Summary

• The US equity market fell in the first quarter, as investors were buffeted by geopolitical risks, an uncertain outlook for interest rates, and evolving sentiment about artificial intelligence.
• In the first quarter, the Lazard US Convertibles Portfolio underperformed its benchmark, the ICE BofA All US Convertibles Index.
• Names linked to AI positively impacted absolute and relative performance, particularly exposures in computer hardware and energy solutions from the industrial sector.
• Lazard believes the sector and market-cap biases of US convertible bonds could continue to be advantageous.
• Lazard expects issuance to stay robust throughout 2026 as companies address refinancing needs in a higher-rate environment, helping sustain attractive convexity and yield opportunities.

Market Review

The US equity market fell in the first quarter, as investors were buffeted by geopolitical risks, an uncertain outlook for interest rates, and evolving sentiment about artificial intelligence (AI).

The quarter was a

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