LAZARDFunds
ANNUAL REPORT
DECEMBER 31, 1999
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THE LAZARD FUNDS, INC.
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BOARD OF DIRECTORS
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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 LLP
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 WORLDWIDE
NETWORK
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
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Overview .............................................. 2
Growth Charts ......................................... 3
Performance Table ..................................... 9
Portfolios of Investments
Lazard Equity Portfolio ............................. 12
Lazard Mid Cap Portfolio ............................ 14
Lazard Small Cap Portfolio .......................... 16
Lazard Global Equity Portfolio ...................... 19
Lazard International Equity Portfolio ............... 21
Lazard International Small Cap Portfolio ............ 23
Lazard Emerging Markets Portfolio ................... 25
Lazard Bond Portfolio ............................... 28
Lazard High Yield Portfolio ......................... 33
Lazard International Fixed-Income Portfolio ......... 37
Lazard Strategic Yield Portfolio .................... 44
Notes to Portfolios of Investments .................. 57
Statements of
Assets and Liabilities .............................. 62
Operations .......................................... 64
Changes in Net Assets ............................... 66
Financial Highlights .................................. 72
Notes to Financial Highlights ......................... 83
Notes to Financial Statements ......................... 84
Report of Independent Auditors ........................ 89
Tax Information (unaudited) ........................... 90
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THE LAZARD FUNDS, INC.
OVERVIEW
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The extraordinary performance of global markets throughout 1999 may have masked
a less appealing feature of the "new economy". As technology continued to impact
the economy, a dual system emerged, in which technology and tech-related
companies enjoyed phenomenal performance, and more traditional companies with
higher earnings suffered paradoxically lower valuations. But while technology
stock outperformance may be the most conspicuous feature of today's economy, it
is hardly the most enduring. With the effects of technology only beginning to
penetrate the overall economy, the new economy's real impact will be the
long-term benefits of technological integration within the most traditional
companies. Through business-to-business e-commerce, the Internet has already
made some of the largest, most traditional U.S. companies radically more
efficient, thereby heightening productivity.
This transitional stage of the new economy--during which traditional companies
see their valuations fall as they implement the Internet and other technological
developments into their operations--has created a challenging environment for
many investors. As the economy's weighting shifted, we located value in solid
companies across a range of industries, including technology, energy,
healthcare, and industrial manufacturing. Our tech holdings had strong absolute
returns, but our lower weight in the group relative to the S&P 500 meant returns
lagged the broader market, even as the portfolio outperformed its value peers. A
notable holding, Hewlett Packard, performed strongly as the company took on new
leadership, launched an I.P.O. of its medical businesses, and refocused its core
computer and printing operations. At the same time, our investment in many
well-managed, globally diversified, industrial companies proved advantageous; in
the aftermath of the turmoil in foreign markets late in 1998, many of these
companies saw an upswing in profitability as business conditions improved. As
well, restructuring continued to be a central theme during 1999. Procter &
Gamble announced a stunning plan to reorganize its far-flung consumer products
and health care businesses into more efficient global business units, and
investors applauded the move even as they shunned many other consumer company
stocks.
International equities outperformed the S&P 500 for the first time since 1994,
with the MSCI EAFE Index advancing 27.0%. As a result of corporate reform and
economic recovery, Japanese equities rose over 60%, while European equities,
furthered by a wave of hostile bids and a growing equity culture, posted solid
gains.
The bond market was testy throughout the year, suffering amid rising interest
rates and negative returns. These conditions were spurred, in part, by rising
inflation expectations, which contributed to three Federal Reserve monetary
policy tightenings. At the same time, investor demand for fixed-income
securities remained lukewarm in an environment of relatively low interest rates
and high equity returns. In the near future, Federal Reserve monetary policy
moves will continue to dominate market activity, although absolute returns
should improve.
As traditional companies continue to absorb the latest technology into their
operations, it is logical that technology and tech-related companies will
profit. But the largest gains in financial productivity will be reaped by
traditional companies once the new technology is in place. The wisest strategy
for the new era is one that shuns neither tech nor tradition, but which finds
the relative value within each sector based on Lazard's thorough analyses of
individual companies and an understanding of the global market in which
companies now compete.
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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard Equity
Portfolio S&P 500
------------- -------
Dec-89 ............................. 10000 10000
Jan-90 ............................. 9392.22 9328.6
Feb-90 ............................. 9578.61 9448.75
Mar-90 ............................. 9813.61 9699.14
Apr-90 ............................. 9465.07 9457.15
May-90 ............................. 10148.1 10379.3
Jun-90 ............................. 10107.5 10309.3
Jul-90 ............................. 10099.2 10276.2
Aug-90 ............................. 9185.59 9347.3
Sep-90 ............................. 8696.12 8892.37
Oct-90 ............................. 8711.75 8854.49
Nov-90 ............................. 9284.89 9426.84
Dec-90 ............................. 9527.2 9689.47
Jan-91 ............................. 9907.29 10111.5
Feb-91 ............................. 10642.7 10834.6
Mar-91 ............................. 10758.4 11097
Apr-91 ............................. 10741.5 11123.3
May-91 ............................. 11081.3 11603.2
Jun-91 ............................. 10575.7 11071.7
Jul-91 ............................. 11073.2 11587.7
Aug-91 ............................. 11538.3 11862.2
Sep-91 ............................. 11380.5 11663.8
Oct-91 ............................. 11513.5 11820.5
Nov-91 ............................. 10906.7 11344.3
Dec-91 ............................. 12150.3 12641.7
Jan-92 ............................. 12278.3 12406.2
Feb-92 ............................. 12603.3 12566.9
Mar-92 ............................. 12219.3 12322.4
Apr-92 ............................. 12163.6 12684.2
May-92 ............................. 12143.8 12746.4
Jun-92 ............................. 11660 12556.7
Jul-92 ............................. 11992.5 13069.7
Aug-92 ............................. 11656.1 12802.1
Sep-92 ............................. 11834.2 12952.5
Oct-92 ............................. 12033.2 12997.2
Nov-92 ............................. 12609.1 13439.8
Dec-92 ............................. 12789.1 13604.7
Jan-93 ............................. 13030.1 13718.4
Feb-93 ............................. 13180.6 13905.4
Mar-93 ............................. 13752.8 14198.8
Apr-93 ............................. 13473.3 13855.6
May-93 ............................. 13825.5 14226.3
Jun-93 ............................. 13906 14268
Jul-93 ............................. 13933.4 14210.6
Aug-93 ............................. 14451 14749.7
Sep-93 ............................. 14430.3 14636.6
Oct-93 ............................. 15015.8 14939.4
Nov-93 ............................. 14901.5 14797.1
Dec-93 ............................. 15170.2 14976
Jan-94 ............................. 15934.7 15485.2
Feb-94 ............................. 15727.2 15064.9
Mar-94 ............................. 15039.1 14408
Apr-94 ............................. 15290.3 14592.8
May-94 ............................. 15471.6 14832.2
Jun-94 ............................. 15110.8 14468.7
Jul-94 ............................. 15642.7 14943.8
Aug-94 ............................. 16344.8 15556.5
Sep-94 ............................. 16081.5 15176.2
Oct-94 ............................. 16307.8 15517.2
Nov-94 ............................. 15725 14952.1
Dec-94 ............................. 15811.7 15173.8
Jan-95 ............................. 16076.2 15567.2
Feb-95 ............................. 16777.7 16173.9
Mar-95 ............................. 17249.2 16651.2
Apr-95 ............................. 17729.9 17141.6
May-95 ............................. 18468.2 17826.7
Jun-95 ............................. 19045 18240.8
Jul-95 ............................. 19768 18845.7
Aug-95 ............................. 20068.9 18893
Sep-95 ............................. 20763.3 19690.3
Oct-95 ............................. 20624.3 19620
Nov-95 ............................. 21577.1 20481.3
Dec-95 ............................. 21770.9 20875.8
Jan-96 ............................. 22521.2 21586.4
Feb-96 ............................. 23158.9 21786.5
Mar-96 ............................. 23346.5 21996.3
Apr-96 ............................. 23847.3 22320.5
May-96 ............................. 24131.5 22896.2
Jun-96 ............................. 23886.1 22983.4
Jul-96 ............................. 22586.7 21968
Aug-96 ............................. 23351.2 22431.3
Sep-96 ............................. 24193.5 23693.8
Oct-96 ............................. 24773.7 24347.2
Nov-96 ............................. 26445.3 26187.6
Dec-96 ............................. 26105.8 25668.8
Jan-97 ............................. 27354.1 27272.6
Feb-97 ............................. 27679.8 27486.5
Mar-97 ............................. 26648.6 26357
Apr-97 ............................. 27449.1 27930.6
May-97 ............................. 29377.1 29631
Jun-97 ............................. 30341.7 30958.4
Jul-97 ............................. 32615.2 33421.8
Aug-97 ............................. 31475.3 31549.5
Sep-97 ............................. 32843.2 33277.5
Oct-97 ............................. 30964.1 32166
Nov-97 ............................. 32009 33655
Dec-97 ............................. 32665.1 34232.8
Jan-98 ............................. 32616.1 34611.4
Feb-98 ............................. 34953.9 37107.6
Mar-98 ............................. 37013.9 39007.9
Apr-98 ............................. 37291.8 39400.3
May-98 ............................. 36311.1 38722.6
Jun-98 ............................. 36968.3 40295.6
Jul-98 ............................. 36014.5 39864.4
Aug-98 ............................. 30313.4 34092.8
Sep-98 ............................. 31416.8 36279.9
Oct-98 ............................. 34775.3 39234.9
Nov-98 ............................. 36896.6 41614.5
Dec-98 ............................. 38318.6 44016.4
Jan-99 ............................. 39199.9 45849.7
Feb-99 ............................. 37878.9 44426.1
Mar-99 ............................. 38795.1 46205.4
Apr-99 ............................. 41191.9 47995.8
May-99 ............................. 40679.9 46862.6
Jun-99 ............................. 42495 49463.5
Jul-99 ............................. 41313.7 47919.2
Aug-99 ............................. 39801.6 47679.7
Sep-99 ............................. 37863.2 46372.3
Oct-99 ............................. 39676.1 49307.2
Nov-99 ............................. 39640.4 50309.6
Dec-99 ............................. 39937.7 53272.8
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 with market capitalizations 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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard Mid Cap
Portfolio Russell Midcap
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11-4-97 .............................. 9990 10033.3
Dec-97 ............................... 10274.7 10309.2
Feb-98 ............................... 11145.9 10906.4
Apr-98 ............................... 11696.7 11452
Jun-98 ............................... 10915.8 11251.2
Aug-98 ............................... 8674.86 9000.83
Oct-98 ............................... 9536.73 10236.9
Dec-98 ............................... 10650.1 11350.4
Feb-99 ............................... 10222.1 10954
Apr-99 ............................... 11342 12131.7
Jun-99 ............................... 11739.1 12523.9
Aug-99 ............................... 10476.2 11864.8
Oct-99 ............................... 10445.8 11990.3
Dec-99 ............................... 11116.5 13420.2
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 with market capitalizations 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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard Small Cap
Portfolio Russell 2000
---------------- ------------
10/30/91 ............... 10000 10000
Nov-91 ................. 9720 9537.2
Dec-91 ................. 10453.5 10300.4
Jan-92 ................. 11316.3 11135.7
Feb-92 ................. 11827.9 11460.8
Mar-92 ................. 11827.9 11073
Apr-92 ................. 11547 10684.3
May-92 ................. 11557 10826.4
Jun-92 ................. 10955.1 10317.7
Jul-92 ................. 11256.1 10676.3
Aug-92 ................. 0935.1 10374.4
Sep-92 ................. 11015.3 10613.3
Oct-92 ................. 11547 10948.2
Nov-92 ................. 12560.3 11786.7
Dec-92 ................. 13041.3 12197
Jan-93 ................. 13443.2 12609.5
Feb-93 ................. 13563.7 12318.7
Mar-93 ................. 14216.8 12718.3
Apr-93 ................. 13885.2 12368.7
May-93 ................. 14528.2 12915.7
Jun-93 ................. 14920.1 12996
Jul-93 ................. 15045.6 13175.4
Aug-93 ................. 15925.8 13744.3
Sep-93 ................. 16232.9 14132.2
Oct-93 ................. 16386.4 14496.1
Nov-93 ................. 16171.5 14023.8
Dec-93 ................ 16965.6 14503
Jan-94 ................. 17588.2 14957.4
Feb-94 ................. 17599.3 14903.1
Mar-94 ................. 16765.4 14118.2
Apr-94 ................. 16743.2 14201.9
May-94 ................. 16787.7 14042.1
Jun-94 ................. 16598.7 13568.3
Jul-94 ................. 16947.6 13791.4
Aug-94 ................. 17926.5 14559.6
Sep-94 ................. 17926.5 14510.2
Oct-94.................. 17641.9 14451.6
Nov-94 ................. 16754.2 13867.6
Dec-94 ................ 17310.3 14238.8
Jan-95 ................. 17238 14059
Feb-95 ................. 17973.8 14644.3
Mar-95 ................. 18408.1 14895.3
Apr-95 ................. 18794.1 15226.2
May-95 ................. 19349 15488
Jun-95 ................. 20217.5 16291.5
Jul-95 ................. 21146.9 17229.9
Aug-95 ................. 21255.6 17586.4
Sep-95 ................. 21267.7 17900.5
Oct-95 ................. 20047.9 17100
Nov-95 ................. 20893.3 17818.3
Dec-95 ................ 21036.4 18288.4
Jan-96 ................. 21221 18268.6
Feb-96 ................. 22012.3 18838.1
Mar-96 ................. 22408 19221.4
Apr-96 ................. 23283.4 20249.2
May-96 ................. 24063.1 21047.2
Jun-96 ................. 23375.9 20183
Jul-96 ................. 21697.7 18420.2
Aug-96 ................. 23098.4 19489.7
Sep-96 ................. 23930.9 20251.4
Oct-96 ................. 24142.3 19939.3
Nov-96 ................. 25582.7 20760.8
Dec-96 ................ 26070.4 21304.9
Jan-97 ................. 26819.7 21730.6
Feb-97 ................. 26720.8 21203.6
Mar-97 ................. 25745.3 20203
Apr-97 ................. 26494.6 20259.4
May-97 ................. 29083.2 22513.3
Jun-97 ................. 30426.2 23478.2
Jul-97 ................. 31942.5 24570.6
Aug-97 ................. 32621.2 25132.8
Sep-97 ................. 34108.6 26972.3
Oct-97 ................. 32765.6 25787.4
Nov-97 ................. 32621.1 25620.5
Dec-97 ................ 33384.9 26068.9
Jan-98 ................. 33068.1 25657.5
Feb-98 ................. 35436.1 27554.7
Mar-98 ................. 36703.5 28691
Apr-98 ................. 36803.5 28849.7
May-98 ................. 34869.1 27295.8
Jun-98 ................. 33784.7 27353.1
Jul-98 ................. 31399.5 25138.9
Aug-98 ................. 25144.7 20257.4
Sep-98 ................. 25833.7 21842.8
Oct-98 ................. 27326.9 22733.5
Nov-98 ................. 28450 23924.5
Dec-98 ................. 29172.6 25405
Jan-99 ................. 28953.8 25742.6
Feb-99 ................. 26875 23657.7
Mar-99 ................. 26892.2 24027
Apr-99 ................. 29793.8 26180.1
May-99 ................. 31235.8 26562.3
Jun-99 ................. 32374.4 27762.9
Jul-99 ................. 31905 27001.1
Aug-99 ................. 30105.5 26002.1
Sep-99 ................. 29566.6 26007.3
Oct-99 ................. 28098.7 26114.2
Nov-99 ................. 28656.1 27672.1
Dec-99 ................ 29687.8 30804.6
LAZARD GLOBAL EQUITY PORTFOLIO
The Lazard Global Equity Portfolio seeks long-term capital appreciation. The
Portfolio invests primarily in equity securities, principally common stocks, of
relatively large companies, both U.S. and non-U.S., 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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard Global
Equity Portfolio MSCI World
---------------- ----------
1/4/96 ............................. 10000 10000
Jan-96 ............................. 10010 10117.9
Feb-96 ............................. 10170 10177.4
Mar-96 ............................. 10310 10344.6
Apr-96 ............................. 10430 10585.7
May-96 ............................. 10460 10592.7
Jun-96 ............................. 10530 10644.2
Jul-96 ............................. 10160 10265.9
Aug-96 ............................. 10290 10381.8
Sep-96 ............................. 10620 10786.2
Oct-96 ............................. 10720 10859.3
Nov-96 ............................. 11570 11465.7
Dec-96 ............................. 11578.4 11279.9
Jan-97 ............................. 11550 11413.7
Feb-97 ............................. 11749.8 11542.8
Mar-97 ............................. 11679.2 11312.3
Apr-97 ............................. 11911.2 11679.9
May-97 ............................. 12451.4 12398.7
Jun-97 ............................. 13215.2 13014.9
Jul-97 ............................. 13717.5 13612.2
Aug-97 ............................. 12974.6 12699.5
Sep-97 ............................. 13780.2 13387.3
Oct-97 ............................. 12900 12680.5
Nov-97 ............................. 13131.5 12902.8
Dec-97 ............................. 13345.5 13057.9
Jan-98 ............................. 13592.2 13419.6
Feb-98 ............................. 14500.6 14325.2
Mar-98 ............................. 15442.7 14927.9
Apr-98 ............................. 15610.9 15071.5
May-98 ............................. 15644.5 14880.4
Jun-98 ............................. 15779.1 15231.6
Jul-98 ............................. 15768 15204.9
Aug-98 ............................. 13454.8 13175
Sep-98 ............................. 13193.3 13405.7
Oct-98 ............................. 14349 14615.3
Nov-98 ............................. 15211.4 15482.2
Dec-98 ............................. 15627.3 16236.2
Jan-99 ............................. 15864.8 16589.4
Feb-99 ............................. 15412.7 16145.7
Mar-99 ............................. 16043.7 16815.6
Apr-99 ............................. 16828.8 17476.1
May-99 ............................. 16401.4 16835.2
Jun-99 ............................. 17221.4 17618
Jul-99 ............................. 17150.8 17563.4
Aug-99 ............................. 17049.1 17529.8
Sep-99 ............................. 16762 17357.4
Oct-99 ............................. 17298.4 18256.5
Nov-99 ............................. 17537.1 18767.7
Dec-99 ............................. 18193 20284.4
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 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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard International
Equity Portfolio MSCI EAFE
-------------------- ---------
10/29/91 .............. 10000 10000
Nov-91 9990 9533.13
Dec-91 ................ 10319.1 10025.6
Jan-92 ................ 10459.4 9811.65
Feb-92 ................ 10569.6 9460.46
Mar-92 ................ 10319.1 8835.87
Apr-92 ................ 10539.6 8877.43
May-92 ................ 11030.5 9471.63
Jun-92 ................ 10820.1 9022.68
Jul-92 ................ 10198.9 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 ................ 10042.5 9860.73
Apr-93 ................ 10266.1 10796.5
May-93 ................ 10550.7 11024.6
Jun-93 ................ 10428.7 10852.6
Jul-93 ................ 10744.8 11232.5
Aug-93 ................ 11539.2 11838.8
Sep-93 ................ 11203.1 11572.3
Oct-93 ................ 11793.8 11929
Nov-93 ................ 11569.8 10886.3
Dec-93 ................ 12627.6 11672.3
Jan-94 ................ 13826.8 12659.2
Feb-94 ................ 13396.3 12624.1
Mar-94 ................ 12842.8 12080.4
Apr-94 ................ 13324.6 12592.9
May-94 ................ 13242.6 12520.6
Jun-94 ................ 12955.6 12697.6
Jul-94 ................ 13598.4 12819.7
Aug-94 ................ 14217 13123.2
Sep-94 ................ 13526.3 12709.8
Oct-94 ................ 13763.4 13133
Nov-94 ................ 12938.6 12501.9
Dec-94 ................ 12657.4 12580.1
Jan-95 ................ 12048.8 12096.8
Feb-95 ................ 12127.7 12062.1
Mar-95 ................ 12285.5 12814.4
Apr-95 ................ 12815.2 13296.3
May-95 ................ 12927.9 13137.9
Jun-95 ................ 13142.1 12907.4
Jul-95 ................ 13976.1 13711
Aug-95 ................ 13728.1 13188
Sep-95 ................ 14032.5 13445.5
Oct-95 ................ 13807 13084.1
Nov-95 ................ 13942.3 13448.1
Dec-95 ................ 14320.6 13989.9
Jan-96 ................ 14400.8 14047.4
Feb-96 ................ 14607 14094.9
Mar-96 ................ 14962.1 14394.3
Apr-96 ................ 15333.9 14812.7
May-96 ................ 15230.3 14540.2
Jun-96 ................ 15518.1 14622
Jul-96 ................ 15091.4 14194.6
Aug-96 ................ 15114.4 14225.7
Sep-96 ................ 15471.2 14603.7
Oct-96 ................ 15540.3 14454.3
Nov-96 ................ 16357.6 15029.4
Dec-96 ................ 16559.8 14836.1
Jan-97 ................ 16134.2 14316.9
Feb-97 ................ 16535.5 14551.1
Mar-97 ................ 16936.7 14603.8
Apr-97 ................ 16814.8 14681.3
May-97 ................ 17520.1 15636.6
Jun-97 ................ 18609.7 16499
Jul-97 ................ 19038.2 16766
Aug-97 ................ 17838.4 15513.9
Sep-97 ................ 19344.3 16383
Oct-97 ................ 18144.5 15123.7
Nov-97 ................ 18266.9 14969.5
Dec-97 ................ 18520.4 15100.1
Jan-98 ................ 18957.9 15790.1
Feb-98 ................ 20045 16803.3
Mar-98 ................ 21291.2 17320.7
Apr-98 ................ 21635.9 17457.8
May-98 ................ 22220 17373.1
Jun-98 ................ 21982.3 17505.1
Jul-98 ................ 22248.3 17682.6
Aug-98 ................ 19193.6 15491.9
Sep-98 ................ 18220.5 15017
Oct-98 ................ 19605.2 16582.3
Nov-98 ................ 20724.7 17431.9
Dec-98 ................ 21493.2 18119.4
Jan-99 ................ 21409.3 18065.9
Feb-99 ................ 20844.1 17635.3
Mar-99 ................ 21536.2 18371.6
Apr-99 ................ 22537.6 19116
May-99 ................ 21719.5 18131.5
Jun-99 ................ 22651.2 18838.5
Jul-99 ................ 23371.5 19398.6
Aug-99 ................ 23822.6 19469.4
Sep-99 ................ 23808.3 19665.4
Oct-99 ................ 24460.7 20402.1
Nov-99 ................ 24901 21110.7
Dec-99 ................ 26668.9 23005.5
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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard International
Small Cap Portfolio MSCI EAFE Small Cap
-------------------- -------------------
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................... 11042.5 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................... 9782.26 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 11495.2
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................... 10829.2 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 .................. 12221.5 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 9895.18
Nov-97................... 12308.2 9205.22
Dec-97 .................. 12254.2 8668.49
Jan-98................... 12526.7 9210.4
Feb-98................... 13679.8 10035.8
Mar-98................... 14780.5 10257.6
Apr-98................... 15440.9 10237.8
May-98................... 15786.8 10271.2
Jun-98 .................. 15314.8 9862.51
Jul-98................... 15115.7 9727.81
Aug-98................... 13341.1 8433.37
Sep-98................... 12315.2 8045.6
Oct-98................... 12657.5 8690.12
Nov-98................... 12753.7 9105.26
Dec-98 .................. 13179.7 9140.23
Jan-99................... 12949.1 9025.2
Feb-99................... 12787.2 8911.32
Mar-99................... 12996 9393.88
Apr-99................... 13642.6 10092.2
May-99................... 13399.8 9726.32
Jun-99 .................. 14047 10243.5
Jul-99................... 14601.8 10556.7
Aug-99................... 14853.7 10781
Sep-99................... 15017.1 10747.1
Oct-99................... 14866.2 10599.8
Nov-99................... 15412.4 10657.3
Dec-99 .................. 16616.1 10755.8
PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS.
5
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
GROWTH CHARTS (continued)
- --------------------------------------------------------------------------------
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 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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard Emerging MSCI Emerging
Markets Portfolio Markets (Free)
----------------- --------------
7/15/94 .............................. 10000 10000
Jul-94 ............................... 10210 10280
Aug-94 ............................... 11300 11555.8
Sep-94 ............................... 11660 11687.5
Oct-94 ............................... 11580 11477.1
Nov-94 ............................... 11320 10880.3
Dec-94 ............................... 9860 10006.6
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 ............................... 10163.9 10161.3
Feb-96 ............................... 10244.2 9999.7
Mar-96 ............................... 10244.2 10077.6
Apr-96 ............................... 10897.5 10480.5
May-96 ............................... 11269.2 10433.7
Jun-96 ............................... 11168.7 10498.8
Jul-96 ............................... 10676.6 9781.27
Aug-96 ............................... 10867.4 10031.7
Sep-96 ............................... 11168.7 10118.5
Oct-96 ............................... 11048.2 9848.69
Nov-96 ............................... 11369.6 10013.8
Dec-96 ............................... 11472.7 10059
Jan-97 ............................... 12240.3 10745.1
Feb-97 ............................... 12762.2 11205.3
Mar-97 ............................... 12639.4 10911
Apr-97 ............................... 12772.4 10930.3
May-97 ............................... 13189.1 11243.1
Jun-97 ............................... 14164.6 11844.9
Jul-97 ............................... 14143.8 12021.7
Aug-97 ............................... 12597.6 10491.9
Sep-97 ............................... 13178.8 10782.7
Oct-97 ............................... 10770 9013.36
Nov-97 ............................... 10252.5 8684.48
Dec-97 ............................... 10343.9 8893.76
Jan-98 ............................... 9781.73 8196.22
Feb-98 ............................... 10625 9051.71
Mar-98 ............................... 11243.4 9444.52
Apr-98 ............................... 11175.9 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 ............................... 10103.4 9287.36
Jul-99 ............................... 9818.45 9034.74
Aug-99 ............................... 9640.73 9116.94
Sep-99 ............................... 9286.73 8808.79
Oct-99 ............................... 9446.27 8996.35
Nov-99 ............................... 10657.3 9803.01
Dec-99 ............................... 12330.5 11049.8
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. Govern ment securities.
COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF THE
LAZARD BOND PORTFOLIO AND THE LEHMAN INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard Bond Lehman Int.
Portfolio G/C Bond
----------- -----------
11/12/91 ............................. 10000 10000
Nov-91 ............................... 10103.5 10114.8
Dec-91 ............................... 10392.2 10361.8
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 10674.5
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 10958.5
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 12061.2
Oct-93 ............................... 11939.3 12093.4
Nov-93 ............................... 11903.3 12026
Dec-93 ............................... 11926.3 12081.1
Jan-94 ............................... 12117.8 12215.2
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 12367.8
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 13105.5
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 14619.8
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 15214.6
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 ............................... 15869.8 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 16648.7
May-99 ............................... 15787.3 16520.5
Jun-99 ............................... 15762.1 16532.7
Jul-99 ............................... 15721.1 16517.3
Aug-99 ............................... 15704.5 16530.5
Sep-99 ............................... 15827.7 16684.3
Oct-99 ............................... 15821.4 16727.7
Nov-99 ............................... 15856.2 16748.4
Dec-99 ............................... 15832.4 16693.1
PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS.
6
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
GROWTH CHARTS (continued)
- --------------------------------------------------------------------------------
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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard High
Yield Portfolio MLHY Master II
--------------- --------------
1/2/98 ............................. 10000 10000
Jan-98 ............................. 10222.3 10159.4
Feb-98 ............................. 10473.7 10200.5
Mar-98 ............................. 10715.9 10297.5
Apr-98 ............................. 10848 10341.6
May-98 ............................. 10849.7 10403.8
Jun-98 ............................. 10879 10457.6
Jul-98 ............................. 10969.3 10524.2
Aug-98 ............................. 10353.9 9992.92
Sep-98 ............................. 10147.8 10018.9
Oct-98 ............................. 9801.8 9805
Nov-98 ............................. 10227.2 10313.7
Dec-98 ............................. 10290 10295.2
Jan-99 ............................. 10421.1 10434.1
Feb-99 ............................. 10484 10363.2
Mar-99 ............................. 10604.1 10483.6
Apr-99 ............................. 10774.3 10675.4
May-99 ............................. 10661.8 10577.7
Jun-99 ............................. 10652.2 10551.6
Jul-99 ............................. 10624.5 10565.3
Aug-99 ............................. 10448.2 10453.3
Sep-99 ............................. 10377.1 10411.5
Oct-99 ............................. 10311.4 10355.3
Nov-99 ............................. 10522.8 10490.2
Dec-99 ............................. 10593.3 10553.6
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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard
International
Fixed-Income
Portfolio SWGBI 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
Jul-99 ............................... 16370.1 18160.6
Aug-99 ............................... 16441.6 18276.9
Sep-99 ............................... 16703.1 18617.5
Oct-99 ............................... 16751.5 18597.1
Nov-99 ............................... 16572.3 18342.3
Dec-99 ............................... 16703.2 18324.7
PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS.
7
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
GROWTH CHARTS (continued)
- --------------------------------------------------------------------------------
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
[FIGURES BELOW REPRESENT LINE CHART IN ITS PRINTED FORM]
Lazard Strategic One Month LIBOR
Yield Portfolio USD 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 ............................... 17301.4 14469.4
Jul-99 ............................... 17249.5 14530.2
Aug-99 ............................... 17160.7 14593.7
Sep-99 ............................... 17122.1 14657.9
Oct-99 ............................... 17179.3 14722.7
Nov-99 ............................... 17371.3 14799.8
Dec-99 ............................... 17564.2 14876.7
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 DECEMBER 31, 1999
--------------------------------------------------------------------
INSTITUTIONAL SHARES
--------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
YEAR YEAR YEAR YEAR INCEPTION*
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Lazard Equity Portfolio 4.23% 15.23% 20.36% 14.85% 14.09%
Standard & Poor's 500 Stock Index** 21.04% 27.56% 28.55% 18.21% 16.85%
Lazard Mid Cap Portfolio 4.38% -- -- -- 5.03%
Russell Midcap Index** 18.23% -- -- -- 14.62%
Lazard Small Cap Portfolio 1.77% 4.43% 11.39% -- 14.25%
Russell 2000 Index** 21.26% 13.08% 16.69% -- 14.77%
Lazard Global Equity Portfolio 16.42% 16.26% -- -- 16.17%
MSCI World Index** 24.93% 21.61% -- -- 19.37%
Lazard International Equity Portfolio 24.07% 17.21% 16.07% -- 12.76%
MSCI EAFE Index** 26.96% 15.75% 12.83% -- 10.74%
Lazard International Small Cap Portfolio 26.07% 10.78% 9.86% -- 8.70%
MSCI EAFE Small Cap Index** 17.67% (2.21%) (1.76%) -- 1.20%
Lazard Emerging Markets Portfolio 55.81% 2.43% 4.57% -- 3.91%
MSCI Emerging Markets (Free) Index** 66.41% 3.18% 2.00% -- 1.83%
Lazard Bond Portfolio (0.46%) 4.56% 6.75% -- 5.79%
Lehman Intermediate Gov't/Corp. Bond Index** 0.39% 5.50% 7.10% -- 6.48%
Lazard High Yield Portfolio 2.94% -- -- -- 2.93%
Merrill Lynch High Yield Master II Index** 2.51% -- -- -- 2.74%
Lazard International Fixed-Income Portfolio+ (2.92%) 1.24% 5.50% -- 6.48%
Salomon World Government Bond Index Ex-US+** (5.07%) 2.30% 5.91% -- 7.70%
Lazard Strategic Yield Portfolio 4.91% 3.64% 7.53% -- 7.06%
One Month LIBOR USD Fixed Index** 5.28% 5.49% 5.58% -- 4.93%
</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 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 DECEMBER 31, 1999
------------------------------------------------------------------------
INSTITUTIONAL SHARES
------------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
YEAR YEAR YEAR YEAR INCEPTION*
------------ ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Lazard Equity Portfolio 4.23% 52.99% 152.59% 299.38% 425.24%
Standard & Poor's 500 Stock Index** 21.04% 107.54% 251.08% 432.73% 609.70%
Lazard Mid Cap Portfolio 4.38% -- -- -- 11.17%
Russell Midcap Index** 18.23% -- -- -- 34.20%
Lazard Small Cap Portfolio 1.77% 13.88% 71.51% -- 196.88%
Russell 2000 Index** 21.26% 44.59% 116.35% -- 208.05%
Lazard Global Equity Portfolio 16.42% 57.13% -- -- 81.93%
MSCI World Index** 24.93% 79.83% -- -- 102.84%
Lazard International Equity Portfolio 24.07% 61.03% 110.69% -- 166.68%
MSCI EAFE Index** 26.96% 55.06% 82.87% -- 130.05%
Lazard International Small Cap Portfolio 26.07% 35.96% 60.04% -- 66.16%
MSCI EAFE Small Cap Index** 17.67% ( 6.50%) ( 8.51%) -- 7.56%
Lazard Emerging Markets Portfolio 55.81% 7.48% 25.06% -- 23.30%
MSCI Emerging Markets (Free) Index** 66.41% 9.85% 10.42% -- 10.50%
Lazard Bond Portfolio (0.46%) 14.31% 38.62% -- 58.32%
Lehman Intermediate Gov't/Corp. Bond Index** 0.39% 17.42% 40.90% -- 66.94%
Lazard High Yield Portfolio 2.94% -- -- -- 5.93%
Merrill Lynch High Yield Master II Index** 2.51% -- -- -- 5.54%
Lazard International Fixed-Income Portfolio+ (2.92%) 3.76% 30.70% -- 67.03%
Salomon World Government Bond Index Ex-US+** (5.07%) 7.05% 33.23% -- 83.25%
Lazard Strategic Yield Portfolio 4.91% 11.31% 43.78% -- 75.64%
One Month LIBOR USD Fixed Index** 5.28% 17.40% 31.18% -- 48.70%
</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 Europe, Australasia and Far East Index (EAFE Index)
countries plus equities from Canada and the United States. The Morgan Stanley
Capital International (MSCI) 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.
This performance data is not authorized for distribution to prospective
investors in the Fund unless preceded or accompanied by an effective prospectus.
10
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PERFORMANCE TABLE (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL
RETURNS FOR CUMULATIVE TOTAL RETURNS FOR
PERIODS ENDED DECEMBER 31, PERIODS ENDED DECEMBER 31,
1999 1999
--------------------------- ----------------------------
OPEN SHARES
----------------------------------------------------------
ONE SINCE ONE SINCE
YEAR INCEPTION* YEAR INCEPTION*
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Lazard Equity Portfolio 3.92% 13.54% 3.92% 44.53%
Standard & Poor's 500 Stock Index** 21.04% 27.48% 21.04% 102.25%
Lazard Mid Cap Portfolio 3.96% 4.70% 3.96% 10.43%
Russell Midcap Index** 18.23% 14.62% 18.23% 34.19%
Lazard Small Cap Portfolio 1.47% 3.66% 1.47% 11.05%
Russell 2000 Index** 21.26% 12.70% 21.26% 41.76%
Lazard Global Equity Portfolio 16.06% 17.02% 16.06% 58.24%
MSCI World Index** 24.93% 21.79% 24.93% 77.72%
Lazard International Equity Portfolio 23.67% 18.18% 23.67% 63.39%
MSCI EAFE Index** 26.96% 17.45% 26.96% 60.44%
Lazard International Small Cap Portfolio 25.55% 9.61% 25.55% 30.24%
MSCI EAFE Small Cap Index** 17.67% (1.41%) 17.67% ( 4.01%)
Lazard Emerging Markets Portfolio 55.26% 1.59% 55.26% 4.81%
MSCI Emerging Markets (Free) Index** 66.41% 2.79% 66.41% 8.54%
Lazard Bond Portfolio (0.76%) 4.15% (0.76%) 12.17%
Lehman Intermediate Gov't/Corp. Bond Index** 0.39% 5.66% 0.39% 16.85%
Lazard High Yield Portfolio 2.68% 0.21% 2.68% 0.38%
Merrill Lynch High Yield Master II Index** 2.51% 1.80% 2.51% 3.36%
Lazard International Fixed-Income Portfolio (3.21%) 1.34% (3.21%) 4.04%
Salomon World Government Bond Index Ex-US** (5.07%) 2.67% (5.07%) 8.15%
Lazard Strategic Yield Portfolio 4.40% 2.90% 4.40% 8.76%
One Month LIBOR USD Fixed Index** 5.28% 5.50% 5.28% 17.03%
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EQUITY PORTFOLIO
COMMON STOCKS--97.7%
AEROSPACE & DEFENSE--5.2%
Boeing Co. .................................... 22,000 $ 914,375
General Dynamics Corp. ........................ 97,200 5,127,300
Honeywell International, Inc. ................. 156,000 8,999,250
United Technologies Corp. ..................... 164,600 10,699,000
-----------
25,739,925
-----------
ALUMINUM--1.5%
Alcoa, Inc. ................................... 87,400 7,254,200
-----------
AUTOMOTIVE--3.1%
Ford Motor Co. ................................ 114,400 6,113,250
General Motors Corp. .......................... 131,100 9,529,331
-----------
15,642,581
-----------
BANKING & FINANCIAL SERVICES--19.6%
Bank of America Corp. ......................... 181,750 9,121,578
Chase Manhattan Corp. ......................... 110,224 8,563,027
Citigroup, Inc. ............................... 299,123 16,620,022
Federal National Mortgage
Association .................................. 183,800 11,476,012
First Union Corp. ............................. 103,600 3,399,375
FleetBoston Financial Corp. ................... 189,200 6,586,525
J.P. Morgan & Company, Inc. ................... 78,200 9,902,075
Mellon Financial Corp. ........................ 259,800 8,849,438
Morgan Stanley Dean Witter & Co. .............. 67,800 9,678,450
The Hartford Financial Services
Group, Inc. .................................. 99,000 4,690,125
Wells Fargo Co. ............................... 222,800 9,009,475
-----------
97,896,102
-----------
BREWERY--1.3%
Anheuser-Busch Companies, Inc. ................ 89,500 6,343,313
-----------
COMPUTERS & BUSINESS
EQUIPMENT--6.7%
3Com Corp. (a) ................................ 144,900 6,810,300
Compaq Computer Corp. ......................... 185,800 5,028,212
Hewlett-Packard Co. ........................... 58,100 6,619,769
International Business
Machines Corp. ............................... 69,500 7,506,000
Oracle Corp. (a) .............................. 68,100 7,631,456
-----------
33,595,737
-----------
CONGLOMERATES--0.9%
Textron, Inc. ................................. 60,700 4,654,931
-----------
COSMETICS & TOILETRIES--1.1%
Gillette Co. .................................. 128,200 5,280,238
-----------
DIVERSIFIED--3.0%
Minnesota Mining &
Manufacturing Co. ............................ 84,300 $ 8,250,863
PPG Industries, Inc. .......................... 107,700 6,737,981
-----------
14,988,844
-----------
DRUGS & HEALTH CARE--9.9%
American Home Products Corp. .................. 224,000 8,834,000
Amgen, Inc. (a) ............................... 77,600 4,660,850
Bristol-Myers Squibb Co. ...................... 173,800 11,155,787
Merck & Company, Inc. ......................... 177,300 11,890,181
Pharmacia & Upjohn, Inc. ...................... 146,900 6,610,500
United Healthcare Corp. ....................... 117,500 6,242,188
-----------
49,393,506
-----------
ELECTRONICS--3.5%
Intel Corp. ................................... 94,800 7,803,225
Motorola, Inc. ................................ 42,500 6,258,125
Texas Instruments, Inc. ....................... 35,500 3,439,063
-----------
17,500,413
-----------
FOOD & BEVERAGES--3.8%
H.J. Heinz Co. ................................ 75,000 2,985,938
PepsiCo, Inc. ................................. 220,900 7,786,725
Ralston Purina Group .......................... 145,500 4,055,812
Unilever NV ADR ............................... 74,803 4,072,088
-----------
18,900,563
-----------
HOTELS & RESTAURANTS--1.2%
McDonald's Corp. .............................. 147,600 5,950,125
-----------
HOUSEHOLD PRODUCTS--2.7%
Procter & Gamble Co. .......................... 120,900 13,246,106
-----------
INDUSTRIAL & MACHINERY--1.5%
Ingersoll-Rand Co. ............................ 136,800 7,532,550
-----------
INSURANCE--0.5%
Allstate Corp. ................................ 103,798 2,491,152
-----------
MULTIMEDIA--1.5%
Gannett Company, Inc. ......................... 93,600 7,634,250
-----------
OIL & GAS--5.1%
Chevron Corp. ................................. 89,600 7,761,600
Conoco, Inc., Class B ......................... 194,674 4,842,516
Exxon Mobil Corp. ............................. 73,664 5,934,556
Texaco, Inc. .................................. 123,800 6,723,887
-----------
25,262,559
-----------
PAPER PRODUCTS--3.7%
International Paper Co. ....................... 187,400 10,576,387
Kimberly-Clark Corp. .......................... 124,012 8,091,783
-----------
18,668,170
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EQUITY PORTFOLIO (CONTINUED)
PHOTOGRAPHY--1.1%
Eastman Kodak Co. ............................. 86,200 $ 5,710,750
-----------
PUBLISHING--1.6%
New York Times Co. ............................ 167,300 8,218,613
-----------
RETAIL--4.0%
Dayton Hudson Corp. ........................... 66,000 4,846,875
Federated Department Stores, Inc. (a) ......... 183,400 9,273,162
Lowe's Companies, Inc. ........................ 59,500 3,555,125
TJX Companies, Inc. ........................... 111,400 2,276,738
-----------
19,951,900
-----------
SERVICES--1.7%
First Data Corp. .............................. 176,600 8,708,588
-----------
TELECOMMUNICATIONS--10.9%
Alcatel SA ADR ................................ 182,000 8,190,000
AT&T Corp. .................................... 263,500 13,372,625
Bell Atlantic Corp. ........................... 273,200 16,818,875
SBC Communications, Inc. ...................... 328,479 16,013,351
-----------
54,394,851
-----------
UTILITIES--2.6%
Entergy Corp. ................................. 273,700 7,047,775
Southern Co. .................................. 263,500 6,192,250
-----------
13,240,025
-----------
TOTAL COMMON STOCKS
(Identified cost $409,821,835) ................ 488,199,992
-----------
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--2.3%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $11,645,000
United States Treasury Note,
5.250%, 01/31/01, with a value of
$11,790,563)
(Identified cost $11,557,000) ................ $ 11,557 $ 11,557,000
------------
TOTAL INVESTMENTS
(Identified cost $421,378,835) (b) ............ 100.0% $499,756,992
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS ................................. -- (103,159)
----------- ------------
NET ASSETS ..................................... 100.0% $499,653,833
=========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD MID CAP PORTFOLIO
COMMON STOCKS--99.2%
ADVERTISING AGENCIES--1.6%
Young & Rubicam, Inc. ......................... 9,500 $ 672,125
-----------
AEROSPACE & DEFENSE--2.2%
General Dynamics Corp. ........................ 17,600 928,400
-----------
AUTO PARTS--1.1%
Borg-Warner Automotive, Inc. .................. 11,100 449,550
-----------
BANKING & FINANCIAL SERVICES--12.7%
Capital One Financial Corp. ................... 18,000 867,375
Comerica, Inc. ................................ 12,200 569,587
Franklin Resources, Inc. ...................... 25,700 824,006
Hibernia Corp., Class A ....................... 51,300 545,062
North Fork Bancorporation, Inc. ............... 53,350 933,625
South Trust Corp. ............................. 27,100 1,024,719
The CIT Group, Inc., Class A .................. 23,300 492,213
-----------
5,256,587
-----------
BREWERY--2.3%
Adolph Coors Co., Class B ..................... 18,000 945,000
-----------
CHEMICALS & PLASTICS--1.9%
Eastman Chemical Co. .......................... 16,300 777,306
-----------
COMPUTERS & BUSINESS
EQUIPMENT--14.4%
3Com Corp. (a) ................................ 16,900 794,300
Ceridian Corp. (a) ............................ 46,200 996,187
Electronics for Imaging, Inc. (a) ............. 9,500 552,188
NCR Corp. (a) ................................. 24,700 935,512
Quantum Corporation--Hard Disk
Drive (a) .................................... 60,500 915,063
Seagate Technology, Inc. (a) .................. 17,300 805,531
Storage Technology Corp. (a) .................. 52,800 973,500
-----------
5,972,281
-----------
COSMETICS & TOILETRIES--1.6%
Avon Products, Inc. ........................... 19,800 653,400
-----------
DIVERSIFIED--1.6%
PPG Industries, Inc. .......................... 10,800 675,675
-----------
DOMESTIC OIL--2.0%
EOG Resources, Inc. ........................... 47,800 839,488
-----------
DRUGS & HEALTH CARE--5.4%
Biomet, Inc. .................................. 20,700 828,000
IMS Health, Inc. .............................. 26,000 706,875
Watson Pharmaceuticals, Inc. (a) .............. 19,600 701,925
-----------
2,236,800
-----------
ELECTRONICS--2.9%
KEMET Corp. (a) ............................... 14,800 $ 666,925
LSI Logic Corp. (a) ........................... 8,000 540,000
-----------
1,206,925
-----------
FOOD & BEVERAGES--3.7%
Ralston Purina Group .......................... 25,200 702,450
Whitman Corp. ................................. 63,600 854,625
-----------
1,557,075
-----------
GAS & PIPELINE UTILITIES--1.3%
Cooper Cameron Corp. (a) ...................... 11,400 557,888
-----------
HOTELS & RESTAURANTS--2.3%
Tricon Global Restaurants, Inc. (a) ........... 25,300 977,212
-----------
HOUSEHOLD APPLIANCES &
HOME FURNISHINGS--4.6%
Black & Decker Corp. .......................... 15,800 825,550
Ethan Allen Interiors, Inc. ................... 14,350 460,097
Maytag Corp. .................................. 13,200 633,600
-----------
1,919,247
-----------
HOUSEHOLD PRODUCTS--2.1%
Dial Corp. .................................... 36,300 882,544
-----------
INDUSTRIAL & MACHINERY--1.6%
Ingersoll-Rand Co. ............................ 11,900 655,244
-----------
INSURANCE--5.4%
Ace, Ltd. ..................................... 46,600 777,638
Ambac Financial Group, Inc. ................... 16,700 871,531
Everest Reinsurance Holdings, Inc. ............ 26,100 582,356
-----------
2,231,525
-----------
OIL & GAS--2.2%
Devon Energy Corp. ............................ 27,700 910,638
-----------
PAPER PRODUCTS--1.8%
Bowater Inc. .................................. 14,000 760,375
-----------
PUBLISHING--1.1%
New York Times Co. ............................ 9,600 471,600
-----------
RETAIL--6.6%
Borders Group, Inc. (a) ....................... 66,100 1,061,731
Saks, Inc. (a) ................................ 53,200 827,925
Venator Group, Inc. (a) ....................... 121,300 849,100
-----------
2,738,756
-----------
TELECOMMUNICATIONS--4.4%
Broad Wing, Inc. .............................. 14,200 523,625
Harris Corp. .................................. 32,900 878,019
Tritel, Inc., Class A (a) ..................... 13,000 411,937
-----------
1,813,581
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD MID CAP PORTFOLIO (CONTINUED)
TRANSPORTATION--2.2%
CNF Transportation, Inc. ...................... 26,900 $ 928,050
-----------
UTILITIES--7.6%
CMS Energy Corp. .............................. 27,100 845,181
Entergy Corp. ................................. 29,100 749,325
Niagara Mohawk Power Corp. (a) ................ 60,200 839,037
NiSource, Inc. ................................ 40,700 727,513
-----------
3,161,056
-----------
WASTE MANAGEMENT--2.6%
Republic Services, Inc., Class A (a) .......... 73,800 1,060,875
-----------
TOTAL COMMON STOCKS
(Identified cost $41,813,455) ................. 41,239,203
-----------
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--1.2%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $490,000 United
States Treasury Note, 6.250%,
10/31/01, with a value of
$494,900)
(Identified cost $485,000) ................... $ 485 $ 485,000
-----------
TOTAL INVESTMENTS
(Identified cost $42,298,455) (b) ............. 100.4% $41,724,203
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS ................................. (0.4) (179,352)
----------- -----------
NET ASSETS ..................................... 100.0% $41,544,851
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD SMALL CAP PORTFOLIO
COMMON STOCKS--96.6%
AEROSPACE & DEFENSE--1.5%
AAR Corp. ..................................... 253,800 $ 4,552,537
Aviation Sales Co. (a) ........................ 192,800 3,181,200
BE Aerospace, Inc. (a) ........................ 36,500 307,969
Cordant Technologies, Inc. .................... 212,200 7,002,600
-----------
15,044,306
-----------
APPAREL & TEXTILES--0.6%
Nautica Enterprises, Inc. (a) ................. 486,100 5,499,006
-----------
AUTO PARTS--4.6%
Borg-Warner Automotive, Inc. .................. 204,900 8,298,450
Dura Automotive Systems, Inc. (a) ............. 230,283 4,015,560
Pennzoil-Quaker State Co. ..................... 999,600 10,183,425
Superior Industries
International, Inc. ......................... 357,100 9,574,744
Tower Automotive, Inc. (a) .................... 894,800 13,813,475
-----------
45,885,654
-----------
BANKING & FINANCIAL SERVICES--6.9%
Chittenden Corp. .............................. 202,100 5,987,212
Cullen/Frost Bankers, Inc. .................... 375,600 9,671,700
Enhance Financial Services
Group, Inc. .................................. 492,000 7,995,000
Hudson United Bancorp ......................... 485,568 12,412,326
Independence Community Bank
Corp ......................................... 408,900 5,111,250
Queens County Bancorp, Inc. ................... 364,445 9,885,571
Southwest Bancorporation of
Texas, Inc. (a) .............................. 483,800 9,585,287
Staten Island Bancorp, Inc. ................... 414,300 7,457,400
-----------
68,105,746
-----------
BROADCASTING--0.7%
Classic Communications, Inc.,
Class A (a) .................................. 200,000 7,312,500
-----------
BUILDING & CONSTRUCTION--1.0%
Apogee Enterprises, Inc. ...................... 1,030,100 5,214,881
Granite Construction, Inc. .................... 244,700 4,511,656
Huttig Building Products, Inc. (a) ............ 1 5
-----------
9,726,542
-----------
BUSINESS SERVICES AND SUPPLIES--5.9%
ACNielsen Corp. (a) ........................... 468,900 11,546,662
Acxiom Corp. (a) .............................. 165,700 3,976,800
American Management
Systems, Inc. (a) ............................ 268,400 8,421,050
CDI Corp. (a) ................................. 371,300 8,957,612
Gartner Group, Inc., Class A .................. 220,300 3,359,575
Interim Services, Inc. (a) .................... 229,800 5,687,550
The Standard Register Co. ..................... 407,100 7,887,563
United Stationers, Inc. (a) ................... 299,400 8,551,613
-----------
58,388,425
-----------
CHEMICALS & PLASTICS--1.9%
Ferro Corp. ................................... 416,900 9,171,800
H.B. Fuller Co. ............................... 179,600 10,046,375
-----------
19,218,175
-----------
COAL--0.4%
CONSOL Energy, Inc. ........................... 352,700 3,571,088
-----------
COMMERCIAL SERVICES--0.6%
Hussmann International, Inc. .................. 387,000 5,829,188
-----------
COMPUTERS & BUSINESS EQUIPMENT--4.7%
Bell & Howell Co. (a) ......................... 420,300 13,370,794
Mentor Graphics Corp. (a) ..................... 699,500 9,224,656
Quantum Corporation-
Hard Disk Drive (a) .......................... 1,419,600 9,848,475
Storage Technology Corp. (a) .................. 343,300 6,329,594
Tektronix, Inc. ............................... 191,700 7,452,337
-----------
46,225,856
-----------
CONTAINERS--0.5%
American National Can Group, Inc. ............. 400,000 5,200,000
-----------
DRUGS & HEALTH CARE--2.8%
AmeriSource Health Corp.,
Class A (a) .................................. 431,500 6,553,406
Apria Healthcare Group, Inc. (a) .............. 654,700 11,743,681
West Pharmaceutical Services, Inc. ............ 316,068 9,778,354
-----------
28,075,441
-----------
ELECTRICAL EQUIPMENT--2.1%
Anixter International, Inc. (a) ............... 742,900 15,322,312
Belden, Inc. .................................. 270,220 5,674,620
-----------
20,996,932
-----------
ELECTRONICS--2.9%
AMETEK, Inc. .................................. 689,900 13,151,219
KEMET Corp. (a) ............................... 206,800 9,318,925
Sensormatic Electronics Corp. (a) ............. 384,300 6,701,231
-----------
29,171,375
-----------
FOOD & BEVERAGES--5.4%
American Italian Pasta Co.,
Class A (a) .................................. 429,100 13,194,825
Aurora Foods, Inc. (a) ........................ 527,900 4,916,069
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
16
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD SMALL CAP PORTFOLIO (CONTINUED)
Flowers Industries, Inc. ...................... 537,900 $ 8,572,781
Lance, Inc. ................................... 532,900 5,329,000
Ralcorp Holdings, Inc. (a) .................... 642,300 12,805,856
Whitman Corp. ................................. 626,800 8,422,625
-----------
53,241,156
-----------
GAS EXPLORATION--1.3%
Barrett Resources Corp. (a) ................... 424,300 12,490,331
-----------
HOMEBUILDERS--3.1%
Kaufman & Broad Home Corp. .................... 513,400 12,417,863
Toll Brothers, Inc. (a) ....................... 974,500 18,150,062
-----------
30,567,925
-----------
HOTELS & RESTAURANTS--1.9%
Lone Star Steakhouse &
Saloon, Inc. (a) ............................. 770,500 6,874,304
Morton's Restaurant Group, Inc. (a) ........... 450,700 6,985,850
Prime Hospitality Corp. (a) ................... 610,700 5,381,794
-----------
19,241,948
-----------
HOUSEHOLD APPLIANCES & HOME
FURNISHINGS--5.2%
Bassett Furniture Industries, Inc. ............ 374,500 5,992,000
Ethan Allen Interiors, Inc. ................... 343,200 11,003,850
Furniture Brands International,
Inc. (a) .................................... 779,900 17,157,800
Harman International Industries, Inc. ......... 317,100 17,797,237
-----------
51,950,887
-----------
INDUSTRIAL & MACHINERY--5.1%
Applied Power, Inc., Class A .................. 255,800 9,400,650
JLG Industries, Inc. .......................... 989,900 15,776,531
Regal-Beloit Corp. ............................ 763,600 15,749,250
Roper Industries, Inc. ........................ 258,600 9,778,313
-----------
50,704,744
-----------
INSURANCE--4.2%
Arthur J. Gallagher & Co. ..................... 251,200 16,265,200
Everest Reinsurance Holdings, Inc. ............ 254,300 5,674,069
E. W. Blanch Holdings, Inc. ................... 58,000 3,552,500
HCC Insurance Holdings, Inc. .................. 284,600 3,753,162
Radian Group, Inc. ............................ 261,571 12,490,015
-----------
41,734,946
-----------
LEISURE TIME--1.6%
Carmike Cinemas, Inc., Class A (a) ............ 582,700 $ 4,552,344
Polaris Industries, Inc. ...................... 168,700 6,115,375
Vail Resorts, Inc. (a) ........................ 261,500 4,690,656
-----------
15,358,375
-----------
MANUFACTURING--2.9%
Alltrista Corp. (a) ........................... 332,400 7,354,350
Crane Co. ..................................... 400,810 7,966,099
Federal Signal Corp. .......................... 467,100 7,502,794
Hawk Corp., Class A (a) ....................... 75,400 438,262
Mark IV Industries, Inc. ...................... 219,864 3,888,844
Modine Manufacturing Co. ...................... 77,700 1,942,500
-----------
29,092,849
-----------
MEDICAL PRODUCTS--2.1%
Invacare Corp. ................................ 357,600 7,174,350
Varian Medical Systems, Inc. (a) .............. 459,400 13,695,863
-----------
20,870,213
-----------
MEDICAL SUPPLIES--1.9%
Datascope Corp. ............................... 264,400 10,576,000
DENTSPLY International, Inc. .................. 360,600 8,519,175
-----------
19,095,175
-----------
MULTIMEDIA--0.7%
The Ackerley Group, Inc. ...................... 400,000 7,250,000
-----------
OIL & GAS--2.6%
Devon Energy Corp. ............................ 324,500 10,667,938
Helmerich & Payne, Inc. ....................... 712,020 15,530,936
-----------
26,198,874
-----------
PAPER PRODUCTS--0.9%
Chesapeake Corp. .............................. 295,300 9,006,650
-----------
PHOTOGRAPHY--0.8%
Polaroid Corp. ................................ 393,800 7,408,363
-----------
PRINTING--0.8%
Mail-Well, Inc. (a) ........................... 562,000 7,587,000
-----------
PUBLISHING--3.9%
Banta Corp. ................................... 658,750 14,863,047
Houghton Mifflin Co. .......................... 206,700 8,720,156
Pulitzer, Inc. ................................ 221,500 8,929,219
R. H. Donnelley Corp. (a) ..................... 341,200 6,440,150
-----------
38,952,572
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
17
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD SMALL CAP PORTFOLIO (CONTINUED)
REAL ESTATE--4.5%
Catellus Development Corp. (a) ................ 377,100 $ 4,831,594
Chelsea GCA Realty, Inc. ...................... 109,000 3,242,750
FelCor Lodging Trust, Inc. .................... 505,925 8,853,687
Glenborough Realty Trust, Inc. ................ 433,700 5,800,738
Kilroy Realty Corp. ........................... 511,000 11,242,000
Reckson Associates Realty Corp. ............... 541,100 11,092,550
-----------
45,063,319
-----------
RETAIL--7.9%
Borders Group, Inc. (a) ....................... 822,900 13,217,831
Casey's General Stores, Inc. .................. 515,600 5,381,575
CompUSA, Inc. (a) ............................. 843,000 4,320,375
Great Atlantic & Pacific Tea
Co., Inc. ................................... 428,800 11,952,800
Hughes Supply, Inc. ........................... 221,300 4,771,781
Pier 1 Imports, Inc. .......................... 1,283,400 8,181,675
Ruddick Corp. ................................. 289,600 4,488,800
Talbots, Inc. ................................. 139,100 6,207,338
The Men's Wearhouse, Inc. (a) ................. 255,200 7,496,500
The Wet Seal, Inc., Class A (a) ............... 284,200 3,481,450
Venator Group, Inc. (a) ....................... 1,204,100 8,428,700
Wild Oats Markets, Inc. (a) ................... 40,650 901,922
-----------
78,830,747
-----------
TELECOMMUNICATIONS
EQUIPMENT--0.6%
Allen Telecom, Inc. (a) ....................... 528,065 6,105,752
-----------
TRANSPORTATION--0.6%
CNF Transportation, Inc. ...................... 168,300 5,806,350
-----------
UTILITIES--1.5%
Avista Corp. .................................. 377,200 5,823,025
Sierra Pacific Resources ...................... 499,392 8,645,724
-----------
14,468,749
-----------
TOTAL COMMON STOCKS
(Identified cost $1,001,502,244) .............. 959,277,159
-----------
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
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 $ 0
------------
REPURCHASE AGREEMENT--3.3%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $25,220,000
United States Treasury Note,
0.00%, 05/15/05, with a value
of $25,503,725 and $4,830,000
United States Treasury Note,
7.00%, 07/15/06, with a value
of $5,101,688 and $3,540,000
United States Treasury Note,
6.125%, 08/15/07 with a
value of $3,535,575)
(Identified cost $33,464,000) ................ 33,464 33,464,000
------------
TOTAL INVESTMENTS
(Identified cost $1,035,966,244) (b) .......... 99.9% $992,741,159
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES .................................. 0.1 616,700
----------- ------------
NET ASSETS ..................................... 100.0% $993,357,859
=========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
18
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD GLOBAL EQUITY PORTFOLIO
COMMON STOCKS--98.4%
AUSTRALIA--1.9%
Broken Hill Proprietary
Company, Ltd. ....................... 99,141 $ 1,301,787
-----------
DENMARK--1.7%
Tele Danmark A/S ..................... 15,800 1,173,950
-----------
FINLAND--1.3%
UPM-Kymmene OYJ ...................... 23,000 926,762
-----------
FRANCE--8.9%
Alcatel .............................. 7,360 1,690,413
Aventis SA ........................... 12,498 726,435
Axa .................................. 4,970 692,903
Banque Nationale de Paris ............ 9,440 871,059
Compagnie de Saint Gobain ............ 2,700 507,795
Total Fina SA, Class B ............... 7,157 955,272
Vivendi .............................. 8,545 771,690
-----------
TOTAL FRANCE ......................... 6,215,567
-----------
GERMANY--5.9%
Aventis SA (a) ....................... 10,278 596,339
DaimlerChrysler AG ................... 11,009 856,141
Deutsche Telekom AG .................. 5,000 356,098
Siemens AG ........................... 8,600 1,094,163
Thyssen Krupp AG (a) ................. 21,000 639,919
Veba AG .............................. 12,500 607,558
-----------
TOTAL GERMANY ........................ 4,150,218
-----------
HONG KONG--1.7%
HSBC Holdings PLC .................... 84,378 1,183,148
-----------
ITALY--2.0%
ENI SpA (a) .......................... 127,100 699,066
San Paolo-IMI-SpA .................... 50,800 690,329
-----------
TOTAL ITALY .......................... 1,389,395
-----------
JAPAN--15.1%
Canon, Inc. .......................... 32,000 1,271,606
Fuji Bank, Ltd. ...................... 58,000 563,708
Industrial Bank of Japan, Ltd. ....... 71,000 684,496
Kao Corp. ............................ 23,000 656,210
Nippon Telegraph &
Telephone Corp. ..................... 38 650,876
Nissan Motor Company, Ltd. (a) ....... 92,000 361,985
NTT Mobile Communications
Network, Inc. ....................... 49 1,884,800
Promise Company, Ltd. ................ 3,100 157,776
Sankyo Company, Ltd. ................. 24,000 493,296
Sony Corp. ........................... 5,400 1,601,449
Sumitomo Trust & Banking
Company, Ltd. ....................... 139,000 $ 938,730
TDK Corp. ............................ 9,000 1,242,928
-----------
TOTAL JAPAN .......................... 10,507,860
-----------
NETHERLANDS--4.0%
Heineken NV .......................... 18,262 890,745
ING Groep NV ......................... 15,700 947,974
Philips Electronics NV ............... 6,908 939,434
-----------
TOTAL NETHERLANDS .................... 2,778,153
-----------
SINGAPORE--1.0%
Oversea-Chinese Banking
Corporation, Ltd. ................... 79,800 733,077
-----------
SPAIN--3.7%
Endesa SA ............................ 54,100 1,074,148
Telefonica SA ........................ 60,102 1,501,484
-----------
TOTAL SPAIN .......................... 2,575,632
-----------
SWITZERLAND--3.2%
ABB Ltd. (a) ......................... 7,537 921,831
Roche Holding AG ..................... 50 593,481
Zurich Allied AG ..................... 1,262 719,648
-----------
TOTAL SWITZERLAND .................... 2,234,960
-----------
UNITED KINGDOM--9.4%
AstraZeneca Group PLC ................ 17,805 739,718
British Aerospace PLC ................ 90,400 594,314
Cadbury Schweppes PLC ................ 87,084 524,687
Diageo PLC ........................... 63,248 504,693
GKN PLC .............................. 22,600 370,169
Granada Group PLC .................... 76,000 767,268
Imperial Chemical Industries PLC ..... 71,500 755,330
National Westminster Bank PLC ........ 28,100 603,686
Royal & Sun Alliance Insurance
Group PLC ........................... 73,681 552,238
SmithKline Beecham PLC ............... 21,200 268,818
Tesco PLC ............................ 66,100 200,730
Unilever PLC ......................... 93,242 685,293
-----------
TOTAL UNITED KINGDOM ................. 6,566,944
-----------
UNITED STATES--38.6%
Aetna, Inc. .......................... 10,050 560,916
American Home Products Corp. ......... 19,000 749,312
AT&T Corp. ........................... 23,700 1,202,775
Bank of America Corp. ................ 10,730 538,512
Bell Atlantic Corp. .................. 24,900 1,532,906
Bristol-Myers Squibb Co. ............. 14,600 937,137
Chase Manhattan Corp. ................ 13,400 1,041,012
Chevron Corp. ........................ 3,900 337,838
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
19
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD GLOBAL EQUITY PORTFOLIO (CONTINUED)
Citigroup, Inc. ...................... 20,825 $1,157,089
Compaq Computer Corp. ................ 14,400 389,700
Eastman Kodak Co. .................... 11,300 748,625
Exxon Mobil Corp. .................... 12,273 988,744
Federal National Mortgage
Association......................... 13,400 836,662
Federated Department Stores, Inc.(a).. 14,000 707,875
First Data Corp. ..................... 15,300 754,481
FleetBoston Financial Corp. .......... 15,000 522,188
FPL Group, Inc. ...................... 18,700 800,594
General Motors Corp. ................. 13,000 944,937
H.J. Heinz Co. ....................... 13,800 549,413
Hewlett-Packard Co. .................. 6,200 706,413
Honeywell International, Inc. ........ 13,400 773,012
Intel Corp. .......................... 4,500 370,406
International Business Machines Corp. 6,720 725,760
McDonald's Corp. ..................... 21,100 850,594
Merck & Company, Inc. ................ 11,200 751,100
Minnesota Mining &
Manufacturing Co. ................... 9,400 920,025
Motorola, Inc. ....................... 8,600 1,266,350
PepsiCo, Inc. ........................ 26,300 927,075
Philip Morris Companies, Inc. ........ 25,190 584,093
PPG Industries, Inc. ................. 6,500 406,656
Texaco, Inc. ......................... 10,300 559,419
Texas Instruments, Inc. .............. 7,300 707,188
The Hartford Financial Services
Group, Inc. ......................... 10,860 514,493
United Technologies Corp. ............ 15,600 1,014,000
Xerox Corp. .......................... 26,300 596,681
----------
TOTAL UNITED STATES .................. 26,973,981
----------
TOTAL COMMON STOCKS
(Identified cost $59,357,494)......... 68,711,434
----------
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------- ---------- -------------
<S> <C> <C>
REPURCHASE AGREEMENT--1.5%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $1,035,000
United States Treasury Note,
7.500%, 05/15/02, with a
value of $1,072,519)
(Identified cost $1,049,000)......... $1,049 $ 1,049,000
-----------
TOTAL INVESTMENTS
(Identified cost $60,406,494) (b) .... 99.9% $69,760,434
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES ......................... 0.1 58,426
------ -----------
NET ASSETS ........................... 100.0% $69,818,860
====== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
20
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL EQUITY PORTFOLIO
COMMON STOCKS--99.0%
AUSTRALIA--2.0%
Broken Hill Proprietary
Company, Ltd. ....................... 5,536,363 $72,696,093
-----------
DENMARK--1.5%
Tele Danmark A/S ..................... 760,700 56,520,497
-----------
FINLAND--1.6%
Merita Nordbanken OYJ ................ 2,478,000 14,602,842
UPM-Kymmene OYJ ...................... 1,067,700 43,021,888
-----------
TOTAL FINLAND ........................ 57,624,730
-----------
FRANCE--13.2%
Alcatel .............................. 430,240 98,815,679
Aventis SA ........................... 943,690 54,851,107
Axa .................................. 380,100 52,992,473
Banque Nationale de Paris ............ 652,122 60,173,400
Compagnie de Saint Gobain ............ 232,300 43,689,166
Compagnie Generale des
Etablissements Michelin, Class B .... 448,600 17,623,985
Suez Lyonnaise des Eaux, SA .......... 213,900 34,281,609
Total Fina SA, Class B ............... 555,570 74,154,053
Vivendi .............................. 618,810 55,884,046
-----------
TOTAL FRANCE ......................... 492,465,518
-----------
GERMANY--11.2%
Allianz AG ........................... 159,469 53,573,786
Aventis SA (a) ....................... 791,223 45,909,389
DaimlerChrysler AG ................... 577,443 44,906,235
Deutsche Lufthansa AG ................ 1,964,500 45,713,476
Deutsche Telekom AG .................. 374,151 26,646,891
Metro AG ............................. 800,424 43,056,784
Siemens AG ........................... 615,700 78,334,438
Thyssen Krupp AG (a) ................. 1,323,200 40,320,982
Veba AG .............................. 822,300 39,967,578
-----------
TOTAL GERMANY ........................ 418,429,559
-----------
HONG KONG--1.7%
HSBC Holdings PLC .................... 4,423,444 62,025,522
-----------
ITALY--2.4%
ENI SpA (a) .......................... 6,806,800 37,438,277
San Paolo-IMI-SpA .................... 2,282,300 31,014,509
Telecom Italia SpA ................... 3,292,500 20,066,027
-----------
TOTAL ITALY .......................... 88,518,813
-----------
JAPAN--25.7%
Asahi Breweries, Ltd. ................ 3,374,000 $36,920,153
Canon, Inc. .......................... 1,905,000 75,700,305
Fuji Bank, Ltd. ...................... 3,518,000 34,191,779
Industrial Bank of Japan, Ltd. ....... 4,190,000 40,394,931
Japan Tobacco, Inc. .................. 3,728 28,533,778
Kao Corp. ............................ 1,737,000 49,558,139
Nintendo Company, Ltd. ............... 198,400 32,972,811
Nippon Telegraph & Telephone Corp. ... 3,373 57,773,809
Nissan Motor Company, Ltd. (a) ....... 9,986,000 39,291,104
NTT Mobile Communications
Network, Inc. ....................... 2,996 115,242,050
Orix Corp. ........................... 444,700 100,195,695
Promise Company, Ltd. ................ 442,500 22,521,288
Sankyo Company, Ltd. ................. 1,341,000 27,562,886
Sony Corp. ........................... 510,800 151,485,175
Sumitomo Trust & Banking Company,
Ltd. ................................ 7,579,000 51,184,400
TDK Corp. ............................ 664,000 91,700,501
-----------
TOTAL JAPAN .......................... 955,228,804
-----------
NETHERLANDS--4.2%
Heineken NV .......................... 888,675 43,345,895
ING Groep NV ......................... 997,000 60,199,395
Philips Electronics NV ............... 385,496 52,424,449
-----------
TOTAL NETHERLANDS .................... 155,969,739
-----------
PORTUGAL--1.1%
Portugal Telecom SA .................. 3,651,600 40,058,189
-----------
SINGAPORE--2.5%
Oversea-Chinese Banking
Corporation, Ltd. ................... 5,264,050 48,357,829
United Overseas Bank, Ltd. ........... 5,193,197 45,836,083
-----------
TOTAL SINGAPORE ...................... 94,193,912
-----------
SPAIN--4.7%
Endesa SA ............................ 2,826,200 56,113,808
Telefonica SA ........................ 4,783,172 119,494,498
-----------
TOTAL SPAIN .......................... 175,608,306
-----------
SWEDEN--3.0%
Electrolux AB, Series B .............. 1,984,500 49,909,860
Nordbanken Holding AB ................ 2,410,800 14,166,177
Svenska Handelsbanken AB, Series A ... 2,609,100 32,809,225
Volvo AB, Series B ................... 631,400 16,324,833
-----------
TOTAL SWEDEN ......................... 113,210,095
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
21
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL EQUITY PORTFOLIO
(CONTINUED)
SWITZERLAND--3.8%
ABB Ltd. (a) ......................... 474,980 $ 58,093,547
Roche Holding AG ..................... 3,950 46,885,009
Zurich Allied AG ..................... 64,890 37,003,153
-------------
TOTAL SWITZERLAND .................... 141,981,709
-------------
UNITED KINGDOM--20.4%
Allied Zurich PLC .................... 2,195,550 25,889,247
AstraZeneca Group PLC ................ 1,312,540 54,530,156
BP Amoco PLC ......................... 5,768,800 58,232,191
British Aerospace PLC ................ 7,003,848 46,045,198
British American Tobacco PLC ......... 4,831,950 27,317,673
British Energy PLC ................... 3,589,800 20,628,535
Cadbury Schweppes PLC ................ 4,246,262 25,584,024
Diageo PLC ........................... 4,339,794 34,629,745
GKN PLC .............................. 1,180,200 19,330,665
Granada Group PLC .................... 5,404,500 54,561,809
Great Universal Stores PLC ........... 4,500,100 26,168,444
Halifax Group PLC .................... 3,829,300 41,813,769
Imperial Chemical Industries PLC ..... 4,052,600 42,811,921
Invensys PLC ......................... 7,020,400 37,117,127
National Westminster Bank PLC ........ 1,790,000 38,455,450
Prudential PLC ....................... 2,286,100 44,608,270
Reed International PLC ............... 5,599,800 42,060,913
Royal & Sun Alliance Insurance Group
PLC ................................. 5,513,863 41,326,362
SmithKline Beecham PLC ............... 2,192,700 27,803,668
Tesco PLC ............................ 5,674,900 17,233,333
Unilever PLC ......................... 4,388,042 32,250,422
-------------
TOTAL UNITED KINGDOM ................. 758,398,922
-------------
TOTAL COMMON STOCKS
(Identified cost $2,786,147,713)...... 3,682,930,408
-------------
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--0.9%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $25,190,000
United States Treasury Note,
5.250%, 01/31/01, with a value of
$25,504,875, and $5,350,000
United States Treasury Note, 6.375%,
09/30/01, with a value of
$5,443,625, and $3,810,000
United States Treasury Note,
7.500%, 02/15/05, with a value
of $4,081,463)
(Identified cost $34,332,000)........ $34,332 $ 34,332,000
--------------
TOTAL INVESTMENTS
(Identified cost $2,820,479,713) (b).. 99.9% $3,717,262,408
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES ......................... 0 .1 4,961,406
------- --------------
NET ASSETS ............................ 100.0% $3,722,223,814
======= ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
22
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL SMALL CAP PORTFOLIO
COMMON STOCKS--96.6%
AUSTRALIA--3.1%
Cochlear, Ltd. ....................... 518,300 $ 6,890,346
------------
AUSTRIA--0.3%
BWT AG ............................... 5,200 699,302
------------
DENMARK--1.2%
Falck A/S ............................ 24,494 2,569,104
------------
FINLAND--4.6%
Amer Group, Ltd. ..................... 308,700 6,266,022
Sampo Insurance Company, Ltd. ........ 61,800 2,160,221
Vaisala OY ........................... 21,400 1,670,689
------------
TOTAL FINLAND ........................ 10,096,932
------------
FRANCE--8.7%
Carbone-Lorraine ..................... 72,500 3,417,937
Havas Advertising SA ................. 17,300 7,371,684
Neopost SA (a), (c) .................. 93,300 3,923,904
SCOR SA ADR .......................... 33,500 1,482,375
Societe BIC SA ....................... 67,000 3,049,308
------------
TOTAL FRANCE ......................... 19,245,208
------------
GERMANY--4.0%
Fielmann AG .......................... 62,300 1,863,909
Hawesko Holding AG ................... 23,076 727,587
Marseille-Kliniken AG ................ 286,200 3,142,508
Prosieben Media AG ................... 54,400 3,161,950
------------
TOTAL GERMANY ........................ 8,895,954
------------
HONG KONG--6.4%
CDL Hotels International, Ltd. ....... 4,976,600 1,984,622
Esprit Asia Holdings, Ltd. ........... 5,803,500 6,271,229
Shaw Brothers (Hong Kong), Ltd. ...... 1,479,500 1,741,484
VTech Holdings, Ltd. ................. 1,265,000 4,117,129
------------
TOTAL HONG KONG ...................... 14,114,464
------------
IRELAND--4.2%
Adare Printing Group PLC ............. 308,000 2,032,227
Anglo Irish Bank Corporation PLC ..... 1,228,300 2,845,854
Waterford Wedgwood PLC ............... 4,266,700 4,341,039
------------
TOTAL IRELAND ........................ 9,219,120
------------
ITALY--7.6%
Banca Popolare di brescia SpA ........ 113,000 10,000,010
Industrie Natuzzi SpA ADR ............ 174,700 2,314,775
Interpump Group SpA .................. 540,200 2,982,053
Manuli Rubber Industries SpA ......... 699,800 1,512,103
------------
TOTAL ITALY .......................... 16,808,941
------------
JAPAN--7.2%
Aderans Company, Ltd. ................ 47,700 1,774,102
H.I.S. Company, Ltd. ................. 53,690 3,830,871
Hitachi Medical Corp. ................ 20,000 209,455
Hokuto Corp. ......................... 26,600 1,429,324
Impact 21 Company, Ltd. .............. 91,000 1,603,210
Kawasumi Laboratories ................ 66,000 775,179
Maruichi Steel Tube, Ltd. ............ 151,000 1,696,662
Meitec Corp. ......................... 56,000 1,781,345
Torii Pharmaceutical Company, Ltd. ... 103,900 2,664,363
------------
TOTAL JAPAN .......................... 15,764,511
------------
NETHERLANDS--7.0%
Beter Bed Holding NV ................. 66,100 1,764,524
Fugro NV ............................. 65,700 2,442,148
Hunter Douglas NV .................... 125,250 3,406,604
PinkRoccade NV (a), (c) .............. 76,900 2,819,733
Telegraaf Holdings ................... 222,300 4,926,544
------------
TOTAL NETHERLANDS .................... 15,359,553
------------
NORWAY--3.1%
Merkantildata ASA .................... 259,200 3,139,856
P4 Radio Hele Norg ASA ............... 724,800 3,711,121
------------
TOTAL NORWAY ......................... 6,850,977
------------
PORTUGAL--2.6%
Campanhia de Seguros Mundial
Confianca SA (a) .................... 110,600 5,756,703
------------
SINGAPORE--1.0%
Want Want Holdings, Ltd.,
Warrants 10/04/24 (a) ............... 155,200 86,136
Want Want Holdings, Ltd. ............. 1,552,000 2,110,720
------------
TOTAL SINGAPORE ...................... 2,196,856
------------
SPAIN--1.5%
Banco Pastor SA ...................... 79,600 3,263,531
------------
SWEDEN--6.7%
Celsius AB, Class B .................. 193,800 4,008,556
Elanders AB .......................... 124,750 2,756,258
Getinge Industries AB ................ 184,798 2,084,923
Industrial & Financial Systems AB .... 177,000 3,848,278
Nobel Biocare AB ..................... 137,400 1,937,713
------------
TOTAL SWEDEN ......................... 14,635,728
------------
SWITZERLAND--7.6%
Bank Sarasin & Cie ................... 2,385 4,838,002
Edipresse SA ......................... 12,660 6,996,671
Gretag Imaging Group ................. 33,800 4,898,166
------------
TOTAL SWITZERLAND .................... 16,732,839
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
23
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL SMALL CAP PORTFOLIO
(CONTINUED)
UNITED KINGDOM--19.8%
AMEC PLC ............................. 1,084,900 $ 4,293,476
Ashtead Group PLC .................... 1,398,400 3,794,844
Corporate Services Group PLC ......... 2,281,500 3,722,160
Danka Business Systems PLC,
ADR (a) ............................. 176,500 2,239,344
Devro PLC ............................ 468,300 762,118
Euromoney Publications PLC ........... 50,644 1,799,716
Games Workshop Group PLC ............. 151,100 1,115,408
Goode Durrant PLC .................... 346,100 2,923,860
Hogg Robinson PLC .................... 789,400 3,060,283
Man (E D & F) Group PLC .............. 849,500 5,680,897
Signet Group PLC, ADR ................ 217,312 6,899,656
SSL International PLC ................ 473,123 5,993,518
Victrex PLC .......................... 598,100 1,323,572
-----------
TOTAL UNITED KINGDOM ................. 43,608,852
-----------
TOTAL COMMON STOCKS
(Identified cost $171,407,150)........ 212,708,921
-----------
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--3.2%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $6,995,000
United States Treasury Note,
6.250%, 04/30/01, with a value of
$7,073,694)
(Identified cost $6,933,000)......... $6,933 $ 6,933,000
------------
TOTAL INVESTMENTS
(Identified cost $178,340,150) (b) ... 99.8% $219,641,921
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES ...................... 0.2 483,113
------ ------------
NET ASSETS ............................ 100.0% $220,125,034
====== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
24
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- ------------------------------------------------ ----------- -----------
<S> <C> <C>
LAZARD EMERGING MARKETS PORTFOLIO
COMMON STOCKS--83.4%
ARGENTINA--1.2%
Quilmes Industrial Quinsasa SA ADR ............ 494,550 $ 5,903,691
-----------
BRAZIL--3.2%
Companhia Cervejaria Brahma ADR ............... 189,700 2,655,800
Embratel Participacoes SA ADR ................. 224,700 6,123,075
Souza Cruz SA ................................. 866,200 6,405,996
-----------
TOTAL BRAZIL .................................. 15,184,871
-----------
CHILE--3.1%
AFP Provida SA ADR ............................ 365,200 7,851,800
Quinenco SA ADR ............................... 428,500 4,767,062
Santa Isabel SA ADR ........................... 205,400 2,002,650
-----------
TOTAL CHILE ................................... 14,621,512
-----------
CROATIA--0.0%
Pliva d.d. GDR (c) ............................ 9,600 127,782
-----------
GREECE--1.2%
Hellenic Telecommunications
Organization SA ADR .......................... 17,500 208,906
Hellenic Telecommunications
Organization SA .............................. 237,822 5,631,671
-----------
TOTAL GREECE .................................. 5,840,577
-----------
HONG KONG--4.4%
China Telecom (Hong Kong), Ltd. ...............
ADR (a) ...................................... 73,800 9,487,912
Guangshen Railway, Ltd. ADR ................... 282,600 1,571,963
Jiangsu Expressway Company, Ltd. .............. 10,130,000 1,654,995
Shenzhen Expressway Co. ....................... 10,254,000 1,622,489
Yue Yuen Industrial Holdings .................. 2,785,300 6,628,681
-----------
TOTAL HONG KONG ............................... 20,966,040
-----------
HUNGARY--2.1%
Magyar Olaj-es Gazipari RT .................... 226,400 4,706,208
Magyar Tavkozlesi RT. ADR ..................... 150,900 5,432,400
-----------
TOTAL HUNGARY ................................. 10,138,608
-----------
INDIA--7.9%
Bharat Heavy Electricals, Ltd. (a) ............ 378,421 1,826,860
Hindalco Industries, Ltd. GDR ................. 264,800 6,156,600
Hindalco Industries, Ltd. ..................... 195,100 3,610,471
Larsen & Toubro, Ltd. ......................... 633,000 8,089,303
Mahanagar Telephone Nigam, Ltd. ...............
GDR (c) ...................................... 506,100 5,744,235
Mahanagar Telephone Nigam, Ltd. ............... 402,200 1,784,474
Reliance Industries, Ltd. ..................... 623,800 3,351,312
State Bank of India GDR (c) ................... 601,700 7,160,230
-----------
TOTAL INDIA ................................... $37,723,485
-----------
INDONESIA--2.1%
Gulf Indonesia Resources, Ltd. (a) ............ 279,500 2,270,937
PT Hanjaya Mandala Sampoerna
Tbk (a) ...................................... 1,684,000 4,283,807
PT Indah Kiat Pulp & Paper Corp. (a) .......... 9,170,000 3,608,945
-----------
TOTAL INDONESIA ............................... 10,163,689
-----------
ISRAEL--4.9%
Bank Hapoalim ................................. 1,542,300 4,803,678
ECI Telecom, Ltd. ADR ......................... 227,900 7,207,338
Partner Communications Company,
Ltd., ADR (a) ................................ 255,200 6,603,300
Supersol, Ltd. ADR ............................ 263,400 4,477,800
-----------
TOTAL ISRAEL .................................. 23,092,116
-----------
MALAYSIA--1.0%
Jaya Tiasa Holdings Berhad .................... 2,480,000 4,535,789
-----------
MEXICO--18.6%
Carso Global Telecom (a) ...................... 987,000 9,271,029
Cemex SA de CV, ADR
Warrants 12/13/02 (a) ........................ 22,074 91,055
Cemex SA de CV ADR (a) ........................ 339,180 9,454,643
Fomento Economico Mexicano SA
de CV ADR .................................... 187,600 8,348,200
Grupo Financiero Banamex Accival
SA de CV (a) ................................. 3,473,300 13,929,858
Grupo Financiero Banorte SA
de CV (a) .................................... 1,996,000 3,012,433
Grupo Industrial Maseca SA
de CV ADR .................................... 670,800 4,863,300
Grupo Iusacell SA de CV ADR (a) ............... 368,700 5,507,456
Grupo Televisa SA (a) ......................... 187,700 12,810,525
Kimberly-Clark de Mexico SA
de CV ........................................ 765,000 2,987,335
Panamerican Beverages, Inc.,
Class A ...................................... 196,600 4,042,588
Pepsi-Gemex SA de CV GDR (a) .................. 527,900 3,398,356
Telefonos de Mexico SA ADR .................... 43,800 4,927,500
Tubos de Acero de Mexico SA ADR ............... 421,400 5,715,237
-----------
TOTAL MEXICO .................................. 88,359,515
-----------
PERU--1.3%
Credicorp, Ltd. ............................... 182,600 2,191,200
Telefonica del Peru SAA ADR ................... 280,700 3,754,362
-----------
TOTAL PERU .................................... 5,945,562
-----------
PHILIPPINES--3.5%
Benpres Holdings Corp. (a) .................... 37,884,000 5,734,302
Manila Electric Co. ........................... 1,014,200 2,894,119
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
25
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EMERGING MARKETS PORTFOLIO (CONTINUED)
Philippine Long Distance Telephone
Co. ADR ............................. 308,900 $ 7,992,788
-----------
TOTAL PHILIPPINES .................... 16,621,209
-----------
POLAND--1.0%
Bank Handlowy W. Warszawie ........... 304,800 4,518,559
-----------
SOUTH AFRICA--9.2%
ABSA Group, Ltd. ..................... 1,125,023 5,044,782
Impala Platinum Holdings, Ltd. ....... 189,600 7,670,252
Liberty Life Association of Africa,
Ltd. ................................ 229,600 2,648,514
Naspers, Ltd. ........................ 468,700 4,416,669
Old Mutual PLC (a) ................... 1,893,800 5,169,804
Sanlam, Ltd. ......................... 3,567,300 4,984,367
Sasol, Ltd. .......................... 600,800 5,066,047
South African Breweries PLC (U.K.) ... 152,100 1,535,545
South African Breweries PLC .......... 702,400 7,143,824
-----------
TOTAL SOUTH AFRICA ................... 43,679,804
-----------
SOUTH KOREA--15.8%
Hanvit Bank GDR (a), (c) ............. 446,300 2,856,320
Hyundai Electronics Industries
Co. (a) ............................. 57,000 1,209,776
Kookmin Bank ......................... 407,153 6,382,495
Korea Electric Power Corp. ........... 255,800 7,929,687
Korea Telecom Corp., ADR ............. 84,936 6,348,966
Pohang Iron & Steel Company, Ltd. .... 35,800 4,177,455
Pohang Iron & Steel Company, Ltd.
ADR ................................. 65,900 2,306,500
Samsung Electronics Co. .............. 91,351 21,399,706
SK Telecom Company, Ltd. ............. 5,533 19,832,065
SK Telecom Company, Ltd. ADR ......... 77,045 2,956,603
-----------
TOTAL SOUTH KOREA .................... 75,399,573
-----------
TAIWAN--0.8%
China Steel Corp. GDR ................ 256,400 3,743,440
-----------
THAILAND--0.4%
Bangkok Expressway Public
Company, Ltd. (a) ................... 4,459,000 2,130,944
-----------
TURKEY--0.8%
Yapi ve Kredi Bankasi AS ............. 116,431,000 3,595,537
-----------
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
VENEZUELA--0.9%
Compania Anonima Nacional
Telefonos de Venezuela ADR .......... 102,800 $ 2,531,450
Mavesa SA ADR ........................ 603,300 1,847,606
-----------
TOTAL VENEZUELA ...................... 4,379,056
-----------
TOTAL COMMON STOCKS
(Identified cost $305,492,446)........ 396,671,359
-----------
PRINCIPAL
AMOUNT
(000)
-----------
CONVERTIBLE BONDS--0.1%
PHILIPPINES--0.1%
Bacnotan Consolidated Industries,
5.50%, 06/21/04 (c)
(Identified cost $1,050,775).......... $ 1,112 400,320
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-------
<S> <C> <C>
PREFERRED STOCKS--13.2%
BRAZIL--12.7%
Banco Itau SA ........................ 115,820,000 9,937,503
Cemig Cia Energetica de Minas
Gerais .............................. 204,247,516 4,579,034
Companhia Brasileira de
Distribuicao Grupo Pao
de Acucar ADR ....................... 340,000 10,986,250
Companhia Cervejaria Brahma .......... 8,091,100 5,912,124
Companhia Paranaense de
Energia-Copel ADR ................... 490,600 4,568,713
Companhia Riograndense Telecom ....... 10,617,800 3,291,430
Copel Paranqense de Energia .......... 208,499,000 2,019,780
Tele Norte Leste Participacoes
SA ADR .............................. 366,800 9,353,400
Tele Sudeste Celular Participacoes
SA ADR .............................. 176,800 6,862,050
Telesp Participacoes SA ADR .......... 138,878,543 3,267,278
----------
TOTAL BRAZIL ......................... 60,777,562
----------
COLOMBIA--0.5%
Banco Ganadero SA ADR ................ 295,300 2,325,487
----------
TOTAL PREFERRED STOCKS
(Identified cost $59,669,955)......... 63,103,049
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
26
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EMERGING MARKETS PORTFOLIO (CONTINUED)
REPURCHASE AGREEMENT--3.1%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99
collateralized by $14,830,000 United
States Treasury Note, 0.000%, 05/15/05,
with a value of $14,996,838)
(Identified cost $14,702,000)........ $14,702 $ 14,702,000
------------
TOTAL INVESTMENTS
(Identified cost $380,915,176) (b) ... 99.8% $474,876,728
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES ...................... 0.2 892,301
------- ------------
NET ASSETS ............................ 100.0% $475,769,029
======= ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
27
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO
ASSET-BACKED SECURITIES--12.7%
Citibank Credit Card Master Trust I:
Series 1999, Class A
5.50%, 02/15/06 (f) ................. $ 1,235 $1,165,531
Series 1999, Class B
5.75%, 02/15/06 ..................... 1,145 1,080,227
Series 1999, Class A
6.10%, 05/15/08 (f) ................. 2,762 2,623,348
Discover Card Master Trust I:
Series 1998, Class A
5.60%, 05/16/06 (f) ................. 1,856 1,767,840
Series 1999-2, Class A
5.90%, 10/15/04 ..................... 824 806,449
First USA Credit Card Master Trust,
Series 1997-6, Class B
6.58%, 03/17/05 (f) ................. 1,461 1,447,690
MBNA Master Credit Card Trust:
Series 1998-J, Class A
5.25%, 02/15/06 (f) ................. 1,504 1,419,866
Series 1999-I Class A
6.40%, 01/18/05 (f) ................. 1,597 1,577,533
MBNA Master Credit Card Trust II:
Series 1998-D Class A
5.80%, 12/15/05 ..................... 400 385,124
Series 1999-B, Class A
5.90%, 08/15/11 ..................... 857 780,496
UCFC Loan Trust,
Series 1997-C, Class A
8.00%, 09/15/00 (j) ................. 578 29,442
----------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $13,433,030)......... 13,083,546
----------
COLLATERALIZED MORTGAGE
OBLIGATIONS--6.4%
Asset Securitization Corp.:
Series 1996-D2, Class ACS2
1.487%, 02/28/26 (e), (j) ........... 2,125 155,059
Series 1996-MD6, Class A1B
6.88%, 11/13/29 ..................... 248 244,362
Series 1996-D3, Class A1A
7.01%, 10/13/26 ..................... 57 57,709
Series 1996-D3, Class A1B
7.21%, 10/31/26 ..................... 375 371,542
Bear Stearns Commercial
Mortgage Securities, Inc.,
Series 1999-WF2, Class A2
7.08%, 07/15/31 ..................... 408 398,209
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Corp.
REMIC:
Series 1697, Class D
6.00%, 03/15/09 ..................... $ 359 $ 340,712
Series 1513 Class L
6.50%, 07/15/07 ..................... 230 227,339
Series 2100, Class GB
7.00%, 04/15/12 ..................... 810 811,264
Federal National Mortgage
Association REMIC,
Series 1993-134, Class K
6.50%, 05/25/08 ..................... 244 241,790
First Union-Lehman Brothers-Bank
of America
Series 1998-C2, Class A2
6.56%, 11/18/08 ..................... 338 319,696
G3 Mortgage Reinsurance, Ltd.,
8.44375%, 05/25/08 (c), (e) ......... 300 276,047
Headlands Mortgage Securities, Inc.:
Series 1997-1, Class X1
0.687%, 03/25/27 (e), (j) ........... 3,013 38,728
Series 1997-4, Class X
1.12%, 11/25/27 (e), (j) ............ 1,714 37,016
Merrill Lynch Mortgage
Investments, Inc.:
Series 1996-C1, Class IO
0.58%, 04/25/28 (c), (e), (j) ....... 4,184 94,162
Series 1998-C3, Class A1
5.65%, 12/15/30 ..................... 938 884,641
Midland Realty Acceptance Corp.,
Series 1996-C1, Class A2
7.475%, 12/25/05 .................... 344 345,940
Morgan Stanley Capital One, Inc.:
Series 1998-HF1, Class X
1.156%, 02/15/18 (e), (j) ........... 4,254 229,361
Series 1997-C1, Class IO2
1.982%, 02/15/20 (e), (j) ........... 113 566
Series 1999-WF1, Class A2
6.21%, 09/15/08 ..................... 230 211,800
Nationslink Funding Corp.,
Series 1998-2, Class A2
6.476%, 07/20/08 (f) ................ 1,072 1,005,633
Prudential Home Mortgage Security,
Series 1993-41, Class A5
0.92%, 10/25/00 (j) ................. 9,086 32,074
Structured Asset Securitization Corp.:
Series 1996-CFL, Class X2
1.097%, 02/25/28 (e), (j) ........... 885 17,993
Series 1996-CFL, Class X1
1.586%, 02/25/28 (e), (j) ........... 1,453 74,966
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
28
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
United States Department of
Veteran Affairs REMIC,
Series 1999-1, Class IO
0.175%, 01/15/29 (e), (j) ........... $ 20,821 $ 178,931
---------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Identified cost $7,186,185).......... 6,595,540
---------
CORPORATE BONDS--20.7%
AUTOMOTIVE--0.1%
Budget Group, Inc.,
9.125%, 04/01/06 .................... 145 134,850
---------
BANKING & FINANCIAL SERVICES--4.7%
American Financial Group,
7.125%, 04/15/09 .................... 812 727,325
ASAT Finance LLC,
12.50%, 11/01/06 (c) ................ 125 134,375
AT&T Capital Corp.,
6.60%, 05/15/05 (f) ................. 1,144 1,100,162
Capital One Bank,
6.70%, 05/15/08 ..................... 416 380,486
First USA Trust,
6.50%, 01/18/06 (c) ................. 400 386,124
Lehman Brothers Holdings, Inc.,
6.625%, 04/01/04 .................... 765 740,550
MBNA America Bank NA,
6.75%, 03/15/08 ..................... 429 392,475
RBF Finance Co.:
11.00%, 03/15/06 .................... 120 127,800
11.375%, 03/15/09 ................... 10 10,700
Transdigm, Inc.,
10.375%, 12/01/08 ................... 175 157,500
U.S. Bancorp,
7.50%, 06/01/26 ..................... 728 728,422
---------
4,885,919
---------
BREWERY--0.8%
Anheuser Busch Companies, Inc.,
7.10%, 06/15/07 ..................... 799 781,174
---------
BROADCASTING--0.2% WRC Media Corp.,
12.75%, 11/15/09 (c) ................ 175 173,688
---------
BUILDING & CONSTRUCTION--0.4%
Building One Services Corp.,
10.50%, 05/01/09 .................... 175 168,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Penhall International,
12.00%, 08/01/06 .................... $ 275 $ 279,125
---------
447,125
---------
CABLE T.V. OPERATOR--2.2%
Adelphia Communications Corp.,
9.375%, 11/15/09 .................... 155 151,900
Charter Communications Holdings
LLC, 8.625%, 04/01/09 ............... 235 217,081
Coaxial Communications Central
Ohio LLC,
10.00%, 08/15/06 .................... 130 127,400
Cox Communications, Inc.,
6.15%, 08/01/03 (f) ................. 1,198 1,153,245
TCI Communications, Inc.,
6.875%, 02/15/06 (f) ................ 673 652,958
---------
2,302,584
---------
CHEMICALS--0.3% ARCO Chemical Co.,
9.80%, 02/01/20 ..................... 180 180,054
Geo Specialty Chemicals, Inc.,
10.125%, 08/01/08 ................... 170 156,400
---------
336,454
---------
COMMERCIAL SERVICES--0.1%
IT Group, Inc.,
11.25%, 04/01/09 .................... 140 135,800
---------
CONTAINERS--0.1%
Amtrol, Inc.,
10.625%, 12/31/06 ................... 82 80,668
---------
ENERGY--1.4%
Dynegy, Inc.,
7.45%, 07/15/06 (f) ................. 982 960,660
Midamerican Energy Co.,
6.375%, 06/15/06 .................... 454 425,071
---------
1,385,731
---------
ENTERTAINMENT--0.3%
Production Resource Group, LLC,
11.50%, 01/15/08 .................... 65 57,850
Station Casinos, Inc.,
10.125%, 03/15/06 ................... 225 229,500
---------
287,350
---------
EQUIPMENT RENTAL--0.3%
United Rentals, Inc.,
9.25%, 01/15/09 ..................... 350 336,875
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
29
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
FOOD & BEVERAGES--0.2%
Advantica Restaurant Group, Inc.,
11.25%, 01/15/08 .................... $ 70 $ 52,850
Agrilink Foods, Inc.,
11.875%, 11/01/08 ................... 120 120,600
----------
173,450
----------
HEALTHCARE--0.6%
Dade International, Inc.,
11.125%, 05/01/06 ................... 85 83,300
Dynacare, Inc.,
10.75%, 01/15/06 .................... 230 223,100
Tenet Healthcare Corp.,
8.625%, 01/15/07 .................... 340 328,950
----------
635,350
----------
HOTELS & RESTAURANTS--0.3%
American Restaurant Group, Inc.,
11.50%, 02/15/03 .................... 125 96,250
Courtyard by Marriott II Ltd., Series B
10.75%, 02/01/08 .................... 200 196,500
----------
292,750
----------
INDUSTRIAL--0.8%
Amatek Industries Pty, Ltd.,
12.00%, 02/15/08 .................... 190 180,500
J.H. Heafner, Inc.,
10.00%, 05/15/08 .................... 170 153,850
Merrill Corp.,
12.00%, 05/01/09 (c) ................ 165 160,875
North American Van Lines, Inc.,
13.375%, 12/01/09 (c) ............... 220 220,000
URS Corp.,
12.25%, 05/01/09 .................... 145 148,625
----------
863,850
----------
INDUSTRIAL & MACHINERY--0.0%
High Voltage Engineering Corp.,
10.50%, 08/15/04 .................... 44 37,620
----------
INTERNET SERVICES--0.6%
Exodus Communications, Inc.,
11.25%, 07/01/08 .................... 110 113,575
PSI Net, Inc.:
10.50%, 12/01/06 (c) ................ 30 30,225
11.00%, 08/01/09 ..................... 145 149,350
Rhythms Net Connections, Inc.,
12.75%, 04/15/09 .................... 140 135,450
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Verio, Inc.:
10.625%, 11/15/09 (c) ............... $ 5 $ 5,125
11.25%, 12/01/08 ..................... 125 131,250
----------
564,975
----------
MANUFACTURING--0.1% ChipPAC International Ltd.,
12.75%, 08/01/09 (c) ................ 130 134,875
----------
OIL & GAS--1.6%
Cheasapeake Energy Corp., Series B
9.625%, 05/01/05 .................... 90 85,500
Comstock Resources, Inc.,
11.25%, 05/01/07 .................... 115 117,587
Frontier Oil Corp.,
11.75%, 11/15/09 .................... 45 44,325
Plains Resources, Inc.,
10.25%, 03/15/06 (c) ................ 140 135,800
Texaco Capital, Inc.,
6.00%, 06/15/05 ..................... 776 724,179
USX- Marathon Group,
6.65%, 02/01/06 ..................... 570 539,450
----------
1,646,841
----------
RETAIL--0.6% Buhrmann US, Inc.,
12.25%, 11/01/09 (c) ................ 165 171,394
Frank's Nursery & Crafts, Inc.,
10.25%, 03/01/08 .................... 85 57,800
Home Interiors & Gifts, Inc.,
10.125%, 06/01/08 ................... 250 212,500
Petro Stopping Centers,
10.50%, 02/01/07 .................... 120 111,300
Rent-A-Center, Inc.,
11.00%, 08/15/08 .................... 100 102,750
----------
655,744
----------
TELECOMMUNICATIONS--2.8%
GTE Corp.,
9.10%, 06/01/03 ..................... 395 416,670
IPC Information Systems, Inc.,
0.00%, 05/01/08 (e) ................. 120 91,200
ITC Deltacom, Inc.,
11.00%, 06/01/07 .................... 290 304,500
Level 3 Communications, Inc,
9.125%, 05/01/08 .................... 185 174,825
LodgeNet Entertainment Corp.,
10.25%, 12/15/06 .................... 245 247,144
Metromedia Fiber Network, Inc.,
10.00%, 11/15/08 .................... 55 56,237
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
30
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
NEXTLINK Communications, Inc.,
10.75%, 06/01/09 .................... $ 210 $ 216,825
RSL Communications PLC,
10.50%, 11/15/08 .................... 200 188,000
US West Communications, Inc.,
5.625%, 11/15/08 .................... 836 727,283
Viatel, Inc.,
11.25%, 04/15/08 .................... 95 94,525
Williams Communications Group,
Inc., 10.875%, 10/01/09 ............. 175 183,094
Worldwide Fiber, Inc.,
12.00%, 08/01/09 (c) ................ 200 208,000
------------
2,908,303
------------
TRANSPORTATION--0.5%
Atlas Air, Inc.,
9.25%, 04/15/08 ..................... 225 214,875
Interpool, Inc.,
6.625%, 03/01/03 .................... 70 62,703
Rail Works Corp.,
11.50%, 04/15/09 .................... 205 207,563
------------
485,141
------------
UTILITIES--1.5%
Texas Utilities Co., Series B
6.375%, 10/01/04 (f) ................ 821 781,239
Western Resources, Inc.,
7.125%, 08/01/09 .................... 850 749,623
------------
1,530,862
------------
WASTE MANAGEMENT--0.2%
Allied Waste North America, Inc.,
10.00%, 08/01/09 (c) ................ 195 174,038
------------
TOTAL CORPORATE BONDS
(Identified cost $22,458,498)......... 21,392,017
------------
COMMERCIAL PAPER--16.4%
American Express Credit Corp.,
5.92%, 01/19/00 ..................... 2,132 2,125,689
Ford Motor Credit Co.,
5.93%, 01/19/00 ..................... 3,348 3,338,073
General Electric Capital Corp.,
5.95%, 01/19/00 ..................... 3,348 3,338,040
General Motors Acceptance Corp.,
5.95%, 01/19/00 ..................... 3,348 3,338,040
Household Finance Corp.,
6.00%, 01/19/00 ..................... 1,396 1,391,812
Morgan Stanley Dean Witter & Co.,
5.95%, 01/24/00 ..................... 3,348 3,335,273
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
TOTAL COMMERCIAL PAPER
(Identified cost $16,866,927)........ $ 16,866,927
------------
MUNICIPALS--2.3%
Harlingen Texas Consolidated
Independent School District,
5.50%, 08/15/26 ..................... $ 1,080 988,524
Massachusetts State Water Pollution
Revenue Bond,
5.375%, 08/01/27 (f) ................ 1,575 1,422,823
------------
TOTAL MUNICIPALS
(Identified cost $2,480,343)......... 2,411,347
------------
MORTGAGE PASS-THROUGH SECURITIES--36.7%
Federal Home Loan Mortgage Corp.:
6.00%, 07/01/29 ..................... 259 237,958
6.00%, 09/01/29 ..................... 277 253,565
6.50%, 07/01/29 ..................... 367 346,045
6.50%, TBA .......................... 11,650 11,300,500
6.937%, 09/01/26 (e) ................ 43 43,938
7.00%, 08/01/28 ..................... 121 117,203
7.50%, TBA .......................... 15,203 15,043,977
8.00%, 06/01/12 ..................... 780 786,108
8.00%, 07/01/12 ..................... 2,389 2,428,005
8.00%, TBA .......................... 2,377 2,392,593
Federal National Mortgage
Association:
6.565%, 06/01/25 (e) ................ 77 79,360
6.995%, 07/01/25 (e) ................ 106 109,228
7.00%, 09/01/29 ..................... 134 129,897
7.50%, 01/01/14 ..................... 800 805,861
8.00%, 12/01/09 ..................... 224 227,623
8.00%, 06/01/12 ..................... 194 197,225
8.00%, 07/01/12 ..................... 460 467,707
8.00%, 12/01/12 ..................... 318 323,527
Government National Mortgage
Association:
6.125%, 10/20/27 .................... 582 590,294
6.375%, 06/20/28 .................... 934 944,210
6.50%, 04/15/28 ..................... 61 57,250
6.75%, 07/20/27 ..................... 135 136,408
7.00%, 04/15/28 ..................... 724 702,422
Morgan Stanley Capital One, Inc.,
Series 1996-WF1, Class X
1.513%, 11/15/28 (c), (e), (j) ...... 2,616 140,644
------------
TOTAL MORTGAGE PASS-THROUGH
SECURITIES
(Identified cost $37,994,588)......... 37,861,548
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
31
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
DISCOUNT NOTES--0.5%
Federal National Mortgage
Association:
5.47%, 01/19/00 ..................... $ 456 $ 454,753
5.68%, 01/24/00 ..................... 25 24,909
------------
TOTAL DISCOUNT NOTES
(Identified cost $479,662)........... 479,662
------------
U.S. GOVERNMENT OBLIGATIONS--19.6%
United States Treasury Notes:
3.625%, 07/15/02 .................... 1,937 1,918,188
5.75%, 11/15/00 ..................... 63 62,803
6.25%, 04/30/01 ..................... 16,980 16,993,244
7.50%, 05/15/02 ..................... 700 718,592
United States Treasury STRIPS:
0.00%, 11/15/04 ..................... 165 120,303
0.00%, 02/15/07 ..................... 400 250,160
0.00%, 05/15/18 ..................... 500 144,490
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Identified cost $20,312,664)........ 20,207,780
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--12.1%
State Street Bank and Trust
Company, 3.00%, 01/03/00, (Dated
12/31/99, collateralized by
$12,595,000 United States Treasury
Note, 5.250%, 01/31/01, with a value
of $12,752,438) (Identified cost
$12,502,000) (f) ..................... $ 12,502 $ 12,502,000
------------
TOTAL INVESTMENTS
(Identified cost $133,713,897) (b) ... 127.4% $131,400,367
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS ........................ (27.4) (28,238,289)
--------- ------------
NET ASSETS ............................ 100.0% $103,162,078
========= ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
32
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO
CORPORATE BONDS--91.1%
AEROSPACE & DEFENSE--1.9%
Sabreliner Corp.,
11.00%, 06/15/08 (c) ................ $ 520 $ 412,100
TransDigm, Inc.,
10.375%, 12/01/08 ................... 1,350 1,215,000
-----------
1,627,100
-----------
AUTOMOTIVE--1.4%
Budget Group, Inc.,
9.125%, 04/01/06 .................... 1,285 1,195,050
-----------
BROADCASTING--1.0%
Paxson Communications Corp.,
11.625%, 10/01/02 ................... 310 320,075
Radio Unica Corp.,
0.00%, 08/01/06 (e) ................. 800 522,000
-----------
842,075
-----------
BUILDING & CONSTRUCTION--2.7%
Amatek Industries Pty Ltd.,
12.00%, 02/15/08 .................... 1,515 1,439,250
Building One Services Corp.,
10.50%, 05/01/09 .................... 875 840,000
-----------
2,279,250
-----------
CABLE T.V. OPERATOR--2.9%
Adelphia Communications Corp.,
9.375%, 11/15/09 .................... 890 872,200
Charter Communications
Holdings LLC,
0.00%, 04/01/11 (e) ................. 700 428,750
Coaxial Communications Central
Ohio LLC,
10.00%, 08/15/06 .................... 317 310,660
Ono Finance PLC,
13.00%, 05/01/09 .................... 810 826,200
-----------
2,437,810
-----------
CHEMICALS--3.7%
Geo Specialty Chemicals, Inc.,
10.125%, 08/01/08 ................... 1,325 1,219,000
Huntsman ICI Chemicals,
0.00%, 12/31/09 (c) ................. 1,200 355,500
Lyondell Chemical Co.,
10.875%, 05/01/09 ................... 1,490 1,534,700
-----------
3,109,200
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL SERVICES--2.8%
IT Group, Inc., Series B
11.25%, 04/01/09 .................... $ 1,110 $ 1,076,700
RailWorks Corp.,
11.50%, 04/15/09 .................... 1,250 1,265,625
-----------
2,342,325
-----------
COMPUTER SERVICES--2.7%
Concentric Network Corp.,
12.75%, 12/15/07 .................... 275 289,438
Globix Corp.,
13.00%, 05/01/05 .................... 970 979,700
Rhythms NetConnections, Inc.,
12.75%, 04/15/09 .................... 1,095 1,059,412
-----------
2,328,550
-----------
CONTAINERS--1.2%
Amtrol, Inc.,
10.625%, 12/31/06 ................... 1,000 983,750
-----------
ENTERTAINMENT--3.6%
Marvel Enterprises, Inc.,
12.00%, 06/15/09 .................... 1,160 1,067,200
Penn National Gaming, Inc.,
10.625%, 12/15/04 ................... 900 927,000
Production Resource Group LLC,
11.50%, 01/15/08 .................... 1,250 1,112,500
-----------
3,106,700
-----------
EQUIPMENT RENTAL--2.3% Neff Corp.,
10.25%, 06/01/08 .................... 660 633,600
Penhall International,
12.00%, 08/01/06 .................... 765 776,475
United Rentals, Inc., Series B
9.25%, 01/15/09 ..................... 550 529,375
-----------
1,939,450
-----------
FIBER OBTICS--1.3%
Metromedia Fiber Network, Inc.:
Series B, 10.00%, 11/15/08 .......... 405 414,113
10.00%, 12/15/09 .................... 650 666,250
-----------
1,080,363
-----------
FOOD & BEVERAGES--2.6%
Advantica Restaurant Group, Inc.,
11.25%, 01/15/08 .................... 600 453,000
Agrilink Foods, Inc.,
11.875%, 11/01/08 ................... 1,140 1,145,700
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
33
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO (CONTINUED)
American Restaurant Group, Inc.,
Series B
11.50%, 02/15/03 .................... $ 747 $ 575,190
---------
2,173,890
---------
HEALTHCARE--3.2%
Dade International Inc.,
11.125%, 05/01/06 ................... 575 563,500
Dynacare, Inc.,
10.75%, 01/15/06 .................... 325 315,250
Unilab Corp.,
12.75%, 10/01/09 (c) ................ 800 828,000
Weight Watchers International, Inc.,
13.00%, 10/01/09 (c) ................ 990 1,001,137
---------
2,707,887
---------
INDUSTRIAL--4.0%
Dictaphone Corp.,
11.75%, 08/01/05 .................... 1,460 1,080,400
Interpool Capital Trust, Series B
9.875%, 02/15/27 .................... 1,245 985,841
URS Corp., Series B
12.25%, 05/01/09 .................... 1,270 1,301,750
---------
3,367,991
---------
INTERNET SERVICES--3.5%
Exodus Communications, Inc.:
10.75%, 12/15/09 (c) ................ 260 264,550
11.25%, 07/01/08 .................... 225 232,313
PSI Net, Inc.:
10.50%, 12/01/06 (c) ................ 895 901,712
11.00%, 08/01/09 .................... 525 540,750
Verio, Inc.:
10.625%, 11/15/09 (c) ............... 435 445,875
11.25%, 12/01/08 .................... 560 588,000
---------
2,973,200
---------
LODGING--1.2%
Lodgian Financing Corp., Series B
12.25%, 07/15/09 (c) ................ 1,075 1,064,250
---------
LODGING & ENTERTAINMENT--0.5%
Courtyard by Marriott II, Ltd.,
10.75%, 02/01/08 .................... 400 393,000
---------
MANUFACTURING--5.9%
ASAT Finance LLC,
12.50%, 11/01/06 (c) ................ 1,080 1,161,000
ChipPAC International Ltd.,
12.75%, 08/01/09 (c) ................ 940 975,250
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Foamex L.P.,
9.875%, 06/15/07 .................... $ 525 $ 435,750
High Voltage Engineering Corp.,
10.50%, 08/15/04 .................... 890 760,950
Holley Performance Products, Inc.,
12.25%, 09/15/07 (c) ................ 1,000 955,000
Precision Partners, Inc.,
12.00%, 03/15/09 (c) ................ 1,000 750,000
---------
5,037,950
---------
OIL & GAS--4.7%
Chesapeake Energy Corp., Series B
9.625%, 05/01/05 .................... 1,000 950,000
Comstock Resources, Inc.,
11.25%, 05/01/07 .................... 1,095 1,119,637
Frontier Oil Corp.,
11.75%, 11/15/09 .................... 320 315,200
Plains Resources, Inc.,
10.25%, 03/15/06 (c) ................ 1,070 1,037,900
RBF Finance Co.:
11.00%, 03/15/06 .................... 115 122,475
11.375%, 03/15/09 ................... 440 470,800
---------
4,016,012
---------
PRINTING--2.5%
Merrill Corp.,
12.00%, 05/01/09 (c) ................ 1,270 1,238,250
Phoenix Color Corp.,
10.375%, 02/01/09 ................... 900 864,000
---------
2,102,250
---------
PUBLISHING--2.6% T/SF Communications Corp.,
Series B,
10.375%, 11/01/07 ................... 995 955,200
WRC Media Inc.,
12.75%, 11/15/09 (c) ................ 1,300 1,290,250
---------
2,245,450
---------
RETAIL--4.0%
Frank's Nursery & Crafts, Inc.,
10.25%, 03/01/08 .................... 1,000 680,000
Home Interiors & Gifts, Inc., Series B,
10.125%, 06/01/08 ................... 710 603,500
Pathmark Stores, Inc.,
10.75%, 11/01/03 (e) ................ 490 49,000
Petro Stopping Centers,
10.50%, 02/01/07 .................... 1,060 983,150
Rent-A-Center, Inc.,
11.00%, 08/15/08 .................... 1,050 1,078,875
---------
3,394,525
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
34
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO (CONTINUED)
SECURITY--0.8%
Loomis Fargo & Co.,
10.00%, 01/15/04 .................... $ 734 $ 726,660
----------
TELECOMMUNICATIONS--21.6%
AirGate PCS, Inc.,
0.00%, 10/01/09 (e) ................. 875 485,625
AMSC Acquisition, Inc.,
12.25%, 04/01/08 .................... 1,020 796,875
Dolphin Telecom PLC, Series B,
0.00%, 05/15/09 (e) ................. 1,000 468,750
Hyperion Telecommunications, Inc.,
12.00%, 11/01/07 .................... 1,015 1,080,975
IPC Information Systems, Inc.,
0.00%, 05/01/08 (e) ................. 930 706,800
ITC DeltaCom, Inc.,
11.00%, 06/01/07 .................... 1,080 1,134,000
Jazztel PLC,
14.00%, 04/01/09 .................... 1,490 1,530,975
Level 3 Communications, Inc.,
9.125%, 05/01/08 .................... 952 899,640
LodgeNet Entertainment Corp.,
10.25%, 12/15/06 .................... 1,000 1,008,750
Nextel Communications, Inc.,
12.00%, 11/01/08 .................... 500 560,000
NEXTLINK Communications, Inc.,
10.75%, 06/01/09 .................... 1,575 1,626,187
RSL Communications PLC,
10.50%, 11/15/08 .................... 1,075 1,010,500
Teligent, Inc., Series B
0.00%, 03/01/08 (e) ................. 805 474,950
United Pan-Europe
Communications N.V.,
10.875%, 11/01/07 (c) ............... 600 613,500
US Unwired, Inc.,
0.00%, 11/01/09 (c), (e) ............ 1,630 953,550
Versatel Telecom International N.V.,
11.875%, 07/15/09 ................... 1,000 1,015,000
Viatel, Inc.:
0.00%, 04/15/08 (e) ................. 595 371,875
11.25%, 04/15/08 .................... 850 845,750
Williams Communications Group,
Inc.:
10.70%, 10/01/07 .................... 800 840,000
10.875%, 10/01/09 ................... 430 449,888
Worldwide Fiber, Inc.,
12.00%, 08/01/09 (c) ................ 1,425 1,482,000
----------
18,355,590
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION & FREIGHT SERVICES--2.4%
Atlas Air, Inc.,
9.25%, 04/15/08 ..................... $ 400 $ 382,000
North American Van Lines, Inc.,
13.375%, 12/01/09 (c) ............... 1,690 1,690,000
----------
2,072,000
----------
WASTE MANAGEMENT--1.2%
Allied Waste Industries, Inc.,
10.00%, 08/01/09 (c) ................ 1,125 1,004,063
----------
WHOLESALE/DISTRIBUTION--2.9%
Buhrmann US, Inc.,
12.25%, 11/01/09 (c) ................ 1,250 1,298,438
J.H. Heafner, Inc., Series D,
10.00%, 05/15/08 .................... 650 588,250
Pentacon, Inc.,
12.25%, 04/01/09 .................... 650 585,000
----------
2,471,688
----------
TOTAL CORPORATE BONDS
(Identified cost $78,998,072)........ 77,378,029
----------
CONVERTIBLE BONDS--0.4%
MANUFACTURING--0.4%
Exide Corp.,
2.90%, 12/15/05 (c)
(Identified cost $398,833)........... 640 336,000
----------
SHARES
----------
PREFERRED STOCKS--5.5%
Adelphia Communications Corp. ........ 4,733 539,562
AirGate PCS, Inc.,
10/01/09 warrants ................... 1,350 118,125
American Mobile Satellite Corp.,
04/01/08 warrants (c) ............... 845 33,800
American Restaurant Group, Inc.,
08/15/08 warrants ................... 220 2
American Restaurant Group, Inc. ...... 260 208,000
Globe Holdings, Inc.,
08/01/09 warrants ................... 300 3
Granite Broadcasting Corp. ........... 700 714,000
Harborside Healthcare Corp. .......... 352 96,800
High Voltage Engineering Corp. ....... 298 244,881
Nextel Communications, Inc. .......... 1,065 1,139,550
Ono Finance PLC (c) .................. 500 55,000
Paxson Communications Corp. .......... 73 746,425
R&B Falcon Corp. ..................... 670 706,850
Supermarkets General Holdings Corp.... 6,750 25,313
----------
TOTAL PREFERRED STOCKS
(Identified cost $4,935,065)......... 4,628,311
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
35
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO (CONTINUED)
REPURCHASE AGREEMENT--0.9%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $830,000 United States
Treasury Note, 5.500%, 03/31/03, with
a value of $822,738)
(Identified cost $804,000)........... $ 804 $ 804,000
-----------
TOTAL INVESTMENTS
(Identified cost $85,135,970) (b) ... 97.9% $83,146,340
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES ...................... 2.1 1,823,430
------ -----------
NET ASSETS ............................ 100.0% $84,969,770
====== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO
CURRENCY DENOMINATED BONDS--89.5%
ARGENTINA--0.1%
Republic of Argentina,
1.00%, 04/01/01 (e) ................. 190 $ 76,771
---------
AUSTRALIA--0.6%
Commonwealth of Australia,
8.75%, 08/15/08 ..................... 600 440,093
---------
AUSTRIA--1.4%
Republic of Austria:
4.50%, 09/28/05 JPY 80,000 929,784
6.25%, 10/16/03 JPY 15,000 177,381
---------
TOTAL AUSTRIA ........................ 1,107,165
---------
BULGARIA--0.1%
Republic of Bulgaria,
1.00%, 07/28/24 USD 55 44,071
---------
CANADA--1.3%
Argos Funding Trust,
5.963%, 02/27/06 .................... 250 168,687
Molson Breweries Company, Ltd.,
6.00%, 06/02/08 (c), (f) ............ 800 523,251
Quebec Housing,
8.95%, 05/13/13 ..................... 402 328,417
---------
TOTAL CANADA ......................... 1,020,355
---------
DENMARK--7.7%
Kingdom of Denmark:
5.00%, 08/15/05 ..................... 11,305 1,506,436
8.00%, 03/15/06 (f) ................. 5,964 912,248
Nykredit,
6.00%, 10/01/29 ..................... 8,136 1,024,584
Unikredit Realkredit,
7.00%, 10/01/29 (f) ................. 19,051 2,543,004
---------
TOTAL DENMARK ........................ 5,986,272
---------
FRANCE--4.6%
Citibank,
5.125%, 01/16/09 EUR 6,600 958,287
Government of France,
0.00%, 04/25/23 (f) EUR 10,622 2,633,287
---------
TOTAL FRANCE ......................... 3,591,574
---------
GERMANY--5.5%
Autobahn Tank & Rast,
6.00%, 10/16/00 ....EUR 425 220,866
Bundesrepublik Deutschland,
0.00%, 01/04/24 (f) ....EUR 2,225 526,232
</TABLE>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
Core Dem, 6.21%,
07/05/15 ....EUR 400 $ 204,083
DePfa Pfandbriefbank AG,
5.50%, 01/15/10 ....EUR 270 266,409
Downey Savings & Loan,
7.25%, 08/07/07 (f) ................. 630 1,054,659
Frank Hypobank,
6.375%, 02/04/08 .................... 365 580,859
Land Hessen,
6.00%, 11/29/13 ....EUR 511 532,851
Landwirtschaftliche Rentenbank,
6.375%, 03/09/05 .................... 494 778,265
LBK Hess Thur Giro,
9.00%, 09/06/04 ....EUR 60 103,174
---------
TOTAL GERMANY ........................ 4,267,398
---------
GREECE--0.7%
Republic of Greece:
6.50%, 01/11/14 ..................... 26,500 80,099
8.90%, 04/01/03 ..................... 36,500 118,956
Republic of Hellenic:
10.80%, 06/30/00 .................... 30,000 92,463
13.00%, 08/14/03 (e) ................ 85,000 266,257
---------
TOTAL GREECE ......................... 557,775
---------
HUNGARY--0.1%
Republic of Hungary,
13.50%, 11/24/01 .................... 19,100 76,851
---------
IRELAND--1.6%
Esat Telecom Group PLC:
11.875%, 12/01/08 ... USD 355 395,825
11.875%, 11/01/09 ... EUR 60 68,576
Helaba Finance BV,
7.375%, 12/30/02 ....GBP 229 372,493
Republic of Ireland,
8.00%, 08/18/06 ... EUR 374 436,942
---------
TOTAL IRELAND......................... 1,273,836
---------
ITALY--1.3%
Films PLC,
3.69813%, 03/31/05 (e) ... EUR 1,600,000 774,136
Societa Sportiva Lazio SpA,
4.553%, 10/15/07 (e) ................ 419,058 211,474
---------
TOTAL ITALY .......................... 985,610
---------
JAPAN--21.8%
European Investment Bank,
3.00%, 09/20/06 (f) ................. 510,000 5,563,228
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
37
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
Export-Import Bank of Japan,
4.375%, 10/01/03 (f) ................ 234,000 $2,602,812
International Bank for
Reconstruction and Development:
2.00%, 02/18/08 (f) ................. 135,000 1,379,003
4.75%, 12/20/04 (f) ................. 486,000 5,648,674
Nippon Credit Bank, Ltd.,
1.80%, 07/27/00 ..................... 60,000 590,428
Spires Ltd.,
2.48%, 01/23/02 ..................... 117,989 1,183,701
----------
TOTAL JAPAN .......................... 16,967,846
----------
LUXEMBOURG--0.1%
PTC International Finance II SA,
11.25%, 12/01/09 ... EUR 50 51,879
----------
MEXICO--0.3%
United Mexican States:
01/01/03 rights USD 769 0
6.942%, 01/31/19 (e), (f) ... USD 250 234,075
----------
TOTAL MEXICO ......................... 234,075
----------
MOROCCO--0.0%
Morocco Restructuring & Consolidation
Agreement, 5.90%, 01/01/09 (e)..... USD 381 345
----------
NETHERLANDS--2.6%
Hermes Europe Railtel BV,
10.375%, 01/15/06 ... EUR 25 25,055
Kappa Beheer BV,
10.625%, 07/15/09 (c) ... EUR 135 143,472
Netia Holdings II BV,
13.50%, 06/15/09 ....EUR 10 10,363
Pannon Finance BV,
7.75%, 08/03/04 (c) ....EUR 75 76,307
Tele1 Europe BV:
05/15/09 warrants (c) ....EUR 100 17,125
11.875%, 12/01/09 ....EUR 215 218,746
13.00%, 05/15/09 ....EUR 100 105,771
United Pan-Europe
Communications NV,
10.875%, 11/01/07 (c) ....EUR 300 311,271
Versatel Telecom International NV,
11.875%, 07/15/09 ....EUR 155 164,727
West LB Finance Curacao NV,
8.125%, 01/24/07 ....GBP 310 528,811
Wolters Kluwer NV,
5.50%, 09/22/06 ....EUR 420 415,767
----------
TOTAL NETHERLANDS ...................... 2,017,415
----------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
PANAMA--0.0%
Republic of Panama,
4.25%, 07/17/14 ....USD 25 $ 19,562
----------
PERU--0.1%
Republic of Peru,
1.00%, 03/08/27 ....USD 79 58,065
----------
SOUTH AFRICA--0.5% Government of Namibia:
12.00%, 04/15/02 ...................... 210 32,996
12.00%, 04/15/05 ...................... 210 30,680
Lesotho Highlands Water,
13.00%, 09/15/10 ...................... 710 107,775
South African Roads,
11.50%, 09/30/05 ...................... 500 74,091
Trans Caledon Tunnel,
12.00%, 12/01/05 ...................... 740 111,765
----------
TOTAL SOUTH AFRICA ..................... 357,307
----------
SPAIN--0.6%
Catalunya Generalitat,
9.30%, 11/24/03 ....EUR 402 470,540
----------
SWEDEN--3.4%
AB Spintab,
7.50%, 06/15/04 ....................... 11,100 1,374,944
Stadshypotek AB,
3.50%, 09/15/04 ....................... 12,000 1,269,103
----------
TOTAL SWEDEN ........................... 2,644,047
----------
TURKEY--0.5%
Rabobank TRL Weekly Request 2,
1.00%, 12/18/00 .......................216,988 406,293
----------
UNITED KINGDOM--8.8%
Birmingham Midshires
Building Society,
9.125%, 01/05/06 ...................... 300 526,628
Coca Cola Enterprises PLC,
6.75%, 03/12/08 ....................... 158 251,989
Colt Telecom Group PLC:
7.625%, 12/15/09 (c) ....EUR 215 215,497
8.875%, 11/30/07 ....EUR 500 269,741
Energis PLC,
9.50%, 06/15/09 ....................... 250 428,054
Hurst Group PLC,
11.125%, 08/06/08 (c) ................. 130 209,989
Imperial Tobacco Finance PLC,
6.375%, 09/27/06 ....EUR 410 407,685
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
38
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
Jazztel PLC,
13.25%, 12/15/09 (c) .....EUR 265 $ 268,282
Landesbank Schleswig-Holstein,
8.00%, 12/28/06 ..................... 422 713,013
Luxfer Holdings PLC,
10.125%, 05/01/09 ................... 55 85,066
Merrill Lynch & Company, Inc.,
7.375%, 12/17/07 .................... 192 314,976
Ono Finance PLC,
13.00%, 05/01/09 .....EUR 595 629,342
Polestar Corp.,
10.50%, 05/30/08 .................... 45 69,607
TeleWest Communications PLC,
9.875%, 04/15/09 (c) ................ 85 87,186
TM Group Holdings PLC,
12.25%, 05/15/08 .................... 55 88,218
United Kingdom Treasury Bonds,
7.25%, 12/07/07 ..................... 1,100 1,938,522
West Coast Train Finance,
6.00%, 03/31/15 (f) ................. 230 335,853
----------
TOTAL UNITED KINGDOM ................. 6,839,648
----------
UNITED STATES--25.8%
Airtouch Communications, Inc.,
5.50%, 07/24/08 ....DEM 1,200 588,176
Cellco Finance NV:
12.75%, 08/01/05 (c) ................ 100 103,625
15.00%, 08/01/05 .................... 50 54,375
Chase Credit Card Master Trust,
5.00%, 08/15/08 ....DEM 1,800 865,994
Citibank ARS Linked Deposit,
10.75%, 02/16/00 .................... 132 132,607
Citibank CRC Linked Deposit:
0.00%, 01/26/00 ..................... 25 25,420
0.00%, 02/10/00 ..................... 110 111,716
Citibank CRC Linked Note,
15.875%, 03/20/00 ................... 20 20,060
Citibank Credit Card Master Trust,
5.75%, 07/16/07 (f) ....DEM 2,250 1,155,907
Citibank MXN Linked Deposit,
0.00%, 12/03/01 ..................... 85 86,037
Citibank SVC Time Deposit,
0.00%, 02/22/00 ..................... 170 171,904
Citibank Time Deposit,
0.00%, 01/18/00 ..................... 121 121,162
Citicorp,
6.25%, 09/19/09 ....DEM 1,020 516,225
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
Countrywide Home Loans, Inc.,
5.25%, 12/15/05 ....DEM 800 $ 397,042
CSFB TRL Weekly Reset 2:
0.00%, 09/14/00 ..................... 121 122,790
1.00%, 11/06/00 ..................... 39 39,678
Exodus Communications, Inc.,
10.75%, 12/15/09 (c) ....EUR 110 113,302
Federal National Mortgage Association:
1.75%, 03/26/08 .....JPY 170,000 1,697,255
2.125%, 10/09/07 (f) ....JPY 340,000 3,492,512
Ford Motor Credit Corp.,
5.25%, 06/16/08 ....EUR 572 279,804
General Motors Acceptance Corp. Swift
Trust 1999-1,
5.00%, 01/18/05 ....EUR 370 366,346
Global TeleSystems Group, Inc.,
10.50%, 12/01/06 (c) ....EUR 105 107,358
Household Finance Corp.,
5.25%, 11/23/05 ....DEM 463 231,529
Imasac SA,
11.00%, 05/02/05 (c) ................ 100 58,000
Inter-American Development Bank,
1.90%, 07/08/09 ....JPY 159,000 1,592,023
MBNA:
5.125%, 04/21/08 .................... 1,880 922,590
6.00%, 05/21/07 ..................... 3,800 1,761,180
Merrill Lynch & Company, Inc.,
5.375%, 01/04/09 ... DEM 830 400,987
North American Capital Corp.,
8.25%, 11/17/03 (f) ....GBP 576 941,764
NTL Communications Corp.,
9.25%, 11/15/06 (c) ....EUR 150 149,591
Salomon, Inc.:
0.00%, 11/28/00 (c) ................. 85 81,354
1.00%, 03/16/00 ..................... 85 88,765
Silgan Holdings, Inc.,
13.25%, 07/15/06 .................... 1 1,090
TTB Finance Cayman, Ltd.,
7.09%, 03/18/07 (e), (f) ............ 486 451,980
United States Treasury Notes,
7.50%, 05/15/02 ..................... 2,010 2,063,386
United States Treasury Strips,
0.00%, 02/15/07 ..................... 250 156,350
Viatel, Inc.,
11.50%, 03/15/09 ....EUR 350 356,098
ZSC Specialty Chemical PLC,
11.00%, 07/01/09 (c) ....USD 200 207,500
----------
TOTAL UNITED STATES .................. 20,033,482
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
39
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
TOTAL CURRENCY DENOMINATED BONDS
(Identified cost $68,259,921)............. $ 69,528,275
------------
DISCOUNT NOTES--7.1%
Federal Farm Credit Bank,
5.48%, 01/21/00 .......................... $ 100 99,696
Federal Home Loan Bank:
4.84%, 05/11/00 .......................... 167 164,059
5.23%, 01/26/00 .......................... 100 99,637
5.40%, 02/09/00 .......................... 285 283,333
5.43%, 02/09/00 .......................... 100 99,412
5.45%, 02/09/00 .......................... 100 99,409
5.46%, 02/11/00 .......................... 100 99,378
5.48%, 02/04/00 .......................... 200 198,965
5.50%, 02/23/00 .......................... 100 99,190
5.52%, 02/23/00 .......................... 159 157,708
5.52%, 03/03/00 .......................... 105 104,002
5.53%, 01/21/00 .......................... 100 99,693
5.53%, 02/18/00 .......................... 110 109,189
5.54%, 05/03/00 .......................... 130 127,539
5.55%, 04/24/00 .......................... 150 147,364
5.56%, 01/26/00 .......................... 140 139,459
5.56%, 09/20/00 .......................... 100 95,938
5.59%, 03/03/00 .......................... 100 99,037
5.60%, 10/20/00 .......................... 100 95,442
5.61%, 03/01/00 .......................... 100 99,065
5.75%, 03/20/00 .......................... 180 177,729
5.77%, 12/22/00 .......................... 100 94,294
Federal Home Loan Mortgage Corp.:
5.51%, 11/13/00 .......................... 100 95,148
5.56%, 03/02/00 .......................... 80 79,246
5.63%, 03/14/00 .......................... 125 123,573
5.70%, 01/31/00 .......................... 100 99,525
5.76%, 03/27/00 .......................... 75 73,968
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal National Mortgage Association:
5.20%, 07/07/00 .......................... $ 100 $ 97,284
5.47%, 05/11/00 .......................... 98 96,049
5.48%, 02/10/00 .......................... 232 230,587
5.48%, 04/12/00 .......................... 145 142,749
5.50%, 01/26/00 .......................... 100 99,618
5.51%, 04/06/00 .......................... 46 45,324
5.53%, 01/24/00 .......................... 130 129,541
5.53%, 02/17/00 .......................... 203 201,534
5.53%, 04/13/00 .......................... 65 63,972
5.54%, 05/04/00 .......................... 100 98,092
5.56%, 07/17/00 .......................... 213 206,487
5.60%, 03/09/00 .......................... 120 118,731
5.60%, 06/01/00 .......................... 100 97,635
5.61%, 02/14/00 .......................... 75 74,486
5.64%, 03/02/00 .......................... 180 178,281
5.72%, 03/16/00 .......................... 203 200,581
5.725%, 02/17/00 ......................... 100 99,253
5.77%, 03/16/00 .......................... 100 98,798
------------
TOTAL DISCOUNT NOTES
(Identified cost $5,540,000).............. 5,540,000
------------
REPURCHASE AGREEMENT--2.2%
State Street Bank and Trust Company,
3.00%, 01/03/00, (Dated 12/31/99,
collateralized by $1,655,000 United
States Treasury Note, 7.50%, 05/15/02,
with a value of $1,714,994) (Identified
cost $1,678,000) (f) ..................... 1,678 1,678,000
------------
TOTAL INVESTMENTS
(Identified cost $75,477,921) (b).......... 98.8% $ 76,746,275
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES .............................. 1.2 907,612
---------- ------------
NET ASSETS ................................. 100.0% $ 77,653,887
========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
40
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
Forward Foreign Currency Contracts open at December 31, 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 1/3/00 120,582 $ 116,000 $ 120,546 $ 4,546 $ --
ARS 1/19/00 22,200 21,000 22,155 1,155 --
ARS 1/21/00 452,981 431,000 451,942 20,942 --
ARS 2/3/00 48,714 46,000 48,534 2,534 --
ARS 2/4/00 132,750 125,000 132,247 7,247 --
ARS 2/9/00 132,625 125,000 132,044 7,044 --
ARS 4/25/00 156,975 150,000 155,068 5,068 --
ARS 4/26/00 31,170 30,000 30,788 788 --
AUD 1/21/00 1,620,549 1,056,173 1,064,259 8,086 --
BRL 1/24/00 165,825 90,000 91,936 1,936 --
BRL 1/31/00 96,820 47,000 53,551 6,551 --
BRL 2/14/00 158,160 80,000 87,040 7,040 --
BRL 6/5/00 81,340 40,000 43,126 3,126 --
CAD 1/21/00 3,810,268 2,601,428 2,640,906 39,478 --
CHF 1/21/00 910,295 599,367 573,195 -- 26,172
CLP 1/26/00 76,055,000 140,000 143,115 3,115 --
CLP 2/22/00 38,290,000 70,000 71,744 1,744 --
CLP 2/29/00 42,000,000 76,004 78,599 2,595 --
CLP 3/10/00 27,325,000 50,000 51,047 1,047 --
CNY 2/28/00 1,423,665 170,000 171,007 1,007 --
CNY 3/3/00 695,729 83,000 83,545 545 --
COP 1/11/00 95,150,000 50,000 50,366 366 --
COP 1/31/00 253,125,000 125,000 132,874 7,874 --
COP 2/7/00 239,568,000 124,000 125,519 1,519 --
COP 3/2/00 127,465,000 65,000 66,355 1,355 --
CZK 2/14/00 730,000 20,639 20,403 -- 236
CZK 2/18/00 3,368,736 96,000 94,160 -- 1,840
CZK 6/7/00 2,121,518 59,090 59,428 338 --
CZK 7/17/00 2,290,000 62,860 64,202 1,342 --
DKK 1/21/00 16,617,275 2,323,058 2,252,080 -- 70,978
EUR 1/21/00 33,125,982 34,919,276 33,421,023 -- 1,498,253
EUR 1/21/00 534,919 539,000 539,683 683 --
GBP 1/21/00 2,753,595 4,513,793 4,448,350 -- 65,443
GBP 1/21/00 402,052 646,534 649,502 2,968 --
GRD 3/3/00 32,552,000 104,000 98,795 -- 5,205
HUF 2/16/00 83,357,451 332,473 326,547 -- 5,926
HUF 2/18/00 25,904,700 103,112 101,434 -- 1,678
HUF 2/22/00 22,276,370 89,212 87,147 -- 2,065
IDR 1/24/00 603,400,000 80,000 86,149 6,149 --
IDR 1/25/00 458,100,000 60,000 65,398 5,398 --
IDR 2/15/00 698,571,000 98,926 99,516 590 --
IDR 3/3/00 110,550,000 15,000 15,721 721 --
IDR 3/20/00 475,901,000 67,000 67,557 557 --
ILS 5/18/00 1,190,000 271,627 281,490 9,863 --
INR 1/13/00 4,171,200 95,000 95,336 336 --
INR 2/29/00 3,349,200 90,000 89,843 -- 157
INR 3/13/00 5,348,480 122,000 121,475 -- 525
JPY 1/21/00 1,657,945,399 15,683,503 16,284,547 601,044 --
JPY 1/21/00 3,532,460 34,700 34,696 -- 4
KES 3/24/00 2,905,500 39,000 38,554 -- 446
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
41
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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>
KES 3/27/00 1,868,750 $ 25,000 $ 24,771 $ -- $ 229
KRW 1/26/00 303,005,000 250,000 267,672 17,672 --
KRW 3/3/00 95,058,500 82,000 83,974 1,974 --
KRW 3/9/00 74,425,000 65,000 65,746 746 --
MXN 1/6/00 702,903 69,000 73,893 4,893 --
MXN 4/6/00 473,800 46,000 48,269 2,269 --
MXN 4/25/00 2,470,000 235,685 249,709 14,024 --
MXN 5/17/00 3,150,000 313,714 315,888 2,174 --
MXN 5/30/00 310,000 30,955 30,942 -- 13
MXN 10/3/00 460,680 44,000 44,047 47 --
MXN 12/29/00 1,285,147 119,000 119,437 437 --
PEN 2/8/00 187,500 52,448 52,777 329 --
PEN 2/9/00 232,245 65,000 65,349 349 --
PEN 2/18/00 393,173 110,000 110,290 290 --
PHP 2/10/00 5,538,000 130,000 136,602 6,602 --
PHP 2/11/00 15,258,080 376,000 376,332 332 --
PHP 3/10/00 1,680,000 40,000 41,350 1,350 --
PHP 4/5/00 1,246,800 30,000 30,595 595 --
PHP 4/13/00 7,201,250 175,000 176,282 1,282 --
PLN 2/8/00 178,227 40,241 42,522 2,281 --
PLN 2/10/00 72,779 16,697 17,354 657 --
PLN 5/4/00 442,131 99,244 102,997 3,753 --
PLN 5/5/00 574,040 127,000 133,688 6,688 --
PLN 7/13/00 932,256 213,112 213,081 -- 31
PLN 10/12/00 369,359 83,002 82,750 -- 252
PLN 10/31/00 248,076 54,000 55,350 1,350 --
SEK 1/21/00 11,286,303 1,350,100 1,328,262 -- 21,838
SKK 1/18/00 3,984,484 93,709 94,072 363 --
SKK 1/31/00 2,231,090 50,764 52,544 1,780 --
SKK 2/8/00 2,451,680 58,069 57,618 -- 451
SKK 2/14/00 2,093,850 49,302 49,132 -- 170
SKK 2/16/00 659,550 15,000 15,468 468 --
SKK 3/20/00 3,071,752 71,887 71,493 -- 394
SKK 3/21/00 5,611,070 131,315 130,567 -- 748
SKK 3/22/00 1,128,062 26,364 26,244 -- 120
SKK 11/20/00 2,982,455 67,067 66,385 -- 682
THB 1/19/00 7,071,000 183,424 187,673 4,249 --
THB 1/20/00 4,923,100 130,000 130,663 663 --
THB 2/17/00 2,431,800 63,000 64,523 1,523 --
THB 3/17/00 2,008,760 52,000 53,292 1,292 --
THB 3/21/00 3,231,275 85,000 85,724 724 --
----------- ----------- --------- ----------
$72,295,874 $71,439,871 $ 847,853 $1,703,856
----------- ----------- --------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
42
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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 1/3/00 120,582 $ 118,450 $ 120,546 $ -- $ 2,096
ARS 1/18/00 145,682 145,000 145,405 -- 405
ARS 1/19/00 22,200 22,143 22,155 -- 12
ARS 1/21/00 125,188 125,000 124,900 100 --
ARS 2/3/00 48,714 48,520 48,534 -- 14
ARS 2/4/00 132,751 131,811 132,248 -- 437
ARS 2/9/00 132,625 132,005 132,044 -- 39
ARS 4/26/00 31,170 30,825 30,788 37 --
AUD 1/21/00 1,310,219 855,344 860,457 -- 5,113
CAD 1/21/00 922,885 630,000 639,654 -- 9,654
CHF 1/21/00 134,615 85,000 84,764 236 --
COP 1/11/00 95,150,000 50,105 50,366 -- 261
COP 1/11/00 118,251,000 63,000 62,594 406 --
COP 1/31/00 22,600,000 11,953 11,864 89 --
COP 2/7/00 96,568,000 50,454 50,596 -- 142
DKK 1/21/00 52,196,712 7,349,545 7,074,032 275,513 --
EUR 1/18/00 90,567 93,708 91,353 2,355 --
EUR 1/21/00 18,219,178 19,055,917 18,381,450 674,467 --
EUR 1/21/00 434,330 436,539 438,198 -- 1,659
EUR 1/31/00 47,000 50,765 47,454 3,311 --
EUR 2/8/00 54,774 58,069 55,338 2,731 --
EUR 2/14/00 47,000 49,302 47,507 1,795 --
EUR 3/20/00 71,039 71,888 71,989 -- 101
EUR 3/21/00 129,765 131,315 131,508 -- 193
EUR 3/22/00 26,000 26,364 26,351 13 --
EUR 6/7/00 58,246 59,090 59,351 -- 261
EUR 11/20/00 62,908 67,066 64,818 2,248 --
GBP 1/21/00 4,918,689 8,057,292 7,945,993 111,299 --
GBP 1/21/00 408,269 657,429 659,546 -- 2,117
GRD 2/14/00 66,282,613 210,003 207,547 2,456 --
GRD 2/24/00 35,607,600 108,000 108,137 -- 137
HUF 2/16/00 12,500,000 48,924 48,968 -- 44
ILS 5/18/00 460,000 105,485 108,811 -- 3,326
JPY 1/11/00 5,276,500 50,000 51,740 -- 1,740
JPY 1/21/00 1,168,438,874 10,954,066 11,476,553 -- 522,487
JPY 1/21/00 203,425,042 2,000,293 1,998,066 2,227 --
MXN 1/6/00 702,903 73,610 73,893 -- 283
MXN 4/25/00 870,000 86,848 87,954 -- 1,106
MXN 5/17/00 2,150,000 215,593 215,606 -- 13
MXN 5/30/00 310,000 30,933 30,942 -- 9
PHP 2/10/00 5,538,000 139,721 136,602 3,119 --
PHP 2/11/00 1,605,000 39,127 39,586 -- 459
PHP 4/13/00 4,559,500 110,000 111,614 -- 1,614
PLN 2/7/00 489,255 112,343 116,762 -- 4,419
PLN 2/8/00 329,726 76,428 78,667 -- 2,239
PLN 2/16/00 225,000 52,204 53,554 -- 1,350
SEK 1/21/00 22,763,827 2,790,098 2,679,029 111,069 --
THB 1/19/00 7,071,000 191,626 187,673 3,953 --
THB 1/20/00 4,923,100 133,418 130,663 2,755 --
----------- ----------- ---------- ----------
$56,192,619 $55,554,170 $1,200,179 $ 561,730
----------- ----------- ---------- ----------
Gross unrealized appreciation/depreciation from Forward Foreign $2,048,032 $2,265,586
Currency Contracts ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
43
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO
CURRENCY DENOMINATED BONDS--74.6%
ARGENTINA--0.6%
Mastellone Hermanos SA,
11.75%, 04/01/08 ....USD 456 $ 369,360
Republic of Argentina:
2.868%, 04/01/01 .................. 2,275 919,233
6.812%, 03/31/05 (e) .............. 704 640,640
-----------
TOTAL ARGENTINA .................... 1,929,233
-----------
AUSTRALIA--1.3%
Credit Foncier,
8.50%, 09/09/02 ................... 6,000 4,065,049
-----------
BULGARIA--0.2%
Republic of Bulgaria,
6.50%, 07/28/24 USD 825 661,072
-----------
CANADA--1.1%
Argos Funding Trust,
5.963%, 02/27/06 .................. 1,000 674,749
Dynacare, Inc.,
10.75%, 01/15/06 ....USD 1,087 1,054,390
Molson Breweries Company, Ltd.,
6.00%, 06/02/08 (c) ............... 629 411,405
Worldwide Fiber, Inc.,
12.00%, 08/01/09 (c) ....USD 1,320 1,372,800
-----------
TOTAL CANADA ....................... 3,513,344
-----------
DENMARK--4.8%
Danske Kredit,
6.00%, 10/01/29 ................... 152 19,158
Kingdom of Denmark,
5.00%, 08/15/05 (f) ............... 34,286 4,568,744
Nykredit AS,
6.00%, 10/01/29 (f) ............... 26,526 3,340,476
Unikredit Realkredit,
7.00%, 10/01/29 (f) ............... 57,428 7,665,720
-----------
TOTAL DENMARK ...................... 15,594,098
-----------
GERMANY--5.8%
Autobahn Tank & Rast,
6.00%, 10/16/00 ....EUR 1,833 952,583
Core Dem,
07/05/15 (f) ....EUR 2,400 1,224,499
Euro Credit Card,
5.50%, 06/18/08 (f) ............... 2,570 1,256,452
Federal Republic of Germany:
6.00%, 09/15/03 ....EUR 11,260 11,810,078
6.00%, 07/04/07 (f) ....EUR 3,160 3,328,062
-----------
TOTAL GERMANY ...................... 18,571,674
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
GREECE--1.4%
Republic of Greece:
6.50%, 01/11/14 ................... 542,600 $ 1,640,053
8.90%, 04/01/03 ................... 110,000 358,498
9.80%, 03/21/00 ................... 109,500 333,713
Republic of Hellenic:
10.80%, 06/30/00 .................. 110,000 339,030
10.38%, 08/14/03 (e), (f) ......... 605,000 1,895,125
-----------
TOTAL GREECE ....................... 4,566,419
-----------
HUNGARY--0.3%
Republic of Hungary,
13.50%, 11/24/01 .................. 221,200 890,020
-----------
INDONESIA--0.0%
Polysindo,
0.00%, 04/26/03 (i) ............... 5,000,000 35,778
PT Polysindo Eka Perkasa,
10.00%, 03/16/00 ....USD 194 9,709
-----------
TOTAL INDONESIA .................... 45,487
-----------
IRELAND--0.4%
Esat Telecom Group PLC:
11.875%, 12/01/08 (f) ....USD 700 780,500
11.875%, 11/01/09 ....EUR 90 102,865
Helaba Finance BV,
7.375%, 12/30/02 ....GBP 142 230,978
-----------
TOTAL IRELAND ...................... 1,114,343
-----------
ITALY--1.1%
Films PLC,
3.698%, 03/31/05 (e), (f) ....EUR 5,200,000 2,515,943
Societa Sportiva Lazio SpA,
4.553%, 10/15/07 (e) .............. 1,760,043 888,192
-----------
TOTAL ITALY ........................ 3,404,135
-----------
JAPAN--1.3%
Export-Import Bank of Japan,
8.00%, 06/04/00 ....USD 26 26,059
Nippon Credit Bank, Ltd.,
1.80%, 07/27/00 (f) ............... 140,000 1,377,665
Spires, Ltd.,
2.48%, 01/23/02 (f) ............... 286,282 2,872,067
-----------
TOTAL JAPAN ........................ 4,275,791
-----------
KOREA--0.1%
Republic of South Korea,
8.875%, 04/15/08 ....USD 265 278,833
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
44
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
LUXEMBOURG--0.2%
Carrier1 International SA,
13.25%, 02/15/09 ....EUR 100 $ 106,527
PSI Net, Inc.,
11.00%, 08/01/09 ....EUR 325 333,937
PTC International Finance II SA,
11.25%, 12/01/09 ....EUR 160 166,011
---------
TOTAL LUXEMBOURG .................. 606,475
---------
MEXICO--0.6%
United Mexican States:
6.25%, 12/31/19 (e) ....USD 750 590,625
6.902%, 12/31/19 (e) ....USD 250 234,075
6.932%, 12/31/19 (e) ....USD 500 468,150
6.942%, 12/31/19 (e) ....USD 750 702,225
---------
TOTAL MEXICO ...................... 1,995,075
---------
MOROCCO--0.2%
Morocco Restructuring &
Consolidation Agreement,
5.906%, 01/01/09 (e) ....USD 777 703,320
---------
NETHERLANDS--0.8%
Cellco Finance NV:
12.75%, 08/01/05 (c) ....USD 150 155,437
15.00%, 08/01/05 ....USD 360 391,500
Global TeleSystems Group, Inc.,
10.50%, 12/01/06 (c) ....EUR 210 214,717
Kappa Beheer BV,
10.625%, 07/15/09 ....EUR 215 228,492
Netia Holdings BV,
13.50%, 06/15/09 (c) ....EUR 40 41,452
Pannon Finance BV,
7.75%, 08/03/04 (c) ....EUR 550 559,583
Tele1 Europe BV:
11.875%, 12/01/09 ....EUR 350 356,098
13.00%, 05/15/09 (c) ....EUR 75 79,329
United Pan-Europe
Communications NV,
10.875%, 11/01/07 (c) ....EUR 350 363,149
Versatel Telecom International NV,
11.875%, 07/15/09 ....EUR 180 191,296
---------
TOTAL NETHERLANDS ................. 2,581,053
---------
PANAMA--0.1%
Republic of Panama,
4.25%, 07/17/14 (e), (f) ....USD 450 352,125
---------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
PERU--0.9%
Peru Central Bank:
0.00%, 01/24/00 ................. 1,333 $ 385,444
0.00%, 02/17/00 .................. 650 186,290
0.00%, 02/18/00 ................. 1,000 287,468
0.00%, 02/21/00 .................. 2,921 838,435
17.25%, 02/21/00 ................ 900 258,374
Republic of Peru:
3.75%, 03/07/17 USD 500 309,400
4.50%, 03/07/17 USD 125 86,563
6.812%, 03/08/27 USD 760 558,600
---------
TOTAL PERU ........................ 2,910,574
---------
PHILIPPINES--0.4%
National Power Corp.,
9.625%, 05/15/28 USD 1,485 1,338,390
---------
POLAND--0.1%
Government of Poland,
12.00%, 06/12/02 ................ 1,300 301,814
---------
SOUTH AFRICA--1.0%
Government of Namibia:
12.00%, 04/15/02 ................ 1,460 229,397
12.00%, 04/15/05 ................ 1,460 213,302
Lesotho Highlands Water:
12.50%, 04/15/02 ................ 6,760 1,082,887
13.00%, 09/15/10 ................ 2,600 394,668
Republic of South Africa,
12.00%, 02/28/05 ................ 2,680 416,410
South African Roads,
11.50%, 09/30/05 ................ 975 144,478
Trans Caledon Tunnel,
12.00%, 12/01/05 ................ 5,700 860,890
---------
TOTAL SOUTH AFRICA ................ 3,342,032
---------
SWEDEN--1.0%
AB Spintab,
7.50%, 06/15/04 (f) ............. 12,900 1,597,908
Stadshypotek AB,
3.50%, 09/15/04 (f) ............. 16,000 1,692,138
---------
TOTAL SWEDEN ...................... 3,290,046
---------
THAILAND--0.0%
Finance One PLC:
1.00%, 08/28/97 (d) ............. 10,000 0
1.00%, 10/15/97 (d) ............. 10,000 0
---------
TOTAL THAILAND .................... 0
---------
TURKEY--0.9%
Rabobank TRL Weekly Request 2,
1.00%, 12/18/00 ................. 1,588,979 2,975,235
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
45
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
UNITED KINGDOM--3.2%
Birmingham Midshires Building
Society,
9.125%, 01/05/06 (f) .............. 900 $1,579,885
Coca Cola Enterprises,
6.75%, 03/12/08 (f) ............... 778 1,240,806
Colt Telecom Group PLC:
7.625%, 12/15/09 (c) ....EUR 350 350,810
8.875%, 11/30/07 (f) ....DEM 950 512,507
Dolphin Telecommunications Group,
0.00%, 06/01/08 ....EUR 780 385,767
Energis PLC,
9.50%, 06/15/09 ................... 325 556,471
Hurst Group PLC,
11.125%, 08/06/08 (c) ............. 90 145,377
Jazztel PLC,
13.25%, 12/15/09 (c) ....EUR 435 440,388
Landwirtschaftliche Rentenbank,
6.375%, 03/09/05 (f) .............. 1,829 2,881,470
Luxfer Holdings Plc,
10.125%, 05/01/09 ................. 105 162,398
Merrill Lynch & Company, Inc.,
7.375%, 12/17/07 (f) .............. 575 943,287
Polestar Corp.,
10.50%, 05/30/08 .................. 80 123,745
Telewest Communications PLC:
0.00%, 04/15/09 (c), (e) .......... 125 128,214
0.00%, 04/15/09 (e) ................ 20 20,030
TM Group Holdings PLC,
12.25%, 05/15/08 .................. 95 152,377
West Coast Train Finance,
6.00%, 03/31/15 ................... 280 408,865
ZSC Specialty Chemical PLC,
11.00%, 07/01/09 (c) ....USD 150 155,625
----------
TOTAL UNITED KINGDOM ................ 10,188,022
----------
UNITED STATES--46.8%
Adelphia Communications Corp.,
9.375%, 11/15/09 (f) .............. 940 921,200
Advantica Restaurant Group, Inc.,
11.25%, 01/15/08 .................. 600 453,000
Agrilink Foods, Inc.,
11.875%, 11/01/08 (f) ............. 770 773,850
AirGate PCS, Inc.,
0.00%, 10/01/09 (e) ............... 675 374,625
Airtouch Communications, Inc.,
5.50%, 07/24/08 (f) ....DEM 3,090 1,514,554
Allied Waste Industries, Inc.,
10.00%, 08/01/09 (c), (f) ......... 1,230 1,097,775
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Amatek Industries Pty, Ltd.,
12.00%, 02/15/08 .................. 1,500 $1,425,000
American Restaurant Group, Inc.,
11.50%, 02/15/03 (f) .............. 1,010 777,700
AMSC Acquisition, Inc.,
12.25%, 04/01/08 (f) .............. 1,055 824,219
Amtrol, Inc.,
10.625%, 12/31/06 (f) ............. 1,025 1,008,344
ARCO Chemical Co.,
9.80%, 02/01/20 ................... 130 130,039
ASAT Finance LLC,
12.50%, 11/01/06 (c) .............. 700 752,500
Asset Securitization Corp.:
Series 1997-D5, Class C
1.599%, 02/14/41 (e) .............. 12,783 1,092,586
Series 1996-D2, Class ACS2
1.488%, 02/28/26 (e) .............. 7,035 513,335
Atlas Air, Inc.,
9.25%, 04/15/08 ................... 150 143,250
Budget Group, Inc.,
9.125%, 04/01/06 (f) .............. 1,740 1,618,200
Buhrmann US, Inc.,
12.25%, 11/01/09 (c), (f) ......... 1,105 1,147,819
Building One Services Corp.,
10.50%, 05/01/09 (f) .............. 740 710,400
Catastophe Reinsurance,
9.77%, 06/01/00 ................... 300 302,466
CB ARS Linked Deposit,
0.00%, 04/17/00 ................... 1,660 1,717,104
Charter Communications
Holdings LLC,
8.625%, 04/01/09 (f) .............. 1,500 1,385,625
Chase Credit Card Master Trust,
5.00%, 08/15/08 (f) DEM 3,280 1,578,034
Chesapeake Energy Corp., Series B
9.625%, 05/01/05 .................. 530 503,500
ChipPAC International Ltd.,
12.75%, 08/01/09 (c), (f) ......... 935 970,062
Citibank Time Deposit,
0.00%, 01/19/00 ................... 100 100,690
Citibank ARS,
0.00%, 02/16/00 ................... 1,170 1,175,382
Citibank CRC Linked Note,
15.875%, 03/20/00 ................. 435 436,305
Citibank CRC Time Deposit:
0.00%, 01/18/00 ................... 215 219,343
0.00%, 01/26/00 ................... 235 238,948
0.00%, 02/10/00 ................... 810 822,636
4.50%, 08/25/04 ................... 1,060 1,033,034
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
46
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Citibank Credit Card Master Trust,
5.75%, 07/16/07 (f) ....DEM 2,100 $1,078,846
Citibank MXN Linked Deposit,
0.00%, 12/03/01 ....................... 815 824,943
Citibank PEN Time Deposit,
0.00%, 01/24/00 ....................... 350 349,685
Citibank SVC Time Deposit:
0.00%, 01/25/00 ....................... 320 325,568
0.00%, 01/26/00 ....................... 620 630,788
0.00%, 02/15/00 ....................... 660 667,392
0.00%, 02/22/00 ....................... 160 160,864
0.00%, 02/28/00 ....................... 77 77,547
Citicorp,
5.50%, 06/30/10 ....DEM 3,180 1,499,623
Coaxial Communications Central
Ohio LLC,
10.00%, 08/15/06 (f) .................. 1,329 1,302,420
Comstock Resources, Inc.,
11.25%, 05/01/07 (f) .................. 1,010 1,032,725
Concentric Network Corp.,
12.75%, 12/15/07 ...................... 365 384,163
Countrywide Home Loan,
5.25%, 12/15/05 (f) ....DEM 3,160 1,568,314
Courtyard by Marriott II, Ltd.,
Series B 10.75%, 02/01/08 (f) ......... 1,610 1,581,825
Credit Suisse First Boston Mortgage,
Series 1998-C2 Class AX
1.22%, 06/15/23 (f), (j) .............. 35,476 1,984,459
CSFB TRL Weekly Reset 1,
0.00%, 09/14/00 ....................... 2,778 2,810,783
CSFB TRL Weekly Reset 2,
1.00%, 11/06/00 ....................... 374 372,980
CSFB TRL Weekly Reset 4,
0.99%, 12/04/00 ....................... 60 60,101
Dade International, Inc.,
11.125%, 05/01/06 (f) ................. 730 715,400
Dictaphone Corp.,
11.75%, 08/01/05 (f) .................. 1,299 961,260
Dura Operating Corp.,
9.00%, 05/01/09 (f) ................... 1,250 1,175,000
Exide Corp.,
2.90%, 12/15/05 (c) ................... 230 120,750
Exodus Communications, Inc.,
10.75%, 12/15/09 (c) ....EUR 185 190,553
Fairchild Semiconductor Corp.,
10.375%, 10/01/07 (f) ................. 675 690,188
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Corp.:
6.50%, TBA ............................ 3,585 $3,477,450
7.00%, 07/01/26 ....................... 8,266 2,627,325
7.00%, 04/01/27 ....................... 4,312 1,375,423
7.50%, TBA ............................ 3,250 3,212,398
8.00%, TBA ............................ 2,290 2,305,022
Federal National Mortgage
Association Series 284 Class 2:
7.50%, 07/01/27 ....................... 8,101 2,555,880
8.00%, 06/01/12 ....................... 688 699,613
8.00%, 12/01/12 ....................... 1,415 1,438,450
First Union Commercial Mortgage Trust,
5.73%, 01/15/08 (f) ................... 6,227 5,868,291
First USA Trust, Series 1998-1
6.50%, 01/18/06 (c), (f) .............. 1,600 1,544,496
Fleming Companies, Inc., Series B
10.50%, 12/01/04 ...................... 430 397,750
Foamex L.P.,
9.875%, 06/15/07 (f) .................. 175 145,250
Ford Motor Credit Corp.,
5.25%, 06/16/08 (f) ....EUR 2,157 1,055,136
Frank's Nursery & Crafts, Inc.,
10.25%, 03/01/08 ...................... 1,000 680,000
Frontier Oil Corp.,
11.75%, 11/15/09 ...................... 265 261,025
G3 Mortgage Reinsurance Ltd.,
8.44375%, 05/25/08 (c), (e) ........... 1,500 1,380,234
Geo Specialty Chemicals, Inc.,
10.125%, 08/01/08 (f) ................. 1,145 1,053,400
Globix Corp.,
13.00%, 05/01/05 (f) .................. 790 797,900
Go Outdoor Systems Holdings,
10.50%, 07/15/09 (c) .................. 595 633,837
Gold Eagle Capital Ltd.,
11.452%, 04/15/01 (c) ................. 950 950,000
Halyard Re B V,
10.579%, 04/05/02 (c) ................. 1,000 1,000,000
Headlands Mortgage Securities, Inc.:
Series 1997-1, Class X1
0.687%, 03/25/27 (e), (j) ............. 43,072 553,483
Series 1997-4, Class X
1.120%, 11/25/27 (e), (j) ............. 15,742 339,871
High Voltage Engineering Corp.,
10.50%, 08/15/04 (f) .................. 954 815,670
Holley Performance Products,
12.25%, 09/15/07 (c) .................. 1,000 955,000
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
47
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Home Interiors & Gifts, Inc.,
10.125%, 06/01/08 ................. 1,250 $1,062,500
Household Finance Corp.,
5.25%, 11/23/05 (f) ....DEM 802 401,050
Huntsman ICI Chemicals, LLC:
0.00%, 12/31/09 (c) ............... 450 133,313
10.125%, 07/01/09 ....EUR 225 238,666
Hyperion Telecommunications, Inc.,
12.00%, 11/01/07 .................. 420 447,300
Imasac SA,
11.00%, 05/02/05 (c) .............. 400 232,000
Imperial Tobacco Finance PLC,
6.375%, 09/27/06 ....EUR 1,410 1,402,040
Interbank AKK Trust,
Series1995-1, Class 1
9.00%, 02/28/01 (c) ............... 750 690,000
Interpool Capital Trust, Series B
9.875%, 02/15/27 .................. 1,370 1,084,821
IPC Information Systems, Inc.,
0.00%, 05/01/08 (e) ............... 925 703,000
IT Group, Inc., Series B
11.25%, 04/01/09 .................. 1,225 1,188,250
ITC Deltacom, Inc.,
11.00%, 06/01/07 .................. 410 430,500
J.H. Heafner, Inc.,
10.00%, 05/15/08 .................. 1,115 1,009,075
Kelvin 1st Event,
15.70%, 02/14/03 (c) .............. 300 306,999
Kelvin 2nd Event,
8.70%, 02/14/03 (c) ............... 600 594,948
Level 3 Communications, Inc.,
9.125%, 05/01/08 .................. 1,025 968,625
LodgeNet Entertainment Corp.,
10.25%, 12/15/06 .................. 735 741,431
Loomis Fargo & Co.,
10.00%, 01/15/04 .................. 484 479,160
Lyondell Chemical Co.,
10.875%, 05/01/09 ................. 1,210 1,246,300
Marvel Enterprises, Inc.,
12.00%, 06/15/09 .................. 1,160 1,067,200
Masaic, Ltd., Class B
14.135%, 02/18/00 ................. 950 950,465
Merrill Corporation,
12.00%, 05/01/09 (c) .............. 1,260 1,228,500
Merrill Lynch & Company, Inc.,
5.375%, 01/04/09 (f) ....DEM 3,590 1,734,389
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Merrill Lynch Mortgage Investments,
Inc., Series 1996-C1, Class IO:
0.581%, 04/25/28 (c), (e) ......... 16,738 $ 376,607
1.561%, 11/21/28 .................. 13,833 998,618
Metromedia Fiber Network, Inc.,
10.00%, 11/15/08 .................. 335 342,538
Morgan Guaranty Trust,
0.00%, 07/31/00 (d) ....THB 10,569 0
Morgan Stanley Capital One, Inc.:
Series 1996-WF1, Class X
1.513%, 11/15/28 (c), (e) ......... 6,128 329,433
Series 1997-C1, Class IO
1.983%, 02/15/20 (e) .............. 475 2,375
Series 1998-HF1, Class X
1.156%, 02/15/18 (e) .............. 19,061 1,027,509
Namazu Re Ltd.,
10.606%, 12/02/04 (c) ............. 1,000 1,000,000
Neff Corp.
10.25%, 06/01/08 .................. 1,350 1,296,000
NEXTLINK Communications, Inc.,
10.75%, 06/01/09 .................. 740 764,050
North American Capital Corp.,
8.25%, 11/17/03 (f) GBP 1,225 2,002,883
North American Van Lines, Inc.,
13.375%, 12/01/09 (c) ............. 1,440 1,440,000
NTL Communications Corp.,
9.25%, 11/15/06 (c) EUR 375 373,979
Pacific Reinsurance,
9.222%, 05/31/03 .................. 1,340 1,346,700
Pathmark Stores, Inc.,
10.75%, 11/01/03 (e) .............. 750 75,000
Paxson Communications Corp.,
11.625%, 10/01/02 ................. 865 893,113
Penhall International Corp.,
12.00%, 08/01/06 .................. 610 619,150
Penn National Gaming, Inc.,
10.625%, 12/15/04 ................. 1,150 1,184,500
Pentacon, Inc.,
12.25%, 04/01/09 .................. 625 562,500
Petro Stopping Centers,
10.50%, 02/01/07 .................. 1,035 959,962
Phoenix Color Corp.,
10.375%, 02/01/09 ................. 1,125 1,080,000
Plains Resources, Inc.,
10.25%, 03/15/06 (c) .............. 1,060 1,028,200
Production Resource Group,
11.50%, 01/15/08 .................. 812 722,680
Prudential Financing Corp.,
Series 1999-C2, Class A1
6.955%, 06/15/08 .................. 5,183 5,102,761
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
48
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Prudential Home Mortgage Security:
Series 1993-5, Class A9
0.474%, 03/25/00 (e), (j) ................ 6,055 $ 1,332
Series 1993-24, Class A7
0.498%, 07/25/00 (e), (j) ................ 28,174 20,567
Series 1993-41, Class A5
0.92%, 10/25/00 (e), (j) ................. 9,086 32,075
PSI Net, Inc.:
10.50%, 12/01/06 (c) ..................... 320 322,400
11.00%, 08/01/09 ......................... 735 757,050
Radio Unica Corp.,
0.00%, 08/01/06 (e) ...................... 1,875 1,223,437
Railworks Corp.,
11.50%, 04/15/09 ......................... 1,500 1,518,750
RBF Finance Co.:
11.00%, 03/15/06 ......................... 605 644,325
11.375%, 03/15/09 ........................ 550 588,500
Rent-A-Center, Inc.,
11.00%, 08/15/08 ......................... 525 539,437
Rhythms Netconnections, Inc.,
12.75%, 04/15/09 ......................... 1,115 1,078,762
RSL Communications PLC,
10.50%, 11/15/08 ......................... 300 282,000
Sabreliner Corp.,
11.00%, 06/15/08 (c) ..................... 520 412,100
Salomon Brothers Structured Note:
0.00%, 11/28/00 (c) ...................... 805 770,465
7.36%, 06/08/01 (c) ...................... 516 507,414
Salomon, Inc.,
1.00%, 03/16/00 .......................... 845 882,433
Samsung Electronics America, Inc.,
9.75%, 05/01/03 (c), (i) ................. 220 226,050
Station Casinos, Inc.,
10.125%, 03/15/06 ........................ 900 918,000
Structured Asset Securitization Corp.:
Series 1996-CFL, Class X1
1.585%, 02/25/28 (e), (j) ................ 3,922 202,276
Series 1996-CFL, Class X2
1.097%, 02/25/28 (e), (j) ................ 1,855 37,695
T/SF Communications Corp.,
Series B 10.375%, 11/01/07 ............... 1,225 1,176,000
Teligent, Inc.,
0.00%, 03/01/08 (e) ...................... 800 472,000
Transdigm Inc.,
10.375%, 12/01/08 ........................ 1,335 1,201,500
TTB Finance Cayman, Ltd.,
7.09%, 03/18/07 (e) ...................... 1,926 1,791,180
UCFC Loan Trust,
8.00%, 09/15/00, (j) ..................... 2,304 117,360
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
United Rentals, Inc.,
9.25%, 01/15/09 .......................... 1,000 $ 962,500
United States Treasury Notes,
7.50%, 05/15/02 .......................... 2,650 2,720,384
URS Corp.,
12.25%, 05/01/09 ......................... 1,090 1,117,250
US Unwired, Inc.,
0.00%, 11/01/09 (c), (e) ................. 1,272 744,120
Verio, Inc.:
10.625%, 11/15/09 (c) .................... 325 333,125
11.25%, 12/01/08 ......................... 560 588,000
Viatel, Inc.:
0.00%, 04/15/08 (e) ...................... 340 212,500
11.50%, 03/15/09 ....EUR 800 813,938
Weight Watchers International, Inc.,
13.00%, 10/01/09 (c) ..................... 800 809,000
Williams Communications Group, Inc.,
10.875%, 10/01/09 ........................ 1,250 1,307,812
WRC Media, Inc.,
12.75%, 11/15/09 (c) ..................... 1,070 1,061,975
-----------
TOTAL UNITED STATES ........................ 150,713,408
-----------
TOTAL CURRENCY DENOMINATED BONDS
(Identified cost $253,703,640)............ 240,207,067
-----------
SHARES
-------
PREFERRED STOCKS--2.4%
MEXICO--0.0%
United Mexican States rights .............. 8,530 0
-----------
NETHERLANDS--0.0%
Tele1 Europe BV
5/15/09 warrants (c) ..................... 75 12,844
-----------
UNITED KINGDOM--0.2%
Ono Finance PLC:
05/01/09 warrants ......................... 90 9,882
05/02/09 warrants ......................... 440,000 465,396
05/08/09 warrants ......................... 350 38,430
-----------
TOTAL UNITED KINGDOM ....................... 513,708
-----------
UNITED STATES--2.2%
Adelphia Communications Corp. (f) ......... 18,220 2,077,080
AirGate PCS, Inc.,
10/01/09 warrants ........................ 900 78,750
American Mobile Satellite Corp.,
04/01/08 warrants (c) .................... 1,385 55,400
American Restaurant Group, Inc.
08/15/08 warrants ........................ 220 2
American Restaurant Group, Inc. ........... 260 208,000
Granite Broadcasting Corp. (f) ............ 705 719,100
Harborside Healthcare Corp. ............... 1,179 324,225
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
49
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
High Voltage Engineering Corp. (f) ......... 1,646 $ 1,352,601
Nextel Communications, Inc.,
Class A ................................... 1,011 1,081,770
Paxson Communications Corp. ................ 118 1,206,550
-----------
TOTAL UNITED STATES ......................... 7,103,478
-----------
TOTAL PREFERRED STOCKS
(Identified cost $8,537,100)............... 7,630,030
-----------
PRINCIPAL
AMOUNT
(000)
-------------
COMMERCIAL PAPER--1.4%
General Electric Capital Corp.,
5.95%, 01/19/00
(Identified cost $4,676,047)............... $ 4,690 4,676,047
-----------
DISCOUNT NOTES--20.2%
Federal Farm Credit Bank:
5.15%, 01/18/00 ........................... 778 776,108
5.48%, 01/21/00 ........................... 450 448,630
5.76%, 04/17/00 ........................... 280 275,206
Federal Home Loan Bank:
4.75%, 03/03/00 ........................... 900 892,638
4.84%, 05/11/00 ........................... 405 397,867
5.23%, 01/26/00 ........................... 851 847,909
5.40%, 02/09/00 ........................... 206 204,795
5.43%, 02/09/00 ........................... 360 357,882
5.45%, 02/09/00 ........................... 770 765,454
5.45%, 05/17/00 ........................... 946 926,379
5.46%, 02/11/00 ........................... 700 695,647
5.465%, 02/11/00 .......................... 2,330 2,315,498
5.47%, 02/09/00 ........................... 2,100 2,087,556
5.47%, 02/11/00 ........................... 288 286,206
5.48%, 02/04/00 ........................... 1,396 1,388,775
5.50%, 02/23/22 ........................... 900 887,275
5.52%, 02/23/00 ........................... 1,251 1,240,833
5.52%, 03/03/00 ........................... 115 113,907
5.53%, 01/21/00 ........................... 545 543,326
5.53%, 02/18/00 ........................... 460 456,608
5.55%, 04/24/00 ........................... 750 736,819
5.56%, 01/26/00 ........................... 910 906,486
5.56%, 04/14/00 ........................... 137 134,800
5.56%, 09/20/00 ........................... 700 671,567
5.57%, 01/28/00 ........................... 500 497,911
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- -------------------------------------------------------------
<S> <C> <C>
5.60%, 06/09/00 ..................... $ 119 $ 116,038
5.60%, 10/20/00 ..................... 259 247,196
5.61%, 03/01/00 ..................... 796 788,557
5.75%, 03/20/00 ..................... 1,935 1,910,584
5.77%, 12/22/00 ..................... 804 758,125
5.79%, 02/23/00 ..................... 1,000 991,476
Federal Home Loan Mortgage Corp.:
5.17%, 01/20/00 ..................... 167 166,544
5.49%, 01/20/00 ..................... 750 747,827
5.51%, 01/14/00 ..................... 440 439,125
5.51%, 11/13/00 ..................... 620 589,918
5.53%, 01/14/00 ..................... 770 768,463
5.61%, 01/14/00 ..................... 1,125 1,122,721
5.63%, 03/14/00 ..................... 1,460 1,443,332
5.70%, 01/31/00 ..................... 700 696,675
5.76%, 03/27/00 ..................... 705 695,299
5.80%, 02/18/00 ..................... 160 158,763
6.00%, 07/01/29 ..................... 2,530 2,316,101
Federal National Mortgage Association:
4.70%, 04/10/00 ..................... 170 167,780
4.73%, 02/04/00 ..................... 632 629,177
5.19%, 01/21/00 ..................... 1,565 1,560,488
5.20%, 07/07/00 ..................... 253 246,130
5.21%, 04/14/00 ..................... 218 214,719
5.45%, 03/03/00 ..................... 85 84,202
5.47%, 01/19/00 ..................... 805 802,798
5.47%, 05/11/00 ..................... 618 605,699
5.48%, 02/10/00 ..................... 1,706 1,695,612
5.48%, 04/12/00 ..................... 905 890,949
5.50%, 01/26/00 ..................... 675 672,422
5.51%, 02/07/00 ..................... 165 164,066
5.51%, 02/17/00 ..................... 845 838,921
5.51%, 04/05/00 ..................... 1,400 1,379,644
5.51%, 04/06/00 ..................... 575 566,551
5.51%, 05/18/00 ..................... 235 230,036
5.53%, 01/24/00 ..................... 820 817,103
5.53%, 04/13/00 ..................... 690 679,083
5.54%, 05/04/00 ..................... 1,560 1,530,232
5.56%, 02/24/00 ..................... 850 842,911
5.56%, 04/25/00 ..................... 1,200 1,178,686
5.56%, 05/25/00 ..................... 1,050 1,026,486
5.57%, 04/17/00 ..................... 290 285,199
5.58%, 01/19/00 ..................... 530 528,521
5.60%, 03/09/00 ..................... 1,200 1,187,306
5.60%, 06/01/00 ..................... 770 751,794
5.61%, 02/14/00 ..................... 570 566,092
5.63%, 02/17/00 ..................... 2,555 2,536,237
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
50
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
- ------------------------------------------------------------------
<S> <C> <C>
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
5.63%, 06/01/00 ....................... $ 531 $ 518,377
5.64%, 03/02/00 ....................... 1,901 1,882,849
5.70%, 02/22/00 ....................... 420 416,542
5.72%, 03/16/00 ....................... 1,390 1,373,436
5.73%, 02/17/00 ....................... 680 674,917
5.75%, 03/02/00 ....................... 205 203,003
5.77%, 03/16/00 ....................... 1,111 1,097,645
5.82%, 06/15/00 ....................... 90 87,585
Morgan Stanley Dean Witter & Co.,
5.95%, 01/24/00 ....................... 3,500 3,486,695
------------
TOTAL DISCOUNT NOTES
(Identified cost $65,262,379).......... 65,232,719
------------
REPURCHASE AGREEMENT--0.9%
State Street Bank and Trust Company,
3.00%, 01/03/00, (dated 12/31/99,
collateralized by $2,835,000 United States
Treasury Note, 7.500%, 11/15/01, with a
value of $2,920,050) (Identified cost
$2,858,000) (f)........................ 2,858 2,858,000
------------
TOTAL INVESTMENTS
(Identified cost $335,037,166) (b)..... 99.5% $320,603,863
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES ........................... 0.5 1,547,428
----- ------------
NET ASSETS .............................. 100.0% $322,151,291
===== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
51
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Forward Foreign Currency Contracts open at December 31, 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 1/3/00 1,090,436 $ 1,049,000 $ 1,090,108 $ 41,108 $ --
ARS 1/13/00 1,260,000 1,206,897 1,258,364 51,467 --
ARS 1/19/00 822,442 778,000 820,800 42,800 --
ARS 1/21/00 175,517 167,000 175,114 8,114 --
ARS 2/4/00 1,152,270 1,085,000 1,147,908 62,908 --
ARS 2/9/00 1,167,100 1,100,000 1,161,987 61,987 --
ARS 4/25/00 1,412,775 1,350,000 1,395,609 45,609 --
ARS 4/26/00 1,241,605 1,195,000 1,226,398 31,398 --
ARS 5/22/00 241,815 235,000 238,194 3,194 --
AUD 1/21/00 677,625 444,000 445,015 1,015 --
AUD 1/21/00 5,031,866 3,316,000 3,304,564 -- 11,436
BRL 1/24/00 1,289,750 700,000 715,058 15,058 --
BRL 1/31/00 869,320 422,000 480,819 58,819 --
BRL 2/14/00 1,522,290 770,000 837,758 67,758 --
BRL 2/14/00 1,528,663 820,000 838,312 18,312 --
BRL 6/5/00 819,500 403,000 434,495 31,495 --
CLP 1/21/00 367,394,500 670,000 691,633 21,633 --
CLP 1/26/00 440,032,500 810,000 828,025 18,025 --
CLP 2/2/00 26,440,000 50,000 49,715 -- 285
CLP 2/2/00 38,937,500 70,000 73,213 3,213 --
CLP 2/14/00 373,320,000 680,000 700,470 20,470 --
CLP 2/22/00 402,045,000 735,000 753,312 18,312 --
CLP 3/10/00 199,472,500 365,000 372,644 7,644 --
CNY 2/22/00 7,104,810 850,000 853,872 3,872 --
CNY 2/22/00 1,329,856 160,000 159,825 -- 175
CNY 2/28/00 6,992,708 835,000 839,945 4,945 --
CNY 3/3/00 6,839,892 816,000 821,352 5,352 --
COP 1/11/00 1,008,590,000 530,000 533,881 3,881 --
COP 1/26/00 194,800,000 100,000 102,470 2,470 --
COP 1/31/00 2,972,500,000 1,492,131 1,560,367 68,236 --
COP 2/7/00 2,430,456,000 1,258,000 1,273,407 15,407 --
COP 3/2/00 509,860,000 260,000 265,420 5,420 --
CRC 2/24/00 21,241,500 70,000 70,067 67 --
CZK 2/14/00 50,472,000 1,426,972 1,410,658 -- 16,314
CZK 2/15/00 1,910,000 54,756 53,384 -- 1,372
CZK 2/22/00 4,873,090 137,133 136,218 -- 915
CZK 6/7/00 27,537,569 766,999 771,389 4,390 --
CZK 7/17/00 9,200,000 252,539 257,929 5,390 --
DKK 1/21/00 30,977,576 4,497,980 4,198,279 -- 299,701
EUR 1/21/00 10,031,014 10,413,994 10,120,357 -- 293,637
GBP 1/21/00 5,623,545 9,236,843 9,084,666 -- 152,177
GBP 1/21/00 1,337,542 2,150,893 2,160,758 9,865 --
GRD 2/14/00 246,236,439 757,534 748,443 -- 9,091
GRD 2/16/00 280,000,000 888,409 850,921 -- 37,488
GRD 2/24/00 106,112,127 329,081 322,252 -- 6,829
GRD 3/3/00 86,612,963 268,897 262,869 -- 6,028
HUF 2/9/00 60,199,390 241,000 236,203 -- 4,797
HUF 2/14/00 141,681,150 566,543 555,278 -- 11,265
HUF 2/15/00 389,525,455 1,557,977 1,526,285 -- 31,692
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
52
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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>
HUF 2/16/00 398,453,500 $ 1,589,237 $ 1,560,912 $ -- $ 28,325
HUF 2/18/00 144,533,700 575,304 565,942 -- 9,362
HUF 2/22/00 135,547,650 538,638 530,274 -- 8,364
HUF 2/28/00 66,708,450 265,000 260,614 -- 4,386
IDR 1/24/00 5,091,187,500 675,000 726,882 51,882 --
IDR 1/25/00 4,161,075,000 545,000 594,029 49,029 --
IDR 2/7/00 3,328,100,000 460,000 474,494 14,494 --
IDR 2/15/00 2,004,525,000 287,593 285,557 -- 2,036
IDR 2/15/00 5,048,865,000 711,108 719,242 8,134 --
IDR 2/28/00 1,370,850,000 190,000 195,028 5,028 --
IDR 3/3/00 641,190,000 87,000 91,183 4,183 --
IDR 3/20/00 7,193,040,000 1,011,000 1,021,099 10,099 --
IDR 4/26/00 14,630,000,000 1,400,000 2,068,993 668,993 --
ILS 2/14/00 392,656 92,000 93,959 1,959 --
ILS 2/15/00 2,513,636 589,074 601,406 12,332 --
ILS 2/29/00 2,222,225 519,211 530,617 11,406 --
ILS 3/3/00 235,345 55,000 56,175 1,175 --
ILS 5/18/00 7,250,000 1,654,873 1,714,962 60,089 --
ILS 6/27/00 384,075 90,000 90,475 475 --
INR 1/13/00 38,855,400 885,000 888,073 3,073 --
INR 2/29/00 40,150,200 915,000 913,401 -- 1,599
INR 3/3/00 12,933,550 295,000 294,121 -- 879
INR 3/13/00 64,006,400 1,460,000 1,453,720 -- 6,280
JPY 1/21/00 519,289,854 4,972,900 5,100,530 127,630 --
JPY 1/21/00 26,661,420 261,900 261,872 -- 28
KES 3/24/00 31,811,500 427,000 422,117 -- 4,883
KES 3/27/00 20,780,500 278,000 275,448 -- 2,552
KRW 1/26/00 2,284,142,500 1,885,000 2,017,794 132,794 --
KRW 2/14/00 35,445,000 30,000 31,312 1,312 --
KRW 2/28/00 181,350,000 155,000 160,203 5,203 --
KRW 3/3/00 881,030,000 760,000 778,295 18,295 --
KRW 3/3/00 265,667,500 235,000 234,689 -- 311
KRW 3/9/00 866,765,000 757,000 765,693 8,693 --
KRW 3/17/00 64,552,500 57,000 57,025 25 --
MXN 1/6/00 8,811,755 865,000 926,344 61,344 --
MXN 4/6/00 5,922,500 575,000 603,358 28,358 --
MXN 4/14/00 2,332,296 218,022 236,836 18,814 --
MXN 4/18/00 2,994,006 287,057 303,541 16,484 --
MXN 4/25/00 18,380,000 1,754,062 1,858,161 104,099 --
MXN 5/17/00 11,750,000 1,170,202 1,178,311 8,109 --
MXN 5/30/00 6,000,000 599,131 598,880 -- 251
MXN 10/3/00 5,057,010 483,000 483,517 517 --
MXN 12/29/00 15,637,257 1,449,000 1,453,277 4,277 --
PEN 2/8/00 1,050,000 293,706 295,550 1,844 --
PEN 2/14/00 1,304,500 369,756 366,433 -- 3,323
PEN 2/18/00 1,644,178 460,000 461,213 1,213 --
PHP 2/7/00 6,674,250 165,000 164,667 -- 333
PHP 2/10/00 59,640,000 1,400,000 1,471,100 71,100 --
PHP 2/11/00 55,188,800 1,360,000 1,361,201 1,201 --
PHP 2/24/00 9,932,400 240,000 244,733 4,733 --
PHP 3/2/00 1,860,750 45,000 45,825 825 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
53
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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>
PHP 3/6/00 3,570,000 $ 85,000 $ 87,894 $ 2,894 $ --
PHP 3/10/00 37,800,000 900,000 930,370 30,370 --
PHP 4/5/00 59,846,400 1,440,000 1,468,558 28,558 --
PHP 4/13/00 62,136,500 1,510,000 1,521,063 11,063 --
PHP 4/19/00 6,868,000 170,000 167,820 -- 2,180
PHP 4/19/00 11,527,600 280,000 281,677 1,677 --
PLN 2/8/00 1,386,210 312,985 330,725 17,740 --
PLN 2/10/00 1,593,060 365,465 379,851 14,386 --
PLN 2/16/00 520,734 117,203 123,944 6,741 --
PLN 2/22/00 1,095,502 254,000 260,288 6,288 --
PLN 3/21/00 686,400 160,000 161,879 1,879 --
PLN 4/20/00 589,149 137,075 137,796 721 --
PLN 5/4/00 6,926,725 1,554,820 1,613,621 58,801 --
PLN 5/15/00 4,279,607 947,048 993,839 46,791 --
PLN 10/12/00 3,128,690 703,077 700,945 -- 2,132
PLN 10/31/00 1,189,846 259,000 265,473 6,473 --
SEK 1/21/00 51,112,980 6,127,287 6,015,384 -- 111,903
SKK 1/18/00 31,870,111 749,532 752,436 2,904 --
SKK 1/31/00 37,406,360 851,112 880,958 29,846 --
SKK 2/8/00 29,083,657 688,860 683,512 -- 5,348
SKK 2/9/00 4,914,805 115,148 115,475 327 --
SKK 2/14/00 36,219,159 852,818 849,870 -- 2,948
SKK 3/20/00 38,089,728 891,405 886,519 -- 4,886
SKK 3/21/00 21,302,205 498,531 495,693 -- 2,838
SKK 3/22/00 9,979,010 233,220 232,157 -- 1,063
SKK 5/26/00 19,000,570 437,770 436,109 -- 1,661
SKK 6/5/00 5,641,875 127,675 129,253 1,578 --
SKK 6/13/00 5,160,899 119,107 118,067 -- 1,040
SKK 11/20/00 27,582,189 620,243 613,938 -- 6,305
THB 1/19/00 29,500,000 765,240 782,966 17,726 --
THB 1/20/00 27,266,400 720,000 723,671 3,671 --
THB 2/17/00 26,248,000 680,000 696,435 16,435 --
THB 3/17/00 22,019,100 570,000 584,159 14,159 --
THB 3/21/00 36,874,550 970,000 978,260 8,260 --
------------ ------------ ---------- ----------
$119,995,973 $121,505,698 $2,608,143 $1,098,418
------------ ------------ ---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
54
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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 1/3/00 1,090,436 $ 1,071,155 $ 1,090,108 $ -- $ 18,953
ARS 1/13/00 1,260,000 1,240,157 1,258,364 -- 18,207
ARS 1/18/00 1,130,288 1,125,000 1,128,144 -- 3,144
ARS 2/4/00 817,291 811,693 814,197 -- 2,504
ARS 2/9/00 1,176,285 1,170,782 1,171,132 -- 350
ARS 4/25/00 606,900 600,000 599,526 474 --
ARS 4/26/00 376,190 372,023 371,582 441 --
AUD 1/21/00 6,721,437 4,303,487 4,414,151 -- 110,664
AUD 1/21/00 490,270 325,000 321,974 3,026 --
CAD 1/21/00 1,489,423 1,017,261 1,032,323 -- 15,062
COP 1/11/00 1,295,130,000 690,000 685,556 4,444 --
COP 1/31/00 331,900,000 175,539 174,226 1,313 --
COP 2/7/00 1,319,860,000 689,582 691,524 -- 1,942
DKK 1/21/00 147,225,638 20,733,016 19,952,957 780,059 --
EUR 1/18/00 724,403 749,532 730,694 18,838 --
EUR 1/21/00 66,294,141 69,821,777 66,884,598 2,937,179 --
EUR 1/21/00 243,841 245,257 246,013 -- 756
EUR 1/31/00 788,000 851,111 795,604 55,507 --
EUR 2/8/00 649,770 688,860 656,465 32,395 --
EUR 2/9/00 110,000 115,148 111,142 4,006 --
EUR 2/14/00 813,000 852,818 821,777 31,041 --
EUR 2/15/00 52,033 54,756 52,599 2,157 --
EUR 2/22/00 135,000 137,133 136,546 587 --
EUR 2/24/00 317,000 329,081 320,682 8,399 --
EUR 3/3/00 136,000 138,013 137,663 350 --
EUR 3/20/00 880,887 891,405 892,659 -- 1,254
EUR 3/21/00 492,648 498,530 499,264 -- 734
EUR 3/22/00 230,000 233,220 233,104 116 --
EUR 5/26/00 419,780 437,770 427,381 10,389 --
EUR 6/5/00 125,000 127,675 127,353 322 --
EUR 6/7/00 756,044 766,999 770,385 -- 3,386
EUR 11/20/00 581,780 620,242 599,449 20,793 --
GBP 1/21/00 13,719,812 22,560,090 22,163,941 396,149 --
GBP 1/21/00 2,358,338 3,806,677 3,809,824 -- 3,147
GRD 2/14/00 191,000,000 580,459 580,550 -- 91
GRD 2/16/00 80,000,000 256,451 243,120 13,331 --
GRD 2/24/00 515,650,800 1,564,000 1,565,982 -- 1,982
IDR 2/7/00 3,328,100,000 392,002 474,494 -- 82,492
IDR 4/26/00 14,630,000,000 1,741,667 2,068,993 -- 327,326
ILS 5/18/00 5,450,000 1,249,771 1,289,178 -- 39,407
JPY 1/11/00 48,016,150 455,000 470,830 -- 15,830
JPY 1/21/00 1,674,151,980 15,479,653 16,443,730 -- 964,077
JPY 1/21/00 31,304,180 308,604 307,474 1,130 --
MXN 1/6/00 8,811,755 922,793 926,344 -- 3,551
MXN 4/25/00 8,380,000 836,542 847,192 -- 10,650
MXN 5/17/00 5,500,000 551,517 551,550 -- 33
PHP 2/10/00 59,640,000 1,504,693 1,471,100 33,593 --
PHP 2/11/00 1,270,000 30,961 31,324 -- 363
PHP 4/13/00 33,989,000 820,000 832,030 -- 12,030
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
55
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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>
PLN 2/8/00 1,386,210 $ 321,314 $ 330,725 $ -- $ 9,411
PLN 2/10/00 1,593,060 369,063 379,851 -- 10,788
PLN 2/16/00 161,804 37,424 38,512 -- 1,088
SEK 1/21/00 79,796,927 9,798,820 9,391,141 407,679 --
THB 1/19/00 29,500,000 799,458 782,966 16,492 --
THB 1/20/00 27,266,400 738,927 723,671 15,256 --
------------ ------------ ---------- ----------
$177,009,908 $173,873,664 $4,795,466 $1,659,222
------------ ------------ ---------- ----------
Gross unrealized appreciation/depreciation from Forward Foreign Currency Contracts $7,403,609 $2,757,640
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
56
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO PORTFOLIOS OF INVESTMENTS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
(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 $ 421,380,709 $ 92,885,907 $ 14,509,624 $ 78,376,283
Mid Cap 42,689,224 3,480,811 4,445,832 (965,021)
Small Cap 1,037,254,459 92,260,030 136,773,330 (44,513,300)
Global Equity 60,435,694 13,348,363 4,023,623 9,324,740
International Equity 2,902,260,471 982,940,255 167,938,318 815,001,937
International Small Cap 178,340,147 56,188,735 14,886,961 41,301,774
Emerging Markets 381,607,102 131,573,764 38,304,138 93,269,626
Bond 133,793,071 473,532 2,866,236 (2,392,704)
High Yield 85,265,064 1,261,703 3,380,427 (2,118,724)
International Fixed-Income 75,153,248 5,536,987 3,943,960 1,593,027
Strategic Yield 334,641,807 3,995,656 18,033,600 (14,037,944)
</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 December 31, 1999, these securities
amounted to $6,743,637, $16,288,887, $2,445,372 $20,147,125, $2,673,110,
and $28,150,184 or 3.06%, 3.42%, 2.37%, 23.71%, 3.44%, and 8.74% of the
net assets of 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 December 31, 1999, Small Cap Portfolio held the following security which
was a private placement and therefore restricted as to resale, and
representing 0.00% (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.
(j) Interest-only Security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
57
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO PORTFOLIOS OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
Abbreviations:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
TBA--To Be Announced
REMIC--Real Estate Mortgage Investment Conduit
<TABLE>
<CAPTION>
CURRENCY TERMS
- --------------
<S> <C>
ARS-- Argentine Peso HUF-- Hungarian Forint
AUD-- Australian Dollar IDR-- Indonesian Rupiah
BRL-- Brazilian Real ILS-- Israeli Shekel
CAD-- Canadian Dollar INR-- Indian Rupee
CHF-- Swiss Franc JPY-- Japanese Yen
CLP-- Chilean Peso KES-- Kenyan Shilling
CNY-- Chinese Yuan Renminbi KRW-- South Korean Won
COP-- Colombian Peso MXN-- Mexican Peso
CRC -- Costa Rican Colon PEN-- Peruvian Nouveau Sol
CZK -- Czech Koruna PHP-- Philippine Peso
DEM-- German Deutsche Mark PLN -- Polish Zloty
DKK-- Danish Krone SEK-- Swedish Krona
EUR-- Euro Currency SKK-- Slovakian Koruna
GBP-- British Pound Sterling THB-- Thailand Baht
GRD-- Greek Drachma USD-- United States Dollar
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
58
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO PORTFOLIOS OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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 ................................... --% --% 6.5% --%
Aerospace & Defense ........................... 3.4 1.2 1.8 --
Airlines ...................................... -- 1.2 -- --
Apparel & Textiles ............................ -- -- 3.6 --
Automotive .................................... 3.6 3.7 1.3 --
Banking & Financial Services .................. 17.2 19.7 13.5 15.5
Brewery ....................................... 1.3 2.2 -- 4.9
Broadcasting .................................. -- -- 1.4 2.7
Building & Construction ....................... -- -- 2.0 --
Business Services & Supplies .................. -- -- 5.4 --
Chemicals & Plastics .......................... 1.1 1.1 1.0 --
Commercial Services ........................... 1.1 1.5 -- --
Communication Services ........................ 2.7 3.1 -- --
Computer Software ............................. -- -- 4.0 --
Computers & Business Equipment ................ 3.5 -- -- --
Conglomerates ................................. 0.8 -- -- 5.1
Construction & Materials ...................... 0.7 1.2 -- 3.0
Consumer Goods ................................ 1.0 0.9 -- --
Cosmetics & Toiletries ........................ 0.9 1.3 -- --
Distribution .................................. -- -- 2.2 --
Diversified ................................... 1.9 -- -- --
Drugs & Health Care ........................... 8.4 6.9 7.1 --
Electrical Equipment .......................... 6.3 8.8 -- 4.5
Electronics ................................... 6.5 3.4 4.2 0.3
Environmental Services ........................ -- -- 0.3 --
Food & Beverages .............................. 3.9 2.1 2.3 5.2
Forest Products ............................... 1.3 1.2 -- --
Holding Company--Diversified .................. -- -- 2.8 --
Hospitals & Long Term Care .................... -- -- 1.4 --
Hotels & Restaurants .......................... 1.2 -- 0.9 --
Household Products & Home Furnishings ......... -- 1.3 3.4 --
Industrial Construction ....................... -- -- -- 1.1
Industrial & Machinery ........................ -- -- 4.2 --
Insurance ..................................... 3.6 6.9 4.3 2.7
Leisure/Entertainment ......................... 1.1 1.5 2.5 --
Manufacturing ................................. 4.0 6.1 -- 1.1
Medical Products .............................. -- -- 0.9 --
Medical Supplies .............................. -- -- 1.0 --
Metals ........................................ -- -- -- 3.7
Oil & Gas ..................................... 5.1 4.6 -- 2.5
Paper Products ................................ -- -- -- 1.4
Petroleum Equipement & Services ............... 1.9 2.0 -- --
Photography ................................... 1.1 -- -- --
Plastics ...................................... -- -- 0.7 --
Printing ...................................... -- -- 2.2 0.9
Publishing .................................... -- 1.1 3.0 --
Railroad ...................................... -- -- -- 0.3
Repurchase Agreement .......................... 1.5 0.9 3.2 3.1
Retail ........................................ 1.0 1.9 6.8 4.6
Services ...................................... 1.1 -- 4.6 --
Steel ......................................... -- -- 0.8 3.4
Telecommunications ............................ 9.2 8.6 -- 21.5
Telecommunications Equipment .................. -- -- -- 1.5
Telephone ..................................... -- -- -- 4.0
Tobacco ....................................... -- 1.5 -- 2.2
Toys & Amusement .............................. -- 0.9 0.5 --
Utilities ..................................... 3.5 3.1 -- 4.6
---- ------- ---- ------
Total Investments ............................. 99.9% 99.9% 99.8% 99.8%
==== ======= ==== ======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
59
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO PORTFOLIOS OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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% 1.8%
Collateralized Mortgage Obligations ............ -- 5.8
Commercial Paper ............................... -- 1.4
Corporate Bonds ................................ 59.5 43.2
Discount Notes ................................. 7.1 20.2
Foreign Government Obligations ................. 15.0 13.0
Mortgage Pass-Through Securities ............... -- 5.5
Preferred Stocks ............................... -- 2.4
Repurchase Agreement ........................... 2.2 0.9
Structured Notes ............................... 3.8 4.5
U.S. Government and Agency Obligations ......... 9.4 0.8
---- ------
Total Investments .............................. 98.8% 99.5%
==== ======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
61
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD
EQUITY MID CAP SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ---------------- ---------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (cost $409,821,835,
$41,813,455, $1,002,502,244, $59,357,494,
$2,786,147,713, $171,407,150, $366,213,176,
$121,211,897, $84,331,970, $73,799,921, and
$332,179,166, respectively)...................................... $ 488,199,992 $ 41,239,203 $ 959,277,159
Repurchase Agreements, at value .................................. 11,557,000 485,000 33,464,000
Cash ............................................................. 682 824 854
Foreign currency (cost $0, $0, $0, $0, $404, $75,631,
$138,380, $0, $0, $131,883, and $260,604, respectively).......... -- -- --
Receivables for:
Investments sold ................................................ -- -- --
Dividends and interest .......................................... 530,748 40,532 1,323,083
Capital stock sold .............................................. 196,761 208 1,651,012
Gross appreciation on foreign currency contracts ................ -- -- --
Deferred organizational expenses ................................. -- 13,726 --
------------- ------------- -------------
Total assets ..................................................... 500,485,183 41,779,493 995,716,108
------------- ------------- -------------
LIABILITIES
Payables for:
Investments purchased ........................................... -- -- --
Capital stock repurchased ....................................... 424,041 146,172 1,602,884
Dividends payable ............................................... -- -- --
Gross depreciation on foreign currency contracts ................ -- -- --
Investment management fees payable ............................... 324,862 55,911 642,793
Accrued directors' fees payable .................................. 3,665 3,665 3,665
Accrued distribution fees payable ................................ 26,294 3,015 18,269
Other accrued expenses and payables .............................. 52,488 25,879 90,638
------------- ------------- -------------
Total liabilities ................................................ 831,350 234,642 2,358,249
------------- ------------- -------------
Net assets ....................................................... 499,653,833 41,544,851 993,357,859
============= ============= =============
NET ASSETS
Paid in capital .................................................. 414,261,716 38,904,655 990,164,619
Undistributed (distributions in excess of)
Investment income--net .......................................... 91,979 -- 6,823,150
Unrealized appreciation (depreciation) on:
Investments--net ................................................ 78,378,157 (574,252) (43,225,085)
Foreign currency--net ........................................... -- -- --
Accumulated realized gain (loss)--net ............................ 6,921,981 3,214,448 39,595,175
------------- ------------- -------------
Net assets ....................................................... $ 499,653,833 $ 41,544,851 $ 993,357,859
============= ============= =============
INSTITUTIONAL SHARES
Net assets ....................................................... $ 377,659,765 $ 27,520,545 $ 906,944,606
Shares of capital stock outstanding* ............................. 17,915,506 2,553,780 54,749,412
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 21.08 $ 10.78 $ 16.57
OPEN SHARES
Net assets ....................................................... $ 121,994,068 $ 14,024,306 $ 86,413,253
Shares of capital stock outstanding* ............................. 5,796,320 1,306,121 5,233,657
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 21.05 $ 10.74 $ 16.51
</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.
62
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD
GLOBAL INTERNATIONAL INTERNATIONAL
EQUITY EQUITY SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------ ----------------- -----------------
<S><C> <C> <C>
$ 68,711,434 $3,682,930,408 $ 212,708,921
1,049,000 34,332,000 6,933,000
103 296 195
-- 404 75,970
-- -- --
95,903 5,003,496 571,755
141,060 3,295,335 44,144
-- -- --
178 -- --
------------ -------------- -------------
69,997,678 3,725,561,939 220,333,985
------------ -------------- -------------
-- -- --
-- 327,819 58
-- -- --
-- -- --
142,445 2,298,741 134,761
3,665 3,665 3,665
1,279 28,178 507
31,429 679,722 69,960
------------ -------------- -------------
178,818 3,338,125 208,951
------------ -------------- -------------
69,818,860 3,722,223,814 220,125,034
============ ============== =============
60,105,393 2,806,207,514 178,022,975
(11,483) (48,028,440) 146,077
9,353,940 896,782,695 41,301,771
(1,305) (159,357) (7,752)
372,315 67,421,402 661,963
------------ -------------- -------------
$ 69,818,860 $3,722,223,814 $ 220,125,034
============ ============== =============
$ 63,557,302 $3,584,093,178 $ 217,683,999
4,366,106 207,337,268 15,418,580
$ 14.56 $ 17.29 $ 14.12
$ 6,261,558 $ 138,130,636 $ 2,441,035
430,069 7,994,053 173,602
$ 14.56 $ 17.28 $ 14.06
<CAPTION>
LAZARD LAZARD
EMERGING LAZARD LAZARD INTERNATIONAL LAZARD
MARKETS BOND HIGH YIELD FIXED-INCOME STRATEGIC YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ---------------- -------------- --------------- ----------------
<S><C> <C> <C> <C> <C>
$ 460,174,728 $ 118,898,367 $ 82,342,340 $ 75,068,275 $ 317,745,863
14,702,000 12,502,000 804,000 1,678,000 2,858,000
708 870 23 379 564
139,669 -- -- 131,439 260,444
-- -- -- 105,210 1,665,165
768,883 948,012 1,996,378 1,089,381 4,872,673
531,180 179 -- 20,293 18,138
-- -- -- 2,048,032 7,403,609
-- -- 14,507 -- --
------------- ------------- ------------ ------------ -------------
476,317,168 132,349,428 85,157,248 80,141,009 334,824,456
------------- ------------- ------------ ------------ -------------
-- 29,030,346 -- 49,827 9,234,793
329 -- 26,891 52,680 180
-- 42,442 14,059 3,144 353,275
-- -- -- 2,265,586 2,757,640
394,638 75,270 117,067 65,632 247,901
3,665 3,665 3,665 3,665 3,665
2,297 2,533 356 781 3,412
147,210 33,094 25,440 45,807 72,299
------------- ------------- ------------ ------------ -------------
548,139 29,187,350 187,478 2,487,122 12,673,165
------------- ------------- ------------ ------------ -------------
475,769,029 103,162,078 84,969,770 77,653,887 322,151,291
============= ============= ============ ============ =============
436,974,802 110,772,924 94,688,950 77,587,304 363,354,068
(525,783) (551,061) 267 (165,595) 6,042,917
93,961,552 (2,313,530) (1,989,630) 1,268,354 (14,433,303)
5,571 -- -- (235,481) 4,606,589
(54,647,113) (4,746,255) (7,729,817) (800,695) (37,418,980)
------------- ------------- ------------ ------------ -------------
$ 475,769,029 $ 103,162,078 $ 84,969,770 $ 77,653,887 $ 322,151,291
============= ============= ============ ============ =============
$ 465,277,971 $ 91,557,165 $ 83,664,378 $ 73,870,888 $ 306,116,480
43,466,805 9,853,933 9,535,605 7,252,221 34,670,734
$ 10.70 $ 9.29 $ 8.77 $ 10.19 $ 8.83
$ 10,491,058 $ 11,604,913 $ 1,305,392 $ 3,782,999 $ 16,034,811
977,024 1,248,705 148,700 372,893 1,816,497
$ 10.74 $ 9.29 $ 8.78 $ 10.14 $ 8.83
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
63
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD
LAZARD LAZARD LAZARD GLOBAL
EQUITY MID CAP SMALL CAP EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME:
Interest ...................................... $ 752,027 $ 53,292 $ 2,920,243 $ 127,985
Dividends ..................................... 9,805,802 705,501 14,134,904 1,253,228
------------ -------------- -------------- --------------
Total investment income* ....................... 10,557,829 758,793 17,055,147 1,381,213
------------ -------------- -------------- --------------
EXPENSES:
Management fees ............................... 3,998,410 445,394 9,055,989 432,935
Administration fees ........................... 151,625 56,876 265,671 56,545
Distribution fees (Open Shares) ............... 359,638 35,568 246,480 15,652
Custodian fees ................................ 119,822 59,740 185,919 99,675
Professional services ......................... 43,979 35,938 56,476 35,612
Registration fees ............................. 50,733 29,697 50,423 31,220
Shareholders' services ........................ 71,221 54,178 133,188 46,943
Directors' fees and expenses .................. 12,285 12,285 12,285 12,285
Shareholders' reports ......................... 22,680 11,178 50,702 3,321
Amortization of organizational expenses ....... -- 4,829 -- 183
Other ......................................... 21,656 2,983 54,474 2,279
------------ -------------- -------------- --------------
Total expenses before fees waived and expenses
reimbursed .................................... 4,852,049 748,666 10,111,607 736,650
Management fees waived and expenses
reimbursed .................................... -- (82,408) -- (111,760)
Expense reductions ............................ (8,037) -- -- --
------------ -------------- -------------- --------------
Expenses--net .................................. 4,844,012 666,258 10,111,607 624,890
------------ -------------- -------------- --------------
INVESTMENT INCOME (LOSS)--NET .................. 5,713,817 92,535 6,943,540 756,323
------------ -------------- -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, CROSS CURRENCY
SWAPS AND FOREIGN CURRENCY--NET
Realized gain (loss) on:
Investments and cross currency swaps--net..... 22,683,544 3,443,959 104,474,693 2,893,788
Foreign currency--net ........................ -- -- -- (995)
Net change in unrealized appreciation
(depreciation) on:
Investments--net ............................. (7,619,666) (2,411,437) (133,084,218) 6,399,569
Foreign currency--net ........................ -- -- -- (1,856)
------------ -------------- -------------- --------------
Realized and unrealized gain (loss) on
investments, cross currency swaps and
foreign currency--net ......................... 15,063,878 1,032,522 (28,609,525) 9,290,506
------------ -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ............................... $ 20,777,695 $ 1,125,057 $ (21,665,985) $ 10,046,829
============ ============== ============== ==============
* Net of foreign withholding taxes of: ......... $ 188,602 $ -- $ 48 $ 84,799
============ ============== ============== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD LAZARD
INTERNATIONAL INTERNATIONAL EMERGING LAZARD LAZARD INTERNATIONAL LAZARD
EQUITY SMALL CAP MARKETS BOND HIGH YIELD FIXED-INCOME STRATEGIC YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------- ---------------- --------------- ----------------- -------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,741,792 $ 351,943 $ 719,637 $ 7,424,159 $ 8,194,131 $ 4,651,795 $ 26,412,902
92,224,683 3,804,899 7,643,355 -- 384,379 -- 875,039
------------ ------------- ------------ -------------- ------------ -------------- -------------
95,966,475 4,156,842 8,362,992 7,424,159 8,578,510 4,651,795 27,287,941
------------ ------------- ------------ -------------- ------------ -------------- -------------
24,275,244 1,424,719 3,643,706 570,987 583,680 752,225 2,647,590
468,671 82,993 117,874 67,840 60,565 65,060 115,603
243,166 6,658 23,394 34,006 3,386 11,118 55,068
3,183,541 280,914 615,288 101,226 73,620 178,259 294,791
89,733 37,924 40,415 36,816 36,397 36,692 41,064
100,060 35,873 38,433 33,655 25,827 39,081 34,931
114,958 55,212 60,077 51,723 45,204 57,445 58,482
12,285 12,285 12,285 12,285 12,285 12,285 12,285
52,753 11,711 10,868 7,985 1,696 13,944 14,555
-- -- -- -- 4,939 -- --
111,050 7,767 31,478 5,095 3,157 6,045 13,257
------------ ------------- ------------ -------------- ------------ -------------- -------------
28,651,461 1,956,056 4,593,818 921,618 850,756 1,172,154 3,287,626
-- (18,247) (13,643) (7,051) (103,715) (66,314) --
(1,328) (284) (15,232) -- (10,120) -- --
------------ ------------- ------------ -------------- ------------ -------------- -------------
28,650,133 1,937,525 4,564,943 914,567 736,921 1,105,840 3,287,626
------------ ------------- ------------ -------------- ------------ -------------- -------------
67,316,342 2,219,317 3,798,049 6,509,592 7,841,589 3,545,955 24,000,315
------------ ------------- ------------ -------------- ------------ -------------- -------------
276,199,370 1,425,429 (297,692) (4,899,519) (5,468,472) (3,101,056) (20,383,172)
(8,914,460) (167,971) (632,019) -- -- (1,091,940) 9,164,836
405,514,343 42,619,439 170,950,299 (2,234,468) (843,969) (3,113,094) (318,998)
(384,477) (8,941) 6,652 -- -- (888,216) 4,360,757
------------ ------------- ------------ -------------- ------------ -------------- -------------
672,414,776 43,867,956 170,027,240 (7,133,987) (6,312,441) (8,194,306) (7,176,577)
------------ ------------- ------------ -------------- ------------ -------------- -------------
$739,731,118 $ 46,087,273 $173,825,289 $ (624,395) $ 1,529,148 $ (4,648,351) $ 16,823,738
============ ============= ============ ============== ============ ============== =============
$ 8,157,162 $ 449,147 $ 681,839 $ -- $ -- $ 1,756 $ 17,581
============ ============= ============ ============== ============ ============== =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
65
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD EQUITY
PORTFOLIO
--------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)--net ................................................... $ 5,713,817 $ 5,367,744
Realized gain (loss) on investments and foreign currency--net ................... 22,683,544 36,224,831
Change in unrealized appreciation (depreciation)--net ........................... (7,619,666) 24,446,325
-------------- -------------
Net increase (decrease) in net assets resulting from operations .................. 20,777,695 66,038,900
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net
Institutional Shares ........................................................... (4,442,659) (4,333,091)
Open Shares ..................................................................... (1,298,892) (934,432)
From realized gains--net
Institutional Shares ........................................................... (22,408,104) (21,315,461)
Open Shares ..................................................................... (7,906,169) (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 ......................... (36,055,824) (33,278,467)
-------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales
Institutional Shares ........................................................... 161,627,546 87,372,723
Open Shares ..................................................................... 84,343,406 120,385,150
Net proceeds in connection with acquisition of Bantam Value Portfolio
Institutional Shares ........................................................... -- --
Open Shares ..................................................................... -- --
Net proceeds from reinvestment of distributions
Institutional Shares ........................................................... 26,163,636 24,696,654
Open Shares ..................................................................... 9,119,227 7,533,249
Cost of shares redeemed
Institutional Shares ........................................................... (158,758,835) (111,996,715)
Open Shares ..................................................................... (86,312,838) (38,387,846)
-------------- -------------
Net increase (decrease) in net assets from capital stock transactions ............ 36,182,142 89,603,215
-------------- -------------
Total increase (decrease) in net assets .......................................... 20,904,013 122,363,648
Net assets at beginning of year .................................................. 478,749,820 356,386,172
-------------- -------------
Net assets at end of year* ....................................................... $ 499,653,833 $ 478,749,820
============== =============
SHARES ISSUED AND REPURCHASED:
INSTITUTIONAL SHARES:
Shares outstanding at beginning of year ......................................... 16,605,093 16,695,862
-------------- -------------
Shares sold ..................................................................... 7,217,805 4,095,584
Shares issued in connection with acquisition of Bantam Value Portfolio .......... -- --
Shares issued to shareholders from reinvestment of distributions ................ 1,227,452 1,165,225
Shares repurchased .............................................................. (7,134,844) (5,351,578)
-------------- -------------
Net increase (decrease) ......................................................... 1,310,413 (90,769)
-------------- -------------
Shares outstanding at end of year ............................................... 17,915,506 16,605,093
============== =============
OPEN SHARES:
Shares outstanding at beginning of year ......................................... 5,406,563 1,141,207
-------------- -------------
Shares sold ..................................................................... 3,792,337 5,735,707
Shares issued in connection with acquisition of Bantam Value Portfolio .......... -- --
Shares issued to shareholders from reinvestment of distributions ................ 426,832 355,884
Shares repurchased .............................................................. (3,829,412) (1,826,235)
-------------- -------------
Net increase (decrease) ......................................................... 389,757 4,265,356
-------------- -------------
Shares outstanding at end of year ............................................... 5,796,320 5,406,563
============== =============
*Includes undistributed (distributions in excess of) investment income--net ..... $ 91,979 $ 119,713
============== =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD MID CAP LAZARD SMALL CAP LAZARD GLOBAL EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------ --------------------------------------- --------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------- ------------------- ------------------- ------------------- ------------------
<S><C> <C> <C> <C> <C> <C>
$ 92,535 $ 277,277 $ 6,943,540 $ 7,081,785 $ 756,323 $ 160,566
3,443,959 1,047,283 104,474,693 (8,015,535) 2,892,793 862,558
(2,411,437) 551,315 (133,084,218) (200,026,407) 6,397,713 1,695,809
--------------- --------------- ---------------- -------------- ---------------- --------------
1,125,057 1,875,875 (21,665,985) (200,960,157) 10,046,829 2,718,933
--------------- --------------- ---------------- -------------- ---------------- --------------
(85,319) (238,083) (6,644,255) (682,951) (720,338) (109,536)
(20,147) (51,279) (425,376) -- (62,237) (14,500)
(374,199) (593,806) (51,857,819) (7,744,125) (2,116,975) (821,122)
(134,758) (171,721) (4,948,488) (533,570) (204,954) (225,207)
(1,176) (18,334) -- -- (146,012) --
(278) (3,181) -- -- (12,615) --
-- -- -- -- -- (10,308)
-- -- -- -- (3,101)
--------------- --------------- -------------- ---------------- --------------
(615,877) (1,076,404) (63,875,938) (8,960,646) (3,263,131) (1,183,774)
--------------- --------------- ---------------- -------------- ---------------- --------------
2,700,743 20,622,564 547,345,994 726,841,164 378,158,687 6,063,563
8,445,908 20,111,962 74,792,124 131,639,336 2,661,134 3,126,095
-- -- 26,354,774 -- -- --
-- -- 3,571,473 -- -- --
410,589 781,532 53,233,833 10,219,065 2,671,819 933,169
144,681 211,355 5,313,688 521,384 234,521 204,554
(31,356,602) (16,067,323) (1,050,552,721) (577,391,571) (341,154,104) (1,037,949)
(11,385,727) (5,968,971) (86,209,652) (68,030,676) (2,071,191) (939,052)
--------------- --------------- ---------------- -------------- ---------------- --------------
(31,040,408) 19,691,119 (426,150,487) 223,798,702 40,500,866 8,350,380
--------------- --------------- ---------------- -------------- ---------------- --------------
(30,531,228) 20,490,590 (511,692,410) 13,877,899 47,284,564 9,885,539
72,076,079 51,585,489 1,505,050,269 1,491,172,370 22,534,296 12,648,757
--------------- --------------- ---------------- -------------- ---------------- --------------
$ 41,544,851 $ 72,076,079 $ 993,357,859 $1,505,050,269 $ 69,818,860 $ 22,534,296
=============== =============== ================ ============== ================ ==============
5,327,538 4,851,388 81,187,480 72,186,366 1,347,859 870,086
--------------- --------------- ---------------- -------------- ---------------- --------------
253,804 1,986,263 31,129,994 39,866,121 26,763,658 487,546
-- -- 1,385,450 -- -- --
39,427 79,580 3,315,054 544,378 189,315 72,432
(3,066,989) (1,589,693) (62,268,566) (31,409,385) (23,934,726) (82,205)
--------------- --------------- ---------------- -------------- ---------------- --------------
(2,773,758) 476,150 (26,438,068) 9,001,114 3,018,247 477,773
--------------- --------------- ---------------- -------------- ---------------- --------------
2,553,780 5,327,538 54,749,412 81,187,480 4,366,106 1,347,859
=============== =============== ================ ============== ================ ==============
1,564,634 176,048 5,391,454 2,302,364 366,528 192,168
--------------- --------------- ---------------- -------------- ---------------- --------------
810,630 1,988,746 4,303,821 6,772,629 188,541 233,011
-- -- 188,462 -- -- --
14,014 21,545 333,269 28,259 16,602 15,814
(1,083,157) (621,705) (4,983,349) (3,711,798) (141,602) (74,465)
--------------- --------------- ---------------- -------------- ---------------- --------------
(258,513) 1,388,586 (157,797) 3,089,090 63,541 174,360
--------------- --------------- ---------------- -------------- ---------------- --------------
1,306,121 1,564,634 5,233,657 5,391,454 430,069 366,528
=============== =============== ================ ============== ================ ==============
$ -- $ 13,218 $ 6,823,150 $ 7,069,548 $ (11,483) $ (9,939)
=============== =============== ================ ============== ================ ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
67
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD INTERNATIONAL EQUITY
PORTFOLIO
--------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)--net .................................................. $ 67,316,342 $ 35,324,118
Realized gain (loss) on investments and foreign currency--net .................. 267,284,910 136,266,402
Change in unrealized appreciation (depreciation)--net .......................... 405,129,866 178,170,268
---------------- --------------
Net increase (decrease) in net assets resulting from operations ................. 739,731,118 349,760,788
---------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net
Institutional Shares .......................................................... (70,479,560) (25,534,748)
Open Shares .................................................................... (2,472,196) (250,536)
From realized gains--net
Institutional Shares .......................................................... (191,266,859) (144,495,716)
Open Shares .................................................................... (7,348,292) (2,219,617)
In excess of investment income--net
Institutional Shares .......................................................... (32,606,665) --
Open Shares .................................................................... (1,143,737) --
In excess of realized gains--net
Institutional Shares .......................................................... -- --
Open Shares .................................................................... -- --
---------------- --------------
Net decrease in net assets resulting from distributions ......................... (305,317,309) (172,500,617)
---------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales
Institutional Shares .......................................................... 1,567,830,033 1,265,219,569
Open Shares .................................................................... 290,150,531 140,707,664
Net proceeds from reinvestment of distributions
Institutional Shares .......................................................... 274,265,893 168,928,556
Open Shares .................................................................... 9,632,374 2,243,315
Cost of shares redeemed
Institutional Shares .......................................................... (1,557,031,320) (829,574,309)
Open Shares .................................................................... (223,629,942) (108,710,913)
---------------- --------------
Net increase (decrease) in net assets from capital stock transactions ........... 361,217,569 638,813,882
---------------- --------------
Total increase (decrease) in net assets ......................................... 795,631,378 816,074,053
Net assets at beginning of year ................................................. 2,926,592,436 2,110,518,383
---------------- --------------
Net assets at end of year* ...................................................... $ 3,722,223,814 $2,926,592,436
================ ==============
SHARES ISSUED AND REPURCHASED:
INSTITUTIONAL SHARES:
Shares outstanding at beginning of year ........................................ 189,079,168 150,349,803
---------------- --------------
Shares sold .................................................................... 97,266,494 81,842,532
Shares issued to shareholders from reinvestment of distributions ............... 16,569,235 11,354,528
Shares repurchased ............................................................. (95,577,629) (54,467,695)
---------------- --------------
Net increase (decrease) ........................................................ 18,258,100 38,729,365
---------------- --------------
Shares outstanding at end of year .............................................. 207,337,268 189,079,168
================ ==============
OPEN SHARES:
Shares outstanding at beginning of year ........................................ 3,106,682 773,878
---------------- --------------
Shares sold .................................................................... 18,015,062 9,132,813
Shares issued to shareholders from reinvestment of distributions ............... 582,110 150,724
Shares repurchased ............................................................. (13,709,801) (6,950,733)
---------------- --------------
Net increase (decrease) ........................................................ 4,887,371 2,332,804
---------------- --------------
Shares outstanding at end of year .............................................. 7,994,053 3,106,682
================ ==============
*Includes undistributed (distributions in excess of) investment income-net ..... $ (48,028,440) $ (20,141,111)
================ ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
68
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD INTERNATIONAL SMALL CAP LAZARD EMERGING MARKETS LAZARD BOND
PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------- ---------------------------------------- -----------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------- ------------------- ------------------- ------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,219,317 $ 1,368,388 $ 3,798,049 $ 5,108,200 $ 6,509,592 $ 5,668,900
1,257,458 12,681,814 (929,711) (48,799,388) (4,899,519) 1,363,055
42,610,498 (4,953,609) 170,956,951 (28,009,620) (2,234,468) (1,212,836)
--------------- --------------- -------------- ------------- ---------------- ---------------
46,087,273 9,096,593 173,825,289 (71,700,808) (624,395) 5,819,119
--------------- --------------- -------------- ------------- ---------------- ---------------
(1,852,846) (752,862) (4,349,612) (4,058,419) (5,357,536) (5,116,501)
(17,000) (5,976) (79,945) (121,120) (671,175) (589,199)
(1,722,369) (15,715,143) -- -- -- (1,325,439)
(22,299) (221,751) -- -- -- (200,980)
-- -- (122,189) -- (478,824) (70)
-- -- (2,246) -- (59,985) (9)
-- -- -- -- -- (150,643)
-- -- -- -- -- (18,525)
--------------- --------------- -------------- ------------- ---------------- ---------------
(3,614,514) (16,695,732) (4,553,992) (4,179,539) (6,567,520) (7,401,366)
--------------- --------------- -------------- ------------- ---------------- ---------------
60,812,490 105,522,613 181,437,898 223,793,607 363,141,029 30,642,538
1,056,862 7,946,853 14,452,309 42,143,524 5,171,755 10,295,197
3,347,465 15,939,095 3,865,326 6,418,310 5,137,228 6,003,999
34,262 221,922 75,410 39,672 653,992 714,757
(66,183,628) (77,988,431) (183,031,252) (95,979,356) (370,764,169) (27,312,623)
(1,840,507) (7,184,846) (16,525,857) (38,420,599) (8,608,945) (2,849,142)
--------------- --------------- -------------- ------------- ---------------- ---------------
(2,773,056) 44,457,206 273,834 137,995,158 (5,269,110) 17,494,726
--------------- --------------- -------------- ------------- ---------------- ---------------
39,699,703 36,858,067 169,545,131 62,114,811 (12,461,025) 15,912,479
180,425,331 143,567,264 306,223,898 244,109,087 115,623,103 99,710,624
--------------- --------------- -------------- ------------- ---------------- ---------------
$ 220,125,034 $ 180,425,331 $ 475,769,029 $ 306,223,898 $ 103,162,078 $ 115,623,103
=============== =============== ============== ============= ================ ===============
15,590,528 12,122,940 42,950,229 25,697,597 10,154,742 9,217,915
--------------- --------------- -------------- ------------- ---------------- ---------------
5,033,426 7,901,725 23,270,856 28,909,650 38,115,392 3,060,161
255,727 1,379,036 395,536 845,770 538,765 599,942
(5,461,101) (5,813,173) (23,149,816) (12,502,788) (38,954,966) (2,723,276)
--------------- --------------- -------------- ------------- ---------------- ---------------
(171,948) 3,467,588 516,576 17,252,632 (300,809) 936,827
--------------- --------------- -------------- ------------- ---------------- ---------------
15,418,580 15,590,528 43,466,805 42,950,229 9,853,933 10,154,742
=============== =============== ============== ============= ================ ===============
232,449 160,229 1,176,048 844,049 1,540,500 726,613
--------------- --------------- -------------- ------------- ---------------- ---------------
93,525 571,256 2,069,221 5,261,508 534,487 1,025,899
2,602 19,069 7,481 7,814 68,542 71,508
(154,974) (518,105) (2,275,726) (4,937,323) (894,824) (283,520)
--------------- --------------- -------------- ------------- ---------------- ---------------
(58,847) 72,220 (199,024) 331,999 (291,795) 813,887
--------------- --------------- -------------- ------------- ---------------- ---------------
173,602 232,449 977,024 1,176,048 1,248,705 1,540,500
=============== =============== ============== ============= ================ ===============
$ 146,077 $ (35,422) $ (525,783) $ 220,015 $ (551,061) $ (180,445)
=============== =============== ============== ============= ================ ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
69
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD HIGH YIELD
PORTFOLIO
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)--net ........................................................... $ 7,841,589
Realized gain (loss) on investments, cross currency swaps and foreign currency--net ..... (5,468,472)
Change in unrealized appreciation (depreciation)--net ................................... (843,969)
------------
Net increase (decrease) in net assets resulting from operations .......................... 1,529,148
------------
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net
Institutional Shares ................................................................... (7,707,773)
Open Shares ............................................................................. (133,823)
From realized gains--net
Institutional Shares ................................................................... --
Open Shares ............................................................................. --
In excess of investment income--net
Institutional Shares ................................................................... (9,851)
Open Shares ............................................................................. (171)
In excess of realized gains--net
Institutional Shares ................................................................... --
Open Shares ............................................................................. --
From capital--net
Institutional Shares ................................................................... --
Open Shares ............................................................................. --
------------
Net decrease in net assets resulting from distributions .................................. (7,851,618)
------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales
Institutional Shares ................................................................... 45,382,021
Open Shares ............................................................................. 999,125
Net proceeds from reinvestment of distributions
Institutional Shares ................................................................... 7,582,376
Open Shares ............................................................................. 121,082
Cost of shares redeemed
Institutional Shares ................................................................... (5,033,496)
Open Shares ............................................................................. (642,431)
------------
Net increase (decrease) in net assets from capital stock transactions .................... 48,408,677
------------
Total increase (decrease) in net assets .................................................. 42,086,207
Net assets at beginning of year .......................................................... 42,883,563
------------
Net assets at end of year* ............................................................... $ 84,969,770
============
SHARES ISSUED AND REPURCHASED:
INSTITUTIONAL SHARES:
Shares outstanding at beginning of year ................................................. 4,453,235
------------
Shares sold ............................................................................. 4,793,737
Shares issued to shareholders from reinvestment of distributions ........................ 833,182
Shares repurchased ...................................................................... (544,549)
------------
Net increase (decrease) ................................................................. 5,082,370
------------
Shares outstanding at end of year ....................................................... 9,535,605
============
OPEN SHARES:
Shares outstanding at beginning of year ................................................. 100,729
------------
Shares sold ............................................................................. 108,247
Shares issued to shareholders from reinvestment of distributions ........................ 12,591
Shares repurchased ...................................................................... (72,867)
------------
Net increase (decrease) ................................................................. 47,971
------------
Shares outstanding at end of year ....................................................... 148,700
============
*Includes undistributed (distributions in excess of) investment income-net .............. $ 267
============
<CAPTION>
LAZARD HIGH YIELD
PORTFOLIO
--------------------
PERIOD ENDED
DECEMBER 31, 1998**
--------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)--net ........................................................... $ 2,666,797
Realized gain (loss) on investments, cross currency swaps and foreign currency--net ..... (2,212,117)
Change in unrealized appreciation (depreciation)--net ................................... (1,145,661)
------------
Net increase (decrease) in net assets resulting from operations .......................... (690,981)
------------
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net
Institutional Shares ................................................................... (2,646,121)
Open Shares ............................................................................. (20,676)
From realized gains--net
Institutional Shares ................................................................... --
Open Shares ............................................................................. --
In excess of investment income--net
Institutional Shares ................................................................... (78,525)
Open Shares ............................................................................. (705)
In excess of realized gains--net
Institutional Shares ................................................................... --
Open Shares ............................................................................. --
From capital--net
Institutional Shares ................................................................... --
Open Shares ............................................................................. --
------------
Net decrease in net assets resulting from distributions .................................. (2,746,027)
------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales
Institutional Shares ................................................................... 52,193,575
Open Shares ............................................................................. 984,032
Net proceeds from reinvestment of distributions
Institutional Shares ................................................................... 2,664,900
Open Shares ............................................................................. 21,381
Cost of shares redeemed
Institutional Shares ................................................................... (9,518,672)
Open Shares ............................................................................. (24,645)
------------
Net increase (decrease) in net assets from capital stock transactions .................... 46,320,571
------------
Total increase (decrease) in net assets .................................................. 42,883,563
Net assets at beginning of year .......................................................... --
------------
Net assets at end of year* ............................................................... $ 42,883,563
============
SHARES ISSUED AND REPURCHASED:
INSTITUTIONAL SHARES:
Shares outstanding at beginning of year ................................................. --
------------
Shares sold ............................................................................. 5,125,438
Shares issued to shareholders from reinvestment of distributions ........................ 270,082
Shares repurchased ...................................................................... (942,285)
------------
Net increase (decrease) ................................................................. 4,453,235
------------
Shares outstanding at end of year ....................................................... 4,453,235
============
OPEN SHARES:
Shares outstanding at beginning of year ................................................. --
------------
Shares sold ............................................................................. 101,097
Shares issued to shareholders from reinvestment of distributions ........................ 1,997
Shares repurchased ...................................................................... (2,365)
------------
Net increase (decrease) ................................................................. 100,729
------------
Shares outstanding at end of year ....................................................... 100,729
============
*Includes undistributed (distributions in excess of) investment income-net .............. $ (21,463)
============
</TABLE>
**Commenced operations on January 2, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD INTERNATIONAL FIXED-INCOME LAZARD STRATEGIC YIELD
PORTFOLIO PORTFOLIO
- ----------------------------------------- -----------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999 DECEMBER 31, 1998
- ------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
$ 3,545,955 $4,875,222 $ 24,000,315 $ 31,621,200
(4,192,996) (139,509) (11,218,336) (30,022,479)
(4,001,310) 9,605,472 4,041,759 (3,041,073)
- ---------------- --------------- -------------- --------------
(4,648,351) 14,341,185 16,823,738 (1,442,352)
- ---------------- --------------- -------------- --------------
-- (1,954,550) (22,570,103) (19,465,202)
-- (62,023) (1,430,212) (791,250)
(675,540) -- -- --
(34,819) -- -- --
-- -- (2,917) (794,218)
-- -- (185) (35,597)
(146) -- -- --
(8) -- -- --
(1,125,469) -- -- (13,228,346)
(52,805) -- -- (592,897)
- ---------------- --------------- -------------- --------------
(1,888,787) (2,016,573) (24,003,417) (34,907,510)
- ---------------- --------------- -------------- --------------
27,539,426 30,541,436 191,948,304 476,144,319
2,031,273 2,380,537 182,317,275 154,324,729
1,719,854 2,276,718 16,624,003 21,895,133
83,838 72,083 1,205,221 1,174,776
(64,592,946) (39,431,530) (293,687,843) (465,223,430)
(2,841,194) (870,320) (189,135,351) (146,658,525)
- ---------------- --------------- -------------- --------------
(36,059,749) (5,031,076) (90,728,391) 41,657,002
- ---------------- --------------- -------------- --------------
(42,596,887) 7,293,536 (97,908,070) 5,307,140
120,250,774 112,957,238 420,059,361 414,752,221
- ---------------- --------------- -------------- --------------
$ 77,653,887 $ 120,250,774 $ 322,151,291 $ 420,059,361
================ =============== ============== ==============
10,782,322 11,439,832 44,107,303 41,370,616
- ---------------- --------------- -------------- --------------
2,688,009 3,069,726 21,343,867 50,232,451
170,799 232,609 1,863,022 2,318,882
(6,388,909) (3,959,845) (32,643,458) (49,814,646)
- ---------------- --------------- -------------- --------------
(3,530,101) (657,510) (9,436,569) 2,736,687
- ---------------- --------------- -------------- --------------
7,252,221 10,782,322 34,670,734 44,107,303
================ =============== ============== ==============
444,293 287,789 2,489,504 1,584,672
- ---------------- --------------- -------------- --------------
198,864 239,066 20,407,856 16,328,778
8,366 7,344 135,127 124,369
(278,630) (89,906) (21,215,990) (15,548,315)
- ---------------- --------------- -------------- --------------
(71,400) 156,504 (673,007) 904,832
- ---------------- --------------- -------------- --------------
372,893 444,293 1,816,497 2,489,504
================ =============== ============== ==============
$ (165,595) $ (282,389) $ 6,042,917 $ 1,046,593
================ =============== ============== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
71
<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
-------------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 21.75 $ 19.98 $ 19.24 $ 17.41 $ 13.75
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ........... 0.26 0.28 0.22 0.33 0.23
Net realized and unrealized gain (loss)..... 0.66 3.10 4.54 3.06 4.93
------- ------- ------- ------- -------
Total from investment operations ........... 0.92 3.38 4.76 3.39 5.16
------- ------- ------- ------- -------
Less distributions from and in excess of:
Net investment income ...................... ( 0.26) ( 0.26) ( 0.22) ( 0.33) ( 0.18)
Net realized gain .......................... ( 1.33) ( 1.35) ( 3.80) ( 1.23) ( 1.32)
------- ------- ------- ------- -------
Total distributions ........................ ( 1.59) ( 1.61) ( 4.02) ( 1.56) ( 1.50)
------- ------- ------- ------- -------
Net asset value, end of period .............. $ 21.08 $ 21.75 $ 19.98 $ 19.24 $ 17.41
======= ======= ======= ======= =======
TOTAL RETURN (A) ............................ 4.2 % 17.3 % 25.1 % 19.9 % 37.7 %
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $377,660 $361,126 $333,575 $278,605 $163,787
Ratios to average net assets:
Net expenses ............................... 0.84% 0.85% 0.86% 0.89% 0.92%
Gross expenses ............................. 0.84% 0.85% 0.87% 0.89% 0.92%
Net investment income ...................... 1.14% 1.28% 1.00% 1.87% 1.45%
Portfolio turnover rate ..................... 62% 76% 78% 66% 81%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
--------------------------- 2/5/97* TO
12/31/99 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 (loss) (c) ........... 0.20 0.20 0.13
Net realized and unrealized gain (loss)..... 0.65 3.12 3.62
------- ------- -------
Total from investment operations ........... 0.85 3.32 3.75
------- ------- -------
Less distributions from and in excess of:
Net investment income ...................... (0.23) (0.20) (0.15)
Net realized gain .......................... (1.33) (1.35) (3.80)
------- ------- -------
Total distributions ........................ (1.56) (1.55) (3.95)
------- ------- -------
Net asset value, end of period .............. $ 21.05 $ 21.76 $ 19.99
======= ======= =======
TOTAL RETURN (A) ............................ 3.9% 17.0% 18.9%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $121,994 $117,624 $ 22,811
Ratios to average net assets:
Net expenses (b) ........................... 1.10% 1.12% 1.22%
Gross expenses (b) ......................... 1.10% 1.12% 1.35%
Net investment income (b) .................. 0.89% 0.96% 0.60%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
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 MID CAP PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
--------------------------- 11/4/97* TO
12/31/99 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 (loss) (c) ............ 0.02 0.05 0.02
Net realized and unrealized gain (loss)...... 0.43 0.31 0.26
------- ------- -------
Total from investment operations ............ 0.45 0.36 0.28
------- ------- -------
Less distributions from and in excess of:
Net investment income ....................... (0.03) (0.05) (0.02)
Net realized gain ........................... (0.10) (0.11) --
------- ------- -------
Total distributions ......................... (0.13) (0.16) (0.02)
------- ------- -------
Net asset value, end of period ............... $ 10.78 $ 10.46 $ 10.26
======= ======= =======
TOTAL RETURN (A) ............................. 4.4% 3.7% 2.8%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ..... $27,521 $55,731 $49,779
Ratios to average net assets:
Net expenses (b) ............................ 1.05% 1.05% 1.05%
Gross expenses (b) .......................... 1.17% 1.23% 1.44%
Net investment income (b) ................... 0.23% 0.48% 1.02%
Portfolio turnover rate ...................... 113% 86% 1%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------- FOR THE PERIOD
11/4/97* TO
12/31/99 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 (loss) (c) ............ (0.01) 0.02 0.01
Net realized and unrealized gain (loss)...... 0.42 0.32 0.26
------- ------- -------
Total from investment operations ............ 0.41 0.34 0.27
------- ------- -------
Less distributions from and in excess of:
Net investment income ....................... (0.02) (0.04) (0.01)
Net realized gain ........................... (0.10) (0.11) --
------- ------- -------
Total distributions ......................... (0.12) (0.15) (0.01)
------- ------- -------
Net asset value, end of period ............... $ 10.74 $ 10.45 $ 10.26
======= ======= =======
TOTAL RETURN (A) ............................. 4.0% 3.4% 2.7%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ..... $14,024 $16,345 $ 1,806
Ratios to average net assets:
Net expenses (b) ............................ 1.35% 1.35% 1.35%
Gross expenses (b) .......................... 1.55% 1.66% 4.97%
Net investment income (b) ................... (0.08%) 0.29% 0.72%
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 SMALL CAP PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 17.39 $ 20.02 $ 18.44 $ 15.95 $ 14.35
-------- ---------- ----------- -------- --------
Income (loss) from investment operations:
Net investment income (loss) (c) ............. 0.10 0.08 0.07 0.11 0.13
Net realized and unrealized
gain (loss) ................................. 0.17(d) (2.60) 4.92 3.68 2.95
-------- ---------- ----------- -------- --------
Total from investment operations ............. 0.27 (2.52) 4.99 3.79 3.08
-------- ---------- ----------- -------- --------
Less distributions from and in excess of:
Net investment income ........................ (0.11) (0.01) (0.06) (0.11) (0.16)
Net realized gain ............................ (0.98) (0.10) (3.35) (1.19) (1.32)
-------- ---------- ----------- -------- --------
Total distributions .......................... (1.09) (0.11) (3.41) (1.30) (1.48)
-------- ---------- ----------- -------- --------
Net asset value, end of period ................ $ 16.57 $ 17.39 $ 20.02 $ 18.44 $ 15.95
======== ========== =========== ======== ========
TOTAL RETURN (A) .............................. 1.8% (12.6%) 28.1% 23.9% 21.5%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ...... $906,945 $1,411,503 $1,445,075 $981,405 $646,371
Ratios to average net assets:
Net expenses ................................. 0.81% 0.81% 0.82% 0.84% 0.84%
Gross expenses ............................... 0.81% 0.81% 0.82% 0.84% 0.84%
Net investment income ........................ 0.60% 0.50% 0.35% 0.60% 0.90%
Portfolio turnover rate ....................... 50% 46% 56% 51% 70%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
------------------------------- 1/30/97* TO
12/31/99 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 (loss) (c) ............. 0.06 0.03 0.01
Net realized and unrealized
gain (loss) ................................. 0.16(d) (2.60) 4.61
-------- ------- -------
Total from investment operations ............. 0.22 ( 2.57) 4.62
-------- ------- -------
Less distributions from and in excess of:
Net investment income ........................ (0.08) -- --
Net realized gain ............................ (0.98) (0.10) (3.35)
-------- ------- -------
Total distributions .......................... (1.06) (0.10) (3.35)
-------- ------- -------
Net asset value, end of period ................ $ 16.51 $ 17.35 $ 20.02
======== ======= =======
TOTAL RETURN (A) .............................. 1.5% (12.9%) 25.6%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ...... $ 86,413 $ 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) .................... 0.33% 0.21% 0.12%
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 GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
------------------------------------------ 1/4/96* TO
12/31/99 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 (loss) (c) ............ 0.19 0.10 0.14 0.09
Net realized and unrealized gain (loss) ..... 1.95 1.90 1.58 1.49
------- ------- ------- -------
Total from investment operations ............ 2.14 2.00 1.72 1.58
------- ------- ------- -------
Less distributions from and in excess of:
Net investment income ....................... (0.21) (0.08) (0.15) (0.10)
Net realized gain ........................... (0.51) (0.69) (1.14) --
------- ------- ------- -------
Total distributions ......................... (0.72) (0.77) (1.29) (0.10)
------- ------- ------- -------
Net asset value, end of period ............... $ 14.56 $ 13.14 $ 11.91 $ 11.48
======= ======= ======= =======
TOTAL RETURN (A) ............................. 16.4% 17.1% 15.3% 15.8%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ..... $63,557 $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) .......................... 1.21% 2.18% 2.55% 5.06%
Net investment income (b) ................... 1.35% 1.07% 1.02% 1.70%
Portfolio turnover rate ...................... 43% 48% 64% 74%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
--------------------------- 1/30/97* TO
12/31/99 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 (loss) (c) ............ 0.13 0.09 0.08
Net realized and unrealized gain (loss) ..... 1.97 1.88 1.78
------- ------- -------
Total from investment operations ............ 2.10 1.97 1.86
------- ------- -------
Less distributions from and in excess of:
Net investment income ....................... (0.19) (0.04) (0.11)
Net realized gain ........................... (0.51) (0.69) (1.14)
------- ------- -------
Total distributions ......................... (0.70) (0.73) (1.25)
------- ------- -------
Net asset value, end of period ............... $ 14.56 $ 13.16 $ 11.92
======= ======= =======
TOTAL RETURN (A) ............................. 16.1% 16.8% 16.7%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ..... $ 6,262 $ 4,824 $ 2,290
Ratios to average net assets:
Net expenses (b) ............................ 1.35% 1.35% 1.35%
Gross expenses (b) .......................... 1.80% 2.85% 4.23%
Net investment income (b) ................... 0.95% 0.77% 0.67%
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 INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 15.23 $ 13.97 $ 13.62 $ 12.50 $ 11.23
---------- --------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) (c) ........... 0.34 0.18 0.22 0.17 0.19
Net realized and unrealized gain (loss)..... 3.25 2.03 1.40 1.76 1.29
---------- ---------- ---------- ---------- ----------
Total from investment operations ........... 3.59 2.21 1.62 1.93 1.48
---------- ---------- ---------- ---------- ----------
Less distributions from and in excess of:
Net investment income ...................... (0.54) (0.14) (0.34) (0.19) (0.09)
Net realized gain .......................... (0.99) (0.81) (0.93) (0.62) (0.12)
---------- ---------- ---------- ---------- ----------
Total distributions ........................ (1.53) (0.95) (1.27) (0.81) (0.21)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period .............. $ 17.29 $ 15.23 $ 13.97 $ 13.62 $ 12.50
========== ========== ========== ========== ==========
TOTAL RETURN (A) ............................ 24.1% 16.0% 11.8% 15.6% 13.1%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $3,584,093 $2,879,289 $2,099,724 $1,816,173 $1,299,549
Ratios to average net assets:
Net expenses ............................... 0.88% 0.90% 0.89% 0.91% 0.95%
Gross expenses ............................. 0.88% 0.90% 0.89% 0.91% 0.95%
Net investment income ...................... 2.09% 1.37% 1.18% 1.93% 1.82%
Portfolio turnover rate ..................... 35% 41% 37% 39% 63%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
--------------------------- 1/23/97* TO
12/31/99 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 (loss) (c) ........... 0.31 0.18 0.16
Net realized and unrealized gain (loss)..... 3.22 2.00 1.71
------- ------- -------
Total from investment operations ........... 3.53 2.18 1.87
------- ------- -------
Less distributions from and in excess of:
Net investment income ...................... (0.49) (0.09) (0.28)
Net realized gain .......................... (0.99) (0.81) (0.93)
------- ------- -------
Total distributions ........................ (1.48) (0.90) (1.21)
------- ------- -------
Net asset value, end of period .............. $ 17.28 $ 15.23 $ 13.95
======= ======= =======
TOTAL RETURN (A) ............................ 23.7% 15.8% 14.1%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $138,131 $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) .................. 1.87% 1.02% 0.37%
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 INTERNATIONAL SMALL CAP PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED
---------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 11.40 $ 11.69 $ 11.93 $ 10.52 $ 10.38
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss) (c) ........... 0.14 0.05 0.07 0.08 0.14
Net realized and unrealized gain (loss)..... 2.81 0.83 (0.03) 1.55 0.06
-------- -------- -------- -------- --------
Total from investment operations ........... 2.95 0.88 0.04 1.63 0.20
-------- -------- -------- -------- --------
Less distributions from and in excess of:
Net investment income ...................... (0.12) (0.05) (0.07) (0.08) --
Net realized gain .......................... (0.11) (1.12) (0.21) (0.14) (0.06)
-------- -------- -------- -------- --------
Total distributions ........................ (0.23) (1.17) (0.28) (0.22) (0.06)
-------- -------- -------- -------- --------
Net asset value, end of period .............. $ 14.12 $ 11.40 $ 11.69 $ 11.93 $ 10.52
======== ======== ======== ======== ========
TOTAL RETURN (A) ............................ 26.1% 7.6% 0.3% 15.6% 1.9%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $217,684 $177,779 $141,695 $126,973 $115,534
Ratios to average net assets:
Net expenses ............................... 1.01% 1.04% 1.09% 1.12% 1.13%
Gross expenses ............................. 1.01% 1.04% 1.09% 1.12% 1.13%
Net investment income ...................... 1.17% 0.81% 0.73% 1.67% 1.56%
Portfolio turnover rate ..................... 50% 56% 63% 101% 118%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
--------------------------- 2/13/97* TO
12/31/99 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 (loss) (c) ........... 0.09 0.01 0.02
Net realized and unrealized gain (loss)..... 2.80 0.83 (0.42)
------- ------- --------
Total from investment operations ........... 2.89 0.84 (0.40)
------- ------- --------
Less distributions from and in excess of:
Net investment income ...................... (0.10) (0.03) (0.02)
Net realized gain .......................... (0.11) (1.12) (0.21)
------- ------- --------
Total distributions ........................ (0.21) (1.15) (0.23)
------- ------- --------
Net asset value, end of period .............. $ 14.06 $ 11.38 $ 11.69
======= ======= ========
TOTAL RETURN (A) ............................ 25.6% 7.2% (3.2%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $ 2,441 $ 2,646 $ 1,873
Ratios to average net assets:
Net expenses (b) ........................... 1.43% 1.43% 1.43%
Gross expenses (b) ......................... 2.12% 1.93% 3.39%
Net investment income (b) .................. 0.77% 0.43% 0.34%
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 EMERGING MARKETS PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 6.94 $ 9.20 $ 11.21 $ 9.24 $ 9.86
-------- -------- -------- --------- --------
Income (loss) from investment operations:
Net investment income (loss) (c) ........... 0.09 0.10 0.10 0.07 0.08
Net realized and unrealized gain (loss)..... 3.77 (2.26) (1.18) 2.11 (0.66)
-------- -------- -------- --------- --------
Total from investment operations ........... 3.86 (2.16) (1.08) 2.18 (0.58)
-------- -------- -------- --------- --------
Less distributions from and in excess of:
Net investment income ...................... (0.10) (0.10) (0.09) (0.08) (0.04)
Net realized gain .......................... -- -- (0.84) (0.13) --
-------- -------- -------- --------- --------
Total distributions ........................ (0.10) (0.10) (0.93) (0.21) (0.04)
-------- -------- -------- --------- --------
Net asset value, end of period .............. $ 10.70 $ 6.94 $ 9.20 $ 11.21 $ 9.24
======== ======== ======== ========= ========
TOTAL RETURN (A) ............................ 55.8% (23.5%) (9.8%) 23.6% (5.9%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $465,278 $298,033 $236,340 $145,328 $ 35,216
Ratios to average net assets:
Net expenses ............................... 1.24% 1.28% 1.32% 1.38% 1.30%
Gross expenses ............................. 1.25% 1.29% 1.33% 1.48% 2.00%
Net investment income ...................... 1.05% 1.84% 1.26% 1.40% 1.22%
Portfolio turnover rate ..................... 46% 36% 40% 51% 102%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
--------------------------- 1/8/97* TO
12/31/99 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 (loss) (c) ........... 0.06 0.11 0.07
Net realized and unrealized gain (loss)..... 3.79 (2.26) (1.42)
------- -------- --------
Total from investment operations ........... 3.85 (2.15) (1.35)
------- -------- --------
Less distributions from and in excess of:
Net investment income ...................... (0.08) (0.08) (0.07)
Net realized gain .......................... -- -- (0.83)
------- -------- --------
Total distributions ........................ (0.08) (0.08) (0.90)
------- -------- --------
Net asset value, end of period .............. $ 10.74 $ 6.97 $ 9.20
======= ======== ========
TOTAL RETURN (A) ............................ 55.3% (23.3%) (12.0%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $10,491 $ 8,191 $ 7,769
Ratios to average net assets:
Net expenses (b) ........................... 1.60% 1.60% 1.60%
Gross expenses (b) ......................... 1.75% 1.76% 1.93%
Net investment income (b) .................. 0.73% 1.54% 1.01%
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 BOND PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 9.89 $ 10.03 $ 9.88 $ 10.10 $ 9.24
-------- -------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ........... 0.55 0.55 0.59 0.56 0.60
Net realized and unrealized gain (loss)..... (0.60) 0.01 0.23 (0.14) 0.86
-------- -------- ------- ------- -------
Total from investment operations ........... (0.05) 0.56 0.82 0.42 1.46
-------- -------- ------- ------- -------
Less distributions from and in excess of:
Net investment income ...................... (0.55) (0.55) (0.60) (0.57) (0.60)
Net realized gain .......................... -- (0.15) (0.07) (0.07) --
-------- -------- ------- ------- -------
Total distributions ........................ (0.55) (0.70) (0.67) (0.64) (0.60)
-------- -------- ------- ------- -------
Net asset value, end of period .............. $ 9.29 $ 9.89 $ 10.03 $ 9.88 $ 10.10
======== ======== ======= ======= =======
TOTAL RETURN (A) ............................ (0.5%) 5.8% 8.6% 4.4% 16.2%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $ 91,557 $100,397 $92,428 $69,906 $46,083
Ratios to average net assets:
Net expenses ............................... 0.76% 0.78% 0.80% 0.80% 0.80%
Gross expenses ............................. 0.76% 0.79% 0.81% 0.88% 0.97%
Net investment income ...................... 5.74% 5.45% 5.81% 5.77% 6.07%
Portfolio turnover rate ..................... 549% 335% 447% 460% 244%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
------------------------ 3/5/97* TO
12/31/99 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 (loss) (c) ........... 0.51 0.52 0.46
Net realized and unrealized gain (loss)..... (0.58) 0.01 0.24
-------- -------- --------
Total from investment operations ........... (0.07) 0.53 0.70
-------- -------- --------
Less distributions from and in excess of:
Net investment income ...................... (0.52) (0.52) (0.47)
Net realized gain .......................... -- (0.15) (0.07)
-------- -------- --------
Total distributions ........................ (0.52) (0.67) (0.54)
-------- -------- --------
Net asset value, end of period .............. $ 9.29 $ 9.88 $ 10.02
======== ======== ========
TOTAL RETURN (A) ............................ (0.8%) 5.4% 7.2%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $ 11,605 $ 15,226 $ 7 ,283
Ratios to average net assets:
Net expenses (b) ........................... 1.10% 1.10% 1.10%
Gross expenses (b) ......................... 1.15% 1.21% 1.49%
Net investment income (b) .................. 5.37% 5.11% 5.46%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
79
<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>
FOR THE PERIOD
YEAR ENDED 1/2/98* TO
12/31/99 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 (loss) (c) ................ 0.92 0.88
Net realized and unrealized gain (loss) ......... (0.65) ( 0.57)
------- -------
Total from investment operations ................ 0.27 0.31
------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.92) ( 0.89)
Net realized gain ............................... -- --
------- -------
Total distributions ............................. (0.92) ( 0.89)
------- -------
Net asset value, end of period ................... $ 8.77 $ 9.42
======= =======
TOTAL RETURN (A) ................................. 2.9% 2.9%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $83,664 $41,935
Ratios to average net assets:
Net expenses (b) ................................ 0.94% 1.05%
Gross expenses (b) .............................. 1.06% 1.55%
Net investment income (b) ....................... 10.08% 8.87%
Portfolio turnover rate .......................... 190% 418%
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 2/24/98* TO
12/31/99 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 (loss) (c) ................ 0.90 0.72
Net realized and unrealized gain (loss) ......... (0.65) (0.94)
------- --------
Total from investment operations ................ 0.25 (0.22)
------- --------
Less distributions from and in excess of:
Net investment income ........................... (0.89) (0.73)
Net realized gain ............................... -- --
------- --------
Total distributions ............................. (0.89) (0.73)
------- --------
Net asset value, end of period ................... $ 8.78 $ 9.42
======= ========
TOTAL RETURN (A) ................................. 2.7% (2.2%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 1,305 $ 949
Ratios to average net assets:
Net expenses (b) ................................ 1.22% 1.35%
Gross expenses (b) .............................. 2.92% 9.77%
Net investment income (b) ....................... 9.89% 8.59%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
80
<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
--------------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 10.71 $ 9.63 $ 10.78 $ 10.85 $ 10.23
-------- -------- -------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ........... 0.36 0.32 0.40 0.54 0.70
Net realized and unrealized gain (loss)..... (0.68) 0.98 (1.05) 0.03 1.25
-------- -------- -------- ------- -------
Total from investment operations ........... (0.32) 1.30 (0.65) 0.57 1.95
-------- -------- -------- ------- -------
Less distributions from and in excess of:
Net investment income ...................... -- (0.22) (0.13) (0.59) (1.13)
Net realized gain .......................... (0.08) -- (0.12) (0.05) (0.20)
Capital .................................... (0.12) -- (0.25) -- --
-------- -------- -------- ------- -------
Total distributions ........................ (0.20) (0.22) (0.50) (0.64) (1.33)
-------- -------- -------- ------- -------
Net asset value, end of period .............. $ 10.19 $ 10.71 $ 9.63 $ 10.78 $ 10.85
======== ======== ======== ======= =======
TOTAL RETURN (A) ............................ (2.9%) 13.2% (5.6%) 5.5% 19.4%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $ 73,871 $115,500 $110,185 $88,430 $45,624
Ratios to average net assets:
Net expenses ............................... 1.09% 1.09% 1.06% 1.05% 1.05%
Gross expenses ............................. 1.13% 1.10% 1.10% 1.21% 1.25%
Net investment income ...................... 3.55% 4.27% 5.13% 5.54% 5.99%
Portfolio turnover rate ..................... 139% 187% 166% 242% 190%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
----------------------------- 1/8/97* TO
12/31/99 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 (loss) (c) ........... 0.34 0.31 0.43
Net realized and unrealized gain (loss)..... (0.69) 0.96 (0.98)
-------- ------- --------
Total from investment operations ........... (0.35) 1.27 (0.55)
-------- ------- --------
Less distributions from and in excess of:
Net investment income ...................... -- (0.21) (0.08)
Net realized gain .......................... (0.08) -- (0.12)
Capital .................................... (0.12) -- (0.26)
-------- ------- --------
Total distributions ........................ (0.20) (0.21) (0.46)
-------- ------- --------
Net asset value, end of period .............. $ 10.14 $ 10.69 $ 9.63
======== ======= ========
TOTAL RETURN (A) ............................ (3.2%) 12.9% (4.8%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $ 3,783 $ 4,751 $ 2,772
Ratios to average net assets:
Net expenses (b) ........................... 1.35% 1.35% 1.35%
Gross expenses (b) ......................... 1.91% 1.92% 2.71%
Net investment income (b) .................. 3.30% 4.01% 4.68%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
81
<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
--------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 9.01 $ 9.66 $ 10.01 $ 9.52 $ 9.10
-------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ........... 0.61 0.76 0.81 0.76 0.75
Net realized and unrealized gain (loss)..... (0.18) (0.69) (0.28) 0.50 0.43
-------- -------- -------- -------- -------
Total from investment operations ........... 0.43 0.07 0.53 1.26 1.18
-------- -------- -------- -------- -------
Less distributions from and in excess of:
Net investment income ...................... (0.61) (0.44) (0.82) (0.77) (0.76)
Net realized gain .......................... -- -- (0.06) -- --
Capital .................................... -- (0.28) -- -- --
-------- -------- -------- -------- -------
Total distributions ........................ (0.61) (0.72) (0.88) (0.77) (0.76)
-------- -------- -------- -------- -------
Net asset value, end of period .............. $ 8.83 $ 9.01 $ 9.66 $ 10.01 $ 9.52
======== ======== ======== ======== =======
TOTAL RETURN (A) ............................ 4.9% 0.8% 5.3% 13.7% 13.6%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $306,116 $397,599 $399,452 $199,083 $78,474
Ratios to average net assets:
Net expenses ............................... 0.91% 0.90% 0.94% 1.08% 1.09%
Gross expenses ............................. 0.91% 0.90% 0.95% 1.08% 1.09%
Net investment income ...................... 6.82% 6.94% 7.42% 7.88% 8.02%
Portfolio turnover rate ..................... 257% 276% 161% 189% 205%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
----------------------- 1/23/97* TO
12/31/99 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 (loss) (c) ........... 0.58 0.73 0.72
Net realized and unrealized gain (loss)..... (0.19) (0.69) (0.35)
-------- -------- --------
Total from investment operations ........... 0.39 0.04 0.37
-------- -------- --------
Less distributions from and in excess of:
Net investment income ...................... (0.58) (0.40) (0.73)
Net realized gain .......................... -- -- (0.06)
Capital .................................... -- (0.28) --
-------- -------- --------
Total distributions ........................ (0.58) (0.68) (0.79)
-------- -------- --------
Net asset value, end of period .............. $ 8.83 $ 9.02 $ 9.66
======== ======== ========
TOTAL RETURN (A) ............................ 4.4% 0.4% 3.8%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .... $ 16,035 $ 22,460 $ 15,300
Ratios to average net assets:
Net expenses (b) ........................... 1.27% 1.28% 1.39%
Gross expenses (b) ......................... 1.27% 1.28% 1.44%
Net investment income (b) .................. 6.49% 6.60% 6.92%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
82
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
* Commencement of operations
(a) Total returns are historical and assume changes in share price,
reinvestment 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.
(c) For year ended 12/31/99, net investment income has been computed using the
average shares method.
(d) The amount shown for a share outstanding does not correspond with the
aggregate net gain on investments for the period due to timing of sales
and repurchases of Portfolio Shares in relation to fluctuating market
values of the investments of the Portfolio.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
83
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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 eleven portfolios (each referred to as a "Portfolio"), as follows:
Lazard Equity Portfolio, Lazard Mid Cap Portfolio, Lazard Small Cap 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 by 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 the 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. Non-cash dividends, in
which security shares are received, are included in dividend income and are
valued at the security's opening price per share 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, plus 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, such as the
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) SECURITIES LENDING--The Portfolios may lend portfolio securities to
qualified borrowers in order to earn additional income. The terms of the
lending agreements require that loans are secured at all times by cash, U.S.
Government Securities, or irrevocable letters of credit in an amount at least
equal to 102% of the market value of domestic securities loaned (105% in the
case of foreign securities), plus accrued interest and dividends, determined on
a daily basis. Cash collateral received is invested in Navigator Securities
Lending Prime Portfolio, a regulated investment company offered by State Street
Bank and Trust Company. If the borrower defaults on its obligation to return
the securities loaned because of insolvency or other reasons, the Portfolios
could experience delays and costs in recovering the securities loaned or in
gaining access to the collateral. At December 31, 1999, the value of the
securities on loan amounted to $7,853,992 for Small Cap Portfolio. Small Cap
Portfolio received U.S. Treasury obligations valued at $9,653,426.
84
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
(E) 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 transactions, 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 has been 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.
(F) 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, 1999, the following Portfolios had available for federal income
tax purposes unused realized capital losses which can be used to offset future
realized capital gains as follows:
<TABLE>
<CAPTION>
PORTFOLIO EXPIRING 2006 EXPIRING 2007
- --------- ------------- -------------
<S> <C> <C>
Emerging Markets $50,767,177 $3,337,906
Bond -- 4,509,702
High Yield 1,150,441 6,288,085
International Fixed-Income -- 513,432
Strategic Yield 14,900,897 22,094,886
</TABLE>
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, 1999, the following Portfolios elected to defer net capital and
currency losses arising between November 1, 1999 and December 31, 1999, as
follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT
- --------- ------
<S> <C>
Global Equity $ 5,204
International Equity 3,351,875
International Small Cap 1,635,261
Emerging Markets 453,366
Bond 202,528
High Yield 162,198
International Fixed-Income 699,810
Strategic Yield 104,225
</TABLE>
(G) 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, 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
85
<PAGE>
- --------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
relating to shareholder distributions will result in reclassifications and may
affect the allocation between investment income-net, realized gains-net, and
paid in capital.
As a result of these book/tax differences, the Portfolios made the following
reclassifications to the capital accounts for the year ended December 31, 1999:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
------------------------------------------------------
UNDISTRIBUTED C ACCUMULATED
INVESTMENT REALIZED
INCOME GAIN
PORTFOLIO PAID IN CAPITAL (LOSS)-NET (LOSS)-NET
- --------- --------------- ---------- ----------
<S> <C> <C> <C>
Mid Cap $ -- $ 1,167 $ (1,167)
Small Cap 189,250 (120,307) (68,943)
Global Equity -- 183,335 (183,335)
International Equity -- 11,498,487 (11,498,487)
International
Small Cap -- (167,972) 167,972
Emerging Markets -- 10,145 (10,145)
Bond (32,899) (312,678) 345,577
High Yield (112) 31,759 (31,647)
International
Fixed-Income (1,462,315) (2,250,887) 3,713,202
Strategic Yield -- 4,999,426 (4,999,426)
</TABLE>
(H) 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.
(I) 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.
(J) 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.
(K) 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.
(L) 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.
(M) 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.
Cross currency 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.
(N) 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
Fr`eres & Co. LLC, on behalf of each Portfolio. Pursuant to the Management
Agreements, the Manager will regularly provide the Portfolios with investment
research,
86
<PAGE>
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THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL RATE
- --------- -----------
<S> <C>
Equity 0.75%
Mid Cap 0.75
Small Cap 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
</TABLE>
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:
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES OPEN SHARES
ANNUAL ANNUAL
PORTFOLIO OPERATING EXPENSES OPERATING EXPENSES
- --------- ------------------ ------------------
<S> <C> <C>
Mid Cap 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* 0.75 1.05
International Fixed-Income 1.09 1.35
</TABLE>
*FOR PERIODS BEGINNING AFTER AUGUST 31, 1999, ANNUAL OPERATING EXPENSE LIMITS
ON THE HIGH YIELD PORTFOLIO WERE REDUCED FROM 1.05% TO 0.75% FOR INSTITUTIONAL
SHARES, AND FROM 1.35% TO 1.05% FOR OPEN SHARES.
For the year ended December 31, 1999, the Manager did not impose all or part of
its management fee, resulting in the following waivers and reimbursements:
<TABLE>
<CAPTION>
OPEN SHARES
INSTITUTIONAL SHARES OPEN SHARES REIMBURSED
PORTFOLIO WAIVED FEES WAIVED FEES EXPENSES
- --------- ----------- ----------- --------
<S> <C> <C> <C>
Mid Cap $54,285 $28,123 $ --
Global Equity 83,354 28,406 --
International
Small Cap -- 18,247 --
Emerging Markets -- 13,643 --
Bond -- 7,051 --
High Yield 80,879 10,158 12,678
International
Fixed-Income 41,580 24,734 --
</TABLE>
The Fund has engaged State Street Bank and Trust Company ("State Street") to
provide certain administrative services. Each Portfolio bears the cost of such
expenses 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 Fr-res & 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. For such
services, each Portfolio 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. The
distribution fee may be retained by the Distributor, in the case of a
shareholder who purchases Open Shares directly through the Distributor, but
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 employee or an affiliated person of the
Manager its allocated portion 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.
Effective January 1, 2000, each Director who is not an employee or an
affiliated person of the Manager will be paid a quarterly fee of $7,500, plus
$2,500 per meeting attended for the Fund and Lazard Retirement Series, Inc. and
will be reimbursed for travel and other out of pocket expenses. In addition,
the Chairman of the Audit Committee for the Fund and Lazard Retirement Series,
Inc. will also receive an annual fee of $5,000.
87
<PAGE>
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THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
4. SECURITIES TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
Purchases and sales of portfolio securities (excluding short-term securities),
for the year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- --------- --------- -----
<S> <C> <C>
Equity $ 334,501,452 $ 319,960,421
Mid Cap 65,531,512 95,723,539
Small Cap 579,236,524 1,047,276,562
Global Equity 60,837,728 23,299,070
International Equity 1,221,880,687 1,097,482,895
International Small Cap 90,441,210 92,374,717
Emerging Markets 160,672,977 164,480,992
Bond(1) 621,010,139 620,210,957
High Yield 188,219,120 140,396,523
International Fixed-Income(2) 123,564,174 154,867,511
Strategic Yield(3) 774,721,361 879,293,223
</TABLE>
(1) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $559,821,568
AND $538,746,952, RESPECTIVELY.
(2) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $23,470,799
AND $25,077,327, RESPECTIVELY.
(3) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $290,129,178
AND $355,106,416, RESPECTIVELY.
For the year ended December 31, 1999, brokerage commissions were paid to Lazard
Fr`eres & Co. LLC for portfolio transactions executed on behalf of the
Portfolios as follows:
<TABLE>
<CAPTION>
COMMISSIONS
PORTFOLIO PAID
- --------------- ------------
<S> <C>
Equity $85,635
Mid Cap 6,660
Small Cap 1,170
Global Equity 3,931
</TABLE>
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 State Street'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 year ended December 31, 1999, Bantam Value
Portfolio paid a total of $845 in interest and the Fund had borrowings under
this Agreement as follows:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE DAILY WEIGHTED AVERAGE
PORTFOLIO LOAN AMOUNT OF LOAN INTEREST RATE
- --------- ---- --------------- -------------
<S> <C> <C> <C>
Bantam Value $4,443,765 $2,739,656 5.554%
</TABLE>
6. REORGANIZATION
On July 30, 1999, Small Cap Portfolio acquired the net assets of Bantam Value
Portfolio pursuant to a plan of reorganization approved by Bantam Value
Portfolio shareholders on July 16, 1999. The acquisition was accomplished by a
tax-free exchange of 1,385,450 Institutional Shares (valued at $26,354,774) and
188,462 Open Shares (valued at $3,571,473) of Small Cap Portfolio for the
2,091,308 Institutional Shares and 285,910 Open Shares of Bantam Value
Portfolio outstanding on July 30, 1999. Bantam Value Portfolio's net assets at
that date ($29,926,247), including $902,603 of unrealized depreciation and
$377,560 of accumulated realized net loss, were combined with those of Small
Cap Portfolio. The aggregate net assets of Small Cap Portfolio and Bantam Value
Portfolio immediately before the acquisition were $29,926,247 and
$1,250,934,139 respectively. The aggregate net assets of Small Cap Portfolio
immediately after the acquisition were $1,280,860,386. For the period January
1, 1999 through July 30, 1999 (acquisition date), Bantam Value Portfolio had a
net increase in net assets resulting from operations in the amount of
$3,833,373.
7. PROXY VOTING RESULTS
A special meeting of the Bantam Value Portfolio stockholders was held on July
16, 1999 to vote on the reorganization. The following is the voting results:
<TABLE>
<CAPTION>
# OF SHARES VOTED % OF SHARES VOTED
----------------- -----------------
<S> <C> <C>
Affirmative 2,128,383.883 99.61%
Against 3,297.000 0.15
Abstain 5,000.000 0.24
------------- ------
Total 2,136,680.883 100.00
------------- ------
</TABLE>
88
<PAGE>
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THE LAZARD FUNDS, INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders
The Lazard Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of The Lazard Funds, Inc. (comprised of Lazard
Equity Portfolio, Lazard Mid Cap Portfolio, Lazard Small Cap 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) as of December 31, 1999 and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights as stated
above, present fairly, in all material respects, the financial position of each
of the respective portfolios constituting The Lazard Funds, Inc. as of December
31, 1999, the results of their operations for the year then ended and changes in
their net assets for each of the two years in the period then ended and the
financial highlights for the periods presented in conformity with generally
accepted accounting principles.
ANCHIN, BLOCK & ANCHIN LLP
New York, New York
January 31, 2000
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<PAGE>
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TAX INFORMATION (UNAUDITED)
THE LAZARD FUNDS, INC.
YEAR ENDED DECEMBER 31, 1999
The following tax information represents year end disclosures of various tax
benefits passed through to shareholders for 1999.
The amount of long-term capital gain paid is as follows:
<TABLE>
<S> <C>
PORTFOLIO AMOUNT
--------- ------
Equity $30,314,273
Mid Cap 178,725
Small Cap 45,898,956
Global Equity 1,448,455
International Equity 166,600,128
International Small Cap 1,615,091
Emerging Markets 0
Bond 0
High Yield 0
International Fixed-Income 84,355
Strategic Yield 0
</TABLE>
Of the distributions made by the following Portfolios, the corresponding
percentage represents the amount of each distribution which will qualify for
the dividends received deduction available to corporate shareholders.
<TABLE>
<S> <C>
PORTFOLIO PERCENTAGE
--------- ----------
Equity 100.00%
Mid Cap 16.66%
Small Cap 32.98%
Global Equity 30.48%
International Equity 0.69%
International Small Cap 2.09%
Emerging Markets 0.00%
Bond 0.00%
High Yield 0.00%
International Fixed-Income 0.00%
Strategic Yield 0.00%
</TABLE>
The above figures may differ from those cited elsewhere in this report due to
differences in the calculations of income and capital gains for Securities and
Exchange Commission (book) purposes and Internal Revenue Service (tax)
purposes.
- --------------------------------------------------------------------------------
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<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 Fr`eres & 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
http://www.anchin.com
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 shareholders 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.
