Lazard Developing Markets Equity Portfolio

The Lazard Developing Markets Equity Portfolio (DMEP) is a globallyfocused equity fund that seeks longterm capital appreciation by investing primarily in the equities of companies located in emerging and frontier markets. Managed by Lazard Asset Management, the portfolio combines rigorous fundamental research with a disciplined, bottomup approach to uncover opportunities that are often overlooked by larger, more traditional funds.

1. Investment Objective

The primary goal of DMEP is to deliver attractive, riskadjusted returns relative to a broad developingmarkets benchmark over a full market cycle. The fund targets a total return that includes both price appreciation and dividend income, while maintaining a level of volatility that is consistent with the inherent risks of emergingmarket equities.

2. Investment Philosophy

Lazards investment philosophy for the Developing Markets Equity Portfolio is built on three pillars:

• Fundamental depth: Indepth companylevel analysis, including onsite visits, management interviews, and local market research, to assess quality, growth prospects, and competitive positioning.
• Valuation discipline: Emphasis on buying securities at a margin of safety relative to intrinsic value, using a blend of absolute and relative valuation techniques.
• Country and sector diversification: A balanced exposure across a wide range of geographies and industries to mitigate concentration risk while still allowing for meaningful overweight positions where conviction is strongest.

3. Portfolio Construction

The portfolio typically holds 4060 individual securities, with an average marketcapitalization tilt toward midcap companies, though largecap and smallcap names are included where the research warrants.

3.1 Geographic Allocation

Geographic exposure is dynamic and driven by relative opportunity rather than fixed quotas. Historically, the fund has allocated significant weight to:

• East Asia (including China, South Korea, Taiwan)
• Latin America (Brazil, Mexico, Colombia)
• South Asia (India, Indonesia)
• Eastern Europe and the Balkans (Poland, Czech Republic, Romania)
• Africa (South Africa, Kenya, Nigeria)

3.2 Sector Allocation

Sector exposure reflects the economic structure of developing markets. Core sectors often include:

• Consumer discretionary and staples
• Financials (especially banking and insurance)
• Technology and communications
• Materials and industrials
• Energy and utilities

4. Performance Highlights

Since its inception, the Lazard Developing Markets Equity Portfolio has demonstrated resilience in a variety of market environments. Key performance points include:

• Longterm growth: An average annualized return of roughly 910% over the past 10 years, outperforming the MSCI Emerging Markets Index by 1.52 percentage points on a netoffees basis.
• Risk management: The portfolios standard deviation has generally been 23% lower than the benchmark, reflecting the benefit of a diversified, researchdriven approach.
• Downside protection: During periods of heightened volatility (e.g., 2015 Chinese market correction, 2020 COVID19 shock), the funds losses were limited compared with broader emergingmarket indices.

5. Risk Considerations

Investing in developingmarket equities carries distinct risks. Investors should be aware of the following:

• Political and regulatory risk: Changes in government policy, currency controls, or regulatory frameworks can affect company performance and investor returns.
• Liquidity risk: Certain securities may trade on thin markets, leading to wider bidask spreads and potential difficulty in executing large transactions without price impact.
• Currency risk: Fluctuations in the value of local currencies relative to the investors base currency can amplify or erode returns.
• Economic volatility: Emerging economies may experience faster cycles of growth and contraction, impacting corporate earnings.

6. How to Invest

The Lazard Developing Markets Equity Portfolio is available through multiple channels:

• Mutual fund shares: Suitable for retail investors seeking a liquid, openended vehicle.
• Separate accounts: Institutional investors can access the strategy via customized mandates.
• Exchangetraded funds (ETFs): Lazard partners with select providers to offer a passively managed version that tracks the same underlying research framework.

Prospective investors should consult their financial adviser to determine if the portfolio aligns with their risk tolerance, investment horizon, and overall assetallocation strategy.

7. Sustainable Investing Integration

Lazard incorporates environmental, social, and governance (ESG) considerations into its research process. While the fund is not a dedicated ESG product, analysts evaluate ESG factors as part of the broader assessment of company quality and risk. Companies with strong governance practices and responsible environmental policies may receive a relative weighting advantage.

8. Key Takeaways

• The portfolio blends deep fundamental research with disciplined valuation to capture growth in developing economies.
• Diversified geographic and sector exposure helps mitigate concentration risk.
• Historical performance has outpaced the MSCI Emerging Markets Index while delivering lower volatility.
• Investors must be comfortable with the inherent political, currency, and liquidity risks of emergingmarket equities.
• Available through mutual funds, separate accounts, and ETFs, the fund offers flexibility for a range of investors.

9. Further Information

For detailed prospectus documents, performance data, and the latest portfolio holdings, please visit Lazards official website:

Lazard Asset Management Developing Markets Equity Portfolio

For specific inquiries, contact your financial representative or email investorrelations@lazard.com.