Geif citywire wealth manager conference june 2013 final
The Importance of MGlobal Equity InJuneJK l WKyle WaPortfolio ManMaintaining a Balancedncome Portfolio2013ldhaldhauernager/Analyst
Ri k A titRisk AppetiteA Slow Migration Back to RiskRiskgHigh YieldDebtDebtInvestmentGrade DebtGovernment2009 2010 2011DebtFor illustrative purposes onlyEquityTime2012 20131 Lazard Asset Management1 Lazard Asset Management
C i i h Di id d Yi ldYield Opportunities Exist OutsCompanies with Dividend Yield >By Market Cap By Beta32%68%Market Cap> $10B56%68%Market Cap < $10BBeta < 0.9More DefSmall-cap, less-defensive, and EM compAs of 31 December 2012Data based on the MSCI ACWI. The data presented above do not represent any product or strategy managed bySource: Lazard, MSCI3% i h MSCI ACWIside Defensive Mega Caps> 3% in the MSCI ACWIa By Region44%Beta > 0.9Less Defensive64%36% DevelopedMarketsEmergingMarkets64%9,fensivepanies increase the high-yield universe.2 Lazard Asset Management2 Lazard Asset Managementy Lazard and are provided for illustrative purposes only.
Wh I l d E i M kWhy Include Emerging Marke6(%)Outperformance of Top Yielders13.34020Global Excluding Emerging MarketsIn addition tomarkets increenhances yiel1 Relative performance of top quartile by trailing dividend yieldData indexed from 29 December 2000 to 31 December 2012Based on Societe Generale’s proprietary universe.p p yThe performance quoted represents past performance. Past performance is not a reliable indicator of future resuproduct or strategy managed by Lazard Asset Management and are provided for illustrative purposes only.Source: Societe Generalet ?ets?5.1Global Including Emerging Marketso enhancing returns, including emergingeases diversification potential andeld3 Lazard Asset Management3 Lazard Asset Managementlts. The above returns do not represent the performance of any.
S f I St k ESafe Income Stocks are ExpeRelative P/E of US High Yielding Stocks from Defens1.5(x)g g1 01.00.50.01952 1955 1958 1961 1964 1967 1970 1973 1976 1979 19Source: Empirical Research1 US Consumer Staples, Telecom and Utilities Stocks in the Top Quintile of Dividend Yield Relative Trailing-P/Eiensive...ive Sectors1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 20124 Lazard Asset Management4 Lazard Asset ManagementE Ratios 1952 Through March 2013 Cap weighted
d H B “B d P...and Have Become “Bond PCorrelation of US High Yielding Stocks Relative Perfo100(%)5075250(50)(25)(75)1929 1933 1937 1941 1945 1949 1953 1957 1961 1965 1969Source: Empirical Research1 US Highest Quintile of Dividend Yield Correlation of Relative Returns with Those of Treasury Bonds 1929 Thri ”roxies”ormance and Treasury Bonds1Average9 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2015 Lazard Asset Management5 Lazard Asset Managementrough March 2013, trailing 2 year data
US Top-quartile Dividend YieE t Di tEurope at a Discount12m forward PE premium/discount10%15%Europe US0%5%-10%-5%-20%-15%-30%-25%-35%02 03 04 05 06 07YeAs of 30 April 2013Source: Datastream, Goldman Sachs Global ECS Researchld Stocks Trade at Premium,08 09 10 11 12 13ear6 Lazard Asset Management6 Lazard Asset Management
European Dividend Yields GrYi ldYields% of companies with DY>CYp55%60% % of companies with DY>CYAverage40%45%50%30%35%40%20%25%5%10%15%0%5%1999 2000 2001 2002 2003 2004 2005 2As of 30 April 2013Source: Datastream, Goldman Sachs Global ECS Researcheater than Corporate Bond006 2007 2008 2009 2010 2011 2012 20137 Lazard Asset Management7 Lazard Asset Management
C li l St k P i d fCyclical Stocks- Poised for aCyclical Income Minus Defensive Income – Rolling 1280%100%60%80%40%0%20%Defensive Income Stocks Outperform-20%-40%Dec1989Dec1990Dec1991Dec1992Dec1993Dec1994Dec1995Dec1996Dec1997Dec1998Dec1999Dec200As of 31 May 2013Source Merrill Lynch Bank of AmericaR b d?Rebound?2 months Performance DifferenceCyclical Income Stocks Outperformc0Dec2001Dec2002Dec2003Dec2004Dec2005Dec2006Dec2007Dec2008Dec2009Dec2010Dec2011Dec20128 Lazard Asset Management8 Lazard Asset Management
Cyclical Income Stocks TendR tRatesCyclical Income Minus Defensive Income – Rolling 1280%100%Cyclicals vs Defensives 1yr % change in Uy g60%20%40%0%-40%-20%-60%Jan1998Jan1999Jan2000Jan2001Jan2002Jan2003Jan2004Jan200As of 31 May 2013Source Merrill Lynch Bank of Americato Outperform Amid Rising2 months Performance DifferenceUS 10yr yieldR2= 57%R2= 57%n05Jan2006Jan2007Jan2008Jan2009Jan2010Jan2011Jan2012Jan20139 Lazard Asset Management9 Lazard Asset Management
L d Gl b l E it ILazard Global Equity IncomeGlobal Equity Income Active Weight by Sector810q y g y(%)46240-20-6-4-8ConsumerStaplesHealthCareMaterialsInformationTechnologyEnergyAs of 31 March 2013Source MSCI and Lazard Asset ManagementF dFundUtilities TelecomServicesIndustrials ConsumerDiscretionaryFinancialsy10 Lazard Asset Management10 Lazard Asset Management
M k t C B kdMarket Cap Breakdown60 050.060.040.030.020.010.00.0>£20 Billion £10-20 Billion £As at 31 March 2013Subject to changeSource: Lazard Asset Management/FactsetLazard Global Equity IncomeMSCI AC World Index£5-10 £1-5 >£1 billion11 Lazard Asset Management11 Lazard Asset Management
Holdings by SectorL d Gl b l E i ILazard Global Equity Income27.8Financials% ofPortfolio% ofAConsumer10.94.221.312.712.7ConsumerDiscretionaryTelecom ServicesFinancialsDiscretionary 12.7Bayerische Motoren WerkeDarden RestaurantsDirecional Engenharia SAElectroluxHasbroLas Vegas SandsMRV Engenharia e Participacoes10.310.510.98.710.2EnergyIndustrialsMRV Engenharia e ParticipacoesNagaCorpNutri/SystemPandoraSands ChinaTofas Turk Otomobil FabrikaValeoWynn ResortsConsumer Staples 4.16.812.04 65.16.8MaterialsInformationTechnologyConsumer Staples 4.1AviOriflame CosmeticsOrkla Ser ASyscoEnergy 8.7ConocoPhillipsEniRoyal Dutch Shell Cl A10.89.93.34.14.6UtilitiesConsumer StaplesHealth CareRoyal Dutch Shell Cl ASeadrillTotalTupras-Turkiye Petrol Rafinerileri ASFinancials 27.8Agricultural Bank of ChinaAllianzAmeriprise FinancialAviv REIT0.03.53.90 10 20 30Cash & EquivalentsUtilities(%)P tf li MSCI ACWIAviv REITAXABanco do BrasilBank Pembangunan Daerah Jawa BaratCapital One FinancialChina Construction Bank HDirect Line Insurance GroupDuke RealtyPortfolio MSCI ACWIAs of 31 March 2013The allocations and specific securities mentioned are based upon a portfolio that represents the proposed investmThe securities mentioned are not necessarily held by Lazard for all client portfolios, and their mention should notthat any investment in these securities was or will prove to be profitable or that the investment decisions we mathat any investment in these securities was, or will prove to be, profitable, or that the investment decisions we mano assurance that any securities referenced herein are currently held in the portfolio or that securities sold have nPlease note that cash is not viewed as a strategic asset class.Source: Lazard, MSCIMSCIACWI% ofPortfolio% of MSCIACWIFinancials (continued)% ofPortfolio% of MSCIACWIMaterials 5 1 6 810.9( )EPR PropertiesFibra Uno Administration SA REITIndustrial & Commercial Bank of ChinaKrung Thai BankLexington Realty TrustMack-Cali RealtyMedical Properties TrustMizuho Financial GroupMaterials 5.1 6.8Israel ChemicalsKumba Iron OreRexamSouthern CopperTelecom Services 12.7 4.2Belgacom SABezeq The Israeli TelecomCenturyLink10.8Mizuho Financial GroupPeoples United FinancialSampoSberbank of Russia (ADR)SwedbankSwiss ReTisco Financial GroupWestfield Group REITZurich Insurance Group AGCenturyLinkMobile Telesystems (ADR)MTN GroupTelstraVodacom GroupVodafone GroupUtilities 3.3 3.5Duet GroupR d El t i10.810.3Zurich Insurance Group AGHealth Care 4.6 9.9Johnson & JohnsonLife Healthcare Group HoldingsPfizerSanofi-AventisIndustrials 10.2 10.5AtlantiaChangsha Zoomlion Heavy IndustryRed ElectricaCash & Equivalents 3.9 0.0Total Portfolio 100.0 100.021.3Changsha Zoomlion Heavy IndustryGlobaltrans Investment (GDR, RegS)HarscoOrascom Construction IndustriesRepublic Services Cl ARexelTransurban GroupInformationTechnology 6 8 12 0Technology 6.8 12.0AppleCisco SystemsIntelMicrosoftQualcommRadiant Opto ElectronicsSiliconware Precision Industriesment for a fully discretionary account. Allocations and security selection are subject to change.be considered a recommendation or solicitation to purchase or sell these securities. It should not be assumedake in the future will be profitable or equal to the investment performance of securities referenced herein There is12 Lazard Asset Management12 Lazard Asset Managementake in the future will be profitable or equal to the investment performance of securities referenced herein. There isnot been repurchased.
F d P f SFund Performance SummaryPerformance (%) – Institutional Share ClassQ1 2013 20Lazard Global Equity Income Fund 10.9 14MSCI AC W ld I d 14 2 11MSCI AC World Index 14.2 11Relative Performance -3.3 +3IMA OE Global Equity Income 13.9 10Quartile 3Annualised Returns (% p.a.) for periods ending 3Quartile 3Percentile 73 4Annualised Returns (% p.a.) for periods ending 31 YearLazard Global Equity Income Fund 18.6MSCI AC World Index 17.0Relative Performance +1.6IMA OE Global Equity Income 19.1Reporting Currency: SterlingReporting Date: 31 March 2013Past performance is not a reliable indicator of future resultsInstit tional share class (Income nits) All data in sterling and ill strated on a percentage gro th basis sell to selQuartile 2Percentile 46Institutional share class (Income units) All data in sterling and illustrated on a percentage growth basis, sell to selSource: Morningstar Direct012 2011 2010 2009 20084.9 -3.7 15.2 25.0 -20.91 7 6 2 16 8 20 6 19 51.7 -6.2 16.8 20.6 -19.53.2 +2.5 -1.6 +4.4 -1.40.5 -2.4 14.9 17.5 -17.61 3 2 2 21 March 20131 3 2 2 24 52 35 27 501 March 20133 Years 5 YearsSince Inception(1 October 2008)8.9 8.9 12.88.3 8.3 11.4+0.6 +0.6 +1.49.8 8.4 12.0ll net income rein ested at pa date Net of fees and e penses3 1 159 15 1413 Lazard Asset Management13 Lazard Asset Managementll, net income reinvested at pay date. Net of fees and expenses.
Th I t f M i t i iThe Importance of MaintaininRolling 3 Year Betag1.200.801.000.600.200.400.000 0ul08ep08ov08an09ar09ay09ul09ep09ov09an10ar10ay10ul10ep10JuSeNoJaMaMaJuSeNoJaMaMaJuSeAs at 31 March 2013The performance quoted represents past performance. Past performance is not a reliable indicator of future resuSource: LazardB l d P tf lig a Balanced Portfolioov10an11ar11ay11ul11ep11ov11an12ar12ay12ul12ep12ov12an13ar13NoJaMaMaJuSeNoJaMaMaJuSeNoJaMa14 Lazard Asset Management14 Lazard Asset Managementlts.
Consistently Robust Income GL d Gl b l E i ILazard Global Equity Income vs.Yield(%)78(%)56Target Yield4523014Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 44Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4As of 31 December 2012Charts depicts the rolling 12 month dividends paid by the representative account divided by the average price of tAll data in sterling. Performance is preliminary and presented gross of fees. This information is for illustrative purpLazard Global Equity Income MSCI ACWIAll data in sterling. Performance is preliminary and presented gross of fees. This information is for illustrative purpperformance. Please refer to the attached disclosures for performance presented on a net-of-fee basis and for apast performance. Past performance is not a reliable indicator of future results.Source: Lazard, FactSet, MSCIGenerationMSCI ACWIMSCI ACWIQ10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12the account during the period gross of taxes.poses only and is supplemental to the complete composite15 Lazard Asset Management15 Lazard Asset Managementposes only and is supplemental to the complete compositedescription of this composite. The performance quoted represents
Investment ProcessL d Gl b l E i ILazard Global Equity IncomeGlobal Equity Univ6000 Stocks6000 Stocks900 StocksAnalystsValuation FinaProdDividendSustainabilityCon60 – 100 StocksPortfolioConstructionPortfolioThe investment process is neither static nor sequential but ongoingverseFund ManagersSelected forCapital GrowthSelected forCapital Growthancialductivity Selected forIncome &GrowthSelected forIncome &GrowthnvictionsGrowthGrowthSell Discipline Deteriorating fundamentals New idea offers more attractivecombination of capitalSell Discipline Deteriorating fundamentals New idea offers more attractivecombination of capitalcombination of capitalappreciation potential and yield. Deteriorating income potential Risk managementcombination of capitalappreciation potential and yield. Deteriorating income potential Risk management17 Lazard Asset Management17 Lazard Asset Management
Wh L d Gl b l E it IWhy Lazard Global Equity Inc Access the best combination of quality and vaq y Balanced portfolio not biased towards global No UK bias No US bias Access to the strong fundamentals in emergin Higher yield than “bond proxies” and greaterAs of 31 March 2013 and is subject to change.F d?come Fund?aluationl mega capsng marketscapital appreciation potential18 Lazard Asset Management18 Lazard Asset Management
Gl b l E i IBiographiesKyle A. WaldhauerS i Vi P id P f li M /A lGlobal Equity IncomeSenior Vice President, Portfolio Manager/AnalystLazard Asset Management LLC (New York)Kyle Waldhauer is a Portfolio Manager/Analyst on thinternational strategies. Kyle has been in the investmerepresentative at Fidelity Investments. He has a BS inhe Global Equity Income team. He also works on a number of global andnt industry since 1994. Prior to joining Lazard in 1998, Kyle was a financialEconomics and Finance from Southern New Hampshire University.19 Lazard Asset Management19 Lazard Asset Management
R l t Di lRegulatory DisclosuresCertain information included herein is derived by Lazard in part from an MSCI indproduct or report, and does not endorse or express any opinion regarding this proauthor or source of any such information or analysis. MSCI makes no express or irespect to any Index Data or data derived therefrom. The MSCI Index Data may nor financial products.This is a financial promotion and is not intended to constitute investment advice.pdistribution only to professional investors and advisers authorised to carry out busReferences to Director and other titles are Lazard internal titles and may not implySecurities identified in this document are not necessarily held by Lazard Asset Manrecommendation or solicitation to purchase, sell or hold these securities. It shouldprofitableprofitable.Past performance is not a reliable indicator of future results. Investors are remindeto stock market and currency movements. When you sell your investment you mabetween the currency in which shares are denominated and currency of investmenHigh yielding securities may carry a greater risk of capital values falling or of limiteield sec rities nless he or she is prepared to accept a high degree of risk to bothyield securities unless he or she is prepared to accept a high degree of risk to bothdegree of risk due to the undeveloped nature of securities markets in the emergingstrategy is either suitable or should constitute a substantial part of their portfolio.The Lazard Global Equity Income Fund is a sub-fund of Lazard Investment FundThe Authorised Corporate Director of the fund is Lazard Fund Managers Limitedd i b r f IMA C pi f th Pr p t K I t r I f r ti Dand is a member of IMA. Copies of the Prospectus, Key Investor Information Doaddress below or at www.lazardassetmanagement.co.ukThere can be no assurance that the Funds objectives or performance target will beThe annual management charge is deducted from the capital of the fund. This willcapital growth.p gIssued and approved by Lazard Asset Management Limited, 50 Stratton Street, LoManagement Limited is authorised and regulated by the Financial Conduct AuthorThe contents of this document are confidential and should not be disclosed otherdex or indices (the “Index Data”). However, MSCI has not reviewed thisoduct or report or any analysis or other information contained herein or themplied warranties or representations and shall have no liability whatsoever withnot be further redistributed or used as a basis for other indices or any securitiesIn the UK this document, which is supplied for information only, is forpp ysiness under the Financial Services and Markets Act 2000.y any legal status or responsibility.nagement for all client portfolios, and should not be considered as ad also not be assumed that any investment in these securities were, or will be,ed that the value of shares and the income from them can fall as well as rise dueay get back less than you originally invested. Fluctuations in the rate of exchangent may have the effect of causing the value of investment to diminish or increase.ed prospects of capital growth or recovery. No investor should invest in highcapital and income In estments in emerging markets carr an abo e a eragecapital and income. Investments in emerging markets carry an above-averageg countries. Investors should consider whether or not investment in such ads, a UK-authorised Open Ended Investment Company (OEIC) and UCITS.d, which is authorised and regulated by the Financial Conduct Authority (FCA)t d R p rt d A t r il bl i E li h r t fr thocument and Report and Accounts are available in English on request from thee achievedl increase the income from the fund but may constrain or erode potential forondon W1J 8LL. Registered number in England 525667. Lazard Assetrity (FCA).than to the persons for whom it is intended.20 Lazard Asset Management20 Lazard Asset Management
C t t D t ilContact DetailsCompany: Lazard Asset Managemp y gAddress: 50 Stratton StreetLondon W1J 8LLJBroker SupportDesk Telephone: 0800 374810Desk Telephone: 0800 374810Fax: (020) 7659 5794E-Mail: email@example.comWebsite: lazardassetmanagementWebsite: lazardassetmanagementment Limitedt co ukt.co.uk21 Lazard Asset Management21 Lazard Asset Management