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LAZARDFUNDS
SEMI-ANNUAL REPORT
JUNE 30, 2000
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THE LAZARD FUNDS, INC.
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<TABLE>
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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 PRESIDENT, 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
DAVID M. GOLDENBERG VICE PRESIDENT AND SECRETARY
GERALD B. MAZZARI TREASURER
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THE LAZARD FUNDS, INC.
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<TABLE>
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TABLE OF CONTENTS PAGE
<S> <C>
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 ............................... 27
Lazard High Yield Portfolio ......................... 32
Lazard International Fixed-Income Portfolio ......... 36
Lazard Strategic Yield Portfolio .................... 48
Notes to Portfolios of Investments .................... 63
Statements of
Assets and Liabilities .............................. 68
Operations .......................................... 70
Changes in Net Assets ............................... 72
Financial Highlights .................................. 78
Notes to Financial Highlights ......................... 89
Notes to Financial Statements ......................... 90
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THE LAZARD FUNDS, INC.
OVERVIEW
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After a difficult start, equity markets around the world staged a rally late in
the first quarter, only to experience a fundamental turnaround during the early
part of the second quarter. While growth stocks led the initial rally in late
February, the market underwent a sharp rotation back to value at the end of
March. That rotation lasted through May, fueled by tighter monetary policy and
concerns over global growth. Thus, investors began to focus on fundamentals
after an extended period dominated by momentum strategies. While the S&P 500
fell nearly 3% by the end of the second quarter, the tech-laden NASDAQ
Composite bore the brunt of the sell-off, falling over 13% and suffering its
first quarterly decline since 1998. The volatile period was marked by dramatic
reversals, including a sharp rebound in global tech and telecom shares in June.
However, market sentiment has fundamentally changed; even amid the tech rally
in June, some of the most established Internet companies experienced weakness.
For example, Amazon fell nearly 20% in a single day after an analyst noted that
the company is still unable to generate cash flow from its operations even as
its sales grow strongly. Thus, investors have begun to question where
money-losing dot-coms will obtain financing, an issue that was far from their
minds amid the euphoria of late 1999 and early 2000.
During this very turbulent period, companies reporting earnings that were even
modestly disappointing experienced dramatic weakness. Even established,
blue-chip companies with solid franchises were dealt with harshly if they did
not meet Wall Street's expectations. Still, while the market volatility dented
the prospects of many Internet start-up hopefuls, established companies
continued to adapt their business to leverage technology to drive financial
productivity to new levels. Meanwhile, a host of companies around the globe
also formed web-enabled business-to-business ("B2B") exchanges, and other
companies reshaped themselves via M&A and disposals. Even as telecommunication
stock prices fell, companies moved to focus operations and highlight the hidden
asset values, amid the continuing trend to carve out wireless operations.
During the first quarter, the rotation into more established and profitable
technology stocks benefited U.S. investors. There were also strong gains in
U.S. healthcare holdings that had lagged in 1999, although consumer staples
holdings continued to lag. By the end of June, those same investors benefited
from a relatively high weight in healthcare as these stocks rebounded from
recent weakness. The high weight in consumer staples also helped as a wave of
industry consolidation sparked investor interest. After languishing during
1999, these sectors have been the primary beneficiaries of the rotation out of
technology as investors seek companies that both possess consistent earnings
growth and trade at more reasonable valuations. While a low weight in
technology helped returns overall, stock selection in the sector was equally
important as investors began to differentiate between providers of enabling
technology and companies with a less clear ability to add value.
In the bond market, the U.S. Treasury yield curve inversion that began in late
January and continued through March dominated the first quarter of 2000. The
yield curve inverted on the expectation of continued short-term interest rate
hikes combined with the announcement of less frequent U.S. Treasury auctions
and an aggressive buy-back plan. After reports of continued strong economic
growth, the Federal Reserve increased rates as expected by 25 basis points in
February and again by 25 basis points in March. After a rocky ride during April
and May, the U.S. bond market enjoyed a strong month in June. Interest rates
fell significantly as investors reacted positively to the Federal Reserve's
decision to leave interest rates unchanged at the June meeting. More moderate
economic numbers also painted a brighter outlook with less inflationary
pressure.
The return to more fundamental issues of investing is a healthy one, both for
relative value investors and for the economy as a whole. It also presents many
new opportunities. As the equity market's focus on fundamentals persists,
Lazard continues to seek - as it always has - relative value investments among
competitive, traditional companies in conjunction with opportunistic
investments in currently weakened technology, media and telecom companies that
can prove real financial productivity.
2
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THE LAZARD FUNDS, INC.
GROWTH CHARTS
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LAZARD EQUITY PORTFOLIO
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 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
LAZARD EQUITY PORTFOLIO, STANDARD & POOR'S 500 INDEX, STANDARD & POOR'S BARRA
VALUE INDEX AND RUSSELL 1000 VALUE INDEX
[Table below represents line chart in its printed piece]
Lazard Equity S&P Barra Russell
Portfolio S&P 500 Value 1000 Value
---------------------------------------------------
Jun-90 10000 10000 10000 10000
Jul-90 9991.88 9967.9 10001 9912.67
Aug-90 9087.93 9066.9 9120.91 9040.95
Sep-90 8603.67 8625.62 8698.61 8603.36
Oct-90 8619.13 8588.87 8575.09 8485.6
Nov-90 9186.17 9144.05 9160.77 9073.96
Dec-90 9425.91 9398.81 9367.81 9304.7
Jan-91 9801.96 9808.13 9810.9 9723.69
Feb-91 10529.5 10509.6 10.450.57 10370.2
Mar-91 10644 10764.2 10545.7 10523.6
Apr-91 10627.3 10789.7 10629 10601.5
May-91 10963.5 11255.1 11136 10996.9
Jun-91 10463.3 10739.5 10582.5 10533.9
Jul-91 10955.4 11240.1 11002.7 10974.8
Aug-91 11415.7 11506.4 11162.2 11174.6
Sep-91 11259.5 11313.9 11045 11092.5
Oct-91 11391.1 11465.9 11206.2 11276.3
Nov-91 10790.7 11004 10580.9 10697.6
Dec-91 12021.2 12262.5 11481.4 11594.2
Jan-92 12147.8 12034 11481.4 11612.5
Feb-92 12469.3 12189.9 11714.5 11896.8
Mar-92 12089.3 11952.8 11530.5 11724.3
Apr-92 12034.2 12303.7 12093.2 12229.1
May-92 12014.7 12364 12127.1 12290.1
Jun-92 11536.1 12180 12027.6 12213.6
Jul-92 11865 12677.6 12461.8 12685.2
Aug-92 11532.2 12418.1 12100.5 12297.2
Sep-92 11708.4 12564 12233.5 12467.4
Oct-92 11905.3 12607.3 12135.7 12479
Nov-92 12475 13036.6 12464.6 12888.4
Dec-92 12653.2 13196.6 12690.2 13195.4
Jan-93 12891.5 13306.9 13040.4 13578.6
Feb-93 13040.5 13488.3 13490.3 14056.9
Mar-93 13606.6 13772.9 13862.6 14471.1
Apr-93 13330 13440 13807.2 14285.8
May-93 13678.5 13799.5 14065.4 14572.9
Jun-93 13758.1 13839.9 14251 14894.2
Jul-93 13785.3 13784.3 14427.8 15060.7
Aug-93 14297.4 14307.3 14993.3 15604.6
Sep-93 14276.9 14197.5 14987.3 15629.4
Oct-93 14856.2 14491.3 15068.7 15618.6
Nov-93 14743.1 14353.2 14799.1 15296.2
Dec-93 15008.9 14526.7 15051 15586.9
Jan-94 15765.3 15020.6 15752.7 16176.7
Feb-94 15560 14613 15182.8 15623.4
Mar-94 14879.2 13975.8 14558.3 15042.2
Apr-94 15127.7 14155 14864.9 15330.8
May-94 15307.1 14387.3 15110.9 15507.4
Jun-94 14950.2 14034.7 14692.9 15136
Jul-94 15476.4 14495.6 15189.6 15606.8
Aug-94 16171 15089.9 15619 16055.2
Sep-94 15910.5 14720.9 15069.2 15522.4
Oct-94 16134.4 15051.7 15397.2 15738.7
Nov-94 15557.8 14503.5 14773.3 15102.9
Dec-94 15643.6 14718.6 14954.8 15276.9
Jan-95 15905.3 15100.3 15359.7 15747.1
Feb-95 16599.3 15688.7 15956.2 16369.7
Mar-95 17065.8 16151.7 16396.1 16728.9
Apr-95 17541.4 16627.4 16935.8 17257.5
May-95 18271.8 17292 17689.3 17983.9
Jun-95 18842.5 17693.7 17823.6 18227.6
Jul-95 19557.8 18280.4 18437.6 18862.1
Aug-95 19855.6 18326.3 18595 19128.6
Sep-95 20542.6 19099.6 19241.8 19820.3
Oct-95 20405.1 19031.4 18942.2 19623.5
Nov-95 21347.7 19866.9 19934.9 20617.4
Dec-95 21539.4 20249.6 20487.5 21135.5
Jan-96 22281.8 20938.8 21100.9 21794.1
Feb-96 22912.7 21132.9 21298.9 21958.9
Mar-96 23098.3 21336.5 21797.5 22332.2
Apr-96 23593.8 21651 22019.4 22417.9
May-96 23875 22209.3 22351.2 22698.2
Jun-96 23632.1 22294 22243.2 22716.8
Jul-96 22346.5 21309 21304.8 21858.3
Aug-96 23103 21758.4 21892.8 22483.4
Sep-96 23936.3 22983 22830.5 23377.2
Oct-96 24510.3 23616.8 23604.4 24280.9
Nov-96 26164.2 25402.1 25410.2 26041.5
Dec-96 25828.3 24898.8 24993.4 25709.2
Jan-97 27063.3 26454.5 26145.6 26955.6
Feb-97 27385.5 26661.9 26336.5 27351.6
Mar-97 26365.2 25566.4 25435.8 26368
Apr-97 27157.3 27092.7 26389.6 27475.8
May-97 29064.8 28742.1 28044.8 29010.6
Jun-97 30019.1 30029.8 29116.1 30255.1
Jul-97 32268.5 32419.2 31445.4 32531.2
Aug-97 31140.7 30603.1 30024.1 31372.1
Sep-97 32494 32279.2 31783.5 33268.2
Oct-97 30634.9 31201.1 30615.4 32338.7
Nov-97 31668.7 32645.4 31782.5 33768.4
Dec-97 32317.8 33205.9 32488.1 34754.1
Jan-98 32269.3 33573.2 32087.5 34262.4
Feb-98 34582.3 35994.5 34494.4 36568.9
Mar-98 36620.4 37837.7 36241.5 38805.4
Apr-98 36895.4 38218.4 36670.6 39065.1
May-98 35925 37561 36154.6 38485.7
Jun-98 36575.3 39086.8 36429.1 38979.1
Jul-98 35631.6 38668.5 35638.6 38291.1
Aug-98 29991.1 33070.1 29907.9 32592.6
Sep-98 31082.8 35191.6 31725.1 34463.5
Oct-98 34405.6 38057.9 34210.1 37133
Nov-98 36504.3 40366.1 35992.1 38863
Dec-98 37911.2 42696 37256.1 40185.9
Jan-99 38783.1 44474.3 38008.7 40507
Feb-99 37476.1 43093.4 37190.4 39935.4
Mar-99 38382.7 44819.3 38317.6 40761.7
Apr-99 40754 46556 41621 44568.9
May-99 40247.4 45456.8 40885.6 44079.1
Jun-99 42043.2 47979.7 42456 45358.7
Jul-99 40874.4 46481.8 41150.4 44030.6
Aug-99 39378.4 46249.4 40109.3 42396.6
Sep-99 37460.7 44981.2 38539.9 40914.8
Oct-99 39254.3 47828.1 40715.4 43269.9
Nov-99 39219 48800.4 40476.9 42931.5
Dec-99 39513.1 51674.8 41997.6 43138.9
Jan-00 38201.7 49078.6 40661.2 41731.7
Feb-00 36458.2 48149.6 38120.7 38631
Mar-00 39476.5 52860.1 42095.5 43344.4
Apr-00 38726.5 51266.6 41813.9 42839.9
May-00 38932.5 50214.6 41944.4 43291.4
Jun-00 38164.4 51452.4 40287.6 41315
LAZARD MID CAP PORTFOLIO
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
LAZARD MID CAP PORTFOLIO, RUSSELL MIDCAP INDEX AND RUSSELL MIDCAP VALUE INDEX
[Table below represents line chart in its printed piece]
Lazard Mid Cap Russell Russell
Portfolio Midcap Midcap Value
--------- ------ ------------
11/4/97 10000 10000 10000
Nov-97 9990 10033.3 10166.9
Dec-97 10274.7 10309.2 10555.9
Jan-98 10284.7 10115.4 10350.8
Feb-98 11145.9 10906.4 11042.3
Mar-98 11656.6 11423.4 11610.8
Apr-98 11696.7 11452 11546
May-98 11115.9 11097.5 11276.3
Jun-98 10915.8 11251.2 11312.2
Jul-98 10174.6 10714.6 10738.7
Aug-98 8674.86 9000.83 9228.75
Sep-98 9095.59 9583.37 9767.24
Oct-98 9536.73 10236.9 10399.8
Nov-98 10128 10721.6 10765.2
Dec-98 10650.1 11350.4 11092.4
Jan-99 10538.3 11330.9 10833.9
Feb-99 10222.1 10954 10595.7
Mar-99 10425.5 11297.2 10747
Apr-99 11342 12131.7 11764.9
May-99 11474.7 12096.9 11814
Jun-99 11739.1 12523.9 11948.7
Jul-99 11199.1 12179.5 11649.6
Aug-99 10476.2 11864.8 11247
Sep-99 10026.3 11447.7 10677.7
Oct-99 10445.8 11990.3 10992.8
Nov-99 10722 12335.2 10791.2
Dec-99 11116.5 13420.2 11080.3
Jan-00 10219.5 12976 10417.5
Feb-00 10642.6 13973.3 9981.89
Mar-00 11797.7 14773.5 11192
Apr-00 11643.1 14074.3 11236.8
May-00 11838.7 13701.6 11429.9
Jun-00 11674.2 14106.9 11003.9
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
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
LAZARD SMALL CAP PORTFOLIO, RUSSELL 2000 INDEX AND RUSSELL 2000 VALUE INDEX
[Table below represents line chart in its printed piece]
Lazard
Small Cap Russell 2000
Portfolio Russell 2000 Value
--------- ------------ ------------
10/30/91 10000 10000 10000
Nov-91 9720 9537.2 9594.2
Dec-91 10453.5 10300.4 10216.3
Jan-92 11316.3 11135.7 11070.9
Feb-92 11827.9 11460.8 11599
Mar-92 11827.9 11073 11472.8
Apr-92 11547 10684.3 11313.9
May-92 11557 10826.4 11621.5
Jun-92 10955.1 10317.7 11245.2
Jul-92 11256.1 10676.3 11668.8
Aug-92 10935.1 10374.4 11441.4
Sep-92 11015.3 10613.3 11657.4
Oct-92 11547 10948.2 11929.5
Nov-92 12560.3 11786.7 12667.5
Dec-92 13041.3 12197 13192.9
Jan-93 13443.2 12609.5 13892.9
Feb-93 13563.7 12318.7 13948.4
Mar-93 14216.8 12718.3 14477.5
Apr-93 13885.2 12368.7 14129.6
May-93 14528.2 12915.7 14574
Jun-93 14920.1 12996 14711.4
Jul-93 15045.6 13175.4 14964
Aug-93 15925.8 13744.3 15548.8
Sep-93 16232.9 14132.2 15921.5
Oct-93 16386.4 14496.1 16286.1
Nov-93 16171.5 14023.8 15871.6
Dec-93 16965.6 14503 16338.6
Jan-94 17588.2 14957.4 16920.6
Feb-94 17599.3 14903.1 16871
Mar-94 16765.4 14118.2 16116
Apr-94 16743.2 14201.9 16274.4
May-94 16787.7 14042.1 16251.2
Jun-94 16598.7 13568.3 15829.4
Jul-94 16947.6 13791.4 16122
Aug-94 17926.5 14559.6 16756.1
Sep-94 17926.5 14510.2 16577.8
Oct-94 17641.9 14451.6 16273.7
Nov-94 16754.2 13867.6 15616.8
Dec-94 17310.3 14238.8 16085.4
Jan-95 17238 14059 16007.6
Feb-95 17973.8 14644.3 16600.3
Mar-95 18408.1 14895.3 16681.2
Apr-95 18794.1 15226.2 17177.3
May-95 19349 15488 17545.6
Jun-95 20217.5 16291.5 18145.1
7/1/95 21146.9 17229.9 18807.2
Aug-95 21255.6 17586.4 19365.9
Sep-95 21267.7 17900.5 19655.1
Oct-95 20047.9 17100 18870.1
Nov-95 20893.3 17818.3 19620
Dec-95 21036.4 18288.4 20227.8
Jan-96 21221 18268.6 20361.9
Feb-96 22012.3 18838.1 20681
Mar-96 22408 19221.4 21115.1
Apr-96 23283.4 20249.2 21691.1
May-96 24063.1 21047.2 22240.3
Jun-96 23375.9 20183 21977.6
Jul-96 21697.7 18420.2 20809.3
Aug-96 23098.4 19489.7 21712.2
Sep-96 23930.9 20251.4 22305
Oct-96 24142.3 19939.3 22563.7
Nov-96 25582.7 20760.8 23777.9
Dec-96 26070.4 21304.9 24549.7
Jan-97 26819.7 21730.6 24927
Feb-97 26720.8 21203.6 25163.6
Mar-97 25745.3 20203 24488.7
Apr-97 26494.6 20259.4 24848.7
May-97 29083.2 22513.3 26826.9
Jun-97 30426.2 23478.2 28184.6
Jul-97 31942.5 24570.6 29367.5
Aug-97 32621.2 25132.8 29833.8
Sep-97 34108.6 26972.3 31817.8
Oct-97 32765.6 25787.4 30952.7
Nov-97 32621.1 25620.5 31291.9
Dec-97 33384.9 26068.9 32352.7
Jan-98 33068.1 25657.5 31767.4
Feb-98 35436.1 27554.7 33687.8
Mar-98 36703.5 28691 35054.2
Apr-98 36803.5 28849.7 35227.3
May-98 34869.1 27295.8 33980.3
Jun-98 33784.7 27353.1 33788.3
Jul-98 31399.5 25138.9 31141.7
Aug-98 25144.7 20257.4 26264.6
Sep-98 25833.7 21842.8 27747.7
Oct-98 27326.9 22733.5 28571.6
Nov-98 28450 23924.5 29345
Dec-98 29172.6 25405 30265.2
Jan-99 28953.8 25742.6 29578.2
Feb-99 26875 23657.7 27558.9
Mar-99 26892.2 24027 27331.6
Apr-99 29793.8 26180.1 29826.7
May-99 31235.8 26562.3 30743.5
Jun-99 32374.4 27762.9 31856.8
Jul-99 31905 27001.1 31100.8
Aug-99 30105.5 26002.1 29964.1
Sep-99 29566.6 26007.3 29365.1
Oct-99 28098.7 26114.2 28777.5
Nov-99 28656.1 27672.1 28926.5
Dec-99 29687.8 30804.6 29815.2
Jan-00 28684.3 30310.2 29035.5
Feb-00 28291.3 35315.6 30810.2
Mar-00 30853.4 32987.3 30954.7
Apr-00 31121.8 31002.1 31137.9
May-00 30655.6 29195.3 30662.7
Jun-00 30907 31740.2 31558.7
LAZARD GLOBAL EQUITY PORTFOLIO
Lazard Global Equity Portfolio seeks long-term capital appreciation. The
Portfolio invests primarily in equity securities, principally common stocks, of
relatively large U.S. and non-U.S. companies with market capitalizations in the
range of the Morgan Stanley Capital International (MSCI) World Index that the
Investment Manager believes are undervalued based on their earnings, cash flow
or asset values.
COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF
LAZARD GLOBAL EQUITY PORTFOLIO AND MORGAN STANLEY CAPITAL
INTERNATIONAL WORLD INDEX
[Table below represents line chart in its printed piece]
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
Jan-00 17206.1 19120.5
Feb-00 17030.6 19169.8
Mar-00 18154.6 20492.5
Apr-00 17556.2 19623.7
May-00 17468.4 19124.5
Jun-00 17730.8 19765.5
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
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 (EAFE) 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
LAZARD INTERNATIONAL EQUITY PORTFOLIO AND MORGAN STANLEY CAPITAL
INTERNATIONAL EUROPE, AUSTRALASIA AND FAR EAST INDEX
[Table below represents line chart in its printed piece]
Lazard
International
Equity
Portfolio MSCI EAFE
------------- ---------
10/29/91 10000 10000
Nov-91 9990 9533.13
Dec-91 10319.2 10025.6
Jan-92 10459.4 9811.65
Feb-92 10569.6 9460.46
Mar-92 10319.2 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 13137.8
Jun-95 13142.1 12907.4
Jul-95 13976.1 13711
Aug-95 13728.2 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 14962.2 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 16765.9
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 15790.2
Feb-98 20045 16803.3
Mar-98 21291.2 17320.7
Apr-98 21635.9 17457.8
May-98 22220.1 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 19115.9
May-99 21719.5 18131.5
Jun-99 22651.2 18838.5
Jul-99 23371.6 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 23005.4
Jan-00 24539.7 21543.7
Feb-00 24678.3 22123.7
Mar-00 25835 22982.1
Apr-00 24786.1 21772.7
May-00 24554.8 21240.9
Jun-00 25465.3 22071.6
LAZARD INTERNATIONAL SMALL CAP PORTFOLIO
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 with market capitalizations in
the range of the Morgan Stanley Capital International (MSCI) Europe,
Australasia and Far East (EAFE) 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
LAZARD INTERNATIONAL SMALL CAP PORTFOLIO AND MORGAN STANLEY CAPITAL
INTERNATIONAL EUROPE, AUSTRALASIA AND FAR EAST SMALL CAP INDEX
[Table below represents line chart in its printed piece]
Lazard
International MSCI
Small Cap EAFE
Portfolio 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 11042.6 12515.7
May-94 10992.5 12357.5
Jun-94 10712.5 12610.7
Jul-94 10912.5 12634.4
Aug-94 11352.6 12761
Sep-94 11002.5 12302.1
Oct-94 11092.6 12476.1
Nov-94 10612.5 11605.9
Dec-94 10382.4 11756.3
Jan-95 10072.3 11305.3
Feb-95 10012.3 11155
Mar-95 9782.3 11384.4
Apr-95 10002.3 11637.6
May-95 10272.4 11368.6
Jun-95 10362.4 11115.4
Jul-95 10752.5 11827.5
Aug-95 10652.5 11495.1
Sep-95 10962.5 11463.5
Oct-95 10532.4 11004.7
Nov-95 10502.4 11139.1
Dec-95 10567.7 11519
Jan-96 10738.7 11867
Feb-96 10829.1 11977.8
Mar-96 10969.9 12215.1
Apr-96 11412.3 12856
May-96 11492.8 12594.8
Jun-96 11533 12579.1
Jul-96 11130.8 11882.8
Aug-96 11482.7 11922.4
Sep-96 11553.1 11977.8
Oct-96 11643.6 11764.2
Nov-96 12186.6 11914.4
Dec-96 12221.4 11503.1
Jan-97 12385.4 11271
Feb-97 12621 11481.2
Mar-97 12426.3 11191.5
Apr-97 11985.8 10818.4
May-97 12556.1 11638
Jun-97 13124 11847.6
Jul-97 13010.4 11430.7
Aug-97 12618 10701.2
Sep-97 13351.2 10475.4
Oct-97 12711 9895.2
Nov-97 12308.2 9205.2
Dec-97 12254.2 8668.5
Jan-98 12526.7 9210.4
Feb-98 13679.8 10035.7
Mar-98 14780.5 10257.6
Apr-98 15440.9 10237.9
May-98 15786.8 10271.2
Jun-98 15314.8 9862.5
Jul-98 15115.7 9727.8
Aug-98 13341.1 8433.4
Sep-98 12315.2 8045.6
Oct-98 12657.5 8690.1
Nov-98 12753.7 9105.3
Dec-98 13179.7 9140.2
Jan-99 12949.1 9025.2
Feb-99 12787.2 8911.3
Mar-99 12996 9393.9
Apr-99 13642.6 10092.2
May-99 13399.8 9726.3
Jun-99 14047 10243.4
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
Jan-00 16662.6 10768.6
Feb-00 17204.8 11033.2
Mar-00 17534.5 11294.6
Apr-00 16734.4 10446
May-00 16510.1 10424.6
Jun-00 16804.7 11341.4
PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS.
5
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
GROWTH CHARTS (CONTINUED)
--------------------------------------------------------------------------------
LAZARD EMERGING MARKETS PORTFOLIO
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 located 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
LAZARD EMERGING MARKETS PORTFOLIO AND MORGAN STANLEY CAPITAL
INTERNATIONAL EMERGING MARKETS (FREE) INDEX
[Table below represents line chart in its printed piece]
Lazard MSCI
Emerging Emerging
Markets Markets
Portfolio (Free)
--------- --------
7/15/94 10000 10000
10210 10280
11300 11555.8
11660 11687.5
11580 11477.1
11320 10880.3
Dec-94 9860 10006.6
8640 8941.91
8420 8712.99
8400 8768.76
8650 9162.48
9160 9649.92
Jun-95 9140 9678.87
9490 9896.16
9370 9663.01
9460 9617.11
9040 9248.96
8920 9084.05
Dec-95 9280.04 9486.93
10163.9 10161.3
10244.2 9999.7
10244.2 10077.6
10897.5 10480.5
11269.1 10433.6
Jun-96 11168.7 10498.8
10676.6 9781.27
10867.4 10031.7
11168.7 10118.5
11048.2 9848.69
11369.6 10013.8
Dec-96 11472.7 10059
12240.3 10745.1
12762.2 11205.4
12639.4 10911
12772.4 10930.3
13189.1 11243.1
Jun-97 14164.6 11844.9
14143.8 12021.7
12597.6 10491.9
13178.8 10782.6
10770 9013.36
10252.5 8684.48
Dec-97 10343.9 8893.76
9781.73 8196.22
10625 9051.71
11243.4 9444.52
11175.9 9341.64
9837.95 8061.45
Jun-98 9276.2 7215.84
9535.01 7444.62
6649.72 5292.08
7088.6 5627.79
7684.75 6220.4
8247.27 6737.74
Dec-98 7914.91 6640.1
7356.11 6532.97
7344.34 6596.51
8404.5 7465.87
9293.28 8389.55
9020.05 8340.75
Jun-99 10103.4 9287.36
9818.45 9034.74
9640.73 9116.94
9286.73 8808.79
9446.27 8996.35
10657.3 9803.01
Dec-99 12330.5 11049.8
12007.5 11115.6
12100 11262.3
12158.1 11317.3
10902.1 10244.4
10418.1 9820.9
Jun-00 11282.3 10166.8
LAZARD BOND PORTFOLIO
Lazard Bond Portfolio seeks to build and preserve capital. The Portfolio
invests in a range of bonds and other fixed-income securities, including
mortgage-backed securities, asset-backed securities, municipal securities,
corporate fixed-income securities and U.S. Government securities.
COMPARISON OF $10,000 INVESTMENT IN THE INSTITUTIONAL SHARES OF
LAZARD BOND PORTFOLIO AND LEHMAN INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX
[Table below represents line chart in its printed piece]
Lazard
Bond Lehman In.
Portfolio G/C Bond
--------- ----------
11/12/91 10000 10000
Nov-91 10103.5 10114.8
Dec-91 10392.2 10361.9
Jan-92 10277.7 10268
Feb-92 10304.8 10308.6
Mar-92 10242.6 10268
Apr-92 10323.3 10358.3
May-92 10467 10518.8
Jun-92 10599.7 10674.5
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 12061.1
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 11847.9
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 15827.6 16684.3
Oct-99 15821.4 16727.7
Nov-99 15856.2 16748.4
Dec-99 15833.1 16693.5
Jan-00 15739 16632.5
Feb-00 15870.5 16769.5
Mar-00 15951.4 16944.6
Apr-00 15933.8 16905.6
May-00 15917.4 16932.7
Jun-00 16214 17231.5
PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS.
6
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
GROWTH CHARTS (CONTINUED)
--------------------------------------------------------------------------------
LAZARD HIGH YIELD PORTFOLIO
Lazard High Yield Portfolio seeks maximum total return from a combination of
capital appreciation and current income. The Portfolio invests primarily in
high-yielding U.S. 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
LAZARD HIGH YIELD PORTFOLIO AND MERRILL LYNCH HIGH YIELD MASTER II INDEX
[Table below represents line chart in its printed piece]
Lazard High
Yield MLHY
Portfolio 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 10363.1
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 10592.8 10553.6
Jan-00 10550 10513.2
Feb-00 10593.2 10535.7
Mar-00 10370.8 10381
Apr-00 10273.3 10381.1
May-00 10122.8 10250.6
Jun-00 10234.2 10448.8
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO
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
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO AND
SALOMON WORLD GOVERNMENT BOND INDEX EX-US
[Table below represents line chart in its printed piece]
Lazard
International
Fixed-Income SWGBI
Portfolio Ex-US
----------- -----------
11/8/91 10000 10000
10036.5 10156
10394.5 10684.1
10093 10495
10106.3 10436.2
9966.71 10325.6
10027.9 10398.9
10311.9 10718.2
10507 11018.3
10664.4 11275
10974.1 11590.7
10958.8 11706.6
10712.4 11388.2
10536 11207.1
Dec-92 10606 11274.4
10780.4 11428.8
10985.4 11656.2
11184.5 11945.3
11550.9 12303.7
11746.6 12527.6
11625.3 12293.4
11657.8 12302
12045.5 12739.9
12228.9 12955.2
12212.1 12895.6
12132.2 12836.3
Dec-93 12267.5 12978.8
12353.8 13034.6
12323.5 13071.1
12412.5 13230.5
12389.6 13316.5
12309.3 13136.8
12613.9 13454.7
12603.2 13489.7
12505.1 13411.4
12749 13677
13068.7 14029.8
12838.6 13747.8
Dec-94 12779.1 13754.7
12966.2 14054.6
13374.6 14452.3
14465.5 15740.2
14872.2 16077.1
15226.3 16428.3
15311.4 16510
15316 16597.4
14508.6 15648.4
14894.1 16110
14998.8 16161.5
15108.8 16302.9
Dec-95 15255.6 16444.5
14986.2 16081.1
15010.8 16127.2
15014.5 16166.9
15035.6 16134.5
15090.4 16143.4
15176.4 16233.8
15569.4 16681.9
15659.9 16793.7
15684.6 16761.7
15935.7 17045
16132.2 17240.3
Dec-96 16097.2 17118.3
15456.4 16422.6
15337.2 16232.1
15190.8 16128.2
14886.4 15800.8
15387 16382.3
15580.3 16583.8
15203.8 16151
15175 16223.6
15550 16617.9
15729 16990.1
15405.9 16555.2
Dec-97 15199.7 16388
15267.3 16499.4
15514.1 16732
15269.2 16456
15603.5 16818
15492 16791.1
15459.5 16730.6
15507.4 16750.7
15443.8 17209.7
16339.5 18338.6
16949 19165.7
16740.5 18775.2
Dec-98 17205.9 19304
17076.9 19001.1
16482.8 18334.8
16530.6 18370
16514.2 18342.3
16192.2 17972.5
15853.3 17544.8
16370.1 18160.6
16441.6 18276.9
16703.1 18617.5
16751.5 18597.1
16572.3 18342.3
Dec-99 16703.5 18324.7
16047.1 17772.5
15849.7 17495.8
16342.6 18111.7
15619.5 17320.2
15783.5 17496.8
Jun-00 16129.6 17967.6
PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS.
7
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
GROWTH CHARTS (CONTINUED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO
Lazard Strategic Yield Portfolio seeks total return from a combination of
capital appreciation and current income. The Portfolio invests primarily 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
LAZARD STRATEGIC YIELD PORTFOLIO AND ONE MONTH LIBOR USD FIXED INDEX
[Table below represents line chart in its printed piece]
Lazard One Month
Strategic Yield LIBOR
Portfolio USD Fixed
--------------- ----------
10/1/91 10000 10000
10359.8 10041.8
10493.2 10084.2
Dec-91 10212.9 10119.7
10133.8 10154.3
10298.7 10189.6
10421.4 10225
10420.1 10257.9
10536.4 10291.5
10640.3 10324.6
10841.5 10353.1
10955.8 10382.7
11071.4 10409.8
10596.5 10437.6
10594 10473.9
Dec-92 10821.1 10502.3
11106.5 10529.2
11322.1 10556.8
11506 10584.3
11516.1 10611.5
11617.2 10639.8
11928 10667.6
12086 10695.4
12184.6 10723.4
12172.4 10751.5
12354.4 10779.6
12391.5 10811.1
Dec-93 12508.8 10840
12759.9 10867.8
12574.3 10899.6
12322 10932.5
12151.3 10968.3
12146.9 11007.6
12057 11048.5
12191.7 11089.2
12357.7 11133.3
12288.5 11179.1
12258.5 11225.1
12315.9 11280.3
Dec-94 12216.5 11335.2
12206.5 11391.2
12267.8 11447.8
12329.6 11504.7
12613.8 11561.3
12959.5 11618.1
13033.5 11675.8
13135.4 11731.6
13276.8 11787.6
13399.8 11843.8
13492.7 11899.9
13663.8 11957.6
Dec-95 13873.3 12012.9
14155.6 12066
14102.5 12118.2
14205.9 12171.8
14340.3 12225
14478.1 12279.1
14643 12333.7
14732.3 12388.2
14891.4 12443
15216.8 12498
15387 12552.6
15619.5 12609.4
Dec-96 15780.6 12665.8
15977.1 12721.8
16135.3 12778
16052.2 12837.1
16140.6 12896.4
16338.9 12956
16499.2 13015.8
16611.4 13075.3
16526.9 13135.4
16702.1 13195.8
16487.4 13256.1
16582.4 13320.3
Dec-97 16618.3 13382.2
16761.2 13443.4
16926.1 13505.5
17145.9 13567.9
17241.6 13630.2
17234.2 13692.9
17199.7 13755.8
17423.3 13819
16550.4 13882.5
16550.4 13942.9
16326.3 14002.5
16644.7 14066.5
Dec-98 16742.1 14124.4
16901.1 14181.2
16942.3 14238.3
17112.6 14295.6
17341 14352.6
17191.9 14410.3
17301.4 14469.4
17249.5 14530.2
17160.7 14593.7
17122.1 14657.9
17179.3 14722.6
17371.3 14799.8
Dec-99 17564.2 14869.9
17550.1 14940.8
17723.8 15011.6
17760.4 15086.7
17738.3 15162.4
17645.4 15244
Jun-00 17791.3 15328.3
PAST PERFORMANCE IS NOT INDICATIVE, NOR A GUARANTEE, OF FUTURE RESULTS.
8
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 2000
----------------------------------------------------------------------
INSTITUTIONAL SHARES
----------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
YEAR YEAR YEAR YEAR INCEPTION*
------------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Lazard Equity Portfolio (9.22)% 8.33% 15.16% 14.33% 13.22%
Standard & Poor's 500 Index** 7.24% 19.66% 23.80% 17.80% 16.12%
Standard & Poor's BARRA Value Index** (5.11)% 11.43% 17.72% 14.95% 13.69%
Russell 1000 Value Index** (8.92)% 10.94% 17.78% 15.24% 13.89%
Lazard Mid Cap Portfolio (0.56)% -- -- -- 6.00%
Russell Midcap Index** 12.64% -- -- -- 13.84%
Russell Midcap Value Index** (7.91)% -- -- -- 3.67%
Lazard Small Cap Portfolio (4.54)% 0.52% 8.86% -- 13.91%
Russell 2000 Index** 14.32% 10.57% 14.27% -- 14.26%
Russell 2000 Value Index** (0.94)% 3.84% 11.70% -- 14.18%
Lazard Global Equity Portfolio 2.96% 10.29% -- -- 13.61%
MSCI World Index** 12.19% 14.95% -- -- 16.38%
Lazard International Equity Portfolio 12.42% 11.02% 14.14% -- 11.39%
MSCI EAFE Index** 17.16% 10.19% 11.33% -- 9.57%
Lazard International Small Cap Portfolio 19.63% 8.59% 10.15% -- 8.21%
MSCI EAFE Small Cap Index** 10.72% (1.44)% 0.40% -- 1.93%
Lazard Emerging Markets Portfolio 11.67% (7.30)% 4.30% -- 2.04%
MSCI Emerging Markets (Free) Index** 9.47% (4.96)% 0.99% -- 0.28%
Lazard Bond Portfolio 2.86% 4.23% 5.10% -- 5.73%
Lehman Intermediate Gov't/Corp. Bond Index** 4.23% 5.63% 5.82% -- 6.48%
Lazard High Yield Portfolio (3.92)% -- -- -- 0.93%
Merrill Lynch High Yield Master II Index** (0.97)% -- -- -- 1.78%
Lazard International Fixed-Income Portfolio+ 1.75% 1.16% 1.05% -- 5.67%
Salomon World Government Bond Index Ex-US+** 2.41% 2.71% 1.71% -- 7.00%
Lazard Strategic Yield Portfolio 2.83% 2.55% 6.42% -- 6.81%
One Month LIBOR USD Fixed Index** 5.93% 5.60% 5.59% -- 5.00%
</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 indices are 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. (the "Fund") will fluctuate, so that an investor's shares in a Portfolio,
when redeemed, may be worth more or less than their original cost. Within the
longer periods illustrated there may have been short-term fluctuations,
counter to the overall trend of investment results, and no single period of
any length may be taken as typical of what may be expected in future periods.
+ Effective January 1, 1993, the Portfolio is measured by the index "excluding
U.S." Performance of the index "Since Inception" is a blended return of the
index "including U.S." and the index "excluding U.S." for the applicable
periods.
See additional footnotes on next page.
9
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PERFORMANCE TABLE (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 2000
-------------------------------------------------------------------------
INSTITUTIONAL SHARES
-------------------------------------------------------------------------
ONE THREE FIVE TEN SINCE
YEAR YEAR YEAR YEAR INCEPTION*
------------- ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Lazard Equity Portfolio (9.22)% 27.13% 102.54% 281.64% 407.30%
Standard & Poor's 500 Index** 7.24% 71.34% 190.80% 414.52% 606.65%
Standard & Poor's BARRA Value Index** (5.11)% 38.37% 126.04% 302.88% 436.11%
Russell 1000 Value Index** (8.92)% 36.55% 126.65% 313.15% 448.03%
Lazard Mid Cap Portfolio (0.56)% -- -- -- 16.74%
Russell Midcap Index** 12.64% -- -- -- 41.07%
Russell Midcap Value Index** (7.91)% -- -- -- 10.04%
Lazard Small Cap Portfolio (4.54)% 1.58% 52.87% -- 209.07%
Russell 2000 Index** 14.32% 35.19% 94.83% -- 217.40%
Russell 2000 Value Index** (0.94)% 11.97% 73.92% -- 215.59%
Lazard Global Equity Portfolio 2.96% 34.17% -- -- 77.31%
MSCI World Index** 12.19% 51.87% -- -- 97.66%
Lazard International Equity Portfolio 12.42% 36.82% 93.76% -- 154.65%
MSCI EAFE Index** 17.16% 33.78% 71.00% -- 120.72%
Lazard International Small Cap Portfolio 19.63% 28.04% 62.17% -- 68.05%
MSCI EAFE Small Cap Index** 10.72% (4.27)% 2.03% -- 13.41%
Lazard Emerging Markets Portfolio 11.67% (20.35)% 23.43% -- 12.82%
MSCI Emerging Markets (Free) Index** 9.47% (14.17)% 5.04% -- 1.67%
Lazard Bond Portfolio 2.86% 13.24% 28.24% -- 62.14%
Lehman Intermediate Gov't/Corp. Bond Index** 4.23% 17.87% 32.70% -- 72.32%
Lazard High Yield Portfolio (3.92)% -- -- -- 2.34%
Merrill Lynch High Yield Master II Index** (0.97)% -- -- -- 4.49%
Lazard International Fixed-Income Portfolio+ 1.75% 3.53% 5.35% -- 61.30%
Salomon World Government Bond Index Ex-US+** 2.41% 8.35% 8.83% -- 79.68%
Lazard Strategic Yield Portfolio 2.83% 7.84% 36.50% -- 77.91%
One Month LIBOR USD Fixed Index** 5.93% 17.76% 31.28% -- 53.28%
</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 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 S&P BARRA Value Index is a capitalization-weighted
index of all the stocks in the S&P 500 Index that have low price-to-book
ratios. The Russell 1000 Value Index measures the performance of those
Russell 1000 Index (consisting of the 1,000 largest U.S. companies by
capitalization) companies with lower price-to-book ratios and lower
forecasted growth values. The Russell Midcap Index measures the performance
of the 800 smallest companies in the Russell 1000 Index. The Russell Midcap
Value Index measures the performance of those Russell Midcap Index companies
with lower price-to-book ratios and lower forecasted growth values. The
Russell 2000 Index is composed of the 2,000 smallest U.S. companies included
in the Russell 3000 Index. The Russell 2000 Value Index measures the
performance of those Russell 2000 Index companies with lower price-to-book
ratios and lower forecasted growth values. The Morgan Stanley Capital
International (MSCI) World Index represents market value-weighted average
returns of selected securities listed on the stock exchanges of Europe,
Australia, the Far East ("EAFE"), New Zealand, Canada and the United States.
The MSCI EAFE Index is a broadly diversified international index composed of
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 of small cap companies 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 of U.S. Government and corporate bonds in the intermediate maturity
range 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 (LIBOR) USD Fixed Index is an
average derived from sixteen quotations of the rate that banks dealing in
Eurodollars charge each other for large loans, as 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 CUMULATIVE TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 2000 FOR PERIODS ENDED JUNE 30, 2000
---------------------------------------------------------------------------------
OPEN SHARES
---------------------------------------------------------------------------------
ONE THREE SINCE ONE THREE SINCE
YEAR YEAR INCEPTION* YEAR YEAR INCEPTION*
------------- ------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Lazard Equity Portfolio (9.43)% 8.03% 10.28% (9.43)% 26.07% 39.45%
Standard & Poor's 500 Index** 7.24% 19.66% 22.86% 7.24% 71.34% 101.38%
Standard & Poor's BARRA Value Index** (5.11)% 11.43% 13.46% (5.11)% 38.37% 53.62%
Russell 1000 Value Index** (8.92)% 10.94% 13.21% (8.92)% 36.55% 52.47%
Lazard Mid Cap Portfolio (0.96)% -- 5.64% (0.96)% -- 15.67%
Russell Midcap Index** 12.64% -- 13.84% 12.64% -- 41.06%
Russell Midcap Value Index** (7.91)% -- 3.67% (7.91)% -- 10.04%
Lazard Small Cap Portfolio (4.79)% 0.24% 4.31% (4.79)% 0.71% 15.49%
Russell 2000 Index** 14.32% 10.57% 11.74% 14.32% 35.19% 46.06%
Russell 2000 Value Index** (0.94)% 3.84% 7.15% (0.94)% 11.97% 26.60%
Lazard Global Equity Portfolio 2.73% 10.02% 13.49% 2.73% 33.17% 54.11%
MSCI World Index** 12.19% 14.95% 17.44% 12.19% 51.87% 73.18%
Lazard International Equity Portfolio 11.99% 10.65% 13.73% 11.99% 35.49% 55.63%
MSCI EAFE Index** 17.16% 10.19% 13.36% 17.16% 33.78% 53.93%
Lazard International Small Cap Portfolio 19.08% 8.21% 8.43% 19.08% 26.71% 31.45%
MSCI EAFE Small Cap Index** 10.72% (1.44)% 0.36% 10.72% (4.27)% 1.22%
Lazard Emerging Markets Portfolio 11.20% (7.49)% (1.27)% 11.20% (20.82)% (4.36)%
MSCI Emerging Markets (Free) Index** 9.47% (4.96)% (0.04)% 9.47% (14.17)% (0.13)%
Lazard Bond Portfolio 2.50% 3.87% 4.22% 2.50% 12.05% 14.72%
Lehman Intermediate Gov't/Corp. Bond Index** 4.23% 5.63% 5.80% 4.23% 17.87% 20.61%
Lazard High Yield Portfolio (4.25)% -- (1.41)% (4.25)% -- (3.28)%
Merrill Lynch High Yield Master II Index** (0.97)% -- 0.98% (0.97)% -- 2.33%
Lazard International Fixed-Income Portfolio 1.55% 0.89% 0.13% 1.55% 2.68% 0.45%
Salomon World Government Bond Index Ex-US** 2.41% 2.71% 1.40% 2.41% 8.35% 4.97%
Lazard Strategic Yield Portfolio 2.45% 2.10% 2.79% 2.45% 6.44% 9.94%
One Month LIBOR USD Fixed Index** 5.93% 5.60% 5.61% 5.93% 17.76% 20.64%
</TABLE>
11
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EQUITY PORTFOLIO
COMMON STOCKS--99.0%
AEROSPACE & DEFENSE--2.0%
Honeywell International, Inc. ........ 44,500 $1,499,094
United Technologies Corp. ............ 83,400 4,910,175
----------
6,409,269
----------
ALUMINUM--1.2%
Alcoa, Inc. .......................... 126,200 3,659,800
----------
AUTOMOTIVE--1.8%
Ford Motor Co. ....................... 81,200 3,491,600
General Motors Corp. ................. 34,446 2,000,021
Visteon Corp. (a) .................... 10,631 128,910
----------
5,620,531
----------
BANKING & FINANCIAL SERVICES--15.9%
Bank of America Corp. ................ 118,150 5,080,450
Chase Manhattan Corp. ................ 165,336 7,615,789
Citigroup, Inc. ...................... 146,923 8,852,111
Federal National Mortgage
Association ......................... 53,000 2,765,938
FleetBoston Financial Corp. .......... 129,000 4,386,000
Mellon Financial Corp. ............... 160,400 5,844,575
Morgan Stanley Dean Witter & Co. ..... 70,400 5,860,800
The Hartford Financial Services
Group, Inc. ......................... 85,500 4,782,656
Wells Fargo Co. ...................... 140,000 5,425,000
----------
50,613,319
----------
BREWERY--1.5%
Anheuser-Busch Companies, Inc. ....... 65,700 4,906,969
----------
BROADCASTING--0.4%
Comcast Corp., Class A (a) ........... 32,800 1,328,400
----------
CHEMICALS & PLASTICS--0.5%
Du Pont (E.I.) de Nemours & Co. ...... 36,400 1,592,500
----------
COMPUTER SOFTWARE--2.5%
Microsoft Corp. (a) .................. 98,200 7,856,000
----------
COMPUTERS & BUSINESS EQUIPMENT--9.2%
Compaq Computer Corp. ................ 198,900 5,084,381
Hewlett-Packard Co. .................. 42,400 5,294,700
International Business Machines
Corp. ............................... 84,600 9,268,987
Oracle Corp. (a) ..................... 70,700 5,943,219
Seagate Technology, Inc. (a) ......... 21,800 1,199,000
Xerox Corp. .......................... 117,900 2,446,425
----------
29,236,712
----------
CONGLOMERATES--0.9%
Textron, Inc. ........................ 52,500 2,851,406
----------
COSMETICS & TOILETRIES--0.7%
Gillette Co. ......................... 64,300 2,246,481
----------
DIVERSIFIED--3.9%
Minnesota Mining &
Manufacturing Co. ................... 55,900 4,611,750
PPG Industries, Inc. ................. 56,100 2,485,931
Tyco International, Ltd. ............. 111,600 5,287,050
----------
12,384,731
----------
DRUGS & HEALTH CARE--13.1%
American Home Products Corp. ......... 145,900 8,571,625
Baxter International, Inc. ........... 45,600 3,206,250
Bristol-Myers Squibb Co. ............. 110,300 6,424,975
Johnson & Johnson .................... 40,700 4,146,312
Merck & Company, Inc. ................ 131,800 10,099,175
Pharmacia Corp. ...................... 80,801 4,176,402
Schering-Plough Corp. ................ 97,500 4,923,750
----------
41,548,489
----------
ELECTRONICS--5.3%
Intel Corp. .......................... 89,900 12,018,506
Motorola, Inc. ....................... 42,400 1,232,250
Texas Instruments, Inc. .............. 51,000 3,503,063
----------
16,753,819
----------
FOOD & BEVERAGES--3.8%
H.J. Heinz Co. ....................... 74,600 3,263,750
Hershey Foods Corp. .................. 36,700 1,779,950
PepsiCo, Inc. ........................ 160,500 7,132,219
----------
12,175,919
----------
HOTELS & RESTAURANTS--1.0%
McDonald's Corp. ..................... 99,600 3,280,575
----------
HOUSEHOLD PRODUCTS--1.2%
Procter & Gamble Co. ................. 66,700 3,818,575
----------
INDUSTRIAL & MACHINERY--1.0%
Ingersoll-Rand Co. ................... 77,100 3,103,275
----------
INSURANCE--0.7%
Allstate Corp. ....................... 93,798 2,087,006
----------
LEISURE/ENTERTAINMENT--1.1%
The Walt Disney Co. .................. 88,200 3,423,263
----------
MULTIMEDIA--1.5%
Gannett Company, Inc. ................ 39,800 2,380,537
Time Warner, Inc. .................... 32,800 2,492,800
----------
4,873,337
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EQUITY PORTFOLIO (CONTINUED)
OIL & GAS--7.2%
Chevron Corp. .............................. 60,700 $ 5,148,119
Coastal Corp. .............................. 62,100 3,780,338
Conoco, Inc., Class B ...................... 143,574 3,526,536
Exxon Mobil Corp. .......................... 82,764 6,496,974
Texaco, Inc. ............................... 73,300 3,903,225
------------
22,855,192
------------
PAPER PRODUCTS--2.3%
International Paper Co. .................... 84,100 2,507,231
Kimberly-Clark Corp. ....................... 85,612 4,911,989
------------
7,419,220
------------
PETROLEUM EQUIPMENT & SERVICES--1.3%
Halliburton Co. ............................ 20,200 953,188
Schlumberger Ltd. .......................... 41,000 3,059,625
------------
4,012,813
------------
PHOTOGRAPHY--0.8%
Eastman Kodak Co. .......................... 41,600 2,475,200
------------
PUBLISHING--0.7%
New York Times Co. ......................... 58,500 2,310,750
------------
RETAIL--3.7%
Federated Department Stores, Inc. (a) 84,700 2,858,625
Lowe's Companies, Inc. ..................... 51,400 2,110,612
Target Corp. ............................... 71,200 4,129,600
The Gap, Inc. .............................. 83,700 2,615,625
------------
11,714,462
------------
SERVICES--1.6%
First Data Corp. ........................... 104,400 5,180,850
------------
TELECOMMUNICATIONS--12.2%
Alcatel SA ADR ............................. 80,600 5,359,900
AT&T Corp. ................................. 144,300 4,563,487
AT&T Wireless Group (a) .................... 145,200 4,047,450
Bell Atlantic Corp. ........................ 154,000 7,825,125
Lucent Technologies, Inc. .................. 112,000 6,636,000
SBC Communications, Inc. ................... 237,279 10,262,317
------------
38,694,279
------------
TOTAL COMMON STOCKS
(Identified cost $288,678,803) ............. 314,433,142
------------
PRINCIPAL
AMOUNT
(000)
----------
REPURCHASE AGREEMENT--3.2%
State Street Bank and Trust Company,
6.40%, 07/03/00, (Dated 06/30/00,
collateralized by $10,240,000
United States Treasury Note,
6.25%, 01/31/02, with a value
of $10,470,400)
(Identified cost $10,262,000).............. $ 10,262 10,262,000
------------
TOTAL INVESTMENTS
(Identified cost $298,940,803) (b) ......... 102.2% $324,695,142
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS .............................. (2.2) (6,935,874)
---------- ------------
NET ASSETS .................................. 100.0% $317,759,268
========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD MID CAP PORTFOLIO
COMMON STOCKS--97.8%
AEROSPACE & DEFENSE--0.3%
The B.F. Goodrich Co. ....................... 2,300 $ 78,344
---------
AUTO PARTS--2.4%
Borg-Warner Automotive, Inc. ................ 8,600 302,075
Delphi Automotive Systems Corp. ............. 21,600 314,550
---------
616,625
---------
BANKING & FINANCIAL SERVICES--10.2%
Capital One Financial Corp. ................. 8,100 361,462
Comerica, Inc. .............................. 12,200 547,475
Franklin Resources, Inc. .................... 17,000 516,375
North Fork Bancorporation, Inc. ............. 41,150 622,394
Paine Webber Group, Inc. .................... 2,900 131,950
SouthTrust Corp. ............................ 21,200 479,650
---------
2,659,306
---------
BREWERY--2.7%
Adolph Coors Co., Class B ................... 11,700 707,850
---------
BROADCASTING--1.2%
USA Networks, Inc. (a) ...................... 14,500 313,563
---------
BUSINESS SERVICES AND SUPPLIES--7.1%
Acxiom Corp. (a) ............................ 14,800 403,300
Gartner Group, Inc., Class A ................ 38,500 462,000
J.D. Edwards & Co. (a) ...................... 29,700 447,356
Sabre Holdings Corp., Class A ............... 18,500 527,250
---------
1,839,906
---------
CABLE TELEVISION OPERATOR--1.1%
Cablevision Systems Corp.,
Class A (a) ................................ 4,300 291,863
---------
CHEMICALS & PLASTICS--1.1%
Eastman Chemical Co. ........................ 6,100 291,275
---------
COMMUNICATION SERVICES--2.7%
At Home Corp. (a) ........................... 20,400 423,300
Western Wireless Corp., Class A ............. 5,200 283,400
---------
706,700
---------
COMPUTER SOFTWARE--2.5%
Autodesk, Inc. .............................. 12,800 444,000
Intuit, Inc. (a) ............................ 4,800 198,600
---------
642,600
---------
COMPUTERS & BUSINESS EQUIPMENT--10.8%
Ceridian Corp. (a) .......................... 31,800 765,187
Diebold, Inc. ............................... 17,900 498,963
Electronics for Imaging, Inc. (a) ........... 17,300 437,906
NCR Corp. (a) ............................... 14,200 552,913
Seagate Technology, Inc. (a) ................ 9,300 511,500
StorageNetworks, Inc. (a) ................... 500 45,125
---------
2,811,594
---------
CONGLOMERATES--2.4%
Textron, Inc. ............................... 11,400 619,162
---------
CONTAINERS--0.9%
Sealed Air Corp. (a) ........................ 4,400 230,450
---------
COSMETICS & TOILETRIES--1.9%
Avon Products, Inc. ......................... 11,000 489,500
---------
DIVERSIFIED--2.4%
PPG Industries, Inc. ........................ 10,800 478,575
SPX Corp. (a) ............................... 1,300 157,219
---------
635,794
---------
DRUGS & HEALTH CARE--3.7%
Biogen, Inc. (a) ............................ 1,800 116,100
Genzyme Corp. (a) ........................... 6,500 386,344
Watson Pharmaceuticals, Inc. (a) ............ 8,400 451,500
---------
953,944
---------
ELECTRONICS--4.8%
Amphenol Corp., Class A (a) ................. 5,600 370,650
KEMET Corp. (a) ............................. 8,200 205,513
LSI Logic Corp. (a) ......................... 12,300 665,737
---------
1,241,900
---------
FOOD & BEVERAGES--3.6%
Keebler Foods Co. ........................... 6,300 233,887
Nabisco Group Holdings Corp. ................ 8,600 223,063
Whitman Corp. ............................... 40,000 495,000
---------
951,950
---------
GAS & PIPELINE UTILITIES--1.7%
Cooper Cameron Corp. (a) .................... 6,900 455,400
---------
HOTELS & RESTAURANTS--1.9%
Tricon Global Restaurants, Inc. (a) ......... 18,000 508,500
---------
HOUSEHOLD APPLIANCES & HOME
FURNISHINGS--2.7%
Black & Decker Corp. ........................ 10,900 428,506
Ethan Allen Interiors, Inc. ................. 11,150 267,600
---------
696,106
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD MID CAP PORTFOLIO (CONTINUED)
INDUSTRIAL & MACHINERY--1.0%
Ingersoll-Rand Co. ........................ 6,500 $ 261,625
-----------
INSURANCE--5.8%
Ace, Ltd. ................................. 17,300 484,400
Ambac Financial Group, Inc. ............... 11,100 608,419
Everest Re Group, Ltd. .................... 12,800 420,800
-----------
1,513,619
-----------
OIL & GAS--9.1%
Baker Hughes, Inc. ........................ 4,600 147,200
Coastal Corp. ............................. 10,200 620,925
Devon Energy Corp. ........................ 7,900 443,881
EOG Resources, Inc. ....................... 14,900 499,150
Tidewater, Inc. ........................... 4,000 144,000
USX-Marathon Group ........................ 21,300 533,831
-----------
2,388,987
-----------
PAPER PRODUCTS--3.9%
Bowater, Inc. ............................. 8,900 392,712
Consolidated Papers, Inc. ................. 16,800 614,250
-----------
1,006,962
-----------
PRINTING--0.4%
Valassis Communications, Inc. (a) ......... 2,700 102,938
-----------
RETAIL--4.4%
Borders Group, Inc. (a) ................... 24,300 378,169
Saks, Inc. (a) ............................ 21,200 222,600
Venator Group, Inc. (a) ................... 53,200 545,300
-----------
1,146,069
-----------
TELECOMMUNICATIONS--2.0%
Harris Corp. .............................. 16,300 533,825
-----------
UTILITIES--3.1%
Entergy Corp. ............................. 16,600 451,312
GPU, Inc. ................................. 13,100 354,519
-----------
805,831
-----------
TOTAL COMMON STOCKS
(Identified cost $25,442,640) ............. 25,502,188
-----------
PRINCIPAL
AMOUNT
(000)
------
REPURCHASE AGREEMENT--2.1%
State Street Bank and Trust Company,
6.40%, 07/03/00, (Dated 06/30/00,
collateralized by $545,000 United
States Treasury Bond, 7.625%,
02/15/07, with a value
of $568,844)
(Identified cost $554,000)................ $ 554 554,000
-----------
TOTAL INVESTMENTS
(Identified cost $25,996,640) (b) ......... 99.9% $26,056,188
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES ........................... 0.1 22,243
------ -----------
NET ASSETS ................................. 100.0% $26,078,431
====== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
-===============================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD SMALL CAP PORTFOLIO
COMMON STOCKS--95.5%
AEROSPACE & DEFENSE--0.2%
AAR Corp. ................................. 155,800 $1,869,600
----------
AIRLINES--0.7%
Alaska Air Group, Inc. (a) ................ 228,900 6,208,913
----------
AUTO PARTS--2.9%
Borg-Warner Automotive, Inc. .............. 204,300 7,176,038
Pennzoil-Quaker State Co. ................. 996,600 12,021,487
Tower Automotive, Inc. (a) ................ 530,800 6,635,000
----------
25,832,525
----------
BANKING & FINANCIAL SERVICES--5.7%
Chittenden Corp. .......................... 201,500 4,924,156
Cullen/Frost Bankers, Inc. ................ 187,200 4,925,700
Heller Financial, Inc. .................... 380,800 7,806,400
Independence Community Bank
Corp. .................................... 408,900 5,417,925
Queens County Bancorp, Inc. ............... 364,445 6,719,455
Southwest Bancorporation of Texas,
Inc. (a) ................................. 482,400 10,009,800
Staten Island Bancorp, Inc. ............... 413,100 7,280,887
Wilmington Trust Corp. .................... 103,600 4,428,900
----------
51,513,223
----------
BREWERY--0.7%
Adolph Coors Co., Class B ................. 97,600 5,904,800
----------
BROADCASTING--0.3%
Classic Communications, Inc.,
Class A (a) .............................. 318,200 2,843,913
----------
BUILDING & CONSTRUCTION--1.8%
Apogee Enterprises, Inc. .................. 212,100 748,978
Dycom Industries, Inc. (a) ................ 185,450 8,530,700
Granite Construction, Inc. ................ 161,000 3,944,500
Insituform Technologies, Inc.,
Class A (a) .............................. 112,700 3,056,988
----------
16,281,166
----------
BUSINESS SERVICES & SUPPLIES--10.4%
ACNielsen Corp. (a) ....................... 467,500 10,285,000
Acxiom Corp. (a) .......................... 336,700 9,175,075
Affiliated Computer Services, Inc.,
Class A (a) .............................. 107,400 3,550,913
American Management Systems,
Inc. (a) ................................. 345,600 11,345,400
CDI Corp. (a) ............................. 342,200 6,972,325
ChoicePoint, Inc. (a) ..................... 80,800 3,595,600
Gartner Group, Inc., Class A .............. 586,700 7,040,400
Interim Services, Inc. (a) ................ 229,100 4,066,525
MAXIMUS, Inc. (a) ......................... 254,700 5,635,237
National Data Corp. ....................... 223,400 5,138,200
Tetra Tech, Inc. (a) ...................... 37,000 818,188
The BISYS Group, Inc. (a) ................. 79,800 4,907,700
The Profit Recovery Group
International, Inc. (a) .................. 546,000 9,077,250
The Standard Register Co. ................. 193,100 2,751,675
United Stationers, Inc. (a) ............... 297,500 9,631,562
----------
93,991,050
----------
CHEMICALS & PLASTICS--2.2%
Ferro Corp. ............................... 415,700 8,729,700
H.B. Fuller Co. ........................... 171,000 7,791,187
Minerals Technologies, Inc. ............... 76,500 3,519,000
----------
20,039,887
----------
COMMUNICATION SERVICES--0.9%
Brightpoint, Inc. (a) ..................... 956,800 8,282,300
----------
COMPUTER SERVICES--0.6%
Answerthink, Inc. (a) ..................... 97,900 1,627,588
Dendrite International, Inc. (a) .......... 118,200 3,937,537
----------
5,565,125
----------
COMPUTER SOFTWARE--0.7%
Transaction Systems Architects, Inc.,
Class A (a) .............................. 388,500 6,653,063
----------
COMPUTERS & BUSINESS EQUIPMENT--9.1%
Bell & Howell Co. (a) ..................... 419,000 10,160,750
Black Box Corp. (a) ....................... 65,900 5,217,427
Diebold, Inc. ............................. 257,700 7,183,387
Electronics for Imaging, Inc. (a) ......... 217,000 5,492,813
Mentor Graphics Corp. (a) ................. 624,300 12,407,962
Micron Electronics, Inc. (a) .............. 599,000 7,487,500
Paradyne Networks, Inc. (a) ............... 153,600 5,001,600
Quantum Corporation-
Hard Disk Drive (a) ...................... 1,173,200 12,978,525
RadiSys Corp. (a) ......................... 151,300 8,586,275
Storage Technology Corp. (a) .............. 380,000 4,156,250
Tektronix, Inc. ........................... 46,800 3,463,200
----------
82,135,689
----------
CONTAINERS--0.7%
Packaging Corp. of America (a) ............ 656,100 6,643,013
----------
DRUGS & HEALTH CARE--3.4%
AmeriSource Health Corp.,
Class A (a) .............................. 351,400 10,893,400
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
16
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD SMALL CAP PORTFOLIO (CONTINUED)
Apria Healthcare Group, Inc. (a) ........ 566,100 $ 6,934,725
Enzon, Inc. (a) ......................... 129,900 5,520,750
Hooper Holmes, Inc. ..................... 232,400 1,859,200
West Pharmaceutical Services, Inc. ...... 264,868 5,727,770
-----------
30,935,845
-----------
EDUCATION--0.8%
DeVry, Inc. (a) ......................... 127,600 3,373,425
ITT Educational Services, Inc. (a) ...... 245,300 4,308,081
-----------
7,681,506
-----------
ELECTRICAL EQUIPMENT--1.3%
Anixter International, Inc. (a) ......... 218,800 5,798,200
Belden, Inc. ............................ 218,120 5,589,325
-----------
11,387,525
-----------
ELECTRONICS--3.1%
AMETEK, Inc. ............................ 491,400 8,599,500
General Semiconductor, Inc. (a) ......... 330,000 4,867,500
KEMET Corp. (a) ......................... 218,700 5,481,169
Sensormatic Electronics Corp. (a) ....... 584,000 9,234,500
-----------
28,182,669
-----------
FOOD & BEVERAGES--4.0%
American Italian Pasta Co., Class A
(a) .................................... 310,900 6,431,744
Flowers Industries, Inc. ................ 626,700 12,494,831
Ralcorp Holdings, Inc. (a) .............. 642,300 7,868,175
Whitman Corp. ........................... 794,400 9,830,700
-----------
36,625,450
-----------
GAS EXPLORATION--1.0%
Barrett Resources Corp. (a) ............. 283,600 8,632,075
-----------
HOMEBUILDERS--2.5%
Kaufman & Broad Home Corp. .............. 417,200 8,265,775
Toll Brothers, Inc. (a) ................. 705,300 14,458,650
-----------
22,724,425
-----------
HOTELS & RESTAURANTS--1.8%
Lone Star Steakhouse & Saloon, Inc. 472,900 4,788,113
Morton's Restaurant Group, Inc. (a) ..... 296,700 6,379,050
Prime Hospitality Corp. (a) ............. 511,500 4,827,281
-----------
15,994,444
-----------
HOUSEHOLD APPLIANCES & HOME
FURNISHINGS--4.6%
Bassett Furniture Industries, Inc. ...... 373,400 4,714,175
Ethan Allen Interiors, Inc. ............. 342,200 8,212,800
Furniture Brands International,
Inc. (a) ............................... 777,600 11,761,200
Harman International Industries, Inc. 274,000 16,714,000
-----------
41,402,175
-----------
INDUSTRIAL & MACHINERY--3.8%
JLG Industries, Inc. .................... 768,900 9,130,687
Regal-Beloit Corp. ...................... 761,300 12,228,381
Roper Industries, Inc. .................. 257,800 6,606,125
Snap-on, Inc. ........................... 250,300 6,664,238
-----------
34,629,431
-----------
INSURANCE--3.0%
Arthur J. Gallagher & Co. ............... 228,800 9,609,600
Everest Re Group, Ltd. .................. 253,500 8,333,813
Radian Group, Inc. ...................... 171,071 8,852,924
-----------
26,796,337
-----------
MANUFACTURING--1.5%
Crane Co. ............................... 246,810 6,000,568
Federal Signal Corp. .................... 465,700 7,684,050
-----------
13,684,618
-----------
MEDICAL PRODUCTS--4.1%
INAMED Corp. (a) ........................ 230,400 8,438,400
Invacare Corp. .......................... 594,800 15,613,500
STERIS Corp. (a) ........................ 600,000 5,325,000
Varian Medical Systems, Inc. (a) ........ 198,600 7,770,225
-----------
37,147,125
-----------
MEDICAL SERVICES--0.4%
MedQuist, Inc. (a) ...................... 120,102 4,083,468
-----------
MEDICAL SUPPLIES--1.2%
DENTSPLY International, Inc. ............ 339,800 10,470,087
-----------
MULTIMEDIA--0.5%
The Ackerley Group, Inc. ................ 400,000 4,700,000
-----------
OIL & GAS--3.0%
Devon Energy Corp. ...................... 127,500 7,163,906
Helmerich & Payne, Inc. ................. 428,620 16,019,673
Louis Dreyfus Natural Gas Corp. (a) ..... 133,300 4,173,956
-----------
27,357,535
-----------
PHOTOGRAPHY--0.8%
Polaroid Corp. .......................... 392,600 7,091,337
-----------
PRINTING--1.9%
Mail-Well, Inc. (a) ..................... 560,300 4,832,588
Valassis Communications, Inc. (a) ....... 313,700 11,959,812
-----------
16,792,400
-----------
PUBLISHING--4.0%
Banta Corp. ............................. 501,750 9,501,891
Houghton Mifflin Co. .................... 238,700 11,144,306
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
17
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD SMALL CAP PORTFOLIO (CONTINUED)
Pulitzer, Inc. .......................... 181,200 $ 7,644,375
R. H. Donnelley Corp. (a) ............... 424,600 8,226,625
-----------
36,517,197
-----------
REAL ESTATE--2.2%
Chelsea GCA Realty, Inc. ................ 108,700 3,756,944
FelCor Lodging Trust, Inc. .............. 263,125 4,867,812
Kilroy Realty Corp. ..................... 154,600 4,009,938
Reckson Associates Realty Corp. ......... 296,600 7,044,250
-----------
19,678,944
-----------
RETAIL--6.4%
Abercrombie & Fitch Co., Class A (a) 21,700 264,469
Borders Group, Inc. (a) ................. 820,500 12,769,031
Hughes Supply, Inc. ..................... 278,600 5,502,350
Pier 1 Imports, Inc. .................... 1,215,200 11,848,200
The Men's Wearhouse, Inc. (a) ........... 310,200 6,921,337
Venator Group, Inc. (a) ................. 1,084,700 11,118,175
Whole Foods Market, Inc. (a) ............ 237,600 9,815,850
-----------
58,239,412
-----------
TELECOMMUNICATIONS EQUIPMENT--1.3%
Allen Telecom, Inc. (a) ................. 295,765 5,231,343
ANTEC Corp. (a) ......................... 158,800 6,600,125
-----------
11,831,468
-----------
TRANSPORTATION--1.8%
CNF Transportation, Inc. ................ 245,900 5,594,225
Landstar System, Inc. (a) ............... 173,100 10,310,269
-----------
15,904,494
-----------
UTILITIES--0.2%
Sierra Pacific Resources ................ 170,892 2,146,831
-----------
TOTAL COMMON STOCKS
(Identified cost $866,399,895) .......... 864,401,065
-----------
</TABLE>
<TABLE>
<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--2.1%
State Street Bank and Trust Company,
6.40%, 07/03/00, (Dated 06/30/00,
collateralized by $19,710,000
United States Treasury Note,
5.375%, 06/30/03, with a value
of $19,177,830)
(Identified cost $18,800,000)........... 18,800 18,800,000
------------
TOTAL INVESTMENTS
(Identified cost $886,199,895) (b) ...... 97.6% $883,201,065
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES ......................... 2.4 21,654,969
------ ------------
NET ASSETS ............................... 100.0% $904,856,034
====== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
18
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD GLOBAL EQUITY PORTFOLIO
COMMON STOCKS--97.4%
AUSTRALIA--1.1%
Broken Hill Proprietary Company,
Ltd. .................................. 88,741 $1,048,163
----------
BERMUDA--1.2%
Tyco International, Ltd. ............... 24,100 1,141,737
----------
DENMARK--1.3%
Tele Danmark A/S ....................... 18,500 1,245,058
----------
FINLAND--0.9%
UPM-Kymmene OYJ ........................ 34,600 858,848
----------
FRANCE--9.8%
Alcatel ................................ 36,000 2,361,165
Aventis SA ............................. 20,675 1,509,003
Axa .................................... 7,270 1,145,211
Banque Nationale de Paris .............. 13,540 1,303,006
Compagnie de Saint Gobain .............. 3,200 432,594
Total Fina SA, Class B ................. 10,757 1,649,316
Vivendi ................................ 13,945 1,230,814
----------
TOTAL FRANCE ........................... 9,631,109
----------
GERMANY--5.5%
Allianz AG ............................. 2,900 1,041,836
Bayerische Hypo-und
Vereinsbank AG ........................ 15,400 994,763
Deutsche Telekom AG .................... 7,200 411,056
E.On AG ................................ 19,000 916,035
Siemens AG ............................. 9,200 1,387,752
Thyssen Krupp AG ....................... 35,800 582,740
----------
TOTAL GERMANY .......................... 5,334,182
----------
HONG KONG--1.4%
HSBC Holdings PLC ...................... 121,578 1,389,815
----------
ITALY--1.4%
San Paolo-IMI SpA ...................... 76,100 1,350,614
----------
JAPAN--14.8%
Canon, Inc. ............................ 31,000 1,542,623
Fuji Bank, Ltd. ........................ 82,000 622,892
Fujitsu, Ltd. .......................... 34,000 1,176,005
Industrial Bank of Japan, Ltd. ......... 110,000 833,514
Kao Corp. .............................. 35,000 1,068,753
Nippon Telegraph & Telephone Corp. ..... 54 717,591
Nissan Motor Company, Ltd. (a) ......... 253,000 1,490,269
NTT DoCoMo, Inc. ....................... 33 892,606
Sankyo Company, Ltd. ................... 33,000 744,875
Sony Corp. ............................. 13,800 1,287,593
Sumitomo Electric Industries, Ltd. ..... 43,000 736,761
Sumitomo Trust & Banking
Company, Ltd. ......................... 130,000 925,027
TDK Corp. .............................. 9,000 1,292,682
The Sakura Bank, Ltd. .................. 162,000 1,119,137
----------
TOTAL JAPAN ............................ 14,450,328
----------
NETHERLANDS--5.4%
Getronics NV ........................... 48,400 746,251
Heineken NV ............................ 27,062 1,647,052
ING Groep NV ........................... 21,600 1,460,004
Koninklijke (Royal) Philips
Electronics NV ........................ 30,232 1,425,808
----------
TOTAL NETHERLANDS ...................... 5,279,115
----------
SINGAPORE--1.1%
Oversea-Chinese Banking
Corporation, Ltd. ..................... 159,800 1,101,112
----------
SPAIN--2.8%
Endesa SA .............................. 77,500 1,501,242
Telefonica SA (a) ...................... 59,002 1,267,408
----------
TOTAL SPAIN ............................ 2,768,650
----------
SWEDEN--0.9%
Investor AB, Series B .................. 67,900 927,659
----------
SWITZERLAND--3.1%
ABB Ltd. ............................... 10,537 1,261,172
Roche Holding AG ....................... 102 992,926
Zurich Allied AG ....................... 1,676 828,085
----------
TOTAL SWITZERLAND ...................... 3,082,183
----------
UNITED KINGDOM--9.8%
AstraZeneca Group PLC .................. 23,105 1,078,521
BP Amoco PLC ........................... 104,700 1,004,392
Cadbury Schweppes PLC .................. 162,084 1,064,382
Diageo PLC ............................. 112,848 1,012,549
GKN PLC ................................ 53,200 678,589
Imperial Chemical Industries PLC ....... 100,700 799,176
National Grid Group PLC ................ 118,700 935,742
SmithKline Beecham PLC ................. 80,800 1,057,536
Tesco PLC .............................. 176,500 548,812
Vodafone AirTouch PLC .................. 347,600 1,404,296
----------
TOTAL UNITED KINGDOM ................... 9,583,995
----------
UNITED STATES--36.9%
Aetna, Inc. ............................ 8,850 568,059
American Home Products Corp. ........... 25,400 1,492,250
AT&T Corp. ............................. 29,400 929,775
AT&T Wireless Group (a) ................ 41,600 1,159,600
Bank of America Corp. .................. 15,530 667,790
Bell Atlantic Corp. .................... 27,000 1,371,937
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
19
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD GLOBAL EQUITY PORTFOLIO (CONTINUED)
Bristol-Myers Squibb Co. .............. 25,500 $1,485,375
Chase Manhattan Corp. ................. 30,900 1,423,331
Chevron Corp. ......................... 10,200 865,088
Citigroup, Inc. ....................... 23,725 1,429,431
Compaq Computer Corp. ................. 40,200 1,027,613
Exxon Mobil Corp. ..................... 24,173 1,897,580
Federated Department Stores, Inc. (a) 19,700 664,875
First Data Corp. ...................... 17,100 848,588
FleetBoston Financial Corp. ........... 18,000 612,000
General Motors Corp. .................. 8,600 499,338
H.J. Heinz Co. ........................ 20,900 914,375
Hewlett-Packard Co. ................... 10,200 1,273,725
Intel Corp. ........................... 11,400 1,524,037
International Business
Machines Corp. ....................... 16,320 1,788,060
Lucent Technologies, Inc. ............. 22,100 1,309,425
McDonald's Corp. ...................... 31,100 1,024,356
Merck & Company, Inc. ................. 15,500 1,187,688
Microsoft Corp. (a) ................... 18,000 1,440,000
Minnesota Mining &
Manufacturing Co. .................... 13,900 1,146,750
Motorola, Inc. ........................ 21,900 636,469
PepsiCo, Inc. ......................... 35,700 1,586,419
PPG Industries, Inc. .................. 7,900 350,069
Procter & Gamble Co. .................. 3,600 206,100
Texas Instruments, Inc. ............... 16,400 1,126,475
The Hartford Financial Services
Group, Inc. .......................... 14,860 831,231
Time Warner, Inc. ..................... 7,700 585,200
United Technologies Corp. ............. 21,400 1,259,925
Xerox Corp. ........................... 45,500 944,125
----------
TOTAL UNITED STATES ................... 36,077,059
----------
TOTAL COMMON STOCKS
(Identified cost $91,930,555) ......... 95,269,627
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--3.5%
State Street Bank and Trust Company,
6.40%, 07/03/00, (Dated 06/30/00,
collateralized by $3,595,000
United States Treasury Note,
5.375%, 06/30/03, with a value
of $3,497,935)
(Identified cost $3,427,000).......... $3,427 $ 3,427,000
-----------
TOTAL INVESTMENTS
(Identified cost $95,357,555) (b) ..... 100.9% $98,696,627
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS ......................... (0.9) (862,686)
------ -----------
NET ASSETS ............................. 100.0% $97,833,941
====== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
20
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL EQUITY PORTFOLIO
COMMON STOCKS--96.5%
AUSTRALIA--1.7%
Broken Hill Proprietary
Company, Ltd. ............................. 5,050,463 $59,653,480
-----------
DENMARK--1.2%
Tele Danmark A/S ........................... 615,200 41,403,227
-----------
FINLAND--0.9%
UPM-Kymmene OYJ ............................ 1,235,600 30,670,324
-----------
FRANCE--13.6%
Alcatel .................................... 1,373,700 90,098,124
Aventis SA ................................. 1,047,412 76,447,299
Axa ........................................ 273,400 43,067,491
Banque Nationale de Paris .................. 398,122 38,312,794
Compagnie de Saint Gobain .................. 210,800 28,497,120
Lagardere SCA .............................. 231,980 17,717,712
Suez Lyonnaise des Eaux SA ................. 261,300 45,776,501
Total Fina SA, Class B ..................... 521,370 79,938,997
Vivendi .................................... 525,510 46,382,592
-----------
TOTAL FRANCE ............................... 466,238,630
-----------
GERMANY--8.5%
Allianz AG ................................. 172,759 62,064,322
Bayerische Hypo-und
Vereinsbank AG ............................ 1,054,700 68,128,379
Deutsche Lufthansa AG ...................... 1,829,500 42,285,777
Deutsche Telekom AG ........................ 280,951 16,039,797
E.On AG .................................... 777,300 37,475,476
Siemens AG ................................. 297,500 44,875,693
Thyssen Krupp AG ........................... 1,123,400 18,286,303
-----------
TOTAL GERMANY .............................. 289,155,747
-----------
HONG KONG--1.3%
HSBC Holdings PLC .......................... 3,897,944 44,559,222
-----------
ITALY--2.7%
Alleanza Assicurazioni ..................... 1,094,120 14,571,567
ENI SpA .................................... 6,341,300 36,626,953
San Paolo-IMI SpA .......................... 2,350,400 41,714,619
-----------
TOTAL ITALY ................................ 92,913,139
-----------
JAPAN--23.3%
ACOM Company, Ltd. ......................... 172,300 14,484,860
Canon, Inc. ................................ 1,298,000 64,591,115
Fuji Bank, Ltd. ............................ 3,238,000 24,596,655
Fujitsu, Ltd. .............................. 1,706,000 59,007,777
Industrial Bank of Japan, Ltd. ............. 3,840,000 29,097,216
Kao Corp. .................................. 1,515,000 46,261,724
Nippon Paper Industries
Company, Ltd. ............................. 2,982,000 20,347,468
Nippon Telegraph & Telephone Corp. 4,582 60,888,933
Nissan Motor Company, Ltd. (a) ............. 18,194,000 107,169,789
NTT DoCoMo, Inc. ........................... 1,266 34,243,628
Orix Corp. ................................. 337,800 49,823,950
Sankyo Company, Ltd. ....................... 1,229,000 27,740,965
Sony Corp. ................................. 668,000 62,326,943
Sumitomo Electric Industries, Ltd. ......... 1,426,000 24,433,044
Sumitomo Trust & Banking
Company, Ltd. ............................. 6,639,000 47,240,424
TDK Corp. .................................. 582,000 83,593,425
The Sakura Bank, Ltd. ...................... 5,644,000 38,990,171
-----------
TOTAL JAPAN ................................ 794,838,087
-----------
NETHERLANDS--6.9%
Akzo Nobel NV .............................. 965,600 41,022,713
Getronics NV ............................... 2,156,114 33,243,854
Heineken NV ................................ 803,675 48,913,390
ING Groep NV ............................... 881,500 59,583,044
Koninklijke (Royal) Philips
Electronics NV ............................ 1,105,284 52,127,626
-----------
TOTAL NETHERLANDS .......................... 234,890,627
-----------
PORTUGAL--1.7%
Portugal Telecom SA ........................ 5,145,100 57,765,463
-----------
SINGAPORE--2.9%
Oversea-Chinese Banking
Corporation, Ltd. ......................... 6,885,050 47,441,862
United Overseas Bank, Ltd. ................. 7,907,197 51,737,884
-----------
TOTAL SINGAPORE ............................ 99,179,746
-----------
SPAIN--3.0%
Endesa SA .................................. 2,572,200 49,825,756
Telefonica SA (a) .......................... 2,450,872 52,646,592
-----------
TOTAL SPAIN ................................ 102,472,348
-----------
SWEDEN--3.1%
Electrolux AB, Series B .................... 1,984,500 30,712,500
Investor AB, Series B ...................... 2,873,400 39,256,769
Svenska Handelsbanken AB, Series A 2,409,100 34,961,995
-----------
TOTAL SWEDEN ............................... 104,931,264
-----------
SWITZERLAND--4.4%
ABB Ltd. ................................... 446,980 53,498,955
Roche Holding AG ........................... 4,731 46,054,239
Zurich Allied AG ........................... 105,190 51,972,745
-----------
TOTAL SWITZERLAND .......................... 151,525,939
-----------
UNITED KINGDOM--21.3%
AstraZeneca Group PLC ...................... 1,062,440 49,593,769
BP Amoco PLC ............................... 6,324,500 60,671,256
British Aerospace PLC ...................... 6,553,848 40,856,496
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
21
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
British Energy PLC ....................... 3,589,800 $ 9,749,947
British Telecommunications PLC ........... 3,019,600 39,018,882
Cadbury Schweppes PLC .................... 5,982,462 39,285,946
Diageo PLC ............................... 5,006,194 44,918,982
GKN PLC .................................. 1,844,100 23,522,289
Great Universal Stores PLC ............... 5,749,100 36,970,585
Halifax Group PLC ........................ 3,589,200 34,431,382
Imperial Chemical Industries PLC ......... 5,886,000 46,712,519
Invensys PLC ............................. 11,922,100 44,737,527
National Grid Group PLC .................. 4,064,200 32,039,101
Prudential PLC ........................... 2,106,100 30,847,635
Reed International PLC ................... 4,599,800 40,019,746
Royal & Sun Alliance Insurance
Group PLC ............................... 1 6
SmithKline Beecham PLC ................... 4,958,100 64,893,160
Tesco PLC ................................ 15,244,500 47,401,550
Vodafone AirTouch PLC .................... 10,500,700 42,422,577
-------------
TOTAL UNITED KINGDOM ..................... 728,093,355
-------------
TOTAL COMMON STOCKS
(Identified cost $2,844,175,842).......... 3,298,290,598
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--3.1%
State Street Bank and Trust
Company, 6.40%, 07/03/00,
(Dated 06/30/00, collateralized
by $5,370,000 United States
Treasury Note, 6.25%,
01/31/02, with a value of
$5,490,825, and $94,780,000
United States Treasury Note,
7.50%, 02/15/05, with a value
of $102,006,976)
(Identified cost $105,379,000)......... $105,379 $ 105,379,000
--------------
TOTAL INVESTMENTS
(Identified cost
$2,949,554,842) (b) ................... 99.6% $3,403,669,598
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES ................. 0.4 12,213,621
-------- --------------
NET ASSETS .............................. 100.0% $3,415,883,219
======== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
22
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL SMALL CAP PORTFOLIO
COMMON STOCKS--98.5%
AUSTRALIA--3.0%
Cochlear, Ltd. ........................ 480,300 $8,260,546
----------
BELGIUM--1.0%
Creyf's NV ............................ 104,794 2,781,303
Creyf's (a) ........................... 372 4
----------
TOTAL BELGIUM ......................... 2,781,307
----------
FINLAND--6.2%
Amer Group, Ltd. ...................... 226,735 6,234,163
Elcoteq Network Corp., Class A ........ 215,800 4,728,259
Sampo Insurance Company, Ltd. ......... 92,600 3,757,224
Vaisala Oyj ........................... 116,800 2,341,689
----------
TOTAL FINLAND ......................... 17,061,335
----------
FRANCE--7.7%
Carbone-Lorraine ...................... 140,986 5,572,415
CNP Assurances ........................ 68,709 2,341,795
Neopost SA (a), (c) ................... 93,300 3,024,047
SCOR SA ADR ........................... 54,500 2,363,938
Societe BIC SA ........................ 157,700 7,723,536
----------
TOTAL FRANCE .......................... 21,025,731
----------
GERMANY--4.4%
Fielmann AG ........................... 183,200 6,016,598
Hawesko Holding AG .................... 78,776 1,534,233
Marseille-Kliniken AG ................. 153,700 1,239,932
SCS Standard Computersysteme (a) ...... 16,070 15,342
Techem AG (a) ......................... 128,946 3,077,620
----------
TOTAL GERMANY ......................... 11,883,725
----------
HONG KONG--5.1%
Esprit Asia Holdings, Ltd. ............ 5,433,500 5,680,588
Shaw Brothers (Hong Kong), Ltd. ....... 2,161,500 2,245,930
VTech Holdings, Ltd. .................. 1,577,000 5,967,738
----------
TOTAL HONG KONG ....................... 13,894,256
----------
IRELAND--3.1%
Waterford Wedgwood PLC ................ 7,789,500 8,477,768
----------
ITALY--2.0%
Industrie Natuzzi SpA ADR ............. 257,600 3,059,000
Interpump Group SpA ................... 540,200 2,398,141
----------
TOTAL ITALY ........................... 5,457,141
----------
JAPAN--14.4%
Aderans Company, Ltd. ................. 47,700 2,207,314
Diamond Lease Company, Ltd. ........... 196,000 2,532,548
Hitachi Medical Corp. ................. 288,000 3,501,437
Hokuto Corp. ......................... 68,200 2,487,479
I S B Corp. ........................... 58,000 1,175,251
Impact 21 Company, Ltd. ............... 189,600 2,859,055
Japan Digital Laboratory
Company, Ltd. ........................ 285,000 5,192,074
Kawasumi Laboratories ................. 66,000 628,246
Maruichi Steel Tube, Ltd. ............. 151,000 1,914,095
Meitec Corp. .......................... 56,000 2,216,672
Ministop Company, Ltd. ................ 131,000 2,808,774
Nippon Shinyaku Company, Ltd. ......... 618,000 6,261,251
Secom Techno Service Company,
Ltd. ................................. 71,000 2,040,903
Yoshinoya D&C Company, Ltd. ........... 169 3,440,366
----------
TOTAL JAPAN ........................... 39,265,465
----------
NETHERLANDS--12.2%
Beter Bed Holding NV .................. 108,900 3,264,560
CSM NV ................................ 137,600 2,706,155
Fugro NV .............................. 102,800 5,864,056
Hunter Douglas NV ..................... 266,676 7,217,788
PinkRoccade NV (a), (c) ............... 96,100 5,000,196
Telegraaf Holdings .................... 275,700 6,317,062
Wolters Kluwer NV ..................... 107,800 2,871,376
----------
TOTAL NETHERLANDS ..................... 33,241,193
----------
NORWAY--4.4%
Merkantildata ASA ..................... 780,800 4,012,969
P4 Radio Hele Norg ASA ................ 724,800 3,970,118
Tandberg Television ASA (a) ........... 683,900 3,945,347
----------
TOTAL NORWAY .......................... 11,928,434
----------
SINGAPORE--0.6%
Want Want Holdings, Ltd. .............. 1,552,000 1,489,920
Want Want Holdings, Ltd., Warrants
10/04/24 ............................. 155,200 52,768
----------
TOTAL SINGAPORE ....................... 1,542,688
----------
SPAIN--3.8%
Aldeasa SA ............................ 163,300 2,845,222
Banco Pastor SA ....................... 79,600 3,355,142
Prosegur, CIA de Seguridad SA ......... 358,600 4,193,856
----------
TOTAL SPAIN ........................... 10,394,220
----------
SWEDEN--4.6%
Elanders AB ........................... 124,750 2,871,230
Getinge Industries AB ................. 184,798 1,759,981
Industrial & Financial Systems AB ..... 256,783 2,853,144
Nobel Biocare AB ...................... 229,200 5,067,347
----------
TOTAL SWEDEN .......................... 12,551,702
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
23
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL SMALL CAP PORTFOLIO (CONTINUED)
SWITZERLAND--7.1%
Bank Sarasin & Cie ....................... 2,885 $ 7,427,818
Edipresse SA ............................. 16,360 7,712,156
Gretag Imaging Group ..................... 22,300 4,292,405
-----------
TOTAL SWITZERLAND ........................ 19,432,379
-----------
UNITED KINGDOM--18.9%
AMEC PLC ................................. 1,084,900 3,077,928
Ashtead Group PLC ........................ 3,590,400 5,215,328
Corporate Services Group PLC (a) ......... 3,272,200 4,802,630
Euromoney Publications PLC ............... 50,644 1,803,090
Goode Durrant PLC ........................ 632,900 3,859,292
Hogg Robinson PLC ........................ 789,400 3,368,323
Man (E D & F) Group PLC .................. 979,400 7,869,047
Signet Group PLC ADR ..................... 258,912 6,278,616
SSL International PLC .................... 707,123 7,650,125
Victrex PLC .............................. 488,200 1,602,969
Williams PLC ............................. 1,053,900 6,139,425
-----------
TOTAL UNITED KINGDOM ..................... 51,666,773
-----------
TOTAL COMMON STOCKS
(Identified cost $245,375,965)............ 268,864,663
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--1.0%
State Street Bank and Trust
Company, 6.40%, 07/03/00,
(Dated 06/30/00, collateralized
by $2,680,000 United States
Treasury Bond, 7.625%,
02/15/07, with a value of
$2,797,250)
(Identified cost $2,739,000)......... $2,739 $ 2,739,000
------------
TOTAL INVESTMENTS
(Identified cost $248,114,965) (b) 99.5% $271,603,663
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES ............... 0.5 1,384,304
------ ------------
NET ASSETS ............................ 100.0% $272,987,967
====== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
24
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EMERGING MARKETS PORTFOLIO
COMMON STOCKS--84.4%
BRAZIL--2.8%
Companhia Cervejaria Brahma ADR 69,700 $1,184,900
Embratel Participacoes SA ADR ......... 190,800 4,507,650
Souza Cruz SA ......................... 405,000 2,423,038
Telesp Celular Participacoes SA ADR 64,600 2,898,925
----------
TOTAL BRAZIL .......................... 11,014,513
----------
CHILE--1.6%
AFP Provida SA ADR .................... 296,000 6,253,000
----------
GREECE--1.4%
Hellenic Telecommunications
Organization SA ...................... 218,622 5,356,651
Hellenic Telecommunications
Organization SA ADR .................. 26,000 316,875
----------
TOTAL GREECE .......................... 5,673,526
----------
HONG KONG--5.2%
China Telecom (Hong Kong), Ltd.
ADR (a) .............................. 85,700 15,238,531
Yue Yuen Industrial Holdings .......... 2,323,300 5,126,132
----------
TOTAL HONG KONG ....................... 20,364,663
----------
HUNGARY--1.2%
Magyar Tavkozlesi RT. ADR ............. 134,900 4,645,619
----------
INDIA--9.2%
Bharat Heavy Electricals, Ltd. ........ 307,421 918,821
Hindalco Industries, Ltd. ............. 172,100 3,043,645
Hindalco Industries, Ltd. GDR (c) ..... 224,800 4,327,400
Infosys Technologies, Ltd. ............ 20,700 3,856,667
Larsen & Toubro, Ltd. ................. 574,000 3,171,463
Mahanagar Telephone Nigam, Ltd. ....... 941,769 4,525,342
Reliance Industries, Ltd. ............. 941,900 7,191,348
Satyam Computer Services, Ltd. ........ 35,000 2,337,749
State Bank of India ................... 1,349,300 6,840,180
----------
TOTAL INDIA ........................... 36,212,615
----------
INDONESIA--0.9%
PT Hanjaya Mandala Sampoerna Tbk 1,363,000 1,977,732
PT Indah Kiat Pulp & Paper Corp. (a) 7,397,000 1,500,106
----------
TOTAL INDONESIA ....................... 3,477,838
----------
ISRAEL--2.0%
Bank Hapoalim ......................... 1,315,300 3,814,144
Check Point Software Technologies,
Ltd. (a) ............................. 10,600 2,244,550
Partner Communications Company,
Ltd. ADR (a) ......................... 204,800 1,945,600
----------
TOTAL ISRAEL .......................... 8,004,294
----------
MALAYSIA--0.3%
Jaya Tiasa Holdings Berhad ............ 1,240,000 1,416,210
----------
MEXICO--16.9%
Carso Global Telecom (a) .............. 3,473,000 9,911,771
Cemex SA de CV ADR .................... 184,880 4,321,570
Fomento Economico Mexicano SA
de CV ADR ............................ 153,400 6,605,787
Grupo Financiero Banamex Accival
SA de CV (a) ......................... 2,236,000 9,401,828
Grupo Financiero Banorte SA de
CV (a) ............................... 1,703,000 2,352,306
Grupo Iusacell SA de CV Series V
ADR (a) .............................. 466,600 7,290,625
Grupo Televisa SA (a) ................. 162,700 11,216,131
Kimberly-Clark de Mexico SA de CV 646,000 1,837,091
Pepsi-Gemex SA de CV GDR (a) .......... 122,200 542,263
Telefonos de Mexico SA ADR ............ 70,000 3,998,750
Tubos de Acero de Mexico SA ADR ....... 356,300 4,943,663
Wal-Mart de Mexico SA de CV
Series C (a) ......................... 1,702,000 3,923,969
----------
TOTAL MEXICO .......................... 66,345,754
----------
PERU--0.3%
Credicorp, Ltd. ....................... 148,000 1,332,000
----------
PHILIPPINES--2.3%
Benpres Holdings Corp. (a) ............ 30,494,000 2,926,014
Manila Electric Co. ................... 984,240 1,445,069
Philippine Long Distance Telephone
Co. ADR .............................. 260,000 4,615,000
----------
TOTAL PHILIPPINES ..................... 8,986,083
----------
POLAND--0.1%
Bank Handlowy W. Warszawie ............ 25,974 409,796
----------
RUSSIA--3.8%
Mobile Telesystems, ADR (a) ........... 318,700 6,852,050
OAO Lukoil Holding ADR ................ 160,200 8,189,424
----------
TOTAL RUSSIA .......................... 15,041,474
----------
SOUTH AFRICA--6.9%
ABSA Group, Ltd. ...................... 938,023 3,553,013
Impala Platinum Holdings, Ltd. ........ 149,700 5,564,383
Old Mutual PLC ........................ 1,804,800 3,966,548
Sanlam, Ltd. .......................... 3,374,000 3,983,160
Sasol, Ltd. ........................... 681,800 4,572,130
South African Breweries PLC ........... 596,400 4,447,729
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
25
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD EMERGING MARKETS PORTFOLIO (CONTINUED)
South African Breweries PLC
(U.K.) ................................ 130,600 $ 953,966
------------
TOTAL SOUTH AFRICA ..................... 27,040,929
------------
SOUTH KOREA--17.3%
Hanvit Bank GDR (a), (c) ............... 380,300 1,882,485
Hyundai Electronics Industries
Co. (a) ............................... 225,200 4,443,309
Kookmin Bank ........................... 329,053 4,190,536
Korea Electric Power Corp. ............. 225,600 7,000,525
Korea Telecom Corp. ADR ................ 119,936 5,801,904
LG Chemical, Ltd. ...................... 104,100 2,081,953
Pohang Iron & Steel Company,
Ltd. .................................. 35,800 3,098,059
Pohang Iron & Steel Company,
Ltd. ADR .............................. 81,900 1,965,600
Samsung Electronics Co. ................ 56,581 18,724,592
Samsung Fire & Marine Insurance 76,638 2,130,695
SK Telecom Company, Ltd. ............... 44,330 14,511,289
SK Telecom Company, Ltd. ADR ........... 60,901 2,211,467
------------
TOTAL SOUTH KOREA ...................... 68,042,414
------------
TAIWAN--8.6%
ASE Test, Ltd. (a) ..................... 169,600 4,992,600
Asustek Computer, Inc. GDR (c) ......... 361,216 3,287,066
China Steel Corp. GDR .................. 269,900 3,589,670
Compal Electronics, Inc. GDR ........... 235,883 2,830,601
Far Eastern Textile, Ltd. .............. 1,046,000 1,300,478
GigaMedia, Ltd. (a) .................... 31,400 380,725
Siliconware Precision Industries
Co. ADR (a) ........................... 299,700 2,772,225
Taiwan Semiconductor
Manufacturing Company, Ltd.
(a) ................................... 1,753,000 8,329,960
United Microelectronics Corp. (a) 1,710,000 4,758,503
Via Technologies, Inc. (a) ............. 106,000 1,638,731
------------
TOTAL TAIWAN ........................... 33,880,559
------------
TURKEY--3.0%
Erciyas Biracilik ve Malt Sanayii
AS (a) ................................ 76,104,000 3,557,322
Turkiye Garanti Bankasi AS ADR
(a), (c) .............................. 206,800 2,460,920
Yapi ve Kredi Bankasi AS ............... 527,984,578 5,872,027
------------
TOTAL TURKEY ........................... 11,890,269
------------
VENEZUELA--0.6%
Compania Anonima Nacional
Telefonos de Venezuela ADR ............ 83,300 2,264,719
------------
TOTAL COMMON STOCKS
(Identified cost $298,481,100) ......... 332,296,275
------------
PREFERRED STOCKS--8.8%
BRAZIL--8.7%
Banco Itau SA .......................... 79,228,500 6,962,970
Cemig Cia Energetica de Minas
Gerais ................................ 176,829,516 3,088,511
Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar ADR ............................ 122,200 3,925,675
Companhia Cervejaria Brahma ............ 8,091,100 6,864,088
Companhia Paranaense de
Energia-Copel ADR ..................... 398,700 3,712,894
Copel Paranqense de Energia ............ 208,499,000 1,965,336
Tele Norte Leste Participacoes
SA ADR ................................ 328,984 7,772,244
------------
TOTAL BRAZIL ........................... 34,291,718
------------
COLOMBIA--0.1%
Banco Ganadero SA ADR .................. 83,700 329,569
------------
TOTAL PREFERRED STOCKS
(Identified cost $29,090,138) .......... 34,621,287
------------
<PAGE>
PRINCIPAL
AMOUNT
(000)
-----------
REPURCHASE AGREEMENT--6.8%
State Street Bank and Trust
Company, 6.40%, 07/03/00,
(Dated 06/30/00, collateralized
by $1,745,000 United States
Treasury Bond, 5.375%,
06/30/03, with a value of
$1,697,885 and $24,435,000
United States Treasury Note,
7.625%, 02/15/07, with a value
of $25,504,031)
(Identified cost $26,660,000).......... $ 26,660 26,660,000
------------
TOTAL INVESTMENTS
(Identified cost $354,231,238) (b) ..... 100.0% $393,577,562
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS .......................... -- (183,197)
----------- ------------
NET ASSETS .............................. 100.0% $393,394,365
=========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
26
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO
ASSET-BACKED SECURITIES--12.7%
Associates Automobile Receivables
Trust, Series 2000-1, Class M
7.51%, 05/15/05 ........................ $ 400 $ 400,000
Chevy Chase Auto Receivables Trust,
Series 2000-1, Class A4
7.47%, 07/15/05 ........................ 195 195,160
Citibank Credit Card Master Trust I:
Series 1999, Class A
5.50%, 02/15/06 ........................ 1,235 1,167,075
Series 1999, Class B
5.75%, 02/15/06 ........................ 1,145 1,082,025
Series 1999, Class A
6.10%, 05/15/08 (f) .................... 2,762 2,612,852
Discover Card Master Trust I,
Series 1999-2, Class A
5.90%, 10/15/04 ........................ 824 806,531
Ford Credit Auto Owner Trust,
Series 1999-B, Class A4
5.80%, 06/15/02 ........................ 195 193,050
MBNA Master Credit Card Trust,
Series 1998-J, Class A
5.25%, 02/15/06 ........................ 1,504 1,423,160
MBNA Master Credit Card Trust II:
Series 1998-D, Class A
5.80%, 12/15/05 ........................ 400 385,500
Series 2000-E, Class B
8.15%, 10/15/12 ........................ 800 827,250
Sears Credit Account Master Trust,
Series 2000-1, Class A
7.25%, 11/15/07 ........................ 830 828,963
UCFC Loan Trust,
Series 1997-C, Class A
8.00%, 09/15/00 (j) .................... 578 6,954
---------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $10,099,378)............ 9,928,520
---------
COLLATERALIZED MORTGAGE
OBLIGATIONS--9.1%
Asset Securitization Corp.:
Series 1996-D2, Class ACS2
1.486%, 02/14/29 (e), (j) .............. 2,125 135,469
Series 1996-MD6, Class A1B
6.88%, 11/13/29 ........................ 248 243,884
Series 1996-D3, Class A1A
7.01%, 10/13/26 ........................ 46 46,925
Series 1996-D3, Class A1B
7.21%, 10/13/26 ........................ 375 372,428
Bear Stearns Commercial Mortgage
Securities, Inc.:
Series 1999-WF2, Class A2
7.08%, 07/15/31 ........................ 408 398,323
Series 2000-WF1, Class A1
7.64%, 02/15/32 ........................ 588 596,141
Federal Home Loan Mortgage Corp.
REMIC:
Series 1697, Class D
6.00%, 03/15/09 ........................ 359 339,815
Series 1513, Class L
6.50%, 07/15/07 ........................ 230 225,975
Series 2100, Class GB
7.00%, 04/15/12 ........................ 753 750,224
Federal National Mortgage
Association REMIC,
Series 1993-134, Class K
6.50%, 05/25/08 ........................ 244 241,636
First Union-Lehman Brothers-Bank of
America,
Series 1998-C2, Class A2
6.56%, 11/18/08 ........................ 338 320,802
Merrill Lynch Mortgage
Investments, Inc.:
Series 1996-C1, Class IO
0.584%, 04/25/28 (c), (e), (j) ......... 4,079 85,671
Series 1998-C3, Class A1
5.65%, 12/15/30 ........................ 875 826,493
Morgan Stanley Capital One, Inc.,
Series 1999-Life, Class A1
6.97%, 10/15/08 ........................ 1,308 1,287,331
Nationslink Funding Corp.,
Series 1998-2, Class A2
6.476%, 07/20/08 (f) ................... 1,072 1,009,069
Prudential Home Mortgage Security,
Series 1993-41, Class A5
0.92%, 10/25/00 (j) .................... 4,549 2,411
Structured Asset Securitization Corp.:
Series 1996-CFL, Class X2
1.169%, 02/25/28 (e), (j) .............. 740 12,951
Series 1996-CFL, Class X1
1.585%, 02/25/28 (e), (j) .............. 1,281 70,503
United States Department of Veteran
Affairs REMIC,
Series 1999-1, Class 2IO
0.175%, 01/15/29 (e), (j) .............. 20,242 177,120
---------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Identified cost $7,423,611)............ 7,143,171
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
27
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
CORPORATE BONDS--25.2%
AUTOMOTIVE--0.1%
Budget Group, Inc.,
9.125%, 04/01/06 ............. $ 80 $ 51,200
---------
BANKING & FINANCIAL SERVICES--6.1%
American Financial Group,
7.125%, 04/15/09 ............. 459 403,030
ASAT Finance LLC,
12.50%, 11/01/06 (c) ......... 125 135,000
AT&T Capital Corp.,
6.60%, 05/15/05 (f) .......... 1,144 1,076,584
Countrywide Home Loans, Inc.,
6.85%, 06/15/04 .............. 550 529,237
Finova Capital Corp.,
6.75%, 03/09/09 .............. 404 323,200
First USA Trust,
6.50%, 01/18/06 (c) .......... 400 389,612
Lehman Brothers Holdings, Inc.,
6.625%, 04/01/04 ............. 707 674,754
MBNA America Bank NA,
6.75%, 03/15/08 (c) .......... 429 387,906
RBF Finance Co.,
11.00%, 03/15/06 ............. 120 128,550
Salomon Smith Barney Holdings,
6.25%, 01/15/05 .............. 630 593,756
Transdigm, Inc.,
10.375%, 12/01/08 ............ 175 150,500
---------
4,792,129
---------
BREWERY--1.0%
Anheuser Busch Companies, Inc.,
7.10%, 06/15/07 .............. 799 774,583
---------
BROADCASTING--0.1%
Echostar DBS Corp.,
9.375%, 02/01/09 ............. 67 64,655
---------
BUILDING & CONSTRUCTION--0.6%
Amatek Industries PTY, Ltd.,
12.00%, 02/15/08 ............. 40 36,600
Building One Services Corp.,
10.50%, 05/01/09 ............. 175 148,750
Dayton Superior Corp.,
13.00%, 06/15/09 (c) ......... 62 61,225
Penhall International,
12.00%, 08/01/06 ............. 190 184,300
---------
430,875
---------
CABLE TELEVISION--2.3%
Adelphia Communications Corp.,
9.375%, 11/15/09 ............. 80 74,000
Cox Communications, Inc.,
6.15%, 08/01/03 (f) .......... 988 937,836
LodgeNet Entertainment Corp.,
10.25%, 12/15/06 ............. 155 148,800
TCI Communications, Inc.,
6.875%, 02/15/06 ............. 673 652,339
---------
1,812,975
---------
CHEMICALS--0.3%
ARCO Chemical Co.,
9.80%, 02/01/20 .............. 180 166,364
Geo Specialty Chemicals, Inc.,
10.125%, 08/01/08 ............ 95 81,700
---------
248,064
---------
COMMERCIAL SERVICES--0.2%
IT Group, Inc. Series B,
11.25%, 04/01/09 ............. 145 129,775
---------
CONTAINERS--0.1%
Amtrol, Inc.,
10.625%, 12/31/06 ............ 62 55,490
---------
ENERGY--1.7%
Dynegy, Inc.,
7.45%, 07/15/06 (f) .......... 852 829,076
Midamerican Energy Co.,
6.375%, 06/15/06 ............. 454 424,140
Orion Power Holdings, Inc.,
12.00%, 05/01/10 (c) ......... 110 113,850
---------
1,367,066
---------
ENTERTAINMENT--0.6%
Penn National Gaming, Inc.,
10.625%, 12/15/04 ............ 130 141,700
Production Resource Group, LLC,
11.50%, 01/15/08 ............. 65 13,325
Station Casinos, Inc.,
10.125%, 03/15/06 ............ 225 226,125
YankeeNets LLC,
12.75%, 03/01/07 (c) ......... 75 71,250
---------
452,400
---------
EQUIPMENT RENTAL--0.1%
United Rentals, Inc. Series B,
9.25%, 01/15/09 .............. 125 112,813
---------
FIBER OPTICS--0.5%
360networks, Inc.,
13.00%, 05/01/08 (c) ......... 95 95,000
FLAG Telecom Holdings, Ltd.,
11.625%, 03/30/10 ............ 145 140,650
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
28
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
Metromedia Fiber Network, Inc.:
10.00%, 11/15/08 .................. $ 55 $ 54,313
10.00%, 12/15/09 .................. 35 34,475
Williams Communications Group, Inc.,
10.875%, 10/01/09 .................. 90 88,200
----------
412,638
----------
FOOD & BEVERAGES--0.2%
Advantica Restaurant Group, Inc.,
11.25%, 01/15/08 .................. 70 46,900
Agrilink Foods, Inc.,
11.875%, 11/01/08 ................. 120 93,600
----------
140,500
----------
HEALTHCARE--0.2%
Dade International, Inc.,
11.125%, 05/01/06 ................. 15 8,400
Dynacare, Inc.,
10.75%, 01/15/06 .................. 115 105,800
Hanger Orthopedic Group, Inc.,
11.25%, 06/15/09 .................. 30 26,100
Tenet Healthcare Corp.,
8.625%, 01/15/07 .................. 40 38,200
----------
178,500
----------
HOTELS & RESTAURANTS--0.2%
Courtyard by Marriott II, Ltd.
Series B,
10.75%, 02/01/08 .................. 200 195,500
----------
INDUSTRIAL--0.6%
J.H. Heafner, Inc.,
10.00%, 05/15/08 .................. 170 124,100
North American Van Lines, Inc.,
13.375%, 12/01/09 (c) ............. 220 206,800
URS Corp. Series B,
12.25%, 05/01/09 .................. 145 148,625
----------
479,525
----------
INDUSTRIAL & MACHINERY--0.0%
High Voltage Engineering Corp.,
10.50%, 08/15/04 .................. 44 31,460
----------
INSURANCE--0.9%
Atlas Reinsurance PLC,
9.83%, 04/04/03 (c) ............... 740 739,859
----------
INTERNET SERVICES--0.2%
Rhythms NetConnections, Inc.,
12.75%, 04/15/09 .................. 70 49,350
Verio, Inc.:
10.625%, 11/15/09 ................. 5 5,544
11.25%, 12/01/08 ................... 85 95,412
----------
150,306
----------
INTERNET SOFTWARE--0.5%
Covad Communications Group, Inc.
Series B,
12.00%, 02/15/10 .................. 70 54,600
Exodus Communications, Inc.:
11.25%, 07/01/08 .................. 110 108,900
11.625%, 07/15/10 (c) .............. 20 20,000
PSINet, Inc.,
10.50%, 12/01/06 .................. 175 161,000
----------
344,500
----------
LODGING & ENTERTAINMENT--0.2%
MGM Grand, Inc.,
9.75%, 06/01/07 ................... 155 157,325
----------
MACHINERY--0.2%
Generac Portable Products, Inc.,
11.25%, 07/01/06 .................. 155 124,000
----------
MANUFACTURING--0.1%
Tekni-Plex, Inc.,
12.75%, 06/15/10 (c) .............. 80 80,000
----------
OIL & GAS--2.0%
Chesapeake Energy Corp. Series B,
9.625%, 05/01/05 (f) .............. 115 112,412
Comstock Resources, Inc.,
11.25%, 05/01/07 .................. 115 116,869
Plains Resources, Inc.:
10.25%, 03/15/06 (c) .............. 140 141,050
Series B, 10.25%, 03/15/06 ......... 10 9,925
Texaco Capital, Inc.,
6.00%, 06/15/05 ................... 637 606,023
USX-Marathon Group,
6.65%, 02/01/06 ................... 570 541,549
----------
1,527,828
----------
<PAGE>
PRINTING--0.3%
Merrill Corp. Series B,
12.00%, 05/01/09 .................. 147 107,310
Phoenix Color Corp.,
10.375%, 02/01/09 ................. 155 139,500
----------
246,810
----------
PUBLISHING--0.4%
Jostens, Inc.,
12.75%, 05/01/10 (c) .............. 91 89,635
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
29
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
T/SF Communications Corp. Series B,
10.375%, 11/01/07 ................... $ 90 $ 83,700
WRC Media, Inc.,
12.75%, 11/15/09 (c) ................ 175 161,000
----------
334,335
----------
RETAIL--0.5%
Buhrmann US, Inc.,
12.25%, 11/01/09 .................... 65 68,250
Home Interiors & Gifts, Inc. Series B,
10.125%, 06/01/08 ................... 250 157,500
Petro Stopping Centers,
10.50%, 02/01/07 .................... 120 106,800
Rent-A-Center, Inc.,
11.00%, 08/15/08 .................... 100 97,000
----------
429,550
----------
SEMICONDUCTOR
MANUFACTURERS--0.1%
Fairchild Semiconductor Corp.,
10.375%, 10/01/07 ................... 85 86,488
----------
TELECOMMUNICATIONS--2.4%
Adelphia Business Solutions, Inc.,
12.00%, 11/01/07 .................... 85 79,900
Crown Castle International Corp.,
10.75%, 08/01/11 .................... 35 35,525
GTE Corp.,
9.10%, 06/01/03 ..................... 395 410,717
ICG Holdings, Inc.,
0.00%, 05/01/06 (e) ................. 145 119,987
ITC DeltaCom, Inc.,
11.00%, 06/01/07 .................... 160 160,000
Level 3 Communications, Inc.:
11.00%, 03/15/08 (c) ................ 80 79,200
11.25%, 03/15/10 (c) ................. 70 68,950
MGC Communications, Inc.,
13.00%, 04/01/10 (c) ................ 120 112,800
Orius Capital Corp.,
12.75%, 02/01/10 (c) ................ 113 116,390
Spectrasite Holdings, Inc. Series B,
0.00%, 03/15/10 (e) ................. 175 95,375
WorldCom, Inc.,
7.75%, 04/01/07 ..................... 600 600,666
----------
1,879,510
----------
TELEPHONE--1.2%
NEXTLINK Communications, Inc.,
10.75%, 06/01/09 .................... 95 93,575
US West Communications, Inc.,
5.625%, 11/15/08 (f) ................ 836 717,605
Viatel, Inc.:
11.25%, 04/15/08 .................... 95 70,300
11.50%, 03/15/09 ..................... 60 45,600
----------
927,080
----------
TRANSPORTATION--0.1%
Interpool, Inc.,
6.625%, 03/01/03 .................... 70 63,122
----------
UTILITIES--1.0%
Texas Utilities Co. Series B,
6.375%, 10/01/04 (f) ................ 821 790,697
----------
WASTE MANAGEMENT--0.1%
Allied Waste North America, Inc.
Series B,
10.00%, 08/01/09 .................... 55 45,925
----------
WHOLESALE/DISTRIBUTION--0.1%
Fleming Companies, Inc.,
10.50%, 12/01/04 .................... 60 54,150
----------
TOTAL CORPORATE BONDS
(Identified cost $20,893,350)......... 19,711,633
----------
SHARES
----------
COMMON STOCKS--0.0%
PUBLISHING--0.0%
WRC Media, Inc. (c)
(Identified cost $4,274)............. 236 236
----------
PREFERRED STOCKS--0.0%
BANKING & FINANCIAL SERVICES--0.0%
ASAT Finance LLC, Warrants
11/01/06 (c) ........................ 125 25,000
----------
PRINTING--0.0%
Merrill Corp. Class B, Warrants
05/01/09 (c) ........................ 147 2
----------
TOTAL PREFERRED STOCKS
(Identified cost $1,773).............. 25,002
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
30
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD BOND PORTFOLIO (CONTINUED)
COMMERCIAL PAPER--8.0%
Ford Motor Credit Co.,
6.52%, 07/17/00 .......................... $2,514 $ 2,506,715
General Electric Capital Corp.,
6.50%, 07/17/00 .......................... 2,509 2,501,752
General Motors Acceptance Corp.,
6.50%, 07/17/00 .......................... 1,200 1,196,533
-----------
TOTAL COMMERCIAL PAPER
(Identified cost $6,205,000)............... 6,205,000
-----------
DISCOUNT NOTES--0.9%
Federal National Mortgage
Association,
6.40%, 07/20/00
(Identified cost $707,602)................ 710 707,602
-----------
MORTGAGE PASS-THROUGH
SECURITIES--32.9%
Federal Home Loan Mortgage Corp.:
6.50%, 02/01/15 .......................... 1,976 1,906,783
6.50%, TBA ............................... 1,534 1,452,023
6.775%, 11/01/03 ......................... 1,090 1,073,900
7.50%, 05/01/15 .......................... 2,395 2,389,074
7.50%, 12/01/29 .......................... 878 866,717
7.50%, TBA ............................... 2,023 1,992,655
7.674%, 09/01/26 (e) ..................... 40 41,967
8.00%, 06/01/12 .......................... 729 731,690
8.00%, 07/01/12 .......................... 2,152 2,174,497
8.00%, TBA ............................... 5,677 5,691,192
Federal National Mortgage
Association:
6.50%, 08/15/04 .......................... 344 337,388
7.125%, 02/15/05 ......................... 3,200 3,212,992
7.125%, 03/15/07 ......................... 250 250,488
7.458%, 06/01/25 (e) ..................... 67 69,216
7.621%, 07/01/25 (e) ..................... 97 99,896
8.00%, 12/01/09 .......................... 199 201,220
8.00%, 06/01/12 .......................... 172 174,636
8.00%, 07/01/12 .......................... 237 239,611
8.00%, 12/01/12 .......................... 278 281,078
Government National Mortgage
Association:
6.375%, 06/20/28 ......................... 826 826,103
6.75%, 07/20/27 .......................... 114 114,786
7.125%, 10/20/27 ......................... 494 496,519
8.00%, TBA ............................... 955 965,142
Morgan Stanley Capital One, Inc.,
Series 1996-WF1, Class X
1.384%, 11/15/28 (c), (e), (j) ........... 2,571 134,186
-----------
TOTAL MORTGAGE PASS-THROUGH
SECURITIES
(Identified cost $25,457,864).............. 25,723,759
-----------
U.S. GOVERNMENT OBLIGATIONS--19.1%
Resolution Funding Corp. STRIP,
0.00%, 01/15/21 .......................... 29 7,606
United States Treasury Notes:
3.625%, 07/15/02 ......................... 1,972 1,958,626
5.50%, 08/31/01 .......................... 3,846 3,803,348
5.875%, 10/31/01 ......................... 3,182 3,157,148
United States Treasury STRIPS:
0.00%, 11/15/04 .......................... 3,204 2,436,001
0.00%, 11/15/09 .......................... 39 21,529
0.00%, 02/15/11 .......................... 5,480 2,852,340
0.00%, 11/15/21 .......................... 2,200 596,178
0.00%, 11/15/27 .......................... 500 99,030
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Identified cost $14,874,632).............. 14,931,806
-----------
REPURCHASE AGREEMENT--1.5%
State Street Bank and Trust Company,
6.40%, 07/03/00,
(Dated 06/30/00, collateralized by
$1,135,000 United States Treasury
Note, 7.50%, 02/15/05, with a
value of $1,221,544) (f)
(Identified cost $1,196,000).............. 1,196 1,196,000
-----------
TOTAL INVESTMENTS
(Identified cost $86,863,484) (b) ......... 109.4% $85,572,729
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS ............................. (9.4) (7,359,104)
------ -----------
NET ASSETS ................................. 100.0% $78,213,625
====== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
31
<PAGE>
-===============================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO
CORPORATE BONDS--86.8%
AEROSPACE & DEFENSE--2.6%
Sabreliner Corp.,
11.00%, 06/15/08 (c) ................. $ 1,465 $1,210,456
TransDigm, Inc.,
10.375%, 12/01/08 .................... 1,605 1,380,300
----------
2,590,756
----------
AUTOMOTIVE--0.6%
Budget Group, Inc.,
9.125%, 04/01/06 ..................... 930 595,200
----------
BROADCASTING--1.1%
XM Satellite Radio, Inc.,
14.00%, 03/15/10 (c) ................. 1,215 1,069,200
----------
BUILDING & CONSTRUCTION--3.3%
Amatek Industries PTY, Ltd.,
12.00%, 02/15/08 ..................... 1,785 1,633,275
Building One Services Corp.,
10.50%, 05/01/09 ..................... 875 743,750
Dayton Superior Corp.,
13.00%, 06/15/09 (c) ................. 951 939,112
----------
3,316,137
----------
CABLE TELEVISION--2.4%
Adelphia Communications Corp.,
9.375%, 11/15/09 ..................... 900 832,500
Cable Satisfaction International, Inc.,
12.75%, 03/01/10 ..................... 500 486,250
LodgeNet Entertainment Corp.,
10.25%, 12/15/06 ..................... 190 182,400
Ono Finance PLC,
13.00%, 05/01/09 ..................... 1,010 954,450
----------
2,455,600
----------
CHEMICALS--3.8%
Agriculture Minerals & Chemicals,
10.75%, 09/30/03 ..................... 1,290 774,000
Geo Specialty Chemicals, Inc.,
10.125%, 08/01/08 .................... 1,025 881,500
Lyondell Chemical Co.,
10.875%, 05/01/09 .................... 720 716,400
Sterling Chemicals, Inc.:
0.00%, 08/15/08 (e) .................. 680 292,400
Series A:
11.25%, 04/01/07 ..................... 675 533,250
11.75%, 08/15/06 ..................... 815 660,150
----------
3,857,700
----------
COMMERCIAL SERVICES--2.2%
IT Group, Inc., Series B,
11.25%, 04/01/09 ..................... 1,700 1,521,500
RailWorks Corp.,
11.50%, 04/15/09 ..................... 730 686,200
----------
2,207,700
----------
CONTAINERS--0.6%
Amtrol, Inc.,
10.625%, 12/31/06 .................... 700 626,500
----------
ELECTRONICS--1.9%
Flextronics International, Ltd.,
9.875%, 07/01/10 (c) ................. 1,865 1,869,663
----------
ENERGY--1.3%
Orion Power Holdings, Inc.,
12.00%, 05/01/10 (c) ................. 1,295 1,340,325
----------
ENTERTAINMENT--3.8%
Marvel Enterprises, Inc.,
12.00%, 06/15/09 ..................... 730 584,000
Penn National Gaming, Inc.,
10.625%, 12/15/04 .................... 1,345 1,466,050
Production Resource Group LLC,
11.50%, 01/15/08 ..................... 1,250 256,250
Station Casinos, Inc.,
9.875%, 07/01/10 (c) ................. 780 783,900
YankeeNets LLC,
12.75%, 03/01/07 (c) ................. 705 669,750
----------
3,759,950
----------
EQUIPMENT RENTAL--3.0%
Neff Corp.,
10.25%, 06/01/08 ..................... 660 409,200
Penhall International,
12.00%, 08/01/06 ..................... 1,290 1,251,300
United Rentals, Inc. Series B:
9.00%, 04/01/09 ...................... 800 708,000
9.25%, 01/15/09 ...................... 700 631,750
----------
3,000,250
----------
FIBER OPTICS--3.1%
360networks, Inc.,
13.00%, 05/01/08 (c) ................. 1,025 1,025,000
FLAG Telecom Holdings, Ltd.,
11.625%, 03/30/10 .................... 691 670,270
Metromedia Fiber Network, Inc.:
10.00%, 12/15/09 ..................... 715 704,275
Series B, 10.00%, 11/15/08 ........... 405 399,937
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
32
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
-------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO (CONTINUED)
Williams Communications Group, Inc.,
10.70%, 10/01/07 ...................... $ 315 $ 313,425
----------
3,112,907
----------
FOOD & BEVERAGES--1.5%
Advantica Restaurant Group, Inc.,
11.25%, 01/15/08 ...................... 710 475,700
Agrilink Foods, Inc.,
11.875%, 11/01/08 ..................... 1,335 1,041,300
----------
1,517,000
----------
HEALTHCARE--2.2%
Dade International, Inc.,
11.125%, 05/01/06 ..................... 190 106,400
Dynacare, Inc.,
10.75%, 01/15/06 ...................... 325 299,000
Hanger Orthopedic Group, Inc.,
11.25%, 06/15/09 ...................... 990 861,300
Tenet Healthcare Corp.,
9.25%, 09/01/10 (c) ................... 900 906,750
----------
2,173,450
----------
INDUSTRIAL--2.2%
Interpool Capital Trust Series B,
9.875%, 02/15/27 ...................... 1,245 924,201
URS Corp. Series B,
12.25%, 05/01/09 ...................... 1,270 1,301,750
----------
2,225,951
----------
INTERNET SERVICES--2.8%
FirstWorld Communications, Inc.
Class B,
0.00%, 04/15/08 (e) ................... 1,445 664,700
Globix Corp.,
12.50%, 02/01/10 ...................... 705 585,150
NorthPoint Communications Group, Inc.,
12.875%, 02/15/10 (c) ................. 520 374,400
Verio, Inc.:
10.625%, 11/15/09 ..................... 700 776,125
11.25%, 12/01/08 ...................... 340 381,650
----------
2,782,025
----------
INTERNET SOFTWARE--3.9%
Covad Communications Group, Inc.
Series B,
12.00%, 02/15/10 ...................... 1,085 846,300
Exodus Communications, Inc.,
11.625%, 07/15/10 (c) ................. 1,650 1,650,000
PSINet, Inc.,
10.50%, 12/01/06 ...................... 1,505 1,384,600
----------
3,880,900
----------
LODGING & ENTERTAINMENT--2.1%
Courtyard by Marriott II, Ltd. Series B,
10.75%, 02/01/08 ...................... 1,200 1,173,000
Lodgian Financing Corp. Series B,
12.25%, 07/15/09 ...................... 1,075 861,344
----------
2,034,344
----------
MACHINERY--0.7%
Generac Portable Product, Inc.,
11.25%, 07/01/06 ...................... 830 664,000
----------
MANUFACTURING--5.5%
ASAT Finance LLC,
12.50%, 11/01/06 (c) .................. 620 669,600
Foamex L.P.:
9.875%, 06/15/07 ...................... 1,235 940,144
13.50%, 08/15/05 ...................... 415 354,306
High Voltage Engineering Corp.,
10.50%, 08/15/04 ...................... 1,020 729,300
Holley Performance Products, Inc.
Series B,
12.25%, 09/15/07 ...................... 1,010 727,200
Precision Partners, Inc.,
12.00%, 03/15/09 ...................... 1,000 580,000
Repap New Brunswick,
10.625%, 04/15/05 ..................... 220 193,600
Tekni-Plex, Inc.,
12.75%, 06/15/10 (c) .................. 1,280 1,280,000
----------
5,474,150
----------
OIL & GAS--3.7%
Chesapeake Energy Corp. Series B,
9.625%, 05/01/05 ...................... 1,300 1,270,750
Comstock Resources, Inc.,
11.25%, 05/01/07 ...................... 1,250 1,270,312
Plains Resources, Inc.,
10.25%, 03/15/06 (c) .................. 1,085 1,093,138
RBF Finance Co.,
11.00%, 03/15/06 ...................... 115 123,194
----------
3,757,394
----------
PRINTING--1.7%
Merrill Corp. Series B,
12.00%, 05/01/09 ...................... 1,168 852,640
Phoenix Color Corp.,
10.375%, 02/01/09 ..................... 955 859,500
----------
1,712,140
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
33
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO (CONTINUED)
PUBLISHING--3.2%
Jostens, Inc.,
12.75%, 05/01/10 (c) ................. $1,210 $1,191,850
T/SF Communications Corp. Series B,
10.375%, 11/01/07 .................... 830 771,900
WRC Media, Inc.,
12.75%, 11/15/09 (c) ................. 1,300 1,196,000
----------
3,159,750
----------
RETAIL--1.7%
Home Interiors & Gifts, Inc. Series B,
10.125%, 06/01/08 .................... 710 447,300
Petro Stopping Centers,
10.50%, 02/01/07 ..................... 1,060 943,400
Rent-A-Center, Inc.,
11.00%, 08/15/08 ..................... 360 349,200
----------
1,739,900
----------
SECURITY--0.7%
Loomis Fargo & Co.,
10.00%, 01/15/04 ..................... 734 704,640
----------
TELECOMMUNICATIONS--19.7%
Colo.com,
13.875%, 03/15/10 (c) ................ 670 720,250
Colt Telecom Group PLC,
0.00%, 12/15/06 (e) .................. 1,335 1,174,800
Crown Castle International Corp.,
10.75%, 08/01/11 ..................... 1,150 1,167,250
GT Group Telecom, Inc. Series A,
0.00%, 02/01/10 (c), (e) ............. 1,160 643,800
Hyperion Telecommunications, Inc.,
12.00%, 11/01/07 ..................... 1,565 1,471,100
ICG Holdings, Inc.,
0.00%, 05/01/06 (e) .................. 1,765 1,460,538
IMPSAT Fiber Networks, Inc.,
13.75%, 02/15/05 (c) ................. 985 856,950
IPCS, Inc.,
0.00%, 07/15/10 (c), (e) ............. 2,150 1,128,750
ITC DeltaCom, Inc.:
9.75%, 11/15/08 ...................... 130 123,500
11.00%, 06/01/07 ..................... 880 880,000
Jazztel PLC,
14.00%, 04/01/09 ..................... 505 459,550
Leap Wireless International, Inc.,
12.50%, 04/15/10 (c) ................. 456 392,160
Level 3 Communications, Inc.,
11.25%, 03/15/10 (c) ................. 945 930,825
MGC Communications, Inc.,
13.00%, 04/01/10 (c) ................. 1,390 1,306,600
Netia Holdings BV Series B,
10.25%, 11/01/07 ..................... 1,000 825,000
Nextel Communications, Inc.:
9.375%, 11/15/09 ..................... 495 472,725
12.00%, 11/01/08 ..................... 500 531,250
Orius Capital Corp.,
12.75%, 02/01/10 (c) ................. 1,310 1,349,300
Spectrasite Holdings, Inc. Series B,
0.00%, 03/15/10 (e) .................. 1,700 926,500
Ubquitel Operating Co.,
0.00%, 04/15/10 (c), (e) ............. 1,259 728,646
US Unwired, Inc. Series B,
0.00%, 11/01/09 (e) .................. 600 325,500
Versatel Telecom International N.V.,
11.875%, 07/15/09 .................... 1,000 985,000
Winstar Communications, Inc.,
12.75%, 04/15/10 (c) ................. 935 878,900
----------
19,738,894
----------
<PAGE>
TELEPHONE--0.9%
Viatel, Inc.:
0.00%, 04/15/08 (e) .................. 595 279,650
11.25%, 04/15/08 ..................... 850 629,000
11.50%, 03/15/09 ..................... 40 30,400
----------
939,050
----------
TRANSPORTATION & FREIGHT
SERVICES--1.6%
North American Van Lines, Inc.,
13.375%, 12/01/09 (c) ................ 1,690 1,588,600
----------
WASTE MANAGEMENT--1.6%
Allied Waste North America, Inc.
Series B,
10.00%, 08/01/09 ..................... 1,905 1,590,675
----------
WHOLESALE/DISTRIBUTION--1.4%
Buhrmann US, Inc.,
12.25%, 11/01/09 ..................... 620 651,000
J.H. Heafner, Inc. Series D,
10.00%, 05/15/08 ..................... 615 448,950
Pentacon, Inc.,
12.25%, 04/01/09 ..................... 635 349,250
----------
1,449,200
----------
TOTAL CORPORATE BONDS
(Identified cost $93,439,767) ......... 86,933,951
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
34
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD HIGH YIELD PORTFOLIO (CONTINUED)
COMMON STOCKS--0.0%
PUBLISHING--0.0%
WRC Media, Inc. (c)
(Identified cost $31,751).............. 1,755 $ 1,755
---------
PREFERRED STOCKS--7.9%
BROADCASTING--1.5%
Granite Broadcasting Corp. ............. 888 754,800
Paxson Communications Corp. ............ 77 739,200
---------
1,494,000
---------
CABLE TELEVISION--1.3%
Adelphia Communications Corp. .......... 11,450 1,207,975
Cable Satisfaction International, Inc.,
Warrants 03/01/10 ..................... 500 13,750
Ono Finance PLC (c) .................... 500 50,000
---------
1,271,725
---------
INDUSTRIAL--1.3%
R&B Falcon Corp. ....................... 1,142 1,296,170
---------
INTERNET SERVICES--0.0%
FirstWorld Communications, Inc.,
Warrants 04/15/08 (c) ................. 365 25,550
---------
INTERNET SOFTWARE--0.9%
PSINet, Inc. (c) ....................... 26,355 882,892
---------
MANUFACTURING--0.4%
ASAT Finance LLC, Warrants
11/01/06 (c) .......................... 1,080 216,000
High Voltage Engineering Corp. ......... 316 221,200
---------
437,200
---------
MEDICAL SERVICES--0.0%
Harborside Healthcare Corp. ............ 375 41,625
---------
PRINTING--0.0%
Merrill Corp. Class B, Warrants
05/01/09 (c) .......................... 1,168 12
---------
TELECOMMUNICATIONS--1.3%
Motient Corp., Warrants
04/01/08 .............................. 1,345 53,800
Nextel Communications, Inc. ............ 1,245 1,195,025
---------
1,248,825
---------
TELEPHONE--1.2%
NEXTLINK Communications, Inc. .......... 23,468 1,208,602
---------
TEXTILES--0.0%
Globe Holdings, Inc., Warrants
08/01/09 .............................. 300 3
---------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
TOTAL PREFERRED STOCKS
(Identified cost $8,548,561) .......... $ 7,906,604
------------
REPURCHASE AGREEMENT--6.2%
State Street Bank and Trust Company,
6.40%, 07/03/00, (Dated 06/30/00,
collateralized by $6,530,000
United States Treasury Note,
5.375%, 06/30/03, with a value of
$6,353,690) (Identified cost
$6,226,000)............................ $6,226 6,226,000
------------
TOTAL INVESTMENTS
(Identified cost $108,246,079) (b) ..... 100.9% $101,068,310
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS .......................... (0.9) (934,080)
------ ------------
NET ASSETS .............................. 100.0% $100,134,230
====== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
35
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO
CURRENCY DONOMINATED BONDS--92.9%
ARGENTINA--0.4%
Republic of Argentina:
2.807%, 04/01/01 (e) ................. 190 $ 48,058
2.807%, 09/01/02 (e) ................. 70 42,898
2.807%, 04/01/07 (e) ................. 300 193,605
2.807%, 04/01/07 (e) ..............USD 90 68,310
---------
TOTAL ARGENTINA ....................... 352,871
---------
AUSTRALIA--0.5%
Commonwealth of Australia,
8.75%, 08/15/08 ...................... 600 417,509
---------
AUSTRIA--1.3%
Republic of Austria:
4.50%, 09/28/05 ...................JPY 80,000 883,238
6.25%, 10/16/03 ...................JPY 15,000 166,661
---------
TOTAL AUSTRIA ......................... 1,049,899
---------
BERMUDA--0.4%
FLAG Telecom Holdings Ltd.,
11.625%, 03/30/10 .................EUR 350 306,578
---------
BRAZIL--0.6%
DB BRL Structured Note,
0.00%, 10/11/00 ...................USD 78 78,078
Deutsche Bank NY,
0.00%, 03/01/01 ...................USD 235 244,329
Republic of Brazil,
7.375%, 04/15/24 (e) ..............USD 130 102,219
Salomon, Inc.,
0.00%, 12/02/02 (c) ...............USD 95 90,377
---------
TOTAL BRAZIL .......................... 515,003
---------
BULGARIA--0.1%
Republic of Bulgaria, Series A,
7.063%, 07/28/24 ..................USD 85 66,937
---------
CANADA--3.0%
Argos Funding Trust,
5.963%, 02/27/06 (c) ................. 250 164,493
Cable Satisfaction International, Inc.,
12.75%, 03/01/10 ..................USD 170 165,325
Molson Breweries Company, Ltd.,
6.00%, 06/02/08 (c), (f) ............. 800 516,119
North American Capital Corp.,
8.25%, 11/17/03 (f) ...............GBP 576 890,807
Province of Quebec,
5.125%, 01/04/09 ..................EUR 400 358,967
Quebec Housing,
8.95%, 05/13/13 ...................... 397 324,392
---------
TOTAL CANADA .......................... 2,420,103
---------
CAYMAN ISLANDS--0.6%
TTB Finance Cayman, Ltd.,
7.728%, 03/18/07 (e) ..............USD 486 466,560
---------
COSTA RICA--0.2%
Citibank CRC Time Deposit:
0.00%, 07/26/00 ...................USD 30 30,411
0.00%, 08/10/00 ...................USD 121 122,319
---------
TOTAL COSTA RICA ...................... 152,730
---------
DENMARK--6.3%
Kingdom of Denmark,
8.00%, 03/15/06 ...................... 4 567
Nykreditas AS,
6.00%, 10/01/29 ...................... 17,012 1,993,806
Unikredit Realkredit,
7.00%, 10/01/29 (f) .................. 25,016 3,095,113
---------
TOTAL DENMARK ......................... 5,089,486
---------
EL SALVADOR--0.1%
Citibank SVC Time Deposit,
0.00%, 08/22/00 ...................USD 74 74,651
---------
FRANCE--2.8%
Government of France:
0.00%, 04/25/23 ...................EUR 6,760 1,751,555
6.50%, 10/25/06 ...................EUR 480 487,905
---------
TOTAL FRANCE .......................... 2,239,460
---------
GERMANY--9.7%
Autobahn Tank & Rast,
6.00%, 10/16/00 ...................DEM 425 207,663
Brokat Infosystems AG,
11.50%, 03/31/10 (c) ..............EUR 20 17,949
Bundesrepublik Deutschland STRIP,
0.00%, 01/04/24 ...................EUR 4,425 1,153,508
Core Series 1998-1A, Class B3,
6.77%, 07/05/15 (c) ...............EUR 400 191,816
Cybernet Internet Services
International, Inc.,
14.00%, 07/01/09 ..................USD 30 25,200
DePfa Pfandbriefbank AG,
5.50%, 01/15/10 (c) ...............EUR 270 251,196
Downey Savings & Loan,
7.25%, 08/07/07 (f) ...............GBP 630 979,101
Federal Republic of Germany,
6.00%, 07/04/07 ...................EUR 1,930 1,926,040
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
Frank Hypobank,
6.375%, 02/04/08 .................GBP 365 $ 542,589
Land Hessen,
6.00%, 11/29/13 ..................EUR 511 514,223
Landesbank Schleswig-Holstein,
8.00%, 12/28/06 ..................GBP 250 397,680
Landwirtschaftliche Rentenbank,
6.375%, 03/09/05 .................GBP 270 404,043
LBK Hess Thur Giro,
9.00%, 09/06/04 ..................GBP 230 373,679
West LB Finance Curacao NV:
8.125%, 01/24/07 .................GBP 310 495,636
8.50%, 06/02/03 ..................GBP 250 392,895
---------
TOTAL GERMANY ........................ 7,873,218
---------
GREECE--0.1%
Republic of Hellenic,
8.90%, 04/01/03 ..................... 21,500 65,000
---------
HUNGARY--0.6%
Republic of Hungary:
9.50%, 01/12/02 ..................... 55,300 201,229
13.50%, 11/24/01 .................... 77,300 295,044
---------
TOTAL HUNGARY ........................ 496,273
---------
IRELAND--0.6%
Atlas Reinsurance PLC,
9.83%, 04/04/03 (c) ..............USD 500 499,905
---------
ITALY--4.2%
Films PLC,
5.541%, 03/31/05 (e) ................ 1,600,000 512,789
Republic of Italy,
1.80%, 02/23/10 ..................JPY 286,000 2,715,659
Societa Sportiva Lazio SpA,
4.55%, 10/15/07 (e) ................. 419,058 204,038
---------
TOTAL ITALY .......................... 3,432,486
---------
JAPAN--5.1%
Export-Import Bank of Japan,
4.375%, 10/01/03 (f) ................ 234,000 2,460,303
Nippon Credit Bank, Ltd.,
1.80%, 07/27/00 ..................... 60,000 566,043
Spires, Ltd.,
2.48%, 01/23/02 ..................... 117,989 1,133,130
---------
TOTAL JAPAN .......................... 4,159,476
---------
LUXEMBOURG--0.1%
PTC International Finance II SA,
11.25%, 12/01/09 .................EUR 50 50,146
---------
MEXICO--0.2%
Citibank MXN Linked Deposit,
0.00%, 12/03/01 ..................USD 85 94,010
United Mexican States:
rights 01/01/03 ..................USD 1 0
9.875%, 01/15/07 .................USD 95 97,973
---------
TOTAL MEXICO ......................... 191,983
---------
MOROCCO--0.0%
Morocco Restructuring & Consolida-
tion Agreement,
5.906%, 01/01/09 (e) .............USD 1 341
---------
NETHERLANDS--2.6%
Completel Europe NV,
14.00%, 04/15/10 (c) .............EUR 100 92,129
Deutsche Telekom
International Finance,
6.125%, 07/06/05 .................EUR 930 891,423
KPNQwest NV,
7.125%, 06/01/09 .................EUR 85 75,145
Netia Holdings BV,
13.75%, 06/15/10 (c) .............EUR 105 101,747
SWT Finance BV,
12.50%, 06/01/10 (c) .............EUR 170 163,922
Tele1 Europe BV,
13.00%, 05/15/09 .................EUR 115 111,986
United Pan-Europe
Communications NV:
Series B, 0.00%, 11/01/09 (e) ....EUR 90 42,962
11.25%, 02/01/10 .................EUR 85 71,655
Versatel Telecom NV,
11.25%, 03/30/10 (c) .............EUR 170 152,155
Wolters Kluwer NV,
5.50%, 09/22/06 ..................EUR 420 387,742
---------
TOTAL NETHERLANDS .................... 2,090,866
---------
NORWAY--0.1%
Enitel ASA,
12.50%, 04/15/10 (c) .............EUR 90 83,775
---------
PANAMA--0.1%
Republic of Panama,
7.063%, 07/17/16 .................USD 82 67,456
---------
PERU--0.2%
Peruvian Central Bank,
0.00%, 10/17/00 ..................... 350 96,227
Republic of Peru,
3.75%, 03/07/17 (e) ..............USD 110 66,418
---------
TOTAL PERU ........................... 162,645
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
37
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
---------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
PHILIPPINES--0.1%
Republic of Philippines,
9.875%, 01/15/19 .............USD 83 $ 67,753
----------
SINGAPORE--0.1%
Flextronics International Ltd.,
9.75%, 07/01/10 (c) ..........EUR 80 78,285
----------
SOUTH AFRICA--0.4%
Government of Namibia:
12.00%, 04/15/02 ................ 210 30,288
12.00%, 04/15/05 ................ 210 27,635
Lesotho Highlands Waters,
12.00%, 12/01/05 ................ 740 100,934
12.50%, 04/15/02 ................ 870 128,096
South African Roads,
11.50%, 09/30/05 ................ 270 36,180
----------
TOTAL SOUTH AFRICA ............... 323,133
----------
SPAIN--0.5%
Catalunya Generalitat,
9.30%, 11/24/03 ..............EUR 402 428,647
----------
SOUTH KOREA--0.1%
Salomon, Inc.:
0.00%, 11/28/00 (c) ..........USD 85 86,165
6.95%, 01/10/01 (c) ..........USD 21 21,880
----------
TOTAL SOUTH KOREA ................ 108,045
----------
SUPRANATIONAL--20.3%
European Investment Bank,
3.00%, 09/20/06 (f) ..........JPY 510,000 5,277,603
Inter-American Development Bank,
1.90%, 07/08/09 ..............JPY 295,000 2,826,829
International Bank for Reconstruc-
tion and Development:
2.00%, 02/18/08 (f) ..........JPY 313,000 3,069,674
4.75%, 12/20/04 ..............JPY 486,000 5,350,100
----------
TOTAL SUPRANATIONAL .............. 16,524,206
----------
SWEDEN--3.2%
AB Spintab,
7.50%, 06/15/04 ................. 8,600 1,026,154
Kingdom of Sweden,
5.00%, 01/15/04 ................. 5,600 629,009
Stadshypotek AB,
3.50%, 09/15/04 ................. 9,000 929,286
----------
TOTAL SWEDEN ..................... 2,584,449
----------
TURKEY--0.9%
Cellco Finance NV:
12.75%, 08/01/05 (c) .........USD 100 104,250
15.00%, 08/01/05 .............USD 50 53,750
Chase TRL Daily Reset 5,
0.00%, 09/06/00 ..............USD 175 177,413
CSFB TRL Weekly Reset 5,
0.00%, 03/09/01 ..............USD 218 226,984
Turkey Treasury Bills:
0.00%, 08/16/00 ................. 7,700 11,535
0.00%, 08/23/00 ................. 111,300 153,868
----------
TOTAL TURKEY ..................... 727,800
----------
UNITED KINGDOM--9.3%
Avecia Group PLC,
11.00%, 07/01/09 .............USD 200 196,000
BAE Systems PLC,
7.45%, 11/29/03 ................. 310 454,989
Birmingham Midshires Building
Society,
9.125%, 01/05/06 ................ 300 493,558
Clondalkin Industries PLC,
10.625%, 01/15/10 (c) ........EUR 100 98,143
Coca Cola Enterprises PLC,
6.75%, 03/12/08 ................. 158 232,973
Colt Telecom Group PLC:
7.625%, 12/15/09 (c) .........EUR 215 189,866
8.875%, 11/30/07 (f) .........DEM 500 234,181
Diamond Holdings PLC,
10.00%, 02/01/08 ................ 145 196,528
Energis PLC,
9.50%, 06/15/09 ................. 205 299,180
Esprit Telecom Group PLC,
11.50%, 12/15/07 .............DEM 200 76,002
Gala Group Holdings PLC,
12.00%, 06/01/10 (c) ............ 125 195,757
Hurst Group PLC,
11.125%, 08/06/08 (c) ........... 25 38,489
Imperial Tobacco Finance PLC,
6.375%, 09/27/06 .............EUR 410 380,272
<PAGE>
INEOS Acrylics Finance,
10.25%, 05/15/10 (c) .........EUR 25 24,691
IPC Magazines Group PLC:
0.00%, 03/15/08 (e) ............. 60 53,567
9.625%, 03/15/08 ................ 85 111,192
Jazztel PLC,
14.00%, 07/15/10 (c) .........EUR 290 279,632
Ono Finance PLC:
13.00%, 05/01/09 (f) .........EUR 595 556,686
14.00%, 07/15/10 .............EUR 340 316,483
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
38
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
---------------------------------------- ------------------ -------------------
<S> <C> <C>
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
Polestar Corp.,
10.50%, 05/30/08 ..................... 45 $ 63,211
Regional Independent Media:
0.00%, 07/01/08 (e) .................. 45 50,386
10.50%, 07/01/08 USD 280 280,000
TeleWest Communications PLC:
0.00%, 04/15/09 (e) .................. 50 43,502
9.875%, 02/01/10 (c) ................. 50 69,413
United Kingdom Treasury,
7.50%, 12/07/06 ...................... 1,380 2,298,973
West Coast Train Finance,
6.00%, 03/31/15 ...................... 230 313,212
----------
TOTAL UNITED KINGDOM .................. 7,546,886
----------
UNITED STATES--18.1%
Airtouch Communications, Inc.,
5.50%, 07/24/08 (c), (f) ..........DEM 1,200 553,511
American Standard, Inc.,
8.25%, 06/01/09 ...................GBP 40 60,542
Chase Credit Card Master Trust,
5.00%, 08/15/08 (f) ...............DEM 1,800 823,105
Citibank Credit Card Master Trust:
5.125%, 01/16/09 (f) ..............FRF 6,600 907,255
5.75%, 07/16/07 (f) ................DEM 2,250 1,086,267
Citicorp,
6.25%, 09/19/09 (f) ...............DEM 1,020 488,645
Corning, Inc.,
5.625%, 02/18/05 (c) ..............EUR 140 131,987
Countrywide Home Loans, Inc.,
5.25%, 12/15/05 (f) ...............DEM 800 370,218
Exodus Communications, Inc.:
10.75%, 12/15/09 ..................EUR 75 68,738
11.375%, 07/03/08 (c) ..............EUR 170 162,705
Federal National Mortgage
Association,
2.125%, 10/09/07 ..................JPY 340,000 3,342,161
Ford Motor Credit Corp.,
5.25%, 06/16/08 ...................DEM 572 261,202
General Motors Acceptance Corp.
Swift Trust 1999-1,
5.00%, 01/18/05 (c) ...............EUR 370 341,494
Household Finance Corp.,
6.25%, 04/30/07 ...................FRF 2,200 320,862
International Business Machines
Corp.,
0.90%, 04/14/03 (f) ...............JPY 72,000 673,755
MBNA:
5.125%, 04/21/08 (f) ..............DEM 1,880 869,277
6.00%, 05/21/07 ...................NLG 3,800 1,649,314
Merrill Lynch & Company, Inc.,
5.375%, 01/04/09 ..................DEM 830 379,016
7.375%, 12/17/07 ...................GBP 231 354,839
NTL Communications Corp.:
Series B, 9.25%, 11/15/06 .........EUR 235 197,993
11.50%, 11/15/09 ..................EUR 50 26,732
Resolution Funding Corp. STRIP,
0.00%, 01/15/21 ...................... 824 216,127
Silgan Holdings, Inc.,
13.25%, 07/15/06 ..................... 1 1,068
United States Treasury Bills:
5.83%, 11/09/00 ...................... 100 97,878
5.864%, 02/01/01 ..................... 79 76,233
United States Treasury Notes:
5.50%, 08/31/01 ...................... 331 327,329
5.875%, 10/31/01 ...................... 274 271,860
United States Treasury STRIP,
0.00%, 11/15/04 ...................... 750 570,225
Viatel, Inc.,
12.75%, 04/15/08 (c) ..............EUR 45 39,525
----------
TOTAL UNITED STATES ................... 14,669,863
----------
TOTAL CURRENCY DENOMINATED
BONDS
(Identified cost $75,751,652)......... 75,384,424
----------
SHARES
-----------
PREFERRED STOCKS--0.0%
CANADA--0.0%
Cable Satisfaction International, Inc.,
Warrants 03/01/10 .................... 170 4,675
----------
UNITED KINGDOM--0.0%
Avecia Group PLC ...................... 350 8,925
----------
TOTAL PREFERRED STOCKS
(Identified cost $15,451)............. 13,600
----------
<PAGE>
PRINCIPAL
AMOUNT
(000)
-----------
DISCOUNT NOTES--6.2%
Federal Agricultural Mortgage Corp.,
6.05%, 07/05/00 ...................... $ 100 99,933
Federal Home Loan Bank:
5.77%, 12/22/00 ...................... 100 97,211
5.80%, 08/08/00 ...................... 100 99,388
5.94%, 01/12/01 ...................... 100 96,783
6.07%, 07/26/00 ...................... 300 298,735
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
39
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION (000) VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
6.09%, 03/08/01 ......................... $170 $ 162,810
6.11%, 03/13/01 ......................... 172 164,556
6.11%, 03/16/01 ......................... 230 219,929
6.12%, 09/27/00 ......................... 100 98,504
6.22%, 03/23/01 ......................... 45 42,940
6.31%, 07/05/00 ......................... 111 110,922
6.35%, 08/14/00 ......................... 100 99,224
6.39%, 08/07/00 ......................... 110 109,375
6.39%, 09/19/00 ......................... 100 98,580
6.42%, 07/28/00 ......................... 100 99,518
6.42%, 09/05/00 ......................... 100 98,823
6.45%, 12/06/00 ......................... 210 204,055
6.48%, 11/06/00 ......................... 100 97,696
6.51%, 06/04/01 ......................... 100 93,888
Federal Home Loan Mortgage Corp.:
5.51%, 11/13/00 ......................... 100 97,934
6.02%, 07/13/00 ......................... 2 1,996
6.16%, 07/13/00 ......................... 204 203,581
6.38%, 08/03/00 ......................... 77 76,550
6.415%, 08/15/00 ........................ 255 252,955
6.48%, 09/21/00 ......................... 192 189,304
Federal National Mortgage
Association:
5.20%, 07/07/00 ......................... 100 99,913
5.82%, 12/29/00 ......................... 100 97,074
5.83%, 08/10/00 ......................... 100 99,352
5.89%, 09/28/00 ......................... 150 147,727
6.01%, 07/06/00 ......................... 120 119,900
6.05%, 07/20/00 ......................... 100 99,681
6.08%, 07/20/00 ......................... 110 109,647
6.30%, 07/10/00 ......................... 215 214,661
6.37%, 07/11/00 ......................... 125 124,779
6.40%, 07/17/00 ......................... 50 49,858
6.41%, 08/14/00 ......................... 100 99,216
6.41%, 08/21/00 ......................... 129 127,829
6.51%, 08/24/00 ......................... 140
6.52%, 08/31/00 ......................... 110 108,785
6.63%, 11/16/00 ......................... 165 160,806
-----------
TOTAL DISCOUNT NOTES
(Identified cost $5,013,051).............. 5,013,051
-----------
REPURCHASE AGREEMENT--0.4%
State Street Bank and Trust Company,
6.40%, 07/03/00, (Dated 06/30/00,
collateralized by $380,000 United
States Treasury Note, 5.375%,
06/30/03, with a value of $369,740)
(f) (Identified cost $358,000)........... $ 358 $ 358,000
-----------
TOTAL INVESTMENTS
(Identified cost $81,138,154) (b)......... 99.5% $80,769,075
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES ............................. 0.5 422,316
----- -----------
NET ASSETS ................................ 100.0% $81,191,391
===== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
40
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
Forward Foreign Currency Contracts open at June 30, 2000:
<TABLE>
<CAPTION>
Forward 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 10/18/00 320,075 $ 310,000 $ 318,388 $ 8,388 $ --
ARS 10/24/00 23,361 23,000 23,224 224 --
ARS 10/31/00 93,242 92,000 92,621 621 --
ARS 11/6/00 56,980 56,000 56,573 573 --
ARS 12/6/00 213,045 210,000 210,936 936 --
ARS 3/28/01 113,905 110,000 110,997 997 --
ARS 5/16/01 74,830 70,000 72,334 2,334 --
AUD 7/28/00 216,020 128,883 129,250 367 --
BRL 7/24/00 60,000 32,232 33,005 773 --
BRL 7/24/00 118,000 64,906 64,910 4 --
BRL 7/31/00 36,850 20,000 20,225 225 --
BRL 8/4/00 84,870 45,000 46,532 1,532 --
CAD 7/28/00 868,142 590,244 587,007 -- 3,237
CAD 7/28/00 1,600,373 1,088,060 1,082,116 -- 5,944
CAD 7/28/00 671,679 456,000 454,166 -- 1,834
CHF 7/28/00 910,295 549,994 559,584 9,590 --
CHF 7/28/00 148,366 91,000 91,205 205 --
CLP 7/31/00 43,000,000 81,209 79,615 -- 1,594
CLP 8/1/00 26,430,000 50,000 48,929 -- 1,071
CLP 8/3/00 13,352,500 25,000 24,713 -- 287
CLP 8/30/00 72,500,400 137,000 133,740 -- 3,260
CNY 7/5/00 423,642 51,000 51,158 158 --
CNY 7/10/00 955,351 115,000 115,336 336 --
CNY 8/18/00 451,856 54,000 54,436 436 --
CNY 9/5/00 691,124 83,000 83,195 195 --
CZK 7/17/00 2,290,000 62,860 61,526 -- 1,334
CZK 8/3/00 3,230,000 81,168 86,837 5,669 --
CZK 8/14/00 730,000 20,278 19,634 -- 644
CZK 8/18/00 3,368,736 93,098 90,621 -- 2,477
CZK 10/4/00 3,385,000 89,991 91,254 1,263 --
CZK 2/22/01 2,840,000 79,032 77,000 -- 2,032
CZK 6/7/01 1,745,000 46,323 47,474 1,151 --
CZK 6/12/01 3,190,000 85,979 86,801 822 --
DKK 7/28/00 1,507,523 193,000 193,153 153 --
EUR 7/3/00 155,628 147,897 148,607 710 --
EUR 7/28/00 19,725 18,956 18,866 -- 90
EUR 7/28/00 25,000 24,148 23,912 -- 236
EUR 7/28/00 12,494 12,039 11,950 -- 89
EUR 7/28/00 53,132 51,401 50,819 -- 582
EUR 7/28/00 180,642 171,000 172,777 1,777 --
EUR 7/28/00 15,575,791 14,733,920 14,897,643 163,723 --
EUR 7/28/00 58,223 53,321 55,687 2,366 --
EUR 7/28/00 276,778 250,000 264,728 14,728 --
EUR 7/28/00 70,922 64,000 67,834 3,834 --
EUR 7/28/00 82,750 74,723 79,147 4,424 --
EUR 7/28/00 64,956 58,308 62,128 3,820 --
EUR 7/28/00 62,774 57,200 60,041 2,841 --
EUR 7/28/00 101,950 93,000 97,511 4,511 --
EUR 7/28/00 47,247 42,650 45,190 2,540 --
EUR 7/28/00 13,110 12,000 12,539 539 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
41
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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>
EUR 7/28/00 43,469 $ 39,820 $ 41,576 $ 1,756 $ --
EUR 7/28/00 16,438 14,746 15,722 976 --
EUR 7/28/00 280,338 251,715 268,132 16,417 --
EUR 7/28/00 469,971 421,987 449,509 27,522 --
EUR 7/28/00 18,146 16,381 17,356 975 --
EUR 7/28/00 105,669 96,000 101,068 5,068 --
EUR 7/28/00 1,277,726 1,170,142 1,222,096 51,954 --
EUR 7/28/00 37,303 33,947 35,678 1,731 --
EUR 7/28/00 77,264 70,519 73,900 3,381 --
EUR 7/28/00 55,156 51,516 52,755 1,239 --
EUR 7/28/00 103,993 98,807 98,891 84 --
EUR 7/28/00 5,570,719 5,327,000 5,328,177 1,177 --
EUR 7/28/00 50,668 48,697 48,462 -- 235
EUR 7/28/00 244,326 235,000 233,688 -- 1,312
EUR 7/28/00 199,090 190,251 190,422 171 --
EUR 7/28/00 761,586 728,000 728,427 427 --
EUR 7/28/00 50,725 48,442 48,516 74 --
EUR 7/28/00 11,384 11,000 10,888 -- 112
EUR 7/28/00 37,139 35,883 35,522 -- 361
EUR 7/28/00 30,984 29,924 29,635 -- 289
EUR 7/28/00 79,763 76,341 76,290 -- 51
EUR 7/28/00 33,156 31,434 31,712 278 --
EUR 7/28/00 80,095 75,908 76,608 700 --
EUR 7/28/00 24,134 22,759 23,084 325 --
GBP 7/28/00 108,007 171,597 163,515 -- 8,082
GBP 7/28/00 11,146 17,729 16,874 -- 855
GBP 7/28/00 52,200 82,452 79,027 -- 3,425
GBP 7/28/00 961,005 1,517,234 1,454,899 -- 62,335
GBP 7/28/00 91,868 144,784 139,082 -- 5,702
GBP 7/28/00 8,887 13,269 13,455 186 --
GBP 7/28/00 238,716 353,460 361,401 7,941 --
GBP 7/28/00 125,576 185,601 190,114 4,513 --
GBP 7/28/00 315,858 473,045 478,189 5,144 --
GBP 7/28/00 37,950 56,834 57,454 620 --
GBP 7/28/00 117,300 175,067 177,585 2,518 --
GBP 7/28/00 98,464 149,665 149,068 -- 597
GBP 7/28/00 69,300 105,958 104,916 -- 1,042
GBP 7/28/00 61,130 93,125 92,546 -- 579
GBP 7/28/00 565,464 856,000 856,076 76 --
GBP 7/28/00 63,581 96,000 96,257 257 --
GBP 7/28/00 45,866 69,382 69,439 57 --
GRD 7/3/00 52,400,000 145,241 148,494 3,253 --
GRD 7/5/00 40,300,000 111,228 114,195 2,967 --
GRD 7/31/00 30,000,000 83,623 84,912 1,289 --
GRD 8/3/00 52,450,000 147,859 148,441 582 --
GRD 8/7/00 355,800,000 1,008,789 1,006,833 -- 1,956
GRD 8/21/00 45,500,000 128,578 128,696 118 --
HUF 8/4/00 8,290,230 29,000 30,312 1,312 --
IDR 7/24/00 849,557,000 109,268 96,722 -- 12,546
IDR 8/4/00 849,240,000 105,000 96,522 -- 8,478
ILS 11/20/00 700,000 166,965 169,463 2,498 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
42
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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>
ILS 11/20/00 225,000 $ 54,459 $ 54,470 $ 11 $ --
ILS 3/9/01 184,185 45,000 44,288 -- 712
ILS 3/28/01 186,345 45,000 44,757 -- 243
INR 7/21/00 4,638,900 105,000 103,353 -- 1,647
INR 8/4/00 3,220,760 73,000 71,572 -- 1,428
INR 8/14/00 3,758,700 85,000 83,432 -- 1,568
JPY 7/28/00 1,400,235 13,802 13,267 -- 535
JPY 7/28/00 3,634,813 35,542 34,440 -- 1,102
JPY 7/28/00 1,427,152 13,722 13,522 -- 200
JPY 7/28/00 119,709,440 1,150,223 1,134,247 -- 15,976
JPY 7/28/00 116,516,186 1,120,133 1,103,991 -- 16,142
JPY 7/28/00 37,620,180 351,000 356,451 5,451 --
JPY 7/28/00 4,398,685 41,117 41,678 561 --
JPY 7/28/00 28,846,800 270,000 273,323 3,323 --
JPY 7/28/00 3,040,385 28,726 28,807 81 --
JPY 7/28/00 34,234,650 321,000 324,373 3,373 --
JPY 7/28/00 11,700,640 112,000 110,864 -- 1,136
JPY 7/28/00 479,968,830 4,531,000 4,547,703 16,703 --
JPY 7/28/00 54,995,316 519,000 521,080 2,080 --
JPY 7/28/00 10,479,600 100,000 99,294 -- 706
JPY 7/28/00 11,505,450 110,000 109,014 -- 986
KES 7/3/00 1,200,000 15,968 15,390 -- 578
KES 7/14/00 2,835,000 37,715 36,315 -- 1,400
KES 8/8/00 1,600,000 21,291 20,450 -- 841
KES 9/29/00 2,300,000 29,307 29,144 -- 163
KRW 7/26/00 159,523,200 144,000 142,933 -- 1,067
KRW 7/26/00 172,832,400 156,000 154,858 -- 1,142
KRW 8/14/00 95,924,400 86,000 85,910 -- 90
KRW 8/14/00 111,850,000 100,000 100,173 173 --
MXN 10/3/00 1,500,000 151,745 148,071 -- 3,674
MXN 10/3/00 460,680 44,000 45,475 1,475 --
MXN 11/13/00 918,900 90,000 89,694 -- 306
MXN 12/29/00 633,247 59,000 61,048 2,048 --
MXN 12/29/00 651,900 60,000 62,846 2,846 --
MXN 1/24/01 400,000 37,555 38,315 760 --
MXN 4/16/01 286,796 28,000 26,934 -- 1,066
PEN 8/8/00 181,135 50,000 51,434 1,434 --
PEN 8/11/00 286,800 80,000 81,371 1,371 --
PEN 8/11/00 107,550 30,000 30,514 514 --
PEN 9/26/00 355,120 100,000 99,473 -- 527
PHP 7/6/00 1,539,200 37,000 35,303 -- 1,697
PHP 7/13/00 2,659,200 64,000 60,730 -- 3,270
PHP 7/13/00 8,506,800 204,000 194,275 -- 9,725
PHP 9/5/00 1,517,250 35,000 33,786 -- 1,214
PLN 7/3/00 400,000 91,293 91,772 479 --
PLN 7/5/00 150,414 33,000 34,488 1,488 --
PLN 7/5/00 244,586 55,880 56,080 200 --
PLN 7/6/00 724,029 167,000 165,955 -- 1,045
PLN 7/10/00 546,000 124,274 124,989 715 --
PLN 7/13/00 932,256 213,111 213,205 94 --
PLN 10/12/00 369,359 83,002 82,198 -- 804
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
43
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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>
PLN 10/31/00 248,076 $ 54,000 $ 54,899 $ 899 $ --
PLN 3/12/01 778,855 170,000 166,038 -- 3,962
PLN 3/21/01 1,035,000 230,538 220,103 -- 10,435
SEK 7/28/00 3,618,884 413,629 411,218 -- 2,411
SEK 7/28/00 1,422,552 164,000 161,646 -- 2,354
SKK 7/17/00 2,400,000 50,415 53,654 3,239 --
SKK 9/12/00 1,490,000 33,653 33,242 -- 411
SKK 9/19/00 3,250,000 73,405 72,491 -- 914
SKK 9/19/00 600,000 13,360 13,383 23 --
SKK 11/20/00 2,982,455 67,067 66,414 -- 653
SKK 3/9/01 1,700,000 38,104 37,729 -- 375
SKK 3/20/01 5,910,000 134,996 131,115 -- 3,881
SKK 3/20/01 1,600,000 36,552 35,497 -- 1,055
SKK 3/22/01 1,700,000 38,871 37,713 -- 1,158
THB 7/10/00 4,382,480 116,000 111,897 -- 4,103
THB 9/5/00 1,922,760 49,000 49,163 163 --
THB 9/5/00 2,434,740 62,000 62,254 254 --
TWD 8/21/00 4,770,900 155,000 155,193 193 --
TWD 9/25/00 3,437,280 112,000 111,991 -- 9
VEB 9/26/00 64,262,000 92,000 91,158 -- 842
----------- ----------- -------- --------
Total Forward Foreign Currency Purchase Contracts $50,530,247 $50,734,328 $440,302 $236,221
=========== =========== ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
44
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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 10/18/00 260,000 $ 256,663 $ 258,629 $ -- $ 1,966
ARS 10/24/00 61,380 60,000 61,020 -- 1,020
ARS 3/28/01 113,905 110,373 110,997 -- 624
ARS 5/16/01 74,830 71,883 72,335 -- 452
BRL 7/24/00 60,000 32,051 33,005 -- 954
CHF 7/28/00 246,367 148,948 151,449 -- 2,501
CZK 8/18/00 2,950,000 79,778 79,356 422 --
DKK 7/28/00 866,602 109,558 111,034 -- 1,476
DKK 7/28/00 8,607,752 1,087,730 1,102,877 -- 15,147
DKK 7/28/00 3,920,604 471,794 502,332 -- 30,538
DKK 7/28/00 12,769,213 1,536,035 1,636,068 -- 100,033
DKK 7/28/00 6,146,618 792,550 787,542 5,008 --
EUR 7/3/00 154,917 145,241 147,929 -- 2,688
EUR 7/17/00 55,467 50,415 53,014 -- 2,599
EUR 7/28/00 5,601 5,356 5,358 -- 2
EUR 7/28/00 89,347 85,436 85,457 -- 21
EUR 7/28/00 1,910,555 1,807,385 1,827,372 -- 19,987
EUR 7/28/00 1,198,990 1,132,986 1,146,788 -- 13,802
EUR 7/28/00 2,725,747 2,579,102 2,607,072 -- 27,970
EUR 7/28/00 118,093 108,226 112,951 -- 4,725
EUR 7/28/00 36,133 33,000 34,560 -- 1,560
EUR 7/28/00 228,008 210,000 218,081 -- 8,081
EUR 7/28/00 50,000 45,790 47,823 -- 2,033
EUR 7/28/00 32,718 30,000 31,294 -- 1,294
EUR 7/28/00 120,244 110,132 115,009 -- 4,877
EUR 7/28/00 44,000 39,497 42,085 -- 2,588
EUR 7/28/00 70,324 63,440 67,263 -- 3,823
EUR 7/28/00 83,627 75,084 79,985 -- 4,901
EUR 7/28/00 71,439 65,000 68,328 -- 3,328
EUR 7/28/00 134,845 123,461 128,974 -- 5,513
EUR 7/28/00 27,750 25,918 26,542 -- 624
EUR 7/28/00 112,766 106,000 107,856 -- 1,856
EUR 7/28/00 39,378 37,495 37,664 -- 169
EUR 7/28/00 79,288 76,115 75,835 280 --
EUR 7/28/00 281,281 271,181 269,035 2,146 --
EUR 7/28/00 155,829 148,755 149,045 -- 290
EUR 7/28/00 2,555,419 2,441,703 2,444,160 -- 2,457
EUR 7/28/00 868,343 836,214 830,536 5,678 --
EUR 7/28/00 340,815 328,000 325,976 2,024 --
EUR 7/28/00 88,894 85,000 85,023 -- 23
EUR 7/28/00 232,630 225,000 222,502 2,498 --
EUR 7/28/00 82,035 79,327 78,463 864 --
EUR 7/28/00 19,967 18,819 19,098 -- 279
EUR 7/28/00 340,000 319,974 325,197 -- 5,223
EUR 7/28/00 125,675 118,848 120,203 -- 1,355
EUR 7/28/00 60,324 57,000 57,697 -- 697
EUR 7/28/00 49,726 46,872 47,561 -- 689
EUR 7/28/00 72,850 69,372 69,679 -- 307
EUR 7/28/00 54,834 52,284 52,446 -- 162
EUR 7/28/00 460,000 438,357 439,972 -- 1,615
EUR 7/28/00 31,964 30,588 30,572 16 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
45
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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>
EUR 8/3/00 88,539 $ 81,168 $ 84,715 $ -- $ 3,547
EUR 8/3/00 155,292 147,859 148,585 -- 726
EUR 8/14/00 20,289 20,278 19,425 853 --
EUR 9/12/00 34,813 33,653 33,386 267 --
EUR 9/19/00 76,534 73,405 73,429 -- 24
EUR 9/19/00 14,144 13,360 13,570 -- 210
EUR 10/4/00 92,950 89,990 89,260 730 --
EUR 11/20/00 62,908 67,067 60,573 6,494 --
EUR 3/9/01 38,814 38,104 37,597 507 --
EUR 3/20/01 136,034 134,996 131,845 3,151 --
EUR 3/20/01 36,832 36,551 35,698 853 --
EUR 3/22/01 39,089 38,871 37,890 981 --
EUR 6/7/01 48,149 46,323 46,863 -- 540
EUR 6/12/01 87,522 85,979 85,208 771 --
GBP 7/28/00 77,350 122,891 117,103 5,788 --
GBP 7/28/00 15,475 24,586 23,428 1,158 --
GBP 7/28/00 269,480 425,368 407,975 17,393 --
GBP 7/28/00 1,274,865 2,012,348 1,930,062 82,286 --
GBP 7/28/00 2,041,808 3,222,892 3,091,165 131,727 --
GBP 7/28/00 44,423 69,000 67,254 1,746 --
GBP 7/28/00 49,125 72,214 74,372 -- 2,158
GBP 7/28/00 425,000 627,916 643,422 -- 15,506
GBP 7/28/00 972,523 1,471,427 1,472,336 -- 909
GBP 7/28/00 140,449 212,709 212,630 79 --
GBP 7/28/00 149,290 225,278 226,015 -- 737
GBP 7/28/00 49,469 75,000 74,893 107 --
GBP 7/28/00 40,302 60,490 61,014 -- 524
GBP 7/28/00 13,245 20,000 20,052 -- 52
GRD 7/3/00 52,400,000 147,897 148,494 -- 597
GRD 7/5/00 40,300,000 114,407 114,194 213 --
IDR 7/24/00 849,557,000 100,183 96,722 3,461 --
IDR 8/4/00 849,240,000 101,462 96,522 4,940 --
JPY 7/28/00 121,749,171 1,170,136 1,153,573 16,563 --
JPY 7/28/00 10,100,947 97,087 95,706 1,381 --
JPY 7/28/00 1,123,050 10,780 10,641 139 --
JPY 7/28/00 51,228,150 474,555 485,387 -- 10,832
JPY 7/28/00 7,394,800 70,000 70,066 -- 66
JPY 7/28/00 106,671,600 100,000 101,113 -- 1,113
JPY 7/28/00 726,225 6,900 6,881 19 --
JPY 7/28/00 61,747,230 588,854 585,055 3,799 --
JPY 7/28/00 8,162,924 77,000 77,344 -- 344
JPY 7/28/00 348,588,213 3,289,468 3,302,872 -- 13,404
JPY 7/28/00 10,595,000 100,000 100,388 -- 388
JPY 7/28/00 6,135,941 58,100 58,138 -- 38
JPY 7/28/00 2,356,570 22,473 22,328 145 --
JPY 7/28/00 1,576,988 15,000 14,942 58 --
KES 7/3/00 1,200,000 15,434 15,390 44 --
KRW 7/26/00 99,598,400 88,000 89,240 -- 1,240
MXN 1/24/01 400,000 39,555 38,315 1,240 --
PHP 7/13/00 3,892,050 93,000 88,885 4,115 --
PLN 7/3/00 400,000 90,868 91,773 -- 905
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
46
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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 7/5/00 395,000 $ 89,677 $ 90,568 $ -- $ 891
PLN 7/6/00 724,029 168,320 165,955 2,365 --
PLN 7/13/00 932,256 220,574 213,205 7,369 --
PLN 10/12/00 369,359 85,293 82,198 3,095 --
PLN 10/31/00 248,076 57,023 54,899 2,124 --
SEK 7/28/00 4,326,216 494,453 491,593 2,860 --
SEK 7/28/00 1,088,325 124,238 123,668 570 --
SEK 7/28/00 803,894 91,841 91,348 493 --
SEK 7/28/00 9,995,678 1,165,595 1,135,820 29,775 --
----------- ----------- -------- --------
Total Forward Foreign Currency Sale Contracts $36,197,632 $36,174,037 $358,595 $335,000
=========== =========== ======== ========
Gross unrealized appreciation/depreciation from Forward Foreign Currency Contracts $798,897 $571,221
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
47
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO
CURRENCY DENOMINATED BONDS--73.5%
ARGENTINA--1.4%
Mastellone Hermanos SA,
11.75%, 04/01/08 (f) ..............USD 456 $ 342,000
Republic of Argentina:
2.807%, 04/01/01 (e) ................. 4,120 1,042,099
2.807%, 09/01/02 (e) ................. 1,870 1,145,994
2.807%, 04/01/07 (e) ................. 2,445 1,577,877
2.807%, 04/01/07 (e) ..............USD 365 277,035
----------
TOTAL ARGENTINA ....................... 4,385,005
----------
AUSTRALIA--0.3%
Amatek Industries PTY, Ltd.,
12.00%, 02/15/08 (f) ..............USD 1,000 915,000
----------
BERMUDA--0.3%
FLAG Telecom Holdings Ltd.,
11.625%, 03/30/10 .................EUR 1,155 1,011,708
----------
BRAZIL--1.7%
DB BRL Structured Note,
17.65%, 10/11/00 ..................USD 284 284,284
Deutsche Bank NY,
0.00%, 03/01/01 (f) ...............USD 2,985 3,103,504
Republic of Brazil,
7.375%, 04/15/24 (e) ..............USD 1,265 994,669
Salomon, Inc.,
0.00%, 12/02/02 (c) ...............USD 895 847,475
----------
TOTAL BRAZIL .......................... 5,229,932
----------
BULGARIA--0.2%
Republic of Bulgaria, Series A,
7.063%, 07/28/24 ..................USD 850 669,375
----------
CANADA--1.9%
360networks, Inc.,
13.00%, 05/01/08 (c) ..............USD 785 785,000
Argos Funding Trust,
5.963%, 02/27/06 (c), (f) ............ 1,000 657,973
Cable Satisfaction International, Inc.,
12.75%, 03/01/10 ..................USD 540 525,150
Dynacare, Inc.,
10.75%, 01/15/06 (f) ..............USD 1,087 1,000,040
GT Group Telecom, Inc.,
0.00%, 02/01/10 (c), (e), (f) .....USD 775 430,125
Molson Breweries Company, Ltd.,
6.00%, 06/02/08 (c), (f) ............. 629 405,798
North American Capital Corp.,
8.25%, 11/17/03 (f) ...............GBP 1,225 1,894,510
Repap Enterprises, Inc.,
10.625%, 04/15/05 USD 150 132,000
----------
TOTAL CANADA .......................... 5,830,596
----------
CAYMAN ISLANDS--1.1%
Residential Reinsurance,
10.94%, 06/01/01 (c) ..............USD 560 558,600
Seismic, Ltd.,
10.79%, 01/01/02 (c), (f) .........USD 890 890,000
TTB Finance Cayman, Ltd.,
7.728%, 03/18/07 (e), (f) .........USD 1,926 1,848,960
----------
TOTAL CAYMAN ISLANDS .................. 3,297,560
----------
COSTA RICA--0.6%
Citibank CRC Linked Deposit,
14.50%, 07/18/00 ..................USD 77 78,247
Citibank CRC Time Deposit:
0.00%, 08/10/00 ...................USD 705 712,685
14.00%, 07/03/00 ..................USD 855 865,260
14.00%, 07/26/00 ..................USD 275 278,767
----------
TOTAL COSTA RICA ...................... 1,934,959
----------
DENMARK--6.3%
Nykredit AS,
6.00%, 10/01/29 (f) .................. 60,430 7,082,396
Unikredit Realkredit,
7.00%, 10/01/29 (f) .................. 97,281 12,036,123
----------
TOTAL DENMARK ......................... 19,118,519
----------
EL SALVADOR--0.6%
Citibank SVC Linked Deposit,
0.00%, 09/26/00 ...................USD 265 265,636
Citibank SVC Time Deposit:
0.00%, 08/08/00 ...................USD 485 491,693
0.00%, 08/15/00 ...................USD 424 429,470
0.00%, 10/05/00 ...................USD 600 600,000
----------
TOTAL EL SALVADOR ..................... 1,786,799
----------
FRANCE--2.4%
Credit Foncier,
8.50%, 09/09/02 (f) ...............AUD 6,000 3,665,448
Republic of France,
3.50%, 07/12/04 ...................EUR 3,860 3,474,169
----------
TOTAL FRANCE .......................... 7,139,617
----------
GERMANY--3.1%
Autobahn Tank & Rast,
6.00%, 10/16/00 (f) ...............DEM 1,833 895,638
Brokat Infosystems AG,
11.50%, 03/31/10 (c) ..............EUR 55 49,358
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
48
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Core Series 1998-1A, Class B3,
6.77%, 07/05/15 (c), (f) .........EUR 2,400 $1,150,895
Cybernet Internet Services
International, Inc.,
14.00%, 07/01/09 .................USD 85 71,400
Euro Credit Card,
5.50%, 06/18/08 (f) ................. 2,570 1,188,190
Federal Republic of Germany,
6.00%, 07/04/07 (f) ..............EUR 3,160 3,153,517
Landwirtschaftliche Rentenbank,
6.375%, 03/09/05 (f) .............GBP 1,829 2,737,017
----------
TOTAL GERMANY ........................ 9,246,015
----------
GREECE--0.8%
Republic of Hellenic:
5.90%, 02/11/03 ..................... 115,000 323,838
8.90%, 04/01/03 ..................... 110,000 332,560
10.38%, 08/14/03 (e), (f) ........... 605,000 1,773,007
----------
TOTAL GREECE ......................... 2,429,405
----------
HUNGARY--2.8%
Republic of Hungary:
9.50%, 01/12/02 ..................... 1,508,400 5,488,866
13.50%, 01/12/01 .................... 192,000 714,517
13.50%, 11/24/01 (f) ................ 575,800 2,197,750
----------
TOTAL HUNGARY ........................ 8,401,133
----------
INDONESIA--0.0%
Polysindo,
0.00%, 04/26/03 (i) ................. 5,000,000 28,563
PT Polysindo Eka Perkasa,
10.00%, 03/16/01 .................USD 194 9,709
----------
TOTAL INDONESIA ...................... 38,272
----------
IRELAND--0.4%
Atlas Reinsurance PLC,
9.83%, 04/04/03 (c), (f) .........USD 1,020 1,019,837
Helaba Finance BV,
7.375%, 12/30/02 (f) .............GBP 142 218,309
----------
TOTAL IRELAND ........................ 1,238,146
----------
ITALY--0.8%
Films PLC,
5.541%, 03/31/05 (e), (f) ........... 5,200,000 1,666,563
Societa Sportiva Lazio SpA,
4.55%, 10/15/07 (e), (f) ............ 1,760,043 856,961
----------
TOTAL ITALY .......................... 2,523,524
----------
JAPAN--1.3%
Nippon Credit Bank, Ltd.,
1.80%, 07/27/00 (f) ................. 140,000 1,320,767
Spires, Ltd.,
2.48%, 01/23/02 (f) ................. 286,282 2,749,365
----------
TOTAL JAPAN .......................... 4,070,132
----------
KENYA--0.0%
Kenyan Treasury Bill,
0.00%, 07/17/00 ..................... 5,000 64,020
----------
LUXEMBOURG--0.1%
PTC International Finance II SA,
11.25%, 12/01/09 .................EUR 160 160,466
----------
MEXICO--0.6%
Citibank MXN Linked Deposit,
0.00%, 12/03/01 ..................USD 815 901,390
United Mexican States:
rights 01/03/03 ..................USD 1,236 0
7.925%, 12/31/19 (e) .............USD 800 786,954
9.875%, 01/15/07 .................USD 160 165,008
----------
TOTAL MEXICO ......................... 1,853,352
----------
NETHERLANDS--1.6%
Completel Europe NV,
14.00%, 04/15/10 (c) .............EUR 525 483,675
IFCO Systems NV,
10.625%, 03/15/10 (c), (f) .......EUR 200 200,487
KPNQwest NV,
7.125%, 06/01/09 .................EUR 275 243,114
Netia Holdings BV,
13.75%, 06/15/10 (c) .............EUR 255 247,100
SWT Finance BV,
12.50%, 06/01/10 (c) .............EUR 540 520,694
Tele1 Europe BV:
13.00%, 05/15/09 .................EUR 315 306,745
13.00%, 05/15/09 (c), (f) ........EUR 75 73,035
TPSA Eurofinance BV,
6.125%, 10/27/04 .................EUR 2,100 1,984,550
United Pan-Europe
Communications NV:
Series B, 0.00%, 11/01/09 (e) ....EUR 220 105,017
11.25%, 02/01/10 .................EUR 340 286,620
Versatel Telecom NV,
11.25%, 03/30/10 (c), (f) ........EUR 440 393,814
----------
TOTAL NETHERLANDS .................... 4,844,851
----------
<PAGE>
NORWAY--0.1%
Enitel ASA,
12.50%, 04/15/10 (c), (f) ........EUR 300 279,250
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
49
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
PANAMA--0.2%
Republic of Panama,
7.063%, 07/17/16 USD 787 $ 647,576
----------
PERU--0.4%
Peruvian Central Bank:
0.00%, 08/16/00 .................. 1,178 331,436
0.00%, 10/17/00 .................. 1,000 274,934
Republic of Peru,
3.75%, 03/07/17 (e) ...........USD 1,000 603,800
----------
TOTAL PERU ........................ 1,210,170
----------
PHILIPPINES--0.2%
Republic of Philippines,
9.875%, 01/15/19 ..............USD 774 631,816
----------
POLAND--0.1%
Government of Poland,
12.00%, 06/12/02 ................. 1,300 269,589
----------
SINGAPORE--0.1%
Flextronics International Ltd.,
9.75%, 07/01/10 (c) ...........EUR 200 195,714
----------
SOUTH AFRICA--1.3%
Government of Namibia:
12.00%, 04/15/02 ................. 1,460 210,578
12.00%, 04/15/05 ................. 1,460 192,126
Lesotho Highlands Water:
12.00%, 12/01/05 (f) ............. 5,700 777,460
12.50%, 04/15/02 ................. 8,590 1,264,762
13.00%, 09/15/10 (f) ............. 7,100 958,317
Republic of South Africa,
12.00%, 02/28/05 ................. 2,680 373,275
South African Roads,
11.50%, 09/30/05 ................. 415 55,610
----------
TOTAL SOUTH AFRICA ................ 3,832,128
----------
SOUTH KOREA--1.2%
Salomon Brothers Structured Note:
0.00%, 11/28/00 (c) ...........USD 805 816,028
7.36%, 06/08/01 (c) ...........USD 516 529,172
Salomon, Inc.,
6.95%, 01/10/01 (c) ...........USD 2,351 2,385,063
----------
TOTAL SOUTH KOREA ................. 3,730,263
----------
SWEDEN--1.1%
AB Spintab,
7.50%, 06/15/04 (f) .............. 12,900 1,539,232
CB Bus AB,
11.00%, 02/15/10 (c), (f) ....EUR 220 218,435
Stadshypotek AB,
3.50%, 09/15/04 (f) .............. 16,000 $1,652,064
----------
TOTAL SWEDEN ...................... 3,409,731
----------
THAILAND--0.0%
Finance One PLC:
0.00%, 08/28/97 (d) .............. 10,000 0
0.00%, 10/15/97 (d) .............. 10,000 0
Morgan Guarantee Trust,
0.00%, 07/31/00 (d) .............. 10,569 0
----------
TOTAL THAILAND .................... 0
----------
TURKEY--3.6%
Cellco Finance NV:
12.75%, 08/01/05 (c), (f) ....USD 150 156,375
15.00%, 08/01/05 (f) .........USD 905 972,875
Chase TRL Daily Reset 5,
0.00%, 09/06/00 ..............USD 1,028 1,042,382
CSFB TRL Weekly Reset 5,
0.00%, 03/09/01 ..............USD 2,695 2,806,061
Interbank AKK Trust, Series 1995-1
Class 1,
9.00%, 02/28/01 (c), (f) .....USD 500 485,000
Turkey Treasury Bills,
0.00%, 08/23/00 .................. 3,778,600 5,380,781
----------
TOTAL TURKEY ...................... 10,843,474
----------
<PAGE>
UNITED KINGDOM--5.5%
Avecia Group PLC,
11.00%, 07/01/09 (f) ..........USD 425 416,500
BAE Systems PLC,
7.45%, 11/29/03 (f) .............. 1,300 1,908,019
Birmingham Midshires Building
Society,
9.125%, 01/05/06 (f) ............. 900 1,480,674
Clondalkin Industries PLC,
10.625%, 01/15/10 (c), (f) ....EUR 165 161,936
Coca Cola Enterprises PLC,
6.75%, 03/12/08 (f) .............. 778 1,147,173
Colt Telecom Group PLC:
7.625%, 12/15/09 (c) ..........EUR 350 309,085
8.875%, 11/30/07 (f) ..........DEM 950 444,943
Coral Group Holdings PLC,
13.50%, 09/30/09 (f) ............. 150 236,044
Diamond Holdings PLC,
10.00%, 02/01/08 ................. 460 623,467
Energis PLC:
9.50%, 06/15/09 .................. 125 182,427
9.75%, 06/15/09 ...............USD 175 255,398
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
50
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Esprit Telecom Group PLC,
11.50%, 12/15/07 (f) ................DEM 645 $ 245,106
Gala Group Holdings PLC,
12.00%, 06/01/10 (c), (f) .............. 390 610,763
Hurst Group PLC,
11.125%, 08/06/08 (c), (f) ............. 35 53,885
Imperial Tobacco Finance PLC,
6.375%, 09/27/06 (f) ................EUR 1,760 1,632,385
INEOS Acrylics Finance,
10.25%, 05/15/10 (c) ................EUR 85 83,949
IPC Magazines Group PLC:
0.00%, 03/15/08 (e) .................... 190 169,628
9.625%, 03/15/08 ....................... 290 379,360
Jazztel PLC:
14.00%, 04/01/09 ....................EUR 150 130,490
14.00%, 07/15/10 (c) ................EUR 730 703,901
Luxfer Holdings PLC,
10.125%, 05/01/09 ...................... 50 70,359
Ono Finance PLC:
13.00%, 05/01/09 ....................EUR 385 360,208
14.00%, 07/15/10 (f) ................EUR 845 786,554
Polestar Corp.,
10.50%, 05/30/08 (f) ................... 150 210,702
Regional Independent Media:
0.00%, 07/01/08 (e), (f) ............... 180 201,545
10.50%, 07/01/08 (f) ................USD 830 830,000
RSL Communications PLC,
12.875%, 03/01/10 (c), (f) ..........EUR 45 34,369
Telewest Communications PLC:
0.00%, 04/15/09 (e) .................... 240 208,808
9.875%, 02/01/10 (c), (f) .............. 110 152,709
United Kingdom Treasury,
8.50%, 12/07/05 ........................ 1,250 2,143,873
West Coast Train Finance,
6.00%, 03/31/15 (f) .................... 280 381,301
----------
TOTAL UNITED KINGDOM .................... 16,555,561
----------
UNITED STATES--31.4%
Adelphia Communications Corp.,
9.375%, 11/15/09 (f) ................... 440 407,000
Advantica Restaurant Group, Inc.,
11.25%, 01/15/08 (f) ................... 950 636,500
Agriculture Minerals & Chemicals,
10.75%, 09/30/03 (f) ................... 130 78,000
Agrilink Foods, Inc.,
11.875%, 11/01/08 (f) .................. 770 600,600
Airtouch Communications, Inc.,
5.50%, 07/24/08 (c), (f) ............DEM 3,090 1,425,290
Allied Waste North America, Inc.
Series B,
10.00%, 08/01/09 (f) ................... 1,070 893,450
Alpha Wind 2000 Ltd.,
11.38%, 05/22/01 (c) ................... 425 423,938
American Standard, Inc.,
8.25%, 06/01/09 .....................GBP 100 151,355
Amtrol, Inc.,
10.625%, 12/31/06 (f) .................. 495 443,025
ARCO Chemical Co.,
9.80%, 02/01/20 (f) .................... 130 120,152
ASAT Finance LLC,
12.50%, 11/01/06 (c), (f) .............. 405 437,400
Asset Securitization Corp.:
Series 1996-D2, Class ACS2
1.486%, 02/14/29 (e), (f), (j) ......... 7,035 448,481
Series 1997-D5, Class PS1
1.416%, 02/14/41 (e), (f), (j) ......... 12,695 1,090,982
Budget Group, Inc.,
9.125%, 04/01/06 (f) ................... 595 380,800
Buhrmann US, Inc.,
12.25%, 11/01/09 ....................... 1,125 1,181,250
Building One Services Corp.,
10.50%, 05/01/09 (f) ................... 740 629,000
Chase Credit Card Master Trust,
5.00%, 08/15/08 (f) .................DEM 3,280 1,499,881
Chesapeake Energy Corp.
Series B,
9.625%, 05/01/05 (f) ................... 970 948,175
Citibank Credit Card Master Trust,
5.75%, 07/16/07 (f) .................DEM 2,100 1,013,850
Citicorp,
5.50%, 06/30/10 (f) .................DEM 3,180 1,430,819
Colo.com,
13.875%, 03/15/10 (c), (f) ............. 365 392,375
Comstock Resources, Inc.,
11.25%, 05/01/07 (f) ................... 974 989,827
Corning, Inc.,
5.625%, 02/18/05 (c), (f) ...........EUR 680 641,081
Countrywide Home Loan, Inc.,
5.25%, 12/15/05 (f) .................DEM 3,160 1,462,360
Courtyard by Marriott II, Ltd.
Series B,
10.75%, 02/01/08 (f) ................... 1,610 1,573,775
Covad Communications Group, Inc.
Series B,
12.00%, 02/15/10 ....................... 710 553,800
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
51
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Credit Suisse First Boston Mortgage,
Series 1998-C2 Class AX,
0.982%, 06/15/23 (f), (j) ............... 35,273 $1,923,808
Crown Castle International Corp.,
10.75%, 08/01/11 ........................ 785 796,775
Dade International, Inc.,
11.125%, 05/01/06 (f) ................... 130 72,800
Dayton Superior Corp.,
13.00%, 06/15/09 (c), (f) ............... 508 501,650
Echostar DBS Corp.,
9.375%, 02/01/09 (f) .................... 503 485,395
Exodus Communications, Inc.:
10.75%, 12/15/09 (f) .................EUR 200 183,303
11.375%, 07/03/08 (c) ................EUR 425 406,762
11.625%, 07/15/10 (c) ................... 495 495,000
Fairchild Semiconductor Corp.,
10.375%, 10/01/07 (f) ................... 350 356,125
Federal Home Loan Mortgage Corp.:
6.50%, 06/01/15 ......................... 1,878 1,812,517
8.00%, TBA .............................. 5,335 5,349,375
Federal National Mortgage Association:
Series 284 Class 2, 7.50%, 07/01/27 (j) 7,550 2,385,326
8.00%, 06/01/12 ......................... 613 619,481
8.00%, 12/01/12 ......................... 1,237 1,249,718
First USA Trust, Series 1998-1
6.50%, 01/18/06 (c), (f) ................ 1,600 1,558,448
FirstWorld Communications, Inc.,
0.00%, 04/15/08 (e), (f) ................ 645 296,700
Fleming Companies, Inc. Series B,
10.50%, 12/01/04 (f) .................... 490 442,225
Foamex L.P.:
9.875%, 06/15/07 (f) .................... 175 133,219
13.50%, 08/15/05 (f) .................... 295 251,856
Ford Motor Credit Corp.,
5.25%, 06/16/08 (f) ..................DEM 2,157 984,986
Generac Portable Products LLC,
11.25%, 07/01/06 (f) .................... 760 608,000
Geo Specialty Chemicals, Inc.,
10.125%, 08/01/08 (f) ................... 785 675,100
Globix Corp.,
12.50%, 02/01/10 ........................ 395 327,850
Gold Eagle Capital, Ltd. Class B,
11.681%, 04/15/01 (c), (e), (f) ......... 950 950,000
Halyard Re B V,
10.58%, 04/05/02 (c) .................... 500 497,500
Hanger Orthopedic Group, Inc.,
11.25%, 06/15/09 (f) .................... 200 174,000
High Voltage Engineering Corp.,
10.50%, 08/15/04 (f) .................... 454 324,610
Holley Performance Products, Inc.
Series B,
12.25%, 09/15/07 (f) .................... 1,000 720,000
Home Interiors & Gifts, Inc.,
10.125%, 06/01/08 (f) ................... 750 472,500
Household Finance Corp.,
6.25%, 04/30/07 (f) ..................FRF 11,400 1,662,648
Hyperion Telecommunications, Inc.,
12.00%, 11/01/07 (f) .................... 1,005 944,700
ICG Holdings, Inc.,
0.00%, 05/01/06 (e), (f) ................ 830 686,825
Interpool Capital Trust Series B,
9.875%, 02/15/27 (f) .................... 1,370 1,016,992
IT Group, Inc. Series B,
11.25%, 04/01/09 (f) .................... 1,225 1,096,375
ITC DeltaCom, Inc.:
9.75%, 11/15/08 (f) ..................... 180 171,000
11.00%, 06/01/07 (f) .................... 665 665,000
J.H. Heafner, Inc.,
10.00%, 05/15/08 (f) .................... 615 448,950
Jostens, Inc.,
12.75%, 05/01/10 (c) .................... 745 733,825
Kelvin 2nd Event,
8.70%, 02/14/03 (c) ..................... 600 595,992
Leap Wireless International, Inc.,
12.50%, 04/15/10 (c), (f) ............... 605 520,300
Level 3 Communications, Inc.:
11.00%, 03/15/08 (c), (f) ............... 300 297,000
11.25%, 03/15/10 (c), (f) ............... 405 398,925
LodgeNet Entertainment Corp.,
10.25%, 12/15/06 (f) .................... 730 700,800
Loomis Fargo & Co.,
10.00%, 01/15/04 (f) .................... 484 464,640
Lyondell Chemical Co.,
10.875%, 05/01/09 (f) ................... 510 507,450
Marvel Enterprises, Inc.,
12.00%, 06/15/09 (f) .................... 490 392,000
Merrill Corp.,
12.00%, 05/01/09 (f) .................... 894 652,620
Merrill Lynch & Company, Inc.,
5.375%, 01/04/09 (f) .................DEM 3,590 1,639,360
7.375%, 12/17/07 (f) .................GBP 575 883,257
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
52
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Merrill Lynch Mortgage
Investments, Inc.,
Series 1996-C1, Class IO,
0.584%, 04/25/28 (c), (e), (f), (j) .... 16,316 $ 342,649
Metromedia Fiber Network, Inc.:
10.00%, 11/15/08 (f) ................... 335 330,812
10.00%, 12/15/09 ....................... 275 270,875
MGC Communications, Inc.,
13.00%, 04/01/10 (c), (f) .............. 995 935,300
MGM Grand, Inc.,
9.75%, 06/01/07 ........................ 1,290 1,309,350
Morgan Stanley Capital One, Inc.,
Series 1996-WF1, Class X,
1.384%, 11/15/28 (c), (e), (f), (j) .... 6,022 314,307
Namazu Re, Ltd.,
11.363%, 12/02/04 (c), (f) ............. 1,000 982,500
Neff Corp.,
10.25%, 06/01/08 (f) ................... 1,350 837,000
NEXTLINK Communications, Inc.,
10.75%, 06/01/09 (f) ................... 605 595,925
North American Van Lines, Inc.,
13.375%, 12/01/09 (c), (f) ............. 1,440 1,353,600
NorthPoint Communications
Group, Inc.,
12.875%, 02/15/10 (c) .................. 695 500,400
NTL Communications Corp.:
Series B, 9.25%, 11/15/06 ...........EUR 470 395,986
11.50%, 11/15/09 ....................EUR 150 80,195
Orion Power Holdings, Inc.,
12.00%, 05/01/10 (c) ................... 1,170 1,210,950
Orius Capital Corp.,
12.75%, 02/01/10 (c), (f) .............. 945 973,350
Pacific Reinsurance,
9.222%, 05/31/03 (f) ................... 1,340 1,333,300
Paxson Communications Corp.,
11.625%, 10/01/02 (f) .................. 365 373,213
Penhall International Corp.,
12.00%, 08/01/06 (f) ................... 905 877,850
Penn National Gaming, Inc.,
10.625%, 12/15/04 (f) .................. 705 768,450
Pentacon, Inc.,
12.25%, 04/01/09 (f) ................... 550 302,500
Petro Stopping Centers,
10.50%, 02/01/07 (f) ................... 1,180 1,050,200
Phoenix Color Corp.,
10.375%, 02/01/09 (f) .................. 635 571,500
Plains Resources, Inc. Series B,
10.25%, 03/15/06 (c), (f) .............. 810 811,350
Precision Partners, Inc.,
12.00%, 03/15/09 ....................... 245 142,100
Production Resource Group,
11.50%, 01/15/08 (f) ................... 812 166,460
Prudential Home Mortgage Security:
Series 1993-24, Class A7,
0.617%, 07/25/00 (e), (j) .............. 2,030 0
Series 1993-5, Class A9,
0.68%, 03/25/10 (e), (j) ............... 3,265 0
Series 1993-41, Class A5,
0.92%, 10/25/00 (e), (j) ............... 4,549 2,411
PSINet, Inc.:
10.50%, 12/01/06 ....................... 1,055 970,600
11.00%, 08/01/09 (f) ................EUR 325 282,353
Railworks Corp.,
11.50%, 04/15/09 (f) ................... 935 878,900
RBF Finance Co.,
11.00%, 03/15/06 (f) ................... 605 648,106
Rent-A-Center, Inc.,
11.00%, 08/15/08 (f) ................... 780 756,600
Rhythms NetConnections, Inc.,
12.75%, 04/15/09 (f) ................... 387 272,835
Sabreliner Corp.,
11.00%, 06/15/08 (c), (f) .............. 720 594,900
Spectrasite Holdings, Inc. Series B,
12.875%, 03/15/10 ...................... 1,275 694,875
Station Casinos, Inc.,
10.125%, 03/15/06 (f) .................. 900 904,500
Sterling Chemicals, Inc. Series A:
11.25%, 04/01/07 ....................... 260 205,400
13.50%, 08/15/08 (e) ................... 495 212,850
Structured Asset Securitization Corp.:
Series 1996-CFL, Class X2,
1.169%, 02/25/28 (e), (j) .............. 1,550 27,131
Series 1996-CFL, Class X1
1.585%, 02/25/28 (e), (f), (j) ......... 3,458 190,235
T/SF Communications Corp.
Series B,
10.375%, 11/01/07 (f) .................. 725 674,250
Tekni-Plex, Inc.,
12.75%, 06/15/10 (c) ................... 675 675,000
Transdigm, Inc.,
10.375%, 12/01/08 (f) .................. 835 718,100
Ubquitel Operating Co.,
0.00%, 04/15/10 (c), (e) ............... 922 533,607
UCFC Loan Trust,
8.00%, 09/15/00 (j) .................... 2,304 27,720
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
53
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
United Rentals, Inc.:
Series B, 9.00%, 04/01/09 ............. 25 $ 22,125
9.25%, 01/15/09 (f) ................... 750 676,875
United States Treasury Bills:
5.70%, 10/12/00 ....................... 625 614,881
5.80%, 07/13/00 ....................... 850 846,080
5.81%, 02/01/01 ....................... 25 24,132
5.83%, 11/09/00 ....................... 765 748,771
United States Treasury STRIP,
0.00%, 11/15/01 ....................... 600 549,732
URS Corp.,
12.25%, 05/01/09 (f) .................. 1,090 1,117,250
US Unwired, Inc. Series B,
0.00%, 11/01/09 (e) ................... 492 266,910
Verio, Inc.:
10.625%, 11/15/09 ..................... 325 360,344
11.25%, 12/01/08 (f) .................. 410 460,225
Viatel, Inc.:
0.00%, 04/15/08 (e), (f) .............. 340 159,800
11.50%, 03/15/09 (f) .................. 300 228,000
12.75%, 04/15/08 (c) ...............EUR 125 109,791
Williams Communications Group,
Inc.,
10.875%, 10/01/09 (f) ................. 545 534,100
Winstar Communications, Inc.,
12.75%, 04/15/10 (c) .................. 595 559,300
WRC Media, Inc.,
12.75%, 11/15/09 (c), (f) ............. 1,070 984,400
XM Satellite Radio, Inc.,
14.00%, 03/15/10 (c), (f) ............. 970 853,600
YankeeNets LLC,
12.75%, 03/01/07 (c), (f) ............. 530 503,500
-----------
TOTAL UNITED STATES .................... 95,107,165
-----------
TOTAL CURRENCY DENOMINATED
BONDS
(Identified cost $237,226,369)......... 222,900,823
-----------
SHARES
-----
COMMON STOCKS--0.0%
UNITED STATES--0.0%
WRC Media, Inc. (c)
(Identified cost $26,133).............. 1,445 1,445
-----------
PREFERRED STOCKS--2.0%
CANADA--0.0%
Cable Satisfaction International, Inc.,
Warrants 03/01/10 ..................... 540 14,850
-----------
UNITED KINGDOM--0.0%
Avecia Group PLC ....................... 1,100 28,050
Ono Finance PLC,
Warrants 05/31/09 ..................... 350 33,415
Ono Finance PLC,
Warrants 05/31/09 (c) ................. 90 8,592
---------
TOTAL UNITED KINGDOM ................... 70,057
---------
UNITED STATES--2.0%
Adelphia Communications Corp. .......... 1,600 168,800
ASAT Finance LLC, Warrants
11/01/06 (c) .......................... 700 140,000
Granite Broadcasting Corp. ............. 845 718,250
Harborside Healthcare Corp. ............ 1,259 139,749
High Voltage Engineering Corp. ......... 1,748 1,223,600
Merrill Corp. Series B, Warrants
05/01/09 (c) .......................... 894 9
Motient Corp. Warrants, 04/01/08 ....... 1,385 55,400
Nextel Communications, Inc.,
Series E .............................. 617 592,579
NEXTLINK Communications, Inc.,
Class A ............................... 11,548 594,722
Paxson Communications Corp. ............ 122 1,171,200
PSINet, Inc., Series D (c) ............. 10,655 356,942
R&B Falcon Corp. ....................... 647 734,345
---------
TOTAL UNITED STATES .................... 5,895,596
---------
TOTAL PREFERRED STOCKS
(Identified cost $7,518,568).............. 5,980,503
---------
PRINCIPAL
AMOUNT
(000)
---------
COMMERCIAL PAPER--2.0%
General Electric Capital Corp.,
6.50%, 07/17/00
(Identified cost $5,982,667)............ $ 6,000 5,982,667
---------
DISCOUNT NOTES--22.1%
Federal Agricultural Mortgage Corp.,
6.05%, 07/05/00 ........................ 1,541 1,539,964
Federal Farm Credit Bank,
6.69%, 05/08/01 ........................ 100 94,220
Federal Home Loan Bank:
5.76%, 07/19/00 ........................ 230 229,338
5.77%, 12/22/00 ........................ 804 781,578
5.85%, 08/02/00 ........................ 2,685 2,671,038
5.98%, 12/04/00 ........................ 3,365 3,277,802
6.07%, 07/26/00 ........................ 2,062 2,053,072
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
54
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
DESCRIPTION (000) (H) VALUE
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
6.09%, 02/16/01 ........................ $ 100 $ 96,109
6.09%, 03/08/01 ........................ 3,395 3,251,420
6.11%, 03/13/01 ........................ 1,391 1,330,799
6.11%, 03/16/01 ........................ 595 568,946
6.12%, 09/27/00 ........................ 1,025 1,009,666
6.15%, 04/09/01 ........................ 2,050 1,951,241
6.22%, 03/23/01 ........................ 584 557,261
6.35%, 08/14/00 ........................ 1,400 1,389,134
6.40%, 07/28/00 ........................ 642 638,918
6.40%, 09/06/00 ........................ 2,473 2,443,544
6.40%, 09/11/00 ........................ 1,935 1,910,232
6.42%, 07/28/00 ........................ 700 696,629
6.42%, 09/05/00 ........................ 529 522,774
6.50%, 11/10/00 ........................ 700 683,317
6.51%, 06/04/01 ........................ 2,050 1,924,700
Federal Home Loan Mortgage
Corp.:
5.51%, 11/13/00 ........................ 620 607,189
6.01%, 07/06/00 ........................ 2,480 2,477,930
6.02%, 07/13/00 ........................ 667 665,661
6.05%, 03/10/01 ........................ 2,000 1,917,344
6.06%, 02/01/01 ........................ 1,330 1,281,865
6.06%, 03/01/01 ........................ 2,350 2,253,873
6.38%, 08/03/00 ........................ 1,783 1,772,572
6.41%, 09/07/00 ........................ 430 424,794
6.42%, 08/01/00 ........................ 220 218,784
6.42%, 08/15/00 ........................ 2,288 2,269,653
6.48%, 09/21/00 ........................ 1,884 1,857,549
6.50%, 08/03/00 ........................ 159 158,053
Federal National Mortgage
Association:
5.20%, 07/07/00 ........................ 253 252,781
5.80%, 10/03/00 ........................ 483 475,685
5.82%, 12/29/00 ........................ 645 626,126
5.83%, 08/10/00 ........................ 2,867 2,848,428
5.86%, 08/10/00 ........................ 990 983,554
5.89%, 08/24/00 ........................ 183 181,383
5.89%, 09/28/00 ........................ 200 196,969
5.90%, 08/24/00 ........................ 131 129,841
5.92%, 08/17/00 ........................ 165 163,725
6.01%, 07/06/00 ........................ 930 929,224
6.05%, 07/20/00 ........................ 425 423,643
6.08%, 07/20/00 ........................ 424 422,640
6.30%, 07/10/00 ........................ 1,850 1,847,086
6.37%, 07/11/00 ........................ 1,730 1,726,939
6.40%, 07/17/00 ........................ 775 772,796
6.40%, 07/19/00 ........................ 235 234,248
6.41%, 08/14/00 ........................ 1,145 1,136,029
6.41%, 08/21/00 ........................ 126 124,856
6.44%, 08/10/00 ........................ 815 809,168
6.46%, 08/03/00 ........................ 771 766,434
6.47%, 09/28/00 ........................ 478 470,354
6.48%, 08/24/00 ........................ 201 199,046
6.50%, 08/24/00 ........................ 227 224,787
6.50%, 05/30/01 ........................ 1,667 1,566,771
6.51%, 08/17/00 ........................ 977 968,696
6.51%, 08/24/00 ........................ 1,074 1,063,513
6.52%, 08/31/00 ........................ 1,740 1,720,777
6.63%, 11/16/00 ........................ 305 297,249
------------
TOTAL DISCOUNT NOTES
(Identified cost $67,089,717)............ 67,089,717
------------
REPURCHASE AGREEMENT--1.6%
State Street Bank and Trust
Company, 6.40%, 07/03/00,
(Dated 06/30/00, collateralized
by $5,215,000 United States
Treasury Note, 5.375%,
06/30/03, with a value of
$5,074,195) (f) (Identified cost
$4,970,000)............................. 4,970 4,970,000
------------
TOTAL INVESTMENTS
(Identified cost $322,813,454) (b)....... 101.2% $306,925,155
LIABILITIES IN EXCESS OF CASH
AND OTHER ASSETS ....................... (1.2) (3,622,054)
------- ------------
NET ASSETS ............................... 100.0% $303,303,101
======= ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
55
<PAGE>
--------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
Forward Foreign Currency Contracts open at June 30, 2000:
<TABLE>
<CAPTION>
Forward U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Purchase Contracts Date Currency Date Value Appreciation Depreciation
-------------------- ------------ -------------- ---------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ARS 7/31/00 702,100 $ 700,000 $ 701,819 $ 1,819 $ --
ARS 9/6/00 1,556,975 1,550,000 1,553,557 3,557 --
ARS 10/18/00 1,213,188 1,175,000 1,206,792 31,792 --
ARS 10/24/00 73,130 72,000 72,701 701 --
ARS 11/6/00 742,775 730,000 737,465 7,465 --
ARS 2/5/01 1,388,520 1,330,000 1,363,433 33,433 --
ARS 3/6/01 1,288,125 1,250,000 1,259,410 9,410 --
ARS 3/28/01 1,708,575 1,650,000 1,664,953 14,953 --
ARS 5/16/01 74,830 70,000 72,334 2,334 --
BRL 7/24/00 2,290,000 1,230,191 1,259,695 29,504 --
BRL 7/31/00 141,873 77,000 77,866 866 --
BRL 8/4/00 5,497,690 2,915,000 3,014,250 99,250 --
CAD 7/28/00 8,077,480 5,491,709 5,461,707 -- 30,002
CLP 7/7/00 89,223,750 165,000 165,317 317 --
CLP 8/1/00 475,740,000 900,000 880,728 -- 19,272
CLP 8/3/00 671,195,000 1,270,000 1,242,264 -- 27,736
CLP 8/3/00 84,000,000 158,640 155,469 -- 3,171
CLP 8/3/00 117,502,000 220,000 217,475 -- 2,525
CLP 8/30/00 568,360,800 1,074,000 1,048,443 -- 25,557
CNY 7/5/00 12,800,625 1,541,000 1,545,764 4,764 --
CNY 7/5/00 4,404,877 529,000 531,919 2,919 --
CNY 7/10/00 15,368,690 1,850,000 1,855,405 5,405 --
CNY 8/18/00 8,175,243 977,000 984,886 7,886 --
CZK 7/17/00 9,200,000 252,539 247,178 -- 5,361
CZK 8/3/00 47,300,000 1,188,621 1,271,639 83,018 --
CZK 8/14/00 50,472,000 1,402,000 1,357,506 -- 44,494
CZK 10/4/00 38,552,000 1,024,910 1,039,296 14,386 --
CZK 2/15/01 765,000 20,990 20,736 -- 254
CZK 2/22/01 3,088,050 86,139 83,724 -- 2,415
CZK 6/7/01 62,780,000 1,666,578 1,707,985 41,407 --
CZK 6/12/01 75,810,000 2,043,286 2,062,816 19,530 --
EUR 7/3/00 1,728,123 1,642,278 1,650,165 7,887 --
EUR 7/28/00 54,244 52,128 51,882 -- 246
EUR 7/28/00 249,977 240,883 239,093 -- 1,790
EUR 7/28/00 711,170 688,000 680,207 -- 7,793
EUR 7/28/00 366,684 350,000 350,719 719 --
EUR 7/28/00 458,890 427,710 438,911 11,201 --
EUR 7/28/00 144,901 132,703 138,592 5,889 --
EUR 7/28/00 260,466 237,936 249,126 11,190 --
EUR 7/28/00 997,009 900,000 953,601 53,601 --
EUR 7/28/00 282,950 255,504 270,631 15,127 --
EUR 7/28/00 86,608 77,744 82,838 5,094 --
EUR 7/28/00 242,669 221,120 232,103 10,983 --
EUR 7/28/00 49,250 45,149 47,106 1,957 --
EUR 7/28/00 114,710 105,000 109,716 4,716 --
EUR 7/28/00 523,240 479,000 500,459 21,459 --
EUR 7/28/00 143,781 131,711 137,522 5,811 --
EUR 7/28/00 119,063 108,645 113,879 5,234 --
EUR 7/28/00 48,668 44,200 46,549 2,349 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
56
<PAGE>
--------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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>
EUR 7/28/00 19,900 $ 17,852 $ 19,033 $ 1,181 $ --
EUR 7/28/00 7,571,686 6,798,465 7,242,025 443,560 --
EUR 7/28/00 7,660,984 6,878,721 7,327,435 448,714 --
EUR 7/28/00 27,219 24,572 26,034 1,462 --
EUR 7/28/00 8,560,107 7,842,000 8,187,412 345,412 --
EUR 7/28/00 549,529 500,000 525,603 25,603 --
EUR 7/28/00 21,580 19,746 20,641 895 --
EUR 7/28/00 566,603 517,139 541,934 24,795 --
EUR 7/28/00 458,325 419,569 438,370 18,801 --
EUR 7/28/00 378,828 354,033 362,334 8,301 --
EUR 7/28/00 428,625 407,665 409,963 2,298 --
EUR 7/28/00 96,691 91,500 92,482 982 --
EUR 7/28/00 196,005 188,000 187,471 -- 529
EUR 7/28/00 39,322 37,641 37,610 -- 31
EUR 7/28/00 315,620 301,306 301,878 572 --
EUR 7/28/00 101,336 97,394 96,924 -- 470
EUR 7/28/00 3,981,993 3,830,000 3,808,622 -- 21,378
EUR 7/28/00 268,617 256,690 256,922 232 --
EUR 7/28/00 25,038 23,911 23,947 36 --
EUR 7/28/00 83,647 80,000 80,005 5 --
EUR 7/28/00 719,368 693,471 688,048 -- 5,423
EUR 7/28/00 186,278 180,000 178,167 -- 1,833
EUR 7/28/00 647,506 625,608 619,315 -- 6,293
EUR 7/28/00 540,198 521,712 516,678 -- 5,034
EUR 7/28/00 1,032,381 988,092 987,433 -- 659
EUR 7/28/00 118,414 112,265 113,258 993 --
EUR 7/28/00 34,205 32,238 32,716 478 --
EUR 7/28/00 358,914 338,000 343,287 5,287 --
EUR 7/28/00 368,587 349,319 352,539 3,220 --
EUR 7/28/00 101,364 95,587 96,951 1,364 --
GBP 7/28/00 270,017 428,992 408,788 -- 20,204
GBP 7/28/00 82,312 130,887 124,615 -- 6,272
GBP 7/28/00 152,141 242,000 230,332 -- 11,668
GBP 7/28/00 1,639,369 2,587,662 2,481,898 -- 105,764
GBP 7/28/00 464,399 733,044 703,070 -- 29,974
GBP 7/28/00 1,624,015 2,563,994 2,458,653 -- 105,341
GBP 7/28/00 265,397 418,385 401,794 -- 16,591
GBP 7/28/00 341,000 505,822 516,252 10,430 --
GBP 7/28/00 31,105 46,440 47,091 651 --
GBP 7/28/00 245,919 363,469 372,306 8,837 --
GBP 7/28/00 1,242,604 1,860,278 1,881,222 20,944 --
GBP 7/28/00 131,100 196,388 198,477 2,089 --
GBP 7/28/00 795,674 1,187,145 1,204,598 17,453 --
GBP 7/28/00 86,968 132,191 131,664 -- 527
GBP 7/28/00 160,231 243,551 242,579 -- 972
GBP 7/28/00 193,578 294,897 293,065 -- 1,832
GBP 7/28/00 327,050 490,663 495,132 4,469 --
GBP 7/28/00 158,951 240,446 240,642 196 --
GRD 7/3/00 581,858,950 1,612,781 1,648,905 36,124 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
57
<PAGE>
--------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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>
GRD 7/5/00 622,900,000 $1,719,199 $1,765,056 $45,857 $ --
GRD 7/10/00 342,726,000 971,969 970,941 -- 1,028
GRD 8/3/00 545,500,000 1,537,789 1,543,842 6,053 --
GRD 8/7/00 188,400,000 534,165 533,129 -- 1,036
GRD 8/21/00 44,500,000 125,752 125,868 116 --
HUF 8/4/00 50,027,250 175,000 182,915 7,915 --
IDR 7/24/00 10,764,165,000 1,384,460 1,225,503 -- 158,957
IDR 8/4/00 17,170,824,000 2,123,000 1,951,591 -- 171,409
ILS 8/15/00 3,408,330 815,000 830,611 15,611 --
ILS 8/28/00 2,121,725 516,738 516,562 -- 176
ILS 11/15/00 2,942,800 700,000 712,629 12,629 --
ILS 11/20/00 1,280,000 305,307 309,875 4,568 --
ILS 3/9/01 4,870,670 1,190,000 1,171,172 -- 18,828
ILS 3/28/01 2,443,190 590,000 586,812 -- 3,188
ILS 4/10/01 340,000 82,685 81,603 -- 1,082
INR 7/21/00 45,196,140 1,023,000 1,006,950 -- 16,050
INR 8/4/00 51,576,280 1,169,000 1,146,132 -- 22,868
INR 8/14/00 61,908,000 1,400,000 1,374,173 -- 25,827
JPY 7/28/00 6,594,275 64,681 62,481 -- 2,200
JPY 7/28/00 18,261,000 180,000 173,023 -- 6,977
JPY 7/28/00 50,787,112 496,598 481,208 -- 15,390
JPY 7/28/00 57,435,796 552,055 544,204 -- 7,851
JPY 7/28/00 34,806,389 334,612 329,790 -- 4,822
JPY 7/28/00 12,676,748 121,100 120,112 -- 988
JPY 7/28/00 74,100,699 692,659 702,104 9,445 --
JPY 7/28/00 3,773,875 35,000 35,757 757 --
JPY 7/28/00 49,732,014 469,879 471,211 1,332 --
JPY 7/28/00 38,374,150 364,600 363,595 -- 1,005
JPY 7/28/00 963,143 8,985 9,126 141 --
JPY 7/28/00 6,331,800 60,000 59,994 -- 6
JPY 7/28/00 28,109,160 270,000 266,334 -- 3,666
KES 7/3/00 44,000,000 585,496 564,309 -- 21,187
KES 8/8/00 44,800,000 596,141 572,587 -- 23,554
KES 9/29/00 37,500,000 477,829 475,177 -- 2,652
KRW 7/6/00 1,146,390,000 1,030,000 1,027,629 -- 2,371
KRW 7/26/00 1,588,728,600 1,434,000 1,423,501 -- 10,499
KRW 7/26/00 1,471,158,400 1,328,000 1,318,158 -- 9,842
KRW 8/14/00 1,272,671,400 1,141,000 1,139,801 -- 1,199
KRW 8/14/00 260,610,500 233,000 233,402 402 --
MXN 8/24/00 2,222,898 227,000 221,919 -- 5,081
MXN 9/6/00 1,287,515 131,312 128,062 -- 3,250
MXN 10/3/00 2,000,000 202,327 197,428 -- 4,899
MXN 10/3/00 5,057,010 483,000 499,196 16,196 --
MXN 11/13/00 14,600,300 1,430,000 1,425,143 -- 4,857
MXN 12/29/00 8,629,332 804,000 831,903 27,903 --
MXN 12/29/00 7,007,925 645,000 675,593 30,593 --
MXN 1/24/01 9,700,000 910,713 929,137 18,424 --
MXN 2/15/01 8,891,850 850,000 847,198 -- 2,802
MXN 4/16/01 20,997,535 2,050,000 1,971,988 -- 78,012
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
58
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Purchase Contracts Date Currency Date Value Appreciation Depreciation
-------------------- ------------ -------------- ---------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
MXN 2/4/02 7,153,500 $ 600,000 $ 621,892 $ 21,892 $ --
PEN 7/19/00 822,853 235,000 234,839 -- 161
PEN 8/8/00 3,350,998 925,000 951,528 26,528 --
PEN 8/11/00 5,252,025 1,465,000 1,490,105 25,105 --
PEN 8/14/00 3,549,150 990,000 1,006,137 16,137 --
PEN 9/26/00 2,450,328 690,000 686,366 -- 3,634
PHP 7/6/00 60,278,400 1,449,000 1,382,532 -- 66,468
PHP 7/13/00 27,713,850 667,000 632,917 -- 34,083
PHP 8/3/00 20,563,080 491,000 463,162 -- 27,838
PHP 9/5/00 40,012,050 923,000 890,984 -- 32,016
PHP 9/5/00 18,450,670 427,000 410,858 -- 16,142
PLN 7/3/00 9,140,000 2,086,050 2,097,006 10,956 --
PLN 7/5/00 1,823,200 400,000 418,032 18,032 --
PLN 7/5/00 6,091,800 1,391,775 1,396,756 4,981 --
PLN 7/5/00 1,185,000 270,276 271,702 1,426 --
PLN 7/6/00 7,296,647 1,683,000 1,672,472 -- 10,528
PLN 7/10/00 2,880,000 655,514 659,283 3,769 --
PLN 8/22/00 714,203 165,000 161,364 -- 3,636
PLN 10/12/00 3,128,690 703,076 696,262 -- 6,814
PLN 10/31/00 1,189,846 259,000 263,309 4,309 --
PLN 12/4/00 15,086,978 3,365,000 3,305,643 -- 59,357
PLN 3/2/01 8,360,000 1,819,171 1,787,081 -- 32,090
PLN 3/6/01 5,005,000 1,100,000 1,068,727 -- 31,273
PLN 3/12/01 5,062,558 1,105,000 1,079,246 -- 25,754
PLN 3/21/01 1,415,000 315,180 300,913 -- 14,267
SKK 7/13/00 3,090,000 70,701 69,092 -- 1,609
SKK 7/17/00 36,709,400 771,125 820,674 49,549 --
SKK 8/7/00 29,600,000 642,607 661,190 18,583 --
SKK 8/25/00 9,550,000 201,309 213,191 11,882 --
SKK 9/11/00 57,070,000 1,285,485 1,273,284 -- 12,201
SKK 9/12/00 28,760,000 649,575 641,641 -- 7,934
SKK 11/20/00 27,582,189 620,243 614,203 -- 6,040
SKK 3/9/01 44,650,000 1,000,784 990,936 -- 9,848
SKK 3/20/01 25,280,000 577,446 560,846 -- 16,600
SKK 3/20/01 35,630,000 813,953 790,464 -- 23,489
SKK 3/22/01 12,250,000 280,096 271,752 -- 8,344
THB 7/10/00 72,726,500 1,925,000 1,856,910 -- 68,090
THB 9/5/00 31,352,760 799,000 801,656 2,656 --
THB 9/5/00 36,953,070 941,000 944,850 3,850 --
TWD 8/21/00 63,252,900 2,055,000 2,057,554 2,554 --
TWD 9/25/00 43,119,450 1,405,000 1,404,881 -- 119
VEB 9/26/00 834,009,000 1,194,000 1,183,078 -- 10,922
------------- ------------- ----------- ----------
Total Forward Foreign Currency Purchase Contracts $ 161,636,262 $ 162,395,503 $ 2,433,468 $1,674,227
============= ============= =========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
59
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward U.S. $ Cost U.S. $
Foreign Currency Expiration Foreign on Origination Current Unrealized Unrealized
Sale Contracts Date Currency Date Value Appreciation Depreciation
------------------ ------------ ------------ ---------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ARS 7/31/00 702,100 $ 701,609 $ 701,819 $ -- $ 210
ARS 10/18/00 540,000 533,070 537,153 -- 4,083
ARS 10/18/00 673,188 664,615 669,639 -- 5,024
ARS 10/24/00 71,610 70,000 71,190 -- 1,190
ARS 11/6/00 358,225 350,000 355,664 -- 5,664
ARS 11/6/00 384,550 381,384 381,801 -- 417
ARS 3/28/01 1,708,575 1,655,596 1,664,953 -- 9,357
AUD 7/28/00 5,465,104 3,258,459 3,269,911 -- 11,452
AUD 7/28/00 1,502,216 895,508 898,814 -- 3,306
BRL 7/24/00 1,790,000 956,197 984,653 -- 28,456
BRL 7/24/00 500,000 275,028 275,043 -- 15
BRL 8/4/00 2,765,250 1,500,000 1,516,119 -- 16,119
CAD 7/28/00 9,525,318 6,350,000 6,440,683 -- 90,683
DKK 7/28/00 31,752,310 4,026,670 4,068,297 -- 41,627
DKK 7/28/00 60,996,958 7,337,450 7,815,297 -- 477,847
DKK 7/28/00 59,592,892 7,167,345 7,635,400 -- 468,055
EUR 7/3/00 1,720,229 1,612,781 1,642,628 -- 29,847
EUR 7/10/00 1,013,832 971,969 968,543 3,426 --
EUR 7/17/00 848,407 771,125 810,882 -- 39,757
EUR 7/28/00 351,118 339,286 335,831 3,455 --
EUR 7/28/00 20,000 19,329 19,129 200 --
EUR 7/28/00 32,988 31,537 31,551 -- 14
EUR 7/28/00 526,177 503,143 503,267 -- 124
EUR 7/28/00 16,217,591 15,324,813 15,511,500 -- 186,687
EUR 7/28/00 47,985,236 45,391,634 45,896,024 -- 504,390
EUR 7/28/00 6,146,452 5,814,544 5,878,844 -- 64,300
EUR 7/28/00 16,995,227 16,080,883 16,255,277 -- 174,394
EUR 7/28/00 378,354 347,121 361,881 -- 14,760
EUR 7/28/00 122,172 111,830 116,853 -- 5,023
EUR 7/28/00 435,782 398,000 416,809 -- 18,809
EUR 7/28/00 165,000 151,107 157,816 -- 6,709
EUR 7/28/00 190,856 175,000 182,547 -- 7,547
EUR 7/28/00 1,808,895 1,657,400 1,730,138 -- 72,738
EUR 7/28/00 50,063 45,096 47,883 -- 2,787
EUR 7/28/00 198,020 178,000 189,398 -- 11,398
EUR 7/28/00 33,000 29,622 31,563 -- 1,941
EUR 7/28/00 988,959 892,140 945,901 -- 53,761
EUR 7/28/00 270,557 242,920 258,778 -- 15,858
EUR 7/28/00 72,692 66,187 69,527 -- 3,340
EUR 7/28/00 34,738 31,440 33,226 -- 1,786
EUR 7/28/00 754,494 690,800 721,645 -- 30,845
EUR 7/28/00 162,246 151,534 155,182 -- 3,648
EUR 7/28/00 249,166 237,251 238,318 -- 1,067
EUR 7/28/00 295,773 283,943 282,896 1,047 --
EUR 7/28/00 3,172,666 3,041,000 3,034,532 6,468 --
EUR 7/28/00 410,650 391,737 392,771 -- 1,034
EUR 7/28/00 431,895 413,000 413,091 -- 91
EUR 7/28/00 845,000 795,230 808,210 -- 12,980
EUR 7/28/00 311,650 294,721 298,081 -- 3,360
EUR 7/28/00 640,600 603,829 612,709 -- 8,880
EUR 7/28/00 337,602 319,000 322,903 -- 3,903
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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>
EUR 7/28/00 1,252,958 $ 1,194,696 $ 1,198,406 $ -- $ 3,710
EUR 7/28/00 1,155,000 1,100,657 1,104,713 -- 4,056
EUR 7/28/00 795,725 761,469 761,080 389 --
EUR 8/3/00 1,296,562 1,188,621 1,240,563 -- 51,942
EUR 8/3/00 1,615,100 1,537,790 1,545,344 -- 7,554
EUR 8/7/00 686,934 642,607 657,412 -- 14,805
EUR 8/14/00 1,402,786 1,402,000 1,343,020 58,980 --
EUR 8/25/00 219,420 201,309 210,200 -- 8,891
EUR 9/11/00 1,333,486 1,285,485 1,278,752 6,733 --
EUR 9/12/00 671,969 649,575 644,427 5,148 --
EUR 10/4/00 1,058,612 1,024,910 1,016,590 8,320 --
EUR 11/20/00 581,780 620,242 560,188 60,054 --
EUR 2/15/01 20,894 20,990 20,215 775 --
EUR 2/22/01 85,000 86,139 82,269 3,870 --
EUR 3/9/01 1,019,444 1,000,785 987,476 13,309 --
EUR 3/20/01 581,885 577,446 563,969 13,477 --
EUR 3/20/01 820,212 813,954 794,957 18,997 --
EUR 3/22/01 281,674 280,096 273,030 7,066 --
EUR 6/7/01 1,732,244 1,666,578 1,685,997 -- 19,419
EUR 6/12/01 2,079,950 2,043,286 2,024,961 18,325 --
GBP 7/28/00 30,950 49,172 46,856 2,316 --
GBP 7/28/00 237,207 376,865 359,116 17,749 --
GBP 7/28/00 275,620 435,356 417,271 18,085 --
GBP 7/28/00 16,280,169 25,697,921 24,647,119 1,050,802 --
GBP 7/28/00 341,000 506,314 516,252 -- 9,938
GBP 7/28/00 7,148 10,500 10,821 -- 321
GBP 7/28/00 144,100 211,827 218,158 -- 6,331
GBP 7/28/00 1,320,000 1,965,942 1,998,394 -- 32,452
GBP 7/28/00 445,561 674,847 674,551 296 --
GBP 7/28/00 158,958 239,868 240,653 -- 785
GBP 7/28/00 100,754 151,328 152,535 -- 1,207
GBP 7/28/00 72,848 110,000 110,287 -- 287
GRD 7/3/00 581,858,950 1,642,278 1,648,905 -- 6,627
GRD 7/5/00 622,900,000 1,768,346 1,765,056 3,290 --
IDR 7/24/00 10,764,165,000 1,269,359 1,225,503 43,856 --
IDR 8/4/00 17,170,824 2,051,472 1,951,591 99,881 --
JPY 7/28/00 67,514,780 655,000 639,702 15,298 --
JPY 7/28/00 13,958,004 133,980 132,252 1,728 --
JPY 7/28/00 151,439,068 1,455,096 1,434,885 20,211 --
JPY 7/28/00 143,854,863 1,383,220 1,363,025 20,195 --
JPY 7/28/00 886,507,602 8,520,261 8,399,657 120,604 --
JPY 7/28/00 851,840 8,000 8,071 -- 71
JPY 7/28/00 71,061,120 676,000 673,304 2,696 --
JPY 7/28/00 48,443,307 458,700 459,000 -- 300
JPY 7/28/00 29,478,247 281,120 279,306 1,814 --
JPY 7/28/00 9,041,395 86,000 85,667 333 --
KES 7/3/00 44,000,000 565,917 564,309 1,608 --
KRW 7/26/00 2,383,570,800 2,106,000 2,135,680 -- 29,680
KRW 9/6/00 1,287,515 132,596 128,062 4,534 --
MXN 1/24/01 9,700,000 939,467 929,137 10,330 --
PEN 8/8/00 3,350,998 939,312 951,528 -- 12,216
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
61
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
LAZARD STRATEGIC YIELD PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
Forward 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 7/3/00 9,140,000 $ 2,076,329 $ 2,097,009 $ -- $ 20,680
PLN 7/5/00 9,100,000 2,065,975 2,086,490 -- 20,515
PLN 7/6/00 7,296,647 1,696,302 1,672,472 23,830 --
PLN 7/10/00 1,185,000 270,276 271,267 -- 991
PLN 8/22/00 714,203 167,065 161,364 5,701 --
PLN 10/12/00 3,128,690 722,478 696,262 26,216 --
PLN 10/31/00 1,189,846 273,496 263,309 10,187 --
SEK 7/28/00 26,834,653 3,067,133 3,049,251 17,882 --
SEK 7/28/00 1,849,294 211,271 210,137 1,134 --
------------ ------------ ---------- ----------
Total Forward Foreign Currency Sale Contracts $218,682,907 $219,630,353 $1,750,615 $2,698,061
============ ============ ========== ==========
Gross unrealized appreciation/depreciation from Forward Foreign Currency Contracts $4,184,083 $4,372,288
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
62
<PAGE>
--------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
NOTES TO PORTFOLIOS OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
(a) Non-income producing security.
(b) For federal income tax purposes, the aggregate cost, aggregate gross
unrealized appreciation, aggregate gross unrealized depreciation and the
net unrealized appreciation (depreciation) is as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE NET
GROSS GROSS UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO COST APPRECIATION DEPRECIATION (DEPRECIATION)
----------------------------- ---------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Equity $ 298,940,803 $ 53,399,380 $ 27,645,041 $ 25,754,339
Mid Cap 25,996,640 2,674,036 2,614,488 59,548
Small Cap 886,199,895 109,847,275 112,846,105 (2,998,830)
Global Equity 95,357,555 9,978,055 6,638,983 3,339,072
International Equity 2,949,554,842 636,736,258 182,621,502 454,114,756
International Small Cap 248,114,965 42,926,703 19,438,005 23,488,698
Emerging Markets 354,231,238 80,158,592 40,812,268 39,346,324
Bond 86,863,484 591,122 1,881,877 (1,290,755)
High Yield 108,246,079 1,478,201 8,655,970 (7,177,769)
International Fixed-Income 81,138,154 3,877,654 4,246,733 (369,079)
Strategic Yield 322,813,454 3,501,158 19,389,457 (15,888,299)
</TABLE>
(c) Pursuant to Rule 144A of the Securities Act of 1933, these securities may
only be resold in transactions exempt from registration, normally to
qualified institutional buyers. At June 30, 2000, these securities
amounted to $8,024,243, $11,957,871, $3,314,622, $28,970,134, $4,741,376,
and $38,910,478 or 2.94%, 3.04%, 4.24%, 28.93%, 5.84%, and 12.83% of 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 June 30, 2000, Small Cap Portfolio held the following security which was
a private placement and therefore restricted as to resale, and valued at
zero:
ACQUISITION ACQUISITION
SECURITY DATE COST
----------------------------------- ----------- -----------
Interactive Light Holdings, Inc.,
10.00%, 02/07/01 1/25/99 $1,000,000
Interactive Light Holdings, Inc. is valued as determined in good faith and in
accordance with the procedures adopted by the Board of Directors. Small Cap
Portfolio will bear any cost, including those involved in registration
under the Securities Act of 1933, in connection with the disposition of
such security.
(h) Principal amount denominated in respective country's currency unless
otherwise noted.
(i) Issue in default.
(j) Interest-only security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
63
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
NOTES TO PORTFOLIOS OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Abbreviations:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
TBA--To Be Announced
REMIC--Real Estate Mortgage Investment Conduit
CURRENCY TERMS
------------------------------
ARS -- Argentine Peso ILS -- Israeli Shekel
AUD -- Australian Dollar INR -- Indian Rupee
BRL -- Brazilian Real JPY -- Japanese Yen
CAD -- Canadian Dollar KES -- Kenyan Shilling
CHF -- Swiss Franc KRW -- South Korean Won
CLP -- Chilean Peso MXN -- Mexican Peso
CNY -- Chinese Yuan Renminbi NLG -- Netherlands Guilder
CZK -- Czech Koruna PEN -- Peruvian Nouveau Sol
DEM -- German Deutsche Mark PHP -- Philippine Peso
DKK -- Danish Krone PLN -- Polish Zloty
EUR -- Euro Currency SEK -- Swedish Krona
FRF -- French Franc SKK -- Slovakian Koruna
GBP -- British Pound Sterling THB -- Thailand Baht
GRD -- Greek Drachma TWD -- Taiwan Dollar
HUF -- Hungarian Forint USD -- United States Dollar
IDR -- Indonesian Rupiah VEB -- Venezuelan Bolivar
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO HOLDINGS BY INDUSTRY, FOR THOSE PORTFOLIOS PREVIOUSLY PRESENTED BY
COUNTRY:
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD LAZARD
GLOBAL INTERNATIONAL INTERNATIONAL EMERGING
EQUITY EQUITY SMALL CAP MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRY
Advertising ..................................... --% --% 2.8% --%
Aerospace & Defense ............................. 1.3 1.2 -- --
Apparel & Textiles .............................. -- -- 3.1 0.3
Automotive ...................................... 2.7 3.8 1.4 --
Banking & Financial Services .................... 17.4 20.8 8.1 14.1
Brewery ......................................... 1.7 1.4 -- 4.3
Broadcasting .................................... -- -- 1.4 2.9
Building & Construction ......................... -- -- 1.1 --
Business Services & Supplies .................... -- -- 10.7 --
Chemicals & Plastics ............................ 0.8 2.6 0.8 --
Commercial Services ............................. 2.0 2.3 -- --
Computer Software ............................... 1.5 -- 3.8 2.1
Computers & Business Equipment .................. 5.1 -- 1.9 1.6
Conglomerates ................................... -- -- -- 1.5
Construction & Materials ........................ 0.4 0.8 -- 1.5
Cosmetics & Toiletries .......................... 1.1 1.4 -- --
Distribution .................................... -- -- 1.6 --
Diversified ..................................... 2.7 0.5 -- --
Drugs & Health Care ............................. 9.8 7.8 8.1 --
Electrical Equipment ............................ 4.7 5.6 -- 4.8
Electronics ..................................... 6.4 3.4 7.9 3.5
Food & Beverages ................................ 4.7 2.5 4.3 1.8
Forest Products ................................. 0.9 1.5 -- --
Holding Company-Diversified ..................... -- -- 2.3 --
Hospitals & Long-Term Care ...................... -- -- 0.5 --
Hotels & Restaurants ............................ 1.0 -- -- --
Household Appliances & Home Furnishings ......... 0.2 0.9 7.2 --
Industrial Construction ......................... -- -- 4.1 --
Insurance ....................................... 3.7 5.9 3.1 2.6
Leisure/Entertainment ........................... -- -- 2.3 --
Manufacturing ................................... 3.2 5.9 -- 0.2
Medical Products ................................ -- -- 1.9 --
Medical Supplies ................................ -- -- 1.9 --
Metals .......................................... -- -- -- 3.3
Multimedia ...................................... 0.6 -- -- --
Oil & Gas ....................................... 5.5 5.1 -- 3.2
Paper Products .................................. -- -- -- 0.8
Petroleum Equipment & Services .................. 1.1 1.7 -- --
Petrochemicals .................................. -- -- -- 2.4
Printing ........................................ -- -- 1.1 --
Publishing ...................................... -- 1.2 4.0 --
Repurchase Agreements ........................... -- 3.1 1.0 6.8
Retail .......................................... 1.2 2.5 10.5 3.3
Semiconductor Manufacturers ..................... -- -- -- 3.4
Services ........................................ 0.9 -- 1.9 --
Steel ........................................... -- -- 0.7 3.5
Suppress Display ................................ 3.5 -- -- --
Telecommunications .............................. 13.4 12.7 -- 23.3
Telephone ....................................... -- -- -- 3.3
Tobacco ......................................... -- -- -- 1.1
Transportation-Air .............................. -- 1.2 -- --
Utilities ....................................... 3.4 3.8 -- 4.4
----- ------- ---- -------
Total Investments ............................... 100.9% 99.6% 99.5% 100.0%
===== ======= ==== =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
65
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO HOLDINGS BY ASSET TYPE, FOR THOSE PORTFOLIOS PREVIOUSLY PRESENTED BY
COUNTRY:
LAZARD LAZARD
INTERNATIONAL STRATEGIC
FIXED-INCOME YIELD
PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------
ASSET TYPE
Asset-Backed Securities ........................ 1.7% 1.8%
Collateralized Mortgage Obligations ............ -- 1.4
Commercial Paper ............................... -- 2.0
Corporate Bonds ................................ 65.5 49.7
Discount Notes ................................. 6.2 22.1
Foreign Government Obligations ................. 17.2 13.7
Mortgage Pass-Through Securities ............... -- 3.8
Preferred Stocks ............................... -- 2.0
Repurchase Agreements .......................... 0.4 1.6
Structured Notes ............................... 2.7 2.1
U.S. Government and Agency Obligations ......... 5.8 0.9
Warrants ....................................... -- 0.1
---- -------
Total Investments .............................. 99.5% 101.2%
==== =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
67
<PAGE>
--------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD
EQUITY MID CAP SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (cost $298,940,803,
$25,996,640, $886,199,895, $95,357,555,
$2,949,554,842, $248,114,965, $354,231,238,
$86,863,484, $108,246,079, $81,138,154, and
$322,813,454, respectively)...................................... $ 324,695,142 $ 26,056,188 $883,201,065
Cash ............................................................. 600 880 10,429,824
Foreign currency (cost $0, $0, $0, $33,933, $0,
$71,396, $2,592,734, $0, $0, $278,381, and
$866,815, respectively).......................................... -- -- --
Receivables for:
Investments sold ................................................ -- 30,311 10,367,607
Dividends and interest .......................................... 306,126 32,288 363,389
Capital stock sold .............................................. 2,517,366 65,717 12,101,333
Gross appreciation on foreign currency contracts ................ -- -- --
Deferred organizational expenses ................................. -- 11,318 --
------------- -------------- ------------
Total assets ..................................................... 327,519,234 26,196,702 916,463,218
------------- -------------- ------------
LIABILITIES
Due to Custodian:
Cash ............................................................ -- -- --
Foreign currency (cost $0, $0, $0, $0, $10,725,972, $0,
$0, $0, $0, $0, and $0, respectively)............................ -- -- --
Payables for:
Investments purchased ........................................... 6,180,104 13,500 9,137,131
Capital stock repurchased ....................................... 3,263,964 -- 1,726,986
Dividends payable ............................................... -- -- --
Gross depreciation on foreign currency contracts ................ -- -- --
Investment management fees payable ............................... 200,889 43,588 560,729
Accrued directors' fees payable .................................. 5,835 734 11,713
Accrued distribution fees payable ................................ 19,341 1,473 13,621
Other accrued expenses and payables .............................. 89,833 58,976 157,004
------------- -------------- ------------
Total liabilities ................................................ 9,759,966 118,271 11,607,184
------------- -------------- ------------
Net assets ....................................................... 317,759,268 26,078,431 904,856,034
============= ============== ============
NET ASSETS
Paid in capital .................................................. 247,417,364 22,304,498 865,439,720
Undistributed (distributions in excess of)
investment income--net .......................................... 1,726,605 17,117 9,114,122
Unrealized appreciation (depreciation) on:
Investments--net ................................................ 25,754,339 59,548 (2,998,830)
Foreign currency--net ........................................... -- -- --
Accumulated realized gain (loss)--net ............................ 42,860,960 3,697,268 33,301,022
------------- -------------- ------------
Net assets ....................................................... $ 317,759,268 $ 26,078,431 $904,856,034
============= ============== ============
INSTITUTIONAL SHARES
Net assets ....................................................... $ 226,408,848 $ 19,828,588 $844,659,462
Shares of capital stock outstanding* ............................. 11,116,967 1,752,099 48,972,005
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 20.37 $ 11.32 $ 17.25
OPEN SHARES
Net assets ....................................................... $ 91,350,420 $ 6,249,843 $ 60,196,572
Shares of capital stock outstanding* ............................. 4,497,194 555,313 3,506,683
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... $ 20.31 $ 11.25 $ 17.17
</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.
68
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
----------------------------------------------------------------------------------------------------------------------------------
LAZARD LAZARD LAZARD LAZARD LAZARD LAZARD
GLOBAL INTERNATIONAL INTERNATIONAL EMERGING LAZARD LAZARD INTERNATIONAL STRATEGIC
EQUITY EQUITY SMALL CAP MARKETS BOND HIGH YIELD FIXED-INCOME YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 98,696,627 $3,403,669,598 $271,603,663 $393,577,562 $ 85,572,729 $101,068,310 $80,769,075 $306,925,155
13 598 970 835 165 510 227 --
33,829 -- 71,255 2,592,803 -- -- 278,383 866,860
-- 14,102,520 1,110,222 1,829,824 22,072,553 976,146 891,078 8,329,246
124,973 6,109,616 1,413,617 635,358 905,770 2,236,458 1,382,609 5,189,574
1,318 24,089,655 1,051,701 2,288,169 30,266 -- 53,851 20,776
-- -- -- -- -- -- 798,897 4,184,083
87 -- -- -- -- 12,099 -- --
------------- -------------- ------------ ------------ ------------ ------------ ----------- ------------
98,856,847 3,447,971,987 275,251,428 400,924,551 108,581,483 104,293,523 84,174,120 325,515,694
------------- -------------- ------------ ------------ ------------ ------------ ----------- ------------
-- -- -- -- -- -- -- 2,768
-- 10,729,824 -- -- -- -- -- --
745,833 13,535,580 1,930,106 6,852,050 28,638,632 3,955,673 2,128,304 17,247,774
-- 4,576,567 51,058 107,777 1,573,191 -- 87,571 167,312
-- -- -- -- 41,006 24,821 -- 128,096
-- -- -- -- -- -- 571,221 4,372,288
216,387 2,124,709 173,082 329,306 48,238 126,909 107,239 186,401
1,134 42,597 2,791 5,872 1,490 1,260 1,170 3,939
1,385 31,809 444 1,918 2,205 3,164 2,399 2,876
58,167 1,047,682 105,980 233,263 63,096 47,466 84,825 101,139
------------- -------------- ------------ ------------ ------------ ------------ ----------- ------------
1,022,906 32,088,768 2,263,461 7,530,186 30,367,858 4,159,293 2,982,729 22,212,593
------------- -------------- ------------ ------------ ------------ ------------ ----------- ------------
97,833,941 3,415,883,219 272,987,967 393,394,365 78,213,625 100,134,230 81,191,391 303,303,101
============= ============== ============ ============ ============ ============ =========== ============
89,997,478 2,663,931,868 227,566,110 387,839,695 86,819,967 118,359,994 84,330,604 350,881,533
487,455 (22,676,830) 2,608,105 589,181 (542,907) 267 724,805 6,097,884
3,339,072 454,114,756 23,488,698 39,346,324 (1,290,755) (7,177,769) (369,079) (15,888,299)
985 196,294 (10,975) 2,317 -- -- 208,810 (239,798)
4,008,951 320,317,131 19,336,029 (34,383,152) (6,772,680) (11,048,262) (3,703,749) (37,548,219)
------------- -------------- ------------ ------------ ------------ ------------ ----------- ------------
$ 97,833,941 $3,415,883,219 $272,987,967 $393,394,365 $ 78,213,625 $100,134,230 $81,191,391 $303,303,101
============= ============== ============ ============ ============ ============ =========== ============
$ 91,517,027 $3,258,450,495 $270,859,462 $383,862,931 $ 67,650,267 $ 82,503,151 $66,241,021 $289,512,715
6,448,425 197,356,243 18,966,128 39,210,393 7,337,114 10,311,562 6,777,183 33,456,355
$ 14.19 $ 16.51 $ 14.28 $ 9.79 $ 9.22 $ 8.00 $ 9.77 $ 8.65
$ 6,316,914 $ 157,432,724 $ 2,128,505 $ 9,531,434 $ 10,563,358 $ 17,631,079 $14,950,370 $ 13,790,386
445,362 9,562,112 149,999 972,503 1,145,504 2,202,694 1,537,381 1,593,830
$ 14.18 $ 16.46 $ 14.19 $ 9.80 $ 9.22 $ 8.00 $ 9.72 $ 8.65
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
69
<PAGE>
--------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD LAZARD LAZARD
EQUITY MID CAP SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME:
Interest ......................................................... $ 143,096 $ 11,513 $ 795,911
Dividends ........................................................ 3,306,317 183,535 5,446,819
------------ ---------- -----------
Total investment income* .......................................... 3,449,413 195,048 6,242,730
------------ ---------- -----------
EXPENSES:
Management fees .................................................. 1,468,365 117,005 3,484,087
Administration fees .............................................. 61,544 25,501 115,298
Distribution fees (Open Shares) .................................. 124,636 11,772 85,494
Custodian fees ................................................... 51,681 32,915 105,806
Professional services ............................................ 22,719 18,292 27,411
Registration fees ................................................ 21,151 13,621 29,005
Shareholders' services ........................................... 34,993 25,287 51,953
Directors' fees and expenses ..................................... 10,387 607 21,661
Shareholders' reports ............................................ 10,971 2,965 17,795
Amortization of organizational expenses .......................... -- 2,408 --
Other ............................................................ 8,340 975 13,248
------------ ---------- -----------
Total expenses before fees waived and expenses reimbursed ......... 1,814,787 251,348 3,951,758
Management fees waived and expenses reimbursed ................... -- (73,417) --
Expense reductions ............................................... -- -- --
------------ ---------- -----------
Expenses--net ..................................................... 1,814,787 177,931 3,951,758
------------ ---------- -----------
INVESTMENT INCOME (LOSS)--NET ..................................... 1,634,626 17,117 2,290,972
------------ ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY--NET
Realized gain (loss) on:
Investments--net ................................................. 35,938,979 482,820 (6,294,153)
Foreign currency--net ............................................ -- -- --
Change in net unrealized appreciation (depreciation) on:
Investments--net ................................................. (52,623,818) 633,800 40,226,255
Foreign currency--net ............................................ -- -- --
------------ ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY--NET ........................................ (16,684,839) 1,116,620 33,932,102
------------ ---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS .................................................. $(15,050,213) $1,133,737 $36,223,074
============ ========== ===========
*Net of foreign withholding taxes of .............................. $ 6,643 $ -- $ --
============ ========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70
<PAGE>
================================================================================
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
LAZARD LAZARD LAZARD LAZARD LAZARD LAZARD
GLOBAL INTERNATIONAL INTERNATIONAL EMERGING LAZARD LAZARD INTERNATIONAL STRATEGIC
EQUITY EQUITY SMALL CAP MARKETS BOND HIGH YIELD FIXED-INCONE YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 108,608 $ 3,038,834 $ 494,174 $ 565,052 $ 3,279,813 $ 5,231,400 $ 1,720,019 $ 11,866,837
853,101 37,867,120 3,293,240 3,111,398 -- 345,584 -- 440,886
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
961,709 40,905,954 3,787,414 3,676,450 3,279,813 5,576,984 1,720,019 12,307,723
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
324,775 13,110,165 1,039,301 2,011,101 231,044 341,746 265,862 1,203,877
31,043 246,944 50,100 62,609 31,623 31,495 29,471 54,489
7,935 180,927 2,900 12,449 13,531 15,948 5,341 19,178
50,144 1,693,650 164,537 410,036 48,591 33,110 79,084 122,812
18,257 52,640 19,684 22,147 18,696 17,579 18,427 20,702
11,857 37,152 18,381 18,266 14,446 13,394 17,810 20,668
22,516 64,724 27,430 28,660 25,874 22,370 28,795 28,328
1,420 81,426 5,126 10,257 2,094 1,712 1,458 7,088
1,529 35,140 4,318 6,073 3,770 856 5,553 6,813
91 -- -- -- -- 2,408 -- --
1,758 51,765 3,451 6,651 1,850 1,821 2,402 6,821
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
471,325 15,554,533 1,335,228 2,588,249 391,519 482,439 454,203 1,490,776
(8,388) -- (8,374) (7,744) (7,066) (114,836) (62,262) --
(166) (189) (1,468) (19,019) (942) (6,723) -- --
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
462,771 15,554,344 1,325,386 2,561,486 383,511 360,880 391,941 1,490,776
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
498,938 25,351,610 2,462,028 1,114,964 2,896,302 5,216,104 1,328,078 10,816,947
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
3,697,336 257,492,216 19,204,922 20,582,123 (2,026,425) (3,318,445) (1,791,206) (12,026,718)
(60,700) (4,596,487) (530,856) (318,162) -- -- (1,111,848) 11,897,479
(6,014,868) (442,667,939) (17,813,073) (54,615,228) 1,022,775 (5,188,139) (1,637,433) (1,454,996)
2,290 355,651 (3,223) (3,254) -- -- 444,291 (4,846,387)
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
(2,375,942) (189,416,559) 857,770 (34,354,521) (1,003,650) (8,506,584) (4,096,196) (6,430,622)
----------- ------------- ------------ ------------ ----------- ----------- ----------- ------------
$(1,877,004) $(164,064,949) $ 3,319,798 $(33,239,557) $ 1,892,652 $(3,290,480) $(2,768,118) $ 4,386,325
=========== ============= ============ ============ =========== =========== =========== ============
$ 100,085 $ 6,277,241 $ 469,652 $ 300,745 $ -- $ -- $ 1,651 $ 3,955
=========== ============= ============ ============ =========== =========== =========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
71
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LAZARD EQUITY PORTFOLIO
------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)--net ................................................... $ 1,634,626 $ 5,713,817
Realized gain (loss) on investments and foreign currency--net ................... 35,938,979 22,683,544
Change in unrealized appreciation (depreciation)--net ........................... (52,623,818) (7,619,666)
-------------- --------------
Net increase (decrease) in net assets resulting from operations .................. (15,050,213) 20,777,695
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net
Institutional Shares ............................................................ -- (4,442,659)
Open Shares ..................................................................... -- (1,298,892)
From realized gains--net
Institutional Shares ............................................................ -- (22,408,104)
Open Shares ..................................................................... -- (7,906,169)
In excess of investment income--net
Institutional Shares ............................................................ -- --
Open Shares ..................................................................... -- --
-------------- --------------
Net decrease in net assets resulting from distributions .......................... -- (36,055,824)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales
Institutional Shares ............................................................ 37,416,464 161,627,546
Open Shares ..................................................................... 14,362,212 84,343,406
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
Open Shares ..................................................................... -- 9,119,227
Cost of shares redeemed
Institutional Shares ............................................................ (177,634,299) (158,758,835)
Open Shares ..................................................................... (40,988,729) (86,312,838)
-------------- --------------
Net increase (decrease) in net assets from capital stock transactions ............ (166,844,352) 36,182,142
-------------- --------------
Total increase (decrease) in net assets .......................................... (181,894,565) 20,904,013
Net assets at beginning of period ................................................ 499,653,833 478,749,820
-------------- --------------
Net assets at end of period* ..................................................... $ 317,759,268 $ 499,653,833
============== ==============
SHARES ISSUED AND REPURCHASED:
INSTITUTIONAL SHARES:
Shares outstanding at beginning of period ....................................... 17,915,506 16,605,093
-------------- --------------
Shares sold ..................................................................... 1,825,079 7,217,805
Shares issued in connection with acquisition of Bantam Value Portfolio .......... -- --
Shares issued to shareholders from reinvestment of distributions ................ -- 1,227,452
Shares repurchased .............................................................. (8,623,618) (7,134,844)
-------------- --------------
Net increase (decrease) ......................................................... (6,798,539) 1,310,413
-------------- --------------
Shares outstanding at end of period ............................................. 11,116,967 17,915,506
============== ==============
OPEN SHARES:
Shares outstanding at beginning of period ....................................... 5,796,320 5,406,563
-------------- --------------
Shares sold ..................................................................... 701,291 3,792,337
Shares issued in connection with acquisition of Bantam Value Portfolio .......... -- --
Shares issued to shareholders from reinvestment of distributions ................ -- 426,832
Shares repurchased .............................................................. (2,000,417) (3,829,412)
-------------- --------------
Net increase (decrease) ......................................................... (1,299,126) 389,757
-------------- --------------
Shares outstanding at end of period ............................................. 4,497,194 5,796,320
============== ==============
*Includes undistributed (distributions in excess of) investment income--net ..... $ 1,726,605 $ 91,979
============== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
72
<PAGE>
================================================================================
--------------------------------------------------------------------------------
LAZARD MID CAP PORTFOLIO LAZARD SMALL CAP PORTFOLIO
------------------------------------- ----------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
----------------- ----------------- ------------------ -------------------
$ 17,117 $ 92,535 $ 2,290,972 $ 6,943,540
482,820 3,443,959 (6,294,153) 104,474,693
633,800 (2,411,437) 40,226,255 (133,084,218)
---------------- --------------- -------------- ----------------
1,133,737 1,125,057 36,223,074 (21,665,985)
---------------- --------------- -------------- ----------------
-- (85,319) -- (6,644,255)
-- (20,147) -- (425,376)
-- (374,199) -- (51,857,819)
-- (134,758) -- (4,948,488)
-- (1,176) -- --
-- (278) -- --
---------------- --------------- -------------- ----------------
-- (615,877) -- (63,875,938)
---------------- --------------- -------------- ----------------
3,972,543 2,700,743 277,171,556 547,345,994
2,186,375 8,445,908 51,435,453 74,792,124
-- -- -- 26,354,774
-- -- -- 3,571,473
-- 410,589 -- 53,233,833
-- 144,681 -- 5,313,688
(12,291,140) (31,356,602) (373,216,339) (1,050,552,721)
(10,467,935) (11,385,727) (80,115,569) (86,209,652)
---------------- --------------- -------------- ----------------
(16,600,157) (31,040,408) (124,724,899) (426,150,487)
---------------- --------------- -------------- ----------------
(15,466,420) (30,531,228) (88,501,825) (511,692,410)
41,544,851 72,076,079 993,357,859 1,505,050,269
---------------- --------------- -------------- ----------------
$ 26,078,431 $ 41,544,851 $ 904,856,034 $ 993,357,859
================ =============== ============== ================
2,553,780 5,327,538 54,749,412 81,187,480
---------------- --------------- -------------- ----------------
348,872 253,804 16,624,375 31,129,994
-- -- -- 1,385,450
-- 39,427 -- 3,315,054
(1,150,553) (3,066,989) (22,401,782) (62,268,566)
---------------- --------------- -------------- ----------------
(801,681) (2,773,758) (5,777,407) (26,438,068)
---------------- --------------- -------------- ----------------
1,752,099 2,553,780 48,972,005 54,749,412
================ =============== ============== ================
1,306,121 1,564,634 5,233,657 5,391,454
---------------- --------------- -------------- ----------------
205,670 810,630 3,058,529 4,303,821
-- -- -- 188,462
-- 14,014 -- 333,269
(956,478) (1,083,157) (4,785,503) (4,983,349)
---------------- --------------- -------------- ----------------
(750,808) (258,513) (1,726,974) (157,797)
---------------- --------------- -------------- ----------------
555,313 1,306,121 3,506,683 5,233,657
================ =============== ============== ================
$ 17,117 $ -- $ 9,114,122 $ 6,823,150
================ =============== ============== ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
73
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
LAZARD GLOBAL EQUITY PORTFOLIO
--------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------------ -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)--net ................................................... $ 498,938 $ 756,323
Realized gain (loss) on investments and foreign currency--net ................... 3,636,636 2,892,793
Change in unrealized appreciation (depreciation)--net ........................... (6,012,578) 6,397,713
------------ --------------
Net increase (decrease) in net assets resulting from operations .................. (1,877,004) 10,046,829
------------ --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net
Institutional Shares .......................................................... -- (720,338)
Open Shares ................................................................... -- (62,237)
From realized gains--net
Institutional Shares .......................................................... -- (2,116,975)
Open Shares ................................................................... -- (204,954)
In excess of investment income--net
Institutional Shares .......................................................... -- (146,012)
Open Shares ................................................................... -- (12,615)
------------ --------------
Net decrease in net assets resulting from distributions .......................... -- (3,263,131)
------------ --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales
Institutional Shares .......................................................... 31,734,389 378,158,687
Open Shares ................................................................... 927,328 2,661,134
Net proceeds from reinvestment of distributions
Institutional Shares .......................................................... -- 2,671,819
Open Shares ................................................................... -- 234,521
Cost of shares redeemed
Institutional Shares .......................................................... (2,046,833) (341,154,104)
Open Shares ................................................................... (722,799) (2,071,191)
------------ --------------
Net increase (decrease) in net assets from capital stock transactions ............ 29,892,085 40,500,866
------------ --------------
Total increase (decrease) in net assets .......................................... 28,015,081 47,284,564
Net assets at beginning of period ................................................ 69,818,860 22,534,296
------------ --------------
Net assets at end of period* ..................................................... $ 97,833,941 $ 69,818,860
============ ==============
SHARES ISSUED AND REPURCHASED:
INSTITUTIONAL SHARES:
Shares outstanding at beginning of period ....................................... 4,366,106 1,347,859
------------ --------------
Shares sold ..................................................................... 2,228,163 26,763,658
Shares issued to shareholders from reinvestment of distributions ................ -- 189,315
Shares repurchased .............................................................. (145,844) (23,934,726)
------------ --------------
Net increase (decrease) ......................................................... 2,082,319 3,018,247
------------ --------------
Shares outstanding at end of period ............................................. 6,448,425 4,366,106
============ ==============
OPEN SHARES:
Shares outstanding at beginning of period ....................................... 430,069 366,528
------------ --------------
Shares sold ..................................................................... 66,375 188,541
Shares issued to shareholders from reinvestment of distributions ................ -- 16,602
Shares repurchased .............................................................. (51,082) (141,602)
------------ --------------
Net increase (decrease) ......................................................... 15,293 63,541
------------ --------------
Shares outstanding at end of period ............................................. 445,362 430,069
============ ==============
*Includes undistributed (distributions in excess of) investment income--net ..... $ 487,455 $ (11,483)
============ ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
74
<PAGE>
================================================================================
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
LAZARD INTERNATIONAL SMALL CAP
LAZARD INTERNATIONAL EQUITY PORTFOLIO PORTFOLIO LAZARD EMERGING MARKETS PORTFOLIO
----------------------------------------- ----------------------------------- -------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, JUNE 30, 2000 DECEMBER 31, JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
-------------------- -------------------- ------------------ ---------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
$ 25,351,610 $ 67,316,342 $ 2,462,028 $ 2,219,317 $ 1,114,964 $ 3,798,049
252,895,729 267,284,910 18,674,066 1,257,458 20,263,961 (929,711)
(442,312,288) 405,129,866 (17,816,296) 42,610,498 (54,618,482) 170,956,951
------------------ ------------------ -------------- ------------- ---------------- ----------------
(164,064,949) 739,731,118 3,319,798 46,087,273 (33,239,557) 173,825,289
------------------ ------------------ -------------- ------------- ---------------- ----------------
-- (70,479,560) -- (1,852,846) -- (4,349,612)
-- (2,472,196) -- (17,000) -- (79,945)
-- (191,266,859) -- (1,722,369) -- --
-- (7,348,292) -- (22,299) -- --
-- (32,606,665) -- -- -- (122,189)
-- (1,143,737) -- -- -- (2,246)
------------------ ------------------ -------------- ------------- ---------------- ----------------
-- (305,317,309) -- (3,614,514) -- (4,553,992)
------------------ ------------------ -------------- ------------- ---------------- ----------------
1,178,170,146 1,567,830,033 152,564,181 60,812,490 185,960,722 181,437,898
156,332,466 290,150,531 152,496 1,056,862 1,163,847 14,452,309
-- 274,265,893 -- 3,347,465 -- 3,865,326
-- 9,632,374 -- 34,262 -- 75,410
(1,345,322,553) (1,557,031,320) (102,682,570) (66,183,628) (235,081,217) (183,031,252)
(131,455,705) (223,629,942) (490,972) (1,840,507) (1,178,459) (16,525,857)
------------------ ------------------ -------------- ------------- ---------------- ----------------
(142,275,646) 361,217,569 49,543,135 (2,773,056) (49,135,107) 273,834
------------------ ------------------ -------------- ------------- ---------------- ----------------
(306,340,595) 795,631,378 52,862,933 39,699,703 (82,374,664) 169,545,131
3,722,223,814 2,926,592,436 220,125,034 180,425,331 475,769,029 306,223,898
------------------ ------------------ -------------- ------------- ---------------- ----------------
$ 3,415,883,219 $ 3,722,223,814 $ 272,987,967 $ 220,125,034 $ 393,394,365 $ 475,769,029
================== ================== ============== ============= ================ ================
207,337,268 189,079,168 15,418,580 15,590,528 43,466,805 42,950,229
------------------ ------------------ -------------- ------------- ---------------- ----------------
72,803,921 97,266,494 10,627,648 5,033,426 18,740,441 23,270,856
-- 16,569,235 -- 255,727 -- 395,536
(82,784,946) (95,577,629) (7,080,100) (5,461,101) (22,996,853) (23,149,816)
------------------ ------------------ -------------- ------------- ---------------- ----------------
(9,981,025) 18,258,100 3,547,548 (171,948) (4,256,412) 516,576
------------------ ------------------ -------------- ------------- ---------------- ----------------
197,356,243 207,337,268 18,966,128 15,418,580 39,210,393 43,466,805
================== ================== ============== ============= ================ ================
7,994,053 3,106,682 173,602 232,449 977,024 1,176,048
------------------ ------------------ -------------- ------------- ---------------- ----------------
9,685,551 18,015,062 10,793 93,525 110,775 2,069,221
-- 582,110 -- 2,602 -- 7,481
(8,117,492) (13,709,801) (34,396) (154,974) (115,296) (2,275,726)
------------------ ------------------ -------------- ------------- ---------------- ----------------
1,568,059 4,887,371 (23,603) (58,847) (4,521) (199,024)
------------------ ------------------ -------------- ------------- ---------------- ----------------
9,562,112 7,994,053 149,999 173,602 972,503 977,024
================== ================== ============== ============= ================ ================
$ (22,676,830) $ (48,028,440) $ 2,608,105 $ 146,077 $ 589,181 $ (525,783)
================== ================== ============== ============= ================ ================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
75
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
LAZARD BOND PORTFOLIO
------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------------ -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)--net ........................................................... $ 2,896,302 $ 6,509,592
Realized gain (loss) on investments, cross currency swaps and foreign currency--net ..... (2,026,425) (4,899,519)
Change in unrealized appreciation (depreciation)--net ................................... 1,022,775 (2,234,468)
------------- --------------
Net increase (decrease) in net assets resulting from operations .......................... 1,892,652 (624,395)
------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net
Institutional Shares .................................................................... (2,562,295) (5,357,536)
Open Shares ............................................................................. (325,853) (671,175)
From realized gains--net
Institutional Shares .................................................................... -- --
Open Shares ............................................................................. -- --
In excess of investment income--net
Institutional Shares .................................................................... -- (478,824)
Open Shares ............................................................................. -- (59,985)
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 .................................. (2,888,148) (6,567,520)
------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales
Institutional Shares .................................................................... 24,379,130 363,141,029
Open Shares ............................................................................. 1,118,215 5,171,755
Net proceeds from reinvestment of distributions
Institutional Shares .................................................................... 2,252,960 5,137,228
Open Shares ............................................................................. 304,257 653,992
Cost of shares redeemed
Institutional Shares .................................................................... (49,631,171) (370,764,169)
Open Shares ............................................................................. (2,376,348) (8,608,945)
------------- --------------
Net increase (decrease) in net assets from capital stock transactions .................... (23,952,957) (5,269,110)
------------- --------------
Total increase (decrease) in net assets .................................................. (24,948,453) (12,461,025)
Net assets at beginning of period ........................................................ 103,162,078 115,623,103
------------- --------------
Net assets at end of period* ............................................................. $ 78,213,625 $ 103,162,078
============= ==============
SHARES ISSUED AND REPURCHASED:
INSTITUTIONAL SHARES:
Shares outstanding at beginning of period ............................................... 9,853,933 10,154,742
------------- --------------
Shares sold ............................................................................. 2,643,324 38,115,392
Shares issued to shareholders from reinvestment of distributions ........................ 245,262 538,765
Shares repurchased ...................................................................... (5,405,405) (38,954,966)
------------- --------------
Net increase (decrease) ................................................................. (2,516,819) (300,809)
------------- --------------
Shares outstanding at end of period ..................................................... 7,337,114 9,853,933
============= ==============
OPEN SHARES:
Shares outstanding at beginning of period ............................................... 1,248,705 1,540,500
------------- --------------
Shares sold ............................................................................. 121,871 534,487
Shares issued to shareholders from reinvestment of distributions ........................ 33,121 68,542
Shares repurchased ...................................................................... (258,193) (894,824)
------------- --------------
Net increase (decrease) ................................................................. (103,201) (291,795)
------------- --------------
Shares outstanding at end of period ..................................................... 1,145,504 1,248,705
============= ==============
*Includes undistributed (distributions in excess of) investment income--net ............. $ (542,907) $ (551,061)
============= ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
76
<PAGE>
================================================================================
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
LAZARD INTERNATIONAL FIXED-INCOME
LAZARD HIGH YIELD PORTFOLIO PORTFOLIO LAZARD STRATEGIC YIELD PORTFOLIO
------------------------------------------ --------------------------------------- ----------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, JUNE 30, 2000 DECEMBER 31, JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
------------------ ---------------- ------------------ ------------------ ------------------ -------------------
<S> <C> <C> <C> <C> <C>
$ 5,216,104 $ 7,841,589 $ 1,328,078 $ 3,545,955 $ 10,816,947 $ 24,000,315
(3,318,445) (5,468,472) (2,903,054) (4,192,996) (129,239) (11,218,336)
(5,188,139) (843,969) (1,193,142) (4,001,310) (6,301,383) 4,041,759
-------------- -------------- ------------- ------------- --------------- ----------------
(3,290,480) 1,529,148 (2,768,118) (4,648,351) 4,386,325 16,823,738
-------------- -------------- ------------- ------------- --------------- ----------------
(4,495,853) (7,707,773) (411,267) -- (10,277,023) (22,570,103)
(720,251) (133,823) (26,411) -- (484,957) (1,430,212)
-- -- -- (675,540) -- --
-- -- -- (34,819) -- --
-- (9,851) -- -- -- (2,917)
-- (171) -- -- -- (185)
-- -- -- (146) -- --
-- -- -- (8) -- --
-- -- -- (1,125,469) -- --
-- -- -- (52,805) -- --
-------------- -------------- ------------- ------------ --------------- ----------------
(5,216,104) (7,851,618) (437,678) (1,888,787) (10,761,980) (24,003,417)
-------------- -------------- ------------- ------------ --------------- ----------------
6,726,457 45,382,021 6,795,641 27,539,426 55,526,591 191,948,304
17,463,142 999,125 14,317,899 2,031,273 1,183,010 182,317,275
4,399,176 7,582,376 403,749 1,719,854 9,134,397 16,624,003
473,533 121,082 25,856 83,838 410,722 1,205,221
(5,035,405) (5,033,496) (11,833,778) (64,592,946) (75,214,865) (293,687,843)
(355,859) (642,431) (2,966,067) (2,841,194) (3,512,390) (189,135,351)
-------------- -------------- ------------- ------------ --------------- ----------------
23,671,044 48,408,677 6,743,300 (36,059,749) (12,472,535) (90,728,391)
-------------- -------------- ------------- ------------ --------------- ----------------
15,164,460 42,086,207 3,537,504 (42,596,887) (18,848,190) (97,908,070)
84,969,770 42,883,563 77,653,887 120,250,774 322,151,291 420,059,361
-------------- -------------- ------------- ------------ --------------- ----------------
$ 100,134,230 $ 84,969,770 $ 81,191,391 $ 77,653,887 $ 303,303,101 $ 322,151,291
============== ============== ============= ============ =============== ================
9,535,605 4,453,235 7,252,221 10,782,322 34,670,734 44,107,303
-------------- -------------- ------------- ------------ --------------- ----------------
833,990 4,793,737 694,133 2,688,009 6,330,446 21,343,867
530,685 833,182 41,616 170,799 1,046,715 1,863,022
(588,718) (544,549) (1,210,787) (6,388,909) (8,591,540) (32,643,458)
-------------- -------------- ------------- ------------ --------------- ----------------
775,957 5,082,370 (475,038) (3,530,101) (1,214,379) (9,436,569)
-------------- -------------- ------------- ------------ --------------- ----------------
10,311,562 9,535,605 6,777,183 7,252,221 33,456,355 34,670,734
============== ============== ============= ============ =============== ================
148,700 100,729 372,893 444,293 1,816,497 2,489,504
-------------- -------------- ------------- ------------ --------------- ----------------
2,036,932 108,247 1,467,383 198,864 134,338 20,407,856
58,488 12,591 2,669 8,366 47,047 135,127
(41,426) (72,867) (305,564) (278,630) (404,052) (21,215,990)
-------------- -------------- ------------- ------------ --------------- ----------------
2,053,994 47,971 1,164,488 (71,400) (222,667) (673,007)
-------------- -------------- ------------- ------------ --------------- ----------------
2,202,694 148,700 1,537,381 372,893 1,593,830 1,816,497
============== ============== ============= ============ =============== ================
$ 267 $ 267 $ 724,805 $ (165,595) $ 6,097,884 $ 6,042,917
============== ============== ============= ============ =============== ================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
77
<PAGE>
--------------------------------------------------------------------------------
THE LAZARD FUNDS, INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
--------------------------------------------------------------------------------
LAZARD EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED -----------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------------- ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 21.08 $ 21.75 $ 19.98 $ 19.24 $ 17.41 $ 13.75
-------- ------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.09 0.26 0.28 0.22 0.33 0.23
Net realized and unrealized gain (loss) ......... (0.80) 0.66 3.10 4.54 3.06 4.93
-------- ------- ------- ------- ------- -------
Total from investment operations ................ (0.71) 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 ................... $ 20.37 $ 21.08 $ 21.75 $ 19.98 $ 19.24 $ 17.41
======== ======= ======= ======= ======= =======
TOTAL RETURN (A) ................................. (3.4)% 4.2% 17.3% 25.1% 19.9% 37.7%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $226,409 $377,660 $361,126 $333,575 $278,605 $163,787
Ratios to average net assets:
Net expenses (b) ................................ 0.86% 0.84% 0.85% 0.86% 0.89% 0.92%
Gross expenses (b) .............................. 0.86% 0.84% 0.85% 0.87% 0.89% 0.92%
Net investment income (b) ....................... 0.90% 1.14% 1.28% 1.00% 1.87% 1.45%
Portfolio turnover rate .......................... 22% 62% 76% 78% 66% 81%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED ---------------------- 2/5/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
======== -======= =======- =======-
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 21.05 $ 21.76 $ 19.99 $ 20.19
-====== -======= -======= =======
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.06 0.20 0.20 0.13
Net realized and unrealized gain (loss) ......... (0.80) 0.65 3.12 3.62
-====== -======= -======= =======
Total from investment operations ................ (0.74) 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 ................... $ 20.31 $ 21.05 $ 21.76 $ 19.99
-====== -======= -======= =======
TOTAL RETURN (A) ................................. (3.5)% 3.9% 17.0% 18.9%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $91,350 $121,994 $117,624 $22,811
Ratios to average net assets:
Net expenses (b) ................................ 1.12% 1.10% 1.12% 1.22%
Gross expenses (b) .............................. 1.12% 1.10% 1.12% 1.35%
Net investment income (b) ....................... 0.64% 0.89% 0.96% 0.60%
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 MID CAP PORTFOLIO
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED --------------------------- 11/4/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
INSTITUTIONAL SHARES ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 10.78 $ 10.46 $ 10.26 $ 10.00
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.01 0.02 0.05 0.02
Net realized and unrealized gain (loss) ......... 0.53 0.43 0.31 0.26
------- ------- ------- -------
Total from investment operations ................ 0.54 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 ................... $ 11.32 $ 10.78 $ 10.46 $ 10.26
======= ======= ======= =======
TOTAL RETURN (A) ................................. 5.0% 4.4% 3.7% 2.8%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $19,829 $27,521 $55,731 $49,779
Ratios to average net assets:
Net expenses (b) ................................ 1.05% 1.05% 1.05% 1.05%
Gross expenses (b) .............................. 1.50% 1.17% 1.23% 1.44%
Net investment income (b) ....................... 0.19% 0.23% 0.48% 1.02%
Portfolio turnover rate .......................... 73% 113% 86% 1%
</TABLE>
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED --------------------------- 11/4/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 10.74 $ 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) ......... 0.51 0.42 0.32 0.26
------- ------- ------- -------
Total from investment operations ................ 0.51 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 ................... $ 11.25 $ 10.74 $ 10.45 $ 10.26
======= ======= ======= =======
TOTAL RETURN (A) ................................. 4.8% 4.0% 3.4% 2.7%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 6,250 $14,024 $16,345 $ 1,806
Ratios to average net assets:
Net expenses (b) ................................ 1.35% 1.35% 1.35% 1.35%
Gross expenses (b) .............................. 1.87% 1.55% 1.66% 4.97%
Net investment income (loss) (b) ................ (0.09)% (0.08)% 0.29% 0.72%
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 SMALL CAP PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED ----------------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES ------------- ------------- --------------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 16.57 $ 17.39 $ 20.02 $ 18.44 $ 15.95 $ 14.35
-------- ---------- ---------- ---------- -------- --------
Income (loss) from investment operations:
Net investment income (loss) (c) ............ 0.04 0.10 0.08 0.07 0.11 0.13
Net realized and unrealized gain (loss) ..... 0.64 0.17 (d) (2.60) 4.92 3.68 2.95
-------- ---------- ---------- ---------- -------- --------
Total from investment operations ............ 0.68 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 ............... $ 17.25 $ 16.57 $ 17.39 $ 20.02 $ 18.44 $ 15.95
-------- ---------- ---------- ---------- -------- --------
TOTAL RETURN (A) ............................. 4.1% 1.8% (12.6)% 28.1% 23.9% 21.5%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ..... $844,659 $ 906,945 $1,411,503 $1,445,075 $981,405 $646,371
Ratios to average net assets:
Net expenses (b) ............................ 0.83% 0.81% 0.81% 0.82% 0.84% 0.84%
Gross expenses (b) .......................... 0.83% 0.81% 0.81% 0.82% 0.84% 0.84%
Net investment income (b) ................... 0.51% 0.60% 0.50% 0.35% 0.60% 0.90%
Portfolio turnover rate ...................... 33% 50% 46% 56% 51% 70%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED --------------------------- 1/30/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES ----------- ------------- ------------ -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 16.51 $ 17.35 $ 20.02 $ 18.75
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ............ 0.02 0.06 0.03 0.01
Net realized and unrealized gain (loss) ..... 0.64 0.16(d) (2.60) 4.61
------- ------- ------- -------
Total from investment operations ............ 0.66 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 ............... $ 17.17 $ 16.51 $ 17.35 $ 20.02
======= ======= ======= =======
TOTAL RETURN (A) ............................. 4.0% 1.5% (12.9)% 25.6%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ..... $60,197 $86,413 $93,547 $46,097
Ratios to average net assets:
Net expenses (b) ............................ 1.11% 1.09% 1.09% 1.14%
Gross expenses (b) .......................... 1.11% 1.09% 1.09% 1.23%
Net investment income (b) ................... 0.25% 0.33% 0.21% 0.12%
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 GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED ------------------------------------------ 1/4/96* TO
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96
INSTITUTIONAL SHARES -------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 14.56 $ 13.14 $ 11.91 $ 11.48 $ 10.00
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.08 0.19 0.10 0.14 0.09
Net realized and unrealized gain (loss) ......... (0.45) 1.95 1.90 1.58 1.49
------- ------- ------- ------- -------
Total from investment operations ................ (0.37) 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 ................... $ 14.19 $ 14.56 $ 13.14 $ 11.91 $ 11.48
======= ======= ======= ======= =======
TOTAL RETURN (A) ................................. (2.5)% 16.4% 17.1% 15.3% 15.8%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $91,517 $63,557 $17,710 $10,359 $ 9,784
Ratios to average net assets:
Net expenses (b) ................................ 1.05% 1.05% 1.05% 1.05% 1.05%
Gross expenses (b) .............................. 1.05% 1.21% 2.18% 2.55% 5.06%
Net investment income (b) ....................... 1.18% 1.35% 1.07% 1.02% 1.70%
Portfolio turnover rate .......................... 31% 43% 48% 64% 74%
</TABLE>
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED --------------------------- 1/30/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 14.56 $ 13.16 $ 11.92 $ 11.31
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.06 0.13 0.09 0.08
Net realized and unrealized gain (loss) ......... (0.44) 1.97 1.88 1.78
------- ------- ------- -------
Total from investment operations ................ (0.38) 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 ................... $ 14.18 $ 14.56 $ 13.16 $ 11.92
======= ======= ======= =======
TOTAL RETURN (A) ................................. (2.6)% 16.1% 16.8% 16.7%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 6,317 $ 6,262 $ 4,824 $ 2,290
Ratios to average net assets:
Net expenses (b) ................................ 1.35% 1.35% 1.35% 1.35%
Gross expenses (b) .............................. 1.61% 1.80% 2.85% 4.23%
Net investment income (b) ....................... 0.82% 0.95% 0.77% 0.67%
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 INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED -------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................. $ 17.29 $ 15.23 $ 13.97 $ 13.62 $ 12.50 $ 11.23
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) (c) .................... 0.12 0.34 0.18 0.22 0.17 0.19
Net realized and unrealized gain (loss) ............. (0.90) 3.25 2.03 1.40 1.76 1.29
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations .................... (0.78) 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 ....................... $ 16.51 $ 17.29 $ 15.23 $ 13.97 $ 13.62 $ 12.50
========== ========== ========== ========== ========== ==========
TOTAL RETURN (A) ..................................... (4.5)% 24.1% 16.0% 11.8% 15.6% 13.1%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............. $3,258,450 $3,584,093 $2,879,289 $2,099,724 $1,816,173 $1,299,549
Ratios to average net assets:
Net expenses (b) ................................... 0.88% 0.88% 0.90% 0.89% 0.91% 0.95%
Gross expenses (b) .................................. 0.88% 0.88% 0.90% 0.89% 0.91% 0.95%
Net investment income (b) ........................... 1.46% 2.09% 1.37% 1.18% 1.93% 1.82%
Portfolio turnover rate .............................. 32% 35% 41% 37% 39% 63%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED ------------------------ 1/23/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES -------- -------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................. $ 17.28 $ 15.23 $ 13.95 $ 13.29
-------- -------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) .................... 0.10 0.31 0.18 0.16
Net realized and unrealized gain (loss) ............. (0.92) 3.22 2.00 1.71
-------- -------- ------- -------
Total from investment operations .................... (0.82) 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 ....................... $ 16.46 $ 17.28 $ 15.23 $ 13.95
-------- -------- ------- -------
TOTAL RETURN (A) ..................................... (4.8)% 23.7% 15.8% 14.1%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............. $157,433 $138,131 $47,303 $10,794
Ratios to average net assets:
Net expenses (b) .................................... 1.15% 1.16% 1.24% 1.25%
Gross expenses (b) .................................. 1.15% 1.16% 1.24% 1.61%
Net investment income (b) ........................... 1.22% 1.87% 1.02% 0.37%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
82
<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>
SIX MONTHS YEAR ENDED
ENDED ------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 14.12 $ 11.40 $ 11.69 $ 11.93 $ 10.52 $ 10.38
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.13 0.14 0.05 0.07 0.08 0.14
Net realized and unrealized gain (loss) ......... 0.03 2.81 0.83 (0.03) 1.55 0.06
-------- -------- -------- -------- -------- --------
Total from investment operations ................ 0.16 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 ................... $ 14.28 $ 14.12 $ 11.40 $ 11.69 $ 11.93 $ 10.52
======== ======== ======== ======== ======== ========
TOTAL RETURN (A) ................................. 1.1% 26.1% 7.6% 0.3% 15.6% 1.9%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $270,859 $217,684 $177,779 $141,695 $126,973 $115,534
Ratios to average net assets:
Net expenses (b) ................................ 0.95% 1.01% 1.04% 1.09% 1.12% 1.13%
Gross expenses (b) .............................. 0.95% 1.01% 1.04% 1.09% 1.12% 1.13%
Net investment income (b) ....................... 1.78% 1.17% 0.81% 0.73% 1.67% 1.56%
Portfolio turnover rate .......................... 33% 50% 56% 63% 101% 118%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED ----------------------- 2/13/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 14.06 $ 11.38 $ 11.69 $ 12.32
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.08 0.09 0.01 0.02
Net realized and unrealized gain (loss) ......... 0.05 2.80 0.83 (0.42)
------- ------- ------- -------
Total from investment operations ................ 0.13 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 ................... $ 14.19 $ 14.06 $ 11.38 $ 11.69
======= ======= ======= =======
TOTAL RETURN (A) ................................. 0.9% 25.6% 7.2% (3.2)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 2,129 $ 2,441 $ 2,646 $ 1,873
------- ------- ------- -------
Ratios to average net assets:
Net expenses (b) ................................ 1.43% 1.43% 1.43% 1.43%
Gross expenses (b) .............................. 2.15% 2.12% 1.93% 3.39%
Net investment income (b) ....................... 1.14% 0.77% 0.43% 0.34%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
83
<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>
SIX MONTHS YEAR ENDED
ENDED ------------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES ------------- ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 10.70 $ 6.94 $ 9.20 $ 11.21 $ 9.24 $ 9.86
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.03 0.09 0.10 0.10 0.07 0.08
Net realized and unrealized gain (loss) ......... (0.94) 3.77 (2.26) (1.18) 2.11 (0.66)
-------- -------- -------- -------- -------- --------
Total from investment operations ................ (0.91) 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 ................... $ 9.79 $ 10.70 $ 6.94 $ 9.20 $ 11.21 $ 9.24
======== ======== ======== ======== ======== ========
TOTAL RETURN (A) ................................. (8.5)% 55.8% (23.5)% (9.8)% 23.6% (5.9)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $383,863 $465,278 $298,033 $236,340 $145,328 $ 35,216
Ratios to average net assets:
Net expenses (b) ................................ 1.27% 1.24% 1.28% 1.32% 1.38% 1.30%
Gross expenses (b) .............................. 1.27% 1.25% 1.29% 1.33% 1.48% 2.00%
Net investment income (b) ....................... 0.56% 1.05% 1.84% 1.26% 1.40% 1.22%
Portfolio turnover rate .......................... 40% 46% 36% 40% 51% 102%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED --------------------------- 1/8/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 10.74 $ 6.97 $ 9.20 $ 11.45
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.01 0.06 0.11 0.07
Net realized and unrealized gain (loss) ......... (0.95) 3.79 (2.26) (1.42)
------- ------- ------- -------
Total from investment operations ................ (0.94) 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 ................... $ 9.80 $ 10.74 $ 6.97 $ 9.20
======= ======= ======= =======
TOTAL RETURN (A) ................................. (8.8)% 55.3% (23.3)% (12.0)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 9,531 $10,491 $ 8,191 $ 7,769
Ratios to average net assets:
Net expenses (b) ................................ 1.60% 1.60% 1.60% 1.60%
Gross expenses (b) .............................. 1.76% 1.75% 1.76% 1.93%
Net investment income (b) ....................... 0.27% 0.73% 1.54% 1.01%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
84
<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>
SIX MONTHS YEAR ENDED
ENDED -----------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES ----------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 9.29 $ 9.89 $ 10.03 $ 9.88 $ 10.10 $ 9.24
------- -------- -------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.29 0.55 0.55 0.59 0.56 0.60
Net realized and unrealized gain (loss) ......... (0.07) (0.60) 0.01 0.23 (0.14) 0.86
------- -------- -------- ------- ------- -------
Total from investment operations ................ 0.22 (0.05) 0.56 0.82 0.42 1.46
------- -------- -------- ------- ------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.29) (0.55) (0.55) (0.60) (0.57) (0.60)
Net realized gain ............................... -- -- (0.15) (0.07) (0.07) --
------- -------- -------- ------- ------- -------
Total distributions ............................. (0.29) (0.55) (0.70) (0.67) (0.64) (0.60)
------- -------- -------- ------- ------- -------
Net asset value, end of period ................... $ 9.22 $ 9.29 $ 9.89 $ 10.03 $ 9.88 $ 10.10
======= ======== ======== ======= ======= =======
TOTAL RETURN (A) ................................. 2.4% (0.5)% 5.8% 8.6% 4.4% 16.2%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $67,650 $ 91,557 $100,397 $92,428 $69,906 $46,083
Ratios to average net assets:
Net expenses (b) ................................ 0.79% 0.76% 0.78% 0.80% 0.80% 0.80%
Gross expenses (b) .............................. 0.80% 0.76% 0.79% 0.81% 0.88% 0.97%
Net investment income (b) ....................... 6.30% 5.74% 5.45% 5.81% 5.77% 6.07%
Portfolio turnover rate .......................... 220% 549% 335% 447% 460% 244%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED ----------------------- 3/5/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES ------- ------- -------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 9.29 $ 9.88 $ 10.02 $ 9.86
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.28 0.51 0.52 0.46
Net realized and unrealized gain (loss) ......... (0.07) (0.58) 0.01 0.24
------- ------- ------- -------
Total from investment operations ................ 0.21 (0.07) 0.53 0.70
------- ------- ------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.28) (0.52) (0.52) (0.47)
Net realized gain ............................... -- -- (0.15) (0.07)
------- ------- ------- -------
Total distributions ............................. (0.28) (0.52) (0.67) (0.54)
------- ------- ------- -------
Net asset value, end of period ................... $ 9.22 $ 9.29 $ 9.88 $ 10.02
======= ======= ======= =======
TOTAL RETURN (A) ................................. 2.3% (0.8)% 5.4% 7.2%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $10,563 $11,605 $15,226 $ 7,283
Ratios to average net assets:
Net expenses (b) ................................ 1.10% 1.10% 1.10% 1.10%
Gross expenses (b) .............................. 1.23% 1.15% 1.21% 1.49%
Net investment income (b) ....................... 6.03% 5.37% 5.11% 5.46%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
85
<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
SIX MONTHS YEAR PERIOD
ENDED ENDED 1/2/98* TO
6/30/00+ 12/31/99 12/31/98
INSTITUTIONAL SHARES ------- -------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period ............. $ 8.77 $ 9.42 $ 10.00
------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.48 0.92 0.88
Net realized and unrealized gain (loss) ......... (0.77) (0.65) (0.57)
------- ------- -------
Total from investment operations ................ (0.29) 0.27 0.31
------- ------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.48) (0.92) (0.89)
Net realized gain ............................... -- -- --
------- ------- -------
Total distributions ............................. (0.48) (0.92) (0.89)
------- ------- -------
Net asset value, end of period ................... $ 8.00 $ 8.77 $ 9.42
======= ======= =======
TOTAL RETURN (A) ................................. (3.4)% 2.9% 2.9%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $82,503 $83,664 $41,935
Ratios to average net assets:
Net expenses (b) ................................ 0.75% 0.94% 1.05%
Gross expenses (b) .............................. 1.00% 1.06% 1.55%
Net investment income (b) ....................... 11.47% 10.08% 8.87%
Portfolio turnover rate .......................... 100% 190% 418%
</TABLE>
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS YEAR PERIOD
ENDED ENDED 2/24/98* TO
6/30/00+ 12/31/99 12/31/98
OPEN SHARES -------- -------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ............. $ 8.78 $ 9.42 $ 10.37
------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.47 0.90 0.72
Net realized and unrealized gain (loss) ......... (0.78) (0.65) (0.94)
------- ------- -------
Total from investment operations ................ (0.31) 0.25 (0.22)
------- ------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.47) (0.89) (0.73)
Net realized gain ............................... -- -- --
------- ------- -------
Total distributions ............................. (0.47) (0.89) (0.73)
------- ------- -------
Net asset value, end of period ................... $ 8.00 $ 8.78 $ 9.42
======= ======= =======
TOTAL RETURN (A) ................................. (3.7)% 2.7% (2.2)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $17,631 $ 1,305 $ 949
Ratios to average net assets:
Net expenses (b) ................................ 1.05% 1.22% 1.35%
Gross expenses (b) .............................. 1.40% 2.92% 9.77%
Net investment income (b) ....................... 11.29% 9.89% 8.59%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
86
<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>
SIX MONTHS YEAR ENDED
ENDED -----------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES ------------- ------------- ------------ -------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 10.19 $ 10.71 $ 9.63 $ 10.78 $ 10.85 $ 10.23
-------- -------- -------- -------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.18 0.36 0.32 0.40 0.54 0.70
Net realized and unrealized gain (loss) ......... (0.54) (0.68) 0.98 (1.05) 0.03 1.25
-------- -------- -------- -------- ------- -------
Total from investment operations ................ (0.36) (0.32) 1.30 (0.65) 0.57 1.95
-------- -------- -------- -------- ------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.06) -- (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 ............................. (0.06) (0.20) (0.22) (0.50) (0.64) (1.33)
-------- -------- -------- -------- ------- -------
Net asset value, end of period ................... $ 9.77 $ 10.19 $ 10.71 $ 9.63 $ 10.78 $ 10.85
======== ======== ======== ======== ======= =======
TOTAL RETURN (A) ................................. (3.4)% (2.9)% 13.2% (5.6)% 5.5% 19.4%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 66,241 $ 73,871 $115,500 $110,185 $88,430 $45,624
Ratios to average net assets:
Net expenses (b) ................................ 1.09% 1.09% 1.09% 1.06% 1.05% 1.05%
Gross expenses (b) .............................. 1.24% 1.13% 1.10% 1.10% 1.21% 1.25%
Net investment income (b) ....................... 3.76% 3.55% 4.27% 5.13% 5.54% 5.99%
Portfolio turnover rate .......................... 71% 139% 187% 166% 242% 190%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED ----------------------- 1/8/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES ---------- -------- -------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 10.14 $ 10.69 $ 9.63 $ 10.64
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.17 0.34 0.31 0.43
Net realized and unrealized gain (loss) ......... (0.53) (0.69) 0.96 (0.98)
------- ------- ------- -------
Total from investment operations ................ (0.36) (0.35) 1.27 (0.55)
------- ------- ------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.06) -- (0.21) (0.08)
Net realized gain ............................... -- (0.08) -- (0.12)
Capital ........................................ -- (0.12) -- (0.26)
------- ------- ------- -------
Total distributions ............................. (0.06) (0.20) (0.21) (0.46)
------- ------- ------- -------
Net asset value, end of period ................... $ 9.72 $ 10.14 $ 10.69 $ 9.63
======= ======= ======= =======
TOTAL RETURN (A) ................................. (3.5)% (3.2)% 12.9% (4.8)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $14,950 $ 3,783 $ 4,751 $ 2,772
Ratios to average net assets:
Net expenses (b) ................................ 1.35% 1.35% 1.35% 1.35%
Gross expenses (b) .............................. 1.99% 1.91% 1.92% 2.71%
Net investment income (b) ....................... 3.51% 3.30% 4.01% 4.68%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
87
<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>
SIX MONTHS YEAR ENDED
ENDED ------------------------------------------------------------
6/30/00+ 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
INSTITUTIONAL SHARES --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 8.83 $ 9.01 $ 9.66 $ 10.01 $ 9.52 $ 9.10
-------- -------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.29 0.61 0.76 0.81 0.76 0.75
Net realized and unrealized gain (loss) ......... (0.18) (0.18) (0.69) (0.28) 0.50 0.43
-------- -------- -------- -------- -------- -------
Total from investment operations ................ 0.11 0.43 0.07 0.53 1.26 1.18
-------- -------- -------- -------- -------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.29) (0.61) (0.44) (0.82) (0.77) (0.76)
Net realized gain ............................... -- -- -- (0.06) -- --
Capital ......................................... -- -- (0.28) -- -- --
-------- -------- -------- -------- -------- -------
Total distributions ............................. (0.29) (0.61) (0.72) (0.88) (0.77) (0.76)
-------- -------- -------- -------- -------- -------
Net asset value, end of period ................... $ 8.65 $ 8.83 $ 9.01 $ 9.66 $ 10.01 $ 9.52
======== ======== ======== ======== ======== =======
TOTAL RETURN (A) ................................. 1.3% 4.9% 0.8% 5.3% 13.7% 13.6%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $289,513 $306,116 $397,599 $399,452 $199,083 $78,474
Ratios to average net assets:
Net expenses (b) ................................ 0.91% 0.91% 0.90% 0.94% 1.08% 1.09%
Gross expenses (b) .............................. 0.91% 0.91% 0.90% 0.95% 1.08% 1.09%
Net investment income (b) ....................... 6.76% 6.82% 6.94% 7.42% 7.88% 8.02%
Portfolio turnover rate .......................... 113% 257% 276% 161% 189% 205%
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED PERIOD
ENDED ----------------------- 1/23/97* TO
6/30/00+ 12/31/99 12/31/98 12/31/97
OPEN SHARES ---------- -------- -------- =-------===
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 8.83 $ 9.02 $ 9.66 $ 10.08
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) (c) ................ 0.28 0.58 0.73 0.72
Net realized and unrealized gain (loss) ......... (0.18) (0.19) (0.69) (0.35)
------- ------- ------- -------
Total from investment operations ................ 0.10 0.39 0.04 0.37
------- ------- ------- -------
Less distributions from and in excess of:
Net investment income ........................... (0.28) (0.58) (0.40) (0.73)
Net realized gain ............................... -- -- -- (0.06)
Capital ......................................... -- -- (0.28) --
------- ------- ------- -------
Total distributions ............................. (0.28) (0.58) (0.68) (0.79)
------- ------- ------- -------
Net asset value, end of period ................... $ 8.65 $ 8.83 $ 9.02 $ 9.66
======= ======= ======= =======
TOTAL RETURN (A) ................................. 1.1% 4.4% 0.4% 3.8%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $13,790 $16,035 $22,460 $15,300
Ratios to average net assets:
Net expenses (b) ................................ 1.31% 1.27% 1.28% 1.39%
Gross expenses (b) .............................. 1.31% 1.27% 1.28% 1.44%
Net investment income (b) ....................... 6.36% 6.49% 6.60% 6.92%
SEE NOTES TO FINANCIAL HIGHLIGHTS.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
88
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
* Commencement of operations.
+ Unaudited.
(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 six months ended 6/30/00 and year ended 12/31/99, net investment income
has been computed using the average shares method.
(d) The amount shown for a share outstanding did 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.
89
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
1. ORGANIZATION
The Lazard Funds, Inc. (the "Fund") was incorporated in Maryland on May 17,
1991 and is registered under the Investment Company Act of 1940, as amended
(the "Act"), 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"), NASDAQ or other U.S. exchanges 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 SECURITIES TRANSACTIONS AND INVESTMENT INCOME--Portfolio
securities transactions are accounted for on trade date. Realized gains and
losses on sales of investments are recorded on a specific identification basis
and dividend income is recorded on the ex-dividend date. 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. For the period ended June 30, 2000, the value
of the securities on loan and corresponding collateral received were as
follows:
90
<PAGE>
================================================================================
THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
SECURITIES
PORTFOLIO LOANED COLLATERAL
------------ ------------
Small Cap(1) $ 7,569,363 $ 7,740,100
Global Equity(2) 7,521,238 7,863,493
International Equity(1) 206,082,372 216,818,556
International Small Cap (2) 25,234,983 26,515,880
Emerging Markets(2) 97,687,267 101,680,469
(1) COLLATERAL IS U.S. TREASURY OBLIGATIONS.
(2) COLLATERAL IS CASH.
(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 rates 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 gains (losses) from
foreign currency transactions represent net foreign currency 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
currency 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:
PORTFOLIO EXPIRING 2006 EXPIRING 2007
--------- ------------- -------------
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
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:
PORTFOLIO AMOUNT
---------------------------- ----------
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
(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.
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THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Income dividends and capital gains distributions are determined in accordance
with federal income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments of foreign
currency transactions. Book and tax differences relating to shareholder
distributions will result in reclassifications and may affect the allocation
between investment income-net, realized gains-net, and paid in capital.
(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 segregated 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 "Investment Manager"), a
division of Lazard Fr-res & Co. LLC, on behalf of each Portfolio. Pursuant to
the Management Agreements, the Investment Manager will regularly provide the
Portfolios with investment research, advice and supervision and furnish
continuously an investment program for each Portfolio consistent with its
investment objectives and policies, including the purchase, retention and
disposition of securities. Each of the Portfolios pays the Investment Manager
an investment management fee at the annual rate set forth below as a percentage
of the average daily net assets of the relevant Portfolio:
PORTFOLIO ANNUAL RATE
---------------------------- -----------
Equity 0.75%
Mid Cap 0.75
Small Cap 0.75
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
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THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
The investment management fees are accrued daily and payable monthly.
The Investment Manager has voluntarily agreed to reduce its fees and, if
necessary, reimburse the following Portfolios if annualized operating expenses
exceed the following percentages of average daily net assets for the respective
shares:
INSTITUTIONAL SHARES OPEN SHARES
ANNUAL ANNUAL
PORTFOLIO OPERATING EXPENSES OPERATING EXPENSES
---------------------------- ---------------------- -------------------
Mid Cap 1.05% 1.35%
Global Equity 1.05 1.35
International Small Cap N/A 1.43
Emerging Markets N/A 1.60
Bond N/A 1.10
High Yield 0.75 1.05
International Fixed-Income 1.09 1.35
For the period ended June 30, 2000, the Investment Manager waived part of its
management fee, or reimbursed the indicated Portfolios for other expenses as
follows:
INSTITUTIONAL SHARES OPEN SHARES
AMOUNT WAIVED/ AMOUNT WAIVED/
PORTFOLIO REIMBURSED REIMBURSED
------------------ -------------------- --------------
Mid Cap $48,952 $24,465
Global Equity -- 8,388
International
Small Cap -- 8,374
Emerging Markets -- 7,744
Bond -- 7,066
High Yield 93,162 21,674
International
Fixed-Income 48,522 13,740
The Fund has entered into an administrative agreement with 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 Distribution and Servicing Plan (the "Plan"), in
accordance with Rule 12b-1 under the Act. Under the Plan, the Distributor is
entitled to an asset-based fee to support distribution efforts and/or servicing
of Open Shares accounts. For such services, each Portfolio has agreed to pay a
monthly fee at an annual rate of 0.25% of the average daily net assets of the
Portfolio's Open Shares. Under the Plan, the Distributor may make payments to
external organizations, such as 401(k) alliance sponsors, discount brokers and
bank trust departments, in respect of these services.
Certain Directors of the Fund are Managing Directors of the Investment Manager.
The Fund pays each Director who is not an employee or an affiliated person of
the Investment Manager its allocated portion of a fixed fee of $30,000 per
year, plus $2,500 per meeting attended for the Fund and Lazard Retirement
Series, Inc., another multi-portfolio fund advised by the Investment Manager,
and reimburses such Directors for travel and other out of pocket expenses. In
addition, the Chairman of the Audit Committee for the Fund and Lazard
Retirement Series, Inc. also receives an annual fee of $5,000.
4. SECURITIES TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
Purchases and sales of portfolio securities (excluding short-term securities),
for the period ended June 30, 2000 were as follows:
PORTFOLIO PURCHASES SALES
------------------------------- -------------- --------------
Equity $ 86,103,079 $ 243,185,089
Mid Cap 22,983,191 39,836,827
Small Cap 302,544,560 431,352,754
Global Equity 55,254,854 26,379,127
International Equity 1,080,093,295 1,279,557,381
International Small Cap 139,864,060 85,100,167
Emerging Markets 151,876,323 211,358,553
Bond(1) 200,296,327 223,365,020
High Yield 109,005,946 88,497,106
International Fixed-Income(2) 55,664,689 46,405,679
Strategic Yield(3) 263,241,845 270,958,106
(1) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $188,027,897
AND $205,621,535, RESPECTIVELY.
(2) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $7,512,889
AND $10,172,604, RESPECTIVELY.
(3) INCLUDES PURCHASES AND SALES OF U.S. GOVERNMENT SECURITIES OF $60,878,383
AND $71,247,594, RESPECTIVELY.
<PAGE>
For the period ended June 30, 2000, brokerage commissions were paid to Lazard
Fr-res & Co. LLC for portfolio transactions executed on behalf of the
Portfolios as follows:
COMMISSIONS
PORTFOLIO PAID
------------------ -----------
Equity $18,910
Mid Cap 3,145
Global Equity 4,418
Emerging Markets 275
5. LINE OF CREDIT
The Fund has entered into a $50 million Line of Credit Agreement (the
"Agreement") with State Street, effective April 24, 1996, primarily for
temporary or emergency pur-
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THE LAZARD FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
poses, 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
period ended June 30, 2000, Emerging Markets Portfolio paid a total of $18,726
in interest, for which the Portfolio was reimbursed by the Investment Manager,
and the Fund had borrowings under this Agreement as follows:
MAXIMUM AVERAGE DAILY WEIGHTED AVERAGE
PORTFOLIO LOAN AMOUNT OF LOAN INTEREST RATE
------------------ -------------- ---------------- -----------------
Emerging Markets $50,000,000 $35,468,092 6.336%
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.
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<PAGE>
THE LAZARD FUNDS, INC.
30 Rockefeller Plaza
New York, New York 10112
Telephone: (800) 823-6300
http://www.lazardnet.com
INVESTMENT MANAGER
Lazard Asset Management
30 Rockefeller Plaza
New York, New York 10112
Telephone: (800) 823-6300
DISTRIBUTOR
Lazard Freres & Co. LLC
30 Rockefeller Plaza
New York, New York 10112
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
P.O. Box 9363
Boston, Massachusetts 02205-9363
Telephone: (800) 986-3455
INDEPENDENT PUBLIC ACCOUNTANTS
Anchin, Block & Anchin LLP
1375 Broadway
New York, New York 10018
http://www.anchin.com
LEGAL COUNSEL
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
<PAGE>
LAZARD Funds
30 Rockefeller Plaza
New York, New York 10112
Telephone (800) 823-6300
http://www.lazardnet.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.
