Lazard International Strategic Equity Portfolio Q1 2025 Commentary

2025-05-27 00:30:00 ET

Summary

• During the first quarter, the Lazard International Strategic Equity Portfolio rose 5.1%, lagging the MSCI EAFE Index which rose 6.9%.
• The investment philosophy of the Lazard International Equity Platform is one of Relative Value where we contrast a company’s level and trajectory of financial productivity with its valuation.
• Style headwinds had been significant during the COVID-era, and we had expected them to subside.

Market Overview

• Driven by Europe, and helped by stronger currencies, International equities rose strongly
• International outperformed the US by the largest quarterly amount in more than two decades
• European defense spending and potential German fiscal spending are significant and contributed to strong European returns
• Tariff concerns are contributing to higher inflation expectations
• Amidst higher rates, Value significantly outperformed as banks extended their run within financials, followed by other outperforming sectors like energy and utilities
• Quality significantly lagged the market during the last two quarters

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