-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UkDCAeZGJa1o9RXghkXkV0IisSuirgb+aeYiwl0tJj5Oh3MDmhL10DIo+lH2fV27 GZLBwLspsPtN0lWtO5njOQ== 0000930413-99-001075.txt : 19990830 0000930413-99-001075.hdr.sgml : 19990830 ACCESSION NUMBER: 0000930413-99-001075 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAZARD FUNDS INC CENTRAL INDEX KEY: 0000874964 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06312 FILM NUMBER: 99700489 BUSINESS ADDRESS: STREET 1: STATE STREET BANK & TRUST CO STREET 2: PO BOX 9110 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 2126326000 MAIL ADDRESS: STREET 1: STATE STREET BANK & TRUST CO STREET 2: PO BOX 9110 CITY: BOSTON STATE: MA ZIP: 02109 N-30D 1 LAZARD FUNDS SEMI-ANNUAL REPORT LazardFunds Semi-Annual Report June 30, 1999 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. - -------------------------------------------------------------------------------- BOARD OF DIRECTORS - ------------------ JOHN J. BURKE RETIRED; FORMER VICE CHAIRMAN AND DIRECTOR, MONTANA POWER COMPANY KENNETH S. DAVIDSON MANAGING PARTNER, DAVIDSON CAPITAL MANAGEMENT CORPORATION NORMAN EIG VICE CHAIRMAN AND MANAGING DIRECTOR, LAZARD FRERES & CO. LLC CARL FRISCHLING SENIOR PARTNER, KRAMER, LEVIN, NAFTALIS & FRANKEL HERBERT W. GULLQUIST VICE CHAIRMAN AND MANAGING DIRECTOR, LAZARD FRERES & CO. LLC; CHIEF INVESTMENT OFFICER, LAZARD ASSET MANAGEMENT WILLIAM KATZ PRESIDENT AND CHIEF OPERATING OFFICER, BBDO NEW YORK LESTER Z. LIEBERMAN PRIVATE INVESTOR RICHARD REISS, JR. MANAGING PARTNER, GEORGICA ADVISERS LLC JOHN RUTLEDGE PRESIDENT, RUTLEDGE AND COMPANY OFFICERS - -------- NORMAN EIG CHAIRMAN OF THE BOARD HERBERT W. GULLQUIST PRESIDENT WILLIAM G. BUTTERLY, III VICE PRESIDENT AND SECRETARY JAMES GIALLANZA TREASURER
- -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. - -------------------------------------------------------------------------------- TABLE OF CONTENTS Overview .............................................. 2 Growth Charts ......................................... 3 Performance Table ..................................... 9 Portfolio of Investments Lazard Equity Portfolio ............................. 12 Lazard Mid Cap Portfolio ............................ 14 Lazard Small Cap Portfolio .......................... 16 Lazard Bantam Value Portfolio ....................... 19 Lazard Global Equity Portfolio ...................... 20 Lazard International Equity Portfolio ............... 22 Lazard International Small Cap Portfolio ............ 24 Lazard Emerging Markets Portfolio ................... 26 Lazard Bond Portfolio ............................... 28 Lazard High Yield Portfolio ......................... 32 Lazard International Fixed-Income Portfolio ......... 36 Lazard Strategic Yield Portfolio .................... 43 Notes to Portfolios of Investments .................. 53 Statements of Assets and Liabilities .............................. 58 Operations .......................................... 60 Changes in Net Assets ............................... 62 Financial Highlights .................................. 68 Notes to Financial Highlights ......................... 80 Notes to Financial Statements ......................... 81 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. OVERVIEW - -------------------------------------------------------------------------------- The bull market that swept through during the second quarter was anything but routine. While the market continued its climb and major indices rose dramatically, a huge reversal took place. After many years of growth outperformance, the beginning of the second quarter saw small caps, cyclicals, and value stocks begin to rally, and mega-cap growth stocks take a beating. This resulted in an almost revolutionary broadening of the market. With very few exceptions, stock prices moved higher across industry sectors, market capitalizations, and regions. The broadening brought dramatic reversals: for example, small cap stocks, which had fallen steeply during the first quarter, advanced a stunning 15.5% during the second quarter. As well, industrial manufacturing and telecommunications companies also experienced sharp turnarounds as investors sought out companies likely to benefit from the strong economy. This broadened equity rally was ill-received by the bond market, however, which correctly anticipated the Federal Reserve Bank's increase of its key target rate, causing a sharp rise in interest rates. Nevertheless, the depth and extent of the equity markets' rally was by far the more significant event of the last six months. The strength of global stock markets during the spring boiled down to two fundamental issues: valuations and earnings. As investors continued their migration into the mega-cap stocks in the first quarter, the valuation disparity between this increasingly narrow group of companies and almost all other sectors became impossible to ignore. The inevitable reversal was most obvious in technology, where the "cheaper" stocks from that sector dominated, and better-than-expected profits added to performance at IBM and Hewlett-Packard. While rising interest rates in the U.S. caused price/earnings ratios to compress in industries such as pharmaceuticals, industrial companies benefited, as higher rates are coincident with stronger growth and generally improved commodity pricing. At the same time, energy stocks continued to outperform the broad market aided by another wave of consolidation, which included BP Amoco's bid for ARCO. Industry consolidation and global merger and acquisition activity continued at full speed, with the notable participation of telecommunications and financial services companies, while corporate restructuring was highlighted by the mega-restructuring at both Procter & Gamble and at Hewlett-Packard. Those invested internationally were also rewarded during the spring, as Asia rebounded strongly and most markets in Europe began to move back up. Moreover, European hostile bids were met with an unusually low level of resistance amidst the region's already busy M&A field. The changing attitude toward such aggressive maneuvers presented even more opportunities for the value investor, and the portfolios' European returns outperformed significantly. Amid Medicare concerns and issues raised by upcoming elections, health care stocks were one of the few equity disappointments. Still, with careful selection, value remains to be found in this very profitable sector. As previously mentioned, the bond market fared poorly amidst the rising interest rate environment. The anticipation of rising interest rates, in general, coupled with a robust new issue supply calendar across the corporate, high yield, and municipal bond sectors, caused bond prices to move lower. The second quarter marked the first time in 5 years that high-grade bonds posted back-to-back negative, quarterly returns. However, as bond participants have already calculated the forthcoming effects of strong economic growth and a modest increase in inflation, we believe that there are many opportunities for bond investors, particularly among those sectors that offer yield premiums relative to government securities. In the broadening market, holders of diversified portfolios should examine recent M&A activity closely. The tendency for large growth companies to make value decisions by opportunistically acquiring smaller companies at remarkably low valuations has been marked by a focus on the actual financial productivity of those companies. Similarly, broadly diversified portfolios can flourish, provided they consider seriously the financial productivity of their holdings. As always, a comprehensive and intimate knowledge of the companies themselves will be foremost. 2 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. GROWTH CHARTS - -------------------------------------------------------------------------------- LAZARD EQUITY PORTFOLIO The Lazard Equity Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of relatively large U.S. companies with market capitalizations in the range of the S&P 500 Stock Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD EQUITY PORTFOLIO AND THE STANDARD & POOR'S 500 STOCK INDEX [The following table represents a chart in the printed piece.] LAZARD EQUITY EQUITY PORTFOLIO S&P 500 - ------ --------- ------- Jun-89 10000 10000 Jul-89 10716.04 10902.9 Aug-89 10935.42 11116.05 Sep-89 10884.79 11070.92 Oct-89 10530.19 10813.85 Nov-89 10614.84 11034.35 Dec-89 10694.65 11299.28 Jan-90 10044.65 10540.65 Feb-90 10243.98 10676.41 Mar-90 10495.31 10959.34 Apr-90 10122.56 10685.9 May-90 10853.05 11727.88 Jun-90 10809.57 11648.72 Jul-90 10800.79 11611.33 Aug-90 9823.66 10561.78 Sep-90 9300.2 10047.74 Oct-90 9316.91 10004.94 Nov-90 9929.86 10651.65 Dec-90 10189 10948.41 Jan-91 10595.5 11425.21 Feb-91 11381.99 12242.34 Mar-91 11505.71 12538.85 Apr-91 11487.63 12568.57 May-91 11851.05 13110.78 Jun-91 11310.35 12510.17 Jul-91 11842.34 13093.27 Aug-91 12339.85 13403.45 Sep-91 12171.05 13179.21 Oct-91 12313.32 13356.34 Nov-91 11664.31 12818.21 Dec-91 12994.35 14284.23 Jan-92 13131.25 14018.12 Feb-92 13478.75 14199.65 Mar-92 13068.07 13923.47 Apr-92 13008.5 14332.26 May-92 12987.38 14402.49 Jun-92 12470 14188.18 Jul-92 12825.57 14767.77 Aug-92 12465.78 14465.47 Sep-92 12656.26 14635.44 Oct-92 12869.14 14685.93 Nov-92 13484.99 15185.99 Dec-92 13677.53 15372.32 Jan-93 13935.19 15500.84 Feb-93 14096.23 15712.11 Mar-93 14708.17 16043.64 Apr-93 14409.2 15655.86 May-93 14785.84 16074.66 Jun-93 14871.93 16121.76 Jul-93 14901.33 16056.95 Aug-93 15454.87 16666.15 Sep-93 15432.73 16538.32 Oct-93 16058.92 16880.5 Nov-93 15936.67 16719.62 Dec-93 16223.95 16921.76 Jan-94 17041.57 17497.1 Feb-94 16819.65 17022.23 Mar-94 16083.79 16280.06 Apr-94 16352.43 16488.77 May-94 16546.35 16759.36 Jun-94 16160.47 16348.58 Jul-94 16729.3 16885.47 Aug-94 17480.13 17577.78 Sep-94 17198.57 17148 Oct-94 17440.6 17533.31 Nov-94 16817.3 16894.75 Dec-94 16910.09 17145.3 Jan-95 17192.95 17589.88 Feb-95 17943.15 18275.36 Mar-95 18447.37 18814.66 Apr-95 18961.53 19368.75 May-95 19751.08 20142.92 Jun-95 20367.92 20610.84 Jul-95 21141.18 21294.3 Aug-95 21463 21347.75 Sep-95 22205.67 22248.62 Oct-95 22057.01 22169.19 Nov-95 23075.98 23142.42 Dec-95 23283.22 23588.14 Jan-96 24085.63 24391.08 Feb-96 24767.67 24617.19 Mar-96 24968.28 24854.25 Apr-96 25503.88 25220.6 May-96 25807.83 25871.04 Jun-96 25545.33 25969.61 Jul-96 24155.65 24822.28 Aug-96 24973.31 25345.78 Sep-96 25874.12 26772.24 Oct-96 26494.62 27510.62 Nov-96 28282.35 29590.14 Dec-96 27919.25 29003.96 Jan-97 29254.26 30816.13 Feb-97 29602.53 31057.73 Mar-97 28499.69 29781.57 Apr-97 29355.84 31559.53 May-97 31417.79 33480.87 Jun-97 32449.33 34980.81 Jul-97 34880.82 37764.24 Aug-97 33661.73 35648.68 Sep-97 35124.64 37601.16 Oct-97 33114.99 36345.28 Nov-97 34232.48 38027.71 Dec-97 34934.14 38680.64 Jan-98 34881.72 39108.45 Feb-98 37382.01 41928.95 Mar-98 39585.07 44076.13 Apr-98 39882.31 44519.54 May-98 38833.4 43753.8 Jun-98 39536.28 45531.08 Jul-98 38516.25 45043.9 Aug-98 32419.12 38522.44 Sep-98 33599.18 40993.66 Oct-98 37190.93 44332.59 Nov-98 39459.58 47021.36 Dec-98 40980.35 49735.43 Jan-99 41922.9 51806.91 Feb-99 40510.1 50198.3 Mar-99 41490.04 52208.74 Apr-99 44052.05 54231.82 May-99 43504.48 52951.41 Jun-99 45445.65 55890.21 LAZARD MID CAP PORTFOLIO The Lazard Mid Cap Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of medium-size U.S. companies in the range of the Russell Midcap Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD MID CAP PORTFOLIO AND THE RUSSELL MIDCAP INDEX [The following table represents a chart in the printed piece.] LAZARD RUSSELL MIDCAP MIDCAP ------ ------ 11-4-97 10000 10000 Nov-97 9990 10033.3 Dec-97 10274.67 10309.21 Jan-98 10284.68 10115.4 Feb-98 11145.91 10906.42 Mar-98 11656.64 11423.39 Apr-98 11696.7 11451.95 May-98 11115.87 11097.51 Jun-98 10915.78 11251.21 Jul-98 10174.6 10714.64 Aug-98 8674.86 9000.83 Sep-98 9095.59 9583.37 Oct-98 9536.73 10236.86 Nov-98 10128.01 10721.57 Dec-98 10650.11 11350.39 Jan-99 10538.28 11330.87 Feb-99 10222.13 10954 Mar-99 10425.55 11297.19 Apr-99 11341.96 12131.72 May-99 11474.66 12096.9 Jun-99 11739.27 12523.92 PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS. 3 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. GROWTH CHARTS (CONTINUED) - -------------------------------------------------------------------------------- LAZARD SMALL CAP PORTFOLIO The Lazard Small Cap Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of relatively small U.S. companies in the range of the Russell 2000 Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD SMALL CAP PORTFOLIO AND THE RUSSELL 2000 INDEX [The following table represents a chart in the printed piece.] LAZARD SMALL CAP PORTFOLIO RUSSELL 2000 ------------- ------------ Oct 30, 91 10000 10000 Nov-91 9720 9537.2 Dec-91 10453.51 10300.37 Jan-92 11316.28 11135.73 Feb-92 11827.92 11460.78 Mar-92 11827.92 11072.95 Apr-92 11547.02 10684.29 May-92 11557.05 10826.39 Jun-92 10955.12 10317.65 Jul-92 11256.09 10676.3 Aug-92 10935.06 10374.37 Sep-92 11015.32 10613.29 Oct-92 11547.02 10948.25 Nov-92 12560.27 11786.66 Dec-92 13041.26 12196.96 Jan-93 13443.15 12609.46 Feb-93 13563.71 12318.69 Mar-93 14216.78 12718.3 Apr-93 13885.23 12368.68 May-93 14528.25 12915.74 Jun-93 14920.09 12995.95 Jul-93 15045.6 13175.42 Aug-93 15925.82 13744.34 Sep-93 16232.87 14132.2 Oct-93 16386.4 14496.11 Nov-93 16171.46 14023.83 Dec-93 16965.56 14503.02 Jan-94 17588.15 14957.4 Feb-94 17599.26 14903.1 Mar-94 16765.44 14118.16 Apr-94 16743.2 14201.88 May-94 16787.67 14042.11 Jun-94 16598.67 13568.33 Jul-94 16947.64 13791.39 Aug-94 17926.49 14559.57 Sep-94 17926.49 14510.21 Oct-94 17641.94 14451.59 Nov-94 16754.15 13867.6 Dec-94 17310.35 14238.84 Jan-95 17237.97 14059 Feb-95 17973.81 14644.28 Mar-95 18408.08 14895.28 Apr-95 18794.09 15226.25 May-95 19348.99 15487.99 Jun-95 20217.52 16291.51 Jul 1, 95 21146.93 17229.9 Aug-95 21255.63 17586.39 Sep-95 21267.7 17900.48 Oct-95 20047.92 17099.97 Nov-95 20893.31 17818.34 Dec-95 21036.36 18288.39 Jan-96 21221.01 18268.64 Feb-96 22012.35 18838.07 Mar-96 22408.01 19221.43 Apr-96 23283.42 20249.2 May-96 24063.06 21047.22 Jun-96 23375.92 20183.02 Jul-96 21697.72 18420.23 Aug-96 23098.42 19489.71 Sep-96 23930.92 20251.37 Oct-96 24142.34 19939.3 Nov-96 25582.69 20760.8 Dec-96 26070.43 21304.94 Jan-97 26819.74 21730.61 Feb-97 26720.78 21203.64 Mar-97 25745.26 20203.04 Apr-97 26494.57 20259.41 May-97 29083.24 22513.27 Jun-97 30426.21 23478.19 Jul-97 31942.47 24570.63 Aug-97 32621.18 25132.8 Sep-97 34108.55 26972.27 Oct-97 32765.58 25787.38 Nov-97 32621.09 25620.54 Dec-97 33384.95 26068.89 Jan-98 33068.14 25657.53 Feb-98 35436.11 27554.65 Mar-98 36703.47 28691 Apr-98 36803.53 28849.66 May-98 34869.13 27295.82 Jun-98 33784.7 27353.14 Jul-98 31399.5 25138.9 Aug-98 25144.72 20257.43 Sep-98 25833.69 21842.78 Oct-98 27326.87 22733.52 Nov-98 28450.01 23924.53 Dec-98 29172.64 25404.98 Jan-99 28953.84 25742.62 Feb-99 26874.96 23657.72 Mar-99 26892.16 24027.02 Apr-99 29793.82 26180.08 May-99 31235.84 26562.31 Jun-99 32376.58 27762.93 LAZARD BANTAM VALUE PORTFOLIO The Lazard Bantam Value Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities of small U.S. companies with market capitalizations under $500 million that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD BANTAM VALUE PORTFOLIO AND THE RUSSELL 2000 INDEX [The following table represents a chart in the printed piece.] LAZARD BANTAM VALUE PORTFOLIO Russell 2000 --------------- ------------ 3/1/96 10000 10000 Mar-96 10630 10204 Apr-96 11450 10749.61 May-96 11880 11173.25 Jun-96 11770 10714.48 Jul-96 11160 9778.67 Aug-96 11930 10346.42 Sep-96 12210 10750.76 Oct-96 12730 10585.09 Nov-96 13310 11021.2 Dec-96 13329.42 11310.06 Jan-97 14082.31 11536.04 Feb-97 14050.5 11256.29 Mar-97 13520.29 10725.11 Apr-97 13265.79 10755.03 May-97 14979.59 11951.53 Jun-97 16012.29 12463.77 Jul-97 17131.96 13043.71 Aug-97 17849.41 13342.15 Sep-97 19284.32 14318.66 Oct-97 18490 13689.64 Nov-97 18121.17 13601.07 Dec-97 17853.1 13839.09 Jan-98 17204.8 13620.71 Feb-98 18813.08 14627.82 Mar-98 19897.73 15231.07 Apr-98 20022.4 15315.3 May-98 18700.87 14490.42 Jun-98 17853.72 14520.85 Jul-98 16507.55 13345.39 Aug-98 13202.74 10753.98 Sep-98 13745.37 11595.59 Oct-98 14376.28 12068.45 Nov-98 15550.83 12700.72 Dec-98 15385.37 13486.26 Jan-99 15599.22 13665.49 Feb-99 14829.09 12558.72 Mar-99 14980.94 12754.64 Apr-99 16419.71 13897.45 May-99 17454.64 14100.36 Jun-99 17430.21 14737.98 PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS. 4 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. GROWTH CHARTS (CONTINUED) - -------------------------------------------------------------------------------- LAZARD GLOBAL EQUITY PORTFOLIO The Lazard Global Equity Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, both U.S. and non-U.S., of relatively large companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) World Index, that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD GLOBAL EQUITY PORTFOLIO AND THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX [The following table represents a chart in the printed piece.] MORGAN STANLEY LAZARD GLOBAL CAPITAL INTERNATIONAL EQUITY PORTFOLIO WORLD INDEX ---------------- ----------- 1-4-96 10000 10000 Jan-96 10010 10117.88 Feb-96 10170 10177.37 Mar-96 10310 10344.59 Apr-96 10430 10585.72 May-96 10460 10592.71 Jun-96 10530 10644.19 Jul-96 10160 10265.89 Aug-96 10290 10381.79 Sep-96 10620 10786.17 Oct-96 10720 10859.3 Nov-96 11570 11465.68 Dec-96 11578.38 11279.93 Jan-97 11550 11413.71 Feb-97 11749.84 11542.8 Mar-97 11679.24 11312.29 Apr-97 11911.21 11679.94 May-97 12451.39 12398.73 Jun-97 13215.21 13014.94 Jul-97 13717.46 13612.2 Aug-97 12974.56 12699.5 Sep-97 13780.24 13387.31 Oct-97 12900 12680.55 Nov-97 13131.5 12902.79 Dec-97 13345.5 13057.88 Jan-98 13592.23 13419.61 Feb-98 14500.62 14325.19 Mar-98 15442.66 14927.9 Apr-98 15610.88 15071.53 May-98 15644.52 14880.4 Jun-98 15779.06 15231.57 Jul-98 15768.02 15204.87 Aug-98 13454.85 13174.98 Sep-98 13193.29 13405.72 Oct-98 14349.02 14615.29 Nov-98 15211.4 15482.17 Dec-98 15627.28 16236.2 Jan-99 15864.81 16589.37 Feb-99 15412.66 16145.72 Mar-99 16043.66 16815.61 Apr-99 16828.83 17476.14 May-99 16401.38 16835.18 Jun-99 17221.45 17618.04 LAZARD INTERNATIONAL EQUITY PORTFOLIO The Lazard International Equity Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of relatively large non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD INTERNATIONAL EQUITY PORTFOLIO AND THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA AND FAR EAST INDEX [The following table represents a chart in the printed piece.] CAPITAL INTERNATIONAL LAZARD INTERNATIONAL EUROPE, AUSTRALASIA AND EQUITY PORTFOLIO FAR EAST INDEX ---------------- -------------- 10/29/91 10000 10000 Nov-91 9990 9533.13 Dec-91 10319.15 10025.6 Jan-92 10459.41 9811.65 Feb-92 10569.61 9460.46 Mar-92 10319.15 8835.87 Apr-92 10539.56 8877.43 May-92 11030.47 9471.63 Jun-92 10820.08 9022.68 Jul-92 10198.93 8791.76 Aug-92 10078.7 9343.19 Sep-92 9627.87 9158.69 Oct-92 9457.55 8678.28 Nov-92 9417.48 8759.94 Dec-92 9635.88 8805.25 Jan-93 9554.57 8804.12 Feb-93 9768.02 9070.12 Mar-93 10042.46 9860.73 Apr-93 10266.08 10796.54 May-93 10550.68 11024.56 Jun-93 10428.71 10852.56 Jul-93 10744.82 11232.45 Aug-93 11539.22 11838.81 Sep-93 11203.13 11572.33 Oct-93 11793.84 11928.97 Nov-93 11569.78 10886.26 Dec-93 12627.59 11672.32 Jan-94 13826.8 12659.16 Feb-94 13396.32 12624.09 Mar-94 12842.84 12080.36 Apr-94 13324.57 12592.92 May-94 13242.57 12520.62 Jun-94 12955.58 12697.56 Jul-94 13598.43 12819.68 Aug-94 14217.01 13123.18 Sep-94 13526.27 12709.8 Oct-94 13763.39 13133.04 Nov-94 12938.62 12501.86 Dec-94 12657.4 12580.13 Jan-95 12048.76 12096.8 Feb-95 12127.66 12062.08 Mar-95 12285.46 12814.39 Apr-95 12815.2 13296.34 May-95 12927.91 13137.85 Jun-95 13142.06 12907.41 Jul-95 13976.12 13711.03 Aug-95 13728.15 13187.95 Sep-95 14032.47 13445.51 Oct-95 13807.05 13084.09 Nov-95 13942.3 13448.09 Dec-95 14320.59 13989.92 Jan-96 14400.79 14047.42 Feb-96 14607 14094.9 Mar-96 14962.15 14394.27 Apr-96 15333.92 14812.71 May-96 15230.31 14540.16 Jun-96 15518.11 14622.02 Jul-96 15091.36 14194.62 Aug-96 15114.38 14225.71 Sep-96 15471.23 14603.68 Oct-96 15540.3 14454.29 Nov-96 16357.61 15029.42 Dec-96 16559.83 14836.14 Jan-97 16134.24 14316.88 Feb-97 16535.47 14551.1 Mar-97 16936.7 14603.78 Apr-97 16814.76 14681.32 May-97 17520.06 15636.64 Jun-97 18609.71 16499 Jul-97 19038.22 16765.95 Aug-97 17838.38 15513.87 Sep-97 19344.3 16382.96 Oct-97 18144.47 15123.68 Nov-97 18266.93 14969.51 Dec-97 18520.41 15100.08 Jan-98 18957.91 15790.15 Feb-98 20045 16803.32 Mar-98 21291.19 17320.73 Apr-98 21635.88 17457.83 May-98 22220.05 17373.09 Jun-98 21982.29 17505.12 Jul-98 22248.28 17682.59 Aug-98 19193.59 15491.91 Sep-98 18220.47 15016.96 Oct-98 19605.23 16582.33 Nov-98 20724.69 17431.87 Dec-98 21493.16 18119.39 Jan-99 21409.34 18065.88 Feb-99 20844.13 17635.33 Mar-99 21536.16 18371.56 Apr-99 22537.59 19115.95 May-99 21719.47 18131.5 Jun-99 22651.24 18838.52 PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS. 5 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. GROWTH CHARTS (CONTINUED) - -------------------------------------------------------------------------------- LAZARD INTERNATIONAL SMALL CAP PORTFOLIO The Lazard International Small Cap Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of relatively small non-U.S. companies in the range of the Morgan Stanley Capital International Europe, Australasia and Far East Small Cap Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD INTERNATIONAL SMALL CAP PORTFOLIO AND THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA AND FAR EAST SMALL CAP INDEX [The following table represents a chart in the printed piece.] MORGAN STANLEY LAZARD CAPITAL INTERNATIONAL INTERNATIONAL EUROPE AUSTRALASIA SMALL CAP AND FAR EAST SMALL PORTFOLIO CAP INDEX --------- --------- 12/1/93 10000 10000 Dec-93 10872.5 10854.3 Jan-94 12082.8 12056.9 Feb-94 11882.7 12286.4 Mar-94 11162.6 12009.5 Apr-94 11042.6 12515.7 May-94 10992.5 12357.5 Jun-94 10712.5 12610.7 Jul-94 10912.5 12634.4 Aug-94 11352.6 12761 Sep-94 11002.5 12302.1 Oct-94 11092.6 12476.1 Nov-94 10612.5 11605.9 Dec-94 10382.4 11756.3 Jan-95 10072.3 11305.3 Feb-95 10012.3 11155 Mar-95 9782.3 11384.4 Apr-95 10002.3 11637.6 May-95 10272.4 11368.6 Jun-95 10362.4 11115.4 Jul-95 10752.5 11827.5 Aug-95 10652.5 11495.1 Sep-95 10962.5 11463.5 Oct-95 10532.4 11004.7 Nov-95 10502.4 11139.1 Dec-95 10567.7 11519 Jan-96 10738.7 11867 Feb-96 10829.1 11977.8 Mar-96 10969.9 12215.1 Apr-96 11412.3 12856 May-96 11492.8 12594.8 Jun-96 11533 12579.1 Jul-96 11130.8 11882.8 Aug-96 11482.7 11922.4 Sep-96 11553.1 11977.8 Oct-96 11643.6 11764.2 Nov-96 12186.6 11914.4 Dec-96 12221.4 11503.1 Jan-97 12385.4 11271 Feb-97 12621 11481.2 Mar-97 12426.3 11191.5 Apr-97 11985.8 10818.4 May-97 12556.1 11638 Jun-97 13124 11847.6 Jul-97 13010.4 11430.7 Aug-97 12618 10701.2 Sep-97 13351.2 10475.4 Oct-97 12711 9895.2 Nov-97 12308.2 9205.2 Dec-97 12254.2 8668.5 Jan-98 12526.7 9210.4 Feb-98 13679.8 10035.7 Mar-98 14780.5 10257.6 Apr-98 15440.9 10237.9 May-98 15786.8 10271.2 Jun-98 15314.8 9862.5 Jul-98 15115.7 9727.8 Aug-98 13341.1 8433.4 Sep-98 12315.2 8045.6 Oct-98 12657.5 8690.1 Nov-98 12753.7 9105.3 Dec-98 13179.7 9140.2 Jan-99 12949.1 9025.2 Feb-99 12787.2 8911.3 Mar-99 12996 9393.9 Apr-99 13642.6 10092.2 May-99 13399.8 9726.3 Jun-99 14047 10243.4 LAZARD EMERGING MARKETS PORTFOLIO The Lazard Emerging Markets Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of non-U.S. companies whose principal activities are in emerging market countries that the Investment Manager believes are undervalued based on the their earnings, cash flow or asset values. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD EMERGING MARKETS PORTFOLIO AND THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS (FREE) INDEX [The following table represents a chart in the printed piece.] LAZARD MORGAN STANLEY INTERNATIONAL CAPITAL INTERNATIONAL SMALL CAP EMERGING MARKETS PORTFOLIO (FREE) INDEX --------- --------- 7-15-94 10000 10000 Jul-94 10210 10280 Aug-94 11300 11555.75 Sep-94 11660 11687.48 Oct-94 11580 11477.11 Nov-94 11320 10880.3 Dec-94 9860 10006.61 Jan-95 8640 8941.91 Feb-95 8420 8712.99 Mar-95 8400 8768.76 Apr-95 8650 9162.48 May-95 9160 9649.92 Jun-95 9140 9678.87 Jul-95 9490 9896.16 Aug-95 9370 9663.01 Sep-95 9460 9617.11 Oct-95 9040 9248.96 Nov-95 8920 9084.05 Dec-95 9280.04 9486.93 Jan-96 10163.86 10161.26 Feb-96 10244.2 9999.7 Mar-96 10244.2 10077.6 Apr-96 10897.53 10480.5 May-96 11269.15 10433.65 Jun-96 11168.71 10498.76 Jul-96 10676.56 9781.27 Aug-96 10867.39 10031.67 Sep-96 11168.71 10118.55 Oct-96 11048.18 9848.69 Nov-96 11369.58 10013.75 Dec-96 11472.68 10059.01 Jan-97 12240.26 10745.14 Feb-97 12762.21 11205.35 Mar-97 12639.4 10910.99 Apr-97 12772.44 10930.3 May-97 13189.13 11243.12 Jun-97 14164.56 11844.86 Jul-97 14143.81 12021.7 Aug-97 12597.64 10491.94 Sep-97 13178.75 10782.65 Oct-97 10770 9013.36 Nov-97 10252.45 8684.48 Dec-97 10343.93 8893.76 Jan-98 9781.73 8196.22 Feb-98 10624.99 9051.71 Mar-98 11243.37 9444.52 Apr-98 11175.91 9341.64 May-98 9837.95 8061.45 Jun-98 9276.2 7215.84 Jul-98 9535.01 7444.62 Aug-98 6649.72 5292.08 Sep-98 7088.6 5627.79 Oct-98 7684.75 6220.4 Nov-98 8247.27 6737.74 Dec-98 7914.91 6640.1 Jan-99 7356.11 6532.97 Feb-99 7344.34 6596.51 Mar-99 8404.5 7465.87 Apr-99 9293.28 8389.55 May-99 9020.05 8340.75 Jun-99 10103.36 9287.36 PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS. 6 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. GROWTH CHARTS (CONTINUED) - -------------------------------------------------------------------------------- LAZARD BOND PORTFOLIO The Lazard Bond Portfolio seeks to build and preserve capital. The Portfolio invests in a range of bonds and other fixed-income securities, including mortgage-backed securities, asset backed securities, municipal securities, corporate fixed-income securities and U.S. Government securities. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD BOND PORTFOLIO AND THE LEHMAN INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX [The following table represents a chart in the printed piece.] LEHMAN INTERMEDIATE LAZARD BOND GOVERNMENT/CORPORATE PORTOLIO BOND INDEX -------- ---------- 11-12-91 10000 10000 Nov-91 10103.5 10114.8 Dec-91 10392.2 10361.9 Jan-92 10277.7 10268 Feb-92 10304.8 10308.6 Mar-92 10242.6 10268 Apr-92 10323.3 10358.3 May-92 10467 10518.8 Jun-92 10599.7 10674.6 Jul-92 10810.9 10886.8 Aug-92 10912.9 10995.7 Sep-92 11037.2 11145 Oct-92 10891.4 11000.4 Nov-92 10843.6 10958.6 Dec-92 10983.3 11105.3 Jan-93 11180.9 11321.3 Feb-93 11360.5 11499.8 Mar-93 11383.2 11545.5 Apr-93 11464.6 11638.5 May-93 11409.8 11612.6 Jun-93 11626 11794.9 Jul-93 11713.3 11823.8 Aug-93 11912 12011.3 Sep-93 11901.7 12061.1 Oct-93 11939.3 12093.4 Nov-93 11903.3 12026 Dec-93 11926.3 12081.1 Jan-94 12117.8 12215.3 Feb-94 11910.1 12034.6 Mar-94 11640.6 11836 Apr-94 11494.6 11755.5 May-94 11441.8 11763.3 Jun-94 11434.4 11765 Jul-94 11635.3 11934.3 Aug-94 11648.2 11971.6 Sep-94 11396.7 11861.5 Oct-94 11405.8 11859.9 Nov-94 11369.8 11806 Dec-94 11421.2 11847.8 Jan-95 11608.4 12047.5 Feb-95 11841.2 12297.4 Mar-95 11910.4 12367.7 Apr-95 12070.8 12520.4 May-95 12550.1 12899 Jun-95 12643 12985.4 Jul-95 12573.3 12987.2 Aug-95 12703.9 13105.4 Sep-95 12843.2 13200.4 Oct-95 13022.2 13347.5 Nov-95 13167.2 13522.9 Dec-95 13271.5 13664.6 Jan-96 13387.2 13782.5 Feb-96 13239 13620.7 Mar-96 13151.7 13550.5 Apr-96 13119.8 13502.6 May-96 13108.1 13492.4 Jun-96 13222.8 13635.8 Jul-96 13262.5 13676.3 Aug-96 13303.6 13687.1 Sep-96 13504.5 13877.8 Oct-96 13713 14123 Nov-96 13916.3 14309.2 Dec-96 13850.6 14217.5 Jan-97 13949.5 14272.8 Feb-97 13984.3 14300.1 Mar-97 13876.2 14201.4 Apr-97 14048.2 14368.2 May-97 14187.4 14487.5 Jun-97 14318.8 14619.7 Jul-97 14578.1 14917.2 Aug-97 14531.8 14842.2 Sep-97 14717.4 15014.8 Oct-97 14865.8 15181.1 Nov-97 14894.5 15214.7 Dec-97 15036.6 15336.3 Jan-98 15228 15537.2 Feb-98 15223.1 15525.3 Mar-98 15233.2 15575.1 Apr-98 15303.5 15653.3 May-98 15404.7 15768 Jun-98 15504.8 15868.8 Jul-98 15543.6 15924.6 Aug-98 15627.5 16174.6 Sep-98 15869.7 16580.6 Oct-98 15719 16564.2 Nov-98 15807 16562.9 Dec-98 15905 16629.2 Jan-99 16025.9 16720.5 Feb-99 15745.4 16474.7 Mar-99 15884 16597.7 Apr-99 15942 16648.6 May-99 15787.3 16520.5 Jun-99 15762.1 16532.7 LAZARD HIGH YIELD PORTFOLIO The Lazard High Yield Portfolio seeks maximum total return from a combination of capital appreciation and current income. The Portfolio invests primarily in high-yielding corporate fixed-income securities rated, at the time of purchase, below investment grade ("junk bonds"). COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD HIGH YIELD PORTFOLIO AND THE MERRILL LYNCH HIGH YIELD MASTER II INDEX [The following table represents a chart in the printed piece.] LAZARD MERRILL HIGH YIELD LYNCH HIGH YIELD PORTOLIO MASTER II INDEX -------- --------------- 1-2-98 10000 10000 Jan-98 10222.27 10159.4 Feb-98 10473.66 10200.55 Mar-98 10715.86 10297.45 Apr-98 10848.05 10341.63 May-98 10849.67 10403.78 Jun-98 10878.96 10457.57 Jul-98 10969.26 10524.18 Aug-98 10353.88 9992.92 Sep-98 10147.84 10018.9 Oct-98 9801.8 9805 Nov-98 10227.2 10313.68 Dec-98 10289.99 10295.22 Jan-99 10421.09 10434.1 Feb-99 10484.03 10363.15 Mar-99 10604.11 10483.57 Apr-99 10774.31 10675.42 May-99 10661.83 10577.53 Jun-99 10652.23 10551.3 PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS. 7 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. GROWTH CHARTS (CONTINUED) - -------------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO The Lazard International Fixed-Income Portfolio seeks maximum total return from a combination of capital appreciation and current income. The Portfolio invests primarily in non-U.S. fixed-income securities of varying maturities. The portfolio typically invests more than half of its total assets in corporate bonds, mortgage-related securities and asset-backed securities and typically invests less than half of its total assets in foreign government obligations. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO AND THE SALOMON WORLD GOVERNMENT BOND INDEX EX-US [The following table represents a chart in the printed piece.] LAZARD INTERNATIONAL SALOMON WORLD FIXED-INCOME GOVERNMENT BOND PORTFOLIO INDEX EX-US --------- ----------- 11/8/91 10000 10000 Nov-91 10036.5 10156 Dec-91 10394.5 10684.1 Jan-92 10093 10495 Feb-92 10106.3 10436.2 Mar-92 9966.7 10325.6 Apr-92 10027.9 10398.9 May-92 10311.9 10718.2 Jun-92 10507 11018.3 Jul-92 10664.4 11275 Aug-92 10974.1 11590.7 Sep-92 10958.8 11706.6 Oct-92 10712.4 11388.2 Nov-92 10536 11207.1 Dec-92 10606 11274.4 Jan-93 10780.4 11428.8 Feb-93 10985.4 11656.3 Mar-93 11184.5 11945.3 Apr-93 11550.9 12303.7 May-93 11746.6 12527.6 Jun-93 11625.3 12293.3 Jul-93 11657.8 12302 Aug-93 12045.5 12739.9 Sep-93 12228.8 12955.2 Oct-93 12212.1 12895.6 Nov-93 12132.2 12836.3 Dec-93 12267.5 12978.8 Jan-94 12353.8 13034.6 Feb-94 12323.5 13071.1 Mar-94 12412.5 13230.5 Apr-94 12389.6 13316.5 May-94 12309.3 13136.8 Jun-94 12613.8 13454.7 Jul-94 12603.2 13489.7 Aug-94 12505.1 13411.4 Sep-94 12749 13677 Oct-94 13068.7 14029.8 Nov-94 12838.6 13747.8 Dec-94 12779.1 13754.7 Jan-95 12966.2 14054.6 Feb-95 13374.6 14452.3 Mar-95 14465.5 15740.2 Apr-95 14872.2 16077.1 May-95 15226.3 16428.3 Jun-95 15311.4 16509.9 Jul-95 15316 16597.4 Aug-95 14508.6 15648.4 Sep-95 14894.1 16110 Oct-95 14998.8 16161.5 Nov-95 15108.8 16302.9 Dec-95 15255.6 16444.6 Jan-96 14986.2 16081.1 Feb-96 15010.8 16127.2 Mar-96 15014.5 16166.9 Apr-96 15035.6 16134.5 May-96 15090.4 16143.4 Jun-96 15176.4 16233.8 Jul-96 15569.4 16681.9 Aug-96 15659.9 16793.6 Sep-96 15684.6 16761.7 Oct-96 15935.7 17045 Nov-96 16132.2 17240.3 Dec-96 16097.2 17118.3 Jan-97 15456.4 16422.6 Feb-97 15337.2 16232.1 Mar-97 15190.8 16128.2 Apr-97 14886.4 15800.8 May-97 15387 16382.3 Jun-97 15580.3 16583.8 Jul-97 15203.7 16151 Aug-97 15175 16223.6 Sep-97 15550 16617.9 Oct-97 15729 16990.1 Nov-97 15405.9 16555.2 Dec-97 15199.7 16388 Jan-98 15267.3 16499.4 Feb-98 15514.1 16732 Mar-98 15269.2 16456 Apr-98 15603.6 16818 May-98 15492 16791.1 Jun-98 15459.5 16730.6 Jul-98 15507.4 16750.7 Aug-98 15443.8 17209.7 Sep-98 16339.5 18338.6 Oct-98 16949 19165.7 Nov-98 16740.5 18775.2 Dec-98 17205.9 19304 Jan-99 17076.9 19001.1 Feb-99 16482.8 18334.8 Mar-99 16530.6 18370 Apr-99 16514.2 18342.3 May-99 16192.2 17972.6 Jun-99 15853.3 17544.8 LAZARD STRATEGIC YIELD PORTFOLIO The Lazard Strategic Yield Portfolio seeks total return from a combination of capital appreciation and current income. The Portfolio invests in a wide variety of U.S. and non-U.S. fixed-income securities. The Portfolio typically invests approximately half of its total assets in investment grade corporate bonds, mortgage-related securities and asset-backed securities. The Portfolio typically invests approximately half of its total assets in fixed-income securities rated below investment grade ("junk bonds"), emerging markets securities, structured notes, and local currency-denominated bonds. Structured notes are securities that provide cash flows based on the movements of underlying variables, such as exchange rates or interest rates. COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE LAZARD STRATEGIC YIELD PORTFOLIO AND THE ONE MONTH LIBOR USD FIXED INDEX [The following table represents a chart in the printed piece.] LAZARD ONE MONTH STRATEGIC LIBOR USD YIELD PORTOLIO FIXED INDEX -------------- ----------- 10/1/91 10000 10000 Oct-91 10359.7 10041.8 Nov-91 10493.2 10084.2 Dec-91 10212.9 10119.7 Jan-92 10133.8 10154.3 Feb-92 10298.7 10189.6 Mar-92 10421.4 10225 Apr-92 10420.1 10257.9 May-92 10536.4 10291.5 Jun-92 10640.3 10324.6 Jul-92 10841.5 10353.1 Aug-92 10955.8 10382.7 Sep-92 11071.4 10409.8 Oct-92 10596.5 10437.6 Nov-92 10594 10473.9 Dec-92 10821.1 10502.3 Jan-93 11106.5 10529.2 Feb-93 11322.1 10556.8 Mar-93 11506 10584.3 Apr-93 11516.1 10611.5 May-93 11617.2 10639.8 Jun-93 11928 10667.6 Jul-93 12086 10695.4 Aug-93 12184.6 10723.4 Sep-93 12172.4 10751.5 Oct-93 12354.4 10779.6 Nov-93 12391.5 10811.1 Dec-93 12508.8 10840 Jan-94 12759.9 10867.8 Feb-94 12574.3 10899.6 Mar-94 12322 10932.5 Apr-94 12151.3 10968.3 May-94 12146.9 11007.6 Jun-94 12057 11048.6 Jul-94 12191.7 11089.2 Aug-94 12357.7 11133.3 Sep-94 12288.5 11179.1 Oct-94 12258.6 11225.2 Nov-94 12315.9 11280.3 Dec-94 12216.5 11335.2 Jan-95 12206.5 11391.2 Feb-95 12267.8 11447.8 Mar-95 12329.6 11504.7 Apr-95 12613.8 11561.3 May-95 12959.5 11618.1 Jun-95 13033.5 11675.8 Jul-95 13135.4 11731.6 Aug-95 13276.8 11787.6 Sep-95 13399.8 11843.8 Oct-95 13492.7 11899.9 Nov-95 13663.8 11957.6 Dec-95 13873.3 12012.9 Jan-96 14155.6 12066 Feb-96 14102.5 12118.2 Mar-96 14205.9 12171.8 Apr-96 14340.3 12225 May-96 14478.1 12279.1 Jun-96 14643 12333.7 Jul-96 14732.3 12388.2 Aug-96 14891.4 12443 Sep-96 15216.8 12498 Oct-96 15387 12552.6 Nov-96 15619.5 12609.4 Dec-96 15780.6 12665.8 Jan-97 15977.1 12721.8 Feb-97 16135.3 12778.1 Mar-97 16052.2 12837.1 Apr-97 16140.6 12896.4 May-97 16338.9 12956 Jun-97 16499.2 13015.8 Jul-97 16611.4 13075.3 Aug-97 16526.9 13135.4 Sep-97 16702.1 13195.8 Oct-97 16487.4 13256.1 Nov-97 16582.4 13320.3 Dec-97 16618.3 13382.2 Jan-98 16761.2 13443.4 Feb-98 16926.1 13505.5 Mar-98 17145.9 13567.9 Apr-98 17241.6 13630.2 May-98 17234.2 13692.9 Jun-98 17199.7 13755.8 Jul-98 17423.3 13819 Aug-98 16550.4 13882.5 Sep-98 16550.4 13942.9 Oct-98 16326.3 14002.5 Nov-98 16644.7 14066.5 Dec-98 16742.1 14124.4 Jan-99 16901.1 14181.2 Feb-99 16942.3 14238.3 Mar-99 17112.6 14295.6 Apr-99 17341 14352.6 May-99 17191.9 14410.3 Jun-99 17301.1 14469.4 PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS. 8 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PERFORMANCE TABLE - --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 1999 ----------------------------------------------------------------- INSTITUTIONAL SHARES ----------------------------------------------------------------- ONE THREE FIVE TEN SINCE YEAR YEAR YEAR YEAR INCEPTION* ------------------------------------------------------------------ Lazard Equity Portfolio 14.95% 21.17% 22.97% 16.35% 15.31% Standard & Poor's 500 Stock Index** 22.75% 29.11% 27.87% 18.78% 16.89% Lazard Mid Cap Portfolio 7.55% -- -- -- 10.18% Russell Midcap Index** 11.31% -- -- -- 14.59% Lazard Small Cap Portfolio (4.17%) 11.47% 14.30% -- 16.56% Russell 2000 Index** 1.50% 11.22% 15.40% -- 14.25% Lazard Bantam Value Portfolio (2.37%) 13.98% -- -- 18.13% Russell 2000 Index** 1.50% 11.22% -- -- 12.38% Lazard Global Equity Portfolio 9.14% 17.82% -- -- 16.87% MSCI World Index** 15.67% 18.29% -- -- 17.62% Lazard International Equity Portfolio 3.04% 13.44% 11.82% -- 11.26% MSCI EAFE Index** 7.62% 8.81% 8.21% -- 8.61% Lazard International Small Cap Portfolio (8.28%) 6.79% 5.57% -- 6.28% MSCI EAFE Small Cap Index** 3.86% (6.62%) (4.07%) -- 0.43% Lazard Emerging Markets Portfolio 8.92% (3.29%) -- -- 0.21% MSCI Emerging Markets (Free) Index** 28.71% (4.00%) -- -- (1.47%) Lazard Bond Portfolio 1.66% 6.03% 6.63% -- 6.12% Lehman Intermediate Gov't/Corp. Bond Index** 4.18% 6.63% 7.04% -- 6.78% Lazard High Yield Portfolio (2.09%) -- -- -- 4.32% Merrill Lynch High Yield Master II Index** 0.90% -- -- -- 3.67% Lazard International Fixed-Income Portfolio+ 2.54% 1.46% 4.68% -- 6.20% Salomon World Government Bond Index Ex-US+** 4.87% 2.62% 5.45% -- 7.61% Lazard Strategic Yield Portfolio 0.59% 5.72% 7.49% -- 7.33% One Month LIBOR USD Fixed Index** 5.19% 5.47% 5.54% -- 4.88%
NOTES TO PERFORMANCE TABLE * Performance is measured for Lazard Equity Portfolio from: June 1, 1987--Institutional, February 5, 1997--Open; Lazard Mid Cap Portfolio from: November 4, 1997--Institutional, November 4, 1997--Open; Lazard Small Cap Portfolio from: October 30, 1991--Institutional, January 30, 1997--Open; Lazard Bantam Value Portfolio from: March 1, 1996--Institutional, January 23, 1997--Open; Lazard Global Equity Portfolio from: January 4, 1996--Institutional, January 30, 1997--Open; Lazard International Equity Portfolio from: October 29, 1991--Institutional, January 23, 1997--Open; Lazard International Small Cap Portfolio from: December 1, 1993--Institutional, February 13, 1997--Open; Lazard Emerging Markets Portfolio from: July 15, 1994--Institutional, January 8, 1997--Open; Lazard Bond Portfolio from: November 12, 1991--Institutional, March 5, 1997--Open; Lazard High Yield Portfolio from: January 2, 1998--Institutional, February 24, 1998--Open; Lazard International Fixed-Income Portfolio from: November 8, 1991--Institutional, January 8, 1997--Open; Lazard Strategic Yield Portfolio from: October 1, 1991--Institutional, January 23, 1997--Open. The performance for the relevant index is for the comparable period. Portfolio returns are net of fees and assume reinvestment of all dividends and distributions, if any. Certain expenses of a Portfolio may have been waived and/or reimbursed by the Investment Manager and/or the Administrator; without such waiver/reimbursement of expenses the Portfolio's total return would have been lower. Past performance is not indicative, nor a guarantee, of future results; the investment return and principal value of each Portfolio of The Lazard Funds, Inc. will fluctuate, so that an investor's shares in a 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. +Effective January 1, 1993 the Portfolio is measured by the index "excluding U.S." Performance of the index "Since Inception" is a blended return of the index "including U.S." and the index "excluding U.S." for the applicable periods. See additional footnotes on next page. 9 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PERFORMANCE TABLE (CONTINUED) - --------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 1999 ----------------------------------------------------------------------------- INSTITUTIONAL SHARES ----------------------------------------------------------------------------- ONE THREE FIVE TEN SINCE YTD YEAR YEAR YEAR YEAR INCEPTION* ----------- ----------- ------------- ------------ ------------ ------------- Lazard Equity Portfolio 10.90% 14.95% 77.90% 181.22% 354.46% 458.84% Standard & Poor's 500 Stock Index** 12.38% 22.75% 115.21% 241.86% 458.90% 558.95% Lazard Mid Cap Portfolio 10.23% 7.55% -- -- -- 17.39% Russell Midcap Index** 10.34% 11.31% -- -- -- 25.24% Lazard Small Cap Portfolio 10.98% (4.17%) 38.51% 95.06% -- 223.77% Russell 2000 Index** 9.28% 1.50% 37.56% 104.62% -- 177.63% Lazard Bantam Value Portfolio 13.29% (2.37%) 48.08% -- -- 74.30% Russell 2000 Index** 9.28% 1.50% 37.56% -- -- 47.38% Lazard Global Equity Portfolio 10.20% 9.14% 63.54% -- -- 72.21% MSCI World Index** 8.51% 15.67% 65.52% -- -- 76.18% Lazard International Equity Portfolio 5.38% 3.04% 45.96% 74.83% -- 126.51% MSCI EAFE Index** 3.97% 7.62% 28.84% 48.36% -- 88.39% Lazard International Small Cap Portfolio 6.58% (8.28%) 21.80% 31.13% -- 40.47% MSCI EAFE Small Cap Index** 12.07% 3.86% (18.57%) (18.77%) -- 2.43% Lazard Emerging Markets Portfolio 27.67% 8.92% (9.54%) -- -- 1.03% MSCI Emerging Markets (Free) Index** 39.87% 28.71% (11.54%) -- -- (7.13%) Lazard Bond Portfolio (0.90%) 1.66% 19.21% 37.85% -- 57.62% Lehman Intermediate Gov't/Corp. Bond Index** (0.58%) 4.18% 21.24% 40.52% -- 65.33% Lazard High Yield Portfolio 3.51% (2.09%) -- -- -- 6.52% Merrill Lynch High Yield Master II Index** 2.49% 0.90% -- -- -- 5.51% Lazard International Fixed-Income Portfolio+ (7.86%) 2.54% 4.46% 25.68% -- 58.53% Salomon World Government Bond Index Ex-US+** (9.11%) 4.87% 8.08% 30.40% -- 75.45% Lazard Strategic Yield Portfolio 3.34% 0.59% 18.15% 43.49% -- 73.01% One Month LIBOR USD Fixed Index** 2.44% 5.19% 17.32% 30.96% -- 44.69%
** The performance data of the indices have been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to their accuracy. These indices are unmanaged and have no fees or costs. The S&P 500 Stock 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 500 stocks representing all major industries. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index. The Russell 2000 Index is composed of 2,000 common stocks of U.S. companies. The Morgan Stanley Capital International (MSCI) World Index is an arithmetic, market value-weighted average return net of dividends taxation, which is derived from equities of EAFE Index countries plus equities from Canada and the United States. The Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East Index (EAFE Index) is a broadly diversified international index composed of the equity securities of approximately 1,000 companies located outside the United States. The MSCI EAFE Small Cap Index is an arithmetic, market value-weighted average of the performance of securities listed on the stock exchanges of EAFE Index countries. The MSCI Emerging Markets (Free) Index is comprised of emerging market securities in countries open to non-local investors. The Lehman Intermediate Gov't/Corp. Bond Index is an index calculated by Lehman Brothers. 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 Salomon World Government Bond Index Ex-US is a market capitalization-weighted index of institutionally traded fixed rate non-U.S. dollar government bonds, fully hedged into U.S. dollars. The One Month London Interbank Offered Rate USD Fixed Index (LIBOR) is an average derived from sixteen quotations provided by banks determined by the British Bankers Association. See additional footnotes on next page. 10 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PERFORMANCE TABLE (CONTINUED) - --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR CUMULATIVE TOTAL RETURNS FOR PERIODS ENDED JUNE 30,1999 PERIODS ENDED JUNE 30, 1999 ---------------------------------------------------------------------- OPEN SHARES ---------------------------------------------------------------------- ONE SINCE ONE SINCE YEAR INCEPTION* YTD YEAR INCEPTION* ----------- ------------ ----------- ----------- ------------- Lazard Equity Portfolio 14.63% 19.73% 10.71% 14.63% 53.98% Standard & Poor's 500 Stock Index** 22.75% 30.06% 12.38% 22.75% 87.78% Lazard Mid Cap Portfolio 7.13% 9.83% 9.95% 7.13% 16.79% Russell Midcap Index** 11.31% 14.59% 10.34% 11.31% 25.23% Lazard Small Cap Portfolio (4.47%) 8.33% 10.84% (4.47%) 21.30% Russell 2000 Index** 1.50% 10.68% 9.28% 1.50% 27.76% Lazard Bantam Value Portfolio (2.67%) 9.29% 13.05% (2.67%) 24.17% Russell 2000 Index** 1.50% 10.45% 9.28% 1.50% 27.39% Lazard Global Equity Portfolio 8.89% 18.27% 10.03% 8.89% 50.02% MSCI World Index** 15.67% 19.68% 8.51% 15.67% 54.36% Lazard International Equity Portfolio 2.75% 14.47% 5.19% 2.75% 38.97% MSCI EAFE Index** 7.62% 11.86% 3.97% 7.62% 31.38% Lazard International Small Cap Portfolio (8.53%) 4.25% 6.41% (8.53%) 10.39% MSCI EAFE Small Cap Index** 3.86% (3.71%) 12.07% 3.86% (8.59%) Lazard Emerging Markets Portfolio 9.10% (5.91%) 27.40% 9.10% (13.99%) MSCI Emerging Markets (Free) Index** 28.71% (3.64%) 39.87% 28.71% (8.77%) Lazard Bond Portfolio 1.40% 4.97% (0.98%) 1.40% 11.92% Lehman Intermediate Gov't/Corp. Bond Index** 4.18% 6.49% (0.58%) 4.18% 15.72% Lazard High Yield Portfolio (2.26%) 0.75% 3.33% (2.26%) 1.01% Merrill Lynch High Yield Master II Index** 0.90% 2.47% 2.49% 0.90% 3.33% Lazard International Fixed-Income Portfolio 2.23% (0.44%) (7.97%) 2.23% (1.08%) Salomon World Government Bond Index Ex-US** 4.87% 1.42% (9.11%) 4.87% 3.55% Lazard Strategic Yield Portfolio 0.21% 2.94% 3.03% 0.21% 7.31% One Month LIBOR USD Fixed Index** 5.19% 5.48% 2.44% 5.19% 13.88% This performance data is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
11 - ---------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS JUNE 30, 1999 (UNAUDITED) - ---------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD EQUITY PORTFOLIO COMMON STOCKS--99.1% AEROSPACE & DEFENSE--5.5% AlliedSignal, Inc. ....................... 140,600 $ 8,857,800 British Aerospace PLC ADR ................ 135,800 3,615,675 Gulfstream Aerospace Corp. (a) ........... 103,000 6,958,937 Raytheon Co. ............................. 31,600 2,223,850 United Technologies Corp. ................ 124,400 8,917,925 ------------ 30,574,187 ------------ ALUMINUM--0.3% Alcoa, Inc. .............................. 26,400 1,633,500 ------------ AUTOMOTIVE--2.4% Ford Motor Co. ........................... 64,900 3,662,794 General Motors Corp. ..................... 144,300 9,523,800 ------------ 13,186,594 ------------ AUTO PARTS--0.3% Delphi Automotive Systems Corp. .......... 100,855 1,872,121 ------------ BANKING & FINANCIAL SERVICES--19.1% Bank One Corp. ........................... 161,200 9,601,475 BankAmerica Corp. ........................ 156,350 11,462,409 Chase Manhattan Corp. .................... 169,524 14,685,017 Citigroup, Inc. .......................... 195,524 9,287,366 Comerica, Inc. ........................... 34,700 2,062,481 Federal National Mortgage Association..... 110,800 7,575,950 First Union Corp. ........................ 120,600 5,668,200 Fleet Financial Group, Inc. .............. 189,200 8,395,750 Goldman Sachs Group, Inc. (a) ............ 28,000 2,023,000 Mellon Bank Corp. ........................ 259,800 9,450,225 Morgan Stanley Dean Witter & Co. ......... 78,100 8,005,250 The Hartford Financial Services Group, Inc. ............................. 124,400 7,254,075 Washington Mutual, Inc. .................. 196,000 6,933,500 Wells Fargo Co. .......................... 100,200 4,283,550 ------------ 106,688,248 ------------ CHEMICALS & PLASTICS--0.8% Du Pont (E.I.) de Nemours & Co. .......... 66,000 4,508,625 ------------ COMPUTERS & BUSINESS EQUIPMENT--6.9% Compaq Computer Corp. .................... 168,400 3,988,975 Hewlett-Packard Co. ...................... 115,800 11,637,900 International Business Machines Corp. ................................... 116,800 15,096,400 NCR Corp. (a) ............................ 56,600 2,762,787 Xerox Corp. .............................. 88,300 5,215,219 ------------ 38,701,281 ------------ DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- CONGLOMERATES--2.1% Philip Morris Companies, Inc. ............ 285,500 $ 11,473,531 ------------ DIVERSIFIED--2.5% Minnesota Mining & Manufacturing Co. ..................... 84,300 7,328,832 PPG Industries, Inc. ..................... 70,500 4,163,906 Seagram Companies, Ltd. .................. 43,400 2,186,275 ------------ 13,679,013 ------------ DRUGS & HEALTH CARE--7.6% American Home Products Corp. ............. 224,000 12,880,000 Amgen, Inc. (a) .......................... 105,000 6,391,875 Baxter International, Inc. ............... 64,400 3,904,250 Bristol-Myers Squibb Co. ................. 159,700 11,248,869 Merck & Company, Inc. .................... 106,200 7,858,800 ------------ 42,283,794 ------------ ELECTRONICS--3.9% Intel Corp. .............................. 94,800 5,640,600 Motorola, Inc. ........................... 85,200 8,072,700 Texas Instruments, Inc. .................. 55,600 8,062,000 ------------ 21,775,300 ------------ ENERGY--1.9% Mobil Corp. .............................. 105,600 10,454,400 ------------ FOOD & BEVERAGES--6.6% Diageo PLC ADR ........................... 143,572 6,173,596 H.J. Heinz Co. ........................... 75,000 3,759,375 Heineken NV ADR .......................... 71,150 3,643,058 Hershey Foods Corp. ...................... 74,200 4,405,625 PepsiCo, Inc. ............................ 218,700 8,460,956 Ralston Purina Group ..................... 145,500 4,428,656 Unilever NV ADR .......................... 83,303 5,810,384 ------------ 36,681,650 ------------ HOTELS & RESTAURANTS--1.1% McDonald's Corp. ......................... 147,600 6,097,725 ------------ HOUSEHOLD PRODUCTS--2.2% Colgate-Palmolive Co. .................... 40,600 4,009,250 Procter & Gamble Co. ..................... 95,000 8,478,750 ------------ 12,488,000 ------------ INDUSTRIAL & MACHINERY--1.9% Ingersoll-Rand Co. ....................... 165,300 10,682,512 ------------ INSURANCE--4.1% Aetna, Inc. .............................. 96,600 8,639,663 Allstate Corp. ........................... 224,798 8,064,628 UNUM Corp. ............................... 111,900 6,126,525 ------------ 22,830,816 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 12 - ---------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - ----------------------------------------------------------------------------
DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD EQUITY PORTFOLIO (CONTINUED) MULTIMEDIA--1.2% Gannett Company, Inc. .................... 93,600 $6,680,700 ---------- OIL & GAS--2.8% Chevron Corp. ............................ 60,400 5,749,325 Exxon Corp. .............................. 60,600 4,673,775 Texaco, Inc. ............................. 86,100 5,381,250 ---------- 15,804,350 ---------- PAPER PRODUCTS--1.5% International Paper Co. .................. 89,500 4,519,750 Kimberly-Clark Corp. ..................... 70,212 4,002,084 ---------- 8,521,834 ---------- PHOTOGRAPHY--1.0% Eastman Kodak Co. ........................ 86,200 5,840,050 ---------- PUBLISHING--1.2% New York Times Co. ....................... 185,400 6,825,038 ---------- RETAIL--6.2% Albertsons, Inc. ......................... 79,261 4,086,895 AutoNation, Inc. (a) ..................... 188,900 3,364,781 Federated Department Stores, Inc. (a) ..................................... 155,000 8,205,312 Office Depot, Inc. (a) ................... 249,150 5,496,872 Sears, Roebuck & Co. ..................... 88,300 3,934,869 TJX Companies, Inc. ...................... 111,400 3,711,013 Toys "R" Us, Inc. (a) .................... 286,100 5,918,694 ---------- 34,718,436 ---------- SERVICES--1.5% First Data Corp. ......................... 176,600 8,642,363 ---------- TELECOMMUNICATIONS--10.6% Ameritech Corp. .......................... 200,000 14,700,000 AT&T Corp. ............................... 238,300 13,300,119 Bell Atlantic Corp. ...................... 344,900 22,547,837 SBC Communications, Inc. ................. 152,100 8,821,800 ---------- 59,369,756 ---------- TRANSPORTATION--0.6% Burlington Northern Santa Fe Corp. ....... 100,600 3,118,600 ---------- UTILITIES--3.3% Consolidated Edison, Inc. ................ 110,700 5,009,175 Entergy Corp. ............................ 100,400 3,137,500 FPL Group, Inc. .......................... 103,800 5,670,075 Southern Co. ............................. 175,000 4,637,500 ---------- 18,454,250 ---------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- TOTAL COMMON STOCKS (Identified cost $438,009,585)........... $ 553,586,674 ------------- REPURCHASE AGREEMENT--3.4% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $18,760,000 United States Treasury Note, 6.500%, 05/31/01, with a value of $19,135,200) (Identified cost $18,757,000)............ $18,757 18,757,000 ------------- TOTAL INVESTMENTS (Identified cost $456,766,585) (b) ....... 102.5% $572,343,674 LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ............................. (2.5) (13,970,305) ------- ------------- NET ASSETS ................................ 100.0% $558,373,369 ======= ============= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 13 - ---------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - ---------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD MID CAP PORTFOLIO COMMON STOCKS--97.7% ADVERTISING AGENCIES--2.3% Young & Rubicam, Inc. .................... 34,000 $ 1,544,875 ----------- AEROSPACE & DEFENSE--5.2% Gulfstream Aerospace Corp. (a) ........... 26,100 1,763,381 Litton Industries, Inc. (a) .............. 23,700 1,700,475 ----------- 3,463,856 ----------- APPAREL & TEXTILES--2.1% Polo Ralph Lauren Corp., Class A (a) 33,300 632,700 Warnaco Group, Inc., Class A ............. 29,600 791,800 ----------- 1,424,500 ----------- AUTO PARTS--2.0% Borg-Warner Automotive, Inc. ............. 24,700 1,358,500 ----------- BANKING & FINANCIAL SERVICES--12.8% Comerica, Inc. ........................... 15,200 903,450 Franklin Resources, Inc. ................. 21,600 877,500 Heller Financial, Inc. ................... 37,100 1,031,844 Hibernia Corp., Class A .................. 64,200 1,007,138 North Fork Bancorporation, Inc. .......... 66,750 1,422,609 SouthTrust Corp. ......................... 33,900 1,300,912 Sovereign Bancorp, Inc. .................. 83,600 1,013,650 The CIT Group, Inc., Class A ............. 35,200 1,016,400 ----------- 8,573,503 ----------- BROADCASTING--2.2% King World Productions, Inc. (a) ......... 42,000 1,462,125 ----------- COMMERCIAL SERVICES--1.8% Gartner Group, Inc., Class A (a) ......... 58,700 1,203,350 ----------- COMPUTERS & BUSINESS EQUIPMENT--5.0% 3Com Corp. (a) ........................... 27,100 723,231 NCR Corp. (a) ............................ 16,700 815,169 Quantum Corp. (a) ........................ 36,300 875,738 Seagate Technology, Inc. (a) ............. 35,800 917,375 ----------- 3,331,513 ----------- DIVERSIFIED--0.9% SPX Corp. (a) ............................ 7,500 626,250 ----------- DRUGS & HEALTH CARE--1.3% Watson Pharmaceuticals, Inc. (a) ......... 24,500 859,031 ----------- ELECTRONICS--3.0% Tektronix, Inc. .......................... 45,100 1,361,456 Thomas & Betts Corp. ..................... 14,100 666,225 ----------- 2,027,681 ----------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- ENERGY--1.4% Noble Affiliates, Inc. ................... 33,600 $ 947,100 ----------- FOOD & BEVERAGES--5.6% Hershey Foods Corp. ...................... 21,600 1,282,500 Ralston Purina Group ..................... 44,300 1,348,381 Whitman Corp. ............................ 62,000 1,116,000 ----------- 3,746,881 ----------- GAS & PIPELINE UTILITIES--1.1% Cooper Cameron Corp. (a) ................. 19,900 737,544 ----------- HOMEBUILDERS--2.0% Lennar Corp. ............................. 56,600 1,358,400 ----------- HOTELS & RESTAURANTS--3.2% Hilton Hotels Corp. ...................... 65,600 930,700 Tricon Global Restaurants, Inc. (a) ...... 22,200 1,201,575 ----------- 2,132,275 ----------- HOUSEHOLD APPLIANCES & HOME FURNISHINGS--3.9% Black & Decker Corp. ..................... 2,700 170,438 Ethan Allen Interiors, Inc. .............. 31,050 1,172,137 Maytag Corp. ............................. 11,700 815,344 Whirlpool Corp. .......................... 6,200 458,800 ----------- 2,616,719 ----------- HOUSEHOLD PRODUCTS--0.9% Dial Corp. ............................... 16,400 609,875 ----------- INDUSTRIAL & MACHINERY--1.3% Ingersoll-Rand Co. ....................... 13,500 872,438 ----------- INSURANCE--10.3% Ace, Ltd. ................................ 51,400 1,452,050 Ambac Financial Group, Inc. .............. 25,700 1,468,112 American Bankers Insurance Group, Inc. .................................... 13,600 740,350 Everest Reinsurance Holdings ............. 32,600 1,063,575 Hartford Life, Inc., Class A ............. 27,800 1,462,975 Protective Life Corp. .................... 20,900 710,600 ----------- 6,897,662 ----------- OIL & GAS--1.7% Enron Oil & Gas Co. ...................... 54,400 1,101,600 ----------- PUBLISHING--4.6% New York Times Co. ....................... 42,700 1,571,894 Tribune Co. .............................. 17,700 1,542,112 ----------- 3,114,006 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 14 - ---------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - ---------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD MID CAP PORTFOLIO (CONTINUED) RETAIL--8.5% Borders Group, Inc. (a) .................. 43,000 $ 679,938 Consolidated Stores Corp. (a) ............ 33,300 899,100 Saks, Inc. (a) ........................... 32,500 938,437 Tandy Corp. .............................. 22,000 1,075,250 TJX Companies, Inc. ...................... 28,300 942,744 Toys "R" Us, Inc. (a) .................... 29,900 618,556 Venator Group, Inc. (a) .................. 53,000 553,188 ---------- 5,707,213 ---------- TELEPHONE--2.6% Cincinnati Bell, Inc. .................... 70,900 1,768,069 ---------- TRANSPORTATION--1.7% CNF Transportation, Inc. ................. 30,300 1,162,763 ---------- UTILITIES--7.7% Entergy Corp. ............................ 34,500 1,078,125 Midamerican Energy Holdings Co. .......... 40,300 1,395,387 Niagara Mohawk Power Corp. (a) ........... 90,100 1,447,231 NiSource, Inc. ........................... 47,100 1,215,769 ---------- 5,136,512 ---------- WASTE MANAGEMENT--2.6% Republic Services, Inc., Class A (a) ..... 71,600 1,772,100 ---------- TOTAL COMMON STOCKS (Identified cost $59,267,506)............. 65,556,341 ---------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- REPURCHASE AGREEMENT--2.7% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $1,845,000 United States Treasury Note, 5.500%, 12/31/00, with a value of $1,841,253) (Identified cost $1,804,000).............................. $1,804 $ 1,804,000 ----------- TOTAL INVESTMENTS (Identified cost $61,071,506) (b)........ 100.4% $67,360,341 LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ............................. (0.4) (245,953) ------ ----------- NET ASSETS ................................ 100.0% $67,114,388 ====== =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 15 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD SMALL CAP PORTFOLIO COMMON STOCKS--91.7% AEROSPACE & DEFENSE--0.9% AAR Corp. .............................. 232,600 $5,277,113 Aviation Sales Co. (a) ................. 152,500 6,023,750 ---------- 11,300,863 ---------- APPAREL & TEXTILES--2.0% Nautica Enterprises, Inc. (a) .......... 483,500 8,159,063 Stride Rite Corp. ...................... 813,700 8,391,281 The Timberland Co., Class A (a) ........ 116,600 7,936,088 ---------- 24,486,432 ---------- AUTO PARTS--5.1% Borg-Warner Automotive, Inc. ........... 187,800 10,329,000 Dura Automotive Systems, Inc. (a) ...... 418,357 13,910,370 Pennzoil-Quaker State Co. .............. 220,300 3,304,500 Superior Industries International, Inc. 477,100 13,030,794 Tower Automotive, Inc. (a) ............. 820,100 20,861,294 ---------- 61,435,958 ---------- BANKING & FINANCIAL SERVICES--5.7% Bancorp Queens County, Inc. ............ 334,045 10,814,707 Coast Federal Trust (a) ................ 301,500 320,344 Cullen/Frost Bankers, Inc. ............. 413,000 11,383,312 Eaton Vance Corp. ...................... 82,900 2,854,869 Enhance Financial Services Group, Inc. .................................. 450,900 8,905,275 Hudson United Bancorp .................. 432,025 13,230,765 Independence Community Bank Corp. ................................. 529,900 7,153,650 Southwest Bancorporation of Texas, Inc. (a) .............................. 390,000 7,020,000 Staten Island Bancorp, Inc. ............ 379,700 6,834,600 ---------- 68,517,522 ---------- BUILDING & CONSTRUCTION--1.1% Apogee Enterprises, Inc. ............... 982,700 13,205,031 ---------- BUSINESS SERVICESS AND SUPPLIES--1.6% CDI Corp. (a) .......................... 386,100 13,151,531 HA-LO Industries, Inc. (a) ............. 562,500 5,554,688 United Stationers, Inc. (a) ............ 20,400 450,075 ---------- 19,156,294 ---------- CHEMICALS & PLASTICS--1.7% Ferro Corp. ............................ 290,400 7,986,000 H.B. Fuller Co. ........................ 179,600 12,280,150 ---------- 20,266,150 ---------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- COAL--0.1% CONSOL Energy, Inc. (a) ................ 58,500 $ 702,000 ---------- COMMERCIAL SERVICES--2.6% Inacom Corp. (a) ....................... 880,000 11,110,000 Nielsen Media Research, Inc. ........... 304,733 8,913,440 Pittston Brink's Group ................. 449,200 12,016,100 ---------- 32,039,540 ---------- COMPUTERS & BUSINESS EQUIPMENT--2.5% Bell & Howell Co. (a) .................. 598,700 22,638,343 Data General Corp. (a) ................. 122,300 1,780,994 Sequent Computer Systems, Inc. (a) ..... 357,500 6,345,625 ---------- 30,764,962 ---------- DRUGS & HEALTH CARE--2.4% Apria Healthcare Group, Inc. (a) ....... 634,900 10,793,300 Perrigo Co. (a) ........................ 835,320 6,369,315 West Pharmaceutical Services, Inc. ..... 305,100 11,975,175 ---------- 29,137,790 ---------- ELECTRICAL EQUIPMENT--2.4% Anixter International, Inc. (a) ........ 703,300 12,835,225 Belden, Inc. ........................... 353,920 8,471,960 MagneTek, Inc. (a) ..................... 731,700 7,728,581 ---------- 29,035,766 ---------- ELECTRONICS--6.7% AMETEK, Inc. ........................... 733,100 16,861,300 Credence Systems Corp. (a) ............. 700,000 25,987,500 Kemet Corp. (a) ........................ 1,230,200 28,217,713 Tektronix, Inc. ........................ 313,900 9,475,856 ---------- 80,542,369 ---------- FOOD & BEVERAGES--3.2% American Italian Pasta Co., Class A (a) ........................... 371,600 11,287,350 Aurora Foods, Inc. (a) ................. 483,800 8,466,500 Lance, Inc. ............................ 565,600 8,837,500 Ralcorp Holdings, Inc. (a) ............. 602,100 9,671,231 ---------- 38,262,581 ---------- GAS EXPLORATION--1.7% Barrett Resources Corp. (a) ............ 532,800 20,446,200 ---------- HOMEBUILDERS--3.3% Kaufman & Broad Home Corp. ............. 424,700 10,564,413 Lennar Corp. ........................... 509,600 12,230,400 Toll Brothers, Inc. (a) ................ 801,500 17,182,156 ---------- 39,976,969 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 16 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD SMALL CAP PORTFOLIO (CONTINUED) HOTELS & RESTAURANTS--1.6% CKE Restaurants, Inc. .................. 385,000 $6,256,250 Lone Star Steakhouse & Saloon, Inc. (a) ...................... 624,400 6,068,388 Morton's Restaurant Group, Inc. (a) .... 356,900 6,803,406 ---------- 19,128,044 ---------- HOUSEHOLD APPLIANCES & HOME FURNISHINGS--3.6% Bassett Furniture Industries, Inc. ..... 322,900 7,386,337 Bush Industries, Inc., Class A ......... 466,600 7,757,225 Furniture Brands International, Inc. (a) .............................. 604,800 16,858,800 Harman International Industries, Inc. 274,100 12,060,400 ---------- 44,062,762 ---------- INDUSTRIAL & MACHINERY--4.7% Applied Power, Inc., Class A ........... 280,100 7,650,231 JLG Industries, Inc. ................... 1,004,900 20,474,837 Regal-Beloit Corp. ..................... 640,100 15,122,363 Roper Industries, Inc. ................. 426,800 13,657,600 ---------- 56,905,031 ---------- INSURANCE--3.4% Arthur J. Gallagher & Co. .............. 294,100 14,557,950 HCC Insurance Holdings, Inc. ........... 669,900 15,198,356 Radian Group, Inc. ..................... 239,771 11,703,822 ---------- 41,460,128 ---------- LEISURE TIME--2.0% Carmike Cinemas, Inc., Class A (a) ..... 524,700 8,362,406 Polaris Industries, Inc. ............... 353,900 15,394,650 ---------- 23,757,056 ---------- MANUFACTURING--6.2% Alltrista Corp. (a) .................... 304,600 10,051,800 Crane Co. .............................. 657,310 20,664,183 Mark IV Industries, Inc. ............... 985,464 20,817,927 Modine Manufacturing Co. ............... 256,700 8,358,794 Varlen Corp. ........................... 366,468 14,841,954 ---------- 74,734,658 ---------- MEDICAL PRODUCTS--1.5% Invacare Corp. ......................... 327,700 8,765,975 Varian Medical Systems, Inc. ........... 375,200 9,473,800 ---------- 18,239,775 ---------- MEDICAL SUPPLIES--2.3% Datascope Corp. (a) .................... 587,700 18,879,862 Dentsply International, Inc. ........... 330,500 9,254,000 ---------- 28,133,862 ---------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- OFFICE FURNISHINGS--0.7% Interface, Inc., Class A ............... 1,004,900 $8,667,262 ---------- OIL & GAS--2.7% Atwood Oceanics, Inc. (a) .............. 212,400 6,637,500 Devon Energy Corp. ..................... 297,400 10,632,050 Helmerich & Payne, Inc. ................ 667,020 15,883,414 ---------- 33,152,964 ---------- PAPER PRODUCTS--1.9% Chesapeake Corp. ....................... 307,500 11,512,031 The Standard Register Co. .............. 373,100 11,472,825 ---------- 22,984,856 ---------- PRINTING--0.8% Electronics for Imaging, Inc. (a) ...... 188,300 9,673,913 ---------- PUBLISHING--2.4% Banta Corp. ............................ 603,750 12,678,750 Pulitzer, Inc. ......................... 180,000 8,741,250 World Color Press, Inc. (a) ............ 277,000 7,617,500 ---------- 29,037,500 ---------- REAL ESTATE--4.4% Catellus Development Corp. (a) ......... 528,900 8,197,950 FelCor Suite Hotels, Inc. .............. 463,725 9,622,294 Glenborough Realty Trust, Inc. ......... 681,600 11,928,000 Kilroy Realty Corp. .................... 511,000 12,455,625 Reckson Associates Realty Corp. ........ 495,900 11,653,650 ---------- 53,857,519 ---------- RETAIL--4.2% Cole National Corp. (a) ................ 220,800 1,752,600 CompUSA, Inc. (a) ...................... 592,900 4,409,694 Great Atlantic & Pacific Tea Company, Inc. ......................... 290,300 9,815,769 Oakley, Inc. (a) ....................... 750,000 5,343,750 Pier 1 Imports, Inc. ................... 1,176,200 13,232,250 Talbots, Inc. .......................... 163,100 6,218,187 The Elder-Beerman Stores Corp. (a) ..... 609,500 4,456,969 The Wet Seal, Inc., Class A (a) ........ 200,800 5,747,900 ---------- 50,977,119 ---------- STEEL--0.4% WHX Corp. (a) .......................... 693,700 4,552,406 ---------- TELECOMMUNICATIONS--0.9% NTL, Inc. (a) .......................... 122,600 10,566,588 ---------- TELECOMMUNICATIONS EQUIPMENT--1.9% Allen Telecom, Inc. (a) ................ 715,765 7,694,474 Oak Industries, Inc. (a) ............... 348,685 15,233,176 ---------- 22,927,650 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 17 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD SMALL CAP PORTFOLIO (CONTINUED) TRANSPORTATION--1.1% Budget Group, Inc., Class A (a) ........ 631,900 $ 7,780,269 Pittston Burlington Group .............. 596,520 5,666,940 ------------- 13,447,209 ------------- UTILITIES--2.0% Avista Corp. ........................... 336,000 5,460,000 Calpine Corp. (a) ...................... 126,800 6,847,200 Sierra Pacific Resources ............... 317,800 11,559,975 ------------- 23,867,175 ------------- TOTAL COMMON STOCKS (Identified cost $1,013,542,548)....................... 1,109,409,904 ------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- CONVERTIBLE BONDS--0.0% RESTAURANTS, LODGING & ENTERTAINMENT--0.0% Interactive Light Holdings, Inc., 10.00%, 02/07/01 (a),(g) (Identified cost $1,000,000)........... $1,000 $ 500,000 ---------- REPURCHASE AGREEMENT--7.5% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $15,780,000 United States Treasury Note, 6.125%, 12/31/01, with a value of $15,878,625, and $24,835,000 United States Treasury Note, 6.500%, 08/31/01, with a value of $25,734,988, and $48,870,000 United States Treasury Note, 6.625%, 07/31/01, with a value of $51,008,063) (Identified cost $90,789,000).......... 90,789 90,789,000 ---------- TOTAL INVESTMENTS (Identified cost $1,105,331,548) (b) .................... 99.2% $1,200,698,904 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................ 0.8 9,540,981 ------ -------------- NET ASSETS .............................. 100.0% $1,210,239,885 ====== ============== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 18 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - ---------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD BANTAM VALUE PORTFOLIO COMMON STOCKS--87.2% AEROSPACE & DEFENSE--2.1% BE Aerospace, Inc. (a) ................. 36,500 $ 682,094 ----------- APPAREL & TEXTILES--6.9% Candie's, Inc. (a) ..................... 365,800 1,107,094 Stride Rite Corp. ...................... 113,300 1,168,406 ----------- 2,275,500 ----------- AUTO PARTS--5.8% Dura Automotive Systems, Inc. (a) ...... 58,026 1,929,364 ----------- BANKING & FINANCIAL SERVICES--2.9% Southwest Bancorporation of Texas, Inc. (a) .............................. 52,500 945,000 ----------- BUILDING & CONSTRUCTION--3.8% Apogee Enterprises, Inc. ............... 93,600 1,257,750 ----------- DRUGS & HEALTH CARE--9.2% Apria Healthcare Group, Inc. (a) ....... 113,600 1,931,200 West Pharmaceutical Services, Inc. ..... 28,268 1,109,519 ----------- 3,040,719 ----------- FOOD & BEVERAGES--3.7% American Italian Pasta Co., Class A (a) ........................... 40,700 1,236,262 ----------- HOTELS & RESTAURANTS--8.7% Lone Star Steakhouse & Saloon, Inc. (a) ................................... 89,200 866,913 Morton's Restaurant Group, Inc. (a) .... 46,100 878,781 Prime Hospitality Corp. (a) ............ 92,900 1,114,800 ----------- 2,860,494 ----------- HOUSEHOLD APPLIANCES & HOME FURNISHINGS--3.3% Bassett Furniture Industries, Inc. ..... 29,000 663,375 Bush Industries, Inc., Class A ......... 26,100 433,912 ----------- 1,097,287 ----------- INDUSTRIAL & MACHINERY--6.4% OmniQuip International, Inc. ........... 72,700 572,512 Regal-Beloit Corp. ..................... 65,200 1,540,350 ----------- 2,112,862 ----------- LEISURE TIME--4.4% Carmike Cinemas, Inc., Class A (a) ..... 69,200 1,102,875 Trendwest Resorts, Inc. (a) ............ 15,200 339,150 ----------- 1,442,025 -----------
DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- MANUFACTURING--10.7% Hawk Corp., Class A (a) ................ 117,900 $ 1,038,994 Varlen Corp. ........................... 61,450 2,488,725 ----------- 3,527,719 ----------- MEDICAL SUPPLIES--1.3% Datascope Corp. (a) .................... 13,500 433,688 ----------- OFFICE FURNISHINGS--0.6% Interface, Inc., Class A ............... 22,600 194,925 ----------- OIL & GAS--3.6% Atwood Oceanics, Inc. (a) .............. 38,000 1,187,500 ----------- PUBLISHING--3.7% Pulitzer, Inc. ......................... 25,100 1,218,919 ----------- RETAIL--4.7% The Wet Seal, Inc., Class A (a) ........ 26,000 744,250 Wild Oats Markets, Inc. (a) ............ 27,100 822,316 ----------- 1,566,566 ----------- TELECOMMUNICATIONS EQUIPMENT--3.5% Allen Telecom, Inc. (a) ................ 106,400 1,143,800 ----------- TRANSPORTATION--1.9% Budget Group, Inc., Class A (a) ........ 51,000 627,938 ----------- TOTAL COMMON STOCKS (Identified cost $27,205,605)........... 28,780,412 ----------- PRINCIPAL AMOUNT (000) --------- REPURCHASE AGREEMENT--14.3% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $4,790,000 United States Treasury Note, 6.125%, 12/31/01, with a value of $4,819,938) (Identified cost $4,725,000)........... $ 4,725 4,725,000 ----------- TOTAL INVESTMENTS (Identified cost $31,930,605) (b) ...... 101.5% $33,505,412 LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ........................... (1.5) (479,549) --------- ----------- NET ASSETS .............................. 100.0% $33,025,863 ========= =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 19 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD GLOBAL EQUITY PORTFOLIO COMMON STOCKS--97.1% AUSTRALIA--2.0% Broken Hill Proprietary Company, Ltd. .................................. 113,641 $1,314,642 ---------- FRANCE--7.1% Alcatel ................................ 6,060 852,709 Axa SA ................................. 4,970 606,089 Banque Nationale de Paris .............. 9,440 786,283 Cie de Saint Gobain .................... 2,700 430,019 Elf Aquitaine SA ....................... 4,550 667,440 Rhone-Poulenc SA ....................... 12,498 570,871 Vivendi ................................ 10,445 845,766 ---------- TOTAL FRANCE ........................... 4,759,177 ---------- GERMANY--4.6% DaimlerChrysler AG ..................... 7,609 658,874 Hoechst AG ............................. 13,700 619,984 Siemens AG ............................. 8,600 663,126 Thyssen Krupp AG (a) ................... 21,000 461,749 VEBA AG ................................ 11,500 675,722 ---------- TOTAL GERMANY .......................... 3,079,455 ---------- HONG KONG--1.3% HSBC Holdings, Ltd. .................... 23,326 850,831 ---------- ITALY--2.3% Ente Nazionale Idrocarburi SPA (ENI) 88,400 527,626 San Paolo-Imi SPA ...................... 35,300 480,335 Telecom Italia SPA ..................... 104,700 567,712 ---------- TOTAL ITALY ............................ 1,575,673 ---------- JAPAN--11.1% Canon, Inc. ............................ 26,000 747,954 Industrial Bank of Japan, Ltd. ......... 70,000 555,510 Kao Corporation ........................ 25,000 702,654 Nippon Telegraph & Telephone Corp. 38 442,920 Nissan Motor Company, Ltd. (a) ......... 74,000 353,575 NTT Mobile Communications .............. 16 216,913 NTT Mobile Communications-- New (a) ............................... 64 857,072 Promise Company, Ltd. .................. 9,000 531,950 Sankyo Company, Ltd. ................... 24,000 605,109 Sony Corp. ............................. 5,800 625,692 Sumitomo Trust & Banking, Ltd. ......... 218,000 1,048,822 TDK Corp. .............................. 8,000 732,082 ---------- TOTAL JAPAN ............................ 7,420,253 ---------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- NETHERLANDS--3.5% Heineken NV ............................ 16,262 $ 832,317 ING Groep NV ........................... 12,100 654,848 Philips Electronics NV ................. 9,108 898,056 ---------- TOTAL NETHERLANDS ...................... 2,385,221 ---------- SINGAPORE--0.5% Oversea-Chinese Banking Corporation, Ltd. ..................... 40,000 333,725 ---------- SPAIN--3.3% Argentaria, Caja Postal y Banco Hipotecario de Espana SA .............. 31,000 705,916 Endesa SA .............................. 21,800 464,732 Telefonica SA .......................... 21,308 1,026,002 ---------- TOTAL SPAIN ............................ 2,196,650 ---------- SWEDEN--1.3% ABB AB (a) ............................. 6,077 569,115 Volvo AB, Series B ..................... 11,700 339,739 ---------- TOTAL SWEDEN ........................... 908,854 ---------- SWITZERLAND--1.6% Roche Holding AG ....................... 50 513,793 Zurich Allied AG ....................... 942 535,482 ---------- TOTAL SWITZERLAND ...................... 1,049,275 ---------- UNITED KINGDOM--11.7% AstraZeneca Group PLC .................. 13,405 522,683 British American Tobacco PLC ........... 64,200 605,654 British Aerospace PLC .................. 90,400 588,496 British Petroleum Company PLC .......... 38,800 694,761 Cadbury Schweppes PLC .................. 87,084 555,777 Diageo PLC ............................. 63,248 664,465 Granada Group PLC ...................... 38,000 703,796 Imperial Chemical Industries PLC ....... 61,000 602,388 National Westminster Bank PLC .......... 35,100 744,140 Prudential Corporation PLC ............. 44,500 655,838 Royal & Sun Alliance Insurance Group PLC ............................. 74,181 664,734 SmithKline Beecham PLC ................. 21,200 275,686 Unilever PLC ........................... 62,142 551,466 ---------- TOTAL UNITED KINGDOM ................... 7,829,884 ---------- UNITED STATES--46.8% Aetna, Inc. ............................ 7,150 639,478 AlliedSignal, Inc. ..................... 13,400 844,200 American Home Products Corp. ........... 19,000 1,092,500 AT&T Corp. ............................. 24,900 1,389,731 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 20 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD GLOBAL EQUITY PORTFOLIO (CONTINUED) Bank One Corp. ......................... 15,400 $ 917,262 BankAmerica Corp. ...................... 10,730 786,643 Bell Atlantic Corp. .................... 24,900 1,627,837 Bristol-Myers Squibb Co. ............... 14,600 1,028,387 Chase Manhattan Corp. .................. 14,700 1,273,387 Citigroup, Inc. ........................ 16,725 794,438 Compaq Computer Corp. .................. 8,500 201,344 Delphi Automotive Systems Corp. ........ 9,086 168,659 Eastman Kodak Co. ...................... 11,300 765,575 Federal National Mortgage Association ........................... 13,400 916,225 Federated Department Stores, Inc. (a) 14,000 741,125 First Data Corp. ....................... 17,600 861,300 Fleet Financial Group, Inc. ............ 15,000 665,625 FPL Group, Inc. ........................ 18,700 1,021,487 General Motors Corp. ................... 13,000 858,000 H.J. Heinz Co. ......................... 13,800 691,725 Hewlett-Packard Co. .................... 10,700 1,075,350 International Business Machines Corp. ................................. 8,920 1,152,910 Johnson & Johnson ...................... 5,600 548,800 McDonald's Corp. ....................... 21,100 871,694 Merck & Company, Inc. .................. 11,200 828,800 Minnesota Mining & Manufacturing Co. ................................... 7,800 678,113 Mobil Corp. ............................ 8,200 811,800 Motorola, Inc. ......................... 11,400 1,080,150 PepsiCo, Inc. .......................... 20,100 777,619 Philip Morris Companies, Inc. .......... 25,190 1,012,323 Sears, Roebuck & Co. ................... 16,970 756,226 Texaco, Inc. ........................... 10,300 643,750 Texas Instruments, Inc. ................ 6,000 870,000 The Hartford Financial Services Group, Inc. ........................... 10,860 633,274 Toys "R" Us, Inc. (a) .................. 32,200 666,138 United Technologies Corp. .............. 15,600 1,118,325 Xerox Corp. ............................ 10,700 631,969 ---------- TOTAL UNITED STATES .................... 31,442,169 ---------- TOTAL COMMON STOCKS (Identified cost $57,723,765)........... 65,145,809 ---------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- REPURCHASE AGREEMENT--3.7% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $2,450,000 United States Treasury Note, 6.625%, 03/31/02, with a value of $2,538,812) (Identified cost $2,484,000)........... $2,484 $ 2,484,000 ----------- TOTAL INVESTMENTS (Identified cost $60,207,765) (b) ...... 100.8% $67,629,809 LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ........................... (0.8) (506,416) ------ ----------- NET ASSETS .............................. 100.0% $67,123,393 ====== =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 21 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD INTERNATIONAL EQUITY PORTFOLIO COMMON STOCKS--94.4% AUSTRALIA--2.3% Broken Hill Proprietary Company, Ltd. ................................. 5,093,963 $58,928,869 Westpac Banking Corporation, Ltd. ..... 2,367,100 15,334,759 ----------- TOTAL AUSTRALIA ....................... 74,263,628 ----------- DENMARK--0.7% Unidanmark, Class A ................... 320,600 21,337,179 ----------- FINLAND--1.0% Merita, Ltd., Class A ................. 2,478,000 14,075,003 UPM-Kymmene OYJ ....................... 559,600 17,305,914 ----------- TOTAL FINLAND ......................... 31,380,917 ----------- FRANCE--13.2% Alcatel ............................... 337,540 47,495,611 Axa SA ................................ 380,100 46,353,037 Banque Nationale de Paris ............. 684,922 57,049,003 Cie de Saint Gobain ................... 303,730 48,373,973 Elf Aquitaine SA ...................... 383,700 56,284,950 Michelin, Class B ..................... 510,900 20,892,658 Rhone-Poulenc SA ...................... 904,790 41,328,070 Suez Lyonnaise des Eaux ............... 213,900 38,565,252 Vivendi ............................... 937,610 75,921,364 ----------- TOTAL FRANCE .......................... 432,263,918 ----------- GERMANY--8.9% Allianz AG ............................ 118,656 32,903,157 DaimlerChrysler AG .................... 448,043 38,796,680 Deutsche Telekom AG ................... 351,551 14,749,535 Hoechst AG ............................ 1,032,400 46,720,566 Metro AG .............................. 800,324 49,665,855 Siemens AG ............................ 660,400 50,921,859 Thyssen Krupp AG (a) .................. 1,140,000 25,066,361 VEBA AG ............................... 561,600 32,998,754 ----------- TOTAL GERMANY ......................... 291,822,767 ----------- HONG KONG--1.3% HSBC Holdings, Ltd. ................... 1,158,348 42,251,500 ----------- ITALY--4.0% Ente Nazionale Idrocarburi SPA (ENI) 6,544,800 39,063,444 San Paolo-Imi SPA ..................... 2,538,500 34,541,937 Telecom Italia SPA .................... 10,507,400 56,973,984 ----------- TOTAL ITALY ........................... 130,579,365 ----------- JAPAN--21.7% Asahi Breweries, Ltd. ................. 2,393,000 29,791,337 Canon, Inc. ........................... 1,706,000 49,077,292 DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- Fuji Bank, Ltd. ....................... 2,150,000 $15,000,413 Industrial Bank of Japan, Ltd. ........ 4,190,000 33,251,219 Japan Tobacco, Inc. ................... 4,540 50,290,154 Kao Corporation ....................... 1,448,000 40,697,693 Nintendo Co. .......................... 250,400 35,209,589 Nippon Telegraph & Telephone Corp. 3,293 38,382,491 Nissan Motor Company, Ltd. (a) ........ 9,986,000 47,713,548 NTT Mobile Communications ............. 1,093 14,817,889 NTT Mobile Communications-- New (a) .............................. 4,372 58,548,730 Orix Corp. ............................ 642,300 57,343,473 Promise Company, Ltd. ................. 557,500 32,951,351 Ricoh Company, Ltd. ................... 1,281,000 17,641,944 Sankyo Company, Ltd. .................. 1,342,000 33,835,662 Sony Corp. ............................ 510,800 55,104,075 Sumitomo Trust & Banking, Ltd. ........ 11,181,000 53,793,023 TDK Corp. ............................. 491,000 44,931,553 ----------- TOTAL JAPAN ........................... 708,381,436 ----------- MALAYSIA--0.4% Genting Berhad ........................ 4,167,500 14,319,609 ----------- NETHERLANDS--4.2% Heineken NV ........................... 865,775 44,311,849 ING Groep NV .......................... 813,300 44,015,502 Philips Electronics NV ................ 509,496 50,236,727 ----------- TOTAL NETHERLANDS ..................... 138,564,078 ----------- SINGAPORE--1.7% Oversea-Chinese Banking Corporation, Ltd. .................... 2,241,000 18,696,945 United Overseas Bank, Ltd. ............ 5,199,800 36,355,828 ----------- TOTAL SINGAPORE ....................... 55,052,773 ----------- SPAIN--5.1% Argentaria, Caja Postal y Banco Hipotecario de Espana SA ............. 2,393,400 54,501,265 Endesa SA ............................. 1,585,900 33,808,190 Telefonica SA ......................... 1,649,640 79,431,841 ----------- TOTAL SPAIN ........................... 167,741,296 ----------- SWEDEN--5.1% ABB AB (a) ............................ 465,350 43,580,310 Electrolux AB, Series B ............... 1,984,500 41,611,615 Nordbanken Holding AB ................. 2,291,600 13,416,482 Svenska Handelsbanken AB, Series A ............................. 3,163,000 38,005,183 Volvo AB, Series B .................... 1,026,900 29,818,689 ----------- TOTAL SWEDEN .......................... 166,432,279 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 22 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD INTERNATIONAL EQUITY PORTFOLIO (CONTINUED) SWITZERLAND--3.6% Nestle SA .............................. 14,754 $ 26,574,467 Roche Holding AG ....................... 3,750 38,534,499 The Swatch Group AG .................... 21,115 14,202,489 Zurich Allied AG ....................... 64,890 36,886,863 ------------- TOTAL SWITZERLAND ...................... 116,198,318 ------------- UNITED KINGDOM--21.2% Allied Zurich PLC ...................... 2,195,550 27,599,373 AstraZeneca Group PLC .................. 1,312,540 51,178,082 British American Tobacco PLC ........... 4,823,150 45,500,913 British Aerospace PLC .................. 9,542,848 62,123,118 British Energy PLC ..................... 969,800 8,331,129 British Petroleum Company PLC .......... 2,758,600 49,396,053 Cadbury Schweppes PLC .................. 2,706,262 17,271,580 Diageo PLC ............................. 4,184,194 43,957,922 Granada Group PLC ...................... 2,849,200 52,769,866 Great Universal Stores PLC ............. 3,020,600 33,685,644 Imperial Chemical Industries PLC ....... 4,052,600 40,020,269 Invensys PLC ........................... 10,732,700 50,752,266 National Westminster Bank PLC .......... 2,931,900 62,157,942 Prudential Corporation PLC ............. 3,201,300 47,180,569 Royal & Sun Alliance Insurance Group PLC ............................. 5,198,658 46,585,086 SmithKline Beecham PLC ................. 2,192,700 28,514,014 Unilever PLC ........................... 3,014,642 26,752,805 ------------- TOTAL UNITED KINGDOM ................... 693,776,631 ------------- TOTAL COMMON STOCKS (Identified cost $2,521,889,137)........ 3,084,365,694 ------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ----------------------------------------- ------------- ------------------- REPURCHASE AGREEMENT--3.7% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $45,075,000 United States Treasury Note, 6.500%, 05/31/01, with a value of $45,976,500 and $73,830,000 United States Treasury Note, 6.500%, 08/31/01, with a value of $76,506,338) (Identified cost $120,075,000)......... $120,075 $ 120,075,000 TOTAL INVESTMENTS (Identified cost $2,641,964,137) (b) ............... 98.1% $3,204,440,694 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................ 1.9 62,094,820 -------- -------------- NET ASSETS .............................. 100.0% $3,266,535,514 ======== ============== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 23 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD INTERNATIONAL SMALL CAP PORTFOLIO COMMON STOCKS--93.5% AUSTRALIA--3.9% Cochlear, Ltd. ......................... 931,000 $7,382,788 ---------- AUSTRIA--1.9% BWT AG ................................. 5,146 974,696 KTM-Sportmotorcycle AG ................. 39,200 2,618,524 ---------- TOTAL AUSTRIA .......................... 3,593,220 ---------- CANADA--0.1% Maple Leaf Foods, Inc. ................. 26,000 222,479 ---------- DENMARK--1.0% Falck AS ............................... 14,894 1,218,416 Falck AS-New (a) ....................... 9,600 765,370 ---------- TOTAL DENMARK .......................... 1,983,786 ---------- FINLAND--4.2% Amer Group, Ltd. ....................... 191,400 2,752,401 Asko OYJ-A, Class A .................... 101,730 1,657,970 Sampo Insurance Company, Ltd. .......... 61,800 1,790,154 Santasalo-JOT Group .................... 29,700 160,735 Vaisala OY ............................. 21,400 1,577,304 ---------- TOTAL FINLAND .......................... 7,938,564 ---------- FRANCE--7.9% Carbone-Lorraine ....................... 46,900 2,381,084 Havas Advertising SA ................... 8,600 1,851,964 Neopost SA (c) ......................... 231,900 5,378,719 SCOR SA ADR ............................ 33,500 1,687,562 Societe BIC SA ......................... 67,000 3,532,775 ---------- TOTAL FRANCE ........................... 14,832,104 ---------- GERMANY--5.9% Data Modul AG .......................... 10,918 189,081 Fielmann AG ............................ 62,300 2,305,569 Hawesko Holding AG ..................... 62,700 2,132,933 Holsten Brauerei AG .................... 337 59,752 Marseille-Kliniken AG .................. 286,200 3,953,393 Prosieben Media AG ..................... 54,400 2,467,443 ---------- TOTAL GERMANY .......................... 11,108,171 ---------- HONG KONG--5.2% CDL Hotels International, Ltd. ......... 4,976,600 2,084,648 Esprit Asia Holdings, Ltd. ............. 5,803,500 3,927,045 Peregrine Investment Holdings, Ltd. (a), (d) .............................. 2,163,800 0 Shaw Brothers (Hong Kong), Ltd. ........ 1,479,500 1,010,666 VTech Holdings, Ltd. ................... 910,000 2,891,179 ---------- TOTAL HONG KONG ........................ 9,913,538 ---------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- IRELAND--3.0% Adare Printing Group PLC ............... 308,000 $1,936,761 Anglo Irish Bank Corporation PLC ....... 754,000 1,857,654 Waterford Wedgwood PLC ................. 1,900,500 1,959,131 ---------- TOTAL IRELAND .......................... 5,753,546 ---------- ITALY--7.8% Banca Popolare di Brescia SPA .......... 113,000 4,839,997 Industrie Natuzzi SPA ADR .............. 98,800 1,920,425 Interpump Group SPA .................... 352,000 1,516,752 Luxottica Group SPA ADR ................ 252,200 3,924,863 Manuli Rubber Industries SPA ........... 699,800 1,767,403 Premafin Finanziaria SPA (a) ........... 1,304,000 743,358 ---------- TOTAL ITALY ............................ 14,712,798 ---------- JAPAN--4.2% Aderans Company, Ltd. .................. 47,700 2,038,596 Hokuto Corp. ........................... 26,600 1,429,280 Kawasumi Laboratories .................. 66,000 987,518 Paris Miki, Inc. ....................... 63,300 3,453,583 ---------- TOTAL JAPAN ............................ 7,908,977 ---------- NETHERLANDS--6.3% Avalix Groep NV (a), (c) ............... 162,700 1,333,369 Beter Bed Holding NV ................... 61,632 1,778,934 Moolen Van Der ......................... 35,800 2,297,301 Scala Business Solutions NV, 3/31/01 warrants (a) .................. 59,100 54,831 Scala Business Solutions NV (a) ........ 505,140 4,295,971 Telegraaf Holdings ..................... 110,100 2,167,785 ---------- TOTAL NETHERLANDS ...................... 11,928,191 ---------- NORWAY--3.0% P4 Radio Hele Norg ASA (a) ............. 724,800 2,897,176 Schibsted ASA .......................... 240,800 2,704,245 ---------- TOTAL NORWAY ........................... 5,601,421 ---------- PORTUGAL--2.3% Campanhia de Seguros Mundial Confianca SA (a) ...................... 110,600 4,362,101 ---------- SPAIN--2.0% Banco Pastor SA ........................ 72,400 3,690,629 ---------- SWEDEN--4.5% Elanders AB ............................ 124,750 2,130,846 Getinge Industries AB .................. 184,798 2,732,023 Industrial & Financial Systems AB ...... 239,400 2,326,599 Monark Stiga AB ........................ 348,575 1,313,983 ---------- TOTAL SWEDEN ........................... 8,503,451 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 24 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD INTERNATIONAL SMALL CAP PORTFOLIO (CONTINUED) SWITZERLAND--10.0% Bank Sarasin & Cie .................... 2,120 $ 3,639,895 Brauerei Eoichof AG ................... 4,213 3,250,981 Edipresse SA .......................... 12,660 4,111,183 Gretag Imaging Group .................. 33,800 3,265,674 Moevenpick Holding AG ................. 1,730 747,579 SAIA-Burgess Electronics AG ........... 5,900 1,528,969 TAG Heuer International SA ............ 22,700 2,364,735 ----------- TOTAL SWITZERLAND ..................... 18,909,016 ----------- TAIWAN--1.6% Want Want Holdings, Ltd. .............. 1,662,000 2,974,980 ----------- UNITED KINGDOM--18.7% AMEC PLC .............................. 716,500 2,919,456 Ashtead Group PLC ..................... 605,200 1,669,407 Carpetright PLC ....................... 160,300 998,058 Denison International PLC ADR (a) ..... 121,500 1,868,062 Devro PLC ............................. 468,300 1,040,803 Euromoney Publications PLC ............ 50,644 1,337,113 Games Workshop Group PLC .............. 151,100 888,379 Goode Durrant PLC ..................... 346,100 2,536,762 Hogg Robinson PLC ..................... 789,400 2,824,543 Jardine Lloyd Thompson Group PLC ...... 769,800 3,015,293 JBA Holdings PLC ...................... 883,700 1,601,872 Man (E D & F) Group PLC ............... 594,500 3,401,603 Seton Healthcare Group PLC ............ 356,423 4,084,372 Signet Group PLC ADR .................. 217,312 5,459,964 Victrex PLC ........................... 598,100 1,715,815 ----------- TOTAL UNITED KINGDOM .................. 35,361,502 ----------- TOTAL COMMON STOCKS (Identified cost $166,626,862)......... 176,681,262 ----------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- REPURCHASE AGREEMENT--4.2% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $7,905,000 United States Treasury Note, 5.750%, 10/31/00, with a value of $8,003,813) (Identified cost $7,846,000)........... $7,846 $ 7,846,000 ------------ TOTAL INVESTMENTS (Identified cost $174,472,862) (b) ................. 97.7% $184,527,262 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................ 2.3 4,392,069 ------ ------------ NET ASSETS .............................. 100.0% $188,919,331 ====== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 25 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD EMERGING MARKETS PORTFOLIO COMMON STOCKS--84.0% ARGENTINA--3.1% Quilmes Industrial Quinsasa ADR ........ 684,050 $8,465,119 Telefonica de Argentina SA ADR ......... 112,400 3,526,550 ---------- TOTAL ARGENTINA ........................ 11,991,669 ---------- BRAZIL--2.7% Companhia Cervejaria Brahma ADR 189,700 2,145,981 Embratel Participacoes SA ADR .......... 196,600 2,727,825 Souza Cruz SA .......................... 801,200 5,633,968 Telecomunicacoes Brasileiras SA ADR ................................... 89,600 5,600 ---------- TOTAL BRAZIL ........................... 10,513,374 ---------- CHILE--4.0% AFP Provida SA ADR ..................... 404,900 8,907,800 Quinenco SA ADR ........................ 428,500 4,017,187 Santa Isabel SA ADR .................... 236,800 2,397,600 ---------- TOTAL CHILE ............................ 15,322,587 ---------- CZECH REPUBLIC--1.0% Ceske Energeticke Zavody AS (a) ........ 1,892,000 3,887,818 ---------- GREECE--1.4% Hellenic Telecommunication Organization SA ADR ................... 17,500 193,594 Hellenic Telecommunication Organization SA ....................... 237,822 5,090,045 ---------- TOTAL GREECE ........................... 5,283,639 ---------- HONG KONG--5.9% China Telecom, Ltd. ADR (a) ............ 97,100 5,534,700 Guangshen Railway, Ltd. ADR ............ 444,300 3,387,787 Jiangsu Expressway Company, Ltd. ....... 10,130,000 2,193,489 Peregrine Investment Holdings, Ltd. (a), (d) .............................. 2,329,000 0 Shenzhen Expressway Co. ................ 21,334,000 4,509,546 Yue Yuen Industrial Holdings ........... 3,051,300 7,039,707 ---------- TOTAL HONG KONG ........................ 22,665,229 ---------- HUNGARY--2.2% Magyar Olaj-es Gazipari RT ............. 184,800 4,449,610 Magyar Tavkozlesi RT ADR ............... 150,900 4,149,750 ---------- TOTAL HUNGARY .......................... 8,599,360 ---------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- INDIA--7.3% Bharat Heavy Electricals, Ltd. (a) ..... 250,241 $1,419,071 Hindalco Industries, Ltd. GDR .......... 264,800 5,097,400 Hindalco Industries, Ltd. .............. 195,100 2,826,656 Larsen & Toubro, Ltd. .................. 656,000 4,332,503 Mahanagar Telephone Nigam, Ltd. GDR (c) ............................... 545,100 5,532,765 Mahanagar Telephone Nigam, Ltd. ........ 402,200 1,724,509 State Bank of India GDR (c) ............ 601,700 7,310,655 ---------- TOTAL INDIA ............................ 28,243,559 ---------- ISRAEL--4.2% Bank Hapoalim .......................... 1,044,300 2,678,315 ECI Telecom, Ltd. ADR .................. 227,900 7,563,431 Supersol, Ltd. ADR ..................... 409,700 5,991,863 ---------- TOTAL ISRAEL ........................... 16,233,609 ---------- MALAYSIA--1.2% Jaya Tiasa Holdings Berhad ............. 2,480,000 4,554,502 ---------- MEXICO--17.7% Carso Global Telecom ................... 987,000 6,247,895 Cemex SA de CV (a) ..................... 2,048,904 10,091,357 Fomento Economico Mexicano SA de CV ADR ............................. 207,400 8,270,075 Grupo Financiero Banamex Accival SA de CV (a) .......................... 3,363,300 8,558,923 Grupo Financiero Banorte SA de CV (a) ............................. 1,996,000 2,920,666 Grupo Industrial Maseca SA de CV ADR ................................... 670,800 5,995,275 Grupo Televisa SA (a) .................. 197,700 8,859,431 Kimberly-Clark de Mexico SA ............ 850,400 3,498,624 Panamerican Beverages, Inc., Class A ADR ................................... 196,600 4,681,538 Pepsi-Gemex SA de CV GDR ............... 527,900 4,817,087 Tubos de Acero de Mexico SA ADR ........ 421,400 4,582,725 ---------- TOTAL MEXICO ........................... 68,523,596 ---------- PERU--2.2% Credicorp, Ltd. ........................ 198,300 2,181,300 Telefonica del Peru SA ADR ............. 409,200 6,189,150 ---------- TOTAL PERU ............................. 8,370,450 ---------- PHILIPPINES--4.0% Benpres Holdings Corp. ................. 42,916,000 10,150,958 Philippine Long Distance Telephone Co. ADR ............................... 180,900 5,449,613 ---------- TOTAL PHILIPPINES ...................... 15,600,571 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 26 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD EMERGING MARKETS PORTFOLIO (CONTINUED) POLAND--1.8% Bank Handlowy W. Warszawie ............ 507,400 $ 7,042,735 ----------- SOUTH AFRICA--10.7% Amalgamated Banks of South Africa, Ltd. ................................. 1,053,323 5,961,382 Barlow, Ltd. .......................... 958,515 5,528,061 Impala Platinum Holdings, Ltd. ........ 78,100 1,964,796 JD Group, Ltd. ........................ 590,616 3,611,822 Liberty Life Association, Ltd. ........ 229,600 2,941,346 Naspers, Ltd. ......................... 759,100 4,560,387 Rembrandt Group, Ltd. ................. 789,200 6,578,847 Sanlam, Ltd. (a) ...................... 3,567,300 4,227,079 South African Breweries PLC ........... 702,400 6,099,728 ----------- TOTAL SOUTH AFRICA .................... 41,473,448 ----------- SOUTH KOREA--12.1% Korea Electric Power Corp. ............ 202,100 8,398,281 Korea Telecom Corp. ADR (a) ........... 107,836 4,313,440 Pohang Iron & Steel Company, Ltd. ..... 35,800 4,321,980 Samsung Electronics Co. ............... 140,251 15,388,231 SK Telecom Company, Ltd. .............. 4,501 6,027,257 SK Telecom Company, Ltd. ADR .......... 486,701 8,273,917 SK Telecom Company, Ltd., rights Exp. 7/28/99 (a) ..................... 1,032 0 ----------- TOTAL SOUTH KOREA ..................... 46,723,106 ----------- THAILAND--0.8% Bangkok Expressway Public Company, Ltd. (a) .................... 4,459,000 2,932,359 ----------- UNITED KINGDOM--0.5% Liberty International PLC (a) ......... 107,049 708,751 South African Breweries PLC ........... 152,100 1,306,625 ----------- TOTAL UNITED KINGDOM .................. 2,015,376 ----------- VENEZUELA--1.2% Compania Anonima Nacional Telefonos de Venezuela ADR ........... 102,800 2,801,300 Mavesa SA ADR ......................... 603,300 1,960,725 ----------- TOTAL VENEZUELA ....................... 4,762,025 ----------- TOTAL COMMON STOCKS (Identified cost $293,247,782)......... 324,739,012 ----------- PREFERRED STOCKS--11.2% BRAZIL--10.6% Banco Itau SA ......................... 11,166,000 5,739,091
DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- Celular CRT Participacoes SA (a) ....... 10,617,800 $ 1,421,304 Celular CRT Participacoes SA, rights Exp. 7/5/99 (a) ....................... 4,474,786 0 Cemig Cia Energetica de Minas Gerais ................................ 204,247,516 4,269,529 Companhia Brasileira de Distri- buicao Grupo Pao de Acucar GDR ........ 320,800 5,994,950 Companhia Cervejaria Brahma ............ 8,091,100 4,565,382 Companhia Paranaense de Energia-Copel ADR ..................... 433,300 3,628,887 Companhia Riograndense Telecom ......... 10,617,800 2,575,738 Copel Paranqense de Energia ............ 208,499,000 1,673,409 Telecomunicacoes Brasileiras SA ADR ................................... 89,600 8,080,800 Telesp de Sao Paulo SA ................. 25,636,118 3,040,715 ------------ TOTAL BRAZIL ........................... 40,989,805 ------------ COLOMBIA--0.6% Banco Ganadero SA ADR .................. 295,300 2,270,119 ------------ TOTAL PREFERRED STOCKS (Identified cost $61,105,136)........... 43,259,924 ------------ PRINCIPAL AMOUNT (000) ----------- CONVERTIBLE BONDS--0.1% PHILIPPINES--0.1% Bacnotan Consolidated Industries, 5.50%, 06/21/04 (a), (c) (Identified cost $1,050,775)........... $ 1,112 422,560 ------------ REPURCHASE AGREEMENT--4.2% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $16,190,000 United States Treasury Note, 6.500%, 05/31/01, with a value of $16,513,800) (Identified cost $16,189,000).......... 16,189 16,189,000 ------------ TOTAL INVESTMENTS (Identified cost $371,592,693) (b) ..... 99.5% $384,610,496 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................ 0.5 2,115,944 ----------- ------------ NET ASSETS .............................. 100.0% $386,726,440 =========== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 27 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- LAZARD BOND PORTFOLIO ASSET-BACKED SECURITIES--19.7% American Express, Series 1999, Class A 5.95%, 12/15/06 ...................... $ 1,065 $1,044,467 Capital Auto Receivables Asset Trust, Series 1999-1, Class A3 5.68%, 08/15/04 ........................ 944 932,030 Capital One Master Trust, Series 1998-4, Class A 5.43%, 01/15/07 ........ 444 429,734 Carco Auto Loan Master Trust, Series 1999-1, Class A2 5.78%, 03/15/04 ....... 812 802,232 Citibank Credit Card Master Trust, Series 1998-1, Class B 5.875%, 01/15/03 ....................... 993 985,658 Citibank Credit Card Master Trust I: Series 1998, Class A 5.30%, 01/09/06 ........................ 1,729 1,651,558 Series 1999, Class A 5.50%, 02/15/06 ........................ 843 810,721 Series 1999, Class B 5.75%, 02/15/06 ........................ 1,145 1,100,986 Series 1999, Class A 6.10%, 05/15/08 ........................ 2,762 2,686,874 Delta Funding Home Equity Loan Trust, Series 1997-3, Class A6 7.72%, 05/25/20 ........................ 394 404,543 Discover Card Master Trust I: Series 1998, Class A 5.60%, 05/16/06 ........................ 1,856 1,797,425 Series 1998-6, Class A 5.85%, 01/17/06 ........................ 500 486,405 Series 1999-2, Class A 5.90%, 10/15/04 ........................ 824 815,513 Federal Express Corp. Trust, Series 1998-1, Class 1A 6.72%, 01/15/22 ....... 1,287 1,243,788 First USA Credit Card Master Trust: Series 1998-9, Class A 5.28%, 09/18/06 ........................ 815 778,577 Series 1997-6, Class B 6.58%, 03/17/05 ........................ 1,461 1,464,346 Ford Credit Auto Owner Trust, Series 1999-B, Class A4 5.80%, 06/15/02 ........................ 386 383,947 MBNA Master Credit Card Trust, Series 1998-J, Class A 5.25%, 02/15/06 ........................ 429 410,497 PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- MBNA Master Credit Card Trust II: Series 1998-D Class A 5.80%, 12/15/05 ....................... $ 400 $ 391,000 Series 1999-B, Class A 5.90%, 08/15/11 ....................... 857 809,111 Standard Credit Card Master Trust I: Series 1993-2, Class A 5.95%, 10/07/04 ....................... 2,019 1,977,974 Series 1995-9, Class A 6.55%, 10/07/07 ....................... 595 592,769 UCFC Loan Trust, Series 1997-C, Class A 8.00%, 09/15/00 ............... 578 51,478 ---------- TOTAL ASSET-BACKED SECURITIES (Identified cost $22,478,479) ......... 22,051,633 ---------- COLLATERALIZED MORTGAGE OBLIGATIONS--14.0% Asset Securitization Corp.: Series 1996-D2, Class ACS2 1.488%, 02/28/26 (e) .................. 2,125 171,328 Series 1996-MD6, Class A1B 6.88%, 11/13/29 ....................... 248 249,795 Series 1996-D3, Class A1A 7.01%, 10/13/26 ....................... 68 69,224 Series 1995-MD4, Class A1 7.10%, 08/13/29 ....................... 306 309,126 Series 1996-D3, Class A1B 7.21%, 10/31/26 ....................... 375 382,879 CS First Boston Mortgage, Series 1997-C1, Class AIB 7.15%, 08/20/06 ....................... 780 782,675 Federal Home Loan Mortgage Corp.: Series 1679, Class J 6.00%, 02/15/09 ....................... 359 340,489 Series 1697, Class D 6.00%, 03/15/09 ....................... 359 349,688 6.00%, 11/15/27 ....................... 978 915,036 Series 2136, Class PE 6.00%, 01/15/28 ....................... 680 636,222 Series 1513, Class L 6.50%, 07/15/07 ....................... 230 230,718 Series 1478, Class H 6.50%, 03/15/08 ....................... 373 373,878 Series G025, Class B 6.50%, 12/25/08 ....................... 707 700,149 Series 2056, Class TD 6.50%, 05/15/18 ....................... 1,630 1,606,055 6.50%, 06/15/24 ....................... 520 514,150 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 28 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- LAZARD BOND PORTFOLIO (CONTINUED) Series 2111, Class PH 6.50%, 02/15/28 ....................... $ 1,682 $1,631,002 Series 1946, Class PD 6.75%, 05/15/24 ....................... 683 678,605 Federal National Mortgage Association REMIC: Series 1992-129, Class G 4.00%, 06/25/18 ....................... 74 73,699 Series 1996-40, Class J 6.00%, 12/25/08 ....................... 840 808,231 Series 1999-15, Class PC 6.00%, 09/25/18 ....................... 940 887,417 Series 1994-28, Class H 6.25%, 03/25/23 ....................... 367 361,378 Series 1993-134, Class K 6.50%, 05/25/08 ....................... 254 253,810 Series 1993-206, Class KA 6.50%, 12/25/22 ....................... 502 494,836 G3 Mortgage Reinsurance, Ltd., 7.9425%, 05/25/08 (c), (e) ............ 300 274,547 GMAC Commercial Mortgage Securities, Inc., Series 1996-C1, Class A2A 6.79%, 09/15/03 ............. 252 254,066 Headlands Mortgage Securities, Inc.: Series 1997-1, Class X1 0.682%, 03/25/27 (e) .................. 3,653 57,257 Series 1997-4, Class X 1.138%, 11/25/27 (e) .................. 2,092 53,431 Merrill Lynch Mortgage Investments, Inc.: Series 1996-C1, Class IO 0.571%, 04/25/28 (c), (e) ............. 4,414 107,599 Series 1998-C3, Class A1 5.65%, 12/15/30 ....................... 969 932,624 Midland Realty Acceptance Corp., Series 1996-C1, Class A2 7.475%, 12/25/05 ...................... 344 354,547 Morgan Stanley Capital One, Inc.: Series 1998-HF1, Class X 1.033%, 02/15/18 (e) .................. 4,297 244,435 Series 1996-WF1,Class X 1.401%, 11/15/28 (c), (e) ............. 2,673 149,112 Series 1997-C1, Class IO 2.75%, 02/15/20 (e) ................... 509 7,721 Prudential Home Mortgage Security, Series 1993-41, Class A5 0.914%, 10/25/00 ...................... 11,403 83,358 PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- Structured Asset Securitization Corp.: Series 1996-CFL, Class X2 1.153%, 02/25/28 (e) .................. $ 1,214 $ 26,943 Series 1996-CFL, Class X1 1.461%, 02/25/28 (e) .................. 1,700 87,164 United States Department of Veteran Affairs: Series 1999-1, Class IO 0.175%, 01/15/29 (e) .................. 21,438 180,883 Series 1997-1, Class IO 0.368%, 02/15/27 (e) .................. 8,060 112,089 ---------- TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Identified cost $16,412,009) ........ 15,746,166 ---------- CORPORATE BONDS--22.1% BANKING & FINANCIAL SERVICES--6.7% American Financial Group, 7.125%, 04/15/09 ...................... 812 755,542 Associates Corp. North America, 6.25%, 11/01/08 ....................... 431 411,286 AT&T Capital Corp., 6.60%, 05/15/05 ....................... 1,144 1,098,457 Capital One Bank: 6.70%, 05/15/08 ....................... 416 397,318 7.15%, 09/15/06 ....................... 268 268,670 First USA Trust, 6.50%, 01/18/06 (c) ................... 400 393,540 Ford Motor Credit Co., 6.75%, 05/15/05 ....................... 743 741,730 General Motors Acceptance Corp., 5.85%, 01/14/09 ....................... 831 762,467 Lehman Brothers Holdings, Inc., 6.625%, 04/01/04 ...................... 765 745,217 MBNA Corp., 6.75%, 03/15/08 ....................... 429 407,031 RBF Finance Co., 11.00%, 03/15/06 (c) .................. 70 72,100 Resolution Funding Strips, 0.00%, 04/15/07 ....................... 1,248 761,130 U.S. Bancorp, Inc., 7.50%, 06/01/26 ....................... 728 759,821 ---------- 7,574,309 ---------- BREWERY--0.7% Anheuser Busch Company, Inc., 7.10%, 06/15/07 ....................... 799 802,116 ---------- BROADCASTING--0.2% EchoStar DBS Corp., 9.375%, 02/01/09 (c) .................. 200 204,000 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 29 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- LAZARD BOND PORTFOLIO (CONTINUED) BUILDING & CONSTRUCTION--0.5% Penhall Aquisition Corp., 12.00%, 08/01/06 ...................... $550 $ 555,500 ---------- CABLE T.V. OPERATOR--1.6% Charter Communications Holdings LLC, 8.625%, 04/01/09 (c) .................. 235 225,600 Coaxial Communications Central Ohio LLC,10.00%, 08/15/06 ............. 130 131,463 CSC Holdings, Inc., 10.50%, 05/15/16 ...................... 208 239,200 Fundy Cable, Ltd., 11.00%, 11/15/05 ...................... 452 494,940 TCI Communications, Inc., 6.875%, 02/15/06 ...................... 673 673,760 ---------- 1,764,963 ---------- CONTAINERS--0.1% Amtrol, Inc., 10.625%, 12/31/06 ..................... 82 81,078 ---------- ENERGY--0.4% Midamerican Energy Co., 6.375%, 06/15/06 ...................... 454 438,287 ---------- ENTERTAINMENT--1.3% Production Resource Group, LLC, 11.50%, 01/15/08 ...................... 125 127,500 Regal Cinemas, Inc., 9.50%, 06/01/08 ....................... 730 682,550 Station Casinos, Inc., 10.125%, 03/15/06 ..................... 600 618,000 ---------- 1,428,050 ---------- EQUIPMENT RENTAL--0.2% United Rentals, Inc., 9.25%, 01/15/09 (c) ................... 250 248,125 ---------- FOOD & BEVERAGES--0.2% Advantica Restaurant Group, Inc., 11.25%, 01/15/08 ...................... 185 177,600 ---------- HEALTHCARE--1.0% Dade International, Inc., 11.125%, 05/01/06 ..................... 200 210,000 Dynacare, Inc.: 10.75%, 01/15/06 ...................... 122 123,220 10.75%, 01/15/06 (c) .................. 175 178,062 Quest Diagnostics, Inc., 10.75%, 12/15/06 ..................... 218 248,520 PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- Tenet Healthcare Corp., 8.625%, 01/15/07 ...................... $340 $ 331,500 ---------- 1,091,302 ---------- HOTELS & RESTAURANTS--0.2% American Restaurant Group, Inc., 11.50%, 02/15/03 ...................... 205 186,550 ---------- INDUSTRIAL--1.7% Amatek Industries Pty, Ltd., 12.00%, 02/15/08 (c) .................. 245 236,425 Fisher Scientific International, Inc., 9.00%, 02/01/08 ....................... 315 299,250 J.H. Heafner, Inc., 10.00%, 05/15/08 ...................... 310 308,450 Mediq, Inc., 11.00%, 06/01/08 ...................... 350 273,000 Pen Holdings, Inc., 9.875%, 06/15/08 ...................... 400 403,000 Transdigm, Inc, 10.375%, 12/01/08 ..................... 250 245,000 URS Corp., 12.25%, 05/01/09 (c) .................. 145 147,175 ---------- 1,912,300 ---------- INDUSTRIAL & MACHINERY--0.0% High Voltage Engineering Corp., 10.50%, 08/15/04 ...................... 64 59,520 ---------- LEISURE TIME--0.2% Booth Creek Ski Holdings, Inc., 12.50%, 03/15/07 ...................... 270 237,600 ---------- MANUFACTURING--0.2% Advanced Glassfiber Yarns, LLC, 9.875%, 01/15/09 (c) .................. 225 218,812 ---------- OIL & GAS--1.2% Texaco Capital, Inc., 6.00%, 06/15/05 ....................... 776 747,606 USX-Marathon Group, 6.65%, 02/01/06 ....................... 570 548,757 ---------- 1,296,363 ---------- RETAIL--0.9% Frank's Nursery & Crafts, Inc., 10.25%, 03/01/08 ...................... 300 298,500 Home Interiors & Gifts, Inc., 10.125%, 06/01/08 ..................... 250 248,125 Petro Stopping Centers, 10.50%, 02/01/07 ...................... 365 383,250 Renters Choice, Inc., 11.00%, 08/15/08 (c) .................. 100 100,500 ---------- 1,030,375 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 30 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- LAZARD BOND PORTFOLIO (CONTINUED) TELECOMMUNICATIONS--1.4% GTE Corp., 9.10%, 06/01/03 ....................... $ 395 $ 426,734 LodgeNet Entertainment Corp., 10.25%, 12/15/06 ...................... 245 248,981 RSL Communications PLC, 10.50%, 11/15/08 ...................... 200 198,000 US West Communications, Inc., 5.625%, 11/15/08 ...................... 836 755,335 ---------- 1,629,050 ---------- TRANSPORTATION--0.5% Atlantic Express Transportation Corp., 10.75%, 02/01/04 ...................... 407 402,930 Atlas Air, Inc., 9.25%, 04/15/08 ....................... 120 114,000 ---------- 516,930 ---------- UTILITIES--2.9% Calpine Corp., 8.75%, 07/15/07 ....................... 650 642,739 National Rural Utilities Cooperative, 5.75%, 11/01/08 ....................... 1,072 994,666 Texas Utilities Co., Series B 6.375%, 10/01/04 ...................... 821 811,920 Western Resources, Inc., 7.125%, 08/01/09 ...................... 850 840,089 ---------- 3,289,414 ---------- TOTAL CORPORATE BONDS (Identified cost $25,678,527) ......... 24,742,244 ---------- MORTGAGE PASS-THROUGH SECURITIES--27.2% Federal Home Loan Mortgage Corp.: 6.50%, 04/15/11 ....................... 682 672,193 6.50%, TBA ............................ 12,743 12,376,883 7.00%, 08/01/28 ....................... 124 123,655 7.00%, TBA ............................ 6,028 5,963,922 7.472%, 09/01/26 (e) .................. 50 51,852 7.50%, TBA ............................ 531 536,804 7.504%, 11/01/26 (e) .................. 35 35,591 Federal National Mortgage Association: 6.00%, 07/01/14 ....................... 306 294,649 6.50%, 12/01/28 ....................... 3,121 3,011,854 7.00%, TBA ............................ 135 133,438 PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- 7.075%, 05/01/06 ...................... $ 445 $ 455,840 7.323%, 06/01/25 (e) .................. 90 91,657 7.467%, 07/01/25 (e) .................. 127 130,222 7.50%, 01/01/14 ....................... 904 921,100 8.00%, 12/01/09 ....................... 254 261,529 8.00%, 06/01/12 ....................... 223 229,582 8.00%, 07/01/12 ....................... 560 575,554 8.00%, 12/01/12 ....................... 375 386,044 Government National Mortgage Association: 1.00%, 06/20/28 ....................... 1,162 1,182,997 5.50%, 10/20/27 ....................... 680 690,150 6.50%, 07/20/27 ....................... 166 168,152 7.00%, 04/15/28 ....................... 778 767,563 8.00%, 11/15/28 ....................... 1,466 1,508,056 ---------- TOTAL MORTGAGE PASS-THROUGH SECURITIES (Identified cost $30,457,977) ......... 30,569,287 ---------- U.S. GOVERNMENT OBLIGATIONS--16.3% Tennessee Valley Authority Federal, 0.00%, 11/15/29 ....................... 751 775,250 United States Treasury Notes: 3.625%, 07/15/02 ...................... 1,845 1,825,388 5.75%, 11/15/00 ....................... 10,842 10,887,753 6.00%, 07/31/02 ....................... 1,340 1,354,030 United States Treasury Strips, 0.00%, 11/15/04 ....................... 4,763 3,481,467 ---------- TOTAL U.S. GOVERNMENT OBLIGATIONS (Identified cost $18,183,101) ......... 18,323,888 ---------- REPURCHASE AGREEMENT--11.7% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $13,235,000 United States Treasury Note, 6.625%, 10/31/00, with a value of $13,400,438) (Identified cost $13,134,000) (f) ..... 13,134 13,134,000 ---------- TOTAL INVESTMENTS (Identified cost $126,344,093) (b) ................. 111.0% $124,567,218 LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ........................... (11.0) (12,371,181) ---------- ------------ NET ASSETS .............................. 100.0% $112,196,037 ========== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 31 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- LAZARD HIGH YIELD PORTFOLIO CORPORATE BONDS--90.0% AEROSPACE & DEFENSE--1.3% Sabreliner Corp., 11.00%, 06/15/08 (c) .................. $1,300 $1,124,500 ---------- AUTOMOTIVE--1.9% Avis Rent a Car, Inc., 11.00%, 05/01/09 (c) .................. 650 658,938 Budget Group, Inc., 9.125%, 04/01/06 (c) .................. 1,085 1,002,475 ---------- 1,661,413 ---------- BANKING & FINANCIAL SERVICES--1.3% RBF Finance Co., 11.00%, 03/15/06 (c) .................. 1,125 1,158,750 ---------- BROADCASTING--3.7% CD Radio, Inc., 14.50%, 05/15/09 (c) .................. 690 703,800 EchoStar DBS Corp., 9.375%, 02/01/09 (c) .................. 785 800,700 Golden Sky Systems, Inc., 1.00%, 03/01/07 (c) ................... 615 365,925 Paxson Communications Corp., 11.625%, 10/01/02 ..................... 310 320,075 Radio Unica Corp., 1.00%, 08/01/06 ....................... 800 460,000 Spanish Broadcasting Systems, Inc., 11.00%, 03/15/04 ...................... 500 540,000 ---------- 3,190,500 ---------- BUILDING & CONSTRUCTION--2.2% Penhall Aquisition Corp., 12.00%, 08/01/06 ...................... 1,250 1,262,500 Prison Realty Trust, Inc., 12.00%, 06/01/06 ...................... 660 656,700 ---------- 1,919,200 ---------- CABLE T.V. OPERATOR--4.3% Cablevision SA, 13.75%, 05/01/09 (c) .................. 1,000 910,000 Coaxial Communications Central Ohio LLC, 10.00%, 08/15/06 ...................... 317 320,566 CSC Holdings, Inc., 10.50%, 05/15/16 ...................... 300 345,000 Fundy Cable, Ltd., 11.00%, 11/15/05 ...................... 600 657,000 PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- Ono Finance PLC, 13.00%, 05/01/09 (c) .................. $1,500 $1,541,250 ---------- 3,773,816 ---------- CHEMICALS--3.7% Geo Specialty Chemicals, Inc., 10.125%, 08/01/08 ..................... 1,250 1,200,000 LaRoche Industries, Inc., 9.50%, 09/15/07 ....................... 900 711,000 Lyondell Chemical Co., 10.875%, 05/01/09 (c) ................. 1,240 1,289,600 ---------- 3,200,600 ---------- COMMERCIAL SERVICES--8.1% Building One Services Corp., 10.50%, 05/01/09 (c) .................. 1,300 1,241,500 Falcon Products, Inc., 11.375%, 06/15/09 (c) ................. 1,000 995,000 Fisher Scientific International, Inc., 9.00%, 02/01/08 ....................... 250 237,500 IT Group, Inc., 11.25%, 04/01/09 (c) .................. 1,535 1,473,600 Jordan Industries, Inc., 10.375%, 08/01/07 ..................... 1,175 1,189,687 Pentacon, Inc., 12.25%, 04/01/09 (c) .................. 1,000 987,500 RailWorks Corp., 11.50%, 04/15/09 (c) .................. 1,000 987,500 ---------- 7,112,287 ---------- COMPUTER SERVICES--3.6% Concentric Network Corp., 12.75%, 12/15/07 ...................... 1,150 1,204,625 PSINet, Inc., 11.50%, 11/01/08 ...................... 1,250 1,318,750 Rhythms Net Connections, Inc., 12.75%, 04/15/09 (c) .................. 700 654,500 ---------- 3,177,875 ---------- CONTAINERS--1.8% Amtrol, Inc., 10.625%, 12/31/06 ..................... 1,000 988,750 Silgan Holdings, Inc., 13.25%, 07/15/06 ...................... 500 552,500 ---------- 1,541,250 ---------- ENERGY--1.1% Cherokee International LLC, 10.50%, 05/01/09 (c) .................. 965 962,588 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 32 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- LAZARD HIGH YIELD PORTFOLIO (CONTINUED) ENTERTAINMENT--6.7% Marvel Enterprises, Inc., 12.00%, 06/15/09 (c) .................. $1,375 $1,416,250 Penn National Gaming, Inc., 10.625%, 12/15/04 ..................... 900 900,000 Production Resource Group LLC, 11.50%, 01/15/08 ...................... 1,250 1,275,000 Regal Cinemas, Inc., 9.50%, 06/01/08 ....................... 1,000 935,000 Station Casinos, Inc., 10.125%, 03/15/06 ..................... 1,000 1,030,000 TVN Entertainment Corp., 14.00%, 08/01/08 ...................... 500 325,000 ---------- 5,881,250 ---------- EQUIPMENT RENTAL--2.3% Neff Corp., 10.25%, 06/01/08 ...................... 1,460 1,474,600 United Rentals, Inc., 9.25%, 01/15/09 (c) ................... 550 545,875 ---------- 2,020,475 ---------- FOOD & BEVERAGES--4.0% Advantica Restaurant Group, Inc., 11.25%, 01/15/08 ...................... 975 936,000 Agrilink Foods, Inc., 11.875%, 11/01/08 ..................... 900 927,000 American Restaurant Group, Inc., 11.50%, 02/15/03 ...................... 1,142 1,039,220 Fleming Companies, Inc., 10.625%, 07/31/07 ..................... 600 558,000 ---------- 3,460,220 ---------- HEALTHCARE--4.3% Dade International Inc., 11.125%, 05/01/06 ..................... 575 603,750 Dynacare, Inc.: 10.75%, 01/15/06 ...................... 625 631,250 10.75%, 01/15/06 (c) .................. 450 457,875 Genesis Health Ventures, Inc.: 9.75%, 06/15/05 ....................... 1,000 810,000 9.875%, 01/15/09 ...................... 800 640,000 Universal Hospital Services, Inc., 10.25%, 03/01/08 (c) .................. 775 651,000 ---------- 3,793,875 ---------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- INDUSTRIAL--7.6% Amatek Industries Pty, Ltd., 12.00%, 02/15/08 (c) .................. $1,615 $1,558,475 Dictaphone Corp., 11.75%, 08/01/05 ...................... 515 283,250 Globe Holdings, Inc., 0.00%, 08/01/09 ....................... 300 105,000 Interpool Capital Trust, 9.875%, 02/15/27 ...................... 500 447,688 J.H. Heafner, Inc., 10.00%, 05/15/08 ...................... 650 646,750 Mediq, Inc., 11.00%, 06/01/08 ...................... 1,300 1,014,000 Transdigm, Inc., 10.375%, 12/01/08 ..................... 840 823,200 URS Corp., 12.25%, 05/01/09 (c) .................. 1,270 1,289,050 Volume Services America, Inc., 11.25%, 03/01/09 (c) .................. 425 467,500 ---------- 6,634,913 ---------- LEISURE TIME--0.5% Booth Creek Ski Holdings, Inc., Series B, 12.50%, 03/15/07 ...................... 500 440,000 ---------- LODGING & ENTERTAINMENT--2.7% Courtyard by Marriott II, Ltd., 10.75%, 02/01/08 ...................... 400 408,000 Hollywood Casino Corp., 11.25%, 05/01/07 (c) .................. 1,115 1,117,787 United Artists Theatre Co., 9.75%, 04/15/08 ....................... 600 462,000 Venetian Casino Resort LLC, 12.25%, 11/15/04 ...................... 340 334,050 ---------- 2,321,837 ---------- MANUFACTURING--7.5% Advanced Glassfiber Yarns, LLC, 9.875%, 01/15/09 (c) .................. 685 666,162 Axiohm Transaction Solutions, Inc., 9.75%, 10/01/07 ....................... 500 325,000 Fairchild Semiconductor Corp., 10.375%, 10/01/07 (c) ................. 1,350 1,336,500 Foamex L.P., 9.875%, 06/15/07 ...................... 1,325 1,126,250 Henry Co., 10.00%, 04/15/08 ...................... 500 473,750 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 33 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ------------------------------------------ ------------- -------------------- LAZARD HIGH YIELD PORTFOLIO (CONTINUED) High Voltage Engineering Corp., 10.50%, 08/15/04 ...................... $ 890 $ 827,700 Precise Technology, Inc., 11.125%, 06/15/07 ..................... 100 96,125 Precision Partners, Inc., 12.00%, 03/15/09 (c) .................. 1,000 950,000 Repap Enterprises, Inc., 10.625%, 04/15/05 ..................... 1,000 765,000 ---------- 6,566,487 ---------- MINING--0.8% Pen Holdings, Inc., 9.875%, 06/15/08 ...................... 725 730,438 ---------- OIL & GAS--1.0% Comstock Resources, Inc., 11.25%, 05/01/07 (c) .................. 830 846,600 ---------- PRINTING--1.0% Phoenix Color Corp., 10.375%, 02/01/09 ..................... 900 882,000 ---------- PUBLISHING--1.1% T/SF Communications Corp., 10.375%, 11/01/07 ..................... 995 995,000 ---------- RETAIL--3.7% Frank's Nursery & Crafts, Inc., 10.25%, 03/01/08 ...................... 1,000 995,000 Home Interiors & Gifts, Inc., Series B 10.125%, 06/01/08 ..................... 710 704,675 Petro Stopping Centers, 10.50%, 02/01/07 ...................... 450 472,500 Rent-A-Center, Inc., 11.00%, 08/15/08 ...................... 1,050 1,052,625 ---------- 3,224,800 ---------- SECURITY--1.3% Loomis Fargo & Co., 10.00%, 01/15/04 ...................... 1,100 1,089,000 ---------- TELECOMMUNICATIONS--11.5% AMSC Acquisition, Inc., 12.25%, 04/01/08 ...................... 905 692,325 Call-Net Enterprises, Inc., 9.375%, 05/15/09 ...................... 550 523,875 Covad Communications Group, Inc., 12.50%, 02/15/09 ...................... 330 313,500 Dolphin Telecom PLC, 1.00%, 05/15/09 (c) ................... 1,000 493,750 PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ------------------------------------------ ------------- ----------------- Hyperion Telecommunications, Inc.: 12.00%, 11/01/07 (c) .................. $ 300 $ 303,000 12.25%, 09/01/04 ...................... 500 525,000 IPC Information Systems, Inc., 0.00%, 05/01/08 ....................... 1,200 888,000 ITC DeltaCom, Inc., 11.00%, 06/01/07 ...................... 500 537,500 LodgeNet Entertainment Corp., 10.25%, 12/15/06 ...................... 1,000 1,016,250 Nextel Communications, Inc., 12.00%, 11/01/08 (c) .................. 500 565,000 NEXTLINK Communications, Inc., 10.75%, 06/01/09 ...................... 1,300 1,332,500 Pegasus Communications Corp., 9.75%, 12/01/06 ....................... 500 500,000 RSL Communications PLC, 10.50%, 11/15/08 ...................... 1,075 1,064,250 Viatel, Inc., 11.25%, 04/15/08 ...................... 1,250 1,268,750 ---------- 10,023,700 ---------- TRANSPORTATION & FREIGHT SERVICES--1.0% Atlantic Express Transportation Corp., 10.75%, 02/01/04 ...................... 500 495,000 Atlas Air, Inc., 9.25%, 04/15/08 ....................... 400 380,000 ---------- 875,000 ---------- TOTAL CORPORATE BONDS (Identified cost $79,805,632) .......... 78,608,374 ---------- CONVERTIBLE BONDS--0.6% MANUFACTURING--0.6% Exide Corp., 2.90%, 12/15/05 (c) (Identified cost $523,474) ............ 870 528,525 ---------- SHARES ---------- PREFERRED STOCKS--4.9% Adelphia Communications Corp. .......... 9,733 1,109,562 American Mobile Satellite Corp., 04/01/08 warrants (c) ................. 475 19,000 American Restaurant Group, Inc., 08/15/08 warrants ..................... 200 2 American Restaurant Group, Inc. ........ 223 223,000 Concentric Network Corp. ............... 466 442,700 Forman Petroleum Corp., 06/01/04 warrants ..................... 250 0 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 34 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE - ---------------------------------------------------------------------------- LAZARD HIGH YIELD PORTFOLIO (CONTINUED) Globe Holdings, Inc., 08/01/08 warrants ..................... 300 $ 3 Harborside Healthcare Corp. ............ 330 224,400 High Voltage Engineering Corp. ......... 281 230,420 Jitney-Jungle Stores of America, Inc. .. 1,600 56,000 Nextel Communications, Inc. ............ 1,000 1,090,000 Paxson Communications Corp. ............ 44 396,000 S.F. Holdings Group, Inc. .............. 352 77,440 S.F. Holdings Group, Inc. (c) .......... 1,110 56 Supermarkets General Holdings Corp .................................. 10,000 370,000 TVN Entertainment Corp., 08/01/08 warrants ..................... 500 1,000 ---------- TOTAL PREFERRED STOCKS (Identified cost $4,755,708) .......... 4,239,583 ---------- ....................................... PRINCIPAL AMOUNT (000) ---------- REPURCHASE AGREEMENT--1.5% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $1,335,000 United States Treasury Note, 3.625%, 01/15/08, with a value of $1,319,643) (Identified cost $1,293,000)............................... $1,293 1,293,000 ----------- TOTAL INVESTMENTS (Identified cost $86,377,814) (b) ...... 97.0% $84,669,482 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................ 3.0 2,642,582 ------- ---------- NET ASSETS .............................. 100.0% $87,312,064 ======= ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 35 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ---------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO CURRENCY DENOMINATED BONDS--86.2% ARGENTINA--0.7% Argentina Resolution Co., 0.00%, 07/01/99 ....................... 125 $ 125,017 Argentina Time Deposit: 0.00%, 07/21/99 ....................... 313 331,699 0.00%, 07/22/99 ....................... 126 134,158 Republic of Argentina: 1.7904%, 04/01/01 (e) ................. 36 19,767 3.0468%, 04/01/07 (e), (f) ............ 73 51,107 ----------- TOTAL ARGENTINA ........................ 661,748 ----------- AUSTRALIA--0.8% Commonwealth of Australia, 6.75%, 11/15/06 ....................... 1,070 733,176 ----------- AUSTRIA--1.0% Republic of Austria: 4.50%, 09/28/05 ................... JPY 80,000 785,021 6.25%, 10/16/03 ................... JPY 15,000 151,600 ----------- TOTAL AUSTRIA .......................... 936,621 ----------- BELGIUM--2.8% Kingdom of Belgium, 5.75%, 03/28/08 (f) ................EUR 2,416 2,668,563 ----------- CANADA--2.1% Argos Funding Trust, 5.963%, 02/27/06 ...................... 250 167,233 General Motors Acceptance Corp., 6.50%, 03/23/04GBP .................... 77 121,286 Government of Canada, 8.00%, 06/01/23 ....................... 682 600,947 Molson Breweries Company, Ltd., 6.00%, 06/02/08 (c) ................... 800 532,488 Province of Quebec, 8.625%, 11/04/11 ..................GBP 111 205,967 Quebec Housing, 8.95%, 05/13/13 ....................... 402 341,603 ---------- TOTAL CANADA ........................... 1,969,524 ---------- CAYMAN ISLANDS--0.3% Philip Morris Finance, 5.625%, 06/24/08 ..................DEM 258 267,385 ---------- COSTA RICA--0.2% Costa Rica Republic, 9.335%, 05/15/09 (c) ...............USD 200 195,000 ---------- PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ---------------------------------------------------------------------------- DENMARK--7.6% Danske Kredit, 6.00%, 10/01/29 ........................ 9,433 $1,238,603 Kingdom of Denmark: 5.00%, 08/15/05 ........................ 9,000 1,281,828 7.00%, 11/10/24 ........................ 5,452 881,276 8.00%, 03/15/06 (f) .................... 904 149,635 Nykredit, 6.00%, 10/01/29 ........................ 9,141 1,208,500 Realkredit Danmark, 6.00%, 10/01/29 ........................ 10,087 1,332,868 Unikredit Realkredit, 7.00%, 10/01/29 ........................ 7,595 1,060,764 ---------- TOTAL DENMARK ........................... 7,153,474 ---------- FINLAND--1.1% Republic of Finland, 9.50%, 03/15/04 .................. EUR 840 1,065,745 --------- FRANCE--8.4% Citibank, 5.125%, 01/16/09 ................. EUR 6,600 1,037,186 Credit Foncier de France, 7.50%, 03/29/05 (f) .............. EUR 2,782 3,308,268 Exide Holdings, 9.125%, 04/15/04 (c) ............. EUR 375 199,824 Government of France, 0.00%, 04/25/23 (f) .............. EUR 12,889 3,451,866 --------- TOTAL FRANCE ...................... 7,997,144 --------- GERMANY--7.6% Autobahn Tank & Rast, 6.00%, 10/16/00 .................. EUR 425 230,835 Bayerische Landesbank Girozentrale, 6.875%, 06/07/02 (f) ............. 826 1,325,483 Bundesrepublik Deutschland, 0.00%, 01/04/24 (f) .............. EUR 8,963 2,359,979 Core Dem, 6.39%, 07/05/15 .................. EUR 400 208,296 Downey Savings & Loan, 7.25%, 08/07/07 (f) .............. 630 1,070,322 Frank Hypobank, 6.375%, 02/04/08 ................. 365 583,530 Land Hessen, 6.00%, 11/29/13 .................. EUR 511 574,278 Landwirtschaftliche Rentenbank, 6.375%, 03/09/05 ................. 494 783,807 LBK Hess Thur Giro, 9.00%, 09/06/04 .................. EUR 60 104,397 --------- TOTAL GERMANY ..................... 7,240,927 ---------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 36 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ---------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED) GREECE--0.7% Republic of Greece, 8.90%, 04/01/03 ....................... 70,000 $ 238,490 Republic of Hellenic: 11.10%, 08/14/03 (e) .................. 113,000 370,838 12.80%, 06/30/00 ...................... 30,000 97,026 ---------- TOTAL GREECE ........................... 706,354 ---------- INDONESIA--0.1% Sertifikat Bank Indonesia, 0.00%, 09/09/99 ....................... 500,000 69,701 ---------- IRELAND--1.3% Esat Telecom Group PLC, 11.875%, 12/01/08 ................ USD 375 386,250 Helaba Finance BV, 7.375%, 12/30/02 ................. GBP 229 371,790 Republic of Ireland, 8.00%, 08/18/06 .................. EUR 374 463,353 --------- TOTAL IRELAND ..................... 1,221,393 --------- ITALY--2.1% Films PLC, 4.28125%, 03/31/05 (e) ........... EUR 1,600,000 837,413 Republic of Italy, 10.50%, 04/28/14 ................. EUR 340 778,807 Societa Sportiva Lazio SPA, 6.375%, 10/15/07 ................. 723,544 375,581 --------- TOTAL ITALY ............................ 1,991,801 ---------- JAPAN--19.5% Asterique, 2.48%, 01/23/02 ....................... 191,549 1,602,127 European Investment Bank, 3.00%, 09/20/06 ....................... 510,000 4,637,513 Export-Import Bank of Japan, 4.375%, 10/01/03 (f) .................. 234,000 2,209,721 International Bank for Reconstruction and Development: 2.00%, 02/18/08 (f) ................... 560,000 4,716,508 4.75%, 12/20/04 (f) ................... 486,000 4,778,043 Nippon Credit Bank, Ltd., 1.80%, 07/27/00 ....................... 60,000 499,859 ---------- TOTAL JAPAN ............................ 18,443,771 ---------- LEBANON--0.6% LBP Treasury Notes: 0.00%, 08/26/99 ....................... 131,750 92,793 0.00%, 12/02/99 ....................... 683,000 463,878 ---------- TOTAL LEBANON .......................... 556,671 ---------- PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ---------------------------------------------------------------------------- LUXEMBOURG--0.1% Texon International PLC, 10.00%, 02/01/08 ................. EUR 250 $ 118,260 --------- MEXICO--0.2% United Mexican States: 6.038%, 12/31/19 (e), (f) ........ USD 250 208,125 06/30/03 rights .................. USD 769 0 --------- TOTAL MEXICO ...................... 208,125 --------- MOROCCO--0.0% Morocco Restructuring & Consolidation Agreement, 6.0625%, 01/01/09 (e) ............ USD 1 321 --------- NETHERLANDS--1.5% Government of Netherlands, 8.75%, 01/15/07 .................. EUR 647 843,822 West LB Finance Curacao NV, 8.125%, 01/24/07 ................. GBP 310 533,919 --------- TOTAL NETHERLANDS ................. 1,377,741 --------- PANAMA--0.1% Republic of Panama, 4.00%, 07/17/14 .................. USD 145 106,212 --------- PERU--0.4% Republic of Peru, 0.00%, 09/05/04 .................. USD 600 423,420 --------- POLAND--0.2% Polish Treasury Bill, 0.00%, 08/04/99 .................. 650 163,264 --------- SOUTH AFRICA--0.4% Government of Namibia: 12.00%, 04/15/02 ...................... 210 31,808 12.00%, 04/15/05 ...................... 210 28,906 Lesotho Highlands Water, 12.50%, 04/15/02 ...................... 997 158,869 South African Roads, 11.50%, 09/30/05 ...................... 500 69,394 Trans Caledon Tunnel, 12.00%, 12/01/05 ...................... 740 106,681 ---------- TOTAL SOUTH AFRICA ..................... 395,658 ---------- SPAIN--0.5% Catalunya Generalitat, 9.30%, 11/24/03 .................. EUR 402 496,959 --------- SWEDEN--1.6% Kingdom of Sweden, 9.00%, 04/20/09 ....................... 9,700 1,483,738 --------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 37 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------ ------------------ ------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED) THAILAND--0.0% Finance One PLC, 2.00%, 08/31/01 (d) .............. USD 220 $ 0 Siam Commercial Bank PLC, 7.50%, 03/15/06 (c) .............. USD 45 37,570 --------- TOTAL THAILAND ......................... 37,570 --------- TURKEY--0.4% Turkey Treasury Bills: 0.00%, 09/15/99 ....................... 166,000 335,453 --------- UNITED KINGDOM--8.6% Birmingham Midshires Building Society, 9.125%, 01/05/06 ...................... 300 532,907 Coca Cola Enterprises PLC, 6.75%, 03/12/08 ....................... 158 253,294 Colt Telecom Group PLC, 8.875%, 11/30/07 ................. EUR 500 275,121 Coral Group PLC, 13.50%, 09/30/09 ...................... 400 630,500 Energis PLC, 9.50%, 06/15/09 (c) ................... 225 359,089 Finance for Resident Society House, 11.126%, 10/05/58 ..................... 290 767,145 Haven Funding PLC, 8.125%, 09/30/37 ...................... 290 581,059 HMV Media Group PLC, 10.875%, 05/15/08 ...................... 195 318,127 Hurst Group PLC, 11.125%, 08/06/08 (c) .................. 130 203,376 International Finance Corp., 11.75%, 08/15/99 .................. SKK 750 16,882 Landesbank Schleswig-Holstein, 8.00%, 12/28/06 ........................ 422 720,354 Leica Geosystems Finance PLC, 9.875%, 12/15/08 (c) .............. EUR 400 423,679 Luxfer Holdings PLC, 10.125%, 05/01/09 (c) .................. 450 689,806 MBNA, 5.125%, 04/21/08 .................. EUR 1,880 995,045 Merrill Lynch & Company, Inc., 7.375%, 12/17/07 ....................... 192 317,000 Polestar Corp., 10.50%, 05/30/08 ....................... 509 782,369 TeleWest Communications PLC, 1.00%, 04/15/09 (c) .................... 85 88,428 PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ---------------------------------------------------------------------------- Texon International PLC, 10.00%, 02/01/08 ................. EUR 363 $ 171,714 ---------- TOTAL UNITED KINGDOM .............. 8,125,895 ---------- UNITED STATES--15.3% Airtouch Communications, Inc., 5.50%, 07/24/08 ................. EUR 620 331,911 Cablevision SA, 13.75%, 05/01/09 (c) ................... 175 159,250 Cellco Finance NV, 15.00%, 08/01/05 (c) ................... 50 51,500 Chase Credit Card Master Trust, 5.00%, 12/28/10 ................. EUR 1,800 944,448 Chase TRL Weekly Reset, 0.00%, 09/20/99 ................. DEM 537 542,172 Citibank CRC Time Deposit: 0.00%, 08/03/99 ........................ 35 35,787 0.00%, 10/18/99 ........................ 48 49,661 Citibank Pen Time Deposit: 0.00%, 07/14/99 ........................ 34 35,380 0.00%, 08/04/99 ........................ 64 65,319 0.00%, 08/05/99 ........................ 60 60,576 0.00%, 09/23/99 ........................ 142 142,653 El Salvadore Citibank Time Deposit, 0.00%, 07/27/99 ........................ 119 120,928 Federal Home Loan Bank, 5.54%, 07/13/99 ........................ 110 110,000 Federal National Mortgage Association: 1.75%, 03/26/08 .................. JPY 170,000 1,405,167 2.125%, 10/09/07 (f) ............. JPY 550,000 4,651,153 Ford Motor Credit Corp., 5.25%, 06/16/08 .................. EUR 572 302,386 Household Finance Corp., 5.25%, 11/23/05 .................. DEM 463 247,582 Imasac SA, 11.00%, 05/02/05 (c) .................. 100 61,500 ING Bank NV, (London), 0.00%, 08/11/99 (c) ................... 400 500,000 Inter American Development Bank, 1.00%, 07/08/09 .................. JPY 127,000 1,043,548 Merrill Lynch & Company, Inc., 5.375%, 01/04/09 ................. DEM 830 437,464 North American Capital Corp., 8.25%, 11/17/03 (f) .............. GBP 876 1,445,209 Rao Gazprom, 12.75%, 03/13/00 ...................... 159 58,130 Salomon Brothers Structured Note: 0.00%, 07/06/99 ....................... 600 598,346 0.00%, 09/29/99 ....................... 100 107,460 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 38 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ---------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED) Silgan Holdings, Inc., 13.25%, 07/15/06 ...................... 1 $ 1,105 TTB Finance Cayman, Ltd., 6.17609%, 03/18/07 (e), (f) ........... 486 437,400 United States Treasury Strips, 0.00%, 02/15/16 (f) ................... 577 201,973 Viatel, Inc., 11.50%, 03/15/09 ................. EUR 350 371,622 ---------- TOTAL UNITED STATES .................... 14,519,630 ---------- TOTAL CURRENCY DENOMINATED BONDS (Identified cost $84,922,607) .......... 81,671,244 ---------- ....................................... SHARES -------- COMMON STOCKS--0.0% Viatel, Inc. (Identified cost $0) ...... 1 56 ---------- PREFERRED STOCKS--0.0% Forman Petroleum Corp., 06/01/04 warrants ..................... 309 1 Forman Petroleum Corp. ................. 51 5 ---------- TOTAL PREFERRED STOCKS (Identified cost $2,123) ................ 6 ---------- PRINCIPAL AMOUNT (000) --------- COMMERCIAL PAPER--1.1% American Express Credit Corp., 4.70%, 07/06/99 ....................... $ 125 124,918 General Electric Capital Corp.: 4.85%, 07/07/99 ....................... 355 354,716 4.86%, 07/26/99 ....................... 250 249,156 Prudential Funding Corp.: 4.00%, 09/24/99 ....................... 50 49,528 4.50%, 09/09/99 ....................... 240 238,297 ---------- TOTAL COMMERCIAL PAPER (Identified cost $1,016,615) ........... 1,016,615 ---------- DISCOUNT NOTES--4.8% Federal Farm Credit Banks, 4.53%, 11/03/99 ....................... 384 378,038 Federal Home Loan Banks: 4.68%, 07/07/99 ....................... 172 171,866 4.84%, 08/04/99 ....................... 100 99,543 4.82%, 09/15/99 ....................... 341 337,530 4.84%, 05/11/00 ....................... 272 260,481 Federal Home Loan Mortgage Corp.: 4.72%, 07/07/99 ....................... 90 89,930 PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - ---------------------------------------------------------------------------- 4.70%, 07/09/99 ....................... $ 100 $ 99,896 4.71%, 07/12/99 ....................... 115 114,834 4.71%, 08/06/99 ....................... 100 99,529 4.94%, 09/24/99 ....................... 120 118,600 Federal National Mortgage Association: 4.77%, 07/12/99 ....................... 100 99,589 4.77%, 07/14/99 ....................... 200 199,656 4.69%, 07/16/99 ....................... 235 254,503 4.73%, 07/20/99 ....................... 100 99,750 4.72%, 08/11/99 ....................... 100 99,463 4.80%, 08/13/99 ....................... 150 149,140 4.88%, 08/18/99 ....................... 265 263,276 4.76%, 08/23/99 ....................... 100 99,299 4.80%, 08/30/99 ....................... 90 89,272 4.88%, 09/08/99 ....................... 340 336,825 4.96%, 09/17/99 ....................... 100 98,925 4.66%, 10/25/99 ....................... 80 78,799 4.69%, 11/05/99 ....................... 248 243,879 4.79%, 11/23/99 ....................... 160 156,913 5.12%, 12/10/99 ....................... 116 113,328 4.71%, 12/17/99 ....................... 367 358,885 ----------- TOTAL DISCOUNT NOTES (Identified cost $4,511,749)............ 4,511,749 ----------- REPURCHASE AGREEMENT--0.7% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $705,000 United States Treasury Note, 6.250%, 02/15/03, with a value of $729,694) (Identified cost $714,000) (f)......... 714 714,000 ----------- TOTAL INVESTMENTS (Identified cost $91,167,094) (b)....... 92.8% $87,913,670 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................ 7.2 6,818,525 ------- ----------- NET ASSETS .............................. 100.0% $94,732,195 ======= =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 39 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED) Forward Foreign Currency Contracts open at June 30, 1999:
U.S. $ Cost U.S. $ Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized Purchase Contracts Date Currency Date Value Appreciation Depreciation - -------------------- ------------ ---------------- ---------------- ------------- -------------- ------------- ARS 7/1/99 114,840 $ 110,000 $ 114,851 $ 4,851 $ -- ARS 7/21/99 585,728 571,533 584,909 13,376 -- ARS 12/7/99 27,837 27,000 26,945 -- 55 ARS 12/7/99 102,582 116,000 115,677 -- 323 AUD 12/13/99 548,629 360,559 363,519 2,960 -- CAD 12/13/99 3,889,995 2,649,319 2,647,577 -- 1,742 CHF 12/13/99 1,065,115 706,596 698,123 -- 8,473 CLP 8/11/99 38,832,000 80,000 74,696 -- 5,304 CLP 8/30/99 45,045,000 90,000 86,368 -- 3,632 CLP 11/26/99 80,480,000 160,000 152,173 -- 7,827 CNY 7/13/99 955,500 115,000 115,271 271 -- CNY 7/19/99 1,081,600 130,000 130,403 403 -- CNY 8/26/99 1,001,724 120,000 120,294 294 -- CNY 9/7/99 543,315 65,000 65,161 161 -- CSK 7/16/99 3,107,000 90,220 88,012 -- 2,208 CSK 11/18/99 6,526,800 210,000 184,191 -- 25,809 CZK 12/28/99 1,230,000 34,160 34,681 521 -- DKK 12/13/99 43,597,274 6,129,881 6,112,227 -- 17,654 EUR 12/13/99 27,356,952 28,677,909 28,561,594 -- 116,315 GBP 12/13/99 1,153,811 1,835,403 1,814,530 -- 20,873 GRD 12/28/99 93,381,860 317,000 291,068 -- 25,932 HUF 7/19/99 9,161,520 40,000 37,647 -- 2,353 HUF 8/9/99 20,110,000 82,018 82,188 170 -- HUF 8/16/99 35,188,600 145,000 143,556 -- 1,444 HUF 9/15/99 83,357,450 341,000 337,529 -- 3,471 HUF 9/21/99 13,114,850 53,000 53,027 27 -- IDR 7/12/99 100,000,000 12,783 14,372 1,589 -- IDR 8/26/99 680,000,000 80,000 96,313 16,313 -- IDR 8/8/99 1,103,700,000 129,846 155,728 25,882 -- IDR 10/27/99 760,000,000 80,000 105,821 25,821 -- IDR 11/8/99 2,150,000,000 248,268 298,494 50,226 -- ILS 07/12/99 565,000 137,469 137,677 208 -- ILS 8/10/99 304,556 73,000 73,800 800 -- ILS 5/18/00 1,190,000 271,627 276,050 4,423 -- INR 7/8/99 3,901,500 90,000 89,667 -- 333 INR 8/2/99 3,206,420 74,000 73,216 -- 784 INR 8/9/99 6,540,000 150,000 149,147 -- 853 INR 8/19/99 2,821,000 65,000 64,218 -- 782 INR 8/20/99 1,562,400 36,000 35,560 -- 440 INR 8/25/99 1,914,000 44,000 43,523 -- 477 INR 9/09/99 4,818,000 110,000 109,257 -- 743 JPY 9/10/99 2,155,507,602 18,090,311 18,006,153 39,277 123,435 KRW 7/26/99 309,125,000 250,000 266,832 16,832 -- KRW 8/6/99 40,320,000 35,000 34,800 -- 200 KRW 9/29/99 187,500,000 150,000 161,710 11,710 -- MXN 7/6/99 669,151 62,415 70,715 8,300 -- MXN 7/8/99 2,686,136 272,000 283,602 11,602 -- MXN 11/29/99 295,468 28,235 29,190 955 --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 40 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
U.S. $ Cost U.S. $ Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized Purchase Contracts Date Currency Date Value Appreciation Depreciation - -------------------- ------------ ------------ ---------------- -------------- -------------- ------------- MXN 12/29/99 2,390,000 $ 216,839 $ 232,695 $ 15,856 $ -- MXN 12/30/99 1,671,907 153,000 162,700 9,700 -- PHP 2/10/00 5,538,000 130,000 141,929 11,929 -- PHP 3/10/00 1,680,000 40,000 42,954 2,954 -- PLN 7/6/99 455,587 125,000 115,872 -- 9,128 PLN 7/13/99 916,392 240,000 232,703 -- 7,297 PLN 9/15/99 88,176 22,000 22,082 82 -- PLN 11/5/99 519,012 139,000 128,721 -- 10,279 SEK 12/13/99 5,622,811 677,366 669,412 -- 7,954 SKK 8/19/99 2,970,000 66,295 66,459 164 -- SKK 9/21/99 5,327,947 117,260 117,942 682 -- SKK 11/17/99 3,898,895 87,029 84,858 -- 2,171 THB 7/14/99 11,994,100 324,691 325,523 832 -- THB 12/21/99 7,071,000 187,113 192,525 5,412 -- THB 1/19/00 7,071,000 183,424 192,487 9,063 -- THB 1/20/00 4,923,100 130,000 134,015 4,015 -- ZAR 11/26/99 398,790 63,000 64,181 1,181 -- ----------- ----------- -------- -------- $66,648,569 $66,539,120 $298,842 $408,291 ----------- ----------- -------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 41 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
U.S. $ Cost U.S. $ Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized Sale Contracts Date Currency Date Value Appreciation Depreciation - ------------------ ------------ ---------------- ---------------- ------------- -------------- ------------- ARS 7/1/99 114,840 $ 112,610 $ 114,851 $ -- $ 2,241 ARS 7/21/99 585,728 571,132 584,909 -- 13,777 AUD 12/13/99 213,169 140,421 141,244 -- 823 CAD 12/13/99 377,919 258,300 257,216 1,084 -- DKK 12/13/99 82,976,991 11,637,509 11,633,163 13,905 9,559 EUR 8/19/99 61,465 66,295 63,595 2,700 -- EUR 8/19/99 113,000 117,260 117,215 45 -- EUR 11/17/99 53,715 57,843 55,967 1,876 -- EUR 12/13/99 5,845,323 5,908,320 5,864,491 43,829 -- GBP 12/13/99 4,792,493 7,698,864 7,568,628 130,236 -- GDR 12/28/99 93,381,860 315,458 291,068 24,390 -- IDR 8/26/99 500,000,000 69,494 70,818 -- 1,324 INR 7/8/99 5,481,250 125,000 125,973 -- 973 JPY 9/10/99 2,152,655,035 18,209,746 17,982,325 231,442 4,021 KRW 9/29/99 74,900,000 60,796 64,598 -- 3,802 MXN 7/8/99 800,000 83,941 84,464 -- 523 PHP 2/10/00 5,538,000 139,721 141,929 -- 2,208 SEK 12/13/99 3,256,019 389,569 387,638 2,745 814 THB 7/14/99 4,594,100 124,528 124,685 -- 157 THB 12/21/99 7,071,000 189,673 192,525 -- 2,852 THB 1/19/00 7,071,000 191,626 192,487 -- 861 THB 1/20/00 4,923,100 133,417 134,015 -- 598 ZAR 11/26/99 398,790 61,244 64,181 -- 2,937 ----------- ----------- -------- -------- $46,662,767 $46,257,985 $452,252 $ 47,470 ----------- ----------- -------- -------- Gross unrealized appreciation/depreciation from Forward Foreign Currency Contracts $751,094 $455,761 ======== ========
As of June 30, 1999, the Lazard International Fixed-Income Portfolio had the following outstanding cross currency swap agreement:
SWAP NOTIONAL CURRENCY NOTIONAL CURRENCY RATE RATE TRADE TERMINATION UNREALIZED COUNTERPARTY RECEIVED PAID RECEIVED PAID DATE DATE LOSS - ------------------------- ------------------- ------------------- ---------- --------------- --------- ------------- ----------- Standard Chartered Bank 5,500,000 PHP 144,699 USD 10.70% 6 Month LIBOR 4/29/99 4/30/02 $217
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 42 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- LAZARD STRATEGIC YIELD PORTFOLIO CURRENCY DENOMINATED BONDS--82.6% ARGENTINA--1.1% Argentina Bocon, 1.00%, 04/01/01 (f) ........... USD 1,347 $ 739,603 Argentina Resolution Co., 0.00%, 07/01/99 ................... 965 965,130 Argentina Time Deposit: 0.00%, 07/21/99 ................... 520 551,067 0.00%, 07/22/99 ................... 632 672,918 Mastellone Hermanos SA, 11.75%, 04/01/08 .................. 456 318,060 Republic of Argentina, 5.94%, 03/31/05 (e) ........... USD 813 692,745 ---------- TOTAL ARGENTINA .................... 3,939,523 ---------- AUSTRALIA--1.2% Credit Foncier, 8.50%, 09/09/02 (f) ............... 6,000 4,157,872 ---------- BULGARIA--0.1% National Republic of Bulgaria, 5.875%, 07/28/11 .............. USD 450 304,875 ---------- CANADA--1.9% Argos Funding Trust, 5.963%, 02/27/06 .................. 1,000 668,931 Callable Net Enterprises, Inc., 9.375%, 05/15/09 .............. USD 1,500 1,428,750 Dynacare, Inc., 10.75%, 01/15/06 (f) .......... USD 2,522 2,547,220 Fundy Cable, Ltd., 11.00%, 11/15/05 (f) .......... USD 208 227,760 General Motors Acceptance Corp., 6.50%, 03/23/04 ............... GBP 256 403,238 Molson Breweries Company, Ltd., 6.00%, 06/02/08 (c) ............... 629 418,668 Province of Quebec, 8.625%, 11/04/11 .............. GBP 431 799,747 ---------- TOTAL CANADA ....................... 6,494,314 ---------- CAYMAN ISLANDS--0.2% Philip Morris Finance, 5.625%, 06/24/08 .............. DEM 764 790,001 ---------- COSTA RICA--0.2% Costa Rica Republic, 9.335%, 05/15/09 (c) .......... USD 575 560,625 ---------- DENMARK--7.0% Danske Kredit, 6.00%, 10/01/29 ................... 30,578 4,015,053
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- Kingdom of Denmark: 5.00%, 08/15/05 (f) ............... 40,000 $5,697,013 8.00%, 11/15/01 ................... 24,370 3,701,691 8.00%, 03/15/06 (f) ............... 26,615 4,405,450 Nykredit AS, 6.00%, 10/01/29 (f) ............... 35,197 4,653,274 Realkredit Danmark AS, 6.00%, 10/01/29 ................... 10,153 1,341,589 Unikredit, 7.00%, 10/01/29 ................... 4,458 622,632 ---------- TOTAL DENMARK ...................... 24,436,702 ---------- FRANCE--2.5% Credit Foncier de France, 7.50%, 03/29/05 (f) ........... EUR 7,043 8,374,903 Exide Holdings, 9.125%, 04/15/04 (c) .......... EUR 900 479,577 ---------- TOTAL FRANCE ....................... 8,854,480 ---------- GERMANY--3.2% Autobahn Tank & Rast, 6.00%, 10/16/00 ............... EUR 1,833 995,577 Bt Croatia, 1.00%, 10/01/99 ............... EUR 1,000 103,410 Core Dem, 6.39%, 07/05/15 (f) ........... EUR 2,400 1,249,778 Federal Republic of Germany: 6.00%, 07/04/07 (f) ........... EUR 5,967 6,764,961 6.50%, 10/14/05 ............... EUR 1,623 1,882,706 ---------- TOTAL GERMANY ...................... 10,996,432 ---------- GREECE--0.9% Republic of Greece: 8.90%, 04/01/03 ................... 110,000 374,770 9.80%, 03/21/00 ................... 109,500 348,069 Republic of Hellenic: 11.10%, 08/14/03 (e), (f) ......... 605,000 1,985,462 12.80%, 06/30/00 .................. 110,000 355,761 ---------- TOTAL GREECE ....................... 3,064,062 ---------- INDONESIA--0.1% Polysindo (i) ...................... 5,000,000 36,101 PT Polysindo Eka Perkasa, 10.00%, 03/16/00 .............. USD 194 9,709 Sertifikat Bank Indonesia, 0.00%, 09/09/99 ................... 2,000,000 278,803 ---------- TOTAL INDONESIA .................... 324,613 ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 43 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED) IRELAND--0.5% Esat Telecom Group PLC, 11.875%, 12/01/08 ............. USD 1,350 $1,390,500 Helaba Finance BV, 7.375%, 12/30/02 .............. EUR 142 230,542 ---------- TOTAL IRELAND ...................... 1,621,042 ---------- ITALY--1.2% Films PLC, 4.28125%, 03/31/05 (e), (f) ... EUR 5,200,000 2,721,593 Societa Sportiva Lazio SPA, 6.375%, 10/15/07 .................. 3,038,887 1,577,440 ---------- TOTAL ITALY ........................ 4,299,033 ---------- JAPAN--1.0% Asterique, 2.48%, 01/23/02 (f) ............... 286,282 2,394,479 Export-Import Bank of Japan, 8.00%, 06/04/00 ............... USD 78 77,709 Nippon Credit Bank, Ltd., 1.80%, 07/27/00 ................... 140,000 1,166,339 ---------- TOTAL JAPAN ........................ 3,638,527 ---------- KOREA--0.5% SK Telecom Company, Ltd., 7.75%, 04/29/04 ............... USD 1,675 1,616,626 ---------- LEBANON--1.2% LBP Treasury Bill, 0.00%, 10/28/99 ................... 1,325,000 844,907 LBP Treasury Notes: 0.00%, 07/15/99 ................... 537,200 383,343 0.00%, 08/26/99 ................... 1,461,920 1,029,645 0.00%, 12/02/99 ................... 2,891,000 1,963,503 ---------- TOTAL LEBANON ...................... 4,221,398 ---------- MEXICO--0.8% United Mexican States: 6.038%, 12/31/19 (e) .......... USD 750 624,375 6.097%, 12/31/19 (e) .......... USD 250 208,125 6.115%, 12/31/19 (e) .......... USD 500 416,250 6.20%, 12/31/19 (e) ........... USD 500 416,250 6.25%, 12/31/19 ............... USD 1,450 1,069,375 06/30/03 rights ............... USD 8,530 0 ---------- TOTAL MEXICO ....................... 2,734,375 ---------- MOROCCO--0.4% Morocco Restructuring & Consolidation Agreement, 6.0625%, 01/01/09 (e) ......... USD 1,908 1,526,822 ----------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- NETHERLANDS--0.3% KPNQWEST NV, 7.125%, 06/01/09 (c) .......... EUR 950 $ 979,308 ---------- PANAMA--0.4% Republic of Panama, 4.00%, 07/17/14 (e), (f) ...... USD 1,795 1,314,837 ---------- PERU--0.4% Republic of Peru, 0.00%, 09/05/04 ............... USD 1,900 1,340,830 ---------- PHILIPPINES--0.7% National Power Corp., 9.625%, 05/15/28 .............. USD 1,850 1,609,500 Republic of Philippines: 8.875%, 04/15/08 .............. USD 450 438,570 9.875%, 01/15/19 .............. USD 300 294,000 ---------- TOTAL PHILIPPINES .................. 2,342,070 ---------- POLAND--0.7% Government of Poland, 12.00%, 06/12/02 .................. 1,300 336,712 Netia Holdings BV, 13.50%, 06/15/09 (c) .............. 510 541,506 Polish Treasury Bill, 0.00%, 08/04/99 ................... 5,800 1,456,813 ---------- TOTAL POLAND ....................... 2,335,031 ---------- SOUTH AFRICA--0.8% Government of Namibia: 12.00%, 04/15/02 .................. 1,460 221,144 12.00%, 04/15/05 .................. 1,460 200,964 Lesotho Highlands Water, 12.50%, 04/15/02 .................. 6,760 1,077,186 Republic of South Africa, 12.00%, 02/28/05 .................. 2,680 401,065 South African Roads, 11.50%, 09/30/05 .................. 975 135,318 Trans Caledon Tunnel, 12.00%, 12/01/05 .................. 5,700 821,729 ---------- TOTAL SOUTH AFRICA ................. 2,857,406 ---------- THAILAND--0.1% Finance One PLC, 2.00%, 08/31/01 (d) ........... USD 1,515 0 Siam Commercial Bank PLC, 7.50%, 03/15/06 (c) ........... USD 525 438,322 ---------- TOTAL THAILAND ..................... 438,322 ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 44 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED) TURKEY--0.7% Turkey Treasury Bills, 0.00%, 09/15/99 ................... 1,259,000 $2,544,188 ---------- UNITED KINGDOM--6.5% Birmingham Midshires Building Society, 9.125%, 01/05/06 (f) .............. 900 1,598,720 Coca Cola Enterprises, 6.75%, 03/12/08 ................... 778 1,247,232 Colt Telecom Group PLC, 8.875%, 11/30/07 (f) .......... EUR 1,900 1,045,459 Coral Group PLC, 13.50%, 09/30/09 .................. 1,250 1,970,313 Dunlop Standard Aerospace Holdings PLC, 11.875%, 05/15/09 (c) ......... USD 200 200,500 Energis PLC, 9.50%, 06/15/09 (c) ............... 800 1,276,763 Finance for Social Resources, 11.126%, 10/05/58 (f) ............. 580 1,534,804 HMV Media Group PLC, 10.875%, 05/15/08 ................. 730 1,190,936 Hurst Group PLC, 11.125%, 08/06/08 (c) ............. 715 1,118,566 International Finance Corp., 11.75%, 08/15/99 SKK 3,550 79,908 Landwirtschaftliche Rentenbank, 6.375%, 03/09/05 (f) .............. 1,829 2,901,989 Leica Geosystems Finance PLC, 9.875%, 12/15/08 (c) .......... EUR 1,200 1,271,038 Luxfer Holdings PLC, 10.125%, 05/01/09 (c) ............. 1,500 2,299,355 Ono Finance PLC, 13.00%, 05/01/09 .............. EUR 840 889,727 Orange PLC, 8.875%, 06/01/09 (c) .............. 700 1,114,409 Polestar Corp., 10.50%, 05/30/08 .................. 1,090 1,675,407 Telewest Communications PLC, 1.00%, 04/15/09 (c) ............... 125 130,041 Texon International PLC, 10.00%, 02/01/08 .............. EUR 1,348 637,659 United Kingdom Treasury Bond, 7.25%, 12/07/07 (f) ............... 250 445,488 ---------- TOTAL UNITED KINGDOM .............. . 22,628,314 ----------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- UNITED STATES--48.0% Advanced Glassfiber Yarns, LLC, 9.875%, 01/15/09 (c), (f) ......... 925 $ 899,563 Advantica Restaurant Group, Inc., 11.25%, 01/15/08 (f) .............. 1,335 1,281,600 Agrilink Foods, Inc., 11.875%, 11/01/08 (f) ......... USD 725 746,750 Airtouch Communications, Inc., 5.50%, 07/24/08 ............... EUR 2,420 1,295,523 Amatek Industries Pty, Ltd., 12.00%, 02/15/08 (c) .............. 1,575 1,519,875 American Restaurant Group, Inc., 11.50%, 02/15/03 .................. 1,750 1,592,500 AMSC Acquisition, Inc., 12.25%, 04/01/08 (f) .............. 1,235 944,775 Amtrol, Inc., 10.625%, 12/31/06 ................. 1,010 998,637 Argosy Gaming Co., 10.75%, 06/01/09 (c) .............. 1,350 1,377,000 Asset Securitization Corp.: Series 1997-D5, Class C, 1.385%, 02/14/41 (e) .............. 12,867 1,182,298 Series 1996-D2, Class ACS2, 1.488%, 02/28/26 (e) .............. 7,035 567,197 Atlantic Express Transportation Corp., 10.75%, 02/01/04 .................. 1,254 1,241,460 Atlas Air, Inc., 9.25%, 04/15/08 ................... 550 522,500 Axiohm Transaction Solutions, Inc., 9.75%, 10/01/07 ................... 1,200 780,000 Booth Creek Ski Holdings, Inc., 12.50%, 03/15/07 .................. 1,542 1,356,960 Budget Group, Inc., 9.125%, 04/01/06 (c) .............. 1,740 1,626,900 Building One Services Corp., 10.50%, 05/01/09 (c) .............. 915 873,825 Cablevision Industries Corp., 13.75%, 05/01/09 (c) .............. 450 409,500 Capital One Master Trust, Series 1999-1, Class A, 5.043%, 07/16/07 (f) .............. 9,630 9,612,859 Catastrophe Reinsurance, 8.71125%, 06/01/00 ................ 300 296,730 Cellco Finance NV, 15.00%, 08/01/05 (c) .............. 360 370,800 Charter Communications Holdings LLC, 8.625%, 04/01/09 (c), (f) ......... 1,500 1,440,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 45 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - --------------------------------------- ------------------ ------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED) Chase Credit Card Master Trust, 5.00%, 12/28/10 ..................... 3,280 $ 1,720,995 Chase TRL Weekly Reset, 0.00%, 09/20/99 ................. DEM 3,578 3,607,969 Cherokee International Finance LLC, 10.50%, 05/01/09 (c) ................ 540 538,650 Citibank CRC Time Deposit: 0.00%, 08/03/99 ..................... 616 629,860 0.00%, 10/18/99 ..................... 248 256,581 Citibank Pen Time Deposit: 0.00%, 07/14/99 ..................... 333 346,520 0.00%, 07/20/99 ..................... 290 300,063 0.00%, 08/04/99 ..................... 356 363,333 0.00%, 08/05/99 ..................... 315 318,024 0.00%, 09/23/99 ..................... 933 937,292 Citibank SVC Time Deposit, 0.00%, 08/16/99 ..................... 570 581,628 Coaxial Communications Central Ohio LLC, 10.00%, 08/15/06 (f) ................ 1,329 1,343,951 Comstock Resources, Inc., 11.25%, 05/01/07 (c) ................ 590 601,800 Concentric Network Corp., 12.75%, 12/15/07 .................... 1,420 1,487,450 Courtyard by Marriott II, Ltd., Series B, 10.75%, 02/01/08 (f) ................ 1,610 1,642,200 Covad Communications Group, Inc., 12.50%, 02/15/09 .................... 400 380,000 Credit Suisse First Boston Mortgage: Series 1998-C2, Class AX, 0.987%, 06/15/23 .................... 35,671 2,129,167 Series 1998-C2, Class A1, 5.96%, 11/17/30 (f) ................. 8,081 7,848,021 CSC Holdings, Inc., 10.50%, 05/15/16 (f) ................ 658 756,700 Dade International, Inc., 11.125%, 05/01/06 ................... 850 892,500 Dictaphone Corp., 11.75%, 08/01/05 (f) ................ 1,299 714,450 Domestic, Inc., 8.70%, 04/30/02 ..................... 500 502,500 Dura Operating Corp., 9.00%, 05/01/09 (c) ................. 1,250 1,203,125 EchoStar DBS Corp., 9.375%, 02/01/09 (c) ................ 865 882,300 El Salvadore Citibank Time Deposit, 0.00%, 07/27/99 ..................... 333 338,395
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - --------------------------------------- ------------------ ------------------- Exide Corp., 2.90%, 12/15/05 (c) ................. 265 $ 160,988 Fairchild Semiconductor Corp., 10.375%, 10/01/07 (c) ............... 1,175 1,163,250 Falcon Products Inc., 11.375%, 06/15/09 (c) ............... 440 437,800 Federal Farm Credit Banks, 5.55%, 07/01/99 ..................... 2,081 2,081,000 Federal Home Loan Banks, 5.54%, 07/13/99 ..................... 205 205,000 Federal Home Loan Mortgage Corp., 6.50%, TBA .......................... 3,585 3,541,299 Federal National Mortgage Association: 8.00%, 06/01/12 ..................... 792 814,391 8.00%, 12/01/12 ..................... 1,670 1,716,409 First USA Trust: Series 1999-1, Class A, 5.08%, 10/19/06 (e) ................. 6,974 6,965,282 Series 1998-1, 6.50%, 01/18/06 (c) ................. 1,600 1,574,160 Fisher Scientific International, Inc., 9.00%, 02/01/08 ..................... 1,700 1,615,000 Fleming Companies, Inc., 10.625%, 07/31/07 ................... 550 511,500 Foamex L.P., 9.875%, 06/15/07 .................... 325 276,250 Ford Motor Credit Corp., 5.25%, 06/16/08 EUR 2,157 1,140,291 Frank's Nursery & Crafts, Inc., 10.25%, 03/01/08 .................... 1,000 995,000 G3 Mortgage Reinsurance, Ltd., 7.9425%, 05/25/08 (c), (e) .......... 1,500 1,372,734 Genesis Health Ventures, Inc., 9.875%, 01/15/09 .................... 900 720,000 Geo Specialty Chemicals, Inc., 10.125%, 08/01/08 ................... 670 643,200 Government National Mortgage Association, 8.00%, 11/15/28 ..................... 2,409 2,477,870 Halyard Re B V, 1.00%, 04/05/02 (c) ................. 1,000 1,000,000 Headlands Mortgage Securities, Inc.: Series 1997-1, Class X1, 0.682%, 03/25/27 (e) ............... 52,219 818,282 Series 1997-4, Class X, 1.138%, 11/25/27 (e) ............... 19,208 490,586
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 46 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED) Henry Co., 10.00%, 04/15/08 .................. 590 $ 559,025 High Voltage Engineering Corp., 10.50%, 08/15/04 .................. 954 887,220 Hollywood Casino Corp., 11.25%, 05/01/07 (c) .............. 880 882,200 Home Interiors & Gifts, Inc., 10.125%, 06/01/08 ................. 790 784,075 Household Finance Corp., 5.25%, 11/23/05 ................EUR 802 428,857 Huntsman ICI Chemicals LLC, 10.125%, 07/01/09 ..............EUR 550 571,220 Imasac SA, 11.00%, 05/02/05 (c) .............. 400 246,000 ING Bank NV, (London), 0.00%, 08/11/99 (c) ............... 1,300 1,625,000 Interbank AKK Trust, Series 1995-1, Class 1, 9.00%, 02/28/01 (c) ............... 1,000 875,000 IPC Information Systems, Inc., 0.00%, 05/01/08 (e) ............... 1,050 777,000 IT Group, Inc., 11.25%, 04/01/09 (c) .............. 1,225 1,176,000 J.H. Heafner, Inc., 10.00%, 05/15/08 (c) .............. 1,635 1,626,825 Jordan Industries, Inc., 10.375%, 08/01/07 ................. 975 987,187 LodgeNet Entertainment Corp., 10.25%, 12/15/06 .................. 735 746,944 Loomis Fargo & Co., 10.00%, 01/15/04 .................. 725 717,750 Marvel Enterprises, Inc., 12.00%, 06/15/09 (c) .............. 1,385 1,426,550 Masaic, Ltd., Class B, 0.99%, 02/18/00 ................... 950 948,214 Mediq, Inc., 11.00%, 06/01/08 .................. 1,350 1,053,000 Merrill Lynch & Company, Inc.: 5.375%, 01/04/09 .................. 3,590 1,892,165 7.375%, 12/17/07 .................. 575 949,350 Merrill Lynch Mortgage Investments, Inc., Series 1996-C1, Class IO: 0.571%, 04/25/28 (c), (e) ......... 17,655 430,351 1.651%, 11/21/28 .................. 14,806 1,069,312 Morgan Guaranty Trust, 0.00%, 07/31/99 (d) ........... THB 10,569 0
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - ------------------------------------- ------------------ ------------------- Morgan Stanley Capital One, Inc.: Series 1998-HF1, Class X 1.033%, 02/15/18 (e) .............. 19,253 $ 1,095,039 Series 1996-WF1, Class X 1.401%, 11/15/28 (c), (e) ......... 6,261 349,267 Series 1997-C1, Class IO 2.75%, 02/15/20 (e), (f) .......... 2,138 32,409 Series 1998-HF2, Class A1 6.01%, 11/15/30 ................... 10 10,446 Mosaic Re, Ltd., 14.02%, 07/09/99 (c) .............. 750 750,338 Neff Corp., 10.25%, 06/01/08 .................. 1,350 1,368,500 North American Capital Corp., 8.25%, 11/17/03 (f) GBP 1,225 2,020,983 Pacific Reinsurance, 1.00%, 05/31/03 ................... 1,340 1,346,700 Paxson Communications Corp., 11.625%, 10/01/02 (f) ............. 1,865 1,925,612 Pen Holdings, Inc., 9.875%, 06/15/08 .................. 875 881,563 Penhall International Corp., 12.00%, 08/01/06 .................. 1,750 1,767,500 Penn National Gaming, Inc., 10.625%, 12/15/04 ................. 1,150 1,150,000 Pentacon, Inc., 12.25%, 04/01/09 (c), (f) ......... 975 962,812 Peru Trade Finance Paper, 0.00%, 09/04/04 ................... 2,099 1,481,554 Petro Stopping Centers, 10.50%, 02/01/07 (f) .............. 1,570 1,648,500 Phoenix Color Corp., 10.375%, 02/01/09 ................. 1,125 1,102,500 Prison Reality Trust Inc., 12.00%, 06/01/06 .................. 725 721,375 Production Resource Group, 11.50%, 01/15/08 .................. 1,452 1,481,040 Prudential Home Mortgage Security: Series 1993-5, Class A9 0.439%, 03/25/00 (e) .............. 35,284 5,645 Series 1993-24, Class A7 0.509%, 07/25/00 (e) .............. 39,240 129,886 Series 1993-41, Class A5 0.914%, 10/25/00 (e) .............. 11,403 83,361 PSINet, Inc., 11.50%, 11/01/08 .................. 1,250 1,318,750 Quest Diagnostics, Inc., 10.75%, 12/15/06 .................. 1,248 1,422,720
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 47 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - -------------------------------------------- ------------------ ------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED) Radio Unica Corp., 1.00%, 08/01/06 .......................... 1,875 $ 1,078,125 Railworks Corp., 11.50%, 04/15/09 (c) ..................... 1,025 1,012,187 Rao Gazprom, 12.75%, 03/13/00 ......................... 702 256,651 RBF Finance Co., 11.00%, 03/15/06 (c) ..................... 1,425 1,467,750 Regal Cinemas, Inc., 9.50%, 06/01/08 .......................... 1,200 1,122,000 Rent-A-Center, Inc., 11.00%, 08/15/08 ......................... 125 125,313 Renters Choice, Inc., 11.00%, 08/15/08 (c) ..................... 400 402,000 Rhythms Netconnections, Inc., 12.75%, 04/15/09 (c) ..................... 500 467,500 RSL Communications PLC, 10.50%, 11/15/08 ......................... 1,200 1,188,000 Sabreliner Corp., 11.00%, 06/15/08 (c) ..................... 1,030 890,950 Salomon Brothers Structured Note: 0.00%, 07/06/99 .......................... 2,700 2,692,636 0.00%, 09/29/99 .......................... 1,200 1,289,520 7.36%, 06/08/01 .......................... 516 514,236 Silgan Holdings, Inc., 13.25%, 07/15/06 ......................... 1,446 1,597,830 Spanish Broadcasting Systems, Inc., 11.00%, 03/15/04 (f) ..................... 2,006 2,166,480 Station Casinos, Inc., 10.125%, 03/15/06 ........................ 900 927,000 Structured Asset Securitization Corp.: Series 1996-CFL, Class X2 1.153%, 02/25/28 (e) ..................... 2,543 56,445 Series 1996-CFL, Class X1 1.461%, 02/25/28 (e) ..................... 4,589 235,189 Swiss Re Earthquake Fund, 10.493%, 07/16/00 ........................ 1,000 1,000,312 T/SF Communications Corp., 10.375%, 11/01/07 ........................ 1,225 1,225,000 Transdigm, Inc, 10.375%, 12/01/08 ........................ 875 857,500 Trinity Re Florida Huricane Fund 99, 10.00%, 12/31/99 (e) ..................... 1,550 1,517,217 TTB Finance Cayman, Ltd., 6.176%, 03/18/07 (e) ..................... 1,926 1,733,400
PRINCIPAL AMOUNT DESCRIPTION (000) (H) VALUE - -------------------------------------------- ------------------ --------------- TVN Entertainment Corp., 14.00%, 08/01/08 (c) ..................... 2,025 $ 1,316,250 UCFC Loan Trust, 8.00%, 09/15/00 .......................... 2,304 205,200 United Artists Theatre Co., 9.75%, 04/15/08 .......................... 125 96,250 United Rentals, Inc., 9.25%, 01/15/09 (c) ...................... 1,000 992,500 United States Department of Veteran Affairs REMIC, Series 1997-1, Class IO 0.367%, 02/15/27 (e) ..................... 31,999 444,993 Universal Hospital Services, Inc., 10.25%, 03/01/08 (c) ..................... 200 168,000 URS Corp., 12.25%, 05/01/09 (c) ..................... 1,090 1,106,350 Venetian Casino Resort LLC, 12.25%, 11/15/04 ......................... 1,255 1,233,037 Viatel, Inc., 11.50%, 03/15/09 ..................... EUR 800 849,421 Volume Services America, Inc., 11.25%, 03/01/09 (c) ..................... 525 577,500 ----------- TOTAL UNITED STATES ....................... 166,509,505 ----------- TOTAL CURRENCY DENOMINATED BONDS (Identified cost $301,764,081)............. 286,871,133 ----------- SHARES ------ PREFERRED STOCKS--1.9% Adelphia Communications Corp. ............. 18,220 2,077,080 American Mobile Satellite Corp., 04/01/08 warrants (c) .................... 1,265 50,600 Concentric Network Corp. .................. 298 283,100 E. Spire Communications, Inc. (c) ......... 64 3,538 Forman Petroleum Corp., 06/01/04 warrants ........................ 1,144 1 Forman Petroleum Corp. .................... 161 16 Harborside Healthcare Corp. ............... 1,104 750,720 High Voltage Engineering Corp. ............ 1,550 1,271,000 Nextel Communications, Inc., Class A .................................. 950 1,035,500 Paxson Communications Corp. ............... 111 999,000 TVN Entertainment Corp., 09/01/08 warrants (c) .................... 2,025 4,050 XCL, Ltd. (c) ............................. 2,252 31,528 ----------- TOTAL PREFERRED STOCKS (Identified cost $7,440,733)............... 6,506,133 -----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 48 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - -------------------------------------------- ------------------- ------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED) COMMERCIAL PAPER--0.7% American Express Credit Corp., 4.70%, 07/06/99 .......................... $ 465 $ 464,696 General Electric Capital Corp., 4.86%, 07/26/99 .......................... 1,470 1,465,039 Prudential Funding Corp., 4.00%, 09/24/99 .......................... 570 564,617 ------------ TOTAL COMMERCIAL PAPER (Identified cost $2,494,352)............... 2,494,352 ------------ DISCOUNT NOTES--12.4% Federal Farm Credit Banks: 4.53%, 11/03/99 .......................... 9 8,859 4.64%, 12/21/99 .......................... 1,772 1,732,488 Federal Home Loan Bank: 4.68%, 07/07/99 .......................... 2,185 2,183,296 4.85%, 07/28/99 .......................... 770 767,199 4.84%, 08/04/99 .......................... 593 590,289 4.82%, 09/15/99 .......................... 1,630 1,613,414 4.75%, 11/12/99 .......................... 370 363,458 4.75%, 03/03/00 .......................... 900 870,787 4.70%, 04/10/00 .......................... 1,400 1,348,091 4.84%, 05/11/00 .......................... 1,655 1,584,911 Federal Home Loan Mortgage Corp.: 4.72%, 07/07/99 .......................... 230 229,821 4.71%, 07/08/99 .......................... 976 975,106 4.73%, 07/09/99 .......................... 266 265,721 4.71%, 07/12/99 .......................... 1,774 1,771,447 4.86%, 07/19/99 .......................... 454 452,897 4.71%, 08/06/99 .......................... 1,754 1,745,735 4.79%, 08/16/99 .......................... 233 231,580 4.89%, 09/02/99 .......................... 225 223,074 4.94%, 09/14/99 .......................... 735 727,436 4.95%, 09/15/99 .......................... 126 124,683 4.99%, 09/23/99 .......................... 131 129,475 4.94%, 09/24/99 .......................... 445 439,810 4.72%, 11/24/99 .......................... 176 172,631 5.11%, 12/14/99 .......................... 2,054 2,005,602 Federal National Mortgage Association: 4.77%, 07/12/99 .......................... 474 473,310 4.77%, 07/14/99 .......................... 1,110 1,108,088 4.70%, 07/16/99 .......................... 2,765 2,759,605 4.73%, 07/20/99 .......................... 550 548,627 4.66%, 07/22/99 .......................... 1,091 1,088,034 4.72%, 08/11/99 .......................... 820 815,592 4.80%, 08/13/99 .......................... 988 982,393
PRINCIPAL AMOUNT DESCRIPTION (000) VALUE - -------------------------------------------- ------------------- ------------------- 4.88%, 08/18/99 .......................... $1,707 $ 1,695,893 4.76%, 08/23/99 .......................... 594 589,837 4.79%, 08/24/99 .......................... 634 629,448 4.80%, 08/30/99 .......................... 100 99,200 4.88%, 09/08/99 .......................... 1,315 1,302,709 4.92%, 09/10/99 .......................... 449 444,643 4.96%, 09/17/99 .......................... 261 258,195 4.66%, 10/25/99 .......................... 610 600,841 4.69%, 11/04/99 .......................... 298 293,108 4.69%, 11/05/99 .......................... 1,068 1,050,254 4.71%, 11/17/99 .......................... 326 320,072 4.76%, 11/19/99 .......................... 285 279,687 4.79%, 11/22/99 .......................... 2,410 2,363,824 4.79%, 11/23/99 .......................... 770 755,144 4.84%, 11/26/99 .......................... 535 524,355 5.12%, 12/10/99 .......................... 1,050 1,025,808 4.71%, 12/17/99 .......................... 1,424 1,392,514 4.73%, 02/04/00 .......................... 888 862,565 4.70%, 04/10/00 .......................... 170 163,697 ------------ TOTAL DISCOUNT NOTES (Identified cost $42,985,253).............. 42,985,253 ------------ REPURCHASE AGREEMENT--1.2% State Street Bank and Trust Company, 4.70%, 07/01/99, (Dated 06/30/99, collateralized by $3,965,000 United States Treasury Note, 6.625%, 03/31/02, with a value of $4,108,731) (Identified cost $4,026,000)............................... 4,026 4,026,000 ------------ TOTAL INVESTMENTS (Identified cost $358,710,419) (b)......... 98.8% $342,882,871 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................... 1.2 4,328,938 ------ ------------ NET ASSETS ................................. 100.0% $347,211,809 ====== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 49 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED) Forward Foreign Currency Contracts open at June 30, 1999:
U.S. $ Cost U.S. $ Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized Purchase Contracts Date Currency Date Value Appreciation Depreciation - -------------------- ------------ ---------------- ---------------- ------------ -------------- ------------- ARS 7/1/99 929,160 $ 890,000 $ 929,253 $ 39,253 $ -- ARS 7/21/99 541,836 519,000 541,078 22,078 -- ARS 11/16/99 290,415 285,000 282,670 -- 2,330 ARS 11/22/99 1,736,975 1,675,000 1,689,171 14,171 -- ARS 11/22/99 760,854 733,000 739,914 6,914 -- ARS 1/03/00 1,090,436 1,049,000 1,046,082 -- 2,918 AUD 12/13/99 5,748,260 3,774,882 3,808,764 33,882 -- CLP 8/11/99 398,028,000 820,000 765,638 -- 54,362 CLP 7/21/99 416,670,000 860,000 803,281 -- 56,719 CLP 8/30/99 32,678,750 65,000 62,657 -- 2,343 CLP 11/26/99 387,310,000 770,000 732,332 -- 37,668 CNY 7/13/99 7,477,830 900,000 902,117 2,117 -- CNY 7/19/99 8,320,000 1,000,000 1,003,099 3,099 -- CNY 8/2/99 6,410,327 770,000 771,743 1,743 -- CNY 8/26/99 7,512,930 900,000 902,205 2,205 -- CNY 9/7/99 3,176,306 380,000 380,943 943 -- COP 7/1299 1,277,045,000 770,000 723,620 -- 46,380 CRC 8/12/99 101,988,360 348,000 348,117 117 -- CZK 7/16/99 6,960,000 202,102 197,157 -- 4,945 CZK 9/13/99 4,258,744 118,842 120,387 1,545 -- CZK 11/18/99 1,243,200 40,000 35,084 -- 4,916 CZK 12/28/99 73,972,000 2,054,379 2,085,680 31,301 -- DKK 12/13/99 29,569,284 4,161,389 4,144,838 -- 16,551 EUR 12/13/99 3,096,345 3,260,497 3,232,689 -- 27,808 GBP 12/13/99 5,588,324 8,941,172 8,825,457 -- 115,715 GRD 12/3/99 5,560,000 18,029 17,367 -- 662 GRD 12/28/99 476,335,860 1,617,000 1,484,724 -- 132,276 GRD 12/29/99 45,694,000 155,000 142,415 -- 12,585 GRD 2/16/00 280,000,000 888,409 870,798 -- 17,611 HUF 7/14/99 182,305,160 761,000 750,136 -- 10,864 HUF 8/9/99 145,440,000 593,173 594,400 1,227 -- HUF 8/16/99 195,842,760 807,000 798,964 -- 8,036 HUF 9/15/99 398,453,500 1,630,000 1,613,409 -- 16,591 HUF 9/21/99 64,584,450 261,000 261,131 131 -- IDR 7/12/99 1,000,000,000 127,828 143,721 15,893 -- IDR 8/26/99 3,400,000,000 400,000 481,564 81,564 -- IDR 9/8/99 1,839,500,000 216,412 259,548 43,136 -- IDR 10/27/99 5,795,000,000 610,000 806,883 196,883 -- IDR 11/8/99 9,250,000,000 1,068,129 1,284,218 216,089 -- IDR 4/6/00 14,630,000,000 1,400,000 1,961,408 561,408 -- ILS 7/1/99 1,677,000 409,949 409,504 -- 445 ILS 7/12/99 560,000 136,220 136,459 239 -- ILS 7/12/99 1,420,000 345,583 346,021 438 -- ILS 8/10/00 4,209,548 1,009,000 1,020,051 11,051 -- ILS 5/18/00 7,250,000 1,654,873 1,681,822 26,949 -- INR 7/8/99 9,970,500 230,000 229,148 -- 852 INR 7/13/99 35,301,000 820,000 810,260 -- 9,740 INR 8/2/99 23,831,500 550,000 544,175 -- 5,825
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 50 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
U.S. $ Cost U.S. $ Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized Purchase Contracts Date Currency Date Value Appreciation Depreciation - -------------------- ------------ ---------------- ---------------- -------------- -------------- ------------- INR 8/9/99 19,620,000 $ 450,000 $ 447,441 $ -- $ 2,559 INR 8/19/99 25,779,600 594,000 586,851 -- 7,149 INR 8/20/99 10,112,200 233,000 230,154 -- 2,846 INR 8/25/99 23,229,000 534,000 528,216 -- 5,784 INR 9/9/99 31,536,000 720,000 715,134 -- 4,866 JPY 9/10/99 1,197,605,662 7,113,667 6,963,113 -- 150,554 JPY 9/10/99 1,161,646,841 9,542,426 9,704,340 161,914 -- KRW 7/26/99 1,817,655,000 1,470,000 1,568,973 98,973 -- KRW 9/29/99 962,500,000 770,000 830,111 60,111 -- KRW 11/15/99 36,060,000 30,000 31,067 1,067 -- MXN 7/6/99 9,456,651 882,068 999,371 117,303 -- MXN 7/8/99 21,577,968 2,185,000 2,278,200 93,200 -- MXN 7/14/99 2,058,132 214,612 216,689 2,077 -- MXN 9/7/99 2,300,000 223,735 235,985 12,250 -- MXN 11/4/99 2,994,006 298,000 299,021 1,021 -- MXN 11/29/99 5,581,067 533,333 551,369 18,036 -- MXN 12/29/99 12,866,000 1,167,302 1,252,653 85,351 -- PEN 9/24/99 444,745 131,000 130,305 -- 695 PHP 7/7/99 14,111,250 355,000 369,115 14,115 -- PHP 8/31/99 7,326,400 190,000 190,577 577 -- PHP 2/10/00 59,640,000 1,400,000 1,528,470 128,470 -- PHP 3/10/99 37,800,000 900,000 966,468 66,468 -- PHP 4/19/00 6,868,000 170,000 175,049 5,049 -- PLN 7/6/99 1,694,786 465,000 431,043 -- 33,957 PLN 7/13/99 114,549 30,000 29,088 -- 912 PLN 7/19/99 133,439 33,000 33,839 839 -- PLN 7/26/99 4,472,000 1,091,530 1,132,277 40,747 -- PLN 8/10/99 1,350,140 340,000 340,739 739 -- PLN 9/14/99 1,330,000 330,336 333,147 2,811 -- PLN 9/15/99 2,945,880 735,000 737,743 2,743 -- PLN 9/16/99 506,318 126,000 126,771 771 -- SKK 7/12/99 4,948,020 117,115 112,105 -- 5,010 SKK 8/18/99 19,079,236 435,275 427,065 -- 8,210 SKK 8/19/99 18,980,000 423,661 424,707 1,046 -- SKK 9/21/99 20,227,339 445,173 447,761 2,588 -- SKK 11/17/99 31,185,528 696,106 678,745 -- 17,361 THB 7/14/99 56,766,400 1,536,719 1,540,654 3,935 -- THB 7/19/99 16,800,000 454,423 456,086 1,663 -- THB 12/21/99 34,997,000 926,092 952,877 26,785 -- THB 12/29/99 16,500,000 436,814 449,279 12,465 -- THB 1/19/00 29,500,000 765,240 803,051 37,811 -- THB 1/20/99 27,266,400 720,000 742,237 22,237 -- ZAR 11/26/99 2,177,520 344,000 350,447 6,447 -- ----------- ----------- ---------- -------- $91,554,495 $93,070,435 $2,343,985 $828,045 ----------- ----------- ---------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 51 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
U.S. $ Cost U.S. $ Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized Sale Contracts Date Currency Date Value Appreciation Depreciation - ------------------ ------------ ---------------- ---------------- --------------- -------------- ------------- ARS 7/1/99 929,160 $ 911,120 $ 929,253 $ -- $ 18,133 ARS 7/21/99 541,836 519,921 541,078 -- 21,157 AUD 12/13/99 6,950,946 4,567,953 4,605,657 -- 37,704 CAD 12/13/99 1,337,846 911,173 910,574 599 -- COP 7/12/99 590,507,225 716,360 723,622 -- 7,262 DKK 12/13/99 207,207,191 29,047,058 29,049,921 -- 2,863 DKK 12/13/99 5,166,825 728,947 724,376 4,571 -- EUR 7/12/99 108,000 117,115 111,428 5,687 -- EUR 8/18/99 403,930 435,275 417,890 17,385 -- EUR 8/19/99 392,789 423,661 406,404 17,257 -- EUR 9/13/99 113,000 118,842 117,141 1,701 -- EUR 09/21/99 429,000 445,173 445,003 170 -- EUR 11/17/99 343,773 370,194 358,185 12,009 -- EUR 12/13/99 47,342,604 49,630,757 49,427,300 203,457 -- EUR 12/13/99 12,516,801 13,050,724 13,067,969 -- 17,245 GBP 12/13/99 18,576,943 29,877,347 29,337,960 539,387 -- IDR 8/26/99 2,000,000,000 277,971 283,273 -- 5,302 ILS 7/1/99 1,677,000 410,727 409,504 1,223 -- INR 7/13/99 39,684,250 905,000 912,047 -- 7,047 JPY 9/10/99 3,235,580,143 27,405,775 27,028,599 377,176 -- JPY 9/10/99 174,970,715 1,449,300 1,461,628 -- 12,328 KRW 9/29/99 250,000,000 202,922 215,613 -- 12,691 NZD 12/13/99 4,372 2,333 2,324 9 -- PHP 7/7/99 6,938,750 175,000 181,500 -- 6,500 PHP 2/10/00 59,640,000 1,504,693 1,528,470 -- 23,777 THB 7/14/99 15,766,400 427,366 427,904 -- 538 THB 12/21/99 34,997,000 938,761 952,877 -- 14,116 THB 12/29/99 16,500,000 448,004 449,279 -- 1,275 THB 1/19/99 29,500,000 799,458 803,051 -- 3,593 THB 2/20/99 27,266,400 738,928 742,237 -- 3,309 ZAR 11/26/99 2,177,520 334,411 350,447 -- 16,036 ------------ ------------ ---------- ---------- $167,892,269 $166,922,514 $1,180,631 $ 210,876 ------------ ------------ ---------- ---------- Gross unrealized appreciation/depreciation from Forward Foreign Currency Contracts $3,524,616 $1,038,921 ========== ==========
As of June 30, 1999, the Lazard Strategic Yield Portfolio had the following outstanding cross currency swap agreement:
SWAP NOTIONAL CURRENCY NOTIONAL CURRENCY RATE RATE TRADE TERMINATION UNREALIZED COUNTERPARTY RECEIVED PAID RECEIVED PAID DATE DATE LOSS - ------------------------- ------------------- ------------------- ---------- --------------- --------- ------------- ----------- Standard Chartered Bank 60,000,000 PHP 1,578,532 USD 10.70% 6 Month LIBOR 4/29/99 4/30/02 $2,369
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 52 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO PORTFOLIOS OF INVESTMENTS JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- (a) Non-income producing security. (b) For federal income tax purposes, the aggregate cost, aggregate gross unrealized appreciation, aggregate gross unrealized depreciation and the net unrealized appreciation (depreciation) is as follows:
AGGREGATE AGGREGATE NET GROSS GROSS UNREALIZED AGGREGATE UNREALIZED UNREALIZED APPRECIATION PORTFOLIO COST APPRECIATION DEPRECIATION (DEPRECIATION) - ----------------------------- ---------------- -------------- -------------- --------------- Equity $ 456,766,585 $123,890,387 $ 8,313,298 $ 115,577,089 Mid Cap 61,071,506 8,592,185 2,303,350 6,288,835 Small Cap 1,105,331,548 197,612,779 102,245,423 95,367,356 Bantam Value 31,930,605 4,752,555 3,177,748 1,574,807 Global Equity 60,207,765 8,331,414 909,370 7,422,044 International Equity 2,641,964,137 660,331,248 97,854,691 562,476,557 International Small Cap 174,472,862 33,584,646 23,530,246 10,054,400 Emerging Markets 371,592,693 56,470,930 43,453,127 13,017,803 Bond 126,344,093 720,077 2,496,952 (1,776,875) High Yield 86,377,814 945,712 2,654,044 (1,708,332) International Fixed-Income 91,167,094 1,678,025 4,931,666 (3,253,641) Strategic Yield 358,710,419 2,791,858 18,621,775 (15,829,917)
(c) Pursuant to Rule 144A of the Securities Act of 1933, these securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 1999, these securities amounted to $6,712,088, $13,265,980, $2,555,597, $30,070,531, $3,501,510, and $45,801,693 or 3.6%, 3.4%, 2.3%, 34.4%, 3.7% and 12.9% of net assets for the International Small Cap Portfolio, Emerging Markets Portfolio, Bond Portfolio, High Yield Portfolio, International Fixed-Income Portfolio and Strategic Yield Portfolio, respectively. (d) Bankrupt security valued at zero. (e) Variable rate security. Interest rate shown is the current rate. (f) Segregated securities for when-issued purchases and/or forward foreign currency contracts. (g) At June 30, 1999, Small Cap Portfolio held the following security, which was a private placement and therefore restricted as to resale, representing 0.04% (at value) of the net assets of the Portfolio:
ACQUISITION ACQUISITION SECURITY DATE COST - ----------------------------------- ------------- ------------ Interactive Light Holdings, Inc. 10.00%, 02/07/01 1/25/99 $1,000,000
Interactive Light Holdings, Inc. is valued as determined in good faith and in accordance with the procedures adopted by the Board of Directors. Small Cap Portfolio will bear any cost, including those involved in registration under the Securities Act of 1933, in connection with the disposition of such security. (h) Principal amount denominated in respective country's currency unless otherwise noted. (i) Issue in default. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 53 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO PORTFOLIOS OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- Abbreviations: ADR--American Depositary Receipt GDR--Global Depositary Receipt TBA--Settlement is on a delayed delivery or when issued basis with final maturity to be announced in the future. REMIC--Real Estate Mortgage Investment Conduit
CURRENCY TERMS - ------------------------------- ARS--Argentine Peso ILS--Israeli Shekel AUD--Australian Dollar INR--Indian Rupee CAD--Canadian Dollar JPY--Japanese Yen CHF--Swiss Franc KRW--South Korean Won CLP--Chilean Peso MXN--Mexican Peso CNY--Chinese Yuan Renminbi NZD--New Zealand Dollar COP--Colombian Peso PEN--Peruvian Nouveau Sol CZK--Czech Koruna PHP--Philippine Peso DKK--Danish Krone PLN--Polish Zloty EUR--Euro Currency SEK--Swedish Krona GBP--Pound Sterling SKK--Slovakian Koruna GRD--Greek Drachma THB--Thailand Baht HUF--Hungarian Forint USD--United States Dollar IDR--Indonesian Rupiah ZAR--South African Rand
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 54 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO PORTFOLIOS OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PORTFOLIO HOLDINGS BY INDUSTRY, FOR THOSE PORTFOLIOS PREVIOUSLY PRESENTED BY COUNTRY:
LAZAD LAZARD LAZARD LAZARD GLOBAL INTERNATIONAL INTERNATIONAL EMERGING EQUITY EQUITY SMALL CAP MARKETS PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ----------- --------------- --------------- ---------- INDUSTRY Advertising ................................... --% --% 3.2% --% Apparel & Textiles ............................ -- -- 2.1 -- Aerospace & Defense ........................... 3.8 1.9 -- -- Automotive .................................... 3.3 4.2 2.7 -- Auto Parts .................................... 0.3 -- -- -- Banking & Financial Services .................. 18.9 20.9 12.3 14.0 Brewery ....................................... -- -- 1.8 5.8 Broadcasting .................................. -- -- 1.3 2.3 Building & Construction ....................... -- -- 1.5 -- Business Services & Supplies .................. -- -- 2.6 -- Chemicals & Plastics .......................... 1.8 2.7 1.4 -- Commercial Services ........................... 1.3 2.3 -- -- Communication Services ........................ 1.6 2.2 -- -- Computer Softwear ............................. -- -- 4.4 -- Computers & Business Equipment ................ 4.6 -- -- -- Conglomerates ................................. 1.5 -- -- 7.9 Construction & Materials ...................... 0.6 1.5 -- 3.9 Consumer Goods ................................ 1.7 2.1 -- -- Cosmetics & Toiletries ........................ 1.0 1.2 -- -- Diversified ................................... 1.0 -- -- -- Drugs & Health Care ........................... 8.1 4.7 6.1 -- Electrical Equipment .......................... 3.1 4.5 -- 4.0 Electronics ................................... 5.4 3.0 4.5 -- Energy ........................................ 1.2 -- -- -- Environmental Services ........................ -- -- 0.5 -- Food & Beverages .............................. 5.2 5.0 4.1 7.3 Holding Company-Diversified ................... -- -- 1.5 -- Hospitals & Long Term Care .................... -- -- 2.1 -- Hotels & Restaurants .......................... 1.3 -- 1.5 -- Household Products & Home Furnishings ......... -- 1.3 2.0 -- Industrial Construction ....................... -- -- -- 2.5 Industrial & Machinery ........................ -- -- 4.7 -- Insurance ..................................... 4.6 7.3 5.7 1.8 Leisure/Entertainment ......................... 1.0 2.1 2.1 -- Manufacturing ................................. 2.8 5.7 1.6 0.4 Medical Supplies .............................. -- -- 3.1 -- Metals ........................................ -- -- -- 2.6 Newspaper ..................................... -- -- 1.4 -- Office Equipment .............................. -- 0.5 -- -- Oil & Gas ..................................... 3.8 4.4 -- 1.1 Paper Products ................................ -- 0.5 -- 0.9 Petroleum Equipment & Services ................ 2.0 1.8 -- -- Photography ................................... 1.1 -- -- -- Plastics ...................................... -- -- 0.9 -- Printing ...................................... -- -- 2.2 1.2 Publishing .................................... -- -- 1.9 -- Railroad ...................................... -- -- -- 0.9 Repurchase Agreement .......................... 3.7 3.7 4.2 4.2 Retail ........................................ 3.2 2.5 11.9 5.9 Services ...................................... 1.3 -- 1.9 -- Steel ......................................... -- -- -- 2.3 Telecommunications ............................ 7.5 5.8 -- 21.3 Telephone ..................................... -- -- -- 2.1 Tobacco ....................................... 0.9 2.9 -- 1.5 Toys & Amusement .............................. -- 1.1 0.5 -- Utilities ..................................... 3.2 2.3 -- 5.6 ----- ------- ---- ------ Total Investments ............................. 100.8% 98.1% 97.7% 99.5%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 55 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO PORTFOLIOS OF INVESTMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- PORTFOLIO HOLDINGS BY ASSET TYPE, FOR THOSE PORTFOLIOS PREVIOUSLY PRESENTED BY COUNTRY:
LAZARD LAZARD INTERNATIONAL STRATEGIC FIXED-INCOME YIELD PORTFOLIO PORTFOLIO --------------- ---------- ASSET TYPE Asset-Backed Securities ...................... 1.8% 6.2% Collateralized Mortgage Obligations .......... -- 4.5 Commercial Paper ............................. 1.1 0.7 Corporate Bonds .............................. 51.6 45.6 Discount Notes ............................... 4.9 12.4 Foreign Government Obligations ............... 23.0 17.2 Mortgage Backed Securities ................... -- 0.2 Mortgage Pass-Through Securities ............. -- 0.3 Preferred Stocks ............................. -- 2.2 REMICs ....................................... -- 0.1 Repurchase Agreement ......................... 0.7 1.2 Structured Notes ............................. 3.1 5.1 United States Government Obligations ......... 6.6 3.1 ---- ------ Total Investments ............................ 92.8% 98.8%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 56 [This page left blank intentionally ] 57 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
LAZARD EQUITY PORTFOLIO ----------------- ASSETS Investments in securities, at value (cost $438,009,585, $59,267,506, $1,014,542,548, $27,205,605, $57,723,765, $2,521,889,137, $166,626,862, $355,403,693, $113,210,093, $85,084,814, $90,453,094 and $354,684,419, respectively)......... $ 553,586,674 Repurchase Agreements, at value .................................. 18,757,000 Cash ............................................................. 698 Foreign currency (cost $0, $0, $0, $0, $6,799, $16,288,483 $1,957,316, $989,078, $0, $0, $0 and $1,486,608 respectively) ................................................... -- Receivables for: Investments sold ................................................ -- Dividends and interest .......................................... 688,313 Capital stock sold .............................................. 1,399,368 Gross appreciation on foreign currency contracts ................ -- Deferred organizational expenses ................................. -- ------------- Total assets ..................................................... 574,432,053 ------------- LIABILITIES Payables for: Investments purchased ........................................... 11,699,408 Capital stock repurchased ....................................... 3,897,105 Dividends payable ............................................... -- Gross depreciation on foreign currency contracts ................ -- Depreciation on cross currency contracts ........................ -- Investment management fees payable ............................... 335,232 Due to Custodian (cost $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $176,456, and $0, respectively).................................. -- Accrued directors' fees payable .................................. 2,730 Accrued distribution fees payable ................................ 31,213 Accrued expenses and other payables .............................. 92,996 ------------- Total liabilities ................................................ 16,058,684 ------------- Net assets ....................................................... 558,373,369 ============= NET ASSETS Paid in capital .................................................. 402,361,723 Undistributed (distributions in excess of) investment income--net ..................................................... 3,193,706 Unrealized appreciation (depreciation) on: Investments and cross currency swap--net ........................ 115,577,089 Foreign currency--net .......................................... -- Accumulated realized gain (loss)--net ............................ 37,240,851 ------------- Net assets ....................................................... $ 558,373,369 ============= INSTITUTIONAL SHARES Net assets ....................................................... $ 395,219,650 Shares of capital stock outstanding* ............................. 16,387,212 NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 24.12 OPEN SHARES Net assets ....................................................... $ 163,153,719 Shares of capital stock outstanding* ............................. 6,774,239 NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 24.08 LAZARD LAZARD LAZARD BANTAM MID CAP SMALL CAP VALUE PORTFOLIO PORTFOLIO PORTFOLIO ----------------- ------------------- --------------- ASSETS Investments in securities, at value (cost $438,009,585, $59,267,506, $1,014,542,548, $27,205,605, $57,723,765, $2,521,889,137, $166,626,862, $355,403,693, $113,210,093, $85,084,814, $90,453,094 and $354,684,419, respectively)......... $ 65,556,341 $ 1,109,909,904 $ 28,780,412 Repurchase Agreements, at value .................................. 1,804,000 90,789,000 4,725,000 Cash ............................................................. 449 75,294 989,167 Foreign currency (cost $0, $0, $0, $0, $6,799, $16,288,483 $1,957,316, $989,078, $0, $0, $0 and $1,486,608 respectively) ................................................... -- -- -- Receivables for: Investments sold ................................................ -- 14,778,406 170,916 Dividends and interest .......................................... 34,984 893,555 8,441 Capital stock sold .............................................. 47,113 2,461,074 -- Gross appreciation on foreign currency contracts ................ -- -- -- Deferred organizational expenses ................................. 16,160 -- 7 ------------- --------------- ------------ Total assets ..................................................... 67,459,047 1,218,907,233 34,673,943 ------------- --------------- ------------ LIABILITIES Payables for: Investments purchased ........................................... -- 3,126,282 1,362,138 Capital stock repurchased ....................................... 187,650 4,650,426 142,634 Dividends payable ............................................... -- -- -- Gross depreciation on foreign currency contracts ................ -- -- -- Depreciation on cross currency contracts ........................ -- -- -- Investment management fees payable ............................... 111,367 727,789 75,718 Due to Custodian (cost $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $176,456, and $0, respectively).................................. -- -- -- Accrued directors' fees payable .................................. 2,730 2,730 -- Accrued distribution fees payable ................................ 2,978 23,034 876 Accrued expenses and other payables .............................. 39,934 137,087 66,714 ------------- --------------- ------------ Total liabilities ................................................ 344,659 8,667,348 1,648,080 ------------- --------------- ------------ Net assets ....................................................... 67,114,388 1,210,239,885 33,025,863 ============= =============== ============ NET ASSETS Paid in capital .................................................. 58,710,609 1,028,859,234 31,593,988 Undistributed (distributions in excess of) investment income--net ..................................................... 48,227 9,862,544 (161,785) Unrealized appreciation (depreciation) on: Investments and cross currency swap--net ........................ 6,288,835 95,367,356 1,574,807 Foreign currency--net .......................................... -- -- -- Accumulated realized gain (loss)--net ............................ 2,066,717 76,150,751 18,853 ------------- --------------- ------------ Net assets ....................................................... $ 67,114,388 $ 1,210,239,885 $ 33,025,863 ============= =============== ============ INSTITUTIONAL SHARES Net assets ....................................................... $ 52,479,789 $ 1,096,005,903 $ 29,079,406 Shares of capital stock outstanding* ............................. 4,551,561 56,804,362 2,105,604 NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 11.53 $ 19.29 $ 13.81 OPEN SHARES Net assets ....................................................... $ 14,634,599 $ 114,233,982 $ 3,946,457 Shares of capital stock outstanding* ............................. 1,273,283 5,941,887 288,210 NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 11.49 $ 19.23 $ 13.69
* $0.001 par value, 1,550,000,000 shares authorized for the Portfolios in total. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 58 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
LAZARD LAZARD LAZARD LAZARD GLOBAL INTERNATIONAL INTERNATIONAL EMERGING EQUITY EQUITY SMALL CAP MARKETS PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - -------------- ------------------ --------------- ---------------- $65,145,809 $ 3,084,365,694 $176,681,262 $ 368,421,496 2,484,000 120,075,000 7,846,000 16,189,000 882 1,488,241 506 283 6,799 16,282,805 1,957,369 1,050,412 -- 8,838,364 2,557,064 1,618,319 106,213 9,358,221 543,820 1,571,472 413,043 94,481,523 1,700,265 269,851 -- -- -- -- 271 -- -- -- ----------- --------------- ------------ -------------- 68,157,017 3,334,889,848 191,286,286 389,120,833 ----------- --------------- ------------ -------------- 860,016 64,052,363 2,026,114 1,844,174 -- 1,606,314 118,389 66,732 -- -- -- -- -- -- -- -- -- -- -- -- 117,612 1,916,871 113,299 333,029 -- -- -- -- 2,730 2,730 2,730 2,730 1,275 18,470 546 2,054 51,991 757,586 105,877 145,674 ----------- --------------- ------------ -------------- 1,033,624 68,354,334 2,366,955 2,394,393 ----------- --------------- ------------ -------------- 67,123,393 3,266,535,514 188,919,331 386,726,440 =========== =============== ============ ============== 57,897,336 2,622,840,909 177,572,238 431,431,621 470,030 13,583,540 1,233,493 3,082,408 7,422,044 562,476,557 10,054,400 13,017,803 (1,000) (353,461) (16,055) (79,435) 1,334,983 67,987,969 75,255 (60,725,957) ----------- --------------- ------------ -------------- $67,123,393 $ 3,266,535,514 $188,919,331 $ 386,726,440 =========== =============== ============ ============== $60,547,796 $ 3,163,224,741 $186,235,651 $ 376,403,052 4,182,232 197,085,973 15,324,528 42,488,297 $ 14.48 $ 16.05 $ 12.15 $ 8.86 $ 6,575,597 $ 103,310,773 $ 2,683,680 $ 10,323,388 454,031 6,450,606 221,614 1,162,974 $ 14.48 $ 16.02 $ 12.11 $ 8.88 LAZARD LAZARD LAZARD INTERNATIONAL LAZARD BOND HIGH YIELD FIXED-INCOME STRATEGIC PORTFOLIO PORTFOLIO PORTFOLIO YIELD PORTFOLIO --------------- --------------- --------------- ---------------- $111,433,218 $ 83,376,482 $ 87,199,670 $ 338,856,871 13,134,000 1,293,000 714,000 4,026,000 741 564 591 269 -- -- -- 1,461,448 7,134,251 1,882,356 7,194,740 5,948,987 1,088,759 1,862,412 1,434,833 6,193,826 319,624 -- 732,446 180,526 -- -- 751,094 3,524,616 -- 16,941 -- -- ------------ ------------- ------------ -------------- 133,110,593 88,431,755 98,027,374 360,192,543 ------------ ------------- ------------ -------------- 19,424,663 909,586 1,711,787 10,637,782 1,316,839 -- 806,104 456,324 47,790 10,961 8,953 446,335 -- -- 455,761 1,038,921 -- -- 217 2,369 76,696 143,028 68,238 283,761 -- -- 180,057 -- 2,730 2,730 2,730 2,730 2,816 201 857 4,354 43,022 53,185 60,475 108,158 ------------ ------------- ------------ -------------- 20,914,556 1,119,691 3,295,179 12,980,734 ------------ ------------- ------------ -------------- 112,196,037 87,312,064 94,732,195 347,211,809 ============ ============= ============ ============== 116,883,708 92,010,606 99,385,816 381,825,817 (187,200) (31,191) 1,055,164 1,024,146 (1,776,875) (1,708,332) (3,253,641) (15,829,917) -- -- 239,672 2,409,730 (2,723,596) (2,959,019) (2,694,816) (22,217,967) ------------ ------------- ------------ -------------- $112,196,037 $ 87,312,064 $ 94,732,195 $ 347,211,809 ============ ============= ============ ============== $ 98,457,066 $ 86,245,291 $ 90,376,412 $ 328,870,169 10,332,497 9,269,004 9,204,321 36,562,485 $ 9.53 $ 9.30 $ 9.82 $ 8.99 $ 13,738,971 $ 1,066,773 $ 4,355,783 $ 18,341,640 1,441,924 114,586 445,016 2,038,419 $ 9.53 $ 9.31 $ 9.79 $ 9.00
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 59 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED) - --------------------------------------------------------------------------------
LAZARD LAZARD LAZARD LAZARD BANTAM EQUITY MID CAP SMALL CAP VALUE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------------- ---------------- --------------- ---------------- INVESTMENT INCOME INCOME: Interest ........................................ $ 371,586 $ 27,908 $ 1,460,883 $ 80,470 Dividends ....................................... 5,077,974 379,668 6,601,973 59,718 ----------- ------------ ----------- ------------ Total investment income* ......................... 5,449,560 407,576 8,062,856 140,188 ----------- ------------ ----------- ------------ EXPENSES: Management fees ................................. 1,970,379 249,701 4,746,816 210,205 Administration fees ............................. 74,859 28,972 135,196 27,921 Distribution fees (Open Shares) ................. 183,414 19,135 120,787 6,404 Custodian fees .................................. 59,763 27,090 118,262 28,826 Professional services ........................... 17,701 15,428 23,836 2,762 Registration fees ............................... 17,334 4,435 15,640 12,438 Shareholders' services .......................... 33,551 27,159 61,893 27,495 Directors' fees and expenses .................... 5,389 5,389 5,389 2,659 Shareholders' reports ........................... 5,505 4,393 11,187 5,236 Amortization of organizational expenses ......... -- 2,395 -- 498 Other ........................................... 9,394 1,804 32,711 26,996 ----------- ------------ ----------- ------------ Total expenses before fees waived and expenses reimbursed ...................................... 2,377,289 385,901 5,271,717 351,440 Management fees waived and expenses reimbursed ...................................... -- (13,334) -- (49,467) Expense reductions .............................. (1,722) -- (1,857) -- ----------- ------------ ----------- ------------ Expenses--net .................................... 2,375,567 372,567 5,269,860 301,973 ----------- ------------ ----------- ------------ INVESTMENT INCOME (LOSS)--NET .................... 3,073,993 35,009 2,792,996 (161,785) ----------- ------------ ----------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CROSS CURRENCY SWAP AND FOREIGN CURRENCY--NET Realized gain (loss) on: Investments--net .............................. 22,688,141 1,786,104 84,155,019 (53,774) Foreign currency--net ......................... -- -- -- -- Net change in unrealized appreciation (depreciation) on: Investments and cross currency swap--net ..................................... 29,579,266 4,451,650 5,508,223 6,715,991 Foreign currency--net ......................... -- -- -- -- ----------- ------------ ----------- ------------ Realized and unrealized gain (loss) on investments, cross currency swap and foreign currency--net ................................... 52,267,407 6,237,754 89,663,242 6,662,217 ----------- ------------ ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................. $55,341,400 $ 6,272,763 $92,456,238 $ 6,500,432 =========== ============ =========== ============ *Net of foreign withholding taxes of: ............ $ 124,307 $ -- $ 48 $ -- =========== ============ =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 60 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
LAZARD LAZARD LAZARD LAZARD GLOBAL INTERNATIONAL INTERNATIONAL EMERGING EQUITY EQUITY SMALL CAP MARKETS PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - ------------- ----------------- --------------- ---------------- $ 69,409 $ 1,840,095 $ 155,521 $ 350,178 666,526 44,943,603 2,018,702 4,538,446 ---------- ------------- ----------- ------------- 735,935 46,783,698 2,174,223 4,888,624 ---------- ------------- ----------- ------------- 176,932 11,137,711 665,063 1,637,550 27,033 220,408 40,050 55,066 6,884 88,859 3,408 11,215 42,035 1,409,012 137,719 236,319 15,131 30,701 16,092 16,397 17,677 52,597 9,908 10,995 22,761 49,675 28,114 31,138 5,389 5,389 5,389 5,389 731 11,988 4,434 4,623 90 -- -- -- 703 54,443 4,431 28,037 ---------- ------------- ----------- ------------- 315,366 13,060,783 914,608 2,036,729 (59,320) -- (9,237) (6,892) (80) (1,736) (63) (3,606) ---------- ------------- ----------- ------------- 255,966 13,059,047 905,308 2,026,231 ---------- ------------- ----------- ------------- 479,969 33,724,651 1,268,915 2,862,393 ---------- ------------- ----------- ------------- 1,354,060 60,798,495 (734,886) (6,792,158) (3,863) (3,060,656) (171,060) (226,542) 4,467,673 71,208,205 11,372,068 90,006,550 (1,551) (578,581) (17,244) (78,354) ---------- ------------- ----------- ------------- 5,816,319 128,367,463 10,448,878 82,909,496 ---------- ------------- ----------- ------------- $6,296,288 $ 162,092,114 $11,717,793 $ 85,771,889 ========== ============= =========== ============= $ 59,443 $ 5,945,817 $ 283,372 $ 397,033 ========== ============= =========== ============= LAZARD LAZARD LAZARD LAZARD HIGH INTERNATIONAL STRATEGIC BOND YIELD FIXED-INCOME YIELD PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - ---------------- ---------------- --------------- ----------------- $ 3,637,693 $ 3,458,492 $ 2,601,587 $ 14,042,249 -- 164,117 -- 500,069 ------------ -------------- ------------- --------------- 3,637,693 3,622,609 2,601,587 14,542,318 ------------ -------------- ------------- --------------- 285,169 262,863 423,356 1,408,636 33,722 29,325 33,605 59,879 17,831 1,259 5,720 27,029 52,917 33,551 86,456 149,008 15,670 15,421 15,710 17,578 7,977 21,818 6,208 11,415 24,563 22,546 27,708 29,117 5,389 5,389 5,389 5,389 1,794 338 4,271 4,030 -- 2,505 -- -- 2,752 1,176 2,990 9,872 ------------ -------------- ------------- --------------- 447,784 396,191 611,413 1,721,953 (1,365) (19,835) (9,773) -- -- (6,837) -- -- ------------ -------------- ------------- --------------- 446,419 369,519 601,640 1,721,953 ------------ -------------- ------------- --------------- 3,191,274 3,253,090 1,999,947 12,820,365 ------------ -------------- ------------- --------------- (2,531,283) (729,321) (1,864,024) (11,611,702) -- -- (1,220,404) 10,594,953 (1,697,813) (562,671) (7,635,089) (1,715,612) -- -- (413,063) 2,163,898 ------------ -------------- ------------- --------------- (4,229,096) (1,291,992) (11,132,580) (568,463) ------------ -------------- ------------- --------------- $ (1,037,822) $ 1,961,098 $ (9,132,633) $ 12,251,902 ============ ============== ============= =============== $ -- $ -- $ -- $ 8,994 ============ ============== ============= ===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 61 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
LAZARD EQUITY PORTFOLIO -------------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, (UNAUDITED) 1998 ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: Operations: Investment income (loss)--net .................................................... $ 3,073,993 $ 5,367,744 Realized gain (loss) on investments and foreign currency--net .................... 22,688,141 36,224,831 Change in unrealized appreciation (depreciation)--net ............................ 29,579,266 24,446,325 ------------- ------------ Net increase (decrease) in net assets resulting from operations ................... 55,341,400 66,038,900 ------------- ------------ DISTRIBUTIONS TO SHAREHOLDERS: From investment income--net Institutional Shares ............................................................ -- (4,333,091) Open Shares ...................................................................... -- (934,432) From realized gains--net Institutional Shares ............................................................ -- (21,315,461) Open Shares ...................................................................... -- (6,695,483) In excess of investment income--net Institutional Shares ............................................................ -- -- Open Shares ...................................................................... -- -- In excess of realized gains--net Institutional Shares ............................................................ -- -- Open Shares ...................................................................... -- -- ------------- ------------ Net decrease in net assets resulting from distributions ........................... -- (33,278,467) ------------- ------------ CAPITAL STOCK TRANSACTIONS: Net proceeds from sales Institutional Shares ............................................................ 70,478,901 87,372,723 Open Shares ...................................................................... 60,514,231 120,385,150 Net proceeds from reinvestment of distributions Institutional Shares ............................................................ -- 24,696,654 Open Shares ...................................................................... -- 7,533,249 Cost of shares redeemed Institutional Shares ............................................................ (76,097,836) 111,996,715) Open Shares ...................................................................... (30,613,147) (38,387,846) ------------- ------------ Net increase (decrease) in net assets from capital stock transactions ............. 24,282,149 89,603,215 ------------- ------------ Total increase (decrease) in net assets ........................................... 79,623,549 122,363,648 Net assets at beginning of period ................................................. 478,749,820 356,386,172 ------------- ------------ Net assets at end of period* ...................................................... $ 558,373,369 $478,749,820 ============= ============ SHARES ISSUED AND REPURCHASED: INSTITUTIONAL SHARES: Shares outstanding at beginning of period ........................................ 16,605,093 16,695,862 ------------- ------------ Shares sold ...................................................................... 3,126,321 4,095,584 Shares issued to shareholders from reinvestment of distributions ................. -- 1,165,225 Shares repurchased ............................................................... (3,344,202) (5,351,578) ------------- ------------ Net increase (decrease) .......................................................... (217,881) (90,769) ------------- ------------ Shares outstanding at end of period .............................................. 16,387,212 16,605,093 ============= ============ OPEN SHARES: Shares outstanding at beginning of period ........................................ 5,406,563 1,141,207 ------------- ------------ Shares sold ...................................................................... 2,693,094 5,735,707 Shares issued to shareholders from reinvestment of distributions ................. -- 355,884 Shares repurchased ............................................................... (1,325,418) (1,826,235) ------------- ------------ Net increase (decrease) .......................................................... 1,367,676 4,265,356 ------------- ------------ Shares outstanding at end of period .............................................. 6,774,239 5,406,563 ============= ============ * Includes undistributed (distributions in excess of) investment income--net ..... $ 3,193,706 $ 119,713 ============= ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 62 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
LAZARD MID CAP LAZARD SMALL CAP LAZARD BANTAM VALUE PORTFOLIO PORTFOLIO PORTFOLIO - -------------------------------------- --------------------------------------- --------------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, (UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998 - ------------------ ----------------- ------------------ ------------------ ------------------ ------------------ $ 35,009 $ 277,277 $ 2,792,996 $ 7,081,785 $ (161,785) $ (331,086) 1,786,104 1,047,283 84,155,019 (8,015,535) (53,774) 72,685 4,451,650 551,315 5,508,223 (200,026,407) 6,715,991 (12,144,931) - ------------ ------------ -------------- -------------- ------------ ------------ 6,272,763 1,875,875 92,456,238 (200,960,157) 6,500,432 (12,403,332) - ------------ ------------ -------------- -------------- ------------ ------------ -- (238,083) -- (682,951) -- -- -- (51,279) -- -- -- -- -- (593,806) -- (7,744,125) -- (805,472) -- (171,721) -- (533,570) -- (91,260) -- (18,334) -- -- -- -- -- (3,181) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------ ------------ -------------- -------------- ------------ ------------ -- (1,076,404) -- (8,960,646) -- (896,732) - ------------ ------------ -------------- -------------- ------------ ------------ 2,596,082 20,622,564 263,225,033 726,841,164 859,596 15,742,416 2,496,732 20,111,962 47,777,868 131,639,336 224,257 6,621,216 -- 781,532 -- 10,219,065 -- 802,893 -- 211,355 -- 521,384 -- 74,738 (10,630,741) (16,067,323) (660,285,705) (577,391,571) (37,528,113) (15,048,400) (5,696,527) (5,968,971) (37,983,818) (68,030,676) (3,824,551) (6,418,518) - ------------ ------------ -------------- -------------- ------------ ------------ (11,234,454) 19,691,119 (387,266,622) 223,798,702 (40,268,811) 1,774,345 - ------------ ------------ -------------- -------------- ------------ ------------ (4,961,691) 20,490,590 (294,810,384) 13,877,899 (33,768,379) (11,525,719) 72,076,079 51,585,489 1,505,050,269 1,491,172,370 66,794,242 78,319,961 - ------------ ------------ -------------- -------------- ------------ ------------ $ 67,114,388 $ 72,076,079 $1,210,239,885 $1,505,050,269 $ 33,025,863 $ 66,794,242 ============ ============ ============== ============== ============ ============ 5,327,538 4,851,388 81,187,480 72,186,366 4,899,918 4,887,256 - ------------ ------------ -------------- -------------- ------------ ------------ 244,386 1,986,263 15,205,278 39,866,121 68,554 1,165,000 -- 79,580 -- 544,378 -- 64,129 (1,020,363) (1,589,693) (39,588,396) (31,409,385) (2,862,868) (1,216,467) - ------------ ------------ -------------- -------------- ------------ ------------ (775,977) 476,150 (24,383,118) 9,001,114 (2,794,314) 12,662 - ------------ ------------ -------------- -------------- ------------ ------------ 4,551,561 5,327,538 56,804,362 81,187,480 2,105,604 4,899,918 ============ ============ ============== ============== ============ ============ 1,564,634 176,048 5,391,454 2,302,364 582,897 585,520 - ------------ ------------ -------------- -------------- ------------ ------------ 236,212 1,988,746 2,764,415 6,772,629 18,464 484,655 -- 21,545 -- 28,259 -- 6,106 (527,563) (621,705) (2,213,982) (3,711,798) (313,151) (493,384) - ------------ ------------ -------------- -------------- ------------ ------------ (291,351) 1,388,586 550,433 3,089,090 (294,687) (2,623) - ------------ ------------ -------------- -------------- ------------ ------------ 1,273,283 1,564,634 5,941,887 5,391,454 288,210 582,897 ============ ============ ============== ============== ============ ============ $ 48,227 $ 13,218 $ 9,862,544 $ 7,069,548 $ (161,785) $ -- ============ ============ ============== ============== ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 63 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - --------------------------------------------------------------------------------
LAZARD GLOBAL EQUITY PORTFOLIO ------------------------------------ SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, (UNAUDITED) 1998 ------------------ --------------- INCREASE (DECREASE) IN NET ASSETS: Operations: Investment income (loss)--net .................................................. $ 479,969 $ 160,566 Realized gain (loss) on investments and foreign currency--net .................. 1,350,197 862,558 Change in unrealized appreciation (depreciation)--net .......................... 4,466,122 1,695,809 ------------- ----------- Net increase (decrease) in net assets resulting from operations ................. 6,296,288 2,718,933 ------------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: From investment income--net Institutional Shares .......................................................... -- (109,536) Open Shares ................................................................... -- (14,500) From realized gains--net Institutional Shares .......................................................... -- (821,122) Open Shares ................................................................... -- (225,207) In excess of investment income--net Institutional Shares .......................................................... -- -- Open Shares ................................................................... -- -- In excess of realized gains--net Institutional Shares .......................................................... -- (10,308) Open Shares ................................................................... -- (3,101) ------------- ----------- Net decrease in net assets resulting from distributions ......................... -- (1,183,774) ------------- ----------- CAPITAL STOCK TRANSACTIONS: Net proceeds from sales Institutional Shares .......................................................... 250,547,403 6,063,563 Open Shares ................................................................... 1,311,137 3,126,095 Net proceeds from reinvestment of distributions Institutional Shares .......................................................... -- 933,169 Open Shares ................................................................... -- 204,554 Cost of shares redeemed Institutional Shares .......................................................... (213,459,334) (1,037,949) Open Shares ................................................................... (106,397) (939,052) ------------- ----------- Net increase (decrease) in net assets from capital stock transactions ........... 38,292,809 8,350,380 ------------- ----------- Total increase (decrease) in net assets ......................................... 44,589,097 9,885,539 Net assets at beginning of period ............................................... 22,534,296 12,648,757 ------------- ----------- Net assets at end of period* .................................................... $ 67,123,393 $22,534,296 ============= =========== SHARES ISSUED AND REPURCHASED: INSTITUTIONAL SHARES: Shares outstanding at beginning of period ...................................... 1,347,859 870,086 ------------- ----------- Shares sold .................................................................... 18,190,929 487,546 Shares issued to shareholders from reinvestment of distributions ............... -- 72,432 Shares repurchased ............................................................. (15,356,556) (82,205) ------------- ----------- Net increase (decrease) ........................................................ 2,834,373 477,773 ------------- ----------- Shares outstanding at end of period ............................................ 4,182,232 1,347,859 ============= =========== OPEN SHARES: Shares outstanding at beginning of period ...................................... 366,528 192,168 ------------- ----------- Shares sold .................................................................... 95,513 233,011 Shares issued to shareholders from reinvestment of distributions ............... -- 15,814 Shares repurchased ............................................................. (8,010) (74,465) ------------- ----------- Net increase (decrease) ........................................................ 87,503 174,360 ------------- ----------- Shares outstanding at end of period ............................................ 454,031 366,528 ============= =========== * Includes undistributed (distributions in excess of) investment Income--net $ 470,030 $ (9,939) ============= ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 64 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
LAZARD INTERNATIONAL EQUITY LAZARD INTERNATIONAL SMALL CAP LAZARD EMERGING MARKETS PORTFOLIO PORTFOLIO PORTFOLIO - ------------------------------------------ ------------------------------------- --------------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, (UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998 - ------------------- -------------------- ------------------ ---------------- ------------------ ------------------ $ 33,724,651 $ 35,324,118 $ 1,268,915 $ 1,368,388 $ 2,862,393 $ 5,108,200 57,737,839 136,266,402 (905,946) 12,681,814 (7,018,700) (48,799,388) 70,629,624 178,170,268 11,354,824 (4,953,609) 89,928,196 (28,009,620) - -------------- -------------- ------------- ------------- ------------ ------------ 162,092,114 349,760,788 11,717,793 9,096,593 85,771,889 (71,700,808) - -------------- -------------- ------------- ------------- ------------ ------------ -- (25,534,748) -- (752,862) -- (4,058,419) -- (250,536) -- (5,976) -- (121,120) -- (144,495,716) -- (15,715,143) -- -- -- (2,219,617) -- (221,751) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - -------------- -------------- ------------- ------------- ------------ ------------ -- (172,500,617) -- (16,695,732) -- (4,179,539) - -------------- -------------- ------------- ------------- ------------ ------------ 818,294,714 1,265,219,569 30,302,463 105,522,613 89,875,388 223,793,607 133,066,796 140,707,664 1,011,158 7,946,853 12,541,739 42,143,524 -- 168,928,556 -- 15,939,095 -- 6,418,310 -- 2,243,315 -- 221,922 -- 39,672 (691,983,755) (829,574,309) (33,401,395) (77,988,431) (94,919,806) (95,979,356) (81,526,791) (108,710,913) (1,136,019) (7,184,846) (12,766,668) (38,420,599) - -------------- -------------- ------------- ------------- ------------ ------------ 177,850,964 638,813,882 (3,223,793) 44,457,206 (5,269,347) 137,995,158 - -------------- -------------- ------------- ------------- ------------ ------------ 339,943,078 816,074,053 8,494,000 36,858,067 80,502,542 62,114,811 2,926,592,436 2,110,518,383 180,425,331 143,567,264 306,223,898 244,109,087 - -------------- -------------- ------------- ------------- ------------ ------------ $3,266,535,514 $2,926,592,436 $ 188,919,331 $ 180,425,331 $386,726,440 $306,223,898 ============== ============== ============= ============= ============ ============ 189,079,168 150,349,803 15,590,528 12,122,940 42,950,229 25,697,597 - -------------- -------------- ------------- ------------- ------------ ------------ 52,731,046 81,842,532 2,652,174 7,901,725 12,740,446 28,909,650 -- 11,354,528 -- 1,379,036 -- 845,770 (44,724,241) (54,467,695) (2,918,174) (5,813,173) (13,202,378) (12,502,788) - -------------- -------------- ------------- ------------- ------------ ------------ 8,006,805 38,729,365 (266,000) 3,467,588 (461,932) 17,252,632 - -------------- -------------- ------------- ------------- ------------ ------------ 197,085,973 189,079,168 15,324,528 15,590,528 42,488,297 42,950,229 ============== ============== ============= ============= ============ ============ 3,106,682 773,878 232,449 160,229 1,176,048 844,049 - -------------- -------------- ------------- ------------- ------------ ------------ 8,600,660 9,132,813 90,147 571,256 1,843,998 5,261,508 -- 150,724 -- 19,069 -- 7,814 (5,256,736) (6,950,733) (100,982) (518,105) (1,857,072) (4,937,323) - -------------- -------------- ------------- ------------- ------------ ------------ 3,343,924 2,332,804 (10,835) 72,220 (13,074) 331,999 - -------------- -------------- ------------- ------------- ------------ ------------ 6,450,606 3,106,682 221,614 232,449 1,162,974 1,176,048 ============== ============== ============= ============= ============ ============ $ 13,583,540 $ (20,141,111) $ 1,233,493 $ (35,422) $ 3,082,408 $ 220,015 ============== ============== ============= ============= ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 65 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - --------------------------------------------------------------------------------
LAZARD BOND PORTFOLIO -------------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, (UNAUDITED) 1998 ------------------ --------------- INCREASE (DECREASE) IN NET ASSETS: Operations: Investment income (loss)--net ............................................. $ 3,191,274 $ 5,668,900 Realized gain (loss) on investments and foreign currency--net ............ (2,531,283) 1,363,055 Change in unrealized appreciation (depreciation)--net .................... (1,697,813) (1,212,836) ------------ ------------ Net increase (decrease) in net assets resulting from operations ........... (1,037,822) 5,819,119 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: From investment income--net Institutional Shares .................................................... (2,821,955) (5,116,501) Open Shares ............................................................. (376,064) (589,199) From realized gains--net Institutional Shares .................................................... -- (1,325,439) Open Shares ............................................................. -- (200,980) In excess of investment income--net Institutional Shares .................................................... -- (70) Open Shares ............................................................. -- (9) In excess of realized gains--net Institutional Shares .................................................... -- (150,643) Open Shares ............................................................. -- (18,525) From capital--net Institutional Shares .................................................... -- -- Open Shares ............................................................. -- -- ------------ ------------ Net decrease in net assets resulting from distributions ................... (3,198,019) (7,401,366) ------------ ------------ CAPITAL STOCK TRANSACTIONS: Net proceeds from sales Institutional Shares .................................................... 141,180,892 30,642,538 Open Shares ............................................................. 4,002,274 10,295,197 Net proceeds from reinvestment of distributions Institutional Shares .................................................... 2,502,699 6,003,999 Open Shares ............................................................. 329,659 714,757 Cost of shares redeemed Institutional Shares .................................................... 141,907,473) (27,312,623) Open Shares ............................................................. (5,299,276) (2,849,142) ------------ ------------ Net increase (decrease) in net assets from capital stock transactions ..... 808,775 17,494,726 ------------ ------------ Total increase (decrease) in net assets ................................... (3,427,066) 15,912,479 Net assets at beginning of period ......................................... 115,623,103 99,710,624 ------------ ------------ Net assets at end of period* .............................................. $112,196,037 $115,623,103 ============ ============ SHARES ISSUED AND REPURCHASED: INSTITUTIONAL SHARES: Shares outstanding at beginning of period 10,154,742 9,217,915 ------------ ------------ Shares sold .............................................................. 14,569,805 3,060,161 Shares issued to shareholders from reinvestment of distributions ......... 258,024 599,942 Shares repurchased ....................................................... (14,650,074) (2,723,276) ------------ ------------ Net increase (decrease) .................................................. 177,755 936,827 ------------ ------------ Shares outstanding at end of period ...................................... 10,332,497 10,154,742 ============ ============ OPEN SHARES: Shares outstanding at beginning of period ................................ 1,540,500 726,613 ------------ ------------ Shares sold .............................................................. 410,234 1,025,899 Shares issued to shareholders from reinvestment of distributions ......... 33,984 71,508 Shares repurchased ....................................................... (542,794) (283,520) ------------ ------------ Net increase (decrease) .................................................. (98,576) 813,887 ------------ ------------ Shares outstanding at end of period ...................................... 1,441,924 1,540,500 ============ ============ *Includes undistributed (distributions in excess of) investment Income--net .............................................................. $ (187,200) $ (180,445) ============ ============ **Commenced operations on January 2, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 66 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME LAZARD STRATEGIC YIELD LAZARD HIGH YIELD PORTFOLIO PORTFOLIO PORTFOLIO - -------------------------------------- ------------------------------------- --------------------------------------- SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, (UNAUDITED) 1998** (UNAUDITED) 1998 (UNAUDITED) 1998 - ------------------ ----------------- ------------------ ---------------- ------------------ ------------------ $ 3,253,090 $ 2,666,797 $ 1,999,947 $ 4,875,222 $ 12,820,365 $ 31,621,200 (729,321) (2,212,117) (3,084,428) (139,509) (1,016,749) (30,022,479) (562,671) (1,145,661) (8,048,152) 9,605,472 448,286 (3,041,073) ----------- ----------- ------------ ------------ ------------- ------------ 1,961,098 (690,981) (9,132,633) 14,341,185 12,251,902 (1,442,352) ----------- ----------- ------------ ------------ ------------- ------------ (3,217,364) (2,646,121) (635,111) (1,954,550) (12,133,476) (19,465,202) (45,454) (20,676) (27,283) (62,023) (709,336) (791,250) -- -- -- -- -- -- -- -- -- -- -- -- -- (78,525) -- -- -- (794,218) -- (705) -- -- -- (35,597) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (13,228,346) -- -- -- -- -- (592,897) ----------- ----------- ------------ ------------ ------------- ------------ (3,262,818) (2,746,027) (662,394) (2,016,573) (12,842,812) (34,907,510) ----------- ----------- ------------ ------------ ------------- ------------ 45,012,187 52,193,575 17,534,979 30,541,436 150,181,204 476,144,319 89,000 984,032 447,909 2,380,537 95,771,378 154,324,729 3,161,681 2,664,900 596,489 2,276,718 8,596,424 21,895,133 42,534 21,381 25,537 72,083 572,933 1,174,776 (2,575,181) (9,518,672) (33,860,476) (39,431,530) (227,011,988) 465,223,430) -- (24,645) (467,990) (870,320) (100,366,593) 146,658,525) ----------- ----------- ------------ ------------ ------------- ------------ 45,730,221 46,320,571 (15,723,552) (5,031,076) (72,256,642) 41,657,002 ----------- ----------- ------------ ------------ ------------- ------------ 44,428,501 42,883,563 (25,518,579) 7,293,536 (72,847,552) 5,307,140 42,883,563 -- 120,250,774 112,957,238 420,059,361 414,752,221 ----------- ----------- ------------ ------------ ------------- ------------ $87,312,064 $42,883,563 $ 94,732,195 $120,250,774 $ 347,211,809 $420,059,361 =========== =========== ============ ============ ============= ============ 4,453,235 -- 10,782,322 11,439,832 44,107,303 41,370,616 ----------- ----------- ------------ ------------ ------------- ------------ 4,752,765 5,125,438 1,705,067 3,069,726 16,606,254 50,232,451 335,124 270,082 58,454 232,609 951,408 2,318,882 (272,120) (942,285) (3,341,522) (3,959,845) (25,102,480) (49,814,646) ----------- ----------- ------------ ------------ ------------- ------------ 4,815,769 4,453,235 (1,578,001) (657,510) (7,544,818) 2,736,687 ----------- ----------- ------------ ------------ ------------- ------------ 9,269,004 4,453,235 9,204,321 10,782,322 36,562,485 44,107,303 =========== =========== ============ ============ ============= ============ 100,729 -- 444,293 287,789 2,489,504 1,584,672 ----------- ----------- ------------ ------------ ------------- ------------ 10,116 101,097 43,464 239,066 10,605,670 16,328,778 3,741 1,997 2,513 7,344 63,365 124,369 -- (2,365) (45,254) (89,906) (11,120,120) (15,548,315) ----------- ----------- ------------ ------------ ------------- ------------ 13,857 100,729 723 156,504 (451,085) 904,832 ----------- ----------- ------------ ------------ ------------- ------------ 114,586 100,729 445,016 444,293 2,038,419 2,489,504 =========== =========== ============ ============ ============= ============ $ (31,191) $ (21,463) $ 1,055,164 $ (282,389) $ 1,024,146 $ 1,046,593 =========== =========== ============ ============ ============= ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 67 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. FINANCIAL HIGHLIGHTS SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD: - -------------------------------------------------------------------------------- LAZARD EQUITY PORTFOLIO
YEAR ENDED --------------------------------------------------------------- SIX MONTHS ENDED 6/30/99+ 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES ------------- ------------ ------------ ------------ ------------ ----------- Net asset value, beginning of period ...... $ 21.75 $ 19.98 $ 19.24 $ 17.41 $ 13.75 $ 13.89 ------- ------- ------- ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.14 0.28 0.22 0.33 0.23 0.14 Net realized and unrealized gain (loss) ................................... 2.23 3.10 4.54 3.06 4.93 0.44 ------- ------- ------- ------- ------- ------- Total from investment operations ......... 2.37 3.38 4.76 3.39 5.16 0.58 ------- ------- ------- ------- ------- ------- Less distributions from and in excess of: Net investment income .................... -- (0.26) (0.22) (0.33) (0.18) (0.15) Net realized gain ........................ -- (1.35) (3.80) (1.23) (1.32) (0.57) ------- ------- ------- ------- ------- ------- Total distributions ...................... -- (1.61) (4.02) (1.56) (1.50) (0.72) ------- ------- ------- ------- ------- ------- Net asset value, end of period ............ $ 24.12 $ 21.75 $ 19.98 $ 19.24 $ 17.41 $ 13.75 ======= ======= ======= ======= ======= ======= TOTAL RETURN (A) .......................... 10.9% 17.3% 25.1% 19.9% 37.7% 4.2% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $395,220 $361,126 $333,575 $278,605 $163,787 $89,105 Ratios to average net assets: Net expenses (b) ......................... 0.83% 0.85% 0.86% 0.89% 0.92% 1.05% Gross expenses (b) ....................... 0.83% 0.85% 0.87% 0.89% 0.92% 1.05% Net investment income (b) ................ 1.24% 1.28% 1.00% 1.87% 1.45% 1.15% Portfolio turnover rate ................... 21% 76% 78% 66% 81% 67%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 2/5/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ...... $ 21.76 $ 19.99 $ 20.19 ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.11 0.20 0.13 Net realized and unrealized gain (loss) ................................... 2.21 3.12 3.62 ------- ------- ------- Total from investment operations ......... 2.32 3.32 3.75 ------- ------- ------- Less distributions from and in excess of: Net investment income .................... -- (0.20) (0.15) Net realized gain ........................ -- (1.35) (3.80) ------- ------- ------- Total distributions ...................... -- (1.55) (3.95) ------- ------- ------- Net asset value, end of period ............ $ 24.08 $ 21.76 $ 19.99 ======= ======= ======= TOTAL RETURN (A) .......................... 10.7% 17.0% 18.9% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $163,154 $117,624 $22,811 Ratios to average net assets: Net expenses (b) ......................... 1.09% 1.12% 1.22% Gross expenses (b) ....................... 1.09% 1.12% 1.35% Net investment income (b) ................ 0.99% 0.96% 0.60% SEE NOTES TO FINANCIAL HIGHLIGHTS.
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 FOR THE PERIOD ENDED ENDED 11/4/97* TO 6/30/99+ 12/31/98 12/31/97 INSTITUTIONAL SHARES ------------ ------------ --------------- Net asset value, beginning of period ... $ 10.46 $ 10.26 $ 10.00 ------- ------- ------- Income (loss) from investment operations: Net investment income ................. 0.01 0.05 0.02 Net realized and unrealized gain (loss) ................................ 1.06 0.31 0.26 ------- ------- ------- Total from investment operations ...... 1.07 0.36 0.28 ------- ------- ------- Less distributions from and in excess of: Net investment income ................. -- (0.05) (0.02) Net realized gain ..................... -- (0.11) -- ------- ------- ------- Total distributions ................... -- (0.16) (0.02) ------- ------- ------- Net asset value, end of period ......... $ 11.53 $ 10.46 $ 10.26 ======= ======= ======= TOTAL RETURN (A) ....................... 10.2% 3.7% 2.8% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................ $52,480 $55,731 $49,779 Ratios to average net assets: Net expenses (b) ...................... 1.05% 1.05% 1.05% Gross expenses (b) .................... 1.08% 1.23% 1.44% Net investment income (b) ............. 0.17% 0.48% 1.02% Portfolio turnover rate ................ 57% 86% 1%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 11/4/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ... $ 10.45 $ 10.26 $ 10.00 ------- ------- ------- Income (loss) from investment operations: Net investment income ................. (0.01) 0.02 0.01 Net realized and unrealized gain (loss) ................................ 1.05 0.32 0.26 ------- ------- ------- Total from investment operations ...... 1.04 0.34 0.27 ------- ------- ------- Less distributions from and in excess of: Net investment income ................. -- ( 0.04) (0.01) Net realized gain ..................... -- ( 0.11) -- ------- ------- ------- Total distributions ................... -- ( 0.15) (0.01) ------- ------- ------- Net asset value, end of period ......... $ 11.49 $ 10.45 $ 10.26 ======= ======= ======= TOTAL RETURN (A) ....................... 10.0% 3.4% 2.7% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................ $14,635 $16,345 $ 1,806 Ratios to average net assets: Net expenses (b) ...................... 1.35% 1.35% 1.35% Gross expenses (b) .................... 1.43% 1.66% 4.97% Net investment income (b) ............. (0.12%) 0.29% 0.72% SEE NOTES TO FINANCIAL HIGHLIGHTS.
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 ENDED 6/30/99+ INSTITUTIONAL SHARES --------------- Net asset value, beginning of period ...... $ 17.39 --------- Income (loss) from investment operations: Net investment income .................... 0.08 Net realized and unrealized gain (loss) ................................... 1.82 --------- Total from investment operations ......... 1.90 --------- Less distributions from and in excess of: Net investment income .................... -- Net realized gain ........................ -- --------- Total distributions ...................... -- --------- Net asset value, end of period ............ $ 19.29 ========= TOTAL RETURN (A) .......................... 11.0% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $1,096,006 Ratios to average net assets: Net expenses (b) ......................... 0.81% Gross expenses (b) ....................... 0.81% Net investment income (b) ................ 0.46% Portfolio turnover rate ................... 16%
YEAR ENDED ----------------------------------------------------------------------- 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES --------------- --------------- ------------ ------------ ------------- Net asset value, beginning of period ...... $ 20.02 $ 18.44 $ 15.95 $ 14.35 $ 15.26 --------- --------- ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.08 0.07 0.11 0.13 0.07 Net realized and unrealized gain (loss) ................................... (2.60) 4.92 3.68 2.95 0.22 --------- --------- ------- ------- ------- Total from investment operations ......... (2.52) 4.99 3.79 3.08 0.29 --------- --------- ------- ------- ------- Less distributions from and in excess of: Net investment income .................... (0.01) (0.06) (0.11) (0.16) (0.04) Net realized gain ........................ (0.10) (3.35) (1.19) (1.32) (1.16) --------- --------- ------- ------- ------- Total distributions ...................... (0.11) (3.41) (1.30) (1.48) (1.20) --------- --------- ------- ------- ------- Net asset value, end of period ............ $ 17.39 $ 20.02 $ 18.44 $ 15.95 $ 14.35 ========= ========= ======= ======= ======= TOTAL RETURN (A) .......................... (12.6%) 28.1% 23.9% 21.5% 2.0% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $1,411,503 $1,445,075 $981,405 $646,371 $429,673 Ratios to average net assets: Net expenses (b) ......................... 0.81% 0.82% 0.84% 0.84% 0.85% Gross expenses (b) ....................... 0.81% 0.82% 0.84% 0.84% 0.85% Net investment income (b) ................ 0.50% 0.35% 0.60% 0.90% 0.51% Portfolio turnover rate ................... 46% 56% 51% 70% 70%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 1/30/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ........ $ 17.35 $ 20.02 $ 18.75 ------- ------- ------- Income (loss) from investment operations: Net investment income ...................... 0.01 0.03 0.01 Net realized and unrealized gain (loss) ..................................... 1.87 (2.60) 4.61 ------- ------- ------- Total from investment operations ........... 1.88 (2.57) 4.62 ------- ------- ------- Less distributions from and in excess of: Net investment income ...................... -- -- -- Net realized gain .......................... -- (0.10) (3.35) ------- ------- ------- Total distributions ........................ -- (0.10) (3.35) ------- ------- ------- Net asset value, end of period .............. $ 19.23 $ 17.35 $ 20.02 ======= ======= ======= TOTAL RETURN (A) ............................ 10.8% (12.9%) 25.6% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ................................. $114,234 $ 93,547 $46,097 Ratios to average net assets: Net expenses (b) ........................... 1.09% 1.09% 1.14% Gross expenses (b) ......................... 1.09% 1.09% 1.23% Net investment income (b) .................. 0.19% 0.21% 0.12% SEE NOTES TO FINANCIAL HIGHLIGHTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 70 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD: - -------------------------------------------------------------------------------- LAZARD BANTAM VALUE PORTFOLIO
SIX MONTHS YEAR ENDED FOR THE PERIOD ENDED --------------------------- 3/1/96* TO 6/30/99+ 12/31/98 12/31/97 12/31/96 INSTITUTIONAL SHARES ------------ ------------ ------------ -------------- Net asset value, beginning of period ...... $ 12.19 $ 14.32 $ 12.58 $ 10.00 -------- -------- ------- ------- Income (loss) from investment operations: Net investment income (loss) ............. (0.06) -- -- 0.22 Net realized and unrealized gain (loss) ................................... 1.68 (1.98) 4.12 3.11 -------- -------- ------- ------- Total from investment operations ......... 1.62 (1.98) 4.12 3.33 -------- -------- ------- ------- Less distributions from and in excess of: Net investment income .................... -- -- -- (0.22) Net realized gain ........................ -- (0.15) (2.38) (0.53) -------- -------- ------- ------- Total distributions ...................... -- (0.15) (2.38) (0.75) -------- -------- ------- ------- Net asset value, end of period ............ $ 13.81 $ 12.19 $ 14.32 $ 12.58 ======== ======== ======= ======= TOTAL RETURN (A) .......................... 13.3% (13.8%) 33.9% 33.3% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 29,079 $ 59,737 $69,972 $34,549 Ratios to average net assets: Net expenses (b) ......................... 1.05% 1.05% 1.05% 1.05% Gross expenses (b) ....................... 1.19% 1.09% 1.14% 1.91% Net investment income (b) ................ (0.55%) (0.40%) (0.42%) 2.80% Portfolio turnover rate ................... 46% 95% 110% 262%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 1/23/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ...... $ 12.11 $ 14.26 $ 13.13 ------- -------- ------- Income (loss) from investment operations: Net investment income (loss) ............. (0.13) (0.04) -- Net realized and unrealized gain (loss) ................................... 1.71 (1.96) 3.51 -------- -------- ------- Total from investment operations ......... 1.58 (2.00) 3.51 -------- -------- ------- Less distributions from and in excess of: Net investment income .................... -- -- -- Net realized gain ........................ -- (0.15) ( 2.38) -------- -------- ------- Total distributions ...................... -- (0.15) ( 2.38) -------- -------- ------- Net asset value, end of period ............ $ 13.69 $ 12.11 $ 14.26 ======== ======== ======= TOTAL RETURN (A) .......................... 13.1% (14.0%) 27.8% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 3,946 $ 7,057 $ 8,348 Ratios to average net assets: Net expenses (b) ......................... 1.35% 1.35% 1.35% Gross expenses (b) ....................... 1.89% 1.60% 1.88% Net investment income (b) ................ (0.82%) (0.70%) (0.69%)
SEE NOTES TO FINANCIAL HIGHLIGHTS. 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 GLOBAL EQUITY PORTFOLIO
SIX MONTHS YEAR ENDED FOR THE PERIOD ENDED --------------------------- 1/4/96* TO 6/30/99+ 12/31/98 12/31/97 12/31/96 INSTITUTIONAL SHARES ------------ ------------ ------------ --------------- Net asset value, beginning of period ...... $ 13.14 $ 11.91 $ 11.48 $ 10.00 ------- ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.11 0.10 0.14 0.09 Net realized and unrealized gain (loss) ................................... 1.23 1.90 1.58 1.49 ------- ------- ------- ------- Total from investment operations ......... 1.34 2.00 1.72 1.58 ------- ------- ------- ------- Less distributions from and in excess of: Net investment income .................... -- (0.08) (0.15) (0.10) Net realized gain ........................ -- (0.69) (1.14) -- ------- ------- ------- ------- Total distributions ...................... -- (0.77) (1.29) (0.10) ------- ------- ------- ------- Net asset value, end of period ............ $ 14.48 $ 13.14 $ 11.91 $ 11.48 ======= ======= ======= ======= TOTAL RETURN (A) .......................... 10.2% 17.1% 15.3% 15.8% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $60,548 $17,710 $10,359 $ 9,784 Ratios to average net assets: Net expenses (b) ......................... 1.05% 1.05% 1.05% 1.05% Gross expenses (b) ....................... 1.26% 2.18% 2.55% 5.06% Net investment income (b) ................ 2.10% 1.07% 1.02% 1.70% Portfolio turnover rate ................... 24% 48% 64% 74%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 1/30/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ...... $ 13.16 $ 11.92 $ 11.31 ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.09 0.09 0.08 Net realized and unrealized gain (loss) ................................... 1.23 1.88 1.78 ------- ------- ------- Total from investment operations ......... 1.32 1.97 1.86 ------- ------- ------- Less distributions from and in excess of: Net investment income .................... -- (0.04) (0.11) Net realized gain ........................ -- (0.69) (1.14) ------- ------- ------- Total distributions ...................... -- (0.73) (1.25) ------- ------- ------- Net asset value, end of period ............ $ 14.48 $ 13.16 $ 11.92 ======= ======= ======= TOTAL RETURN (A) .......................... 10.0% 16.8% 16.7% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 6,576 $ 4,824 $ 2,290 Ratios to average net assets: Net expenses (b) ......................... 1.35% 1.35% 1.35% Gross expenses (b) ....................... 1.91% 2.85% 4.23% Net investment income (b) ................ 1.52% 0.77% 0.67%
SEE NOTES TO FINANCIAL HIGHLIGHTS. 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 PORTFOLIO
SIX MONTHS ENDED 6/30/99+ INSTITUTIONAL SHARES --------------- Net asset value, beginning of period ...... $ 15.23 --------- Income (loss) from investment operations: Net investment income .................... 0.17 Net realized and unrealized gain (loss) ................................... 0.65 --------- Total from investment operations ......... 0.82 --------- Less distributions from and in excess of: Net investment income .................... -- Net realized gain ........................ -- --------- Total distributions ...................... -- --------- Net asset value, end of period ............ $ 16.05 ========= TOTAL RETURN (A) .......................... 5.4% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $3,163,225 Ratios to average net assets: Net expenses (b) ......................... 0.87% Gross expenses (b) ....................... 0.87% Net investment income (b) ................ 2.27% Portfolio turnover rate ................... 12% YEAR ENDED ----------------------------------------------------------------------------- 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES --------------- --------------- --------------- --------------- ------------- Net asset value, beginning of period ...... $ 13.97 $ 13.62 $ 12.50 $ 11.23 $ 12.32 --------- --------- --------- --------- ------- Income (loss) from investment operations: Net investment income .................... 0.18 0.22 0.17 0.19 0.08 Net realized and unrealized gain (loss) ................................... 2.03 1.40 1.76 1.29 (0.05) --------- --------- --------- --------- ------- Total from investment operations ......... 2.21 1.62 1.93 1.48 0.03 --------- --------- --------- --------- ------- Less distributions from and in excess of: Net investment income .................... (0.14) (0.34) (0.19) (0.09) -- Net realized gain ........................ (0.81) (0.93) (0.62) (0.12) (1.12) --------- --------- --------- --------- ------- Total distributions ...................... (0.95) (1.27) (0.81) (0.21) (1.12) --------- --------- --------- --------- ------- Net asset value, end of period ............ $ 15.23 $ 13.97 $ 13.62 $ 12.50 $ 11.23 ========= ========= ========= ========= ======= TOTAL RETURN (A) .......................... 16.0% 11.8% 15.6% 13.1% 0.2% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $2,879,289 $2,099,724 $1,816,173 $1,299,549 $831,877 Ratios to average net assets: Net expenses (b) ......................... 0.90% 0.89% 0.91% 0.95% 0.94% Gross expenses (b) ....................... 0.90% 0.89% 0.91% 0.95% 0.94% Net investment income (b) ................ 1.37% 1.18% 1.93% 1.82% 0.75% Portfolio turnover rate ................... 41% 37% 39% 63% 106%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 1/23/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ...... $ 15.23 $ 13.95 $ 13.29 ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.14 0.18 0.16 Net realized and unrealized gain (loss) ................................... 0.65 2.00 1.71 ------- ------- ------- Total from investment operations ......... 0.79 2.18 1.87 ------- ------- ------- Less distributions from and in excess of: Net investment income .................... -- (0.09) (0.28) Net realized gain ........................ -- (0.81) (0.93) ------- ------- ------- Total distributions ...................... -- (0.90) (1.21) ------- ------- ------- Net asset value, end of period ............ $ 16.02 $ 15.23 $ 13.95 ======= ======= ======= TOTAL RETURN (A) .......................... 5.2% 15.8% 14.1% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $103,311 $47,303 $10,794 Ratios to average net assets: Net expenses (b) ......................... 1.16% 1.24% 1.25% Gross expenses (b) ....................... 1.16% 1.24% 1.61% Net investment income (b) ................ 2.19% 1.02% 0.37% SEE NOTES TO FINANCIAL HIGHLIGHTS.
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 SMALL CAP PORTFOLIO
YEAR ENDED ------------------------------------------------------------------ SIX MONTHS ENDED 6/30/99+ 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES ------------- ------------ ------------ ------------ ------------ -------------- Net asset value, beginning of period ...... $ 11.40 $ 11.69 $ 11.93 $ 10.52 $ 10.38 $ 10.86 ------- ------- ------- ------- ------- -------- Income (loss) from investment operations: Net investment income .................... 0.08 0.05 0.07 0.08 0.14 0.07 Net realized and unrealized gain (loss) ................................... 0.67 0.83 (0.03) 1.55 0.06 (0.55) ------- ------- ------- ------- ------- -------- Total from investment operations ......... 0.75 0.88 0.04 1.63 0.20 (0.48) ------- ------- ------- ------- ------- -------- Less distributions from and in excess of: Net investment income .................... -- (0.05) (0.07) (0.08) -- -- Net realized gain ........................ -- (1.12) (0.21) (0.14) (0.06) -- ------- ------- ------- ------- ------- -------- Total distributions ...................... -- (1.17) (0.28) (0.22) (0.06) -- ------- ------- ------- ------- ------- -------- Net asset value, end of period ............ $ 12.15 $ 11.40 $ 11.69 $ 11.93 $ 10.52 $ 10.38 ======= ======= ======= ======= ======= ======== TOTAL RETURN (A) .......................... 6.6% 7.6% 0.3% 15.6% 1.9% (4.5%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $186,236 $177,779 $141,695 $126,973 $115,534 $ 83,432 Ratios to average net assets: Net expenses (b) ......................... 1.01% 1.04% 1.09% 1.12% 1.13% 1.05% Gross expenses (b) ....................... 1.01% 1.04% 1.09% 1.12% 1.13% 1.26% Net investment income (b) ................ 1.44% 0.81% 0.73% 1.67% 1.56% 0.95% Portfolio turnover rate ................... 21% 56% 63% 101% 118% 113%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 2/13/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ...... $ 11.38 $ 11.69 $ 12.32 ------- ------- -------- Income (loss) from investment operations: Net investment income .................... 0.06 0.01 0.02 Net realized and unrealized gain (loss) ................................... 0.67 0.83 (0.42) ------- ------- -------- Total from investment operations ......... 0.73 0.84 (0.40) ------- ------- -------- Less distributions from and in excess of: Net investment income .................... -- (0.03) (0.02) Net realized gain ........................ -- (1.12) (0.21) ------- ------- -------- Total distributions ...................... -- (1.15) (0.23) ------- ------- -------- Net asset value, end of period ............ $ 12.11 $ 11.38 $ 11.69 ======= ======= ======== TOTAL RETURN (A) .......................... 6.4% 7.2% (3.2%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 2,684 $ 2,646 $ 1,873 Ratios to average net assets: Net expenses (b) ......................... 1.43% 1.43% 1.43% Gross expenses (b) ....................... 2.11% 1.93% 3.39% Net investment income (b) ................ 0.97% 0.43% 0.34% SEE NOTES TO FINANCIAL HIGHLIGHTS.
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 EMERGING MARKETS PORTFOLIO
YEAR ENDED ------------------------------------------------------- SIX MONTHS FOR THE PERIOD ENDED 7/15/94* TO 6/30/99+ 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES ------------ ------------ -------------- ------------ -------------- --------------- Net asset value, beginning of period ...... $ 6.94 $ 9.20 $ 11.21 $ 9.24 $ 9.86 $ 10.00 ------- ------- -------- ------- -------- -------- Income (loss) from investment operations: Net investment income .................... 0.07 0.10 0.10 0.07 0.08 0.01 Net realized and unrealized gain (loss) ................................... 1.85 (2.26) (1.18) 2.11 (0.66) (0.15) ------- ------- -------- ------- -------- -------- Total from investment operations ......... 1.92 (2.16) (1.08) 2.18 (0.58) (0.14) ------- ------- -------- ------- -------- -------- Less distributions from and in excess of: Net investment income .................... -- (0.10) (0.09) (0.08) (0.04) -- Net realized gain ........................ -- -- (0.84) (0.13) -- -- ------- ------- -------- ------- -------- -------- Total distributions ...................... -- (0.10) (0.93) (0.21) (0.04) -- ------- ------- -------- ------- -------- -------- Net asset value, end of period ............ $ 8.86 $ 6.94 $ 9.20 $ 11.21 $ 9.24 $ 9.86 ======= ======= ======== ======= ======== ======== TOTAL RETURN (A) .......................... 27.7% (23.5%) (9.8%) 23.6% (5.9%) (1.4%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $376,403 $298,033 $236,340 $145,328 $ 35,216 $ 17,025 Ratios to average net assets: Net expenses (b) ......................... 1.23% 1.28% 1.32% 1.38% 1.30% 1.30% Gross expenses (b) ....................... 1.23% 1.29% 1.33% 1.48% 2.00% 2.31% Net investment income (b) ................ 1.76% 1.84% 1.26% 1.40% 1.22% 0.31% Portfolio turnover rate ................... 21% 36% 40% 51% 102% 31%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 1/8/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------- --------------- Net asset value, beginning of period ...... $ 6.97 $ 9.20 $ 11.45 ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.05 0.11 0.07 Net realized and unrealized gain (loss) ................................... 1.86 (2.26) ( 1.42) ------- ------- ------- Total from investment operations ......... 1.91 (2.15) ( 1.35) ------- ------- ------- Less distributions from and in excess of: Net investment income .................... -- (0.08) ( 0.07) Net realized gain ........................ -- -- ( 0.83) ------- ------ ------- Total distributions ...................... -- (0.08) ( 0.90) ------- ------- ------- Net asset value, end of period ............ $ 8.88 $ 6.97 $ 9.20 ======= ======= ======= TOTAL RETURN (A) .......................... 27.4% (23.3%) (12.0%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $10,323 $ 8,191 $ 7,769 Ratios to average net assets: Net expenses (b) ......................... 1.60% 1.60% 1.60% Gross expenses (b) ....................... 1.76% 1.76% 1.93% Net investment income (b) ................ 1.37% 1.54% 1.01% SEE NOTES TO FINANCIAL HIGHLIGHTS.
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 BOND PORTFOLIO
YEAR ENDED ------------------------------------------------------------------ SIX MONTHS ENDED 6/30/99+ 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES -------------- ------------ ------------ ------------ ------------ ------------ Net asset value, beginning of period ...... $ 9.89 $ 10.03 $ 9.88 $ 10.10 $ 9.24 $ 10.28 -------- ------- ------- ------- ------- -------- Income (loss) from investment operations: Net investment income .................... 0.27 0.55 0.59 0.56 0.60 0.58 Net realized and unrealized gain (loss) ................................... (0.36) 0.01 0.23 (0.14) 0.86 (1.01) -------- ------- ------- ------- ------- -------- Total from investment operations ......... (0.09) 0.56 0.82 0.42 1.46 (0.43) -------- ------- ------- ------- ------- -------- Less distributions from and in excess of: Net investment income .................... (0.27) (0.55) (0.60) (0.57) (0.60) (0.58) Net realized gain ........................ -- (0.15) (0.07) (0.07) -- (0.03) -------- ------- ------- ------- ------- -------- Total distributions ...................... (0.27) (0.70) (0.67) (0.64) (0.60) (0.61) -------- ------- ------- ------- ------- -------- Net asset value, end of period ............ $ 9.53 $ 9.89 $ 10.03 $ 9.88 $ 10.10 $ 9.24 ======== ======= ======= ======= ======= ======== TOTAL RETURN (A) .......................... (0.9%) 5.8% 8.6% 4.4% 16.2% (4.2%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 98,457 $100,397 $92,428 $69,906 $46,083 $ 24,494 Ratios to average net assets: Net expenses (b) ......................... 0.74% 0.78% 0.80% 0.80% 0.80% 0.80% Gross expenses (b) ....................... 0.74% 0.79% 0.81% 0.88% 0.97% 1.23% Net investment income (b) ................ 5.64% 5.45% 5.81% 5.77% 6.07% 6.11% Portfolio turnover rate ................... 242% 335% 447% 460% 244% 121%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 3/5/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES -------------- ------------ --------------- Net asset value, beginning of period ...... $ 9.88 $ 10.02 $ 9.86 -------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.25 0.52 0.46 Net realized and unrealized gain (loss) ................................... (0.35) 0.01 0.24 -------- ------- ------- Total from investment operations ......... (0.10) 0.53 0.70 -------- ------- ------- Less distributions from and in excess of: Net investment income .................... (0.25) (0.52) ( 0.47) Net realized gain ........................ -- (0.15) ( 0.07) -------- ------- ------- Total distributions ...................... (0.25) (0.67) ( 0.54) -------- ------- ------- Net asset value, end of period ............ $ 9.53 $ 9.88 $ 10.02 ======== ======= ======= TOTAL RETURN (A) .......................... (1.0%) 5.4% 7.2% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 13,739 $15,226 $ 7,283 Ratios to average net assets: Net expenses (b) ......................... 1.10% 1.10% 1.10% Gross expenses (b) ....................... 1.12% 1.21% 1.49% Net investment income (b) ................ 5.26% 5.11% 5.46% SEE NOTES TO FINANCIAL HIGHLIGHTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 76 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD: - -------------------------------------------------------------------------------- LAZARD HIGH YIELD PORTFOLIO
SIX MONTHS FOR THE PERIOD ENDED 1/2/98* TO 6/30/99+ 12/31/98 INSTITUTIONAL SHARES ------------ --------------- Net asset value, beginning of period ...... $ 9.42 $ 10.00 ------- ------- Income (loss) from investment operations: Net investment income .................... 0.44 0.88 Net realized and unrealized gain (loss) ................................... (0.12) (0.57) ------- ------- Total from investment operations ......... 0.32 0.31 ------- ------- Less distributions from and in excess of: Net investment income .................... (0.44) (0.89) Net realized gain ........................ -- -- ------- ------- Total distributions ...................... (0.44) (0.89) ------- ------- Net asset value, end of period ............ $ 9.30 $ 9.42 ======= ======= TOTAL RETURN (A) .......................... 3.5% 2.9% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $86,245 $41,935 Ratios to average net assets: Net expenses (b) ......................... 1.05% 1.05% Gross expenses (b) ....................... 1.10% 1.55% Net investment income (b) ................ 9.29% 8.87% Portfolio turnover rate ................... 79% 418%
SIX MONTHS FOR THE PERIOD ENDED 2/24/98* TO 6/30/99+ 12/31/98 OPEN SHARES ------------ --------------- Net asset value, beginning of period ...... $ 9.42 $ 10.37 ------- -------- Income (loss) from investment operations: Net investment income .................... 0.42 0.72 Net realized and unrealized gain (loss) ................................... (0.11) (0.94) ------- -------- Total from investment operations ......... 0.31 (0.22) ------- -------- Less distributions from and in excess of: Net investment income .................... (0.42) (0.73) Net realized gain ........................ -- -- ------- -------- Total distributions ...................... (0.42) (0.73) ------- -------- Net asset value, end of period ............ $ 9.31 $ 9.42 ======= ======== TOTAL RETURN (A) .......................... 3.3% (2.2%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 1,067 $ 949 Ratios to average net assets: Net expenses (b) ......................... 1.35% 1.35% Gross expenses (b) ....................... 3.54% 9.77% Net investment income (b) ................ 9.02% 8.59% SEE NOTES TO FINANCIAL HIGHLIGHTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 77 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD: - -------------------------------------------------------------------------------- LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO
YEAR ENDED ----------------------------------------------------------------- SIX MONTHS ENDED 6/30/99+ 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES -------------- ------------ -------------- ------------ ------------ ----------- Net asset value, beginning of period ...... $ 10.71 $ 9.63 $ 10.78 $ 10.85 $ 10.23 $ 10.51 -------- ------- -------- ------- ------- ------- Income (loss) from investment operations: Net investment income .................... 0.20 0.32 0.40 0.54 0.70 0.59 Net realized and unrealized gain (loss) ................................... (1.03) 0.98 (1.05) 0.03 1.25 (0.16) -------- ------- -------- ------- ------- ------- Total from investment operations ......... (0.83) 1.30 (0.65) 0.57 1.95 0.43 -------- ------- -------- ------- ------- ------- Less distributions from and in excess of: Net investment income .................... (0.06) (0.22) (0.13) (0.59) (1.13) (0.59) Net realized gain ........................ -- -- (0.12) (0.05) (0.20) (0.12) Capital .................................. -- -- (0.25) -- -- -- -------- ------- -------- ------- ------- ------- Total distributions ...................... (0.06) (0.22) (0.50) (0.64) (1.33) (0.71) -------- ------- -------- ------- ------- ------- Net asset value, end of period ............ $ 9.82 $ 10.71 $ 9.63 $ 10.78 $ 10.85 $ 10.23 ======== ======= ======== ======= ======= ======= TOTAL RETURN (A) .......................... (7.9%) 13.2% (5.6%) 5.5% 19.4% 4.2% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 90,376 $115,500 $110,185 $88,430 $45,624 $35,803 Ratios to average net assets: Net expenses (b) ......................... 1.05% 1.09% 1.06% 1.05% 1.05% 1.05% Gross expenses (b) ....................... 1.05% 1.10% 1.10% 1.21% 1.25% 1.51% Net investment income (b) ................ 3.56% 4.27% 5.13% 5.54% 5.99% 5.68% Portfolio turnover rate ................... 64% 187% 166% 242% 190% 66%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 1/8/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES -------------- ------------ --------------- Net asset value, beginning of period ...... $ 10.69 $ 9.63 $ 10.64 -------- ------- -------- Income (loss) from investment operations: Net investment income .................... 0.17 0.31 0.43 Net realized and unrealized gain (loss) ................................... (1.01) 0.96 (0.98) -------- ------- -------- Total from investment operations ......... (0.84) 1.27 (0.55) -------- ------- -------- Less distributions from and in excess of: Net investment income .................... (0.06) (0.21) (0.08) Net realized gain ........................ -- -- (0.12) Capital .................................. -- -- (0.26) -------- ------- -------- Total distributions ...................... (0.06) (0.21) (0.46) -------- ------- -------- Net asset value, end of period ............ $ 9.79 $ 10.69 $ 9.63 ======== ======= ======== TOTAL RETURN (A) .......................... (8.0%) 12.9% (4.8%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $ 4,356 $ 4,751 $ 2,772 Ratios to average net assets: Net expenses (b) ......................... 1.35% 1.35% 1.35% Gross expenses (b) ....................... 1.77% 1.92% 2.71% Net investment income (b) ................ 3.26% 4.01% 4.68% SEE NOTES TO FINANCIAL HIGHLIGHTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 78 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD: - -------------------------------------------------------------------------------- LAZARD STRATEGIC YIELD PORTFOLIO
YEAR ENDED ------------------------------------------------------------------ SIX MONTHS ENDED 6/30/99+ 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 INSTITUTIONAL SHARES ------------- ------------ ------------ ------------ ------------ -------------- Net asset value, beginning of period ...... $ 9.01 $ 9.66 $ 10.01 $ 9.52 $ 9.10 $ 10.13 ------- ------- ------- ------- ------- -------- Income (loss) from investment operations: Net investment income .................... 0.31 0.76 0.81 0.76 0.75 0.76 Net realized and unrealized gain (loss) ................................... (0.02) (0.69) (0.28) 0.50 0.43 (0.99) ------- ------- ------- ------- ------- -------- Total from investment operations ......... 0.29 0.07 0.53 1.26 1.18 (0.23) ------- ------- ------- ------- ------- -------- Less distributions from and in excess of: Net investment income .................... (0.31) (0.44) (0.82) (0.77) (0.76) (0.76) Net realized gain ........................ -- -- (0.06) -- -- (0.04) Capital .................................. -- (0.28) -- -- -- -- ------- ------- ------- ------- ------- -------- Total distributions ...................... (0.31) (0.72) (0.88) (0.77) (0.76) (0.80) ------- ------- ------- ------- ------- -------- Net asset value, end of period ............ $ 8.99 $ 9.01 $ 9.66 $ 10.01 $ 9.52 $ 9.10 ======= ======= ======= ======= ======= ======== TOTAL RETURN (A) .......................... 3.3% 0.8% 5.3% 13.7% 13.6% (2.3%) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ............................... $328,870 $397,599 $399,452 $199,083 $78,474 $ 62,328 Ratios to average net assets: Net expenses (b) ......................... 0.90% 0.90% 0.94% 1.08% 1.09% 1.05% Gross expenses (b) ....................... 0.90% 0.90% 0.95% 1.08% 1.09% 1.15% Net investment income (b) ................ 6.84% 6.94% 7.42% 7.88% 8.02% 8.03% Portfolio turnover rate ................... 136% 276% 161% 189% 205% 195%
SIX MONTHS YEAR FOR THE PERIOD ENDED ENDED 1/23/97* TO 6/30/99+ 12/31/98 12/31/97 OPEN SHARES ------------ ------------ --------------- Net asset value, beginning of period ..... $ 9.02 $ 9.66 $ 10.08 ------- ------- ------- Income (loss) from investment operations: Net investment income ................... 0.30 0.73 0.72 Net realized and unrealized gain (loss) .................................. (0.03) (0.69) (0.35) ------- ------- ------- Total from investment operations ........ 0.27 0.04 0.37 ------- ------- ------- Less distributions from and in excess of: Net investment income ................... (0.29) (0.40) (0.73) Net realized gain ....................... -- -- (0.06) Capital ................................. -- (0.28) -- ------- ------- ------- Total distributions ..................... (0.29) (0.68) ( 0.79) ------- ------- ------- Net asset value, end of period ........... $ 9.00 $ 9.02 $ 9.66 ======= ======= ======= TOTAL RETURN (A) ......................... 3.0% 0.4% 3.8% RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in thousands) .............................. $18,342 $22,460 $15,300 Ratios to average net assets: Net expenses (b) ........................ 1.25% 1.28% 1.39% Gross expenses (b) ...................... 1.25% 1.28% 1.44% Net investment income (b) ............... 6.55% 6.60% 6.92% SEE NOTES TO FINANCIAL HIGHLIGHTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 79 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- * Commencement of operations + Unaudited (a) Total returns are historical and assume changes in share price, reinvestments of all dividends and distributions, and no sales charge. Had certain expenses not been waived and/or reimbursed by the Investment Manager and/or the Administrator during the periods shown, total returns would have been lower. Periods of less than one year are not annualized. (b) Annualized for periods of less than one year. 80 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 (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 (the "Act"), as amended, as a no-load, open-end management investment company. The Fund is comprised of twelve portfolios (each referred to as a "Portfolio"), as follows: Lazard Equity Portfolio, Lazard Mid Cap Portfolio, Lazard Small Cap Portfolio, Lazard Bantam Value Portfolio, Lazard Global Equity Portfolio, Lazard International Equity Portfolio, Lazard International Small Cap Portfolio, Lazard Emerging Markets Portfolio, Lazard Bond Portfolio, Lazard High Yield Portfolio, Lazard International Fixed-Income Portfolio and Lazard Strategic Yield Portfolio. Effective November 1, 1996, the Board of Directors of the Fund approved the offering of two different classes of shares for the Portfolios Institutional Shares and Retail ("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. The Equity Portfolio is operated as a "diversified" fund as defined in the Act. The remaining Portfolios are "non-diversified". 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies: (A) VALUATION OF INVESTMENTS--Market values for equity securities listed on the New York Stock Exchange ("NYSE"), other U.S. exchanges or NASDAQ are based on the last quoted sales prices on the principal exchange on which the security is traded as of the close of regular trading on the NYSE (normally 4:00 p.m. Eastern Time) on each valuation date; securities not traded on the valuation date are valued at the closing bid price. Any securities not listed, for which current over-the-counter market quotations or bids are readily available, are valued at the last quoted bid price, or, if available, the mean of two such prices. Securities listed on foreign exchanges are valued at the last quoted sales price; securities not traded on the valuation date are valued at the closing bid price. Bonds and other fixed-income securities are valued on the basis of prices provided by a pricing service which are based primarily on institutional size trading in similar groups of securities, or using brokers' quotations. Mortgage-backed securities issued by certain government-related organizations are valued using pricing services or brokers' quotations based on a matrix system which considers such factors as other security prices, yields and maturities. Debt securities maturing in sixty days or less are valued at amortized cost except where to do so would not accurately reflect their fair value, in which case such securities are valued at fair value as determined in good faith in accordance with procedures adopted by the Board of Directors. Options on stocks and stock indices traded on national securities exchanges are valued as of the close of options trading on such exchanges (which is currently 4:10 p.m. Eastern Time). Securities for which market quotations are not readily available are valued at fair value as determined in good faith using methods approved by the Board of Directors. (B) PORTFOLIO SECURITY TRANSACTIONS AND INVESTMENT INCOME--Portfolio security transactions are accounted for on trade date. Realized gains and losses on sales of investments are recorded on a specific identification basis and dividend income is recorded on the ex-dividend date. Interest income is accrued daily. The Portfolios amortize premiums and accrete discounts on fixed-income securities using the effective yield method. (C) REPURCHASE AGREEMENTS--In connection with transactions in repurchase agreements, the Fund's custodian takes possession of the underlying collateral securities, the value or market price of which is at least equal to the principal amount, including interest, of the repurchase transaction. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. In the event of default of the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to delay due to legal proceedings and the Portfolio may suffer a loss. (D) FOREIGN CURRENCY TRANSLATION AND FORWARD FOREIGN CURRENCY CONTRACTS--The accounting records of the Portfolios are maintained in U.S. dollars. Portfolio securities and other assets and liabilities denominated in a foreign currency are translated to U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of transactions. 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 or loss from investments. Net realized exchange gains (losses) from foreign currency transactions represent net foreign exchange gains (losses) from forward foreign currency contracts, disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities trans- 81 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- actions, and the difference between the amount of net investment income recorded on the Portfolio's accounting records and the U.S. dollar equivalent amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, other than investments in securities, as a result of changes in exchange rates. A forward foreign currency contract is an agreement between two parties to buy or sell currency at a set price on a future date. Certain Portfolios may enter into forward foreign currency contracts for risk management. Risk management includes hedging strategies which serve to reduce a Portfolio's exposure to foreign currency fluctuations. Such exposure may exist during the period that a foreign denominated investment is held, or during the period between the trade date and settlement date of an investment which is purchased or sold. Upon entering into these contracts risks may arise from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of the foreign currency relative to the U.S. dollar. The U.S. dollar value of forward foreign currency contracts is determined using forward exchange rates provided by a quotation service. Daily fluctuations in the value of such contracts are recorded as unrealized gains or losses. When the contract is closed, the Portfolio records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. Such gains and losses are disclosed in the realized or unrealized gain (loss) on foreign currency in the accompanying Statements of Operations. (E) FEDERAL INCOME TAXES--The Fund's policy is to continue to have each Portfolio qualify as a regulated investment company under the Internal Revenue Code and to distribute all of its taxable income, including any realized net capital gains to shareholders. Therefore, no federal income tax provision is required. At December 31, 1998, the following Portfolios had available for federal income tax purposes unused realized capital losses which can be used to offset future realized capital gains. The capital loss carryforwards will expire on December 31, 2006, as follows: PORTFOLIO AMOUNT - ------------------ -------------- Small Cap $ 6,880,893 Emerging Markets 50,767,177 High Yield 1,150,441 Strategic Yield 14,900,897 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, 1998, the following Portfolios elected to defer net capital and currency losses arising between November 1, 1998 and December 31, 1998, as follows: PORTFOLIO AMOUNT - ------------------------- ------------ Global Equity $ 9,036 International Equity 2,186,212 International Small Cap 77,804 Emerging Markets 2,332,238 Bond 147,945 High Yield 916,890 Strategic Yield 6,526,143 (F) DIVIDENDS AND DISTRIBUTIONS--The Fund intends to declare dividends from net investment income daily on shares of Bond Portfolio, High Yield Portfolio, International Fixed-Income Portfolio and Strategic Yield Portfolio and to pay such dividends monthly. Dividends from net investment income on shares of Equity Portfolio, Mid Cap Portfolio, Small Cap Portfolio, Bantam Value Portfolio, Global Equity Portfolio, International Equity Portfolio, International Small Cap Portfolio and Emerging Markets Portfolio will be declared and paid annually. During any particular year, net realized gains from investment transactions in excess of available capital loss carryforwards would be taxable to the Portfolio if not distributed. The Portfolios intend to declare and distribute these amounts annually to shareholders; however, to avoid taxation, a second distribution may be required. Income dividends and capital gains distributions are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These differences, which may result in distribution reclassifications, are primarily due to differing treatments of foreign currency transactions. Book and tax differences relating to shareholder distributions will result in reclassifications and may affect the allocation between investment income-net, realized gains-net, and paid in capital. (G) ORGANIZATIONAL EXPENSES--Costs incurred by the Fund in connection with its organization have been deferred and are being amortized on a straight line basis over a five-year period from the date of commencement of operations of each Portfolio. In the event that any of the initial shares of any of the Portfolios are redeemed during such amortization period, the appropriate Portfolio will be reimbursed by such holder for any unamortized organizational expenses in the same proportion as the number of shares redeemed bears to the number of initial shares held at the time of redemption. 82 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- (H) ALLOCATION OF EXPENSES--Expenses not directly chargeable to a specific Portfolio are allocated primarily on the basis of relative net assets. The Portfolios will accrue distribution fees and shareholders' services fees to the respective class. Each Portfolio's income, expenses (other than the fees mentioned above) 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) STRUCTURED INVESTMENTS--Certain Portfolios may invest in structured investments whose values are linked either directly or inversely to changes in foreign currencies, interest rates, commodities, indices, or other underlying instruments. A Portfolio uses these securities to increase or decrease its exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest in through conventional securities. Structured investments may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment. (K) DELAYED DELIVERY COMMITMENTS--Each Portfolio may purchase or sell securities on a when-issued or forward commitment basis. Payment and delivery may take place a month or more after the date of the transaction. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Collateral consisting of liquid securities or cash is maintained at the custodian in a segregated account in an amount at least equal to these commitments. (L) CROSS CURRENCY SWAPS--The Fund enters into cross currency swap contracts for investment, hedging and risk management purposes. A cross currency swap is an agreement between counterparties to exchange interest rate payments and currencies with an agreement to re-exchange the currencies at a future date. If forecasts of interest rates, exchange rates and other market conditions are incorrect, investment performance will diminish compared to what performance would have been if these investment techniques were not used. Even if the forecasts are correct, there are risks that the positions may correlate imperfectly with the asset and liability being hedged, a liquid secondary market may not always exist or a counterparty to a transaction may not perform. Swap contracts are marked-to-market daily using market quotations. The change in market value is recorded by the Portfolio as an unrealized gain or loss. The difference between the rates received and paid by the Portfolio constitutes investment income. (M) ESTIMATES--The preparation of financial statements in conformity with generally accepted accounting principles requires the Fund to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. 3. INVESTMENT MANAGEMENT, ADMINISTRATIVE AND DISTRIBUTION AGREEMENTS The Fund has entered into investment management agreements (the "Management Agreements") with Lazard Asset Management (the "Manager"), a division of Lazard Freres & Co. LLC, on behalf of each Portfolio. Pursuant to the Management Agreements, the Manager will regularly provide the Portfolios with investment research, advice and supervision and furnish continuously an investment program for each Portfolio consistent with its investment objectives and policies, including the purchase, retention and disposition of securities. Each of the Portfolios pays the Manager an investment management fee at the annual rate set forth below as a percentage of the average daily net assets of the relevant Portfolio: PORTFOLIO ANNUAL RATE - ---------------------------- ------------ Equity 0.75% Mid Cap 0.75% Small Cap 0.75% Bantam Value 0.75% Global Equity 0.75% International Equity 0.75% International Small Cap 0.75% Emerging Markets 1.00% Bond 0.50% High Yield 0.75% International Fixed-Income 0.75% Strategic Yield 0.75% The investment management fees are accrued daily and payable monthly. The Manager has voluntarily agreed to reduce its fees and, if necessary, reimburse the following Portfolios if annualized operating expenses exceed the following percentages of average daily net assets for the respective shares: INSTITUTIONAL OPEN SHARES SHARES ANNUAL ANNUAL OPERATING OPERATING PORTFOLIO EXPENSES EXPENSES - ------------------------------------ --------------- ---------- Mid Cap ............................ 1.05% 1.35% Bantam Value ....................... 1.05% 1.35% Global Equity ...................... 1.05% 1.35% International Small Cap ............ 1.04% 1.43% Emerging Markets ................... 1.28% 1.60% Bond ............................... 0.78% 1.10% High Yield ......................... 1.05% 1.35% International Fixed-Income ......... 1.09% 1.35% 83 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- For the period ended June 30, 1999, the Manager did not impose all or part of its management fee, resulting in the following waivers and reimbursements: INSTITUTIONAL OPEN OPEN SHARES SHARES SHARES FEES FEES EXPENSES PORTFOLIO WAIVED WAIVED REIMBURSED - ------------------------------------ --------------- --------- ----------- Mid Cap ............................ $ 7,463 $5,871 $ -- Bantam Value ....................... 35,724 13,743 -- Global Equity ...................... 43,883 15,437 -- International Small Cap ............ -- 9,237 -- Emerging Markets ................... -- 6,892 -- Bond ............................... -- 1,365 -- High Yield ......................... 8,905 3,778 7,152 International Fixed-Income ......... -- 9,773 -- The Fund has engaged State Street Bank and Trust Company ("State Street") to provide certain administrative services. Each Portfolio bears the cost of such services at the annual rate of $37,500, plus $7,500 per additional class, and 0.02% of average daily net assets up to $1 billion plus 0.01% of average daily net assets over $1 billion. The Fund has a distribution agreement with Lazard Freres & Co. LLC ( the "Distributor" ). The Distributor acts as distributor for shares of each of the Portfolios and bears the cost of printing and mailing prospectuses to potential investors and of any advertising expenses incurred in connection with distribution of shares. The Distributor provides the Open Shares of each Portfolio with distribution services pursuant to a separate Distribution Plan ( the "Plan"), in accordance with Rule 12b-1 under the Act. Under the Plan, the Distributor is entitled to distribution fees from the Open Shares. The distribution fee is an asset-based fee to support distribution efforts and/or servicing of accounts. The Open Shares will pay a monthly distribution fee at an annual rate of 0.25% of the average daily net assets of the Portfolio's Open Shares for such services under the 12b-1 plan adopted by the Fund. The distribution fee may be retained by the Distributor if an Open Shares shareholder invests directly through the Distributor. Usually the fees are paid to external organizations, such as 401(k) alliance sponsors, discount brokers and bank trust departments, who distribute the Fund to the public. Certain Directors of the Fund are Managing Directors of the Manager. The Fund pays each Director who is not an officer of the Manager or an interested Director its allocable share of a fixed fee of $20,000 per year, plus $1,000 per meeting attended for the Fund and Lazard Retirement Series, Inc., a related party, and reimburses them for travel and out of pocket expenses. 4. SECURITIES TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES Purchases and sales of portfolio securities (excluding short-term securities), for the period ended June 30, 1999 were as follows: PORTFOLIO PURCHASES SALES - ---------------------------------------- --------------- ---------------- Equity ................................. $148,964,221 $ 107,916,703 Mid Cap ................................ 37,234,361 48,314,484 Small Cap .............................. 199,761,515 608,126,332 Bantam Value ........................... 23,734,406 63,028,127 Global Equity(1) ....................... 48,059,407 10,505,248 International Equity ................... 443,509,070 344,001,744 International Small Cap ................ 35,531,700 40,085,179 Emerging Markets ....................... 64,893,551 73,045,777 Bond(2) ................................ 280,011,948 272,834,574 High Yield ............................. 97,719,576 53,253,344 International Fixed-Income(3) .......... 63,886,406 79,831,843 Strategic Yield(4) ..................... 454,620,249 525,230,671 (1) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $938,350 AND $0, RESPECTIVELY. (2) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $242,376,587 AND $243,632,674, RESPECTIVELY. (3) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $18,533,747 AND $19,557,196, RESPECTIVELY. (4) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $479,341,480 AND $412,931,475, RESPECTIVELY. For the period ended June 30, 1999, brokerage commissions were paid to Lazard Freres & Co. LLC for portfolio transactions executed on behalf of the Portfolios as follows: COMMISSIONS PORTFOLIO PAID - ----------------------- ------------ Equity ................ $11,285 Mid Cap ............... 140 Small Cap ............. 1,170 Bantam Value .......... 765 Global Equity ......... 3,931 5. LINE OF CREDIT The Fund has entered into a $50 million Line of Credit Agreement (the "Agreement") with State Street Bank and Trust Company, effective April 24, 1996, primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest on borrowings is payable at the bank's Cost of Funds plus 0.50%, on an annualized basis. Under this Agreement, the Fund has agreed to pay a 0.08% per annum fee on the unused portion of the commitment, payable quarterly in arrears. During the period ended June 30, 1999, Bantam Value Portfolio paid a total of $845 in interest and the Fund had borrowings under this Agreement as follows: MAXIMUM AVERAGE DAILY WEIGHTED AVERAGE PORTFOLIO LOAN AMOUNT OF LOAN INTEREST RATE - ---------------------- ------------- ---------------- ----------------- Bantam Value ......... $4,443,765 $2,739,656 5.554% 84 - -------------------------------------------------------------------------------- THE LAZARD FUNDS, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- 6. SUBSEQUENT EVENT: The Board of Directors of the Fund has approved an Agreement and Plan of Reorganization ("Agreement") between Small Cap Portfolio ("Acquiring Portfolio") and Bantam Value Portfolio ("Target Portfolio"). The Agreement provides for the transfer of all of the assets and the assumption of all the liabilities of the Target Portfolio in exchange solely for the number of shares of the Acquiring Portfolio having the same aggregate net asset value as the outstanding shares of the Target Portfolio at the close of business on the day that the Reorganization is effective. The Reorganization, which has been approved by the vote of a majority (as defined by Act) of outstanding voting shares of the Target Portfolio, will be effective on July 30, 1999. 7. TAX INFORMATION: Bantam Value Portfolio merged with Small Cap Portfolio after the close of business on July 30, 1999. Bantam Value Portfolio distributed $208,002 ($0.08796 per share) of long-term capital gains on July 26, 1999, to shareholders of record on July 22, 1999. Of the total amount distributed, none will qualify for the dividends received deduction available to corporate shareholders. 85 THE LAZARD FUNDS, INC. 30 Rockefeller Plaza New York, New York 10112 TELEPHONE: (800) 823-6300 http://www.lazardfunds.com INVESTMENT MANAGER Lazard Asset Management 30 Rockefeller Plaza New York, New York 10112 Telephone: (800) 823-6300 DISTRIBUTOR Lazard Freres & Co. LLC 30 Rockefeller Plaza New York, New York 10112 CUSTODIAN State Street Bank and Trust Company 225 Franklin Street Boston, Massachusetts 02110 TRANSFER AGENT AND DIVIDEND DISBURSING AGENT Boston Financial Data Services, Inc. P.O. Box 9363 Boston, Massachusetts 02205-9363 Telephone: (800) 986-3455 INDEPENDENT PUBLIC ACCOUNTANTS Anchin, Block & Anchin LLP 1375 Broadway New York, New York 10018 LEGAL COUNSEL Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, New York 10038-4982 LAZARDFunds 30 Rockefeller Plaza New York, New York 10112 Telephone (800) 823-6300 http://www.lazardfunds.com This report is for the information of the stockholders of The Lazard Funds, Inc. Its use in connection with any offering of the Fund's shares is authorized only in the case of a concurrent or prior delivery of the Fund's current prospectus. -----END PRIVACY-ENHANCED MESSAGE-----