Annualized Returns
Name 3-Month YTD 1-Year 3-Year 5-Year 10-Year Since Inception (%; Gross of fees) (11/01/2004) Lazard Global Equity Select with Emerging Markets ADR - SMA -2.6 -10.4 -6.5 12.1 N/A N/A 13.0 (%; Net of fees) Lazard Global Equity Select with Emerging Markets ADR - SMA -3.4 -11.7 -9.3 8.9 N/A N/A 9.7 MSCI AC World Index -1.6 -10.7 -9.3 10.3 N/A N/A 11.0
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.

		Lazard			MSCI ACWI			MSCI World Index
Number of Securities		62			2,548			1,750
Current Dividend Yield (%)		2.9			2.8			2.9
Average Weighted Market Cap ($ billions)		110.1			70.7			71.1
Turnover – Trailing 12 Months (%)		50.1			N/A			N/A

Characteristics

Equity	99.4
Cash and Equivalents	0.6
Brazil	2.4
Companhia Vale do Rio Doce (Spon ADR)
Petroleo Brasileiro (Spon ADR)
Canada	2.4
Telus (Non-voting)
Finland	1.7
Nokia (Spon ADR)
France	7.4
Groupe Danone (Spon ADR)
Suez (Spon ADR)
Total (Spon ADR)
Germany	5.4
Adidas (Spon ADR)
Allianz (Spon ADR)
E.ON (Spon ADR)
Indonesia	0.8
Telekomunik Indonesia (Spon ADR)
Ireland	0.8
CRH (ADR)
Italy	3.0
Eni (Spon ADR)
Japan	6.3
Canon (Spon ADR)
Hoya (Spon ADR)
Mitsubishi Corp (Spon ADR)
Sumitomo Mitsui Financial Group (ADR)
Netherlands	1.7
Heineken (ADR)
TNT (ADR)
Russia	1.2
Mobile Telesystems (Spon ADR)
Singapore	2.0
DBS Group Holdings (Spon ADR)
Singapore Telecommunications (ADR)
South Korea	1.4
Kookmin Bank (Spon ADR)
Spain	1.0
Banco Santander (Spon ADR)

Sweden	0.6
Ericsson Cl B (Spon ADR)
Switzerland	10.7
Nestle (Spon ADR)
Novartis (Spon ADR)
Roche Holdings (Spon ADR)
UBS (GRS)
Zurich Financial Services (Spon ADR)
Taiwan	1.0
Taiwan Semiconductor Manufacturing (Spon ADR)
Turkey	0.6
Turkcell Iletisim Hizmetleri (Spon ADR)
United Kingdom	14.0
BAE Systems (Spon ADR)
BP (Spon ADR)
British American Tobacco (Spon ADR)
Diageo (Spon ADR)
GlaxoSmithKline (Spon ADR)
Imperial Tobacco Group (Spon ADR)
Prudential (Spon ADR)
Vodafone Group (Spon ADR)
United States	35.1
Bank of New York
Boeing
Cisco Systems
Citigroup
Comcast Special Cl A
ConocoPhillips
Dow Chemical
Exxon Mobil
Halliburton
Honeywell International
Intel
International Business Machines
Johnson & Johnson
Merck
Microsoft
Oracle
Procter & Gamble
Textron
United Technologies
Visa Cl A
Wal-Mart Stores
Wyeth

1. Portfolio characteristics are based upon a representative portfolio which represents the proposed investment for a fully discretionary account. Source: Lazard, FactSet.
2. The allocations and specific securities mentioned are based upon a representative portfolio which represents the proposed investment for a fully discretionary account. Allocations and security selection are subject to change. It should not be assumed that any of the referenced securities were or will be profitable, or that the investment decisions we make in the future will be profitable. All information provided in this list should not be considered a recommendation or solicitation to purchase or sell any particular security. Please note that cash is not viewed as a strategic asset class.
3. Non-Euro ex-U.K. represents Denmark, Norway, Sweden, and Switzerland.

Global stock markets remained highly volatile through the second quarter, marking the worst first-half performance since 1982, as measured by the MSCI World Index.

The rally that began in mid-March continued until mid-May. Global indices were powered in particular by the surging energy and materials sectors. Investor optimism was, however, to prove misplaced. World equity markets fell heavily from mid-May to the end of the quarter, as a plethora of concerns weighed on investor sentiment. Chief among these worries was an oil price that climbed unchecked to breach $140 per barrel towards the end of June. In Europe, Eurozone consumer price inflation hit a 16-year high of 4.0%, as commodity prices continued to climb. Elsewhere, fears persisted over the state of the U.S. economy, as home prices continued to record significant decreases and a key consumer confidence measure touched a 16-year low.

The financials sector remained in the eye of the storm, as a number of European banks carried out rights issues to repair balance sheets that had been badly damaged by subprime mortgage-backed trading. The energy sector advanced significantly on the back of higher oil and gas prices, and the consumer staples sector failed to play its usual safe-haven role during the market turbulence.

The strategy’s underweight exposure to the strong-performing materials sector hurt relative returns over the quarter. Although overall stock selection within the energy sector had a detrimental effect upon the strategy, a number of oil stocks held within the strategy benefited from the surging oil price and added value, as did an energy services company.

In the industrials sector, overall stock selection was negative, although not owning a diversified U.S. manufacturer proved helpful after the company announced an unexpected fall in profits in April.

Our holdings in a French utilities company added value, as benefits from its impending merger with another French utilities firm caused the share price to rise.

In the consumer staples sector, our position in a French food processing company detracted from returns following market worries over the possibility of slowing sales in emerging markets, and concerns about beleaguered Western consumers rejecting premium-brand consumer staples products in favor of cheaper, private-label alternatives.

In the information technology sector, a Finnish mobile phone handset manufacturer declined on news of slowing handset sales and a profit warning by a rival.

Lastly, the strategy’s underweight position in banking stocks proved helpful, although owning a large U.S. investment bank hurt performance, as speculation surrounding the bank’s capital base plagued the stock.

The global economy has had to wrestle with two major shocks since last August: the seizure of global credit markets and record oil prices. A number of economies are now seemingly experiencing significant corrections to their hitherto rampant domestic housing markets, with dramatic consequences for consumer sentiment in these markets.

Despite a disappointing quarter, we remain substantially overweight in the consumer staples sector. Elsewhere, we retain our underweight exposure to materials stocks.

4. The allocations and specific securities mentioned are based upon a representative portfolio which represents the proposed investment for a fully discretionary account. Allocations and security selection are subject to change. It should not be assumed that any of the referenced securities were or will be profitable, or that the investment decisions we make in the future will be profitable. All information provided in this list should not be considered a recommendation or solicitation to purchase or sell any particular security. Please note that cash is not viewed as a strategic asset class.
5. The allocations and specific securities mentioned are derived from a representative portfolio which represents the proposed investment for a fully discretionary account. Allocations and security selection are subject to change. The information provided should not be considered a recommendation or solicitation to purchase or sell any particular security. There is no assurance that any securities referenced herein will remain in the account’s portfolio or that securities sold have not been repurchased. The securities discussed may not represent the account’s entire portfolio. It should not be assumed that any of the referenced securities were, or will prove to be profitable, or that the investment decisions we make in the future will be profitable.

Foreign securities may be less liquid, more volatile, and less subject to governmental supervision than in the United States. The values of foreign securities are affected by changes in currency rates, application of foreign tax laws, changes in government administration, and economic and monetary policy. Many emerging markets countries have experienced substantial rates of inflation, which have had, and may continue to have, adverse effects on the securities markets of some of these countries.