Benefits of investing in the Lazard Defensive Australian Equity Fund

Lazard believes some of the significant benefits of investing in the Fund are:

1. Income and capital growth - the potential to earn dividends and franking credits from Australian shares and participate in any capital growth of those shares.
2. Active cash exposure - active allocation to cash when income from shares is not as attractive as the yield on cash investments or when in our opinion equities appear to be over-priced.
3. Regular distributions - income distributed on a quarterly basis, if of an economic size.
4. Expertise - the Fund is managed by a team of investment professionals who have many years of experience managing Australian equity strategies. They also have access to LAM's global investment professionals.
5. Liquidity - investors have timely access to their investment and are normally provided with daily Fund valuations (daily unit prices).
6. Simplicity/transparency - the Fund will only invest in equities and cash. Given the nature of the Fund, Lazard considers it important to avoid using derivatives.
7. Reporting - regular reporting is provided to investors including balances, fact sheets and annual tax statements.

Risk level

High

Investor suitability

Investors seeking an investment return objective similar to the Fund and are comfort- able with the risks of investing, as described in the PDS.

About the Fund

The Lazard Defensive Australian Equity Fund is designed to provide regular, tax effective income that grows over time. It sources that income by investing in Australian companies with sustainable dividends, or by investing in cash, depending on where the best opportunities exist.

Investment return objective

Over an investment cycle, the Fund seeks to achieve:

1. reduced exposure to S&P/ASX200 Accumulation Index drawdowns;
2. a total return that exceeds the Reserve Bank of Australia Cash Rate; and
3. an income return at a premium to the S&P/ASX200 Accumulation Index dividend yield.

How we invest your money

The investment strategy of the Fund is to provide investors with access to companies listed on the Australian Securities Exchange that Lazard believes offer sustainably high dividends and capital appreciation potential.

The number of stocks will generally range from 0 to 50, which means Lazard makes active investment decisions as to which stocks the Fund holds. The Fund may reallocate capital from equities towards Cash investments, up to 100%, as cash yields rise and / or dividend yields fall or when in our opinion equities appear to be over-priced, so reducing the number of equities that qualify for inclusion in the Fund.

The Fund may hold a position of generally up to 3% in any one company at the time of purchase (except in the event of a corporate action).

Given the nature of the Fund, Lazard considers it important to avoid derivatives which will not be used in this Fund during the life of the PDS.

The Fund may also invest in initial public offerings which are expected to be listed within 3 months from the date of purchase.

Asset classes and range

• Equities of companies listed or to be listed, predominantly on the Australian Securities Exchange: 0% to 100%.

Within this range the Fund may also invest up to 10% in the equities of companies listed on the New Zealand Stock Exchange.

• Cash investments: 0% to 100%

Within this class and range, the Fund can invest in:

1. At call cash accounts and term deposits; and
2. Other securities, for example exchange traded funds, that in turn invest in bank deposit accounts, with highly rated Australian Deposit-taking Institutions (together referred to as "Cash investments).