Value for Money Brochure

Value Assessment Lazard Investment Funds

Year Ending 30 September 2020

Lazard Fund Managers Limited is the Authorised Corporate Director (ACD) of Lazard Investment Funds (the “Lazard Funds”). Contents

. Forward, Jeremy Taylor, CEO ...... 2 . Value Assessments by Fund …………………..15

. Lazard Investment Fund Range ………………...3 • Lazard Developing Markets Fund……………..15 • Lazard Emerging Markets Fund…………..…..16 . Share Class Summary …………………….……..4 • Lazard European Alpha Fund ………………….17 . Introduction to the Value Assessment………...5 • Lazard European Smaller Companies Fund….18 . Summary of our Conclusions …………………..7 • Lazard Global Equity Income Fund……………19 • Lazard Managed Balanced Fund……………...20 . Results by Category ………………………………8 • Lazard Managed Equity Fund………………….21 • Performance …...... 8 • Lazard Multicap UK Income Fund………….....22 • Service…………………………………………….9 • Lazard UK Omega Fund………………………..23 • Cost ……………………………………………..11 • Lazard UK Smaller Companies Fund …………24 • Clarity…...... 13 . Glossary of Terms………………...... 25

Lazard Asset Management | 1 A Message From Our CEO, Jeremy Taylor

For decades, Lazard Asset Management has served as trusted The Value Assessment stewards of our clients’ capital, helping them to navigate through The Financial Conduct Authority (“FCA”) has asked firms like ours various market cycles and historic global events. to evaluate and report on how our UK authorised funds deliver value for investors. As a passionately client-focused organisation, Research & Culture we welcome the FCA’s efforts to improve value for investors On-the-ground, global fundamental research is the foundation of across the UK’s asset management industry. We aim to provide our investment approach. Our investment professionals transparency around our investment objectives and the collaborate on detailed fundamental analysis integrating assessment of our results. knowledge across regions, sectors and asset classes to arrive at Our specific clients generally tend to be institutional in nature and unique insights. We empower our investment teams to make independent investment decisions, and we support them with hence our assessment has been made with that in mind. The criteria go beyond costs and simple performance to include a global research capabilities and a strong operations infrastructure. number of different factors which we have taken into account to Our culture supports and fosters both collaboration and an entrepreneurial spirit. This model allows our teams to focus on ensure that we are acting in the best interests of our investors. We do not view this assessment as a one-off event, but rather as what we do best: i.e. deliver a consistent risk adjusted pattern of an ongoing process of monitoring all our funds to deliver value to performance to meet our clients’ needs. our clients. Risk Management We have used a broad range of underlying data to create an “We always aim to provide Risk management is integral to our portfolio construction. Our objective assessment of value based on performance, service, value for our clients through a independent global risk management team provides objective cost, and clarity. Overall, we have concluded that our 10 funds do strict investment discipline monitoring of all our portfolios to ensure our investment teams provide value for our investors. Where our analysis has that does not waver from understand the balance of risk and return and our investment highlighted areas for improvement, we have provided an investment process or strategies deliver their expected pattern of performance. explanation and any changes that we plan to make. objectives” Environmental, Social and Governance (“ESG”) I hope you find this report useful and that it offers further clarity on your investments and the value that Lazard Asset ESG considerations, including a company's governance policies Management provides. and board structure, environmental practices and labour policies can affect a security's valuation and financial performance. We Jeremy Taylor aim to invest in enterprises that financially prosper while CEO, London protecting and preserving human and natural capital. As such, Lazard Fund Managers Limited relevant investment professionals integrate ESG analysis into their research and decision-making processes. Our strong sense of fiduciary duty and a robust set of ESG principles drives the engagement we have with the companies we invest in on behalf of our clients.

Lazard Asset Management | 2 Lazard Investment Fund Range

Sub Fund Launch Date Portfolio Managers

Lazard Developing Markets Fund September 2010 Kevin O’Hare, Peter Gillespie & Team

Lazard Emerging Markets Fund May 1997 James Donald & Team

Lazard European Alpha Fund August 1986 Aaron Barnfather, Paul Selvey-Clinton & Team

Lazard European Smaller Companies Fund May 2000 Edward Rosenfeld & Team

Lazard Global Equity Income Fund October 2007 Jimmie Bork, Nicolas Sordoni & Team

Lazard Managed Balanced Fund September 1999 Louis Florentin-Lee, Barnaby Wilson, Alan Custis, Benjamin Böhme & Team

Lazard Managed Equity Fund September 2002 Louis Florentin-Lee, Barnaby Wilson & Team

Lazard Multicap UK Income Fund March 1971 Alan Clifford, Alan Custis & Team

Lazard UK Omega Fund February 2005 Alan Custis & Team

Lazard UK Smaller Companies Fund February 1963 Alan Clifford & Team

Lazard Asset Management | 3 Share Class Summary

This guide provides an overview of the UK domiciled fund share classes and share class types in the Lazard Funds range

The difference between the share classes that Lazard offers is based on investment size and associated fees.

Share Class Share Class Description Share Class Types

A share class The A share class is available to Intermediaries and direct retail investors with a Accumulation minimum initial investment amount of £1,000. Dividend and Income distributions of the fund are reinvested in the capital of the fund on behalf of its B share class This is the historical commission paying share class available to all types of investors on the interim and annual accounting dates. investors. Initial investment amount is £1,000. In June 2020 all individual investors were transferred to the ‘A’ share class. Income Dividend and Income distributions are paid by the fund C share class The annual management fee charged in respect of the shares in the C classes to investors on the relevant interim and annual is a ‘clean’ fee insofar as it does not include any provision to cover the payment allocation dates. of any commissions to the holders of such shares. Minimum initial investment is £500,000. This share class is primarily for investors using Financial Advisors and investment platforms (or direct investors should they meet the minimum investment amount).

EA share class This share class is available to attract assets into the fund. It is intended that this share class will only be available for investment for a limited period. Minimum initial investment is £250,000.

S share class This share class is available to key strategic partners such as Wealth Managers, investment platforms and private banks. The minimum initial investment is £25,000,000.

Lazard Asset Management | 4 Introduction to the Value Assessment

In 2019, the FCA set out rules requiring fund managers to publicly attest to the value their funds offer and outline any corrective actions taken, if appropriate.

The FCA outlined seven key criteria for assessing value. Lazard Fund Managers, as the Authorised Corporate Director (“ACD”) of the Funds, has assessed each of these criteria for each unit class of each Fund that we manage, as outlined below.

Quality of Service Performance Costs Charged by the ACD Economies of Scale

taking into account the range after deducting charges, especially whether the ACD has and their reasonableness in light and nature of services provided, reviewed over a relevant been able to achieve and share of the relevant Funds’ both directly and indirectly to timeframe and against the savings and benefits of investment objectives and the investors of the Funds. investment objectives and economies of scale with distribution activities. strategy of the Funds. investors.

Comparable Market Rates Comparable Services Classes of Units encompassing a review of the encompassing a comparison of comprising a review of whether relevant Fund’s charges services that the Lazard Asset it is appropriate for investors to compared to charges incurred Management (“Lazard”) group be invested in share classes by similar funds. of companies provide to the with higher charges than those Funds and to its clients with applying to other comparable similar investment objectives share classes of the same Fund. and/or strategies.

Lazard Asset Management | 5 Introduction to the Value Assessment

We have grouped the seven criteria into four main components: Performance, Service, Cost and Clarity. We call these our ‘Pillars of Value’. Our aim is to ensure that we can demonstrate value for investors for each of these pillars.

The Pillars of Value We have used a broad range of underlying data to create an objective Performance Service Cost Clarity assessment of each of the Pillars of Value. In this report we outline how we have evaluated our fund offering according to the four pillars Performance Professional OCF compared Clarity of Fund against alpha experience of the against peer group objectives framework, laying out our approach to analysis, findings and any corrective target/passive investment team ￮￮ action where required. alternative ￮ Economies of Clarity of ￮ Consistency of scale investment Our overall conclusion is that our 10 Funds do provide value for our Performance application of the ￮ process and investors. Where the results of our analysis highlight areas that need more against peer group Fund’s investment Cost savings associated risks ￮ philosophy ￮ attention, an explanation is provided in this report. Any remedial action Risk adjusted ￮ Website content required will be passed through our robust governance framework and performance Accessibility of communicated to clients in line with our normal procedures and regulatory Fund information expectations. ￮ Effectiveness of administrative We will continue to monitor all of our Funds to ensure that we are services delivering value to our investors and will continue to report these results annually.

Lazard Asset Management | 6 Summary of Our Conclusions

We have set out a summary of our analysis and conclusions against each of the four pillars in the following pages. Taking the cumulative results of our assessment, we have given each of our Funds a star rating out of five. In order to arrive at these scores, we applied a 50% weighting to the Performance pillar, and a 50% weighting to the Service, Cost and Clarity pillars combined.

For more detail about the results of our analysis per Fund, see the Value Assessment by Fund statements attached to this report.

Summary Scores Demonstrates outstanding value Lazard Developing Markets Fund Demonstrates good value Lazard Emerging Markets Fund Demonstrates value Lazard European Alpha Fund Falls short of expectations of value in certain areas

Lazard European Smaller Companies Fund Has not demonstrated value

Lazard Global Equity Income Fund

Lazard Managed Balanced Fund

Lazard Managed Equity Fund

Lazard Multicap UK Income Fund

Lazard UK Omega Fund

Lazard UK Smaller Companies Fund

Lazard Asset Management | 7 Results by Category

Performance In assessing the performance of each Fund, we asked the following relevant questions: Key Questions Supporting Evidence and Conclusion . What is the performance net of all charges? How does each Fund We analysed the performance of each Fund over the . What have the returns been over the short, medium and long-term? compare against a appropriate timeframe of 1, 3 and 5 years, taking into . How does it compare to a passive alternative? passive alternative? account the proposed holding period of each Fund as set out in the Prospectus. . How consistent is the performance of the Fund? . How does it perform against a low risk alternative? How does each Fund Each Fund was compared against its relevant peer compare to its funds, which are a pre-defined group selected by . How does it compare to its sector/comparable peers? sector/comparable Morningstar, based on their comparative equity style. . Does it offer additional downside protection versus comparators? peers? For our peer group analysis, we compared the Funds . How does the return compare to the level of risk taken? against the primary share classes of the funds in the peer group. We performed the above analysis over the appropriate timeframe of one, three and five years. How does each Fund’s An analysis was undertaken assessing each Fund’s While the above metrics were considered, the greatest emphasis in our returns compare to level of risk and a range of risk metrics across analysis was placed on the five year data in the following three areas: the level of risk taken? different timeframes. Returns above the benchmark were compared to the volatility of those returns. This . benchmark relative performance; metric is used as a measure of a portfolio manager's . performance relative to peers; and level of skill and ability to generate excess returns . risk adjusted performance. relative to a benchmark, but it also attempts to identify the consistency of the performance. An Funds that favoured a “relative value” approach tended to perform less assessment of the maximum loss occurred from strongly over a five year period. Over the last five years and particularly peak to trough was also included. Please refer to the throughout 2020, this style bias has faced a significant headwind, which has Value Assessments by Fund for more been exacerbated by the impact of the global pandemic. In addition, income- comprehensive findings for each Fund. orientated investment funds suffered during the one year period as the pandemic had a tangible effect on the dividend streams of many companies on a global basis. Please refer to the Values Assessments by Fund for more comprehensive findings of the Performance assessment of each Fund.

Lazard Asset Management | 8 Results by Category

Service In our assessment of quality of service we split the range Key Questions Supporting Evidence and Conclusion of services into the following three broad categories: What is the Clients benefit from Lazard’s global reach and the professional sources of insight and investment ideas provided by 1. Portfolio Management and Investment Process experience of each our sector and regional specialists. Lazard has a In assessing the value that our Portfolio Management and Investment Fund's investment highly interactive partnership between analysts and teams offer to Fund investors, we considered the size and experience of team? portfolio managers. We concluded that across each Fund the level of professional experience of our Lazard’s investment teams, any relevant professional qualifications of the investment teams is exceptional. individuals running each Fund, how many years’ experience they each have and their tenure at Lazard. We also considered more broadly the breadth of How consistently is Lazard’s investment philosophy has a robust and experienced investment professionals that support the Portfolio each Fund’s consistent framework. Every stock in a portfolio is Management team, including our dedicated risk management team. investment philosophy carefully considered against the Fund’s objectives to applied? maximise returns whilst ensuring no style drift. Each of our investment teams is supported by Lazard’s global sector ESG considerations are integrated in the investment specialists, comprising portfolio manager/analysts and research analysts, process of each of our Funds. who provide their teams with additional industry knowledge and insights as well as investment-related recommendations. Our Portfolio How effective are the We have regular meetings with our administrators Management teams also leverage investment and intellectual resources administrative ensuring all services are provided on time to across Lazard’s global platform, which includes monthly meetings, analyst services provided to investors e.g. half-yearly valuation statements. The investors? administrative services provided by the Fund meetings, global views and commodity/currency views. Administrator and other third parties and Lazard’s Our Funds typically operate within a clearly defined set of rules that restrict oversight of these services demonstrates value to risk in the form of stock and/or sector weights. Restrictions on the number investors. of positions that a Fund can own restricts it from benchmark hugging, Can investors access A range of Fund information including the Key closet indexing, or otherwise delivering benchmark-like returns for active Fund information Investor Information Sheet (“KIID”), Prospectus, fact fees. (continued overleaf) (either directly from sheet and application forms can easily be accessed the website or from on our website. Alternatively, investors can call our the Helpdesk)? freephone number or email the Lazard helpdesk for copies.

Lazard Asset Management | 9 Results by Category

Service 1. Portfolio Management and Investment Process (continued) The complaints rate across all of our Funds is very low as are the breaches As part of our value assessment we monitored how consistently each reported for each Fund to the year ended 30 September 2020. Fund’s investment philosophy has been applied. We also considered our We carefully considered our oversight of the Fund Administrator and other risk management process and the governing mechanisms we have in outsourced service providers. A monthly call takes place for all outsourced place to monitor this. services as well as a due diligence exercise once a year. Lazard also has One area that was carefully considered in our value assessment was the quarterly outsourcing committee meetings attended by senior environmental, social and governance considerations that each Fund takes management. This committee in turn reports to the ACD’s board. into account. As an investment manager with a diverse range of investment strategies, the implementation and incorporation of ESG issues 3. Investor Access and Communication into our investment processes is reflected differently across asset classes We reviewed our website and of all the information investors receive in and strategies. The continued integration of ESG considerations into each relation to the Funds. The Fund Administrator delivers semi-annual periodic of our Funds’ investment philosophies is therefore an evolving process. statements and they have a contact centre that is open each business day For further information please refer to the Lazard Sustainable Investment with a dedicated Lazard telephone number. We did not find any issues Report 2020 with how they are communicating with clients or handling complaints against the KPIs that we set. 2. Fund Administration Our website contains all of the necessary marketing and regulatory As part of our value assessment we carefully analysed the services that information relating to the Funds. However, this information is not The Bank of New York Mellon (International) Limited (“BNY Mellon”) available on one piece of literature and needs to be sourced through a provides as Fund Administrator. BNY Mellon provide a number of services number of marketing pieces. Furthermore, whilst the Ongoing charge on behalf of the Funds, including Custody, Fund Accounting and Transfer (“OCF”) is available via each Fund’s Key Investor Information Document, Agency and they also serve as Trustee & Depositary providing oversight there is not an explanation to show details of how the OCF is calculated and protection of fund assets. Having one entity perform all of these and the split between the Annual Management Charge (“AMC”) and functions offers value to investors both in terms of cost efficiencies and additional fees. the oversight that the ACD has. One consequence of our findings in this regard is that we will review fund We assessed these services against the Key Performance Indicators literature and its accessibility. We are also considering how to provide (“KPIs”) that we have in place in our Service Level Agreement with BNY more insight into the Funds. This insight will be available on our website Mellon. The KPIs are split between Fund Accounting and Transfer Agency. for investors to view in 2021. The services were assessed for timeliness and accuracy of delivery. In the year to 30 September 2020, all KPIs met the agreed service levels and there were no significant issues. Lazard Asset Management | 10 Results by Category

Cost In assessing the cost of each Fund and whether it provides Key Questions Supporting Evidence and Conclusion value for money to investors, we considered the following Is each Fund’s We compared each fund’s OCF against a relevant peer areas. Ongoing Charges group of funds. The funds in the peer group have been Figure (“OCF”) selected from the Funds IA Sector as defined by 1. AFM Costs within 10% of the Morningstar. Our analysis is based on all share classes We compared the charges that we levy on investors against the cost we peer group of the funds in the peer group and they are net of fees. incur in providing the services to which the charges relate. This includes average? All but one of our ten Funds has an OCF within 10% of ongoing charges, initial charges and performance fees (if applicable) but its peers. Four of the Funds are above 10% less not transaction costs. expensive than the peer group average 2. Comparable Market Rates Does each Fund Each Fund benefits from the economies of scale We compared the costs of each Fund against the costs charged by our benefit from offered by Lazard’s global infrastructure. Funds (and peers. In establishing a suitable peer group, we selected a relative subset economies of fund shareholders) benefit from resources of Lazard’s as defined by Morningstar based on each Fund’s IA sector. scale? £156.4 billion1 AUM, which is far greater than the £1.3 1 billion combined AUM of the Lazard Investment Funds. For all but one of our funds, our OCF was found to be within 10% of the As part of the wider Lazard group, the Funds can average of the defined peer group. Four of the Funds are more than 10% leverage off improvements to areas such as technology, cheaper than the peer group. ESG and Client Relationship Management, amongst others. 3. Comparable Services Can cost savings be As part of our assessment, we recognised that further We assessed each charge that each Fund incurs against the charges for achieved? cost savings could be achieved. Since 30 September comparable services provided to other funds or clients within the Lazard 2020, the Funds’ Custody Safekeeping and Transaction group. This included those charges levied on institutional mandates of a costs have been reviewed and renegotiated. The comparable size and with similar investment objectives, wherever revised costs result in a reduction of approximately 25% relevant. annually, which will reduce the OCF of each Fund. We have also identified other professional fees which will Compared to Lazard’s offshore fund range, which has more assets under be reviewed before the next financial year end. management than the UK Funds, wherever there is a comparable fund, our UK Funds had a lower OCF. (continued overleaf) 1. As at 30 September 2020

Lazard Asset Management | 11 Results by Category

Cost

3. Comparable Services (continued) . We believe that financial intermediaries and shareholders prefer a In comparison to segregated mandates run to a similar strategy as the simple and clear competitive flat fee structure and our Funds’ fees are relevant Fund, for investments under £100 million the cost of the Fund is reviewed by consultants and financial intermediaries. comparable. However, for investments over £100 million the AMC of each Our analysis on economies of scale assessed that our Funds and their Fund would be around 5bps higher. This reflects the fact that a segregated investors benefit from resources of Lazard’s £156.4 billion AUM1, which is mandate client will only be paying for the cost of investment management far greater than the £1.3 billion combined AUM of the UK Funds alone. and not the ancillary costs (custodian and dealing costs for example) Furthermore, Lazard provides many additional services to our Funds, the associated with a fund proposition. Reporting (e.g. Prospectus, Report & costs of which are borne by Lazard rather than investors. For example, Accounts, Factsheets, KIIDs etc.) requirements are, in many cases, also Lazard provides the Funds with extensive technology and operations greater for pooled funds, with significant resource and cost impact. support. 4. Economies of Scale 5. Classes of Units We assessed to what extent each Fund is able to achieve any savings as a We examined the different share classes in each Fund and the costs result of economies of scale. associated with them, as well as if it is in the best interests of retail We consider that there are three ways fund investors can share in investors to move them between share classes. Following last year's economies of scale: (i) setting competitive fees at the outset; (ii) value assessment, we decided to switch all direct retail investors into a reinvesting profits back into the business; and (iii) reducing advisory fees lower fee paying share class. This switch was completed in 2020, which via breakpoints. Taking each of these in turn: means that all retail investors are now in the appropriate share classes.

. We have set the Funds’ fees at levels that we believe are appropriate from the outset, taking into account reasonably anticipated asset growth and fluctuations.

. Over the past five years, Lazard has substantially invested back in the business via hiring investment personnel and implementing new systems, resources, databases and other capabilities.

1. As at 30 September 2020

Lazard Asset Management | 12 Results by Category

Clarity Our assessment on clarity covered the following areas. Key Questions Supporting Evidence and Conclusion 1. Fund Objectives How well do we Each Fund's objectives are laid out in the articulate each Fund’s Prospectus, which is widely available. Our analysis We asked ourselves how well we articulate each Fund’s objectives, objectives? concluded that our Fund investment objectives are constraints and comparators. Our analysis concluded that our Fund satisfactory, however a review will be undertaken to objectives and policies were satisfactory. However, we recognise that determine whether they could be improved by there is room for improvement. adding more details around the objectives of the Funds. We also considered whether each Fund is being run to its stated objectives and in accordance with its stated investment policy. Our Funds are Do we clearly Each Fund’s investment policy and risk factors are meeting their objectives and policies set out in the Prospectus. articulate our set out in the Prospectus. However, we will review investment process whether we make more information readily available 2. Investment Process and Risks and any associated on our website. We considered whether investors can answer the following questions and risks? Interim and annual report and accounts are provided how readily available this information is: twice a year and available on our website. Within this document is a detailed commentary on market . What should I expect this Fund to do? review, outlook and stocks that have benefitted and detracted from Fund performance. The commentary . Where does it invest? is written with the retail investor in mind to provide a . What is it trying to achieve? simple guide of how the Funds have operated over the reporting period. . Is the factsheet and KIID clear to understand?

How useful is the Our website contains all the necessary marketing . How can I measure success? website content? and regulatory information relating to the Funds. The website content is accessible and clear but a full . What are its constraints? review of content for each Fund will take place in 2021. (continued overleaf)

Lazard Asset Management | 13 Results by Category

Clarity

2. Investment Process and Risks (continued)

We concluded that for our institutional investors, we are able to provide all of the information that they require. However, we have identified that for the end retail investors, it may be difficult for them to identify the information required to answer all of the questions listed above. Fund documentation such as Prospectus, Factsheets, KIIDs, Value Assessment, Report & Accounts and Fund specific outlook and insights can be accessed on the website.

3. Fund Documentation We analysed whether investors understand the information they get and whether it is expressed clearly and in plain English. We have concluded that the information that investors receive is easy for them to understand.

We also considered whether each Fund’s charges are expressed in a way that is easy for investors to understand. We concluded that the charges on the KIIDs are not broken down sufficiently and the portfolio transaction charges are only available to certain clients upon request. We will work on improving the KIIDs over the coming year.

Lazard Asset Management | 14 Value Assessments by Fund

Lazard Developing Markets Fund Summary The objective of the Fund is to achieve capital growth over at least five We have given this Fund a 4-star rating, meaning that our assessment years. has concluded that overall the Fund offers good value to investors.

Performance Against unprecedented investment challenges throughout 2020, the five year track Comparable services – Compared to the Lazard offshore fund range, the OCF for record for the Fund continues to be very satisfactory indeed, with the Fund this Fund is lower. In addition, the minimum initial investment is also lower for this outperforming both its benchmark and applicable peer group. Furthermore, the Fund. When compared with segregated mandates that Lazard offers to institutional risk/return profile of this Fund is amongst the most impressive in its sector. clients, in some instances the costs associated with these mandates may be We believe that the expertise of the investment team, backed by access to lower. This reflects the fact that a segregated mandate client will only be paying for Lazard’s extensive global resources, will continue to allow us to identify attractive the cost of investment management, and not the ancillary costs associated with a investment opportunities. fund proposition.

Service Economies of scale – We assessed to what extent the Fund is able to achieve any savings as a result of economies of scale considering, amongst other things, Our assessment considered the range and quality of our services. Our conclusion Lazard’s extensive global knowledge and expertise, technology and operations is that we provide a wide range of high quality services, through a safe and secure support. Our analysis indicates that investors in the Fund benefit from Lazard’s global infrastructure, experienced investment professionals and effective risk global resources and additional services. management practices, all underpinned by a culture of client-centric continuous improvement. Classes of units – We examined different share classes in the Fund and the costs associated with each, as well as if it is in the best interests of retail investors to Cost move them between share classes. We moved all direct retail shareholders to the AFM costs – We compared the charges that we levy on investors against the cost cheapest share class during the course of the last year. From our analysis, each we incur in providing the services to which the charges relate. share class is appropriately priced and we are not proposing making any changes this year. Comparable market rates – We also compared the OCF of the Fund with those charged by its peers. From this analysis we found that the Fund’s OCF is within Clarity 10% of the OCF of the average of the defined peer group. Our assessment considered how well we articulate the Fund objective, investment process and associated risks, as well as content available on the website specifically for this Fund. Our conclusion was that Fund Objective and Policy was satisfactory, but there is room for improvement.

Lazard Asset Management | 15 Value Assessments by Fund

Lazard Emerging Markets Fund Summary The objective of the Fund is to achieve capital growth over at least five We have given this fund a 3-star rating, meaning that our assessment years. has concluded that overall the fund offers value to investors.

Performance This Fund has, since inception, been resolute in its application of a “relative value” Comparable services – Compared to the Lazard offshore fund range, the OCF for style. The investment team focus on making investments in high quality the UK Fund is lower. When compared with segregated mandates that Lazard companies, which are priced at attractive valuations. Over the last five years and, offers to institutional clients, in some instances the costs associated with these particularly, throughout 2020, this style bias has faced a significant headwind, mandates may be lower. This reflects the fact that a segregated mandate client which has been exacerbated by the impact of the global pandemic. will only be paying for the cost of investment management, and not the ancillary Notwithstanding the challenges to our investment style, the fund has performed costs associated with a fund proposition. comparably to the majority of other funds which apply a similar approach, and we Economies of scale – We assessed to what extent the fund is able to achieve any continue to have a high degree of conviction that our approach will continue to savings as a result of economies of scale considering, amongst other things, yield successful results over the longer term. We believe that the team’s long-term Lazard’s extensive global knowledge and expertise, technology and operations experience in the emerging market equity space, and its access to Lazard’s support. Our analysis indicates that investors in the fund benefit from Lazard’s extensive global resources, will allow us to uncover attractive investment global resources and additional services. opportunities in the current market environment. Classes of units – We examined different share classes in the fund and the costs Service associated with each, as well as if it is in the best interests of retail investors to Our assessment considered the range and quality of our services. Our conclusion move them between share classes. We moved all direct retail shareholders to the is that we provide a wide range of high quality services, through a safe and secure cheapest share class during the course of the last year. From our analysis, each global infrastructure, experienced investment professionals and effective risk share class is appropriately priced and we are not proposing making any changes management practices, all underpinned by a culture of client-centric continuous this year. improvement. Clarity Cost Our assessment considered how well we articulate the Fund objective, investment AFM costs – We compared the charges that we levy on investors against the cost process and associated risks, as well as content available on the website we incur in providing the services to which the charges relate. specifically for this Fund. Our conclusion was that Fund Objective and Policy was satisfactory, but there is room for improvement. Comparable market rates – We also compared the OCF of the fund with those charged by its peers. From this analysis we found that the fund’s OCF is more than 10% cheaper than the average OCF of the defined peer group.

Lazard Asset Management | 16 Value Assessments by Fund

Lazard European Alpha Fund Summary The objective of the Fund is to achieve capital growth, net of fees, in We have given this fund a 3-star rating, meaning that our assessment excess of the FTSE World Europe ex. UK Index, measured in sterling, has concluded that overall the fund offers value to investors. over at least five years.

Performance Comparable services – Compared to the Lazard offshore fund range, the OCF for Strong headwinds have proved challenging for the Fund and while it has the UK fund is lower. In addition, the minimum initial investment is also lower for outperformed its benchmark over a one year period it has struggled on the medium the UK Fund. When compared with segregated mandates that Lazard offers to to longer term time frame. European markets have witnessed sluggish growth institutional clients, in some instances the costs associated with these mandates over recent years, while the negative interest rate and quantitative easing policies may be lower. This reflects the fact that a segregated mandate client will only be employed by the European Central Bank (ECB) have also resulted in investors paying for the cost of investment management, and not the ancillary costs favouring growth-style investing over value. associated with a fund proposition. We continue to maintain a disciplined security selection process by focusing on Economies of scale – We assessed to what extent the fund is able to achieve any companies that demonstrate high and/or improving levels of financial productivity. savings as a result of economies of scale considering, amongst other things, In this increasingly complex market environment, we firmly believe that our active, Lazard’s extensive global knowledge and expertise, technology and operations bottom-up stock selection approach focused on company fundamentals is best support. Our analysis indicates that investors in the fund benefit from Lazard’s suited to uncovering investment opportunities at attractive valuations. global resources and additional services. Service Classes of units – We examined different share classes in the fund and the costs Our assessment considered the range and quality of our services. Our conclusion associated with each, as well as if it is in the best interests of retail investors to is that we provide a wide range of high quality services, through a safe and secure move them between share classes. We moved all direct retail shareholders to the global infrastructure, experienced investment professionals and effective risk cheapest share class during the course of the last year. From our analysis, each management practices, all underpinned by a culture of client-centric continuous share class is appropriately priced and we are not proposing making any changes improvement. this year.

Cost Clarity AFM costs – We compared the charges that we levy on investors against the cost Our assessment considered how well we articulate the Fund objective, investment we incur in providing the services to which the charges relate. process and associated risks, as well as content available on the website specifically for this Fund. Our conclusion was that Fund Objective and Policy was Comparable market rates – We also compared the OCF of the fund with those satisfactory, but there is room for improvement. charged by its peers. From this analysis we found that the fund’s OCF is within 10% of the OCF of the average of the defined peer group.

Lazard Asset Management | 17 Value Assessments by Fund

Lazard European Smaller Companies Fund Summary The objective of the Fund is to achieve capital growth over at least five We have given this fund a 3-star rating, meaning that our assessment years. has concluded that overall the fund offers value to investors.

Performance The Fund has delivered positive absolute returns while experienced challenging Comparable services – Compared to the Lazard offshore fund range, the OCF for style headwinds and this is reflected in the fact that it has underperformed its the UK fund is lower. In addition, the minimum initial investment is also lower for benchmark in the medium term. However, we have seen outperformance in the the UK Fund. When compared with segregated mandates that Lazard offers to short term which is reflective of the fact that the fund is evenly balanced – able to institutional clients, in some instances the costs associated with these mandates participate when the market advances, while defending in potential declines. We may be lower. This reflects the fact that a segregated mandate client will only be believe that our bottom-up approach focused on the trade-off between financial paying for the cost of investment management, and not the ancillary costs productivity and valuation is well suited to this task. associated with a fund proposition.

Service Economies of scale – We assessed to what extent the fund is able to achieve any Our assessment considered the range and quality of our services. Our conclusion savings as a result of economies of scale considering, amongst other things, is that we provide a wide range of high quality services, through a safe and secure Lazard’s extensive global knowledge and expertise, technology and operations global infrastructure, experienced investment professionals and effective risk support. Our analysis indicates that investors in the fund benefit from Lazard’s management practices, all underpinned by a culture of client-centric continuous global resources and additional services. improvement. Classes of units – We examined different share classes in the fund and the costs Cost associated with each, as well as if it is in the best interests of retail investors to move them between share classes. We moved all direct retail shareholders to the AFM costs – We compared the charges that we levy on investors against the cost cheapest share class during the course of the last year. From our analysis, each we incur in providing the services to which the charges relate. share class is appropriately priced and we are not proposing making any changes this year. Comparable market rates – We also compared the OCF of the fund with those charged by its peers. From this analysis we found that the fund’s OCF is more than Clarity 10% cheaper than the average OCF of the defined peer group. Our assessment considered how well we articulate the Fund objective, investment process and associated risks, as well as content available on the website specifically for this Fund. Our conclusion was that Fund Objective and Policy was satisfactory, but there is room for improvement.

Lazard Asset Management | 18 Value Assessments by Fund

Lazard Global Equity Income Fund Summary The objective of the Fund is to outperform the MSCI All Country World We have given this fund a 3-star rating, meaning that our assessment Index, while generating income, over at least five years. has concluded that overall the fund offers value to investors.

Performance The Fund maintains a clear bias to value-style investing and this means the Fund Comparable services – There is no comparable fund in the Lazard offshore fund has faced very significant headwinds during the more recent period – this factor range. When compared with segregated mandates that Lazard offers to has been exacerbated due to the unprecedented impact of the pandemic, which institutional clients, in some instances the costs associated with these mandates has resulted in continued rises in share prices of companies which we already may be lower. This reflects the fact that a segregated mandate client will only be believe are fully valued. It has also had a tangible effect on the dividend streams of paying for the cost of investment management, and not the ancillary costs many companies on a global basis. associated with a fund proposition. Notwithstanding the above, the Fund has continued to deliver a premium yield, and Economies of scale – We assessed to what extent the fund is able to achieve any changes to the portfolio management team which were put in place last year have savings as a result of economies of scale considering, amongst other things, already begun to show a positive impact. The investment team have very long- Lazard’s extensive global knowledge and expertise, technology and operations term experience in actively managing high yielding equities, whilst harnessing the support. Our analysis indicates that investors in the fund benefit from Lazard’s capability of the full Lazard research platform. We believe the team remain well global resources and additional services. placed to identify attractive investment opportunities in this challenging market environment. Classes of units – We examined different share classes in the fund and the costs associated with each, as well as if it is in the best interests of retail investors to Service move them between share classes. We moved all direct retail shareholders to the Our assessment considered the range and quality of our services. Our conclusion cheapest share class during the course of the last year. From our analysis, each is that we provide a wide range of high quality services, through a safe and secure share class is appropriately priced and we are not proposing making any changes global infrastructure, experienced investment professionals and effective risk this year. management practices, all underpinned by a culture of client-centric continuous improvement. Clarity Our assessment considered how well we articulate the Fund objective, investment Cost process and associated risks, as well as content available on the website AFM costs – We compared the charges that we levy on investors against the cost specifically for this Fund. Our conclusion was that Fund Objective and Policy was we incur in providing the services to which the charges relate. satisfactory, but there is room for improvement.

Comparable market rates – We also compared the OCF of the fund with those charged by its peers. From this analysis we found that the fund’s OCF is within 10% of the OCF of the average of the defined peer group.

Lazard Asset Management | 19 Value Assessments by Fund

Lazard Managed Balanced Fund Summary The objective of the Fund is to deliver income and capital growth. We have given this fund a 4-star rating, meaning that our assessment has concluded that overall the fund offers good value to investors. Performance Over the short, medium and long term the fund has outperformed it benchmark significantly, despite the fact that it has been a difficult environment for value style Economies of scale – We assessed to what extent the fund is able to achieve any investing. The low interest rate environment has resulted in high valuations in fixed savings as a result of economies of scale considering, amongst other things, income markets, while also supporting growth as an investment style over more Lazard’s extensive global knowledge and expertise, technology and operations value-orientated investing. However, recent market volatility created opportunities support. Our analysis indicates that investors in the fund benefit from Lazard’s to find quality companies at more attractive valuations, which should continue to global resources and additional services. benefit the Fund over the long run. Classes of units – We examined different share classes in the fund and the costs Service associated with each, as well as if it is in the best interests of retail investors to Our assessment considered the range and quality of our services. Our conclusion move them between share classes. We moved all direct retail shareholders to the is that we provide a wide range of high quality services, through a safe and secure cheapest share class during the course of the last year. From our analysis, each global infrastructure, experienced investment professionals and effective risk share class is appropriately priced and we are not proposing making any changes management practices, all underpinned by a culture of client-centric continuous this year. improvement. Clarity Cost Our assessment considered how well we articulate the Fund objective, investment AFM costs – We compared the charges that we levy on investors against the cost process and associated risks, as well as content available on the website we incur in providing the services to which the charges relate. specifically for this Fund. Our conclusion was that Fund Objective and Policy was satisfactory, but there is room for improvement. Comparable market rates – We also compared the OCF of the fund with those charged by its peers. From this analysis we found that the fund’s OCF is more than 10% cheaper than the average OCF of the defined peer group.

Comparable services – There is no comparable fund in the Lazard offshore fund range. When compared with segregated mandates that Lazard offers to institutional clients, in some instances the costs associated with these mandates may be lower. This reflects the fact that a segregated mandate client will only be paying for the cost of investment management, and not the ancillary costs associated with a fund proposition.

Lazard Asset Management | 20 Value Assessments by Fund

Lazard Managed Equity Fund Summary The objective of the Fund is to achieve capital growth. We have given this fund a 3-star rating, meaning that our assessment has concluded that overall the fund offers value to investors. Performance The returns of the Fund are in line with those of its benchmark over 1 and 3 years but are lagging over 5 years. It has been a difficult environment for value style Economies of scale – We assessed to what extent the fund is able to achieve any investing, as further reduction in interest rates has strongly benefitted growth over savings as a result of economies of scale considering, amongst other things, value. However, the market volatility seen more recently has created opportunities Lazard’s extensive global knowledge and expertise, technology and operations to find high quality companies which should benefit the Fund over the long run. support. Our analysis indicates that investors in the fund benefit from Lazard’s global resources and additional services. Service Our assessment considered the range and quality of our services. Our conclusion Classes of units – We examined different share classes in the fund and the costs is that we provide a wide range of high quality services, through a safe and secure associated with each, as well as if it is in the best interests of retail investors to global infrastructure, experienced investment professionals and effective risk move them between share classes. We moved all direct retail shareholders to the management practices, all underpinned by a culture of client-centric continuous cheapest share class during the course of the last year. From our analysis, each improvement. share class is appropriately priced and we are not proposing making any changes this year. Cost Clarity AFM costs – We compared the charges that we levy on investors against the cost we incur in providing the services to which the charges relate. Our assessment considered how well we articulate the Fund objective, investment process and associated risks, as well as content available on the website Comparable market rates – We also compared the OCF of the fund with those specifically for this Fund. Our conclusion was that Fund Objective and Policy was charged by its peers. From this analysis we found that the fund’s OCF is within satisfactory, but there is room for improvement. 10% of the OCF of the average of the defined peer group.

Lazard Asset Management | 21 Value Assessments by Fund

Lazard Multicap UK Income Fund Summary The objective of the Fund is to achieve income combined with capital We have given this fund a 4-star rating, meaning that our assessment growth. has concluded that overall the fund offers good value to investors.

Performance Against a challenging backdrop for relative value mangers the Fund has been Comparable services – There is no comparable fund in the Lazard offshore fund disciplined in its investment style but has underperformed against its benchmark range. When compared with segregated mandates that Lazard offers to over the short and medium term. This factor has been exacerbated due to the institutional clients, in some instances the costs associated with these mandates unprecedented impact of the pandemic, which has resulted in continued rises in may be lower. This reflects the fact that a segregated mandate client will only be share prices of companies which we already believe are fully valued. It has also paying for the cost of investment management, and not the ancillary costs had a tangible effect on the dividend streams of many UK companies. However, associated with a fund proposition. the Fund has performed favourably against comparable passive alternatives. Economies of scale – We assessed to what extent the fund is able to achieve any One of the primary drives of the fund is income and a good steady income over savings as a result of economies of scale considering, amongst other things, and above the benchmark has been delivered over the long run. Lazard’s extensive global knowledge and expertise, technology and operations Service support. Our analysis indicates that investors in the fund benefit from Lazard’s global resources and additional services. Our assessment considered the range and quality of our services. Our conclusion is that we provide a wide range of high quality services, through a safe and secure Classes of units – We examined different share classes in the fund and the costs global infrastructure, experienced investment professionals and effective risk associated with each, as well as if it is in the best interests of retail investors to management practices, all underpinned by a culture of client-centric continuous move them between share classes. We moved all direct retail shareholders to the improvement. cheapest share class during the course of the last year. From our analysis, each share class is appropriately priced and we are not proposing making any changes Cost this year. AFM costs – We compared the charges that we levy on investors against the cost we incur in providing the services to which the charges relate. Clarity Our assessment considered how well we articulate the Fund objective, investment Comparable market rates – We also compared the OCF of the fund with those process and associated risks, as well as content available on the website charged by its peers. From this analysis we found that the fund’s OCF is more than specifically for this Fund. Our conclusion was that Fund Objective and Policy was 10% cheaper than the average OCF of the defined peer group. satisfactory, but there is room for improvement.

Lazard Asset Management | 22 Value Assessments by Fund

Lazard UK Omega Fund Summary The objective of the Fund is to achieve capital growth over at least five We have given this fund a 3-star rating, meaning that our assessment years. has concluded that overall the fund offers value to investors.

Performance Over the last five years, the UK stock market has been heavily impacted by the political The level of turnover reflects trading recommendations by analysts, resulting from price and economic uncertainties related to Brexit. As the final stages of the Brexit targets being met, updates to investment thesis and other factors. We have therefore negotiations unfold, there remains considerable potential for further volatility, which concluded that the Fund offers value to investors in terms of its comparable market may be exacerbated by the unprecedented impact of the global pandemic. rates. The Fund has maintained its investment discipline against this extremely difficult backdrop, and continues to pursue a value-orientated approach to deploying capital, Comparable services – There is no comparable fund in the Lazard offshore fund range. resulting in a concentrated and high-conviction portfolio of between 25 – 35 holdings. When compared with segregated mandates that Lazard offers to institutional clients, in The value-orientated style bias has not been fully rewarded by the market but, in spite some instances the costs associated with these mandates may be lower. This reflects of that factor, the Fund has performed in line with its benchmark over the last twelve the fact that a segregated mandate client will only be paying for the cost of investment months, in spite of the exceptionally challenging backdrop. We believe that the team’s management, and not the ancillary costs associated with a fund proposition. long experience, backed by Lazard’s global resources, will allow us to identify attractive opportunities in this environment. Economies of scale – We assessed to what extent the fund is able to achieve any savings as a result of economies of scale considering, amongst other things, Lazard’s Service extensive global knowledge and expertise, technology and operations support. Our analysis indicates that investors in the fund benefit from Lazard’s global resources and Our assessment considered the range and quality of our services. Our conclusion is additional services. that we provide a wide range of high quality services, through a safe and secure global infrastructure, experienced investment professionals and effective risk management Classes of units – We examined different share classes in the fund and the costs practices, all underpinned by a culture of client-centric continuous improvement. associated with each, as well as if it is in the best interests of retail investors to move them between share classes. We moved all direct retail shareholders to the cheapest Cost share class during the course of the last year. From our analysis, each share class is AFM costs – We compared the charges that we levy on investors against the cost we appropriately priced and we are not proposing making any changes this year. incur in providing the services to which the charges relate. Clarity Comparable market rates – We also compared the OCF of the Fund with those charged Our assessment considered how well we articulate the Fund objective, investment by its peers. From this analysis we found that the Fund’s OCF is more than 10% more process and associated risks, as well as content available on the website specifically for expensive than the average OCF of the defined peer group. Given that the Fund runs this Fund. Our conclusion was that Fund Objective and Policy was satisfactory, but a concentrated portfolio, which is intended to capture the best ideas generated by there is room for improvement. Lazard’s analyst platform, portfolio turnover tends to be circa 100% per annum.

Lazard Asset Management | 23 Value Assessments by Fund

Lazard UK Smaller Companies Fund Summary The objective of the Fund is to achieve capital growth, over a rolling We have given this fund a 3-star rating, meaning that our assessment five year period, net of fees at a rate greater than that of the Numis has concluded that overall the fund offers value to investors. Smaller Companies ex Investment Companies Index.

Performance Comparable market rates – We also compared the OCF of the fund with those Over the last five years, the UK stock market has been heavily impacted by the charged by its peers. From this analysis we found that the fund’s OCF is within political and economic uncertainties related to Brexit. As the final stages of the 10% of the OCF of the average of the defined peer group. Brexit negotiations unfold, there remains considerable potential for further volatility, which may be exacerbated by the unprecedented impact of the global Comparable services – There is no other comparable fund in the Lazard offshore pandemic. This has particularly weighed on small-cap companies, which have fund range. When compared with segregated mandates that Lazard offers to struggled compared their large-cap peers as investors favoured the perceived institutional clients, in some instances the costs associated with these mandates safety and higher liquidity of large-cap stocks. may be lower. This reflects the fact that a segregated mandate client will only be paying for the cost of investment management, and not the ancillary costs The Fund has maintained its investment discipline against this extremely difficult associated with a fund proposition. backdrop, and continues to pursue a value-orientated approach to deploying capital. The value-orientated style bias has not been fully rewarded by the market but, in Economies of scale – We assessed to what extent the fund is able to achieve any spite of that factor, the Fund has outperformed its benchmark over the last twelve savings as a result of economies of scale considering, amongst other things, months, in spite of the exceptionally challenging backdrop. We believe that the Lazard’s extensive global knowledge and expertise, technology and operations team’s long experience, backed by Lazard’s global resources, will allow us to support. Our analysis indicates that investors in the fund benefit from Lazard’s identify attractive opportunities in this environment. global resources and additional services.

Service Classes of units – We examined different share classes in the fund and the costs Our assessment considered the range and quality of our services. Our conclusion associated with each, as well as if it is in the best interests of retail investors to is that we provide a wide range of high quality services, through a safe and secure move them between share classes. We moved all direct retail shareholders to the global infrastructure, experienced investment professionals and effective risk cheapest share class during the course of the last year. From our analysis, each management practices, all underpinned by a culture of client-centric continuous share class is appropriately priced and we are not proposing making any changes improvement. this year.

Lazard Asset Management | 24 Glossary of Terms

ACD – Lazard Fund Managers Limited, the Authorised Corporate Director of the Funds, or “us”

AFM Costs – the Authorised Fund Manager’s costs, being those of Lazard Fund Managers Limited

AUM – assets under management

BNY – The Bank of New York Mellon (International) Limited, the Depository and Fund Administrator

Funds – the sub-funds of Lazard Investment Funds, being the subject of this Value Assessment

FCA – the Financial Conduct Authority

IA – the Investment Association, the trade body for UK authorised investment funds

KIID – the Key Investor Information Document

Lazard – the Lazard Asset Management group of companies

OCF – the ongoing charges figure

Lazard Asset Management | 25 Issued and approved in the United Kingdom by Lazard Asset Management Limited, 50 Stratton Street, London W1J 8LL.

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Incorporated in England and Wales, registered number 525667. Lazard Asset Management Limited is authorised and regulated by the Financial Conduct Authority.