UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

Investment Company Act file number               811-21511

 

Lazard Global Total Return and Income Fund, Inc.

(Exact name of registrant as specified in charter)

 

30 Rockefeller Plaza

New York, New York 10112

(Address of principal executive offices)          (Zip code)

 

Nathan A. Paul, Esq.

Lazard Asset Management LLC

30 Rockefeller Plaza

New York, New York 10112

(Name and address of agent for service)

Registrant’s telephone number, including area code:     (212) 632-6000

 

 

Date of fiscal year end:

12/31

 

 

Date of reporting period:

12/31/10



ITEM 1. REPORTS TO STOCKHOLDERS.


(FRONT COVER)

LAZARD ASSET MANAGEMENT

Lazard Global Total

Return and Income

Fund, Inc.

Annual Report

D E C E M B E R  3 1,  2 0 1 0

LAZARD




 

 

 

     

Lazard Global Total Return and Income Fund, Inc.

 

 

 

 

 

     

Table of Contents

Page

Investment Overview

2

 

Portfolio of Investments

8

 

Notes to Portfolio of Investments

15

 

Statements of

 

 

Assets and Liabilities

16

 

Operations

17

 

Changes in Net Assets

18

 

Cash Flows

19

 

Financial Highlights

20

 

Notes to Financial Statements

21

 

Report of Independent Registered Public Accounting Firm

28

 

Proxy Voting Results

29

 

Portfolio Management Change

29

 

Dividend Reinvestment Plan

30

 

Board of Directors and Officers Information

31

 

Other Information

33

 




 

 

Lazard Global Total Return and Income Fund, Inc.

 

Investment Overview

 

 

Dear Stockholders,

We are pleased to present this annual report for Lazard Global Total Return and Income Fund, Inc. (“LGI” or the “Fund”), for the year ended December 31, 2010. LGI is a diversified, closed-end management investment company that began trading on the New York Stock Exchange (“NYSE”) on April 28, 2004. Its ticker symbol is “LGI.”

As of December 31, 2010, the Fund’s net asset value (“NAV”) performance for the fourth quarter and year-to-date lagged its benchmark, the Morgan Stanley Capital International (MSCI®) World® Index (the “Index”). However, we are pleased with LGI’s favorable NAV performance since inception. We believe that LGI’s investment thesis remains sound and that the Fund has provided investors with an attractive yield and diversification, backed by the extensive experience, commitment, and professional management of Lazard Asset Management LLC (the “Investment Manager” or “Lazard”).

Portfolio Update (as of December 31, 2010)

For the fourth quarter of 2010, the Fund’s NAV increased 6.1%, underperforming the Index gain of 9.0%. Similarly, the year-to-date NAV gain of 4.1% lagged the Index gain of 11.8%. However, the Fund’s NAV performance has outperformed the Index for the five-year period and, since inception, has returned 5.4% (annualized) versus 4.9% (annualized) for the Index. Shares of LGI ended the year with a market price of $15.06, representing a 10.5% discount to the Fund’s NAV of $16.83.

The Fund’s net assets were $161.7 million as of December 31, 2010, with total leveraged assets of $198.8 million, representing an 18.7% leverage rate, which was lower than in the third quarter and well below the maximum permitted leverage rate of 33⅓%.

Within the global equity portfolio, stock selection in the consumer discretionary sector helped performance during the fourth quarter. However, stock selection in the information technology, energy, and consumer staples sectors hurt performance. An underweight exposure to the materials sector and an overweight exposure to the health care sector also detracted from performance. The smaller, short-duration1 emerging market currency and debt portion of the Fund has added value for the year-

to-date, and remains a positive contributor to performance for the Fund since inception.

As of December 31, 2010, 72.5% of the Fund’s total leveraged assets consisted of global equities and 27.1% consisted of emerging market currency and debt instruments, while the remaining 0.4% consisted of cash and other net assets.

Declaration of Distributions

Pursuant to LGI’s level distribution policy, the Fund declares, monthly, a distribution equal to 6.25% (on an annualized basis) of the Fund’s NAV on the last business day of the previous year. The current monthly distribution rate per share of $0.08766 is based on the Fund’s NAV of $16.83 on December 31, 2010 and is equal to, on an annualized basis, 7.0% of the Fund’s $15.06 market price as of the close of trading on the NYSE on December 31, 2010. For 2010, of the $1.0794 per share distributed to stockholders, approximately $0.41 is a return of capital and is reported in Box 3 on the Form 1099-DIV that you receive.

Additional Information

Please note that, available on www.LazardNet.com, are frequent updates on the Fund’s performance, press releases, distribution information, and a monthly fact sheet that provides information about the Fund’s major holdings, sector weightings, regional exposures, and other characteristics, including notices required by Section 19(a) of the Investment Company Act of 1940, as amended. You may also reach Lazard by phone at 1-800-823-6300.

On behalf of Lazard, we thank you for your investment in Lazard Global Total Return and Income Fund, Inc. and look forward to continuing to serve your investment needs in the future.

Message from the Portfolio Managers

Global Equity Portfolio
(72.5% of total leveraged assets)

The Fund’s global equity portfolio is invested primarily in equity securities of large, well-known global companies with, we believe, strong financial productivity at attractive valuations. Examples include GlaxoSmithKline, a global research-based pharmaceutical company based in the United Kingdom; Bank of New York Mel-



2



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Investment Overview (continued)

 

 

lon, a U.S.-based company that provides financial products and services for institutions and individuals worldwide; Canon Inc., a Japanese manufacturer and distributor of network digital multifunction devices, copying machines, printers and cameras; and Total SA, a French energy supplier that explores for, produces, refines, transports, and markets oil and natural gas.

Companies held in the global equity portfolio are all based in developed-market regions around the world. As of December 31, 2010, 50.7% of these stocks were based in North America, 21.9% were based in Continental Europe (not including the United Kingdom), 15.0% were from the United Kingdom, 6.3% were from Japan, and 6.1% were from the rest of Asia (not including Japan).

The global equity portfolio is similarly well diversified across a number of industry sectors. The top two sectors, by weight, at December 31, 2010, were information technology (20.3%), which includes computer software, technology hardware, semiconductors, and services companies, and health care (17.5%), which includes health care equipment & services and pharmaceuticals biotechnology & life sciences companies. Other sectors in the portfolio include consumer discretionary, consumer staples, energy, industrials, materials, financials, and telecommunication services. The average dividend yield on the securities held in the global equity portfolio was approximately 2.7% as of December 31, 2010.

Global Equity Markets Review
Global stock markets posted robust returns in 2010 as worldwide economic growth continued to slowly improve. Macroeconomic developments were mixed during the fourth quarter, but the positive factors generally outweighed negative developments, and global equity markets rose. Positive GDP announcements from Japan, Northern Europe, the United States, and most emerging market countries, combined with better-than-expected corporate earnings, propelled markets higher. On the other hand, negative factors included ongoing concerns about sovereign debt levels in Europe, tensions on the Korean peninsula, and a failure by the G-20 to establish parameters governing exchange rates.

U.S. markets performed well, as GDP grew, and many companies reported strong earnings, and had cash-rich

balance sheets. Additionally, the U.S. Federal Reserve announced a second round of quantitative easing in November. European markets posted positive returns but lagged the MSCI All Country World® Index, as concerns remained about sovereign contagion after Ireland agreed to a large rescue package. Asian markets outperformed the Index due to continued strong growth, despite several measures taken by China to combat inflation concerns and prevent a property bubble. Japanese markets also outperformed the Index amid signs of positive wage growth and muted yen volatility.

All sectors in the Index, except for utilities, rose for the year. During the fourth quarter, the more cyclically geared sectors were among the strongest performing sectors, including materials and energy, which benefited from continued expectations of worldwide economic growth and commodity price strength. The information technology and industrials sectors also performed well on strong world growth, and industrials also benefited from robust manufacturing data.

Most emerging market currencies continued to appreciate in the fourth quarter, relative to the U.S. dollar, due to continued strong relative growth prospects. Additionally, the currencies of natural resource-rich countries Australia and Canada appreciated relative to the U.S. dollar, as did the Swiss franc and Japanese yen. In contrast, the euro and the British pound sterling were hurt by sovereign debt concerns.

What Helped and What Hurt LGI
Within the global equity portfolio, stock selection in the consumer discretionary sector helped performance during the year. In the fourth quarter, shares of Comcast rose as the company, one of the United States’ largest cable and media companies, reported quarterly results that exceeded expectations. The company’s ability to sell bundled services and increase its average revenue per user drove earnings.

However, stock selection in the information technology, energy, and consumer staples sectors hurt performance for the year. During the fourth quarter, within information technology, Cisco Systems performed poorly after the company reported quarterly earnings in-line with consensus expectations, but the results were largely overshadowed by management’s negative guidance regarding a choppy demand environment. In consumer staples, shares of William



3



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Investment Overview (continued)

 

 

Morrison Supermarkets lagged due to de-rating in the fourth quarter on concerns about slowing industry growth, which is a function of U.K. austerity measures. An underweight exposure to the materials sector and an overweight exposure to the health care sector also detracted from performance for the year.

Emerging Market Currency and Debt Portfolio
(27.1% of total leveraged assets)

The Fund also seeks enhanced income through investing in primarily high-yielding, short-duration emerging market forward currency contracts and local currency debt instruments. As of December 31, 2010, this portfolio consisted of forward currency contracts (72.4%) and sovereign debt obligations (27.6%). The average duration of the emerging market currency and debt portfolio increased from approximately 4 months to approximately 5 months during the fourth quarter, with an average yield of 5.7%2 as of December 31, 2010.

Emerging Market Currency and Debt Market Review
External factors overwhelmed fundamentals during certain periods throughout 2010, including the fourth quarter. The post quantitative easing (QE2) rally in October was reversed during November and the crisis in peripheral Europe returned to the forefront, this time with Ireland in focus. As we experienced in May, many emerging market countries experienced heightened sensitivity to global risk aversion during November, prompted by Irish contagion, due to heavy foreign investor positioning and currencies in disparate countries such as India, Poland and Mexico sold off.

The risks in peripheral Europe notwithstanding, growth continued to be strong throughout emerging market countries, led by Latin America and Asia. Domestic-demand driven countries such as Chile, Brazil, and the Philippines were among top performers for the quarter, while a cyclical growth rebound and non-interventionist monetary policy made Mexico the quarter’s top performer. While many of these countries have benefit-

ed from portfolio capital, increasing intra-emerging markets trade, cross-border investment flows, and healthy banks, low leverage among these countries may decrease the potential for continued growth.

What Helped and What Hurt LGI
Latin American country selection favored Chile, Brazil and Mexico, while our lack of investment in Colombia helped performance. Chilean exposure was abetted by continued monetary normalization and terms of trade gains from continued high copper prices.

The Asian region was the top performer in the quarter on optimism that the global recovery is intact, after the U.S. economy grew more than estimated in the third quarter coupled with a robust growth outlook across Asia. Exposure to the Philippines benefited from seasonal remittance inflows and strong domestic growth, while India’s capital account flows were sufficient to finance the country’s current account deficit. Strong account surplus positions and upward GDP projections in Malaysia and the Philippines were complemented by surging foreign inflows in South Korea.

Exposure to smaller, less liquid markets such as Serbia and Zambia also helped. Serbia’s attractive yields amidst relative currency stability contributed to performance. The Zambian kwacha appreciated as the economy benefited from rising prices and volumes of copper, its key export, in addition to investment inflows.

Turkey was the worst performer during the quarter due to December’s lira weakness, on widening current account deficit and central bank policy stance. Despite its fourth quarter detraction, Turkey was the second best performer for the full year. Ghana was hurt by rising year-end imports related to strong growth, which resulted in local currency weakness. Loose monetary policy and strong growth also weighed on the Ugandan shilling as strong economic growth fueled rising year-end imports resulting in local currency weakness.



4



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Investment Overview (continued)

 

 

 

 

 

Notes to Investment Overview:

 

 

1

A measure of the average cash weighted term-to-maturity of the investment holdings. Duration is a measure of the price sensitivity of a bond to interest rate movements. Duration for a forward currency contract is equal to its term-to-maturity.

2

The quoted yield does not account for the implicit cost of borrowing on the forward currency contracts, which would reduce the yield shown.

All returns reflect reinvestment of all dividends and distributions. Past performance is not indicative, or a guarantee, of future results.

The performance data of the Index and other market data have been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to their accuracy. The Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The Index is unmanaged, has no fees or costs and is not available for investment.

The views of the Fund’s Investment Manager and the securities described in this report are as of December 31, 2010; these views and portfolio holdings may have changed subsequent to this date. Nothing herein should be construed as a recommendation to buy, sell, or hold a particular security. There is no assurance that the securities discussed herein will remain in the Fund at the time you receive this report, or that securities sold will not have been repurchased. The specific securities discussed may, in aggregate, represent only a small percentage of the Fund’s holdings. It should not be assumed that securities identified and discussed were, or will be, profitable, or that the investment decisions made in the future will be profitable, or equal the investment performance of the securities discussed herein.

The views and opinions expressed are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendations for, any person. There can be no guarantee as to the accuracy of the outlooks for markets, sectors and securities as discussed herein.

5



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Investment Overview (continued)

 

 

Comparison of Changes in Value of $10,000 Investment in
LGI and MSCI World Index*

(LINE GRAPH)

 

 

 

 

 

 

 

 

 

Value at
12/31/10

 

 

 

 

 

 

(GRAPHIC)

LGI at Market Price

 

$

12,826

 

(GRAPHIC)

LGI at Net Asset Value

 

 

14,166

 

(GRAPHIC)

MSCI World Index

 

 

13,722

 


 

 

 

 

 

 

 

 

 

 

 

Average Annual Total Returns*

 

 

 

 

 

 

 

 

 

Periods Ended December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One
Year

 

Five
Years

 

Since
Inception**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Price

 

8.90

%

 

4.56%

 

3.80%

 

 

Net Asset Value

 

4.14

%

 

3.14%

 

5.35%

 

 

MSCI World Index

 

11.76

%

 

2.43%

 

4.85%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*

All returns reflect reinvestment of all dividends and distributions. The performance quoted represents past performance. Current performance may be lower or higher than the performance quoted. Past performance is not indicative, or a guarantee, of future results; the investment return, market price and net asset value of the Fund will fluctuate, so that an investor’s shares in the Fund, when sold, may be worth more or less than their original cost. The returns do not reflect the deduction of taxes that a stockholder would pay on the Fund’s distributions or on the sale of Fund shares.

 

 

 

 

 

 

 

The performance data of the Index has been prepared from sources and data that the Investment Manager believes to be reliable, but no representation is made as to its accuracy. The Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The Index is unmanaged, has no fees or costs and is not available for investment.

 

 

 

 

 

 

**

The Fund’s inception date was April 28, 2004.

 

6



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Investment Overview (concluded)

 

 

 

 

 

 

 

 

 

 

 

 

 

Ten Largest Equity Holdings

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Security

 

 

Value

 

Percentage of
Net Assets

 

 

 

 

 

 

 

 

 

 

Johnson & Johnson

 

$

6,450,955

 

4.0

%

 

 

Microsoft Corp.

 

 

6,326,672

 

3.9

 

 

 

The Home Depot, Inc.

 

 

5,802,430

 

3.6

 

 

 

Oracle Corp.

 

 

5,768,590

 

3.6

 

 

 

International Business Machines Corp.

 

 

5,694,288

 

3.5

 

 

 

HSBC Holdings PLC Sponsored ADR

 

 

5,687,693

 

3.5

 

 

 

United Technologies Corp.

 

 

5,423,808

 

3.4

 

 

 

Singapore Telecommunications, Ltd. ADR

 

 

5,163,250

 

3.2

 

 

 

Novartis AG ADR

 

 

4,651,155

 

2.9

 

 

 

Cisco Systems, Inc.

 

 

4,458,692

 

2.8

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

Portfolio Holdings Presented by Sector

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sector

 

 

 

 

Percentage of
Total Investments

 

 

 

 

 

 

 

 

 

Consumer Discretionary

 

 

 

 

7.6

%

 

 

Consumer Staples

 

 

 

 

6.8

 

 

 

Emerging Markets Debt Obligations

 

 

 

 

12.2

 

 

 

Energy

 

 

 

 

10.9

 

 

 

Financials

 

 

 

 

14.9

 

 

 

Health Care

 

 

 

 

15.4

 

 

 

Industrials

 

 

 

 

7.8

 

 

 

Information Technology

 

 

 

 

17.9

 

 

 

Materials

 

 

 

 

3.4

 

 

 

Telecommunication Services

 

 

 

 

3.1

 

 

 

 

 

 

 

 

   

 

 

Total Investments

 

 

 

 

100.0

%

 

 

 

 

 

 

 

   

 

 

7



 

 

Lazard Global Total Return and Income Fund, Inc.


Portfolio of Investments

December 31, 2010

 

 

 

 

 

 

 

 

 

Description

 

Shares

 

Value

 

           

Common Stocks—89.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Australia—2.2%

 

 

 

 

 

 

 

BHP Billiton, Ltd. Sponsored ADR

 

 

38,500

 

$

3,577,420

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

France—5.9%

 

 

 

 

 

 

 

GDF Suez Sponsored ADR

 

 

75,981

 

 

2,738,355

 

Sanofi-Aventis ADR

 

 

105,200

 

 

3,390,596

 

Total SA Sponsored ADR

 

 

64,000

 

 

3,422,720

 

 

 

 

 

 

   

 

Total France

 

 

 

 

 

9,551,671

 

 

 

 

 

 

   

 

 

Germany—1.8%

 

 

 

 

 

 

 

SAP AG Sponsored ADR

 

 

59,300

 

 

3,001,173

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Ireland—1.3%

 

 

 

 

 

 

 

CRH PLC Sponsored ADR

 

 

98,300

 

 

2,044,640

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Italy—1.0%

 

 

 

 

 

 

 

Eni SpA Sponsored ADR

 

 

36,350

 

 

1,589,949

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Japan—6.3%

 

 

 

 

 

 

 

Canon, Inc. Sponsored ADR

 

 

44,700

 

 

2,294,898

 

Hoya Corp. Sponsored ADR

 

 

73,500

 

 

1,786,785

 

Mitsubishi UFJ Financial Group, Inc.

 

 

 

 

 

 

 

ADR

 

 

528,000

 

 

2,856,480

 

Nomura Holdings, Inc. ADR

 

 

332,600

 

 

2,121,988

 

Sumitomo Mitsui Financial Group,

 

 

 

 

 

 

 

Inc. Sponsored ADR

 

 

160,600

 

 

1,141,866

 

 

 

 

 

 

   

 

Total Japan

 

 

 

 

 

10,202,017

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Singapore—3.2%

 

 

 

 

 

 

 

Singapore Telecommunications, Ltd.

 

 

 

 

 

 

 

ADR (c)

 

 

217,400

 

 

5,163,250

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Spain—1.4%

 

 

 

 

 

 

 

Banco Santander SA Sponsored ADR

 

 

220,693

 

 

2,350,380

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Switzerland—9.4%

 

 

 

 

 

 

 

Credit Suisse Group AG Sponsored

 

 

 

 

 

 

 

ADR (c)

 

 

73,400

 

 

2,966,094

 

Novartis AG ADR

 

 

78,900

 

 

4,651,155

 

Roche Holding AG Sponsored ADR

 

 

92,400

 

 

3,386,460

 

UBS AG (a)

 

 

107,587

 

 

1,771,958

 

Zurich Financial Services AG ADR

 

 

92,500

 

 

2,394,825

 

 

 

 

 

 

   

 

Total Switzerland

 

 

 

 

 

15,170,492

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

United Kingdom—13.4%

 

 

 

 

 

 

 

BP PLC Sponsored ADR (c)

 

 

97,100

 

 

4,288,907

 

British American Tobacco PLC

 

 

 

 

 

 

 

Sponsored ADR

 

 

37,700

 

 

2,929,290

 

 

 

 

 

 

 

 

 

Description

 

Shares

 

Value

 

           

GlaxoSmithKline PLC Sponsored

 

 

 

 

 

 

 

ADR (c)

 

 

80,200

 

$

3,145,444

 

HSBC Holdings PLC Sponsored

 

 

 

 

 

 

 

ADR (c)

 

 

111,436

 

 

5,687,693

 

Unilever PLC Sponsored ADR

 

 

99,100

 

 

3,060,208

 

William Morrison Supermarkets

 

 

 

 

 

 

 

PLC ADR

 

 

120,300

 

 

2,497,428

 

 

 

 

 

 

   

 

Total United Kingdom

 

 

 

 

 

21,608,970

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

United States—43.3%

 

 

 

 

 

 

 

Bank of New York Mellon Corp. (c)

 

 

103,600

 

 

3,128,720

 

Cisco Systems, Inc. (a), (c)

 

 

220,400

 

 

4,458,692

 

Comcast Corp., Class A

 

 

160,900

 

 

3,348,329

 

ConocoPhillips

 

 

32,900

 

 

2,240,490

 

Emerson Electric Co.

 

 

67,600

 

 

3,864,692

 

Halliburton Co.

 

 

89,900

 

 

3,670,617

 

Honeywell International, Inc. (c)

 

 

64,700

 

 

3,439,452

 

International Business Machines

 

 

 

 

 

 

 

Corp. (c)

 

 

38,800

 

 

5,694,288

 

Johnson & Johnson (c)

 

 

104,300

 

 

6,450,955

 

Merck & Co., Inc.

 

 

75,300

 

 

2,713,812

 

Microsoft Corp. (c)

 

 

226,600

 

 

6,326,672

 

Oracle Corp.

 

 

184,300

 

 

5,768,590

 

PepsiCo, Inc.

 

 

41,100

 

 

2,685,063

 

Pfizer, Inc. (c)

 

 

87,566

 

 

1,533,281

 

The Home Depot, Inc. (c)

 

 

165,500

 

 

5,802,430

 

United Technologies Corp.

 

 

68,900

 

 

5,423,808

 

Wal-Mart Stores, Inc.

 

 

62,800

 

 

3,386,804

 

 

 

 

 

 

   

 

Total United States

 

 

 

 

 

69,936,695

 

 

 

 

 

 

   

 

Total Common Stocks

 

 

 

 

 

 

 

(Identified cost $149,030,438)

 

 

 

 

 

144,196,657

 

 

 

 

 

 

   

 


 

 

 

 

 

 

 

 

Description

 

Principal
Amount
(000) (d)

 

Value

 

           

Foreign Government

 

 

 

 

 

 

 

Obligations—12.4%

 

 

 

 

 

 

 

 

Brazil—3.8%

 

 

 

 

 

 

 

Brazil NTN-F:

 

 

 

 

 

 

 

10.00%, 01/01/12

 

 

4,500

 

$

2,791,957

 

10.00%, 01/01/13

 

 

5,795

 

 

3,345,360

 

 

 

 

 

 

   

 

Total Brazil

 

 

 

 

 

6,137,317

 

 

 

 

 

 

   

 



The accompanying notes are an integral part of these financial statements.

8



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Portfolio of Investments (continued)

December 31, 2010

 

 

 

 

 

 

 

 

 

Description

 

Principal
Amount
(000) (d)

 

Value

 

           

Egypt—3.4%

 

 

 

 

 

 

 

Egypt Treasury Bills:

 

 

 

 

 

 

 

0.00%, 01/11/11

 

 

1,975

 

$

339,567

 

0.00%, 02/01/11

 

 

4,675

 

 

799,647

 

0.00%, 02/08/11

 

 

1,275

 

 

217,705

 

0.00%, 02/15/11

 

 

2,750

 

 

468,746

 

0.00%, 02/22/11

 

 

1,800

 

 

306,282

 

0.00%, 03/15/11

 

 

2,700

 

 

457,019

 

0.00%, 03/29/11

 

 

8,125

 

 

1,370,501

 

0.00%, 05/31/11

 

 

350

 

 

58,006

 

0.00%, 06/21/11

 

 

4,425

 

 

728,742

 

0.00%, 07/12/11

 

 

900

 

 

147,279

 

0.00%, 08/02/11

 

 

825

 

 

134,191

 

0.00%, 09/06/11

 

 

350

 

 

56,350

 

0.00%, 09/20/11

 

 

2,625

 

 

420,868

 

 

 

 

 

 

   

 

Total Egypt

 

 

 

 

 

5,504,903

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Ghana—1.1%

 

 

 

 

 

 

 

Ghana Government Bonds:

 

 

 

 

 

 

 

14.00%, 03/07/11

 

 

1,000

 

 

674,832

 

16.00%, 05/02/11

 

 

460

 

 

312,726

 

13.67%, 06/11/12

 

 

790

 

 

537,826

 

15.00%, 12/10/12

 

 

320

 

 

224,323

 

 

 

 

 

 

   

 

Total Ghana

 

 

 

 

 

1,749,707

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Description

 

Principal
Amount
(000) (d)

 

Value

 

           

Mexico—2.6%

 

 

 

 

 

 

 

Mexican Bonos:

 

 

 

 

 

 

 

9.00%, 12/20/12

 

 

17,220

 

$

1,494,027

 

8.00%, 12/17/15

 

 

11,500

 

 

994,680

 

7.75%, 12/14/17

 

 

7,000

 

 

602,397

 

Mexican Cetes:

 

 

 

 

 

 

 

0.00%, 01/13/11

 

 

6,790

 

 

548,857

 

0.00%, 04/07/11

 

 

6,790

 

 

543,013

 

 

 

 

 

 

   

 

Total Mexico

 

 

 

 

 

4,182,974

 

 

 

 

 

 

   

 

 

Poland—1.5%

 

 

 

 

 

 

 

Poland Government Bonds:

 

 

 

 

 

 

 

4.75%, 04/25/12

 

 

1,872

 

 

634,583

 

0.00%, 10/25/12

 

 

5,188

 

 

1,618,704

 

3.00%, 08/24/16

 

 

413

 

 

141,690

 

 

 

 

 

 

   

 

Total Poland

 

 

 

 

 

2,394,977

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Total Foreign Government

 

 

 

 

 

 

 

Obligations

 

 

 

 

 

 

 

(Identified cost $18,906,810)

 

 

 

 

 

19,969,878

 

 

 

 

 

 

   

 

 

Total Investments—101.6%

 

 

 

 

 

 

 

(Identified cost $167,937,248) (b)

 

 

 

 

$

164,166,535

 

Liabilities in Excess of Cash

 

 

 

 

 

 

 

and Other Assets—(1.6)%

 

 

 

 

 

(2,514,497

)

 

 

 

 

 

   

 

Net Assets—100.0%

 

 

 

 

$

161,652,038

 

 

 

 

 

 

   

 



The accompanying notes are an integral part of these financial statements.

9



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Portfolio of Investments (continued)

December 31, 2010

 

 

Forward Currency Purchase Contracts open at December 31, 2010:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency
Purchase Contracts

 

Counterparty

 

Expiration
Date

 

Foreign
Currency

 

U.S. $ Cost
on Origination
Date

 

U.S. $
Current
Value

 

Unrealized
Appreciation

 

Unrealized
Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARS

 

CIT

 

01/10/11

 

1,629,018

 

$

407,000

 

$

409,738

 

$

2,738

 

$

 

ARS

 

CIT

 

01/12/11

 

1,845,383

 

 

461,000

 

 

463,935

 

 

2,935

 

 

 

ARS

 

BNP

 

01/25/11

 

3,121,968

 

 

772,000

 

 

782,418

 

 

10,418

 

 

 

ARS

 

BNP

 

02/08/11

 

1,547,904

 

 

384,000

 

 

386,651

 

 

2,651

 

 

 

ARS

 

CIT

 

02/09/11

 

1,325,445

 

 

330,000

 

 

331,009

 

 

1,009

 

 

 

ARS

 

BNP

 

02/18/11

 

2,804,454

 

 

694,000

 

 

698,951

 

 

4,951

 

 

 

ARS

 

BNP

 

02/22/11

 

1,350,315

 

 

333,000

 

 

336,235

 

 

3,235

 

 

 

ARS

 

BNP

 

02/28/11

 

1,738,952

 

 

429,000

 

 

432,425

 

 

3,425

 

 

 

BRL

 

BRC

 

01/04/11

 

1,419,312

 

 

845,332

 

 

855,007

 

 

9,675

 

 

 

BRL

 

JPM

 

01/04/11

 

6,400,565

 

 

3,814,401

 

 

3,855,762

 

 

41,361

 

 

 

BRL

 

JPM

 

01/04/11

 

678,942

 

 

396,000

 

 

409,001

 

 

13,001

 

 

 

CLP

 

BNP

 

01/10/11

 

172,088,700

 

 

361,000

 

 

367,536

 

 

6,536

 

 

 

CLP

 

HSB

 

01/20/11

 

198,851,800

 

 

412,000

 

 

424,359

 

 

12,359

 

 

 

CLP

 

BNP

 

02/14/11

 

396,799,550

 

 

833,000

 

 

845,044

 

 

12,044

 

 

 

CLP

 

BNP

 

02/28/11

 

155,588,700

 

 

321,000

 

 

330,944

 

 

9,944

 

 

 

CLP

 

CIT

 

03/07/11

 

380,244,375

 

 

783,000

 

 

808,319

 

 

25,319

 

 

 

CLP

 

CIT

 

03/17/11

 

216,807,500

 

 

455,000

 

 

460,516

 

 

5,516

 

 

 

CNY

 

JPM

 

03/17/11

 

14,581,257

 

 

2,193,000

 

 

2,212,343

 

 

19,343

 

 

 

CNY

 

JPM

 

05/27/11

 

492,029

 

 

72,177

 

 

74,720

 

 

2,543

 

 

 

CNY

 

BRC

 

07/29/11

 

5,434,092

 

 

813,000

 

 

826,327

 

 

13,327

 

 

 

CNY

 

BRC

 

07/29/11

 

1,097,824

 

 

169,000

 

 

166,939

 

 

 

 

2,061

 

CNY

 

BRC

 

07/29/11

 

254,486

 

 

38,000

 

 

38,698

 

 

698

 

 

 

CNY

 

JPM

 

07/29/11

 

4,071,165

 

 

609,000

 

 

619,076

 

 

10,076

 

 

 

CNY

 

JPM

 

07/29/11

 

1,460,246

 

 

222,074

 

 

222,050

 

 

 

 

24

 

COP

 

BNP

 

01/03/11

 

1,414,192,450

 

 

710,692

 

 

736,559

 

 

25,867

 

 

 

COP

 

HSB

 

01/03/11

 

1,414,192,450

 

 

737,000

 

 

736,559

 

 

 

 

441

 

COP

 

BNP

 

01/24/11

 

1,531,200,000

 

 

800,000

 

 

801,513

 

 

1,513

 

 

 

CZK

 

CAL

 

01/21/11

 

15,157,156

 

 

787,575

 

 

808,723

 

 

21,148

 

 

 

CZK

 

BRC

 

01/31/11

 

15,064,466

 

 

780,025

 

 

803,776

 

 

23,751

 

 

 

CZK

 

CAL

 

03/03/11

 

8,165,027

 

 

426,579

 

 

435,541

 

 

8,962

 

 

 

EGP

 

CIT

 

01/03/11

 

986,000

 

 

168,978

 

 

169,854

 

 

876

 

 

 

EUR

 

BRC

 

01/03/11

 

650,581

 

 

884,000

 

 

869,372

 

 

 

 

14,628

 

EUR

 

BRC

 

01/03/11

 

256,840

 

 

340,000

 

 

343,216

 

 

3,216

 

 

 

EUR

 

BRC

 

01/03/11

 

207,796

 

 

272,000

 

 

277,677

 

 

5,677

 

 

 

EUR

 

CIT

 

01/03/11

 

553,197

 

 

731,355

 

 

739,238

 

 

7,883

 

 

 

EUR

 

CIT

 

01/06/11

 

192,292

 

 

256,960

 

 

256,959

 

 

 

 

1

 

EUR

 

JPM

 

03/14/11

 

248,708

 

 

328,295

 

 

332,272

 

 

3,977

 

 

 

EUR

 

BRC

 

04/04/11

 

505,051

 

 

671,407

 

 

674,682

 

 

3,275

 

 

 

GHS

 

CIT

 

01/06/11

 

475,000

 

 

324,232

 

 

319,087

 

 

 

 

5,145

 

GHS

 

SCB

 

01/10/11

 

284,000

 

 

193,777

 

 

190,557

 

 

 

 

3,220

 

GHS

 

SCB

 

01/10/11

 

127,650

 

 

86,000

 

 

85,650

 

 

 

 

350

 

GHS

 

CIT

 

01/20/11

 

1,155,000

 

 

779,352

 

 

772,713

 

 

 

 

6,639

 

GHS

 

BRC

 

01/24/11

 

199,580

 

 

134,000

 

 

133,366

 

 

 

 

634

 

GHS

 

SCB

 

01/31/11

 

299,000

 

 

199,400

 

 

199,388

 

 

 

 

12

 

GHS

 

BRC

 

10/11/11

 

237,330

 

 

109,369

 

 

147,224

 

 

37,855

 

 

 

IDR

 

BRC

 

01/10/11

 

5,224,050,000

 

 

585,000

 

 

579,271

 

 

 

 

5,729

 

ILS

 

CAL

 

01/07/11

 

6,061,140

 

 

1,669,000

 

 

1,708,006

 

 

39,006

 

 

 

ILS

 

CIT

 

01/26/11

 

3,419,437

 

 

949,000

 

 

963,301

 

 

14,301

 

 

 

The accompanying notes are an integral part of these financial statements.

10



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Portfolio of Investments (continued)

December 31, 2010

 

 

Forward Currency Purchase Contracts open at December 31, 2010 (continued):


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency
Purchase Contracts

 

Counterparty

 

Expiration
Date

 

Foreign
Currency

 

U.S. $ Cost
on Origination
Date

 

U.S. $
Current
Value

 

Unrealized
Appreciation

 

Unrealized
Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ILS

 

CIT

 

01/31/11

 

1,900,305

 

$

533,000

 

$

535,300

 

$

2,300

 

$

 

INR

 

HSB

 

01/12/11

 

14,351,050

 

 

313,000

 

 

320,487

 

 

7,487

 

 

 

INR

 

SCB

 

01/12/11

 

31,625,410

 

 

659,000

 

 

706,257

 

 

47,257

 

 

 

INR

 

BRC

 

01/27/11

 

41,654,360

 

 

902,000

 

 

927,742

 

 

25,742

 

 

 

INR

 

JPM

 

02/22/11

 

23,736,000

 

 

516,000

 

 

526,101

 

 

10,101

 

 

 

INR

 

BRC

 

03/14/11

 

23,373,300

 

 

510,000

 

 

516,039

 

 

6,039

 

 

 

INR

 

BNP

 

05/31/11

 

42,264,610

 

 

902,608

 

 

920,113

 

 

17,505

 

 

 

KES

 

CIT

 

01/10/11

 

20,784,000

 

 

258,186

 

 

257,228

 

 

 

 

958

 

KES

 

SCB

 

01/14/11

 

20,988,000

 

 

260,620

 

 

259,753

 

 

 

 

867

 

KES

 

CIT

 

01/20/11

 

41,313,000

 

 

511,933

 

 

511,300

 

 

 

 

633

 

KES

 

SCB

 

01/31/11

 

27,991,000

 

 

347,050

 

 

346,424

 

 

 

 

626

 

KRW

 

SCB

 

01/19/11

 

2,300,645,000

 

 

2,027,000

 

 

2,025,564

 

 

 

 

1,436

 

KRW

 

CIT

 

03/28/11

 

440,230,000

 

 

380,000

 

 

386,211

 

 

6,211

 

 

 

KZT

 

CIT

 

01/18/11

 

37,270,000

 

 

253,159

 

 

253,006

 

 

 

 

153

 

KZT

 

HSB

 

01/28/11

 

34,752,000

 

 

235,687

 

 

235,988

 

 

301

 

 

 

KZT

 

BRC

 

01/31/11

 

17,760,000

 

 

120,488

 

 

120,613

 

 

125

 

 

 

KZT

 

CIT

 

01/31/11

 

35,520,000

 

 

240,977

 

 

241,226

 

 

249

 

 

 

KZT

 

HSB

 

02/07/11

 

32,531,200

 

 

221,000

 

 

220,977

 

 

 

 

23

 

KZT

 

BRC

 

02/10/11

 

32,531,200

 

 

221,000

 

 

220,998

 

 

 

 

2

 

KZT

 

CIT

 

03/29/11

 

35,472,000

 

 

240,651

 

 

241,283

 

 

632

 

 

 

KZT

 

BRC

 

04/01/11

 

56,874,000

 

 

385,979

 

 

386,888

 

 

909

 

 

 

KZT

 

BRC

 

05/03/11

 

66,555,000

 

 

452,294

 

 

452,786

 

 

492

 

 

 

KZT

 

BRC

 

05/03/11

 

35,520,000

 

 

241,468

 

 

241,649

 

 

181

 

 

 

KZT

 

CIT

 

05/10/11

 

41,044,475

 

 

279,024

 

 

279,233

 

 

209

 

 

 

KZT

 

HSB

 

05/10/11

 

40,996,000

 

 

278,600

 

 

278,903

 

 

303

 

 

 

KZT

 

HSB

 

05/10/11

 

32,597,000

 

 

221,673

 

 

221,763

 

 

90

 

 

 

KZT

 

BRC

 

05/20/11

 

33,277,500

 

 

225,901

 

 

226,393

 

 

492

 

 

 

KZT

 

BRC

 

05/20/11

 

30,763,200

 

 

208,706

 

 

209,288

 

 

582

 

 

 

KZT

 

CIT

 

06/09/11

 

17,612,000

 

 

119,728

 

 

119,818

 

 

90

 

 

 

KZT

 

HSB

 

06/15/11

 

17,612,000

 

 

119,688

 

 

119,818

 

 

130

 

 

 

KZT

 

BRC

 

06/20/11

 

30,763,200

 

 

208,734

 

 

209,288

 

 

554

 

 

 

KZT

 

HSB

 

06/28/11

 

34,752,000

 

 

235,927

 

 

236,425

 

 

498

 

 

 

KZT

 

BRC

 

06/30/11

 

17,760,000

 

 

120,554

 

 

120,825

 

 

271

 

 

 

KZT

 

CIT

 

07/18/11

 

49,299,000

 

 

335,025

 

 

335,422

 

 

397

 

 

 

KZT

 

BRC

 

08/02/11

 

66,555,000

 

 

452,447

 

 

452,880

 

 

433

 

 

 

KZT

 

BRC

 

08/10/11

 

26,490,000

 

 

180,155

 

 

180,264

 

 

109

 

 

 

MXN

 

HSB

 

03/09/11

 

6,364,080

 

 

480,000

 

 

512,849

 

 

32,849

 

 

 

MYR

 

HSB

 

01/24/11

 

1,477,832

 

 

472,000

 

 

478,580

 

 

6,580

 

 

 

MYR

 

SCB

 

02/10/11

 

1,989,156

 

 

638,000

 

 

643,434

 

 

5,434

 

 

 

MYR

 

BRC

 

03/03/11

 

1,306,980

 

 

411,000

 

 

422,257

 

 

11,257

 

 

 

MYR

 

JPM

 

03/10/11

 

7,480,905

 

 

2,370,000

 

 

2,415,867

 

 

45,867

 

 

 

PEN

 

BNP

 

03/24/11

 

1,426,201

 

 

511,000

 

 

506,462

 

 

 

 

4,538

 

PEN

 

BNP

 

03/24/11

 

326,451

 

 

115,969

 

 

115,927

 

 

 

 

42

 

PHP

 

BRC

 

01/28/11

 

35,796,950

 

 

769,000

 

 

817,312

 

 

48,312

 

 

 

PHP

 

JPM

 

01/28/11

 

33,517,440

 

 

759,000

 

 

765,267

 

 

6,267

 

 

 

PHP

 

HSB

 

03/03/11

 

24,453,990

 

 

561,000

 

 

558,190

 

 

 

 

2,810

 

PHP

 

BRC

 

05/19/11

 

42,180,000

 

 

980,018

 

 

961,340

 

 

 

 

18,678

 

PHP

 

BRC

 

05/27/11

 

58,158,620

 

 

1,352,212

 

 

1,325,213

 

 

 

 

26,999

 

The accompanying notes are an integral part of these financial statements.

11



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Portfolio of Investments (continued)

December 31, 2010

 

 

Forward Currency Purchase Contracts open at December 31, 2010 (continued):


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency
Purchase Contracts

 

Counterparty

 

Expiration
Date

 

Foreign
Currency

 

U.S. $ Cost
on Origination
Date

 

U.S. $
Current
Value

 

Unrealized
Appreciation

 

Unrealized
Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLN

 

CIT

 

01/03/11

 

2,194,700

 

$

707,694

 

$

741,353

 

$

33,659

 

$

 

PLN

 

JPM

 

01/28/11

 

5,203,052

 

 

1,701,818

 

 

1,754,884

 

 

53,066

 

 

 

PLN

 

CIT

 

02/03/11

 

922,190

 

 

307,233

 

 

310,918

 

 

3,685

 

 

 

RON

 

ING

 

01/18/11

 

696,681

 

 

224,132

 

 

218,410

 

 

 

 

5,722

 

RON

 

BRC

 

02/02/11

 

1,189,562

 

 

360,200

 

 

372,455

 

 

12,255

 

 

 

RON

 

BRC

 

02/22/11

 

1,721,000

 

 

528,928

 

 

537,288

 

 

8,360

 

 

 

RSD

 

CIT

 

01/06/11

 

20,421,450

 

 

249,987

 

 

256,387

 

 

6,400

 

 

 

RSD

 

BRC

 

01/10/11

 

49,204,000

 

 

615,435

 

 

616,991

 

 

1,556

 

 

 

RSD

 

CIT

 

01/10/11

 

21,032,000

 

 

261,300

 

 

263,730

 

 

2,430

 

 

 

RSD

 

BRC

 

01/13/11

 

31,579,750

 

 

389,801

 

 

395,630

 

 

5,829

 

 

 

RSD

 

CIT

 

01/19/11

 

20,273,000

 

 

257,451

 

 

253,516

 

 

 

 

3,935

 

RSD

 

CIT

 

01/20/11

 

19,811,000

 

 

249,179

 

 

247,663

 

 

 

 

1,516

 

RSD

 

CIT

 

01/20/11

 

17,375,800

 

 

219,391

 

 

217,220

 

 

 

 

2,171

 

RSD

 

CIT

 

01/21/11

 

20,503,000

 

 

252,687

 

 

256,237

 

 

3,550

 

 

 

RSD

 

BRC

 

02/22/11

 

21,198,000

 

 

266,977

 

 

262,518

 

 

 

 

4,459

 

RSD

 

BRC

 

02/22/11

 

18,083,250

 

 

229,731

 

 

223,945

 

 

 

 

5,786

 

RSD

 

BRC

 

02/22/11

 

12,944,800

 

 

163,507

 

 

160,310

 

 

 

 

3,197

 

RSD

 

CIT

 

02/23/11

 

24,427,470

 

 

300,572

 

 

302,429

 

 

1,857

 

 

 

RUB

 

CIT

 

01/24/11

 

13,255,825

 

 

430,000

 

 

433,487

 

 

3,487

 

 

 

RUB

 

BRC

 

01/31/11

 

18,788,000

 

 

596,066

 

 

614,047

 

 

17,981

 

 

 

RUB

 

BRC

 

02/28/11

 

16,975,000

 

 

549,051

 

 

553,417

 

 

4,366

 

 

 

TRY

 

BRC

 

01/06/11

 

594,150

 

 

397,000

 

 

384,679

 

 

 

 

12,321

 

TRY

 

JPM

 

01/10/11

 

2,144,105

 

 

1,435,000

 

 

1,387,551

 

 

 

 

47,449

 

TRY

 

BRC

 

01/20/11

 

595,331

 

 

397,000

 

 

384,824

 

 

 

 

12,176

 

TRY

 

JPM

 

01/24/11

 

1,075,000

 

 

746,891

 

 

694,565

 

 

 

 

52,326

 

TRY

 

JPM

 

02/28/11

 

2,838,018

 

 

1,811,000

 

 

1,825,583

 

 

14,583

 

 

 

TWD

 

BRC

 

03/22/11

 

24,823,320

 

 

807,000

 

 

853,115

 

 

46,115

 

 

 

UAH

 

ING

 

01/10/11

 

1,345,185

 

 

167,000

 

 

168,061

 

 

1,061

 

 

 

UAH

 

ING

 

01/13/11

 

1,356,175

 

 

169,219

 

 

169,201

 

 

 

 

18

 

UAH

 

ING

 

01/18/11

 

1,909,610

 

 

237,269

 

 

237,706

 

 

437

 

 

 

UAH

 

ING

 

01/20/11

 

2,892,445

 

 

358,642

 

 

359,720

 

 

1,078

 

 

 

UAH

 

ING

 

02/15/11

 

1,849,000

 

 

228,494

 

 

227,854

 

 

 

 

640

 

UAH

 

CIT

 

02/17/11

 

1,173,050

 

 

145,000

 

 

144,473

 

 

 

 

527

 

UAH

 

ING

 

02/17/11

 

1,386,810

 

 

171,000

 

 

170,800

 

 

 

 

200

 

UAH

 

HSB

 

02/22/11

 

1,752,818

 

 

217,000

 

 

215,568

 

 

 

 

1,432

 

UAH

 

ING

 

03/01/11

 

1,914,390

 

 

234,107

 

 

234,966

 

 

859

 

 

 

UAH

 

BRC

 

08/10/11

 

1,443,000

 

 

169,765

 

 

170,336

 

 

571

 

 

 

UAH

 

ING

 

09/07/11

 

2,117,000

 

 

248,930

 

 

248,256

 

 

 

 

674

 

UAH

 

BRC

 

09/12/11

 

1,761,570

 

 

207,000

 

 

206,333

 

 

 

 

667

 

UGX

 

CIT

 

01/04/11

 

134,411,000

 

 

58,048

 

 

58,169

 

 

121

 

 

 

UGX

 

CIT

 

01/10/11

 

268,772,000

 

 

116,000

 

 

116,226

 

 

226

 

 

 

UGX

 

CIT

 

01/12/11

 

165,456,000

 

 

71,859

 

 

71,530

 

 

 

 

329

 

UGX

 

CIT

 

01/18/11

 

134,411,000

 

 

57,848

 

 

58,063

 

 

215

 

 

 

UGX

 

BRC

 

01/20/11

 

1,344,988,000

 

 

582,751

 

 

580,863

 

 

 

 

1,888

 

UGX

 

CIT

 

01/21/11

 

654,141,000

 

 

283,571

 

 

282,469

 

 

 

 

1,102

 

UGX

 

SCB

 

01/24/11

 

710,497,000

 

 

308,670

 

 

306,685

 

 

 

 

1,985

 

UGX

 

CIT

 

01/28/11

 

149,890,000

 

 

65,000

 

 

64,666

 

 

 

 

334

 

UGX

 

SCB

 

01/31/11

 

691,486,000

 

 

295,874

 

 

298,200

 

 

2,326

 

 

 

The accompanying notes are an integral part of these financial statements.

12



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Portfolio of Investments (continued)

December 31, 2010

 

 

Forward Currency Purchase Contracts open at December 31, 2010 (concluded):


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency
Purchase Contracts

 

Counterparty

 

Expiration
Date

 

Foreign
Currency

 

U.S. $ Cost
on Origination
Date

 

U.S. $
Current
Value

 

Unrealized
Appreciation

 

Unrealized
Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UGX

 

CIT

 

02/15/11

 

472,000,000

 

 

$

203,098

 

$

203,066

 

 

$

 

 

$

32

 

UGX

 

CIT

 

02/22/11

 

1,623,726,000

 

 

 

699,580

 

 

697,796

 

 

 

 

 

 

1,784

 

UYU

 

JPM

 

01/24/11

 

6,178,455

 

 

 

309,000

 

 

307,386

 

 

 

 

 

 

1,614

 

UYU

 

CIT

 

02/22/11

 

5,090,160

 

 

 

254,000

 

 

251,863

 

 

 

 

 

 

2,137

 

UYU

 

CIT

 

03/23/11

 

4,678,470

 

 

 

229,000

 

 

230,296

 

 

 

1,296

 

 

 

 

ZMK

 

BRC

 

01/06/11

 

228,655,000

 

 

 

47,000

 

 

47,617

 

 

 

617

 

 

 

 

ZMK

 

CIT

 

01/07/11

 

2,467,660,000

 

 

 

511,432

 

 

513,855

 

 

 

2,423

 

 

 

 

ZMK

 

BRC

 

01/14/11

 

3,292,953,000

 

 

 

686,891

 

 

685,390

 

 

 

 

 

 

1,501

 

ZMK

 

SCB

 

01/18/11

 

1,132,186,000

 

 

 

239,312

 

 

235,588

 

 

 

 

 

 

3,724

 

ZMK

 

SCB

 

01/18/11

 

601,304,000

 

 

 

129,787

 

 

125,121

 

 

 

 

 

 

4,666

 

ZMK

 

BRC

 

01/21/11

 

220,972,000

 

 

 

45,617

 

 

45,971

 

 

 

354

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

   

 

 

   

 

 

   

 

Total Forward Currency Purchase Contracts

 

 

$

74,412,236

 

$

75,066,704

 

 

$

927,429

 

 

$

272,961

 

 

 

 

   

 

   

 

 

   

 

 

   

 

Forward Currency Sale Contracts open at December 31, 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency
Sale Contracts

 

Counterparty

 

Expiration
Date

 

Foreign
Currency

 

U.S. $ Cost
on Origination
Date

 

U.S. $
Current
Value

 

Unrealized
Appreciation

 

Unrealized
Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BRL

 

BRC

 

01/04/11

 

1,419,312

 

$

818,000

 

$

855,007

 

$

 

$

37,007

 

BRL

 

JPM

 

01/04/11

 

722,610

 

 

420,000

 

 

435,307

 

 

 

 

15,307

 

BRL

 

JPM

 

01/04/11

 

6,356,897

 

 

3,661,596

 

 

3,829,456

 

 

 

 

167,860

 

BRL

 

BRC

 

02/02/11

 

1,426,191

 

 

844,000

 

 

853,428

 

 

 

 

9,428

 

BRL

 

JPM

 

02/02/11

 

6,400,565

 

 

3,790,008

 

 

3,830,077

 

 

 

 

40,069

 

CNY

 

JPM

 

03/17/11

 

1,460,246

 

 

220,248

 

 

221,556

 

 

 

 

1,308

 

CNY

 

JPM

 

03/17/11

 

3,342,528

 

 

504,000

 

 

507,145

 

 

 

 

3,145

 

CNY

 

JPM

 

07/29/11

 

12,317,813

 

 

1,875,000

 

 

1,873,090

 

 

1,910

 

 

 

COP

 

BNP

 

01/03/11

 

1,414,192,450

 

 

755,848

 

 

736,558

 

 

19,290

 

 

 

COP

 

HSB

 

01/03/11

 

1,414,192,450

 

 

710,692

 

 

736,558

 

 

 

 

25,866

 

EGP

 

CIT

 

01/03/11

 

986,000

 

 

169,865

 

 

169,853

 

 

12

 

 

 

EUR

 

BRC

 

01/03/11

 

163,028

 

 

223,000

 

 

217,855

 

 

5,145

 

 

 

EUR

 

BRC

 

01/03/11

 

247,000

 

 

351,795

 

 

330,066

 

 

21,729

 

 

 

EUR

 

BRC

 

01/03/11

 

505,051

 

 

671,617

 

 

674,899

 

 

 

 

3,282

 

EUR

 

CIT

 

01/03/11

 

200,138

 

 

266,132

 

 

267,445

 

 

 

 

1,313

 

EUR

 

CIT

 

01/03/11

 

539,000

 

 

707,694

 

 

720,266

 

 

 

 

12,572

 

EUR

 

CIT

 

01/06/11

 

189,000

 

 

249,987

 

 

252,560

 

 

 

 

2,573

 

EUR

 

BRC

 

01/10/11

 

455,973

 

 

615,435

 

 

609,310

 

 

6,125

 

 

 

EUR

 

CIT

 

01/10/11

 

194,743

 

 

261,300

 

 

260,232

 

 

1,068

 

 

 

EUR

 

BRC

 

01/13/11

 

292,270

 

 

389,801

 

 

390,554

 

 

 

 

753

 

EUR

 

ING

 

01/18/11

 

162,000

 

 

224,132

 

 

216,475

 

 

7,657

 

 

 

EUR

 

CIT

 

01/19/11

 

190,428

 

 

257,451

 

 

254,463

 

 

2,988

 

 

 

EUR

 

CIT

 

01/20/11

 

165,160

 

 

219,391

 

 

220,697

 

 

 

 

1,306

 

EUR

 

CIT

 

01/20/11

 

186,005

 

 

249,179

 

 

248,551

 

 

628

 

 

 

EUR

 

CAL

 

01/21/11

 

602,000

 

 

787,575

 

 

804,429

 

 

 

 

16,854

 

EUR

 

CIT

 

01/21/11

 

190,957

 

 

252,687

 

 

255,168

 

 

 

 

2,481

 

EUR

 

JPM

 

01/28/11

 

1,302,000

 

 

1,701,818

 

 

1,739,792

 

 

 

 

37,974

 

EUR

 

BRC

 

01/31/11

 

595,000

 

 

780,025

 

 

795,062

 

 

 

 

15,037

 

EUR

 

CAL

 

01/31/11

 

2,974,265

 

 

4,086,000

 

 

3,974,328

 

 

111,672

 

 

 

EUR

 

CIT

 

02/03/11

 

232,000

 

 

307,233

 

 

310,006

 

 

 

 

2,773

 

EUR

 

BRC

 

02/22/11

 

117,948

 

 

163,506

 

 

157,592

 

 

5,914

 

 

 

The accompanying notes are an integral part of these financial statements.

13



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Portfolio of Investments (concluded)

December 31, 2010

 

 

Forward Currency Sale Contracts open at December 31, 2010 (concluded):


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency
Sale Contracts

 

Counterparty

 

Expiration
Date

 

Foreign
Currency

 

U.S. $ Cost
on Origination
Date

 

U.S. $
Current
Value

 

Unrealized
Appreciation

 

Unrealized
Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EUR

 

BRC

 

02/22/11

 

170,436

 

 

$

229,731

 

$

227,722

 

 

$

2,009

 

 

$

 

EUR

 

BRC

 

02/22/11

 

197,650

 

 

 

266,977

 

 

264,083

 

 

 

2,894

 

 

 

 

EUR

 

BRC

 

02/22/11

 

399,304

 

 

 

528,928

 

 

533,516

 

 

 

 

 

 

4,588

 

EUR

 

CIT

 

02/23/11

 

225,558

 

 

 

300,572

 

 

301,370

 

 

 

 

 

 

798

 

EUR

 

CAL

 

03/03/11

 

324,000

 

 

 

426,579

 

 

432,882

 

 

 

 

 

 

6,303

 

EUR

 

HSB

 

03/07/11

 

843,757

 

 

 

1,115,000

 

 

1,127,287

 

 

 

 

 

 

12,287

 

EUR

 

HSB

 

03/14/11

 

1,399,339

 

 

 

1,845,000

 

 

1,869,505

 

 

 

 

 

 

24,505

 

EUR

 

HSB

 

03/23/11

 

2,207,173

 

 

 

2,898,978

 

 

2,948,650

 

 

 

 

 

 

49,672

 

IDR

 

BRC

 

01/10/11

 

5,224,050,000

 

 

 

577,881

 

 

579,270

 

 

 

 

 

 

1,389

 

JPY

 

SCB

 

01/21/11

 

69,765,435

 

 

 

855,000

 

 

859,434

 

 

 

 

 

 

4,434

 

JPY

 

CAL

 

02/10/11

 

11,904,354

 

 

 

147,000

 

 

146,680

 

 

 

320

 

 

 

 

JPY

 

JPM

 

02/28/11

 

40,937,125

 

 

 

491,000

 

 

504,496

 

 

 

 

 

 

13,496

 

JPY

 

BRC

 

03/24/11

 

76,150,854

 

 

 

911,000

 

 

938,711

 

 

 

 

 

 

27,711

 

KZT

 

CIT

 

01/18/11

 

37,270,000

 

 

 

252,850

 

 

253,006

 

 

 

 

 

 

156

 

KZT

 

HSB

 

01/28/11

 

34,752,000

 

 

 

235,447

 

 

235,987

 

 

 

 

 

 

540

 

KZT

 

BRC

 

01/31/11

 

17,760,000

 

 

 

120,366

 

 

120,613

 

 

 

 

 

 

247

 

KZT

 

BRC

 

01/31/11

 

35,520,000

 

 

 

241,141

 

 

241,226

 

 

 

 

 

 

85

 

KZT

 

HSB

 

02/07/11

 

32,531,200

 

 

 

220,925

 

 

220,978

 

 

 

 

 

 

53

 

KZT

 

BRC

 

02/10/11

 

32,531,200

 

 

 

220,850

 

 

220,998

 

 

 

 

 

 

148

 

MXN

 

HSB

 

03/09/11

 

6,364,080

 

 

 

509,086

 

 

512,850

 

 

 

 

 

 

3,764

 

PEN

 

HSB

 

03/24/11

 

633,375

 

 

 

225,000

 

 

224,919

 

 

 

81

 

 

 

 

PLN

 

CIT

 

01/03/11

 

2,194,700

 

 

 

731,355

 

 

741,353

 

 

 

 

 

 

9,998

 

RSD

 

CIT

 

01/06/11

 

20,421,450

 

 

 

256,960

 

 

256,387

 

 

 

573

 

 

 

 

TWD

 

BRC

 

03/22/11

 

24,823,320

 

 

 

782,576

 

 

853,115

 

 

 

 

 

 

70,539

 

UGX

 

CIT

 

01/04/11

 

134,411,000

 

 

 

57,936

 

 

58,169

 

 

 

 

 

 

233

 

ZMK

 

BRC

 

01/06/11

 

228,655,000

 

 

 

49,375

 

 

47,617

 

 

 

1,758

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

   

 

 

   

 

 

   

 

Total Forward Currency Sale Contracts

 

 

$

41,032,528

 

$

41,468,609

 

 

 

191,773

 

 

 

627,854

 

 

 

 

   

 

   

 

 

   

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross unrealized appreciation/depreciation on Forward Currency Purchase and Sale Contracts

 

 

$

1,119,202

 

 

$

900,815

 

 

 

 

   

 

 

   

 


 

 

 

 

Currency Abbreviations:

 

 

ARS

Argentine Peso

KZT

Kazakhstani Tenge

BRL

Brazilian Real

MXN

Mexican New Peso

CLP

Chilean Peso

MYR

Malaysian Ringgit

CNY

Chinese Renminbi

PEN

Peruvian New Sol

COP

Colombian Peso

PHP

Philippine Peso

CZK

Czech Koruna

PLN

Polish Zloty

EGP

Egyptian Pound

RON

New Romanian Leu

EUR

Euro

RSD

Serbian Dinar

GHS

Ghanaian Cedi

RUB

Russian Ruble

IDR

Indonesian Rupiah

TRY

New Turkish Lira

ILS

Israeli Shekel

TWD

New Taiwan Dollar

INR

Indian Rupee

UAH

Ukranian Hryvnia

JPY

Japanese Yen

UGX

Ugandan Shilling

KES

Kenyan Shilling

UYU

Uruguayan Peso

KRW

South Korean Won

ZMK

Zambian Kwacha

 

 

Counterparty Abbreviations:

BNP

BNP Paribas SA

BRC

Barclays Bank PLC

CAL

Calyon Bank

CIT

Citibank NA

HSB

HSBC Bank USA

ING

ING Bank NV

JPM

JPMorgan Chase Bank

SCB

Standard Chartered Bank



The accompanying notes are an integral part of these financial statements.

14



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Notes to Portfolio of Investments

December 31, 2010

 

 

 

(a)

Non-income producing security.

(b)

For federal income tax purposes, the aggregate cost was $167,947,236, aggregate gross unrealized appreciation was $18,328,347, aggregate gross unrealized depreciation was $22,109,048, and the net unrealized depreciation was $3,780,701.

(c)

Segregated security for forward currency contracts.

(d)

Principal amount denominated in respective country’s currency.


 

 

Security Abbreviations:

ADR

— American Depositary Receipt

NTN-F

— Brazil Sovereign “Nota do Tesouro Nacional” Series F


 

 

 

 

 

Portfolio holdings by industry (as percentage of net assets):

Alcohol & Tobacco

 

1.8

%

 

Banking

 

9.1

 

 

Cable Television

 

2.1

 

 

Computer Software

 

9.3

 

 

Energy Integrated

 

7.2

 

 

Energy Services

 

2.3

 

 

Financial Services

 

4.4

 

 

Food & Beverages

 

3.6

 

 

Gas Utilities

 

1.7

 

 

Housing

 

1.3

 

 

Insurance

 

1.5

 

 

Manufacturing

 

7.9

 

 

Metals & Mining

 

2.2

 

 

Pharmaceutical & Biotechnology

 

15.6

 

 

Retail

 

7.2

 

 

Semiconductor & Components

 

2.5

 

 

Technology Hardware

 

6.3

 

 

Telecommunications

 

3.2

 

 

 

 

   

 

Subtotal

 

89.2

 

 

Foreign Government Obligations

 

12.4

 

 

 

 

   

 

Total Investments

 

101.6

%

 

 

 

   

 

The accompanying notes are an integral part of these financial statements.

15



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Statement of Assets and Liabilities

December 31, 2010

 

 

 

 

 

 

ASSETS

 

 

 

 

Investments in securities, at value (cost $167,937,248)

 

$

164,166,535

 

Cash

 

 

22,875

 

Foreign currency, at value (cost $459,103)

 

 

464,710

 

Dividends and interest receivable

 

 

852,855

 

Gross unrealized appreciation on forward currency contracts

 

 

1,119,202

 

 

 

   

 

Total assets

 

 

166,626,177

 

 

 

   

 

 

LIABILITIES

 

 

 

 

Payables for:

 

 

 

 

Management fees

 

 

142,314

 

Accrued directors’ fees

 

 

245

 

Line of credit outstanding

 

 

3,790,000

 

Gross unrealized depreciation on forward currency contracts

 

 

900,815

 

Other accrued expenses and payables

 

 

140,765

 

 

 

   

 

Total liabilities

 

 

4,974,139

 

 

 

   

 

Net assets

 

$

161,652,038

 

 

 

   

 

 

 

 

 

 

NET ASSETS

 

 

 

 

Paid in capital (Note 2(h))

 

$

167,758,935

 

Undistributed net investment income (Note 2(h))

 

 

61,791

 

Accumulated net realized loss

 

 

(2,632,792

)

Net unrealized appreciation (depreciation) on:

 

 

 

 

Investments

 

 

(3,770,713

)

Foreign currency and forward currency contracts

 

 

234,817

 

 

 

   

 

Net assets

 

$

161,652,038

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

Shares of common stock outstanding*

 

 

9,605,237

 

Net asset value per share

 

$

16.83

 

Market value per share

 

$

15.06

 

 

 

 

 

 

*  $0.001 par value, 500,000,000 shares authorized for the Fund.

 

 

 

 

The accompanying notes are an integral part of these financial statements.

16



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Statement of Operations

For the Year Ended December 31, 2010

 

INVESTMENT INCOME


 

 

 

 

 

Income:

 

 

 

 

Dividends (net of foreign withholding taxes of $219,792)

 

$

3,998,426

 

Interest (net of foreign withholding taxes of $6,339)

 

 

2,209,623

 

 

 

   

 

Total investment income

 

 

6,208,049

 

 

 

   

 

 

Expenses:

 

 

 

 

Management fees (Note 3)

 

 

1,713,148

 

Professional services

 

 

134,243

 

Shareholders’ reports

 

 

112,113

 

Custodian fees

 

 

104,069

 

Administration fees

 

 

73,879

 

Shareholders’ services

 

 

43,576

 

Shareholders’ meeting

 

 

32,252

 

Directors’ fees and expenses

 

 

5,324

 

Other

 

 

80,669

 

 

 

   

 

Total expenses before interest expense

 

 

2,299,273

 

Interest expense

 

 

197,540

 

 

 

   

 

Total expenses

 

 

2,496,813

 

 

 

   

 

Net investment income

 

 

3,711,236

 

 

 

   

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY AND FORWARD CURRENCY CONTRACTS

 

 

 

 

Net realized gain on:

 

 

 

 

Investments (net of foreign capital gains taxes of $72,987)

 

 

671,172

 

Foreign currency and forward currency contracts

 

 

2,677,565

 

 

 

   

 

Total net realized gain on investments, foreign currency and forward currency contracts

 

 

3,348,737

 

 

 

   

 

Net change in unrealized depreciation on:

 

 

 

 

Investments

 

 

(362,046

)

Foreign currency and forward currency contracts

 

 

(576,093

)

 

 

   

 

Total net change in unrealized depreciation on investments, foreign currency and forward currency contracts

 

 

(938,139

)

 

 

   

 

Net realized and unrealized gain on investments, foreign currency and forward currency contracts

 

 

2,410,598

 

 

 

   

 

Net increase in net assets resulting from operations

 

$

6,121,834

 

 

 

   

 

The accompanying notes are an integral part of these financial statements.

17



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Statements of Changes in Net Assets


 

 

 

 

 

 

 

 

           

 

 

Year Ended
December 31, 2010

 

Year Ended
December 31, 2009

 

 

 

 

 

 

 

INCREASE (DECREASE) IN NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations:

 

 

 

 

 

 

 

Net investment income

 

$

3,711,236

 

$

4,651,720

 

Net realized gain (loss) on investments, foreign currency and forward currency contracts

 

 

3,348,737

 

 

(5,525,748

)

Net change in unrealized appreciation (depreciation) on investments, foreign currency and forward currency contracts

 

 

(938,139

)

 

36,313,936

 

 

 

   

 

   

 

Net increase in net assets resulting from operations

 

 

6,121,834

 

 

35,439,908

 

 

 

   

 

   

 

 

 

 

 

 

 

 

 

Distributions to Stockholders (Note 2(h)):

 

 

 

 

 

 

 

From net investment income

 

 

(6,474,272

)

 

(702,650

)

Return of capital

 

 

(3,893,621

)

 

(8,864,743

)

 

 

   

 

   

 

Net decrease in net assets resulting from distributions

 

 

(10,367,893

)

 

(9,567,393

)

 

 

   

 

   

 

Total increase (decrease) in net assets

 

 

(4,246,059

)

 

25,872,515

 

Net assets at beginning of year

 

 

165,898,097

 

 

140,025,582

 

 

 

   

 

   

 

Net assets at end of year*

 

$

161,652,038

 

$

165,898,097

 

 

 

   

 

   

 

 

 

 

 

 

 

 

 

* Includes undistributed (distributions in excess of) net investment

 

 

 

 

 

 

 

income of (Note 2(h))

 

$

61,791

 

$

(533,754

)

 

 

   

 

   

 

 

 

 

 

 

 

 

 

Transactions in Capital Shares:

 

 

 

 

 

 

 

Common shares outstanding at beginning of year

 

 

9,605,237

 

 

9,605,237

 

 

 

   

 

   

 

Common shares outstanding at end of year

 

 

9,605,237

 

 

9,605,237

 

 

 

   

 

   

 

The accompanying notes are an integral part of these financial statements.

18



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Statement of Cash Flows

For the Year Ended December 31, 2010

 

INCREASE (DECREASE) IN CASH AND FOREIGN CURRENCY


 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net increase in net assets from operations

 

$

6,121,834

 

Adjustments to reconcile net increase in net assets from operations to net cash provided in operating activities

 

 

 

 

Decrease in interest and dividends receivable

 

 

621,139

 

Accretion of bond discount and amortization of bond premium

 

 

(804,417

)

Inflation index adjustment

 

 

(108,051

)

Decrease in other accrued expenses and payables

 

 

(34,091

)

Net realized gain on investments, foreign currency and forward currency contracts

 

 

(3,348,737

)

Net change in unrealized depreciation on investments, foreign currency and forward currency contracts

 

 

938,139

 

Purchase of long-term investments

 

 

(51,077,357

)

Proceeds from disposition of long-term investments

 

 

67,352,162

 

Proceeds from disposition of short-term investments, net

 

 

3,479,348

 

 

 

   

 

Net cash provided in operating activities

 

 

23,139,969

 

 

 

   

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Cash distribution paid (Note 2(h))

 

 

(10,367,893

)

Gross drawdowns in line of credit balance

 

 

3,790,000

 

Gross paydowns in line of credit balance

 

 

(19,336,000

)

 

 

   

 

Net cash used in financing activities

 

 

(25,913,893

)

 

 

   

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

2,673,315

 

 

 

   

 

Net decrease in cash and foreign currency

 

 

(100,609

)

 

 

 

 

 

Cash and foreign currency:

 

 

 

 

Beginning balance

 

 

588,194

 

 

 

   

 

Ending balance

 

$

487,585

 

 

 

   

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

Cash paid during the year for interest

 

$

(212,419

)

 

 

   

 

The accompanying notes are an integral part of these financial statements.

19



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Financial Highlights

Selected data for a share of common stock outstanding throughout each year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

12/31/10

 

12/31/09

 

12/31/08

 

12/31/07

 

12/31/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, beginning of year

 

$

17.27

 

$

14.58

 

$

24.37

 

$

23.77

 

$

21.10

 

 

 

   

 

   

 

   

 

   

 

   

 

Income (loss) from investment operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

0.39

 

 

0.48

 

 

0.66

 

 

0.42

 

 

0.40

 

Net realized and unrealized gain (loss)

 

 

0.25

 

 

3.21

 

 

(9.02

)

 

1.84

 

 

4.61

 

 

 

   

 

   

 

   

 

   

 

   

 

Total from investment operations

 

 

0.64

 

 

3.69

 

 

(8.36

)

 

2.26

 

 

5.01

 

 

 

   

 

   

 

   

 

   

 

   

 

Less distributions from (Note 2(h)):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.67

)

 

(0.08

)

 

(1.03

)

 

(1.15

)

 

(1.12

)

Net realized gains

 

 

 

 

 

 

(0.33

)

 

(0.51

)

 

(1.22

)

Return of capital

 

 

(0.41

)

 

(0.92

)

 

(0.07

)

 

 

 

 

 

 

   

 

   

 

   

 

   

 

   

 

Total distributions

 

 

(1.08

)

 

(1.00

)

 

(1.43

)

 

(1.66

)

 

(2.34

)

 

 

   

 

   

 

   

 

   

 

   

 

Net asset value, end of year

 

$

16.83

 

$

17.27

 

$

14.58

 

$

24.37

 

$

23.77

 

 

 

   

 

   

 

   

 

   

 

   

 

Market value, end of year

 

$

15.06

 

$

14.89

 

$

11.83

 

$

23.34

 

$

22.58

 

 

 

   

 

   

 

   

 

   

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Return based upon:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value (a)

 

 

4.14

%

 

26.90

%

 

–35.33

%

 

9.74

%

 

24.46

%

Market value (a)

 

 

8.90

%

 

36.72

%

 

–44.43

%

 

11.35

%

 

35.64

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios and Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of year (in thousands)

 

$

161,652

 

$

165,898

 

$

140,026

 

$

234,125

 

$

228,274

 

Ratios to average net assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net expenses

 

 

1.59

%

 

1.61

%

 

1.83

%

 

1.58

%

 

1.50

%

Gross expenses

 

 

1.59

%

 

1.61

%

 

1.83

%

 

1.58

%

 

1.51

%

Gross expenses excluding interest expense

 

 

1.47

%

 

1.42

%

 

1.45

%

 

1.42

%

 

1.43

%

Net investment income

 

 

2.37

%

 

3.28

%

 

3.26

%

 

1.71

%

 

1.76

%

Portfolio turnover rate

 

 

32

%

 

25

%

 

25

%

 

28

%

 

38

%


 

 

(a)

Total return based on per share market price assumes the purchase of common shares at the closing market price on the business day immediately preceding the first day, and sales of common shares at the closing market price on the last day, of each period indicated; dividends and distributions are assumed to be reinvested in accordance with the Fund’s Dividend Reinvestment Plan. The total return based on net asset value, or NAV, assumes the purchase of common shares at the “net asset value, beginning of period” and sales of common shares at the “net asset value, end of period”, for each of the periods indicated; distributions are assumed to be reinvested at NAV. Past performance is not indicative, or a guarantee, of future results; the investment return, market price and net asset value of the Fund will fluctuate, so that an investor’s shares in the Fund, when sold, may be worth more or less than their original cost. The returns do not reflect the deduction of taxes that a stockholder would pay on the Fund’s distributions or on the sale of Fund shares.

The accompanying notes are an integral part of these financial statements.

20



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Notes to Financial Statements

December 31, 2010

 

1. Organization

Lazard Global Total Return and Income Fund, Inc. (the “Fund”) was incorporated in Maryland on January 27, 2004 and is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, closed-end management investment company. The Fund trades on the NYSE under the ticker symbol LGI and commenced operations on April 28, 2004. The Fund’s investment objective is total return, consisting of capital appreciation and income.

2. Significant Accounting Policies

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The following is a summary of significant accounting policies:

(a) Valuation of Investments—Market values for securities are generally based on the last reported sales price on the principal exchange or market on which the security is traded, generally as of the close of regular trading on the NYSE (normally 4:00 p.m. Eastern time) on each valuation date. Any securities not listed, for which current over-the-counter market quotations or bids are readily available, are valued at the last quoted bid price or, if available, the mean of two such prices. Securities listed on foreign exchanges are valued at the last reported sales price except as described below; securities listed on foreign exchanges that are not traded on the valuation date are valued at the last quoted bid price. Forward currency contracts are valued at the current cost of offsetting the contracts. Investments in money market funds are valued at the fund’s net asset value.

Bonds and other fixed-income securities that are not exchange-traded are valued on the basis of prices provided by pricing services which are based primarily on institutional trading in similar groups of securities, or by using brokers’ quotations.

If a significant event materially affecting the value of securities occurs between the close of the exchange or market on which the security is principally traded and the time when the Fund’s net asset value is calculated, or when current market quotations otherwise are determined not to be readily available or reliable (including restricted or other illiquid securities such as derivative instruments), such securities will be valued at their fair values as determined by, or in accordance with procedures approved by, the Board of Directors (the “Board”). The Valuation Committee of the Investment Manager may evaluate a variety of factors to determine the fair value of securities for which market quotations are determined not to be readily avail-

able or reliable. These factors include, but are not limited to, the type of security, the value of comparable securities, observations from financial institutions and relevant news events. Input from the Investment Manager’s analysts also will be considered.

(b) Portfolio Securities Transactions and Investment Income—Portfolio securities transactions are accounted for on trade date. Realized gain (loss) on sales of investments are recorded on a specific identification basis. Dividend income is recorded on the ex-dividend date and interest income is accrued daily. The Fund amortizes premiums and accretes discounts on fixed-income securities using the effective yield method.

The Fund may be subject to taxes imposed by foreign countries in which they invest. Such taxes are generally based upon income earned or capital gains, realized or unrealized. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains concurrent with the recognition of income or capital gains (realized and unrealized) from the applicable portfolio securities.

(c) Repurchase Agreements—In connection with transactions in repurchase agreements, the Fund’s custodian takes possession of the underlying collateral securities, the fair value of which, at all times, is required to be at least equal to the principal amount, plus accrued interest, of the repurchase transaction. If the seller defaults, and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited.

(d) Leveraging—The Fund uses leverage to invest Fund assets in currency investments, primarily using forward currency contracts and by borrowing under a credit facility with State Street Bank and Trust Company (“State Street”), up to a maximum of 33⅓% of the Fund’s total leveraged assets. If the assets of the Fund decline due to market conditions such that this 33⅓% threshold will be exceeded, leverage risk will increase.

If the Fund is able to realize a higher return on the leveraged portion of its investment portfolio than the cost of such leverage together with other related expenses, the effect of the leverage will be to cause the Fund to realize a higher net return than if the Fund were not so leveraged. There is no assurance that any leveraging strategy the Fund employs will be successful.

Using leverage is a speculative investment technique and involves certain risks. These include higher volatility of net asset value, the likelihood of more volatility in the market value of the Fund’s common stock and, with respect to borrowings, the possibility either that the Fund’s return will



21



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Notes to Financial Statements (continued)

December 31, 2010

 

fall if the interest rate on any borrowings rises, or that income will fluctuate because the interest rate of borrowings varies.

If the market value of the Fund’s leveraged currency investments declines, the leverage will result in a greater decrease in net asset value, or less of an increase in net asset value, than if the Fund were not leveraged. Such results also will tend to have a similar effect on the market price of the Fund’s common stock. To the extent that the Fund is required or elects to prepay any borrowings, the Fund may need to liquidate investments to fund such prepayments. Liquidation at times of adverse economic conditions may result in capital losses and may reduce returns.

(e) Foreign Currency Translation and Forward Currency Contracts—The accounting records of the Fund are maintained in U.S. dollars. Portfolio securities and other assets and liabilities denominated in a foreign currency are translated daily into U.S. dollars at the prevailing rates of exchange. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rates on the respective transaction dates.

The Fund does not isolate the portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in their market prices. Such fluctuations are included in net realized and unrealized gain (loss) on investments. Net realized gain (loss) on foreign currency and forward currency contracts represents net foreign currency gain (loss) from forward currency contracts, disposition of foreign currencies, currency gain (loss) realized between the trade and settlement dates on securities transactions, and the difference between the amount of dividends, interest and foreign withholding taxes recorded on the Fund’s accounting records and the U.S. dollar equivalent amounts actually received or paid. Net change in unrealized appreciation (depreciation) on foreign currency reflects the impact of changes in exchange rates on the value of assets and liabilities, other than investments in securities, during the year.

A forward currency contract is an agreement between two parties to buy or sell currency at a set price on a future date. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of the foreign currency relative to the U.S. dollar.

The U.S. dollar value of forward currency contracts is determined using forward exchange rates provided by

quotation services. Daily fluctuations in the value of such contracts are recorded as unrealized appreciation (depreciation) on forward currency contracts. When the contract is closed, the Fund records a realized gain (loss) equal to the difference between the value at the time it was opened and the value at the time it was closed.

(f) Structured Investments—The Fund may invest in structured investments, whose values are linked either directly or inversely to changes in foreign currencies, interest rates, commodities, indices, or other underlying instruments. The Fund may use these investments to increase or decrease its exposure to different underlying instruments, to gain exposure to markets that might be difficult to invest in through conventional securities or for other purposes. Structured investments may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment.

(g) Federal Income Tax Policy—It is the Fund’s policy to comply with the requirements of Subchapter M of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute substantially all of its taxable income to its stockholders. Therefore, no provision for federal income taxes is required. The Fund files tax returns with the U.S. Internal Revenue Service and various states.

At December 31, 2010, the Fund had $2,622,804 of unused realized capital loss carryforwards, expiring in 2017.

Under current tax law, certain capital and net foreign currency losses realized after October 31 within the taxable year may be deferred and treated as occurring on the first day of the following tax year. For the tax year ended December 31, 2010, the Fund had no net capital and foreign currency losses arising between November 1, 2010 and December 31, 2010.

Management has analyzed the Fund’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years (2007-2009), or expected to be taken in the Fund’s 2010 tax returns.

(h) Dividends and Distributions—The Fund intends to declare and to pay dividends monthly from net investment income. Distributions to stockholders are recorded on the ex-dividend date. During any particular year, net realized gains from investment transactions in excess of available capital loss carryforwards would be taxable to the Fund, if not distributed. The Fund intends to declare and distribute these amounts, at least annually, to stockholders; however, to avoid taxation, a second distribution may be required.



22



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Notes to Financial Statements (continued)

December 31, 2010

 

Income dividends and capital gains distributions are determined in accordance with federal income tax regulations which may differ from GAAP. These book/tax differences, which may result in distribution reclassifications, are primarily due to differing treatments of foreign currency transactions and wash sales. The book/tax differences relating to stockholder distributions resulted in reclassifications among certain capital accounts as follows:

 

 

 

 

 

Paid in Capital

 

Distribution in excess of
Net Investment Income

 

Accumulated Net
Realized Loss

 

 

 

 

 

$(5,794,534)

 

$7,252,202

 

$(1,457,668)

The Fund has implemented a level distribution policy to seek to maintain a stable monthly distribution, subject to oversight of the Fund’s Board. Under the Fund’s level distribution policy, the Fund intends to make regular monthly distributions at a fixed rate per share. If for any monthly distribution, net investment income and net realized short-term capital gain were less than the amount of the distribution, the difference would generally be distributed from the Fund’s assets. In addition, in order to make such distributions, the Fund might have to sell a portion of its investment portfolio at a time when independent investment judgment might not dictate such actions.

In July 2010, the Investment Manager, on behalf of itself and the Fund, received an exemptive order from the Securities and Exchange Commission (the “SEC”) facilitating the implementation of a distribution policy that may include multiple long-term capital gains distributions (“Managed Distribution Policy”). As a result, the Fund may, subject to the determination of its Board, implement a Managed Distribution Policy.

Concurrent with the monthly distributions paid from February 2010 through December 2010, the Fund issued notices pursuant to Section 19(a) of the Act (the “Section 19(a) Notices”) stating that the Fund currently estimates that it has distributed more than its net investment income and realized capital gains. Based on these estimates, it is possible that some or all of the amounts distributed may represent a return of capital. The Section 19(a) Notices may also be viewed at www.LazardNet.com.

The amounts and sources of distributions shown on the Section 19(a) Notices are only estimates and are not provided for tax reporting purposes. The actual amounts and sources of the cumulative distributions for tax reporting purposes will depend upon the Fund’s investment experience during the year and may be subject to changes based on tax regulations. The Fund will send stockholders a Form 1099-DIV for the calendar year explaining how to report these distributions for federal income tax purposes.

The tax character of dividends and distributions paid during the years ended December 31, was as follows:

 

 

 

 

 

 

 

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Ordinary Income

 

$

6,474,272

 

$

702,650

 

Long-Term Capital Gain

 

 

 

 

 

Return of Capital

 

 

3,893,621

 

 

8,864,743

 

 

 

   

 

   

 

Total

 

$

10,367,893

 

$

9,567,393

 

 

 

   

 

   

 

At December 31, 2010, the components of accumulated losses on a tax basis were $0 of undistributed ordinary income, $0 of undistributed long-term capital gain and $3,484,093 of net unrealized depreciation.

(i) Estimates—The preparation of financial statements in conformity with GAAP requires the Fund to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting year. Actual results could differ from those estimates.

(j) Subsequent Events—Management has performed its evaluation of subsequent events and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.

3. Investment Management Agreement

The Fund has entered into an investment management agreement (the “Management Agreement”) with the Investment Manager. Pursuant to the Management Agreement, the Investment Manager regularly provides the Fund with investment research, advice and supervision and furnishes continuously an investment program for the Fund consistent with its investment objective and policies, including the purchase, retention and disposition of securities.

The Fund has agreed to pay the Investment Manager an annual investment management fee of 0.85% of the Fund’s average daily “Total Leveraged Assets” (the Fund’s total assets including Financial Leverage (defined below)) for the services and facilities provided by the Investment Manager, payable on a monthly basis. The fee paid to the Investment Manager will be higher when the Investment Manager uses Currency Commitments and Borrowings (“Financial Leverage”) to make Currency Investments, rather than by reducing the percentage of “Net Assets” (the Fund’s assets without taking into account Financial Leverage) invested in Global Equity Investments for the purposes of making Currency Investments. “Global Equity Investments” refers to investments in the Fund’s global equity strategy consisting of equity securities of companies with market capitalizations of $5 billion or greater domi-



23



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Notes to Financial Statements (continued)

December 31, 2010

 

ciled in those countries that comprise the Morgan Stanley Capital International (MSCI®) World® Index. “Currency Investments” refers to investments in the Fund’s emerging income strategy, consisting of emerging market currencies (primarily by entering into forward currency contracts), or instruments whose value is derived from the performance of an underlying emerging market currency, but also may invest in debt obligations, including government, government agency and corporate obligations and structured notes denominated in emerging market currencies. “Currency Commitments” are the aggregate financial exposures created by forward currency contracts in excess of that represented in the Fund’s Net Assets, and “Borrowings” refers to the borrowings under the Fund’s credit facility. Assuming Financial Leverage in the amount of 33⅓% of the Fund’s Total Leveraged Assets, the annual fee payable to the Investment Manager would be 1.28% of Net Assets (i.e., not including amounts attributable to Financial Leverage).

The following is an example of this calculation of the Investment Manager’s fee, using very simple illustrations. If the Fund had assets of $1,000, it could invest $1,000 in Global Equity Investments and enter into $500 in forward currency contracts (because the Fund would not have to pay money at the time it enters into the currency contracts). Similarly, the Fund could invest $1,000 in Global Equity Investments, borrow $500 and invest the $500 in foreign currency denominated bonds. In either case, the Investment Manager’s fee would be calculated based on $1,500 of assets, because the fee is calculated based on Total Leveraged Assets (Net Assets plus Financial Leverage). In our example, the Financial Leverage is in the form of either the forward currency contracts (Currency Commitments) or investments from Borrowings. The amount of the Financial Leverage outstanding, and therefore the amount of Total Leveraged Assets on which the Investment Manager’s fee is based, fluctuates daily based on changes in value of the Fund’s portfolio holdings, including changes in value of the currency involved in the forward currency contracts and foreign currency denominated bonds acquired with the proceeds of Borrowings. However, the Investment Manager’s fee will be the same regardless of whether Currency Investments are made with Currency Commitments or with Borrowings (without taking into account the cost of Borrowings).

This method of calculating the Investment Manager’s fee is different than the way closed-end investment companies typically calculate management fees. Traditionally, closed-end investment companies calculate management fees based on Net Assets plus Borrowings (excluding Financial Leverage obtained through Currency Commitments). The Investment Manager’s fee is different because

the Fund’s leverage strategy is different than the leverage strategy employed by many other closed-end investment companies. Although the Fund may employ Borrowings in making Currency Investments, the Fund’s leverage strategy relies primarily on Currency Commitments, rather than relying exclusively on borrowing money and/or issuing preferred stock, as is the strategy employed by most closed-end investment companies. The Investment Manager’s fee would be lower if its fee were calculated only on Net Assets plus Borrowings, because the Investment Manager would not earn fees on Currency Investments made with Currency Commitments (forward currency contracts). Using the example above, where the Fund has assets of $1,000 and invests $1,000 in Global Equity Investments and $500 in forward currency contracts, the following table illustrates how the Investment Manager’s fee would be different if it did not earn management fees on these types of Currency Investments. A discussion of the most recent review and approval by the Fund’s Board of the Management Agreement (including the method of calculating the Investment Manager’s fee) is included under “Other Information—Board Consideration of Management Agreement.”

 

 

 

 

 

 

 

 

Beginning assets of $1,000

 

Fund’s management
fee based on
Total Leveraged
Assets (includes
Currency
Commitments)

 

Typical
management
fee formula,
calculated excluding
Currency
Commitments

 

Global Equity Investments (Net Assets)

 

$

1,000

 

$

1,000

 

Currency Commitments

 

$

500

 

$

500

 

Assets used to calculate

 

 

 

 

 

 

 

management fee

 

$

1,500

 

$

1,000

 

Management fee (0.85%)

 

$

12.75

 

$

8.50

 

Investment Manager Fee Conflict Risk—The fee paid to the Investment Manager for investment management services will be higher when the Fund uses Financial Leverage, whether through forward currency contracts or Borrowings, because the fee paid will be calculated on the basis of the Fund’s assets including this Financial Leverage. Consequently, the Investment Manager may have a financial interest for the Fund to utilize such Financial Leverage, which may create a conflict of interest between the Investment Manager and the stockholders of the Fund.

The Fund has implemented procedures to monitor this potential conflict.

4. Administration Agreement

The Fund has entered into an administration agreement with State Street to provide certain administrative services. The Fund bears the cost of such services at a fixed annual



24



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Notes to Financial Statements (continued)

December 31, 2010

 

rate of $42,500, plus 0.02% of average daily net assets up to $1 billion and 0.01% of average daily net assets over $1 billion.

5. Directors’ Compensation

Certain Directors of the Fund are officers of the Investment Manager. Each Director who is not an affiliated person of the Investment Manager or any of its affiliates is paid by the Fund, The Lazard Funds, Inc., Lazard Retirement Series, Inc. and Lazard World Dividend & Income Fund, Inc. (collectively with the Fund, the “Lazard Funds”), each a registered management investment company advised by the Investment Manager: (1) an annual retainer of $80,000, (2) a per meeting in person regular or special meeting fee of $5,000 ($1,500 for telephonic participation), including Board, committee, subcommittee or other special meetings specifically authorized by the Board and held in connection with delegated Fund business, and (3) a telephone Audit Committee or special Board meeting fee of $1,500, with an additional annual fee for the Audit Committee Chairman, Lester Z. Lieberman, of $5,000. (Prior to July 1, 2010, the compensation consisted of: (1) an annual retainer of $60,000, (2) $4,000 per meeting attended in person ($1,500 per meeting attended by telephone) and (3) $1,000 for each committee, subcommittee or other special meetings specifically authorized by the Board and held in connection with delegated Fund business.) The Independent Directors also are reimbursed for travel and other out-of-pocket expenses for attending Board and committee meetings. No additional compensation is provided in respect of committee meetings held in conjunction with a meeting of the Board. Compensation is divided among the Lazard Funds based on relative net assets. The Directors do not receive benefits from the Fund pursuant to any pension, retirement or similar arrangement.

6. Securities Transactions and Transactions with Affiliates

Purchases and sales of portfolio securities (excluding short-term investments) for the year ended December 31, 2010 were $51,185,408 and $67,425,157, respectively.

For the year ended December 31, 2010, no brokerage commissions were paid to affiliates of the Investment Manager or other affiliates of the Fund for portfolio transactions executed on behalf of the Fund.

7. Line of Credit

The Fund has a $30 million Line of Credit Agreement (the “Agreement”) with State Street primarily to borrow to invest Fund assets in Currency Investments. The Fund may borrow the lesser of $30 million or 33⅓% of its Total Leveraged Assets. Interest on borrowings is payable at the

higher of the Federal Funds rate or Overnight LIBOR rate plus 1.25%, on an annualized basis. Under the Agreement, the Fund has also agreed to pay a 0.15% per annum fee on the unused portion of the commitment, payable quarterly in arrears, and a closing fee of 0.05% on the commitment, paid at closing. During the year ended December 31, 2010, the Fund had borrowings under the Agreement as follows:

 

 

 

 

 

Average Daily

 

Maximum Daily

 

Weighted Average

Loan Balance*

 

Loan Outstanding

 

Interest Rate

 

 

 

 

 

$13,499,236

 

$19,336,000

 

1.48%

* For 356 days borrowings were outstanding.

8. Foreign Securities Investment Risks

The Fund invests in securities of foreign entities and in instruments denominated in foreign currencies which involve risks not typically associated with investments in domestic securities. Non-domestic securities carry special risks, such as exposure to currency fluctuations, less developed or less efficient trading markets, political instability, a lack of company information, differing auditing and legal standards, and, potentially, less liquidity. The Fund’s investments in emerging market countries are exposed to additional risks. The Fund’s performance will be influenced by political, social and economic factors affecting companies in emerging market countries. Emerging market countries generally have economic structures that are less diverse and mature, and political systems that are less stable, than those of developed countries.

9. Contractual Obligations

The Fund enters into contracts in the normal course of business that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.

10. Fair Value Measurements

Fair value is defined as the price that the Fund would receive to sell an asset, or would pay to transfer a liability, in an orderly transaction between market participants at the date of measurement. The Fair Value Measurements and Disclosures provisions of GAAP also establish a framework for measuring fair value, and a three-level hierarchy for fair value measurement that is based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer, broadly, to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability based on market data



25



 

 

Lazard Global Total Return and Income Fund, Inc.


Notes to Financial Statements (continued)

December 31, 2010

 

obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. Each investment’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the overall fair value measurement. The three-level hierarchy of inputs is summarized below.

 

 

Level 1—unadjusted quoted prices in active markets for identical investments

 

 

Level 2—other significant observable inputs (including unadjusted quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

 

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in these securities.



The following table summarizes the valuation of the Fund’s investments by each fair value hierarchy level as of December 31, 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

 

Unadjusted
Quoted Prices in
Active Markets
for Identical
Investments
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

Balance as of
December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stocks*

 

$

144,196,657

 

$

 

$

 

$

144,196,657

 

Foreign Government Obligations*

 

 

 

 

19,070,723

 

 

899,155

 

 

19,969,878

 

Other Financial Instruments**

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency Contracts

 

 

 

 

1,119,202

 

 

 

 

1,119,202

 

 

 

   

 

   

 

   

 

   

 

Total

 

$

144,196,657

 

$

20,189,925

 

$

899,155

 

$

165,285,737

 

 

 

   

 

   

 

   

 

   

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Financial Instruments**

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Currency Contracts

 

$

 

$

(900,815

)

$

 

$

(900,815

)

 

 

   

 

   

 

   

 

   

 


 

 

*

Please refer to Portfolio of Investments and Notes to Portfolio of Investments, on pages 8 to 9 and 15, for portfolio holdings by country and industry.

**

Other financial instruments are derivative instruments which are valued at the unrealized appreciation/depreciation on the instruments.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value during the year ended December 31, 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

Balance as of
December 31,
2009

 

Accrued
Discounts

 

Realized
Loss

 

Change in
Unrealized
Appreciation

 

Purchases

 

Sales

 

Net
Transfers
Into
Level 3

 

Net
Transfers
Out of
Level 3

 

Balance as of
December 31,
2010

 

Net Change in
Unrealized
Appreciation
from Investments
Still Held at
December 31,
2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations

 

$

1,490,542

 

$

49,041

 

$

(230,827

)

$

210,136

 

$

204,574

 

$

(824,311

)

$

 

$

 

$

899,155

 

$

(5,862

)

Supranationals

 

 

664,021

 

 

1,509

 

 

(180,270

)

 

177,396

 

 

 

 

(662,656

)

 

 

 

 

 

 

 

 

 

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

Total

 

$

2,154,563

 

$

50,550

 

$

(411,097

)

$

387,532

 

$

204,574

 

$

(1,486,967

)

$

 

$

 

$

899,155

 

$

(5,862

)

 

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

There were no significant transfers into and out of Levels 1, 2 and 3 during the year ended December 31, 2010.

26



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Notes to Financial Statements (concluded)

December 31, 2010

 

11. Derivative Instruments

The Fund may use derivative instruments, including forward currency contracts, to gain exposure to the local currency and interest rates of emerging markets or to hedge certain types of currency exposure.

For the year ended December 31, 2010, the cost of purchases and the proceeds from sales of forward currency contracts were $803,894,591 and $801,404,932, respectively.

The following table summarizes the fair value of derivative instruments on the Statement of Assets and Liabilities as of December 31, 2010:

 

 

 

 

 

 

 

Fair Value

 

 

 

 

 

Asset Derivatives

 

 

 

 

Foreign Exchange Risk:

 

 

 

 

Gross unrealized appreciation on forward currency contracts

 

$

1,119,202

 

 

 

   

 

Liability Derivatives

 

 

 

 

Foreign Exchange Risk:

 

 

 

 

Gross unrealized depreciation on forward currency contracts

 

$

900,815

 

 

 

   

 

The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2010 was:

 

 

 

 

 

 

 

Amount

 

 

 

 

 

Realized Gain (Loss) on Derivatives Recognized in Income

 

 

 

 

Foreign Exchange Risk:

 

 

 

 

Net realized gain on forward currency contracts

 

$

2,743,313

 

 

 

   

 

 

 

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on Derivatives
Recognized in Income

 

 

 

 

Foreign Exchange Risk:

 

 

 

 

Net change in unrealized appreciation on forward currency contracts

 

$

(571,835

)

 

 

   

 



27



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Report of Independent Registered Public Accounting Firm

 

 

 

 

To the Stockholders and Board of Directors of
Lazard Global Total Return and Income Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of Lazard Global Total Return and Income Fund, Inc. (the “Fund”), including the portfolio of investments, as of December 31, 2010, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Lazard Global Total Return and Income Fund, Inc. as of December 31, 2010, and the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
New York, New York
March 1, 2011

28



 

Lazard Global Total Return and Income Fund, Inc.

 

Proxy Voting Results

(unaudited)

 

The Annual Meeting of Stockholders was held on April 29, 2010, to vote on the following proposal. The proposal received the required number of votes of stockholders and was adopted.

Election of the following Directors:

 

 

three Class II Directors (Kenneth S. Davidson, Nancy A. Eckl and Lester Z. Lieberman), each to serve for a three-year term expiring at the 2013 Annual Meeting and/or until his or her successor is duly elected and qualified.


 

 

 

 

 

 

Director

 

 

For

 

Withhold Authority

 

 

 

 

 

 

Kenneth S. Davidson

 

8,234,590

 

425,477

Nancy A. Eckl

 

8,233,212

 

426,855

Lester Z. Lieberman

 

8,222,343

 

437,724


 

Portfolio Management Change

(unaudited)

 

Effective February 2011, the portfolio management team responsible for the Global Equity portfolio of the Fund is comprised of: Michael G. Fry, Michael Powers, Ronald Temple and Andrew Lacey. A biography for Mr. Temple, which was not previously included in the Fund’s prospectus, is set forth below:

Ronald Temple, a Managing Director of the Investment Manager, is a portfolio manager/analyst on various of the Investment Manager’s U.S. Equity teams and the Global Equity Select team. Mr. Temple is a Co-Director of Research and has primary research coverage of the financials sector. Mr. Temple joined the Investment Manager in 2001 and had been working in the investment field since 1991.

29



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Dividend Reinvestment Plan

(unaudited)

 

Unless you elect to receive distributions in cash (i.e., optout), all dividends, including any capital gain distributions, on your common stock will be automatically reinvested by Computershare, Inc., as dividend disbursing agent (the “Plan Agent”), in additional common stock under the Fund’s Dividend Reinvestment Plan (the “Plan”). You may elect not to participate in the Plan by contacting the Plan Agent. If you do not participate, you will receive all distributions in cash, paid by check mailed directly to you by the Plan Agent.

Under the Plan, the number of shares of common stock you will receive will be determined on the dividend or distribution payment date, as follows:

 

 

(1)

If the common stock is trading at or above net asset value at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) net asset value per common share on that date or (ii) 95% of the common stock’s market price on that date.

 

 

(2)

If the common stock is trading below net asset value at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase common stock in the open market, on the NYSE or elsewhere, for the participants’ accounts. It is possible that the market price for the common stock may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in common stock issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase common stock in the open market within 30 days of the valuation date. Interest will not be paid on any uninvested cash payments.

You may withdraw from the Plan at any time by giving written notice to the Plan Agent. If you withdraw or the

Plan is terminated, you will receive whole shares in your account under the Plan and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus an initial $15 service fee plus $0.12 per share being liquidated (for processing and brokerage expenses).

The Plan Agent maintains all stockholders’ accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Shares of common stock in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all common stock you have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or distributions in newly-issued shares of common stock. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.

Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions.

If you hold your common stock with a brokerage firm that does not participate in the Plan, you will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above. Consult your financial advisor for more information.

The Fund reserves the right to amend or terminate the Plan if, in the judgment of the Board, the change is warranted. There is no direct service charge to participants in the Plan (other than the service charge when you direct the Plan Agent to sell your common stock held in a dividend reinvestment account); however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained from the Plan Agent at P.O. Box 43010, Providence, Rhode Island 02940-3010.



30



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Board of Directors and Officers Information

(unaudited)

 

 

 

 

 

 

Name (Age)
Address(1)

 

Position(s) with the Fund
(Since)

 

Principal Occupation(s) During Past 5 Years
and Other Directorships Held(2)

         

Board of Directors:

 

 

 

 

 

 

 

 

 

Class I — Directors with Term Expiring in 2012

 

 

 

 

 

 

Independent Directors:

 

 

 

 

 

 

Leon M. Pollack (70)

 

Director
(August 2006)

 

Former Managing Director, Donaldson, Lufkin & Jenrette; Trustee, Adelphi University

 

 

 

 

 

Robert M. Solmson (63)

 

Director
(September 2004)

 

President, Fairwood Capital, LLC, a private investment corporation engaged primarily in real estate and hotel investments; Director, Colonial Williamsburg Co.; Former Chief Executive Officer and Chairman, RFS Hotel Investors, Inc.; Former Director, Morgan Keegan & Co., Inc.; Former Director, Independent Bank, Memphis

 

 

 

 

 

Interested Director(3):

 

 

 

 

 

 

 

 

 

Charles L. Carroll (50)

 

Chief Executive Officer,
President and Director
(June 2004)

 

Deputy Chairman and Head of Global Marketing of the Investment Manager

 

 

 

 

 

Class II — Directors with Term Expiring in 2013

 

 

 

 

 

Independent Directors:

 

 

 

 

 

 

 

 

 

Kenneth S. Davidson (65)(4)

 

Director
(February 2004)

 

President, Davidson Capital Management Corporation, an investment manager; Partner, Aquiline Holdings LLC, an investment manager; Trustee, The Juilliard School; Chairman of the Board, Bridgehampton Chamber Music Festival; Trustee, American Friends of the National Gallery, London

 

 

 

 

 

Nancy A. Eckl (48)

 

Director
(February 2007)

 

Former Vice President, Trust Investments, American Beacon Advisors, Inc. (“American Beacon”) and Vice President of certain funds advised by American Beacon; Trustee, College Retirement Equities Fund (eight accounts); Trustee, TIAA-CREF Funds (49 funds) and TIAA-CREF Life Funds (10 funds), and Member of the Management Committee of TIAA Separate Account VA-I

 

 

 

 

 

Lester Z. Lieberman (80)

 

Director
(February 2004)

 

Private Investor; Chairman, Healthcare Foundation of New Jersey; Director, Cives Steel Co.; Director, Northside Power Transmission Co.; Advisory Trustee, New Jersey Medical School; Director, Public Health Research Institute; Trustee Emeritus, Clarkson University; Council of Trustees, New Jersey Performing Arts Center

 

 

 

 

 

Class III — Directors with Term Expiring in 2011

 

 

 

 

 

Independent Director:

 

 

 

 

 

 

 

 

 

Richard Reiss, Jr. (66)

 

Director
(February 2004)

 

Chairman, Georgica Advisors LLC, an investment manager; Director, O’Charley’s, Inc., a restaurant chain

 

 

 

 

 

Interested Director(3):

 

 

 

 

 

 

 

 

 

Ashish Bhutani (50)

 

Director
(July 2005)

 

Chief Executive Officer of the Investment Manager; Vice Chairman and Director of Lazard Ltd (since January 2010)


 

 

(1)

The address of each Director is Lazard Asset Management LLC, 30 Rockefeller Plaza, New York, New York 10112-6300.

(2)

Each Director also serves as a Director for each of the Lazard Funds (comprised of, as of January 31, 2011, 22 investment portfolios). All of the Independent Directors, except Mr. Lieberman, are also board members of Lazard Alternative Strategies Fund, L.L.C., a privately-offered fund registered under the Act and advised by an affiliate of the Investment Manager.

(3)

Messrs. Bhutani and Carroll are “interested persons” (as defined in the Act) of the Fund because of their positions with the Investment Manager.

(4)

It is possible that Mr. Davidson could be deemed to be an affiliate of a company that has an indirect ownership interest in a broker-dealer that the Investment Manager may use to execute portfolio transactions for clients other than the Fund, and thus an “interested person” (as defined in the Act) of the Fund. However, due to the structure of Mr. Davidson’s relationship with the company and the remote nature of any deemed affiliation with the broker-dealer, Mr. Davidson is not identified as an “interested person” (as defined in the Act) of the Fund. Mr. Davidson participates in Fund Board meetings as if his status were that of an “interested person” (as defined in the Act).

31



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Board of Directors and Officers Information (concluded)

(unaudited)

 

 

 

 

 

 

Name (Age)
Address(1)

 

Position(s) with the Fund
(Since) and Term(2)

 

Principal Occupation(s) During Past 5 Years

         

Officers(3):

 

 

 

 

 

 

 

 

 

Nathan A. Paul (38)

 

Vice President
and Secretary
(February 2004)

 

Managing Director and General Counsel of the Investment Manager

 

 

 

 

 

Stephen St. Clair (52)

 

Treasurer
(February 2004)

 

Vice President of the Investment Manager

 

 

 

 

 

Brian D. Simon (48)

 

Chief Compliance Officer
(January 2009) and
Assistant Secretary
(February 2004)

 

Managing Director (since February 2011) of the Investment Manager (previously, Director) and Chief Compliance Officer (since January 2009) of the Fund and the Investment Manager

 

 

 

 

 

Tamar Goldstein (35)

 

Assistant Secretary
(February 2009)

 

Vice President (since March 2009) and previously Counsel (November 2006 to February 2009) of the Investment Manager; Associate at Schulte Roth & Zabel LLP, a law firm, from May 2004 to October 2006

 

 

 

 

 

Cesar A. Trelles (36)

 

Assistant Treasurer
(December 2004)

 

Vice President (since February 2011, previously, Fund Administration Manager) of the Investment Manager


 

 

(1)

The address of each officer is Lazard Asset Management LLC, 30 Rockefeller Plaza, New York, New York 10112-6300.

(2)

Each officer serves for an indefinite term, until his or her successor is elected and qualifies or until his or her earlier resignation or removal.

 

Each officer serves in the same capacity for the other Lazard Funds.

(3)

In addition to Charles L. Carroll, President, whose information is included in the Class I Interested Director section.

32



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Other Information

(unaudited)

 

Tax Information
Year Ended December 31, 2010

The following tax information represents year end disclosures of the tax benefits passed through to stockholders for 2010:

Of the dividends paid by the Fund, 62.15% of each dividend will be subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The same information will be reported in conjunction with your 2010 Form 1099-DIV.

Of the dividends paid by the Fund, 25.72% of the dividends qualify for the dividends received deduction available to corporate shareholders.

Pursuant to Section 871 of the Code, the Fund has no designated qualified short-term gains for purposes of exempting withholding of tax on such distributions to U.S. nonresident shareholders.

Proxy Voting

A description of the policies and procedures used to determine how proxies relating to Fund portfolio securities are voted is available (1) without charge, upon request, by calling (800) 823-6300 or (2) on the SEC’s website at http://www.sec.gov.

The Fund’s proxy voting record for the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (800) 823-6300 or (2) on the SEC’s website at http://www.sec.gov. Information as of June 30 each year will generally be available by the following August 31.

Form N-Q

The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330.

Board Consideration of Management Agreement

At the meeting of the Fund’s Board held on November 17-18, 2010, the Board considered the approval, for an additional annual period, of the Management Agreement between the Fund and the Investment Manager. The Independent Directors were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Investment Manager.

Services Provided

Representatives of the Investment Manager discussed with the Board the Investment Manager’s written presentation provided in advance of the meeting addressing, among other matters, the nature, extent and quality of services that the Investment Manager provides the Fund, including a discussion of the Investment Manager and its clients (of which the Lazard Funds complex of 20 active funds comprises approximately $20.3 billion, and the Fund and the other publicly-traded closed-end fund managed by the Investment Manager comprise approximately $246.4 million, of the nearly $130 billion of total assets under the management of the Investment Manager and its global affiliates as of September 30, 2010). The representatives of the Investment Manager noted that the Investment Manager believes that the Fund continues to benefit significantly from the infrastructure and services provided by the Investment Manager’s global investment management platform and technology, operational and legal and compliance support. The Directors also considered information provided by the Investment Manager regarding its personnel, resources, financial condition and experience. The Directors were provided with the Fund’s market price performance and market discounts to net asset value and distributions.

The Directors considered the various services provided by the Investment Manager including the Investment Manager’s research and portfolio management capabilities and oversight of day-to-day operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Directors also considered the Investment Manager’s infrastructure and agreed that the Fund benefits from the services and infrastructure provided by the Investment Manager. The Directors accepted management’s assertion that such services and infrastructure are greater than those typically provided to a fund complex not managed by a large, global firm such as the Investment Manager.

Comparative Management Fee, Expense Ratio and Performance Information

The Directors reviewed comparative management fee, expense ratio and performance (through September 30, 2010) information prepared by Lipper. They noted the limitations of the Lipper comparison group (“Group”) and that Lipper’s management fee comparisons include administrative fees (which, for the Fund, is paid to the Fund’s third party administrator that is not affiliated with the Investment Manager) and that the quintile rankings used therein (referred to below) did not include fixed dollar amounts paid to administrators. It was noted that such fixed fees were not material relative to the Fund’s management fees,



33



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Other Information (continued)

(unaudited)

 

but could affect management fee quintile rankings if included in Lipper’s analysis. Lipper’s materials stated that Lipper’s reports are specifically designed to provide boards of directors the necessary fee, expense and investment performance information to help fulfill their advisory contract renewal responsibilities under Section 15(c) of the Act.

The Directors also discussed the management fees and expense ratios (leveraged and unleveraged) for the Fund, and it was noted that, as calculated by Lipper, they were below or within a few basis points of the medians of the Group and the Lipper universe (“Universe”).

The Directors noted that the Fund’s total return performance (based on net asset value) generally ranked second or third of the four funds in the Fund’s Group over various measurement periods ended September 30, 2010. The Directors, however, noted that no funds in the Group or Universe pursued a strategy similar to that of the Fund’s strategy of investing in global equity securities and in forward currency contracts. They also were advised that the Investment Manager did not manage any separately managed accounts with similar investment objectives, policies and strategies using the Fund’s investment strategies.

Fee Calculation

The Board considered that the method of calculating management fees is based on the Fund’s Total Leveraged Assets, pursuant to which the management fee borne by stockholders will increase to the extent the Investment Manager makes Currency Investments by incurring Financial Leverage rather than reducing the percentage of Net Assets invested in Global Equity Investments, for the purposes of making Currency Investments, and considered the advantages of increased investment exposure through Financial Leverage. The Board considered the economic equivalence, and the similarities, from an investment management perspective, of Currency Investments (1) made with Currency Commitments and (2) made with the proceeds of Borrowings.

The Board considered that (1) this method of calculating management fees is different than the way closed-end investment companies typically calculate management fees, (2) traditionally closed-end funds calculate management fees based on Net Assets plus Borrowings (excluding Financial Leverage obtained through Currency Commitments) and (3) the Investment Manager’s fee would be lower if its fee were calculated only on Net Assets plus Borrowings, because the Investment Manager would not earn fees on Currency Investments made with Currency Commitments (forward currency contracts or other derivative instruments whose value is derived from the performance of an underlying emerging market currency).

The Board considered that the Investment Manager’s fee is different because the Fund’s leverage strategy is different than the strategy employed by many other leveraged closed-end investment companies—that although the Fund may employ Borrowings in making Currency Investments, the Fund’s leverage strategy relies primarily on Currency Commitments rather than relying exclusively on borrowing money and/or issuing preferred stock. The Board considered the Fund’s use of Currency Commitments for leverage (rather than relying exclusively on borrowing money and/or issuing preferred stock) and the Investment Manager’s belief that forward currency contracts, or other derivative instruments whose value is derived from the performance of an underlying emerging market currency, often offer a more attractive way to gain exposure to emerging market interest rate opportunities and currencies than investments in debt obligations and the fact that there might not be a viable debt market in certain emerging market countries. The Board also considered the Investment Manager’s view that foreign currency contracts present less counterparty and custody risks and the Investment Manager’s extensive expertise with these instruments, as discussed in detail in previous Board meetings.

Procedures adopted by the Investment Manager to evaluate possible conflicts of interest that may arise from the fee calculation methodology, include the following: (1) no less frequently than monthly, decisions regarding the amount of the Fund’s allocation to Currency Investments must be reviewed by a Managing Director of the Investment Manager not involved in the decision-making process and the Fund’s Chief Compliance Officer, and that such review be documented to include the basis therefor, documentation to be retained for six years, the first two years in an easily accessible place, (2) the Investment Manager must provide the Board with a quarterly report regarding these decisions and the reasons therefor and (3) the Investment Manager must deliver a quarterly certification to the Board, signed by a Managing Director of the Investment Manager and the Fund’s or the Investment Manager’s Chief Compliance Officer (as applicable), that the procedures had been complied with during the previous quarter. The Investment Manager’s representatives stated that such procedures had been followed and that the Investment Manager would continue to follow those procedures.

Investment Manager Profitability and Economies of Scale

The Directors reviewed the Fund information prepared by the Investment Manager concerning the estimated expenses incurred, and profits realized, by the Investment Manager and its affiliates resulting from the Fund’s Management Agreement, including the projected dollar amount of expenses allocated and profit received by the



34



 

 

Lazard Global Total Return and Income Fund, Inc.

 

Other Information (concluded)

(unaudited)

 

Investment Manager for the calendar year ending December 31, 2010 (assuming that asset levels were unchanged from September 30, 2010 to December 31, 2010) and for calendar year 2011 assuming that the average net assets used in the 2010 projection increased by 20%, and the method used to determine such expenses and profits. The representatives of the Investment Manager stated that neither the Investment Manager nor its affiliates receive any significant indirect benefits from the Investment Manager acting as investment adviser to the Fund. The Investment Manager’s representatives stated that the broker-dealer that is treated as an affiliate of the Investment Manager did not effect trades for the Fund from January 1, 2010 through September 30, 2010. The Investment Manager’s representatives reviewed with the Board information provided on the Investment Manager’s brokerage practices and the Fund’s brokerage allocation, commission payments and soft dollar commissions and benefits.

The profitability percentages were within ranges determined by relevant court cases not to be so disproportionately large that they bore no reasonable relationship to the services rendered. Representatives of the Investment Manager stated that the Investment Manager believed the profits are not unreasonable in light of the services provided and other factors. The Directors considered the Investment Manager’s estimated and projected profitability with respect to the Fund as part of their evaluation of whether the Fund’s fee under its Management Agreement bears a reasonable relationship to the mix of services provided by the Investment Manager, including the nature, extent and quality of such services, and evaluated profitability in light of the relevant circumstances for the Fund. It was noted that, because the Fund is a closed-end fund without daily inflows and outflows of capital, there were not at this time significant

economies of scale to be realized by the Investment Manager in managing the Fund’s assets.

At the conclusion of these discussions, each of the Directors expressed the opinion that he or she had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Fund’s Management Agreement. Based on its discussions and considerations as described above, the Board made the following conclusions and determinations.

 

 

The Board concluded that the nature, extent and quality of the services provided by the Investment Manager are adequate and appropriate, noting the benefits of advisory and research services and other services and infrastructure (as discussed above) associated with a nearly $130 billion global asset management business.

 

 

The Board was generally satisfied with the Fund’s overall performance, in light of the considerations described above.

 

 

The Board concluded that the Fund’s fee paid to the Investment Manager was reasonable in light of the considerations discussed above.

 

 

The Board determined that because the Fund is a closed-end fund without daily inflows and outflows of capital the Fund’s fee schedule is reasonable in light of current economies of scale considerations and that there were not at this time significant economies of scale to be realized by the Investment Manager.

The Board considered these conclusions and determinations in their totality and, without any one factor being dispositive, determined that approval of the Fund’s Management Agreement was in the best interests of the Fund and its stockholders.



35


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Lazard Global Total Return and Income Fund, Inc.

30 Rockefeller Plaza

New York, New York 10112-6300

Telephone: 800-823-6300

http://www.LazardNet.com

 

Investment Manager

Lazard Asset Management LLC

30 Rockefeller Plaza

New York, New York 10112-6300

Telephone: 800-823-6300

 

Custodian

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

 

Transfer Agent and Registrar

Computershare Trust Company, N.A.

P.O. Box 43010

Providence, Rhode Island 02940-3010

 

Dividend Disbursing Agent

Computershare, Inc.

P.O. Box 43010

Providence, Rhode Island 02940-3010

 

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Two World Financial Center

New York, New York 10281-1414

 

Legal Counsel

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, New York 10038-4982

http://www.stroock.com



(BACK COVER)

This report is intended only for the information of stockholders of common stock of Lazard Global Total Return and Income Fund, Inc.

Lazard Asset Management LLC

30 Rockefeller Plaza

www.LazardNet.com

New York, NY 10112-6300




ITEM 2. CODE OF ETHICS.

          The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

          The Registrant’s Board of Directors (the “Board”) has determined that Lester Z. Lieberman, Robert M. Solmson and Nancy A. Eckl, members of the Audit Committee of the Board, are audit committee financial experts as defined by the Securities and Exchange Commission (the “SEC”). Mr. Lieberman, Mr. Solmson and Ms. Eckl are “independent” as defined by the SEC for purposes of audit committee financial expert determinations.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $60,000 in 2009 and $62,000 in 2010.

(b) Audit-Related Fees. There were no fees billed in the Reporting Periods by the Auditor to the Registrant for assurance and related services that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4. There were no fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to Lazard Asset Management LLC, the Registrant’s investment manager (“Lazard”), and any entity controlling, controlled by or under common control with Lazard that provides ongoing services to the Registrant (“Service Affiliates”).

(c) Tax Fees. The aggregate fees billed in the Reporting Periods by the Auditor to the Registrant for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $6,562.50 in 2009 and $6,750 in 2010. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; and (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments. There were no fees billed for the Reporting Periods for Tax Services by the Auditor to Service Affiliates.

(d) All Other Fees. There were no fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) above. There were no fees billed in the Reporting Periods for non-audit services by the Auditor to Service Affiliates, other than the services reported in paragraphs (a) through (c) above.

(e) Audit Committee Pre-Approval Policies and Procedures. The Registrant’s Audit Committee pre-approves the Auditor’s engagements for audit and non-audit services to the Registrant and, as required, non-audit services to Service Affiliates on a case-by-case basis. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor’s independence. There were no services provided by the Auditor that were approved pursuant to (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) None.


(g) Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant and rendered to Service Affiliates for the Reporting Periods were $863,606 in 2009 and $935,847 in 2010.

(h) Auditor Independence. The Audit Committee considered whether provision of non-audit services to Service Affiliates that were not required to be pre-approved is compatible with maintaining the Auditor’s independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

 

 

 

          The Registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. It is composed of the following Directors, each of whom is not an “interested person” (as defined in the Investment Company Act of 1940) of the Registrant (“Independent Directors”):

 

 

 

Lester Z. Lieberman, Audit Committee Chairman
Nancy A. Eckl
Leon M. Pollack
Richard Reiss, Jr.
Robert M. Solmson

ITEM 6. INVESTMENTS

     Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENTCOMPANIES.

 

 

 

 

 

          The Registrant has delegated voting of proxies in respect of portfolio holdings to Lazard, to vote the Registrant’s proxies in accordance with Lazard’s proxy voting policy and guidelines (the “Voting Guidelines”) that provide as follows:

 

 

 

 

 

 

Lazard votes proxies in the best interests of its clients.

 

 

 

 

 

 

Unless Lazard’s Proxy Committee otherwise determines, Lazard votes proxies in a manner consistent with the Voting Guidelines.

 

 

 

 

 

 

To avoid conflicts of interest, Lazard votes proxies where a material conflict has been deemed to exist in accordance with specific proxy voting guidelines regarding various standard proxy proposals (“Approved Guidelines”) or, if the Approved Guideline is to vote case-by-case, in accordance with the recommendation of an independent source.

 

 

 

 

 

 

Lazard also may determine not to vote proxies in respect of securities of any issuer if it determines that it would be in the client’s overall best interests not to vote.

 

 

 

 

 

          The Voting Guidelines address how it will vote proxies on particular types of matters such as the election for directors, adoption of option plans and anti-takeover proposals. For example, Lazard generally will:

 

 

 

 

 

 

vote as recommended by management in routine election or re-election of directors;

 

 

 

 

 

 

favor programs intended to reward management and employees for positive, long-term performance, evaluating whether Lazard believes, under the circumstances, that the level of compensation is appropriate or excessive; and

 

 

 

 

 

 

vote against anti-takeover measures, such as adopting supermajority voting requirements, shareholder rights plans and fair price provisions.




 

 

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

 

 

Principal Portfolio Managers

 

 

 

As of the date of the filing of this Report on Form N-CSR, the following persons are responsible for the management of the Registrant’s portfolio:

 

 

 

James Donald is responsible for allocation of the Registrant’s assets between Global Equity Investments and Currency Investments (each, as defined in the notes to the Registrant’s annual report to shareholders contained in Item 1) and overall management of the Registrant’s portfolio. Global Equity Investments and Currency Investments are each managed on a team basis, with each member of the team involved at all levels of the investment process.

 

 

 

Mr. Donald, a Managing Director of Lazard, is a portfolio manager/analyst on Lazard’s Emerging Markets Equity team and Head of the Emerging Markets Group. Prior to joining Lazard in 1996, Mr. Donald was a portfolio manager with Mercury Asset Management. Mr. Donald is a CFA Charterholder.

 

 

 

Global Equity Investments. Michael G. Fry, Michael Powers, Ronald Temple and Andrew Lacey are the portfolio managers responsible for investing the Registrant’s assets allocated to Global Equity Investments.

 

 

 

Michael G. Fry, a Managing Director of the Investment Manager, is a portfolio manager/analyst on the Investment Manager’s Global Equity and International Equity teams. Prior to joining the Investment Manager in 2005, Mr. Fry held several positions at UBS Global Asset Management, including Head of Global Equity Portfolio Management, Global Head of Equity Research and Head of Australian Equities. Mr. Fry began working in the investment field in 1981.

 

 

 

Ronald Temple, a Managing Director of the Investment Manager, is a portfolio manager/analyst on various of the Investment Manager’s U.S. Equity teams and the Global Equity Select team. Mr. Temple is a Co-Director of Research and has primary research coverage of the financials sector. Mr. Temple joined the Investment Manager in 2001 and had been working in the investment field since 1991.

 

 

 

Mr. Lacey, a Deputy Chairman of Lazard, is responsible for oversight of U.S. and Global strategies. He also is a portfolio manager/analyst on various of Lazard’s U.S. Equity and Global Equity teams. Mr. Lacey joined Lazard in 1996, and has been working in the investment field since 1995.

 

 

 

Mr. Powers, a Managing Director of Lazard, is a portfolio manager/analyst on Lazard’s Global Equity and International Equity teams. He began working in the investment field in 1990 when he joined Lazard.

 

 

 

Currency Investments. Ardra Belitz and Ganesh Ramachandran are jointly responsible for investment of the Registrant’s assets allocated to Currency Investments.

 

 

 

Ms. Belitz is a Managing Director of Lazard and a portfolio manager/analyst specializing in emerging market currency and debt. She has been working in the investment field since 1994 and joined Lazard in 1996.

 

 

 

Mr. Ramachandran is a Managing Director of Lazard and a portfolio manager/analyst specializing in emerging market currency and debt. He joined Lazard in 1997.

 

 

 

Portfolio Management

 

 

 

Team Management. Portfolio managers at Lazard manage multiple accounts for a diverse client base, including private clients, institutions and investment funds. Lazard manages all portfolios on a team basis. The team is involved at all levels of the investment process. This team approach allows for every portfolio manager to benefit from his/her peers, and for clients to receive the firm’s best thinking, not that of a single portfolio manager. Lazard manages all like investment mandates against a model portfolio. Specific client objectives, guidelines or limitations then are applied against the model, and any necessary adjustments are made.

 

 

 

Material Conflicts Related to Management of Similar Accounts. Although the potential for conflicts of interest exist when an investment adviser and portfolio managers manage other accounts that invest in securities in which the Registrant may invest or that may pursue a strategy similar to one of the Registrant’s component strategies (collectively, “Similar Accounts”), Lazard has procedures in place that are designed to ensure that all accounts are treated fairly and that the Registrant is not disadvantaged, including procedures regarding trade allocations and “conflicting trades” (e.g., long and short positions in the same security, as described below). In addition, the Registrant, as a registered investment company, is subject to




 

 

 

different regulations than certain of the Similar Accounts, and, consequently, may not be permitted to engage in all the investment techniques or transactions, or to engage in such techniques or transactions to the same degree, as the Similar Accounts.

 

 

 

Potential conflicts of interest may arise because of Lazard’s management of the Registrant and Similar Accounts. For example, conflicts of interest may arise with both the aggregation and allocation of securities transactions and allocation of limited investment opportunities, as Lazard may be perceived as causing accounts it manages to participate in an offering to increase Lazard’s overall allocation of securities in that offering, or to increase Lazard’s ability to participate in future offerings by the same underwriter or issuer. Allocations of bunched trades, particularly trade orders that were only partially filled due to limited availability, and allocation of investment opportunities generally, could raise a potential conflict of interest, as Lazard may have an incentive to allocate securities that are expected to increase in value to preferred accounts. Initial public offerings, in particular, are frequently of very limited availability. Additionally, portfolio managers may be perceived to have a conflict of interest because of the large number of Similar Accounts, in addition to the Registrant, that they are managing on behalf of Lazard. In addition, Lazard could be viewed as having a conflict of interest to the extent that Lazard and/or portfolio managers have a materially larger investment in a Similar Account than their investment in the Registrant. Although Lazard does not track each individual portfolio manager’s time dedicated to each account, Lazard periodically reviews each portfolio manager’s overall responsibilities to ensure that he or she is able to allocate the necessary time and resources to effectively manage the Registrant.

 

 

 

A potential conflict of interest may be perceived to arise if transactions in one account closely follow related transactions in a different account, such as when a purchase increases the value of securities previously purchase by the other account, or when a sale in one account lowers the sale price received in a sale by a second account. Lazard and certain of the Registrant’s portfolio managers manage hedge funds that are subject to performance/incentive fees. Certain hedge funds managed by Lazard may also be permitted to sell securities short. However, Lazard currently does not have any portfolio managers that manage both hedge funds that engage in short sales and long-only accounts, including open-end and closed-end registered investment companies. When Lazard engages in short sales of securities of the type in which the Registrant invests, Lazard could be seen as harming the performance of the Registrant for the benefit of the account engaging in short sales if the short sales cause the market value of the securities to fall. As described above, Lazard has procedures in place to address these conflicts.

 

 

 

Accounts Managed by the Portfolio Managers. The chart below includes information regarding the members of the portfolio management team responsible for managing the Registrant. Specifically, it shows the number of portfolios and assets managed by management teams of which each of the Registrant’s portfolio managers is a member. Regardless of the number of accounts, the portfolio management team still manages each account based on a model portfolio as described above.


 

 

 

 

 

 

 

Portfolio Manager

 

Registered Investment
Companies ($*)#

 

Other Pooled Investment
Vehicles ($*)#

 

Other Accounts ($*)#, +








Ardra Belitz

 

2 (256.3 million)

 

4 (2.9 billion)

 

4 (187.7 million)

Michael G. Fry

 

8 (3.4 billion)

 

4 (144.6 million)

 

242 (9.1 billion)

Ronald Temple

 

9 (9.4 billion)

 

7 (715.5 million)

 

190 (5.1 billion)

James M. Donald

 

10 (24.0 billion)

 

18 (6.8 billion)

 

214 (12.6 billion)

Andrew D. Lacey

 

15 (12.9 billion)

 

10 (976.0 million)

 

199 (5.4 billion)

Ganesh Ramachandran

 

2 (256.3 million)

 

4 (2.9 billion)

 

4 (187.7 million)

Michael Powers

 

8 (3.4 billion)

 

3 (72.9 million)

 

241 (9.0 billion)









 

 

 

* Total assets in accounts as of December 31, 2010.

 

# The following portfolio managers manage accounts with respect to which the advisory fee is based on the performance of the account:

 

(1) Mr. Donald manages four other accounts and one registered investment company with assets under management of approximately $1.5 billion and $2.1 billion, respectively.

 

(2) Mr. Fry and Mr. Powers manage one registered investment company with assets under management of approximately $2.1 billion.

 

(3) Mr. Lacey and Mr. Temple manage one registered investment company with assets under management of approximately $6.5 billion.

 

(4) Ms. Belitz and Mr. Ramachandran manage three other pooled investment vehicles with assets under management of approximately $2.6 billion.

 

+ Includes an aggregation of any Similar Accounts within managed account programs where the third party program sponsor is responsible for applying specific client objectives, guidelines and limitations against the model portfolio managed by the portfolio management team.




 

 

 

Compensation for Portfolio Managers

 

 

 

Lazard’s portfolio managers are generally responsible for managing multiple types of accounts that may, or may not, invest in securities in which the Registrant may invest or pursue a strategy similar to one of the Registrant’s component strategies. Portfolio managers responsible for managing the Registrant may also manage sub-advised registered investment companies, collective investment trusts, unregistered funds and/or other pooled investment vehicles, separate accounts, separately managed account programs (often referred to as “wrap accounts”) and model portfolios.

 

 

 

During the fiscal year covered by this Report on Form N-CSR, Lazard compensates portfolio managers by a competitive salary and bonus structure, which is determined both quantitatively and qualitatively. Salary and bonus are paid in cash, stock and restricted fund interests. Portfolio managers are compensated on the performance of the aggregate group of portfolios managed by the teams of which they are a member rather than for a specific fund or account. Various factors are considered in the determination of a portfolio manager’s compensation. All of the portfolios managed by a portfolio manager are comprehensively evaluated to determine his or her positive and consistent performance contribution over time. Further factors include the amount of assets in the portfolios as well as qualitative aspects that reinforce Lazard’s investment philosophy.

 

 

 

Total compensation is generally not fixed, but rather is based on the following factors: (i) leadership, teamwork and commitment, (ii) maintenance of current knowledge and opinions on companies owned in the portfolio; (iii) generation and development of new investment ideas, including the quality of security analysis and identification of appreciation catalysts; (iv) ability and willingness to develop and share ideas on a team basis; and (v) the performance results of the portfolios managed by the investment teams of which the portfolio manager is a member.

 

 

 

Variable bonus is based on the portfolio manager’s quantitative performance as measured by his or her ability to make investment decisions that contribute to the pre-tax absolute and relative returns of the accounts managed by the teams of which the portfolio manager is a member, by comparison of each account to a predetermined benchmark (as set forth in the prospectus or other governing document) over the current fiscal year and the longer-term performance (3-, 5- or 10-year, if applicable) of such account, as well as performance of the account relative to peers. The variable bonus for the Registrant’s portfolio management team in respect of its management of the Registrant is determined by reference to the Morgan Stanley Capital International (MSCI®) World Index. The portfolio manager’s bonus also can be influenced by subjective measurement of the manager’s ability to help others make investment decisions. Portfolio managers managing accounts that pay performance fees may receive a portion of the performance fee as part of their compensation.

 

 

 

Ownership of Registrant Securities

 

 

 

As of December 31, 2010, the portfolio managers of the Registrant owned the following shares of Common Stock of the Registrant.


 

 

 

 

Portfolio Manager

 

Market Value of Shares

 


 


 

 

Ardra Belitz

None

James M. Donald

$100,001-$500,000

Andrew D. Lacey

$50,001-$100,000

Ganesh Ramachandran

$10,001-$50,000

Michael Powers

None

Michael G. Fry

None

Ronald Temple

None

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

     Not applicable.


ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors during the period covered by this report. A description of these procedures can be found in the proxy statement for the Registrant’s most recent shareholder meeting, which is available at www.sec.gov.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The Registrant’s principal executive and principal financial officers have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) There were no changes to the Registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Code of Ethics referred to in Item 2.

(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3) Not applicable.

(b) Certifications of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Lazard Global Total Return and Income Fund, Inc.

 

 

 

By

/s/ Charles L. Carroll

 

 


 

 

Charles L. Carroll

 

Chief Executive Officer

 

 

Date

March 10, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

 

By

/s/ Charles L. Carroll

 

 


 

 

Charles L. Carroll

 

Chief Executive Officer

 

 

Date

March 10, 2011


 

 

 

By

/s/ Stephen St. Clair

 

 


 

 

Stephen St. Clair

 

Chief Financial Officer

 

 

Date

March 10, 2011