Lazard’s Global Diversification: IEQ ETF Outperforms S&P 500 with European Banks, Gold, and AI Hardware

Lazard Asset Management is strategically recalibrating its investment portfolio, shifting focus towards undervalued international assets amidst increasing global market volatility. This pivot emphasizes European banks, select Asian entities, gold mining companies, and semiconductor manufacturers, reflecting a broader quest for diversification beyond U.S. markets. This international orientation appears to be yielding positive results, with the iShares MSCI ACWI ex US ETF (IEQ) demonstrating a substantial 23% advance in 2025, effectively doubling the performance of the S&P 500 (SP500) and underscoring the appeal of global diversification.

Paul Moghtader, Managing Director of Lazard Advantage, articulated the firm’s rationale, stating, “Markets are becoming increasingly volatile and risky… international exposure becomes more attractive relative to the U.S.” Moghtader oversees the Lazard International Dynamic Equity (IEQ) ETF, which manages $422 million in assets and holds a five-star rating from Morningstar, with an expense ratio of 0.40%. This fund exemplifies the firm’s conviction in capturing value from diverse global economies.

• Lazard Asset Management is strategically reallocating its investment portfolio.
• The firm is shifting focus towards undervalued international assets.
• Key sectors of emphasis include European banks, specific Asian entities, gold miners, and semiconductor manufacturers.
• This strategy aims for broader diversification beyond traditional U.S. markets.
• The Lazard International Dynamic Equity (IEQ) ETF embodies this global investment approach.
• International exposure is deemed more attractive due to increasing market volatility and risk.

Strategic Sector Focus

The ETF maintains significant positions in key global players such as Taiwan Semiconductor (TSM), Novartis (NVS), Tencent (0700.HK), and Samsung Electronics (005930.KQ). Furthermore, it has strategically overweighted European financial institutions like BNP Paribas (BNP), Barclays, and Société Générale, alongside Japan Post Bank. These banking sector allocations have proven lucrative, with BNP Paribas registering nearly a 30% increase in 2025, bolstered by its acquisition of AXA Investment Managers, which solidified its position as Europe’s fifth-largest asset manager. Société Générale has seen a notable 94% surge, while Barclays and Japan Post also posted strong gains of 34% and 25% respectively.

Concurrently, Lazard has amplified its exposure to Canadian gold miners, including Barrick Gold (B), Kinross Gold (KGC), and Torex Gold (TXG.TO). These investments align with a defensive strategy, recognizing commodities as a crucial hedge against macroeconomic uncertainty. Barrick Gold and Kinross Gold have shown impressive returns, advancing 72% and 125% respectively, affirming the value proposition of precious metals in a volatile global landscape.

Technological Realignment

Lazard has also executed a notable realignment within its technology holdings. Recognizing that advancements in artificial intelligence are simplifying software development, the firm reduced its exposure to software-centric companies such as AppLovin (APP), Gartner (IT), and Cadence Design Systems (CDNS) in August. This divestment was complemented by strategic acquisitions in hardware and technological infrastructure firms, including Amphenol (APH), Ericsson (EAC), Western Digital (WDC), and NetGear (NTGR). This shift reflects an expectation that value creation will increasingly migrate towards the foundational hardware supporting AI and other advanced technologies.

With approximately $231 billion under management, Lazard Asset Management’s comprehensive strategy integrates both defensive and growth-oriented investments. The firm employs a rigorous quantitative model that systematically evaluates assets based on valuation, quality, growth potential, and market sentiment, reinforcing its standing as a prominent leader in international investment management.