Lazard Feb 2024

Global Listed Infrastructure Fund Factsheet

Diversification Inflation-linked Risk Adjusted Returns

Historically offered attractive Companies’ revenue streams Historically defended well in
yield, strong performance and are implicitly or explicitly linked downturns in comparison to
lower risk than global equities to inflation global equity markets

Fund Facts Allocations (%)

Number of stocks 26
Sector
Gas Utilities
Total Fund Size $1,960.7m 7%
Electricity Railroads
Inception Date 5 October 2005
Utilities 16%
Total Management Costs 0.98% p.a. 13%
Minimum Investment $20,000
Buy/Sell Spread +0.25%/-0.25%
Diversified
Distributions Quarterly1 Toll Roads
Utilities
21%
APIR Code LAZ0014AU 25%

Communications
Investment Characteristics 2% Water Utilities
Cash & Net 12%
Premium/ Airports Hedging
Lazard Index2 Discount (%) 2% 2%
EV:EBITDA Multiple (X) 12.6 13.5 -6.6
EBITDA Margin (%) 29.8 28.1 6.3 Region United
Kingdom
Forward Price/Earnings 18.2 18.4 -1.1 20%
Dividend Yield (%) 4.2 3.8 11.2
3 Year Turnover (% pa) 31.4 - -
North
America
Performance (%) 36%
Excess
Europe ex UK
Lazard Index2 Return
33%
1 Month 0.7 0.6 0.1
Cash & Net Australia
3 Months 4.2 0.5 3.7
Hedging 5%
1 Year 7.7 1.6 6.1 2% Hong Kong
4%
3 Years (pa) 10.4 4.2 6.2
5 Years (pa) 6.2 3.6 2.6 Down Market Capture Ratio3
10 Years (pa) 9.6 7.3 2.3
Since Inception (pa) 9.9 7.7 2.2

Growth of $20,000 83%

Lazard Index 2
Index2 Lazard
115,000
95,000 Top 5 Holdings (%)
75,000 Lazard
55,000 Norfolk Southern 8.5
35,000 National Grid 8.4
15,000 Vinci 8.1
Oct-05

Oct-07

Oct-09

Oct-11

Oct-13

Oct-15

Oct-17

Oct-19

Oct-21

Oct-23

Ferrovial 8.1
CSX 7.2

1 Distributions are made quarterly if of an economic size.

2 The Global Listed Infrastructure Index (AUD Hedged) from inception to 31 March 2015, is the UBS Global 50/50 Infrastructure and
Utilities Net Index (AUD Hedged); from 1 April 2015 to 30 June 2018, the FTSE Developed Core Infrastructure 50/50 100% Hedged to
AUD Net Tax Index; and thereafter, the MSCI World Core Infrastructure 100% Hedged to AUD Index.
3 Down Market Capture Ratio is calculated since inception and based on performance net of all fees. Down Market capture is a
statistical measure of an investment manager’s overall performance in down markets, being calendar months where the Index
experiences negative performance. A Down Market Capture ratio (or percentage) of less than 100 (or 100%) reflects that the
manager, on average, has outperformed the Index during such down markets.
Investments can go up and down. Past performance is not necessarily indicative of future performance. Fund returns are quoted after
the deduction of Management Costs. Performance assumes reinvestment of all distributions.
 Lazard Global Listed Infrastructure Fund

Commentary
Global equity markets advanced in February 2024 driven by a US-led surge in technology stocks and strong corporate earnings,
particularly from artificial intelligence chip designer Nvidia. However, investor optimism was tempered by uncertainty surrounding
the timing of interest rate cuts from key central banks, including the US Federal Reserve, European Central Bank and Bank of
England. While inflation data influenced market expectations, central banks maintained a cautious approach to adjusting interest
rates.

The Lazard Global Listed Infrastructure Fund returned 0.69% (net of fees) during the month of February 2024, outperforming the
MSCI World Core Infrastructure 100% Hedged to AUD Index, which returned 0.60%, but underperforming the MSCI World Local
Currency Index, which returned 4.61% for the same period.

Contributors to Performance

• Freight railroads Norfolk Southern (NSC) and CSX were strong contributors to performance during the month. NSC shares
rose on news that an activist group led by Ancora had acquired a US$1 billion stake in the railroad and planned a proxy fight to
overhaul the board and replace its management team. The activist group highlighted that its plan includes raising service
levels and addressing operating inefficiencies, as NSC currently has the lowest operating margin of its Class 1 railroad peer
group. In the case of CSX, there was no company-specific news in February, rather the backdrop of a strong equity market.

• American Electric Power (AEP) added to performance after activist investor Icahn Capital disclosed a stake of 5.53 million
shares in the company. AEP announced that it had entered into an agreement with Icahn Capital to add two new directors to
its board. AEP has been underperforming its regulated utility peer group largely because of under-earning its regulatory
allowed returns. We have previously highlighted that there is no valid reason for a regulated utility to under-earn its allowed
returns in the long run. Even small changes in assumed allowed returns can significantly impact long run equity values. Hence,
simply eliminating the under-earning could create substantial value for shareholders.

• US electricity utility Exelon shares rose after its FY2024 earnings beat market expectations and the company lowered its
longer-term growth to a 5%-7%p.a. path, which we view as attractive and affordable for customers. In addition, the resolution
of the Illinois rate case for their largest subsidiary ComEd is likely to alleviate pressure on the share price later this year.

• Shares in French toll road and airport operator Vinci benefitted from rising expectation of its free cashflow after another record
year in 2023. The continuous recovery in airport traffic in addition to the strong and high margin growth in renewables at Cobra
Industrial Services provides Vinci with a platform to invest in long-term predictable assets and an avenue to redeploy capital
from the French motorway operations that are approaching their concession expiry within the next 10 years.

Detractors from Performance

• European regulated utilities such as Terna, Snam, United Utilities and Severn Trent, fell as the market was focused on high
growth technology companies during the month. While the steady predictable nature of these regulated utilities may seem
inadequate in the current market environment, we believe these stocks have strong value propositions that will serve investors
well in the long run, especially in more challenging environments.

• Following a strong 12-month period of performance, global toll road and airport constructor and operator Ferrovial (FER) fell
slightly mid-month on a softer Q4 result for its key asset, the 407ETR, in Toronto Canada. The 407ETR, which is around 40%
of our valuation for FER, reported 2023 results showing strong year-on-year growth but sequentially lower traffic growth
quarter on quarter with numbers below consensus estimates. Late in February, FER reported its own full year results which
were broadly in-line with expectations with the exception of US Managed Lanes which continued to exceed all broker
estimates.
 Lazard Global Listed Infrastructure Fund

Outlook

The combination of volatile equity markets and our conservative approach leads us to view current market conditions cautiously.
We see some pockets of attractive value opportunities, particularly in Europe. Inflation has been running strong in most
developed countries, resulting in increases in interest rates from historic lows. While we are starting to see signs of inflation
moderating, we believe inflation will remain above most Central Bank target ranges for a number of years ahead. High bursts of
inflation have positive cashflow implications for toll roads, airports, railways and non-US utilities. In contrast, the implications of
higher inflation for US utilities are likely negative.

For a long time, we have cautioned investors about the valuation of the US utility sector. Lazard’s Global Listed Infrastructure
strategy has been underweight this sector for some time. We remain cautious on the US utilities sector as a whole. However, we
are beginning to see some specific stock opportunities within the US utilities sector. We may seek to take advantage of these
opportunities in the months ahead.

The scarce valuation opportunities have led to a relatively concentrated portfolio where we believe the risk/return trade-off is
favourable, however this brings a higher degree of stock-specific risk. In our opinion, the only way to generate returns that
properly compensate for the risk taken is through highly selective stock-picking. We caution investors to expect increased
volatility in the short to medium term. Value is emerging now and on a 5-year view and valuations look more attractive on a
risk/return basis. We believe returns available in the strategy look relatively attractive at this time when compared to a passive
investment in infrastructure indices, bonds or in broader equity markets. We believe the preferred infrastructure characteristics
we seek for all our investments will continue to serve our investors well over the longer term.

For more information, call us on 1800 825 287

or visit www.lazardassetmanagement.com
Disclaimer
The information in this Fact Sheet was prepared by Lazard Asset Management Pacific Co ABN 13 064 523 619, AFS License 238432, and should not be considered a recommendation to purchase, sell or hold any particular
security. Securities and sectors mentioned in this Fact Sheet are presented to illustrate companies and sectors in which the Lazard Global Listed Infrastructure Fund (‘Fund’) may invest. Holdings are subject to change
daily. This Fact Sheet has been prepared without taking account of any investor’s objectives, financial situation or needs. Investors should get professional advice as to whether investment in the Fund is appropriate
having regard to their particular investment needs, objectives and financial circumstances before investing. Lazard has prepared a target market determination (TMD) for the Fund which sets out the class of consumers
for whom the Fund, including the Fund’s key attributes, would likely be consistent with their likely objectives, financial situation and needs. A copy of the TMD is available at www.lazardassetmanagement.com, by
contacting [email protected], or from their IDPS operator. It is recommended that investors consider whether their objectives, financial situation and needs are consistent with the target market of the Fund.
Investors should obtain a copy of the current Product Disclosure Statement (PDS) for the Fund, available at www.lazardassetmanagement.com, by contacting [email protected], or from their IDPS operator and
should consider the PDS before making any decision about whether to acquire or to continue to hold the Fund. Neither Lazard nor any member of the Lazard Group, including Lazard Asset Management LLC and its
affiliates guarantees in any way the performance of the Fund, repayment of capital from the Fund, any particular return from or any increase in the value of the Fund.

Certain information included herein is derived by Lazard in part from an MSCI index or indices (the “Index Data”). However, MSCI has not reviewed this product or report, and does not endorse or express any opinion
regarding this product or report or any analysis or other information contained herein or the author or source of any such information or analysis. Neither MSCI nor any third party involved in or related to the computing
or compiling of the Index Data makes any express or implied warranties, representations, or guarantees concerning the Index Data or any information or data derived therefrom, and in no event will MSCI or any third
party have any liability for any direct, indirect, special, punitive, consequential, or any other damages (including lost profits) relating to any use of this information. Any use of MSCI data requires a license from MSCI.
None of the Index Data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.