 

Notes to Investment Overviews:

 

All Portfolios’ total returns reflect reinvestment of all dividends and distributions, if any. Certain expenses of a 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 disbursing agent (“DST”); without such waiver/reimbursement of expenses, such Portfolio’s returns would have been lower. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. Past performance is not indicative, or a guarantee, of future results. Returns for a period of less than one year are not annualized.

 

The performance data of the indices and other market data have been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to their accuracy. These indices are unmanaged, have no fees or costs and are not available for investment.

 

The views of the Investment Manager and the securities described in this report are as of June 30, 2018; these views and portfolio holdings may have changed subsequent to this date. Nothing herein should be construed as a recommendation to buy, sell, or hold a particular security. There is no assurance that the securities discussed herein will remain in a Portfolio at the time you receive this report, or that securities sold will not have been repurchased. The specific securities discussed may, in aggregate, represent only a small percentage of a Portfolio’s holdings. It should not be assumed that securities identified and discussed were, or will be, profitable, or that the investment decisions made in the future will be profitable, or equal the investment performance of the securities discussed herein.

 

The views and opinions expressed are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendations for, any person. There can be no guarantee as to the accuracy of any outlooks for markets, sectors and securities as discussed herein. You should read the Fund’s prospectus or each Portfolio’s summary prospectus for a more detailed discussion of each Portfolio’s investment objectives, strategies, risks and fees.

 

Semi-Annual Report  7

 

Lazard Retirement Series, Inc. Performance Overviews (unaudited)

 

 

Lazard Retirement US Strategic Equity Portfolio

 

Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement US Strategic Equity Portfolio and S&P 500® Index*

  

 

Average Annual Total Returns*

Periods Ended June 30, 2018

    One
Year		   Five
Years		   Ten
Years		  
Service Shares   12.57%   10.44%   8.27%  
S&P 500 Index   14.37%   13.42%   10.17%  

 

* 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance.
   
  Performance results do not include adjustments made for financial reporting purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”), if any, and 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 performance data of the index has been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to its accuracy. The S&P 500 Index is a market capitalization-weighted index of 500 companies in leading industries of the US economy. The index is unmanaged, has no fees or costs and is not available for investment.

 

8  Semi-Annual Report

 

 

 

Lazard Retirement US Small-Mid Cap Equity Portfolio

 

Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement US Small-Mid Cap Equity Portfolio, Russell 2500® Index and Russell 2000/2500 Linked Index*

  

 

Average Annual Total Returns*

Periods Ended June 30, 2018

    One
Year		   Five
Years		   Ten
Years		  
Service Shares   13.68%   11.94%   10.26%  
Russell 2500 Index   16.24%   12.29%   10.74%  
Russell 2000/2500 Linked Index   16.24%   12.29%   10.96%  

 

* 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance.
   
  Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, and 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 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 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 3,000 US companies, representing approximately 98% of the investable US equity market. The Russell 2500 Index includes approximately 2,500 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000/2500 Linked Index is an unmanaged index created by the Investment Manager, which links the performance of the Russell 2000® Index for all periods through May 31, 2009 (when the Portfolio’s investment focus was changed from small cap companies to small-mid cap companies) and the Russell 2500 Index for all periods thereafter. The Russell 2000 Index includes approximately 2,000 of the smallest securities in the Russell 3000 Index, representing roughly 10% of the total market capitalization of Russell 3,000 companies. The indices are unmanaged, have no fees or costs and are not available for investment.

 

Semi-Annual Report  9

 

 

 

Lazard Retirement International Equity Portfolio

 

Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement International Equity Portfolio and MSCI EAFE® Index*

  

 

Average Annual Total Returns*

Periods Ended June 30, 2018

    One
Year		   Five
Years		   Ten
Years		  
Service Shares   6.15%   5.41%   3.46%  
MSCI EAFE Index   6.84%   6.44%   2.84%  

 

* 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance.
   
  Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, and 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 performance data of the index has been prepared from sources and data that the Investment Manager believes to be reliable, but no presentation is made as to its accuracy. 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 index is unmanaged, has no fees or costs and is not available for investment.

 

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Lazard Retirement Emerging Markets Equity Portfolio

 

Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement Emerging Markets Equity Portfolio and MSCI Emerging Markets® Index*

  

 

Average Annual Total Returns*

Periods Ended June 30, 2018

    One
Year		   Five
Years		   Ten
Years		  
Service Shares**   –0.55%   2.24%   1.75%  
Investor Shares**   –0.31%   2.49%   2.00%  
MSCI Emerging Markets Index   8.20%   5.01%   2.26%  

 

* 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance.
   
  Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, also exclude one-time adjustments related to reimbursed custodian out-of-pocket expenses (Note 3 in the Notes to Financial Statements), and 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 performance data of the index has been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to its accuracy. 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 24 emerging markets country indices. The index is unmanaged, has no fees or costs and is not available for investment.
   
** The performance of Service Shares and Investor Shares may vary, primarily based on the differences in fees borne by shareholders investing in different classes.

 

Semi-Annual Report  11

 

 

 

Lazard Retirement Global Dynamic Multi-Asset Portfolio

 

Comparison of Changes in Value of $10,000 Investment in the Service Shares of Lazard Retirement Global Dynamic Multi-Asset Portfolio, MSCI World® Index and GDMA Index*

  
 

 

Average Annual Total Returns*

Periods Ended June 30, 2018

    One
Year		   Five
Years		   Since
Inception		 †
Service Shares   9.10%   7.44%   7.90%  
MSCI World Index   11.09%   9.94%   10.28%  
GDMA Index   6.20%   5.77%   5.55%  

 

* 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance.
   
  Performance results do not include adjustments made for financial reporting purposes in accordance with GAAP, if any, and 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 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 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% of 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 indices are unmanaged, have no fees or costs and are not available for investment.
   
† The inception date for the Portfolio was April 30, 2012.

 

12  Semi-Annual Report

 

Lazard Retirement Series, 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 (Service 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 January 1, 2018 through June 30, 2018 and held for the entire period.

 

Actual Expenses

For each Share class of the Portfolios, the first line of the table below 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 table below 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 shareholders reports of other mutual funds.

 

Please note that you also bear fees and charges imposed by participating insurance companies at the separate account level, which are described in the separate prospectuses issued by the participating insurance companies. Such charges will have the effect of reducing account value.

 

Semi-Annual Report  13

 

 

 

Portfolio  Beginning
Account Value
1/1/18		  Ending
Account Value
6/30/18		  Expenses Paid
During Period*
1/1/18 - 6/30/18		  Annualized Expense
Ratio During Period
1/1/18 - 6/30/18
               
US Strategic Equity              
Service Shares              
Actual  $1,000.00  $1,028.50   $5.03  1.00%
Hypothetical (5% Return Before Expenses)  $1,000.00  $1,019.84   $5.01  1.00%
               
US Small-Mid Cap Equity              
Service Shares              
Actual  $1,000.00  $1,039.60   $5.82  1.15%
Hypothetical (5% Return Before Expenses)  $1,000.00  $1,019.09   $5.76  1.15%
               
International Equity              
Service Shares              
Actual  $1,000.00  $970.50   $5.42  1.11%
Hypothetical (5% Return Before Expenses)  $1,000.00  $1,019.29   $5.56  1.11%
               
Emerging Markets Equity              
Service Shares              
Actual  $1,000.00  $879.20   $6.29  1.35%
Hypothetical (5% Return Before Expenses)  $1,000.00  $1,018.10   $6.76  1.35%
Investor Shares              
Actual  $1,000.00  $880.30   $5.13  1.10%
Hypothetical (5% Return Before Expenses)  $1,000.00  $1,019.34   $5.51  1.10%
               
Global Dynamic Multi-Asset              
Service Shares              
Actual  $1,000.00  $994.10   $5.19  1.05%
Hypothetical (5% Return Before Expenses)  $1,000.00  $1,019.59   $5.26  1.05%

 

* 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 181/365 (to reflect one-half year period).

 

14  Semi-Annual Report

 

Lazard Retirement Series, Inc. Portfolio Holdings Presented by Sector June 30, 2018 (unaudited)

 

 

Sector*  Lazard
Retirement
US Strategic
Equity Portfolio		  Lazard
Retirement
US Small-Mid Cap
Equity Portfolio		  Lazard
Retirement
International
Equity Portfolio		  Lazard
Retirement
Emerging Markets
Equity Portfolio		  
                       
Consumer Discretionary   10.7%   10.7%   13.0%   8.3%  
Consumer Staples   6.5    2.3    9.4    6.7   
Energy   7.6    4.1    7.6    8.2   
Financials   14.2    18.1    17.6    27.8   
Health Care   14.1    8.9    8.7    0.6   
Industrials   11.2    18.9    18.9    4.6   
Information Technology   28.9    13.1    7.7    24.0   
Materials   2.6    8.2    4.9    4.7   
Real Estate   1.7    10.5    2.4    —   
Telecommunication Services   —    —    4.6    11.0   
Utilities   —    2.6    1.4    1.9   
Short-Term Investments   2.5    2.6    3.8    2.2   
Total Investments   100.0%   100.0%   100.0%   100.0%  

 

Sector*   Lazard Retirement
Global Dynamic
Multi-Asset
Portfolio		                          
                                   
Consumer Discretionary     9.9 %                          
Consumer Staples     6.7                            
Energy     4.2                            
Financials     15.9                            
Health Care     9.0                            
Industrials     11.1                            
Information Technology     13.5                            
Materials     3.0                            
Real Estate     2.9                            
Telecommunication Services     2.4                            
Utilities     2.6                            
Municipal     0.4                            
Sovereign Debt     12.4                            
US Government Securities     0.2                            
US Treasury Securities     3.0                            
Short-Term Investments     2.8                            
Total Investments     100.0 %                          

 

* Represents percentage of total investments.

 

Semi-Annual Report  15

 

Lazard Retirement Series, Inc. Portfolios of Investments June 30, 2018 (unaudited)

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement US Strategic Equity Portfolio
 
Common Stocks  |  97.3%          
 
Aerospace & Defense  |  2.5%          
United Technologies Corp.   1,890   $236,307 
 
Auto Components  |  1.2%          
Aptiv PLC   1,170    107,207 
 
Banks  |  10.5%          
Bank of America Corp.   6,300    177,597 
Citizens Financial Group, Inc.   5,385    209,477 
Commerce Bancshares, Inc.   1,095    70,857 
Sterling Bancorp   4,955    116,443 
SunTrust Banks, Inc.   3,720    245,594 
Wells Fargo & Co.   2,800    155,232 
         975,200 
Beverages  |  6.5%          
Molson Coors Brewing Co., Class B   2,670    181,667 
The Coca-Cola Co.   9,490    416,231 
         597,898 
Biotechnology  |  1.2%          
Biogen, Inc. (*)   230    66,755 
Gilead Sciences, Inc.   660    46,755 
         113,510 
Building Products  |  0.4%          
Johnson Controls International PLC   1,140    38,133 
 
Capital Markets  |  2.3%          
Intercontinental Exchange, Inc.   2,910    214,030 
 
Chemicals  |  1.0%          
Nutrien, Ltd.   960    52,205 
Sensient Technologies Corp.   635    45,434 
         97,639 
Commercial Services & Supplies  |  0.6%          
Copart, Inc. (*)   950    53,732 
 
Communications Equipment  |  6.2%          
Cisco Systems, Inc.   8,395    361,237 
Motorola Solutions, Inc.   1,210    140,808 
Palo Alto Networks, Inc. (*)   335    68,832 
         570,877 
Description  Shares   Fair
Value		 
 
Construction Materials  |  0.8%          
Vulcan Materials Co.   550   $70,983 
 
Electrical Equipment  |  2.0%          
Eaton Corp. PLC   1,925    143,874 
Rockwell Automation, Inc.   250    41,558 
         185,432 
Energy Equipment & Services  |  1.8%          
Schlumberger, Ltd.   2,465    165,229 
 
Equity Real Estate Investment Trusts (REITs)  |  1.7%          
Prologis, Inc.   2,340    153,715 
 
Health Care Equipment & Supplies  |  5.0%          
Danaher Corp.   1,160    114,469 
Medtronic PLC   4,130    353,569 
         468,038 
Health Care Providers & Services  |  1.0%          
Humana, Inc.   305    90,777 
 
Hotels, Restaurants & Leisure  |  3.2%          
McDonald’s Corp.   1,095    171,576 
Starbucks Corp.   2,550    124,567 
         296,143 
Household Durables  |  0.8%          
Whirlpool Corp.   480    70,190 
 
Industrial Conglomerates  |  1.0%          
Honeywell International, Inc.   655    94,353 
 
Insurance  |  1.3%          
Aon PLC   895    122,767 
 
Internet Software & Services  |  7.2%          
Alphabet, Inc., Class A (*)   411    464,097 
Alphabet, Inc., Class C (*)   38    42,395 
eBay, Inc. (*)   4,445    161,175 
         667,667 
IT Services  |  4.4%          
CoreLogic, Inc. (*)   1,040    53,976 
DXC Technology Co.   1,415    114,063 
Visa, Inc., Class A   1,295    171,523 
Worldpay, Inc., Class A (*)   840    68,695 
         408,257 


 

The accompanying notes are an integral part of these financial statements.

 

16  Semi-Annual Report

 

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement US Strategic Equity Portfolio (concluded)
 
Machinery  |  3.3%          
Deere & Co.   570   $79,686 
Gates Industrial Corp. PLC   2,890    47,020 
Kennametal, Inc.   2,210    79,339 
Wabtec Corp.   1,000    98,580 
         304,625 
Media  |  0.8%          
The Madison Square Garden Co., Class A (*)   230    71,344 
 
Metals & Mining  |  0.8%          
Steel Dynamics, Inc.   1,650    75,818 
 
Multiline Retail  |  1.1%          
Dollar Tree, Inc. (*)   1,205    102,425 
 
Oil, Gas & Consumable Fuels  |  5.8%          
ConocoPhillips   3,650    254,113 
EOG Resources, Inc.   1,485    184,778 
Pioneer Natural Resources Co.   540    102,190 
         541,081 
Pharmaceuticals  |  6.8%          
Johnson & Johnson   1,695    205,672 
Pfizer, Inc.   7,550    273,914 
Zoetis, Inc.   1,738    148,060 
         627,646 
Road & Rail  |  1.3%          
Norfolk Southern Corp.   810    122,205 
 
Semiconductors & Semiconductor Equipment  |  3.3%          
Analog Devices, Inc.   1,718    164,791 
Skyworks Solutions, Inc.   1,420    137,243 
         302,034 
Description  Shares   Fair
Value		 
 
Software  |  3.5%          
Microsoft Corp.   3,250   $320,482 
 
Specialty Retail  |  3.7%          
AutoZone, Inc. (*)   120    80,512 
Lowe’s Cos., Inc.   2,735    261,384 
         341,896 
Technology Hardware, Storage & Peripherals  |  4.3%          
Apple, Inc.   2,139    395,950 
 
Total Common Stocks
(Cost $7,571,268)		        9,003,590 
 
Short-Term Investments  |  2.5%          
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield)
(Cost $234,296)		   234,296    234,296 
 
Total Investments  |  99.8%
(Cost $7,805,564)		       $9,237,886 
 
Cash and Other Assets in Excess of Liabilities  |  0.2%        14,557 
 
Net Assets  |  100.0%       $9,252,443 


 

The accompanying notes are an integral part of these financial statements.

 

Semi-Annual Report  17

 

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement US Small-Mid Cap Equity Portfolio
           
Common Stocks  |  96.9%          
           
Air Freight & Logistics  |  0.8%          
Echo Global Logistics, Inc. (*)   17,300   $506,025 
           
Airlines  |  1.2%          
Alaska Air Group, Inc.   12,975    783,560 
           
Auto Components  |  1.0%          
Modine Manufacturing Co. (*)   35,415    646,324 
           
Banks  |  13.4%          
Bank of the Ozarks, Inc.   17,775    800,586 
Cadence BanCorp   33,640    971,187 
Comerica, Inc.   12,905    1,173,323 
Commerce Bancshares, Inc.   21,171    1,369,975 
PacWest Bancorp   18,215    900,185 
Sterling Bancorp   51,045    1,199,558 
Texas Capital Bancshares, Inc. (*)   11,370    1,040,355 
Wintrust Financial Corp.   14,610    1,271,800 
         8,726,969 
Biotechnology  |  1.1%          
Cellectis SA ADR (*)   13,995    395,919 
Exelixis, Inc. (*)   16,085    346,149 
         742,068 
Building Products  |  1.3%          
Armstrong World Industries, Inc. (*)   6,300    398,160 
PGT Innovations, Inc. (*)   22,700    473,295 
         871,455 
Capital Markets  |  1.3%          
Morningstar, Inc.   6,730    863,122 
           
Chemicals  |  5.1%          
Ingevity Corp. (*)   9,440    763,319 
Innospec, Inc.   13,715    1,049,883 
Sensient Technologies Corp.   9,700    694,035 
Valvoline, Inc.   38,255    825,160 
         3,332,397 
Commercial Services & Supplies  |  1.3%          
Deluxe Corp.   12,665    838,550 
           
Communications Equipment  |  1.6%          
Ciena Corp. (*)   39,350    1,043,168 
Description  Shares   Fair
Value		 
 
Construction & Engineering  |  1.1%          
Dycom Industries, Inc. (*)   7,695   $727,254 
 
Construction Materials  |  1.2%          
Eagle Materials, Inc.   7,725    810,893 
 
Containers & Packaging  |  1.8%          
Graphic Packaging Holding Co.   80,200    1,163,702 
 
Electric Utilities  |  1.5%          
PNM Resources, Inc.   25,390    987,671 
 
Electrical Equipment  |  5.6%          
Atkore International Group, Inc. (*)   49,860    1,035,592 
EnerSys   9,290    693,405 
Generac Holdings, Inc. (*)   14,005    724,479 
Regal Beloit Corp.   14,440    1,181,192 
         3,634,668 
Electronic Equipment, Instruments & Components  |  2.1%          
Belden, Inc.   10,705    654,290 
FLIR Systems, Inc.   13,530    703,154 
         1,357,444 
Energy Equipment & Services  |  4.1%          
NCS Multistage Holdings, Inc. (*)   37,910    550,832 
Oceaneering International, Inc.   27,595    702,569 
Oil States International, Inc. (*)   26,950    865,095 
U.S. Silica Holdings, Inc.   20,590    528,957 
         2,647,453 
Equity Real Estate Investment Trusts (REITs)  |  10.5%          
Alexandria Real Estate Equities, Inc.   8,490    1,071,183 
Brandywine Realty Trust   60,295    1,017,780 
Camden Property Trust   11,740    1,069,866 
DCT Industrial Trust, Inc.   17,275    1,152,761 
Hudson Pacific Properties, Inc.   23,350    827,290 
Invitation Homes, Inc.   35,700    823,242 
Kilroy Realty Corp.   11,540    872,886 
         6,835,008 
Food & Staples Retailing  |  1.0%          
Sprouts Farmers Market, Inc. (*)   30,855    680,970 
 
Food Products  |  1.3%          
The Simply Good Foods Co. (*)   57,895    836,004 


 

The accompanying notes are an integral part of these financial statements.

 

18  Semi-Annual Report

 

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement US Small-Mid Cap Equity Portfolio (concluded)
 
Health Care Equipment & Supplies  |  2.6%             
Avanos Medical, Inc. (*)   8,100   $463,725 
Lantheus Holdings, Inc. (*)   24,915    362,513 
STERIS PLC   8,075    847,956 
         1,674,194 
Health Care Providers & Services  |  0.8%          
Molina Healthcare, Inc. (*)   5,175    506,840 
 
Health Care Technology  |  1.8%          
Cotiviti Holdings, Inc. (*)   15,190    670,335 
Evolent Health, Inc., Class A (*)   23,765    500,253 
         1,170,588 
Hotels, Restaurants & Leisure  |  2.0%          
Penn National Gaming, Inc. (*)   18,575    623,934 
The Cheesecake Factory, Inc.   12,410    683,295 
         1,307,229 
Household Durables  |  2.9%          
Leggett & Platt, Inc.   25,005    1,116,223 
Whirlpool Corp.   5,450    796,954 
         1,913,177 
Independent Power & Renewable Electricity Producers  |  1.1%          
Pattern Energy Group, Inc., Class A   37,990    712,313 
 
Insurance  |  3.3%          
Arch Capital Group, Ltd. (*)   39,675    1,049,801 
Reinsurance Group of America, Inc.   8,215    1,096,538 
         2,146,339 
Internet Software & Services  |  1.5%          
j2 Global, Inc.   11,145    965,268 
 
IT Services  |  3.2%          
CoreLogic, Inc. (*)   21,084    1,094,260 
Leidos Holdings, Inc.   16,800    991,200 
         2,085,460 
Life Sciences Tools & Services  |  1.2%          
Cambrex Corp. (*)   15,185    794,175 
 
Machinery  |  5.6%          
Gates Industrial Corp. PLC   63,105    1,026,718 
Kennametal, Inc.   26,415    948,299 
TriMas Corp. (*)   24,665    725,151 
Wabtec Corp.   9,615    947,847 
         3,648,015 
Description  Shares   Fair
Value		 
 
Media  |  2.9%          
Emerald Expositions Events, Inc.   35,750   $736,450 
Scholastic Corp.   26,785    1,186,843 
         1,923,293 
Pharmaceuticals  |  1.3%          
Catalent, Inc. (*)   21,010    880,109 
 
Professional Services  |  1.0%          
FTI Consulting, Inc. (*)   10,540    637,459 
 
Semiconductors & Semiconductor Equipment  |  2.7%          
Cypress Semiconductor Corp.   55,095    858,380 
Versum Materials, Inc.   23,665    879,155 
         1,737,535 
Software  |  2.0%          
Bottomline Technologies de, Inc. (*)   15,990    796,781 
CyberArk Software, Ltd. (*)   8,280    521,309 
         1,318,090 
Specialty Retail  |  1.1%          
Floor & Decor Holdings, Inc., Class A (*)   14,505    715,532 
 
Textiles, Apparel & Luxury Goods  |  0.7%             
Steven Madden, Ltd.   8,520    452,412 
 
Trading Companies & Distributors  |  0.9%             
DXP Enterprises, Inc. (*)   15,770    602,414 
 
Total Common Stocks
(Cost $56,332,267)		        63,225,147 
 
Short-Term Investments  |  2.6%          
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield)
(Cost $1,678,801)		   1,678,801    1,678,801 
 
Total Investments  |  99.5%
(Cost $58,011,068)		       $64,903,948 
 
Cash and Other Assets in Excess of Liabilities  |  0.5%        294,573 
 
Net Assets  |  100.0%       $65,198,521 


 

The accompanying notes are an integral part of these financial statements.

Semi-Annual Report  19

 

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement International Equity Portfolio
 
Common Stocks  |  95.2%          
 
Australia  |  2.8%          
BHP Billiton PLC   258,401   $5,782,540 
 
Belgium  |  1.6%          
Anheuser-Busch InBev SA/NV   32,517    3,280,284 
 
Brazil  |  1.0%          
Cielo SA   479,600    2,044,247 
 
Canada  |  4.8%          
Canadian National Railway Co.   25,190    2,060,381 
National Bank of Canada   66,800    3,207,254 
Suncor Energy, Inc.   111,240    4,526,939 
         9,794,574 
Denmark  |  1.3%          
Carlsberg A/S, Class B   23,006    2,708,827 
 
Finland  |  1.4%          
Sampo Oyj, A Shares   57,368    2,797,493 
 
France  |  11.0%          
Air Liquide SA   15,453    1,940,668 
Capgemini SE   24,991    3,354,596 
Cie de Saint-Gobain   44,553    1,986,952 
Cie Generale des Etablissements Michelin SCA   27,066    3,291,370 
Safran SA   30,871    3,744,885 
Societe Generale SA   46,679    1,965,551 
Valeo SA   38,475    2,100,079 
Vinci SA   43,182    4,147,418 
         22,531,519 
Germany  |  4.2%          
Fresenius SE & Co. KGaA   36,224    2,908,655 
SAP SE   49,484    5,716,738 
         8,625,393 
India  |  0.9%          
ICICI Bank, Ltd. Sponsored ADR   232,920    1,870,348 
 
Ireland  |  3.5%          
Ryanair Holdings PLC Sponsored ADR (*)   26,754    3,056,110 
Shire PLC   71,849    4,040,619 
         7,096,729 
Description  Shares   Fair
Value		 
 
Israel  |  0.0%          
Bank Leumi Le-Israel BM   11,989   $71,008 
 
Japan  |  17.2%          
Daiwa House Industry Co., Ltd.   145,192    4,943,574 
Don Quijote Holdings Co., Ltd.   111,300    5,340,050 
Isuzu Motors, Ltd.   149,300    1,980,257 
Kao Corp.   33,920    2,585,288 
KDDI Corp.   95,700    2,616,493 
Makita Corp.   89,000    3,981,052 
Nexon Co., Ltd. (*)   184,100    2,670,345 
Shin-Etsu Chemical Co., Ltd.   25,700    2,279,843 
Sony Corp.   44,800    2,298,510 
Sumitomo Mitsui Financial Group, Inc.   84,100    3,259,035 
United Arrows, Ltd.   5,900    220,034 
Yamaha Corp.   58,900    3,055,588 
         35,230,069 
Luxembourg  |  0.8%          
Tenaris SA   88,656    1,616,742 
 
Netherlands  |  6.4%          
ABN AMRO Group NV   50,435    1,305,320 
Royal Dutch Shell PLC, A Shares   200,573    6,950,764 
Wolters Kluwer NV   88,794    4,998,074 
         13,254,158 
Norway  |  2.8%          
Equinor ASA   94,444    2,499,594 
Telenor ASA   161,128    3,302,488 
         5,802,082 
Singapore  |  2.1%          
DBS Group Holdings, Ltd.   149,460    2,902,167 
NetLink NBN Trust   2,457,100    1,335,447 
         4,237,614 
Spain  |  1.4%          
Red Electrica Corporacion SA   139,005    2,828,128 
 
Sweden  |  3.6%          
Assa Abloy AB, Class B   186,912    3,977,883 
Epiroc AB, Class A (*)   64,431    676,124 
Nordea Bank AB   284,891    2,741,033 
         7,395,040 
Switzerland  |  6.8%          
Ferguson PLC   62,363    5,060,381 
Julius Baer Group, Ltd.   43,860    2,576,650 
Novartis AG   84,049    6,366,253 
         14,003,284 


 

The accompanying notes are an integral part of these financial statements.

 

20  Semi-Annual Report

 

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement International Equity Portfolio (concluded)
 
Taiwan  |  0.9%          
Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR   52,800   $1,930,368 
 
Turkey  |  1.1%          
Turkcell Iletisim Hizmetleri AS   839,328    2,215,164 
 
United Kingdom  |  15.2%          
British American Tobacco PLC   88,901    4,489,850 
Compass Group PLC   194,072    4,134,552 
Diageo PLC   59,206    2,125,241 
Howden Joinery Group PLC   263,810    1,865,816 
Informa PLC   247,142    2,722,890 
Melrose Industries PLC   792,020    2,222,583 
Prudential PLC   292,139    6,674,996 
RELX PLC   38,921    833,240 
RSA Insurance Group PLC   236,762    2,122,470 
Unilever PLC   74,224    4,105,847 
         31,297,485 
United States  |  4.4%          
Aon PLC   32,475    4,454,596 
Medtronic PLC   52,900    4,528,769 
         8,983,365 
Total Common Stocks
(Cost $170,043,409)		        195,396,461 
Description  Shares   Fair
Value		 
 
Preferred Stocks  |  0.7%          
 
Germany  |  0.7%          
Volkswagen AG
(Cost $2,003,720)		   9,353   $1,553,112 
 
Short-Term Investments  |  3.8%          
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield)
(Cost $7,792,028)		   7,792,028    7,792,028 
 
Total Investments  |  99.7%
(Cost $179,839,157)		       $204,741,601 
 
Cash and Other Assets in Excess of Liabilities  |  0.3%        569,848 
 
Net Assets  |  100.0%       $205,311,449 


 

The accompanying notes are an integral part of these financial statements.

 

Semi-Annual Report  21

 

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement Emerging Markets Equity Portfolio
           
Common Stocks  |  97.9%          
           
Argentina  |  1.1%          
YPF SA Sponsored ADR   821,734   $11,159,148 
           
Brazil  |  8.0%          
Ambev SA ADR   2,575,900    11,926,417 
Banco do Brasil SA   2,904,766    21,472,372 
BB Seguridade Participacoes SA   2,101,700    13,263,906 
CCR SA   3,486,400    9,103,365 
Cia de Saneamento Basico do Estado de Sao Paulo   912,600    5,483,959 
Cielo SA   3,258,984    13,891,096 
Petrobras Distribuidora SA   1,372,000    6,474,587 
         81,615,702 
China  |  19.5%          
AAC Technologies Holdings, Inc.   743,500    10,404,459 
Anhui Conch Cement Co., Ltd., Class H   1,169,500    6,643,370 
Baidu, Inc. Sponsored ADR (*)   68,700    16,694,100 
China Construction Bank Corp., Class H   50,681,390    46,473,470 
China Mobile, Ltd. Sponsored ADR   775,949    34,444,376 
China Shenhua Energy Co., Ltd., Class H   3,640,329    8,571,383 
CNOOC, Ltd.   6,335,000    10,853,752 
ENN Energy Holdings, Ltd.   1,399,000    13,738,808 
Hengan International Group Co., Ltd.   914,500    8,745,730 
NetEase, Inc. ADR   98,665    24,929,685 
Weichai Power Co., Ltd., Class H   13,003,864    17,895,792 
         199,394,925 
Egypt  |  1.0%          
Commercial International Bank Egypt SAE GDR (London)   2,032,761    10,048,783 
Commercial International Bank Egypt SAE GDR (United States)   144,531    715,430 
         10,764,213 
Hong Kong  |  0.1%          
ASM Pacific Technology, Ltd.   106,600    1,338,640 
           
Hungary  |  1.7%          
OTP Bank Nyrt.   485,168    17,559,380 
Description  Shares   Fair
Value		 
 
India  |  9.0%          
Axis Bank, Ltd.   2,369,138   $17,648,667 
Bajaj Auto, Ltd.   210,031    8,610,148 
HCL Technologies, Ltd.   705,262    9,514,428 
Hero MotoCorp, Ltd.   308,534    15,632,466 
Infosys, Ltd. Sponsored ADR   196,700    3,821,881 
Punjab National Bank (*)   4,571,410    5,072,759 
Tata Consultancy Services, Ltd.   1,186,986    31,944,064 
         92,244,413 
Indonesia  |  4.8%          
PT Astra International Tbk   20,971,700    9,636,661 
PT Bank Mandiri (Persero) Tbk   37,441,258    17,794,725 
PT Semen Indonesia (Persero) Tbk   10,217,400    5,073,448 
PT Telekomunikasi Indonesia (Persero) Tbk Sponsored ADR   618,500    16,087,185 
         48,592,019 
Malaysia  |  0.6%          
British American Tobacco Malaysia Berhad   707,100    6,083,707 
 
Mexico  |  3.6%          
America Movil SAB de CV, Class L Sponsored ADR   1,320,432    21,998,397 
Grupo Mexico SAB de CV, Series B   2,596,897    7,373,474 
Kimberly-Clark de Mexico SAB de CV, Series A  4,141,762    6,996,695 
         36,368,566 
Pakistan  |  1.5%          
Habib Bank, Ltd.   2,671,570    3,660,053 
Oil & Gas Development Co., Ltd.   3,007,000    3,852,234 
Pakistan Petroleum, Ltd.   4,532,002    8,016,660 
         15,528,947 
Philippines  |  0.6%          
PLDT, Inc. Sponsored ADR   272,000    6,359,360 
 
Russia  |  10.6%          
ALROSA PAO   11,186,274    17,785,471 
Gazprom PJSC Sponsored ADR   2,462,570    10,812,571 
LUKOIL PJSC Sponsored ADR   261,247    17,830,664 
Magnit PJSC Sponsored GDR (London)   479,321    8,611,739 
Magnit PJSC Sponsored GDR (United States)   2,884    51,912 
Mobile TeleSystems PJSC Sponsored ADR   1,669,220    14,739,212 
Sberbank of Russia PJSC   11,087,621    38,389,236 
         108,220,805 


 

The accompanying notes are an integral part of these financial statements.

 

22  Semi-Annual Report

 

 

 

Description  Shares   Fair
Value		 
 
Lazard Retirement Emerging Markets Equity Portfolio (concluded)
 
South Africa  |  9.7%          
Imperial Holdings, Ltd.   741,806   $10,581,601 
Life Healthcare Group Holdings, Ltd.   3,716,876    6,737,967 
Nedbank Group, Ltd.   550,622    10,009,995 
PPC, Ltd. (*)   7,743,992    4,081,800 
Sanlam, Ltd.   1,837,285    9,317,978 
Shoprite Holdings, Ltd.   1,098,098    17,607,416 
Standard Bank Group, Ltd.   849,394    11,832,872 
The Bidvest Group, Ltd.   761,606    10,925,128 
Vodacom Group, Ltd.   1,180,752    10,547,856 
Woolworths Holdings, Ltd.   1,781,958    7,191,932 
         98,834,545 
South Korea  |  15.6%          
Coway Co., Ltd.   165,071    12,823,050 
Hanwha Life Insurance Co., Ltd.   1,456,114    6,908,188 
Hyundai Mobis Co., Ltd.   73,708    14,005,300 
KB Financial Group, Inc.   281,905    13,340,807 
KT&G Corp.   94,081    9,021,892 
Samsung Electronics Co., Ltd.   1,091,450    45,574,539 
Shinhan Financial Group Co., Ltd.   558,248    21,608,851 
SK Hynix, Inc.   473,662    36,308,059 
         159,590,686 
Taiwan  |  5.0%          
Hon Hai Precision Industry Co., Ltd.   4,905,151    13,412,548 
Taiwan Semiconductor Manufacturing Co., Ltd.   5,273,642    37,520,121 
         50,932,669 
Description  Shares   Fair
Value		 
 
Thailand  |  1.3%          
Kasikornbank Public Co. Ltd.   976,836   $5,883,124 
The Siam Cement Public Co. Ltd. (‡)   570,050    7,119,271 
         13,002,395 
Turkey  |  4.2%          
Akbank Turk AS   4,064,274    6,632,128 
KOC Holding AS   2,869,436    8,868,434 
Tupras Turkiye Petrol Rafinerileri AS   532,150    12,508,043 
Turk Telekomunikasyon AS (*)   7,491,295    8,132,105 
Turkiye Is Bankasi AS, C Shares   5,314,850    6,575,082 
         42,715,792 
Total Common Stocks
(Cost $966,263,886)		        1,000,305,912 
 
Short-Term Investments  |  2.2%          
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield)
(Cost $22,788,405)		   22,788,405    22,788,405 
 
Total Investments  |  100.1%
(Cost $989,052,291)		       $1,023,094,317 
 
Liabilities in Excess of Cash and Other Assets  |  (0.1)%        (1,065,509)
 
Net Assets  |  100.0%       $1,022,028,808 


 

The accompanying notes are an integral part of these financial statements.

 

Semi-Annual Report  23

 

 

 

Description  Shares   Fair
Value		 
         
Lazard Retirement Global Dynamic Multi-Asset Portfolio
         
Common Stocks  |  73.9%        
         
Australia  |  1.9%        
Aristocrat Leisure, Ltd.   22,595   $515,936 
BlueScope Steel, Ltd.   31,987    407,732 
Cochlear, Ltd.   1,592    236,697 
CSL, Ltd.   27,474    3,927,729 
Flight Centre Travel Group, Ltd.   5,405    254,472 
Investa Office Fund REIT   64,282    248,987 
Link Administration Holdings, Ltd.   39,451    214,397 
Qantas Airways, Ltd.   149,694    684,511 
Regis Resources, Ltd.   65,759    250,418 
Sandfire Resources NL   64,804    441,303 
Stockland REIT   87,572    258,096 
Whitehaven Coal, Ltd.   58,101    249,654 
         7,689,932 
Austria  |  0.2%          
Erste Group Bank AG   7,278    303,404 
Lenzing AG   2,861    345,236 
         648,640 
Belgium  |  0.3%          
Anheuser-Busch InBev SA/NV Sponsored ADR   10,120    1,019,691 
Proximus SADP   9,642    217,476 
         1,237,167 
Canada  |  3.6%          
Air Canada (*)   11,122    179,776 
BRP, Inc.   8,759    422,276 
CAE, Inc.   58,333    1,211,646 
Canadian National Railway Co.   18,315    1,497,251 
Canfor Corp. (*)   17,250    415,160 
CGI Group, Inc., Class A (*)   3,939    249,616 
CI Financial Corp.   12,122    217,885 
Colliers International Group, Inc.   4,967    377,895 
Constellation Software, Inc.   573    444,379 
National Bank of Canada   30,525    1,465,590 
Norbord, Inc.   4,345    178,672 
Northland Power, Inc.   11,307    210,977 
Parex Resources, Inc. (*)   55,463    1,047,116 
Quebecor, Inc., Class B   26,030    533,015 
Rogers Communications, Inc., Class B   11,759    558,500 
Royal Bank of Canada   10,008    753,578 
Suncor Energy, Inc.   47,087    1,916,217 
Tamarack Valley Energy, Ltd. (*)   67,732    237,512 
Description  Shares   Fair
Value		 
         
Teck Resources, Ltd., Class B   23,494   $598,497 
The Toronto-Dominion Bank   38,518    2,228,968 
         14,744,526 
Denmark  |  0.3%          
Danske Bank A/S   22,675    708,705 
Dfds A/S   2,438    155,567 
H Lundbeck A/S   4,129    289,922 
         1,154,194 
Faeroe Islands  |  0.1%          
Bakkafrost P/F   5,353    297,147 
           
Finland  |  0.3%          
Fortum OYJ   20,905    498,637 
Sampo Oyj, A Shares ADR   34,975    847,619 
         1,346,256 
France  |  2.4%          
AXA SA   43,100    1,055,917 
Engie SA   53,744    822,492 
Faurecia SA   3,470    246,927 
Hermes International   397    242,647 
Ipsen SA   1,494    234,158 
Peugeot SA   16,102    367,178 
Schneider Electric SE   7,445    619,265 
Societe Generale SA   2,526    106,364 
Thales SA   1,816    233,809 
TOTAL SA   70,128    4,264,578 
Ubisoft Entertainment SA ADR (*)   59,915    1,310,041 
Veolia Environnement SA   7,439    159,147 
         9,662,523 
Germany  |  1.7%          
Allianz SE   3,268    675,294 
Continental AG   2,358    538,958 
Continental AG Sponsored ADR   21,015    956,813 
Covestro AG   16,584    1,478,739 
Deutsche Lufthansa AG   46,355    1,114,723 
Deutsche Telekom AG   10,929    169,611 
Rheinmetall AG   3,753    414,445 
RWE AG   6,937    158,109 
SAP SE   1,361    157,232 
Schaeffler AG (Preference Shares)   36,072    469,063 
Siltronic AG   887    126,822 
Symrise AG ADR   39,890    872,195 
         7,132,004 
Hong Kong  |  1.3%          
AIA Group, Ltd. Sponsored ADR   37,190    1,302,579 
CK Asset Holdings, Ltd.   86,804    685,857 


 

The accompanying notes are an integral part of these financial statements.

 

24  Semi-Annual Report

 

 

 

Description  Shares   Fair
Value		 
         
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
         
Hang Seng Bank, Ltd. Sponsored ADR   49,290   $1,237,179 
Kerry Properties, Ltd.   54,500    260,378 
Swire Pacific, Ltd., Class A   35,500    375,091 
Swire Properties, Ltd.   94,000    347,414 
The Wharf Holdings, Ltd.   76,000    243,435 
Wharf Real Estate Investment Co., Ltd.   25,875    183,745 
Wheelock & Co., Ltd.   125,765    874,174 
         5,509,852 
Ireland  |  0.1%          
Shire PLC ADR   3,730    629,624 
           
Israel  |  0.5%          
Bank Leumi Le-Israel BM   61,252    362,783 
Israel Discount Bank, Ltd., ADR   27,965    842,026 
Israel Discount Bank, Ltd., Class A   132,643    387,948 
Nice, Ltd. (*)   2,553    264,968 
         1,857,725 
Italy  |  1.0%          
Assicurazioni Generali SpA   9,033    151,253 
Enel SpA   337,100    1,867,578 
Intesa Sanpaolo SpA   415,472    1,233,899 
Poste Italiane SpA   27,228    227,330 
Terna SpA   37,694    203,398 
UniCredit SpA   18,949    315,151 
         3,998,609 
Japan  |  5.9%          
Amano Corp.   10,300    243,252 
Central Japan Railway Co.   1,400    290,270 
Daicel Corp.   52,333    578,365 
Daito Trust Construction Co., Ltd.   1,900    308,776 
Daiwa House Industry Co., Ltd. ADR   31,750    1,082,675 
Dexerials Corp.   12,400    123,616 
East Japan Railway Co.   14,700    1,407,863 
Haseko Corp.   31,300    431,930 
Japan Post Holdings Co., Ltd.   84,800    928,401 
Juki Corp.   7,600    76,387 
Kamigumi Co., Ltd.   16,100    333,761 
Kao Corp.   2,900    221,030 
Kao Corp. ADR   60,350    922,812 
KDDI Corp.   20,090    549,272 
Keyence Corp.   300    169,196 
Kinden Corp.   9,100    148,556 
Kobe Bussan Co., Ltd.   2,700    132,997 
Marvelous, Inc.   17,800    146,499 
Description  Shares   Fair
Value		 
         
Maxell Holdings, Ltd.   7,100   $119,457 
Miraca Holdings, Inc.   5,000    148,869 
Mitsubishi UFJ Financial Group, Inc.   258,300    1,465,020 
Mitsui Chemicals, Inc.   4,100    108,837 
MS&AD Insurance Group Holdings, Inc.   34,246    1,063,732 
Nikkiso Co., Ltd.   18,200    184,343 
Nishimatsu Construction Co., Ltd.   5,100    146,214 
Nissan Motor Co., Ltd.   17,500    170,055 
Nitto Denko Corp.   1,700    128,436 
Nomura Holdings, Inc.   54,300    262,858 
NTT DOCOMO, Inc.   77,882    1,983,552 
Okumura Corp.   5,500    179,332 
ORIX Corp.   39,800    628,583 
Ryohin Keikaku Co., Ltd. ADR   18,665    1,308,043 
Seven & I Holdings Co., Ltd.   10,100    440,231 
Shikoku Electric Power Co., Inc.   33,300    445,328 
Shin-Etsu Chemical Co., Ltd.   2,100    186,291 
Sompo Holdings, Inc.   30,396    1,227,953 
Start Today Co., Ltd.   4,700    170,154 
Subaru Corp.   7,800    226,924 
Sumitomo Heavy Industries, Ltd.   4,100    137,957 
Sumitomo Mitsui Trust Holdings, Inc.   9,800    388,215 
Takeuchi Manufacturing Co., Ltd.   6,600    138,530 
Teijin, Ltd.   10,700    196,074 
The 77 Bank, Ltd.   8,600    187,430 
The Chiba Bank, Ltd.   25,800    181,782 
The Chugoku Electric Power Co., Inc.   12,400    160,256 
The Dai-ichi Life Insurance Co., Ltd.   44,900    798,649 
Tokyo Gas Co., Ltd.   48,400    1,284,338 
Tokyu Fudosan Holdings Corp.   23,900    168,242 
Topcon Corp.   8,600    147,236 
Toyobo Co., Ltd.   12,600    209,507 
V Technology Co., Ltd.   800    147,664 
Yamaha Corp. Sponsored ADR   19,400    1,021,216 
         23,856,966 
Malta  |  0.1%          
Kindred Group PLC   19,388    243,905 
           
Netherlands  |  0.9%          
Euronext NV   3,313    210,255 
Koninklijke Ahold Delhaize NV   15,688    375,322 
Royal Dutch Shell PLC, A Shares   33,832    1,172,432 
Wolters Kluwer NV   1,737    97,773 
Wolters Kluwer NV Sponsored ADR   30,365    1,705,299 
         3,561,081 


 

The accompanying notes are an integral part of these financial statements.

Semi-Annual Report  25

 

 

 

Description  Shares   Fair
Value		 
         
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
         
New Zealand  |  0.0%        
Spark New Zealand, Ltd.   75,228   $189,907 
           
Norway  |  1.8%          
Aker BP ASA   5,763    212,252 
DNO ASA (*)   232,455    427,757 
Equinor ASA   167,518    4,433,600 
Leroy Seafood Group ASA   63,237    425,991 
Marine Harvest ASA   16,665    331,822 
Salmar ASA   8,070    338,630 
Telenor ASA   54,113    1,109,103 
         7,279,155 
Portugal  |  0.1%          
Galp Energia SGPS SA   12,687    241,243 
           
Russia  |  0.1%          
Evraz PLC   73,582    493,516 
           
Singapore  |  0.9%          
Best World International, Ltd.   153,100    139,356 
City Developments, Ltd.   24,400    196,202 
Oversea-Chinese Banking Corp., Ltd.   77,900    663,395 
Oversea-Chinese Banking Corp., Ltd. ADR   54,715    935,353 
Singapore Airlines, Ltd.   56,100    439,130 
Singapore Technologies Engineering, Ltd.   183,800    442,857 
UOL Group, Ltd.   105,600    588,972 
Venture Corp., Ltd.   12,400    161,610 
         3,566,875 
Spain  |  0.1%          
Amadeus IT Group SA   3,147    247,956 
Banco Bilbao Vizcaya Argentaria SA   18,940    133,773 
Corporacion Financiera Alba SA   1,750    101,643 
Mapfre SA   39,803    119,779 
         603,151 
Sweden  |  1.1%          
Assa Abloy AB ADR   69,565    733,911 
Atlas Copco AB, Class B   7,651    200,089 
Axfood AB   27,363    526,116 
Boliden AB   14,673    474,802 
Electrolux AB, Series B   21,700    493,839 
Hexagon AB ADR   16,140    908,521 
Nordea Bank AB Sponsored ADR   58,560    558,662 
Swedish Orphan Biovitrum AB (*)   10,225    222,845 
Volvo AB, Class B   14,843    236,429 
         4,355,214 
Description  Shares   Fair
Value		 
         
Switzerland  |  1.8%          
Adecco Group AG   2,171   $128,259 
Georg Fischer AG   283    362,670 
Julius Baer Group, Ltd. ADR   56,955    662,386 
Novartis AG   27,520    2,084,490 
Partners Group Holding AG   1,618    1,186,818 
Roche Holding AG   13,936    3,100,972 
         7,525,595 
United Kingdom  |  5.2%          
Abcam PLC   14,272    250,948 
Admiral Group PLC   14,456    363,616 
Anglo American PLC   9,945    220,856 
Ashtead Group PLC ADR   10,235    1,240,175 
British American Tobacco PLC Sponsored ADR   25,565    1,289,754 
Bunzl PLC Sponsored ADR   20,655    632,456 
Cineworld Group PLC   220,294    771,951 
Coca-Cola European Partners PLC   22,340    907,898 
Compass Group PLC   66,289    1,412,235 
Compass Group PLC Sponsored ADR   47,112    1,019,975 
Crest Nicholson Holdings PLC   20,111    103,361 
CVS Group PLC   7,342    109,949 
Diageo PLC Sponsored ADR   9,175    1,321,292 
Electrocomponents PLC   13,926    139,279 
Fiat Chrysler Automobiles NV (*)   8,965    170,657 
Hargreaves Lansdown PLC   21,980    571,713 
Howden Joinery Group PLC   81,260    574,717 
International Consolidated Airlines Group SA   106,540    933,303 
Janus Henderson Group PLC   7,333    225,343 
Land Securities Group PLC REIT   9,726    122,435 
Lloyds Banking Group PLC   172,969    143,897 
National Grid PLC   20,992    232,245 
Persimmon PLC   22,227    742,831 
Prudential PLC ADR   21,020    960,614 
RELX NV Sponsored ADR   66,745    1,423,671 
Rio Tinto PLC Sponsored ADR   12,080    670,198 
Royal Bank of Scotland Group PLC (*)   62,229    210,256 
RSA Insurance Group PLC ADR   93,790    858,179 
SSE PLC   57,099    1,020,143 
SSP Group PLC   22,120    185,014 
Taylor Wimpey PLC   117,522    277,409 
Unilever PLC Sponsored ADR   29,930    1,654,530 
WH Smith PLC   18,488    487,634 
         21,248,534 


 

The accompanying notes are an integral part of these financial statements.

 

26  Semi-Annual Report

 

 

 

Description  Shares   Fair
Value		 
         
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
         
United States  |  42.2%        
Accenture PLC, Class A   11,966   $ 1,957,518 
Adobe Systems, Inc. (*)   6,202    1,512,110 
Air Lease Corp.   3,500    146,895 
Alaska Air Group, Inc.   3,621    218,672 
Align Technology, Inc. (*)   1,637    560,083 
Ally Financial, Inc.   13,134    345,030 
Alphabet, Inc., Class A (*)   1,947    2,198,533 
Alphabet, Inc., Class C (*)   98    109,334 
Amazon.com, Inc. (*)   439    746,212 
Amdocs, Ltd.   4,382    290,045 
Ameren Corp.   7,137    434,286 
American Express Co.   23,418    2,294,964 
Ameriprise Financial, Inc.   2,174    304,099 
Amgen, Inc.   2,452    452,615 
Anthem, Inc.   6,093    1,450,317 
Aon PLC   21,373    2,931,734 
Apple, Inc.   23,773    4,400,620 
Applied Materials, Inc.   11,461    529,384 
Aptiv PLC   3,659    335,274 
AT&T, Inc.   4,695    150,756 
Atmos Energy Corp.   10,481    944,757 
Automatic Data Processing, Inc.   4,039    541,791 
Avery Dennison Corp.   13,747    1,403,569 
Bank of America Corp.   33,174    935,175 
Baxter International, Inc.   2,473    182,606 
Best Buy Co., Inc.   4,118    307,120 
BGC Partners, Inc., Class A   22,647    256,364 
Biogen, Inc. (*)   5,355    1,554,235 
Booking Holdings, Inc. (*)   745    1,510,182 
BorgWarner, Inc.   5,145    222,058 
Box, Inc., Class A (*)   10,123    252,974 
Bristol-Myers Squibb Co.   14,745    815,988 
Broadridge Financial Solutions, Inc.   7,170    825,267 
Carnival Corp.   17,449    1,000,002 
Carnival PLC   10,955    626,651 
Caterpillar, Inc.   1,724    233,895 
CBRE Group, Inc., Class A (*)   13,874    662,345 
Celgene Corp. (*)   5,995    476,123 
Centene Corp. (*)   3,157    388,974 
Church & Dwight Co., Inc.   4,048    215,192 
Cigna Corp.   10,373    1,762,891 
Cisco Systems, Inc.   23,035    991,196 
Citigroup, Inc.   9,592    641,897 
Citizens Financial Group, Inc.   7,990    310,811 
Colgate-Palmolive Co.   3,550    230,075 
Description  Shares   Fair
Value		 
         
Comcast Corp., Class A   64,196   $ 2,106,271 
Comerica, Inc.   14,265    1,296,974 
ConocoPhillips   6,283    437,422 
Costco Wholesale Corp.   3,433    717,428 
CVS Health Corp.   6,479    416,924 
Deckers Outdoor Corp. (*)   4,634    523,132 
Delta Air Lines, Inc.   4,279    211,982 
Diamondback Energy, Inc.   1,612    212,091 
DXC Technology Co.   11,350    914,923 
Eastman Chemical Co.   17,733    1,772,591 
Eaton Corp. PLC   15,595    1,165,570 
eBay, Inc. (*)   19,855    719,942 
EchoStar Corp., Class A (*)   2,433    108,025 
Edwards Lifesciences Corp. (*)   1,740    253,292 
Eli Lilly & Co.   12,572    1,072,769 
Encompass Health Corp.   3,549    240,338 
Exelon Corp.   4,775    203,415 
Express Scripts Holding Co. (*)   6,873    530,664 
F5 Networks, Inc. (*)   5,901    1,017,627 
Facebook, Inc., Class A (*)   8,734    1,697,191 
FactSet Research Systems, Inc.   2,041    404,322 
Fifth Third Bancorp   5,506    158,022 
Fiserv, Inc. (*)   10,904    807,877 
Five Below, Inc. (*)   6,150    600,916 
Graco, Inc.   4,982    225,286 
HCA Healthcare, Inc.   1,938    198,839 
HollyFrontier Corp.   2,827    193,452 
Honeywell International, Inc.   17,831    2,568,556 
HP, Inc.   9,663    219,253 
Humana, Inc.   5,890    1,753,041 
Huntsman Corp.   6,502    189,858 
IDEXX Laboratories, Inc. (*)   1,991    433,919 
Insperity, Inc.   3,456    329,184 
Intel Corp.   67,975    3,379,037 
Intercontinental Exchange, Inc.   20,485    1,506,672 
Intuit, Inc.   4,370    892,813 
IPG Photonics Corp. (*)   1,743    384,558 
IQVIA Holdings, Inc. (*)   17,282    1,725,089 
j2 Global, Inc.   2,671    231,335 
Jabil, Inc.   8,315    229,993 
Johnson & Johnson   22,917    2,780,749 
Jones Lang LaSalle, Inc.   4,316    716,413 
JPMorgan Chase & Co.   22,998    2,396,392 
Kimberly-Clark Corp.   9,604    1,011,685 
Kohl’s Corp.   3,468    252,817 
Koppers Holdings, Inc. (*)   3,082    118,195 
L Brands, Inc.   3,074    113,369 
Lam Research Corp.   1,473    254,608 


 

The accompanying notes are an integral part of these financial statements.

Semi-Annual Report  27

 

 

 

Description  Shares   Fair
Value		 
         
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
         
Lamb Weston Holdings, Inc.   4,124   $282,535 
Las Vegas Sands Corp.   5,810    443,652 
Lear Corp.   1,630    302,870 
Lockheed Martin Corp.   9,328    2,755,771 
Lowe’s Cos., Inc.   2,128    203,373 
LPL Financial Holdings, Inc.   6,698    438,987 
Lululemon Athletica, Inc. (*)   2,022    252,447 
Marathon Petroleum Corp.   2,588    181,574 
Marsh & McLennan Cos., Inc.   11,502    942,819 
MasterCard, Inc., Class A   15,013    2,950,355 
Maxim Integrated Products, Inc.   10,227    599,916 
McGrath RentCorp   4,214    266,620 
Merck & Co., Inc.   6,267    380,407 
Micron Technology, Inc. (*)   18,795    985,610 
Microsoft Corp.   35,355    3,486,357 
Morgan Stanley   4,841    229,463 
Motorola Solutions, Inc.   8,540    993,800 
NetApp, Inc.   3,394    266,531 
Newfield Exploration Co. (*)   18,495    559,474 
Newmont Mining Corp.   5,756    217,059 
Nordstrom, Inc.   4,769    246,939 
Northrop Grumman Corp.   7,345    2,260,056 
NVIDIA Corp.   4,087    968,210 
NVR, Inc. (*)   59    175,251 
Omnicom Group, Inc.   26,749    2,040,146 
Oracle Corp.   7,548    332,565 
Palo Alto Networks, Inc. (*)   4,661    957,696 
Park Hotels & Resorts, Inc. REIT   7,744    237,199 
Paychex, Inc.   10,768    735,993 
PayPal Holdings, Inc. (*)   2,106    175,367 
PBF Energy, Inc.   4,424    185,498 
PepsiCo, Inc.   5,757    626,765 
Pfizer, Inc.   7,971    289,188 
PG&E Corp.   7,137    303,751 
Philip Morris International, Inc.   18,355    1,481,983 
Pinnacle West Capital Corp.   5,064    407,956 
PotlatchDeltic Corp. REIT   3,593    182,704 
Prudential Financial, Inc.   3,149    294,463 
Radian Group, Inc.   8,422    136,605 
Raytheon Co.   4,867    940,207 
Red Hat, Inc. (*)   9,058    1,217,123 
Regions Financial Corp.   14,460    257,099 
Republic Services, Inc.   14,838    1,014,326 
Rockwell Automation, Inc.   4,800    797,904 
Ross Stores, Inc.   39,446    3,343,048 
Royal Caribbean Cruises, Ltd.   6,099    631,856 
Description  Shares   Fair
Value		 
         
Ryman Hospitality Properties, Inc. REIT   12,098   $1,005,949 
S&P Global, Inc.   9,427    1,922,071 
Sabra Health Care REIT, Inc.   5,812    126,295 
Schlumberger, Ltd.   16,285    1,091,584 
Seagate Technology PLC   9,365    528,842 
Simon Property Group, Inc. REIT   19,162    3,261,181 
Snap-on, Inc.   4,980    800,386 
Starbucks Corp.   55,132    2,693,198 
Sturm Ruger & Co., Inc.   3,973    222,488 
Sysco Corp.   35,172    2,401,896 
T-Mobile US, Inc. (*)   1,838    109,820 
TE Connectivity, Ltd.   2,043    183,993 
Teradyne, Inc.   14,210    540,975 
Texas Instruments, Inc.   30,197    3,329,219 
The Boeing Co.   12,138    4,072,420 
The Charles Schwab Corp.   22,615    1,155,626 
The Chemours Co.   4,185    185,647 
The Coca-Cola Co.   39,620    1,737,733 
The Estee Lauder Cos., Inc., Class A   13,541    1,932,165 
The Gap, Inc.   6,186    200,365 
The Home Depot, Inc.   3,008    586,861 
The Procter & Gamble Co.   29,099    2,271,468 
The TJX Cos., Inc.   25,670    2,443,271 
The Walt Disney Co.   10,584    1,109,309 
Thermo Fisher Scientific, Inc.   7,120    1,474,837 
U.S. Silica Holdings, Inc.   5,765    148,103 
United Continental Holdings, Inc. (*)   4,843    337,702 
United Rentals, Inc. (*)   2,450    361,669 
United Technologies Corp.   7,305    913,344 
UnitedHealth Group, Inc.   11,199    2,747,563 
Unum Group   7,910    292,591 
USANA Health Sciences, Inc. (*)   2,167    249,855 
Varian Medical Systems, Inc. (*)   3,340    379,825 
Verizon Communications, Inc.   51,781    2,605,102 
Vertex Pharmaceuticals, Inc. (*)   1,153    195,964 
Virtu Financial, Inc., Class A   7,308    194,027 
Visa, Inc., Class A   23,594    3,125,025 
Vistra Energy Corp. (*)   9,114    215,637 
Walgreens Boots Alliance, Inc.   8,965    538,034 
Waste Management, Inc.   16,330    1,328,282 
Welbilt, Inc. (*)   57,660    1,286,395 
Worldpay, Inc., Class A (*)   22,255    1,820,014 
WW Grainger, Inc.   5,575    1,719,330 
Xcel Energy, Inc.   6,040    275,907 
Zoetis, Inc.   27,913    2,377,908 
         171,834,834 
Total Common Stocks
(Cost $277,770,951)		        300,908,175 


 

The accompanying notes are an integral part of these financial statements.

 

28  Semi-Annual Report

 

 

 

Description  Security
Currency		  Principal
Amount
(000)		  Fair
Value		 
            
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
            
Corporate Bonds  |  6.3%           
            
Australia  |  0.3%           
Telstra Corp., Ltd.,
4.000%, 09/16/22		  AUD   900   $684,439 
Toyota Finance Australia, Ltd.,
4.250%, 05/15/19		  AUD   422    316,903 
            1,001,342 
Belgium  |  0.3%             
Anheuser-Busch InBev Finance, Inc.,
2.650%, 02/01/21		  USD   1,030    1,015,587 
              
Canada  |  0.3%             
The Toronto-Dominion Bank:             
2.250%, 11/05/19  USD   665    659,831 
2.621%, 12/22/21  CAD   805    610,585 
            1,270,416 
Denmark  |  0.2%             
Carlsberg Breweries A/S,
2.500%, 05/28/24		  EUR   755    960,636 
              
France  |  0.2%             
Orange SA,
5.375%, 07/08/19		  USD   973    996,659 
              
Germany  |  0.2%             
BMW Finance NV,
0.875%, 08/16/22		  GBP   680    867,743 
              
Mexico  |  0.2%             
America Movil SAB de CV,
6.450%, 12/05/22		  MXN   15,300    706,399 
              
Netherlands  |  0.1%             
Bank Nederlandse Gemeenten NV,
5.000%, 09/16/20		  NZD   647    460,440 
              
New Zealand  |  0.2%             
Fonterra Cooperative Group, Ltd.,
5.500%, 02/26/24		  AUD   1,000    816,490 
Description  Security
Currency		  Principal
Amount
(000)		  Fair
Value		 
            
Spain  |  0.2%           
Iberdrola International BV,
1.125%, 04/21/26		  EUR   600   $692,193 
              
Switzerland  |  0.1%             
ABB Finance USA, Inc.,
3.375%, 04/03/23		  USD   545    542,079 
              
United Kingdom  |  0.3%             
Rolls-Royce PLC,
6.750%, 04/30/19		  GBP   822    1,134,505 
              
United States  |  3.7%             
Amazon.com, Inc.,
3.800%, 12/05/24		  USD   780    795,492 
Apple, Inc.:             
2.850%, 02/23/23  USD   162    159,419 
3.850%, 05/04/43  USD   940    899,457 
Bank of America Corp.,
3.499%, 05/17/22 (§)		  USD   985    984,414 
Caterpillar Financial Services Corp.,
2.550%, 11/29/22		  USD   1,475    1,424,151 
Citigroup, Inc.,
3.570% (BBSW 3 Month + 1.550%), 05/04/21 (§)		  AUD   1,053    789,777 
John Deere Canada Funding, Inc.,
2.050%, 09/17/20		  CAD   1,205    905,237 
John Deere Capital Corp.,
2.300%, 09/16/19		  USD   390    387,656 
Johnson & Johnson,
3.625%, 03/03/37		  USD   940    917,932 
JPMorgan Chase & Co.,
4.500%, 01/24/22		  USD   665    687,711 
Microsoft Corp.,
4.450%, 11/03/45		  USD   1,198    1,286,651 
Morgan Stanley,
3.625%, 01/20/27		  USD   830    798,520 
NIKE, Inc.,
2.375%, 11/01/26		  USD   885    805,265 
Starbucks Corp.,
3.100%, 03/01/23		  USD   480    470,421 
The Goldman Sachs Group, Inc.:             
5.200%, 12/17/19  NZD   785    548,497 
3.625%, 01/22/23  USD   845    839,177 


 

The accompanying notes are an integral part of these financial statements.

Semi-Annual Report  29

 

 

 

Description  Security
Currency		  Principal
Amount
(000)		  Fair
Value		 
            
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
            
The Home Depot, Inc.,
3.750%, 02/15/24		  USD   945   $965,076 
United Parcel Service, Inc.,
2.350%, 05/16/22		  USD   480    465,573 
Wells Fargo & Co.,
3.365% (BBSW 3 Month + 1.320%), 07/27/21 (§)		  AUD   855    638,060 
Wells Fargo Canada Corp.,
3.040%, 01/29/21		  CAD   585    448,131 
            15,216,617 
Total Corporate Bonds
(Cost $26,374,907)		           25,681,106 
              
Foreign Government Obligations  |  11.0%
              
Australia  |  0.6%             
Queensland Treasury Corp.:             
5.500%, 06/21/21  AUD   1,070    864,155 
3.000%, 03/22/24  AUD   1,195    900,300 
Western Australian Treasury Corp.,
6.000%, 10/16/23		  AUD   1,030    889,021 
            2,653,476 
Bermuda  |  0.5%             
Government of Bermuda,
4.854%, 02/06/24		  USD   1,890    1,939,509 
              
Canada  |  2.2%             
City of Vancouver,
2.900%, 11/20/25		  CAD   415    317,043 
Province of British Columbia,
4.700%, 06/18/37		  CAD   945    907,190 
Province of Ontario:             
2.450%, 06/29/22  USD   955    930,992 
1.950%, 01/27/23  CAD   1,610    1,198,318 
Province of Quebec:             
3.500%, 07/29/20  USD   1,625    1,647,783 
1.650%, 03/03/22  CAD   540    401,415 
3.000%, 09/01/23  CAD   2,400    1,866,127 
2.500%, 04/20/26  USD   1,755    1,668,491 
            8,937,359 
Description  Security
Currency		  Principal
Amount
(000)		  Fair
Value		 
            
Cayman Islands  |  0.1%           
Cayman Islands Government Bonds,
5.950%, 11/24/19		  USD   545   $559,988 
              
Chile  |  0.6%             
Bonos de la Tesoreria de la Republica en pesos,
4.500%, 03/01/26		  CLP   610,000    928,688 
Republic of Chile,
3.125%, 01/21/26		  USD   1,415    1,354,863 
            2,283,551 
Czech Republic  |  0.6%             
Czech Republic:             
1.770% (PRIBOR 1Year + 0.650%), 04/18/23 (§)  CZK   27,180    1,277,542 
2.500%, 08/25/28  CZK   27,750    1,280,118 
            2,557,660 
France  |  0.5%             
Government of France,
1.750%, 06/25/39		  EUR   1,480    1,874,655 
              
Hungary  |  0.4%             
Hungary, 6.375%, 03/29/21  USD   646    689,605 
Hungary Government Bonds,
3.000%, 10/27/27		  HUF   280,800    943,775 
            1,633,380 
Japan  |  0.3%             
Japan International Cooperation Agency:             
1.875%, 11/13/19  USD   820    808,250 
2.125%, 10/20/26  USD   500    458,032 
            1,266,282 
Mexico  |  0.7%             
Mexican Bonos,
6.500%, 06/09/22		  MXN   41,260    1,991,061 
United Mexican States,
6.750%, 02/06/24		  GBP   640    1,008,289 
            2,999,350 
New Zealand  |  0.5%             
New Zealand Government Bonds:             
6.000%, 05/15/21  NZD   1,865    1,387,936 
4.500%, 04/15/27  NZD   1,090    791,904 
            2,179,840 


 

The accompanying notes are an integral part of these financial statements.

 

30  Semi-Annual Report

 

 

 

Description  Security
Currency		  Principal
Amount
(000)		  Fair
Value		 
            
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
            
Norway  |  0.9%           
City of Oslo Norway:             
4.600%, 06/22/20  NOK   3,000   $390,734 
2.600%, 11/12/25  NOK   4,000    499,619 
Kommunalbanken AS,
1.375%, 10/26/20 (#)		  USD   800    775,224 
Oslo Kommune:             
3.550%, 02/12/21  NOK   3,000    386,661 
3.650%, 11/08/23  NOK   3,000    396,875 
2.350%, 09/04/24  NOK   9,000    1,111,304 
            3,560,417 
Panama  |  0.5%             
Republic of Panama,
4.000%, 09/22/24		  USD   1,870    1,886,363 
              
Poland  |  0.7%             
Poland Government Bonds:             
1.810% (WIBOR 6 Month), 01/25/21 (§)  PLN   3,780    1,015,135 
2.500%, 07/25/26  PLN   7,367    1,882,753 
            2,897,888 
Romania  |  0.2%             
Romania Government Bonds,
2.875%, 10/28/24		  EUR   687    878,495 
              
Singapore  |  0.8%             
Singapore Government Bonds,
3.000%, 09/01/24		  SGD   4,085    3,106,099 
              
Spain  |  0.2%             
Spain Government Bonds,
1.600%, 04/30/25		  EUR   738    908,860 
              
Sweden  |  0.2%             
Kommuninvest I Sverige AB,
1.500%, 04/23/19 (#)		  USD   700    694,335 
              
United Kingdom  |  0.5%             
United Kingdom Gilt:             
1.750%, 09/07/37  GBP   740    980,223 
1.500%, 07/22/47  GBP   785    979,243 
            1,959,466 
Total Foreign Government Obligations
(Cost $46,157,227)		    44,776,973 
Description  Security
Currency		  Principal
Amount
(000)		  Fair
Value		 
            
Quasi Government Bonds  |  1.3%
              
Canada  |  0.4%             
Canada Housing Trust No. 1,
2.400%, 12/15/22		  CAD   1,120   $853,812 
Export Development Canada,
1.800%, 09/01/22		  CAD   1,305    973,432 
            1,827,244 
Germany  |  0.5%             
KFW,
1.125%, 12/23/19		  GBP   1,415    1,875,085 
              
Mexico  |  0.2%             
Nacional Financiera SNC,
3.375%, 11/05/20		  USD   985    978,843 
              
Singapore  |  0.2%             
Temasek Financial I, Ltd.,
4.300%, 10/25/19		  USD   795    809,450 
              
Total Quasi Government Bonds
(Cost $5,617,723)		           5,490,622 
              
Supranational Bonds  |  1.4%             
African Development Bank,
2.375%, 09/23/21		  USD   955    940,074 
Asian Development Bank:             
1.875%, 04/12/19  USD   780    776,972 
1.000%, 12/15/22  GBP   800    1,047,966 
2.125%, 03/19/25  USD   1,200    1,137,183 
European Investment Bank,
1.125%, 09/16/21 (#)		  CAD   1,285    943,980 
International Bank for Reconstruction & Development,
3.500%, 01/22/21		  NZD   305    211,863 
International Finance Corp.,
3.625%, 05/20/20		  NZD   845    585,962 
              
Total Supranational Bonds
(Cost $5,828,026)		           5,644,000 
              
US Government Securities  |  0.2%             
Federal National Mortgage Association,
2.625%, 09/06/24
(Cost $847,479)		  USD   855    840,479 


 

The accompanying notes are an integral part of these financial statements.

Semi-Annual Report  31

 

 

 

Description  Security
Currency		  Principal
Amount
(000)		  Fair
Value		 
            
Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)
            
US Municipal Bonds  |  0.4%           
            
California  |  0.3%           
California State Build America Bonds,
7.500%, 04/01/34		  USD   940   $1,320,221 
              
Georgia  |  0.1%             
Georgia State Build America Bonds Series B,
2.380%, 02/01/27		  USD   350    327,155 
              
Pennsylvania  |  0.0%             
Pennsylvania State Build America Bonds Third Series B,
5.850%, 07/15/30		  USD   50    52,429 
              
Wisconsin  |  0.0%             
Wisconsin State Build America Bonds Series D,
5.400%, 05/01/28		  USD   175    182,809 
              
Total US Municipal Bonds
(Cost $1,968,578)		           1,882,614 
              
US Treasury Securities  |  3.0%             
US Treasury Notes:             
1.125%, 03/31/20  USD   990    966,449 
1.750%, 05/15/23  USD   2,945    2,812,590 
2.125%, 05/15/25  USD   3,100    2,965,949 
1.625%, 05/15/26  USD   2,172    1,986,532 
3.125%, 11/15/41  USD   3,368    3,456,410 
              
Total US Treasury Securities
(Cost $12,370,982)		           12,187,930 
Description  Shares  
Fair
Value		 
         
Rights  |  0.0%          
           
Italy  |  0.0%          
Intesa Sanpaolo SpA, Expires 07/17/18 (‡)
(Cost $0)		   452,244   $0 
           
Short-Term Investments  |  2.8%          
State Street Institutional Treasury Money Market Fund, Premier Class, 1.74% (7 day yield)
(Cost $11,220,505)		   11,220,505    11,220,505 
           
Total Investments | 100.3%
(Cost $388,156,378) (¤)		       $408,632,404 
           
Liabilities in Excess of Cash and Other Assets | (0.3)%        (1,370,567)
           
Net Assets  |  100.0%       $407,261,837 


 

The accompanying notes are an integral part of these financial statements.

 

32  Semi-Annual Report

 

 

 

Lazard Retirement Global Dynamic Multi-Asset Portfolio (continued)

 

Forward Currency Contracts open at June 30, 2018:

 

Currency
Purchased		  Quantity  Currency
Sold		  Quantity  Counterparty  Settlement
Date		  Unrealized
Appreciation		   Unrealized
Depreciation		 
                              
AUD  81,526    USD  60,300    CIT  08/23/18  $43   $— 
AUD  190,308    USD  140,000    HSB  08/23/18   861    — 
CAD  1,118,331    USD  869,147    HSB  08/23/18   —    17,739 
CAD  1,119,396    USD  844,700    HSB  08/23/18   7,518    — 
CHF  531,939    USD  538,712    HSB  08/23/18   747    — 
EUR  401,044    USD  464,300    CIT  07/19/18   4,576    — 
EUR  1,838,322    USD  2,204,400    CIT  07/19/18   —    55,148 
EUR  3,151,516    USD  3,916,705    CIT  07/19/18   —    232,147 
EUR  492,256    USD  570,000    HSB  07/19/18   5,515    — 
EUR  790,301    USD  979,246    HSB  07/19/18   —    55,275 
EUR  1,669,939    USD  1,973,000    HSB  07/19/18   —    20,611 
EUR  1,996,394    USD  2,359,857    HSB  07/19/18   —    25,798 
EUR  10,067,697    USD  12,512,114    HSB  07/19/18   —    741,587 
EUR  466,578    USD  553,900    HSB  08/23/18   —    6,991 
EUR  3,660,280    USD  4,294,460    HSB  09/28/18   8,029    — 
GBP  1,140,521    USD  1,535,700    CIT  08/23/18   —    27,093 
GBP  93,688    USD  126,217    HSB  08/23/18   —    2,292 
GBP  113,751    USD  153,400    HSB  08/23/18   —    2,938 
GBP  285,237    USD  379,744    SSB  09/28/18   —    1,853 
JPY  28,285,955    USD  256,800    CIT  07/19/18   —    1,046 
JPY  128,595,880    USD  1,161,923    CIT  07/19/18   807    — 
JPY  1,121,811,322    USD  10,537,892    CIT  07/19/18   —    394,765 
JPY  18,803,697    USD  169,892    HSB  07/19/18   126    — 
JPY  44,143,120    USD  400,000    HSB  07/19/18   —    869 
JPY  78,159,825    USD  720,300    HSB  07/19/18   —    13,599 
JPY  615,018,521    USD  5,776,612    HSB  07/19/18   —    215,774 
JPY  49,400,266    USD  447,800    HSB  08/23/18   —    78 
JPY  167,035,648    USD  1,529,897    HSB  09/28/18   —    12,020 
JPY  66,588,262    USD  609,699    SSB  09/28/18   —    4,602 
KRW  1,172,331,485    USD  1,089,527    HSB  09/04/18   —    35,746 
NZD  148,509    USD  100,500    CIT  08/23/18   89    — 
NZD  454,764    USD  314,492    HSB  08/23/18   —    6,469 
SEK  4,990,792    USD  577,296    CIT  08/23/18   —    17,967 
SGD  502,583    USD  374,981    CIT  08/23/18   —    5,732 
USD  165,039    AUD  219,759    CIT  08/23/18   2,379    — 
USD  2,725,571    AUD  3,627,908    HSB  08/23/18   40,289    — 
USD  1,451,461    AUD  1,951,859    HSB  09/28/18   6,614    — 
USD  1,063,988    AUD  1,416,180    JPM  08/23/18   15,768    — 
USD  325,238    AUD  437,148    SSB  09/28/18   1,643    — 
USD  707,303    CAD  939,581    CIT  08/23/18   —    8,019 
USD  1,900,516    CAD  2,447,770    HSB  08/23/18   36,981    — 
USD  4,026,020    CAD  5,180,280    HSB  08/23/18   82,171    — 
USD  2,865,748    CAD  3,802,103    HSB  09/28/18   —    30,588 
USD  1,398,250    CAD  1,798,494    JPM  08/23/18   29,022    — 

 

The accompanying notes are an integral part of these financial statements.

 

Semi-Annual Report  33

 

 

 

Lazard Retirement Global Dynamic Multi-Asset Portfolio (concluded)

 

Currency
Purchased		  Quantity  Currency
Sold		  Quantity  Counterparty  Settlement
Date		  Unrealized
Appreciation		   Unrealized
Depreciation		 
                             
USD  342,993    CAD  455,213    SSB  09/28/18  $—   $3,776 
USD  897,903    CLP  555,694,358    CIT  08/06/18   47,346    — 
USD  388,302    CZK  8,528,246    CIT  08/29/18   3,676    — 
USD  878,976    CZK  19,293,000    HSB  08/29/18   8,857    — 
USD  1,293,441    CZK  28,407,783    JPM  08/29/18   12,242    — 
USD  958,300    EUR  774,703    CIT  07/19/18   52,565    — 
USD  939,859    EUR  777,000    HSB  07/19/18   31,439    — 
USD  971,200    EUR  805,127    HSB  07/19/18   29,896    — 
USD  1,698,172    EUR  1,436,621    HSB  07/19/18   18,564    — 
USD  1,006,776    GBP  751,886    CIT  08/23/18   12,230    — 
USD  411,398    GBP  286,495    HSB  07/19/18   33,025    — 
USD  1,218,126    GBP  904,191    HSB  08/23/18   22,121    — 
USD  2,076,750    GBP  1,552,339    HSB  08/23/18   23,417    — 
USD  163,363    GBP  121,258    JPM  08/23/18   2,971    — 
USD  1,622,376    HKD  12,715,543    SSB  09/28/18   —    666 
USD  74,908    HUF  21,210,034    JPM  08/23/18   —    539 
USD  103,061    HUF  28,990,427    JPM  08/23/18   —    61 
USD  903,046    HUF  243,326,596    JPM  08/23/18   37,505    — 
USD  680,816    ILS  2,434,120    HSB  09/28/18   11,382    — 
USD  281,500    KRW  315,758,550    HSB  09/04/18   —    2,328 
USD  369,101    MXN  7,451,159    CIT  08/23/18   —    3,103 
USD  132,060    MXN  2,669,771    HSB  08/23/18   —    1,301 
USD  234,891    MXN  4,739,873    HSB  08/23/18   —    1,877 
USD  423,700    MXN  8,565,223    HSB  08/23/18   —    4,155 
USD  826,900    MXN  16,801,781    HSB  08/23/18   —    12,391 
USD  388,066    MXN  7,844,008    JPM  08/23/18   —    3,762 
USD  916,804    NOK  7,376,503    CIT  08/23/18   9,264    — 
USD  253,199    NOK  2,054,011    HSB  08/23/18   492    — 
USD  1,681,267    NOK  13,518,985    HSB  08/23/18   18,011    — 
USD  2,827,915    NOK  22,793,221    HSB  09/28/18   19,618    — 
USD  2,908,171    NZD  4,205,294    HSB  08/23/18   59,816    — 
USD  576,206    NZD  833,046    JPM  08/23/18   11,962    — 
USD  270,598    PLN  994,387    HSB  08/23/18   4,922    — 
USD  2,009,914    PLN  7,329,010    HSB  08/23/18   51,780    — 
USD  557,911    PLN  2,035,365    JPM  08/23/18   14,111    — 
USD  189,591    SEK  1,639,038    CIT  08/23/18   5,901    — 
USD  708,107    SEK  6,208,094    HSB  09/28/18   10,381    — 
USD  3,644,211    SGD  4,884,299    CIT  08/23/18   55,710    — 
USD  1,192,917    SGD  1,616,677    HSB  09/28/18   4,149    — 
Total gross unrealized appreciation/depreciation on Forward Currency Contracts $856,531   $ 1,970,705  

 

The accompanying notes are an integral part of these financial statements.

 

34  Semi-Annual Report

 

Lazard Retirement Series, Inc. Notes to Portfolios of Investments June 30, 2018 (unaudited)

 

 

(*) 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 8 in the Notes to Financial Statements.
   
(§) 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 June 30, 2018.
   
(#) Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.” At June 30, 2018, the percentage of net assets for the following Portfolio was as follows:
   
Portfolio   Percentage of
Net Assets
     
Global Dynamic Multi-Asset   0.6%
     
(¤) 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
BBSW — Bank Bill Swap Reference Rate
GDR — Global Depositary Receipt
PJSC — Public Joint Stock Company
PRIBOR — Prague Interbank Offered Rate
REIT — Real Estate Investment Trust
WIBOR — Warsaw Interbank Offered Rate

 

Currency Abbreviations:

AUD — Australian Dollar   JPY — Japanese Yen
CAD — Canadian Dollar   KRW — South Korean Won
CHF — Swiss Franc   MXN — Mexican New Peso
CLP — Chilean Peso   NOK — Norwegian Krone
CZK — Czech Koruna   NZD — New Zealand Dollar
EUR — Euro   PLN — Polish Zloty
GBP — British Pound Sterling   SEK — Swedish Krone
HKD — Hong Kong Dollar   SGD — Singapore Dollar
HUF — Hungarian Forint   USD — United States Dollar
ILS — Israeli Shekel        

 

Counterparty Abbreviations:

CIT — Citibank NA
HSB — HSBC Bank USA NA
JPM — JPMorgan Chase Bank NA
SSB — State Street Bank and Trust Co.

 

The accompanying notes are an integral part of these financial statements.

 

Semi-Annual Report  35

 

 

 

Portfolio holdings by industry (as a percentage of net assets), for those Portfolios previously presented by country:

 

Industry†  Lazard
Retirement
International
Equity
Portfolio		  Lazard
Retirement
Emerging
Markets Equity
Portfolio		  Lazard
Retirement Global
Dynamic
Multi-Asset
Portfolio
                  
Aerospace & Defense   1.8%   —%   3.4%  
Air Freight & Logistics   —    —    0.1   
Airlines   1.5    —    1.0   
Auto Components   2.6    1.4    0.8   
Automobiles   1.7    3.3    0.5   
Banks   8.4    24.9    7.0   
Beverages   3.9    1.2    1.9   
Biotechnology   2.0    —    1.9   
Building Products   2.9    —    0.2   
Capital Markets   1.3    —    3.1   
Chemicals   2.1    —    1.6   
Commercial Services & Suppliers   —    —    0.6   
Communications Equipment   —    —    1.0   
Construction & Engineering   2.0    —    0.1   
Construction Materials   —    2.2    —   
Consumer Finance   —    —    1.0   
Containers & Packaging   —    —    0.3   
Distributors   —    1.0    —   
Diversified Financial Services   —    —    0.7   
Diversified Telecommunication Services   2.3    2.4    1.5   
Electric Utilities   1.4    —    1.5   
Electrical Equipment   1.1    —    0.6   
Electronic Equipment, Instruments & Components   —    2.3    0.7   
Energy Equipment & Services   0.8    —    0.3   
Equity Real Estate Investment Trusts (REITs)   —    —    1.3   
Food & Staples Retailing   —    2.6    1.3   
Food Products   —    —    0.6   
Gas Utilities   —    1.3    0.6   
Health Care Equipment & Supplies   2.2    —    0.6   
Health Care Providers & Services   1.4    0.7    2.4   
Hotels, Restaurants & Leisure   2.0    —    2.3   
Household Durables   1.1    1.3    0.8   
Household Products   —    0.7    0.9   
Independent Power & Renewable Electricity Producers   —    —    0.1   
Industrial Conglomerates   —    1.9    0.7   
Insurance   7.8    2.9    3.7   
Internet & Catalog Retail   —    —    0.8   
Internet Software & Services   —    4.1    1.3   
IT Services   2.6    5.8    3.7   
Leisure Products   1.5    —    0.4   
Life Sciences Tools & Services   —    —    0.8   
Machinery   2.3    1.7    1.2   
Media   1.3    —    1.6   
Metals & Mining   2.8    2.5    0.9   

 

The accompanying notes are an integral part of these financial statements.

 

36  Semi-Annual Report

 

 

 

Industry†  Lazard
Retirement
International
Equity
Portfolio		  Lazard
Retirement
Emerging
Markets Equity
Portfolio		  Lazard
Retirement Global
Dynamic
Multi-Asset
Portfolio
                  
Multiline Retail   2.6%   0.7%   0.4%  
Multi-Utilities   —    —    0.4   
Oil, Gas & Consumable Fuels   6.8    8.2    3.9   
Paper & Forest Products   —    —    0.2   
Personal Products   3.3    0.9    1.3   
Pharmaceuticals   3.1    —    3.5   
Professional Services   2.8    —    0.9   
Real Estate Management & Development   2.4    —    1.7   
Road & Rail   1.0    —    0.8   
Semiconductors & Semiconductor Equipment   0.9    7.3    2.6   
Software   4.1    —    2.7   
Specialty Retail   0.1    0.6    2.3   
Technology Hardware, Storage & Peripherals   —    4.5    1.6   
Textiles, Apparel & Luxury Goods   —    —    0.5   
Tobacco   2.2    1.5    0.7   
Trading Companies & Distributors   3.4    —    1.1   
Transportation Infrastructure   —    0.9    0.1   
Water Utilities   —    0.5    —   
Wireless Telecommunication Services   2.4    8.6    1.0   
Subtotal   95.9    97.9    81.5   
Foreign Government Obligations   —    —    11.0   
Supranational Bonds   —    —    1.4   
US Government Securities   —    —    0.2   
US Municipal Bonds   —    —    0.4   
US Treasury Securities   —    —    3.0   
Short-Term Investments   3.8    2.2    2.8   
Total Investments   99.7%   100.1%   100.3%  

 

†  Industry classifications may be different than those used for compliance monitoring purposes.

 

The accompanying notes are an integral part of these financial statements.

 

Semi-Annual Report  37

 

Lazard Retirement Series, Inc. Statements of Assets and Liabilities (unaudited)

 

 

June 30, 2018  Lazard
Retirement
US Strategic
Equity Portfolio		  Lazard
Retirement
US Small-Mid Cap
Equity Portfolio		  
             
ASSETS            
Investments in securities, at fair value    $9,237,886     $64,903,948   
Foreign currency, at fair value     —      —   
Receivables for:                
Dividends and interest     7,802      80,088   
Investments sold     45,344      177,829   
Capital stock sold     48,105      168,697   
Amount due from Investment Manager (Note 3)     2,590      —   
Gross unrealized appreciation on forward currency contracts     —      —   
Prepaid expenses     3,353      —   
Total assets     9,345,080      65,330,562   
 
LIABILITIES                
Due to custodian     —      —   
Payables for:                
Management fees     —      38,339   
Accrued custodian fees     23,748      28,363   
Accrued distribution fees     1,941      13,509   
Accrued professional services     20,488      21,022   
Foreign capital gains taxes     —      —   
Investments purchased     —      —   
Capital stock redeemed     43,164      23,914   
Gross unrealized depreciation on forward currency contracts     —      —   
Other accrued expenses and payables     3,296      6,894   
Total liabilities     92,637      132,041   
Net assets    $9,252,443     $65,198,521   
 
NET ASSETS                
Paid in capital    $6,994,714     $50,515,315   
Undistributed (Distributions in excess of) net investment income (loss)     45,491      38,900   
Accumulated net realized gain (loss)     779,916      7,751,426   
Net unrealized appreciation (depreciation) on:                
Investments     1,432,322      6,892,880   
Foreign currency translations     —      —   
Forward currency contracts     —      —   
Net assets    $9,252,443     $65,198,521   
 
Service Shares                
Net assets    $9,252,443     $65,198,521   
Shares of capital stock outstanding*     692,531      7,530,220   
Net asset value, offering and redemption price per share    $13.36     $8.66   
 
Investor Shares                
Net assets     —      —   
Shares of capital stock outstanding*     —      —   
Net asset value, offering and redemption price per share     —      —   
 
Cost of investments in securities    $7,805,564     $58,011,068   
Cost of foreign currency    $—     $—   
* $0.001 par value, 2,450,000,000 shares authorized for the Portfolios in total.                

 

The accompanying notes are an integral part of these financial statements.                      

 

38  Semi-Annual Report

 

 

 

  Lazard
Retirement
International
Equity Portfolio		  Lazard
Retirement
Emerging Markets
Equity Portfolio		  Lazard
Retirement
Global Dynamic
Multi-Asset Portfolio		  
     
  $204,741,601   $1,023,094,317   $408,632,404   
   446,708    1,284,371    77,004   
     
   1,373,993    5,542,009    1,327,946   
   648,462    1,117,830    3,720,761   
   280,153    831,568    464,990   
   —    —    —   
   —    —    856,531   
   21,596    —    —   
   207,512,513    1,031,870,095    415,079,636   
     
   302,177    —    —   
     
   126,108    865,650    233,852   
   55,288    453,687    149,306   
   41,500    173,866    82,956   
   25,998    42,339    38,470   
   —    3,675,702    —   
   1,524,338    2,405,096    5,194,970   
   108,788    2,098,801    115,015   
   —    —    1,970,705   
   16,867    126,146    32,525   
   2,201,064    9,841,287    7,817,799   
  $205,311,449   $1,022,028,808   $407,261,837   
     
  $171,751,051   $1,003,367,775   $365,035,930   
   3,053,424    11,297,926    2,791,152   
   5,612,033    (22,934,314)   20,091,436   
   
   24,902,444    30,366,324    20,476,026   
   (7,503)   (68,903)   (18,533)  
   —    —    (1,114,174)  
  $205,311,449   $1,022,028,808   $407,261,837   
     
  $205,311,449   $825,147,145   $407,261,837   
   19,539,420    39,786,386    30,361,074   
  $10.51   $20.74   $13.41   
     
   —   $196,881,663    —   
   —    9,595,062    —   
   —   $20.52    —   
     
  $179,839,157   $989,052,291   $388,156,378   
  $446,865   $1,285,583   $77,100   

 

Semi-Annual Report  39

 

Lazard Retirement Series, Inc. Statements of Operations (unaudited)

 

 

For the Six Months Ended June 30, 2018  Lazard
Retirement
US Strategic
Equity Portfolio		  Lazard
Retirement
US Small-Mid Cap
Equity Portfolio		  
   
Investment Income (Loss)            
   
Income                
Dividends    $86,167     $417,609   
Interest     —      —   
Total investment income*     86,167      417,609   
 
Expenses                
Management fees (Note 3)     33,070      243,430   
Distribution fees (Service Shares)     11,829      81,143   
Custodian fees     14,275      17,182   
Professional services     18,385      22,291   
Administration fees     592      4,057   
Shareholders’ reports     5,677      8,602   
Directors’ fees and expenses     2,639      3,580   
Shareholders’ services     6,401      6,557   
Other     814      1,145   
Total gross expenses     93,682      387,987   
Management fees waived and expenses reimbursed     (46,365)     (14,727)  
Total net expenses     47,317      373,260   
Net investment income (loss)     38,850      44,349   
 
Net Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions and Forward Currency Contracts                
Net realized gain (loss) on:                
Investments**     500,032      4,686,102   
Foreign currency transactions     —      —   
Forward currency contracts     —      —   
Total net realized gain (loss) on investments, foreign currency transactions and forward currency contracts     500,032      4,686,102   
Net change in unrealized appreciation (depreciation) on:                
Investments†     (257,432)     (2,168,570)  
Foreign currency translations     —      —   
Forward currency contracts     —      —   
Total net change in unrealized appreciation (depreciation) on investments, foreign currency translations and forward currency contracts     (257,432)     (2,168,570)  
Net realized and unrealized gain (loss) on investments, foreign currency transactions and forward currency contracts     242,600      2,517,532   
Net increase (decrease) in net assets resulting from operations    $281,450     $2,561,881   
* Net of foreign withholding taxes of    $116     $—   
** Net of foreign capital gains taxes of    $—     $—   
† Includes net change in unrealized appreciation (depreciation) of foreign capital gains taxes of    $—     $—   

 

The accompanying notes are an integral part of these financial statements.

 

40  Semi-Annual Report

 

 

 

  Lazard
Retirement
International
Equity Portfolio		  Lazard
Retirement
Emerging Markets
Equity Portfolio		  Lazard
Retirement
Global Dynamic
Multi-Asset Portfolio		  
     
  $3,907,450   $17,783,495   $3,729,827   
   —    —    1,139,859   
   3,907,450    17,783,495    4,869,686   
   
   806,922    5,803,476    1,577,096   
   268,974    1,159,735    492,842   
   36,337    273,400    92,979   
   45,955    103,089    51,020   
   13,449    71,920    24,642   
   14,190    66,503    23,169   
   6,045    21,554    8,605   
   6,550    17,375    6,934   
   2,922    8,725    3,531   
   1,201,344    7,525,777    2,280,818   
   (6,004)   —    (210,880)  
   1,195,340    7,525,777    2,069,938   
   2,712,110    10,257,718    2,799,748   
   
   6,120,584    31,746,032    18,426,340   
   (18,048)   (267,665)   32,354   
   —    —    1,241,052   
   
   6,102,536    31,478,367    19,699,746   
   
   (14,972,281)   (181,709,372)   (24,229,025)  
   (22,296)   (62,584)   (28,360)  
   —    —    (842,827)  
   
   (14,994,577)   (181,771,956)   (25,100,212)  
   
   (8,892,041)   (150,293,589)   (5,400,466)  
  $(6,179,931)  $(140,035,871)  $(2,600,718)  
  $442,287   $2,619,222   $264,151   
  $—   $7,772   $—   
  $—   $(3,548,084)  $—   

 

Semi-Annual Report  41

 

Lazard Retirement Series, Inc. Statements of Changes in Net Assets

 

 

   Lazard Retirement US Strategic Equity Portfolio  Lazard Retirement US Small-Mid Cap Equity Portfolio  
   Six Months Ended
June 30, 2018
(unaudited)		  Year Ended
December 31,
2017		  Six Months Ended
June 30, 2018
(unaudited)		  Year Ended
December 31,
2017		  
   
Increase (Decrease) in Net Assets                          
                           
Operations                          
Net investment income (loss)    $38,850   $82,899     $44,349   $60,436   
Net realized gain (loss) on investments, foreign currency transactions and forward currency contracts     500,032    1,078,806      4,686,102    7,517,861   
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and forward currency contracts     (257,432)   458,571      (2,168,570)   841,214   
Net increase (decrease) in net assets resulting from operations     281,450    1,620,276      2,561,881    8,419,511   
                           
Distributions to shareholders                          
From net investment income                          
Service Shares     —    (149,459)     —    (230,504)  
Investor Shares     —    —      —    —   
From net realized gains                          
Service Shares     —    (284,563)     —    (6,156,719)  
Net decrease in net assets resulting from distributions     —    (434,022)     —    (6,387,223)  
                           
Capital stock transactions                          
Net proceeds from sales                          
Service Shares     983,814    1,999,390      3,565,066    9,107,568   
Investor Shares     —    —      —    —   
Net proceeds from reinvestment of distributions                          
Service Shares     —    434,022      —    6,387,223   
Investor Shares     —    —      —    —   
Cost of shares redeemed                          
Service Shares     (1,843,025)   (4,227,255)     (7,797,000)   (16,136,589)  
Investor Shares     —    —      —    —   
Net increase (decrease) in net assets from capital stock transactions     (859,211)   (1,793,843)     (4,231,934)   (641,798)  
Total increase (decrease) in net assets     (577,761)   (607,589)     (1,670,053)   1,390,490   
Net assets at beginning of period     9,830,204    10,437,793      66,868,574    65,478,084   
Net assets at end of period*    $9,252,443   $9,830,204     $65,198,521   $66,868,574   
* Includes undistributed (distributions in excess of) net investment income (loss) of    $45,491   $6,641     $38,900   $(5,449)  
 
Shares issued and redeemed                          
                           
Service Shares                          
Shares outstanding at beginning of period     757,010    906,860      8,031,487    8,090,372   
Shares sold     73,959    160,592      421,455    1,102,955   
Shares issued to shareholders from reinvestment of distributions     —    33,683      —    790,116   
Shares redeemed     (138,438)   (344,125)     (922,722)   (1,951,956)  
Net increase (decrease)     (64,479)   (149,850)     (501,267)   (58,885)  
Shares outstanding at end of period     692,531    757,010      7,530,220    8,031,487   
 
Investor 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.

 

42  Semi-Annual Report

 

 

 

  Lazard Retirement International Equity Portfolio  Lazard Retirement Emerging Markets Equity Portfolio  Lazard Retirement Global Dynamic Multi-Asset Portfolio  
  Six Months Ended
June 30, 2018
(unaudited)		  Year Ended
December 31,
2017		  Six Months Ended
June 30, 2018
(unaudited)		  Year Ended
December 31,
2017		  Six Months Ended
June 30, 2018
(unaudited)		  Year Ended
December 31,
2017		  
     
  $2,712,110   $3,377,495   $10,257,718   $16,629,612   $2,799,748   $4,238,978   
     
   6,102,536    81,111,504    31,478,367    27,885,717    19,699,746    18,647,334   
     
   (14,994,577)   (23,520,836)   (181,771,956)   228,603,256    (25,100,212)   38,581,654   
     
   (6,179,931)   60,968,163    (140,035,871)   273,118,585    (2,600,718)   61,467,966   
     
   —    (5,235,528)   —    (15,335,733)   —    —   
   —    —    —    (4,580,560)   —    —   
     
   —    (46,926,172)   —    —    —    (20,127,755)  
   —    (52,161,700)   —    (19,916,293)   —    (20,127,755)  
     
   13,947,186    73,001,825    85,313,263    168,980,904    58,916,852    86,194,773   
   —    —    19,423,624    46,100,850    —    —   
     
   —    52,161,700    —    15,335,733    —    20,127,755   
   —    —    —    4,580,560    —    —   
     
   (23,762,403)   (565,677,666)   (90,368,918)   (325,859,757)   (33,262,052)   (56,741,278)  
   —    —    (33,532,077)   (48,566,540)   —    —   
     
   (9,815,217)   (440,514,141)   (19,164,108)   (139,428,250)   25,654,800    49,581,250   
   (15,995,148)   (431,707,678)   (159,199,979)   113,774,042    23,054,082    90,921,461   
   221,306,597    653,014,275    1,181,228,787    1,067,454,745    384,207,755    293,286,294   
  $205,311,449   $221,306,597   $1,022,028,808   $1,181,228,787   $407,261,837   $384,207,755   
     
  $3,053,424   $341,314   $11,297,926   $1,040,208   $2,791,152   $(8,596)  
     
   20,441,925    56,443,790    39,964,765    46,868,834    28,474,543    24,807,688   
   1,279,737    5,964,005    3,651,336    7,889,712    4,333,392    6,565,631   
     
   —    4,806,678    —    670,092    —    1,499,459   
   (2,182,242)   (46,772,548)   (3,829,715)   (15,463,873)   (2,446,861)   (4,398,235)  
   (902,505)   (36,001,865)   (178,379)   (6,904,069)   1,886,531    3,666,855   
   19,539,420    20,441,925    39,786,386    39,964,765    30,361,074    28,474,543   
     
   —    —    10,240,090    10,098,734    —    —   
   —    —    817,781    2,190,292    —    —   
     
   —    —    —    202,231    —    —   
   —    —    (1,462,809)   (2,251,167)   —    —   
   —    —    (645,028)   141,356    —    —   
   —    —    9,595,062    10,240,090    —    —   

 

Semi-Annual Report  43

 

Lazard Retirement Series, Inc. Financial Highlights

 

 

LAZARD RETIREMENT US STRATEGIC EQUITY PORTFOLIO

   Six Months                       
Selected data for a share of capital  Ended   Year Ended  
stock outstanding throughout each period  6/30/18†   12/31/17   12/31/16   12/31/15   12/31/14   12/31/13   
   
Service Shares                                
Net asset value, beginning of period  $12.99   $11.51   $10.64   $12.15   $12.02   $10.44   
Income (Loss) from investment operations:                                
Net investment income (loss)   0.06    0.13    0.10    0.06    0.09    0.11   
Net realized and unrealized gain (loss)   0.31    1.94    0.90    (0.73)   1.68    2.80   
   
Total from investment operations   0.37    2.07    1.00    (0.67)   1.77    2.91   
Less distributions from:                                
Net investment income   —    (0.20)   (0.01)   (0.05)   (0.09)   (0.11)  
Net realized gains   —    (0.39)   (0.12)   (0.79)   (1.55)   (1.22)  
   
Total distributions   —    (0.59)   (0.13)   (0.84)   (1.64)   (1.33)  
   
Net asset value, end of period  $13.36   $12.99   $11.51   $10.64   $12.15   $12.02   
   
Total Return (a)   2.85%   18.10%   9.42%   –5.44%   14.71%   28.07%  
   
Ratios and Supplemental Data:                                
Net assets, end of period (in thousands)  $9,252   $9,830   $10,438   $11,529   $12,391   $8,944   
Ratios to average net assets (b):                                
Net expenses   1.00%   1.00%   1.00%   1.00%   1.00%   1.00%  
Gross expenses   1.98%   2.14%   2.48%   2.31%   2.59%   2.88%  
Net investment income (loss)   0.82%   0.84%   0.86%   0.53%   0.79%   0.97%  
Portfolio turnover rate   28%   76%   58%   86%   72%   66%  
   
† Unaudited.
(a) 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. Returns for a period of less than one year are not annualized.
(b) Annualized for a period of less than one year.

 

The accompanying notes are an integral part of these financial statements.

 

44  Semi-Annual Report

 

 

 

LAZARD RETIREMENT US SMALL-MID CAP EQUITY PORTFOLIO

   Six Months                       
Selected data for a share of capital  Ended Year Ended  
stock outstanding throughout each period  6/30/18†   12/31/17   12/31/16   12/31/15   12/31/14   12/31/13   
   
Service Shares                                
Net asset value, beginning of period  $8.33   $8.09   $7.39   $8.18   $8.71   $7.30   
Income (Loss) from investment operations:                                
Net investment income (loss)   0.01    0.01    0.03^   (0.02)   (0.02)   (0.03)  
Net realized and unrealized gain (loss)   0.32    1.07    1.09    (0.19)   0.94    2.53   
   
Total from investment operations   0.33    1.08    1.12    (0.21)   0.92    2.50   
Less distributions from:                                
Net investment income   —    (0.03)   —    —    —    —   
Net realized gains   —    (0.81)   (0.42)   (0.58)   (1.45)   (1.09)  
   
Total distributions   —    (0.84)   (0.42)   (0.58)   (1.45)   (1.09)  
   
Net asset value, end of period  $8.66   $8.33   $8.09   $7.39   $8.18   $8.71   
   
Total Return (a)   3.96%   13.95%   15.78%^   –2.38%   11.03%   35.08%  
   
Ratios and Supplemental Data:                                
Net assets, end of period (in thousands)  $65,199   $66,869   $65,478   $59,499   $63,491   $58,923   
Ratios to average net assets (b):                                
Net expenses   1.15%   1.19%   1.25%^   1.25%   1.25%   1.25%  
Gross expenses   1.20%   1.25%   1.32%   1.35%   1.32%   1.35%  
Net investment income (loss)   0.14%   0.09%   0.46%^   –0.22%   –0.20%   –0.33%  
Portfolio turnover rate   43%   79%   94%   89%   92%   101%  
   
† Unaudited.
^ 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 the period custodian fees was offset against the period expense waivers/reimbursements with no impact to net expenses or net investment income (loss).
(a) 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. Returns for a period of less than one year are not annualized.
(b) Annualized for a period of less than one year.

 

The accompanying notes are an integral part of these financial statements.

 

Semi-Annual Report  45

 

 

 

LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO

   Six Months                       
Selected data for a share of capital  Ended   Year Ended  
stock outstanding throughout each period  6/30/18†   12/31/17   12/31/16   12/31/15   12/31/14   12/31/13   
                                    
Service Shares                                
Net asset value, beginning of period  $10.83   $11.57   $12.28   $12.50   $13.26   $11.12   
Income (Loss) from investment operations:                                
Net investment income (loss)   0.14    0.31    0.19^   0.19    0.21    0.17   
Net realized and unrealized gain (loss)   (0.46)   2.24    (0.71)   0.02    (0.76)   2.13   
                                    
Total from investment operations   (0.32)   2.55    (0.52)   0.21    (0.55)   2.30   
Less distributions from:                                
Net investment income   —    (0.33)   (0.16)   (0.21)   (0.21)   (0.16)  
Net realized gains   —    (2.96)   (0.03)   (0.22)   —    —   
                                    
Total distributions   —    (3.29)   (0.19)   (0.43)   (0.21)   (0.16)  
                                    
Net asset value, end of period  $10.51   $10.83   $11.57   $12.28   $12.50   $13.26   
                                    
Total Return (a)   –2.95%*   22.33%   –4.29%^   1.75%   –4.21%   20.76%  
                                    
Ratios and Supplemental Data:                                
Net assets, end of period (in thousands)  $205,311   $221,307   $653,014   $682,012   $690,324   $689,512   
Ratios to average net assets (b):                                
Net expenses   1.11%   1.11%   1.08%^   1.11%   1.09%   1.10%  
Gross expenses   1.12%   1.12%   1.09%   1.11%   1.09%   1.10%  
Net investment income (loss)   2.52%   1.11%   1.59%^   1.42%   1.59%   1.41%  
Portfolio turnover rate   15%   44%   28%   37%   34%   40%  
   
† Unaudited.
^ 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 0.01% impact on the net expenses and net investment income (loss) ratios of the Portfolio.
* The Portfolio received settlement proceeds from a foreign exchange trading class action lawsuit. The proceeds from the settlement represented a realized gain and was recorded in the period received. There was a 0.10% impact on the total return of the Portfolio.
(a) 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. Returns for a period of less than one year are not annualized.
(b) Annualized for a period of less than one year.

 

The accompanying notes are an integral part of these financial statements.

 

46  Semi-Annual Report

 

 

 

LAZARD RETIREMENT EMERGING MARKETS EQUITY PORTFOLIO

   Six Months                       
Selected data for a share of capital  Ended   Year Ended   
stock outstanding throughout each period  6/30/18†   12/31/17   12/31/16   12/31/15   12/31/14   12/31/13   
   
Service Shares                                
Net asset value, beginning of period  $23.59   $18.78   $15.70   $19.96   $21.51   $22.22   
Income (Loss) from investment operations:                                
Net investment income (loss) (a)   0.20    0.31    0.23^   0.27    0.37    0.31   
Net realized and unrealized gain (loss)   (3.05)   4.89    3.04    (4.27)   (1.35)   (0.58)  
   
Total from investment operations   (2.85)   5.20    3.27    (4.00)   (0.98)   (0.27)  
Less distributions from:                                
Net investment income   —    (0.39)   (0.19)   (0.21)   (0.37)   (0.31)  
Net realized gains   —    —    —    (0.05)   (0.20)   (0.13)  
   
Total distributions   —    (0.39)   (0.19)   (0.26)   (0.57)   (0.44)  
   
Net asset value, end of period  $20.74   $23.59   $18.78   $15.70   $19.96   $21.51   
   
Total Return (b)   –12.08%   27.76%   20.84%^   –20.05%   –4.64%   –1.24%  
   
Ratios and Supplemental Data:                                
Net assets, end of period (in thousands)  $825,147   $942,572   $880,047   $754,835   $859,747   $846,233   
Ratios to average net assets (c):                                
Net expenses   1.35%   1.38%   1.37%^   1.39%   1.38%   1.38%  
Gross expenses   1.35%   1.38%   1.38%   1.39%   1.38%   1.38%  
Net investment income (loss)   1.72%   1.45%   1.29%^   1.43%   1.66%   1.42%  
Portfolio turnover rate   8%   10%   12%   9%   12%   14%  

 

   Six Months                       
Selected data for a share of capital  Ended   Year Ended   
stock outstanding throughout each period  6/30/18†   12/31/17   12/31/16   12/31/15   12/31/14   12/31/13   
   
Investor Shares                                
Net asset value, beginning of period  $23.31   $18.56   $15.51   $19.74   $21.28   $21.99   
Income (Loss) from investment operations:                                
Net investment income (loss) (a)   0.22    0.37    0.26^   0.32    0.42    0.37   
Net realized and unrealized gain (loss)   (3.01)   4.83    3.02    (4.25)   (1.34)   (0.59)  
   
Total from investment operations   (2.79)   5.20    3.28    (3.93)   (0.92)   (0.22)  
Less distributions from:                                
Net investment income   —    (0.45)   (0.23)   (0.25)   (0.42)   (0.36)  
Net realized gains   —    —    —    (0.05)   (0.20)   (0.13)  
   
Total distributions   —    (0.45)   (0.23)   (0.30)   (0.62)   (0.49)  
   
Net asset value, end of period  $20.52   $23.31   $18.56   $15.51   $19.74   $21.28   
   
Total Return (b)   –11.97%   28.07%   21.18%^   –19.90%   –4.38%   –1.01%  
   
Ratios and Supplemental Data:                                
Net assets, end of period (in thousands)  $196,882   $238,656   $187,408   $158,018   $229,855   $260,330   
Ratios to average net assets (c):                                
Net expenses   1.10%   1.14%   1.12%^   1.15%   1.14%   1.14%  
Gross expenses   1.10%   1.14%   1.14%   1.15%   1.14%   1.14%  
Net investment income (loss)   1.95%   1.74%   1.52%^   1.71%   1.91%   1.71%  
Portfolio turnover rate   8%   10%   12%   9%   12%   14%  
   
† Unaudited.
^ 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 a 0.06% impact on the total return of the Portfolio. There was a 0.02% 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) Total returns reflect reinvestment of all dividends and distributions, if any. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. 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.

 

Semi-Annual Report  47

 

 

 

LAZARD RETIREMENT GLOBAL DYNAMIC MULTI-ASSET PORTFOLIO

   Six Months                       
Selected data for a share of capital  Ended Year Ended   
stock outstanding throughout each period  6/30/18†   12/31/17   12/31/16   12/31/15   12/31/14   12/31/13   
   
Service Shares                                
Net asset value, beginning of period  $13.49   $11.82   $11.51   $11.86   $12.30   $10.54   
Income (Loss) from investment operations:                                
Net investment income (loss)   0.09    0.17    0.14    0.13    0.11    0.06   
Net realized and unrealized gain (loss)   (0.17)   2.25    0.24    (0.19)   0.23    1.99   
   
Total from investment operations   (0.08)   2.42    0.38    (0.06)   0.34    2.05   
Less distributions from:                                
Net investment income   —    —    (0.03)   —    (0.07)   (0.04)  
Net realized gains   —    (0.75)   (0.04)   (0.29)   (0.71)   (0.25)  
   
Total distributions   —    (0.75)   (0.07)   (0.29)   (0.78)   (0.29)  
   
Net asset value, end of period  $13.41   $13.49   $11.82   $11.51   $11.86   $12.30   
   
Total Return (a)   –0.59%   20.53%   3.30%   –0.44%   2.70%   19.49%  
   
Ratios and Supplemental Data:                                
Net assets, end of period (in thousands)  $407,262   $384,208   $293,286   $222,666   $176,669   $99,760   
Ratios to average net assets (b):                                
Net expenses   1.05%   1.05%   1.05%   1.05%   1.05%   1.05%  
Gross expenses   1.16%   1.19%   1.25%   1.31%   1.33%   1.70%  
Net investment income (loss)   1.42%   1.28%   1.23%   1.18%   1.19%   1.01%  
Portfolio turnover rate   57%   104%   105%   114%   105%   62%  
   
† Unaudited.
(a) 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. Performance information does not reflect the fees and charges imposed by participating insurance companies at the separate account level, and such charges will have the effect of reducing performance. Returns for a period of less than one year are not annualized.
(b) Annualized for a period of less than one year.

 

The accompanying notes are an integral part of these financial statements.

 

48  Semi-Annual Report

 

Lazard Retirement Series, Inc. Notes to Financial Statements June 30, 2018 (unaudited)

 

 

1. Organization

Lazard Retirement Series, Inc. (the “Fund”) was incorporated in Maryland on February 13, 1997 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund, comprised of twenty-three no-load portfolios (each referred to as a “Portfolio”), is currently offered only to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. Portfolio shares may also be offered to certain qualified pension and retirement plans and accounts permitting accumulation of assets on a tax-deferred basis. Effective January 31, 2006, the Fund designated its existing class of shares as Service Shares and commenced offering Investor Shares. Investor Shares and Service Shares are identical, except as to the services offered to and expenses borne by each class of shares. As of June 30, 2018, only Lazard Retirement Emerging Markets Equity Portfolio had issued Investor Shares. Currently, only the following five Portfolios, each of which is “diversified”, as defined in the 1940 Act, are offered: Lazard Retirement US Strategic Equity Portfolio (“US Strategic Equity Portfolio”), Lazard Retirement US Small-Mid Cap Equity Portfolio (“US Small-Mid Cap Equity Portfolio”), Lazard Retirement International Equity Portfolio (“International Equity Portfolio”), Lazard Retirement Emerging Markets Equity Portfolio (“Emerging Markets Equity Portfolio”), and Lazard Retirement Global Dynamic Multi-Asset Portfolio (“Global Dynamic Multi-Asset Portfolio”). Each of the other eighteen Portfolios had not commenced operations as of June 30, 2018.

 

2. Significant Accounting Policies

The accompanying financial statements are presented in conformity with 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. 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 Europe, Latin and South America and Far East securities exchanges and in over-the-counter markets ordinarily is completed well before 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, European or Far Eastern 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


 

Semi-Annual Report  49

 

 

 

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 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.

 

As a result of several court cases in certain countries across the European Union, some Portfolios have filed tax reclaims for previously withheld taxes on dividends earned in those 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 Portfo-


 

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lios’ 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 period ended June 30, 2018, the Global Dynamic Multi-Asset 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, 2017, the following 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:

 

Portfolio  Short-Term   Long-Term 
           
Emerging Markets Equity  $(2,616,173)  $(43,779,077)

 

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, 2017, 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)		 
                     
US Strategic Equity  $7,805,564   $1,563,709   $131,387   $1,432,322 
US Small-Mid Cap Equity   58,011,068    8,396,375    1,503,495    6,892,880 
International Equity   179,839,157    32,625,385    7,722,941    24,902,444 
Emerging Markets Equity   989,052,291    192,914,161    158,872,135    34,042,026 
Global Dynamic Multi-Asset   388,156,378    32,519,757    13,157,905    19,361,852 

 

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. The Fund 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. 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.


 

Semi-Annual Report  51

 

 

 

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 and distributions from real estate investment trusts. The book/tax differences relating to shareholder distributions may result in reclassifications among certain capital accounts.

 

(f) Allocation of Expenses—Expenses common to the Fund, The Lazard Funds, Inc., Lazard Global Total Return and Income Fund, Inc. and Lazard World Dividend & 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 Service 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.

 

(g) 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.

 

(h) 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 its average daily net assets and payable by each Portfolio monthly, at the annual rate set forth below:

 

Portfolio  Annual Rate  
        
US Strategic Equity (a)   0.65%  
US Small-Mid Cap Equity   0.75   
International Equity   0.75   
Emerging Markets Equity   1.00   
Global Dynamic Multi-Asset   0.80   

 

(a) From January 1, 2018 to June 26, 2018, percentage was 0.70%.

 

The Investment Manager has voluntarily agreed to waive its fees and, if necessary, reimburse the Portfolios until May 1, 2019 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 below table hereto, the Fund, on behalf of the Portfolio, may deduct from the payment to be made to the Investment Manager under the Manage-


 

52  Semi-Annual Report

 

 

 

ment Agreement, or the Investment Manager will bear, such excess expense.

 

Portfolio  Service Shares  Investor Shares
           
US Strategic Equity   1.00%   N/A 
US Small-Mid Cap Equity   1.15    N/A 
International Equity   1.10    N/A 
Emerging Markets Equity (a)   1.50    1.20%
Global Dynamic Multi-Asset   1.05    N/A 

 

(a) From January 1, 2018 to June 26, 2018, percentages were 1.55% and 1.30%, respectively.

 

During the period ended June 30, 2018, the Investment Manager waived its management fees and reimbursed the following Portfolios for other expenses as follows:

 

   Service Shares 
Portfolio  Management
Fees Waived		  Expenses
Reimbursed		 
           
US Strategic Equity  $  33,070    $13,295 
US Small-Mid Cap Equity   14,727    — 
International Equity   6,004    — 
Global Dynamic Multi-Asset   210,880    — 

 

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 dollar amount 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 Man-

ager, 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 Service Shares, for distribution and servicing of accounts. The Distributor may make payments to participating insurance companies, certain financial institutions, securities dealers and other industry professionals for providing these services.

 

DST is the Fund’s transfer and dividend disbursing agent. For its services, DST receives a monthly fee computed on the basis of the number of shareholder accounts it maintains, subject to a minimum fee amount per share class in each Portfolio, and is reimbursed for certain out-of-pocket expenses. DST has agreed to waive the monthly minimum fee for the first six months after a new Portfolio or share class has commenced operations.

 

4. Directors’ Compensation

Certain Directors of the Fund are officers of the Investment Manager. Effective January 1, 2018, each Director who is not an affiliated person of the Investment Manager or any of its affiliates is paid by all of the funds in the Lazard Fund Complex: (1) an annual retainer of $225,000, (2) an additional annual fee of $32,500 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 $22,500 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


 

Semi-Annual Report  53

 

 

 

a rate of $5,000 per fund with the remainder allocated based upon each fund’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 period ended June 30, 2018 were as follows:

 

Portfolio  Purchases   Sales 
           
US Strategic Equity  $2,622,272   $3,323,605 
US Small-Mid Cap Equity   27,256,175    31,397,499 
International Equity   30,951,601    41,416,522 
Emerging Markets Equity   93,040,083    89,237,530 
Global Dynamic Multi-Asset   247,067,064    215,470,189 

 

   US Treasury Securities 
Portfolio  Purchases   Sales 
           
Global Dynamic Multi-Asset  $8,737,061   $3,675,059 

 

For the period ended June 30, 2018, 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. 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 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, decreased liquidity and increased redemptions, and, as a result, the


 

54  Semi-Annual Report

 

 

 

Portfolio may have to liquidate portfolio securities at disadvantageous prices. Risks associated with rising interest rates are heightened given that interest rates in the US and other countries are at or near historic lows. 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 requests from shareholders who may own 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, Portfolio expenses and/or taxable distributions. 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 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.

 

(e) 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 transac-


 

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tions 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.

 

7. 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.

 

8. 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.


 

The following table summarizes the valuation of the Portfolios’ assets and liabilities by each fair value hierarchy level as of June 30, 2018:

 

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
June 30, 2018		   
                       
US Strategic Equity Portfolio                      
Common Stocks*  $9,003,590   $—   $—   $9,003,590   
Short-Term Investments   234,296    —    —    234,296   
Total  $9,237,886   $—   $—   $9,237,886   

 

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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
June 30, 2018		   
                       
US Small-Mid Cap Equity Portfolio                      
Common Stocks*  $63,225,147   $—   $—   $63,225,147   
Short-Term Investments   1,678,801    —    —    1,678,801   
Total  $64,903,948   $—   $—   $64,903,948   
                       
International Equity Portfolio                      
Common Stocks*                      
Australia  $—   $5,782,540   $—   $5,782,540   
Belgium   —    3,280,284    —    3,280,284   
Brazil   2,044,247    —    —    2,044,247   
Canada   9,794,574    —    —    9,794,574   
Denmark   —    2,708,827    —    2,708,827   
Finland   —    2,797,493    —    2,797,493   
France   —    22,531,519    —    22,531,519   
Germany   —    8,625,393    —    8,625,393   
India   1,870,348    —    —    1,870,348   
Ireland   3,056,110    4,040,619    —    7,096,729   
Israel   —    71,008    —    71,008   
Japan   —    35,230,069    —    35,230,069   
Luxembourg   —    1,616,742    —    1,616,742   
Netherlands   —    13,254,158    —    13,254,158   
Norway   —    5,802,082    —    5,802,082   
Singapore   —    4,237,614    —    4,237,614   
Spain   —    2,828,128    —    2,828,128   
Sweden   676,124    6,718,916    —    7,395,040   
Switzerland   —    14,003,284    —    14,003,284   
Taiwan   1,930,368    —    —    1,930,368   
Turkey   —    2,215,164    —    2,215,164   
United Kingdom   —    31,297,485    —    31,297,485   
United States   8,983,365    —    —    8,983,365   
Preferred Stocks*   —    1,553,112    —    1,553,112   
Short-Term Investments   7,792,028    —    —    7,792,028   
Total  $36,147,164   $168,594,437   $—   $204,741,601   
                       
Emerging Markets Equity Portfolio                      
Common Stocks*                      
Argentina  $11,159,148   $—   $—   $11,159,148   
Brazil   81,615,702    —    —    81,615,702   
China   76,068,161    123,326,764    —    199,394,925   
Egypt   715,430    10,048,783    —    10,764,213   
Hong Kong   —    1,338,640    —    1,338,640   
Hungary   —    17,559,380    —    17,559,380   
India   3,821,881    88,422,532    —    92,244,413   
Indonesia   16,087,185    32,504,834    —    48,592,019   
Malaysia   —    6,083,707    —    6,083,707   
Mexico   36,368,566    —    —    36,368,566   
Pakistan   —    15,528,947    —    15,528,947   
Philippines   6,359,360    —    —    6,359,360   
Russia   14,791,124    93,429,681    —    108,220,805   
South Africa   —    98,834,545    —    98,834,545   
South Korea   —    159,590,686    —    159,590,686   
Taiwan   —    50,932,669    —    50,932,669   
Thailand   —    13,002,395    —    13,002,395   
Turkey   —    42,715,792    —    42,715,792   
Short-Term Investments   22,788,405    —    —    22,788,405   
Total  $269,774,962   $753,319,355   $—   $1,023,094,317   

 

Semi-Annual Report  57

 

 

 

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
June 30, 2018		   
                       
Global Dynamic Multi-Asset Portfolio                      
                       
Assets:                      
Common Stocks*                      
Australia  $—   $7,689,932   $—   $7,689,932   
Austria   —    648,640    —    648,640   
Belgium   1,019,691    217,476    —    1,237,167   
Canada   14,744,526    —    —    14,744,526   
Denmark   —    1,154,194    —    1,154,194   
Faeroe Islands   —    297,147    —    297,147   
Finland   847,619    498,637    —    1,346,256   
France   1,310,041    8,352,482    —    9,662,523   
Germany   1,829,008    5,302,996    —    7,132,004   
Hong Kong   2,539,758    2,970,094    —    5,509,852   
Ireland   629,624    —    —    629,624   
Israel   842,026    1,015,699    —    1,857,725   
Italy   —    3,998,609    —    3,998,609   
Japan   4,334,746    19,522,220    —    23,856,966   
Malta   —    243,905    —    243,905   
Netherlands   1,705,299    1,855,782    —    3,561,081   
New Zealand   —    189,907    —    189,907   
Norway   —    7,279,155    —    7,279,155   
Portugal   —    241,243    —    241,243   
Russia   —    493,516    —    493,516   
Singapore   935,353    2,631,522    —    3,566,875   
Spain   —    603,151    —    603,151   
Sweden   2,201,094    2,154,120    —    4,355,214   
Switzerland   662,386    6,863,209    —    7,525,595   
United Kingdom   12,204,085    9,044,449    —    21,248,534   
United States   171,208,183    626,651    —    171,834,834   
Corporate Bonds*   —    25,681,106    —    25,681,106   
Foreign Government Obligations*   —    44,776,973    —    44,776,973   
Quasi Government Bonds*   —    5,490,622    —    5,490,622   
Supranational Bonds   —    5,644,000    —    5,644,000   
US Government Securities   —    840,479    —    840,479   
US Municipal Bonds   —    1,882,614    —    1,882,614   
US Treasury Securities   —    12,187,930    —    12,187,930   
Short-Term Investments   11,220,505    —    —    11,220,505   
Other Financial Instruments†                      
Forward Currency Contracts   —    856,531    —    856,531   
Total  $228,233,944   $181,254,991   $—   $409,488,935   
                       
Liabilities:                      
Other Financial Instruments†                       
Forward Currency Contracts  $—   $(1,970,705)  $—   $(1,970,705)  

 

*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).

 

58  Semi-Annual Report

 

 

 

Certain equity securities to which footnote (‡) in the Notes to Portfolios of Investments applies are included in Level 2 and were valued based on reference to similar securities that were trading on active markets.

 

In connection with the implementation of fair value pricing procedures with respect to non-US securities (see Note 2(a)), certain equity securities (other than those securities described in footnote (‡) in the Notes to Portfolios of Investments) in the International Equity, Emerging Markets Equity and Global Dynamic Multi-Asset Portfolios can transfer from Level 1 to Level 2 as a result of fair value pricing procedures and would revert to Level 1 when the fair value pricing procedures are no longer used. Accordingly, a significant portion of the Portfolios’ investments are categorized as Level 2 investments. A Portfolio recognizes all transfers between levels as though they were transferred at the beginning of the reporting period.

 

During the period ended June 30, 2018, securities valued at the following amounts were transferred from Level 2 to Level 1:

 

Portfolio  Amount 
International Equity  $1,895,218 
Emerging Markets Equity   8,977,013 

 

During the period ended June 30, 2018, securities valued at the following amounts were transferred from Level 1 to Level 2:

 

Portfolio  Amount 
Global Dynamic Multi-Asset  $564,903 

 

There were no other transfers into or out of Levels 1, 2 or 3 during the period ended June 30, 2018.

 

9. Derivative Instruments

The Global Dynamic Multi-Asset 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 period ended June 30, 2018, the approximate average monthly notional exposure for derivative instruments was as follows:

 

Forward currency contracts$89,700,000

 

The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of June 30, 2018:

 

   Fair Value 
     
Asset Derivatives    
Foreign Exchange Risk:    
Gross unrealized appreciation on forward currency contracts  $856,531 
      
Liability Derivatives     
Foreign Exchange Risk:     
Gross unrealized depreciation on forward currency contracts  $1,970,705 

 

The effect of derivative instruments on the Statement of Operations for the period ended June 30, 2018 was:

 

   Amount 
      
Realized Gain (Loss) on Derivatives     
Foreign Exchange Risk:     
Net realized gain (loss) on forward currency contracts  $1,241,052 
      
Net Change in Unrealized Appreciation (Depreciation) on Derivatives     
Foreign Exchange Risk:     
Net change in unrealized appreciation (depreciation) on forward currency contracts  $(842,827)

 

None of the other Portfolios presented traded in derivative instruments during the period ended June 30, 2018.

 

As of June 30, 2018, the Global Dynamic Multi-Asset 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.


 

Semi-Annual Report  59

 

 

 

The required information for the affected Portfolio is presented in the below table, as of June 30, 2018:

 

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   $856,531   $    —    $856,531   

 

       Amounts Not Offset in the
Statement of Assets and Liabilities		      
CounterpartyNet Amounts of
Assets Presented
in the Statement of
Assets and Liabilities		  Financial
Instruments		  Collateral
Received		  Net Amounts of
Derivative Assets		  
                       
Citibank NA  $194,586   $(194,586)  $—   $—   
HSBC Bank USA NA   536,721    (536,721)   —    —   
JPMorgan Chase Bank NA   123,581    (4,362)   —    119,219   
State Street Bank and Trust Co.   1,643    (1,643)   —    —   
Total  $856,531   $(737,312)  $—   $119,219   

 

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   $1,970,705    $    —    $1,970,705   

 

       Amounts Not Offset in the
Statement of Assets and Liabilities		      
CounterpartyNet Amounts of
Liabilities Presented
in the Statement of
Assets and Liabilities		  Financial
Instruments		  Collateral
Pledged		  Net Amounts of
Derivative Liabilities		  
                       
Citibank NA  $745,020   $(194,586)  $—   $550,434   
HSBC Bank USA NA   1,210,426    (536,721)   —    673,705   
JPMorgan Chase Bank NA   4,362    (4,362)   —    —   
State Street Bank and Trust Co.   10,897    (1,643)   —    9,254   
Total  $1,970,705   $(737,312)  $—   $1,233,393   

 

10. Subsequent Events

Management has evaluated subsequent events affecting the Fund through the issuance of the financial

statements and has determined that there were no subsequent events that required adjustment or disclosure.


 

60  Semi-Annual Report

 

Lazard Retirement Series, Inc. Board of Directors and Officers Information (unaudited)

 

 

Name (Age)
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 (64)  Director  Debevoise & Plimpton LLP, a law firm, Of Counsel (2013 – present)
   (August 2014)   
      University of California, Berkeley School of Law, Adjunct Professor (Spring 2017)
       
      Cornell Law School, Adjunct Professor (2013 – 2016)
       
Kenneth S. Davidson (73)  Director
(April 1997)		  Davidson Capital Management Corporation, an investment manager, President (1978 – present)
       
      Landseer Advisors LLC, an investment manager, Senior Advisor (2012 – 2014)
       
Nancy A. Eckl (55)  Director
(May 2007)		  College Retirement Equities Fund (eight accounts), Trustee (2007 – present)
       
      TIAA-CREF Funds (67 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 (47)  Director
(April 2014)		  New York University School of Law, Dean and Eric M. and Laurie B. Roth Professor of Law (2013 – present)
       
      Columbia Law School, Professor of Law (2008 – 2013)
       
Richard Reiss, Jr. (74)  Director
(April 1997)		  Georgica Advisors LLC, an investment manager, Chairman (1997 – present)
       
      Resource America, Inc., a real estate asset management company, Director (2016 – present)
       
Robert M. Solmson (70)  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)

 

Semi-Annual Report  61

 

 

 

Name (Age)
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)
         
Interested Directors(4):        
         
Ashish Bhutani (58)   Director   Investment Manager, Chief Executive Officer (2004 – present)
    (July 2005)    
        Lazard Ltd, Vice Chairman and Director (2010 – present)
         
Nathan A. Paul (45)   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) and Managing 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 July 31, 2018, 41 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.

 

62  Semi-Annual Report

 

 

 

Name (Age)
Address(1)		  Position(s) with the Fund
(Since) and Term(2)		  Principal Occupation(s) During the Past Five Years
       
Officers(3):      
       
Mark R. Anderson (48)  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
      
     Senior Vice President, Counsel and Deputy Chief Compliance Officer of AllianceBernstein L.P. (2004 – August 2014)
       
Christopher Snively (33)  Chief Financial Officer
(March 2016)		  Senior Vice President of the Investment Manager (since November 2015)
      Assurance Manager at PricewaterhouseCoopers LLP (2008 – November 2015)
       
Stephen St. Clair (59)  Treasurer
(May 2003)		  Vice President of the Investment Manager
       
Tamar Goldstein (43)  Assistant Secretary
(February 2009)		  Director (since February 2016, previously Senior Vice President), and Director of Legal Affairs (since July 2015) of the Investment Manager
       
Shari L. Soloway (36)  Assistant Secretary
(November 2015)		  Senior Vice President, Legal and Compliance, of the Investment Manager (since September 2015)
       
      Vice President and Associate General Counsel of GE Asset Management (July 2011 – September 2015)
       
Cesar A. Trelles (43)  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.

 

Semi-Annual Report  63

 

Lazard Retirement Series, Inc. Other Information (unaudited)

 

 

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 U.S. 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.

 

Form N-Q

The Fund files a complete schedule of each Portfolio’s holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at https://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

Board Consideration of Management Agreement

 

All Portfolios except Lazard Retirement Equity Franchise Portfolio

 

At a meeting of the Board held on June 26-27, 2018 the Board considered the approval, for an additional annual period, of the Management Agreement between the Fund, on behalf of the Portfolios, and the Investment Manager. The Independent Directors were assisted in their review by independent legal counsel, who advised the Board on relevant legal standards and met with the Independent Directors in executive sessions separate from representatives of the Investment Manager.

 

Services Provided

Representatives of the Investment Manager discussed with the Board the Investment Manager’s written presentation provided in advance of the meeting addressing, among other matters, the nature, extent and quality of services that the Investment Manager

provides the Fund, including a discussion of the Investment Manager and its clients (of which the Lazard Funds complex of 41 active funds comprises approximately $36 billion of the approximately $252 billion of total assets under the management of the Investment Manager and its global affiliates as of March 31, 2018).

 

The Board considered the various services provided by the Investment Manager including the Investment Manager’s research, portfolio management and trading capabilities and oversight of day-to-day operations, including supervision of fund accounting and administration-related services and assistance in meeting legal and regulatory requirements, as well as regular reporting to, and support of, the Board. The Investment Manager’s representatives stated that the Investment Manager believes that the Fund and its shareholders continue to be able to obtain significant benefits as a result of the resources and support of the Investment Manager’s global research, portfolio management, trading, operations, risk management, technology and legal and compliance infrastructure. The Board also considered information provided by the Investment Manager regarding its personnel, resources, financial condition and experience; the Fund’s distribution channels and the relationships with various intermediaries; marketing and shareholder servicing activities on behalf of the Portfolios; and Portfolio asset flows and the growth or decline in asset levels. The Board accepted management’s assertion that the Fund benefits from the services and infrastructure provided by the Investment Manager and that such services and infrastructure are greater than those typically provided to a $36 billion fund complex not managed by a large, global firm such as the Investment Manager.

 

Comparative Fee, Expense Ratio and Performance Information

The Board reviewed information prepared by Strategic Insight, an independent provider of investment company data, comparing the fees and expense ratio(s) (each through December 31, 2017) of each Portfolio and performance (through March 31, 2018) of each active Portfolio to those of a group of comparison funds selected by Strategic Insight (each, a “Group”)


 

64  Semi-Annual Report

 

 

 

and the Portfolio’s broader Morningstar category (each, a “Category”). Strategic Insight’s analyses were for the Service Shares of each Portfolio except for the Emerging Markets Equity Portfolio, which has both Service Shares and Investor Shares outstanding. The Strategic Insight comparisons ranked each Portfolio in a quintile of the Portfolio’s Group and Category (with the first quintile being the most favorable quintile and the fifth quintile being the least favorable). Representatives of the Investment Manager discussed with the Board the methodology used by Strategic Insight in constructing the Groups, noting the limitations of the process and that, as a result, the Investment Manager believed that certain Groups were not comprised of funds the Investment Manager considered to be the most appropriate comparison funds.

 

Advisory Fees and Expense Ratios. The Board discussed the management fees paid to the Investment Manager (referred to in the Strategic Insight materials as “advisory fees”) and expense ratios (as limited by the Investment Manager (“net”)) for each Portfolio and the comparisons provided by Strategic Insight, which compared the contractual (gross) advisory fee and net expense ratio(s) for each Portfolio to their respective Group and Category medians. The Board considered that the Investment Manager continues to voluntarily enter into expense limitation agreements for all of the Portfolios (pursuant to which the Investment Manager was waiving advisory fees and/or reimbursing expenses for certain Portfolios) and that the Investment Manager proposed to lower the expense limitations for the Emerging Markets Equity Portfolio, as discussed below, as well as the expense limitations for certain inactive Portfolios.

 

For the inactive Portfolios (all Portfolios other than the Emerging Markets Equity, Global Dynamic Multi-Asset, International Equity, US Small-Mid Cap Equity and US Strategic Equity Portfolios), the Board determined to defer consideration of advisory fees in the Management Agreement (and review of expense ratios) until a Portfolio was to commence operations, at which time additional information regarding advisory fees and expense ratios would be provided and considered. Accordingly, discussion of advisory fees and expense ratios was limited to those of the five

active Portfolios. However, notwithstanding deferral of consideration of advisory fees, the advisory fees in the Management Agreement for two inactive Portfolios, the Global Strategic Equity and International Equity Concentrated Portfolios, were each proposed to be lowered 0.10% in connection with the lowering of advisory fees of corresponding similar portfolios that are series of The Lazard Funds, Inc., another open-end management investment company managed by the Investment Manager. In connection with this proposal, the Investment Manager represented that there would be no diminution in services provided pursuant to the Management Agreement.

 

Except for the Global Dynamic Multi-Asset Portfolio, the gross advisory fee of each active Portfolio ranked in one of the first three quintiles of the Portfolio’s Group, and the expense ratio of each of the Emerging Markets Equity (Investor Shares), International Equity and US Strategic Equity Portfolios ranked in one of the first three quintiles of the Portfolio’s Group (and that, although the expense ratio of the Global Dynamic Multi-Asset Portfolio was in the fourth quintile of the Portfolio’s Group, it was less than a basis point above the Group median). For each of the Emerging Markets Equity (Service Shares), Global Dynamic Multi-Asset and US Small-Mid Cap Equity Portfolios, the Investment Manager representatives discussed the reasons the Investment Manager believes that the Portfolio’s Group was not comprised of the most appropriate funds and presented for the Board’s consideration a supplemental fee and expense ratio comparison with a group of funds (each, a “Supplemental Group”) the Investment Manager believes are more appropriate than those comprising the Portfolio’s Group.

 

For the Emerging Markets Equity Portfolio (Service Shares), the expense ratio was at the median expense ratio of the funds in the Supplemental Group. In addition, the Investment Manager also proposed to lower the current expense limitation by 0.05% for Service Shares and 0.10% for Investor Shares.

 

For the Global Dynamic Multi-Asset Portfolio, the Portfolio’s advisory fee was two basis points above the median advisory fee of the funds in the Supplemental


 

Semi-Annual Report  65

 

 

 

Group, and the Portfolio’s expense ratio was at the median expense ratio of the funds in the Supplemental Group.

 

For the US Small-Mid Cap Equity Portfolio, the Portfolio’s expense ratio was three basis points above the median expense ratio of the funds in the Supplemental Group.

 

The Board also considered fees paid to the Investment Manager by funds advised or sub-advised by the Investment Manager utilizing the same investment strategies as the Portfolios, as well as the Investment Manager’s separately managed accounts with similar investment objectives, policies and strategies (for each Portfolio, collectively with such funds, “Similar Accounts”). The Board discussed the fees paid to the Investment Manager by the Portfolios compared to the fees paid to the Investment Manager by Similar Accounts. Representatives of the Investment Manager discussed the nature of the Similar Accounts and the significant differences in services provided by the Investment Manager to the different types of Similar Accounts as compared to the services provided to the Portfolios. The Board considered the relevance of the fee information provided for Similar Accounts, in light of the Investment Manager’s discussion of the significant differences in services provided, to evaluate the fees paid to the Investment Manager by the Portfolios.

 

Performance. When evaluating the performance of each active Portfolio, the Board considered Strategic Insight’s performance analysis along with other information provided by, and discussions with, the Investment Manager’s representatives. Strategic Insight’s analyses compared each active Portfolio’s performance to that of the funds in the relevant Group and Category over one-, three-, five- and ten-year periods ended March 31, 2018 (as applicable). The Board considered that each of the Global Dynamic Multi-Asset and US Small-Mid Cap Equity Portfolios ranked in one of the top three quintiles of its respective Group for each of these periods and that the performance of each of the Emerging Markets Equity, International Equity and US Strategic Equity Portfolios was in the fourth or fifth quintile of its Group for the three- and/or five-year periods.

For the Emerging Markets Equity Portfolio, the Board noted that the performance of the Portfolio’s Investor Shares was in the first and second quintile of the Group and Category, respectively, for the ten-year period, and was in third quintile of the Group for the three-year period, and that the performance of the Service Shares was in the third quintile of both the Group and Category for the ten-year period.

 

For the International Equity Portfolio, the Board noted that the performance of the Portfolio was in the third and second quintile of the Group in the five- and ten-year periods, respectively, and was in the third and first quintile of the Category in the one- and ten-year periods, respectively.

 

For the US Strategic Equity Portfolio, the Board noted that the Portfolio’s one-year performance relative to that of the funds in both the Group and Category (ranking in the fourth quintile) had shown some improvement from the three- and five-year Group and Category performance rankings. The Board also considered that the Investment Manager proposed to reduce the Portfolio’s advisory fee in the Management Agreement by 0.05%, with no diminution in services thereunder.

 

The Board also received and would continue to receive regular updates on the Investment Manager’s efforts in respect of underperforming Portfolios.

 

Investment Manager Profitability and Economies of Scale

The Board reviewed information prepared by the Investment Manager for each active Portfolio concerning the estimated profitability percentage of the Management Agreement to the Investment Manager and its affiliates, calculated using the actual revenues received for the calendar year ended December 31, 2017 and the Investment Manager’s cost allocation methodology to compute an estimate of each Portfolio’s costs to the Investment Manager. The Investment Manager’s representatives reviewed with the Board information provided on the Investment Manager’s brokerage practices and the Portfolios’ brokerage allocation, commission payments and soft dollar commissions and benefits. The Investment Manager’s representatives stated that neither the Investment


 

66  Semi-Annual Report

 

 

 

Manager nor its affiliates receive any other significant indirect benefits from the Investment Manager acting as investment manager to the Portfolios. The representatives of the Investment Manager reminded the Board that the Investment Manager is continuing to support distribution relationships through direct payments from its or its affiliates’ own resources to third parties in connection with distribution and shareholder servicing and/or administrative and record-keeping services, and noted that the Fund does not bear any related costs other than the 0.25% 12b-1 fee pursuant to the Distribution and Servicing Plan adopted for the Portfolios’ Service Shares.

 

The profitability percentages were within ranges determined by relevant court cases not to be so disproportionately large that they bore no reasonable relationship to the services rendered. Representatives of the Investment Manager stated that the Investment Manager believed the estimated profitability percentages are not unreasonable in light of the services provided and other factors. The Board (1) considered the Investment Manager’s estimated profitability with respect to each Portfolio as part of their evaluation of the Portfolio’s fee under the Management Agreement, considered in relation to the mix of services provided by the Investment Manager (including the nature, extent and quality of such services), and (2) evaluated the profitability in light of the relevant circumstances for each Portfolio (including the size of each Portfolio and the trend in asset growth or decline). Representatives of the Investment Manager and the Board discussed ways economies of scale could be realized and how they could be shared, including the Investment Manager’s reinvestment of profits back into its business, waiving or reducing Portfolio management fees and/or reimbursing expenses, adding discounts to a Portfolio’s management fee schedule as a Portfolio’s assets increase or by instituting management fees at inception that account for future scale. It was noted that, for Portfolios with declining or stable assets or a low level of assets, the potential that the Investment Manager may have realized any economies of scale would be reduced.

 

At the conclusion of these discussions, each of the Directors expressed the opinion that he or she had

been furnished with such information as may reasonably be necessary to make an informed business decision with respect to evaluation of the renewal of the Management Agreement. Based on its discussions and considerations as described above, with the assistance of independent legal counsel and in the exercise of its business judgment, the Board made the following conclusions and determinations.

 

•The Board concluded that the nature, extent and quality of the services provided by the Investment Manager are adequate and appropriate, noting the benefits of the significant services and infrastructure associated with an approximately $252 billion global asset management business.

 

•For the active Portfolios, the Board concluded that each Portfolio’s fee paid to the Investment Manager was appropriate under the circumstances and in light of the factors and the totality of the services provided (including the lowering of the fee for the US Strategic Equity Portfolio).

 

•For the performance of the active Portfolios, the Board generally was satisfied with the overall performance of most of the Portfolios, either because relative performance in the Group and/or Category was satisfactory or because the Board accepted the assertions of the Investment Manager representatives that performance was consistent with the investment approach employed for a Portfolio. For Portfolios that were not performing in accordance with expectations, the Board would continue to monitor performance.

 

•The Board recognized that economies of scale may be realized as the assets of the Portfolios increase and determined that they would continue to consider potential material economies of scale.

 

In evaluating the Management Agreement, the Board relied on the information described above as well as other information provided by the Investment Manager, in addition to information received on a routine and regular basis throughout the year relating to the operations of the Fund and the investment management and other services provided under the Manage-


 

Semi-Annual Report  67

 

 

 

ment Agreement, including information on the investment performance of the Portfolios in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the Portfolios; and compliance reports. The Board also relied on its previous knowledge of the Fund, gained through meetings and other interactions with the Investment Manager, and the services provided to the Fund by the Investment Manager. The Board consid-

ered these conclusions and determinations in their totality and determined to approve the Fund’s Management Agreement (as proposed to be revised, as applicable) for each Portfolio. In deciding whether to vote to approve the Management Agreement for each Portfolio, each Director may have accorded different weights to different factors so that each Director may have had a different basis for his or her decision.


 

68  Semi-Annual Report

 

 

 

NOTES

 

 

 

NOTES

 

 

 

 

NOTES

 

 

 

NOTES

 

 

 

Lazard Retirement Series, 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

 

 

 

 

Performance information as of the most recent month end is available online at www.lazardassetmanagement.com.

 

Lazard Asset Management LLC • 30 Rockefeller Plaza • New York NY 10112 • www.lazardassetmanagement.com

 

LZDPS010

 

ITEM 2. CODE OF ETHICS.

 

Not applicable.

 

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

 

Not applicable.

 

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 

Not applicable.

 

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 of Directors 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 second fiscal quarter of 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)    Not applicable.

 

(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.

 

Lazard Retirement Series, Inc.
   
By /s/ Nathan A. Paul
  Nathan A. Paul
  Chief Executive Officer
   
Date September 4, 2018

 

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 September 4, 2018
   
By /s/ Christopher Snively
  Christopher Snively
  Chief Financial Officer
   
Date September 4, 2018