LazardFunds
Semi-Annual Report
June 30, 1999
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THE LAZARD FUNDS, INC.
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BOARD OF DIRECTORS
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<S> <C>
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
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NORMAN EIG CHAIRMAN OF THE BOARD
HERBERT W. GULLQUIST PRESIDENT
WILLIAM G. BUTTERLY, III VICE PRESIDENT AND SECRETARY
JAMES GIALLANZA TREASURER
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THE LAZARD FUNDS, INC.
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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
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THE LAZARD FUNDS, INC.
OVERVIEW
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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
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THE LAZARD FUNDS, INC.
GROWTH CHARTS
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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
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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
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THE LAZARD FUNDS, INC.
GROWTH CHARTS (CONTINUED)
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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
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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
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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
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THE LAZARD FUNDS, INC.
GROWTH CHARTS (CONTINUED)
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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
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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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PERFORMANCE TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 1999
-----------------------------------------------------------------
INSTITUTIONAL SHARES
-----------------------------------------------------------------
ONE THREE FIVE TEN SINCE
YEAR YEAR YEAR YEAR INCEPTION*
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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%
</TABLE>
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
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PERFORMANCE TABLE (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 1999
-----------------------------------------------------------------------------
INSTITUTIONAL SHARES
-----------------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
YTD YEAR YEAR YEAR YEAR INCEPTION*
----------- ----------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
** 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
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PERFORMANCE TABLE (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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*
----------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
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.
</TABLE>
11
<PAGE>
- ----------------------------------------------------------------------------
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
<PAGE>
- ----------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
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
<PAGE>
- ----------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- ----------------------------------------------------------------------------
DESCRIPTION SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
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
<PAGE>
- ----------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
-----------
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Purchase Contracts Date Currency Date Value Appreciation Depreciation
- -------------------- ------------ ---------------- ---------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
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 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
40
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Purchase Contracts Date Currency Date Value Appreciation Depreciation
- -------------------- ------------ ------------ ---------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
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
----------- ----------- -------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
41
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Sale Contracts Date Currency Date Value Appreciation Depreciation
- ------------------ ------------ ---------------- ---------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
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
======== ========
</TABLE>
As of June 30, 1999, the Lazard International Fixed-Income Portfolio had the
following outstanding cross currency swap agreement:
<TABLE>
<CAPTION>
SWAP NOTIONAL CURRENCY NOTIONAL CURRENCY RATE RATE TRADE TERMINATION UNREALIZED
COUNTERPARTY RECEIVED PAID RECEIVED PAID DATE DATE LOSS
- ------------------------- ------------------- ------------------- ---------- --------------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Standard Chartered Bank 5,500,000 PHP 144,699 USD 10.70% 6 Month LIBOR 4/29/99 4/30/02 $217
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
42
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
43
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
44
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
45
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------- ------------------ -------------------
<S> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------- ------------------ -------------------
<S> <C> <C>
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
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
46
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ------------------------------------- ------------------ -------------------
<S> <C> <C>
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
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
47
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- -------------------------------------------- ------------------ -------------------
<S> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- -------------------------------------------- ------------------ ---------------
<S> <C> <C>
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
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
48
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------- ------------------- -------------------
<S> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------- ------------------- -------------------
<S> <C> <C>
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
====== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
49
<PAGE>
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Purchase Contracts Date Currency Date Value Appreciation Depreciation
- -------------------- ------------ ---------------- ---------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
50
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Purchase Contracts Date Currency Date Value Appreciation Depreciation
- -------------------- ------------ ---------------- ---------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
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
----------- ----------- ---------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
51
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Sale Contracts Date Currency Date Value Appreciation Depreciation
- ------------------ ------------ ---------------- ---------------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
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
========== ==========
</TABLE>
As of June 30, 1999, the Lazard Strategic Yield Portfolio had the following
outstanding cross currency swap agreement:
<TABLE>
<CAPTION>
SWAP NOTIONAL CURRENCY NOTIONAL CURRENCY RATE RATE TRADE TERMINATION UNREALIZED
COUNTERPARTY RECEIVED PAID RECEIVED PAID DATE DATE LOSS
- ------------------------- ------------------- ------------------- ---------- --------------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Standard Chartered Bank 60,000,000 PHP 1,578,532 USD 10.70% 6 Month LIBOR 4/29/99 4/30/02 $2,369
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
52
<PAGE>
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE NET
GROSS GROSS UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO COST APPRECIATION DEPRECIATION (DEPRECIATION)
- ----------------------------- ---------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
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)
</TABLE>
(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:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
- ----------------------------------- ------------- ------------
<S> <C> <C>
Interactive Light Holdings, Inc.
10.00%, 02/07/01 1/25/99 $1,000,000
</TABLE>
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
<PAGE>
- --------------------------------------------------------------------------------
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
<TABLE>
<CAPTION>
CURRENCY TERMS
- -------------------------------
<S> <C>
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
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
54
<PAGE>
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
LAZAD LAZARD LAZARD LAZARD
GLOBAL INTERNATIONAL INTERNATIONAL EMERGING
EQUITY EQUITY SMALL CAP MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- --------------- --------------- ----------
<S> <C> <C> <C> <C>
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%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
55
<PAGE>
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
LAZARD LAZARD
INTERNATIONAL STRATEGIC
FIXED-INCOME YIELD
PORTFOLIO PORTFOLIO
--------------- ----------
<S> <C> <C>
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%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
56
<PAGE>
[This page left blank intentionally ]
57
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD
EQUITY
PORTFOLIO
-----------------
<S> <C>
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
<CAPTION>
LAZARD
LAZARD LAZARD BANTAM
MID CAP SMALL CAP VALUE
PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ------------------- ---------------
<S> <C> <C> <C>
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
</TABLE>
* $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
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD LAZARD
GLOBAL INTERNATIONAL INTERNATIONAL EMERGING
EQUITY EQUITY SMALL CAP MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------- ------------------ --------------- ----------------
<S> <C> <C> <C>
$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
<CAPTION>
LAZARD
LAZARD LAZARD INTERNATIONAL LAZARD
BOND HIGH YIELD FIXED-INCOME STRATEGIC
PORTFOLIO PORTFOLIO PORTFOLIO YIELD PORTFOLIO
--------------- --------------- --------------- ----------------
<S> <C> <C> <C>
$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
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
59
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD
LAZARD LAZARD LAZARD BANTAM
EQUITY MID CAP SMALL CAP VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
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 $ --
=========== ============ =========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD LAZARD
GLOBAL INTERNATIONAL INTERNATIONAL EMERGING
EQUITY EQUITY SMALL CAP MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------- ----------------- --------------- ----------------
<S> <C> <C> <C>
$ 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
========== ============= =========== =============
<CAPTION>
LAZARD LAZARD LAZARD
LAZARD HIGH INTERNATIONAL STRATEGIC
BOND YIELD FIXED-INCOME YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------- ---------------- --------------- -----------------
<S> <C> <C> <C>
$ 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
============ ============== ============= ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
61
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD EQUITY
PORTFOLIO
--------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998
------------------ -----------------
<S> <C> <C>
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
============= ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
62
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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
- ------------------ ----------------- ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
$ 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) $ --
============ ============ ============== ============== ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
63
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD GLOBAL EQUITY
PORTFOLIO
------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998
------------------ ---------------
<S> <C> <C>
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)
============= ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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
- ------------------- -------------------- ------------------ ---------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
$ 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
============== ============== ============= ============= ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
65
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD BOND
PORTFOLIO
--------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998
------------------ ---------------
<S> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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
- ------------------ ----------------- ------------------ ---------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
$ 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
=========== =========== ============ ============ ============= ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
67
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD EQUITY PORTFOLIO
<TABLE>
<CAPTION>
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 ------------- ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 2/5/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
68
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD MID CAP PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 11/4/97* TO
6/30/99+ 12/31/98 12/31/97
INSTITUTIONAL SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 11/4/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
69
<PAGE>
- --------------------------------------------------------------------------------
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%
<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------------------------------
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
INSTITUTIONAL SHARES --------------- --------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 1/30/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD BANTAM VALUE PORTFOLIO
<TABLE>
<CAPTION>
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 ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 1/23/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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%)
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
71
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
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 ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 1/30/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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%
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
72
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
6/30/99+
INSTITUTIONAL SHARES ---------------
<S> <C>
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%
<CAPTION>
YEAR ENDED
-----------------------------------------------------------------------------
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
INSTITUTIONAL SHARES --------------- --------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 1/23/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
73
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL SMALL CAP PORTFOLIO
<TABLE>
<CAPTION>
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 ------------- ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 2/13/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
74
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD EMERGING MARKETS PORTFOLIO
<TABLE>
<CAPTION>
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 ------------ ------------ -------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 1/8/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------- ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
75
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD BOND PORTFOLIO
<TABLE>
<CAPTION>
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 -------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 3/5/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES -------------- ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
76
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD HIGH YIELD PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS FOR THE PERIOD
ENDED 1/2/98* TO
6/30/99+ 12/31/98
INSTITUTIONAL SHARES ------------ ---------------
<S> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FOR THE PERIOD
ENDED 2/24/98* TO
6/30/99+ 12/31/98
OPEN SHARES ------------ ---------------
<S> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
77
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO
<TABLE>
<CAPTION>
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 -------------- ------------ -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 1/8/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES -------------- ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
78
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO
<TABLE>
<CAPTION>
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 ------------- ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR FOR THE PERIOD
ENDED ENDED 1/23/97* TO
6/30/99+ 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ---------------
<S> <C> <C> <C>
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.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
79
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
- --------------------------------------------------------------------------------
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
<PAGE>
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
<PAGE>
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.
