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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.
Lazard Asset Management LLC
30 Rockefeller Plaza
New York, New York 10112
(Name and address of agent for service)

Registrant's telephone number, including area code:           (212) 632-6000

Date of fiscal year end:            12/31

Date of reporting period:           06/30/06

ITEM 1. REPORTS TO STOCKHOLDERS.

Lazard Funds

Lazard Funds
Semi-Annual
Report

J U N E 3 0 , 2 0 0 6

The Lazard Funds, Inc.
Table of Contents	Page
Investment Overviews	2
Performance Overviews	13
Information About Your Portfolio’s Expenses	24
Portfolio Holdings Presented by Sector	27
Portfolio Holdings Presented by Credit Rating	28
Portfolios of Investments
Lazard Equity Portfolio	29
Lazard U.S. Equity Value Portfolio	31
Lazard U.S. Strategic Equity Portfolio	33
Lazard Mid Cap Portfolio	35
Lazard Small Cap Portfolio	37
Lazard U.S. Small Cap Equity Growth Portfolio	40
Lazard International Equity Portfolio	41
Lazard International Equity Select Portfolio	43
Lazard International Strategic Equity Portfolio	44
Lazard International Small Cap Portfolio	46
Lazard Emerging Markets Portfolio	48
Lazard High Yield Portfolio	50
Notes to Portfolios of Investments	54
Statements of
Assets and Liabilities	56
Operations	58
Changes in Net Assets	60
Financial Highlights	66
Notes to Financial Statements	78
Board of Directors and Officers Information	82
Other Information	84

Please consider a Portfolio’s investment objectives, risks, charges and expenses carefully before investing. For more complete information about The Lazard Funds, Inc., you may obtain the prospectus by calling 800-823-6300. Read the prospectus carefully before you invest. The prospectus contains investment objectives, risks, charges, expenses and other information about Portfolios of The Lazard Funds, Inc., which may not be detailed in this report.

Distributed by Lazard Asset Management Securities LLC.

The Lazard Funds, Inc.
Investment Overviews

A Message from Lazard

After the long bear market, the past three years have witnessed many markets and asset classes rallying strongly, with some advancing to levels that had not been reached since 2000. The sharp rally in global equities continued into the beginning of the first quarter of 2006 and then flattened out in a mid-quarter sell-off, before bouncing back in mid-March and advancing to record post-2000 levels. This ongoing rally in global equities then persisted through the first half of the second quarter, before falling off sharply during the quarter’s second half. Many of the sectors and markets which had benefited the most during the first quarter of the year suffered the most in the second quarter. This global equity-market correction prompted some investors to take profits, fearing that the downturn in equities might continue or become more severe.

Yet, the market behavior during the last two quarters is an excellent example of why specific investment goals, long-term investing, and portfolio diversification all make good sense. While the markets’ recent volatility may be unsettling, short-term market swings can be dampened in a diversified portfolio, since, for example, over the long term, U.S.- and non-U.S.-equity returns are not perfectly correlated. So, for long-term investors, such market behavior should not be a prompt to make unplanned changes to the strategies you have carefully mapped out to meet your investment goals.

We believe that today’s market looks nothing like the technology bubble in early 2000, when that bull market was overbought and investor exuberance lifted stock prices well beyond companies’ earnings growth potential. The lessons learned from that peak in the market are clear: it is not necessarily wise to chase the hot investment of the day. But, it does make sense to keep a diversified portfolio. Although diversification does not ensure a profit or protect against a loss, dividing your portfolio among a variety of equity and fixed income assets should help offset short-term losses from some investments with gains in others. For example, throughout most of 2005 and the first quarter of 2006, small-cap and emerging-markets stocks posted solid gains. However, in the second quarter of 2006, this trend reversed when small-cap and emerging-markets stocks sold off sharply, as investors’ appetites for riskier asset classes diminished. Conversely, large-cap value stocks and more defensive sectors and regions posted gains for the quarter. Remember, this is how markets normally behave—cyclically. Until May 8, most emerging-markets equities were enjoying strong market conditions, but they were among the hardest hit in the sell-off. Much of the selling appeared to be indiscriminate, however, and we actually viewed this period of market weakness as a salutary event. Thus, volatile times, when it’s most difficult to stick to a well-structured, long-term investment plan, are the most important times to do so.

Looking ahead, although equity markets were volatile during the first half of 2006, the global economic backdrop continues to appear solid, with interest rates low by historical standards and corporate profits quite robust. In addition, equity valuations appear reasonable, particularly among high-quality larger stocks, which have lagged the broad market in recent years. As a result, we believe that the outlook for equities is positive, although we would expect investor risk tolerance to continue to wane, as the effects of the earlier Federal Reserve rate hikes, which tend to trail the announcements, are felt, and central banks around the world further reduce liquidity. The kind of fund flows experienced by emerging markets equities tend to make it challenging for fundamentally oriented investors, such as Lazard. However, we believe excellent opportunities are likely to arise from this inefficient market period, though developing-markets shares may trade within a range for a period of time.

World Markets Overview

U.S. Equities: Inflation Worries Weigh on the Fed

A sharp rally in U.S. stocks marked the beginning of the first quarter of 2006. Stocks then flattened out in a mid-quarter sell-off before bouncing back in mid-March and advancing to levels that had not been reached since 2000. The mid-quarter sell-off was attributed to concerns about the sustainability of U.S. economic growth and worries that the continued monetary tightening by the U.S. Federal Reserve and central banks around the world would lead to a reduction in investor risk tolerance. However, a continuation of strong profit growth, coupled with robust merger and acquisition activity, aided the overall rally and U.S. stocks had their best performance in five quarters. In fact, the first quarter witnessed significant

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merger and acquisition activity, with the largest deal being AT&T’s $67 billion offer for BellSouth. Small cap leadership in the first quarter was from the more speculative elements of the market, with non-earners and low-priced stocks under $5 million in market capitalization posting strong gains. Given the positive economic environment in the first quarter, more cyclical sectors, such as materials and industrials, helped boost the performance of small- and mid-cap stocks. The rally in equities continued through the first half of the second quarter, before stocks fell sharply amid concerns over a potential acceleration in inflation and its implications for future monetary policy. Comments from the newly installed Federal Reserve Chairman, Benjamin Bernanke, regarding the “unwelcome” increase in prices called into question the prevailing belief that the cycle of monetary tightening in the United States was nearing an end. Concerns that the Federal Reserve would continue to aggressively raise rates fueled fears of a material global economic slowdown and a sharp contraction in liquidity, as central banks around the world tightened monetary policy. Smaller- and mid-cap stocks underperformed for the quarter, after significantly outperforming their larger peers in recent quarters, as the cyclical sectors that had boosted small- and mid-cap returns in the first quarter were hardest hit in the sell-off. Sector leadership for both small caps and mid caps reversed to more-defensive groups, such as utilities and consumer staples. A rebound toward the end of the quarter helped the S&P 500^® Index finish the first half of 2006 with a gain of 2.71% . Value stocks continued their lead over growth stocks for the year-to-date, as the Russell 3000^® Value Index rose 6.9%, while the Russell 3000 Growth Index fell 0.32% . Despite their poor performance in the second quarter, small-cap stocks, as measured by the Russell 2000^® Index, gained 8.21% over the first six-months of 2006. Mid-cap stocks also finished the period in positive territory, gaining 4.84%, as measured by the Russell Midcap^® Index. Large-cap stocks, as measured by the Russell 1000^® Index, returned 2.76% for the six months.

International Equities: Japanese Market Breaks its Stride

The first quarter of 2006 also began with a sharp rally in international stocks, which then flattened out in a mid-quarter sell-off before a mid-March rebound, when they advanced to levels not seen since 2000. The first-quarter 2006 sell-off was ascribed to concerns about the sustainability of growth, given the synchronized monetary tightening around the world (e.g. in the United States, Europe, and Japan). However, a continuation of strong profit growth, coupled with robust merger and acquisition activity (particularly in Europe), aided the overall rally in the international markets. In fact, the first quarter saw over $800 billion worth of global merger and acquisition activity.

The rally in international equities continued through the first half of the second quarter, before stocks fell sharply as the U.S. Federal Reserve raised rates for the seventeenth consecutive time in two years, and the European Central Bank lifted borrowing costs for the third time since December to help curb inflation. Central banks in China, Denmark, India, Malaysia, South Africa, South Korea, Sweden, Thailand, and Turkey also raised rates, helping to fuel fears of a material global economic slowdown and a sharp contraction in liquidity. Not surprisingly, investors shunned riskier asset classes that had performed well in recent years, such as emerging-markets and small-cap stocks, based on concerns that higher rates would limit economic growth. Companies in the fragile economies of Germany and Japan also fared poorly in the sell-off. The Japanese market, which had soared in the second half of 2005, reversed course in the first half of 2006, as foreign investors reduced exposure, causing the market to fall. This profit taking was fueled by concerns about the dampening effects of the Fed’s tightening policy on the economy of the United States, one of Japan’s largest overseas markets. Smaller, less-liquid markets, such as Greece and Austria, also lagged in the decline. In contrast, the U.K. market proved resilient. For the year-to-date period, the Morgan Stanley Capital International (MSCI^®) Europe, Australasia, and Far East (EAFE^®) Index gained 10.16% .

Emerging Markets Equities: A Major Correction

Emerging markets equities began 2006 with quite solid returns, rising over 20% by the end of April, aided by heightened interest in the asset class. Capital flows into the asset class exceeded last year’s total of $20.3 billion, reaching approximately $30 billion. However, beginning in May, emerging markets shares experienced a major correction, as

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investors became more concerned about inflationary pressures and higher interest rates globally. As inflation and interest-rate concerns rose, this asset class, as well as many commodity shares, led markets sharply lower, culminating in close to a 25% decline over an approximately one-month period. Much of the selling appears to have been indiscriminate, with activity focused in relatively liquid shares.

The MSCI Emerging Markets (EM^®) Index has gained 7.16% for the year-to-date, with Latin American shares performing the best, and African shares being the poorest performers. The oil-rich country of Russia benefited from a high crude-oil price, which remained robust based on low inventory levels and terrorism concerns. Powerful individual-country performances were generated in Morocco, Venezuela, and Argentina, as investors sought exposure to frontier emerging markets. Jordan exhibited profit taking on market valuation, while shares in Egypt and Turkey were subjected to profit taking and currency pressure.

U.S. Fixed Income: Yield Spreads Under Pressure

In the first quarter of 2006, cost-push inflation concerns remained at the forefront, in the face of continuing energy-cost pressures, as exhibited by strength in global oil prices. Oil closed the quarter with strong, upward price momentum (about $67 a barrel). Under the weight of these forces, bond prices retreated as the benchmark ten-year Treasury closed the period at a yield of 4.85%, up 30 basis points for the month and 46 basis points for the quarter. Yet, U.S. trade continues to drive dramatic growth in the international reserve assets of both low-cost producers and oil exporters. China’s international reserves have now surpassed Japan’s. The yield curve remained unusually flat for a period that has been marked by relatively robust nominal economic growth, as low final-goods inflation and foreign-driven investment anchor long-term rates. The benchmark two-year Treasury closed the period at a yield 4.82%, only 3 basis points lower than the benchmark ten-year Treasury.

In the second quarter, higher levels of core inflation with strong anti-inflation rhetoric from central bankers unsettled markets globally. In the United States, mixed economic data coupled with continued tightening by the Federal Reserve, set the tone for fixed-income markets. Bond-market yields, as measured by the ten-year Treasury benchmark, rose 29 basis points during the quarter and 74 basis points, year-to-date. Yield spreads came under pressure, as global equities, led by emerging markets, were down for the quarter. In spite of increased U.S. equity volatility, U.S. fixed-income volatility remained unusually subdued. Despite the lack of interest-rate volatility, mortgage-backed securities spreads widened in tandem with other sectors spreads during the second quarter, giving back all of the positive relative performance that the sector enjoyed during the first quarter.

High Yield Fixed Income: Higher Credit Risk Prevailed

For the first half of 2006, high yield continued to outperform other fixed-income sectors, as the large high-yield coupon cushioned price erosion from rising rates. The recent Treasury rate rise was driven, in part, by a stronger economy, a positive for many high-yield credits, particularly the lower tiers. In fact, for the year-to-date, lower-tier credits have posted the best performance, including many air transportation and automotive-related securities. During the period, high yield market spreads narrowed about 30 basis points, as Treasury rates rose. BB spreads were essentially flat, and B spreads narrowed about 25 basis points. CCC spreads materially compressed, narrowing by 165 basis points. The lower tiers of high yield were the most volatile and contributed an outsized percentage of Merrill Lynch High Yield Master II^® Index spread tightening. With the spread between BB and B sectors squeezed down to 40 basis points, a better-quality portfolio remains likely to outperform as the credit cycle turns.

Lazard Equity Portfolio

For the six month period ended June 30, 2006, Lazard Equity Portfolio’s Institutional Shares posted a total return of 2.96%, while Open Shares posted a total return of 2.72%, as compared with the 2.71% return of the S&P 500 Index.

The Portfolio benefited from strong stock selection in health care after shares of Sepracor rose due to positive news that the FDA did not approve a potential competitive sleep aid. This decision gives the company a competitive advantage in the growing insomnia treatment market. Subsequently, the stock rose based on speculation of a takeover, given that it is

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likely that one of the largest competitive threats to the company’s insomnia drug has been eliminated. Shares of Laboratory Corporation of America also rose steadily during the first half of the year. Lab Corp., one of two clinical laboratory-testing companies that dominate the independent lab-testing business, reported better-than-expected earnings due to robust pricing and volume growth. Stock selection in technology also boosted returns; larger technology holdings with positive cash flow, such as Oracle, Cisco, and Hewlett-Packard, performed well. Oracle in particular, reported better-than-expected earnings. The company’s latest results support the premise that it is executing its acquisition strategy effectively. In addition, customers are embracing its broader product offerings, potentially helping the company to gain market share from its largest competitor. The company also announced that it plans to use the solid free cash flow that it has generated to repurchase $4 billion in stock over the year. We believe that the company’s improving fundamentals and continued solid execution of its acquisition strategy may lead to a higher valuation for the shares. Conversely, stock selection in consumer discretionary, particularly media, detracted from performance, as Westwood One shares declined. The company announced that revenues for the first quarter would be lower than had previously been forecasted, due to a weaker advertising market and greater competitive pressure. In addition, increased investment spending in 2006 is likely to further depress earnings relative to prior expectations. We have subsequently sold Westwood One. Expedia shares also declined, after the company released its earnings report. Although revenue growth was in line with our expectations, the company announced that it had increased general and administrative expenses and technology spending. Expedia was also sold during the first half of the year.

While the equity markets were volatile during the period, the global economic backdrop continues to appear solid, with interest rates low by historical standards and corporate profits quite robust. In addition, equity valuations appear reasonable, particularly among high-quality larger stocks, which have lagged the broad market in recent years. As a result, we feel that the outlook for equities is positive, although we would expect investor risk tolerance to continue to wane, as the effects of the earlier Federal Reserve rate hikes, which tend to trail the announcements, are felt, and central banks around the world further reduce liquidity.

Lazard U.S. Equity Value Portfolio

For the six month period ended June 30, 2006, Lazard U.S. Equity Value Portfolio’s Institutional Shares posted a total return of 5.39%, while Open Shares posted a total return of 5.19%, as compared with the 6.56% return of the Russell 1000 Value Index.

Stock selection and an overweight position in energy benefited performance, as this sector rose sharply when the price of oil reached record levels during the first half of the year. Shares of Marathon Oil rose significantly, as the company benefited from higher oil prices and solid refining margins. Stock selection in health care also helped returns, as the shares of Sepracor posted gains due to positive news that the FDA did not approve a potential competitive sleep aid. This decision gives the company a competitive advantage in the growing insomnia treatment market. Subsequently, the stock rose based on speculation of a takeover, given that it is likely that one of the largest competitive threats to the company’s insomnia drug has been eliminated. Conversely, stock selection in telecom services detracted from returns, as the shares of wireless provider, Sprint Nextel Corp., were weak due to concerns about new subscriptions and the timing of a share buyback. Stock selection in technology also hurt returns, as the shares of Microsoft fell following the release of disappointing quarterly earnings. We have owned Microsoft based on its attractive valuation and the expectation that it should witness accelerating growth in both revenues and profits, driven by the upcoming release of its new PC operating system and suite of office software. While Microsoft’s first-quarter earnings report and comments about future sales did support the expected acceleration in revenues, the company decided to significantly increase its spending on research and marketing in order to drive its future revenue growth and emerging businesses. This change in strategic direction and the lack of detail regarding where the incremental spending would be directed took investors by surprise and led to a sharp sell-off in the stock. While the announcement was disappointing, we believe

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the market reaction was overdone and maintained our position. However, we intend to closely monitor this increased spending and the likely return it will generate for the company.

Lazard U.S. Strategic Equity Portfolio

For the six month period ended June 30, 2006, Lazard U.S. Strategic Equity Portfolio’s Institutional Shares and Open Shares both posted a total return of 2.31%, as compared with the 2.71% return of the S&P 500 Index.

During the period, stock selection in technology benefited returns, as larger technology holdings with positive cash flow, such as Oracle, Cisco, and Hewlett-Packard, performed well. Oracle in particular, reported better-than-expected earnings. The company’s latest results support the premise that the company is executing its acquisition strategy effectively. In addition, customers are embracing its broader product offerings, potentially helping the company to gain market share from its largest competitor. The company also announced that it plans to use the solid free cash flow that it has generated to repurchase $4 billion in stock over the year. Stock selection and an underweight position in health care also helped returns, after shares of Sepracor rose due to positive news that the FDA did not approve a potential competitive sleep aid. This decision gives the company a competitive advantage in the growing insomnia treatment market. Subsequently, the stock rose based on speculation of a takeover, given that it is likely that one of the largest competitive threats to the company’s insomnia drug has been eliminated. Shares of Laboratory Corporation of America also rose steadily during the first half of the year. Lab Corp., one of two clinical laboratory-testing companies that dominate the independent lab-testing business, reported better-than-expected earnings due to robust pricing and volume growth. Conversely, stock selection in consumer discretionary, particularly media, detracted from performance, as Westwood One shares declined. The company announced that revenues for the first quarter would be lower than had previously been forecasted, due to a weaker advertising market and greater competitive pressure. In addition, increased investment spending in 2006 is likely to further depress earnings relative to prior expectations. We subsequently sold Westwood One. Expedia shares also declined, after the company released its earnings report. Although revenue growth was in line with our expectations, the company announced that it had increased general and administrative expenses and technology spending. Expedia was also sold during the first half of the year. Stock selection and an underweight position in energy also hurt returns. In particular, the Portfolio was underweight in the oil-service companies that are more tied to the capital-spending cycle than the larger, integrated-oil companies.

Lazard Mid Cap Portfolio

For the six month period ended June 30, 2006, Lazard Mid Cap Portfolio’s Institutional Shares posted a total return of 3.17%, while Open Shares posted a total return of 3.06%, as compared with the 4.84% return of the Russell Midcap Index.

The first quarter of 2006 was disappointing. Although the Portfolio had two stock-specific issues (discussed below), much of the underperformance was related to the market’s gravitation toward the more speculative asset classes. Specifically, stock selection in consumer discretionary, particularly media, detracted from performance, as Westwood One shares declined. The company announced that revenues for the first quarter would be lower than had previously been forecasted, due to a weaker advertising market and greater competitive pressure. In addition, increased investment spending in 2006 is likely to further depress earnings relative to prior expectations. Thus, we subsequently sold Westwood One. Expedia shares also declined, after the company released its earnings report. Although revenue growth was in line with our expectations, the company announced that it had increased general and administrative expenses and technology spending. Expedia was also sold from the Portfolio in the first half of the year. In financials, the Portfolio’s underweight position in REITs detracted from performance, as this sector rose sharply despite rising interest rates. A large weighting in insurance stocks also hurt returns, as this group underperformed. Conversely, an underweight position in utilities benefited performance, as this sector declined after performing well in 2005.

During the second quarter, investors’ risk appetite moved away from the deeper cyclicals, which provided a more compelling backdrop favoring

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Lazard’s investment style. Solid performance, relative to the benchmark, can be attributed to broad stock selection during the second quarter. Performance benefited from stock selection in industrials, as shares of food-services company ARAMARK Corp. rose sharply. The company received a takeover offer from a private equity group led by its Chairman and Goldman Sachs. The $32 cash offer was at a 13% premium to the previous day’s closing price. However, the stock subsequently traded higher, as investors believed that the company could eventually receive a higher bid. Overseas Shipholding Group also performed well, after the company announced a $300 million share repurchase program, representing approximately 15% of its outstanding shares. This announcement underscores the company’s solid cash-flow generation and its commitment to enhancing shareholder value. Stock selection in health care also helped performance, after shares of Sepracor rose, due to positive news that the FDA did not approve a potential competitive sleep aid. This decision gives the company a competitive advantage in the growing insomnia treatment market. Subsequently, the stock rose based on speculation of a takeover, given that it is likely that one of the largest competitive threats to the company’s insomnia drug has been eliminated. The underweight position in utilities detracted from performance during the second quarter, as this normally defensive sector held up well in the downturn.

Mid-cap equity valuations appear reasonable, particularly among higher quality, less-volatile stocks, which have lagged the broad market in recent years. Thus, our outlook for equities is positive even though we expect investor risk tolerance to continue to wane.

Lazard Small Cap Portfolio

For the six month period ended June 30, 2006, Lazard Small Cap Portfolio’s Institutional Shares posted a total return of 6.69%, while Open Shares posted a total return of 6.54%, as compared with the 8.21% return of the Russell 2000 Index.

For the Portfolio, stock selection in the transportation and materials sectors benefited performance during the first quarter of 2006, while stock selection in technology and energy hurt results. In the transportation sector, American Commercial Lines gained significantly. This marine transportation company has consistently raised earnings expectations well above analysts’ estimates. The company continues to benefit from robust freight demand, coupled with solid pricing, improved operational productivity, and increasing profits. Within materials, the steel industry did quite well in the first quarter, reflective of the continued strength of the U.S. economy. Oregon Steel Mills, which produces steel plate, pipe, and tubular products, was a solid performer. The main driver was a favorable product mix for Oregon Steel, where its particular product lines witnessed solid pricing. SafeNet, the Portfolio’s largest technology position, hurt returns as the company continued to experience inconsistent results, which called into question its growth profile. We believe that SafeNet is uniquely positioned to benefit from future government and enterprise security spending and continue to hold the shares. Within energy, shares of Brigham Exploration, an independent exploration and production company, declined sharply in the quarter. A fourth-quarter earnings miss and reduced guidance was the catalyst that drove the share price down. Higher production costs and disappointing drilling results led to the earnings shortfall. We believe that the cost issues are temporary and continue to hold the shares.

During the second quarter, stock selection in industrials and financials benefited performance, while stock selection in the consumer discretionary and materials sectors hurt returns. Within industrials, shares of Insteel Industries benefited from continued robust non-residential construction demand for the company’s products. Additionally, shares in Ladish, a supplier of metal components for the aerospace and industrial markets, also benefited from continued solid demand for its products. Stock selection in financials also helped returns, as shares in Texas Regional Bancshares rose sharply after the company received takeover bid from Banco Bilbao. Conversely, stock selection in consumer discretionary hurt performance, as the shares of Talbots and Hot Topic declined. Talbots is a specialty retailer of women’s apparel that continues to struggle with its store merchandising strategy and its recent acquisition of J.Jill Group. Hot Topic, a specialty retailer for young teens, continued to post disappointing same-store sales comparisons as it also works through its remerchan-dising program. In materials, shares in Coeur D’Alene

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Mines, a developer and producer of silver and gold deposits, also declined. The company suffered from a decline in the price of precious metals and uncertainty over the economics of its expansion plans in Bolivia. We continue to hold the stock.

For the first half of 2006, small-cap returns performed measurably better than large-cap returns. On both an absolute basis and relative to large caps, small-cap valuations are only a bit extended compared to historical levels, further underpinning hopes for continued outperfomance by the asset class. The primary risk for small caps continues to be a slowdown in the economy, which would slow the earnings-growth differential relative to large caps, as well as raise the risk premium for investing in the small-cap market. In the immediate term, we anticipate a continued robust economy, which should result in a supportive environment for the U.S. small-cap market. As always, we continue to seek out small-cap companies with above-average prospects that can prosper over the long term, even if the market environment should turn more difficult.

Lazard U.S. Small Cap Equity Growth Portfolio

For the period from February 28, 2006 (the Portfolio’s inception) to June 30, 2006, Lazard U.S. Small Cap Equity Growth Portfolio’s Institutional Shares posted a total return of (1.90)%, while Open Shares posted a total return of (2.00)%, as compared with the (2.74)% return of the Russell 2000 Growth Index.

Solid stock selection and an overweight position in the industrial sector benefited performance over the period. Top performers included a variety of companies that provide products and services used in the transportation, industrial, and construction sectors. Specific strength came from Gardner Denver (providing compressor, vacuum, and fluid transfer products to customers worldwide), Gibralter Industries (processor of metals products), RBC Bearings (international manufacturer of highly-engineered precision bearings), Kennametal (global supplier of tooling, engineered precuts, and metal working consumables) and Trinity Industries (rail cars, barges, and cement aggregates). Good stock selection in the energy sector also helped performance, although a slight underweight position held back results. Positions in Dril-Quip (oil services), Todco (contract-drilling services), and Swift Energy (exploration) all positively contributed to results. Although the information technology sector was quite weak over the period, the Portfolio’s hardware holdings benefited performance. Shares of Fargo Electronics posted significant gains, as the company agreed to be purchased by a larger Swedish company.

The consumer sector was a weak-performing group for the Portfolio, due to poor stock selection and lack of exposure to the stronger consumer staples group, especially food retailing and beverages. Three straight months of losses for the sector has cast a dark cloud over the group, as the cooling housing market and higher energy prices have weighed negatively on the consumer, despite decent retail sales reports. Laggards included Getty Images (creator and distributor of visual content), Guitar Center (musical instrument retailer), and Winnebago Industries (motor homes). Poor stock selection in financials hurt returns, although a half-weighting in the sector helped results. Vineyard National shares were weak, as the company sold additional stock to fund further expansion. The company continues to deliver solid growth and to execute well on its plan to expand into new markets, diversifying away from Southern California. Shares of Clayton Holdings also declined sharply and this stock was sold during the period. An overweight position and poor stock selection in a very weak health care sector also produced disappointing results during the period. DexCom, Inc. a medical-device company focused on the design and development of a continuous glucose monitoring system, for diabetics, was severely penalized as questions arose about its revenue estimates for the next few years. Barrier Therapeutics, a biopharma-ceutical company focused on products for dermatological use, also struggled during the period. Both companies are emerging opportunities with no revenues or earnings, characteristics that the market moved away from in the second quarter. Both stocks continue to be held, as we anticipate positive upside potential going forward.

Lazard International Equity Portfolio

For the six month period ended June 30, 2006, Lazard International Equity Portfolio’s Institutional Shares posted a total return of 9.29%, while Open Shares posted a total return of 9.12%, as compared with the 10.16% return of the MSCI EAFE Index.

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Stock selection in the financials sector benefited performance, as the shares of Spanish financial services group BBVA posted solid gains. BBVA’s first-quarter results confirmed its robust operational performance across all divisions, as well as a sustainable return on equity in excess of 30% and a 20% growth in book value per share. Stock selection in consumer discretionary also boosted returns, as the shares of Volkswagen rose. The company reported a 62% increase in net income for 2005, increased its dividend, and announced cost-saving measures. Shares of U.K. retailer Marks & Spencer also rose. The company continues to improve margins through more direct sourcing, negotiating better terms from suppliers, and selling more merchandise at full price. Regionally, stock selection in Japan produced solid gains, as Japan-based holdings in the consumer, industrial, information technology, and health care sectors rose more than the market.

Conversely, stock selection in information technology detracted from performance, as the shares of Yokogawa Electric declined. We took profits in Yokogawa Electric after the company reduced its forecasts for the full year 2006, based on weaker-than-expected sales for its semiconductor production and test equipment. Although the company continues to witness solid sales growth in its core industrial automation and controls business, we decided to pursue other opportunities with greater upside potential. Shares of Nidec also fell, after the company announced weak earnings results. However, we believe that the contributing factors (materials shortage, late ramp-up of a new lens unit), were temporary in nature, and the stock should rebound as these factors are resolved later in 2006. Stock selection in telecom services detracted from performance, as the shares of France Telecom declined. The company announced disappointing revenue growth, due to increased competition and a slow down in mobile-subscriber growth. However, we believe that the stock’s attractive valuation (at ten times earnings per share) and 6.7% dividend yield indicate that much of the bad news has already been incorporated into the current share price. Stock selection in utilities also dampened performance, as the Portfolio lacked exposure to some of the European utilities, which rose dramatically on merger news, such as Endesa.

While the equity markets were volatile during this six-month period, the international economic backdrop continues to appear solid, with interest rates low, by historical standards, and corporate profits quite robust. In addition, equity valuations appear reasonable, particularly among high-quality larger stocks, which have lagged the broad market in recent years. As a result, we feel that the outlook for international equities is positive. However, we would expect investor risk tolerance to continue to wane, as additional monetary tightening by central banks around the world should further reduce liquidity.

Lazard International Equity Select Portfolio

For the six month period ended June 30, 2006, Lazard International Equity Select Portfolio’s Institutional Shares posted a total return of 9.21%, while Open Shares posted a total return of 9.11%, as compared with the 10.16% return of the MSCI EAFE Index.

Stock selection in health care benefited performance, as the shares of Schering rose significantly. The company received a takeover offer from Bayer AG, as a result of consolidation in the global pharmaceuticals industry. Solid stock selection in technology also boosted results, as the shares of Canon moved higher. The company posted solid sales growth from both cameras and office machines and reported a greater-than-expected reduction in costs. Shares of Nokia also rose, as the company beat earnings estimates in the first quarter by 19%, and the release of new handsets helped propel sales 29% higher on a year-over-year basis. In addition, gross margins are showing signs of stabilizing at approximately 34%. An underweight position in Japan also helped returns, as this region underperformed the MSCI EAFE Index. Weighing on the shares of many Japanese companies are fears that higher global interest rates may lead to slower global growth. Conversely, stock selection in financial stocks, particularly in Japan, detracted from performance, as the shares moved lower with the overall market, and investors took profits in some of the stocks that had recently performed quite well. Shares of Mitsubishi UFJ and Sumitomo Mitsui declined more than the overall market, despite no change in their fundamental outlook. An underweight position in materials also hurt returns, as many commodities, such as copper and zinc, moved to new highs due to robust demand and increased specula-

9

The Lazard Funds, Inc.
Investment Overviews (continued)


tive activity. An underweight position in utilities also dampened performance, as the Portfolio lacked exposure to some of the European utilities that rose dramatically on merger news, such as Endesa.

From our perspective, the outlook for international equities is positive, as valuations appear reasonable among high quality larger non-U.S. stocks. Yet, we expect investor risk tolerance to continue to wane, as additional monetary tightening by central banks around the world is likely to further reduce liquidity.

Lazard International Strategic Equity Portfolio

For the six month period ended June 30, 2006, Lazard International Strategic Equity Portfolio’s Institutional Shares posted a total return of 12.05%, as compared with the 10.16% return of the MSCI EAFE Index. The Portfolio’s Open Shares (first offered on February 3, 2006) posted a total return of 4.96%, as compared with the 3.79% return of the Index during that period.

International equity markets were volatile in the first half of 2006, as a very solid, cyclically driven first quarter was followed by a weak second quarter. More-defensive stocks outperformed in the second quarter, as rising interest rates put pressure on liquidity and valuations, raising fears of a slowdown in global GDP growth. Japan was the weakest market during the period, in sharp contrast to its solid performance in the second half of 2005.

The Portfolio performed somewhat better than broader markets for the first half of the 2006, with robust first-quarter performance offset by some weakness in the second quarter. In the energy sector, holdings in LUKOIL and Statoil benefited from low valuations and high gearing to a strong oil price. In materials, Lafarge saw a new CEO begin to tackle the company’s cost base and returns, as reflected in the stock’s rise in valuation from a very low level. Within consumer discretionary, Porsche benefited from a solid mix effect in the sales of new 911 cars, while its investment in the major restructuring at Volkswagen is starting to pay off. Puma’s new organic investment plan also started to positively affect results during the first half of the year. In financials, stockbroker, Collins Stewart, adopted private equity tactics to gear up its balance sheet and split the company into two parts, realizing some of the value of the group. Stock selection was also solid in banks, driven by Banco di Verona, Hypo Real Estate, and DNB Nor In telecom services, the Portfolio was able to directly buy emerging-markets mobile communications strength in Telekom Indonesia and Maroc Telecom. Weaker performance was recorded in Japanese retail stocks, where Don Quijote and Yamada Denki gave up some of last year’s solid performance. Other Japanese holdings, including Nissan Motor Co., car auction company, USS Co., and education company, Benesse Corp., were weak ahead of what proved to be encouraging operational reporting. Shares of South African retailer, Edgars, fell, based on macro concerns over the local economy. Lagardere shares declined, as the French media company suffered from its holding in Airbus manufacturer, EADS. Yokogawa Electric and DX Services were also weak, and both positions were sold during the first half of the year.

Lazard International Small Cap Portfolio

For the six month period ended June 30, 2006, Lazard International Small Cap Portfolio’s Institutional Shares posted a total return of 9.42%, while Open Shares posted a total return of 9.25%, as compared with the 6.38% return of the MSCI EAFE Small Cap Index.

The first half of 2006 was divided into two distinct market environments for the international equity markets. The year started out strongly, as small cap stocks posted solid gains in the first quarter. European small caps led the other regions, but all regions showed healthy gains. The Portfolio benefited from an overweight position in Europe and an underweight position in Japan. Stock selection in Japan and the United Kingdom was positive, while stock selection in France and the Netherlands dampened performance. In terms of sectors, stock selection in consumer discretionary aided performance, while information technology stock selection hampered results.

The beginning of the second quarter was a continuation of the robust start of the year for international equities, with markets rallying strongly through April. However, a May equity sell-off continued into the beginning of June, as investors’ appetites for risk diminished. The Portfolio witnessed solid performance for the second quarter, outperforming in the declining market environment. By country, stock selection was generally solid, with particularly good performance in Japan and the Netherlands. Good

10

The Lazard Funds, Inc.
Investment Overviews (continued)

stock selection in the industrial and consumer discretionary sectors, along with an underweight position in information technology, also contributed to positive sector performance. Stock selection in Australia and the materials sector hurt returns.

Enodis, a U.K. manufacturer of cooking equipment, was a top performer for the period. The company has historically benefited from good management and a conservative balance sheet. In May, a U.S. competitor, Middleby, approached Enodis and offered a substantial premium for its shares. Not only was there an immediate impact on the day of this announcement, but the offer helped support the shares, as the general markets began to decline through May. The Enodis board has rejected this offer, as it believes the offer substantially undervalues the company. In June, a second U.S. bidder, Manitowoc, emerged and U.K. authorities have now imposed a deadline for the bidding process. We will monitor this situation and the potential for other bids, to determine how it affects the behavior of the Enodis management team.

An underperformer for the period was Eizo Nanao, the Portfolio’s only Japanese technology holding, which designs, assembles, and markets monitors for both personal computers and the amusement industry. The company has now become a leading provider of high-end, high-tech monitors that are used primarily in the medical industry. Eizo Nanao also supplies flat panel LCD screens used in the global financial sector. The amusement-related segment is geared primarily to the domestic Japanese pachinko market. Due to recent changes regarding the regulation of the pachinko industry, pachinko hall owners have been reluctant to order new machines to replace the existing ones. We believe this to be short term in nature and expect Eizo Nanao to benefit when demand resumes.

Lazard Emerging Markets Portfolio

For the six month period ended June 30, 2006, Lazard Emerging Markets Portfolio’s Institutional Shares posted a total return of 4.32%, while Open Shares posted a total return of 4.17%, as compared with the 7.16% return of the MSCI EM Index.

Significant appreciation in several individual holdings helped performance over the first six months of the year. Shares of LG Household and Health (South Korea) finished strongly, after the company announced a stock buyback. Shares of Caemi (Brazil) outperformed, based on continued robust Chinese demand for steel and better than expected negotiated steel prices for 2006. Telekom Indonesia shares rose sharply, due to robust cellular demand, while shares of United Tractors (Indonesia) posted gains, as the company has benefited from increased infrastructure spending in Indonesia. Good stock selection and an overweight position in Indonesia helped performance, as did a favorable overweight in Brazil. Good stock selection within materials and industrials also boosted returns.

Poor stock selection and an underweight in Russia detracted from performance during the period, as this oil-rich country benefited from a rise in oil prices. In addition, weak stock selection within Korea, India, and Brazil hurt returns. In particular, profit taking was experienced in Brazil, following the appointment of a new Finance Minister. An underweight position in China dampened returns, as excitement over Chinese banking helped the Chinese market perform well. An overweight position in Egypt also held back returns, as this country experienced currency weakness and profit taking. Poor stock selection and an overweight position in consumer discretionary stocks hurt returns, as investors became more concerned about inflationary pressures and higher interest rates globally. Stock selection and an underweight position in energy hurt performance, as this sector posted solid gains helped by robust crude oil prices. Shares in Orascom Construction (Egypt) performed poorly, based on weakness in the Egyptian market. Shares of LG Electronics (South Korea) dropped, due to concerns about falling handset prices. Telemar Norte (Brazil) shares suffered, after an unsuccessful attempt to simplify the company’s capital structure. State Bank of India (India) shares declined, due to concerns about rising interest rates.

We view this period of market weakness as a salutary event for the emerging markets asset class, though developing markets shares may trade within a range for a period of time.

Lazard High Yield Portfolio

For the six month period ended June 30, 2006, Lazard High Yield Portfolio’s Institutional Shares posted a total return of 2.05%, while Open Shares posted a total return of 1.90%, as compared with the

11

The Lazard Funds, Inc.
Investment Overviews (concluded)

3.07% return of the Merrill Lynch High Yield Master II Index.

For the first half of 2006, the Portfolio’s conservative approach to high yield investing including higher credit quality and avoidance of industry concentration dampened returns compared to the Index. The lower-quality automotive sector, including auto finance, now comprises over 13% of the Index and outperformed over the period. The Portfolio’s performance was helped by overweighting the building materials and cable sectors, both of which performed well. However, Portfolio returns were hurt by underweighting the automotive and airline sectors, which materially outperformed over the period. The Portfolio’s shorter duration modestly helped performance.

While we anticipate some widening of corporate and high-yield spreads over the near term, absolute yields for upper-tier securities are becoming attractive, and we are now more constructive on our sector. The Portfolio is well diversified with 111 separate holdings having an average rating of B1/B+. Currently 44% of the holdings are rated BB or better and 64% are rated B+ or better as measured by portfolio weightings.

_______________

Notes to Investment Overviews:

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

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

The views of the Fund’s management and the portfolio holdings described in this report are as of June 30, 2006; these views and portfolio holdings may have changed subsequent to this date. Nothing herein should be construed as a recommendation to buy, sell, or hold a particular security. There is no assurance that the securities discussed herein will remain in each Portfolio at the time you receive this report, or that securities sold will have not been repurchased. The specific portfolio securities discussed may in aggregate represent only a small percentage of each Portfolio’s holdings. It should not be assumed that investments in the securities identified and discussed were, or will be, profitable, or that the investment decisions we make in the future will be profitable, or equal the investment performance of the securities discussed herein.

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

12

The Lazard Funds, Inc.
Performance Overviews
(unaudited)

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, 2006
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
Equity Portfolio**	8.16	%	3.10	%	6.77	%	7.69	%	2.74	%	5.33	%
S&P 500 Index	8.63		2.49		8.32		8.63		2.49		7.30

*	All returns reflect reinvestment of all dividends and distributions, if any.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 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 index is unmanaged, has no fees or costs and is not available for investment.
**	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.

13

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)

Lazard U.S. Equity Value Portfolio

Comparison of Changes in Value of $10,000 Investment in the Institutional Shares of
Lazard U.S. Equity Value Portfolio and Russell 1000^® Value Index*

Total Returns*
Period Ended June 30, 2006
	Since
	Inception†
U.S. Equity Value Portfolio**
Institutional Shares	5.89	%
Open Shares	5.62
Russell 1000 Value Index	7.91

*	All returns reflect 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. Returns for period of less than one year are not annualized.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 Russell 1000 Value Index measures the performance of those Russell 1000 companies (the 1,000 largest companies in the Russell 3000® Index, which consists of the 3,000 largest U.S. companies by capitalization) with lower price-to-book ratios and lower forecasted growth values. The index is unmanaged, has no fees or costs and is not available for investment.
**	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 September 30, 2005.

14

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)

Lazard U.S. Strategic Equity Portfolio

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

Average Annual Total Returns*
Periods Ended June 30, 2006
	One		Since
	Year		Inception†
U.S. Strategic Equity Portfolio**
Institutional Shares	7.41	%	4.88	%
Open Shares	7.43		4.75
S&P 500 Index	8.63		5.01

*	All returns reflect 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.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 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 index is unmanaged, has no fees or costs and is not available for investment.
**	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 December 30, 2004.

15

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)

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, 2006
	One		Five		Since
	Year		Years		Inception†
Mid Cap Portfolio**
Institutional Shares	10.34	%	9.88	%	10.54	%
Open Shares	9.99		9.55		10.20
Russell Midcap Index	13.66		9.92		10.01

*	All returns reflect 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.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 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 index is unmanaged, has no fees or costs and is not available for investment.
**	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.

16

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)

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, 2006
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
Small Cap Portfolio**	11.58	%	9.56	%	9.77	%	11.20	%	9.31	%	8.68	%
Russell 2000 Index	14.58		8.50		9.05		14.58		8.50		8.78

*	All returns reflect reinvestment of all dividends and distributions, if any.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 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 index is unmanaged, has no fees or costs and is not available for investment.
**	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.

17

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)

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, 2006
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
International Equity Portfolio**	24.57	%	7.36	%	6.57	%	24.22	%	7.12	%	6.21	%
MSCI EAFE Index	26.56		10.02		6.39		26.56		10.02		7.01

*	All returns reflect reinvestment of all dividends and distributions, if any.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 MSCI EAFE Index is a broadly diversified international index comprised of equity securities of approximately 1,000 companies located outside the United States. The index is unmanaged, has no fees or costs and is not available for investment.
**	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.

18

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)

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, 2006
	One		Five		Since
	Year		Years		Inception†
International Equity Select Portfolio**
Institutional Shares	20.86	%	7.83	%	7.05	%
Open Shares	20.58		7.56		6.78
MSCI EAFE Index	26.56		10.02		8.95

*	All returns reflect 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.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 MSCI EAFE Index is a broadly diversified international index comprised of equity securities of approximately 1,000 companies located outside the United States. The index is unmanaged, has no fees or costs and is not available for investment.
**	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.

19

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)
Lazard International Strategic Equity Portfolio

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

Total Returns*
Period Ended June 30, 2006
	Since Inception†
	Institutional		Open
	Shares		Shares
International Strategic Equity Portfolio**	20.90	%	4.96	%
MSCI EAFE Index	18.11		3.79

*	All returns reflect 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. Returns for period of less than one year are not annualized.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 MSCI EAFE Index is a broadly diversified international index comprised of equity securities of approximately 1,000 companies located outside the United States. The index is unmanaged, has no fees or costs and is not available for investment.
**	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 October 31, 2005 and for Open Shares was February 3, 2006.

20

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)
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, 2006
	Institutional Shares								Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
International Small Cap Portfolio**	23.84	%	17.05	%	11.38	%	23.45	%	16.63	%	10.69	%
MSCI EAFE Small Cap Index	28.39		18.46		5.89		28.39		18.46		7.61

*	All returns reflect 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.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 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 index is unmanaged, has no fees or costs and is not available for investment.
**	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 13, 1997.

21

The Lazard Funds, Inc.
Performance Overviews (continued)
(unaudited)
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 (EM^®) Index*

Average Annual Total Returns*
Periods Ended June 30, 2006
	Institutional Shares						Open Shares
	One		Five		Ten		One		Five		Since
	Year		Years		Years		Year		Years		Inception†
Emerging Markets Portfolio**	35.04	%	23.42	%	8.38	%	34.65	%	23.14	%	8.08	%
MSCI EM Index	35.47		21.18		6.46		35.47		21.18		7.17

*	All returns reflect 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.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 MSCI EM Index is comprised of emerging market securities in countries open to non-local investors. The index is unmanaged, has no fees or costs and is not available for investment.
**	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 8, 1997.

22

The Lazard Funds, Inc.
Performance Overviews (concluded)
(unaudited)
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, 2006
	Institutional Shares						Open Shares
	One		Five		Since		One		Five		Since
	Year		Years		Inception†		Year		Years		Inception†
High Yield Portfolio**	5.07	%	5.13	%	2.04	%	4.77	%	4.85	%	1.21	%
Merrill Lynch High Yield
Master II Index.	4.70		8.33		5.25		4.70		8.33		5.08

*	All returns reflect 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.
	The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, nor a guarantee, of future results; the investment return and principle 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 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 index is unmanaged, has no fees or costs and is not available for investment.
**	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.

23

The Lazard Funds, Inc.
Information About Your Portfolio’s Expenses
(unaudited)

Expense Example

As a shareholder in a Portfolio of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees, distribution and service (12b-1) fees (Open Shares only), and other expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the six month period from January 1, 2006 through June 30, 2006 and held for the entire period.

Actual Expenses

For each Share class of the Portfolios, the first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000=8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

For each Share class of the Portfolios, the second line of the table below provides information about hypothetical account values and hypothetical expenses based on the class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholders reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

				Annualized
	Beginning	Ending	Expenses Paid	Expense Ratio
	Account Value	Account Value	During Period*	During Period
	1/1/06	6/30/06	1/1/06 - 6/30/06	1/1/06 - 6/30/06
Equity Portfolio
Institutional Shares
Actual	$1,000.00	$1,029.60	$5.29	1.05%
Hypothetical (5% Return Before Expenses)	$1,000.00	$1,019.58	$5.26	1.05%
Open Shares
Actual	$1,000.00	$1,027.20	$7.49	1.49%
Hypothetical (5% Return Before Expenses)	$1,000.00	$1,017.40	$7.46	1.49%
U.S. Equity Value Portfolio
Institutional Shares
Actual	$1,000.00	$1,053.90	$5.10	1.00%
Hypothetical (5% Return Before Expenses)	$1,000.00	$1,019.83	$5.01	1.00%
Open Shares
Actual	$1,000.00	$1,051.90	$6.60	1.30%
Hypothetical (5% Return Before Expenses)	$1,000.00	$1,018.36	$6.50	1.30%

24

The Lazard Funds, Inc.
Information About Your Portfolio’s Expenses (continued)
(unaudited)

				Annualized
	Beginning	Ending	Expenses Paid	Expense Ratio
	Account Value	Account Value	During Period*	During Period
	1/1/06	6/30/06	1/1/06 - 6/30/06	1/1/06 - 6/30/06
U.S. Strategic Equity Portfolio
Institutional Shares
Actual	$1,000.00	$1,023.10	$5.27	1.05%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,019.59	$5.26	1.05%
Open Shares
Actual	$1,000.00	$1,023.10	$6.77	1.35%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,018.10	$6.76	1.35%
Mid Cap Portfolio
Institutional Shares
Actual	$1,000.00	$1,031.70	$4.47	0.89%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,020.40	$4.44	0.89%
Open Shares
Actual	$1,000.00	$1,030.60	$5.91	1.17%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,018.98	$5.87	1.17%
Small Cap Portfolio
Institutional Shares
Actual	$1,000.00	$1,066.90	$4.58	0.89%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,020.37	$4.47	0.89%
Open Shares
Actual	$1,000.00	$1,065.40	$6.20	1.21%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,018.80	$6.06	1.21%
U.S. Small Cap Equity Growth Portfolio**
Institutional Shares
Actual	$1,000.00	$   981.00	$6.14	1.25%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,018.59	$6.26	1.25%
Open Shares
Actual	$1,000.00	$   980.00	$7.61	1.55%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,017.10	$7.76	1.55%
International Equity Portfolio
Institutional Shares
Actual	$1,000.00	$1,092.90	$4.34	0.84%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,020.65	$4.19	0.84%
Open Shares
Actual	$1,000.00	$1,091.20	$5.94	1.15%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,019.11	$5.74	1.15%
International Equity Select Portfolio
Institutional Shares
Actual	$1,000.00	$1,092.10	$5.96	1.15%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,019.09	$5.76	1.15%
Open Shares
Actual	$1,000.00	$1,091.10	$7.52	1.45%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,017.61	$7.25	1.45%

25

The Lazard Funds, Inc.
Information About Your Portfolio’s Expenses (concluded)
(unaudited)

				Annualized
	Beginning	Ending	Expenses Paid	Expense Ratio
	Account Value	Account Value	During Period*	During Period
	1/1/06	6/30/06	1/1/06 - 6/30/06	1/1/06 - 6/30/06
International Strategic Equity Portfolio
Institutional Shares
Actual	$1,000.00	$1,120.50	$5.30	1.01%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,019.80	$5.05	1.01%
Open Shares**
Actual	$1,000.00	$1,049.60	$7.37	1.45%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,017.60	$7.25	1.45%
International Small Cap Portfolio
Institutional Shares
Actual	$1,000.00	$1,094.20	$4.48	0.86%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,020.52	$4.32	0.86%
Open Shares
Actual	$1,000.00	$1,092.50	$6.23	1.20%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,018.84	$6.01	1.20%
Emerging Markets Portfolio
Institutional Shares
Actual	$1,000.00	$1,043.20	$5.86	1.16%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,019.06	$5.79	1.16%
Open Shares
Actual	$1,000.00	$1,041.70	$7.54	1.49%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,017.41	$7.45	1.49%
High Yield Portfolio
Institutional Shares
Actual	$1,000.00	$1,020.50	$2.76	0.55%
Hypothetical	$1,000.00	$1,022.07	$2.76	0.55%
Open Shares
Actual	$1,000.00	$1,019.00	$4.26	0.85%
Hypothetical  (5% Return Before Expenses)	$1,000.00	$1,020.58	$4.26	0.85%

*	Expenses are equal to the Portfolio’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period).
**	The commencement of operations for the U.S. Small Cap Equity Growth Portfolio was February 28, 2006. International Strategic Equity Portfolio’s Open Shares were first offered on February 3, 2006.

26

The Lazard Funds, Inc.
Portfolio Holdings Presented by Sector
June 30, 2006 (unaudited)

			Lazard		Lazard						Lazard
	Lazard		U.S. Equity		U.S. Strategic		Lazard		Lazard		U.S. Small Cap
	Equity		Value		Equity		Mid Cap		Small Cap		Equity Growth
Sector*	Portfolio		Portfolio		Portfolio		Portfolio		Portfolio		Portfolio
Commercial Services	3.5	%	1.5	%	3.9	%	6.6	%	10.0	%	4.9	%
Consumer Discretionary	10.8		9.9		17.3		14.2		7.9		15.5
Consumer Durables	1.1		—		—		—		0.9		1.9
Consumer Staples	5.0		4.0		5.3		4.3		0.9		—
Energy	9.9		14.8		7.9		7.2		3.1		5.7
Financials	20.9		30.7		20.9		19.3		17.7		5.9
Health Care	9.7		11.4		6.5		8.8		7.0		17.6
Process Industry	4.8		4.0		7.1		7.4		4.0		7.2
Producer Manufacturing	8.2		7.4		7.1		5.1		6.7		26.5
Technology	15.9		8.4		16.9		14.2		16.8		14.8
Telecommunications	3.6		6.4		4.2		4.1		—		—
Transportation	0.5		0.5		1.1		4.8		3.2		—
Utilities	—		1.0		—		—		0.9		—
Short-Term Investments	6.1		—		1.8		4.0		20.9		—
Total Investments	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
	Lazard		Lazard		Lazard		Lazard		Lazard
	International		International		International		International		Emerging
	Equity		Equity Select		Strategic Equity		Small Cap		Markets
Sector*	Portfolio		Portfolio		Portfolio		Portfolio		Portfolio
Commercial Services	—	%	—	%	3.6	%	18.1	%	4.8	%
Consumer Discretionary	8.0		1.9		10.1		16.2		7.7
Consumer Durables	6.1		2.8		11.2		4.3		4.4
Consumer Staples	7.6		18.0		9.3		1.8		8.4
Energy	5.9		12.1		6.5		6.2		7.2
Financials	25.7		34.8		28.3		12.5		14.9
Health Care	6.9		9.4		10.0		3.8		0.8
Process Industry	0.6		—		—		4.7		11.3
Producer Manufacturing	5.0		2.9		4.0		6.3		1.5
Technology	3.3		10.6		4.7		3.1		10.4
Telecommunications	2.9		3.1		1.4		0.4		14.5
Transportation	3.9		1.2		1.9		1.7		2.3
Utilities	4.1		—		2.5		—		0.7
Short-Term Investments	20.0		3.2		6.5		20.9		11.1
Total Investments	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

* Represents percentage of total investments.

27

The Lazard Funds, Inc.
Portfolio Holdings Presented by Credit Rating
June 30, 2006 (unaudited)

	Lazard
	High Yield
S&P Credit Rating*	Portfolio
BBB-	2.2	%
BB+	7.6
BB	8.5
BB-	17.9
B+	17.7
B	13.9
B-	9.1
CCC+	1.1
CCC-	0.6
CC	1.2
Short-Term Investments	20.2
Total Investments	100.0	%

* Represents percentage of total investments.

28

The Lazard Funds, Inc.
Portfolios of Investments
June 30, 2006 (unaudited)

Description	Shares	Value
Lazard Equity Portfolio
Common Stocks—98.6%
Alcohol & Tobacco—1.4%
Altria Group, Inc.	11,800	$	866,474
Banking—6.1%
Bank of America Corp.	58,338		2,806,058
The Bank of New York Co., Inc.	29,300		943,460
			3,749,518
Building & Construction—1.1%
Masco Corp.	23,100		684,684
Cable & Broadcasting—1.2%
Comcast Corp., Class A (a)	22,200		727,716
Chemicals—2.8%
Cabot Corp.	10,200		352,104
Du Pont (E.I.) de Nemours & Co.	10,500		436,800
Sigma-Aldrich Corp. (c)	4,600		334,144
The Dow Chemical Co.	15,800		616,674
			1,739,722
Commercial Services—2.6%
ARAMARK Corp., Class B	11,100		367,521
Automatic Data Processing, Inc.	27,375		1,241,456
			1,608,977
Computer Software—7.1%
Microsoft Corp.	125,330		2,920,189
Oracle Corp. (a)	96,850		1,403,357
			4,323,546
Consumer Products—1.4%
Fortune Brands, Inc.	5,900		418,959
The Stanley Works	9,300		439,146
			858,105
Drugs—3.4%
Bristol-Myers Squibb Co.	32,800		848,208
Pfizer, Inc.	26,190		614,679
Sepracor, Inc. (a), (c)	10,800		617,112
			2,079,999
Energy Integrated—6.9%
Chevron Corp.	12,888		799,829
ConocoPhillips	10,260		672,338
Exxon Mobil Corp.	39,898		2,447,742
Massey Energy Co.	8,700		313,200
			4,233,109

Description	Shares		Value
Energy Services—3.5%
BJ Services Co.	19,900	$	741,474
Halliburton Co. (c)	5,700		422,997
The Williams Cos., Inc.	42,100		983,456
			2,147,927
Financial Services—11.0%
A.G. Edwards, Inc.	12,300		680,436
American Express Co.	12,100		643,962
Citigroup, Inc.	26,417		1,274,356
JPMorgan Chase & Co.	37,346		1,568,532
MasterCard, Inc., Class A (c)	14,300		686,400
Mellon Financial Corp.	31,000		1,067,330
The Bear Stearns Cos., Inc.	5,800		812,464
			6,733,480
Food & Beverages—2.0%
Kraft Foods, Inc., Class A (c)	19,500		602,550
The Coca-Cola Co.	14,700		632,394
			1,234,944
Forest & Paper Products—4.1%
Ball Corp.	16,400		607,456
Kimberly-Clark Corp.	17,900		1,104,430
Louisiana-Pacific Corp.	23,300		510,270
Weyerhaeuser Co.	4,300		267,675
			2,489,831
Health Services—2.2%
Laboratory Corp. of America
Holdings (a)	11,700		728,091
Medco Health Solutions, Inc. (a)	5,600		320,768
WellPoint, Inc. (a)	4,400		320,188
			1,369,047
Insurance—4.9%
American International Group, Inc.	13,299		785,306
Lincoln National Corp.	7,900		445,876
PartnerRe, Ltd.	5,570		356,759
The Allstate Corp.	15,600		853,788
The St. Paul Travelers Cos., Inc.	12,200		543,876
			2,985,605
Leisure & Entertainment—3.8%
Gannett Co., Inc.	7,700		430,661
McDonald’s Corp.	25,700		863,520
News Corp., Class A	53,700		1,029,966
			2,324,147

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

29

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard Equity Portfolio (concluded)
Manufacturing—8.6%
General Electric Co.	53,825	$	1,774,072
Honeywell International, Inc.	22,543		908,483
Pitney Bowes, Inc.	14,800		611,240
Tyco International, Ltd.	29,700		816,750
United Technologies Corp.	18,500		1,173,270
			5,283,815
Medical Products—4.5%
Invitrogen Corp. (a)	4,700		310,529
Johnson & Johnson	35,995		2,156,820
Zimmer Holdings, Inc. (a)	5,200		294,944
			2,762,293
Printing & Publishing—1.0%
R.H. Donnelley Corp. (a)	11,585		626,401
Retail—6.2%
Dollar Tree Stores, Inc. (a)	24,000		636,000
Liz Claiborne, Inc.	15,800		585,548
The Home Depot, Inc.	52,885		1,892,754
The Kroger Co.	31,200		682,032
			3,796,334
Semiconductors &
Components—1.5%
Flextronics International, Ltd. (a)	29,400		312,228
Intel Corp.	15,720		297,894
Solectron Corp. (a)	87,100		297,882
			908,004
Technology—1.4%
Accenture, Ltd., Class A	9,200		260,544
International Business Machines Corp. .	7,800		599,196
			859,740
Technology Hardware—6.8%
Avaya, Inc. (a)	86,100		983,262
Cisco Systems, Inc. (a)	64,300		1,255,779
Dell, Inc. (a)	26,800		654,188
EMC Corp. (a)	62,300		683,431
Hewlett-Packard Co.	18,100		573,408
			4,150,068

Description	Shares		Value
Telecommunications—2.6%
ALLTEL Corp.	10,500	$	670,215
Sprint Nextel Corp.	47,126		942,049
			1,612,264
Transportation—0.5%
Overseas Shipholding Group, Inc.	5,400		319,410
Total Common Stocks
(Identified cost $56,887,549)			60,475,160
Short-Term Investments—6.3%
Collateral for Securities
on Loan—4.7%
State Street Navigator Securities
Lending Prime Portfolio
5.07% (e), (f)	2,895,491		2,895,491
	Principal
	Amount
	(000)
Repurchase Agreement—1.6%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$1,030,000 United States Treasury
Notes, 4.125-4.625%,
03/31/08-08/15/08, with a
value of $1,026,168)
Proceeds of $1,001,332	$1,001		1,001,000
Total Short-Term Investments
(Identified cost $3,896,491)			3,896,491
Total Investments—104.9%
(Identified cost $60,784,040) (b)		$	64,371,651
Liabilities in Excess of Cash and
Other Assets—(4.9)%			(3,031,553	)
Net Assets—100.0%		$	61,340,098

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

30

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard U.S. Equity Value Portfolio
Common Stocks—128.9%
Alcohol & Tobacco—2.8%
Altria Group, Inc.	60	$	4,406
Banking—13.1%
Bank of America Corp.	212		10,197
City National Corp.	33		2,148
Golden West Financial Corp.	20		1,484
Marshall & Ilsley Corp.	35		1,601
SunTrust Banks, Inc.	30		2,288
The Bank of New York Co., Inc.	90		2,898
			20,616
Chemicals—2.8%
Chemtura Corp.	100		934
Du Pont (E.I.) de Nemours & Co.	59		2,454
The Dow Chemical Co.	25		976
			4,364
Commercial Services—0.8%
Automatic Data Processing, Inc.	29		1,315
Computer Software—3.4%
Compuware Corp. (a)	195		1,307
Microsoft Corp.	125		2,912
Oracle Corp. (a)	81		1,174
			5,393
Consumer Products—3.2%
Fortune Brands, Inc.	20		1,420
The Procter & Gamble Co.	65		3,614
			5,034
Drugs—4.6%
Bristol-Myers Squibb Co.	50		1,293
Pfizer, Inc.	190		4,459
Sepracor, Inc. (a)	25		1,429
			7,181
Electric—1.2%
Edison International	50		1,950
Energy Exploration &
Production—2.1%
Apache Corp.	25		1,706
Occidental Petroleum Corp.	15		1,538
			3,244

Description	Shares		Value
Energy Integrated—14.8%
Chevron Corp.	92	$	5,710
ConocoPhillips	56		3,670
Exxon Mobil Corp.	170		10,429
Marathon Oil Corp.	30		2,499
Massey Energy Co.	25		900
			23,208
Energy Services—2.3%
Halliburton Co.	23		1,707
The Williams Cos., Inc.	80		1,869
			3,576
Financial Services—15.3%
A.G. Edwards, Inc.	30		1,659
Citigroup, Inc.	174		8,394
JPMorgan Chase & Co.	139		5,838
MasterCard, Inc., Class A	50		2,400
Mellon Financial Corp.	62		2,135
The Bear Stearns Cos., Inc.	25		3,502
			23,928
Food & Beverages—1.0%
The Coca-Cola Co.	35		1,506
Forest & Paper Products—4.0%
Ball Corp.	65		2,408
Kimberly-Clark Corp.	37		2,283
Owens-Illinois, Inc. (a)	95		1,592
			6,283
Health Services—3.0%
Medco Health Solutions, Inc. (a)	23		1,318
Triad Hospitals, Inc. (a)	50		1,979
WellPoint, Inc. (a)	20		1,455
			4,752
Insurance—10.9%
American International Group, Inc.	85		5,019
Aon Corp.	50		1,741
Lincoln National Corp.	34		1,919
PartnerRe, Ltd.	18		1,153
The Allstate Corp.	48		2,627
The St. Paul Travelers Cos., Inc.	74		3,299
Willis Group Holdings, Ltd.	40		1,284
			17,042

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

31

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard U.S. Equity Value Portfolio (concluded)
Leisure & Entertainment—7.2%
Gannett Co., Inc.	33	$	1,846
McDonald’s Corp.	75		2,520
News Corp., Class A	95		1,822
Time Warner, Inc.	193		3,339
Viacom, Inc., Class B (a)	48		1,720
			11,247
Manufacturing—9.7%
General Electric Co.	199		6,559
Honeywell International, Inc.	70		2,821
Ingersoll-Rand Co., Ltd., Class A	40		1,711
Pitney Bowes, Inc.	35		1,445
Tyco International, Ltd.	60		1,650
United Technologies Corp.	16		1,015
			15,201
Medical Products—7.0%
Becton, Dickinson & Co.	20		1,223
Invitrogen Corp. (a)	20		1,321
Johnson & Johnson	65		3,895
St. Jude Medical, Inc. (a)	40		1,297
Zimmer Holdings, Inc. (a)	56		3,176
			10,912
Printing & Publishing—1.0%
R.H. Donnelley Corp. (a)	28		1,514
Retail—2.2%
Liz Claiborne, Inc.	44		1,631
The Home Depot, Inc.	50		1,789
			3,420

Description	Shares		Value
Semiconductors &
Components—2.3%
Flextronics International, Ltd. (a)	200	$	2,124
Intel Corp.	80		1,516
			3,640
Technology—1.2%
International Business Machines Corp.	25		1,920
Technology Hardware—3.8%
Avaya, Inc. (a)	115		1,313
Dell, Inc. (a)	70		1,709
EMC Corp. (a)	145		1,591
Hewlett-Packard Co.	43		1,362
			5,975
Telecommunications—8.5%
ALLTEL Corp.	45		2,872
Embarq Corp. (a)	25		1,025
Sprint Nextel Corp.	230		4,598
Verizon Communications, Inc.	145		4,856
			13,351
Transportation—0.7%
Teekay Shipping Corp.	25		1,046
Total Common Stocks
(Identified cost $200,907)			202,024
Total Investments—128.9%
(Identified cost $200,907) (b)		$	202,024
Liabilities in Excess of Cash and
Other Assets—(28.9)%			(45,266	)
Net Assets—100.0%		$	156,758

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

32

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard U.S. Strategic Equity Portfolio
Common Stocks—97.2%
Alcohol & Tobacco—1.3%
Altria Group, Inc.	10,100	$	741,643
Banking—6.0%
Bank of America Corp.	52,076		2,504,856
The Bank of New York Co., Inc.	29,325		944,265
			3,449,121
Cable & Broadcasting—1.0%
Comcast Corp., Class A (a)	17,200		563,816
Chemicals—4.2%
Cabot Corp.	19,560		675,211
Du Pont (E.I.) de Nemours & Co.	13,080		544,128
Sigma-Aldrich Corp.	8,600		624,704
The Dow Chemical Co.	14,300		558,129
			2,402,172
Commercial Services—2.4%
ARAMARK Corp., Class B	16,925		560,387
DST Systems, Inc. (a)	13,300		791,350
			1,351,737
Computer Software—6.1%
Microsoft Corp.	89,905		2,094,787
Oracle Corp. (a)	93,660		1,357,133
			3,451,920
Consumer Products—2.9%
Fortune Brands, Inc.	10,045		713,295
The Stanley Works	20,185		953,136
			1,666,431
Drugs—2.0%
Pfizer, Inc.	22,820		535,585
Sepracor, Inc. (a)	11,000		628,540
			1,164,125
Energy Integrated—5.1%
Chevron Corp.	14,705		912,592
ConocoPhillips	9,200		602,876
Exxon Mobil Corp.	9,300		570,555
Massey Energy Co.	23,400		842,400
			2,928,423
Energy Services—2.7%
BJ Services Co.	14,770		550,330
The Williams Cos., Inc.	41,700		974,112
			1,524,442

Description	Shares		Value
Financial Services—9.8%
A.G. Edwards, Inc.	10,800	$	597,456
Ameriprise Financial, Inc.	13,370		597,238
Citigroup, Inc.	15,005		723,841
JPMorgan Chase & Co.	27,945		1,173,690
MasterCard, Inc., Class A	13,400		643,200
Mellon Financial Corp.	31,900		1,098,317
The Bear Stearns Cos., Inc.	5,530		774,642
			5,608,384
Food & Beverages—2.1%
Coca-Cola Enterprises, Inc.	28,800		586,656
The Coca-Cola Co.	14,000		602,280
			1,188,936
Forest & Paper Products—4.7%
Ball Corp.	15,815		585,788
International Paper Co.	16,770		541,671
Kimberly-Clark Corp.	16,880		1,041,496
Louisiana-Pacific Corp.	22,940		502,386
			2,671,341
Health Services—1.8%
Laboratory Corp. of America
Holdings (a)	16,855		1,048,887
Insurance—4.6%
Marsh & McLennan Cos., Inc.	35,800		962,662
PartnerRe, Ltd.	15,030		962,672
The Allstate Corp.	13,200		722,436
			2,647,770
Leisure & Entertainment—7.0%
Cendant Corp.	36,000		586,440
Gannett Co., Inc.	15,660		875,864
McDonald’s Corp.	23,155		778,008
News Corp., Class A	50,180		962,452
Time Warner, Inc.	45,200		781,960
			3,984,724
Manufacturing—7.1%
Honeywell International, Inc.	18,650		751,595
Ingersoll-Rand Co., Ltd., Class A	14,710		629,294
Pitney Bowes, Inc.	28,000		1,156,400
Tyco International, Ltd.	32,760		900,900
United Technologies Corp.	9,380		594,879
			4,033,068
Medical Products—2.5%
Baxter International, Inc.	16,780		616,833
Johnson & Johnson	13,765		824,799
			1,441,632

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

33

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard U.S. Strategic Equity Portfolio (concluded)
Printing & Publishing—1.5%
R.H. Donnelley Corp. (a)	15,674	$	847,493
Real Estate—0.2%
CBL & Associates Properties, Inc.	2,400		93,432
Retail—7.2%
Dollar Tree Stores, Inc. (a)	37,220		986,330
Foot Locker, Inc.	28,860		706,781
Liz Claiborne, Inc.	25,365		940,027
The Home Depot, Inc.	23,400		837,486
The Kroger Co.	29,700		649,242
			4,119,866
Semiconductors &
Components—1.7%
Flextronics International, Ltd. (a)	39,000		414,180
Solectron Corp. (a)	163,000		557,460
			971,640
Technology—1.7%
International Business Machines Corp.	12,390		951,800
Technology Hardware—7.3%
Avaya, Inc. (a)	116,875		1,334,713
Cisco Systems, Inc. (a)	54,755		1,069,365
Dell, Inc. (a)	24,300		593,163
EMC Corp. (a)	54,600		598,962
Hewlett-Packard Co.	17,340		549,331
			4,145,534

Description	Shares		Value
Telecommunications—3.1%
ALLTEL Corp.	16,213	$	1,034,876
Sprint Nextel Corp.	37,540		750,424
			1,785,300
Transportation—1.2%
Overseas Shipholding Group, Inc.	5,600		331,240
Teekay Shipping Corp.	7,700		322,168
			653,408
Total Common Stocks
(Identified cost $55,619,606)			55,437,045
	Principal
	Amount
	(000)
Repurchase Agreement—1.8%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$900,000 United States Treasury
Note, 7.50%, 11/15/16, with a
value of $1,068,328)
Proceeds of $1,042,346
(Identified cost $1,042,000)	$1,042		1,042,000
Total Investments—99.0%
(Identified cost $56,661,606) (b)		$	56,479,045
Cash and Other Assets in Excess
of Liabilities—1.0%			587,747
Net Assets—100.0%		$	57,066,792

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

34

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard Mid Cap Portfolio
Common Stocks—96.4%
Banking—2.0%
City National Corp.	35,400	$	2,304,186
Hudson City Bancorp, Inc.	172,700		2,302,091
			4,606,277
Chemicals—4.2%
Cabot Corp.	103,300		3,565,916
Celanese Corp., Series A	145,600		2,973,152
Sigma-Aldrich Corp.	43,700		3,174,368
			9,713,436
Commercial Services—4.7%
ARAMARK Corp., Class B	102,100		3,380,531
DST Systems, Inc. (a)	76,200		4,533,900
Republic Services, Inc.	74,481		3,004,564
			10,918,995
Computer Software—2.2%
Compuware Corp. (a)	366,400		2,454,880
Hyperion Solutions Corp. (a)	95,200		2,627,520
			5,082,400
Consumer Products—3.6%
Fortune Brands, Inc.	54,900		3,898,449
The Stanley Works	97,900		4,622,838
			8,521,287
Drugs—1.4%
Sepracor, Inc. (a)	56,400		3,222,696
Energy Integrated—2.7%
Massey Energy Co.	106,300		3,826,800
Sunoco, Inc.	35,800		2,480,582
			6,307,382
Energy Services—4.6%
BJ Services Co.	67,600		2,518,776
Smith International, Inc.	59,900		2,663,753
The Williams Cos., Inc.	236,100		5,515,296
			10,697,825
Financial Services—6.1%
A.G. Edwards, Inc.	45,100		2,494,932
Ameriprise Financial, Inc.	92,600		4,136,442
MasterCard, Inc., Class A	60,800		2,918,400
Mellon Financial Corp.	136,900		4,713,467
			14,263,241

Description	Shares		Value
Food & Beverages—4.3%
Coca-Cola Enterprises, Inc.	221,600	$	4,513,992
Pilgrim’s Pride Corp.	125,000		3,225,000
The Pepsi Bottling Group, Inc.	74,400		2,391,960
			10,130,952
Forest & Paper Products—3.2%
Ball Corp.	95,800		3,548,432
Louisiana-Pacific Corp.	87,300		1,911,870
Temple-Inland, Inc.	48,900		2,096,343
			7,556,645
Health Services—5.9%
Laboratory Corp. of America
Holdings (a)	70,200		4,368,546
Service Corp. International	588,700		4,792,018
Triad Hospitals, Inc. (a)	118,400		4,686,272
			13,846,836
Insurance—10.1%
Lincoln National Corp.	80,834		4,562,271
PartnerRe, Ltd.	74,600		4,778,130
Protective Life Corp.	140,100		6,531,462
RenaissanceRe Holdings, Ltd.	94,400		4,574,624
Willis Group Holdings, Ltd.	98,500		3,161,850
			23,608,337
Leisure & Entertainment—3.0%
Belo Corp., Class A	243,700		3,801,720
Royal Caribbean Cruises, Ltd.	86,300		3,300,975
			7,102,695
Manufacturing—5.1%
Dover Corp.	86,700		4,285,581
Hubbell, Inc., Class B	62,600		2,982,890
Pitney Bowes, Inc.	111,100		4,588,430
			11,856,901
Medical Products—1.5%
Invitrogen Corp. (a)	53,600		3,541,352
Printing & Publishing—1.9%
R.H. Donnelley Corp. (a)	82,735		4,473,481
Real Estate—1.2%
CBL & Associates Properties, Inc.	12,900		502,197
Health Care Property Investors, Inc.	87,300		2,334,402
			2,836,599

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

35

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard Mid Cap Portfolio (concluded)
Retail—7.5%
Dollar Tree Stores, Inc. (a)	188,900	$	5,005,850
Foot Locker, Inc.	149,700		3,666,153
Liz Claiborne, Inc.	135,500		5,021,630
The Kroger Co.	179,300		3,919,498
			17,613,131
Semiconductors &
Components—4.3%
Flextronics International, Ltd. (a)	345,900		3,673,458
Solectron Corp. (a)	834,400		2,853,648
Vishay Intertechnology, Inc. (a)	222,400		3,498,352
			10,025,458
Technology Hardware—7.8%
Arrow Electronics, Inc. (a)	73,100		2,353,820
Avaya, Inc. (a)	605,200		6,911,384
CDW Corp.	62,400		3,410,160
Ingram Micro, Inc., Class A (a)	187,200		3,393,936
Sun Microsystems, Inc. (a)	522,100		2,166,715
			18,236,015
Telecommunications—4.2%
ALLTEL Corp.	80,547		5,141,315
Citizens Communications Co.	349,400		4,559,670
			9,700,985

Description	Shares		Value
Transportation—4.9%
Laidlaw International, Inc.	138,000	$	3,477,600
Overseas Shipholding Group, Inc.	46,400		2,744,560
Teekay Shipping Corp.	44,200		1,849,328
YRC Worldwide, Inc. (a)	78,400		3,301,424
			11,372,912
Total Common Stocks
(Identified cost $212,468,870)			225,235,838
	Principal
	Amount
	(000)
Repurchase Agreement—4.1%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$9,685,000 United States Treasury
Note, 4.625%, 03/31/08, with a
value of $9,705,574)
Proceeds of $9,494,148
(Identified cost $9,491,000)	$9,491		9,491,000
Total Investments—100.5%
(Identified cost $221,959,870) (b)		$	234,726,838
Liabilities in Excess of Cash and
Other Assets—(0.5)%			(1,066,105	)
Net Assets—100.0%		$	233,660,733

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

36

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard Small Cap Portfolio
Common Stocks—98.2%
Banking—10.4%
Bank of the Ozarks, Inc. (c)	73,800	$	2,457,540
BankUnited Financial Corp.,
Class A (c)	55,900		1,706,068
Boston Private Financial
Holdings, Inc. (c)	74,500		2,078,550
First Community Bancorp	33,200		1,961,456
Franklin Bank Corp. (a), (c)	78,500		1,584,915
MB Financial, Inc. (c)	66,000		2,333,760
Provident Bankshares Corp. (c)	66,700		2,427,213
Sterling Bancshares, Inc.	157,900		2,960,625
Texas Regional Bancshares, Inc.,
Class A (c)	92,220		3,496,983
United Bankshares, Inc. (c)	45,600		1,670,328
Wintrust Financial Corp. (c)	43,700		2,222,145
			24,899,583
Building & Construction—2.1%
Building Materials Holding Corp. (c)	42,800		1,192,836
Levitt Corp., Class A (c)	61,600		985,600
Perini Corp. (a), (c)	47,400		1,066,500
Texas Industries, Inc. (c)	33,200		1,762,920
			5,007,856
Chemicals—0.7%
Westlake Chemical Corp. (c)	56,200		1,674,760
Commercial Services—10.7%
ADVO, Inc. (c)	17,300		425,753
Arbitron, Inc. (c)	36,970		1,417,060
G & K Services, Inc. (c)	66,300		2,274,090
H&E Equipment Services, Inc. (c)	56,200		1,655,090
John H. Harland Co. (c)	51,700		2,248,950
Navigant Consulting, Inc. (a), (c)	89,100		2,018,115
Rollins, Inc. (c)	87,600		1,720,464
Tetra Tech, Inc. (a), (c)	97,000		1,720,780
United Rentals, Inc. (a), (c)	88,800		2,839,824
ValueClick, Inc. (a), (c)	105,300		1,616,355
Waste Connections, Inc. (a), (c)	50,700		1,845,480
Watson Wyatt Worldwide, Inc. (c)	47,100		1,655,094
WESCO International, Inc. (a), (c)	20,700		1,428,300
Wireless Facilities, Inc. (a), (c)	338,800		931,700
Wright Express Corp. (a), (c)	65,700		1,888,218
			25,685,273
Computer Software—1.9%
Agile Software Corp. (a), (c)	274,300		1,739,062
Secure Computing Corp. (a), (c)	314,000		2,700,400
			4,439,462

Description	Shares		Value
Consumer Products—3.4%
Fossil, Inc. (a), (c)	95,100	$	1,712,751
Matthews International Corp.,
Class A (c)	59,700		2,057,859
Sealy Corp.	144,800		1,921,496
WMS Industries, Inc. (a), (c)	90,600		2,481,534
			8,173,640
Drugs—1.5%
Sciele Pharma, Inc. (a), (c)	105,500		2,446,545
SFBC International, Inc. (a), (c)	74,900		1,135,484
			3,582,029
Electric—1.1%
Cleco Corp. (c)	111,800		2,599,350
Energy Exploration &
Production—1.3%
Brigham Exploration Co. (a), (c)	157,600		1,246,616
The Exploration Co. of Delaware (a), (c)	172,306		1,836,782
			3,083,398
Energy Services—2.5%
Complete Production Services, Inc.	107,300		2,536,572
Veritas DGC, Inc. (a), (c)	33,000		1,702,140
W-H Energy Services, Inc. (a), (c)	36,000		1,829,880
			6,068,592
Financial Services—1.4%
Waddell & Reed Financial, Inc. (c)	161,700		3,324,552
Food & Beverages—1.2%
Performance Food Group Co. (a), (c)	40,000		1,215,200
Sanderson Farms, Inc. (c)	56,700		1,587,033
			2,802,233
Health Services—4.4%
BioScrip, Inc. (a), (c)	262,400		1,409,088
Centene Corp. (a), (c)	74,600		1,755,338
Five Star Quality Care, Inc. (a), (c)	115,900		1,283,013
Hanger Orthopedic Group, Inc. (a), (c)	184,200		1,539,912
inVentiv Health, Inc. (a), (c)	69,600		2,003,088
LifePoint Hospitals, Inc. (a), (c)	77,200		2,480,436
			10,470,875
Insurance—4.3%
Arch Capital Group, Ltd. (a)	39,000		2,318,940
Aspen Insurance Holdings, Ltd. (c)	145,100		3,379,379
Bristol West Holdings, Inc.	105,400		1,686,400
RLI Corp. (c)	62,400		3,006,432
			10,391,151

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

37

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard Small Cap Portfolio (continued)
Leisure & Entertainment—3.4%
Bally Technologies, Inc. (a), (c)	159,700	$	2,630,259
CBRL Group, Inc. (c)	59,300		2,011,456
Rare Hospitality International, Inc. (a)	40,800		1,173,408
Ruby Tuesday, Inc. (c)	95,900		2,340,919
			8,156,042
Manufacturing—8.3%
Acuity Brands, Inc. (c)	55,400		2,155,614
Applied Signal Technology, Inc. (c)	67,700		1,153,608
Columbus McKinnon Corp. (a)	36,500		793,510
DRS Technologies, Inc. (c)	23,100		1,126,125
Esterline Technologies Corp. (a)	54,100		2,250,019
Insteel Industries, Inc.	139,500		3,375,900
Kennametal, Inc.	36,200		2,253,450
Knoll, Inc. (c)	107,700		1,977,372
Ladish Co., Inc. (a), (c)	46,500		1,742,355
RBC Bearings, Inc. (c)	87,800		1,993,060
Regal-Beloit Corp. (c)	25,300		1,116,995
			19,938,008
Medical Products—3.6%
Advanced Medical Optics, Inc. (a), (c)	38,300		1,941,810
Encore Medical Corp. (a), (c)	382,100		1,837,901
PSS World Medical, Inc. (a), (c)	106,300		1,876,195
Symmetry Medical, Inc. (a), (c)	100,700		1,550,780
Wright Medical Group, Inc. (a), (c)	73,000		1,527,890
			8,734,576
Metals & Mining—4.2%
Cleveland-Cliffs, Inc. (c)	30,500		2,418,345
Coeur d’Alene Mines Corp. (a), (c)	253,300		1,218,373
NS Group, Inc. (a)	27,400		1,509,192
Oregon Steel Mills, Inc. (a)	47,400		2,401,284
RTI International Metals, Inc. (a), (c)	45,869		2,561,325
			10,108,519
Real Estate—5.9%
Alexandria Real Estate Equities, Inc. (c)	23,400		2,075,112
Ashford Hospitality Trust (c)	187,700		2,368,774
BioMed Realty Trust, Inc. (c)	58,600		1,754,484
Brandywine Realty Trust (c)	81,400		2,618,638
Cousins Properties, Inc. (c)	37,400		1,156,782
Healthcare Realty Trust, Inc. (c)	54,300		1,729,455
MFA Mortgage Investments, Inc.	355,700		2,447,216
			14,150,461

Description	Shares		Value
Retail—3.0%
Guitar Center, Inc. (a), (c)	30,400	$	1,351,888
Hot Topic, Inc. (a), (c)	95,500		1,099,205
Pacific Sunwear of California, Inc.
(a), (c)	59,700		1,070,421
The Finish Line, Inc.	135,800		1,606,514
The Talbots, Inc. (c)	46,700		861,615
Tractor Supply Co. (a), (c)	19,600		1,083,292
			7,072,935
Semiconductors &
Components—8.6%
Actel Corp. (a), (c)	156,000		2,238,600
Benchmark Electronics, Inc. (a), (c)	95,275		2,298,033
Coherent, Inc. (a), (c)	97,400		3,285,302
CPI International, Inc.	101,600		1,473,200
Exar Corp. (a), (c)	150,200		1,993,154
FARO Technologies, Inc. (a), (c)	89,000		1,509,440
Integrated Device Technology, Inc.
(a), (c)	168,700		2,392,166
Microsemi Corp. (a), (c)	99,800		2,433,124
Power Integrations, Inc. (a), (c)	63,000		1,101,240
TTM Technologies, Inc. (a), (c)	124,400		1,800,068
			20,524,327
Services—0.8%
Perot Systems Corp., Class A (a), (c)	138,900		2,011,272
Technology Hardware—9.6%
Avocent Corp. (a), (c)	79,700		2,092,125
C-COR, Inc. (a), (c)	219,593		1,695,258
Cognex Corp. (c)	64,800		1,686,744
Emulex Corp. (a)	106,500		1,732,755
FEI Co. (a), (c)	113,300		2,569,644
Ixia (a), (c)	170,400		1,533,600
Komag, Inc. (a), (c)	54,100		2,498,338
Powerwave Technologies, Inc. (a), (c)	207,600		1,893,312
Rogers Corp. (a), (c)	41,800		2,355,012
SafeNet, Inc. (a), (c)	162,600		2,881,272
Varian Semiconductor Equipment
Associates, Inc. (a), (c)	67,300		2,194,653
			23,132,713
Transportation—3.9%
AirTran Holdings, Inc. (a), (c)	176,400		2,621,304
American Commercial Lines, Inc.
(a), (c)	34,600		2,084,650
Hub Group, Inc., Class A (a), (c)	59,600		1,461,988
Swift Transportation Co., Inc. (a), (c)	103,300		3,280,808
			9,448,750
Total Common Stocks
(Identified cost $212,373,166)			235,480,357

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

38

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard Small Cap Portfolio (concluded)
Short-Term Investments—26.0%
Collateral for Securities
on Loan—24.7%
State Street Navigator Securities
Lending Prime Portfolio,
5.07% (e), (f)	59,259,729	$	59,259,729

	Principal
	Amount
Description	(000)		Value
Repurchase Agreement—1.3%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$3,145,000 United States Treasury
Note, 4.625%, 03/31/08, with a
value of $3,151,681)
Proceeds of $3,082,022	$3,081	$	3,081,000
Total Short-Term Investments
(Identified cost $62,340,729)			62,340,729
Total Investments—124.2%
(Identified cost $274,713,895) (b)		$	297,821,086
Liabilities in Excess of Cash and
Other Assets—(24.2)%			(57,954,643	)
Net Assets—100.0%		$	239,866,443

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

39

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard U.S. Small Cap Equity Growth Portfolio
Common Stocks—93.7%
Banking—2.2%
Vineyard National Bancorp Co.	780	$	20,982
Building & Construction—1.8%
PGT, Inc.	1,080		17,064
Commercial Services—1.4%
Getty Images, Inc. (a)	215		13,655
Computer Software—3.1%
Stellent, Inc.	2,000		19,100
webMethods, Inc. (a)	1,120		11,055
			30,155
Drugs—1.5%
Millennium Pharmaceuticals, Inc. (a)	1,460		14,556
Energy Services—5.3%
Dresser-Rand Group, Inc.	420		9,862
Dril-Quip, Inc. (a)	355		29,266
Todco, Class A	310		12,663
			51,791
Health Services—1.7%
Healthspring, Inc.	905		16,969
Insurance—1.8%
Aspen Insurance Holdings, Ltd.	770		17,933
Leisure & Entertainment—7.4%
Caribou Coffee Co.	1,145		8,542
Life Time Fitness, Inc. (a)	660		30,538
Orient-Express Hotels, Ltd., Class A	500		19,420
Winnebago Industries, Inc.	440		13,658
			72,158
Manufacturing—24.8%
A.S.V., Inc. (a)	530		12,211
BE Aerospace, Inc. (a)	1,230		28,118
Gardner Denver, Inc. (a)	870		33,495
Gibraltar Industries, Inc.	870		25,230
Hubbell, Inc., Class B	575		27,399
Kennametal, Inc.	575		35,794
Mueller Water Products, Inc.	1,230		21,414
RBC Bearings, Inc.	1,325		30,077
Trinity Industries, Inc.	713		28,785
			242,523

Description	Shares		Value
Medical Products—16.4%
Aspect Medical Systems, Inc. (a)	865	$	15,085
Barrier Therapeutics, Inc. (a)	3,470		22,694
DexCom, Inc.	1,580		21,456
Intuitive Surgical, Inc. (a)	190		22,414
PDL BioPharma, Inc. (a)	1,075		19,791
PSS World Medical, Inc. (a)	1,755		30,976
Restore Medical, Inc.	2,290		17,633
Wright Medical Group, Inc. (a)	490		10,256
			160,305
Metals & Mining—6.7%
Century Aluminum Co. (a)	500		17,845
Reliance Steel & Aluminum Co.	575		47,696
			65,541
Real Estate—1.6%
FelCor Lodging Trust, Inc.	710		15,435
Retail—7.2%
BJ’s Wholesale Club, Inc. (a)	660		18,711
Dick’s Sporting Goods, Inc. (a)	480		19,008
Guitar Center, Inc. (a)	500		22,235
Urban Outfitters, Inc. (a)	580		10,144
			70,098
Semiconductors &
Components—3.4%
Cree, Inc. (a)	590		14,019
Fargo Electronics (a)	770		19,550
			33,569
Technology Hardware—7.4%
ADTRAN, Inc.	630		14,131
Cadence Design Systems, Inc. (a)	985		16,893
Entegris, Inc. (a)	1,390		13,247
Ingram Micro, Inc., Class A (a)	965		17,495
Varian Semiconductor Equipment
Associates, Inc. (a)	330		10,761
			72,527
Total Common Stocks
(Identified cost $945,370)			915,261
Total Investments—93.7%
(Identified cost $945,370) (b)		$	915,261
Cash and Other Assets in Excess
of Liabilities—6.3%			61,091
Net Assets—100.0%		$	976,352

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

40

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard International Equity Portfolio
Common Stocks—97.9%
Australia—0.7%
BlueScope Steel, Ltd. (c)	1,210,415	$	7,149,257
Belgium—1.5%
InBev NV	305,461		14,978,652
France—17.3%
Axa (c)	527,024		17,291,741
BNP Paribas (c)	223,600		21,400,070
France Telecom SA (c)	785,700		16,887,916
Lafarge SA (c)	101,028		12,678,961
Lagardere SCA (c)	167,310		12,343,812
Sanofi-Aventis (c)	267,797		26,126,537
Schneider Electric SA (c)	132,200		13,776,556
Total SA (c)	502,296		33,044,311
Vivendi SA (c)	531,900		18,635,118
Total France			172,185,022
Germany—11.1%
Allianz AG (c)	99,600		15,730,706
Bayerische Motoren Werke AG (c)	290,900		14,528,727
Commerzbank AG	421,014		15,310,089
Deutsche Bank AG (c)	92,700		10,430,713
Fresenius Medical Care AG & Co.
KGaA (c)	84,829		9,748,976
KarstadtQuelle AG (a), (c)	354,062		9,393,967
Siemens AG	215,272		18,725,767
Volkswagen AG (c)	236,408		16,574,179
Total Germany			110,443,124
Ireland—2.5%
Bank of Ireland	774,260		13,810,602
CRH PLC	326,921		10,626,004
Total Ireland			24,436,606
Italy—9.6%
Banco Popolare di Verona e
Novara Scrl (c)	464,160		12,433,785
Capitalia SpA	1,309,188		10,738,664
Enel SpA (c)	1,707,250		14,713,250
Eni SpA (c)	471,430		13,882,342
Mediaset SpA (c)	1,267,400		14,941,570
Telecom Italia SpA (c)	3,302,250		9,194,322
UniCredito Italiano SpA (c)	2,536,967		19,852,620
Total Italy			95,756,553

Description	Shares		Value
Japan—20.8%
East Japan Railway Co.	2,138	$	15,897,301
Hoya Corp.	336,800		11,991,217
Keyence Corp.	35,700		9,125,259
Marui Co., Ltd.	292,900		4,565,873
Mitsubishi UFJ Financial
Group, Inc.	1,811		25,347,505
Murata Manufacturing Co., Ltd.	150,500		9,781,875
Nidec Corp.	137,300		9,848,751
Nissan Motor Co., Ltd.	1,808,300		19,773,215
Nomura Holdings, Inc.	943,300		17,700,026
Sumitomo Mitsui Financial
Group, Inc.	1,298		13,739,055
Takeda Pharmaceutical Co., Ltd.	290,700		18,105,970
The Sumitomo Trust and Banking
Co., Ltd.	1,109,000		12,126,580
THK Co., Ltd.	347,900		10,377,807
Tokyo Gas Co., Ltd.	2,894,000		13,645,331
Yamato Holdings Co., Ltd.	833,000		14,792,372
Total Japan			206,818,137
Netherlands—1.8%
TNT NV	490,500		17,548,432
Norway—1.5%
Statoil ASA (c)	512,150		14,526,801
Spain—2.0%
Banco Bilbao Vizcaya
Argentaria SA (c)	984,734		20,246,808
Sweden—0.9%
Telefonaktiebolaget LM Ericsson,
B Shares	2,729,000		9,016,541
Switzerland—10.2%
Compagnie Financiere Richemont
AG, A Shares	259,200		11,849,143
Credit Suisse Group	413,559		23,091,784
Julius Baer Holding, Ltd.	116,200		10,073,829
Nestle SA	32,976		10,336,966
Novartis AG	566,100		30,592,506
Zurich Financial Services AG (c)	69,800		15,270,531
Total Switzerland			101,214,759
United Kingdom—18.0%
BAE Systems PLC	1,179,400		8,065,577
Barclays PLC	1,791,500		20,361,268
BP PLC	851,370		9,928,178
Diageo PLC	1,449,842		24,388,748
Gallaher Group PLC	953,582		14,903,246

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

41

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard International Equity Portfolio (concluded)
Imperial Tobacco Group PLC	401,540	$	12,395,135
Lloyds TSB Group PLC	1,051,200		10,333,674
Marks & Spencer Group PLC	1,391,838		15,110,990
National Grid PLC	1,961,427		21,222,382
Old Mutual PLC	2,404,192		7,259,195
Reckitt Benckiser PLC	277,800		10,378,862
Tesco PLC	2,433,400		15,032,323
Vodafone Group PLC	4,612,554		9,832,150
Total United Kingdom			179,211,728
Total Common Stocks
(Identified cost $832,438,823)			973,532,420
Short-Term Investments—24.5%
Collateral for Securities
on Loan—22.9%
State Street Navigator Securities
Lending Prime Portfolio,
5.07% (e), (f)	228,186,025		228,186,025

	Principal
	Amount
Description	(000)		Value
Repurchase Agreement—1.6%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$15,730,000 United States Treasury
Note, 4.625%, 03/31/08, with a
value of $15,763,416)
Proceeds of $15,422,113	$15,417	$	15,417,000
Total Short-Term Investments
(Identified cost $243,603,025)			243,603,025
Total Investments—122.4%
(Identified cost $1,076,041,848) (b)		$	1,217,135,445
Liabilities in Excess of Cash and
Other Assets—(22.4)%			(222,864,410	)
Net Assets—100.0%		$	994,271,035

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

42

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard International Equity Select Portfolio
Common Stocks—96.5%
Denmark—1.0%
Danske Bank A/S ADR	12,600	$	239,526
Finland—4.1%
Nokia Oyj Sponsored ADR	48,400		980,584
France—10.5%
Axa Sponsored ADR	15,200		498,256
Sanofi-Aventis ADR	15,800		769,460
Societe Generale Sponsored ADR	16,700		490,813
Total SA Sponsored ADR	11,000		720,720
Total France			2,479,249
Germany—2.9%
Siemens AG Sponsored ADR	7,800		677,196
Ireland—2.1%
Allied Irish Banks PLC Sponsored ADR	10,400		502,944
Italy—5.0%
Eni SpA Sponsored ADR	12,200		716,750
SanPaolo IMI SpA Sponsored ADR	13,450		474,247
Total Italy			1,190,997
Japan—17.3%
Canon, Inc. Sponsored ADR	11,300		827,951
Hoya Corp. Sponsored ADR	7,400		260,850
Mitsubishi UFJ Financial Group, Inc.
ADR	51,600		719,820
Mitsui Sumitomo Insurance Co., Ltd.
ADR	3,700		465,110
Nissan Motor Co., Ltd. Sponsored ADR	30,300		665,994
Nomura Holdings, Inc. ADR	37,000		695,600
Sumitomo Mitsui Financial Group, Inc.
ADR	44,300		465,150
Total Japan			4,100,475
Netherlands—7.4%
Heineken NV ADR	35,800		758,244
Royal Dutch Shell PLC ADR	10,900		730,082
TNT NV ADR	7,700		275,660
Total Netherlands			1,763,986
Sweden—1.9%
Telefonaktiebolaget LM Ericsson
Sponsored ADR	13,300		439,432

Description	Shares		Value
Switzerland—13.4%
Credit Suisse Group Sponsored ADR	8,200	$	459,118
Nestle SA Sponsored ADR	10,100		791,638
Novartis AG ADR	13,100		706,352
Swiss Re Sponsored ADR	7,700		537,229
UBS AG	4,200		460,740
Zurich Financial Services AG ADR	10,000		213,500
Total Switzerland			3,168,577
United Kingdom—30.9%
Barclays PLC Sponsored ADR	17,800		814,884
BP PLC Sponsored ADR	9,800		682,178
Cadbury Schweppes PLC
Sponsored ADR	12,500		485,250
Diageo PLC Sponsored ADR	10,200		689,010
Gallaher Group PLC Sponsored ADR	7,700		481,558
GlaxoSmithKline PLC ADR	13,400		747,720
HSBC Holdings PLC Sponsored ADR	10,700		945,345
Imperial Tobacco Group PLC ADR	9,600		592,704
Lloyds TSB Group PLC	6,200		244,714
Tesco PLC Sponsored ADR	24,400		452,195
Unilever PLC Sponsored ADR	20,340		458,464
Vodafone Group PLC Sponsored ADR	34,000		724,200
Total United Kingdom			7,318,222
Total Common Stocks
(Identified cost $19,055,816)			22,861,188
	Principal
	Amount
	(000)
Repurchase Agreement—3.2%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$770,000 United States Treasury
Note, 4.625%, 03/31/08, with a
value of $771,636)
Proceeds of $754,250
(Identified cost $754,000)	$754		754,000
Total Investments—99.7%
(Identified cost $19,809,816) (b)		$	23,615,188
Cash and Other Assets in Excess
of Liabilities—0.3%			78,450
Net Assets—100.0%		$	23,693,638

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

43

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard International Strategic Equity Portfolio
Common Stocks—93.7%
Finland—1.9%
Sampo Oyj, A Shares	264,000	$	5,036,448
France—17.9%
Axa	213,530		7,005,952
Lafarge SA	35,375		4,439,544
Lagardere SCA	55,746		4,112,833
Sanofi-Aventis	110,200		10,751,219
Schneider Electric SA	50,323		5,244,158
Total SA	148,552		9,772,720
Vivendi SA	163,461		5,726,857
Total France			47,053,283
Germany—5.2%
Hypo Real Estate Holding AG	65,100		3,953,072
Puma AG	11,568		4,495,557
Wincor Nixdorf AG	40,220		5,140,158
Total Germany			13,588,787
Indonesia—1.4%
PT Telekomunikasi Indonesia
Sponsored ADR	115,800		3,717,180
Ireland—5.5%
Bank of Ireland	448,700		8,003,535
CRH PLC	197,825		6,429,961
Total Ireland			14,433,496
Italy—5.6%
Banco Popolare di Verona e
Novara Scrl	139,698		3,742,190
Capitalia SpA	673,200		5,521,949
UniCredito Italiano SpA	714,052		5,587,697
Total Italy			14,851,836
Japan—18.1%
Benesse Corp.	138,800		4,796,046
Ichiyoshi Securities Co., Ltd.	225,900		3,420,661
Keyence Corp.	12,900		3,297,363
Nissan Motor Co., Ltd.	739,100		8,081,835
Sompo Japan Insurance, Inc.	278,000		3,891,003
Sumitomo Mitsui Financial Group, Inc.	711		7,525,784
Takamatsu Corp.	182,700		3,524,065
Takeda Pharmaceutical Co., Ltd.	106,800		6,651,935
USS Co., Ltd.	96,680		6,393,744
Total Japan			47,582,436

Description	Shares		Value
Mexico—2.8%
Fomento Economico Mexicano
SA de CV Sponsored ADR	47,700	$	3,993,444
Kimberly-Clark de Mexico SA de CV	1,022,700		3,254,476
Total Mexico			7,247,920
Netherlands—2.0%
TNT NV	146,557		5,243,314
Norway—3.0%
Statoil ASA	277,450		7,869,689
South Africa—1.3%
Edgars Consolidated Stores, Ltd.	868,827		3,526,840
South Korea—1.9%
Kookmin Bank Sponsored ADR	59,100		4,908,846
Spain—2.8%
Banco Bilbao Vizcaya Argentaria SA	353,900		7,276,428
Sweden—3.7%
Sandvik AB	475,500		5,528,340
Telefonaktiebolaget LM Ericsson,
B Shares	1,310,000		4,328,204
Total Sweden			9,856,544
Switzerland—8.9%
Compagnie Financiere Richemont AG,
A Shares	106,281		4,858,560
Julius Baer Holding, Ltd.	57,796		5,010,559
Novartis AG	179,237		9,686,114
Schindler Holding AG	75,200		3,895,053
Total Switzerland			23,450,286
United Kingdom—11.7%
Collins Stewart Tullett PLC	430,176		6,038,848
Diageo PLC	351,246		5,908,540
Imperial Tobacco Group PLC	203,875		6,293,416
National Grid PLC	617,249		6,678,553
Tesco PLC	965,286		5,963,052
Total United Kingdom			30,882,409
Total Common Stocks
(Identified cost $232,867,954)			246,525,742
Preferred Stock—2.9%
Germany—2.9%
Porsche AG
(Identified cost $6,307,093)	7,834		7,570,504

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

44

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

	Principal
	Amount
Description	(000)	Value
Lazard International Strategic Equity Portfolio (concluded)
Repurchase Agreement—6.8%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$18,165,000 United States Treasury
Note, 4.625%, 03/31/08, with a
value of $18,203,588)
Proceeds of $17,811,906
(Identified cost $17,806,000)	$17,806	$	17,806,000

Description		Value
Total Investments—103.4%
(Identified cost $256,981,047) (b)	$	271,902,246
Liabilities in Excess of Cash and
Other Assets—(3.4)%		(8,986,046	)
Net Assets—100.0%	$	262,916,200

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

45

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard International Small Cap Portfolio
Common Stocks—97.7%
Australia—3.1%
ABC Learning Centres, Ltd. (c)	1,275,023	$	6,062,579
John Fairfax Holdings, Ltd. (c)	1,938,894		5,401,878
Macquarie Infrastructure Group (c) .	3,714,519		9,272,596
Total Australia			20,737,053
Austria—1.6%
CAT oil AG	305,958		6,200,728
Oesterreichische Post AG	148,320		4,498,482
Total Austria			10,699,210
Finland—1.5%
Sampo Oyj, A Shares	510,000		9,729,502
France—3.4%
Carbone Lorraine SA (c)	169,893		9,338,874
Neopost SA (c)	112,700		12,839,651
Total France			22,178,525
Germany—6.1%
Demag Cranes AG	284,842		8,395,113
DIC Asset AG	224,180		5,732,954
Fielmann AG (c)	69,491		6,617,894
Puma AG	24,132		9,378,178
Techem AG	227,846		10,546,336
Total Germany			40,670,475
Greece—4.4%
Motor Oil (Hellas) Corinth
Refineries SA	273,351		7,284,001
OPAP SA	311,816		11,283,308
Piraeus Bank SA	451,625		10,740,945
Total Greece			29,308,254
Hong Kong—2.7%
Esprit Holdings, Ltd.	1,482,365		12,119,245
Sa Sa International Holdings, Ltd.	15,359,000		5,438,039
Total Hong Kong			17,557,284
Ireland—6.9%
Anglo Irish Bank Corp. PLC	747,368		11,658,587
DCC PLC	498,800		11,990,461
Grafton Group PLC Units (a)	900,100		11,332,144
Irish Life & Permanent PLC	439,400		10,450,200
Total Ireland			45,431,392
Italy—1.0%
Lottomatica SpA (c)	170,706		6,473,983

Description	Shares		Value
Japan—31.6%
ABC-Mart, Inc. (c)	218,500	$	4,615,995
Aoyama Trading Co., Ltd.	268,400		8,405,476
Asahi Pretec Corp. (c)	305,200		9,744,828
Asia Securities Printing Co., Ltd. (c)	718,600		6,807,889
Bosch Corp. (c)	1,305,000		6,415,693
Chiyoda Corp. (c)	438,000		8,965,753
Daito Trust Construction Co., Ltd.	178,600		9,905,297
Dodwell BMS, Ltd. (c)	1,007,700		6,840,530
Don Quijote Co., Ltd. (c)	279,000		6,321,218
eAccess, Ltd. (c)	5,410		3,554,136
Eizo Nanao Corp. (c)	180,900		5,681,065
Hisamitsu Pharmaceutical Co., Inc. (c)	379,000		11,637,056
Hogy Medical Co., Ltd.	142,000		7,440,668
Ichiyoshi Securities Co., Ltd. (c)	469,600		7,110,857
Ito En, Ltd. (c)	192,200		7,044,727
JSR Corp. (c)	382,100		9,659,878
K.K. DaVinci Advisors (a), (c)	6,411		6,337,252
Mars Engineering Corp. (c)	258,600		8,256,922
Nissen Co., Ltd. (c)	648,500		8,078,240
NIWS Co. HQ, Ltd.	7,565		6,472,090
OSG Corp. (c)	591,800		9,975,931
Rinnai Corp. (c)	256,200		6,790,762
Secom Techno Service Co., Ltd.	167,800		7,765,053
Shoei Co, Ltd. (c)	254,760		7,733,169
Suruga Bank, Ltd. (c)	801,000		10,804,724
Takamatsu Corp.	222,200		4,285,973
THK Co., Ltd. (c)	259,200		7,731,899
USS Co., Ltd.	86,010		5,688,104
Total Japan			210,071,185
Netherlands—8.6%
Fugro NV (c)	278,712		12,016,966
Hunter Douglas NV	107,552		7,240,498
James Hardie Industries NV	1,404,300		8,033,598
Koninklijke Boskalis
Westminster NV (c)	160,536		10,889,537
SBM Offshore NV	390,808		10,413,885
USG People NV (c)	112,956		8,636,983
Total Netherlands			57,231,467
Norway—1.2%
Acergy SA (a), (c)	539,000		8,207,221
Spain—2.9%
Abengoa SA (c)	242,800		5,889,353
Indra Sistemas SA (c)	341,651		6,705,678
Prosegur Compania de Seguridad SA	267,551		6,671,028
Total Spain			19,266,059

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

46

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard International Small Cap Portfolio (concluded)
Sweden—5.3%
Elekta AB, B Shares	570,000	$	9,653,708
Getinge AB, B Shares (c)	585,600		9,958,561
Lindex AB (c)	587,100		8,354,018
Swedish Match AB (c)	462,500		7,447,820
Total Sweden			35,414,107
Switzerland—2.7%
Geberit AG (c)	9,500		10,965,714
Sika AG (a)	6,167		6,846,629
Total Switzerland			17,812,343
United Kingdom—14.7%
Bunzl PLC	555,263		6,341,643
Cattles PLC	1,187,612		7,232,134
Enodis PLC	2,180,179		8,709,877
Enterprise Inns PLC	364,817		6,396,605
Erinaceous Group PLC	1,010,408		5,606,401
Filtrona PLC	1,189,754		6,403,483
Intertek Group PLC	503,091		6,513,444
Man Group PLC	205,529		9,685,870
Northgate PLC	647,500		12,526,726
Premier Oil PLC (a)	389,058		6,925,980
Regus Group PLC (a)	5,755,983		11,657,348
Signet Group PLC Sponsored
ADR (c)	180,236		3,202,794
William Hill PLC	571,800		6,625,694
Total United Kingdom			97,827,999
Total Common Stocks
(Identified cost $498,670,626)			648,616,059

Description	Shares		Value
Warrant—0.0%
Japan—0.0%
Belluna Co., Ltd. Right,
09/29/06
(Identified cost $20,894) (a), (g)	21,850	$	243,128
Short-Term Investments—25.8%
Collateral for Securities
on Loan—24.3%
State Street Navigator Securities
Lending Prime Portfolio,
5.07% (e), (f)	161,763,160		161,763,160
	Principal
	Amount
	(000)
Repurchase Agreement—1.5%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$10,055,000 United States Treasury
Note, 4.625%, 03/31/08, with a
value of $10,076,360)
Proceeds of $9,859,269	$9,856		9,856,000
Total Short-Term Investments
(Identified cost $171,619,160)			171,619,160
Total Investments—123.5%
(Identified cost $670,310,680) (b)		$	820,478,347
Liabilities in Excess of Cash and
Other Assets—(23.5)%			(156,295,465	)
Net Assets—100.0%		$	664,182,882

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

47

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares	Value
Lazard Emerging Markets Portfolio
Common Stocks—83.8%
Argentina—1.1%
Banco Macro Bansud SA ADR (c)	1,115,700	$	22,715,652
Brazil—8.4%
Brasil Telecom Participacoes
SA ADR (c)	813,800		26,505,466
Companhia de Concessoes
Rodoviarias	4,622,600		37,805,253
Grendene SA	1,581,300		12,698,623
Petroleo Brasileiro SA ADR	652,200		58,247,982
Souza Cruz SA	1,557,700		23,182,866
Ultrapar Participacoes SA
Sponsored ADR (c)	1,088,200		17,117,386
Total Brazil			175,557,576
Chile—0.3%
Administradora de Fondos de
Pensiones Provida SA
Sponsored ADR	251,660		6,077,589
China—1.8%
CNOOC, Ltd. ADR (c)	342,500		27,530,150
People’s Food Holdings, Ltd. (c)	14,229,400		9,358,191
Total China			36,888,341
Egypt—4.0%
Eastern Tobacco	526,595		27,290,246
Orascom Construction Industries	1,075,619		32,748,281
Orascom Telecom Holding SAE	566,400		23,612,789
Total Egypt			83,651,316
Hong Kong—2.8%
China Netcom Group Corp.
(Hong Kong), Ltd.	7,873,500		13,786,481
Hutchison Telecommunications
International, Ltd. (a)	13,478,000		21,951,423
Pacific Basin Shipping, Ltd.	31,138,000		14,131,769
Texwinca Holdings, Ltd.	13,160,000		8,641,174
Total Hong Kong			58,510,847
Hungary—1.6%
Gedeon Richter Nyrt. (c)	96,990		17,817,623
MOL Hungarian Oil and
Gas Nyrt. (c)	151,100		15,517,710
Total Hungary			33,335,333

Description	Shares		Value
India—6.4%
Hero Honda Motors, Ltd.	1,450,449	$	24,935,499
Hindustan Lever, Ltd.	3,279,800		16,288,581
Oil and Natural Gas Corp., Ltd.	906,182		21,786,552
Satyam Computer Services, Ltd.	2,078,289		32,004,928
State Bank of India	2,495,248		39,347,308
Total India			134,362,868
Indonesia—4.3%
PT Bank Mandiri	98,572,500		18,303,433
PT Telekomunikasi Indonesia
Sponsored ADR (c)	1,560,600		50,095,260
PT United Tractors	37,695,900		21,975,371
Total Indonesia			90,374,064
Israel—3.0%
Bank Hapoalim BM	7,114,300		30,614,752
Israel Chemicals, Ltd.	8,179,414		32,970,194
Total Israel			63,584,946
Mexico—6.2%
Cemex SA de CV Sponsored
ADR (c)	688,533		39,225,709
Desarrolladora Homex SA
de CV ADR (a), (c)	901,342		29,573,031
Grupo Mexico SAB de CV, Series B	6,536,100		18,761,180
Grupo Televisa SA Sponsored ADR .	1,274,000		24,600,940
Kimberly-Clark de Mexico
SA de CV	5,523,400		17,576,779
Total Mexico			129,737,639
Morocco—1.1%
Maroc Telecom	1,682,045		22,665,360
Peru—0.6%
Credicorp, Ltd. (c)	409,900		12,280,604
Philippines—1.2%
Philippine Long Distance
Telephone Co. Sponsored
ADR (c)	753,100		25,997,012
Russia—3.2%
Evraz Group SA GDR	725,300		18,096,235
Mobile TeleSystems Sponsored
ADR (c)	1,184,900		34,883,456
Trader Media East, Ltd. GDR	1,382,156		13,254,014
Total Russia			66,233,705

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

48

The Lazard Funds, Inc.
Portfolios of Investments(continued)
June 30, 2006 (unaudited)

Description	Shares		Value
Lazard Emerging Markets Portfolio (concluded)
South Africa—7.1%
Aquarius Platinum, Ltd. (c)	1,927,142	$	28,692,984
Edgars Consolidated Stores, Ltd.	4,972,600		20,185,336
Kumba Resources, Ltd.	1,766,413		31,703,420
Murray & Roberts Holdings, Ltd.	7,704,945		27,441,456
Sanlam, Ltd.	4,065,790		8,266,408
Steinhoff International Holdings, Ltd.	10,901,256		32,634,601
Total South Africa			148,924,205
South Korea—16.8%
Hite Brewery Co., Ltd.	119,700		11,973,785
Hyundai Motor Co.	171,400		14,561,864
Kangwon Land, Inc.	1,500,000		25,613,998
Kookmin Bank	935,783		76,937,993
KT Corp. Sponsored ADR (c)	749,936		16,086,127
LG Electronics, Inc.	270,650		16,403,895
LG Household & Health Care, Ltd.	444,100		38,338,558
Lotte Shopping Co., Ltd.
GDR (a), (d)	1,493,500		28,615,460
Samsung Electronics Co., Ltd.	131,781		83,760,876
Shinhan Financial Group Co., Ltd.	414,490		19,442,189
SK Corp.	309,700		19,913,250
Total South Korea			351,647,995
Taiwan—8.5%
Advantech Co., Ltd.	6,566,334		18,820,638
Chinatrust Financial Holding
Co., Ltd.	44,643,958		37,022,895
Chunghwa Telecom Co., Ltd.
ADR (c)	324,705		5,997,301
Fubon Financial Holding Co., Ltd.	36,848,000		31,866,572
Hon Hai Precision Industry Co., Ltd.	6,104,535		37,709,084
Taiwan Semiconductor
Manufacturing Co., Ltd.	19,773,481		35,666,408
Taiwan Semiconductor
Manufacturing Co., Ltd.
Sponsored ADR (c)	1,073,971		9,859,050
Total Taiwan			176,941,948
Thailand—0.5%
Thai Union Frozen Products PCL	15,870,600		10,107,603
Turkey—3.6%
Enka Insaat ve Sanayi AS	2,447,343		17,871,689
Turkcell Iletisim Hizmetleri AS	4,249,441		19,394,679
Turkcell Iletisim Hizmetleri AS
ADR (c)	3,145,217		37,302,274
Total Turkey			74,568,642

Description	Shares		Value
United Kingdom—1.3%
Old Mutual PLC (c)	9,135,400	$	27,583,342
Total Common Stocks
(Identified cost $1,488,897,354)			1,751,746,587
Preferred Stocks—10.4%
Brazil—9.5%
AES Tiete SA	626,100,000		15,043,179
Bradespar SA	1,110,900		37,983,874
Companhia de Bebidas das
Americas ADR (c)	749,191		30,904,129
Companhia Vale do Rio Doce,
A Shares	2,590,306		52,757,624
Iochpe Maxion SA	1,047,778		10,166,727
Klabin SA	12,000,400		28,112,292
Telemar Norte Leste SA	1,184,717		23,757,291
Total Brazil			198,725,116
South Korea—0.9%
Hyundai Motor Co.	369,320		17,946,297
Total Preferred Stocks
(Identified cost $188,099,258)			216,671,413
Short-Term Investments—11.8%
Collateral for Securities
on Loan—7.0%
State Street Navigator Securities
Lending Prime Portfolio,
5.07% (e), (f)	146,377,656		146,377,656
	Principal
	Amount
	(000)
Repurchase Agreement—4.8%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$102,025,000 United States
Treasury Note, 4.625%, 03/31/08,
with a value of $102,241,733)
Proceeds of $100,057,175	$100,024		100,024,000
Total Short-Term Investments
(Identified cost $246,401,656)			246,401,656
Total Investments—106.0%
(Identified cost $1,923,398,268) (b)		$	2,214,819,656
Liabilities in Excess of Cash and
Other Assets—(6.0)%			(125,621,152	)
Net Assets—100.0%		$	2,089,198,504

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

49

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2006 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio
Corporate Bonds—92.7%
Aerospace & Defense—1.9%
Sequa Corp.,
8.875%, 04/01/08	$1,300	$	1,352,000
Agriculture—1.5%
Southern States Cooperative, Inc.,
10.50%, 11/01/10 (d)	1,000		1,062,500
Automotive—5.8%
Ford Motor Credit Co.,
7.00%, 10/01/13 (c)	1,725		1,488,165
General Motors Acceptance Corp.:
6.75%, 12/01/14 (c)	1,325		1,232,691
8.00%, 11/01/31 (c)	350		336,000
TRW Automotive, Inc.:
9.375%, 02/15/13	870		924,375
11.00%, 02/15/13	227		247,998
Venture Holdings Co. LLC,
12.00%, 06/01/09 (a), (h)	2,840		284
			4,229,513
Broadcasting—1.6%
CanWest Media, Inc.,
8.00%, 09/15/12	1,161		1,154,869
Building & Construction—1.5%
KB Home,
7.75%, 02/01/10 (c)	1,060		1,065,300
Building Materials—2.0%
Goodman Global Holding Co., Inc.,
7.875%, 12/15/12 (c)	390		377,325
Legrand SA,
8.50%, 02/15/25	925		1,077,625
			1,454,950
Cable Television—5.4%
CCH I LLC,
11.00%, 10/01/15	559		489,125
EchoStar DBS Corp.:
5.75%, 10/01/08 (c)	50		48,875
6.625%, 10/01/14 (c)	810		759,375
Mediacom Broadband LLC,
11.00%, 07/15/13	825		872,025
Rogers Cable, Inc.,
6.25%, 06/15/13 (c)	905		850,700
Shaw Communications, Inc.,
7.25%, 04/06/11 (c)	900		897,750
			3,917,850
	Principal
	Amount
Description	(000)		Value
Chemicals—5.3%
ARCO Chemical Co.,
9.80%, 02/01/20	$     535	$	633,975
Huntsman ICI Chemicals,
10.125%, 07/01/09 (c)	825		839,437
Huntsman International LLC,
9.875%, 03/01/09	325		337,188
Lyondell Chemical Co.,
9.625%, 05/01/07	575		586,500
NOVA Chemicals Corp.,
6.50%, 01/15/12 (c)	687		632,040
Tronox Worldwide LLC,
9.50%, 12/01/12 (d)	800		817,000
			3,846,140
Computer Software—1.2%
SunGard Data Systems, Inc.,
10.25%, 08/15/15 (d)	824		854,900
Diversified—3.0%
AMSTED Industries, Inc.,
10.25%, 10/15/11 (d)	1,345		1,442,512
The Greenbrier Cos., Inc.,
8.375%, 05/15/15	700		714,000
			2,156,512
Drugs—0.7%
Elan Finance PLC,
7.75%, 11/15/11 (c)	500		478,750
Electric Generation—2.2%
Caithness Coso Funding Corp.,
6.263%, 06/15/14 (d)	724		678,098
NRG Energy, Inc.,
7.375%, 02/01/16	125		122,031
Reliant Energy, Inc.,
6.75%, 12/15/14	825		761,062
			1,561,191
Electric Integrated—2.4%
Mission Energy Holding Co.,
13.50%, 07/15/08	500		558,750
MSW Energy Holdings LLC:
7.375%, 09/01/10	425		426,594
8.50%, 09/01/10	695		719,325
			1,704,669
Electronics—1.0%
Freescale Semiconductor, Inc.,
7.125%, 07/15/14	750		757,500

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

50

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2006 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio (continued)
Energy Exploration &
Production—1.8%
Chesapeake Energy Corp.,
6.375%, 06/15/15	$     725	$	674,250
Kerr-McGee Corp.,
6.875%, 09/15/11 (c)	400		414,035
Pogo Producing Co.,
6.875%, 10/01/17 (c)	250		229,375
			1,317,660
Energy Integrated—0.2%
Verasun Energy Corp.,
9.875%, 12/15/12 (d)	125		131,875
Environmental—0.9%
Browning-Ferris Industries, Inc.,
7.40%, 09/15/35 (c)	775		682,000
Financial Services—0.0%
Finance One PLC,
0.00%, 01/03/08 (a), (h), (i)	20,000		0
Morgan Guarantee Trust,
0.00%, 07/31/06 (a), (h), (i)	10,569		0
			0
Food & Beverages—0.6%
NBTY, Inc.,
7.125%, 10/01/15	475		451,250
Forest & Paper Products—4.6%
Bowater Canada Finance,
7.95%, 11/15/11 (c)	1,050		998,812
Georgia-Pacific Corp.:
8.125%, 05/15/11	300		301,500
9.50%, 12/01/11	500		526,250
Smurfit Capital Funding PLC,
7.50%, 11/20/25	1,600		1,468,000
			3,294,562
Gaming—4.6%
Kerzner International, Ltd.,
6.75%, 10/01/15	755		785,200
Majestic Star Casino LLC:
9.50%, 10/15/10	250		262,500
9.75%, 01/15/11 (d)	100		99,750
Mandalay Resorts Group:
9.375%, 02/15/10 (c)	1,035		1,089,337
10.25%, 08/01/07	655		678,744
Wheeling Island Gaming, Inc.,
10.125%, 12/15/09	405		419,681
			3,335,212
	Principal
	Amount
Description	(000)		Value
Gas Distribution—4.6%
ANR Pipeline Co.,
8.875%, 03/15/10	$     500	$	525,000
Ferrellgas Partners LP,
8.75%, 06/15/12	584		591,300
Northwest Pipeline Corp.,
8.125%, 03/01/10	850		879,750
Southern Natural Gas Co.,
8.875%, 03/15/10 (c)	500		526,250
The Williams Cos., Inc.,
8.75%, 03/15/32 (c)	710		777,450
			3,299,750
Health Services—2.2%
Fresenius Medical Capital Trust,
7.875%, 02/01/08 (c)	1,120		1,136,800
Tenet Healthcare Corp.,
7.375%, 02/01/13 (c)	500		456,250
			1,593,050
Hotels—2.9%
Host Marriott LP,
9.25%, 10/01/07	1,285		1,323,550
ITT Corp.,
7.375%, 11/15/15	750		757,500
			2,081,050
Insurance—3.1%
Crum & Forster Holdings Corp.,
10.375%, 06/15/13 (c)	425		435,625
Leucadia National Corp.,
7.00%, 08/15/13 (c)	950		926,250
Presidential Life Corp.,
7.875%, 02/15/09	865		860,675
			2,222,550
Leisure & Entertainment—1.7%
Intrawest Corp.,
7.50%, 10/15/13	845		840,775
Royal Caribbean Cruises, Ltd.,
8.00%, 05/15/10 (c)	400		417,500
			1,258,275
Machinery—1.2%
Case New Holland, Inc.:
6.00%, 06/01/09	725		705,062
9.25%, 08/01/11	125		131,563
			836,625
Media Services—0.7%
Interpublic Group of Cos., Inc.,
6.25%, 11/15/14 (c)	600		496,500

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

51

The Lazard Funds, Inc.
Portfolios of Investments (continued)
June 30, 2006 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio (continued)
Metals & Mining—3.3%
Arch Western Finance LLC,
6.75%, 07/01/13 (c)	$     1,000	$	957,500
Century Aluminum Co.,
7.50%, 08/15/14 (c)	225		224,719
Massey Energy Co.,
6.875%, 12/15/13 (c)	800		742,000
Peabody Energy Corp.,
6.875%, 03/15/13	500		491,250
			2,415,469
Packaging—1.1%
Graham Packaging Co., Inc.:
8.50%, 10/15/12 (c)	250		245,000
9.875%, 10/15/14 (c)	250		245,000
Owens-Brockway Glass Container, Inc.,
8.75%, 11/15/12	325		337,188
			827,188
Printing & Publishing—3.3%
Clarke American Corp.,
11.75%, 12/15/13	475		489,250
Dex Media East LLC,
12.125%, 11/15/12 (c)	195		218,644
Phoenix Color Corp.,
11.00%, 02/01/09	515		486,675
R.H. Donnelley Corp.:
8.875%, 01/15/16 (d)	400		393,500
10.875%, 12/15/12	440		484,550
The Sheridan Group, Inc.,
10.25%, 08/15/11	300		304,500
			2,377,119
Real Estate—2.4%
AMR Real Estate Partners:
7.125%, 02/15/13	500		480,000
8.125%, 06/01/12	350		350,000
CB Richard Ellis Services, Inc.,
9.75%, 05/15/10	227		242,322
Forest City Enterprises, Inc.,
7.625%, 06/01/15	475		477,375
Senior Housing Properties Trust,
7.875%, 04/15/15	179		179,895
			1,729,592
	Principal
	Amount
Description	(000)		Value
Retail—4.2%
Saks, Inc.,
9.875%, 10/01/11 (c)	$     1,225	$	1,310,750
Stater Brothers Holdings, Inc.,
8.125%, 06/15/12	725		720,469
The Jean Coutu Group (PJC), Inc.,
8.50%, 08/01/14 (c)	450		414,562
The Neiman-Marcus Group, Inc.,
10.375%, 10/15/15 (c), (d)	600		628,500
			3,074,281
Steel—1.9%
International Steel Group, Inc.,
6.50%, 04/15/14 (c)	725		685,125
United States Steel Corp.:
9.75%, 05/15/10 (c)	294		313,110
10.75%, 08/01/08	364		391,300
			1,389,535
Support Services—2.3%
Avis Budget Car Rental LLC:
7.625%, 05/15/14 (c), (d)	115		110,975
7.75%, 05/15/16 (c), (d)	110		106,150
H&E Equipment Services LLC,
11.125%, 06/15/12	780		861,900
Hertz Corp.,
8.875%, 01/01/14 (d)	550		563,750
			1,642,775
Telecommunications—7.5%
American Cellular Corp.,
10.00%, 08/01/11	625		659,375
Citizens Communications Co.,
6.25%, 01/15/13	1,000		950,000
Intelsat Subsidiary Holding Co., Ltd.,
8.25%, 01/15/13	800		794,000
PanAmSat Corp.,
9.00%, 08/15/14	846		862,920
Qwest Corp.,
7.875%, 09/01/11	800		810,000
Rogers Wireless, Inc.,
9.625%, 05/01/11	1,000		1,101,250
Stratos Global Corp.,
9.875%, 02/15/13 (d)	250		235,000
			5,412,545

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

52

The Lazard Funds, Inc.
Portfolios of Investments (concluded)
June 30, 2006 (unaudited)

	Principal
	Amount
Description	(000)		Value
Lazard High Yield Portfolio (concluded)
Transportation—2.1%
Kansas City Southern Railway Co.,
7.50%, 06/15/09	610	$	610,000
Stena AB,
7.50%, 11/01/13	975		946,969
			1,556,969
Total Corporate Bonds
(Identified cost $69,388,320)			67,022,476
	Shares
Preferred Stock—1.4%
Broadcasting—1.4%
Paxson Communications Corp.,
14.25%, 11/15/06
(Identified cost $860,697) (c)	119		1,025,516
Warrants—0.0%
Cable Television—0.0%
Ono Finance PLC:
05/31/09 (a), (d), (g)	500		5
03/16/11 (a), (d), (g)	470		4
			9
Retail—0.0%
Travelcenters of America, Inc.:
05/01/09 (a), (d), (g)	810		8
05/01/09 (a), (g)	965		10
			18
Total Warrants
(Identified cost $74,226)			27

Description	Shares		Value
Short-Term Investments—23.9%
Collateral for Securities
on Loan—21.3%
State Street Navigator Securities
Lending Prime Portfolio,
5.07% (e), (f)	15,364,508	$	15,364,508
	Principal
	Amount
	(000)
Repurchase Agreement—2.6%
State Street Bank and Trust Co.,
3.98%, 07/03/06
(Dated 06/30/06, collateralized by
$1,920,000 United States Treasury
Note, 4.625%, 03/31/08, with a
value of $1,924,079)
Proceeds of $1,878,623	$     1,878		1,878,000
Total Short-Term Investments
(Identified cost $17,242,508)			17,242,508
Total Investments—118.0%
(Identified cost $87,565,751) (b)		$	85,290,527
Liabilities in Excess of Cash and
Other Assets—(18.0)%			(13,022,472	)
Net Assets—100.0%		$	72,268,055

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

53

The Lazard Funds, Inc.
Notes to Portfolios of Investments
June 30, 2006 (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) are as follows:

			Aggregate		Aggregate		Net
			Gross		Gross		Unrealized
	Aggregate		Unrealized		Unrealized		Appreciation
Portfolio	Cost		Appreciation		Depreciation		(Depreciation)
Equity	$	60,784,040	$	5,031,169	$	1,443,558	$	3,587,611
U.S. Equity Value		200,907		6,003		4,886		1,117
U.S. Strategic Equity		56,661,606		1,795,145		1,977,706		(182,561	)
Mid Cap		221,959,870		18,274,142		5,507,174		12,766,968
Small Cap		274,713,895		35,844,708		12,737,517		23,107,191
U.S. Small Cap Equity Growth		945,370		42,850		72,959		(30,109	)
International Equity		1,076,041,848		155,576,528		14,482,931		141,093,597
International Equity Select		19,809,816		4,023,093		217,721		3,805,372
International Strategic Equity		256,981,047		19,437,151		4,515,952		14,921,199
International Small Cap		670,310,680		173,192,999		23,025,332		150,167,667
Emerging Markets		1,923,398,268		340,825,452		49,404,064		291,421,388
High Yield		87,565,751		2,115,094		4,390,318		(2,275,224	)

(c)	Security or portion thereof is out on loan.
(d)	Pursuant to Rule 144A under the Securities Act of 1933, these securities may only be traded among “qualified institutional buyers.”
(e)	Rate shown reflects 7 day yield as of June 30, 2006.
(f)	Represents security purchased with cash collateral received for securities on loan.
(g)	Date shown is the expiration date.
(h)	Issue in default.
(i)	Bankrupt issuer; security valued at zero; principal amount denominated in respective country’s currency.

Security Abbreviations:

ADR — American Depositary Receipt
GDR — Global Depositary Receipt

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

54

The Lazard Funds, Inc.
Notes to Portfolios of Investments (concluded)
June 30, 2006 (unaudited)

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

	Lazard		Lazard		Lazard		Lazard		Lazard
	International		International		International		International		Emerging
	Equity		Equity Select		Strategic Equity		Small Cap		Markets
	Portfolio		Portfolio		Portfolio		Portfolio		Portfolio
Industry
Agriculture	—	%	—	%	—	%	—	%	1.6	%
Alcohol & Tobacco	6.7		10.6		4.6		1.1		4.5
Automotive	5.1		2.8		6.0		1.0		2.7
Banking	22.0		23.5		16.2		5.0		11.4
Building & Construction	2.4		—		7.0		10.1		7.0
Chemicals	—		—		—		4.9		—
Commercial Services	—		—		2.4		15.4		—
Computer Software	—		—		—		1.0		0.6
Consumer Products	2.2		—		1.8		2.1		5.4
Drugs	7.5		9.4		10.3		1.7		0.9
Electric	3.6		—		2.5		—		0.7
Energy Exploration & Production	—		—		—		2.0		2.3
Energy Integrated	7.2		12.0		6.7		1.1		5.3
Energy Services	—		—		—		4.6		—
Financial Services	4.6		4.0		8.9		6.7		4.5
Food & Beverages	1.0		7.3		1.5		1.1		0.9
Forest & Paper Products	—		—		1.2		0.9		2.2
Gas Utilities	1.4		—		—		—		—
Health Services	1.0		—		—		—		—
Insurance	4.9		7.2		4.2		—		—
Leisure & Entertainment	4.6		—		5.6		7.6		2.4
Manufacturing	5.1		2.9		5.4		7.7		1.5
Medical Products	—		—		—		4.1		—
Metals & Mining	0.7		—		—		—		9.0
Real Estate	—		—		—		3.8		—
Retail	4.4		1.9		5.3		10.3		3.0
Semiconductors & Components	3.1		4.6		2.0		—		7.1
Technology	1.0		—		—		1.0		1.5
Technology Hardware	0.9		6.0		1.6		1.9		1.8
Telecommunications	3.6		3.1		1.4		0.5		15.4
Transportation	4.9		1.2		2.0		2.1		2.5
Subtotal	97.9		96.5		96.6		97.7		94.2
Collateral for Securities on Loan	22.9		—		—		24.3		7.0
Repurchase Agreements	1.6		3.2		6.8		1.5		4.8
Total Investments	122.4	%	99.7	%	103.4	%	123.5	%	106.0	%

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

55

The Lazard Funds, Inc.
Statements of Assets and Liabilities
June 30, 2006 (unaudited)

			Lazard		Lazard
	Lazard		U.S. Equity		U.S. Strategic			Lazard		Lazard
	Equity		Value		Equity			Mid Cap		Small Cap
	Portfolio		Portfolio		Portfolio			Portfolio		Portfolio
ASSETS
Investments in securities, at value	$	64,371,651	$	202,024	$	56,479,045		$	234,726,838	$	297,821,086
Cash		426		3,735		721			743		1,171
Foreign currency		—		—		—			—		—
Receivables for:
Investments sold		403,773		2,674		447,593			560,060		2,101,655
Capital stock sold		60,091		—		239,730			609,731		73,071
Dividends and interest		79,618		230		56,782			110,887		126,559
Income from securities loaned		713		—		—			—		7,050
Amount due from Investment
Manager		—		19,814		—			—		—
Deferred offering expenses		—		8,076		—			—		—
Total assets		64,916,272		236,553		57,223,871			236,008,259		300,130,592
LIABILITIES
Payables for:
Foreign currency due to Custodian		—		—		—			—		—
Management fees		41,380		—		26,270			140,803		148,601
Accrued distribution fees		2,222		2		60			9,871		7,747
Accrued directors’ fees		762		—		—			886		1,521
Amounts due upon return of
securities on loan		2,895,491		—		—			—		59,259,729
Investments purchased		—		879		91,908			2,071,160		328,309
Capital stock repurchased		590,605		—		—			66,537		439,858
Dividends		—		—		—			—		—
Other accrued expenses and payables .		45,714		78,914		38,841			58,269		78,384
Total liabilities		3,576,174		79,795		157,079			2,347,526		60,264,149
Net assets	$	61,340,098	$	156,758	$	57,066,792		$	233,660,733	$	239,866,443
NET ASSETS
Paid in capital	$	54,546,907	$	150,274	$	56,573,812		$	210,146,301	$	183,805,607
Undistributed (distributions in excess of)
net investment income (loss)		387,271		1,220		187,549			819,304		55,509
Accumulated undistributed net realized
gain (loss)		2,818,309		4,147		487,992			9,928,160		32,898,136
Net unrealized appreciation
(depreciation) on:
Investments		3,587,611		1,117		(182,561	)		12,766,968		23,107,191
Foreign currency		—		—		—			—		—
Net assets	$	61,340,098	$	156,758	$	57,066,792		$	233,660,733	$	239,866,443
Institutional Shares
Net assets	$	50,607,280	$	146,192	$	56,769,577		$	184,320,286	$	202,119,393
Shares of capital stock outstanding*		2,974,173		13,847		5,345,107			13,502,197		12,305,261
Net asset value, offering and
redemption price per share	$	17.02	$	10.56	$	10.62		$	13.65	$	16.43
Open Shares
Net assets	$	10,732,818	$	10,566	$	297,215		$	49,340,447	$	37,747,050
Shares of capital stock outstanding*		631,179		1,002		27,968			3,662,628		2,317,264
Net asset value, offering and
redemption price per share	$	17.00	$	10.54	$	10.63		$	13.47	$	16.29
Cost of investments in securities	$	60,784,040	$	200,907	$	56,661,606		$	221,959,870	$	274,713,895
Cost of foreign currency	$	—	$	—	$	—		$	—	$	—

* $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.

56

Lazard			Lazard			Lazard		Lazard		Lazard		Lazard
U.S. Small Cap			International			International		International		International		Emerging		Lazard
Equity Growth			Equity			Equity Select		Strategic Equity		Small Cap		Markets		High Yield
Portfolio			Portfolio			Portfolio		Portfolio		Portfolio		Portfolio		Portfolio
$	915,261		$	1,217,135,445		$	23,615,188	$	271,902,246	$	820,478,347	$	2,214,819,656	$	85,290,527
	87,907			1,696			290		50		1,358		10,631		556
	—			—			—		370,989		313,347		12,539,926		—
	1,907			10,458,526			—		—		—		4,774,270		1,042,327
	—			94,459			14,395		65,000		3,842,130		11,624,910		556
	273			2,547,695			101,123		685,176		1,897,373		4,835,870		1,414,390
	—			131,760			—		—		57,845		23,981		1,484
	15,800			—			—		—		—		—		—
	4,527			—			—		10,568		—		—		—
	1,025,675			1,230,369,581			23,730,996		273,034,029		826,590,400		2,248,629,244		87,749,840
	—			319,323			—		—		—		—		—
	—			597,207			3,555		152,759		392,044		1,629,937		11,486
	49			8,672			2,226		787		14,176		46,382		520
	10			3,809			126		—		1,240		826		332
	—			228,186,025			—		—		161,763,160		146,377,656		15,364,508
	24,826			6,044,576			—		9,897,572		1,450		7,410,510		—
	—			711,515			—		—		58,658		3,240,023		51
	—			—			—		—		—		—		62,014
	24,438			227,419			31,451		66,711		176,790		725,406		42,874
	49,323			236,098,546			37,358		10,117,829		162,407,518		159,430,740		15,481,785
$	976,352		$	994,271,035		$	23,693,638	$	262,916,200	$	664,182,882	$	2,089,198,504	$	72,268,055
$	991,885		$	1,041,197,946		$	17,663,916	$	230,341,484	$	389,020,225	$	1,533,199,401	$	129,257,392
	(2,165	)		37,947,353			294,263		2,831,658		4,712,736		20,074,643		(284,000	)
	16,741			(225,993,265	)		1,930,087		14,808,798		120,260,626		244,491,679		(54,430,113	)
	(30,109	)		141,093,597			3,805,372		14,921,199		150,167,667		291,421,388		(2,275,224	)
	—			25,404			—		13,061		21,628		11,393		—
$	976,352		$	994,271,035		$	23,693,638	$	262,916,200	$	664,182,882	$	2,089,198,504	$	72,268,055
$	710,603		$	950,845,514		$	12,621,135	$	258,319,250	$	590,821,548	$	1,855,557,630	$	70,413,945
	72,405			62,138,444			984,853		21,366,855		31,571,193		99,718,748		13,582,464
$	9.81		$	15.30		$	12.82	$	12.09	$	18.71	$	18.61	$	5.18
$	265,749		$	43,425,521		$	11,072,503	$	4,596,950	$	73,361,334	$	233,640,874	$	1,854,110
	27,114			2,836,080			863,381		381,303		3,929,668		12,470,405		356,371
$	9.80		$	15.31		$	12.82	$	12.06	$	18.67	$	18.74	$	5.20
$	945,370		$	1,076,041,848		$	19,809,816	$	256,981,047	$	670,310,680	$	1,923,398,268	$	87,565,751
$	—		$	—		$	—	$	368,664	$	308,305	$	12,524,969	$	—

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

57

The Lazard Funds, Inc.
Statements of Operations
For the period ended June 30, 2006 (unaudited)

					Lazard			Lazard
	Lazard				U.S. Equity			U.S. Strategic			Lazard			Lazard
	Equity				Value			Equity			Mid Cap			Small Cap
	Portfolio				Portfolio			Portfolio			Portfolio			Portfolio
INVESTMENT INCOME (LOSS)
Income:
Dividends	$	736,634		$	1,735		$	398,037		$	1,586,637		$	981,851
Interest		30,577			173			43,206			228,614			176,918
Income from securities loaned		1,670			—			—			—			55,268
Total investment income*		768,881			1,908			441,243			1,815,251			1,214,037
Expenses:
Management fees		299,254			509			181,574			863,857			1,037,545
Custodian fees		33,244			25,104			45,530			45,773			64,491
Administration fees		30,512			20,456			25,795			45,552			50,620
Distribution fees (Open Shares)		13,839			13			358			67,554			47,586
Shareholders’ services		25,952			20,522			23,077			28,372			30,307
Professional services		21,594			21,691			21,713			23,311			24,858
Shareholders’ reports		3,582			26			204			1,281			10,677
Registration fees		9,625			11,411			13,233			11,333			11,289
Directors’ fees and expenses		3,018			3			867			7,178			9,101
Amortization of offering expenses		—			15,553			—			—			—
Other		3,111			707			1,210			5,406			6,812
Total gross expenses		443,731			115,995			313,561			1,099,617			1,293,286
Management fees waived and
expenses reimbursed		—			(105,739	)		(57,905	)		—			—
Administration fees waived		—			(9,375	)		(857	)		—			—
Expense reductions		—			(186	)		(164	)		(1,145	)		(710	)
Total net expenses		443,731			695			254,635			1,098,472			1,292,576
Net investment income (loss)		325,150			1,213			186,608			716,779			(78,539	)
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain (loss) on:
Investments**		7,192,461			4,426			477,821			11,019,322			30,290,561
Foreign currency		—			—			—			—			—
Net change in unrealized
appreciation (depreciation) on:
Investments		(4,417,012	)		674			(171,054	)		(4,548,260	)		(10,946,538	)
Foreign currency		—			—			—			—			—
Net realized and unrealized gain (loss)
on investments and foreign currency		2,775,449			5,100			306,767			6,471,062			19,344,023
Net increase (decrease) in net assets
resulting from operations	$	3,100,599		$	6,313		$	493,375		$	7,187,841		$	19,265,484
* Net of foreign withholding taxes of	$	—		$	—		$	—		$	—		$	14
** Net of foreign capital gains taxes of	$	—		$	—		$	—		$	—		$	—

(a) Portfolio commenced operations on February 28, 2006.

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

58

	Lazard			Lazard			Lazard			Lazard			Lazard			Lazard
	U.S. Small Cap			International			International			International			International			Emerging			Lazard
	Equity Growth			Equity			Equity Select			Strategic Equity			Small Cap			Markets			High Yield
	Portfolio(a)			Portfolio			Portfolio			Portfolio			Portfolio			Portfolio			Portfolio
$	900		$	18,654,079		$	424,307		$	3,692,475		$	6,822,112		$	27,588,480		$	5,494
	669			480,811			16,774			247,507			323,095			2,079,307			3,050,885
	—			594,383			—			—			342,656			107,923			13,045
	1,569			19,729,273			441,081			3,939,982			7,487,863			29,775,710			3,069,424
	2,801			3,926,856			96,690			818,092			2,314,294			9,943,609			207,550
	14,840			188,178			24,006			131,328			154,792			1,036,894			32,027
	15,028			126,330			24,545			43,381			85,050			172,739			30,005
	192			57,920			13,373			2,187			84,336			320,014			3,529
	15,432			30,705			23,501			21,423			45,365			153,380			23,996
	17,317			34,063			21,674			56,904			28,113			43,602			21,326
	4,894			15,927			694			365			12,538			137,326			638
	1,119			12,499			11,092			11,609			18,851			22,920			11,028
	27			32,409			739			5,176			18,131			54,723			2,407
	2,273			—			—			15,553			—			—			—
	57			23,238			1,058			4,915			13,723			37,567			2,265
	73,980			4,448,125			217,372			1,110,933			2,775,193			11,922,774			334,771
	(63,392	)		—			(70,554	)		(7,412	)		—			—			(121,350	)
	(6,250	)		—			—			—			—			—			—
	(604	)		(215	)		—			—			(66	)		—			(1,494	)
	3,734			4,447,910			146,818			1,103,521			2,775,127			11,922,774			211,927
	(2,165	)		15,281,363			294,263			2,836,461			4,712,736			17,852,936			2,857,497
	16,741			101,700,956			1,664,055			14,260,884			99,777,312			200,562,673			1,584,216
	—			(764,335	)		—			(272,466	)		(873,054	)		(2,812,811	)		—
	(30,109	)		(20,846,428	)		13,880			2,557,638			(56,548,284	)		(169,341,670	)		(2,767,359	)
	—			27,527			—			13,061			25,926			15,822			—
	(13,368	)		80,117,720			1,677,935			16,559,117			42,381,900			28,424,014			(1,183,143	)
$	(15,533	)	$	95,399,083		$	1,972,198		$	19,395,578		$	47,094,636		$	46,276,950		$	1,674,354
$	—		$	2,322,263		$	43,223		$	436,303		$	579,941		$	2,085,728		$	—
$	—		$	—		$	—		$	—		$	—		$	447,499		$	—

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

59

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

	Lazard Equity Portfolio
	Six Months Ended			Year Ended
	June 30, 2006			December 31,
	(unaudited)			2005
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment income	$	325,150		$	1,105,839
Net realized gain (loss) on investments		7,192,461			16,515,392
Net change in unrealized appreciation (depreciation) on investments		(4,417,012	)		(12,634,283	)
Net increase in net assets resulting from operations		3,100,599			4,986,948
Distributions to shareholders:
From net investment income
Institutional Shares		—			(1,063,134	)
Open Shares		—			(65,960	)
From net realized gains
Institutional Shares		—			—
Open Shares		—			—
Net decrease in net assets resulting from distributions		—			(1,129,094	)
Capital stock transactions:
Net proceeds from sales
Institutional Shares		3,155,688			14,580,293
Open Shares		1,480,624			3,340,694
Net proceeds from reinvestment of distributions
Institutional Shares		—			1,028,498
Open Shares		—			60,698
Cost of shares redeemed
Institutional Shares		(53,262,123	)		(37,171,431	)
Open Shares		(3,450,175	)		(12,495,940	)
Net increase (decrease) in net assets from capital stock transactions		(52,075,986	)		(30,657,188	)
Redemption fees:
Institutional Shares		129			814
Open Shares		157			149
Net increase in net assets from redemption fees		286			963
Total increase (decrease) in net assets		(48,975,101	)		(26,798,371	)
Net assets at beginning of period		110,315,199			137,113,570
Net assets at end of period*	$	61,340,098		$	110,315,199
* Includes undistributed net investment income	$	387,271		$	62,121
** Portfolio commenced operations on September 30, 2005.
Shares issued and repurchased:
Institutional Shares:
Shares outstanding at beginning of period		5,926,763			7,233,860
Shares sold		186,397			913,757
Shares issued to shareholders from reinvestment of distributions		—			61,816
Shares repurchased		(3,138,987	)		(2,282,670	)
Net increase (decrease)		(2,952,590	)		(1,307,097	)
Shares outstanding at end of period		2,974,173			5,926,763
Open Shares:
Shares outstanding at beginning of period		746,298			1,314,098
Shares sold		87,354			208,173
Shares issued to shareholders from reinvestment of distributions		—			3,635
Shares repurchased		(202,473	)		(779,608	)
Net increase (decrease)		(115,119	)		(567,800	)
Shares outstanding at end of period		631,179			746,298

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

60

Lazard U.S. Equity Value Portfolio					Lazard U.S. Strategic Equity Portfolio						Lazard Mid Cap Portfolio
	Six Months Ended		Period Ended			Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2006		December 31,			June 30, 2006			December 31,			June 30, 2006			December 31,
	(unaudited)		2005**			(unaudited)			2005			(unaudited)			2005
$	1,213	$	281		$	186,608		$	14,002		$	716,779		$	1,026,955
	4,426		(279	)		477,821			52,399			11,019,322			13,765,907
	674		443			(171,054	)		(11,507	)		(4,548,260	)		2,956,884
	6,313		445			493,375			54,894			7,187,841			17,749,746
	—		(253	)		—			(13,086	)		—			(861,497	)
	—		(21	)		—			—			—			(123,392	)
	—		—			—			(40,220	)		—			(12,516,725	)
	—		—			—			(2,008	)		—			(4,046,742	)
	—		(274	)		—			(55,314	)		—			(17,548,356	)
	50,000		90,000			52,142,811			14,676,340			35,507,223			114,764,891
	—		10,000			57,464			210,020			13,087,829			28,863,071
	—		253			—			53,306			—			12,237,895
	—		21			—			1,958			—			3,530,222
	—		—			(10,957,717	)		(36,712	)		(28,496,523	)		(11,883,427	)
	—		—			—			(86,616	)		(19,907,479	)		(8,275,736	)
	50,000		100,274			41,242,558			14,818,296			191,050			139,236,916
	—		—			12,092			—			46			—
	—		—			—			866			100			376
	—		—			12,092			866			146			376
	56,313		100,445			41,748,025			14,818,742			7,379,037			139,438,682
	100,445		—			15,318,767			500,025			226,281,696			86,843,014
$	156,758	$	100,445		$	57,066,792		$	15,318,767		$	233,660,733		$	226,281,696
$	1,220	$	7		$	187,549		$	941		$	819,304		$	102,525
	9,025		—			1,453,051			40,000			12,998,140			4,275,005
	4,822		9,000			4,928,426			1,411,446			2,602,229			8,673,483
	—		25			—			5,101			—			922,819
	—		—			(1,036,370	)		(3,496	)		(2,098,172	)		(873,167	)
	4,822		9,025			3,892,056			1,413,051			504,057			8,723,135
	13,847		9,025			5,345,107			1,453,051			13,502,197			12,998,140
	1,002		—			22,498			10,000			4,159,844			2,328,775
	—		1,000			5,470			20,712			975,569			2,176,609
	—		2			—			187			—			269,430
	—		—			—			(8,401	)		(1,472,785	)		(614,970	)
	—		1,002			5,470			12,498			(497,216	)		1,831,069
	1,002		1,002			27,968			22,498			3,662,628			4,159,844

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

61

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

	Lazard Small Cap Portfolio
		Six Months Ended			Year Ended
		June 30, 2006			December 31,
		(unaudited)			2005
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	(78,539	)	$	223,097
Net realized gain on investments and foreign currency		30,290,561			53,339,195
Net change in unrealized appreciation (depreciation) on investments and foreign currency		(10,946,538	)		(41,069,108	)
Net increase (decrease) in net assets resulting from operations		19,265,484			12,493,184
Distributions to shareholders:
From net investment income
Institutional Shares		—			(286,264	)
Open Shares		—			—
From net realized gains
Institutional Shares		—			(58,946,374	)
Open Shares		—			(9,061,885	)
Net decrease in net assets resulting from distributions		—			(68,294,523	)
Capital stock transactions:
Net proceeds from sales
Institutional Shares		4,901,399			16,568,615
Open Shares		7,978,835			13,752,179
Net proceeds from reinvestment of distributions
Institutional Shares		—			57,988,827
Open Shares		—			8,746,033
Cost of shares redeemed
Institutional Shares		(73,175,625	)		(163,691,190	)
Open Shares		(9,398,937	)		(28,472,616	)
Net increase (decrease) in net assets from capital stock transactions		(69,694,328	)		(95,108,152	)
Redemption fees:
Institutional Shares		1,698			423
Open Shares		803			143
Net increase in net assets from redemption fees		2,501			566
Total increase (decrease) in net assets		(50,426,343	)		(150,908,925	)
Net assets at beginning of period		290,292,786			441,201,711
Net assets at end of period*	$	239,866,443		$	290,292,786
* Includes undistributed net investment income (loss)	$	55,509		$	134,048
** Portfolio commenced operations on February 28, 2006.
Shares issued and repurchased:
Institutional Shares:
Shares outstanding at beginning of period		16,447,073			20,752,662
Shares sold		293,571			901,438
Shares issued to shareholders from reinvestment of distributions		—			3,608,019
Shares repurchased		(4,435,383	)		(8,815,046	)
Net increase (decrease)		(4,141,812	)		(4,305,589	)
Shares outstanding at end of period		12,305,261			16,447,073
Open Shares:
Shares outstanding at beginning of period		2,423,023			2,678,808
Shares sold		473,693			780,624
Shares issued to shareholders from reinvestment of distributions		—			545,850
Shares repurchased		(579,452	)		(1,582,259	)
Net increase (decrease)		(105,759	)		(255,785	)
Shares outstanding at end of period		2,317,264			2,423,023

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

62

Lazard U.S. Small Cap Equity
Growth Portfolio				Lazard International Equity Portfolio						Lazard International Equity Select Portfolio
	Period Ended				Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2006**				June 30, 2006			December 31,			June 30, 2006			December 31,
	(unaudited)				(unaudited)			2005			(unaudited)			2005
	$	(2,165	)	$	15,281,363		$	26,631,263		$	294,263		$	256,149
		16,741			100,936,621			208,081,233			1,664,055			1,600,453
		(30,109	)		(20,818,901	)		(116,820,538	)		13,880			(115,763	)
		(15,533	)		95,399,083			117,891,958			1,972,198			1,740,839
		—			—			(28,968,396	)		—			(158,699	)
		—			—			(1,170,597	)		—			(99,660	)
		—			—			—			—			(366,705	)
		—			—			—			—			(300,440	)
		—			—			(30,138,993	)		—			(925,504	)
		716,580			72,778,034			122,670,508			2,191,351			4,625,863
		275,587			8,721,064			19,765,784			1,624,837			6,530,661
		—			—			26,529,862			—			515,622
		—			—			1,097,133			—			382,465
		(10	)		(248,476,106	)		(707,062,857	)		(2,917,262	)		(3,683,339	)
		(272	)		(18,277,461	)		(65,846,086	)		(1,464,973	)		(4,098,636	)
		991,885			(185,254,469	)		(602,845,656	)		(566,047	)		4,272,636
		—			9,800			4,265			—			—
		—			114			1,509			1			129
		—			9,914			5,774			1			129
		976,352			(89,845,472	)		(515,086,917	)		1,406,152			5,088,100
		—			1,084,116,507			1,599,203,424			22,287,486			17,199,386
	$	976,352		$	994,271,035		$	1,084,116,507		$	23,693,638		$	22,287,486
	$	(2,165	)	$	37,947,353		$	22,665,990		$	294,263		$	—
		—			73,968,882			116,921,520			1,045,758			929,081
		72,406			4,856,723			9,484,922			173,511			396,822
		—			—			2,075,889			—			43,923
		(1	)		(16,687,161	)		(54,513,449	)		(234,416	)		(324,068	)
		72,405			(11,830,438	)		(42,952,638	)		(60,905	)		116,677
		72,405			62,138,444			73,968,882			984,853			1,045,758
		—			3,476,798			6,934,136			853,150			598,095
		27,140			580,075			1,528,109			127,682			576,509
		—			—			85,580			—			32,495
		(26	)		(1,220,793	)		(5,071,027	)		(117,451	)		(353,949	)
		27,114			(640,718	)		(3,457,338	)		10,231			255,055
		27,114			2,836,080			3,476,798			863,381			853,150

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

63

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

		Lazard International Strategic
		Equity Portfolio
			Six Months Ended			Period Ended
			June 30, 2006			December 31,
			(unaudited)			2005**
INCREASE (DECREASE) IN NET ASSETS
Operations:
	Net investment income (loss)	$	2,836,461		$	(26,308	)
	Net realized gain on investments and foreign currency		13,988,418			797,849
	Net change in unrealized appreciation (depreciation) on investments and foreign currency		2,570,699			4,020,927
Net increase in net assets resulting from operations			19,395,578			4,792,468
Distributions to shareholders:
	From net investment income
	Institutional Shares		—			—
	Open Shares		—			—
	From net realized gains
	Institutional Shares		—			—
	Open Shares		—			—
Net decrease in net assets resulting from distributions			—			—
Capital stock transactions:
	Net proceeds from sales
	Institutional Shares		104,030,275			130,945,526
	Open Shares		4,793,397			—
	Net proceeds from reinvestment of distributions
	Institutional Shares		—			—
	Open Shares		—			—
	Cost of shares redeemed
	Institutional Shares		(922,714	)		(48,480	)
	Open Shares		(70,330	)		—
Net increase (decrease) in net assets from capital stock transactions			107,830,628			130,897,046
Redemption fees:
	Institutional Shares		—			480
	Open Shares		—			—
Net increase in net assets from redemption fees			—			480
Total increase (decrease) in net assets			127,226,206			135,689,994
Net assets at beginning of period			135,689,994			—
Net assets at end of period*		$	262,916,200		$	135,689,994
*	Includes undistributed (distributions in excess of) net investment income (loss)	$	2,831,658		$	(4,803	)
**	Portfolio commenced operations on October 31, 2005.
Shares issued and repurchased:
Institutional Shares:
	Shares outstanding at beginning of period		12,580,701			—
	Shares sold		8,862,566			12,585,357
	Shares issued to shareholders from reinvestment of distributions		—			—
	Shares repurchased		(76,412	)		(4,656	)
	Net increase (decrease)		8,786,154			12,580,701
	Shares outstanding at end of period		21,366,855			12,580,701
Open Shares:
	Shares outstanding at beginning of period		—
	Shares sold		387,499
	Shares issued to shareholders from reinvestment of distributions		—
	Shares repurchased		(6,196	)
	Net increase (decrease)		381,303
	Shares outstanding at end of period		381,303

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

64

Lazard International Small Cap Portfolio						Lazard Emerging Markets Portfolio						Lazard High Yield Portfolio
	Six Months Ended			Year Ended			Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2006			December 31,			June 30, 2006			December 31,			June 30, 2006			December 31,
	(unaudited)			2005			(unaudited)			2005			(unaudited)			2005
$	4,712,736		$	7,485,441		$	17,852,936		$	18,808,221		$	2,857,497		$	6,471,873
	98,904,258			115,859,140			197,749,862			170,716,417			1,584,216			2,063,175
	(56,522,358	)		(36,646,170	)		(169,325,848	)		204,215,639			(2,767,359	)		(5,250,237	)
	47,094,636			86,698,411			46,276,950			393,740,277			1,674,354			3,284,811
	—			(6,464,749	)		—			(13,292,061	)		(2,755,073	)		(6,269,375	)
	—			(515,782	)		—			(1,306,731	)		(102,424	)		(257,544	)
	—			(127,384,878	)		—			(118,367,442	)		—			—
	—			(14,710,834	)		—			(15,416,936	)		—			—
	—			(149,076,243	)		—			(148,383,170	)		(2,857,497	)		(6,526,919	)
	142,418,255			101,924,321			791,146,499			563,980,565			2,971,705			2,878,040
	32,921,528			72,020,373			167,703,906			190,152,308			14,581			1,749,093
	—			130,072,823			—			116,124,593			2,263,333			4,950,713
	—			13,871,498			—			15,202,210			95,913			241,952
	(176,122,922	)		(268,774,639	)		(393,634,788	)		(265,361,794	)		(8,782,786	)		(26,371,525	)
	(27,062,257	)		(65,490,969	)		(131,941,662	)		(58,143,024	)		(1,197,527	)		(6,105,589	)
	(27,845,396	)		(16,376,593	)		433,273,955			561,954,858			(4,634,781	)		(22,657,316	)
	491			904			3,777			3,049			—			—
	4,225			31,517			29,362			165,155			—			3,860
	4,716			32,421			33,139			168,204			—			3,860
	19,253,956			(78,722,004	)		479,584,044			807,480,169			(5,817,924	)		(25,895,564	)
	644,928,926			723,650,930			1,609,614,460			802,134,291			78,085,979			103,981,543
$	664,182,882		$	644,928,926		$	2,089,198,504		$	1,609,614,460		$	72,268,055		$	78,085,979
$	4,712,736		$	—		$	20,074,643		$	2,221,707		$	(284,000	)	$	(284,000	)
	34,086,489			35,037,543			79,234,728			55,176,272			14,254,153			17,697,485
	7,142,949			5,343,600			40,986,413			33,635,137			562,990			543,000
	—			7,429,635			—			6,685,119			430,049			929,380
	(9,658,245	)		(13,724,289	)		(20,502,393	)		(16,261,800	)		(1,664,728	)		(4,915,712	)
	(2,515,296	)		(951,054	)		20,484,020			24,058,456			(671,689	)		(3,443,332	)
	31,571,193			34,086,489			99,718,748			79,234,728			13,582,464			14,254,153
	3,629,711			2,580,283			10,890,070			2,171,237			564,731			1,317,990
	1,778,354			3,676,088			8,551,894			11,436,559			2,744			329,383
	—			791,807			—			866,896			18,145			45,218
	(1,478,397	)		(3,418,467	)		(6,971,559	)		(3,584,622	)		(229,249	)		(1,127,860	)
	299,957			1,049,428			1,580,335			8,718,833			(208,360	)		(753,259	)
	3,929,668			3,629,711			12,470,405			10,890,070			356,371			564,731

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

65

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		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	16.53		$	16.04		$	14.40		$	11.59		$	14.10		$	16.72
Income (loss) from investment operations:
Net investment income (a)		0.07			0.14			0.15			0.13			0.11			0.13
Net realized and unrealized gain (loss)		0.42			0.51			1.65			2.81			(2.48	)		(1.07	)
Total from investment operations		0.49			0.65			1.80			2.94			(2.37	)		(0.94	)
Less distributions from:
Net investment income		—			(0.16	)		(0.16	)		(0.13	)		(0.14	)		(0.13	)
Net realized gains		—			—			—			—			—			(1.55	)
Total distributions		—			(0.16	)		(0.16	)		(0.13	)		(0.14	)		(1.68	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		—	(c)		—
Net asset value, end of period	$	17.02		$	16.53		$	16.04		$	14.40		$	11.59		$	14.10
Total Return (b)		2.96	%		4.06	%		12.49	%		25.37	%		(16.84	)%		(5.90	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	50,607		$	97,961		$	116,021		$	112,568		$	101,891		$	141,329
Ratios to average net assets:
Net expenses (d)		1.05	%		0.97	%		0.98	%		0.98	%		0.97	%		0.90	%
Gross expenses (d)		1.05	%		0.97	%		0.98	%		0.98	%		0.97	%		0.90	%
Net investment income (d)		0.88	%		0.89	%		1.02	%		1.00	%		0.87	%		0.82	%
Portfolio turnover rate		38	%		73	%		57	%		46	%		74	%		89	%
		Six Months		Year Ended
		Ended
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	16.55		$	16.05		$	14.40		$	11.58		$	14.07		$	16.70
Income (loss) from investment operations:
Net investment income (a)		0.04			0.08			0.10			0.08			0.07			0.09
Net realized and unrealized gain (loss)		0.41			0.51			1.64			2.82			(2.47	)		(1.08	)
Total from investment operations		0.45			0.59			1.74			2.90			(2.40	)		(0.99	)
Less distributions from:
Net investment income		—			(0.09	)		(0.09	)		(0.08	)		(0.09	)		(0.09	)
Net realized gains		—			—			—			—			—			(1.55	)
Total distributions		—			(0.09	)		(0.09	)		(0.08	)		(0.09	)		(1.64	)
Redemption fees		—	(c)		—	(c)		—			—			—	(c)		—
Net asset value, end of period	$	17.00		$	16.55		$	16.05		$	14.40		$	11.58		$	14.07
Total Return (b)		2.72	%		3.67	%		12.09	%		25.06	%		(17.08	)%		(6.23	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	10,733		$	12,354		$	21,093		$	21,546		$	21,292		$	37,082
Ratios to average net assets:
Net expenses (d)		1.49	%		1.35	%		1.32	%		1.31	%		1.28	%		1.18	%
Gross expenses (d)		1.49	%		1.35	%		1.32	%		1.31	%		1.28	%		1.18	%
Net investment income (d)		0.43	%		0.51	%		0.67	%		0.67	%		0.55	%		0.54	%
Portfolio turnover rate		38	%		73	%		57	%		46	%		74	%		89	%

†	Unaudited.
(a)	Net investment income has been computed using the average shares method.
(b)	Total returns reflect reinvestment of all dividends and distributions, if any. Period of less than one year is not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for period 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 U.S. EQUITY VALUE PORTFOLIO

					For the
		Six Months			Period
		Ended			9/30/05* to
Institutional Shares		6/30/06†			12/31/05
Net asset value, beginning of period	$	10.02		$	10.00
Income from investment operations:
Net investment income (a)		0.10			0.03
Net realized and unrealized gain		0.44			0.02
Total from investment operations		0.54			0.05
Less distributions from:
Net investment income		—			(0.03	)
Total distributions		—			(0.03	)
Net asset value, end of period	$	10.56		$	10.02
Total Return (b)		5.39	%		0.48	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	146		$	90
Ratios to average net assets:
Net expenses (c)		1.00	%		1.00	%
Gross expenses (c)		157.23	%		388.31	%
Net investment income (c)		1.85	%		1.17	%
Portfolio turnover rate		47	%		13	%
					For the
		Six Months			Period
		Ended			9/30/05 * to
Open Shares		6/30/06†			12/31/05
Net asset value, beginning of period	$	10.02		$	10.00
Income from investment operations:
Net investment income (a)		0.06			0.02
Net realized and unrealized gain		0.46			0.02
Total from investment operations		0.52			0.04
Less distributions from:
Net investment income		—			(0.02	)
Total distributions		—			(0.02	)
Net asset value, end of period	$	10.54		$	10.02
Total Return (b)		5.19	%		0.41	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	11		$	10
Ratios to average net assets:
Net expenses (c)		1.30	%		1.30	%
Gross expenses (c)		336.52	%		596.46	%
Net investment income (c)		1.12	%		0.86	%
Portfolio turnover rate		47	%		13	%

†	Unaudited.
*	Commencement of operations.
(a)	Net investment income has been computed using the average shares method.
(b)	Total returns reflect 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. 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 U.S. STRATEGIC EQUITY PORTFOLIO

								For the
		Six Months			Year			Period
		Ended			Ended			12/30/04* to
Institutional Shares		6/30/06†			12/31/05			12/31/04
Net asset value, beginning of period	$	10.38		$	10.00		$	10.00
Income from investment operations:
Net investment income (a)		0.04			0.09			—	(c)
Net realized and unrealized gain		0.20			0.41			—
Total from investment operations		0.24			0.50			—
Less distributions from:
Net investment income		—			(0.03	)		—
Net realized gains		—			(0.09	)		—
Total distributions		—			(0.12	)		—
Redemption fees		—	(c)		—			—
Net asset value, end of period	$	10.62		$	10.38		$	10.00
Total Return (b)		2.31	%		4.99	%		0.00	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	56,770		$	15,085		$	400
Ratios to average net assets:
Net expenses (d)		1.05	%		1.16	%		1.25	%
Gross expenses (d)		1.25	%		13.80	%		546.34	%(e)
Net investment income (d)		0.77	%		0.90	%		1.92	%
Portfolio turnover rate		58	%		53	%		0	%
								For the
		Six Months			Year			Period
		Ended			Ended			12/30/04* to
Open Shares		6/30/06†			12/31/05			12/31/04
Net asset value, beginning of period	$	10.39		$	10.00		$	10.00
Income from investment operations:
Net investment income (a)		0.03			0.06			—	(c)
Net realized and unrealized gain		0.21			0.35			—
Total from investment operations		0.24			0.41			—
Less distributions from:
Net realized gains		—			(0.09	)		—
Total distributions		—			(0.09	)		—
Redemption fees		—			0.07			—
Net asset value, end of period	$	10.63		$	10.39		$	10.00
Total Return (b)		2.31	%		4.79	%		0.00	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	297		$	234		$	100
Ratios to average net assets:
Net expenses (d)		1.35	%		1.50	%		1.55	%
Gross expenses (d)		9.36	%		33.06	%		1,049.82	%(e)
Net investment income (d)		0.51	%		0.58	%		1.62	%
Portfolio turnover rate		58	%		53	%		0	%

†	Unaudited.
*	Commencement of operations.
(a)	Net investment income has been computed using the average shares method.
(b)	Total returns reflect 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. Periods of less than one year are not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for periods of less than one year.
(e)	Gross expenses ratio was the result of the Portfolio being in existence for two days during the period ended 12/31/04.

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 MID CAP PORTFOLIO

		Six Months		Year Ended
		Ended
Institutional Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	13.23		$	13.20		$	11.49		$	8.93		$	10.64		$	11.36
Income (loss) from investment operations:
Net investment income (a)		0.05			0.09			0.03			0.04			0.04			0.07
Net realized and unrealized gain (loss)		0.37			1.07			2.83			2.55			(1.57	)		1.31
Total from investment operations		0.42			1.16			2.86			2.59			(1.53	)		1.38
Less distributions from:
Net investment income		—			(0.07	)		(0.04	)		(0.03	)		—			(0.07	)
Net realized gains		—			(1.06	)		(1.11	)		—			(0.18	)		(2.03	)
Total distributions		—			(1.13	)		(1.15	)		(0.03	)		(0.18	)		(2.10	)
Redemption fees		—	(c)		—			—	(c)		—			—	(c)		—
Net asset value, end of period	$	13.65		$	13.23		$	13.20		$	11.49		$	8.93		$	10.64
Total Return (b)		3.17	%		8.89	%		24.97	%		29.03	%		(14.47	)%		12.85	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	184,320		$	171,912		$	56,431		$	39,625		$	28,754		$	21,729
Ratios to average net assets:
Net expenses (d)		0.89	%		0.93	%		1.05	%		1.05	%		1.05	%		1.05	%
Gross expenses (d)		0.89	%		0.93	%		1.13	%		1.31	%		1.40	%		1.71	%
Net investment income (d)		0.69	%		0.67	%		0.21	%		0.42	%		0.40	%		0.65	%
Portfolio turnover rate		52	%		80	%		92	%		96	%		104	%		160	%
		Six Months		Year Ended
		Ended
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	13.07		$	13.06		$	11.38		$	8.84		$	10.57		$	11.30
Income (loss) from investment operations:
Net investment income (loss) (a)		0.03			0.05			(0.01	)		0.01			0.01			0.04
Net realized and unrealized gain (loss)		0.37			1.05			2.80			2.53			(1.56	)		1.30
Total from investment operations		0.40			1.10			2.79			2.54			(1.55	)		1.34
Less distributions from:
Net investment income		—			(0.03	)		—			—	(c)		—			(0.04	)
Net realized gains		—			(1.06	)		(1.11	)		—			(0.18	)		(2.03	)
Total distributions		—			(1.09	)		(1.11	)		—			(0.18	)		(2.07	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		—			—
Net asset value, end of period	$	13.47		$	13.07		$	13.06		$	11.38		$	8.84		$	10.57
Total Return (b)		3.06	%		8.53	%		24.59	%		28.74	%		(14.75	)%		12.50	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	49,340		$	54,370		$	30,412		$	14,978		$	8,128		$	7,584
Ratios to average net assets:
Net expenses (d)		1.17	%		1.23	%		1.35	%		1.35	%		1.35	%		1.35	%
Gross expenses (d)		1.17	%		1.23	%		1.45	%		1.69	%		1.83	%		2.13	%
Net investment income (loss) (d)		0.39	%		0.35	%		(0.09	)%		0.12	%		0.09	%		0.35	%
Portfolio turnover rate		52	%		80	%		92	%		96	%		104	%		160	%

†	Unaudited.
(a)	Net investment income (loss) has been computed using the average shares method.
(b)	Total returns reflect reinvestment of all dividends and distributions, if any. 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. Period of less than one year is not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for period 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 SMALL CAP PORTFOLIO

		Six Months									Year Ended
		Ended
Institutional Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	15.40		$	18.84		$	19.49		$	14.03		$	17.70		$	18.07
Income (loss) from investment operations:
Net investment income (loss) (a)		—	(c)		0.02			0.01			0.07			0.02			0.08
Net realized and unrealized gain (loss)		1.03			0.76			2.93			5.39			(3.18	)		3.06
Total from investment operations		1.03			0.78			2.94			5.46			(3.16	)		3.14
Less distributions from:
Net investment income		—			(0.02	)		(0.07	)		—			—			(0.09	)
Net realized gains		—			(4.20	)		(3.52	)		—			(0.51	)		(3.42	)
Total distributions		—			(4.22	)		(3.59	)		—			(0.51	)		(3.51	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		—	(c)		—
Net asset value, end of period	$	16.43		$	15.40		$	18.84		$	19.49		$	14.03		$	17.70
Total Return (b)		6.69	%		4.31	%		15.28	%		38.92	%		(17.97	)%		18.06	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	202,119		$	253,236		$	390,906		$	465,876		$	388,795		$	575,077
Ratios to average net assets:
Net expenses (d)		0.89	%		0.88	%		0.86	%		0.86	%		0.85	%		0.83	%
Gross expenses (d)		0.89	%		0.88	%		0.86	%		0.86	%		0.85	%		0.83	%
Net investment income (loss) (d)		(0.01	)%		0.10	%		0.07	%		0.42	%		0.14	%		0.41	%
Portfolio turnover rate		51	%		87	%		100	%		77	%		93	%		80	%
		Six Months									Year Ended
		Ended
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	15.29		$	18.78		$	19.44		$	14.03		$	17.67		$	18.04
Income (loss) from investment operations:
Net investment income (loss) (a)		(0.03	)		(0.04	)		(0.05	)		0.02			(0.03	)		0.02
Net realized and unrealized gain (loss)		1.03			0.75			2.91			5.39			(3.17	)		3.05
Total from investment operations		1.00			0.71			2.86			5.41			(3.20	)		3.07
Less distributions from:
Net investment income		—			—			—	(c)		—			—			(0.02	)
Net realized gains		—			(4.20	)		(3.52	)		—			(0.51	)		(3.42	)
Total distributions		—			(4.20	)		(3.52	)		—			(0.51	)		(3.44	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		0.07			—
Net asset value, end of period	$	16.29		$	15.29		$	18.78		$	19.44		$	14.03		$	17.67
Total Return (b)		6.54	%		3.93	%		14.90	%		38.56	%		(17.82	)%		17.69	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	37,747		$	37,057		$	50,295		$	50,202		$	43,110		$	69,531
Ratios to average net assets:
Net expenses (d)		1.21	%		1.19	%		1.18	%		1.19	%		1.15	%		1.13	%
Gross expenses (d)		1.21	%		1.19	%		1.18	%		1.19	%		1.15	%		1.13	%
Net investment income (loss) (d)		(0.33	)%		(0.21	)%		(0.25	)%		0.11	%		(0.17	)%		0.12	%
Portfolio turnover rate		51	%		87	%		100	%		77	%		93	%		80	%

†	Unaudited.
(a)	Net investment income (loss) has been computed using the average shares method.
(b)	Total returns reflect reinvestment of all dividends and distributions, if any. Period of less than one year is not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for period 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 the period: LAZARD U.S. SMALL CAP EQUITY GROWTH PORTFOLIO

		For the
		Period
		2/28/06* to
Institutional Shares		6/30/06†
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment loss (a)		(0.02	)
Net realized and unrealized loss		(0.17	)
Total from investment operations		(0.19	)
Net asset value, end of period	$	9.81
Total Return (b)		(1.90	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	711
Ratios to average net assets:
Net expenses (c)		1.25	%
Gross expenses (c)		24.84	%
Net investment loss (c)		(0.68	)%
Portfolio turnover rate		23	%
		For the
		Period
		2/28/06* to
Open Shares		6/30/06†
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment loss (a)		(0.03	)
Net realized and unrealized loss		(0.17	)
Total from investment operations		(0.20	)
Net asset value, end of period	$	9.80
Total Return (b)		(2.00	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	266
Ratios to average net assets:
Net expenses (c)		1.55	%
Gross expenses (c)		30.58	%
Net investment loss (c)		(1.02	)%
Portfolio turnover rate		23	%

†	Unaudited.
*	Commencement of operations.
(a)	Net investment loss has been computed using the average shares method.
(b)	Total returns reflect 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. Period of less than one year is not annualized.
(c)	Annualized for period of less than one year.

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

71

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		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	14.00		$	12.91		$	11.37		$	8.92		$	10.01		$	13.46
Income (loss) from investment operations:
Net investment income (a)		0.22			0.26			0.18			0.18			0.14			0.11
Net realized and unrealized gain (loss)		1.08			1.16			1.60			2.43			(1.18	)		(3.45	)
Total from investment operations		1.30			1.42			1.78			2.61			(1.04	)		(3.34	)
Less distributions from:
Net investment income		—			(0.33	)		(0.24	)		(0.16	)		(0.05	)		—(c)
Net realized gains		—			—			—			—			—			(0.11	)
Total distributions		—			(0.33	)		(0.24	)		(0.16	)		(0.05	)		(0.11	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		—	(c)		—
Net asset value, end of period	$	15.30		$	14.00		$	12.91		$	11.37		$	8.92		$	10.01
Total Return (b)		9.29	%		11.25	%		16.01	%		29.51	%		(10.44	)%		(24.85	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	950,846		$	1,035,346		$	1,509,462		$	2,103,600		$	1,776,799		$	2,224,089
Ratios to average net assets:
Net expenses (d)		0.84	%		0.89	%		0.90	%		0.90	%		0.90	%		0.90	%
Gross expenses (d)		0.84	%		0.89	%		0.90	%		0.90	%		0.90	%		0.90	%
Net investment income (d)		2.94	%		2.03	%		1.51	%		1.90	%		1.45	%		0.95	%
Portfolio turnover rate		37	%		60	%		58	%		44	%		58	%		69	%
		Six Months									Year Ended
		Ended
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	14.03		$	12.94		$	11.37		$	8.88		$	9.95		$	13.41
Income (loss) from investment operations:
Net investment income (a)		0.19			0.23			0.14			0.15			0.11			0.08
Net realized and unrealized gain (loss)		1.09			1.16			1.61			2.44			(1.18	)		(3.43	)
Total from investment operations		1.28			1.39			1.75			2.59			(1.07	)		(3.35	)
Less distributions from:
Net investment income		—			(0.30	)		(0.18	)		(0.10	)		(0.02	)		—
Net realized gains		—			—			—			—			—			(0.11	)
Total distributions		—			(0.30	)		(0.18	)		(0.10	)		(0.02	)		(0.11	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		0.02			—
Net asset value, end of period	$	15.31		$	14.03		$	12.94		$	11.37		$	8.88		$	9.95
Total Return (b)		9.12	%		10.93	%		15.64	%		29.29	%		(10.57	)%		(25.02	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	43,426		$	48,770		$	89,742		$	105,336		$	88,031		$	116,466
Ratios to average net assets:
Net expenses (d)		1.15	%		1.18	%		1.20	%		1.21	%		1.21	%		1.19	%
Gross expenses (d)		1.15	%		1.18	%		1.20	%		1.21	%		1.21	%		1.19	%
Net investment income (d)		2.54	%		1.78	%		1.18	%		1.61	%		1.14	%		0.70	%
Portfolio turnover rate		37	%		60	%		58	%		44	%		58	%		69	%

†	Unaudited.
(a)	Net investment income has been computed using the average shares method.
(b)	Total returns reflect reinvestment of all dividends and distributions, if any. Period of less than one year is not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for period of less than one year.

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

72

The Lazard Funds, Inc.
Financial Highlights (continued)
Selected data for a share of capital stock outstanding throughout each period: LAZARD INTERNATIONAL EQUITY SELECT PORTFOLIO

																	For the
		Six Months					Year Ended										Period
		Ended															5/31/01* to
Institutional Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	11.73		$	11.25		$	9.80		$	7.74		$	9.15		$	10.00
Income (loss) from investment operations:
Net investment income (a)		0.17			0.18			0.14			0.18			0.12			0.01
Net realized and unrealized gain (loss)		0.92			0.82			1.47			2.12			(1.41	)		(0.85	)
Total from investment operations		1.09			1.00			1.61			2.30			(1.29	)		(0.84	)
Less distributions from:
Net investment income		—			(0.16	)		(0.16	)		(0.24	)		(0.12	)		(0.01	)
Net realized gains		—			(0.36	)		—			—			—			—
Total distributions		—			(0.52	)		(0.16	)		(0.24	)		(0.12	)		(0.01	)
Redemption fees		—			—			—			—			—	(c)		—
Net asset value, end of period	$	12.82		$	11.73		$	11.25		$	9.80		$	7.74		$	9.15
Total Return (b)		9.21	%		8.90	%		16.45	%		29.80	%		(14.12	)%		(8.43	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	12,621		$	12,262		$	10,455		$	9,788		$	20,957		$	8,580
Ratios to average net assets:
Net expenses (d)		1.15	%		1.15	%		1.15	%		1.15	%		1.15	%		1.15	%
Gross expenses (d)		1.78	%		1.97	%		2.13	%		1.85	%		1.63	%		13.75	%
Net investment income (d)		2.73	%		1.55	%		1.43	%		2.26	%		1.41	%		0.15	%
Portfolio turnover rate		21	%		33	%		16	%		29	%		32	%		1	%
																	For the
		Six Months					Year Ended										Period
		Ended															5/31/01* to
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	11.75		$	11.28		$	9.82		$	7.75		$	9.16		$	10.00
Income (loss) from investment operations:
Net investment income (loss) (a)		0.15			0.12			0.13			0.09			0.08			(0.02	)
Net realized and unrealized gain (loss)		0.92			0.83			1.46			2.19			(1.40	)		(0.82	)
Total from investment operations		1.07			0.95			1.59			2.28			(1.32	)		(0.84	)
Less distributions from:
Net investment income		—			(0.12	)		(0.13	)		(0.21	)		(0.09	)		—
Net realized gains		—			(0.36	)		—			—			—			—
Total distributions		—			(0.48	)		(0.13	)		(0.21	)		(0.09	)		—
Redemption fees		—	(c)		—	(c)		—	(c)		—			—			—
Net asset value, end of period	$	12.82		$	11.75		$	11.28		$	9.82		$	7.75		$	9.16
Total Return (b)		9.11	%		8.46	%		16.17	%		29.49	%		(14.37	)%		(8.40	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	11,073		$	10,026		$	6,744		$	7,279		$	2,508		$	434
Ratios to average net assets:
Net expenses (d)		1.45	%		1.45	%		1.45	%		1.45	%		1.45	%		1.45	%
Gross expenses (d)		2.05	%		2.28	%		2.47	%		2.68	%		2.79	%		47.06	%
Net investment income (loss) (d)		2.42	%		1.05	%		1.28	%		1.09	%		0.93	%		(0.31	)%
Portfolio turnover rate		21	%		33	%		16	%		29	%		32	%		1	%

†	Unaudited.
*	Commencement of operations.
(a)	Net investment income (loss) has been computed using the average shares method.
(b)	Total returns reflect reinvestment of all dividends and distributions, if any. 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. Periods of less than one year are not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for periods of less than one year.

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

73

The Lazard Funds, Inc.
Financial Highlights (continued)
Selected data for a share of capital stock outstanding throughout each period: LAZARD INTERNATIONAL STRATEGIC EQUITY PORTFOLIO

					For the
		Six Months			Period
		Ended			10/31/05* to
Institutional Shares		6/30/06†			12/31/05
Net asset value, beginning of period	$	10.79		$	10.00
Income from investment operations:
Net investment income (loss) (a)		0.15			—	(c)
Net realized and unrealized gain		1.15			0.79
Total from investment operations		1.30			0.79
Redemption fees		—			—	(c)
Net asset value, end of period	$	12.09		$	10.79
Total Return (b)		12.05	%		7.90	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	258,319		$	135,690
Ratios to average net assets:
Net expenses (d)		1.01	%		1.46	%
Gross expenses (d)		1.01	%		1.46	%
Net investment income (loss) (d)		2.59	%		(0.20	)%
Portfolio turnover rate		46	%		12	%
		For the
		Period
		2/3/06* to
Open Shares		6/30/06†
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income (a)		0.19
Net realized and unrealized gain		1.87
Total from investment operations		2.06
Net asset value, end of period	$	12.06
Total Return (b)		4.96	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	4,597
Ratios to average net assets:
Net expenses (d)		1.45	%
Gross expenses (d)		2.30	%
Net investment income (d)		3.87	%
Portfolio turnover rate		46	%

†	Unaudited.
*	Commencement of operations.
(a)	Net investment income (loss) has been computed using the average shares method.
(b)	Total returns reflect reinvestment of all dividends and distributions, if any. 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. Periods of less than one year are not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for periods of less than one year.

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

74

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		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	17.10		$	19.24		$	15.46		$	11.07		$	11.58		$	12.57
Income (loss) from investment operations:
Net investment income (a)		0.14			0.24			0.29			0.27			0.17			0.18
Net realized and unrealized gain (loss)		1.47			2.45			4.66			4.39			(0.53	)		(1.03	)
Total from investment operations		1.61			2.69			4.95			4.66			(0.36	)		(0.85	)
Less distributions from:
Net investment income		—			(0.22	)		(0.26	)		(0.27	)		(0.15	)		(0.14	)
Net realized gains		—			(4.61	)		(0.91	)		—			—			—
Total distributions		—			(4.83	)		(1.17	)		(0.27	)		(0.15	)		(0.14	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		—	(c)		—
Net asset value, end of period	$	18.71		$	17.10		$	19.24		$	15.46		$	11.07		$	11.58
Total Return (b)		9.42	%		14.77	%		32.28	%		42.21	%		(3.08	)%		(6.77	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	590,822		$	582,909		$	674,066		$	644,240		$	529,062		$	390,278
Ratios to average net assets:
Net expenses (d)		0.86	%		0.93	%		0.94	%		0.95	%		0.96	%		0.95	%
Gross expenses (d)		0.86	%		0.93	%		0.94	%		0.95	%		0.96	%		0.95	%
Net investment income (d)		1.55	%		1.24	%		1.71	%		2.15	%		1.45	%		1.48	%
Portfolio turnover rate		35	%		33	%		39	%		18	%		25	%		17	%
		Six Months									Year Ended
		Ended
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	17.09		$	19.22		$	15.41		$	11.02		$	11.53		$	12.53
Income (loss) from investment operations:
Net investment income (a)		0.12			0.18			0.23			0.21			0.13			0.11
Net realized and unrealized gain (loss)		1.46			2.45			4.64			4.36			(0.54	)		(1.03	)
Total from investment operations		1.58			2.63			4.87			4.57			(0.41	)		(0.92	)
Less distributions from:
Net investment income		—			(0.16	)		(0.18	)		(0.20	)		(0.10	)		(0.08	)
Net realized gains		—			(4.61	)		(0.91	)		—			—			—
Total distributions		—			(4.77	)		(1.09	)		(0.20	)		(0.10	)		(0.08	)
Redemption fees		—	(c)		0.01			0.03			0.02			—	(c)		—
Net asset value, end of period	$	18.67		$	17.09		$	19.22		$	15.41		$	11.02		$	11.53
Total Return (b)		9.25	%		14.47	%		32.04	%		41.71	%		(3.55	)%		(7.33	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	73,361		$	62,020		$	49,585		$	20,124		$	3,019		$	3,441
Ratios to average net assets:
Net expenses (d)		1.20	%		1.27	%		1.36	%		1.43	%		1.43	%		1.43	%
Gross expenses (d)		1.20	%		1.27	%		1.36	%		1.46	%		1.86	%		2.03	%
Net investment income (d)		1.32	%		0.93	%		1.30	%		1.59	%		1.15	%		0.91	%
Portfolio turnover rate		35	%		33	%		39	%		18	%		25	%		17	%

†	Unaudited.
(a)	Net investment income has been computed using the average shares method.
(b)	Total returns reflect 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. Period of less than one year is not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for period of less than one year.

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

75

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		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	17.84		$	13.98		$	10.80		$	7.11		$	7.22		$	7.52
Income (loss) from investment operations:
Net investment income (a)		0.18			0.29			0.16			0.17			0.10			0.07
Net realized and unrealized gain (loss)		0.59			5.42			3.16			3.69			(0.13	)		(0.31	)
Total from investment operations		0.77			5.71			3.32			3.86			(0.03	)		(0.24	)
Less distributions from:
Net investment income		—			(0.18	)		(0.14	)		(0.17	)		(0.08	)		(0.06	)
Net realized gains		—			(1.67	)		—			—			—			—
Total distributions		—			(1.85	)		(0.14	)		(0.17	)		(0.08	)		(0.06	)
Redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		—	(c)		—
Net asset value, end of period	$	18.61		$	17.84		$	13.98		$	10.80		$	7.11		$	7.22
Total Return (b)		4.32	%		41.40	%		30.79	%		54.45	%		(0.37	)%		(3.16	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	1,855,558		$	1,413,671		$	771,598		$	591,514		$	345,176		$	308,608
Ratios to average net assets:
Net expenses (d)		1.16	%		1.27	%		1.32	%		1.29	%		1.31	%		1.29	%
Gross expenses (d)		1.16	%		1.28	%		1.32	%		1.29	%		1.31	%		1.29	%
Net investment income (d)		1.84	%		1.82	%		1.40	%		2.06	%		1.30	%		0.91	%
Portfolio turnover rate		32	%		48	%		43	%		29	%		31	%		43	%
		Six Months									Year Ended
		Ended
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	17.99		$	14.06		$	10.86		$	7.13		$	7.24		$	7.54
Income (loss) from investment operations:
Net investment income (a)		0.14			0.20			0.13			0.15			0.08			0.05
Net realized and unrealized gain (loss)		0.61			5.51			3.17			3.70			(0.13	)		(0.32	)
Total from investment operations		0.75			5.71			3.30			3.85			(0.05	)		(0.27	)
Less distributions from:
Net investment income		—			(0.14	)		(0.10	)		(0.14	)		(0.06	)		(0.03	)
Net realized gains		—			(1.67	)		—			—			—			—
Total distributions		—			(1.81	)		(0.10	)		(0.14	)		(0.06	)		(0.03	)
Redemption fees		—	(c)		0.03			—	(c)		0.02			—	(c)		—
Net asset value, end of period	$	18.74		$	17.99		$	14.06		$	10.86		$	7.13		$	7.24
Total Return (b)		4.17	%		41.31	%		30.43	%		54.29	%		(0.65	)%		(3.54	)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	233,641		$	195,944		$	30,536		$	18,649		$	9,140		$	6,712
Ratios to average net assets:
Net expenses (d)		1.49	%		1.59	%		1.60	%		1.60	%		1.60	%		1.60	%
Gross expenses (d)		1.49	%		1.59	%		1.71	%		1.76	%		1.84	%		2.00	%
Net investment income (d)		1.47	%		1.21	%		1.11	%		1.82	%		1.09	%		0.63	%
Portfolio turnover rate		32	%		48	%		43	%		29	%		31	%		43	%

†	Unaudited.
(a)	Net investment income has been computed using the average shares method.
(b)	Total returns reflect 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. Period of less than one year is not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for period of less than one year.

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

76

The Lazard Funds, Inc.
Financial Highlights (concluded)
Selected data for a share of capital stock outstanding throughout each period: LAZARD HIGH YIELD PORTFOLIO

		Six Months									Year Ended
		Ended
Institutional Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	5.27		$	5.47		$	5.40		$	4.72		$	5.95		$	6.57
Income (loss) from investment operations:
Net investment income (a)		0.20			0.42			0.44			0.43			0.58			0.76
Net realized and unrealized gain (loss)		(0.09	)		(0.19	)		0.07			0.69			(1.22	)		(0.62	)
Total from investment operations		0.11			0.23			0.51			1.12			(0.64	)		0.14
Less distributions from:
Net investment income		(0.20	)		(0.43	)		(0.44	)		(0.44	)		(0.59	)		(0.76	)
Total distributions		(0.20	)		(0.43	)		(0.44	)		(0.44	)		(0.59	)		(0.76	)
Redemption fees		—			—			—	(c)		—	(c)		—			—
Net asset value, end of period	$	5.18		$	5.27		$	5.47		$	5.40		$	4.72		$	5.95
Total Return (b)		2.05	%		4.33	%		9.88	%		24.58	%		(11.14	)%		2.03	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	70,414		$	75,100		$	96,759		$	127,765		$	78,128		$	71,467
Ratios to average net assets:
Net expenses (d)		0.55	%		0.55	%		0.55	%		0.75	%		0.75	%		0.75	%
Gross expenses (d)		0.85	%		0.86	%		0.89	%		0.98	%		1.08	%		1.07	%
Net investment income (d)		7.58	%		7.89	%		8.11	%		8.45	%		11.09	%		11.85	%
Portfolio turnover rate		14	%		22	%		49	%		68	%		229	%		234	%
		Six Months									Year Ended
		Ended
Open Shares		6/30/06†			12/31/05			12/31/04			12/31/03			12/31/02			12/31/01
Net asset value, beginning of period	$	5.29		$	5.48		$	5.42		$	4.73		$	5.95		$	6.57
Income (loss) from investment operations:
Net investment income (a)		0.19			0.40			0.42			0.42			0.55			0.74
Net realized and unrealized gain (loss)		(0.09	)		(0.19	)		0.06			0.68			(1.19	)		(0.62	)
Total from investment operations		0.10			0.21			0.48			1.10			(0.64	)		0.12
Less distributions from:
Net investment income		(0.19	)		(0.41	)		(0.42	)		(0.42	)		(0.58	)		(0.74	)
Total distributions		(0.19	)		(0.41	)		(0.42	)		(0.42	)		(0.58	)		(0.74	)
Redemption fees		—			0.01			—			0.01			—	(c)		—
Net asset value, end of period	$	5.20		$	5.29		$	5.48		$	5.42		$	4.73		$	5.95
Total Return (b)		1.90	%		4.22	%		9.33	%		24.41	%		(11.27	)%		1.72	%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)	$	1,854		$	2,986		$	7,223		$	2,989		$	965		$	12,249
Ratios to average net assets:
Net expenses (d)		0.85	%		0.85	%		0.85	%		1.05	%		1.05	%		1.05	%
Gross expenses (d)		1.88	%		1.78	%		1.67	%		2.79	%		2.48	%		1.46	%
Net investment income (d)		7.26	%		7.47	%		7.64	%		8.16	%		9.84	%		11.57	%
Portfolio turnover rate		14	%		22	%		49	%		68	%		229	%		234	%

†	Unaudited.
(a)	Net investment income has been computed using the average shares method.
(b)	Total returns reflect 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. Period of less than one year is not annualized.
(c)	Amount is less than $0.01 per share.
(d)	Annualized for period of less than one year.

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

77

The Lazard Funds, Inc.
Notes to Financial Statements
June 30, 2006 (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 twelve no-load portfolios (each referred to as a “Portfolio”), as follows: Lazard Equity Portfolio, Lazard U.S. Equity Value Portfolio, Lazard U.S. Strategic Equity Portfolio, Lazard Mid Cap Portfolio, Lazard Small Cap Portfolio, Lazard U.S. Small Cap Equity Growth Portfolio (commenced operations on February 28, 2006), Lazard International Equity Portfolio, Lazard International Equity Select Portfolio, Lazard International Strategic Equity Portfolio, Lazard International Small Cap Portfolio, Lazard Emerging Markets Portfolio and Lazard High Yield Portfolio. The Fund offers two different classes of shares of the Portfolios – Institutional Shares and Open 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 generally based on the last reported sales 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. The Fund values NASDAQ-traded securities at the NASDAQ Official Closing Price, which may not be the last reported sales price in certain instances. 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 except as described below; 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. 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.

If a significant event materially affecting the value of securities occurs between the close of the exchange or market on which the security is principally traded and the time when a Portfolio’s net asset value is calculated, or when current market quotations otherwise are determined not to be readily available or reliable, such securities will be valued at their fair values as determined by, or in accordance with procedures approved by, the Board of Directors. The Valuation Committee of Lazard Asset Management LLC, the Fund’s investment manager (the “Investment Manager”), may evaluate a variety of factors to determine the fair value of securities for which market quotations are determined not to be readily available or reliable. These factors include, but are not limited to, the type of security, the value of comparable securities, observations from financial institutions and relevant news events. Input from the Investment Manager’s analysts will also be considered. Fair valuing of foreign securities may be determined with the assistance of a pricing service, using correlations between the movement of prices of such securities and indices of domestic securities and other appropriate indicators, such as closing market prices of relevant ADRs or futures contracts. The effect of using fair value pricing is that the net asset value of a Portfolio will reflect the affected securities’ values as determined in the judgment of the Board of Directors, or its designee, instead of being determined by the market. Using a fair value pricing methodology to price securities may result in a value that is different from the most recent closing price of a security and from the prices used by other investment companies to calculate their portfolios’ net asset values.

(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.

The Portfolios may be subject to taxes imposed by foreign countries in which they invest. Such taxes are generally based upon income earned or capital gains, realized or unrealized. The Portfolios accrue and apply such taxes to net investment income, net realized gains and net unrealized gains concurrent with the recognition of income or capital gains (realized and unrealized) from the applicable portfolio securities.

(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.

78 The Lazard Funds, Inc.
Notes to Financial Statements (continued)
June 30, 2006 (unaudited)

(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, 2006, the value of the securities on loan and corresponding collateral received were as follows:

	Securities
Portfolio	Loaned		Collateral
Equity	$	2,829,887	$	2,895,491
Small Cap		52,672,951		59,259,729
International Equity		217,097,272		228,186,025
International Small Cap		153,746,960		161,763,160
Emerging Markets		142,004,152		146,377,656
High Yield		15,047,507		15,364,508

All collateral for securities on loan held by the Portfolios was in the form of cash.

In accordance with U.S. generally accepted accounting principles, cash received as collateral for securities lending transactions which is invested in income producing securities is included in the respective Portfolio of Investments. The related amount payable upon the return of the securities on loan, where cash is received as collateral, is shown on the respective Statement of Assets and Liabilities.

(e) Foreign Currency Translation — 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 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.

(f) 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 of its taxable income, including any net realized capital gains, to shareholders. Therefore, no federal income tax provision is required. At December 31, 2005, 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
High Yield	$	1,451,674	$	2,750,038
Portfolio	Expiring 2008		Expiring 2009
High Yield	$	11,108,357	$	22,048,735
Portfolio	Expiring 2010		Expiring 2011
Equity	$	1,607,716	$	1,556,848
International Equity		250,348,939		73,199,015
High Yield		15,965,271		2,658,732
Portfolio	Expiring 2013
U.S. Equity Value	$	171

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, 2005, the following Portfolios elected to defer net capital losses arising between November 1, 2005 and December 31, 2005, as follows:

Portfolio	Amount
U.S. Equity Value	$	22
Mid Cap		712,153

(g) Dividends and Distributions — The Fund intends to declare dividends from net investment income daily on shares of High Yield Portfolio and to pay such dividends monthly. Dividends from net investment income, if any, on shares of the other Portfolios 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 U.S. generally accepted accounting

79

The Lazard Funds, Inc.
Notes to Financial Statements (continued)
June 30, 2006 (unaudited)

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. During the year ended December 31, 2005, Small Cap Portfolio processed in-kind redemptions to shareholders which resulted in $1,880,696 of net capital gain, which is attributable to the redeeming shareholders, and not to the Portfolio, for tax purposes, and is included in realized gain (loss) on investments on the Statement of Operations.

(h) 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.

(i) 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.

(j) 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 are retained by each Portfolio and are included as paid in capital on its Statement of Assets and Liabilities. The fees are also shown on its Statement of Changes in Net Assets.

(k) Estimates — The preparation of financial statements in conformity with U.S. 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, on behalf of the Portfolios, has entered into investment management agreements (the “Management Agreements”) with the Investment Manager. 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. For its services provided to the Fund, the Investment Manager earns a management fee, accrued daily and payable by each Portfolio monthly, at the annual rate set forth below as a percentage of its average daily net assets:

Portfolio	Annual Rate
Equity	0.75	%
U.S. Equity Value	0.75
U.S. Strategic Equity	0.75
Mid Cap	0.75
Small Cap	0.75
U.S. Small Cap Equity Growth	1.00
International Equity	0.75
International Equity Select	0.85
International Strategic Equity	0.75
International Small Cap	0.75
Emerging Markets	1.00
High Yield	0.55

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:

Portfolio	Institutional Shares		Open Shares
U.S. Equity Value	1.00	%	1.30	%
U.S. Strategic Equity	1.05		1.35
Mid Cap	1.05		1.35
U.S. Small Cap Equity Growth	1.25		1.55
International Equity Select	1.15		1.45
International Strategic Equity	N/A		1.45
International Small Cap	N/A		1.43
Emerging Markets	N/A		1.60
High Yield	0.55		0.85

During the period ended June 30, 2006, the Investment Manager waived its management fee and reimbursed the following Portfolios for other expenses as follows:

Portfolio	Institutional Shares			Open Shares
U.S. Equity Value		$	89,037	$	16,702
U.S. Strategic Equity			46,435		11,470
U.S. Small Cap Equity Growth			42,989		20,403
International Equity Select			38,177		32,377
International Strategic Equity			—		7,412
High Yield			106,843		14,507

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 $42,500, 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. State Street agreed to waive one half of the $37,500 base fee for U.S. Equity Value, U.S. Strategic Equity and U.S. Small Cap Equity Growth Portfolios for one year or until the respective Portfolio’s net assets reach $25 million, whichever comes first. In January 2006, U.S. Strategic

80

The Lazard Funds, Inc.
Notes to Financial Statements (concluded)
June 30, 2006 (unaudited)

Equity Portfolio’s net assets exceeded $25 million and the full base fee became effective.

The Fund has a distribution agreement with Lazard Asset Management Securities LLC (the “Distributor”), a wholly-owned subsidiary of the Investment Manager, to serve as the distributor for shares of each Portfolio and bears the cost of printing and mailing prospectuses to potential investors and of certain expenses in connection with the offering of Portfolio shares.

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

4. Directors’ Compensation

Certain Directors of the Fund are officers 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 $50,000 per year, plus $2,500 per meeting attended ($1,000 per meeting attended by telephone) for the Fund, Lazard Retirement Series, Inc., Lazard Global Total Return and Income Fund, Inc. and Lazard World Dividend & Income Fund, Inc. (collectively, the “Lazard Funds”), each a registered management investment company advised by the Investment Manager, and reimburses such Directors for travel and other out of pocket expenses. In addition, the Chairman of the Audit Committees for the Lazard Funds also receives an annual fee of $5,000.

5. Securities Transactions and Transactions with Affiliates

Purchases and sales of portfolio securities (excluding short-term securities) for the period ended June 30, 2006 were as follows:

Portfolio	Purchases		Sales
Equity	$	29,278,478	$	80,822,771
U.S. Equity Value		149,767		76,330
U.S. Strategic Equity		66,100,427		25,702,298
Mid Cap		118,623,849		116,150,139
Small Cap		136,575,176		205,582,509
U.S. Small Cap Equity Growth		664,339		176,230
International Equity		380,432,083		542,188,182
International Equity Select		4,743,531		5,448,034
International Strategic Equity		201,487,843		96,445,677
International Small Cap		216,711,508		245,723,963
Emerging Markets		1,019,543,083		594,271,815
High Yield		9,791,291		13,593,962

For the period ended June 30, 2006, no brokerage commissions were paid to affiliates of the Investment Manager or other affiliates of the Fund for portfolio transactions executed on behalf of the Fund.

6. Line of Credit

The Fund has a $50 million Line of Credit Agreement (the “Agreement”) with State Street, 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, 2006, the Fund had borrowings under the Agreement as follows:

			Maximum		Weighted
	Average Daily		Daily Loan		Average
Portfolio	Loan Balance		Outstanding		Interest Rate
Equity	$	824,689	$	2,770,000	5.14	%
Mid Cap		1,100,000		1,100,000	5.34
International Equity		8,383,333		13,550,000	5.34
Emerging Markets		15,400,000		25,000,000	5.54

7. Foreign Securities Investment Risks

Certain Portfolios invest in securities of foreign entities and instruments denominated in foreign currencies which involve risks not typically involved in domestic investments. Foreign investments carry special risks, such as exposure to currency fluctuations, less developed or less efficient trading markets, political instability, a lack of company information, differing auditing and legal standards and, potentially, less liquidity. A Portfolio’s investments in emerging markets are exposed to additional volatility. A Portfolio’s performance will be influenced by political, social and economic factors affecting emerging markets. Emerging market countries generally have economic structures that are less diverse and mature, and political systems that are less stable, than those of developed countries.

81

The Lazard Funds, Inc.
Board of Directors and Officers Information
(unaudited)

Name (Age)	Position(s) and Term	Principal Occupation(s) During Past 5 Years
Address(1)	with the Fund(2)	and Other Directorships Held
Non-Interested Directors:
John J. Burke (78)	Director	Lawyer and Private Investor; Director, Lazard Alternative Strategies Fund,
	since May 1991	LLC; Director, Pacific Steel & Recycling; Director, Sletten Construction
		Company; Trustee Emeritus, The University of Montana Foundation.
Kenneth S. Davidson (61)	Director	President, Davidson Capital Management Corporation; Trustee, The Juilliard
	since August 1995	School; Chairman of the Board, Bridgehampton Chamber Music Festival;
		Trustee, American Friends of the National Gallery/London; President,
		Aquiline Advisors LLC.
Lester Z. Lieberman (76)	Director	Private Investor; Chairman, Healthcare Foundation of New Jersey; Director,
	since October 1991	Cives Steel Co.; Director, Northside Power Transmission Co.; Advisory
		Trustee, New Jersey Medical School; Director, Public Health Research
		Institute; Trustee Emeritus, Clarkson University; Council of Trustees, New
		Jersey Performing Arts Center.
Leon Pollack (65)	Director	Director, Lazard Alternative Strategies Fund, LLC; Former Managing Director,
	since August 2006	Donaldson, Lufkin & Jenrette.
Richard Reiss, Jr. (62)	Director	Chairman, Georgica Advisors LLC, an investment manager; Director, Lazard
	since May 1991	Alternative Strategies Fund, LLC; Director, O’Charley’s, Inc., a restaurant
		chain.
Robert M. Solmson (58)	Director	Director, Lazard Alternative Strategies Fund, LLC; Director, Colonial
	since September 2004	Williamsburg Co.; Former Chief Executive Officer and Chairman, RFS Hotel
		Investors, Inc.; Former Director, Morgan Keegan, Inc.; Former Director,
		Independent Bank, Memphis.
Interested Directors(3):
Charles Carroll (45)	Chief Executive Officer,	Deputy Chairman and Head of Global Marketing of the Investment Manager.
	President and Director
	since June 2004
Ashish Bhutani (46)	Director	Chief Executive Officer of the Investment Manager; from 2001 to December
	since July 2005	2002, Co-Chief Executive Officer North America of Dresdner Kleinwort
		Wasserstein and member of its Global Corporate and Markets Board and the
		Global Executive Committee; from 1995 to 2001, Chief Executive Officer of
		Wasserstein Perella Securities; and from 1989 to 2001, Deputy Chairman of
		Wasserstein Perella Group.

(1)	The address of each Director is Lazard Asset Management LLC, 30 Rockefeller Plaza, New York, New York 10112-6300.
(2)	Each Director also serves as a Director for each of the Lazard Funds (comprised of 24 investment portfolios). Each Director serves an indefinite term, until his successor is elected.
(3)	Messrs. Bhutani and Carroll are “interested persons” (as defined in the Act) of the Fund because of their positions with the Investment Manager.
The Fund’s Statement of Additional Information contains further information about the Directors and is available without charge by calling 800-823-6300.

82

The Lazard Funds, Inc.
Board of Directors and Officers Information (concluded)
(unaudited)

Name (Age)	Position(s) and Term
Address(1)	with the Fund(2)	Principal Occupation(s) During Past 5 Years
Officers:
Nathan A. Paul (33)	Vice President	Managing Director and General Counsel of the Investment Manager.
	and Secretary
	since April 2002
Stephen St. Clair (47)	Treasurer	Vice President of the Investment Manager.
	since May 2003
Brian Kawakami (56)	Chief Compliance Officer	Senior Vice President and Chief Compliance Officer of the Investment
	since August 2006	Manager; Chief Compliance Officer at INVESCO, from July 2002 to April
		2006; Chief Compliance Officer at Aeltus Investment Management, from
		1993 to July 2002.
Brian D. Simon (44)	Assistant Secretary	Director of the Investment Manager; Vice President, Law & Regulations at
	since November 2002	J. & W. Seligman & Co., from July 1999 to October 2002.
David A. Kurzweil (32)	Assistant Secretary	Vice President of the Investment Manager; Associate at Kirkpatrick &
	since April 2005	Lockhart LLP, a law firm, from August 1999 to January 2003.
Cesar A. Trelles (31)	Assistant Treasurer	Fund Administration Manager of the Investment Manager; Manager for
	since December 2004	Mutual Fund Finance Group at UBS Global Asset Management, from August
		1998 to August 2004.

(1)	The address of each officer is Lazard Asset Management LLC, 30 Rockefeller Plaza, New York, New York 10112-6300.
(2)	Each officer serves for an indefinite term, until his successor is elected and qualified, and serves in the same capacity for the other Lazard Funds.

83

The Lazard Funds, Inc.
Other Information
(unaudited)

Proxy Voting

A description of the policies and procedures used to determine how proxies relating to Fund portfolio securities are voted is available (1) without charge, upon request, by calling (800) 823-6300 or (2) on the Securities and Exchange Commission (the “SEC”) website at http://www.sec.gov.

The Fund’s proxy voting record for the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (800) 823-6300 or (2) on the SEC’s website at http://www.sec.gov. Information as of June 30 each year will generally be available by the following August 31.

Form N-Q

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

Board consideration of Management Agreement

At the meeting of the Fund’s Board of Directors held on February 7, 2006, the Board considered the approval of a new Management Agreement between the Fund, on behalf of a new portfolio of the Fund, Lazard U.S. Small Cap Equity Growth Portfolio (the “New Portfolio”), and the Investment Manager. The Directors who are not “interested persons” (as defined in the Act) of the Fund (the “Independent Directors”) were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Investment Manager.

Services Provided

The Investment Manager’s representatives referred the Directors to presentations and materials from the Investment Manager on its advisory business at recent Board of Directors meetings for the Fund and other investment companies managed by the Investment Manager having the same Boards of Directors as the Fund, in connection with approval of investment management agreements for those investment companies.

Representatives of the Investment Manager reviewed the previous discussions in connection with the approval of those management agreements, including previous discussions with the Board about (1) the nature, extent and quality of services that the Investment Manager provides the Fund and the other investment companies managed by the Investment Manager, which would apply, as relevant, to the New Portfolio; (2) the Investment Manager’s global structure, including technology and operational support; and (3) the Investment Manager’s research and portfolio management capabilities and that the Investment Manager also provides oversight of the day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Directors also had considered the Investment Manager’s extensive administrative, accounting and compliance infrastructure and agreed that the Fund benefits from all of the services of the Investment Manager’s global platforms, and that such services would be different than those provided to a fund if it were not managed by a global firm such as the Investment Manager.

A number of other factors had been considered in previous discussions, including: the scope of the services to be provided by the Investment Manager; the personnel, resources, technology utilization, business reputation, financial condition and experience of the Investment Manager; and benefits that may accrue to the Investment Manager or its affiliates by virtue of their relationship with the Fund, including the benefits of brokerage relationships with affiliates of the Investment Manager and any research and similar service arrangements with brokers who execute transactions on behalf of the New Portfolio.

The representatives of the Investment Manager confirmed for the Board that there had been no significant changes in the referenced information and noted the applicability of the information, discussions and considerations to the services that would be provided to the New Portfolio.

Comparative Performance and Fees and Expenses

The Directors reviewed and placed significant emphasis on the relative performance and advisory fees and expense ratios for the New Portfolio, including comparative information prepared by Lipper (an independent third party). Performance. Representatives of the Investment Manager gave a presentation on the relative growth strategy to be used for the New Portfolio. They reviewed with the Directors the U.S. Small Cap Equity Growth team, including professional biographies for the proposed portfolio managers for the New Portfolio, and the strategy that would be employed in man-

84

The Lazard Funds, Inc.
Other Information (concluded)
(unaudited)

aging the New Portfolio. The Directors considered the composite performance of other accounts managed by the portfolio managers in similar strategies to the New Portfolio (the “Similar Accounts”), noting that the composite’s performance surpassed that of the benchmark index on a one- and three-year and since-inception basis.

Advisory Fees and Expenses. Representatives of the Investment Manager reviewed the advisory fee and anticipated expense ratio for the New Portfolio and the comparisons provided by Lipper comparing projected expenses and contractual management fees for the New Portfolio to a comparison group chosen by Lipper, noting the assumptions used in the comparisons. The Investment Manager representatives noted that the contractual management fee for the New Portfolio was at the median of the Lipper group and that the average total expense ratio for the New Portfolio (as limited by agreement with Investment Manager) was slightly above the category average. A discussion ensued of the fees charged and services provided under the proposed Management Agreement with respect to the New Portfolio in light of the criteria discussed at previous meetings, and the Board analyzed the fee and expense information.

The Directors also reviewed reports of the advisory fees paid to the Investment Manager by Similar Accounts, showing that advisory fees paid by the Similar Accounts are the same as those to be paid by the New Portfolio.

Investment Manager Profitability and Economies of Scale

Representatives of the Investment Manager noted previous discussions regarding considerations of profitability and economies of scale and noted that because the New Portfolio is newly formed, had not commenced operations, and the eventual aggregate amount of New Portfolio assets was uncertain, the Investment Manager was not able to provide the Board with specific information concerning the cost of services to be provided to the New Portfolio and the expected profits to be realized by the Investment Manager and its affiliates from their relationships with the New Portfolio and the extent to which economies of scale would be realized as the New Portfolio grows and whether fee levels would reflect such economies of scale, if any. The Board determined that it would revisit this issue no later than when it next reviews the investment advisory fee in connection with renewal of the Management Agreement.

The Independent Directors also considered potential benefits to the Investment Manager and its affiliates from acting as investment adviser to the New Portfolio and referred to previous discussion of soft dollar arrangements with respect to portfolio transactions.

At the conclusion of these discussions, each of the Independent Directors expressed the opinion that he had been furnished with sufficient information to make an informed business decision with respect to the approval of a Management Agreement with respect to the New Portfolio. Based on its discussions and considerations as described above, the Board made the following conclusions and determinations.

• The Board concluded that the nature, extent and quality of the services to be provided by the Investment Manager are adequate and appropriate, especially including the benefits of advisory and research services associated with a $74 billion asset management business.
  
  
• The Independent Directors were satisfied with the overall performance of the Investment Manager’s U.S. Small Cap Equity Growth product and the resources the Investment Manager was to devote to management of the investments of the New Portfolio.
  
  
• The Board concluded that the New Portfolio’s fee to be paid to the Investment Manager was reasonable in light of comparative expense and advisory fee information and anticipated benefits to be derived by the Investment Manager from the relationship with the New Portfolio.
  
  
• The Board recognized that economies of scale may be realized as the assets of the New Portfolio increase. The Board determined they would seek to share material economies of scale with the New Portfolio.

The Directors considered these conclusions and determinations and, without any one factor being dispositive, the Board determined that approval of a Management Agreement with respect to the New Portfolio was in the best interests of the New Portfolio and its shareholders.

85

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 Asset Management Securities LLC
30 Rockefeller Plaza
New York, New York 10112-6300

Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

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

Independent Registered Public Accounting Firm
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

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

	The Lazard Funds, Inc.	30 Rockefeller Plaza	Tel 800-823-6300
		New York, NY 10112- 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.    SCHEDULE OF INVESTMENTS

               Not applicable.

ITEM 7.    DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENTCOMPANIES.

               Not applicable.

ITEM 8.    PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

               Not applicable.

ITEM 9.    PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

               Not applicable.

ITEM 10.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

               The Registrant has a Nominating Committee (the "Committee") of the Board of Directors (the “Board”), which is currently comprised of all of the Directors who are not "interested persons" (as defined in the Investment Company Act of 1940, as amended) of the Registrant. The Committee's function is to select and nominate candidates for election to the Board. The Committee will consider recommendations for nominees from stockholders sent to the Secretary of the Registrant, 30 Rockefeller Plaza, New York, New York 10112. Nominations may be submitted only by a stockholder or group of stockholders that, individually or as a group, has beneficially owned the lesser of (a) 1% of the Registrant's outstanding shares or (b) $500,000 of the Registrant's shares for at least one year prior to the date such stockholder or group submits a candidate for nomination. Not more than one nominee for Director may be submitted by such a stockholder or group each calendar year.

In evaluating potential nominees, including any nominees recommended by stockholders, the Committee takes into consideration the factors listed in the Nominating Committee Charter and Procedures, including character and integrity, business and professional experience, and whether the Committee believes that the person has the ability to apply sound and independent business judgment and would act in the interests of the Registrant and its stockholders. A nomination submission must include all information relating to the recommended nominee that is required to be disclosed in solicitations or proxy statements for the election of Directors, as well as information sufficient to evaluate the factors listed above. Nomination submissions must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the stockholders, and such additional information must be provided regarding the recommended nominee as reasonably requested by the Committee.

ITEM 11.  CONTROLS AND PROCEDURES.

(a)           The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)           There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

ITEM 12.  EXHIBITS.

(a)(1)       Not applicable.

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

(a)(3)       Not applicable.

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

The Lazard Funds, Inc.

By	/s/ Charles Carroll
	Charles Carroll
	Chief Executive Officer
Date	September 6, 2006

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/ Charles Carroll
	Charles Carroll
	Chief Executive Officer
Date	September 6, 2006
By	/s/ Stephen St. Clair
	Stephen St. Clair
	Chief Financial Officer
Date	September 6, 2006