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    811-06312


                             THE LAZARD FUNDS, INC.
               (Exact name of Registrant as specified in charter)


                              30 Rockefeller Plaza
                            New York, New York 10112
               (Address of principal executive offices) (Zip code)


                              Nathan A. Paul, Esq.
                              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:   06/30/03






ITEM 1.   REPORTS TO STOCKHOLDERS.

Lazard Funds

Lazard Funds
Semi-Annual
Report

J U N E  3 0 ,  2 0 0 3

The Lazard Funds, Inc.
Table of Contents	Page
Investment Overviews	2
Performance Overviews	8
Portfolios of Investments
Lazard Equity Portfolio	19
Lazard Mid Cap Portfolio	21
Lazard Small Cap Portfolio	23
Lazard International Equity Portfolio	26
Lazard International Equity Select Portfolio	28
Lazard International Small Cap Portfolio	29
Lazard Emerging Markets Portfolio	31
Lazard Bond Portfolio	33
Lazard High Yield Portfolio	36
Lazard Global High Yield Portfolio	41
Lazard Mortgage Portfolio	46
Notes to Portfolios of Investments	47
Statements of
Assets and Liabilities	52
Operations	54
Changes in Net Assets	56
Financial Highlights	62
Notes to Financial Statements	73
Board of Directors and Officers Information	78

The views of the Fund’s management and the portfolio holdings described in this report are as of June 30, 2003; these views and portfolio holdings may have changed subsequent to this date. Information provided in this report should not be considered a recommendation to purchase or sell securities.

The Lazard Funds, Inc.
Investment Overviews

A Message From Lazard

We are pleased to bring you the following semi-annual report of the Fund for the six-month period ended June 30, 2003.

Crosscurrents affected the global economy during the first half of 2003. The capital markets moved lockstep in anticipation of stronger economic growth beginning with the third quarter of 2003. This flow of investment capital, from Treasuries to credit and, ultimately, to the equity markets occurred against a backdrop of considerable uncertainty. Government bond yields fell, worldwide, as deflation fears set in at the beginning of the year. In March, however, global equity markets rose steadily as the uncertainty of a possible war in Iraq and the SARS (Severe Acute Respiratory Syndrome) crisis subsided. Other signs of optimism began to appear in the U.S. and in Europe, as the Federal Reserve cut interest rates, the U.S. government reduced taxes and Germany promised income tax reductions, providing support to the global economy while increasing investor confidence in a late 2003 recovery. Stocks did well abroad, with many countries outpacing gains in the United States. The euro continued to appreciate against the U.S. dollar, enhancing the returns of U.S. dollar-based investors. While the weakness in the euro following its early 1999 creation depressed returns on non-U.S. investments, the rebound in the euro that began in early 2002 has augmented returns for the U.S. dollar-based investors. These positive results, however, were tempered by the fact that much of the economic data across the globe had not materially changed for the better. For example, economic growth estimates for the U.S. and much of Europe remain flat throughout the remaining two quarters of the year.

In this environment, long-term investors are understandably questioning the direction of the capital markets, particularly whether the global market rally that took place in the second quarter was the beginning of a full market recovery. Evidence for this has yet to materialize. We need to see much stronger earnings growth over the next few quarters and better valuations across the board. Regardless of market trends, Lazard will remain focused on seeking financially productive and inexpensively valued companies. We feel that the current environment will likely result in unique buying opportunities for the disciplined investor. In our view, building a portfolio of various asset and investment classes and maintaining a long-term focus is the best path for investors to take in reaching their investment goals.

As bottom-up stock pickers, we remain focused on stock selection and fundamentals of the companies we follow, seeking to identify and take advantage of pricing anomalies and discovering hidden opportunities to uncover value.

The following Investment Overviews are intended to provide you with mid-year reviews about the current market environment and insights on the Portfolios and their recent performance.

Equity Markets Overview

During the first six months of 2003, as U.S. and global stocks climbed, the S&P 500^® Index returned 11.8% and stocks outside the U.S., measured by the Morgan Stanley Capital International (MSCI^®) World^® Index, registered an 11.1% return.

The year began with a sharp, but short-lived, rally that quickly faded in the face of a deteriorating economic outlook, uncertainty about the prospect of a U.S.-led war against Iraq and the fear of SARS spreading from China to the rest of the world. By early March, stocks had approached the lows of October 2002. It was only in mid-March, when investors’ fears subsided, that stocks began to rebound sharply. The equity markets continued on an upward swing through May and June, posting their best quarterly performance since the fourth quarter of 1999, the lead up to the 2000 market peak.

The second quarter’s rally was broad based, with all sectors seeing double-digit gains. However, the more volatile, less profitable companies that had been hardest hit by previous market weakness achieved the strongest gains within each sector. Regionally, returns were fairly consistent, with Europe and Asia generating mid-teens percentage gains in local currency terms; the gain in European markets was, however, enhanced by the continued strength of the euro, which continued to rise against the dollar during the first six months of the year. Emerging markets were the true stars of the period, as markets in Venezuela, Turkey, Russia and Indonesia all posted strong gains. Returns in Asian markets varied from modest increases in Malaysia, Pakistan and Taiwan to impressive returns in South Korea and Indonesia.

Global returns have been strengthening in reaction to attractive valuations, a weaker dollar, and stimulative economic policy. While the more speculative stocks that had been hardest hit during the extended market decline have dominated the early stages of

2

The Lazard Funds, Inc.
Investment Overviews (continued)

this rally, we expect the rally to broaden to include more financially productive, relative value stocks. Hence, our belief remains that investors should strongly maintain an allocation to different asset classes and non-correlated investments in order to manage risk and achieve consistency in returns.

At Lazard, we believe that bottom-up, value-driven investing leads to portfolios that outperform in the long-term. In the second half of 2003, we will, as always, focus on high-quality companies that we believe are capable of generating strong returns for investors in a variety of economic environments.

Fixed-Income Markets Overview

Yields declined through much of the second quarter, at one point having dropped to levels not seen since the mid-1950s. Market participants were encouraged to drive yields that low by Federal Reserve concerns over deflation and the central bank’s policy response of letting the economic rebound extend for some time before any tightening would be considered. However, when the Federal funds rate was only lowered by 25 basis points in late June, the bond market presumed growth, and a sharp backup in yields ensued along with a general steepening of the curve. As such, yields ended the quarter 26 to 30 basis points lower, rather than the 55 to 60 basis point gain that was in place prior to the Fed’s June 25th easing. Market participants, if nothing else, remain optimistic on the U.S. economy and cautious about holding bonds at such low yields. As a consequence, sell-offs have a much more frenzied pace than rallies.

Total return for the Lehman Aggregate Bond Index in the second quarter was 2.5%. The government component of the Aggregate (including Treasuries and Agencies) also returned 2.5%, with Treasuries posting a 2.7% return. The credit sector, the component most responsive to expectations of recovery, was the best performer, registering a 4.8% total return. U.S. corporate bonds, in particular, performed best, with a 5.1% return. Industrial issuers were the leading segment at 5.5%. Breaking down the corporate sector by credit rating, BBB-rated credits had the highest return, at 6.5%. Total return for mortgage pass-through securities lagged other sectors in the quarter; the asset class posted 0.7% total return for the period. Asset-backed securities returned 1.9%.

Looking forward, we believe the economy is likely to continue to expand, although perhaps not quite at the pace the markets appear to be discounting. Considering this potential for relative disappointments, the risks in the market are centered around credit spreads, extension risk in mortgages, and the level of yields. In our opinion, the interest rate risk looms largest. As such, we are reducing the duration exposure in corporates to neutral but raising the overall weight in the Portfolios to maintain yield. Our presumption is that if yields fall from here, we want to own the duration in Treasuries. If yields should trend higher, we want the shortening to be centered in Treasuries as well. While the market makes up its mind on direction, the compounding of the corporate yields will help boost returns.

Lazard Equity Portfolio

For the six months ended June 30, 2003, Lazard Equity Portfolio’s Institutional Shares posted a total return of 9.84%, while Open Shares posted a total return of 9.76%, as compared with the 11.77% return of the S&P 500 Index.

In the first quarter, the Portfolio benefited from strong stock selection in telecommunications, as our holdings (including Comcast and Verizon) defended well despite the group’s sharp decline. The Portfolio’s relatively low weight in the health care sector detracted from returns, as did stock performance in the group. Eli Lilly, for example, lagged the group due to concerns over their anti-psychotic drug ZYPREXA.

The second quarter, conversely, saw the Portfolio benefit from its underweight position in health care, as well as from stock selection in consumer discretionary. Target rallied strongly on expectations the economic rebound will support consumer spending. The Portfolio was hurt in this quarter by stock selection in technology and the utilities sector. In both cases, however, all of our holdings contributed positively, but returns were hurt by not owning some of the sectors’ biggest movers. As sentiment improved, investors embraced risk and sought out the most volatile and highly leveraged stocks.

Lazard Mid Cap Portfolio

Lazard Mid Cap Portfolio’s Institutional Shares posted a total return of 10.19%, while Open Shares posted a total return of 10.07%, as compared with the 15.47% return of the Russell Midcap^® Index for the six months ended June 30, 2003.

3

The Lazard Funds, Inc.
Investment Overviews (continued)

Stock selection in the consumer discretionary sector helped performance during the first quarter. Shares of Mattel, the children’s toy manufacturer, rose after it reported strong fourth-quarter earnings due to cost cuts and higher Barbie Doll sales in the U.S. NIKE, the world’s top shoe company, performed well, as the company’s fourth-quarter results came in above expectations. On the other hand, stock performance in the technology sector detracted from performance: Celestica, the world’s fourth-largest maker of electronics, revised its earnings guidance downward as sales revenues were lower than expected for the first quarter. In health care, shares of King Pharmaceuticals declined in March after it disclosed that the SEC was to conduct an investigation of the company.

The second quarter saw the Portfolio’s overweight position in the consumer durables sector help returns, as did stock selection in commercial services: AmerisourceBergen Corporation completed its acquisition of pharmaceutical packaging company Anderson Packaging, which is expected to increase revenues and solidify the company’s position. Conversely, the Portfolio’s underweight to the telecommunications sector hurt returns, as did stock selection in technology and utilities, where we did not hold some of the biggest movers in the sector.

Lazard Small Cap Portfolio

Lazard Small Cap Portfolio’s Institutional Shares posted a total return of 12.26%, while Open Shares posted a total return of 12.19%, as compared with the 17.88% return of the Russell 2000^® Index for the six months ended June 30, 2003.

Stock selection in the technology sector helped performance during the first quarter. Shares of Microsemi Corp. (which designs and manufactures semiconductors) performed strongly, due to improved pricing and volumes in its military/aero/satellite division. On the other hand, stock selection in finance and in consumer staples detracted from performance. Shares of Investment Technology Group were weak, as the company reported disappointing results in January due to weak trading volume. Robert Mondavi holdings declined after the company lowered full-year forecasts due to sluggish sales, which have suffered because of cheaper imports and price cuts by competitors.

The Portfolio was helped by stock selection in the utilities sector in the second quarter, where DQE’s stock rose after the company announced significant progress in resolving its dispute with the IRS. Stock selection in the consumer discretionary and financials sectors hurt the Portfolio, however, as both sectors saw the strongest rallies in lower-quality stocks. In the financial sector, shares of W Holding declined after the company announced that first-quarter earnings were reduced due to investment losses.

Lazard International Equity Portfolio

Lazard International Equity Portfolio’s Institutional Shares posted a total return of 8.18%, while Open Shares posted a total return of 8.22%, as compared with the 9.47% return of the MSCI Europe, Australasia and Far East (EAFE^®) Index for the six months ended June 30, 2003.

In the first quarter of 2003, the Portfolio benefited from strong stock selection in the financial sector, particularly in Irish bank holdings (Allied Irish and Bank of Ireland), which posted strong returns from their core businesses and had little exposure to volatile capital markets. Strong stock selection in the materials sector was driven by gains in CRH, the Irish building materials company. Conversely, European energy stocks, such as Eni and Total, underperformed during the quarter, on investor fears of a potential oil price drop in the wake of the Iraq war.

The second quarter saw the energy stocks, especially Total, rebound, as the Iraq situation abated; stock selection in consumer discretionary also helped, as Nissan’s shares rose to a 13-year high. Takeda Chemical lagged the gains of some of its pharmaceutical peers due to concerns over the company’s new-drug pipeline. While all of the Portfolio’s financial holdings contributed positively, returns were hurt by not owning some of the sector’s big movers.

Lazard International Equity Select Portfolio

Lazard International Equity Select Portfolio’s Institutional Shares posted a total return of 8.53%, while Open Shares posted a total return of 8.26%, as compared with the 9.47% return of the MSCI EAFE Index for the six months ended June 30, 2003.

The Portfolio benefited from strong holdings in the industrial sector (especially Siemens) and a rebound in Endesa, the Spanish utility, during the first quarter. Results for financial stocks were mixed: bank holdings based in Italy and Ireland performed well, and U.K. financials rebounded late in the quarter from

4

The Lazard Funds, Inc.
Investment Overviews (continued)

earlier weakness; however, financial holdings with more exposure to capital markets activity underper-formed. European energy stocks such as Eni (which had previously held up well during the market’s decline), underperformed during the quarter.

As opposed to their mixed performance in the first quarter, the Portfolio’s financial stocks produced strong second quarter gains, particularly among companies poised to benefit from stronger capital markets. UBS, for example, rose on first-quarter results that were impressive, both overall and relative to its performance in the second half of 2002, and well above expectations. European energy stocks, especially Total, recovered from their underperfor-mance, performing uncharacteristically well in the rally. Performance was hurt by the general market environment, which was characterized by outperformance of more volatile, lower quality stocks.

Lazard International Small Cap Portfolio

Lazard International Small Cap Portfolio’s Institutional Shares posted a total return of 13.01%, while Open Shares posted a total return of 12.89%, as compared with the 19.55% return of the MSCI EAFE Small Cap Index for the six months ended June 30, 2003.

The first quarter saw Man Group, the U.K.-based hedge fund group, showing strong performance after releasing a trading statement indicating that 2002/2003 performance would be well ahead of analysts’ expectations. Esprit Holdings performed extremely well over the quarter, as the apparel manufacturer continued to outperform its competition in a difficult economic environment. On the other hand, Waterford Wedgwood, the Ireland-based manufacturer and marketer of crystal and china, was among the worst performers in the Portfolio this quarter. Concerns about poor holiday sales in the U.S. this past December drove the share price lower. Another poor performer for the quarter was Luminar, the U.K. operator of restaurants and nightclubs. The company reported disappointing like-for-like sales trends for the second half of 2002.

One of the best performers of the second quarter (as well as for the year-to-date) was Techem, the German manufacturer and service provider for water metering devices. Stock selection in financials was a positive, especially Suruga Bank, a regional Japanese bank with operations based in Shizuoka and Tokyo. The company has re-invented itself as a retail bank with nearly 70% of loan assets currently tied to consumers. Conversely, Swedish Match, one of the largest holdings in the Portfolio, underperformed for the quarter. The company reported weak first quarter results, as it was burdened by a strong USD and lower sales revenues in the cigar division.

Lazard Emerging Markets Portfolio

Lazard Emerging markets Portfolio’s Institutional Shares posted a total return of 13.08%, while Open Shares posted a total return of 13.04%, as compared with the 16.13% return of the MSCI Emerging Markets Free^® (EMF) Index for the six months ended June 30, 2003.

Emerging markets equities fell overall during the first quarter of 2003, with Asian markets dropping most, Eastern European markets falling moderately, and Latin American markets posting a very marginal rise. Investor concerns about declining world economic growth, the conflict in Iraq, and the emergence of SARS in Asia all acted to make the period highly volatile and unpredictable. By country, the first quarter included few bright spots, with defaulted Argentina, ironically, performing better than any other nation. By sector, health care, utilities and energy outperformed the index over the quarter. Significant underperformers in the Portfolio included telecom services, information technology, and financials. We purchased some shares in Telkom South Africa, and added to positions in Satyam and Wimm-Bill-Dann. We disposed of the Portfolio’s holding in Panamerican Beverages after Coca Cola Femsa bid for the entire company.

Emerging markets equities recovered dramatically during the second quarter of 2003, helped by the rapid end to the war and the falling impact of SARS. Markets in Asia and Latin America performed similarly to the index, while Eastern European shares demonstrated even better performance. Particularly noteworthy performance was experienced in Venezuela (where the equity market rose by almost 90%), Turkey, Russia and Indonesia (where share prices finished more than 40% higher). Although all sectors posted positive performance, information technology and telecommunications, two sectors that lagged considerably over the past three years, managed to keep pace or actually better the index’s return. The Portfolio participated in several public offerings of Asian companies over the quarter,

5

The Lazard Funds, Inc.
Investment Overviews (continued)

including Indonesia’s largest bank (Bank Mandiri) and Daewoo Shipbuilding, in South Korea. We sold the Portfolio’s position in Quanta Computer, and trimmed holdings in Compal Electronics and Yue Yuen, all due to higher valuations. Holdings in KT Corp. and Telefonos de Mexico were increased due to their defensive natures.

Lazard Bond Portfolio

Lazard Bond Portfolio’s Institutional Shares posted a total return of 2.85%, while Open Shares posted a total return of 2.87%, as compared with the 4.27% return of the Lehman Intermediate Government/ Credit Bond^® Index for the six months ended June 30, 2003.

The Portfolio trailed the index for the first quarter, generally because we were purposely underinvested in BBB credits and, more specifically, debt issued by utilities. The volatility characteristics of the BBB sector hurt total return as much as it helped during the past three months. In an uncertain economic environment, a more cautious approach to credit has his torically proven best. We maintained a relatively neutral duration, an overweight in intermediate-term corporates, and a position that benefits from a flatter yield curve.

In the second quarter, the Portfolio returned 2.0%, compared with 2.7% for the Lehman Intermediate Government/Credit Bond Index and 1.9% for the Lehman Intermediate Aggregate Index (we include the example of the Intermediate Aggregate Index because that Index contains mortgages, and mortgages have been a part of the Fund’s strategy). In addition, we continued to build a corporate bond portfolio within the Portfolio that added yield without adding undue credit volatility to the returns. This process will necessarily cause the performance to lag during a period of sharp credit spread contraction.

Lazard High Yield Portfolio

Lazard High Yield Portfolio’s Institutional Shares posted a total return of 15.39%, while Open Shares posted a total return of 14.98%, as compared with the 17.88% return of the Merrill Lynch High Yield Master II^® Index for the six months ended June 30, 2003.

During the first two quarters of 2003, the high yield market continued the rally that started last November. Strong mutual fund inflows helped to push the market higher. The lowest quality tiers (rated CCC and less) performed the best, returning over 36% year-to-date. In keeping with our style, the Portfolio is of higher quality and is underweight CCC’s, accounting for the majority of underperfor-mance year-to-date. To put the spectrum of performance by quality sector in perspective, the Merrill Lynch BB Index returned 12.3% for the first six months of 2003. Performance was positively affected by several holdings that performed exceptionally well, including Paxson, Alamosa, and Calpine.

Long-term trends in high yield support our focus on the better quality upper tier of high yield. Over the past ten years, according to Merrill Lynch data, the BB quality sector has outperformed the CCC sector by approximately 320 basis points, annualized. During the first half, we continued to trim lower tier credits and add better quality credits. This effort will continue until the Portfolio is approximately 50% BB. Lazard hired a team of five high yield specialists in the fourth quarter of 2002 to enhance and build-out the high yield product. This team generally focuses on the better quality high yield sectors. By merging the two teams, Lazard is making a conscious effort to upgrade the quality of the Portfolio and improve performance.

In our opinion, the climate for high yield remains robust, as high yield companies embrace the new-found liquidity of today’s market and investors remain hungry for the incremental yield of the sector. The strength in high yield is supported by signs of an improved environment: default rates are falling, banks are more accommodating, and high yield companies are more generally focused on repairing their balance sheets. Additionally, the relative value of the sector stands out, in comparison to 4% yields on Treasurys and a still volatile equity market.

Lazard Global High Yield Portfolio

Lazard Global High Yield Portfolio’s Institutional Shares posted a total return of 7.48%, while Open Shares posted a total return of 7.05%, as compared with the 4.89% return of the Global High Yield Blended Index, the 19.11% return of the Merrill Lynch Global High Yield Index and the 0.66% return of the One Month London Interbank Offered Rate (LIBOR) USD Fixed Index for the six months ended June 30, 2003.

6

The Lazard Funds, Inc.
Investment Overviews (concluded)

For the first quarter of 2003, the Portfolio’s returns were predominately driven by the high yield sector, which has drawn record net investment flows because of its high current yields relative to other fixed-income assets and the more constructive view on risk being built on improved company fundamentals. The other sectors in which the Portfolio is invested (including local currency emerging markets, asset-backed securities, and mortgages) also posted positive gains.

The environment for credit remained positive in the second quarter, and the Portfolio posted strong absolute returns. As the demand and outlook remained positive during the quarter, the allocation for high yield increased from approximately 45% of the total Portfolio to 85%. Overall, the Portfolio’s structure is tilted much more toward the higher quality issuers within the high yield marketplace, with 45% of the high yield sector of the Portfolio invested in securities rated BB or better. The emerging market sector also performed well during the quarter, rising approximately 6% on a total rate-of-return basis.

Lazard Mortgage Portfolio

Lazard Mortgage Portfolio posted a total return of 2.64%, as compared with the 1.60% return of the Lehman Fixed-Rate Mortgage-Backed Securities^® (MBS) Index for the six months ended June 30, 2003.

The Portfolio outperformed in the first quarter, largely because we avoided the broad middle of the mortgage market. Our strategy was to buy issues with coupons that were both higher and lower than the index average. Our higher coupon issues provided returns similar to the money-market-like returns of 6.5% coupons. Our lower coupon issues were less affected by prepayments and provided some price appreciation as interest rates declined slightly and spreads for all non-Treasury sectors narrowed.

Once again, in the second quarter, the Portfolio outperformed the Index largely because our strategy was to own issues with coupons that were lower than the Index average. The second quarter may have been the low point for the mortgage sector, as interest rates are already higher than the historical lows of mid-June. Looking forward, we believe that mortgages will return to their historical pattern of providing slightly better returns than Treasuries.

Notes to Investment Overviews:

All returns are for the period ended June 30, 2003 and assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolios have been waived or reimbursed by the Fund’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolios’ returns would have been lower.

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 Global High Yield Blended Index is an index created by the Fund's Investment Manager, which blends the performance of the Merrill Lynch Global High Yield Index for all periods after April 30, 2003 and the performance of the One Month LIBOR USD Fixed Index for all periods prior to May 1, 2003.

Past performance is not indicative, nor a guarantee, of future results.

7

The Lazard Funds, Inc.
Performance Overviews

Lazard Equity Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard Equity Portfolio and S&P 500^® Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
Equity Portfolio**	(0.48	)%	(2.00	)%	9.16	%	(0.74	)%	(2.27	)%	2.86	%
S&P 500 Index	0.25		(1.61	)	10.04		0.25		(1.61	)	5.52

*	All returns assume reinvestment of all dividends and distributions, if any. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investors shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The S&P 500 Index is a market capitalization-weighted index of 500 common stocks, designed to measure performance of the broad domestic economy through changes in the aggregate market value of these stocks, which represent all major industries.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Open Shares was February 5, 1997.

8

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard Mid Cap Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard Mid Cap Portfolio and Russell Midcap^® Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	One		Five		Since
	Year		Years		Inception†
Mid Cap Portfolio**
Institutional Shares	(1.40	)%	5.81	%	6.76	%
Open Shares	(1.71	)	5.46		6.42
Russell Midcap Index	2.63		3.35		5.13

*	All returns assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000® Index (which consists of the 1,000 largest U.S. companies by capitalization).
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for the Portfolio was November 4, 1997.

9

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard Small Cap Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard Small Cap Portfolio and Russell 2000^® Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
Small Cap Portfolio**	(5.12	)%	2.06	%	9.63	%	(4.90	)%	1.87	%	5.30	%
Russell 2000 Index	(1.64	)	0.96		8.25		(1.64	)	0.96		4.43

*	All returns assume reinvestment of all dividends and distributions, if any. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The Russell 2000 Index is comprised of the 2,000 smallest U.S. companies included in the Russell 3000® Index (which consists of the 3,000 largest U.S. companies by capitalization).
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Open Shares was January 30, 1997.

10

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard International Equity Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard International Equity Portfolio and Morgan Stanley Capital International (MSCI^®)
Europe, Australasia and Far East (EAFE^®) Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
International Equity Portfolio**	(4.07	)%	(4.60	)%	5.23	%	(4.19	)%	(4.83	)%	0.85	%
MSCI EAFE Index	(6.46	)	(4.00	)	2.78		(6.46	)	(4.00	)	(0.07	)

*	All returns assume reinvestment of all dividends and distributions, if any. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The MSCI EAFE Index is a broadly diversified international index comprised of equity securities of approximately 1,000 companies located outside the United States.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Open Shares was January 23, 1997.

11

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard International Equity Select Portfolio

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

Average Annual Total Returns*
Periods Ended June 30, 2003
	One		Since
	Year		Inception†
International Equity Select Portfolio**
Institutional Shares	(7.51	)%	(7.32	)%
Open Shares	(7.81	)	(7.55	)
MSCI EAFE Index	(6.46	)	(9.52	)

*	All returns assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The MSCI EAFE Index is a broadly diversified international index comprised of equity securities of approximately 1,000 companies located outside the United States.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for the Portfolio was May 31, 2001.

12

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard International Small Cap Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard International Small Cap Portfolio and MSCI EAFE Small Cap Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Since		One		Five		Since
	Year		Years		Inception†		Year		Years		Inception†
International Small Cap Portfolio**	(1.53	)%	1.15	%	5.17	%	(1.93	)%	0.71	%	3.57	%
MSCI EAFE Small Cap Index	(0.64	)	(1.72	)	(1.04	)	(0.64	)	(1.72	)	(3.30	)

*	All returns assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The MSCI EAFE Small Cap Index is an arithmetic, market value-weighted average of the performance of securities of small cap companies listed on the stock exchanges of EAFE Index countries.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Institutional Shares was December 1, 1993 and for Open Shares was February 13, 1997.

13

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard Emerging Markets Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard Emerging Markets Portfolio and MSCI Emerging Markets Free^® (EMF) Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Since		One		Five		Since
	Year		Years		Inception†		Year		Years		Inception†
Emerging Markets Portfolio**	6.05	%	0.44	%	(0.59	)%	(6.01	)%	0.22	%	(3.44	)%
MSCI EMF Index	6.96		2.52		(2.18	)	6.96		2.52		(3.34	)

*	All returns assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The MSCI EMF Index is comprised of emerging market securities in countries open to non-local investors.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Institutional Shares was July 15, 1994 and for Open Shares was January 8, 1997.

14

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard Bond Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard Bond Portfolio and Lehman Intermediate Government/Credit Bond^® Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
Bond Portfolio**	8.13	%	5.49	%	5.71	%	7.96	%	5.25	%	5.77	%
Lehman Intermediate Gov’t/Credit
Bond Index	10.84		7.64		6.87		10.84		7.64		7.78

*	All returns assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The Lehman Intermediate Government/Credit Bond Index is comprised of U.S. Government and corporate bonds in the intermediate maturity range calculated by Lehman Brothers.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Open Shares was March 5, 1997.

15

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard High Yield Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard High Yield Portfolio and Merrill Lynch High Yield Master II^® Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Since		One		Five		Since
	Year		Years		Inception†		Year		Years		Inception†
High Yield Portfolio**	11.02	%	(2.88	)%	(1.12	)%	10.44	%	(3.17	)%	(2.37	)%
Merrill Lynch High Yield
Master II Index	22.20		2.96		3.53		22.20		2.96		3.22

*	All returns assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The Merrill Lynch High Yield Master II Index provides a broad-based measure of the performance of the non-investment grade U.S. domestic bond market.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Institutional Shares was January 2, 1998 and for Open Shares was February 24, 1998.

16

The Lazard Funds, Inc.
Performance Overviews (continued)

Lazard Global High Yield Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard Global High Yield Portfolio, Global High Yield Blended Index, Merrill Lynch Global High Yield
Index and One Month London Interbank Offered Rate (LIBOR) USD Fixed Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
Global High Yield Portfolio**	7.45	%	2.51	%	5.02	%	6.65	%	2.02	%	2.65	%
Global High Yield Blended Index	5.80		5.03		5.10		5.80		5.03		5.18
Merrill Lynch Global High Yield Index	24.13		2.97		N/A		24.13		2.97		N/A
One Month LIBOR USD Fixed Index	1.53		4.17		4.67		1.53		4.17		4.51

*	All returns assume reinvestment of all dividends and distributions, if any. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 indices are unmanaged, have no fees or costs and are not available for investment. The Global High Yield Blended Index is an index created by the Portfolio’s Investment Manager, which blends the performance of the Merrill Lynch Global High Yield Index for all periods after April 30, 2003 and the performance of the One Month LIBOR USD Fixed Index for all periods prior to May 1, 2003. The Merrill Lynch Global High Yield Index tracks the performance of below investment grade bonds of corporate issuers domiciled in countries having an investment grade foreign currency long term debt rating. The One Month LIBOR USD Fixed Index is an average derived from sixteen quotations of the rate that banks dealing in Eurodollars charge each other for large loans, as provided by banks determined by the British Bankers Association. Before May 1, 2003, the Portfolio was known as Lazard Strategic Yield Portfolio. The dollar values shown above for the Merrill Lynch Global High Yield Index represent the hypothetical return on a $13,932 investment made on January 1, 1998. The $13,932 represents the value, on January 1, 1998, of $10,000 invested in the Institutional Shares of Global High Yield Portfolio on June 30, 1993.
**	The performance of Institutional Shares may be greater than or less than the performance of Open Shares, based on the differences in fees borne by shareholders investing in different classes.
†	The inception date for Open Shares was January 23, 1997 and for Merrill Lynch Global High Yield Index was January 1, 1998.

17

The Lazard Funds, Inc.
Performance Overviews (concluded)

Lazard Mortgage Portfolio

     Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard Mortgage Portfolio and Lehman Fixed-Rate Mortgage-Backed Securities^® (MBS) Index*

Average Annual Total Returns*
Periods Ended June 30, 2003
	Institutional Shares
	One		Since
	Year		Inception**
Mortgage Portfolio	6.96	%	7.39	%
Lehman Fixed-Rate MBS Index	5.72		7.45

*

All returns assume reinvestment of all dividends and distributions, if any. Certain expenses of the Portfolio have been waived or reimbursed by the Portfolio’s Investment Manager or Administrator; without such waiver/reimbursement of expenses, the Portfolio’s returns would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of the Portfolio will fluctuate, so that an investor’s shares in the Portfolio, 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 graph and table above do not reflect the deduction of taxes that a shareholder would pay on the Portfolio’s distributions or the redemption of Portfolio shares. 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 index is unmanaged, has no fees or costs and is not available for investment. The Lehman Fixed-Rate MBS Index is an index of U.S. mortgage-backed securities in the intermediate maturity range calculated by Lehman Brothers.

**

The inception date for the Portfolio was December 29, 2000.

18

The Lazard Funds, Inc.
Portfolios of Investments
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard Equity Portfolio
Common Stocks—98.3%
Aerospace & Defense—3.5%
Lockheed Martin Corp.	36,000	$	1,712,520
The Boeing Co.	42,600		1,462,032
United Technologies Corp.	17,900	1,267,857
		4,442,409
Apparel & Textiles—1.1%
NIKE, Inc., Class B	25,100	1,342,599
Banking & Financial Services—20.2%
American Express Co.	68,300		2,855,623
Bank of America Corp.	37,850		2,991,285
Bank One Corp.	64,800		2,409,264
Citigroup, Inc.	82,697		3,539,432
Freddie Mac	12,800		649,856
Golden West Financial Corp.	26,000		2,080,260
HSBC Holdings PLC ADR	25,700		1,519,127
Lehman Brothers Holdings, Inc.	14,400		957,312
Merrill Lynch & Co., Inc.	21,700		1,012,956
Morgan Stanley	13,800		589,950
National City Corp.	28,100		919,151
Northern Trust Corp.	48,900		2,043,531
SouthTrust Corp.	52,500		1,428,000
Wells Fargo & Co.	46,000	2,318,400
		25,314,147
Brewery—0.8%
Anheuser-Busch Cos., Inc.	19,300	985,265
Business Services & Supplies—5.6%
Accenture, Ltd., Class A (a)	69,900		1,264,491
Automatic Data Processing, Inc.	26,100		883,746
Avery Dennison Corp.	25,700		1,290,140
First Data Corp.	37,500		1,554,000
Pitney Bowes, Inc.	51,700	1,985,797
		6,978,174
Cable & Broadcasting—1.7%
Comcast Corp., Class A (a)	72,800	2,098,824
Chemicals—1.0%
Rohm & Haas Co.	38,800	1,203,964
Computer Software—3.8%
Microsoft Corp.	123,600		3,165,396
Oracle Corp. (a)	76,100		914,722
PeopleSoft, Inc. (a)	36,300	638,517
		4,718,635

Computers & Business Equipment—3.8%
Cisco Systems, Inc. (a)	66,900		1,116,561
Hewlett-Packard Co.	57,900		1,233,270
International Business Machines
Corp.	28,900	2,384,250
		4,734,081
Cosmetics & Toiletries—1.9%
Colgate-Palmolive Co.	40,400	2,341,180
Diversified—5.1%
3M Co.	13,100		1,689,638
Emerson Electric Co.	44,600		2,279,060
General Electric Co.	86,800	2,489,424
		6,458,122
Drugs & Health Care—6.7%
Eli Lilly & Co.	19,800		1,365,606
HCA, Inc.	42,100		1,348,884
Pfizer, Inc.	90,300		3,083,745
Schering-Plough Corp.	49,900		928,140
Wyeth	37,600	1,712,680
		8,439,055
Food & Beverages—4.3%
H.J. Heinz Co.	38,600		1,273,028
PepsiCo, Inc.	29,340		1,305,630
The Coca-Cola Co.	26,200		1,215,942
The Kroger Co. (a)	97,100	1,619,628
		5,414,228
Household Products &
Home Furnishings—1.2%
Newell Rubbermaid, Inc.	54,300	1,520,400
Insurance—6.4%
American International Group, Inc.	21,869		1,206,731
Berkshire Hathaway, Inc., Class A (a)	8		580,000
Jefferson-Pilot Corp.	36,200		1,500,852
Marsh & McLennan Cos., Inc.	29,500		1,506,565
MetLife, Inc.	45,000		1,274,400
The Hartford Financial Services
Group, Inc.	39,500	1,989,220
		8,057,768
Leisure & Entertainment—1.0%
Mattel, Inc.	70,200	1,328,184
Medical Products & Services—2.2%
Guidant Corp.	27,900		1,238,481
Johnson & Johnson	29,100	1,504,470
		2,742,951

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

19

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard Equity Portfolio (concluded)
Metals & Mining—1.2%
Alcoa, Inc.	60,600	$	1,545,300
Multimedia—4.2%
The News Corp., Ltd. ADR	126,500		3,168,825
Viacom, Inc., Class B (a)	47,000	2,052,020
		5,220,845
Oil & Gas—8.4%
Baker Hughes, Inc.	40,800		1,369,656
Burlington Resources, Inc.	32,700		1,768,089
ChevronTexaco Corp.	22,529		1,626,594
ConocoPhillips	23,680		1,297,664
Exxon Mobil Corp.	84,728		3,042,582
Praxair, Inc.	23,600	1,418,360
		10,522,945
Retail—3.6%
Target Corp.	55,400		2,096,336
The Home Depot, Inc.	48,400		1,603,008
Wal-Mart Stores, Inc.	16,600	890,922
		4,590,266
Semiconductors & Components—2.2%
Intel Corp.	73,900		1,535,938
Texas Instruments, Inc.	72,600	1,277,760
		2,813,698
Telecommunications—4.1%
BellSouth Corp.	90,300		2,404,689
Verizon Communications, Inc.	68,800	2,714,160
		5,118,849
Utilities—4.3%
Ameren Corp.	29,700		1,309,770
Entergy Corp.	27,000		1,425,060
KeySpan Corp.	51,500		1,825,675
NiSource, Inc.	47,500	902,500
		5,463,005
Total Common Stocks
(Identified cost $120,451,820)		123,394,894

	Principal
	Amount
	(000)
Repurchase Agreement—1.4%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$1,765,000 United States Treasury
Bill, 0.96%, 07/17/03, with a
value of $1,765,000)
(Identified cost $1,728,000)	$	1,728	$	1,728,000
Total Investments
(Identified cost $122,179,820) (b)		99.7%	$	125,122,894
Cash and Other Assets in Excess
of Liabilities		0.3	346,966
Net Assets		100.0%	$	125,469,860

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

20

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard Mid Cap Portfolio
Common Stocks—98.9%
Aerospace & Defense—2.8%
Alliant Techsystems, Inc. (a)	10,700	$	555,437
Rockwell Collins, Inc.	21,300	524,619
		1,080,056
Apparel & Textiles—3.2%
NIKE, Inc., Class B	9,600		513,504
Polo Ralph Lauren Corp.	26,900	693,751
		1,207,255
Automotive—1.4%
Lear Corp. (a)	11,500	529,230
Banking & Financial Services—11.7%
City National Corp.	17,500		779,800
Federated Investors, Inc., Class B	16,500		452,430
Golden West Financial Corp.	5,400		432,054
Mercantile Bankshares Corp.	14,900		586,762
Northern Trust Corp.	9,100		380,289
SEI Investments Co.	23,700		758,400
SouthTrust Corp.	17,500		476,000
The Student Loan Corp.	4,600	579,600
		4,445,335
Business Services & Supplies—8.5%
ARAMARK Corp., Class B (a)	36,300		813,846
Avery Dennison Corp.	10,800		542,160
CDW Corp. (a)	12,400		567,920
D&B Corp. (a)	12,800		526,080
Pitney Bowes, Inc.	20,600	791,246
		3,241,252
Chemicals—1.7%
Rohm & Haas Co.	20,600	639,218
Computer Software—4.1%
BMC Software, Inc. (a)	40,100		654,833
PeopleSoft, Inc. (a)	29,200		513,628
Symantec Corp. (a)	8,500	372,810
		1,541,271
Computers & Business Equipment—3.3%
Altera Corp. (a)	19,200		314,880
Apple Computer, Inc. (a)	32,100		613,752
Lexmark International, Inc. (a)	4,800	339,696
		1,268,328
Diversified—1.3%
Eaton Corp.	6,400	503,104

Drugs & Health Care—9.3%
AmerisourceBergen Corp.	8,950		620,683
Barr Laboratories, Inc. (a)	9,800		641,900
First Health Group Corp. (a)	26,400		728,640
Genzyme Corp. (a)	9,100		380,380
King Pharmaceuticals, Inc. (a)	39,933		589,411
Triad Hospitals, Inc. (a)	23,300	578,306
		3,539,320
Electronics—1.3%
Waters Corp. (a)	17,000	495,210
Environmental—2.0%
Republic Services, Inc. (a)	34,000	770,780
Food & Beverages—2.0%
The Pepsi Bottling Group, Inc.	38,800	776,776
Household Products &
Home Furnishings—4.5%
Mohawk Industries, Inc. (a)	9,800		544,194
Newell Rubbermaid, Inc.	19,800		554,400
The Black & Decker Corp.	14,000	608,300
		1,706,894
Insurance—2.8%
Jefferson-Pilot Corp.	16,300		675,798
Protective Life Corp.	13,800	369,150
		1,044,948
Leisure & Entertainment—3.5%
Mandalay Resort Group	18,700		595,595
Mattel, Inc.	38,100	720,852
		1,316,447
Manufacturing—1.7%
American Standard Cos., Inc. (a)	8,600	635,798
Medical Products & Services—6.2%
DaVita, Inc. (a)	26,400		706,992
Guidant Corp.	18,700		830,093
Laboratory Corp. of America
Holdings (a)	27,300	823,095
		2,360,180
Oil & Gas—5.7%
Baker Hughes, Inc.	14,100		473,337
Burlington Resources, Inc.	7,300		394,711
Cooper Cameron Corp. (a)	8,700		438,306
GlobalSantaFe Corp.	27,500		641,850
Valero Energy Corp.	5,800	210,714
		2,158,918

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

21

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard Mid Cap Portfolio (concluded)
Printing & Publishing—1.5%
Lee Enterprises, Inc.	15,500	$	581,715
Real Estate—5.4%
AMB Property Corp.	20,100		566,217
Archstone-Smith Trust	25,500		612,000
Health Care Property Investors, Inc.	20,600	872,410
		2,050,627
Restaurants—1.7%
Yum! Brands, Inc. (a)	22,200	656,232
Retail—7.5%
American Eagle Outfitters, Inc. (a)	25,600		469,504
Borders Group, Inc. (a)	28,100		494,841
NBTY, Inc. (a)	26,200		551,772
The Gap, Inc.	31,700		594,692
The TJX Cos., Inc.	39,400	742,296
		2,853,105
Transportation—1.6%
Swift Transportation Co., Inc. (a)	33,100	616,322
Utilities—4.2%
Entergy Corp.	8,200		432,796
KeySpan Corp.	18,700		662,915
NiSource, Inc.	26,200	497,800
		1,593,511
Total Common Stocks
(Identified cost $33,969,066)		37,611,832

	Principal
	Amount
Description	(000)
Short-Term Investments—11.4%
Repurchase Agreement—1.0%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$305,000 United States Treasury
Bond, 12.75%, 11/15/10, with a
value of $388,875)	$	380		$	380,000
Collateral for Securities on Loan—10.4%
State Street Navigator Securities
Lending Prime Portfolio, 1.14% (d)	3,953			3,953,010
Total Short-Term Investments
(Identified cost $4,333,010)				4,333,010
Total Investments
(Identified cost $38,302,076) (b)	110.3%			$	41,944,842
Liabilities in Excess of Cash and
Other Assets		(10.3)		(3,912,069)
Net Assets	100.0		%	$	38,032,773

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

22

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard Small Cap Portfolio
Common Stocks—99.6%
Aerospace & Defense—3.1%
DRS Technologies, Inc. (a)	197,200	$	5,505,824
Moog, Inc., Class A (a)	74,500		2,588,875
The Titan Corp. (a)	547,400	5,632,746
		13,727,445
Agriculture—1.9%
AGCO Corp. (a)	187,500		3,202,500
Delta & Pine Land Co.	225,500	4,956,490
		8,158,990
Automotive—0.3%
American Axle & Manufacturing
Holdings, Inc. (a)	54,600	1,304,940
Banking & Financial Services—11.6%
Chittenden Corp.	83,800		2,291,930
Community First Bankshares, Inc.	203,800		5,563,740
East West Bancorp, Inc.	101,400		3,664,596
Financial Federal Corp. (a)	154,000		3,757,600
First Community Bancorp	78,200		2,437,494
First Midwest Bancorp, Inc.	215,500		6,208,555
Hudson United Bancorp	174,400		5,955,760
IndyMac Bancorp, Inc.	219,800		5,587,316
Sterling Bancshares, Inc.	373,000		4,878,840
The South Financial Group, Inc.	88,600		2,067,038
United Bankshares, Inc.	198,100		5,675,565
W Holding Co., Inc.	106,700		1,805,364
W.P. Stewart & Co., Ltd.	40,600	909,440
		50,803,238
Building & Construction—1.4%
Chicago Bridge & Iron Co. NV,
NY Shares	176,800		4,009,824
Florida Rock Industries, Inc.	53,500	2,208,480
		6,218,304
Business Services & Supplies—5.4%
ADVO, Inc. (a)	74,800		3,321,120
FTI Consulting, Inc. (a)	127,000		3,171,190
Harland (John H.) Co.	53,200		1,391,712
Herman Miller, Inc.	255,400		5,161,634
PRG-Schultz International, Inc. (a)	407,100		2,401,890
ProQuest Co. (a)	49,400		1,274,520
Tier Technologies, Inc., Class B (a)	190,980		1,480,095
Watson Wyatt & Co. Holdings (a)	228,400	5,294,312
		23,496,473

Chemicals—1.6%
Ferro Corp.	108,900	$	2,453,517
Spartech Corp.	216,800	4,598,328
		7,051,845
Computer Software—2.0%
Borland Software Corp. (a)	306,500		2,994,505
Mentor Graphics Corp. (a)	389,000	5,632,720
		8,627,225
Computers & Business Equipment—4.7%
Advanced Digital Information
Corp. (a)	622,700		6,220,773
Extreme Networks, Inc. (a)	843,900		4,472,670
Maxtor Corp. (a)	693,100		5,205,181
ScanSource, Inc. (a)	166,150	4,444,513
		20,343,137
Consumer Products—1.8%
Fossil, Inc. (a)	172,900		4,073,524
The Scotts Co., Class A (a)	77,400	3,831,300
		7,904,824
Diversified—3.8%
Black Hills Corp.	66,000		2,026,200
Fisher Scientific International, Inc. (a)	158,000		5,514,200
Olin Corp.	165,600		2,831,760
The Liberty Corp.	151,000	6,417,500
		16,789,660
Drugs & Health Care—7.4%
aaiPharma, Inc. (a)	364,300		7,242,284
Andrx Corp. (a)	240,100		4,777,990
Celgene Corp. (a)	172,200		5,234,880
LifePoint Hospitals, Inc. (a)	197,000		4,125,180
Manor Care, Inc. (a)	253,200		6,332,532
MIM Corp. (a)	675,900	4,413,627
		32,126,493
Education—1.4%
Learning Tree International, Inc. (a)	199,100		3,111,933
Scholastic Corp. (a)	106,300	3,165,614
		6,277,547
Electrical Equipment—1.7%
Axcelis Technologies, Inc. (a)	343,600		2,102,832
Coherent, Inc. (a)	229,800	5,499,114
		7,601,946

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

23

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard Small Cap Portfolio (continued)
Electronics—4.3%
Actel Corp. (a)	231,800	$	4,751,900
Cree, Inc. (a)	201,400		3,278,792
Electro Scientific Industries, Inc. (a)	80,500		1,220,380
Microsemi Corp. (a)	322,600		5,161,600
Zoran Corp. (a)	228,300	4,385,643
		18,798,315
Environmental—0.8%
Waste Connections, Inc. (a)	104,100	3,648,705
Food & Beverages—1.8%
AFC Enterprises, Inc. (a)	337,100		5,474,504
The Robert Mondavi Corp.,
Class A (a)	85,900	2,174,129
		7,648,633
Forest & Paper Products—0.9%
Packaging Corp. of America (a)	199,600	3,678,628
Industrial & Machinery—1.9%
Nordson Corp.	139,300		3,322,305
Roper Industries, Inc.	131,350	4,886,220
		8,208,525
Insurance—3.6%
HCC Insurance Holdings, Inc.	160,800		4,754,856
Max Re Capital, Ltd.	195,000		2,919,150
Reinsurance Group of America, Inc.	75,600		2,426,760
RLI Corp.	67,400		2,217,460
Triad Guaranty, Inc. (a)	92,800	3,521,760
		15,839,986
Leisure & Entertainment—2.6%
Brunswick Corp.	234,700		5,872,194
Extended Stay America, Inc. (a)	229,800		3,100,002
Sonic Corp. (a)	87,300	2,220,039
		11,192,235
Manufacturing—0.8%
Plexus Corp. (a)	305,700	3,524,721
Medical Products & Services—5.2%
Cambrex Corp.	95,900		2,207,618
Covance, Inc. (a)	176,000		3,185,600
INAMED Corp. (a)	76,400		4,101,916
Invitrogen Corp. (a)	85,700		3,288,309
Pediatrix Medical Group, Inc. (a)	69,900		2,491,935
Varian, Inc. (a)	132,100		4,579,907
Viasys Healthcare, Inc. (a)	147,100	3,044,970
		22,900,255

Oil & Gas—8.5%
Cal Dive International, Inc. (a)	254,200		5,541,560
Helmerich & Payne, Inc.	185,020		5,402,584
Key Energy Services, Inc. (a)	563,700		6,042,864
Kinder Morgan Management, LLC (a)	174,146		6,523,509
Lone Star Technologies, Inc. (a)	125,300		2,653,854
Newfield Exploration Co. (a)	128,300		4,817,665
St. Mary Land & Exploration Co.	134,300		3,666,390
Western Gas Resources, Inc.	62,600	2,478,960
		37,127,386
Printing & Publishing—3.0%
Journal Register Co. (a)	290,300		5,251,527
Pulitzer, Inc.	60,600		2,994,852
R. H. Donnelley Corp. (a)	134,000	4,886,980
		13,133,359
Real Estate—6.3%
Alexandria Real Estate Equities, Inc.	94,500		4,252,500
Camden Property Trust	144,900		5,064,255
Capital Automotive REIT	3,370		94,326
CarrAmerica Realty Corp.	80,500		2,238,705
Catellus Development Corp. (a)	184,600		4,061,200
Healthcare Realty Trust, Inc.	136,000		3,964,400
Maguire Properties, Inc. (a)	181,600		3,495,800
The Mills Corp.	132,300	4,438,665
		27,609,851
Retail—4.6%
American Eagle Outfitters, Inc. (a)	351,200		6,441,008
AnnTaylor Stores Corp. (a)	76,800		2,223,360
BJ’s Wholesale Club, Inc. (a)	137,700		2,073,762
Linens ‘n Things, Inc. (a)	238,900		5,640,429
Too, Inc. (a)	190,800	3,863,700
		20,242,259
Telecommunications—0.6%
C-COR.net Corp. (a)	551,800	2,703,820
Transportation—3.9%
EGL, Inc. (a)	202,200		3,073,440
Forward Air Corp. (a)	111,500		2,828,755
Genesee & Wyoming, Inc.,
Class A (a)	131,000		2,694,670
Swift Transportation Co., Inc. (a)	273,400		5,090,708
USF Corp.	121,200	3,268,764
		16,956,337

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

24

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard Small Cap Portfolio (concluded)
Utilities—2.7%
AGL Resources, Inc.	136,600	$	3,475,104
DQE, Inc.	172,700		2,602,589
Energen Corp.	75,600		2,517,480
MDU Resources Group, Inc.	91,400	3,060,986
		11,656,159
Total Common Stocks
(Identified cost $389,207,726)		435,301,241

	Principal
	Amount
	(000)
Repurchase Agreement—4.1%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$14,510,000 United States Treasury
Bond, 12.75%, 11/15/10, with a
value of $18,500,250)
(Identified cost $18,133,000)	$	18,133	$	18,133,000
Total Investments
(Identified cost $407,340,726) (b)		103.7%	$	453,434,241
Liabilities in Excess of Cash and
Other Assets		(3.7)	(16,350,226)
Net Assets		100.0%	$	437,084,015

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

25

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard International Equity Portfolio
Common Stocks—97.1%
Australia—2.1%
BHP Billiton, Ltd.	7,397,966	$	42,866,885
Belgium—1.3%
Fortis	1,451,360	25,200,029
Denmark—1.2%
Novo Nordisk A/S, B Shares	714,400	25,009,134
Finland—2.5%
Nokia Oyj	3,040,100	50,062,337
France—8.6%
BNP Paribas SA	602,404		30,610,838
Carrefour SA	385,200		18,879,252
Credit Agricole SA	987,313		18,764,066
Lagardere SCA	516,130		22,433,606
Schneider Electric SA	363,000		17,065,875
Total SA	418,725	63,278,894
Total France		171,032,531
Germany—1.9%
Bayerische Motoren Werke AG	304,600		11,717,873
Deutsche Telekom AG (a)	680,850		10,390,837
Siemens AG	309,200	15,168,577
Total Germany		37,277,287
Hong Kong—1.5%
CLP Holdings, Ltd.	4,438,000		19,292,807
Hong Kong & China Gas Co., Ltd.	7,728,000	9,761,392
Total Hong Kong		29,054,199
Ireland—4.0%
Allied Irish Banks PLC	1,478,857		22,230,024
Bank of Ireland	2,781,600		33,699,328
CRH PLC	1,554,479	24,366,413
Total Ireland		80,295,765
Italy—6.8%
Alleanza Assicurazioni SpA	2,050,935		19,500,975
Eni SpA	2,267,500		34,293,133
Snam Rete Gas SpA	4,889,900		19,204,375
Telecom Italia SpA	6,892,500	62,370,194
Total Italy		135,368,677
Japan—13.7%
ACOM Co., Ltd.	542,800		19,619,005
Canon, Inc.	878,000		40,289,652
East Japan Railway Co.	4,625		20,568,395
Fanuc, Ltd.	273,100		13,532,750
Honda Motor Co., Ltd.	246,500		9,340,621

Kao Corp.	1,487,000	$	27,678,076
Nissan Motor Co., Ltd.	5,045,000		48,233,687
NTT DoCoMo, Inc.	18,832		40,777,181
Takeda Chemical Industries, Ltd.	1,001,900		36,963,706
Tokyo Gas Co., Ltd.	5,363,000	15,408,994
Total Japan		272,412,067
Netherlands—9.2%
ABN AMRO Holding NV	1,721,860		32,921,997
Heineken NV	845,281		29,993,952
Koninklijke (Royal) KPN NV (a)	3,576,400		25,339,926
Koninklijke (Royal) Philips
Electronics NV	1,319,175		25,086,313
Royal Dutch Petroleum Co.	1,515,166	70,328,382
Total Netherlands		183,670,570
Norway—0.6%
Statoil ASA	1,344,800	11,457,553
Singapore—1.7%
Oversea-Chinese Banking Corp.,
Ltd.	2,915,850		16,557,922
United Overseas Bank, Ltd.	2,466,897	17,370,541
Total Singapore		33,928,463
Spain—3.3%
Altadis SA	1,203,400		30,844,540
Endesa SA	2,068,300	34,629,415
Total Spain		65,473,955
Sweden—1.1%
Sandvik AB	815,600	21,345,318
Switzerland—7.5%
Compagnie Financiere Richemont
AG, A Shares	1,539,100		24,883,755
Credit Suisse Group	1,469,100		38,664,807
Novartis AG	672,970		26,629,650
Roche Holding AG	115,600		9,067,587
UBS AG	893,996	49,730,611
Total Switzerland		148,976,410
United Kingdom—30.1%
Barclays PLC	7,334,400		54,462,827
Boots Group PLC	4,153,100		44,443,213
BP PLC	6,083,100		42,184,777
BT Group PLC	1,309,950		4,404,285
Cadbury Schweppes PLC	3,381,026		19,973,520
Diageo PLC	3,888,342		41,513,735
GlaxoSmithKline PLC	3,503,201		70,699,214
HSBC Holdings PLC	6,882,162		81,313,188
Imperial Tobacco Group PLC	2,121,240		37,908,914
Kingfisher PLC	8,132,098		37,204,651

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

26

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard International Equity Portfolio (concluded)
Royal Bank of Scotland
Group PLC	1,556,400	$	43,660,954
Tesco PLC	6,116,500		22,129,197
Unilever PLC	3,104,600		24,718,724
Vodafone Group PLC	37,963,500	74,234,822
Total United Kingdom		598,852,021
Total Common Stocks
(Identified cost $1,860,159,245)		1,932,283,201

	Principal
	Amount
	(000)
Repurchase Agreement—2.8%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$44,510,000 United States Treasury
Bond, 12.75%, 11/15/10, with a
value of $56,750,250)
(Identified cost $55,633,000)	$	55,633		$	55,633,000
Total Investments
(Identified cost $1,915,792,245) (b)		99.9%		$	1,987,916,201
Cash and Other Assets in Excess
of Liabilities		0.1		1,965,248
Net Assets		100.0	%	$	1,989,881,449

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

27

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard International Equity Select Portfolio
Common Stocks—41.1%
Denmark—0.9%
Danske Bank A/S ADR	11,600	$	225,901
Finland—1.3%
Nokia Oyj ADR	20,015	328,846
France—4.8%
Aventis SA ADR	4,100		224,270
Axa ADR	14,300		223,223
Societe Generale ADR	26,100		330,885
Total SA ADR	5,900	447,220
Total France		1,225,598
Germany—0.9%
Siemens AG ADR	4,600	224,710
Ireland—1.3%
Allied Irish Banks PLC ADR	11,200	334,992
Italy—2.6%
Eni SpA ADR	5,900		448,636
Sanpaolo IMI SpA ADR	11,800	222,076
Total Italy		670,712
Japan—2.6%
Canon, Inc. ADR	7,400		337,810
Kao Corp. ADR	1,800	335,041
Total Japan		672,851
Netherlands—4.3%
ABN AMRO Holding NV ADR	17,500		334,075
Heineken NV ADR	12,500		443,542
Royal Dutch Petroleum Co.,
NY Shares	7,200	335,664
Total Netherlands		1,113,281
Spain—1.3%
Endesa SA ADR	20,800	339,040

Switzerland—6.0%
Compagnie Financiere Richemont AG
ADR	13,900				224,734
Nestle SA ADR	8,600				443,638
Novartis AG ADR	11,100				441,891
UBS AG	8,100			448,740
Total Switzerland				1,559,003
United Kingdom—15.1%
AstraZeneca PLC ADR	8,200				334,314
Barclays PLC ADR	14,800				442,816
BP PLC ADR	8,000				336,160
Cadbury Schweppes PLC ADR	18,700				452,166
Diageo PLC ADR	10,100				441,976
GlaxoSmithKline PLC ADR	11,000				445,940
HSBC Holdings PLC ADR	7,600				449,237
Tesco PLC ADR	20,800				225,759
Unilever PLC ADR	13,900				446,190
Vodafone Group PLC ADR	16,800			330,120
Total United Kingdom				3,904,678
Total Common Stocks
(Identified cost $10,869,638)				10,599,612
	Principal
	Amount
	(000)
Repurchase Agreement—1.8%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$380,000 United States Treasury
Bond, 12.75%, 11/15/10, with a
value of $484,500)
(Identified cost $472,000)	$	472			472,000
Total Investments
(Identified cost $11,341,638) (b)	42.9%			$	11,071,612
Cash and Other Assets in Excess
of Liabilities	57.1			14,709,421
Net Assets	100.0		%	$	25,781,033

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

28

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard International Small Cap Portfolio
Common Stocks—96.6%
Australia—4.7%
John Fairfax Holdings, Ltd.	2,895,800	$	5,593,156
Macquarie Infrastructure Group	5,340,374		12,857,661
TABCORP Holdings, Ltd.	1,043,400	7,536,373
Total Australia		25,987,190
Austria—1.5%
Erste Bank der oesterreichischen
Sparkassen AG	92,900	8,209,155
Belgium—0.4%
Solvus SA	290,709	2,286,774
Canada—0.9%
Intrawest Corp.	382,300	4,999,795
Denmark—1.3%
ISS A/S	207,800	7,419,020
Finland—4.8%
Amer Group, Ltd.	339,500		10,378,197
Sampo Oyj, A Shares	1,097,600		8,054,138
TietoEnator Oyj	484,700	8,159,830
Total Finland		26,592,165
France—4.9%
Carbone Lorraine SA	160,800		4,367,081
Neopost SA	345,300		14,671,429
Societe BIC SA	205,000	7,980,455
Total France		27,018,965
Germany—5.7%
Fielmann AG	200,500		7,966,445
Medion AG	171,800		7,469,265
Puma AG Rudolf Dassler Sport	50,400		5,006,345
Stada Arzneimittel AG	125,300		7,971,406
Techem AG (a)	257,846	3,177,124
Total Germany		31,590,585
Greece—1.2%
Greek Organization of Football
Prognostics	543,250		5,539,707
Vodafone Panafon SA	143,250	954,106
Total Greece		6,493,813
Hong Kong—2.7%
Esprit Holdings, Ltd.	4,710,065		11,536,357
Shaw Brothers (Hong Kong), Ltd.	3,245,500	3,163,032
Total Hong Kong		14,699,389

Ireland—4.6%
Anglo Irish Bank Corp. PLC	1,377,130		12,176,985
DCC PLC	768,000		10,318,610
Waterford Wedgwood PLC	10,256,613	2,826,762
Total Ireland		25,322,357
Italy—3.0%
Davide Campari-Milano SpA	255,900		9,800,319
Interpump Group SpA	1,038,200		4,208,524
Natuzzi SpA ADR	343,100	2,751,662
Total Italy		16,760,505
Japan—9.7%
Belluna Co., Ltd.	218,500		8,916,511
Daito Trust Construction Co., Ltd.	260,000		5,467,416
Hisamitsu Pharmaceutical Co., Inc.	432,000		4,785,009
Nissin Kogyo Co., Ltd.	316,200		6,280,550
Sammy Corp.	258,000		6,983,136
Secom Techno Service Co., Ltd.	114,000		2,364,022
The Suruga Bank, Ltd.	1,170,000		6,733,042
USS Co., Ltd.	136,500		6,911,680
Yoshinoya D&C Co., Ltd.	3,317	5,138,139
Total Japan		53,579,505
Netherlands—10.7%
CSM NV	260,300		5,736,186
Euronext NV	321,000		7,958,510
Fugro NV	247,827		10,245,313
Hunter Douglas NV	383,893		12,784,457
IHC Caland NV	147,402		7,525,701
Koninklijke Boskalis Westminster NV	312,136		7,663,473
Telegraaf Holdings MIJ NV	453,400	7,289,264
Total Netherlands		59,202,904
Norway—1.1%
DnB Holding ASA	1,228,400	6,058,273
Singapore—0.7%
Want Want Holdings, Ltd.	5,012,000	3,909,360
Spain—8.7%
Abengoa SA	638,000		3,809,764
Aldeasa SA	268,500		5,519,140
Altadis SA	418,200		10,718,952
Banco Pastor SA	379,200		10,146,081
Corporacion Mapfre SA	1,031,800		11,019,264
Prosegur, Compania de Seguridad SA	477,800	7,061,530
Total Spain		48,274,731

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

29

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares	Value
Lazard International Small Cap Portfolio (concluded)
Sweden—5.8%
Alfa Laval AB	737,400	$	7,047,027
D. Carnegie & Co. AB	452,100		3,303,937
Eniro AB	748,800		6,407,635
Swedish Match AB	2,006,500	15,164,773
Total Sweden		31,923,372
Switzerland—2.8%
Edipresse SA	21,860		8,069,100
Kaba Holding AG, B Shares	50,501	7,195,521
Total Switzerland		15,264,621
United Kingdom—21.4%
Bunzl PLC	1,104,019		7,738,076
Carpetright PLC	674,800		6,770,204
Cattles PLC	1,187,700		6,359,816
Euromoney Institutional Investor PLC	244,676		1,145,646
FKI PLC	3,340,453		4,396,015
Intertek Group PLC	970,200		6,956,233
Kidde PLC	6,751,700		9,470,112
Luminar PLC	535,100		4,017,625
Man Group PLC	522,227		10,306,556
Northgate PLC	843,400		7,271,817
Reckitt Benckiser PLC	526,965		9,669,625
Securicor PLC	4,133,000		5,080,948
Signet Group PLC Sponsored ADR	290,012		12,879,433
Singer & Friedlander Group PLC	1,572,816		3,789,255
Trinity Mirror PLC	1,255,800		8,900,343
William Hill PLC	1,415,200		6,667,254
Wood Group (John) PLC	2,225,200	6,609,440
Total United Kingdom		118,028,398
Total Common Stocks
(Identified cost $488,131,866)		533,620,877

Warrants—0.0%
Japan—0.0%
Belluna Co., Ltd. Right,
09/29/03 (a), (e)		21,850		$	158,677
Singapore—0.0%
Want Want Holdings, Ltd.,
10/24/04 (a), (e)	310,400			69,840
Total Warrants
(Identified cost $28,654)				228,517
		Principal
		Amount
		(000)
Short-Term Investments—17.3%
Repurchase Agreement—3.7%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$20,380,000 United States Treasury
Note, 1.625%, 01/31/05, with a
value of $20,634,750)	$	20,229			20,229,000
Collateral for Securities on Loan—13.6%
State Street Navigator Securities
Lending Prime Portfolio, 1.14% (d)		75,409		75,408,945
Total Short-Term Investments
(Identified cost $95,637,945)				95,637,945
Total Investments
(Identified cost $583,798,465) (b)		113.9	%	$	629,487,339
Liabilities in Excess of Cash and
Other Assets		(13.9	)	(76,973,424)
Net Assets		100.0	%	$	552,513,915

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

30

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares		Value
Lazard Emerging Markets Portfolio
Common Stocks—90.4%
Argentina—0.9%
Tenaris SA ADR	144,942	$	3,696,021
Brazil—4.7%
Brasil Telecom Participacoes SA ADR	72,600		2,718,870
Companhia Vale do Rio Doce ADR	198,000		5,872,680
Empresa Brasileira de Aeronautica SA
ADR	305,600		5,836,960
Souza Cruz SA	647,600		5,327,069
Total Brazil	19,755,579
Chile—2.0%
Administradora de Fondos de Pensiones
Provida SA ADR	348,300		8,369,649
China—0.2%
Beijing Capital Land Ltd., H Shares	1,750,100		325,416
Sinotrans, Ltd.	2,381,000		671,724
Total China	997,140
Croatia—1.8%
Pliva d.d. GDR (c)	526,650		7,289,521
Egypt—1.9%
Commercial International Bank	504,200		3,080,634
MobiNil	540,654		4,821,130
Total Egypt	7,901,764
Hong Kong—5.2%
China Mobile (Hong Kong), Ltd.
ADR	543,200		6,393,464
CNOOC, Ltd. ADR	316,700		9,405,990
Yue Yuen Industrial (Holdings), Ltd.	2,352,100		6,017,375
Total Hong Kong	21,816,829
Hungary—2.6%
EGIS Rt.	58,060		1,978,194
Gedeon Richter Rt.	125,490		8,851,655
Total Hungary	10,829,849
India—7.8%
Hindalco Industries, Ltd.	249,247		3,995,622
Hindustan Lever, Ltd.	864,900		3,321,313
Punjab National Bank, Ltd. (a)	122,318		408,253
Reliance Industries, Ltd.	954,800		6,669,423
Satyam Computer Services, Ltd.	1,244,500		5,151,271
State Bank of India	1,565,000		12,938,950
Total India	32,484,832

Indonesia—4.3%
PT Bank Mandiri	16,868,500	1,393,951
PT Hanjaya Mandala Sampoerna Tbk	16,962,000	8,532,400
PT Telekomunikasi Indonesia Tbk	2,272,000	1,273,697
PT Telekomunikasi Indonesia Tbk ADR	610,000	6,832,000
Total Indonesia	18,032,048
Israel—2.2%
Bank Hapoalim, Ltd. (a)	2,301,900	4,887,012
Koor Industries, Ltd. (a)	204,357	4,248,775
Total Israel	9,135,787
Mexico—9.7%
America Telecom SA de CV,
Series A1 Shares (a)	4,941,900	4,646,069
Carso Global Telecom,
Series A1 Shares (a)	1,718,500	2,189,340
Cemex SA de CV ADR	168,085	3,746,615
Fomento Economico Mexicano SA
de CV ADR	112,400	4,630,880
Grupo Financiero Banorte SA de CV,
Series O Shares	2,254,300	6,379,686
Grupo Televisa SA ADR	135,300	4,667,850
Kimberly-Clark de Mexico SA de CV,
Series A Shares	1,558,200	4,185,495
Telefonos de Mexico SA de CV,
Series L Shares ADR	324,300	10,189,506
Total Mexico	40,635,441
Peru—0.9%
Credicorp, Ltd.	361,200	3,575,880
Philippines—2.1%
Philippine Long Distance
Telephone Co. ADR (a)	391,400	4,215,378
San Miguel Corp., Class B	3,837,800	4,523,929
Total Philippines	8,739,307
Russia—2.8%
LUKOIL ADR	78,800	6,233,080
Wimm-Bill-Dann Foods OJSC
ADR (a)	261,300	5,304,390
Total Russia	11,537,470
South Africa—13.9%
ABSA Group, Ltd.	1,778,423	8,321,409
Impala Platinum Holdings, Ltd.	79,100	4,697,550
Iscor, Ltd.	3,788,827	8,072,068
Kumba Resources, Ltd.	2,170,200	8,698,138
Old Mutual PLC	2,297,300	3,317,026
Sanlam, Ltd.	5,674,400	5,289,055
Sappi, Ltd.	358,000	4,304,581

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

31

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Description	Shares		Value
Lazard Emerging Markets Portfolio (concluded)
Sasol, Ltd.	518,900	$	5,772,849
Steinhoff International Holdings, Ltd.	5,155,300		4,530,623
Telkom South Africa, Ltd.	1,009,600		5,209,321
Total South Africa	58,212,620
South Korea—16.8%
Daewoo Shipbuilding & Marine
Engineering Co., Ltd.	123,430		2,048,938
Hite Brewery Co., Ltd.	90,500		4,856,467
Kookmin Bank	314,083		9,465,875
KT Corp. ADR	544,836		10,738,718
LG Household & Health Care, Ltd.	109,600		2,830,607
POSCO	52,000		5,398,074
POSCO ADR	84,800		2,220,912
Samsung Electronics Co., Ltd.	56,481		16,785,898
Samsung Fire & Marine
Insurance Co., Ltd.	115,138		5,600,266
Samsung SDI Co., Ltd.	50,000		3,788,196
SK Telecom Co., Ltd.	36,930		6,307,007
Total South Korea	70,040,958
Taiwan—5.8%
Advantech Co., Ltd.	1,332,000		1,924,299
Ambit Microsystems Corp.	525,000		1,623,086
Chinatrust Financial Holding Co.,
Ltd. (a)	4,615,284		3,720,498
Compal Electronics, Inc.	1,698,000		2,276,429
Compal Electronics, Inc. GDR (a)	302,796		2,028,733
Fubon Financial Holding Co., Ltd.	7,834,000		6,269,916
United Microelectronics Corp. (a)	6,023,000		3,880,754
United Microelectronics Corp.
ADR (a)	692,924		2,598,465
Total Taiwan	24,322,180
Thailand—3.1%
Delta Electronics (Thailand) PCL	5,781,800		3,919,631
PTT PCL (c)	3,452,700		5,256,251
Thai Union Frozen Products PCL	5,936,900		3,671,727
Thai Union Frozen Products PCL
NVDR	48,500		30,284
Total Thailand	12,877,893
Turkey—0.5%
Turkiye Garanti Bankasi AS ADR
(a), (c)	1,595,309		2,160,527
Venezuela—1.2%
Compania Anonima Nacional
Telefonos de Venezuela ADR	411,073		5,134,302
Total Common Stocks
(Identified cost $334,897,234)	377,545,597

Preferred Stocks—6.9%
Brazil—6.9%
Banco Itau Holding Financeira SA
ADR	195,680				6,520,371
Caemi Mineracao e Metalurgica
SA (a)	50,600,900				8,585,750
Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar ADR	164,900				2,529,566
Companhia de Bebidas das
Americas ADR	275,591				5,588,655
Companhia Paranaense de
Energia-Copel ADR (a)	1,174,299				3,522,897
Telemar Norte Leste SA	159,900,000			2,195,908
Total Brazil				28,943,147
Total Preferred Stocks
(Identified cost $33,069,322)				28,943,147
	Principal
	Amount
	(000)
Corporate Bond—0.0%
India—0.0%
Hindustan Lever, Ltd.,
9.00%, 01/01/05
(Identified cost $0)	$	865			1,117
Short-Term Investments—9.5%
Repurchase Agreement—2.7%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$9,145,000 United States Treasury
Bond, 12.75%, 11/15/10, with a
value of $11,659,875)	11,428			11,428,000
Collateral for Securities on Loan—6.8%
State Street Navigator Securities
Lending Prime Portfolio, 1.14% (d)	28,237			28,236,984
Total Short-Term Investments
(Identified cost $39,664,984)				39,664,984
Total Investments
(Identified cost $407,631,540) (b)	106.8		%	$	446,154,845
Liabilities in Excess of Cash and
Other Assets	(6.8		)	(28,288,151)
Net Assets	100.0		%	$	417,866,694

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

32

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard Bond Portfolio
Asset-Backed Securities—7.2%
Bank One Issuance Trust,
Series 2002-A2, Class A2,
4.16%, 01/15/08	$	600	$	629,292
Citibank Credit Card Issuance Trust,
Series 2000-C1, Class C1,
7.45%, 09/15/07		495		547,581
Fleet Credit Card Master Trust II,
Series 2003-A, Class A,
2.40%, 07/15/08		585		592,989
Ford Credit Auto Owner Trust,
Series 2001-B, Class A5,
5.36%, 06/15/05		480		493,760
Harley-Davidson Motorcycle Trust,
Series 2003-1, Class A2,
2.63%, 11/15/10		450		458,745
MBNA Credit Card Master Note Trust,
Series 2001-C3, Class C3,
6.55%, 12/15/08		550		599,711
Nationsbank Credit Card Master Trust,
Series 1993-2, Class A,
6.00%, 12/15/05		500	511,099
Total Asset-Backed Securities
(Identified cost $3,835,096)			3,833,177
Corporate Bonds—44.5%
Aerospace & Defense—1.2%
Lockheed Martin Corp.,
7.25%, 05/15/06		565	643,446
Automotive—0.0%
Venture Holdings Co. LLC,
12.00%, 06/01/09 (f)		50	250
Banking & Financial Services—20.6%
American General Finance Corp.,
5.375%, 10/01/12		545		588,059
Bank of America Corp.,
7.40%, 01/15/11		450		552,875
Bank One Corp.,
6.00%, 08/01/08		550		626,121
Bear Stearns Cos., Inc.,
4.00%, 01/31/08		555		580,550
Boeing Capital Corp.,
6.50%, 02/15/12		570		642,802
CIT Group, Inc.,
4.125%, 02/21/06		545		564,085
Citigroup, Inc.,
5.00%, 03/06/07		500		544,059

Conoco Funding Co.,
6.35%, 10/15/11	430		502,273
Ford Motor Credit Co.,
7.375%, 10/28/09	600		628,987
General Electric Capital Corp.,
5.35%, 03/30/06	565		613,742
General Motors Acceptance Corp.,
6.75%, 01/15/06	525		557,362
Goldman Sachs Group, Inc.,
6.60%, 01/15/12	425		493,842
Household Finance Corp.,
5.75%, 01/30/07	520		573,892
MBNA American Bank NA,
7.125%, 11/15/12	225		263,590
MBNA Corp.,
5.625%, 11/30/07	265		286,432
Morgan Stanley Dean Witter & Co.,
6.60%, 04/01/12	550		635,462
Sovereign Bank,
5.125%, 03/15/13	290		299,492
SunTrust Banks, Inc.,
5.05%, 07/01/07	350		382,191
U. S. Bancorp,
3.125%, 03/15/08	625		630,536
Wachovia Corp.,
4.95%, 11/01/06	450		489,968
Wells Fargo & Co.,
5.125%, 09/01/12	560	603,131
		11,059,451
Brewery—0.6%
Anheuser-Busch Cos., Inc.,
7.50%, 03/15/12	250	315,629
Cable Television—1.1%
AT&T Broadband Corp.,
8.375%, 03/15/13	470	588,631
Chemicals—0.1%
ARCO Chemical Co.,
9.80%, 02/01/20	65	57,200
Diversified—1.2%
Emerson Electric Co.,
5.75%, 11/01/11	545	611,134
Energy—2.2%
Baker Hughes, Inc.,
6.00%, 02/15/09	495		564,062
USX Corp.,
6.65%, 02/01/06	570	634,260
		1,198,322

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

33

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard Bond Portfolio (continued)
Food & Beverages—1.0%
Sara Lee Corp.,
6.25%, 09/15/11	$	475	$	549,736
Forest & Paper Products—0.1%
Smurfit Capital Funding PLC,
7.50%, 11/20/25		70	66,850
Insurance—1.1%
Allstate Corp.,
7.50%, 06/15/13		455	563,783
Lodging & Entertainment—0.0%
Wheeling Island Gaming, Inc.,
10.125%, 12/15/09		20	20,125
Medical Products—0.5%
Becton, Dickinson & Co.,
4.55%, 04/15/13		275	285,322
Metals & Mining—0.1%
TriMas Corp.,
9.875%, 06/15/12		30		30,750
Wolverine Tube, Inc.,
10.50%, 04/01/09		20	21,500
			52,250
Multimedia—2.5%
AOL Time Warner, Inc.,
6.875%, 05/01/12		640		730,634
Viacom Inc.,
5.625%, 08/15/12		525	583,256
			1,313,890
Printing & Publishing—1.3%
Times Mirror Co., Class A,
7.25%, 03/01/13		575		686,279
WRC Media Corp.,
12.75%, 11/15/09		25	26,031
			712,310
Retail—0.6%
Wal-Mart Stores, Inc.,
4.55%, 05/01/13		300	312,080
Telecommunications—3.1%
AT&T Wireless Services, Inc.,
8.125%, 05/01/12		470		566,282
SBC Communications, Inc.,
5.75%, 05/02/06		460		508,030
Verizon Global Funding Corp.,
6.125%, 06/15/07		500	562,847
			1,637,159

Utilities—7.2%
Alabama Power Co.,
2.65%, 02/15/06	545		555,133
American Electric Power Co., Inc.,
Series A,
6.125%, 05/15/06	310		339,807
Georgia Power Co., Series J,
4.875%, 07/15/07	150		161,717
MidAmerican Energy Co.,
6.375%, 06/15/06	454		505,749
Peco Energy Co.,
3.50%, 05/01/08	590		606,715
Public Service Electric & Gas Co.,
6.375%, 05/01/08	500		571,067
Virginia Electric & Power Co.,
Series A,
5.375%, 02/01/07	575		627,947
Wisconsin Electric Power Co.,
4.50%, 05/15/13	500	512,848
		3,880,983
Total Corporate Bonds
(Identified cost $22,997,670)		23,868,551
Mortgage Pass-Through Security—5.6%
Government National Mortgage
Association, Pool#595273,
6.00%, 12/15/32
(Identified cost $2,994,259)	2,837	2,989,872
U.S. Government Securities—24.0%
Federal Home Loan Mortgage Corp.,
5.25%, 01/15/06	5,900		6,422,681
Federal National Mortgage Association:
2.25%, 05/15/06	5,820		5,897,813
4.625%, 05/01/13	555	570,773
Total U.S. Government Securities
(Identified cost $12,771,091)		12,891,267
U.S. Treasury Securities—17.4%
United States Treasury Notes:
2.00%, 05/15/06	4,800		4,851,000
2.25%, 07/31/04	120		121,551
2.625%, 05/15/08	1,000		1,009,141
3.625%, 05/15/13	825		831,445
4.375%, 05/15/07	2,300	2,498,734
Total U.S. Treasury Securities
(Identified cost $9,358,773)		9,311,871

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

34

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard Bond Portfolio (concluded)
Repurchase Agreement—0.4%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$190,000 United States Treasury
Bond, 12.75%, 11/15/10, with a
value of $242,250)
(Identified cost $237,000)	$	237	$	237,000

Total Investments
(Identified cost $52,193,889) (b)	99.1	%	$	53,131,738
Cash and Other Assets in Excess
of Liabilities	0.9		496,662
Net Assets	100.0	%	$	53,628,400

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

35

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio
Corporate Bonds—91.6%
Aerospace & Defense—1.7%
Esterline Technologies Corp.,
7.75%, 06/15/13 (c)	$	450	$	461,250
Sequa Corp., Series B,
8.875%, 04/01/08	1,025			1,071,125
Vought Aircraft Industries, Inc.,
8.00%, 07/15/11 (c)		575	580,750
			2,113,125
Apparel & Textiles—0.3%
Foamex LP,
9.875%, 06/15/07		930	358,050
Automotive—3.7%
Collins & Aikman Corp.,
10.75%, 12/31/11		700		616,000
Dana Corp.,
9.00%, 08/15/11		825		893,062
General Motors Corp.,
7.125%, 07/15/13		850		847,790
HLI Operating Co., Inc.,
10.50%, 06/15/10 (c)		475		498,750
TRW Automotive, Inc.:
9.375%, 02/15/13 (c)		475		515,375
11.00%, 02/15/13 (c)		350		381,500
United Components, Inc.,
9.375%, 06/15/13 (c)		700		726,250
Venture Holdings Co. LLC,
12.00%, 06/01/09 (f)	1,930		9,650
			4,488,377
Broadcasting—1.0%
Vivendi Universal SA,
9.25%, 04/15/10 (c)	1,025		1,165,938
Building & Construction—1.3%
KB Home,
7.75%, 02/01/10		810		875,813
Nortek, Inc., Series B,
9.875%, 06/15/11		690	726,225
			1,602,038
Building Materials—2.2%
Legrand SA,
8.50%, 02/15/25	1,150			1,184,500
Texas Industries, Inc.,
10.25%, 06/15/11 (c)		525		548,625
Thomas & Betts Corp.,
7.25%, 06/01/13	1,000		1,000,000
			2,733,125

Cable Television—5.4%
Charter Communications
Holdings LLC,
10.75%, 10/01/09	1,000		775,000
CSC Holdings, Inc., Series B,
7.625%, 04/01/11	1,190		1,201,900
Directv Holdings/Finance LLC,
8.375%, 03/15/13 (c)	440		490,600
EchoStar DBS Corp.:
9.125%, 01/15/09	300		335,250
10.375%, 10/01/07	490		542,675
Mediacom Broadband LLC,
11.00%, 07/15/13	750		834,375
Mediacom LLC, Series B,
8.50%, 04/15/08	375		378,750
Pegasus Communications Corp.,
Series B,
12.50%, 08/01/07	1,110		1,021,200
Shaw Communications, Inc.,
7.25%, 04/06/11	900	969,750
		6,549,500
Chemicals—2.6%
ARCO Chemical Co.,
9.80%, 02/01/20	1,015		893,200
Equistar Chemical LP,
10.625%, 05/01/11 (c)	250		256,250
Huntsman ICI Chemicals,
10.125%, 07/01/09	825		792,000
Lyondell Chemical Co.:
10.875%, 05/01/09	250		232,500
Series A,
9.625%, 05/01/07	500		490,000
Rhodia SA,
7.625%, 06/01/10 (c)	475	502,312
		3,166,262
Commercial Services—1.9%
Coinmach Corp.,
9.00%, 02/01/10	640		684,800
Iron Mountain, Inc.,
6.625%, 01/01/16	850		837,250
Mobile Mini, Inc.,
9.50%, 07/01/13 (c)	350		362,250
Phoenix Color Corp.,
10.375%, 02/01/09	515	489,250
		2,373,550
Computer Services—0.4%
DigitalNet, Inc.,
9.00%, 07/15/10 (c)	500	500,000

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

36

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio (continued)
Consumer Products—0.9%
Icon Health & Fitness, Inc.,
11.25%, 04/01/12	$	465	$	495,225
Sola International, Inc.,
6.875%, 03/15/08		585	555,750
			1,050,975
Containers—1.6%
Crown Euro Holdings SA:
9.50%, 03/01/11 (c)		850		918,000
10.875%, 03/01/13 (c)		500		545,000
Owens-Brockway Glass Container,
8.75%, 11/15/12		500	542,500
			2,005,500
Diversified—1.0%
Tyco International Group SA,
6.375%, 02/15/06		1,180	1,230,150
Electronics—0.6%
PerkinElmer, Inc.,
8.875%, 01/15/13 (c)		650	705,250
Energy—8.1%
ANR Pipeline, Inc.,
8.875%, 03/15/10 (c)		500		546,250
Chesapeake Energy Corp.,
9.00%, 08/15/12		535		596,525
CITGO Petroleum Corp.,
11.375%, 02/01/11 (c)		925		1,031,375
Compton Petroleum Corp.,
9.90%, 05/15/09		245		269,500
Ferrellgas Partners LP,
8.75%, 06/15/12		865		938,525
Hanover Equipment Trust, Series B,
8.75%, 09/01/11		295		309,750
Houston Exploration Co.,
7.00%, 06/15/13 (c)		450		464,625
Northwest Pipeline Corp.,
8.125%, 03/01/10		850		913,750
Parker Drilling Co., Series D,
9.75%, 11/15/06		645		664,350
Premcor Refining Group, Inc.,
7.50%, 06/15/15 (c)		1,025		1,009,625
Southern Natural Gas Co.,
8.875%, 03/15/10 (c)		500		545,000
Tesoro Petroleum Corp.:
8.00%, 04/15/08 (c)		250		256,250
9.625%, 04/01/12		635		581,025

Williams Cos., Inc.:
6.50%, 08/01/06	275		268,125
6.625%, 11/15/04	470		470,000
8.625%, 06/01/10	465		485,925
Series A,
7.50%, 01/15/31	275		259,875
Williams Holdings,
6.25%, 02/01/06	295	289,100
		9,899,575
Environmental—1.7%
Allied Waste North America, Inc.,
Series B:
8.875%, 04/01/08	230		249,550
10.00%, 08/01/09	995		1,057,187
Browning-Ferris Industries, Inc.,
7.40%, 09/15/35	775	713,000
		2,019,737
Equipment Rental—2.4%
H&E Equipment Services LLC,
11.125%, 06/15/12	780		686,400
National Equipment Services, Inc.,
Series B,
10.00%, 11/30/04	660		132,000
United Rentals, Inc.:
10.75%, 04/15/08 (c)	450		491,625
Series B,
10.75%, 04/15/08	650		710,125
Williams Scotsman, Inc.,
9.875%, 06/01/07	950	931,000
		2,951,150
Food & Beverages—3.5%
Burns Philp Capital Property, Ltd.,
9.75%, 07/15/12 (c)	1,325		1,291,875
Chiquita Brands International, Inc.,
10.56%, 03/15/09	955		1,036,175
Dominos, Inc.,
8.25%, 07/01/11 (c)	675		696,937
Le-Natures, Inc.,
9.00%, 06/15/13 (c)	675		695,250
Merisant Co.,
9.50%, 07/15/13 (c)	500	517,500
		4,237,737
Forest & Paper Products—4.6%
Bowater, Inc.,
6.50%, 06/15/13 (c)	700		664,166
Buckeye Technologies, Inc.,
8.50%, 12/15/05	840		835,800

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

37

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio (continued)
Caraustar Industries, Inc.,
9.875%, 04/01/11	$	1,055	$	1,123,575
Georgia-Pacific Corp.,
9.50%, 12/01/11		500		550,625
Kappa Beheer BV,
10.625%, 07/15/09		870		931,987
Smurfit Capital Funding PLC,
7.50%, 11/20/25		850		811,750
Tembec Industries, Inc.,
8.50%, 02/01/11		750	742,500
			5,660,403
Health Services—3.7%
Fisher Scientific International, Inc.,
8.125%, 05/01/12 (c)		810		866,700
Fresenius Medical Capital Trust,
7.875%, 02/01/08		970		1,028,200
HEALTHSOUTH Corp.,
7.00%, 06/15/08		650		510,250
NDCHealth Corp.,
10.50%, 12/01/12 (c)		760		815,100
Service Corp. International,
6.875%, 10/01/07		1,360	1,346,400
			4,566,650
Insurance—1.5%
Crum & Forster Holdings Corp.,
10.375%, 06/15/13 (c)		825		835,313
Leucadia National Corp.,
7.00%, 08/15/13 (c)		950	957,125
			1,792,438
Lodging & Entertainment—5.6%
Hilton Hotels Corp.,
7.625%, 12/01/12		590		646,050
ITT Corp.,
7.375%, 11/15/15		750		775,312
John Q. Hammons Hotels, Series B,
8.875%, 05/15/12		810		850,500
Mandalay Resort Group:
9.375%, 02/15/10		590		666,700
Series B,
10.25%, 08/01/07		655		740,150
Sun International Hotels, Ltd.,
8.875%, 08/15/11		680		736,100
Venetian Casino Resort LLC,
11.00%, 06/15/10		1,000		1,127,500
Wheeling Island Gaming, Inc.,
10.125%, 12/15/09		335		337,094

Wynn Las Vegas LLC,
12.00%, 11/01/10	825		911,625
		6,791,031
Medical Products—1.2%
Medquest, Inc., Series B,
11.875%, 08/15/12	635		660,400
Sybron Dental Specialties, Inc.,
8.125%, 06/15/12	715	754,325
		1,414,725
Metals & Mining—2.3%
Arch Western Resources LLC,
6.75%, 07/01/13 (c)	675		691,875
Peabody Energy Corp.,
6.875%, 03/15/13 (c)	1,000		1,047,500
TriMas Corp.,
9.875%, 06/15/12	295		302,375
Wolverine Tube, Inc.,
10.50%, 04/01/09	740	795,500
		2,837,250
Office Equipment—1.7%
Xerox Capital Europe PLC,
5.875%, 05/15/04	2,020	2,030,100
Printing & Publishing—6.5%
Dex Media East LLC:
9.875%, 11/15/09	250		278,750
12.125%, 11/15/12	300		354,750
Hollinger Participation Trust,
12.125%, 11/15/10 (c), (g)	777		873,235
Houghton Mifflin Co.,
9.875%, 02/01/13 (c)	325		352,625
Moore North American Finance, Inc.,
7.875%, 01/15/11 (c)	1,000		1,042,500
PRIMEDIA, Inc.:
7.625%, 04/01/08	565		570,650
8.875%, 05/15/11	275		289,438
RH Donnelley Finance Corp.,
10.875%, 12/15/12 (c)	440		512,600
Vertis, Inc., Series B,
10.875%, 06/15/09	890		890,000
Von Hoffmann Press, Inc.:
10.25%, 03/15/09	765		818,550
10.375%, 05/15/07 (h)	910		913,412
WRC Media Corp.,
12.75%, 11/15/09	940	978,775
		7,875,285

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

38

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio (continued)
Real Estate—4.5%
Forest City Enterprises, Inc.,
7.625%, 06/01/15	$	425	$	445,719
Host Marriott LP, Series G,
9.25%, 10/01/07		1,250		1,343,750
La Quinta Properties, Inc.,
8.875%, 03/15/11 (c)		500		532,500
LNR Property Corp.,
10.50%, 01/15/09		1,000		1,072,500
MeriStar Hospitality Corp.:
9.00%, 01/15/08		295		291,313
9.125%, 01/15/11		375		367,500
Tanger Properties LP:
7.875%, 10/24/04		915		953,887
9.125%, 02/15/08		400	425,000
			5,432,169
Retail—4.8%
NBC Acquisition Corp.,
10.75%, 02/15/09 (g)		810		810,000
Petro Stopping Centers,
10.50%, 02/01/07		855		850,725
Rite Aid Corp.,
11.25%, 07/01/08		1,055		1,134,125
Saks, Inc.,
9.875%, 10/01/11		975		1,096,875
ShopKo Stores, Inc.,
9.25%, 03/15/22		910		837,200
Toys “R” Us, Inc.,
7.875%, 04/15/13		1,050	1,129,501
			5,858,426
Steel—0.7%
Armco, Inc.,
9.00%, 09/15/07		200		176,000
United States Steel Corp.,
9.75%, 05/15/10		275		279,125
United States Steel LLC,
10.75%, 08/01/08		435	456,750
			911,875
Telecommunications—6.0%
Alamosa PCS Holdings, Inc.,
0.00%, 02/15/10 (g)		1,665		965,700
AT&T Wireless Services, Inc.,
8.125%, 05/01/12		830		1,000,030
Centennial Cellular
Communications Corp.,
10.125%, 06/15/13 (c)		550		544,500

FairPoint Communications, Inc.,
11.875%, 03/01/10 (c)		500		580,000
Nextel Communications, Inc.,
9.95%, 02/15/08 (g)	1,670			1,745,150
Qwest Services Corp.,
13.50%, 12/15/10 (c)		500		565,000
Rogers Wireless, Inc.,
9.625%, 05/01/11		850		977,500
Sprint Capital Corp.,
6.90%, 05/01/19		295		308,997
Telus Corp.,
8.00%, 06/01/11		500	577,500
			7,264,377
Tobacco—0.9%
DIMON, Inc.,
7.75%, 06/01/13 (c)	1,075		1,104,563
Transportation—2.1%
CP Ships, Ltd.,
10.375%, 07/15/12		615		686,494
Laidlaw International, Inc.,
10.75%, 06/15/11 (c)		800		840,000
Stena AB,
8.75%, 06/15/07	1,000		1,030,000
			2,556,494
Utilities—5.2%
AES Corp.:
8.75%, 05/15/13 (c)		500		520,000
8.875%, 02/15/11		485		474,087
9.375%, 09/15/10		195		195,975
Alliant Energy Resources, Inc.,
9.75%, 01/15/13		500		643,911
Calpine Corp.,
7.875%, 04/01/08	1,645			1,258,425
MSW Energy Holdings LLC,
8.50%, 09/01/10 (c)		675		693,563
PG&E Corp.,
6.875%, 07/15/08 (c)		475		494,000
Reliant Energy Resources Corp.,
Series B,
8.125%, 07/15/05		750		812,380
Reliant Resources, Inc.,
9.25%, 07/15/10 (c)		475		479,750
TXU Corp., Series J,
6.375%, 06/15/06		750	797,812
			6,369,903
Total Corporate Bonds
(Identified cost $105,476,903)			111,615,728

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

39

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
	(000)		Value
Lazard High Yield Portfolio (concluded)
Convertible Bond—0.3%
Energy—0.3%
Hanover Compressor Co.,
4.75%, 03/15/08
(Identified cost $300,549) (i)	$	350	$	308,291
	Shares
Preferred Stock—1.7%
Broadcasting—1.7%
Paxson Communications Corp.
(Identified cost $1,490,091)		205	2,039,750
Warrants—0.0%
Cable Television—0.0%
Ono Finance PLC:
05/31/09 (a), (c), (e)		500		5
03/16/11 (a), (c), (e)		470	5
			10
Retail—0.0%
Travelcenters of America, Inc.,
05/01/09 (a), (c), (e)		810		8,100
05/01/09 (a), (e)		720	7,200
			15,300
Telecommunications—0.0%
Horizon PCS, Inc.,
10/01/10 (a), (c), (e)		1,730	86
Total Warrants
(Identified cost $202,445)			15,396

	Principal
	Amount
	(000)
Repurchase Agreement—8.2%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$8,005,000 United States Treasury
Bond, 12.75%, 11/15/10, with a
value of $10,206,375)
(Identified cost $10,004,000)	$	10,004			10,004,000
Total Investments
(Identified cost $117,473,988) (b)		101.8	%	$	123,983,165
Liabilities in Excess of Cash and
Other Assets		(1.8	)	(2,139,942)
Net Assets		100.0	%	$	121,843,223

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

40

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

		Principal
		Amount
Description		(000) (j)		Value
Lazard Global High Yield Portfolio
Currency Denominated Bonds—88.2%
Bahamas—0.8%
Sun International Hotels, Ltd.,
8.875%, 08/15/11	USD	275	$	297,687
Canada—3.0%
Calpine Canada Energy Finance,
8.50%, 05/01/08	USD	600		468,000
CP Ships, Ltd.,
10.375%, 07/15/12	USD	375		418,594
Rogers Wireless, Inc.,
9.625%, 05/01/11	USD	150	172,500
Total Canada			1,059,094
Colombia—0.3%
Republic of Colombia,
11.375%, 01/31/08	EUR	71	91,765
Costa Rica—1.3%
Costa Rica Treasury Bill (BEM),
21.45%, 07/09/03		180,500	450,862
France—2.3%
Crown Euro Holdings SA,
9.50%, 03/01/11 (c)	USD	275		297,000
Legrand SA,
8.50%, 02/15/25	USD	275		283,250
Rhodia SA,
8.875%, 06/01/11 (c)	USD	225	232,875
Total France			813,125
Ireland—2.0%
BGB Finance (Ireland) PLC,
6.75%, 04/14/05	CZK	825		32,052
Smurfit Capital Funding PLC,
7.50%, 11/20/25	USD	705	673,275
Total Ireland			705,327
Israel—0.3%
Israel Government Bond,
9.00%, 06/29/07		390	96,409
Liberia—1.2%
Royal Caribbean Cruises Ltd.,
8.00%, 05/15/10	USD	400	416,000
Luxembourg—0.3%
Rhiag SA,
10.75%, 06/05/07 (c)	EUR	95	115,094
Mexico—0.1%
Mexico Bonos Bond Unit,
9.00%, 07/09/09		330	33,203

Namibia—0.1%
Govenment of Namibia,
12.00%, 01/15/10		200		28,238
Netherlands—1.4%
Kappa Beheer BV,
10.625%, 07/15/09	USD	365		391,006
10.625%, 07/15/09	EUR	80	98,758
Total Netherlands			489,764
Norway—0.6%
Findexa II AS,
10.25%, 12/01/11	EUR	170	216,694
Slovenia—0.5%
Republic of Slovenia,
7.75%, 02/24/06		31,560	161,359
South Africa—0.3%
Lesotho Water,
13.00%, 09/15/10		600	95,247
Sweden—0.4%
Stena AB,
8.75%, 06/15/07	USD	150	154,500
Thailand—0.0%
Finance One PLC:
0.00%, 01/03/05 (a), (f), (k)		20,000		0
Morgan Guarantee Trust,
0.00%, 07/31/03 (a), (f), (k)		10,569	0
Total Thailand			0
United Kingdom—0.1%
Luxfer Holdings PLC,
10.125%, 05/01/09		35	47,937
United States—73.2%
AES Corp.:
8.75%, 05/15/13 (c)		300		312,000
9.375%, 09/15/10		125		125,625
Allied Waste North America, Inc.,
Series B,
10.00%, 08/01/09		350		371,875
ARCO Chemical Co.,
9.80%, 02/01/20		325		286,000
Armco, Inc.,
9.00%, 09/15/07		575		506,000
Buckeye Technologies, Inc.,
9.25%, 09/15/08		430		427,850
Burns Philp Capital Property, Ltd.,
9.75%, 07/15/12 (c)		310		302,250

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

41

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000) (j)	Value
Lazard Global High Yield Portfolio (continued)
Caraustar Industries, Inc.,
9.875%, 04/01/11	275	$	292,875
CBRE Escrow, Inc.,
9.75%, 05/15/10 (c)	350		367,937
Charter Communications
Holdings LLC,
10.75%, 10/01/09 (l)	700		542,500
Chiquita Brands International, Inc.,
10.56%, 03/15/09	275		298,375
CITGO Petroleum Corp.,
11.375%, 02/01/11 (c)	275		306,625
Collins & Aikman Corp.,
10.75%, 12/31/11	450		396,000
Crum & Forster Holdings Corp.,
10.375%, 06/15/13 (c)	375		379,687
CSC Holdings, Inc., Series B,
7.625%, 04/01/11	325		328,250
Dana Corp.,
9.00%, 08/15/11	275		297,687
Dayton Superior Corp.,
10.75%, 09/15/08 (c)	275		272,250
DIMON, Inc.,
7.75%, 06/01/13 (c)	350		359,625
Dole Foods, Co.,
8.875%, 03/15/11 (c)	275		291,500
El Paso Production Holding Co.,
7.75%, 06/01/13 (c)	275		274,313
Ethyl Corp.,
8.875%, 05/01/10 (c)	300		306,000
Evergreen International Aviation, Inc.,
12.00%, 05/15/10 (c)	250		246,250
FairPoint Communications, Inc.,
11.875%, 03/01/10 (c)	475		551,000
Fisher Scientific International, Inc.,
8.125%, 05/01/12 (c)	145		155,150
Fresenius Medical Capital Trust,
7.875%, 02/01/08	150		159,000
Georgia-Pacific Corp.,
8.875%, 02/01/10 (c)	275		298,375
Hard Rock Hotel, Inc.,
8.875%, 06/01/13 (c)	350		365,750
HEALTHSOUTH Corp.,
7.00%, 06/15/08	225		176,625
HLI Operating Co., Inc.,
10.50%, 06/15/10 (c)	325		341,250
Hollinger Participation Trust,
12.125%, 11/15/10 (c), (g)	514		576,965
Host Marriott LP, Series G,
9.25%, 10/01/07	285		306,375

Huntsman ICI Chemicals,
10.125%, 07/01/09	EUR	145	154,855
Huntsman International LLC,
9.875%, 03/01/09 (c)		325	338,000
ISP Holdings, Inc., Series B,
10.625%, 12/15/09		774	822,375
Jafra Cosmetics, Inc.,
10.75%, 05/15/11 (c)		450	470,250
Jefferson Smurfit Corp.,
7.50%, 06/01/13 (c)		325	331,500
John Q. Hammons Hotels, Series B,
8.875%, 05/15/12		275	288,750
Kansas City Southern Railway Co.,
7.50%, 06/15/09		275	284,969
La Quinta Properties, Inc.,
8.875%, 03/15/11 (c)		275	292,875
Laidlaw International, Inc.,
10.75%, 06/15/11 (c)		275	288,750
LNR Property Corp.,
10.50%, 01/15/09		100	107,250
Mandalay Resort Group,
9.375%, 02/15/10		445	502,850
Mediacom Broadband LLC,
11.00%, 07/15/13		75	83,438
Mediacom LLC, Series B,
8.50%, 04/15/08		200	202,000
MeriStar Hospitality Corp.,
9.125%, 01/15/11		275	269,500
National Equipment Services, Inc.,
Series B,
10.00%, 11/30/04		255	51,000
NBC Acquisition Corp.,
10.75%, 02/15/09 (g)		650	650,000
Nextel Communications, Inc.,
9.95%, 02/15/08 (g)		450	470,250
Owens-Brockway Glass Container,
8.75%, 11/15/12		275	298,375
Parker Drilling Co., Series D,
9.75%, 11/15/06		155	159,650
Pegasus Satellite,
12.375%, 08/01/06		385	359,975
PerkinElmer, Inc.,
8.875%, 01/15/13 (c)		100	108,500
Phillips Van-Heusen Corp.,
8.125%, 05/01/13 (c)		325	333,531
Qwest Services Corp.,
13.50%, 12/15/10 (c)		310	350,300
Rite Aid Corp.,
11.25%, 07/01/08		275	295,625

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

42

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000) (j)	Value
Lazard Global High Yield Portfolio (continued)
Saks, Inc.,
9.875%, 10/01/11	275	$	309,375
Senior Housing Properties Trust,
7.875%, 04/15/15	275		280,500
Sequa Corp., Series B,
8.875%, 04/01/08	275		287,375
Service Corp. International,
6.875%, 10/01/07	275		272,250
Sola International, Inc.,
6.875%, 03/15/08	675		641,250
Tanger Properties LP,
7.875%, 10/24/04	215		224,138
Tenet Healthcare Corp.,
7.375%, 02/01/13	450		434,250
Tesoro Petroleum Corp.,
9.625%, 04/01/12	450		411,750
Town Sports International, Inc.,
9.625%, 04/15/11 (c)	325		339,625
Toys “R” Us, Inc.,
7.875%, 04/15/13	275		295,822
TriMas Corp.,
9.875%, 06/15/12	275		281,875
TRW Automotive, Inc.,
9.375%, 02/15/13 (c)	275		298,375
United Rentals, Inc., Series B,
10.75%, 04/15/08	275		300,437
United States Steel Corp.,
9.75%, 05/15/10	75		76,125
United States Steel LLC,
10.75%, 08/01/08	375		393,750
Venetian Casino Resort LLC,
11.00%, 06/15/10	275		310,062
Venture Holdings Co. LLC,
12.00%, 06/01/09 (f)	910		4,550
Vertis, Inc., Series B,
10.875%, 06/15/09	275		275,000
Von Hoffmann Press, Inc.:
10.25%, 03/15/09	415		444,050
10.375%, 05/15/07 (h)	195		195,731
Wheeling Island Gaming, Inc.,
10.125%, 12/15/09	200		201,250
Williams Cos., Inc., Series A,
6.75%, 01/15/06 (h)	325		320,125
Williams Scotsman, Inc.,
9.875%, 06/01/07	290		284,200
Wolverine Tube, Inc.:
7.375%, 08/01/08 (c)	475		451,250
10.50%, 04/01/09	155		166,625

WRC Media Corp.,
12.75%, 11/15/09		575			598,719
Total United States				25,834,991
Total Currency Denominated Bonds
(Identified cost $31,416,241)				31,107,296
		Shares
Preferred Stock—2.0%
United States—2.0%
Paxson Communications Corp.
(Identified cost $581,292)		70		696,500
Warrants—0.0%
Mexico—0.0%
United Mexican States Rights:
Series B, 06/30/04 (a), (e)	692,000				0
Series C, 06/30/05 (a), (e)	692,000				0
Series D, 06/30/06 (a), (e)	692,000			0
Total Mexico				0
United States—0.0%
Travelcenters of America, Inc.,
05/01/09 (a), (e)		245		2,450
Total Warrants
(Identified cost $0)				2,450
	Principal
	Amount
	(000)
U.S. Government Security—1.4%
Federal National Mortgage Association,
0.89%, 08/21/03
(Identified cost $499,370)	$	500			499,370
Repurchase Agreement—7.3%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$2,640,000 United States Treasury
Bill, 0.96%, 07/17/03, with a
value of $2,640,000)
(Identified cost $2,586,000) (l)		2,586		2,586,000
Total Investments
(Identified cost $35,082,903) (b)		98.9	%	$	34,891,616
Cash and Other Assets in Excess
of Liabilities		1.1		405,530
Net Assets		100.0	%	$	35,297,146

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

43

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Lazard Global High Yield Portfolio (continued)
Forward Foreign Currency Contracts open at June 30, 2003:

Forward			U.S. $ Cost		U.S. $
Foreign Currency	Expiration	Foreign	on Origination		Current		Unrealized		Unrealized
Purchase Contracts	Date	Currency	Date		Value		Appreciation		Depreciation
ARS	07/21/03	101,610	$	36,000	$	35,892	$	—	$	108
BRL	07/23/03	105,552		36,000		36,282		282		—
BRL	03/08/04	3,606,848		1,162,000		848,670		—		313,330
CLP	07/31/03	37,420,650		53,000		53,294		294		—
COP	09/19/03	2,025,200,000		664,000		703,683		39,683		—
CRC	07/09/03	90,197,630		220,392		225,550		5,158		—
CZK	07/11/03	8,958,456		333,972		325,589		—		8,383
EUR	07/31/03	884,600		1,033,434		1,014,863		—		18,571
HUF	07/30/03	27,355,000		117,666		117,180		—		486
IDR	07/31/03	1,432,094,000		173,000		172,213		—		787
IDR	07/31/03	300,240,000		36,000		36,105		105		—
ILS	10/21/03	2,736,525		535,000		621,076		86,076		—
INR	07/09/03	9,388,000		200,000		202,088		2,088		—
KRW	07/23/03	47,420,000		40,000		39,630		—		370
MAD	10/20/03	2,719,300		264,138		279,991		15,853		—
MXN	07/08/03	1,887,375		174,531		180,536		6,005		—
MXN	07/08/03	3,972,910		371,873		380,026		8,153		—
PHP	07/14/03	6,402,200		119,000		119,262		262		—
PHP	12/18/03	3,312,000		60,000		59,746		—		254
PLN	07/11/03	540,736		142,000		138,335		—		3,665
PLN	07/11/03	203,072		54,000		51,951		—		2,049
ROL	07/09/03	3,109,920,000		95,000		94,701		—		299
ROL	07/25/03	5,774,650,000		175,000		174,831		—		169
RUB	07/10/03	5,539,140		180,000		182,429		2,429		—
RUB	09/23/03	3,422,430		110,000		112,315		2,315		—
SKK	07/31/03	44,878,280		1,179,177		1,235,656		56,479		—
THB	10/14/03	36,062,466		834,200		856,662		22,462		—
TRL	07/24/03	34,867,011,575		235,405		239,547		4,142		—
ZAR	07/28/03	420,000		53,050		55,527		2,477		—
ZMK	07/14/03	864,135,000	173,000		179,281		6,281		—
Total Forward Foreign Currency Purchase Contracts			$	8,860,838	$	8,772,911	$	260,544	$	348,471

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

44

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Lazard Global High Yield Portfolio (concluded)

Forward			U.S. $ Cost		U.S. $
Foreign Currency	Expiration	Foreign	on Origination		Current		Unrealized		Unrealized
Sale Contracts	Date	Currency	Date		Value		Appreciation		Depreciation
BRL	03/08/04	3,606,848	$	787,521	$	848,670	$	—	$	61,149
COP	09/19/03	1,579,600,000		550,000		548,853		1,147		—
CRC	07/09/03	90,197,630		221,752		225,550		—		3,798
CZK	07/11/03	8,958,456		335,190		325,589		9,601		—
EUR	07/31/03	1,060,000		1,179,177		1,216,092		—		36,915
EUR	08/27/03	734,000		849,972		841,468		8,504		—
ILS	10/21/03	2,736,525		598,409		621,077		—		22,668
MAD	10/20/03	1,718,100		180,000		176,903		3,097		—
MXN	07/08/03	4,797,900		450,000		458,940		—		8,940
MXN	07/09/03	355,709		33,589		34,023		—		434
ROL	07/09/03	3,109,920,000		95,061		94,701		360		—
SKK	07/31/03	36,958,588		1,033,434		1,017,599		15,835		—
THB	10/14/03	29,267,140		698,000		695,239		2,761		—
ZMK	07/14/03	520,800,000	105,000		108,050		—		3,050
Total Forward Foreign Currency Sale Contracts			$	7,117,105	$	7,212,754		41,305	136,954
Gross unrealized appreciation/depreciation from Forward Foreign Currency Contracts							$	301,849	$	485,425

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

45

The Lazard Funds, Inc.
Portfolios of Investments (concluded)
June 30, 2003 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard Mortgage Portfolio
Collateralized Mortgage
Obligation—3.2%
Federal National Mortgage
Association Grantor Trust,
Series 2002-T1, Class A2,
7.00%, 11/25/31
(Identified cost $401,315)	$	380	$	415,271
Mortgage Pass-Through
Securities—91.8%
Federal Home Loan Mortgage Corp.,
Pool#C65976,
7.00%, 04/01/32		1,605		1,683,700
Federal National Mortgage Association:
5.50%, TBA		4,450		4,584,888
6.00%, TBA		5,330	5,534,875
Total Mortgage Pass-Through Securities
(Identified cost $11,839,820)			11,803,463
U.S. Government Security—72.3%
Federal National Mortgage Association,
1.01%, 07/14/03
(Identified cost $9,296,608) (l)		9,300	9,296,608

Repurchase Agreement—11.4%
State Street Bank and Trust Co.,
0.96%, 07/01/03
(Dated 06/30/03, collateralized by
$1,360,000 United States Treasury
Bond, 5.25%, 02/15/29, with a
value of $1,498,402)
(Identified cost $1,467,000) (l)	1,467			1,467,000
Total Investments
(Identified cost $23,004,743) (b)	178.7	%	$	22,982,342
Liabilities in Excess of Cash and
Other Assets	(78.7	)	(10,124,401		)
Net Assets	100.0	%	$	12,857,941

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

46

The Lazard Funds, Inc.
Notes to Portfolios of Investments
June 30, 2003 (unaudited)

(a)	Non-income producing security.
(b)	For federal income tax purposes, the aggregate cost, aggregate gross unrealized appreciation, aggregate gross unrealized depreciation and the net unrealized appreciation (depreciation) is as follows:

			Aggregate		Aggregate		Net
			Gross		Gross		Unrealized
	Aggregate		Unrealized		Unrealized		Appreciation
Portfolio	Cost		Appreciation		Depreciation		(Depreciation)
Equity	$	122,179,820	$	8,864,726	$	5,921,652	$	2,943,074
Mid Cap		38,302,076		4,293,234		650,468		3,642,766
Small Cap		407,340,726		62,631,183		16,537,668		46,093,515
International Equity		1,915,792,245		175,935,767		103,811,811		72,123,956
International Equity Select		11,341,638		426,656		696,682		(270,026)
International Small Cap		583,798,465		89,452,335		43,763,461		45,688,874
Emerging Markets		407,631,540		71,133,608		32,610,303		38,523,305
Bond		52,193,889		1,089,070		151,221		937,849
High Yield		117,473,988		9,562,089		3,052,912		6,509,177
Global High Yield		35,082,903		1,800,826		1,992,113		(191,287)
Mortgage		23,004,743		13,956		36,357		(22,401)

(c)	Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.”
(d)	Rate shown reflects 7 day yield as of June 30, 2003.
(e)	Date shown is the expiration date.
(f)	Issue in default.
(g)	Step up bonds are securities which increase the interest payment rate at a specified point in time. Rate shown reflects rate in effect at June 30, 2003, which may step up at a future date.
(h)	Variable rate security. Interest rate shown is the rate in effect at June 30, 2003.
(i)	Maturity date shown is the final conversion date.
(j)	Principal amount denominated in respective country’s currency unless otherwise noted.
(k)	Bankrupt security valued at zero.
(l)	Segregated security for forward foreign currency contracts and/or forward roll transactions.

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

47

The Lazard Funds, Inc.
Notes to Portfolios of Investments (continued)
June 30, 2003 (unaudited)
Security		Abbreviations:
ADR	—	American Depositary Receipt
BEM	—	Bonos de Estabilizacion Monetaria
GDR	—	Global Depositary Receipt
NVDR	—	Non-Voting Depositary Receipt
REIT	—	Real Estate Investment Trust
TBA	—	To Be Announced
Currency		Abbreviations:
ARS	—	Argentine Peso	MAD	—	Moroccan Dirham
BRL	—	Brazilian Real	MXN	—	Mexican Peso
CLP	—	Chilean Peso	PHP	—	Philippine Peso
COP	—	Colombian Peso	PLN	—	Polish Zloty
CRC	—	Costa Rican Colon	ROL	—	Romanian Leu
CZK	—	Czech Koruna	RUB	—	New Russian Ruble
EUR	—	Euro	SKK	—	Slovakian Koruna
HUF	—	Hungarian Forint	THB	—	Thailand Baht
IDR	—	Indonesian Rupiah	TRL	—	Turkish Lira
ILS	—	Israeli Shekel	USD	—	United States Dollar
INR	—	Indian Rupee	ZAR	—	South African Rand
KRW	—	South Korean Won	ZMK	—	Zambian Kwacha

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

48

The Lazard Funds, Inc.
Notes to Portfolios of Investments (continued)
June 30, 2003 (unaudited)

Portfolio holdings by industry, for those Portfolios previously presented by country:

	Lazard		Lazard		Lazard		Lazard
	International		International		International		Emerging
	Equity		Equity Select		Small Cap		Markets
	Portfolio		Portfolio		Portfolio		Portfolio
INDUSTRY
Aerospace & Defense	—	%	—	%	—	%	1.4	%
Apparel & Textiles	—		—		3.0		1.4
Automotive	3.5		—		3.7		—
Banking & Financial Services	24.4		10.8		17.3		18.6
Brewery	1.5		1.7		—		3.6
Broadcasting	—		—		—		1.1
Building & Construction	1.2		—		2.1		0.9
Business Services & Supplies	—		—		14.0		—
Chemicals	—		—		—		1.6
Computer Software	—		—		1.5		—
Computers & Business Equipment	—		—		—		3.1
Conglomerates	—		—		—		1.0
Cosmetics & Toiletries	1.4		1.3		—		—
Diversified	3.1		0.9		5.1		—
Drugs & Health Care	7.2		5.6		2.3		4.3
Electronics	5.0		1.3		2.7		7.4
Food & Beverages	3.1		6.9		3.5		3.2
Forest & Paper Products	—		—		—		2.0
Household Products & Home Furnishings	—		—		4.5		2.6
Industrial & Machinery	0.9		—		2.6		—
Insurance	1.0		0.9		2.0		3.4
Leisure & Entertainment	—		—		8.0		—
Manufacturing	—		—		2.1		—
Medical Products & Services	1.3		—		—		—
Metals & Mining	2.2		—		—		7.6
Oil & Gas	11.1		6.1		1.4		7.3
Printing & Publishing	—		—		6.8		—
Real Estate	—		—		1.0		0.1
Retail	7.4		1.7		8.1		0.6
Shipbuilding	—		—		—		0.5
Steel	—		—		—		3.8
Telecommunications	13.4		2.6		0.2		17.4
Tobacco	3.5		—		4.7		3.3
Transportation	1.0		—		—		0.2
Utilities	4.9		1.3		—		0.9
Subtotal	97.1		41.1		96.6		97.3
Repurchase Agreements	2.8		1.8		3.7		2.7
Collateral for Securities on Loan	—		—		13.6		6.8
Total Investments	99.9	%	42.9	%	113.9	%	106.8	%

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

49

The Lazard Funds, Inc.
Notes to Portfolios of Investments (concluded)
June 30, 2003 (unaudited)

Portfolio holdings by asset type, previously presented by country, for Lazard Global High Yield Portfolio:

ASSET TYPE
Corporate Bonds	85.6	%
Foreign Government Obligations	2.6
Preferred Stock	2.0
U.S. Government Security	1.4
Subtotal	91.6
Repurchase Agreement	7.3
Total Investments	98.9	%

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

50

This Page Intentionally Left Blank.

51

The Lazard Funds, Inc.
Statements of Assets and Liabilities
June 30, 2003 (unaudited)

							Lazard
	Lazard		Lazard		Lazard		International
	Equity		Mid Cap		Small Cap		Equity
	Portfolio		Portfolio		Portfolio		Portfolio
ASSETS
Investments in securities, at value	$	125,122,894	$	41,944,842	$	453,434,241	$	1,987,916,201
Cash		874		49		341		420
Foreign currency		—		—		—		3,008,139
Receivables for:
Investments sold		932,600		22,384		4,174,270		9,761,013
Dividends and interest		94,353		20,235		415,060		6,493,564
Capital stock sold		219,262		70,567		267,450		1,068,993
Gross appreciation on foreign currency contracts		—		—		—		—
Due from Investment Manager	—		—		—		—
Total assets	126,369,983		42,058,077		458,291,362		2,008,248,330
LIABILITIES
Payables for:
Investments purchased		—		—		3,267,269		14,857,783
Capital stock repurchased		752,730		16,046		17,555,667		1,901,423
Dividends payable		—		—		—		—
Gross depreciation on foreign currency contracts		—		—		—		—
Payable upon return of securities on loan		—		3,953,010		—		—
Management fees payable		78,915		13,328		282,463		1,252,250
Accrued directors’ fees payable		621		189		2,270		9,385
Accrued distribution fees payable		4,848		1,979		8,810		19,057
Other accrued expenses and payables	63,009		40,752		90,868		326,983
Total liabilities	900,123		4,025,304		21,207,347		18,366,881
Net assets	$	125,469,860	$	38,032,773	$	437,084,015	$	1,989,881,449
NET ASSETS
Paid in capital	$	155,920,594	$	37,896,432	$	442,131,565	$	2,712,373,018
Undistributed (distributions in excess of)
investment income—net		543,584		163,747		947,182		51,058,103
Unrealized appreciation (depreciation) on:
Investments—net		2,943,074		3,642,766		46,093,515		72,123,956
Foreign currency—net		—		—		—		13,847
Accumulated undistributed realized gain (loss)—net	(33,937,392)		(3,670,172)		(52,088,247)		(845,687,475)
Net assets	$	125,469,860	$	38,032,773	$	437,084,015	$	1,989,881,449
Institutional Shares
Net assets	$	102,275,539	$	28,237,130	$	395,837,508	$	1,901,240,329
Shares of capital stock outstanding*		8,035,003		2,869,937		25,129,034		196,966,787
Net asset value, offering and redemption price per share	$	12.73	$	9.84	$	15.75	$	9.65
Open Shares
Net assets	$	23,194,321	$	9,795,643	$	41,246,507	$	88,641,120
Shares of capital stock outstanding*		1,825,011		1,006,838		2,621,123		9,228,601
Net asset value, offering and redemption price per share	$	12.71	$	9.73	$	15.74	$	9.61
Cost of investments in securities	$	122,179,820	$	38,302,076	$	407,340,726	$	1,915,792,245
Cost of foreign currency	$	—	$	—	$	—	$	3,008,264

*$0.001 par value, 1,750,000,000 shares authorized for the Portfolios in total.

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

52

Lazard		Lazard		Lazard						Lazard
International		International		Emerging		Lazard		Lazard		Global		Lazard
Equity Select		Small Cap		Markets		Bond		High Yield		High Yield		Mortgage
Portfolio		Portfolio		Portfolio		Portfolio		Portfolio		Portfolio		Portfolio
$	11,071,612	$	629,487,339	$	446,154,845	$	53,131,738	$	123,983,165	$	34,891,616	$	22,982,342
	272		491		70		937		744		823		631
	—		160,497		1,709,489		—		—		—		—
	14,631,278		337,992		—		—		853,381		64,038		23,449,362
	120,330		2,212,290		1,063,735		579,237		2,216,605		692,685		30,447
	80		233,511		32,542		54		20,741		1,691		—
	—		—		—		—		—		301,849		—
—		—		—		—		—		—		4,679
25,823,572		632,432,120		448,960,681		53,711,966		127,074,636		35,952,702		46,467,461
	—		1,036,595		1,631,056		—		5,119,558		—		33,575,426
	—		3,011,156		759,763		—		—		3		—
	—		—		—		10,796		21,327		63,307		638
	—		—		—		—		—		485,425		—
	—		75,408,945		28,236,984		—		—		—		—
	8,036		345,602		329,439		21,086		47,988		40,853		—
	104		2,265		1,615		150		258		377		660
	724		3,037		2,686		2,034		272		895		—
33,675		110,605		132,444		49,500		42,010		64,696		32,796
42,539		79,918,205		31,093,987		83,566		5,231,413		655,556		33,609,520
$	25,781,033	$	552,513,915	$	417,866,694	$	53,628,400	$	121,843,223	$	35,297,146	$	12,857,941
$	27,086,156	$	540,382,400	$	481,930,421	$	57,148,807	$	170,701,321	$	114,597,753	$	10,689,323
	367,117		8,881,445		4,689,251		(129,171)		(137,030)		368,879		(112,684)
	(270,026)		45,688,874		38,523,305		937,849		6,509,177		(191,287)		(22,401)
	—		11,991		(13,529)		—		—		(181,092)		—
(1,402,214)		(42,450,795)		(107,262,754)		(4,329,085)		(55,230,245)		(79,297,107)		2,303,703
$	25,781,033	$	552,513,915	$	417,866,694	$	53,628,400	$	121,843,223	$	35,297,146	$	12,857,941
$	22,224,798	$	540,677,969	$	403,975,496	$	44,910,206	$	120,476,873	$	31,017,987	$	12,857,941
	2,647,376		43,205,377		50,264,830		4,488,308		23,129,188		4,078,131		1,199,862
$	8.40	$	12.51	$	8.04	$	10.01	$	5.21	$	7.61	$	10.72
$	3,556,235	$	11,835,946	$	13,891,198	$	8,718,194	$	1,366,350	$	4,279,159		N/A
	423,754		951,196		1,724,510		871,111		262,041		560,773		N/A
$	8.39	$	12.44	$	8.06	$	10.01	$	5.21	$	7.63		N/A
$	11,341,638	$	583,798,465	$	407,631,540	$	52,193,889	$	117,473,988	$	35,082,903	$	23,004,743
$	—	$	160,497	$	1,712,256	$	—	$	—	$	—	$	—

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

53

The Lazard Funds, Inc.
Statements of Operations
For the six months ended June 30, 2003 (unaudited)

							Lazard
	Lazard		Lazard		Lazard		International
	Equity		Mid Cap		Small Cap		Equity
	Portfolio		Portfolio		Portfolio		Portfolio
INVESTMENT INCOME
Income:
Interest	$	19,898	$	6,037	$	75,203	$	998,567
Dividends	1,141,795		256,934		2,353,339		37,109,108
Total investment income*	1,161,693		262,971		2,428,542		38,107,675
Expenses:
Management fees		449,063		135,284		1,568,600		6,938,604
Administration fees		34,291		25,923		64,145		164,419
Distribution fees (Open Shares)		26,879		10,568		49,432		108,530
Custodian fees		38,438		33,092		75,070		1,043,586
Professional services		21,897		19,566		30,397		70,485
Registration fees		13,722		12,798		14,949		22,235
Shareholders’ services		30,435		24,933		37,276		52,458
Directors’ fees and expenses		4,065		1,230		14,260		62,411
Shareholders’ reports		12,305		1,081		20,488		40,288
Other	4,620		1,871		11,274		31,383
Total expenses before fees waived and expenses reimbursed		635,715		266,346		1,885,891		8,534,399
Management fees waived and expenses reimbursed		—		(64,266)		—		—
Expense reductions	—		—		(59)		(204)
Expenses—net	635,715		202,080		1,885,832		8,534,195
Investment income (loss)—net	525,978		60,891		542,710		29,573,480
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY—NET
Realized gain (loss) on:
Investments—net**		(1,553,802)	(1,200,831)			(18,553,020)		(54,131,487)
Foreign currency—net		—		—		—		(1,424,535)
Change in net unrealized appreciation (depreciation) on:
Investments—net		12,440,865		4,667,783		67,735,904		178,022,801
Foreign currency—net	—		—		—		(264,305)
Realized and unrealized gain (loss) on investments
and foreign currency—net	10,887,063		3,466,952		49,182,884		122,202,474
Net increase (decrease) in net assets resulting
from operations	$	11,413,041	$	3,527,843	$	49,725,594	$	151,775,954
*Net of foreign withholding taxes of	$	5,159	$	—	$	3,688	$	4,508,102
**Net of foreign capital gains taxes of	$	—	$	—	$	—	$	—

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

54

Lazard		Lazard		Lazard						Lazard
International		International		Emerging		Lazard		Lazard		Global		Lazard
Equity Select		Small Cap		Markets		Bond		High Yield		High Yield		Mortgage
Portfolio		Portfolio		Portfolio		Portfolio		Portfolio		Portfolio		Portfolio
$	3,548	$	484,141	$	136,529	$	889,922	$	4,470,258	$	2,430,255	$	393,171
502,980		10,883,952		6,666,320		—		139,589		68,663		—
506,528		11,368,093		6,802,849		889,922		4,609,847		2,498,918		393,171
	100,967		1,938,853		1,770,843		141,511		354,248		304,303		108,136
	24,691		74,018		57,732		27,976		31,762		30,430		24,003
	3,610		7,529		12,870		12,650		1,543		5,034		—
	22,108		340,282		382,991		40,266		37,550		74,443		22,657
	19,197		32,975		28,351		20,057		20,957		20,851		20,575
	13,267		15,317		16,727		12,603		12,387		13,396		8,089
	23,863		27,274		27,549		24,839		23,172		25,702		11,266
	781		17,161		11,735		1,802		2,917		2,786		2,375
	687		2,690		8,323		1,097		424		1,945		80
2,461		8,657		8,661		2,168		2,790		3,637		2,060
	211,632		2,464,756		2,325,782		284,969		487,750		482,527		199,241
	(70,649)		(4,689)		(9,652)		(13,089)		(130,945)		—		(23,609)
(49)		(51)		—		—		(663)		(822)		—
140,934		2,460,016		2,316,130		271,880		356,142		481,705		175,632
365,594		8,908,077		4,486,719		618,042		4,253,705		2,017,213		217,539
	(401,618)		(17,494,730)		(511,714)		738,050		(1,603,104)		566,252		2,164,921
	—		(258,437)		(347,260)		—		—		14,279		—
	2,119,833		73,338,507		41,586,534		220,354		11,044,561		3,327,417		(868,907)
—		(43,644)		(15,495)		—		—		213,296		—
1,718,215		55,541,696		40,712,065		958,404		9,441,457		4,121,244		1,296,014
$	2,083,809	$	64,449,773	$	45,198,784	$	1,576,446	$	13,695,162	$	6,138,457	$	1,513,553
$	61,895	$	1,205,957	$	597,137	$	—	$	—	$	819	$	—
$	—	$	—	$	10,016	$	—	$	—	$	—	$	—

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

55

The Lazard Funds, Inc.
Statements of Changes in Net Assets

	Lazard Equity Portfolio
	Six Months Ended		Year Ended
	June 30, 2003		December 31,
	(unaudited)		2002
Increase (Decrease) in Net Assets:
Operations:
Investment income (loss)—net	$	525,978	$	1,200,311
Realized gain (loss) on investments and foreign currency—net		(1,553,802)		(22,309,387)
Change in unrealized appreciation (depreciation)—net	12,440,865		(6,894,718)
Net increase (decrease) in net assets resulting from operations	11,413,041		(28,003,794)
Distributions to shareholders:
From investment income—net
Institutional Shares		—		(1,131,482)
Open Shares		—		(159,184)
From realized gains—net
Institutional Shares		—		—
Open Shares	—		—
Net decrease in net assets resulting from distributions	—		(1,290,666)
Capital stock transactions:
Net proceeds from sales
Institutional Shares		6,405,053		27,727,036
Open Shares		2,676,453		14,335,772
Net proceeds from reinvestment of distributions
Institutional Shares		—		1,091,089
Open Shares		—		156,305
Cost of shares redeemed
Institutional Shares		(15,345,178)		(45,188,754)
Open Shares	(2,862,018)		(24,055,833)
Net increase (decrease) in net assets from capital stock transactions	(9,125,690)		(25,934,385)
Total increase (decrease) in net assets		2,287,351		(55,228,845)
Net assets at beginning of period	123,182,509		178,411,354
Net assets at end of period*	$	125,469,860	$	123,182,509
Shares issued and repurchased:
Institutional Shares:
Shares outstanding at beginning of period	8,788,212		10,025,389
Shares sold		539,231		2,217,510
Shares issued to shareholders from reinvestment of distributions		—		92,212
Shares repurchased	(1,292,440)		(3,546,899)
Net increase (decrease)	(753,209)		(1,237,177)
Shares outstanding at end of period		8,035,003		8,788,212
Open Shares:
Shares outstanding at beginning of period	1,837,937		2,634,812
Shares sold		231,287		1,090,032
Shares issued to shareholders from reinvestment of distributions		—		13,257
Shares repurchased	(244,213)		(1,900,164)
Net increase (decrease)	(12,926)		(796,875)
Shares outstanding at end of period		1,825,011		1,837,937
* Includes undistributed (distributions in excess of) investment income—net	$	543,584	$	17,606

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

56

Lazard Mid Cap Portfolio				Lazard Small Cap Portfolio
Six Months Ended		Year Ended		Six Months Ended		Year Ended
June 30, 2003		December 31,		June 30, 2003		December 31,
(unaudited)		2002		(unaudited)		2002
$	60,891	$	114,982	$	542,710	$	605,257
	(1,200,831)		(2,092,690)		(18,553,020)		(30,325,445)
4,667,783		(3,678,819)		67,735,904		(82,045,010)
3,527,843		(5,656,527)		49,725,594		(111,765,198)
	—		—		—		—
	—		—		—		—
	—		(515,271)		—		(15,697,836)
—		(152,893)		—		(1,888,102)
—		(668,164)		—		(17,585,938)
	547,924		13,813,143		19,249,214		110,711,759
	1,900,993		6,411,779		8,885,386		92,473,402
	—		444,842		—		15,182,529
	—		125,407		—		1,872,236
	(3,722,097)		(2,504,309)		(57,542,502)		(198,184,868)
(1,103,581)		(4,397,488)		(15,139,003)		(105,405,889)
(2,376,761)		13,893,374		(44,546,905)		(83,350,831)
	1,151,082		7,568,683		5,178,689		(212,701,967)
36,881,691		29,313,008		431,905,326		644,607,293
$	38,032,773	$	36,881,691	$	437,084,015	$	431,905,326
3,221,004		2,041,924		27,721,008		32,492,106
	60,942		1,390,165		1,367,679		6,527,987
	—		48,352		—		1,034,934
(412,009)		(259,437)		(3,959,653)		(12,334,019)
(351,067)		1,179,080		(2,591,974)		(4,771,098)
	2,869,937		3,221,004		25,129,034		27,721,008
919,414		717,284		3,071,851		3,934,559
	211,938		635,516		626,827		5,642,513
	—		13,751		—		127,884
(124,514)		(447,137)		(1,077,555)		(6,633,105)
87,424		202,130		(450,728)		(862,708)
	1,006,838		919,414		2,621,123		3,071,851
$	163,747	$	102,856	$	947,182	$	404,472

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

57

The Lazard Funds, Inc.
Statements of Changes in Net Assets (continued)

	Lazard International Equity Portfolio
	Six Months Ended		Year Ended
	June 30, 2003		December 31,
	(unaudited)		2002
Increase (Decrease) in Net Assets:
Operations:
Investment income (loss)—net	$	29,573,480	$	30,109,124
Realized gain (loss) on investments and foreign currency—net		(55,556,022)		(363,790,443)
Change in unrealized appreciation (depreciation)—net	177,758,496		121,768,750
Net increase (decrease) in net assets resulting from operations	151,775,954		(211,912,569)
Distributions to shareholders:
From investment income—net
Institutional Shares		—		(9,464,170)
Open Shares		—		(202,681)
From realized gains—net
Institutional Shares		—		—
Open Shares	—		—
Net decrease in net assets resulting from distributions	—		(9,666,851)
Capital stock transactions:
Net proceeds from sales
Institutional Shares		250,244,199		1,237,961,302
Open Shares		73,673,343		252,570,046
Net proceeds from reinvestment of distributions
Institutional Shares		—		8,783,214
Open Shares		—		169,104
Cost of shares redeemed
Institutional Shares		(270,008,593)		(1,481,615,842)
Open Shares	(80,632,986)		(272,014,495)
Net increase (decrease) in net assets from capital stock transactions	(26,724,037)		(254,146,671)
Total increase (decrease) in net assets		125,051,917		(475,726,091)
Net assets at beginning of period	1,864,829,532		2,340,555,623
Net assets at end of period*	$	1,989,881,449	$	1,864,829,532
Shares issued and repurchased:
Institutional Shares:
Shares outstanding at beginning of period	199,225,457		222,189,526
Shares sold		28,191,737		127,897,561
Shares issued to shareholders from reinvestment of distributions		—		942,405
Shares repurchased	(30,450,407)		(151,804,035)
Net increase (decrease)	(2,258,670)		(22,964,069)
Shares outstanding at end of period		196,966,787		199,225,457
Open Shares:
Shares outstanding at beginning of period	9,909,067		11,703,788
Shares sold		8,349,744		26,575,768
Shares issued to shareholders from reinvestment of distributions		—		18,222
Shares repurchased	(9,030,210)		(28,388,711)
Net increase (decrease)	(680,466)		(1,794,721)
Shares outstanding at end of period		9,228,601		9,909,067
* Includes undistributed (distributions in excess of) investment income—net	$	51,058,103	$	21,484,623

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

58

Lazard International Equity Select Portfolio				Lazard International Small Cap Portfolio				Lazard Emerging Markets Portfolio
Six Months Ended		Period Ended		Six Months Ended		Year Ended		Six Months Ended		Year Ended
June 30, 2003		December 31,		June 30, 2003		December 31,		June 30, 2003		December 31,
(unaudited)		2002		(unaudited)		2002		(unaudited)		2002
$	365,594	$	347,964	$	8,908,077	$	6,603,972	$	4,486,719	$	4,545,894
	(401,618)		(989,690)		(17,753,167)		(20,007,139)		(858,974)		(28,276,861)
2,119,833		(2,530,508)		73,294,863		(11,267,736)		41,571,039		21,451,552
2,083,809		(3,172,234)		64,449,773		(24,670,903)		45,198,784		(2,279,415)
	—		(318,477)		—		(7,171,804)		—		(4,037,021)
	—		(29,966)		—		(26,978)		—		(82,176)
	—		—		—		—		—		—
—		—		—		—		—		—
—		(348,443)		—		(7,198,782)		—		(4,119,197)
	119,994		22,819,628		80,269,881		383,788,995		79,079,036		299,712,296
	879,326		2,450,660		13,538,326		3,288,469		7,832,223		14,316,793
	—		314,616		—		6,722,476		—		3,809,865
	—		27,512		—		22,923		—		77,772
	(642,219)		(7,601,487)		(131,943,792)		(220,003,473)		(63,933,831)		(261,081,227)
(125,036)		(39,400)		(5,882,084)		(3,587,015)		(4,625,952)		(11,439,962)
232,065		17,971,529		(44,017,669)		170,232,375		18,351,476		45,395,537
	2,315,874		14,450,852		20,432,104		138,362,690		63,550,260		38,996,925
23,465,159		9,014,307		532,081,811		393,719,121		354,316,434		315,319,509
$	25,781,033	$	23,465,159	$	552,513,915	$	532,081,811	$	417,866,694	$	354,316,434
2,707,101		937,949		47,805,592		33,699,290		48,534,314		42,736,911
	14,660		2,570,262		7,425,971		32,269,208		10,812,098		38,889,222
	—		40,536		—		616,175		—		534,343
(74,385)		(841,646)		(12,026,186)		(18,779,081)		(9,081,582)		(33,626,162)
(59,725)		1,769,152		(4,600,215)		14,106,302		1,730,516		5,797,403
	2,647,376		2,707,101		43,205,377		47,805,592		50,264,830		48,534,314
323,608		47,429		274,030		298,378		1,282,739		927,234
	116,457		277,299		1,161,495		274,383		1,084,460		1,802,074
	—		3,541		—		2,109		—		10,877
(16,311)		(4,661)		(484,329)		(300,840)		(642,689)		(1,457,446)
100,146		276,179		677,166		(24,348)		441,771		355,505
	423,754		323,608		951,196		274,030		1,724,510		1,282,739
$	367,117	$	1,523	$	8,881,445	$	(26,632)	$	4,689,251	$	202,532

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

59

The Lazard Funds, Inc.
Statements of Changes in Net Assets (concluded)

	Lazard Bond Portfolio
	Six Months Ended		Year Ended
	June 30, 2003		December 31,
	(unaudited)		2002
Increase (Decrease) in Net Assets:
Operations:
Investment income (loss)—net	$	618,042	$	2,140,020
Realized gain (loss) on investments, options, swap agreements and foreign currency—net		738,050		1,431,860
Change in unrealized appreciation (depreciation)—net	220,354		(12,803)
Net increase (decrease) in net assets resulting from operations	1,576,446		3,559,077
Distributions to shareholders:
From investment income—net
Institutional Shares		(514,924)		(1,779,401)
Open Shares		(103,118)		(363,821)
From realized gains—net
Institutional Shares		—		—
Open Shares		—		—
From capital
Institutional Shares		—		—
Open Shares	—		—
Net decrease in net assets resulting from distributions	(618,042)		(2,143,222)
Capital stock transactions:
Net proceeds from sales
Institutional Shares		977,004		14,804,435
Open Shares		1,142,472		3,252,031
Net proceeds from reinvestment of distributions
Institutional Shares		457,683		1,555,070
Open Shares		94,105		338,336
Cost of shares redeemed
Institutional Shares		(6,059,760)		(12,782,601)
Open Shares	(3,534,978)		(1,809,414)
Net increase (decrease) in net assets from capital stock transactions	(6,923,474)		5,357,857
Total increase (decrease) in net assets		(5,965,070)		6,773,712
Net assets at beginning of period	59,593,470		52,819,758
Net assets at end of period*	$	53,628,400	$	59,593,470
Shares issued and repurchased:
Institutional Shares:
Shares outstanding at beginning of period	4,954,685		4,603,503
Shares sold		99,308		1,519,530
Shares issued to shareholders from reinvestment of distributions		46,120		161,903
Shares repurchased	(611,805)		(1,330,251)
Net increase (decrease)	(466,377)		351,182
Shares outstanding at end of period		4,488,308		4,954,685
Open Shares:
Shares outstanding at beginning of period	1,102,999		921,653
Shares sold		115,177		334,149
Shares issued to shareholders from reinvestment of distributions		9,487		35,217
Shares repurchased	(356,552)		(188,020)
Net increase (decrease)	(231,888)		181,346
Shares outstanding at end of period		871,111		1,102,999
* Includes undistributed (distributions in excess of) investment income—net	$	(129,171)	$	(129,171)

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

60

Lazard High Yield Portfolio				Lazard Global High Yield Portfolio				Lazard Mortgage Portfolio
Six Months Ended		Year Ended		Six Months Ended		Year Ended		Six Months Ended		Year Ended
June 30, 2003		December 31,		June 30, 2003		December 31,		June 30, 2003		December 31,
(unaudited)		2002		(unaudited)		2002		(unaudited)		2002
$	4,253,705	$	7,806,072	$	2,017,213	$	7,886,539	$	217,539	$	1,989,135
	(1,603,104)		(11,841,659)		580,531		(14,358,080)		2,164,921		3,605,679
11,044,561		(3,502,400)		3,540,713		2,106,314		(868,907)		1,252,401
13,695,162		(7,537,987)		6,138,457		(4,365,227)		1,513,553		6,847,215
	(4,199,736)		(7,756,049)		(1,928,003)		(5,858,506)		(314,638)		(2,242,351)
	(53,969)		(187,053)		(86,983)		(225,134)		—		—
	—		—		—		—		—		(2,856,017)
	—		—		—		—		—		—
	—		—		—		(1,994,483)		—		—
—		—		—		(79,873)		—		—
(4,253,705)		(7,943,102)		(2,014,986)		(8,157,996)		(314,638)		(5,098,368)
	36,795,393		33,315,841		10,235,181		111,973,009		316,993		35,602,493
	466,643		277,793		435,750		2,524,408		—		—
	4,019,295		7,243,422		1,557,656		7,110,539		272,499		4,729,288
	44,452		108,635		69,379		275,541		—		—
	(7,786,456)		(18,643,150)		(63,738,106)		(198,656,188)		(76,078,537)		(32,563,109)
(229,680)		(11,445,492)		(732,678)		(4,563,661)		—		—
33,309,647		10,857,049		(52,172,818)		(81,336,352)		(75,489,045)		7,768,672
	42,751,104		(4,624,040)		(48,049,347)		(93,859,575)		(74,290,130)		9,517,519
79,092,119		83,716,159		83,346,493		177,206,068		87,148,071		77,630,552
$	121,843,223	$	79,092,119	$	35,297,146	$	83,346,493	$	12,857,941	$	87,148,071
16,552,920		12,013,527		10,882,948		21,852,473		8,296,901		7,547,321
	7,296,671		6,503,819		1,357,405		14,344,532		29,594		3,360,753
	801,978		1,396,070		209,399		945,294		25,747		449,901
(1,522,381)		(3,360,496)		(8,371,621)		(26,259,351)		(7,152,380)		(3,061,074)
6,576,268		4,539,393		(6,804,817)		(10,969,525)		(7,097,039)		749,580
	23,129,188		16,552,920		4,078,131		10,882,948		1,199,862		8,296,901
204,131		2,057,861		593,297		846,806		—		—
	93,888		58,368		57,132		324,564		—		—
	8,876		20,386		9,260		36,709		—		—
(44,854)		(1,932,484)		(98,916)		(614,782)		—		—
57,910		(1,853,730)		(32,524)		(253,509)		—		—
	262,041		204,131		560,773		593,297		—		—
$	(137,030)	$	(137,030)	$	368,879	$	366,652	$	(112,684)	$	(15,585)

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

61

The Lazard Funds, Inc.
Financial Highlights

Selected data for a share of capital stock outstanding throughout each period:

LAZARD EQUITY PORTFOLIO

	Six Months		Year Ended
	Ended
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	11.59	$	14.10	$	16.72	$	21.08	$	21.75	$	19.98
Income (loss) from investment operations:
Net investment income (loss) (a)		0.05		0.11		0.13		0.17		0.26		0.28
Net realized and unrealized gain (loss)	1.09		(2.48)		(1.07)		(0.79)		0.66		3.10
Total from investment operations	1.14		(2.37)		(0.94)		(0.62)		0.92		3.38
Less distributions from:
Net investment income		—		(0.14)		(0.13)		(0.23)		(0.26)		(0.26)
Net realized gains	—		—		(1.55)		(3.51)		(1.33)		(1.35)
Total distributions	—		(0.14)		(1.68)		(3.74)		(1.59)		(1.61)
Net asset value, end of period	$	12.73	$	11.59	$	14.10	$	16.72	$	21.08	$	21.75
Total Return (b)		9.84%	(16.84)%			(5.90)%		(2.64)%		4.23%		17.31%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	102,276	$	101,891	$	141,329	$	187,517	$	377,660	$	361,126
Ratios to average net assets:
Net expenses (c)		1.00%		0.97%		0.90%		0.86%		0.84%		0.85%
Gross expenses (c)		1.00%		0.97%		0.90%		0.86%		0.84%		0.85%
Net investment income (c)		0.94%		0.87%		0.82%		0.85%		1.14%		1.28%
Portfolio turnover rate		27%		74%		89%		36%		62%		76%
	Six Months		Year Ended
	Ended
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	11.58	$	14.07	$	16.70	$	21.05	$	21.76	$	19.99
Income (loss) from investment operations:
Net investment income (loss) (a)		0.04		0.07		0.09		0.12		0.20		0.20
Net realized and unrealized gain (loss)	1.09			(2.47)		(1.08)		(0.79)	0.65		3.12
Total from investment operations	1.13			(2.40)		(0.99)		(0.67)	0.85		3.32
Less distributions from:
Net investment income		—		(0.09)		(0.09)		(0.17)		(0.23)		(0.20)
Net realized gains	—			—		(1.55)		(3.51)	(1.33)		(1.35)
Total distributions	—			(0.09)		(1.64)		(3.68)	(1.56)		(1.55)
Net asset value, end of period	$	12.71		$ 11.58		$ 14.07		$ 16.70	$	21.05	$	21.76
Total Return (b)		9.76%	(17.08)%			(6.23)%		(2.91)%		3.92%		16.98%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	23,194		$21,292		$37,082		$62,167	$	121,994	$	117,624
Ratios to average net assets:
Net expenses (c)		1.33%		1.28%		1.18%		1.13%		1.10%		1.12%
Gross expenses (c)		1.33%		1.28%		1.18%		1.13%		1.10%		1.12%
Net investment income (c)		0.61%		0.55%		0.54%		0.57%		0.89%		0.96%
Portfolio turnover rate		27%		74%		89%		36%		62%		76%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

62

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD MID CAP PORTFOLIO

	Six Months		Year Ended
	Ended
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	8.93	$	10.64	$	11.36	$	10.78	$	10.46	$	10.26
Income (loss) from investment operations:
Net investment income (loss) (a)		0.02		0.04		0.07		0.02		0.02		0.05
Net realized and unrealized gain (loss)	0.89		(1.57)		1.31		2.20		0.43		0.31
Total from investment operations	0.91		(1.53)		1.38		2.22		0.45		0.36
Less distributions from:
Net investment income		—		—		(0.07)		(0.03)		(0.03)		(0.05)
Net realized gains	—		(0.18)		(2.03)		(1.61)		(0.10)		(0.11)
Total distributions	—		(0.18)		(2.10)		(1.64)		(0.13)		(0.16)
Net asset value, end of period	$	9.84	$	8.93	$	10.64	$	11.36	$	10.78	$	10.46
Total Return (b)	10.19%		(14.47)%		12.85%		22.44%			4.38%		3.65%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	28,237	$	28,754	$	21,729	$	15,344	$	27,521	$	55,731
Ratios to average net assets:
Net expenses (c)		1.05%		1.05%		1.05%		1.05%		1.05%		1.05%
Gross expenses (c)		1.37%		1.40%		1.71%		1.50%		1.17%		1.23%
Net investment income (c)		0.41%		0.40%		0.65%		0.20%		0.23%		0.48%
Portfolio turnover rate		56%		104%		160%		152%		113%		86%
	Six Months		Year Ended
	Ended
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	8.84	$	10.57	$	11.30	$	10.74	$	10.45	$	10.26
Income (loss) from investment operations:
Net investment income (loss) (a)		—		0.01		0.04		(0.01)		(0.01)		0.02
Net realized and unrealized gain (loss)	0.89		(1.56)		1.30		2.18		0.42		0.32
Total from investment operations	0.89		(1.55)		1.34		2.17		0.41		0.34
Less distributions from:
Net investment income		—		—		(0.04)		—		(0.02)		(0.04)
Net realized gains	—		(0.18)		(2.03)		(1.61)		(0.10)		(0.11)
Total distributions	—		(0.18)		(2.07)		(1.61)		(0.12)		(0.15)
Net asset value, end of period	$	9.73	$	8.84	$	10.57	$	11.30	$	10.74	$	10.45
Total Return (b)	10.07%		(14.75)%		12.50%		22.00%			3.96%		3.42%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	9,796	$	8,128	$	7,584	$	6,342	$	14,024	$	16,345
Ratios to average net assets:
Net expenses (c)		1.35%		1.35%		1.35%		1.35%		1.35%		1.35%
Gross expenses (c)		1.81%		1.83%		2.13%		1.91%		1.55%		1.66%
Net investment income (loss) (c)		0.11%		0.09%		0.35%	(0.09)%		(0.08)%			0.29%
Portfolio turnover rate		56%		104%		160%		152%		113%		86%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

63

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD SMALL CAP PORTFOLIO

	Six Months		Year Ended
	Ended
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99			12/31/98
Net asset value, beginning of period	$	14.03	$	17.70	$	18.07	$	16.57	$	17.39	$		20.02
Income (loss) from investment operations:
Net investment income (loss) (a)		0.02		0.02		0.08		0.09		0.10			0.08
Net realized and unrealized gain (loss)	1.70		(3.18)		3.06		2.45		0.17		(2.60)
Total from investment operations	1.72		(3.16)		3.14		2.54		0.27		(2.52)
Less distributions from:
Net investment income		—		—		(0.09)		(0.23)		(0.11)			(0.01)
Net realized gains	—		(0.51)		(3.42)		(0.81)		(0.98)		(0.10)
Total distributions	—		(0.51)		(3.51)		(1.04)		(1.09)		(0.11)
Net asset value, end of period	$	15.75	$	14.03	$	17.70	$	18.07	$	16.57	$		17.39
Total Return (b)	12.26%		(17.97)%			18.06%		15.89%		1.77%		(12.62)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	395,838	$	388,795	$	575,077	$	730,179	$	906,945	$	1,411,503
Ratios to average net assets:
Net expenses (c)		0.87%		0.85%		0.83%		0.83%		0.81%			0.81%
Gross expenses (c)		0.87%		0.85%		0.83%		0.83%		0.81%			0.81%
Net investment income (c)		0.29%		0.14%		0.41%		0.52%		0.60%			0.50%
Portfolio turnover rate		35%		93%		80%		67%		50%			46%
	Six Months		Year Ended
	Ended
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99			12/31/98
Net asset value, beginning of period	$	14.03	$	17.67	$	18.04	$	16.51	$	17.35		$	20.02
Income (loss) from investment operations:
Net investment income (loss) (a)		—		(0.03)		0.02		0.04		0.06			0.03
Net realized and unrealized gain (loss)	1.71			(3.10)		3.05		2.45		0.16		(2.60)
Total from investment operations	1.71			(3.13)		3.07		2.49		0.22		(2.57)
Less distributions from:
Net investment income		—		—		(0.02)		(0.15)		(0.08)			—
Net realized gains	—			(0.51)		(3.42)		(0.81)		(0.98)		(0.10)
Total distributions	—			(0.51)		(3.44)		(0.96)		(1.06)		(0.10)
Net asset value, end of period	$	15.74		$ 14.03		$ 17.67		$ 18.04		$ 16.51		$	17.35
Total Return (b)	12.19%		(17.82)%			17.69%		15.60%		1.47%		(12.86)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	41,247		$43,110		$69,531		$67,717		$86,413		$	93,547
Ratios to average net assets:
Net expenses (c)		1.20%		1.15%		1.13%		1.12%		1.09%			1.09%
Gross expenses (c)		1.20%		1.15%		1.13%		1.12%		1.09%			1.09%
Net investment income (loss) (c)	(0.04)%			(0.17)%		0.12%		0.24%		0.33%			0.21%
Portfolio turnover rate		35%		93%		80%		67%		50%			46%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Period of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

64

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD INTERNATIONAL EQUITY PORTFOLIO

	Six Months			Year Ended
	Ended
Institutional Shares	6/30/03†				12/31/02			12/31/01			12/31/00			12/31/99			12/31/98
Net asset value, beginning of period	$		8.92	$		10.01	$		13.46	$		17.29	$		15.23	$		13.97
Income (loss) from investment operations:
Net investment income (loss) (a)			0.14			0.14			0.11			0.15			0.34			0.18
Net realized and unrealized gain (loss)	0.59					(1.18)			(3.45)			(2.01)			3.25			2.03
Total from investment operations	0.73					(1.04)			(3.34)			(1.86)			3.59			2.21
Less distributions from:
Net investment income			—			(0.05)			—(d)			(0.17)			(0.54)			(0.14)
Net realized gains	—					—			(0.11)			(1.80)			(0.99)			(0.81)
Total distributions	—					(0.05)			(0.11)			(1.97)			(1.53)			(0.95)
Net asset value, end of period	$		9.65	$		8.92	$		10.01	$		13.46	$		17.29	$		15.23
Total Return (b)			8.18%		(10.44)%			(24.85)%			(10.55)%				24.07%		16.04%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	1,901,240		$	1,776,799		$	2,224,089		$	3,001,933		$	3,584,093		$	2,879,289
Ratios to average net assets:
Net expenses (c)			0.91%			0.90%			0.90%			0.88%			0.88%			0.90%
Gross expenses (c)			0.91%			0.90%			0.90%			0.88%			0.88%			0.90%
Net investment income (c)			3.21%			1.45%			0.95%			0.97%			2.09%			1.37%
Portfolio turnover rate			20%			58%			69%			51%			35%			41%
	Six Months				Year Ended
	Ended
Open Shares	6/30/03†				12/31/02			12/31/01			12/31/00			12/31/99			12/31/98
Net asset value, beginning of period		$	8.88		$	9.95		$	13.41		$	17.28		$	15.23		$	13.95
Income (loss) from investment operations:
Net investment income (loss) (a)			0.13			0.11			0.08			0.10			0.31			0.18
Net realized and unrealized gain (loss)		0.60			(1.16)			(3.43)			(2.02)			3.22			2.00
Total from investment operations		0.73			(1.05)			(3.35)			(1.92)			3.53			2.18
Less distributions from:
Net investment income			—			(0.02)			—			(0.15)			(0.49)			(0.09)
Net realized gains		—			—			(0.11)			(1.80)			(0.99)			(0.81)
Total distributions		—			(0.02)			(0.11)			(1.95)			(1.48)			(0.90)
Net asset value, end of period		$	9.61		$	8.88		$	9.95		$	13.41		$	17.28		$	15.23
Total Return (b)			8.22%		(10.57)%			(25.02)%			(10.95)%				23.67%		15.82%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)		$	88,641		$	88,031		$	116,466		$	147,226		$	138,131		$	47,303
Ratios to average net assets:
Net expenses (c)			1.22%			1.21%			1.19%			1.15%			1.16%			1.24%
Gross expenses (c)			1.22%			1.21%			1.19%			1.15%			1.16%			1.24%
Net investment income (c)			2.91%			1.14%			0.70%			0.66%			1.87%			1.02%
Portfolio turnover rate			20%			58%			69%			51%			35%			41%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.
(d)	Amount is less than $0.01 per share.

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

65

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD INTERNATIONAL EQUITY SELECT PORTFOLIO

	Six Months		Year		Period
	Ended		Ended		5/31/01* to
Institutional Shares	6/30/03†		12/31/02		12/31/01
Net asset value, beginning of period	$	7.74	$	9.15	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (a)		0.12		0.12		0.01
Net realized and unrealized gain (loss)	0.54		(1.41)		(0.85)
Total from investment operations	0.66		(1.29)		(0.84)
Less distributions from:
Net investment income		—		(0.12)		(0.01)
Net realized gains	—		—		—
Total distributions	—		(0.12)		(0.01)
Net asset value, end of period	$	8.40	$	7.74	$	9.15
Total Return (b)		8.53%	(14.12)%		(8.43)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	22,225	$	20,957	$	8,580
Ratios to average net assets:
Net expenses (c)		1.15%		1.15%		1.15%
Gross expenses (c)		1.67%		1.63%	13.75%
Net investment income (c)		3.09%		1.41%		0.15%
Portfolio turnover rate		6%		32%		1%
					For the
	Six Months		Year		Period
	Ended		Ended		5/31/01* to
Open Shares	6/30/03†		12/31/02		12/31/01
Net asset value, beginning of period	$	7.75	$	9.16	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (a)		0.12		0.08		(0.02)
Net realized and unrealized gain (loss)	0.52		(1.40)		(0.82)
Total from investment operations	0.64		(1.32)		(0.84)
Less distributions from:
Net investment income		—		(0.09)		—
Net realized gains	—		—		—
Total distributions	—		(0.09)		—
Net asset value, end of period	$	8.39	$	7.75	$	9.16
Total Return (b)		8.26%	(14.37)%		(8.40)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	3,556	$	2,508	$	434
Ratios to average net assets:
Net expenses (c)		1.45%		1.45%		1.45%
Gross expenses (c)		2.60%		2.79%	47.06%
Net investment income (loss) (c)		2.96%		0.93%	(0.31)%
Portfolio turnover rate		6%		32%		1%

†	Unaudited.
*	Commencement of operations.
(a)	Net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

66

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD INTERNATIONAL SMALL CAP PORTFOLIO

	Six Months		Year Ended
	Ended
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	11.07	$	11.58	$	12.57	$	14.12	$	11.40	$	11.69
Income (loss) from investment operations:
Net investment income (loss) (a)		0.19		0.17		0.18		0.16		0.14		0.05
Net realized and unrealized gain (loss)	1.25		(0.53)		(1.03)		(0.81)		2.81		0.83
Total from investment operations	1.44		(0.36)		(0.85)		(0.65)		2.95		0.88
Less distributions from:
Net investment income		—		(0.15)		(0.14)		(0.11)		(0.12)		(0.05)
Net realized gains	—		—		—		(0.79)		(0.11)		(1.12)
Total distributions	—		(0.15)		(0.14)		(0.90)		(0.23)		(1.17)
Net asset value, end of period	$	12.51	$	11.07	$	11.58	$	12.57	$	14.12	$	11.40
Total Return (b)	13.01%			(3.08)%		(6.77)%		(4.44)%		26.07%		7.55%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	540,678	$	529,062	$	390,278	$	341,808	$	217,684	$	177,779
Ratios to average net assets:
Net expenses (c)		0.95%		0.96%		0.95%		0.98%		1.01%		1.04%
Gross expenses (c)		0.95%		0.96%		0.95%		0.98%		1.01%		1.04%
Net investment income (c)		3.44%		1.45%		1.48%		1.13%		1.17%		0.81%
Portfolio turnover rate		9%		25%		17%		43%		50%		56%
	Six Months		Year Ended
	Ended
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	11.02	$	11.53	$	12.53	$	14.06	$	11.38	$	11.69
Income (loss) from investment operations:
Net investment income (loss) (a)		0.23		0.13		0.11		0.10		0.09		0.01
Net realized and unrealized gain (loss)	1.19			(0.54)		(1.03)		(0.80)		2.80		0.83
Total from investment operations	1.42			(0.41)		(0.92)		(0.70)		2.89		0.84
Less distributions from:
Net investment income		—		(0.10)		(0.08)		(0.04)		(0.10)		(0.03)
Net realized gains	—			—		—		(0.79)		(0.11)		(1.12)
Total distributions	—			(0.10)		(0.08)		(0.83)		(0.21)		(1.15)
Net asset value, end of period	$	12.44		$ 11.02		$ 11.53		$ 12.53		$ 14.06		$ 11.38
Total Return (b)	12.89%			(3.55)%		(7.33)%		(4.85)%		25.55%		7.21%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	11,836		$ 3,019		$ 3,441		$ 1,649		$ 2,441		$ 2,646
Ratios to average net assets:
Net expenses (c)		1.43%		1.43%		1.43%		1.43%		1.43%		1.43%
Gross expenses (c)		1.59%		1.86%		2.03%		2.27%		2.12%		1.93%
Net investment income (c)		3.95%		1.15%		0.91%		0.68%		0.77%		0.43%
Portfolio turnover rate		9%		25%		17%		43%		50%		56%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

67

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD EMERGING MARKETS PORTFOLIO

	Six Months		Year Ended
	Ended
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	7.11	$	7.22	$	7.52	$	10.70	$	6.94	$	9.20
Income (loss) from investment operations:
Net investment income (loss) (a)		0.09		0.10		0.07		0.06		0.09		0.10
Net realized and unrealized gain (loss)	0.84		(0.13)		(0.31)		(3.22)		3.77		(2.26)
Total from investment operations	0.93		(0.03)		(0.24)		(3.16)		3.86		(2.16)
Less distributions from:
Net investment income		—		(0.08)		(0.06)		(0.02)		(0.10)		(0.10)
Net realized gains	—		—		—		—		—		—
Total distributions	—		(0.08)		(0.06)		(0.02)		(0.10)		(0.10)
Net asset value, end of period	$	8.04	$	7.11	$	7.22	$	7.52	$	10.70	$	6.94
Total Return (b)	13.08%			(0.37)%		(3.16)%	(29.53)%			55.81%	(23.49)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	403,975	$	345,176	$	308,608	$	317,691	$	465,278	$	298,033
Ratios to average net assets:
Net expenses (c)		1.30%		1.31%		1.29%		1.26%		1.24%		1.28%
Gross expenses (c)		1.30%		1.31%		1.29%		1.27%		1.25%		1.29%
Net investment income (c)		2.54%		1.30%		0.91%		0.62%		1.05%		1.84%
Portfolio turnover rate		15%		31%		43%		72%		46%		36%
	Six Months		Year Ended
	Ended
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	7.13	$	7.24	$	7.54	$	10.74	$	6.97	$	9.20
Income (loss) from investment operations:
Net investment income (loss) (a)		0.08		0.08		0.05		0.03		0.06		0.11
Net realized and unrealized gain (loss)	0.85			(0.13)		(0.32)		(3.23)		3.79		(2.26)
Total from investment operations	0.93			(0.05)		(0.27)		(3.20)		3.85		(2.15)
Less distributions from:
Net investment income		—		(0.06)		(0.03)		—		(0.08)		(0.08)
Net realized gains	—			—		—		—		—		—
Total distributions	—			(0.06)		(0.03)		—		(0.08)		(0.08)
Net asset value, end of period	$	8.06		$ 7.13		$ 7.24		$ 7.54		$ 10.74		$ 6.97
Total Return (b)	13.04%			(0.65)%		(3.54)%	(29.80)%			55.26%	(23.30)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	13,891		$ 9,140		$ 6,712		$ 5,459		$10,491		$ 8,191
Ratios to average net assets:
Net expenses (c)		1.60%		1.60%		1.60%		1.60%		1.60%		1.60%
Gross expenses (c)		1.79%		1.84%		2.00%		1.80%		1.75%		1.76%
Net investment income (c)		2.30%		1.09%		0.63%		0.30%		0.73%		1.54%
Portfolio turnover rate		15%		31%		43%		72%		46%		36%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

68

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD BOND PORTFOLIO

	Six Months		Year Ended
	Ended
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	9.84	$	9.56	$	9.37	$	9.29	$	9.89	$	10.03
Income (loss) from investment operations:
Net investment income (loss) (a)		0.11		0.41		0.52		0.59		0.55		0.55
Net realized and unrealized gain (loss)	0.17		0.28		0.19		0.08		(0.60)		0.01
Total from investment operations	0.28		0.69		0.71		0.67		(0.05)		0.56
Less distributions from:
Net investment income		(0.11)		(0.41)		(0.52)		(0.59)		(0.55)		(0.55)
Net realized gains	—		—		—		—		—		(0.15)
Total distributions	(0.11)		(0.41)		(0.52)		(0.59)		(0.55)		(0.70)
Net asset value, end of period	$	10.01	$	9.84	$	9.56	$	9.37	$	9.29	$	9.89
Total Return (b)		2.85%		7.44%		7.68%		7.53%	(0.46)%			5.77%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	44,910	$	48,745	$	44,013	$	54,847	$	91,557	$	100,397
Ratios to average net assets:
Net expenses (c)		0.93%		0.98%		0.91%		0.82%		0.76%		0.78%
Gross expenses (c)		0.93%		0.98%		0.91%		0.82%		0.76%		0.79%
Net investment income (c)		2.22%		4.30%		5.44%		6.38%		5.74%		5.45%
Portfolio turnover rate		387%		391%		238%		355%		549%		335%
	Six Months		Year Ended
	Ended
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	9.83	$	9.56	$	9.37	$	9.29	$	9.88	$	10.02
Income (loss) from investment operations:
Net investment income (loss) (a)		0.10		0.40		0.50		0.57		0.51		0.52
Net realized and unrealized gain (loss)	0.18		0.27		0.19		0.08		(0.58)			0.01
Total from investment operations	0.28		0.67		0.69		0.65		(0.07)			0.53
Less distributions from:
Net investment income		(0.10)		(0.40)		(0.50)		(0.57)		(0.52)		(0.52)
Net realized gains	—		—		—		—		—			(0.15)
Total distributions	(0.10)		(0.40)		(0.50)		(0.57)		(0.52)			(0.67)
Net asset value, end of period	$	10.01	$	9.83	$	9.56	$	9.37	$	9.29		$ 9.88
Total Return (b)		2.87%		7.15%		7.49%		7.25%	(0.76)%			5.42%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	8,718	$	10,848	$	8,807	$	11,457	$	11,605		$15,226
Ratios to average net assets:
Net expenses (c)		1.10%		1.10%		1.10%		1.10%		1.10%		1.10%
Gross expenses (c)		1.36%		1.44%		1.35%		1.27%		1.15%		1.21%
Net investment income (c)		2.04%		4.15%		5.24%		6.13%		5.37%		5.11%
Portfolio turnover rate		387%		391%		238%		355%		549%		335%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

69

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD HIGH YIELD PORTFOLIO

											For the
	Six Months		Year Ended								Period
	Ended										1/2/98* to
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	4.72	$	5.95	$	6.57	$	8.77	$	9.42	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (a)		0.22		0.58		0.76		0.96		0.92		0.88
Net realized and unrealized gain (loss)	0.49		(1.22)		(0.62)		(2.20)		(0.65)		(0.57)
Total from investment operations	0.71		(0.64)		0.14		(1.24)		0.27		0.31
Less distributions from:
Net investment income		(0.22)		(0.59)		(0.76)		(0.96)		(0.92)		(0.89)
Net realized gains	—		—		—		—		—		—
Total distributions	(0.22)		(0.59)		(0.76)		(0.96)		(0.92)		(0.89)
Net asset value, end of period	$	5.21	$	4.72	$	5.95	$	6.57	$	8.77	$	9.42
Total Return (b)	15.39%		(11.14)%			2.03%	(15.19)%			2.94%		2.90%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	120,477	$	78,128	$	71,467	$	65,752	$	83,664	$	41,935
Ratios to average net assets:
Net expenses (c)		0.75%		0.75%		0.75%		0.75%		0.94%		1.05%
Gross expenses (c)		1.01%		1.08%		1.07%		1.00%		1.06%		1.55%
Net investment income (c)		9.01%	11.09%		11.85%		12.24%		10.08%			8.87%
Portfolio turnover rate		31%		229%		234%		148%		190%		418%
											For the
	Six Months		Year Ended								Period
	Ended										2/24/98* to
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	4.73	$	5.95	$	6.57	$	8.78	$	9.42	$	10.37
Income (loss) from investment operations:
Net investment income (loss) (a)		0.22		0.55		0.74		0.94		0.90		0.72
Net realized and unrealized gain (loss)	0.48		(1.19)		(0.62)		(2.21)		(0.65)		(0.94)
Total from investment operations	0.70		(0.64)		0.12		(1.27)		0.25		(0.22)
Less distributions from:
Net investment income		(0.22)		(0.58)		(0.74)		(0.94)		(0.89)		(0.73)
Net realized gains	—		—		—		—		—		—
Total distributions	(0.22)		(0.58)		(0.74)		(0.94)		(0.89)		(0.73)
Net asset value, end of period	$	5.21	$	4.73	$	5.95	$	6.57	$	8.78	$	9.42
Total Return (b)	14.98%		(11.27)%			1.72%	(15.54)%			2.68%	(2.24)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	1,366	$	965	$	12,249	$	13,552	$	1,305	$	949
Ratios to average net assets:
Net expenses (c)		1.05%		1.05%		1.05%		1.05%		1.22%		1.35%
Gross expenses (c)		3.06%		2.48%		1.46%		1.38%		2.92%		9.77%
Net investment income (c)		8.74%		9.84%	11.57%		12.10%			9.89%		8.59%
Portfolio turnover rate		31%		229%		234%		148%		190%		418%

†	Unaudited.
*	Commencement of operations.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

70

The Lazard Funds, Inc.
Financial Highlights (continued)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD GLOBAL HIGH YIELD PORTFOLIO

	Six Months		Year Ended
	Ended
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	7.26	$	7.81	$	7.96	$	8.83	$	9.01	$	9.66
Income (loss) from investment operations:
Net investment income (loss) (a)		0.18		0.39		0.48		0.59		0.61		0.76
Net realized and unrealized gain (loss)	0.36		(0.54)		(0.15)		(0.49)		(0.18)		(0.69)
Total from investment operations	0.54		(0.15)		0.33		0.10		0.43		0.07
Less distributions from:
Net investment income		(0.19)		(0.30)		(0.48)		(0.97)		(0.61)		(0.44)
Net realized gains		—		—		—		—		—		—
Capital	—		(0.10)		—		—		—		(0.28)
Total distributions	(0.19)		(0.40)		(0.48)		(0.97)		(0.61)		(0.72)
Net asset value, end of period	$	7.61	$	7.26	$	7.81	$	7.96	$	8.83	$	9.01
Total Return (b)		7.48%	(2.00)%			4.09%		1.12%		4.91%		0.75%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	31,018	$	79,025	$	170,590	$	240,162	$	306,116	$	397,599
Ratios to average net assets:
Net expenses (c)		1.15%		0.98%		0.93%		0.93%		0.91%		0.90%
Gross expenses (c)		1.15%		0.98%		0.93%		0.93%		0.91%		0.90%
Net investment income (c)		5.01%		5.14%		5.99%		6.82%		6.82%		6.94%
Portfolio turnover rate		126%		363%		292%		207%		257%		276%
	Six Months		Year Ended
	Ended
Open Shares	6/30/03†		12/31/02		12/31/01		12/31/00		12/31/99		12/31/98
Net asset value, beginning of period	$	7.28	$	7.81	$	7.96	$	8.83	$	9.02	$	9.66
Income (loss) from investment operations:
Net investment income (loss) (a)		0.16		0.35		0.43		0.55		0.58		0.73
Net realized and unrealized gain (loss)	0.35		(0.54)			(0.15)		(0.49)		(0.19)		(0.69)
Total from investment operations	0.51		(0.19)			0.28		0.06		0.39		0.04
Less distributions from:
Net investment income		(0.16)		(0.25)		(0.43)		(0.93)		(0.58)		(0.40)
Net realized gains		—		—		—		—		—		—
Capital	—		(0.09)			—		—		—		(0.28)
Total distributions	(0.16)		(0.34)			(0.43)		(0.93)		(0.58)		(0.68)
Net asset value, end of period	$	7.63	$	7.28		$ 7.81		$ 7.96		$ 8.83		$ 9.02
Total Return (b)		7.05%	(2.48)%			3.53%		0.71%		4.40%		0.37%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	4,279	$	4,322		$ 6,616		$ 9,633		$16,035		$22,460
Ratios to average net assets:
Net expenses (c)		1.96%		1.58%		1.46%		1.34%		1.27%		1.28%
Gross expenses (c)		1.96%		1.58%		1.46%		1.34%		1.27%		1.28%
Net investment income (c)		4.31%		4.58%		5.38%		6.40%		6.49%		6.60%
Portfolio turnover rate		126%		363%		292%		207%		257%		276%

†	Unaudited.
(a)	For periods beginning with 12/31/99, net investment income (loss) has been computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.

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

71

The Lazard Funds, Inc.
Financial Highlights (concluded)

Selected data for a share of capital stock outstanding throughout each period:

LAZARD MORTGAGE PORTFOLIO
							For the
	Six Months		Year Ended				Period
	Ended						12/29/00* to
Institutional Shares	6/30/03†		12/31/02		12/31/01		12/31/00
Net asset value, beginning of period	$	10.50	$	10.29	$	10.00	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (a)		0.04		0.25		0.40		—	(d)
Net realized and unrealized gain (loss)	0.24		0.60		0.33		—
Total from investment operations	0.28		0.85		0.73		—
Less distributions from:
Net investment income		(0.06)		(0.28)		(0.40)		—	(d)
Net realized gains	—		(0.36)		(0.04)		—
Total distributions	(0.06)		(0.64)		(0.44)		—
Net asset value, end of period	$	10.72	$	10.50	$	10.29	$	10.00
Total Return (b)		2.64%		8.38%		7.44%		0.04%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	12,858	$	87,148	$	77,631	$	100
Ratios to average net assets:
Net expenses (c)		0.65%		0.64%		0.65%		0.65%
Gross expenses (c)		0.74%		0.64%		1.37%		570.50	(e)
Net investment income (c)		0.80%		2.37%		3.04%		4.38%
Portfolio turnover rate		255%		497%		249%		0%

†	Unaudited.
*	Commencement of operations.
(a)	For the periods ended 12/31/02 and 12/31/00, net investment income (loss) was computed using the average shares method.
(b)	Total returns assume changes in share price and reinvestment of all dividends and distributions. Periods of less than one year are not annualized.
(c)	Annualized for periods of less than one year.
(d)	Amount is less than $0.01 per share.
(e)	Gross expense ratio was the result of the Portfolio being in existence for three days during the period ended 12/31/00.

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

72

The Lazard Funds, Inc.
Notes to Financial Statements
June 30, 2003 (unaudited)

1. Organization

The Lazard Funds, Inc. (the “Fund”) was incorporated in Maryland on May 17, 1991 and is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Fund is comprised of eleven no-load portfolios (each referred to as a “Portfolio”), as follows: Lazard Equity Portfolio, Lazard Mid Cap Portfolio, Lazard Small Cap Portfolio, Lazard International Equity Portfolio, Lazard International Equity Select Portfolio, Lazard International Small Cap Portfolio, Lazard Emerging Markets Portfolio, Lazard Bond Portfolio, Lazard High Yield Portfolio, Lazard Global High Yield Portfolio (formerly Lazard Strategic Yield Portfolio) and Lazard Mortgage Portfolio. The Fund offers two different classes of shares of the Portfolios—Institutional Shares and Open Shares (except for Mortgage Portfolio, which currently offers only Institutional Shares). Institutional Shares and Open Shares are identical, except as to minimum investment requirements and the services offered to and expenses borne by each class of shares. All Portfolios are operated as “diversified” funds, as defined in the Act.

2. Significant Accounting Policies

The following is a summary of significant accounting policies:

(a) Valuation of Investments—Market values for securities listed on the New York Stock Exchange (“NYSE”), NASDAQ national market or other U.S. exchanges or markets are based on the closing market price on the principal exchange or market on which the security is traded, generally as of the close of regular trading on the NYSE (normally 4:00 p.m. Eastern time) on each valuation date; securities not traded on the valuation date are valued at the closing bid price. Any securities not listed, for which current over-the-counter market quotations or bids are readily available, are valued at the last quoted bid price or, if available, the mean of two such prices. Securities listed on foreign exchanges are valued at the last reported sales price; securities not traded on the valuation date are valued at the last quoted bid price.

Bonds and other fixed-income securities that are not exchange-traded are valued on the basis of prices provided by pricing services which are based primarily on institutional trading in similar groups of securities, or by using brokers’ quotations. Mortgage-backed securities issued by certain government-related organizations are valued using pricing services or brokers’ quotations based on a matrix system which considers such factors as other security prices, yields and maturities. Debt securities maturing in sixty days or less are valued at amortized cost, except where to do so would not accurately reflect their fair value, in which case such securities are valued at fair value as determined under the supervision of the Board of Directors.

Securities and other assets for which current market quotations are not readily available are valued at fair value as determined in good faith in accordance with procedures approved by the Board of Directors.

(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 and interest income is accrued daily. The Portfolios amortize premiums and accrete discounts on fixed-income securities using the effective yield method.

(c) Repurchase Agreements—In connection with transactions in repurchase agreements, the Fund’s custodian takes possession of the underlying collateral securities, the fair value of which at all times is required to be at least equal to the principal amount, plus accrued interest, of the repurchase transaction. If the seller defaults, and the fair value of the collateral declines, realization of the collateral by a Portfolio may be delayed or limited.

(d) Securities Lending—The Portfolios may lend portfolio securities to qualified borrowers in order to earn additional income. The terms of the lending agreements require that loans are secured at all times by cash, U.S. Government securities or irrevocable letters of credit in an amount at least equal to 102% of the market value of domestic securities loaned (105% in the case of foreign securities), plus accrued interest and dividends, determined on a daily basis. Cash collateral received is invested in State Street Navigator Securities Lending Prime Portfolio, a regulated investment company offered by State Street Bank and Trust Company (“State Street”). If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Portfolios could experience delays and costs in recovering the securities loaned or in gaining access to the collateral.

At June 30, 2003, the value of the securities on loan and corresponding collateral received were as follows:

	Securities
Portfolio	Loaned		Collateral
Mid Cap(1)	$	3,854,810	$	3,953,010
Small Cap(2)		10,363,372		10,685,350
International Equity(2)		145,166,368		152,750,800
International Small Cap(1)		71,687,447		75,408,945
Emerging Markets(1)		27,156,480		28,236,984

(1)	Collateral is cash.
(2)	Collateral is U.S. Treasury obligations.

73

The Lazard Funds, Inc.
Notes to Financial Statements (continued)
June 30, 2003 (unaudited)

In accordance with generally accepted accounting principles, any cash received as collateral for securities lending transactions is shown on the respective Portfolio of Investments. The related amount payable on the return of the securities on loan, where cash is received as collateral, is shown on the respective Statement of Assets and Liabilities.

During the period ended June 30, 2003, the income earned from securities lending, which is included in interest income on the Statement of Operations of the respective Portfolios, was as follows:

	Securities
Portfolio	Lending Income
Mid Cap	$	1,217
Small Cap		8,938
International Equity		992,303
International Small Cap		442,385
Emerging Markets		78,175

(e) Foreign Currency Translation and Forward Foreign Currency Contracts—The accounting records of the Portfolios are maintained in U.S. dollars. Portfolio securities and other assets and liabilities denominated in a foreign currency are translated daily into U.S. dollars at the prevailing rates of exchange. Purchases and sales of securities, income receipts and expense payments are translated into U.S. 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 represents net foreign currency gain (loss) from forward foreign 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 a Portfolio’s accounting records and the U.S. dollar equivalent amounts actually received or paid. Net unrealized foreign currency gain (loss) arises from changes in the value of assets and liabilities, other than investments in securities, as a result of changes in exchange rates.

A forward foreign currency contract is an agreement between two parties to buy or sell currency at a set price on a future date. Certain Portfolios may enter into forward foreign currency contracts for risk management and other purposes. Risk management includes hedging strategies which serve to reduce a Portfolio’s exposure to foreign currency fluctuations. Such exposure may exist during the period that a foreign denominated investment is held, or during the period between the trade date and settlement date of an investment which has been purchased or sold. 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 U.S. dollar.

The U.S. dollar value of forward foreign currency contracts is determined using forward exchange rates provided by quotation services. Daily fluctuations in the value of such contracts are recorded as unrealized gain (loss). When the contract is closed, the 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. Such gain (loss) is disclosed in the realized or unrealized gain (loss) on foreign currency in the accompanying Statement of Operations of the respective Portfolios.

(f) Structured Investments—Global High Yield Portfolio may invest in structured investments, whose values are linked either directly or inversely to changes in foreign currencies, interest rates, commodities, indices, or other underlying instruments. The Portfolio may use these investments to increase or decrease its exposure to different underlying instruments, to gain exposure to markets that might be difficult to invest in through conventional securities or for other purposes. Structured investments may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment.

(g) Forward Commitments—Each Portfolio may purchase or sell securities on a forward commitment, when-issued or delayed delivery basis. Payment and delivery may take place a month or more after the date of the transaction. The price and yield of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Collateral consisting of cash or liquid securities is segregated in an amount at least equal to these commitments.

(h) Forward Roll Transactions—Mortgage Portfolio may engage in forward roll transactions with respect to mortgage-related securities. In a forward roll transaction, the Portfolio sells a mortgage-related security to a financial institution and, simultaneously, agrees to purchase a similar security from that institution at a later date and agreed upon price. At all times during the transaction the Portfolio will segregate cash or liquid securities at least equal to the amount of the repurchase price (including accrued interest).

(i) Interest Rate Swap Agreements—Certain Portfolios may enter into interest rate swap agreements for investment, hedging or risk management purposes. An interest rate swap agreement involves the exchange of commitments to pay or receive interest, such as an exchange of floating rate payments for fixed rate payments. If forecasts of interest rates and other market factors are incorrect,

74

The Lazard Funds, Inc.
Notes to Financial Statements (continued)
June 30, 2003 (unaudited)

investment performance will be lower than it would have been if these investment techniques were not used. Even if the forecasts are correct, there are risks that: a liquid market may not always exist; the positions may correlate imperfectly with the asset and liability being hedged; or a counterparty to a transaction may not perform. Interest rate swap agreements are marked-to-market daily using market quotations. The change in market value is recorded by a Portfolio as unrealized gain (loss). The difference between the rates received and paid by a Portfolio constitutes investment income (loss).

(j) Options Transactions—For hedging and investment purposes, certain Portfolios may purchase and write (sell) put and call options that are traded on U.S. and foreign securities exchanges and over-the counter markets. The Portfolio pays a premium whether or not the option is exercised. The Portfolio bears the risk of loss of any change in market value should the counterparty not perform under the contract. The risk involved in writing an option is that if the option is exercised the underlying security or other assets could then be purchased or sold by the Portfolio at a disadvantageous price. Put and call options purchased are accounted for in the same manner as portfolio securities and other assets. When the Portfolio writes an option, the premium received by the Portfolio is recorded as a liability and is subsequently adjusted to the current market value of the option written.

There were no options transactions for the period ended June 30, 2003.

(k) Federal Income Taxes—The Fund’s policy is to continue to have each Portfolio qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and to distribute all its taxable income, including any realized net capital gains, to shareholders. Therefore, no federal income tax provision is required.

At December 31, 2002, the following Portfolios had available for federal income tax purposes unused realized capital losses which can be used to offset future realized capital gains as follows:

Portfolio	Expiring 2006			Expiring 2007
Emerging Markets		$	30,822,961		$	3,337,906
Bond			—			2,566,482
High Yield		1,150,441				6,288,085
Global High Yield		14,900,897				22,094,886
Portfolio	Expiring 2008			Expiring 2009
International Equity		$	—	$	306,476,891
International Equity Select			—			10,906
International Small Cap			—			3,580,062
Emerging Markets			—			28,250,429
Bond		2,500,484				—
High Yield		9,656,682				20,597,062
Global High Yield		9,399,400				16,205,277

Portfolio	Expiring 2010
Equity	$	29,011,082
Mid Cap		1,950,786
Small Cap		20,017,622
International Equity		401,228,521
International Equity Select		849,474
International Small Cap		12,123,813
Emerging Markets		39,743,070
High Yield		13,902,783
Global High Yield		17,080,505

Under current tax law, certain capital and net foreign currency losses realized after October 31 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, 2002, the following Portfolios elected to defer net capital and currency losses arising between November 1, 2002 and December 31, 2002, as follows:

Portfolio	Amount
Equity	$	946,742
Mid Cap		414,725
Small Cap		5,932,023
International Equity		40,737,305
International Equity Select		140,216
International Small Cap		8,533,177
Emerging Markets		628,507
High Yield		1,907,831
Global High Yield		684,797
Mortgage		37,054

(l) Dividends and Distributions—The Fund intends to declare dividends from net investment income daily on shares of Bond Portfolio, High Yield Portfolio, Global High Yield Portfolio and Mortgage Portfolio and to pay such dividends monthly. Dividends from net investment income, if any, on shares of Equity Portfolio, Mid Cap Portfolio, Small Cap Portfolio, International Equity Portfolio, International Equity Select Portfolio, International Small Cap Portfolio and Emerging Markets Portfolio 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 Portfolio 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.

Income dividends and capital gains distributions are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These book/tax differences, which may result in distribution reclassifications, are primarily due to differing treatments of foreign currency transactions. Book/tax differences relating to shareholder distributions may result in reclassifications among certain capital accounts.

75

The Lazard Funds, Inc.
Notes to Financial Statements (continued)
June 30, 2003 (unaudited)

(m) Allocation of Expenses—Expenses not directly chargeable to a specific Portfolio are allocated among the Portfolios primarily on the basis of relative net assets. A Portfolio accrues distribution and service (12b-1) fees to its Open Shares. Each Portfolio’s 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.

(n) Expense Reductions—Portfolios leaving excess cash in demand deposit accounts may receive credits which are available to offset custody expenses. The Statements of Operations report gross custody expenses, and report the amount of such credits separately as an expense reduction.

(o) Redemption Fee—Each Portfolio may impose a 1.00% redemption fee (short-term trading fee) on Portfolio shares redeemed less than 30 days after such shares were acquired. The fees retained by a Portfolio are included as paid in capital on its Statement of Assets and Liabilities. During the period ended June 30, 2003, redemption fees were received as follows:

Portfolio	Redemption Fees
Equity	$	416
Mid Cap		1
Small Cap		4,490
International Equity		46,450
International Small Cap		10,352
Emerging Markets		19,065
Bond		5,314
High Yield		1,444

(p) Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires the Fund 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 from operations during the reporting period. Actual results could differ from those estimates.

3. Investment Management, Administrative and Distribution Agreements

The Fund has entered into investment management agreements (the “Management Agreements”) with Lazard Asset Management LLC (the “Investment Manager”), a subsidiary of Lazard Frères & Co. LLC (“Lazard”). Pursuant to the Management Agreements, 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 objective and policies, including the purchase, retention and disposition of securities. Each Portfolio pays the Investment Manager a management fee, accrued daily and payable monthly, at the annual rate set forth below as a percentage of its average daily net assets:

Portfolio	Annual Rate
Equity	0.75	%
Mid Cap	0.75
Small Cap	0.75
International Equity	0.75
International Equity Select	0.85
International Small Cap	0.75
Emerging Markets	1.00
Bond	0.50
High Yield	0.75
Global High Yield	0.75
Mortgage	0.40

The Investment Manager has voluntarily agreed to reduce its fees and, if necessary, reimburse the following Portfolios if annualized operating expenses exceed the following percentages of average daily net assets for the respective Shares:

	Institutional Shares		Open Shares
	Annual		Annual
Portfolio	Operating Expenses		Operating Expenses
Mid Cap	1.05	%	1.35	%
International Equity Select	1.15		1.45
International Small Cap	N/A		1.43
Emerging Markets	N/A		1.60
Bond	N/A		1.10
High Yield	0.75		1.05
Mortgage	0.65		N/A

During the period ended June 30, 2003, the Investment Manager waived its management fee/reimbursed the Portfolios for other expenses as follows:

	Institutional Shares		Open Shares
	Amount Waived/		Amount Waived/
Portfolio	Reimbursed		Reimbursed
Mid Cap	$	44,798		$19,468
International Equity Select		54,076		16,573
International Small Cap		—		4,689
Emerging Markets		—		9,652
Bond		—		13,089
High Yield		118,567		12,378
Mortgage		23,609		N/A

The Fund has entered into an administrative agreement with State Street to provide certain administrative services. Each Portfolio bears the cost of such services at a fixed annual rate of $37,500, plus $7,500 per additional class, and 0.02% of average daily net assets up to $1 billion and 0.01% of average daily net assets over $1 billion.

The Fund has a distribution agreement with Lazard pursuant to which Lazard acts as distributor for shares of each Portfolio and bears the cost of printing and mailing

76

The Lazard Funds, Inc.
Notes to Financial Statements (concluded)
June 30, 2003 (unaudited)

prospectuses to potential investors and of any advertising expenses incurred in connection with distribution of Portfolio shares.

Lazard provides Open Shares with distribution services pursuant to a Distribution and Servicing Plan (the “Plan”) in accordance with Rule 12b-1 under the Act. Under the Plan, each Portfolio pays a monthly fee to Lazard, at an annual rate of 0.25% of the average daily net assets of its Open Shares, for distribution and servicing of accounts. Lazard may make payments to certain financial institutions, securities dealers and other industry professionals, for providing these services.

Certain Directors of the Fund are Managing Directors of the Investment Manager. The Fund pays each Director who is not an employee or an affiliated person of the Investment Manager its allocated portion of a fixed fee of $30,000 per year, plus $2,500 per meeting attended for the Fund and Lazard Retirement Series, Inc., another multi-series fund advised by the Investment Manager, and reimburses such Directors for travel and other out of pocket expenses. In addition, the Chairman of the Audit Committee for the Fund and Lazard Retirement Series, Inc. also receives an annual fee of $5,000.

4. Securities Transactions and Transactions with Affiliates

Purchases and sales of portfolio securities (excluding short-term securities) for the period ended June 30, 2003 were as follows:

Portfolio	Purchases		Sales
Equity	$	31,854,783	$	38,282,428
Mid Cap		19,775,450		20,232,461
Small Cap		144,190,940		177,773,328
International Equity		366,057,732		400,171,626
International Equity Select		1,237,712		15,240,890
International Small Cap		43,454,229		82,527,500
Emerging Markets		78,933,522		52,205,156
Bond(1)		29,296,485		17,527,910
High Yield		65,021,262		27,745,900
Global High Yield(2)		60,948,617		82,967,495
Mortgage(3)		-		-

(1)	Excludes purchases and sales of U.S. Government securities of $187,033,124 and $201,411,195, respectively.
(2)	Excludes purchases and sales of U.S. Government securities of $19,824,000 and $32,713,135, respectively.
(3)	Excludes purchases and sales of U.S. Government securities of $21,407,029 and $62,906,523, respectively.

For the period ended June 30, 2003, brokerage commissions of $950 were paid to Lazard for portfolio transactions executed on behalf of Emerging Markets Portfolio.

5. Line of Credit

The Fund has entered into a $50 million Line of Credit Agreement (the “Agreement”) with State Street effective April 24, 1996, primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest on borrowings is payable at State Street’s cost of funds plus 0.50%, on an annualized basis. Under the Agreement, the Fund has agreed to pay a 0.09% per annum fee on the unused portion of the commitment payable quarterly in arrears. During the period ended June 30, 2003, the Fund had no borrowings under this Agreement.

6. Subsequent Event

On July 2, 2003, Lazard International Equity Select Portfolio satisfied a redemption request of approximately $14.6 million. The redeeming shareholder had requested that the Portfolio effect this transaction once the Portfolio raised the necessary funds, which the Portfolio did through the orderly sale of investment securities. As the sales of these securities had not settled at June 30, 2003, the Portfolio’s Statement of Assets and Liabilities reflects this transaction only in its balance for Receivable for Investments Sold. On July 2, 2003, when the sales settled, the receivable was satisfied and the shareholder was paid. As a result of this transaction, the paid in capital and net assets of the Portfolio were reduced by the redemption amount.

77

The Lazard Funds, Inc.
Board of Directors and Officers Information
(unaudited)
Name (Age)	Position(s) with	Principal Occupation(s) During Past 5 Years
Address	the Fund*	and Other Directorships Held
Non-Interested Directors:
John J. Burke (74)	Director	Lawyer and Private Investor; Director, Pacific Steel & Recycling, a steel
50 Burning Tree Lane	since May 1991	service and recycling company; Director, Sletten Construction Company,
Butte, MT 59701		a multi-state general contractor; Trustee Emeritus, The University of Montana
		Foundation.
Kenneth S. Davidson (58)	Director	President, Davidson Capital Management Corporation; Trustee, The Juilliard
Davidson Capital	since August 1995	School; Chairman of the Board, Bridgehampton Chamber Music Festival;
Management Corporation		Trustee, American Friends of the National Gallery/London; Trustee, The
500 Park Avenue		Spence School.
Suite 510
New York, NY 10022
William Katz (48)	Director	President and Chief Executive Officer, BBDO New York, an advertising
BBDO Worldwide	since April 1997	agency; Director, BBDO Worldwide.
1285 Avenue of the Americas
New York, NY 10019
Lester Z. Lieberman (72)	Director	Private Investor; Director, Dowel Associates, a real estate developer;
25 Lindsley Drive	since October 1991	Chairman, Healthcare Foundation of NJ; Director, Cives Steel Co.; Director,
Morristown, NJ 07960		Northside Power Transmission Co.; Advisory Trustee, New Jersey Medical
		School.
Richard Reiss, Jr. (59)	Director	Managing Partner, Georgica Advisors LLC, an investment manager;
Georgica Advisors LLC	since May 1991	Director, Lazard Alternative Strategies Fund, LLC; Director, O’Charley’s,
Carnegie Hall Tower		Inc., a restaurant chain.
152 West 57th Street
46th Floor
New York, NY 10019
Interested Directors**:
Norman Eig (62)	Chairman of the	Managing Director and Co-Chief Executive Officer of the Investment Manager;
Lazard Asset Management LLC	Board	Member of the Management Committee of Lazard.
30 Rockefeller Plaza	since May 1991
New York, NY 10112-6300
Herbert W. Gullquist (66)	President and Director	Managing Director, Co-Chief Executive Officer and Chief Investment Officer
Lazard Asset Management LLC	since May 1991	of the Investment Manager.
30 Rockefeller Plaza
New York, NY 10112-6300
John Rutledge (54)	Director	President, Rutledge Capital, LLC, an economics and investment advisory
Rutledge Capital, LLC	since May 1991	firm; Director, Strategic Optical Holdings Corp.; Director, Framed Picture
29 Horseshoe Road		Enterprise; Director, Crom Corporation, a water storage system manufacturer;
Cos Cob, CT 06807		Director, Earle M. Jorgensen Co., a steel service company; Director,
		Amerindo Funds, Inc., a family of three investment portfolios; Director,
		Vingage Corporation, a streaming video company; Chairman of Advisory
		Board, Saugatuck Capital.

*	Each Director serves an indefinite term, until his successor is elected, and serves in such capacity for 15 Lazard portfolios.
**	Mr. Eig and Mr. Gullquist are “interested persons” (as defined in the Act) of the Fund (“Interested Directors”) because of their positions with the Investment Manager; Mr. Rutledge is an Interested Director because of a family member’s position 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.

78

The Lazard Funds, Inc.

Board of Directors and Officers Information (concluded)
(unaudited)

Name (Age)	Position(s) with
Address	the Fund*	Principal Occupation(s) During Past 5 Years
Officers:
Nathan A. Paul (30)	Vice President	Director and General Counsel of the Investment Manager; from
Lazard Asset Management LLC	and Secretary	September 1997 to October 2000, an Associate at Schulte Roth & Zabel LLP,
30 Rockefeller Plaza	since April 2002	a law firm.
New York, NY 10112-6300
Stephen St. Clair (44)	Treasurer	Fund Administration Manager of the Investment Manager.
Lazard Asset Management LLC	since April 2003
30 Rockefeller Plaza
New York, NY 10112-6300
Brian D. Simon (40)	Assistant Secretary	Vice President of the Investment Manager; from July 1999 to October 2002,
Lazard Asset Management LLC	since November 2002	Vice President, Law & Regulation at J. & W. Seligman & Co.; from July 1997
30 Rockefeller Plaza		to July 1999, an Associate at Schulte Roth & Zabel LLP, a law firm.
New York, NY 10112-6300

* Each Officer serves an indefinite term, until his successor is elected, and serves in such capacity for 15 Lazard portfolios.

79

This Page Intentionally Left Blank.

The Lazard Funds, Inc.
30 Rockefeller Plaza
New York, New York 10112-6300
Telephone: 800-823-6300
http://www.LazardNet.com

Investment Manager
Lazard Asset Management LLC
30 Rockefeller Plaza
New York, New York 10112-6300
Telephone: 800-823-6300

Distributor
Lazard Frères & Co. LLC
30 Rockefeller Plaza
New York, New York 10112-6300

Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

Transfer Agent and Dividend Disbursing Agent
Boston Financial Data Services, Inc.
P.O. Box 8514
Boston, Massachusetts 02266-8514
Telephone: 800-986-3455

Independent Public Accountants Anchin, Block & Anchin LLP
1375 Broadway
New York, New York 10018
http://www.anchin.com

Legal Counsel
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
http://www.stroock.com

This report is for the information of the shareholders of The Lazard Funds, Inc. Its use in connection with any offering of the Fund’s shares is authorized only in the case of a concurrent or prior delivery of the Fund’s current Prospectus.

The Lazard Funds, Inc. 30 Rockefeller Plaza
New York, NY 10112-6300 Tel 800-823-6300
www.LazardNet.com

M F 0 3 1 0 1

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.   [RESERVED]

ITEM 7.   DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
          MANAGEMENT INVESTMENT COMPANIES.

                  Not applicable.

ITEM 8.   [RESERVED]

ITEM 9.   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 controls over financial
reporting that occurred during the Registrant's most recently ended fiscal
half-year that has materially affected, or is reasonably likely to materially
affect, the Registrant's internal control over financial reporting.

ITEM 10.  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.

(b) Certification 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.

THE LAZARD FUNDS, INC.

By: /s/ Norman Eig
    -----------------------------
    Norman Eig
    Chief Executive Officer

Date: August 22, 2003

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/ Norman Eig
    -----------------------------
    Norman Eig
    Chief Executive Officer

Date: August 22, 2003

By: /s/ Stephen St. Clair
    -----------------------------
    Stephen St. Clair
    Chief Financial Officer

Date: August 22, 2003



                                  EXHIBIT INDEX

(a)(2) Certifications of principal executive and principal financial officers as
required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)

(b) Certification of principal executive and principal financial officers as
required by Rule 30a-2(b) under the Investment Company Act of 1940.
(EX-99.906CERT)