Lazard International Strategic Equity Portfolio Q4 2024 Commentary

2025-03-20 11:15:00 ET

Summary

• International markets faced currency headwinds, with Japan outperforming due to a weaker Yen, while semiconductors underperformed and banks excelled.
• Lazard International Strategic Equity Portfolio underperformed the MSCI EAFE Index, impacted by pharmaceutical positions, beverage companies, and semiconductor allocation.
• Positive contributors included Bank Leumi, Compass, Sanrio, and MTU Aero Engines, driven by strong fundamentals and favorable market conditions.
• Outlook for 2025 emphasizes stock selection, corporate fundamentals, and valuation, with potential M&A activity and a balanced portfolio poised for relative performance.

Market Overview

• International markets fell slightly in the quarter in local terms
• But significant currency headwinds drove US dollar ( USDOLLAR , DXY ) EAFE returns down about 8%
• Driven by a weaker Yen, Japan outperformed by 4.5% (in USD) for both the quarter and year
• Semiconductors were among the worst performers while banks were among the top performers for both the quarter and year
• Momentum outperformed in both the quarter and the year and was driven predominantly by low quality in Japan

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