International Equity Select
Lazard International Equity Select ADR seeks to generate strong relative returns over a long-term time horizon by investing in companies with strong financial productivity at attractive valuations. The strategy typically invests in 30-45 U.S.-listed securities of non-U.S. developed markets companies with a market capitalization generally of $5 billion or greater.
PERFORMANCE
UPDATE (as of
03/31/2010)
| Annualized Returns |
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Performance is presented gross and net of all fees. Net of fees performance has been calculated using a 3.0% fee assumption. Gross of fee performance is presented as supplementary information, as performance excludes transaction costs. Please refer to the disclosures for important additional details of this composite. The performance quoted represents past performance. Past performance does not guarantee future results. |
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| Lazard | MSCI EAFE Index |
S&P 500 Index |
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| Number of Securities | 47 | 952 | 500 | |||||
| Current Dividend Yield (%) | 2.9 | 2.9 | 1.9 | |||||
| Average Weighted Market Cap ($ billions) |
62.3 | 45.0 | 83.9 | |||||
| Turnover – Trailing 12 Months (%) |
43.7 | N/A | N/A | |||||
| Characteristics |
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| Geographic Allocation | Lazard Weighting % |
MSCI EAFE Index Weighting % |
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| Continental Europe | 40.2 | 44.2 | |||
| United Kingdom | 34.9 | 21.0 | |||
| Japan | 14.7 | 22.2 | |||
| Asia-Pacific ex-Japan | 7.0 | 12.6 | |||
| North America | 3.1 | 0.0 | |||
| Sector Allocation | Weighting % | |
| Financials | 25.5 | |
| Consumer Staples | 17.5 | |
| Health Care | 15.1 | |
| Information Technology | 10.6 | |
| Energy | 9.3 | |
| Telecommunication Services | 7.0 | |
| Materials | 6.1 | |
| Industrials | 4.7 | |
| Consumer Discretionary | 4.3 | |
| Utilities | 0.0 | |
| Equity | 95.0 |
| Cash and Equivalents | 5.0 |
| Australia | 1.8 |
| BHP (ADR) | |
| Belgium | 2.6 |
| Anheuser-Busch InBev (ADR) | |
| Canada | 3.0 |
| Barrick Gold | |
| Rogers Communications Cl B | |
| Denmark | 2.0 |
| Novo Nordisk (ADR) | |
| Finland | 1.0 |
| Nokia (ADR) | |
| France | 9.7 |
| BNP Paribas (ADR) | |
| LVMH Moet Hennessy Louis Vuitton (ADR) | |
| Sanofi-Aventis (ADR) | |
| Total (ADR) | |
| Germany | 2.1 |
| SAP (ADR) | |
| Hong Kong | 3.4 |
| Esprit Holdings (ADR) | |
| Sun Hung Kai Properties (ADR) | |
| Ireland | 1.5 |
| CRH (ADR) | |
| Italy | 1.4 |
| Eni (ADR) | |
| Japan | 14.0 |
| Canon (ADR) | |
| Fanuc (ADR) | |
| Hoya (ADR) | |
| Mitsubishi Estate (ADR) | |
| Japan (cont.) | |
| Nomura Holdings (ADR) | |
| Sumitomo Mitsui Financial Group (ADR) | |
| Yahoo Japan (ADR) | |
| Netherlands | 1.1 |
| Heineken (ADR) | |
| Singapore | 1.6 |
| Singapore Telecommunications (ADR) | |
| Sweden | 1.7 |
| Assa Abloy (ADR) | |
| Switzerland | 15.2 |
| Credit Suisse Group (ADR) | |
| Nestle (ADR) | |
| Novartis (ADR) | |
| Roche Holdings (ADR) | |
| UBS (ADR) | |
| Xstrata (ADR) | |
| Zurich Financial Services (ADR) | |
| United Kingdom | 33.2 |
| BAE Systems (ADR) | |
| Barclays (ADR) | |
| BG Group (ADR) | |
| BP (ADR) | |
| British American Tobacco (ADR) | |
| GlaxoSmithKline (ADR) | |
| HSBC Holdings (ADR) | |
| Imperial Tobacco Group (ADR) | |
| Lloyds TSB Group (ADR) | |
| Prudential (ADR) | |
| Tesco (ADR) | |
| Tullow Oil (ADR) | |
| Unilever (ADR) | |
| Vodafone Group (ADR) | |
| William Morrison Supermarket (ADR) | |
International stock markets were volatile, but finished the first quarter of 2010 slightly higher amid the continuing global economic recovery. During the period, investors witnessed many developments, including intensifying sovereign default risk in Europe, tightening credit conditions in China, monetary policy tightening in Australia and India, proposals to overhaul the financials sector, and landmark health care legislation in the United States.
European markets declined amid continuing concerns over the possible repercussions of the debt crisis in Greece, despite the European Union’s proposed solution. Furthermore, concerns remained about possible contagion should the situation in Greece deteriorate. Overall, U.S. equities performed well amid the improving economic outlook, while most Asian markets were also higher on continued economic resilience. Australian markets benefited from the strong demand for raw materials, and Japan, which ramped up its quantitative easing measures, also rose during the period.
Information technology was the best-performing sector during the quarter, thanks to resilient demand for consumer electronics. Industrials and materials were also among the better-performing sectors, benefiting from the continued economic recovery. The traditionally defensive utilities and telecom services sectors, however, were among the worst performers, as investors favored cyclical sectors during the quarter.
In currency markets, the U.S. dollar strengthened relative to European currencies due to the relative strength in the U.S. economy and the deteriorating situation in Greece. The U.S. dollar, however, weakened relative to the Australian dollar due to the increasing interest rate differential.
The International Equity Select ADR strategy finished the quarter with a positive performance, but slightly underperformed the MSCI EAFE Index. In the financials sector, a French bank was weak amid regulatory concerns, while an insurance company declined due to its large potential purchase of a life insurance business unit, which would require a large share issue. In the consumer staples sector, a branded and packaged consumer goods company declined during the quarter due to profit-taking following the sharp appreciation of the stock in 2009. A defense and aerospace company in the industrials sector, which declined due to concerns surrounding the defense budgets of the United Kingdom and the United States, hurt the strategy’s performance as well.
Conversely, the strategy benefited from no holdings in the utilities sector, which declined as investors rotated into more cyclical industries. Stock selection in the consumer discretionary sector helped returns as well. A clothing retailer and a luxury goods group both appreciated due to optimism that the improving economy would further lift the companies’ sales.
Equity securities will fluctuate in price; the value of your investment will thus fluctuate, and this may result in a loss. Securities in certain non-domestic countries may be less liquid, more volatile, and less subject to governmental supervision than in one’s home market. The values of these securities may be affected by changes in currency rates, application of a country’s specific tax laws, changes in government administration, and economic and monetary policy.
Certain information included herein is derived by Lazard in part from an MSCI index or indices (the “Index Data”). However, MSCI has not reviewed this product or report, and does not endorse or express any opinion regarding this product or report or any analysis or other information contained herein or the author or source of any such information or analysis. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any Index Data or data derived therefrom. The MSCI Index Data may not be further redistributed or used as a basis for other indices or any securities or financial products.
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