N-CSRS 1 dncsrs.htm FORM N-CSRS Form N-CSRS

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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:

    811-03153

 

 

 

 

 

 

 

Russell Investment Company

(Exact name of registrant as specified in charter)

 

909 A Street, Tacoma Washington   98402
(Address of principal executive offices)   (Zip code)

 

 

Greg J. Lyons, Secretary and Chief Legal Officer

Russell Investment Company

909 A Street

Tacoma, Washington 98402

253-439-2406

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 253-572-9500

 

Date of fiscal year end: October 31

 

Date of reporting period: November 1, 2008 to April 30, 2009

Item 1. Reports to Stockholders

LOGO

 

2009 SEMIANNUAL REPORT

 

 

Russell Funds

 

 

APRIL 30, 2009

FUND

   

SHARE CLASS

   

FUND NAME PRIOR TO

SEPTEMBER 2, 2008

U.S. Equity Funds      
Russell U.S. Core Equity Fund    A, C, E, I, S, Y    Equity I Fund
Russell U.S. Quantitative Equity Fund    A, C, E, I, S, Y    Equity Q Fund
Russell U.S. Growth Fund    C, E, I, S    Select Growth Fund
Russell U.S. Value Fund    C, E, I, S    Select Value Fund
Russell U.S. Small & Mid Cap Fund    A, C, E, I, S, Y    Equity II Fund
International and Global Equity Funds      
Russell International Developed Markets Fund    A, C, E, I, S, Y    International Fund
Russell Global Equity Fund    A, C, E, S, Y    Global Equity Fund
Russell Emerging Markets Fund    A, C, E, S, Y    Emerging Markets Fund
Tax-Managed Equity Funds      
Russell Tax-Managed U.S. Large Cap Fund    C, E, S    Tax-Managed Large Cap Fund
Russell Tax-Managed U.S. Mid & Small Cap Fund    C, E, S    Tax-Managed Mid & Small Cap Fund
Taxable Fixed Income Funds      
Russell Strategic Bond Fund    A, C, E, I, S, Y    Fixed Income III Fund
Russell Investment Grade Bond Fund    C, E, I, S, Y    Fixed Income I Fund
Russell Short Duration Bond Fund    A, C, E, S, Y    Short Duration Bond Fund
Tax Exempt Fixed Income Funds      
Russell Tax Exempt Bond Fund    C, E, S    Tax Exempt Bond Fund
Specialty Funds      
Russell Real Estate Securities Fund    A, C, E, S, Y    Real Estate Securities Fund
Money Market Funds      
Russell Money Market Fund    A, S    Money Market Fund

 

LOGO

 

 

Russell Investment Company

Russell Investment Company is a series investment company with 38 different investment portfolios referred to as Funds. These financial statements report on 16 of these Funds.

 

Russell Investment Company

Russell Funds

Semiannual Report

April 30, 2009 (Unaudited)

Table of Contents

 

     Page

Russell U.S. Core Equity Fund

    3

Russell U.S. Quantitative Equity Fund

    10

Russell U.S. Growth Fund

   22

Russell U.S. Value Fund

   27

Russell U.S. Small & Mid Cap Fund

   32

Russell International Developed Markets Fund

   45
Russell Global Equity Fund    63
Russell Emerging Markets Fund    74
Russell Tax-Managed U.S. Large Cap Fund    89
Russell Tax-Managed U.S. Mid & Small Cap Fund    94
Russell Strategic Bond Fund    101
Russell Investment Grade Bond Fund    153
Russell Short Duration Bond Fund    182
Russell Tax Exempt Bond Fund    202
Russell Real Estate Securities Fund    214
Russell Money Market Fund    220
Notes to Schedules of Investments    225
Statements of Assets and Liabilities    226
Statements of Operations    232
Statements of Changes in Net Assets    236
Statement of Cash Flows    242
Financial Highlights    244
Notes to Financial Highlights    268
Notes to Financial Statements    269
Basis for Approval of Investment Advisory Contracts    311
Shareholder Requests for Additional Information    316
Disclosure of Information about Fund Trustees and Officers    317
Adviser, Money Managers and Service Providers    321

 

Russell Investment Company - Russell Funds.

Copyright © Russell Investments 2009. All rights reserved.

Russell Investments is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Fund objectives, risks, charges and expenses should be carefully considered before investing. A prospectus containing this and other important information must precede or accompany this material. Please read the prospectus carefully before investing.

Securities distributed through Russell Financial Services, Inc. (effective June 2, 2008, the name changed from Russell Fund Distributors, Inc.) member FINRA, part of Russell Investments.

Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Current to the most recent month-end performance data may be obtained by visiting www.russell.com/us/fundperformance.

Russell Investment Company

Russell U.S. Core Equity Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 928.10    $ 1,019.44

Expenses Paid During Period*

    $ 5.16    $ 5.41

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.08% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 923.80    $ 1,015.77

Expenses Paid During Period*

    $ 8.68    $ 9.10

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.82% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 927.70    $ 1,020.08

Expenses Paid During Period*

    $ 4.54    $ 4.76

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.95% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 928.80    $ 1,021.32

Expenses Paid During Period*

    $ 3.35    $ 3.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.70% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Russell U.S. Core Equity Fund   3

Russell Investment Company

Russell U.S. Core Equity Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 928.20    $ 1,020.68

Expenses Paid During Period*

    $ 3.97    $ 4.16

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.83% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 929.00    $ 1,021.57

Expenses Paid During Period*

    $ 3.11    $ 3.26

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.65% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

4   Russell U.S. Core Equity Fund

Russell Investment Company

Russell U.S. Core Equity Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Common Stocks - 90.7%        
Auto and Transportation - 2.2%        

Autoliv, Inc. (Ñ)

    31,100      767

CH Robinson Worldwide, Inc.

    44,700      2,376

Continental Airlines, Inc. Class B (Æ)

    257,356      2,707

CSX Corp.

    440,200      13,025

Delta Air Lines, Inc. (Æ)

    832,196      5,135

Ford Motor Co. (Æ)(Ñ)

    27,712      166

Magna International, Inc. Class A

    220,750      7,497

Navistar International Corp. (Æ)(Ñ)

    152,800      5,776

Norfolk Southern Corp.

    164,983      5,886

PACCAR, Inc. (Ñ)

    197,545      7,001

Toyota Motor Corp. - ADR (Ñ)

    10,900      863

UAL Corp. (Æ)(Ñ)

    28,590      141

Union Pacific Corp.

    592,618      29,121

United Parcel Service, Inc. Class B

    53,320      2,791
         
        83,252
         
Consumer Discretionary - 12.1%        

Accenture, Ltd. Class A

    504,110      14,836

Activision Blizzard, Inc. (Æ)

    746,568      8,041

Amazon.com, Inc. (Æ)

    228,332      18,385

Apollo Group, Inc. Class A (Æ)

    90,100      5,672

AutoNation, Inc. (Æ)(Ñ)

    91,800      1,626

AutoZone, Inc. (Æ)(Ñ)

    25,400      4,226

BCE, Inc.

    256,050      5,479

Bed Bath & Beyond, Inc. (Æ)

    130,800      3,979

Best Buy Co., Inc. (Ñ)

    369,330      14,175

Carnival Corp.

    123,400      3,317

CBS Corp. Class B

    231,750      1,631

Chico’s FAS, Inc. (Æ)(Ñ)

    322,350      2,463

Citadel Broadcasting Corp. (Æ)(Ñ)

    4,364      —

Clear Channel Outdoor Holdings, Inc.
Class A (Æ)

    849,584      3,262

Coach, Inc.

    113,000      2,768

Comcast Corp. Class A

    247,400      3,825

Costco Wholesale Corp.

    407,032      19,782

Darden Restaurants, Inc. (Ñ)

    53,200      1,967

DIRECTV Group, Inc. (The) (Æ)

    219,161      5,420

Dollar Tree, Inc. (Æ)

    85,300      3,612

eBay, Inc. (Æ)

    259,100      4,267

Foot Locker, Inc.

    103,600      1,232

Gap, Inc. (The)

    80,500      1,251

Guess?, Inc.

    76,430      1,990

Hasbro, Inc.

    122,480      3,265

Home Depot, Inc.

    355,100      9,346

JC Penney Co., Inc.

    351,445      10,786

Jones Apparel Group, Inc. (Ñ)

    82,100      759

Kohl’s Corp. (Æ)

    249,580      11,318

Liberty Media Corp.—Capital Series A (Æ)(Ñ)

    173,167      2,026

Limited Brands, Inc.

    77,700      887

Liz Claiborne, Inc.

    21,100      100

Lowe’s Cos., Inc.

    1,832,786      39,405

Macy’s, Inc. (Ñ)

    160,900      2,201

McDonald’s Corp.

    1,113,797      59,354

Newell Rubbermaid, Inc.

    81,800      855

News Corp. Class A

    306,500      2,532
     Principal
Amount ($)
or Shares		      Market
Value
$

Nike, Inc. Class B (Ñ)

    904,264      47,447

Omnicom Group, Inc.

    193,490      6,089

priceline.com, Inc. (Æ)(Ñ)

    48,600      4,719

Robert Half International, Inc. (Ñ)

    109,020      2,619

Staples, Inc.

    320,600      6,611

Target Corp.

    240,900      9,939

Time Warner, Inc.

    179,183      3,912

VF Corp.

    50,800      3,011

Viacom, Inc. Class B (Æ)

    647,900      12,466

Wal-Mart Stores, Inc.

    938,791      47,315

Walt Disney Co. (The)

    620,590      13,591

Wynn Resorts, Ltd. (Æ)(Ñ)

    194,340      7,624

Yum! Brands, Inc.

    462,491      15,424
         
        456,807
         
Consumer Staples - 6.4%        

Altria Group, Inc.

    416,420      6,800

Clorox Co.

    50,410      2,826

Coca-Cola Co. (The)

    1,223,959      52,691

Coca-Cola Enterprises, Inc.

    120,000      2,047

Colgate-Palmolive Co.

    197,540      11,655

ConAgra Foods, Inc.

    38,400      680

Diageo PLC - ADR

    102,890      4,923

General Mills, Inc.

    159,800      8,100

Hansen Natural Corp. (Æ)(Ñ)

    102,600      4,182

JM Smucker Co. (The)

    63,660      2,508

Kellogg Co.

    16,800      708

Kraft Foods, Inc. Class A

    359,900      8,422

Kroger Co. (The)

    272,790      5,898

Lorillard, Inc.

    28,800      1,818

Molson Coors Brewing Co. Class B

    288,650      11,041

Nestle SA - ADR

    185,190      6,009

Pepsi Bottling Group, Inc.

    35,400      1,107

PepsiCo, Inc.

    1,044,095      51,954

Philip Morris International, Inc.

    372,470      13,483

Procter & Gamble Co. (The)

    529,400      26,174

Reynolds American, Inc.

    51,300      1,948

Safeway, Inc.

    48,300      954

Sysco Corp.

    85,410      1,993

Tyson Foods, Inc. Class A (Ñ)

    874,500      9,217

Whole Foods Market, Inc. (Ñ)

    173,310      3,593
         
        240,731
         
Financial Services - 14.3%        

ACE, Ltd.

    285,700      13,234

Aflac, Inc.

    61,155      1,767

Allstate Corp. (The)

    679,170      15,845

Annaly Capital Management, Inc. (ö)

    879,700      12,377

Bank of America Corp. (Ñ)

    2,032,625      18,151

Bank of New York Mellon Corp. (The)

    908,757      23,155

BlackRock, Inc. Class A (Ñ)

    17,070      2,501

Brown & Brown, Inc.

    323,400      6,293

Capital One Financial Corp. (Ñ)

    411,325      6,886

Charles Schwab Corp. (The)

    946,600      17,493

Chubb Corp.

    75,330      2,934

Deutsche Bank AG (Ñ)

    22,800      1,195

Fidelity National Financial, Inc. Class A (Ñ)

    415,330      7,530

Genworth Financial, Inc. Class A (Ñ)

    838,950      1,980

 

Russell U.S. Core Equity Fund   5

Russell Investment Company

Russell U.S. Core Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Goldman Sachs Group, Inc. (The)

    556,724      71,539

Hartford Financial Services Group, Inc. (Ñ)

    214,080      2,456

iShares Russell 1000 Value Index Fund (Ñ)

    69,133      3,112

JPMorgan Chase & Co.

    2,726,627      89,979

Lincoln National Corp.

    127,300      1,431

Mastercard, Inc. Class A (Ñ)

    191,100      35,057

MetLife, Inc.

    945,322      28,123

MFA Financial, Inc. (ö)

    992,950      5,848

Morgan Stanley

    859,100      20,309

Northern Trust Corp.

    64,290      3,495

Old Republic International Corp.

    91,400      856

PNC Financial Services Group, Inc.

    215,144      8,541

Progressive Corp. (The) (Æ)

    117,800      1,800

Prudential Financial, Inc.

    303,300      8,759

Redwood Trust, Inc. (ö)(Ñ)

    322,050      5,240

RenaissanceRe Holdings, Ltd. (Ñ)

    93,975      4,573

State Street Corp.

    158,030      5,394

T Rowe Price Group, Inc. (Ñ)

    69,700      2,685

Travelers Cos., Inc. (The)

    382,494      15,736

Unum Group

    103,600      1,693

US Bancorp

    646,234      11,774

Visa, Inc. (Ñ)

    820,837      53,322

Wells Fargo & Co.

    1,174,965      23,511

XL Capital, Ltd. Class A (Ñ)

    95,850      912
         
        537,486
         
Health Care - 12.3%        

Abbott Laboratories

    613,290      25,666

Alexion Pharmaceuticals, Inc. (Æ)(Ñ)

    105,000      3,509

Allergan, Inc.

    196,900      9,187

Amgen, Inc. (Æ)

    278,000      13,475

Baxter International, Inc.

    149,650      7,258

Boston Scientific Corp. (Æ)

    938,250      7,891

Bristol-Myers Squibb Co.

    334,700      6,426

Brookdale Senior Living, Inc. (Ñ)

    467,200      4,817

Cardinal Health, Inc.

    15,800      534

Cephalon, Inc. (Æ)(Ñ)

    84,900      5,570

Covidien, Ltd.

    218,200      7,196

CVS/Caremark Corp.

    1,779,471      56,552

Eli Lilly & Co.

    143,700      4,731

Express Scripts, Inc. Class A (Æ)

    72,395      4,631

Genzyme Corp. (Æ)

    52,408      2,795

Gilead Sciences, Inc. (Æ)

    699,939      32,057

GlaxoSmithKline PLC - ADR

    24,900      766

Illumina, Inc. (Æ)(Ñ)

    32,100      1,199

Intuitive Surgical, Inc. (Æ)(Ñ)

    38,845      5,583

Johnson & Johnson

    303,520      15,892

Medtronic, Inc.

    57,100      1,827

Merck & Co., Inc.

    1,063,931      25,790

Mylan, Inc. (Æ)(Ñ)

    729,500      9,666

Myriad Genetics, Inc. (Æ)

    153,390      5,950

Novartis AG - ADR

    273,900      10,383

Omnicare, Inc. (Ñ)

    181,750      4,673

Pfizer, Inc.

    2,240,463      29,933

Sanofi-Aventis SA - ADR (Ñ)

    33,100      951

Schering-Plough Corp.

    2,271,018      52,279

St. Jude Medical, Inc. (Æ)

    454,097      15,221
     Principal
Amount ($)
or Shares		      Market
Value
$

Stericycle, Inc. (Æ)(Ñ)

    72,400      3,409

Stryker Corp.

    244,000      9,445

Teva Pharmaceutical Industries, Ltd. - ADR

    59,820      2,625

Thermo Fisher Scientific, Inc. (Æ)

    358,487      12,576

UnitedHealth Group, Inc.

    170,000      3,998

WellPoint, Inc. (Æ)

    49,233      2,105

Wyeth

    1,279,854      54,266
         
        460,832
         
Integrated Oils - 4.4%        

BP PLC - ADR

    17,800      756

Chevron Corp.

    419,208      27,710

ConocoPhillips

    157,842      6,471

Exxon Mobil Corp.

    489,181      32,614

Hess Corp.

    293,540      16,083

Marathon Oil Corp.

    389,250      11,561

Occidental Petroleum Corp.

    635,975      35,799

Petroleo Brasileiro SA - ADR

    311,124      10,444

Royal Dutch Shell PLC - ADR

    14,800      676

Total SA - ADR

    451,930      22,470
         
        164,584
         
Materials and Processing - 5.5%        

Air Products & Chemicals, Inc.

    150,700      9,931

Alcoa, Inc.

    272,700      2,473

Archer-Daniels-Midland Co.

    249,650      6,146

Barrick Gold Corp.

    265,762      7,734

BHP Billiton PLC - ADR (Ñ)

    137,200      5,740

Bunge, Ltd. (Ñ)

    23,800      1,143

Celanese Corp. Class A

    407,200      8,486

Cytec Industries, Inc.

    42,950      853

Eastman Chemical Co.

    31,900      1,266

EI Du Pont de Nemours & Co.

    689,600      19,240

Fluor Corp.

    187,900      7,116

Freeport-McMoRan Copper & Gold, Inc.

    145,000      6,184

MeadWestvaco Corp.

    63,700      998

Monsanto Co.

    578,472      49,106

Newmont Mining Corp.

    837,699      33,709

Owens-Illinois, Inc. (Æ)

    20,200      493

Potash Corp. of Saskatchewan, Inc.

    92,317      7,984

PPG Industries, Inc.

    185,140      8,155

Praxair, Inc.

    195,526      14,588

Quanta Services, Inc. (Æ)

    182,000      4,137

Sherwin-Williams Co. (The) (Ñ)

    85,250      4,829

Sonoco Products Co.

    59,400      1,450

United States Steel Corp. (Ñ)

    121,467      3,225
         
        204,986
         
Miscellaneous - 1.5%        

3M Co.

    170,350      9,812

Berkshire Hathaway, Inc. Class B (Æ)

    1,403      4,300

Eaton Corp.

    89,710      3,929

General Electric Co.

    1,008,100      12,753

Honeywell International, Inc.

    661,550      20,647

Johnson Controls, Inc. (Ñ)

    236,300      4,492
         
        55,933
         

 

6   Russell U.S. Core Equity Fund

Russell Investment Company

Russell U.S. Core Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Other Energy - 5.8%        

Anadarko Petroleum Corp.

    190,100      8,186

Apache Corp.

    241,180      17,572

Arch Coal, Inc. (Ñ)

    949,680      13,267

Baker Hughes, Inc.

    358,450      12,754

Cameron International Corp. (Æ)

    442,590      11,321

Chesapeake Energy Corp. (Ñ)

    1,139,190      22,453

Consol Energy, Inc.

    281,025      8,790

Devon Energy Corp.

    400,087      20,745

EOG Resources, Inc.

    21,400      1,358

EQT Corp. (Ñ)

    39,775      1,338

Forest Oil Corp. (Æ)(Ñ)

    777,645      12,442

Halliburton Co.

    380,200      7,688

Helmerich & Payne, Inc. (Ñ)

    32,400      999

Nabors Industries, Ltd. (Æ)

    83,700      1,273

Peabody Energy Corp.

    64,720      1,708

Petro-Canada

    24,500      773

Reliant Energy, Inc. (Æ)

    2,377,315      11,791

Schlumberger, Ltd.

    272,700      13,360

Southwestern Energy Co. (Æ)

    60,370      2,165

Transocean, Ltd. (Æ)

    428,391      28,908

Weatherford International, Ltd. (Æ)

    265,070      4,408

XTO Energy, Inc.

    481,317      16,682
         
        219,981
         
Producer Durables - 5.4%        

American Tower Corp. Class A (Æ)

    228,662      7,262

Applied Materials, Inc.

    890,280      10,870

Boeing Co. (The)

    101,055      4,047

Centex Corp. (Ñ)

    777,800      8,509

Crane Co.

    29,400      679

Cummins, Inc.

    70,330      2,391

Dover Corp.

    20,500      631

Emerson Electric Co.

    209,600      7,135

Lam Research Corp. (Æ)(Ñ)

    323,960      9,032

Lockheed Martin Corp.

    981,076      77,044

Nokia OYJ - ADR

    53,200      752

Northrop Grumman Corp.

    320,240      15,484

NVR, Inc. (Æ)(Ñ)

    31,690      16,015

Parker Hannifin Corp.

    86,454      3,921

Pulte Homes, Inc. (Ñ)

    249,600      2,873

Raytheon Co.

    153,400      6,938

Sunpower Corp. (Æ)

    289,515      7,342

Telefonaktiebolaget LM Ericsson - ADR (Ñ)

    122,700      1,047

Tyco International, Ltd.

    340,000      8,079

United Technologies Corp.

    289,770      14,152
         
        204,203
         
Technology - 17.9%        

Adobe Systems, Inc. (Æ)

    81,350      2,225

Amphenol Corp. Class A

    540,039      18,275

Analog Devices, Inc.

    33,700      717

Apple, Inc. (Æ)

    620,654      78,097

ASML Holding NV (Ñ)

    756,490      16,000

AU Optronics Corp. - ADR (Ñ)

    103,400      1,122

Avnet, Inc. (Æ)

    465,795      10,196

BMC Software, Inc. (Æ)

    63,675      2,208
     Principal
Amount ($)
or Shares		      Market
Value
$

Broadcom Corp. Class A (Æ)(Ñ)

    603,220      13,989

Cisco Systems, Inc. (Æ)

    2,312,911      44,685

Corning, Inc.

    353,340      5,166

Dell, Inc. (Æ)

    1,804,625      20,970

EMC (Æ)

    458,600      5,746

F5 Networks, Inc. (Æ)(Ñ)

    86,945      2,371

First Solar, Inc. (Æ)(Ñ)

    58,048      10,872

General Dynamics Corp.

    373,779      19,313

Google, Inc. Class A (Æ)

    177,631      70,336

Hewlett-Packard Co.

    1,615,898      58,140

Intel Corp.

    2,008,849      31,700

International Business Machines Corp.

    428,663      44,242

International Rectifier Corp. (Æ)

    752,300      12,699

Juniper Networks, Inc. (Æ)(Ñ)

    646,630      13,999

Marvell Technology Group, Ltd. (Æ)

    548,200      6,019

Maxim Integrated Products, Inc.

    481,700      6,527

McAfee, Inc. (Æ)

    50,340      1,890

Microsoft Corp.

    872,550      17,678

Motorola, Inc.

    984,610      5,445

National Semiconductor Corp.

    75,700      936

Nvidia Corp. (Æ)(Ñ)

    54,600      627

Oracle Corp.

    444,870      8,604

QUALCOMM, Inc.

    1,822,819      77,142

Research In Motion, Ltd. (Æ)

    393,304      27,335

Salesforce.com, Inc. (Æ)(Ñ)

    48,490      2,076

Seagate Technology, Inc. (Æ)

    18,600      —

Symantec Corp. (Æ)

    539,600      9,308

Taiwan Semiconductor Manufacturing Co., Ltd. - ADR

    492,287      5,203

Texas Instruments, Inc.

    583,650      10,541

Tyco Electronics, Ltd.

    148,000      2,581

VeriSign, Inc. (Æ)

    121,300      2,496

Western Digital Corp. (Æ)

    40,000      941

Xilinx, Inc. (Ñ)

    205,150      4,193
         
        672,610
         
Utilities - 2.9%        

Allegheny Energy, Inc.

    190,400      4,935

Alliant Energy Corp.

    24,300      543

Ameren Corp.

    59,200      1,363

American Electric Power Co., Inc.

    87,000      2,295

AT&T, Inc.

    1,167,164      29,903

China Mobile, Ltd. - ADR

    65,800      2,840

CMS Energy Corp. (Ñ)

    113,500      1,364

Dominion Resources, Inc.

    241,930      7,297

Duke Energy Corp.

    85,500      1,181

Edison International

    21,900      624

Exelon Corp.

    164,000      7,565

FPL Group, Inc.

    68,680      3,694

MetroPCS Communications, Inc. (Æ)

    113,990      1,948

Millicom International Cellular SA (Ñ)

    24,280      1,177

NiSource, Inc.

    58,000      637

PG&E Corp.

    98,480      3,656

Progress Energy, Inc. - CVO (ß)

    6,400      —

Public Service Enterprise Group, Inc.

    153,340      4,576

Sprint Nextel Corp. (Æ)

    1,644,165      7,169

TECO Energy, Inc. (Ñ)

    58,500      619

 

Russell U.S. Core Equity Fund   7

Russell Investment Company

Russell U.S. Core Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$		  
       

Telefonica SA - ADR

    11,300      636   

Time Warner Cable, Inc.

    44,976      1,450   

Verizon Communications, Inc.

    263,910      8,007   

Vodafone Group PLC - ADR

    807,910      14,825   

Wisconsin Energy Corp.

    26,000      1,039   
           
        109,343   
           
Total Common Stocks
(cost $3,806,772)		         3,410,748   
           
Preferred Stocks - 0.0%        
Producer Durables - 0.0%        

General Motors Corp.

    441,000      1,006   
           
Total Preferred Stocks
(cost $7,454)		         1,006   
           
Short-Term Investments - 8.3%        

Russell Investment Company Russell Money Market Fund

    256,519,287      256,519   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    54,300      54,300   
           
Total Short-Term Investments
(cost $310,819)		         310,819   
           
Other Securities - 7.1%        

Russell Investment Company Russell Money Market Fund (×)

    133,776,003      133,776   

State Street Securities Lending Quality Trust (×)

    140,887,649      135,813   
           
Total Other Securities
(cost $274,664)		         269,589   
           
Total Investments - 106.1%
(identified cost $4,399,709)		         3,992,162   
Other Assets and Liabilities,
Net - (6.1%)		         (230,867 ) 
           
Net Assets - 100.0%         3,761,295   
           

 

 

See accompanying notes which are an integral part of the financial statements.

 

8   Russell U.S. Core Equity Fund

Russell Investment Company

Russell U.S. Core Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

S&P 500 E-Mini Index (CME)

    5,270      USD   229,245      06/09      35,699

S&P 500 Index (CME)

    400      USD   87,000      06/09      8,226

S&P Midcap 400 E-Mini Index (CME)

    500      USD   28,000      06/09      5,245
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

           49,170
                     

 

 

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    

Auto and Transportation

      2.2   

Consumer Discretionary

      12.1   

Consumer Staples

      6.4   

Financial Services

      14.3   

Health Care

      12.3   

Integrated Oils

      4.4   

Materials and Processing

      5.5   

Miscellaneous

      1.5   

Other Energy

      5.8   

Producer Durables

      5.4   

Technology

      17.9   

Utilities

      2.9   

Preferred Stocks

      — * 

Short-Term Investments

      8.3   

Other Securities

      7.1   
        

Total Investments

      106.1   

Other Assets and Liabilities, Net

      (6.1 ) 
        
     100.0   
        

Futures Contracts

      1.3   

 

* Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

Russell U.S. Core Equity Fund   9

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 915.40    $ 1,018.05

Expenses Paid During Period*

    $ 6.46    $ 6.80

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.36% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 911.20    $ 1,014.38

Expenses Paid During Period*

    $ 9.95    $ 10.49

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.10% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 915.60    $ 1,018.70

Expenses Paid During Period*

    $ 5.84    $ 6.16

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.23% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 916.30    $ 1,019.93

Expenses Paid During Period*

    $ 4.66    $ 4.91

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.98% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

10   Russell U.S. Quantitative Equity Fund

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 915.80    $ 1,019.29

Expenses Paid During Period*

    $ 5.27    $ 5.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.11% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 916.60    $ 1,020.18

Expenses Paid During Period*

    $ 4.42    $ 4.66

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.93% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell U.S. Quantitative Equity Fund   11

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Common Stocks - 101.7%        
Auto and Transportation - 2.6%        

Alaska Air Group, Inc. (Æ)

    65,600      1,101

AMR Corp. (Æ)

    9,700      46

Autoliv, Inc.

    97,746      2,411

BorgWarner, Inc.

    10,096      292

Burlington Northern Santa Fe Corp.

    55,200      3,725

CH Robinson Worldwide, Inc.

    99,163      5,272

Con-way, Inc.

    2,600      65

Continental Airlines, Inc. Class B (Æ)

    22,100      233

CSX Corp. (Û)

    360,500      10,667

Delta Air Lines, Inc. (Æ)

    42,650      263

Expeditors International of Washington, Inc.

    174,354      6,052

Federal Mogul Corp. (Æ)

    5,622      62

FedEx Corp.

    74,660      4,178

Ford Motor Co. (Æ)(Û)

    601,200      3,595

Frontline, Ltd.

    44,600      898

Genuine Parts Co.

    236,400      8,028

Harley-Davidson, Inc.

    9,200      204

JB Hunt Transport Services, Inc.

    95,771      2,693

JetBlue Airways Corp. (Æ)

    194,500      959

Kansas City Southern (Æ)

    36,300      554

Landstar System, Inc.

    8,646      308

Navistar International Corp. (Æ)

    22,200      839

Norfolk Southern Corp.

    180,000      6,422

Skywest, Inc.

    122,600      1,476

Southwest Airlines Co.

    487,400      3,402

Tidewater, Inc.

    32,600      1,410

TRW Automotive Holdings Corp. (Æ)

    78,801      679

Union Pacific Corp. (Û)

    406,800      19,990

United Parcel Service, Inc. Class B

    86,595      4,532

UTI Worldwide, Inc. (Æ)

    151,670      2,042
         
        92,398
         
Consumer Discretionary - 14.2%        

Abercrombie & Fitch Co. Class A

    74,900      2,027

Accenture, Ltd. Class A (Û)

    943,868      27,778

Activision Blizzard, Inc. (Æ)

    34,651      373

Administaff, Inc.

    8,500      227

Advance Auto Parts, Inc.

    17,303      757

Amazon.com, Inc. (Æ)(Û)

    114,420      9,213

AnnTaylor Stores Corp. (Æ)

    3,200      24

Apollo Group, Inc. Class A (Æ)(Û)

    403,987      25,431

AutoZone, Inc. (Æ)

    20,000      3,328

Avon Products, Inc.

    119,700      2,724

Barnes & Noble, Inc.

    14,033      367

Bed Bath & Beyond, Inc. (Æ)

    8,300      252

Best Buy Co., Inc. (Û)

    92,100      3,535

Big Lots, Inc. (Æ)

    172,400      4,765

BJ’s Wholesale Club, Inc. (Æ)

    224,869      7,497

Black & Decker Corp.

    10,000      403

Cabela’s, Inc. (Æ)

    23,100      296

Cablevision Systems Corp. Class A

    140,300      2,408

Career Education Corp. (Æ)

    26,000      573

Carnival Corp.

    3,864      104

CBS Corp. Class B

    207,819      1,463
     Principal
Amount ($)
or Shares		      Market
Value
$

Central European Distribution Corp. (Æ)

    32,300      723

Cintas Corp.

    9,000      231

Coach, Inc. (Û)

    334,939      8,206

Comcast Corp. Class A (Û)

    1,421,507      21,976

Comcast Corp. Class A

    31,843      467

Copart, Inc. (Æ)

    9,155      287

Corrections Corp. of America (Æ)

    1,300      18

Costco Wholesale Corp. (Û)

    146,289      7,110

Darden Restaurants, Inc.

    194,500      7,191

Deckers Outdoor Corp. (Æ)

    12,200      690

DeVry, Inc.

    61,400      2,613

DIRECTV Group, Inc. (The) (Æ)(Û)

    382,600      9,462

DISH Network Corp. Class A (Æ)

    307,369      4,073

Dollar Tree, Inc. (Æ)

    175,654      7,437

DreamWorks Animation SKG, Inc. Class A (Æ)

    75,100      1,803

Earthlink, Inc. (Æ)

    274,485      2,081

eBay, Inc. (Æ)(Û)

    448,900      7,393

Estee Lauder Cos., Inc. (The) Class A

    99,000      2,960

Family Dollar Stores, Inc.

    350,562      11,635

Fastenal Co.

    68,700      2,635

Foot Locker, Inc.

    393,616      4,680

Gannett Co., Inc.

    202,054      790

Gap, Inc. (The) (Û)

    805,300      12,514

Harman International Industries, Inc.

    39,392      717

Hasbro, Inc.

    60,500      1,613

Hewitt Associates, Inc. Class A (Æ)

    100,100      3,139

Hillenbrand, Inc.

    25,500      464

Home Depot, Inc.

    79,200      2,085

HOT Topic, Inc. (Æ)

    10,500      128

HSN, Inc. (Æ)

    2,357      16

International Flavors & Fragrances, Inc.

    61,500      1,919

ITT Educational Services, Inc. (Æ)

    36,060      3,634

Jarden Corp. (Æ)

    174,800      3,513

JC Penney Co., Inc.

    20,300      623

John Wiley & Sons, Inc. Class A

    11,378      386

Jones Apparel Group, Inc.

    570,549      5,272

Kimberly-Clark Corp. (Û)

    195,300      9,597

Kohl’s Corp. (Æ)

    46,800      2,122

Leggett & Platt, Inc.

    101,100      1,452

Liberty Global, Inc. Class A (Æ)(Û)

    150,200      2,477

Liberty Media Corp. - Entertainment
Series A (Æ)

    93,100      2,267

Liberty Media Corp. - Interactive (Æ)

    50,530      268

Limited Brands, Inc.

    123,100      1,406

Lowe’s Cos., Inc.

    72,600      1,561

Macy’s, Inc.

    12,409      170

Manpower, Inc.

    158,990      6,851

Marriott International, Inc. Class A

    2,798      66

Mattel, Inc.

    9,200      138

McDonald’s Corp. (Û)

    643,167      34,274

McGraw-Hill Cos., Inc. (The)

    146,300      4,411

MPS Group, Inc. (Æ)

    67,100      539

MSC Industrial Direct Co. Class A

    27,204      1,111

Net 1 UEPS Technologies, Inc. (Æ)

    21,800      360

Newell Rubbermaid, Inc.

    442,435      4,623

News Corp. Class A

    600,874      4,963

 

12   Russell U.S. Quantitative Equity Fund

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Nike, Inc. Class B

    11,200      588

O’Reilly Automotive, Inc. (Æ)

    13,200      513

Omnicom Group, Inc. (Û)

    221,900      6,983

Panera Bread Co. Class A (Æ)

    125,838      7,048

Penn National Gaming, Inc. (Æ)

    6,052      206

PetSmart, Inc.

    151,191      3,459

PHH Corp. (Æ)

    19,100      320

Phillips-Van Heusen Corp.

    1,300      38

Polo Ralph Lauren Corp. Class A (Û)

    179,400      9,659

RadioShack Corp.

    162,900      2,294

Rent-A-Center, Inc. Class A (Æ)

    73,900      1,423

Republic Services, Inc. Class A

    82,800      1,739

Robert Half International, Inc.

    25,918      623

Ross Stores, Inc.

    284,875      10,808

Scientific Games Corp. Class A (Æ)

    37,900      663

Scripps Networks Interactive, Inc.

    14,469      397

Sears Holdings Corp. (Æ)

    9,100      568

Signet Jewelers, Ltd.

    9,448      150

Snap-On, Inc.

    19,100      648

Sohu.com, Inc. (Æ)

    48,488      2,529

Stanley Works (The)

    10,600      403

Staples, Inc.

    53,600      1,105

Starbucks Corp. (Æ)

    35,200      509

Strayer Education, Inc.

    6,100      1,155

Take-Two Interactive Software, Inc. (Æ)

    131,200      1,191

Target Corp.

    29,100      1,201

Tech Data Corp. (Æ)

    85,135      2,451

TeleTech Holdings, Inc. (Æ)

    47,600      632

Tiffany & Co.

    137,700      3,985

Time Warner, Inc. (Û)

    1,074,768      23,462

TJX Cos., Inc. (Û)

    332,363      9,296

Toro Co.

    45,200      1,373

Tupperware Brands Corp.

    122,138      3,057

United Stationers, Inc. (Æ)

    9,400      308

VF Corp.

    33,000      1,956

Virgin Media, Inc.

    34,500      266

Wal-Mart Stores, Inc. (Û)

    881,513      44,428

Walt Disney Co. (The)

    315,706      6,914

Waste Management, Inc.

    144,800      3,862

WESCO International, Inc. (Æ)

    80,100      2,083

Whirlpool Corp.

    58,600      2,646

World Fuel Services Corp.

    43,400      1,655

Wyndham Worldwide Corp.

    34,447      402

Yum! Brands, Inc. (Û)

    960,627      32,037
         
        509,718
         
Consumer Staples - 9.2%        

Altria Group, Inc.

    23,200      379

Brown-Forman Corp.

    101,125      4,702

Campbell Soup Co.

    159,543      4,103

Casey’s General Stores, Inc.

    90,400      2,406

Church & Dwight Co., Inc.

    37,500      2,040

Clorox Co.

    29,100      1,631

Coca-Cola Co. (The)

    366,745      15,788

Coca-Cola Enterprises, Inc.

    75,864      1,294

Colgate-Palmolive Co.

    115,461      6,812

ConAgra Foods, Inc. (Û)

    428,100      7,577

Constellation Brands, Inc. Class A (Æ)

    109,600      1,270
     Principal
Amount ($)
or Shares		      Market
Value
$

Dean Foods Co. (Æ)

    164,100      3,397

Del Monte Foods Co.

    30,900      233

Dr Pepper Snapple Group, Inc. (Æ)

    15,755      326

General Mills, Inc.

    83,700      4,243

Hansen Natural Corp. (Æ)

    57,456      2,342

Hershey Co. (The)

    93,512      3,380

HJ Heinz Co.

    127,900      4,402

Hormel Foods Corp.

    82,292      2,575

JM Smucker Co. (The)

    84,555      3,332

Kellogg Co. (Û)

    191,300      8,056

Kraft Foods, Inc. Class A (Û)

    469,500      10,986

Kroger Co. (The) (Û)

    1,355,500      29,306

Lorillard, Inc.

    56,263      3,552

McCormick & Co., Inc.

    23,700      698

Molson Coors Brewing Co. Class B

    10,600      406

NBTY, Inc. (Æ)

    4,300      111

Pepsi Bottling Group, Inc. (Û)

    224,600      7,023

PepsiAmericas, Inc.

    7,600      187

PepsiCo, Inc. (Û)

    405,553      20,180

Philip Morris International, Inc.

    290,195      10,505

Procter & Gamble Co. (The) (Û)

    1,458,330      72,100

Reynolds American, Inc. (Û)

    187,200      7,110

Safeway, Inc. (Û)

    1,369,100      27,040

Sara Lee Corp.

    28,800      240

Smithfield Foods, Inc. (Æ)

    22,646      196

SUPERVALU, Inc. (Û)

    731,637      11,962

Sysco Corp. (Û)

    1,695,900      39,565

Tyson Foods, Inc. Class A

    553,660      5,836

Walgreen Co.

    61,700      1,939

Winn-Dixie Stores, Inc. (Æ)

    17,900      205
         
        329,435
         
Financial Services - 13.9%        

Affiliated Managers Group, Inc. (Æ)

    3,200      182

Aflac, Inc. (Û)

    357,383      10,325

Alexandria Real Estate Equities, Inc. (ö)

    2,300      84

Alliance Data Systems Corp. (Æ)

    57,400      2,403

Allstate Corp. (The) (Û)

    491,600      11,469

American Express Co.

    311,623      7,859

American Financial Group, Inc.

    70,300      1,236

Ameriprise Financial, Inc. (Û)

    284,600      7,499

Annaly Capital Management, Inc. (ö)

    438,400      6,168

AON Corp.

    22,100      933

Apartment Investment & Management Co. Class A (ö)

    298,454      2,179

Apollo Investment Corp.

    98,368      472

Arch Capital Group, Ltd. (Æ)

    80,200      4,634

Arthur J Gallagher & Co.

    6,300      142

Assurant, Inc.

    7,200      176

Automatic Data Processing, Inc.

    218,500      7,691

AvalonBay Communities, Inc. (ö)

    2,866      163

Axis Capital Holdings, Ltd.

    221,521      5,458

Bancorpsouth, Inc.

    69,806      1,623

Bank of America Corp. (Û)

    884,617      7,900

Bank of Hawaii Corp.

    23,100      812

Bank of New York Mellon Corp. (The) (Û)

    457,383      11,654

BB&T Corp.

    251,852      5,878

 

Russell U.S. Quantitative Equity Fund   13

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

BioMed Realty Trust, Inc. (ö)

    72,800      831

BlackRock, Inc. Class A

    35,702      5,231

Boston Properties, Inc. (ö)

    8,100      400

Brandywine Realty Trust (ö)

    208,400      1,290

BRE Properties, Inc. Class A (ö)

    21,600      531

Brown & Brown, Inc.

    129,000      2,510

Camden Property Trust (ö)

    76,000      2,062

Capital One Financial Corp.

    27,900      467

Capitol Federal Financial

    13,300      518

Cash America International, Inc.

    73,100      1,635

CBL & Associates Properties, Inc. (ö)

    169,304      1,344

Charles Schwab Corp. (The) (Û)

    869,301      16,065

Chubb Corp. (Û)

    307,027      11,959

Cigna Corp.

    123,300      2,430

Cincinnati Financial Corp.

    161,000      3,856

Citigroup, Inc.

    355,140      1,083

City National Corp.

    16,500      604

CME Group, Inc. Class A

    2,467      546

Comerica, Inc.

    41,947      880

Commerce Bancshares, Inc.

    62,361      2,064

Cullen/Frost Bankers, Inc.

    22,800      1,074

Deluxe Corp.

    46,200      670

Developers Diversified Realty Corp. (ö)

    313,197      1,293

Digital Realty Trust, Inc. (ö)

    3,200      115

Discover Financial Services

    596,000      4,845

Duke Realty Corp. (ö)

    301,370      2,944

Dun & Bradstreet Corp.

    59,700      4,860

Eaton Vance Corp.

    48,885      1,338

Endurance Specialty Holdings, Ltd.

    36,265      949

Equifax, Inc.

    136,600      3,983

Equity Residential (ö)

    42,350      969

Essex Property Trust, Inc. (ö)

    10,600      673

Everest Re Group, Ltd.

    1,900      142

Extra Space Storage, Inc. (ö)

    142,700      1,015

Factset Research Systems, Inc.

    5,600      300

Federal Realty Investment Trust (ö)

    2,660      147

Federated Investors, Inc. Class B

    18,099      414

Fidelity National Financial, Inc. Class A

    3,900      71

Fidelity National Information Services, Inc.

    9,302      166

Fifth Third Bancorp

    401,000      1,644

First American Corp.

    20,316      570

First Horizon National Corp.

    29,321      337

Franklin Resources, Inc. (Û)

    149,570      9,046

Fulton Financial Corp.

    31,000      205

GATX Corp.

    18,800      566

Genworth Financial, Inc. Class A

    417,916      986

Global Payments, Inc.

    73,870      2,368

Goldman Sachs Group, Inc. (The) (Û)

    46,700      6,001

H&R Block, Inc.

    451,200      6,831

Hanover Insurance Group, Inc. (The)

    14,800      444

Hartford Financial Services Group, Inc.

    273,900      3,142

HCC Insurance Holdings, Inc.

    130,170      3,114

HCP, Inc. (ö)

    25,100      551

Health Care REIT, Inc. (ö)

    11,500      392

Hospitality Properties Trust (ö)

    184,305      2,256

HRPT Properties Trust (ö)

    583,700      2,516

Hudson City Bancorp, Inc. (Û)

    2,458,802      30,883
     Principal
Amount ($)
or Shares		      Market
Value
$

IntercontinentalExchange, Inc. (Æ)

    1,900      166

Investment Technology Group, Inc. (Æ)

    112,273      2,558

Jefferies Group, Inc.

    38,800      759

JPMorgan Chase & Co.

    565,319      18,656

Keycorp

    21,000      129

Lazard, Ltd. Class A

    6,600      180

Leucadia National Corp. (Æ)

    45,800      972

Liberty Property Trust (ö)

    61,721      1,502

Lincoln National Corp.

    380,954      4,282

Loews Corp.

    261,749      6,515

M&T Bank Corp.

    10,700      561

Mack-Cali Realty Corp. (ö)

    94,700      2,544

Marsh & McLennan Cos., Inc.

    106,800      2,252

Mastercard, Inc. Class A

    21,700      3,981

MBIA, Inc. (Æ)

    28,500      135

Mercury General Corp.

    13,400      453

Metavante Technologies, Inc. (Æ)

    40,200      948

MetLife, Inc. (Û)

    73,915      2,199

MF Global, Ltd. (Æ)

    12,056      74

Moody’s Corp.

    306,252      9,041

Morgan Stanley

    221,807      5,244

Nasdaq OMX Group, Inc. (The) (Æ)

    196,300      3,775

Nationwide Health Properties, Inc. (ö)

    27,813      687

New York Community Bancorp, Inc.

    244,200      2,762

Northern Trust Corp. (Û)

    150,040      8,156

NYSE Euronext

    348,562      8,076

Old Republic International Corp.

    17,355      163

optionsXpress Holdings, Inc.

    39,200      645

PartnerRe, Ltd. - ADR

    96,954      6,611

Paychex, Inc.

    26,900      727

People’s United Financial, Inc.

    18,400      287

Plum Creek Timber Co., Inc. (ö)

    18,568      641

PNC Financial Services Group, Inc.

    31,800      1,262

Principal Financial Group, Inc.

    10,500      172

Progressive Corp. (The) (Æ)

    398,100      6,083

Prologis (ö)

    372,134      3,390

Prudential Financial, Inc. (Û)

    187,900      5,427

Public Storage (ö)

    37,100      2,480

Raymond James Financial, Inc.

    453,400      7,114

Rayonier, Inc. (ö)

    17,312      669

Regency Centers Corp. (ö)

    15,854      594

Reinsurance Group of America, Inc. Class A

    32,500      1,033

RenaissanceRe Holdings, Ltd.

    88,500      4,306

Ryder System, Inc.

    8,900      246

SEI Investments Co.

    226,348      3,176

Simon Property Group, Inc. (ö)

    1,815      94

SL Green Realty Corp. (ö)

    87,841      1,551

SLM Corp. (Æ)

    94,300      455

StanCorp Financial Group, Inc.

    69,243      1,899

State Street Corp. (Û)

    322,400      11,004

T Rowe Price Group, Inc. (Û)

    238,938      9,204

TCF Financial Corp.

    25,900      360

TD Ameritrade Holding Corp. (Æ)(Û)

    734,000      11,678

Torchmark Corp.

    101,200      2,968

Total System Services, Inc.

    62,900      784

Travelers Cos., Inc. (The) (Û)

    808,899      33,278

 

14   Russell U.S. Quantitative Equity Fund

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

UDR, Inc. (ö)

    40,939      412

Universal American Corp. (Æ)

    40,492      418

Unum Group

    10,056      164

US Bancorp

    149,292      2,720

Valley National Bancorp

    85,900      1,243

Ventas, Inc. (ö)

    5,400      155

Visa, Inc.

    32,800      2,131

Vornado Realty Trust (ö)

    5,846      286

Walter Investment Management
Corp. (Æ)(ö)

    4,732      38

Wells Fargo & Co. (Û)

    1,666,135      33,339

Western Union Co. (The)

    233,700      3,914

XL Capital, Ltd. Class A

    23,400      223

Zions Bancorporation

    6,300      69
         
        501,086
         
Health Care - 14.5%        

Abbott Laboratories

    281,670      11,788

Aetna, Inc. (Û)

    195,900      4,312

AMERIGROUP Corp. Class A (Æ)

    99,800      2,981

AmerisourceBergen Corp. Class A (Û)

    773,293      26,014

Amgen, Inc. (Æ)(Û)

    555,130      26,907

Amylin Pharmaceuticals, Inc. (Æ)

    18,900      207

Baxter International, Inc. (Û)

    116,300      5,640

Beckman Coulter, Inc.

    2,383      125

Becton Dickinson and Co. (Û)

    160,200      9,689

Biogen Idec, Inc. (Æ)(Û)

    540,059      26,106

Boston Scientific Corp. (Æ)(Û)

    1,009,191      8,487

Bristol-Myers Squibb Co. (Û)

    501,744      9,633

Cardinal Health, Inc. (Û)

    415,000      14,023

Catalyst Health Solutions, Inc. (Æ)

    13,300      300

Celgene Corp. (Æ)(Û)

    123,900      5,293

Centene Corp. (Æ)

    47,800      878

Cephalon, Inc. (Æ)

    16,700      1,096

Cerner Corp. (Æ)

    13,982      752

Covance, Inc. (Æ)

    11,700      460

Coventry Health Care, Inc. (Æ)

    197,469      3,142

Covidien, Ltd. (Û)

    255,700      8,433

CR Bard, Inc.

    2,100      150

CVS/Caremark Corp. (Û)

    405,400      12,884

DaVita, Inc. (Æ)

    39,700      1,841

Dentsply International, Inc.

    23,300      667

Edwards Lifesciences Corp. (Æ)

    35,600      2,256

Eli Lilly & Co. (Û)

    418,118      13,764

Endo Pharmaceuticals Holdings, Inc. (Æ)

    113,900      1,884

Express Scripts, Inc. Class A (Æ)

    104,700      6,698

Forest Laboratories, Inc. (Æ)(Û)

    1,214,026      26,332

Gen-Probe, Inc. (Æ)

    27,726      1,335

Genzyme Corp. (Æ)

    9,853      525

Gilead Sciences, Inc. (Æ)

    257,764      11,806

Healthspring, Inc. (Æ)

    72,900      673

Hill-Rom Holdings, Inc.

    16,000      208

Hlth Corp. (Æ)

    140,251      1,543

Hologic, Inc. (Æ)

    66,550      989

Humana, Inc. (Æ)

    468,986      13,497

Idexx Laboratories, Inc. (Æ)

    4,000      157

Illumina, Inc. (Æ)

    9,300      347
     Principal
Amount ($)
or Shares		      Market
Value
$

IMS Health, Inc.

    87,000      1,093

Inverness Medical Innovations, Inc. (Æ)

    13,800      446

Johnson & Johnson (Û)

    1,294,306      67,770

Kindred Healthcare, Inc. (Æ)

    54,935      715

King Pharmaceuticals, Inc. (Æ)

    728,985      5,744

Laboratory Corp. of America Holdings (Æ)

    1,500      96

Life Technologies Corp. (Æ)

    4,826      180

LifePoint Hospitals, Inc. (Æ)

    39,200      1,013

Lincare Holdings, Inc. (Æ)

    120,000      2,896

Magellan Health Services, Inc. (Æ)

    61,033      1,804

McKesson Corp. (Û)

    376,235      13,921

Medco Health Solutions, Inc. (Æ)

    93,317      4,064

Medtronic, Inc.

    273,415      8,749

Merck & Co., Inc. (Û)

    446,518      10,824

Molina Healthcare, Inc. (Æ)

    7,900      171

Mylan, Inc. (Æ)

    19,000      252

Myriad Genetics, Inc. (Æ)

    20,800      807

Omnicare, Inc.

    112,500      2,892

Owens & Minor, Inc.

    21,559      748

Patterson Cos., Inc. (Æ)

    193,212      3,953

Pfizer, Inc. (Û)

    4,555,237      60,858

Pharmaceutical Product Development, Inc.

    19,300      378

Quest Diagnostics, Inc.

    78,500      4,029

Schering-Plough Corp.

    148,989      3,430

St. Jude Medical, Inc. (Æ)(Û)

    181,200      6,074

Stericycle, Inc. (Æ)

    8,000      377

Stryker Corp.

    153,000      5,923

Techne Corp.

    8,000      458

Thermo Fisher Scientific, Inc. (Æ)

    89,330      3,134

UnitedHealth Group, Inc. (Û)

    725,543      17,065

Universal Health Services, Inc. Class B

    72,900      3,674

Varian Medical Systems, Inc. (Æ)

    32,316      1,078

VCA Antech, Inc. (Æ)

    6,700      168

Vertex Pharmaceuticals, Inc. (Æ)

    29,300      903

Watson Pharmaceuticals, Inc. Class B (Æ)

    86,100      2,664

WellCare Health Plans, Inc. (Æ)

    11,000      165

WellPoint, Inc. (Æ)(Û)

    419,838      17,952

Wyeth

    73,315      3,108
         
        523,398
         
Integrated Oils - 8.1%        

Chevron Corp. (Û)

    836,693      55,306

ConocoPhillips (Û)

    1,393,174      57,120

Exxon Mobil Corp. (Û)

    1,775,353      118,363

Hess Corp.

    5,500      301

Marathon Oil Corp. (Û)

    595,500      17,686

Murphy Oil Corp. (Û)

    619,480      29,555

Noble Corp.

    154,500      4,223

Occidental Petroleum Corp. (Û)

    141,751      7,979
         
        290,533
         
Materials and Processing - 4.9%        

Aecom Technology Corp. (Æ)

    16,400      422

Air Products & Chemicals, Inc.

    4,368      288

Airgas, Inc.

    5,500      237

AK Steel Holding Corp.

    227,500      2,960

Alcoa, Inc. (Û)

    419,000      3,800

 

Russell U.S. Quantitative Equity Fund   15

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Allegheny Technologies, Inc.

    8,462      277

Aptargroup, Inc.

    9,487      294

Archer-Daniels-Midland Co. (Û)

    1,009,372      24,851

Armstrong World Industries, Inc. (Æ)

    5,965      108

Ashland, Inc.

    163,000      3,580

Avery Dennison Corp.

    69,500      1,997

Ball Corp.

    42,754      1,613

Bemis Co., Inc.

    72,800      1,750

Bunge, Ltd.

    128,733      6,180

Cabot Corp.

    1,000      15

Ceradyne, Inc. (Æ)

    28,700      495

CF Industries Holdings, Inc.

    1,920      138

Clean Harbors, Inc. (Æ)

    33,500      1,678

Cliffs Natural Resources, Inc.

    34,500      796

Comfort Systems USA, Inc.

    29,800      322

Commercial Metals Co.

    21,959      327

Corn Products International, Inc.

    33,100      791

Crown Holdings, Inc. (Æ)

    72,200      1,592

Cytec Industries, Inc.

    77,100      1,531

Domtar Corp. (Æ)

    553,000      1,006

Dow Chemical Co. (The) (Û)

    521,897      8,350

Eastman Chemical Co.

    54,200      2,151

Ecolab, Inc.

    194,662      7,504

EI Du Pont de Nemours & Co. (Û)

    93,900      2,620

EMCOR Group, Inc. (Æ)

    164,100      3,412

Encore Wire Corp.

    27,735      606

Energizer Holdings, Inc. (Æ)

    6,000      344

Fluor Corp.

    230,066      8,713

FMC Corp.

    31,185      1,520

Freeport-McMoRan Copper & Gold, Inc. Class B

    8,700      371

Granite Construction, Inc.

    83,700      3,302

Huntsman Corp.

    43,535      233

International Paper Co.

    235,482      2,981

Jacobs Engineering Group, Inc. (Æ)

    5,446      207

KBR, Inc.

    279,794      4,370

Martin Marietta Materials, Inc.

    2,000      168

McDermott International, Inc. (Æ)

    19,900      321

Monsanto Co.

    85,851      7,288

Mosaic Co. (The) (Û)

    179,200      7,249

Nucor Corp. (Û)

    68,800      2,799

Owens-Illinois, Inc. (Æ)

    205,300      5,007

Packaging Corp. of America

    29,000      460

Pactiv Corp. (Æ)

    5,800      127

Perini Corp. (Æ)

    93,500      1,618

PPG Industries, Inc.

    84,000      3,700

Praxair, Inc.

    71,600      5,342

Precision Castparts Corp.

    73,900      5,532

Quanta Services, Inc. (Æ)

    62,300      1,416

Reliance Steel & Aluminum Co.

    33,373      1,176

Rock-Tenn Co. Class A

    27,720      1,047

RPM International, Inc.

    10,300      142

Schnitzer Steel Industries, Inc. Class A

    41,172      2,041

Sealed Air Corp.

    4,900      93

Shaw Group, Inc. (The) (Æ)

    6,400      215

Sherwin-Williams Co. (The) (Û)

    143,500      8,128

Sigma-Aldrich Corp.

    5,800      254
     Principal
Amount ($)
or Shares		      Market
Value
$

Sonoco Products Co.

    87,768      2,142

Southern Copper Corp. (Û)

    361,853      6,720

St. Joe Co. (The) (Æ)

    2,300      57

Steel Dynamics, Inc.

    14,900      186

Timken Co.

    2,800      45

United States Steel Corp.

    145,700      3,868

Universal Forest Products, Inc.

    17,900      601

URS Corp. (Æ)

    39,474      1,739

Valspar Corp.

    63,200      1,517

Vulcan Materials Co.

    18,000      856
         
        175,586
         
Miscellaneous - 1.4%        

3M Co. (Û)

    136,800      7,880

Carlisle Cos., Inc.

    63,600      1,447

General Electric Co. (Û)

    2,856,013      36,129

Honeywell International, Inc.

    86,800      2,709

Johnson Controls, Inc.

    108,968      2,071

Teleflex, Inc.

    33,900      1,457

Trinity Industries, Inc.

    23,000      336

Walter Energy, Inc. Class A

    12,200      278
         
        52,307
         
Other Energy - 5.0%        

Alpha Natural Resources, Inc. (Æ)

    79,300      1,624

Anadarko Petroleum Corp.

    170,700      7,350

Apache Corp. (Û)

    174,223      12,694

Arch Coal, Inc.

    10,200      143

Baker Hughes, Inc.

    32,300      1,149

BJ Services Co.

    44,300      615

Cabot Oil & Gas Corp.

    3,700      112

Cameron International Corp. (Æ)

    8,500      217

Chesapeake Energy Corp.

    43,300      854

Cimarex Energy Co.

    35,428      953

Consol Energy, Inc.

    9,700      303

Denbury Resources, Inc. (Æ)

    22,700      370

Devon Energy Corp. (Û)

    138,135      7,162

Diamond Offshore Drilling, Inc.

    80,400      5,822

Dresser-Rand Group, Inc. (Æ)

    7,000      172

Dynegy, Inc. Class A (Æ)

    334,229      595

Encore Acquisition Co. (Æ)

    30,000      876

ENSCO International, Inc. (Û)

    366,700      10,370

EOG Resources, Inc.

    1,200      76

Exterran Holdings, Inc. (Æ)

    46,009      950

FMC Technologies, Inc. (Æ)

    9,500      325

Forest Oil Corp. (Æ)

    12,400      198

Frontier Oil Corp.

    72,796      925

Halliburton Co.

    50,839      1,028

Helmerich & Payne, Inc.

    5,000      154

Holly Corp.

    6,700      140

Key Energy Services, Inc. (Æ)

    45,806      201

Mariner Energy, Inc. (Æ)

    154,808      1,762

Massey Energy Co.

    111,700      1,777

Nabors Industries, Ltd. (Æ)

    273,300      4,157

National Oilwell Varco, Inc. (Æ)

    241,500      7,313

Noble Energy, Inc.

    1,500      85

NRG Energy, Inc. (Æ)(Û)

    286,700      5,155

 

16   Russell U.S. Quantitative Equity Fund

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Oceaneering International, Inc. (Æ)

    4,900      223

Oil States International, Inc. (Æ)

    162,400      3,069

Patterson-UTI Energy, Inc.

    391,783      4,980

Peabody Energy Corp.

    142,600      3,763

Penn Virginia Corp.

    93,183      1,311

PetroHawk Energy Corp. (Æ)

    78,300      1,848

Pioneer Natural Resources Co.

    33,700      779

Pride International, Inc. (Æ)

    46,700      1,060

Reliant Energy, Inc. (Æ)

    207,200      1,028

Rowan Cos., Inc.

    255,780      3,993

Schlumberger, Ltd.

    185,256      9,076

Smith International, Inc.

    33,800      874

Southwestern Energy Co. (Æ)

    226,642      8,127

St. Mary Land & Exploration Co.

    33,987      607

Sunoco, Inc. (Û)

    769,896      20,410

Superior Energy Services, Inc. (Æ)

    144,065      2,768

Tesoro Corp.

    163,032      2,486

Unit Corp. (Æ)

    93,300      2,546

Valero Energy Corp. (Û)

    1,338,334      26,553

W&T Offshore, Inc.

    72,470      673

Western Refining, Inc. (Æ)

    12,900      162

Whiting Petroleum Corp. (Æ)

    81,100      2,657

Williams Cos., Inc. (The)

    458,400      6,464

XTO Energy, Inc.

    6,300      218
         
        181,302
         
Producer Durables - 5.2%        

AGCO Corp. (Æ)

    131,023      3,184

American Tower Corp. Class A (Æ)

    117,600      3,735

AO Smith Corp.

    39,725      1,235

Boeing Co. (The)

    21,800      873

Bucyrus International, Inc. Class A

    74,900      1,626

Caterpillar, Inc.

    107,300      3,818

CommScope, Inc. (Æ)

    38,800      974

Cooper Industries, Ltd. Class A (Û)

    248,000      8,132

Crane Co.

    43,700      1,009

Crown Castle International Corp. (Æ)

    5,300      130

Cummins, Inc. (Û)

    235,400      8,004

Danaher Corp.

    13,300      777

Diebold, Inc.

    49,600      1,311

Dover Corp. (Û)

    408,500      12,574

Emerson Electric Co.

    89,147      3,035

Flowserve Corp.

    55,500      3,768

Gardner Denver, Inc. (Æ)

    7,500      200

General Cable Corp. (Æ)

    54,900      1,490

Goodrich Corp. (Û)

    232,431      10,292

Graco, Inc.

    25,600      604

GrafTech International, Ltd. (Æ)

    113,200      995

Herman Miller, Inc.

    89,906      1,337

Hubbell, Inc. Class B

    49,500      1,643

IDEX Corp.

    54,300      1,371

Illinois Tool Works, Inc.

    53,247      1,746

Ingersoll-Rand Co., Ltd. Class A

    8,200      179

Itron, Inc. (Æ)

    12,500      575

ITT Corp.

    149,800      6,143

John Bean Technologies Corp.

    3,700      41

Joy Global, Inc.

    130,500      3,328
     Principal
Amount ($)
or Shares		      Market
Value
$

Kennametal, Inc.

    36,800      753

Lam Research Corp. (Æ)

    6,000      167

Lennar Corp. Class A

    17,500      170

Lexmark International, Inc. Class A (Æ)

    207,800      4,077

Lincoln Electric Holdings, Inc.

    30,100      1,340

Lockheed Martin Corp. (Û)

    135,063      10,606

Manitowoc Co., Inc. (The)

    281,700      1,676

Molex, Inc.

    66,200      1,104

Northrop Grumman Corp. (Û)

    796,690      38,520

NVR, Inc. (Æ)

    100      51

Pall Corp.

    6,500      172

Parker Hannifin Corp. (Û)

    128,900      5,846

Pentair, Inc.

    50,300      1,340

Pitney Bowes, Inc.

    100,300      2,461

Plantronics, Inc.

    42,300      539

Pulte Homes, Inc.

    139,200      1,602

Raytheon Co. (Û)

    188,100      8,508

Rockwell Collins, Inc.

    9,864      378

Roper Industries, Inc.

    8,500      388

SBA Communications Corp. Class A (Æ)

    12,200      307

Steelcase, Inc. Class A

    70,000      317

Teledyne Technologies, Inc. (Æ)

    32,700      1,044

Terex Corp. (Æ)

    1,400      19

Thomas & Betts Corp. (Æ)

    34,200      1,064

Toll Brothers, Inc. (Æ)

    8,800      178

Tyco International, Ltd. (Û)

    314,122      7,464

United Technologies Corp. (Û)

    181,026      8,841

W.W. Grainger, Inc.

    39,641      3,325

Xerox Corp.

    254,600      1,556
         
        187,942
         
Technology - 16.4%        

ADC Telecommunications, Inc. (Æ)

    3,073      23

Adobe Systems, Inc. (Æ)(Û)

    1,220,892      33,391

Affiliated Computer Services, Inc. Class A (Æ)

    39,100      1,892

Akamai Technologies, Inc. (Æ)

    7,700      170

Altera Corp.

    234,700      3,828

Amdocs, Ltd. (Æ)

    194,100      4,063

Amphenol Corp. Class A

    13,400      453

Analog Devices, Inc. (Û)

    251,900      5,360

Apple, Inc. (Æ)(Û)

    216,955      27,299

Arrow Electronics, Inc. (Æ)

    118,700      2,699

Atmel Corp. (Æ)

    60,807      234

Autodesk, Inc. (Æ)

    9,578      191

Avnet, Inc. (Æ)

    259,904      5,689

Broadcom Corp. Class A (Æ)

    154,322      3,579

CA, Inc.

    317,000      5,468

CACI International, Inc. Class A (Æ)

    18,900      747

Cadence Design Systems, Inc. (Æ)

    21,206      118

Cisco Systems, Inc. (Æ)(Û)

    1,550,430      29,954

Citrix Systems, Inc. (Æ)

    130,700      3,729

Cognizant Technology Solutions Corp. Class A (Æ)

    6,900      171

Computer Sciences Corp. (Æ)(Û)

    704,548      26,040

Compuware Corp. (Æ)

    122,300      915

Corning, Inc.

    9,600      140

 

Russell U.S. Quantitative Equity Fund   17

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Cree, Inc. (Æ)

    6,400      175

Cypress Semiconductor Corp. (Æ)

    51,631      409

Dell, Inc. (Æ)(Û)

    2,904,543      33,751

Digital River, Inc. (Æ)

    21,137      812

EMC Corp. (Æ)

    155,083      1,943

Equinix, Inc. (Æ)

    3,100      218

F5 Networks, Inc. (Æ)

    190,400      5,192

Fairchild Semiconductor International, Inc. Class A (Æ)

    152,500      939

First Solar, Inc. (Æ)

    8,400      1,573

Garmin, Ltd.

    291,900      7,353

General Dynamics Corp.

    211,200      10,913

Google, Inc. Class A (Æ)(Û)

    61,568      24,379

Harris Corp.

    257,800      7,884

Hewlett-Packard Co. (Û)

    545,736      19,636

Ingram Micro, Inc. Class A (Æ)

    327,126      4,750

Integrated Device Technology, Inc. (Æ)

    94,543      513

Intel Corp. (Û)

    1,395,196      22,016

International Business Machines Corp. (Û)

    450,179      46,463

International Rectifier Corp. (Æ)

    9,600      162

Intuit, Inc. (Æ)

    141,300      3,268

Jabil Circuit, Inc.

    854,000      6,917

JDS Uniphase Corp. (Æ)

    442,800      2,041

Juniper Networks, Inc. (Æ)

    248,400      5,378

L-3 Communications Holdings, Inc. (Û)

    103,000      7,843

Linear Technology Corp.

    120,300      2,620

LSI Corp. (Æ)

    78,289      301

Macrovision Solutions Corp. (Æ)

    648      13

Mantech International Corp. Class A (Æ)

    36,300      1,314

Marvell Technology Group, Ltd. (Æ)

    443,593      4,871

Maxim Integrated Products, Inc.

    448,500      6,077

McAfee, Inc. (Æ)

    4,200      158

Microchip Technology, Inc.

    52,200      1,201

Micron Technology, Inc. (Æ)

    33,300      163

Microsoft Corp. (Û)

    2,260,986      45,808

Motorola, Inc. (Û)

    796,300      4,404

National Instruments Corp.

    38,700      853

National Semiconductor Corp.

    115,700      1,431

NCR Corp. (Æ)

    518,400      5,262

NetApp, Inc. (Æ)

    100,393      1,837

NeuStar, Inc. Class A (Æ)

    9,585      182

Novell, Inc. (Æ)

    418,000      1,572

Nvidia Corp. (Æ)

    27,900      320

ON Semiconductor Corp. (Æ)

    37,000      201

Oracle Corp. (Û)

    1,704,101      32,957

PerkinElmer, Inc.

    30,100      439

Plexus Corp. (Æ)

    56,200      1,245

QLogic Corp. (Æ)

    11,000      156

QUALCOMM, Inc. (Û)

    381,989      16,166

Rambus, Inc. (Æ)

    16,900      202

Red Hat, Inc. (Æ)

    42,500      734

SAIC, Inc. (Æ)

    300,100      5,432

SanDisk Corp. (Æ)

    19,600      308

Seagate Technology

    838,842      6,845

Seagate Technology, Inc. (Æ)

    124,942      —

Sun Microsystems, Inc. (Æ)

    62,353      571

SunPower Corp. Class A (Æ)

    15,800      433
     Principal
Amount ($)
or Shares		      Market
Value
$

Symantec Corp. (Æ)(Û)

    1,993,115      34,381

Syniverse Holdings, Inc. (Æ)

    48,900      616

Tellabs, Inc. (Æ)

    1,175,529      6,160

Texas Instruments, Inc. (Û)

    744,999      13,455

Trimble Navigation, Ltd. (Æ)

    50,500      1,083

Tyco Electronics, Ltd.

    11,200      195

Varian Semiconductor Equipment Associates, Inc. (Æ)

    6,600      169

VeriSign, Inc. (Æ)

    40,093      825

Vishay Intertechnology, Inc. (Æ)

    161,294      947

VMware, Inc. Class A (Æ)

    29,300      764

Western Digital Corp. (Æ)

    600,154      14,116

Xilinx, Inc.

    88,400      1,807

Zoran Corp. (Æ)

    39,300      351
         
        589,626
         
Utilities - 6.3%        

Ameren Corp.

    31,900      734

American Electric Power Co., Inc. (Û)

    222,700      5,875

American Water Works Co., Inc.

    5,105      92

Aqua America, Inc.

    26,600      488

AT&T, Inc. (Û)

    2,346,070      60,106

Atmos Energy Corp.

    4,100      101

Calpine Corp. (Æ)

    60,600      491

CenturyTel, Inc.

    105,822      2,873

Consolidated Edison, Inc. (Û)

    65,300      2,425

Dominion Resources, Inc.

    116,700      3,520

DTE Energy Co. (Û)

    141,900      4,196

Duke Energy Corp.

    335,140      4,628

Edison International (Û)

    232,100      6,617

Embarq Corp.

    226,552      8,283

Entergy Corp. (Û)

    92,100      5,965

Exelon Corp.

    152,028      7,013

FirstEnergy Corp. (Û)

    189,100      7,734

FPL Group, Inc.

    128,500      6,912

Frontier Communications Corp.

    244,200      1,736

Hawaiian Electric Industries, Inc.

    195,200      3,033

Integrys Energy Group, Inc.

    41,983      1,109

Laclede Group, Inc. (The)

    7,800      271

Leap Wireless International, Inc. (Æ)

    38,532      1,390

MDU Resources Group, Inc.

    129,186      2,270

MetroPCS Communications, Inc. (Æ)

    35,000      598

Mirant Corp. (Æ)

    172,664      2,198

National Fuel Gas Co.

    28,200      922

NII Holdings, Inc. (Æ)

    255,668      4,132

NiSource, Inc.

    56,579      622

Northeast Utilities

    7,200      151

NSTAR

    39,600      1,244

OGE Energy Corp.

    39,268      1,010

Oneok, Inc.

    8,800      230

PG&E Corp.

    40,900      1,518

Pinnacle West Capital Corp.

    146,714      4,017

Portland General Electric Co.

    63,600      1,162

PPL Corp.

    61,232      1,831

Progress Energy, Inc.

    27,300      931

Public Service Enterprise Group, Inc. (Û)

    317,900      9,486

Questar Corp.

    4,700      140

 

18   Russell U.S. Quantitative Equity Fund

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Qwest Communications International, Inc.

    48,100         187   

SCANA Corp.

    14,000         423   

Sempra Energy

    213,900         9,844   

Southern Co. (The)

    38,600         1,115   

Southern Union Co.

    12,200         194   

Spectra Energy Corp.

    98,200         1,424   

Sprint Nextel Corp. (Æ)

    328,335         1,432   

TECO Energy, Inc.

    69,400         735   

Telephone & Data Systems, Inc.

    12,932         371   

Time Warner Cable, Inc. (Û)

    243,707         7,855   

UGI Corp.

    137,400         3,152   

US Cellular Corp. (Æ)

    39,200         1,333   

Vectren Corp.

    17,767         394   

Verizon Communications, Inc. (Û)

    958,638         29,085   

Windstream Corp.

    43,300         359   

Wisconsin Energy Corp.

    1,900         76   

Xcel Energy, Inc.

    900         17   
           
        226,050   
           
Total Common Stocks
(cost $4,472,167)		         3,659,381   
           
Short-Term Investments - 7.3%        

Russell Investment Company
Russell Money Market Fund

    207,168,900         207,169   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    53,800         53,800   
           
Total Short-Term Investments
(cost $260,969)		         260,969   
           
Total Investments - 109.0%
(identified cost $4,733,136)		         3,920,350   
           
Securities Sold Short - (9.9%)        
Auto and Transportation - (0.6%)        

BorgWarner, Inc.

    (162,600 )       (4,707 ) 

Gentex Corp.

    (222,300 )       (2,972 ) 

Harley-Davidson, Inc.

    (116,700 )       (2,586 ) 

PACCAR, Inc.

    (208,400 )       (7,386 ) 

Southwest Airlines Co.

    (506,800 )       (3,538 ) 
           
        (21,189 ) 
           
Consumer Discretionary - (2.2%)        

Amazon.com, Inc. (Æ)

    (34,600 )       (2,786 ) 

Cablevision Systems Corp. Class A

    (317,600 )       (5,450 ) 

Capella Education Co. (Æ)

    (5,800 )       (298 ) 

Carnival Corp.

    (84,000 )       (2,258 ) 

CBS Corp. Class B

    (808,400 )       (5,691 ) 

Corrections Corp. of America (Æ)

    (120,486 )       (1,702 ) 

CoStar Group, Inc. (Æ)

    (25,500 )       (945 ) 

Dick’s Sporting Goods, Inc. (Æ)

    (121,100 )       (2,301 ) 

DTS, Inc. (Æ)

    (14,500 )       (386 ) 

Electronic Arts, Inc. Series C (Æ)

    (313,000 )       (6,370 ) 

Estee Lauder Cos., Inc. (The) Class A

    (224,400 )       (6,710 ) 

EW Scripps Co. Class A

    (39,811 )       (78 ) 

Geo Group, Inc. (The) (Æ)

    (27,866 )       (463 ) 

IHS, Inc. Class A (Æ)

    (27,761 )       (1,148 ) 
     Principal
Amount ($)
or Shares		        Market
Value
$		  

International Game Technology

    (118,700 )       (1,466 ) 

Iron Mountain, Inc. (Æ)

    (247,100 )       (7,040 ) 

Liberty Media Corp. - Capital Series A (Æ)

    (379,132 )       (4,436 ) 

LKQ Corp. (Æ)

    (166,332 )       (2,824 ) 

Marriott International, Inc. Class A

    (307,600 )       (7,247 ) 

Men’s Wearhouse, Inc. (The)

    (33,200 )       (619 ) 

O’Reilly Automotive, Inc. (Æ)

    (177,300 )       (6,888 ) 

Orient-Express Hotels, Ltd. Class A

    (101,600 )       (657 ) 

Pinnacle Entertainment, Inc. (Æ)

    (21,200 )       (265 ) 

Sally Beauty Holdings, Inc. (Æ)

    (206,925 )       (1,531 ) 

Scientific Games Corp. Class A (Æ)

    (145,666 )       (2,548 ) 

Service Corp. International

    (451,500 )       (2,045 ) 

Urban Outfitters, Inc. (Æ)

    (79,500 )       (1,549 ) 

Waste Management, Inc.

    (108,300 )       (2,890 ) 
           
        (78,591 ) 
           
Consumer Staples - (0.5%)        

Brown-Forman Corp. Class B

    (129,200 )       (6,008 ) 

Hain Celestial Group, Inc. (The) (Æ)

    (50,000 )       (835 ) 

McCormick & Co., Inc.

    (168,400 )       (4,959 ) 

Molson Coors Brewing Co. Class B

    (175,700 )       (6,721 ) 

Smithfield Foods, Inc. (Æ)

    (105,029 )       (907 ) 

Vector Group, Ltd.

    (3,000 )       (40 ) 
           
        (19,470 ) 
           
Financial Services - (1.1%)        

Aflac, Inc.

    (5,000 )       (144 ) 

Alleghany Corp. (Æ)

    (1 )       —   

Capital One Financial Corp.

    (334,900 )       (5,606 ) 

CB Richard Ellis Group, Inc. Class A (Æ)

    (272,900 )       (2,047 ) 

CIT Group, Inc.

    (47,360 )       (105 ) 

Digital Realty Trust, Inc. (ö)

    (40,500 )       (1,458 ) 

Eaton Vance Corp.

    (82,500 )       (2,258 ) 

Fidelity National Financial, Inc. Class A

    (3,583 )       (65 ) 

Health Care REIT, Inc. (ö)

    (23,800 )       (811 ) 

Interactive Brokers Group, Inc. Class A (Æ)

    (17,163 )       (253 ) 

Jefferies Group, Inc.

    (101,910 )       (1,994 ) 

Keycorp

    (717,400 )       (4,412 ) 

Legg Mason, Inc.

    (20,500 )       (411 ) 

Mastercard, Inc. Class A

    (10,900 )       (2,000 ) 

MGIC Investment Corp.

    (351,950 )       (901 ) 

Plum Creek Timber Co., Inc. (ö)

    (20,100 )       (694 ) 

SunTrust Banks, Inc.

    (393,000 )       (5,675 ) 

T Rowe Price Group, Inc.

    (122,300 )       (4,711 ) 

TFS Financial Corp.

    (447,400 )       (5,248 ) 

Tower Group, Inc.

    (12,200 )       (332 ) 

Wright Express Corp. (Æ)

    (51,000 )       (1,168 ) 
           
        (40,293 ) 
           
Health Care - (1.0%)        

Acorda Therapeutics, Inc. (Æ)

    (28,000 )       (555 ) 

Alexion Pharmaceuticals, Inc. (Æ)

    (10,900 )       (364 ) 

athenahealth, Inc. (Æ)

    (13,700 )       (436 ) 

BioMarin Pharmaceutical, Inc. (Æ)

    (135,515 )       (1,743 ) 

Celgene Corp. (Æ)

    (79,100 )       (3,379 ) 

Cougar Biotechnology, Inc. (Æ)

    (15,900 )       (555 ) 

 

Russell U.S. Quantitative Equity Fund   19

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

ev3, Inc. (Æ)

    (12,686 )       (106 ) 

HLTH Corp. (Æ)

    (78,854 )       (867 ) 

Illumina, Inc. (Æ)

    (218,500 )       (8,161 ) 

Intuitive Surgical, Inc. (Æ)

    (24,800 )       (3,565 ) 

Medarex, Inc. (Æ)

    (205,800 )       (1,218 ) 

MedAssets, Inc. New (Æ)

    (32,100 )       (553 ) 

Medicis Pharmaceutical Corp. Class A

    (109,300 )       (1,756 ) 

Meridian Bioscience, Inc.

    (34,500 )       (600 ) 

NuVasive, Inc. (Æ)

    (42,075 )       (1,595 ) 

Psychiatric Solutions, Inc. (Æ)

    (47,000 )       (911 ) 

Seattle Genetics, Inc. (Æ)

    (76,200 )       (703 ) 

Theravance, Inc. (Æ)

    (19,100 )       (274 ) 

United Therapeutics Corp. (Æ)

    (7,400 )       (465 ) 

VCA Antech, Inc. (Æ)

    (102,400 )       (2,562 ) 

Vertex Pharmaceuticals, Inc. (Æ)

    (172,700 )       (5,323 ) 

Wright Medical Group, Inc. (Æ)

    (75,600 )       (1,040 ) 

XenoPort, Inc. (Æ)

    (35,200 )       (481 ) 
           
        (37,212 ) 
           
Integrated Oils - (0.2%)        

Hess Corp.

    (105,100 )       (5,758 ) 
           
Materials and Processing - (0.5%)        

Alcoa, Inc.

    (342,500 )       (3,106 ) 

Century Aluminum Co. (Æ)

    (102,000 )       (412 ) 

Eagle Materials, Inc.

    (57,900 )       (1,610 ) 

Forest City Enterprises, Inc. Class A

    (123,625 )       (1,042 ) 

Hexcel Corp. (Æ)

    (86,600 )       (830 ) 

Kaydon Corp.

    (25,800 )       (825 ) 

Monsanto Co.

    (10,300 )       (874 ) 

Quanta Services, Inc. (Æ)

    (117,800 )       (2,678 ) 

Scotts Miracle-Gro Co. (The)

Class A

    (28,000 )       (946 ) 

St. Joe Co. (The) (Æ)

    (105,600 )       (2,627 ) 

Temple-Inland, Inc.

    (66,463 )       (794 ) 

Vulcan Materials Co.

    (60,000 )       (2,853 ) 
           
        (18,597 ) 
           
Miscellaneous - (0.2%)        

Fortune Brands, Inc.

    (174,100 )       (6,844 ) 
           
Other Energy - (1.2%)        

Anadarko Petroleum Corp.

    (173,300 )       (7,462 ) 

Devon Energy Corp.

    (58,900 )       (3,054 ) 

EQT Corp.

    (178,200 )       (5,993 ) 

Exterran Holdings, Inc. (Æ)

    (69,000 )       (1,425 ) 

Halliburton Co.

    (183,600 )       (3,712 ) 

PetroHawk Energy Corp. (Æ)

    (395,600 )       (9,336 ) 

Plains Exploration & Production Co. (Æ)

    (34,100 )       (643 ) 

Range Resources Corp.

    (159,700 )       (6,383 ) 

Schlumberger, Ltd.

    (94,200 )       (4,615 ) 

Weatherford International, Ltd. (Æ)

    (48,700 )       (810 ) 

Williams Cos., Inc. (The)

    (70,500 )       (995 ) 
           
        (44,428 ) 
           
     Principal
Amount ($)
or Shares		        Market
Value
$		  
Producer Durables - (0.9%)        

American Tower Corp. Class A (Æ)

    (99,300 )       (3,154 ) 

Astec Industries, Inc. (Æ)

    (10,100 )       (311 ) 

Crown Castle International Corp. (Æ)

    (436,100 )       (10,693 ) 

Dionex Corp. (Æ)

    (41,300 )       (2,602 ) 

ESCO Technologies, Inc. (Æ)

    (21,300 )       (886 ) 

Pitney Bowes, Inc.

    (171,100 )       (4,199 ) 

Roper Industries, Inc.

    (100,900 )       (4,600 ) 

SBA Communications Corp. Class A (Æ)

    (154,100 )       (3,883 ) 

Woodward Governor Co.

    (9,529 )       (190 ) 
           
        (30,518 ) 
           
Technology - (1.3%)        

Avocent Corp. (Æ)

    (44,200 )       (638 ) 

Cavium Networks, Inc. (Æ)

    (30,200 )       (380 ) 

Cognizant Technology Solutions Corp.
Class A (Æ)

    (134,900 )       (3,344 ) 

Corning, Inc.

    (210,500 )       (3,078 ) 

DealerTrack Holdings, Inc. (Æ)

    (38,900 )       (591 ) 

EPIQ Systems, Inc. (Æ)

    (58,313 )       (902 ) 

Equinix, Inc. (Æ)

    (37,700 )       (2,648 ) 

II-VI, Inc. (Æ)

    (2,475 )       (59 ) 

Linear Technology Corp.

    (187,200 )       (4,077 ) 

Marvell Technology Group, Ltd. (Æ)

    (294,400 )       (3,233 ) 

Microchip Technology, Inc.

    (244,900 )       (5,633 ) 

Microsemi Corp. (Æ)

    (68,100 )       (914 ) 

Omniture, Inc. (Æ)

    (117,600 )       (1,449 ) 

Power Integrations, Inc.

    (44,200 )       (941 ) 

Rambus, Inc. (Æ)

    (139,100 )       (1,666 ) 

Salesforce.com, Inc. (Æ)

    (168,700 )       (7,222 ) 

Tessera Technologies, Inc. (Æ)

    (26,508 )       (372 ) 

VMware, Inc. Class A (Æ)

    (210,600 )       (5,492 ) 

Yahoo!, Inc. (Æ)

    (197,000 )       (2,815 ) 
           
        (45,454 ) 
           
Utilities - (0.2%)        

Consolidated Edison, Inc.

    (91,600 )       (3,401 ) 

DPL, Inc.

    (27,730 )       (622 ) 

MetroPCS Communications, Inc. (Æ)

    (10,400 )       (178 ) 

Otter Tail Corp.

    (45,442 )       (1,008 ) 

Southern Co. (The)

    (106,500 )       (3,076 ) 
           
        (8,285 ) 
           
Total Securities Sold Short
(proceeds $379,619)		         (356,639 ) 
           
Other Assets and Liabilities,
Net - 0.9%		         33,372   
           
Net Assets - 100.0%         3,597,083   
           

 

See accompanying notes which are an integral part of the financial statements.

 

20   Russell U.S. Quantitative Equity Fund

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

S&P 500 E-Mini Index (CME)

    3,190      USD   138,765      06/09      22,064

S&P 500 Index (CME)

    590      USD   128,325      06/09      19,860

S&P Midcap 400 E-Mini Index (CME)

    438      USD   24,528      06/09      5,114
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

           47,038
                     

 

 

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    

Auto and Transportation

      2.6   

Consumer Discretionary

      14.2   

Consumer Staples

      9.2   

Financial Services

      13.9   

Health Care

      14.5   

Integrated Oils

      8.1   

Materials and Processing

      4.9   

Miscellaneous

      1.4   

Other Energy

      5.0   

Producer Durables

      5.2   

Technology

      16.4   

Utilities

      6.3   

Short-Term Investments

      7.3   
        

Total Investments

      109.0   

Securities Sold Short

      (9.9 ) 

Other Assets and Liabilities, Net

      0.9   
        
     100.0   
        

Futures Contracts

      1.3   

 

See accompanying notes which are an integral part of the financial statements.

 

Russell U.S. Quantitative Equity Fund   21

Russell Investment Company

Russell U.S. Growth Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 996.10    $ 1,014.28

Expenses Paid During Period*

    $ 10.49    $ 10.59

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.12% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 999.30    $ 1,017.95

Expenses Paid During Period*

    $ 6.84    $ 6.90

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.38% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,002.90    $ 1,019.89

Expenses Paid During Period*

    $ 4.92    $ 4.96

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.99% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,001.40    $ 1,019.34

Expenses Paid During Period*

    $ 5.46    $ 5.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.10% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

22   Russell U.S. Growth Fund

Russell Investment Company

Russell U.S. Growth Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Common Stocks - 90.8%        
Auto and Transportation - 2.7%        

CH Robinson Worldwide, Inc.

    3,270      174

Expeditors International of Washington, Inc.

    22,000      764

ExpressJet Holdings, Inc. (Æ)(Ñ)

    7,400      9

Union Pacific Corp.

    17,265      848

United Parcel Service, Inc. Class B

    16,410      859
         
        2,654
         
Consumer Discretionary - 12.7%        

Accenture, Ltd. Class A

    9,000      265

Activision Blizzard, Inc. (Æ)

    18,690      201

Amazon.com, Inc. (Æ)

    16,013      1,289

Apollo Group, Inc. Class A (Æ)

    4,254      268

Best Buy Co., Inc. (Ñ)

    9,690      372

Brown Shoe Co., Inc. (Ñ)

    4,200      27

Casual Male Retail Group, Inc. (Æ)(Ñ)

    21,400      27

Central Garden and Pet Co. (Æ)(Ñ)

    5,600      54

Citi Trends, Inc. (Æ)(Ñ)

    1,600      39

Coach, Inc.

    3,400      83

Darden Restaurants, Inc.

    6,600      244

DreamWorks Animation SKG, Inc. Class A (Æ)

    2,351      57

eBay, Inc. (Æ)(Ñ)

    9,800      161

Guess?, Inc.

    12,430      324

Hot Topic, Inc. (Æ)(Ñ)

    4,100      50

Isle of Capri Casinos, Inc. (Æ)(Ñ)

    5,500      59

JOS A Bank Clothiers, Inc. (Æ)(Ñ)

    2,000      81

Kohl’s Corp. (Æ)

    14,273      647

Lakes Entertainment, Inc. (Æ)(Ñ)

    8,900      28

Lowe’s Cos., Inc.

    62,925      1,353

Lumber Liquidators, Inc. (Æ)(Ñ)

    2,800      42

Marriott International, Inc. Class A (Ñ)

    14,700      346

McDonald’s Corp.

    4,200      224

Morgans Hotel Group Co. (Æ)(Ñ)

    6,600      28

Nike, Inc. Class B (Ñ)

    22,037      1,156

Pacific Sunwear of California, Inc. (Æ)(Ñ)

    16,000      65

PEP Boys-Manny Moe & Jack (Ñ)

    6,200      46

Revlon, Inc. (Æ)(Ñ)

    3,710      18

Scripps Networks Interactive, Inc. (Ñ)

    8,869      243

Shuffle Master, Inc. (Æ)(Ñ)

    8,600      33

Staples, Inc. (Ñ)

    81,500      1,681

Starbucks Corp. (Æ)(Ñ)

    29,300      424

Sturm Ruger & Co., Inc. (Æ)(Ñ)

    4,500      55

Target Corp.

    18,015      743

Tractor Supply Co. (Æ)(Ñ)

    1,232      50

Valuevision Media, Inc. Class A (Æ)(Ñ)

    16,600      12

VF Corp. (Ñ)

    2,100      125

Wal-Mart Stores, Inc.

    11,686      589

Walt Disney Co. (The)

    18,961      415

Weight Watchers International, Inc. (Ñ)

    18,000      448

WPT Enterprises, Inc. (Æ)(Ñ)

    3,396      3

Youbet.com, Inc. (Æ)(Ñ)

    26,300      62

Yum! Brands, Inc.

    4,600      153
         
        12,590
         
     Principal
Amount ($)
or Shares		      Market
Value
$
Consumer Staples - 7.3%        

American Italian Pasta Co. Class A (Æ)

    2,200      69

Chiquita Brands International, Inc. (Æ)(Ñ)

    4,100      31

Church & Dwight Co., Inc. (Ñ)

    2,089      114

Clorox Co.

    3,760      211

Coca-Cola Co. (The)

    24,717      1,064

Colgate-Palmolive Co.

    8,600      507

Diageo PLC - ADR

    4,535      217

Diamond Foods, Inc. (Ñ)

    2,800      73

General Mills, Inc. (Ñ)

    4,800      243

Great Atlantic & Pacific Tea Co. (Æ)(Ñ)

    4,600      34

Kraft Foods, Inc. Class A (Ñ)

    7,000      164

Kroger Co. (The)

    9,940      215

Monterey Gourmet Foods, Inc. (Æ)(Ñ)

    5,948      8

PepsiCo, Inc.

    25,390      1,263

Procter & Gamble Co. (The)

    28,600      1,414

Smart Balance, Inc. (Æ)(Ñ)

    6,200      44

SYSCO Corp.

    32,460      757

Walgreen Co.

    25,000      786
         
        7,214
         
Financial Services - 11.0%        

American Express Co. (Ñ)

    16,800      424

Automatic Data Processing, Inc. (Ñ)

    17,800      627

Bank of America Corp. (Ñ)

    12,600      112

Bank of New York Mellon Corp. (The)

    27,000      688

BlackRock, Inc. Class A (Ñ)

    1,240      182

CME Group, Inc. Class A (Ñ)

    3,200      708

Endurance Specialty Holdings, Ltd. (Ñ)

    5,267      138

Goldman Sachs Group, Inc. (The)

    7,107      913

Hercules Technology Growth Capital, Inc. (Ñ)

    5,000      30

IntercontinentalExchange, Inc. (Æ)

    14,346      1,257

Mastercard, Inc. Class A (Ñ)

    7,542      1,384

MCG Capital Corp.

    600      1

Morgan Stanley (Ñ)

    7,800      184

Northern Trust Corp.

    4,700      255

Prudential Financial, Inc.

    5,800      167

State Street Corp.

    14,900      508

T Rowe Price Group, Inc. (Ñ)

    5,080      196

Visa, Inc. (Ñ)

    34,040      2,211

Wells Fargo & Co.

    13,522      271

Western Union Co. (The)

    37,648      631

WR Berkley Corp.

    1,786      43

ZipRealty, Inc. (Æ)

    8,400      24
         
        10,954
         
Health Care - 13.6%        

Abbott Laboratories

    30,141      1,261

Adolor Corp. (Æ)(Ñ)

    4,800      11

Allergan, Inc.

    19,500      910

AspenBio Pharma, Inc. (Æ)(Ñ)

    9,600      16

Candela Corp. (Æ)

    1,000      1

Celgene Corp. (Æ)

    17,754      758

CVS/Caremark Corp.

    11,690      371

Cyberonics, Inc. (Æ)(Ñ)

    2,600      34

Dentsply International, Inc. (Ñ)

    5,000      143

 

Russell U.S. Growth Fund   23

Russell Investment Company

Russell U.S. Growth Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Express Scripts, Inc. Class A (Æ)

    6,230      398

Genzyme Corp. (Æ)

    9,900      528

Gilead Sciences, Inc. (Æ)

    43,028      1,971

Henry Schein, Inc. (Æ)(Ñ)

    6,400      263

Immunogen, Inc. (Æ)(Ñ)

    8,300      58

Intuitive Surgical, Inc. (Æ)(Ñ)

    1,920      276

Johnson & Johnson

    2,500      131

Maxygen, Inc. (Æ)(Ñ)

    6,800      40

Medco Health Solutions, Inc. (Æ)

    18,000      784

Medtronic, Inc.

    23,552      754

Merck & Co., Inc. (Ñ)

    4,200      102

Mylan, Inc. (Æ)(Ñ)

    10,500      139

Nabi Biopharmaceuticals (Æ)(Ñ)

    14,400      49

Noven Pharmaceuticals, Inc. (Æ)(Ñ)

    3,400      35

Novo Nordisk A/S - ADR

    11,500      546

OraSure Technologies, Inc. (Æ)(Ñ)

    4,300      16

Perma-Fix Environmental Services (Æ)

    7,300      16

Pharmacyclics, Inc. (Æ)(Ñ)

    9,700      12

Questcor Pharmaceuticals, Inc. (Æ)(Ñ)

    9,900      45

St. Jude Medical, Inc. (Æ)

    7,670      257

Stericycle, Inc. (Æ)(Ñ)

    6,320      298

Synovis Life Technologies, Inc. (Æ)(Ñ)

    4,392      67

Teva Pharmaceutical Industries,
Ltd. - ADR

    37,375      1,640

Thermo Fisher Scientific, Inc. (Æ)(Ñ)

    5,300      186

UnitedHealth Group, Inc. (Ñ)

    39,100      920

Vnus Medical Technologies, Inc. (Æ)(Ñ)

    2,200      49

Zimmer Holdings, Inc. (Æ)

    9,700      427
         
        13,512
         
Integrated Oils - 1.4%        

Chevron Corp.

    1,900      126

Exxon Mobil Corp.

    5,964      398

Hess Corp.

    6,648      364

Occidental Petroleum Corp.

    4,730      266

Petroleo Brasileiro SA - ADR

    7,400      248
         
        1,402
         
Materials and Processing - 5.2%        

Air Products & Chemicals, Inc.

    3,800      250

Alcoa, Inc.

    34,350      312

Archer-Daniels-Midland Co.

    12,330      304

Buckeye Technologies, Inc. (Æ)(Ñ)

    10,400      54

Celanese Corp. Class A (Ñ)

    12,300      256

Ecolab, Inc. (Ñ)

    10,500      405

Fluor Corp.

    8,265      313

Monsanto Co.

    18,748      1,592

Potash Corp. of Saskatchewan, Inc.

    4,002      346

Praxair, Inc.

    8,500      634

Quanta Services, Inc. (Æ)(Ñ)

    5,500      125

Syngenta AG - ADR (Æ)(Ñ)

    11,800      503

Unifi, Inc. (Æ)

    13,800      12

Valence Technology, Inc. (Æ)(Ñ)

    19,300      43
         
        5,149
         
     Principal
Amount ($)
or Shares		      Market
Value
$
Miscellaneous - 0.8%        

3M Co.

    3,800      219

ABB, Ltd. - ADR

    21,152      301

Honeywell International, Inc. (Ñ)

    8,600      268
         
        788
         
Other Energy - 4.3%        

Berry Petroleum Co. Class A (Ñ)

    2,700      45

Cameron International Corp. (Æ)

    7,910      202

EOG Resources, Inc.

    12,300      781

National Oilwell Varco, Inc. (Æ)

    18,300      554

Peabody Energy Corp.

    4,710      124

PetroHawk Energy Corp. (Æ)(Ñ)

    23,278      550

Petroquest Energy, Inc. (Æ)(Ñ)

    5,000      15

Schlumberger, Ltd.

    21,402      1,049

Southwestern Energy Co. (Æ)

    4,440      159

Transocean, Ltd. (Æ)(Ñ)

    2,700      182

Warren Resources, Inc. (Æ)(Ñ)

    19,600      31

Weatherford International, Ltd. (Æ)

    19,320      321

XTO Energy, Inc.

    6,300      218
         
        4,231
         
Producer Durables - 4.1%        

American Tower Corp. Class A (Æ)

    12,410      394

Applied Materials, Inc. (Ñ)

    66,550      813

Champion Enterprises, Inc. (Æ)(Ñ)

    17,400      10

Crown Castle International Corp. (Æ)

    31,200      765

Cummins, Inc.

    5,130      174

DayStar Technologies, Inc. (Æ)(Ñ)

    11,400      13

Deere & Co.

    4,547      188

EF Johnson Technologies, Inc. (Æ)(Ñ)

    2,200      1

KLA-Tencor Corp. (Ñ)

    8,890      247

Lam Research Corp. (Æ)(Ñ)

    5,100      142

Lockheed Martin Corp.

    2,800      220

Mattson Technology, Inc. (Æ)(Ñ)

    7,600      9

Powell Industries, Inc. (Æ)(Ñ)

    1,400      50

Raytheon Co.

    5,400      244

Sonic Solutions, Inc. (Æ)(Ñ)

    20,300      45

Sunpower Corp. (Æ)(Ñ)

    8,679      220

Tyco International, Ltd.

    10,100      240

United Technologies Corp.

    5,500      269
         
        4,044
         
Technology - 26.7%        

Actuate Corp. (Æ)(Ñ)

    9,900      37

Adobe Systems, Inc. (Æ)

    62,829      1,718

Affiliated Computer Services, Inc. Class A (Æ)

    2,600      126

Apple, Inc. (Æ)

    27,549      3,466

Art Technology Group, Inc. (Æ)(Ñ)

    17,400      55

ASML Holding NV (Ñ)

    6,870      145

Avistar Communications Corp. (Æ)(Ñ)

    29,800      27

Blue Coat Systems, Inc. (Æ)(Ñ)

    3,100      41

BMC Software, Inc. (Æ)

    4,690      163

Broadcom Corp. Class A (Æ)

    33,551      778

Catapult Communications Corp. (Æ)(Ñ)

    6,000      44

 

24   Russell U.S. Growth Fund

Russell Investment Company

Russell U.S. Growth Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Ceva, Inc. (Æ)(Ñ)

    6,000      49

Cisco Systems, Inc. (Æ)

    22,800      440

Citrix Systems, Inc. (Æ)

    8,113      231

Corning, Inc.

    62,719      917

Dell, Inc. (Æ)

    17,400      202

Ditech Networks, Inc. (Æ)(Ñ)

    13,300      13

DivX, Inc. (Æ)(Ñ)

    4,100      21

First Solar, Inc. (Æ)(Ñ)

    2,770      519

Google, Inc. Class A (Æ)

    8,687      3,440

Hewlett-Packard Co.

    41,248      1,484

Immersion Corp. (Æ)(Ñ)

    6,700      28

Integrated Silicon Solution, Inc. (Æ)

    8,700      19

Intel Corp.

    18,700      295

Interactive Intelligence, Inc. (Æ)(Ñ)

    3,300      36

International Business Machines Corp.

    12,180      1,257

Intuit, Inc. (Æ)

    31,000      717

ION Geophysical Corp. (Æ)(Ñ)

    12,000      30

Juniper Networks, Inc. (Æ)(Ñ)

    13,360      289

Keynote Systems, Inc. (Æ)(Ñ)

    4,500      35

Leadis Technology, Inc. (Æ)

    9,200      6

Maxim Integrated Products, Inc. (Ñ)

    18,000      244

McAfee, Inc. (Æ)(Ñ)

    3,630      136

Micrel, Inc. (Ñ)

    6,400      48

Microsoft Corp.

    46,100      934

MIPS Technologies, Inc. (Æ)(Ñ)

    14,200      47

MoSys, Inc. (Æ)(Ñ)

    13,000      18

Openwave Systems, Inc. (Æ)(Ñ)

    21,500      26

Oplink Communications, Inc. (Æ)(Ñ)

    5,300      59

Oracle Corp.

    51,424      995

Phoenix Technologies, Ltd. (Æ)(Ñ)

    6,200      18

Pixelworks, Inc. (Æ)

    1,233      1

QUALCOMM, Inc.

    89,497      3,788

Research In Motion, Ltd. (Æ)

    6,324      440

RightNow Technologies, Inc. (Æ)(Ñ)

    3,800      29

Sanmina-SCI Corp. (Æ)

    42,900      24

SAP AG - ADR (Ñ)

    12,400      472

Seachange International, Inc. (Æ)(Ñ)

    7,600      48

SourceForge, Inc. (Æ)(Ñ)

    25,500      24

Symantec Corp. (Æ)

    30,000      517

Taiwan Semiconductor Manufacturing Co., Ltd. - ADR

    28,320      299

Teradata Corp. (Æ)

    33,000      552

Transwitch Corp. (Æ)

    39,925      16

Varian Semiconductor Equipment Associates, Inc. (Æ)(Ñ)

    5,400      138

VeriSign, Inc. (Æ)(Ñ)

    36,000      741

Xilinx, Inc. (Ñ)

    15,030      307
         
        26,549
         
Utilities - 1.0%        

China Mobile, Ltd. - ADR

    5,450      235

DG FastChannel, Inc. (Æ)(Ñ)

    2,700      63

Exelon Corp. (Ñ)

    5,500      254

FPL Group, Inc.

    4,246      229
     Principal
Amount ($)
or Shares		      Market
Value
$		  

MetroPCS Communications, Inc. (Æ)

    10,600      181   

Neutral Tandem, Inc. (Æ)

    2,000      57   
           
        1,019   
           
Total Common Stocks
(cost $92,190)		         90,106   
           
Short-Term Investments - 9.0%        

Russell Investment Company
Russell Money Market Fund

    7,383,000      7,383   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    1,500      1,500   
           
Total Short-Term Investments
(cost $8,883)		         8,883   
           
Other Securities - 16.9%        

Russell Investment Company Russell
Money Market Fund (×)

    8,326,232      8,326   

State Street Securities Lending Quality Trust (×)

    8,768,861      8,453   
           
Total Other Securities
(cost $17,095)		         16,779   
           
Total Investments - 116.7%
(identified cost $118,168)		         115,768   
Other Assets and Liabilities,
Net - (16.7%)		         (16,526 ) 
           
Net Assets - 100.0%         99,242   
           

 

See accompanying notes which are an integral part of the financial statements.

 

Russell U.S. Growth Fund   25

Russell Investment Company

Russell U.S. Growth Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

Nasdaq 100 E-Mini Index (CME)

    70      USD   1,951      06/09      284

S&P 500 E-Mini Index (CME)

    120      USD   5,220      06/09      442

S&P 500 Index (CME)

    8      USD   1,740      06/09      80
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     806
                     

 

 

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    

Auto and Transportation

      2.7   

Consumer Discretionary

      12.7   

Consumer Staples

      7.3   

Financial Services

      11.0   

Health Care

      13.6   

Integrated Oils

      1.4   

Materials and Processing

      5.2   

Miscellaneous

      0.8   

Other Energy

      4.3   

Producer Durables

      4.1   

Technology

      26.7   

Utilities

      1.0   

Short-Term Investments

      9.0   

Other Securities

      16.9   
        

Total Investments

      116.7   

Other Assets and Liabilities, Net

      (16.7 ) 
        
     100.0   
        

Futures Contracts

      0.8   

 

See accompanying notes which are an integral part of the financial statements.

 

26   Russell U.S. Growth Fund

Russell Investment Company

Russell U.S. Value Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 913.80    $ 1,014.58

Expenses Paid During Period*

    $ 9.78    $ 10.29

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.06% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 917.40    $ 1,018.30

Expenses Paid During Period*

    $ 6.23    $ 6.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.31% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 919.20    $ 1,019.93

Expenses Paid During Period*

    $ 4.66    $ 4.91

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.98% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 920.30    $ 1,019.54

Expenses Paid During Period*

    $ 5.05    $ 5.31

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.06% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell U.S. Value Fund   27

Russell Investment Company

Russell U.S. Value Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       
Common Stocks - 91.7%        
Auto and Transportation - 2.6%     

CSX Corp.

    20,400      604

Delta Air Lines, Inc. (Æ)

    31,300      193

Magna International, Inc. Class A

    22,500      764

Navistar International Corp. (Æ)(Ñ)

    39,100      1,478

Norfolk Southern Corp.

    8,400      300

Union Pacific Corp.

    8,510      418
         
        3,757
         
Consumer Discretionary - 13.1%     

Advance Auto Parts, Inc.

    8,000      350

American Eagle Outfitters, Inc.

    43,100      639

Apollo Group, Inc. Class A (Æ)

    2,400      151

AutoNation, Inc. (Æ)

    10,300      182

Avon Products, Inc.

    21,500      489

Best Buy Co., Inc. (Ñ)

    7,200      276

Black & Decker Corp.

    8,500      343

CBS Corp. Class B

    62,000      437

Darden Restaurants, Inc.

    10,000      370

DIRECTV Group, Inc. (The) (Æ)(Ñ)

    59,210      1,464

Home Depot, Inc.

    37,830      996

JC Penney Co., Inc. (Ñ)

    65,500      2,010

Kimberly-Clark Corp.

    16,620      817

Kohl’s Corp. (Æ)

    3,900      177

Limited Brands, Inc.

    59,900      684

Macy’s, Inc.

    46,200      632

McDonald’s Corp.

    22,170      1,181

McGraw-Hill Cos., Inc. (The)

    27,400      826

Newell Rubbermaid, Inc.

    34,200      357

Republic Services, Inc. Class A

    24,400      512

Royal Caribbean Cruises, Ltd.

    18,500      273

RR Donnelley & Sons Co.

    35,400      412

Snap-On, Inc.

    7,500      254

Starwood Hotels & Resorts Worldwide, Inc. (ö)(Ñ)

    25,100      524

Tiffany & Co. (Ñ)

    15,600      452

VF Corp.

    4,700      279

Wal-Mart Stores, Inc.

    27,210      1,371

Walt Disney Co. (The)

    24,090      528

Williams-Sonoma, Inc. (Ñ)

    50,000      700

Yum! Brands, Inc.

    26,770      893
         
        18,579
         
Consumer Staples - 2.1%        

Altria Group, Inc.

    15,600      255

Clorox Co.

    4,400      247

Coca-Cola Enterprises, Inc.

    20,500      350

Hershey Co. (The) (Ñ)

    7,300      264

Lorillard, Inc.

    13,900      877

Pepsi Bottling Group, Inc.

    8,200      256

Tyson Foods, Inc. Class A (Ñ)

    71,100      749
         
        2,998
         
Financial Services - 20.9%        

Aflac, Inc.

    8,300      240

Annaly Capital Management, Inc. (ö)

    51,600      726
    

Principal

Amount ($)

or Shares

     

Market

Value
$

AON Corp.

    13,800      582

Arch Capital Group, Ltd. (Æ)

    3,700      214

Bank of America Corp. (Ñ)

    166,349      1,485

Bank of New York Mellon Corp. (The)

    84,210      2,146

Capital One Financial Corp. (Ñ)

    85,900      1,438

Cigna Corp.

    8,100      160

Fidelity National Financial, Inc. Class A

    11,800      214

Genworth Financial, Inc. Class A

    430,368      1,016

Goldman Sachs Group, Inc. (The)

    10,290      1,322

Health Care REIT, Inc. (ö)

    16,100      549

Invesco, Ltd.

    40,700      599

JPMorgan Chase & Co.

    132,400      4,369

Keycorp (Ñ)

    69,500      427

Mastercard, Inc. Class A (Ñ)

    5,250      963

Mercury General Corp.

    17,400      588

MetLife, Inc.

    68,900      2,050

Morgan Stanley (Ñ)

    106,290      2,513

PNC Financial Services Group, Inc. (Ñ)

    15,700      623

State Street Corp.

    49,310      1,683

SunTrust Banks, Inc. (Ñ)

    42,200      609

T Rowe Price Group, Inc. (Ñ)

    19,300      743

Torchmark Corp. (Ñ)

    25,200      739

Travelers Cos., Inc. (The)

    9,300      383

Unum Group

    49,500      809

US Bancorp

    67,790      1,235

Walter Investment Management
Corp. (Æ)(ö)(Ñ)

    2,278      18

Wells Fargo & Co.

    51,500      1,030

Wilmington Trust Corp.

    23,200      337
         
        29,810
         
Health Care - 8.0%        

Abbott Laboratories

    10,930      457

Amgen, Inc. (Æ)

    40,620      1,969

Baxter International, Inc.

    10,720      520

Becton Dickinson and Co.

    10,340      625

Biogen Idec, Inc. (Æ)

    18,205      880

Bristol-Myers Squibb Co.

    38,800      745

CVS/Caremark Corp.

    10,800      343

Eli Lilly & Co.

    13,100      431

Genzyme Corp. (Æ)

    17,310      923

Johnson & Johnson

    23,490      1,230

Life Technologies Corp. (Æ)

    19,100      713

Pfizer, Inc.

    70,200      938

Shire PLC - ADR (Ñ)

    22,340      833

Thermo Fisher Scientific, Inc. (Æ)

    14,520      509

UnitedHealth Group, Inc.

    10,200      240
         
        11,356
         
Integrated Oils - 5.7%        

BP PLC-ADR (Ñ)

    7,000      297

Chevron Corp.

    40,562      2,681

ConocoPhillips

    32,960      1,351

Exxon Mobil Corp.

    17,600      1,173

Hess Corp.

    7,300      400

Marathon Oil Corp.

    34,500      1,025

 

28   Russell U.S. Value Fund

Russell Investment Company

Russell U.S. Value Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Noble Corp.

    14,300      391

Occidental Petroleum Corp.

    14,700      828
         
        8,146
         
Materials and Processing - 7.0%        

Air Products & Chemicals, Inc.

    3,800      250

Alcoa, Inc. (Ñ)

    41,700      378

Archer-Daniels-Midland Co.

    6,400      158

Ashland, Inc. (Ñ)

    26,860      590

Avery Dennison Corp.

    18,100      520

Cabot Corp.

    24,600      359

Celanese Corp. Class A

    9,600      200

CF Industries Holdings, Inc.

    5,400      389

Dow Chemical Co. (The)

    23,700      379

Freeport-McMoRan Copper & Gold, Inc. Class B

    16,500      704

Lubrizol Corp.

    11,600      501

Masco Corp.

    32,200      285

Monsanto Co.

    4,740      402

PPG Industries, Inc.

    8,900      392

Praxair, Inc.

    11,670      871

Precision Castparts Corp.

    14,850      1,112

RPM International, Inc.

    31,650      437

Sealed Air Corp.

    36,700      700

Terra Industries, Inc.

    15,300      406

Timken Co.

    22,200      357

Vulcan Materials Co. (Ñ)

    12,400      590
         
        9,980
         
Miscellaneous - 1.9%        

3M Co.

    4,100      236

Fortune Brands, Inc.

    8,500      334

General Electric Co.

    30,500      386

Johnson Controls, Inc. (Ñ)

    27,500      523

SPX Corp.

    7,500      346

Teleflex, Inc.

    13,300      572

Walter Energy, Inc.

    11,422      260
         
        2,657
         
Other Energy - 5.5%        

Chesapeake Energy Corp. (Ñ)

    68,800      1,356

Devon Energy Corp.

    15,400      798

Dynegy, Inc. Class A (Æ)

    2,043      4

Halliburton Co.

    22,820      461

Nabors Industries, Ltd. (Æ)

    48,900      744

NRG Energy, Inc. (Æ)

    22,700      408

Reliant Energy, Inc. (Æ)

    335,200      1,663

Sunoco, Inc. (Ñ)

    12,400      329

Valero Energy Corp.

    24,200      480

Whiting Petroleum Corp. (Æ)

    4,800      157

Williams Cos., Inc. (The)

    48,200      680

XTO Energy, Inc.

    22,700      787
         
        7,867
         
Producer Durables - 10.3%        

Agilent Technologies, Inc. (Æ)

    26,700      488

Alcatel-Lucent - ADR (Æ)

    389,700      974
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Boeing Co. (The)

    7,090      284

Centex Corp. (Ñ)

    120,500      1,318

Cummins, Inc.

    6,100      207

Deere & Co.

    13,300      549

DR Horton, Inc. (Ñ)

    93,500      1,220

Goodrich Corp.

    3,800      168

Ingersoll-Rand Co., Ltd. Class A

    28,200      614

Lam Research Corp. (Æ)(Ñ)

    48,100      1,341

Lockheed Martin Corp.

    17,650      1,386

Nokia OYJ - ADR

    37,200      526

Northrop Grumman Corp.

    40,210      1,944

Novellus Systems, Inc. (Æ)(Ñ)

    16,800      304

Pitney Bowes, Inc.

    18,700      459

Pulte Homes, Inc. (Ñ)

    89,600      1,031

Raytheon Co.

    30,920      1,399

Tyco International, Ltd.

    18,100      430

Xerox Corp.

    3,900      24
         
        14,666
         
Technology - 10.8%        

Arrow Electronics, Inc. (Æ)

    27,100      616

Avnet, Inc. (Æ)

    14,500      317

Check Point Software Technologies (Æ)

    16,000      371

Cisco Systems, Inc. (Æ)

    67,580      1,306

Corning, Inc.

    15,000      219

Dell, Inc. (Æ)(Ñ)

    85,200      990

EMC Corp. (Æ)

    35,700      447

Garmin, Ltd. (Ñ)

    28,500      718

General Dynamics Corp.

    22,170      1,146

Google, Inc. Class A (Æ)

    2,530      1,002

Hewlett-Packard Co.

    18,100      651

Intel Corp.

    18,500      292

International Business Machines Corp.

    8,730      901

Jabil Circuit, Inc.

    66,900      542

Marvell Technology Group, Ltd. (Æ)

    39,300      432

Maxim Integrated Products, Inc.

    38,300      519

Microsoft Corp.

    38,300      776

Motorola, Inc.

    186,500      1,031

Oracle Corp.

    61,100      1,182

Research In Motion, Ltd. (Æ)

    2,600      181

Rockwell Automation, Inc. (Ñ)

    26,500      837

SAIC, Inc. (Æ)

    20,300      367

Seagate Technology, Inc. (Æ)

    1,900      —

Western Digital Corp. (Æ)

    21,400      503
         
        15,346
         
Utilities - 3.8%        

AT&T, Inc.

    72,320      1,853

Frontier Communications Corp.

    62,100      442

Mirant Corp. (Æ)

    41,982      534

Northeast Utilities

    16,800      353

Progress Energy, Inc. - CVO (ß)

    1,300      —

Shaw Communications, Inc.

    13,800      213

Spectra Energy Corp.

    11,000      159

Sprint Nextel Corp. (Æ)

    264,400      1,153

Verizon Communications, Inc.

    23,900      725
         
        5,432
         
Total Common Stocks
(cost $155,080)		         130,594
         

 

Russell U.S. Value Fund   29

Russell Investment Company

Russell U.S. Value Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

  
       
Short-Term Investments - 7.5%        

Russell Investment Company Russell
Money Market Fund

    8,719,000      8,719   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    2,000      2,000   
           
Total Short-Term Investments
(cost $10,719)		         10,719   
           
Other Securities - 16.4%        

Russell Investment Company Russell
Money Market Fund (×)

    11,555,134      11,555   

State Street Securities Lending Quality
Trust (×)

    12,169,415      11,731   
           
Total Other Securities
(cost $23,724)		         23,286   
           
Total Investments - 115.6%
(identified cost $189,523)		         164,599   
Other Assets and Liabilities,
Net - (15.6%)		         (22,191 ) 
           
Net Assets - 100.0%         142,408   
           

 

 

See accompanying notes which are an integral part of the financial statements.

 

30   Russell U.S. Value Fund

Russell Investment Company

Russell U.S. Value Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

S&P 500 E-Mini Index (CME)

    210      USD   9,135      06/09      1,184

S&P 500 Index (CME)

    12      USD   2,610      06/09      220
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     1,404
                     

 

 

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    

Auto and Transportation

      2.6   

Consumer Discretionary

      13.1   

Consumer Staples

      2.1   

Financial Services

      20.9   

Health Care

      8.0   

Integrated Oils

      5.7   

Materials and Processing

      7.0   

Miscellaneous

      1.9   

Other Energy

      5.5   

Producer Durables

      10.3   

Technology

      10.8   

Utilities

      3.8   

Short-Term Investments

      7.5   

Other Securities

      16.4   
        

Total Investments

      115.6   

Other Assets and Liabilities, Net

      (15.6 ) 
        
     100.0   
        

Futures Contracts

      1.0   

 

See accompanying notes which are an integral part of the financial statements.

 

Russell U.S. Value Fund   31

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 931.10    $ 1,018.55

Expenses Paid During Period*

    $ 6.03    $ 6.31

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 927.50    $ 1,014.88

Expenses Paid During Period*

    $ 9.56    $ 9.99

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.00% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 931.40    $ 1,019.19

Expenses Paid During Period*

    $ 5.41    $ 5.66

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.13% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 932.10    $ 1,020.18

Expenses Paid During Period*

    $ 4.46    $ 4.66

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.93% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

32   Russell U.S. Small & Mid Cap Fund

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 931.30    $ 1,019.79

Expenses Paid During Period*

    $ 4.84    $ 5.06

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.01% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 932.70    $ 1,020.63

Expenses Paid During Period*

    $ 4.03    $ 4.21

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.84% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell U.S. Small & Mid Cap Fund   33

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       
Common Stocks - 89.5%        
Auto and Transportation - 4.2%     

AAR Corp. (Æ)(Ñ)

    92,100      1,388

Alaska Air Group, Inc. (Æ)

    39,200      658

Alexander & Baldwin, Inc. (Ñ)

    89,074      2,373

Allegiant Travel Co. (Æ)(Ñ)

    19,750      1,028

American Railcar Industries, Inc.

    7,100      65

Arkansas Best Corp. (Ñ)

    100,903      2,329

ATC Technology Corp. (Æ)

    11,000      175

Atlas Air Worldwide Holdings, Inc. (Æ)

    10,400      276

Bristow Group, Inc. (Æ)(Ñ)

    47,180      1,074

Con-way, Inc.

    81,370      2,016

Cooper Tire & Rubber Co.

    440,900      3,646

DryShips, Inc. (Ñ)

    68,000      505

Expeditors International of Washington, Inc.

    63,878      2,217

Federal Mogul Corp. (Æ)(Ñ)

    8,707      97

Forward Air Corp.

    134,151      2,236

FreightCar America, Inc. (Ñ)

    10,121      195

Genesee & Wyoming, Inc. Class A (Æ)

    41,416      1,242

Global Ship Lease, Inc.

    19,923      40

Golar LNG, Ltd. (Æ)

    7,500      40

Hawaiian Holdings, Inc. (Æ)

    98,650      492

JetBlue Airways Corp. (Æ)(Ñ)

    240,300      1,185

K-Sea Transportation Partners, LP (Ñ)

    71,000      1,401

Kirby Corp. (Æ)(Ñ)

    55,125      1,701

Knight Transportation, Inc. (Ñ)

    61,968      1,096

Lear Corp. (Æ)

    76,309      61

Marten Transport, Ltd. (Æ)

    12,029      249

Navios Maritime Holdings, Inc. (Æ)

    91,400      376

Navistar International Corp. (Æ)(Ñ)

    33,203      1,255

Oshkosh Corp.

    13,709      132

Pacer International, Inc.

    49,603      210

PHI, Inc. (Æ)

    120,843      1,368

Polaris Industries, Inc. (Ñ)

    100,994      3,378

Republic Airways Holdings, Inc. (Æ)

    36,773      263

Safe Bulkers, Inc.

    120,780      514

Saia, Inc. (Æ)

    26,224      342

Skywest, Inc.

    137,013      1,650

Southwest Airlines Co.

    122,431      855

StealthGas, Inc.

    193,809      977

Stoneridge, Inc. (Æ)

    11,200      26

Superior Industries International, Inc. (Ñ)

    133,284      2,010

Teekay Corp.

    146,000      2,108

Tenneco, Inc. (Æ)(Ñ)

    47,400      145

Tidewater, Inc. (Ñ)

    36,400      1,574

TRW Automotive Holdings Corp. (Æ)

    53,100      458

UTi Worldwide, Inc. (Æ)

    122,407      1,648

Wabash National Corp.

    12,100      15

Wabtec Corp. (Ñ)

    57,929      2,209

Werner Enterprises, Inc. (Ñ)

    29,600      484
         
        49,782
         
Consumer Discretionary - 18.2%     

99 Cents Only Stores (Æ)(Ñ)

    191,500      2,057

Aaron’s, Inc. (Ñ)

    113,800      3,819

Abercrombie & Fitch Co. Class A (Ñ)

    36,600      990
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Administaff, Inc.

    14,926      398

Advance Auto Parts, Inc.

    108,332      4,740

Advisory Board Co. (The) (Æ)

    6,462      120

Aeropostale, Inc. (Æ)(Ñ)

    84,000      2,853

Alberto-Culver Co. Class B

    85,885      1,914

American Eagle Outfitters, Inc.

    137,500      2,038

American Public Education, Inc. (Æ)

    36,125      1,301

American Woodmark Corp.

    1,509      31

AMN Healthcare Services, Inc. (Æ)

    34,291      236

AnnTaylor Stores Corp. (Æ)

    6,305      47

Asbury Automotive Group, Inc.

    58,200      563

Bally Technologies, Inc. (Æ)

    104,835      2,745

Bebe Stores, Inc.

    384,100      3,534

Bed Bath & Beyond, Inc. (Æ)(Ñ)

    84,589      2,573

BJ’s Restaurants, Inc. (Æ)(Ñ)

    74,686      1,232

Black & Decker Corp.

    39,600      1,596

Blockbuster, Inc. Class A (Æ)(Ñ)

    218,600      175

Brightpoint, Inc. (Æ)

    83,414      435

Brinker International, Inc.

    74,500      1,320

Buckle, Inc. (The) (Ñ)

    102,141      3,817

Buffalo Wild Wings, Inc. (Æ)(Ñ)

    34,875      1,362

Build-A-Bear Workshop, Inc. Class A (Æ)

    24,800      135

Cabela’s, Inc. (Æ)(Ñ)

    113,600      1,455

Callaway Golf Co.

    322,700      2,436

Capella Education Co. (Æ)(Ñ)

    15,309      787

Career Education Corp. (Æ)(Ñ)

    31,614      697

Carter’s, Inc. (Æ)

    99,840      2,135

Cato Corp. (The) Class A

    21,476      413

CBS Corp. Class B

    69,600      490

CDI Corp.

    1,600      19

CEC Entertainment, Inc. (Æ)

    481      15

Central Garden and Pet Co. (Æ)

    51,787      470

Charlotte Russe Holding, Inc. (Æ)

    31,304      393

Charming Shoppes, Inc. (Æ)(Ñ)

    13,167      46

Chemed Corp. (Ñ)

    3,800      161

Chico’s FAS, Inc. (Æ)

    57,409      439

Childrens Place Retail Stores, Inc.
(The) (Æ)(Ñ)

    15,000      427

Chipotle Mexican Grill, Inc. Class A (Æ)(Ñ)

    15,575      1,263

Chipotle Mexican Grill, Inc. Class B (Æ)

    13,330      873

Christopher & Banks Corp.

    267,487      1,487

Churchill Downs, Inc.

    36,989      1,288

CKE Restaurants, Inc.

    248,040      2,374

Collective Brands, Inc. (Æ)(Ñ)

    22,010      320

Columbia Sportswear Co. (Ñ)

    43,119      1,325

Copart, Inc. (Æ)

    99,562      3,125

Corinthian Colleges, Inc. (Æ)(Ñ)

    62,625      964

Corrections Corp. of America (Æ)

    124,917      1,765

CRA International, Inc. (Æ)(Ñ)

    19,600      457

Cracker Barrel Old Country Store, Inc. (Ñ)

    13,362      436

Cross Country Healthcare, Inc. (Æ)

    34,222      301

Darden Restaurants, Inc. (Ñ)

    69,500      2,569

DeVry, Inc.

    36,349      1,547

Dice Holdings, Inc. (Æ)

    13,083      52

Dick’s Sporting Goods, Inc. (Æ)(Ñ)

    122,486      2,327

Dillard’s, Inc. Class A (Ñ)

    45,000      347

Dolby Laboratories, Inc. Class A (Æ)(Ñ)

    30,500      1,224

 

34   Russell U.S. Small & Mid Cap Fund

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Dollar Tree, Inc. (Æ)

    115,125      4,874

Dress Barn, Inc. (Æ)(Ñ)

    73,105      1,107

DSW, Inc. Class A (Æ)(Ñ)

    13,700      149

DynCorp International, Inc. Class A (Æ)

    27,265      416

Earthlink, Inc. (Æ)(Ñ)

    238,400      1,807

Electronic Arts, Inc. (Æ)

    147,440      3,000

Elizabeth Arden, Inc. (Æ)

    14,400      125

Ethan Allen Interiors, Inc.

    6,100      82

Ezcorp, Inc. Class A (Æ)

    75,127      931

Family Dollar Stores, Inc.

    8,775      291

Fastenal Co. (Ñ)

    47,592      1,826

Finish Line, Inc. (The) Class A

    67,200      571

Fred’s, Inc. Class A (Ñ)

    4,934      67

FTI Consulting, Inc. (Æ)(Ñ)

    76,248      4,184

Furniture Brands International, Inc. (Ñ)

    50,700      160

G&K Services, Inc. Class A

    3,838      96

Gannett Co., Inc. (Ñ)

    34,532      135

Gap, Inc. (The)

    172,920      2,687

Genesco, Inc. (Æ)(Ñ)

    17,874      407

Geo Group, Inc. (The) (Æ)(Ñ)

    158,410      2,634

Group 1 Automotive, Inc. (Ñ)

    61,060      1,301

Guess?, Inc.

    141,121      3,675

Gymboree Corp. (Æ)(Ñ)

    1,713      59

Harman International Industries, Inc. (Ñ)

    3,261      59

Hasbro, Inc.

    12,829      342

Haverty Furniture Cos., Inc. (Ñ)

    12,600      137

Heidrick & Struggles International, Inc. (Ñ)

    17,600      297

Hewitt Associates, Inc. Class A (Æ)

    74,400      2,333

hhgregg, Inc. (Æ)(Ñ)

    101,200      1,680

Hooker Furniture Corp. (Ñ)

    7,100      83

HOT Topic, Inc. (Æ)(Ñ)

    48,725      596

Insight Enterprises, Inc. (Æ)

    31,500      180

Isle of Capri Casinos, Inc. (Æ)

    27,625      297

ITT Educational Services, Inc. (Æ)(Ñ)

    30,171      3,040

Jack in the Box, Inc. (Æ)

    83,500      2,053

Jarden Corp. (Æ)(Ñ)

    77,600      1,560

Jo-Ann Stores, Inc. (Æ)

    19,457      356

John Wiley & Sons, Inc. Class A

    33,000      1,119

Jones Apparel Group, Inc.

    46,500      430

JOS A Bank Clothiers, Inc. (Æ)(Ñ)

    133,005      5,379

Journal Communications, Inc. Class A

    85,000      132

Kenneth Cole Productions, Inc. Class A (Ñ)

    173,736      1,202

Las Vegas Sands Corp. (Æ)(Ñ)

    229,794      1,797

Lincoln Educational Services Corp. (Æ)(Ñ)

    4,400      73

Liz Claiborne, Inc.

    2,400      11

LKQ Corp. (Æ)(Ñ)

    128,643      2,184

Lumber Liquidators, Inc. (Æ)(Ñ)

    62,100      929

Maidenform Brands, Inc. (Æ)

    20,900      266

Manpower, Inc.

    20,259      873

Monro Muffler, Inc.

    46,500      1,161

Movado Group, Inc. (Ñ)

    67,945      623

National Presto Industries, Inc.

    2,675      191

Netease.com - ADR (Æ)(Ñ)

    111,000      3,350

NetFlix, Inc. (Æ)(Ñ)

    69,100      3,131

New York & Co., Inc. (Æ)

    77,980      452

Newell Rubbermaid, Inc.

    47,900      501

O’Charleys, Inc. (Ñ)

    55,925      390
    

Principal

Amount ($)

or Shares

     

Market

Value
$

O’Reilly Automotive, Inc. (Æ)(Ñ)

    170,544      6,626

On Assignment, Inc. (Æ)

    108,837      383

Orient-Express Hotels, Ltd. Class A (Ñ)

    184,773      1,195

Oxford Industries, Inc.

    5,700      56

Panera Bread Co. Class A (Æ)(Ñ)

    46,800      2,621

Pantry, Inc. (The) (Æ)

    29,306      692

Papa John’s International, Inc. (Æ)

    45,601      1,210

PC Connection, Inc. (Æ)

    16,900      84

Penn National Gaming, Inc. (Æ)

    18,678      635

Perry Ellis International, Inc. (Æ)(Ñ)

    6,500      48

PF Chang’s China Bistro, Inc. (Æ)(Ñ)

    9,639      291

PHH Corp. (Æ)(Ñ)

    56,300      945

Phillips-Van Heusen Corp.

    55,000      1,597

Polo Ralph Lauren Corp. Class A (Ñ)

    28,700      1,545

Pool Corp.

    120,100      2,145

Prestige Brands Holdings, Inc. (Æ)

    62,580      404

PRG-Schultz International, Inc. (Æ)

    22,809      68

RadioShack Corp.

    36,203      510

RC2 Corp. (Æ)

    20,511      232

Red Lion Hotels Corp. (Æ)

    236,168      1,079

Rent-A-Center, Inc. Class A (Æ)

    167,346      3,221

Republic Services, Inc. Class A

    157,996      3,318

Robert Half International, Inc. (Ñ)

    78,169      1,878

Ross Stores, Inc. (Ñ)

    29,080      1,103

RR Donnelley & Sons Co.

    45,700      532

Ruby Tuesday, Inc. (Æ)

    41,000      315

Scholastic Corp. (Ñ)

    19,900      393

School Specialty, Inc. (Æ)(Ñ)

    18,234      342

Shanda Interactive Entertainment, Ltd.
- ADR (Æ)(Ñ)

    18,100      866

Shoe Carnival, Inc. (Æ)

    9,200      107

Sina Corp. (Æ)

    62,936      1,763

Snap-On, Inc.

    45,599      1,547

Sohu.com, Inc. (Æ)(Ñ)

    7,598      396

Spherion Corp. (Æ)

    82,127      295

Stage Stores, Inc.

    94,417      1,157

Stanley Works (The)

    39,000      1,483

Starbucks Corp. (Æ)

    104,980      1,518

Steinway Musical Instruments (Æ)

    501      7

Steven Madden, Ltd. (Æ)

    8,300      244

Stewart Enterprises, Inc. Class A

    625,100      2,182

Tempur-Pedic International, Inc. (Ñ)

    7,321      94

Texas Roadhouse, Inc. Class A (Æ)(Ñ)

    97,950      1,115

Ticketmaster Entertainment, Inc. (Æ)

    6,600      35

Timberland Co. Class A (Æ)

    50,371      818

Toro Co. (Ñ)

    3,496      106

Tractor Supply Co. (Æ)

    16,870      681

TrueBlue, Inc. (Æ)

    31,600      307

Tuesday Morning Corp. (Æ)(Ñ)

    3,100      11

Tween Brands, Inc. (Æ)(Ñ)

    5,600      16

United Online, Inc. (Ñ)

    476,320      2,524

United Stationers, Inc. (Æ)

    15,670      513

Universal Technical Institute, Inc. (Æ)

    34,021      484

Valassis Communications, Inc. (Æ)

    43,200      223

Valueclick, Inc. (Æ)

    31,241      331

VF Corp.

    26,700      1,583

Viad Corp.

    14,051      268

 

Russell U.S. Small & Mid Cap Fund   35

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

VistaPrint, Ltd. (Æ)(Ñ)

    77,125      2,649

Volt Information Sciences, Inc. (Æ)(Ñ)

    10,900      78

Warner Music Group Corp. (Æ)

    47,966      258

Washington Post Co. (The) Class B

    3,605      1,509

Waste Connections, Inc. (Æ)

    145,957      3,763

Watson Wyatt Worldwide, Inc. Class A

    10,190      541

Wendy’s/Arby’s Group, Inc.

    316,239      1,581

WESCO International, Inc. (Æ)

    89,770      2,334

Whirlpool Corp. (Ñ)

    25,000      1,129

Williams-Sonoma, Inc. (Ñ)

    275,520      3,857

WMS Industries, Inc. (Æ)(Ñ)

    33,336      1,070

Wolverine World Wide, Inc.

    31,995      666

World Fuel Services Corp. (Ñ)

    49,053      1,870
         
        217,696
         
Consumer Staples - 2.3%        

Alliance One International, Inc. (Æ)

    381,000      1,429

American Italian Pasta Co. Class A (Æ)

    34,060      1,071

Cal-Maine Foods, Inc. (Ñ)

    22,111      585

Casey’s General Stores, Inc.

    30,080      801

Chiquita Brands International, Inc. (Æ)(Ñ)

    74,534      564

Church & Dwight Co., Inc.

    78,409      4,266

Constellation Brands, Inc. Class A (Æ)

    24,000      278

Dean Foods Co. (Æ)

    86,923      1,799

Del Monte Foods Co.

    582,485      4,398

Diamond Foods, Inc. (Ñ)

    23,150      606

Fresh Del Monte Produce, Inc. (Æ)

    74,600      1,083

Great Atlantic & Pacific Tea Co. (Æ)(Ñ)

    43,600      320

Green Mountain Coffee Roasters,
Inc. (Æ)(Ñ)

    44,175      3,194

Hansen Natural Corp. (Æ)

    17,575      716

J&J Snack Foods Corp.

    18,313      710

M&F Worldwide Corp. (Æ)

    5,716      91

Nash Finch Co.

    23,538      690

NBTY, Inc. (Æ)

    5,370      139

Omega Protein Corp. (Æ)

    4,400      14

Ruddick Corp. (Ñ)

    19,168      492

Schweitzer-Mauduit International, Inc. (Ñ)

    24,700      568

Spartan Stores, Inc.

    22,500      366

Tootsie Roll Industries, Inc.

    20,420      497

TreeHouse Foods, Inc. (Æ)(Ñ)

    75,705      2,013

Weis Markets, Inc.

    11,854      439

Winn-Dixie Stores, Inc. (Æ)

    34,900      400
         
        27,529
         
Financial Services - 14.2%        

Advance America Cash Advance Centers, Inc.

    99,352      397

Affiliated Managers Group, Inc. (Æ)(Ñ)

    95,800      5,446

Allied Capital Corp.

    89,000      199

Allied World Assurance Co. Holdings, Ltd.

    33,000      1,226

American Capital Agency Corp. New (ö)

    4,800      90

American Equity Investment Life Holding
Co. (Ñ)

    146,700      826

American Financial Group, Inc.

    64,300      1,130

Ameriprise Financial, Inc.

    62,680      1,652

Amerisafe, Inc. (Æ)

    20,939      322
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Amtrust Financial Services, Inc.

    25,593      234

Annaly Capital Management, Inc. (ö)

    64,712      911

Anworth Mortgage Asset Corp. (ö)

    408,203      2,625

Apollo Investment Corp.

    162,100      778

Arch Capital Group, Ltd. (Æ)

    37,342      2,158

Ares Capital Corp. (Ñ)

    558,962      3,281

Argo Group International Holdings, Ltd. (Æ)

    7,900      221

Arrow Financial Corp. (Ñ)

    5,333      141

Arthur J Gallagher & Co.

    64,800      1,457

Ashford Hospitality Trust, Inc. (ö)(Ñ)

    44,100      133

Aspen Insurance Holdings, Ltd.

    64,067      1,511

Astoria Financial Corp.

    16,450      136

AvalonBay Communities, Inc. (ö)(Ñ)

    19,500      1,108

Bancfirst Corp. (Ñ)

    6,780      290

Banco Latinoamericano de Exportaciones SA Class E (Ñ)

    37,400      460

Bancorpsouth, Inc. (Ñ)

    4,179      97

Bank of Hawaii Corp. (Ñ)

    37,700      1,325

Bank of the Ozarks, Inc. (Ñ)

    11,168      277

Berkshire Hills Bancorp, Inc.

    7,300      165

BOK Financial Corp. (Ñ)

    85,870      3,234

Boston Properties, Inc. (ö)

    13,900      687

Brandywine Realty Trust (ö)

    116,200      719

Broadridge Financial Solutions, Inc.

    12,309      238

Brookline Bancorp, Inc.

    43,283      429

Calamos Asset Management, Inc. Class A

    88,691      1,012

Capitol Bancorp, Ltd. (Ñ)

    1,100      4

Capitol Federal Financial (Ñ)

    8,200      319

CapLease, Inc. (ö)(Ñ)

    60,100      179

Capstead Mortgage Corp. (ö)

    121,681      1,386

Cash America International, Inc.

    10,224      229

Cathay General Bancorp (Ñ)

    27,000      303

Cedar Shopping Centers, Inc. (ö)

    64,300      231

Center Financial Corp.

    5,564      14

Central Pacific Financial Corp. (Ñ)

    41,200      241

Cigna Corp.

    78,200      1,541

City Holding Co. (Ñ)

    21,438      632

CNA Surety Corp. (Æ)

    136,259      2,623

Cohen & Steers, Inc.

    225,857      3,325

Colonial Properties Trust (ö)(Ñ)

    83,159      602

Commerce Bancshares, Inc.

    50,157      1,660

Community Bank System, Inc. (Ñ)

    24,001      395

Community Trust Bancorp, Inc.

    8,000      242

Corporate Office Properties Trust
SBI MD (ö)(Ñ)

    8,804      269

Crawford & Co. Class B (Æ)(Ñ)

    5,600      33

Cullen/Frost Bankers, Inc. (Ñ)

    63,943      3,011

CVB Financial Corp. (Ñ)

    19,796      119

Cybersource Corp. (Æ)

    156,095      2,281

Delphi Financial Group, Inc. Class A

    172,811      2,984

Deluxe Corp.

    173,247      2,512

Developers Diversified Realty Corp. (ö)

    33,800      140

DiamondRock Hospitality Co. (ö)

    38,200      248

Dime Community Bancshares (Ñ)

    48,253      402

Duke Realty Corp. (ö)(Ñ)

    157,300      1,537

DuPont Fabros Technology, Inc. (ö)

    150,469      1,277

 

36   Russell U.S. Small & Mid Cap Fund

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Education Realty Trust, Inc. (ö)

    16,900      79

Electro Rent Corp.

    233,015      2,230

Employers Holdings, Inc.

    121,600      1,014

Encore Capital Group, Inc. (Æ)(Ñ)

    13,800      121

Endurance Specialty Holdings, Ltd. (Ñ)

    43,200      1,130

Entertainment Properties Trust (ö)(Ñ)

    2,007      46

Equity Lifestyle Properties, Inc. (ö)(Ñ)

    6,983      277

ESSA Bancorp, Inc.

    7,533      103

Evercore Partners, Inc. Class A

    59,700      1,127

Extra Space Storage, Inc. (ö)

    7,400      53

Factset Research Systems, Inc.

    11,475      615

FBL Financial Group, Inc. Class A (Ñ)

    18,100      104

Federated Investors, Inc. Class B (Ñ)

    13,590      311

FelCor Lodging Trust, Inc. (ö)

    98,500      195

First Cash Financial Services, Inc. (Æ)

    13,059      215

First Community Bancshares, Inc. (Ñ)

    300      4

First Financial Bancorp

    22,300      241

First Financial Bankshares, Inc. (Ñ)

    1,813      89

First Industrial Realty Trust, Inc. (ö)(Ñ)

    4,260      16

First Niagara Financial Group, Inc. (Ñ)

    193,200      2,616

Flushing Financial Corp.

    96,976      893

Franklin Street Properties Corp. (ö)(Ñ)

    145,905      1,948

Fulton Financial Corp. (Ñ)

    29,610      196

Getty Realty Corp. (ö)

    14,057      276

Glimcher Realty Trust (ö)(Ñ)

    2,900      7

Global Payments, Inc.

    65,331      2,095

Green Bankshares, Inc. (Ñ)

    14,868      126

Greenhill & Co., Inc. (Ñ)

    7,800      605

H&E Equipment Services, Inc. (Æ)

    20,700      156

Hallmark Financial Services (Æ)

    7,657      51

Hanover Insurance Group, Inc. (The)

    39,400      1,181

Harleysville Group, Inc.

    5,429      157

Hatteras Financial Corp. (ö)(Ñ)

    97,325      2,343

Hercules Technology Growth Capital, Inc.

    115,774      696

Hersha Hospitality Trust (ö)

    20,200      74

Horace Mann Educators Corp.

    183,600      1,612

Hospitality Properties Trust (ö)(Ñ)

    105,100      1,286

HRPT Properties Trust (ö)

    260,313      1,122

Iberiabank Corp.

    5,000      228

Independent Bank Corp. (Ñ)

    4,445      89

Inland Real Estate Corp. (ö)(Ñ)

    31,100      273

Interactive Data Corp.

    8,860      199

Intersections, Inc. (Æ)

    182,425      600

Investment Technology Group, Inc. (Æ)

    7,295      166

IPC Holdings, Ltd.

    95,600      2,489

Jack Henry & Associates, Inc.

    6,645      120

Kite Realty Group Trust (ö)

    12,900      45

Knight Capital Group, Inc. Class A (Æ)

    260,072      4,029

Kohlberg Capital Corp.

    141,681      504

LaBranche & Co., Inc. (Æ)

    48,300      202

Lazard, Ltd. Class A

    59,885      1,635

Legg Mason, Inc.

    48,900      981

Lexington Realty Trust (ö)(Ñ)

    133,109      512

Life Partners Holdings, Inc.

    9,400      176

LTC Properties, Inc. (ö)

    17,643      318

M&T Bank Corp. (Ñ)

    28,000      1,469

Mack-Cali Realty Corp. (ö)

    41,600      1,117
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Maguire Properties, Inc. (Æ)(ö)

    67,200      73

MarketAxess Holdings, Inc. (Æ)

    205,221      1,968

Meadowbrook Insurance Group, Inc.

    44,000      262

Medical Properties Trust, Inc. (ö)(Ñ)

    73,400      392

MFA Financial, Inc. (ö)

    190,157      1,120

Montpelier Re Holdings, Ltd.

    22,200      277

Moody’s Corp.

    34,432      1,016

National Financial Partners Corp. (Ñ)

    46,400      328

National Health Investors, Inc. (ö)

    8,798      236

National Interstate Corp.

    5,820      94

National Penn Bancshares, Inc. (Ñ)

    60,458      489

National Retail Properties, Inc. (ö)

    86,627      1,537

Navigators Group, Inc. (Æ)

    9,568      434

NBT Bancorp, Inc. (Ñ)

    15,118      358

Nelnet, Inc. Class A (Æ)

    44,000      265

NewAlliance Bancshares, Inc. (Ñ)

    66,857      863

NGP Capital Resources Co.

    8,299      58

NorthStar Realty Finance Corp. (ö)(Ñ)

    191,792      608

OceanFirst Financial Corp.

    5,691      69

Odyssey Re Holdings Corp.

    10,400      398

Old National Bancorp (Ñ)

    38,405      523

Omega Healthcare Investors, Inc. (ö)

    38,139      600

optionsXpress Holdings, Inc.

    18,677      307

Oriental Financial Group, Inc. (Ñ)

    222,583      2,068

Pacific Capital Bancorp NA (Ñ)

    4,600      32

PacWest Bancorp (Ñ)

    26,500      386

Parkway Properties, Inc. (ö)

    29,700      412

PartnerRe, Ltd. - ADR

    12,800      873

PennantPark Investment Corp. (Ñ)

    433,288      2,379

Pennsylvania Real Estate Investment
Trust (ö)(Ñ)

    22,600      175

Penson Worldwide, Inc. (Æ)

    11,470      116

Piper Jaffray Cos. (Æ)(Ñ)

    61,513      2,133

Platinum Underwriters Holdings, Ltd.

    39,883      1,147

Potlatch Corp. (ö)

    58,382      1,717

ProAssurance Corp. (Æ)

    5,466      240

ProLogis (ö)(Ñ)

    72,300      659

Prosperity Bancshares, Inc. (Ñ)

    50,141      1,392

Protective Life Corp. (Ñ)

    51,900      445

Provident Financial Services, Inc.

    173,182      1,848

PS Business Parks, Inc. (ö)

    31,057      1,359

RAIT Financial Trust (ö)(Ñ)

    23,900      35

Raymond James Financial, Inc. (Ñ)

    103,255      1,620

Realty Income Corp. (ö)(Ñ)

    11,856      265

RenaissanceRe Holdings, Ltd.

    19,200      934

Renasant Corp. (Ñ)

    13,100      185

Ryder System, Inc.

    77,175      2,137

S1 Corp. (Æ)

    99,289      616

Sanders Morris Harris Group, Inc.

    8,319      38

Sandy Spring Bancorp, Inc. (Ñ)

    13,200      215

Santander BanCorp (Ñ)

    10,100      68

SCBT Financial Corp. (Ñ)

    7,650      176

SeaBright Insurance Holdings, Inc. (Æ)

    22,320      207

SEI Investments Co.

    141,500      1,985

Selective Insurance Group

    1,739      26

Senior Housing Properties Trust (ö)

    87,404      1,433

Simmons First National Corp. Class A

    5,868      152

 

Russell U.S. Small & Mid Cap Fund   37

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Southside Bancshares, Inc.

    5,954      127

Southwest Bancorp, Inc.

    9,700      66

Sovran Self Storage, Inc. (ö)

    33,700      760

StanCorp Financial Group, Inc.

    51,294      1,407

StellarOne Corp. (Ñ)

    86,003      1,107

Sterling Bancorp

    46,300      530

Sterling Bancshares, Inc.

    50,120      333

Stewart Information Services Corp.

    28,000      633

Stifel Financial Corp. (Æ)

    2,078      102

Strategic Hotels & Resorts, Inc. (ö)

    41,500      35

Sun Bancorp, Inc. (Æ)

    15,766      104

Sunstone Hotel Investors, Inc. (ö)(Ñ)

    60,013      317

Susquehanna Bancshares, Inc. (Ñ)

    33,289      268

SVB Financial Group (Æ)(Ñ)

    115,127      2,390

Synovus Financial Corp. (Ñ)

    324,200      1,047

Tanger Factory Outlet Centers (ö)(Ñ)

    3,716      124

TCF Financial Corp.

    2,800      39

Texas Capital Bancshares, Inc. (Æ)(Ñ)

    162,679      2,278

Tompkins Financial Corp. (Ñ)

    3,700      156

Tower Group, Inc.

    65,800      1,789

Transatlantic Holdings, Inc.

    14,642      555

U-Store-It Trust (ö)

    38,400      132

UMB Financial Corp.

    5,153      236

United America Indemnity, Ltd. Class A (Æ)

    31,561      160

United Financial Bancorp, Inc.

    3,148      42

United Western Bancorp, Inc.

    49,800      461

Universal American Corp. (Æ)(Ñ)

    45,900      474

Unum Group

    45,100      737

Urstadt Biddle Properties, Inc. Class A (ö)

    8,300      128

Validus Holdings, Ltd.

    10,601      237

ViewPoint Financial Group

    79,527      1,237

Waddell & Reed Financial, Inc. Class A

    86,789      1,945

Walter Investment Management Corp. (Æ)(ö)

    12,685      101

Washington Trust Bancorp, Inc.

    900      16

WesBanco, Inc. (Ñ)

    19,600      390

Western Alliance Bancorp (Æ)(Ñ)

    5,400      35

Westfield Financial, Inc.

    4,600      43

Whitney Holding Corp. (Ñ)

    105,417      1,261

Wilmington Trust Corp.

    38,900      564

Wilshire Bancorp, Inc. (Ñ)

    14,200      57

World Acceptance Corp. (Æ)(Ñ)

    10,107      300

WSFS Financial Corp.

    13,446      365

Zenith National Insurance Corp.

    108,000      2,461
         
        169,513
         
Health Care - 11.1%        

Allscripts-Misys Healthcare Solutions, Inc. (Ñ)

    249,831      3,103

American Medical Systems Holdings,
Inc. (Æ)(Ñ)

    30,885      382

AMERIGROUP Corp. Class A (Æ)

    43,517      1,300

Amsurg Corp. Class A (Æ)

    25,332      520

Analogic Corp.

    35,796      1,303

Angiodynamics, Inc. (Æ)

    15,568      197

Arqule, Inc. (Æ)

    29,690      132

Assisted Living Concepts, Inc. (Æ)

    9,698      192

athenahealth, Inc. (Æ)(Ñ)

    67,845      2,157
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Bio-Rad Laboratories, Inc. Class A (Æ)

    5,327      371

Bio-Reference Labs, Inc. (Æ)(Ñ)

    1,233      32

Capital Senior Living Corp. (Æ)

    13,816      55

Catalyst Health Solutions, Inc. (Æ)

    11,032      249

Celera Corp. (Æ)

    76,921      622

Centene Corp. (Æ)

    157,604      2,895

Cephalon, Inc. (Æ)(Ñ)

    42,530      2,790

Cerner Corp. (Æ)(Ñ)

    27,150      1,461

China Sky One Medical, Inc. (Æ)(Ñ)

    7,245      102

Conmed Corp. (Æ)

    6,788      90

Coventry Health Care, Inc. (Æ)

    31,278      498

Cubist Pharmaceuticals, Inc. (Æ)

    25,089      416

Cynosure, Inc. Class A (Æ)

    192,260      1,177

DaVita, Inc. (Æ)

    35,389      1,641

Dentsply International, Inc. (Ñ)

    59,563      1,705

Depomed, Inc. (Æ)

    46,868      97

Edwards Lifesciences Corp. (Æ)

    27,590      1,749

Endo Pharmaceuticals Holdings, Inc. (Æ)

    139,986      2,315

Ensign Group, Inc. (The)

    10,495      163

eResearchTechnology, Inc. (Æ)

    224,404      1,138

Gen-Probe, Inc. (Æ)

    85,155      4,101

Genomic Health, Inc. (Æ)

    28,975      652

Gentiva Health Services, Inc. (Æ)

    130,320      2,076

Haemonetics Corp. (Æ)

    29,829      1,540

Hanger Orthopedic Group, Inc. (Æ)

    13,800      192

Harvard Bioscience, Inc. (Æ)

    445,572      1,292

Health Management Associates, Inc.
Class A (Æ)

    74,496      348

Healthsouth Corp. (Æ)(Ñ)

    28,593      268

Healthspring, Inc. (Æ)

    156,640      1,446

HMS Holdings Corp. (Æ)

    67,760      2,031

Hologic, Inc. (Æ)

    122,533      1,821

Humana, Inc. (Æ)

    26,300      757

ICU Medical, Inc. (Æ)

    11,400      429

Idexx Laboratories, Inc. (Æ)(Ñ)

    66,112      2,598

Illumina, Inc. (Æ)(Ñ)

    257,117      9,603

Immucor, Inc. (Æ)

    73,739      1,201

Invacare Corp. (Ñ)

    30,719      473

IPC The Hospitalist Co., Inc. (Æ)

    98,850      1,812

Isis Pharmaceuticals, Inc. (Æ)

    41,272      647

Kendle International, Inc. (Æ)(Ñ)

    16,942      151

Kensey Nash Corp. (Æ)

    2,315      48

Kindred Healthcare, Inc. (Æ)

    142,828      1,860

King Pharmaceuticals, Inc. (Æ)

    411,607      3,243

Laboratory Corp. of America
Holdings (Æ)(Ñ)

    39,889      2,559

LHC Group, Inc. (Æ)(Ñ)

    11,381      260

Life Technologies Corp. (Æ)

    49,269      1,838

Lincare Holdings, Inc. (Æ)(Ñ)

    67,000      1,617

Magellan Health Services, Inc. (Æ)

    45,276      1,338

Martek Biosciences Corp. (Æ)

    7,111      130

Masimo Corp. (Æ)(Ñ)

    59,890      1,731

Matrixx Initiatives, Inc. (Æ)(Ñ)

    20,800      356

Maxygen, Inc. (Æ)

    8,238      48

MedAssets, Inc. (Æ)

    118,700      2,046

Medcath Corp. (Æ)

    10,428      106

Mednax, Inc. (Æ)

    60,765      2,181

 

38   Russell U.S. Small & Mid Cap Fund

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Merit Medical Systems, Inc. (Æ)

    31,500      489

Molina Healthcare, Inc. (Æ)(Ñ)

    55,031      1,191

Mylan, Inc. (Æ)(Ñ)

    29,750      394

Myriad Genetics, Inc. (Æ)

    23,399      908

Nabi Biopharmaceuticals (Æ)(Ñ)

    110,900      382

Nighthawk Radiology Holdings, Inc. (Æ)

    28,790      103

Noven Pharmaceuticals, Inc. (Æ)

    2,711      28

NPS Pharmaceuticals, Inc. (Æ)

    100,638      348

NuVasive, Inc. (Æ)(Ñ)

    79,490      3,013

Odyssey HealthCare, Inc. (Æ)

    52,000      539

Omnicare, Inc. (Ñ)

    120,900      3,108

OSI Pharmaceuticals, Inc. (Æ)(Ñ)

    14,655      492

Owens & Minor, Inc.

    4,900      170

Par Pharmaceutical Cos., Inc. (Æ)

    45,062      484

Patterson Cos., Inc. (Æ)(Ñ)

    185,643      3,798

PDL BioPharma, Inc. (Ñ)

    158,156      1,131

Perrigo Co.

    34,500      894

Pharmaceutical Product Development, Inc.

    17,574      345

PharMerica Corp. (Æ)(Ñ)

    23,100      422

Phase Forward, Inc. (Æ)

    13,703      195

PSS World Medical, Inc. (Æ)

    4,372      63

Quality Systems, Inc. (Ñ)

    63,425      3,401

Questcor Pharmaceuticals, Inc. (Æ)

    42,977      193

Quidel Corp. (Æ)(Ñ)

    15,077      176

RehabCare Group, Inc. (Æ)

    32,100      536

Res-Care, Inc. (Æ)

    14,441      231

ResMed, Inc. (Æ)

    106,094      4,079

Sirona Dental Systems, Inc. (Æ)(Ñ)

    20,024      328

SonoSite, Inc. (Æ)

    14,255      257

Stericycle, Inc. (Æ)(Ñ)

    126,612      5,961

STERIS Corp. (Ñ)

    126,090      3,039

Sun Healthcare Group, Inc. (Æ)

    32,438      275

SXC Health Solutions Corp. (Æ)

    49,480      991

Techne Corp.

    9,900      566

United Therapeutics Corp. (Æ)(Ñ)

    25,316      1,590

Universal Health Services, Inc. Class B

    14,000      706

Valeant Pharmaceuticals
International (Æ)(Ñ)

    78,700      1,319

Varian Medical Systems, Inc. (Æ)

    18,100      604

VCA Antech, Inc. (Æ)(Ñ)

    159,631      3,994

Viropharma, Inc. (Æ)(Ñ)

    162,772      916

Watson Pharmaceuticals, Inc.
Class B (Æ)(Ñ)

    113,210      3,503
         
        132,813
         
Integrated Oils - 0.3%        

Noble Corp.

    38,500      1,052

Sunoco Logistics Partners, LP

    30,100      1,568

Vaalco Energy, Inc. (Æ)

    165,879      791
         
        3,411
         
Materials and Processing - 9.5%     

Acuity Brands, Inc. (Ñ)

    21,697      624

Agrium, Inc. (Ñ)

    29,800      1,282

Airgas, Inc.

    93,219      4,020

Albany International Corp. Class A

    30,200      280

Albemarle Corp.

    71,000      1,904
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Allegheny Technologies, Inc. (Ñ)

    37,005      1,211

Andersons, Inc. (The) (Ñ)

    21,000      337

Apogee Enterprises, Inc. (Ñ)

    162,306      2,175

Arch Chemicals, Inc.

    32,800      793

Armstrong World Industries, Inc. (Æ)

    11,176      203

Ashland, Inc. (Ñ)

    51,800      1,138

Beacon Roofing Supply, Inc. (Æ)(Ñ)

    16,277      259

Brady Corp. Class A

    20,219      426

Buckeye Technologies, Inc. (Æ)

    84,800      437

Cabot Corp.

    146,500      2,139

Carpenter Technology Corp.

    52,314      1,081

Ceradyne, Inc. (Æ)

    3,571      62

CIRCOR International, Inc.

    3,417      88

Cliffs Natural Resources, Inc.

    1,880      43

Cogdell Spencer, Inc. (ö)

    10,800      67

Comfort Systems USA, Inc.

    80,200      865

Commercial Metals Co. (Ñ)

    93,000      1,384

Compass Minerals International, Inc.

    4,994      241

Corn Products International, Inc.

    95,000      2,270

Domtar Corp. (Æ)

    321,800      586

Dycom Industries, Inc. (Æ)

    52,706      444

Eagle Materials, Inc.

    7,250      202

Ecolab, Inc.

    81,904      3,157

EMCOR Group, Inc. (Æ)

    82,264      1,710

Encore Wire Corp. (Ñ)

    30,683      670

Energizer Holdings, Inc. (Æ)(Ñ)

    48,961      2,805

EnerSys (Æ)

    30,300      517

Ennis, Inc.

    97,500      877

Exide Technologies (Æ)

    280,500      1,523

FMC Corp.

    43,300      2,110

Foster Wheeler AG (Æ)

    151,049      3,252

Gerdau Ameristeel Corp.

    254,500      1,331

Gibraltar Industries, Inc. (Ñ)

    28,120      188

Glatfelter

    51,063      453

Greif, Inc. Class A

    40,600      1,838

HB Fuller Co. (Ñ)

    15,300      270

Horsehead Holding Corp. (Æ)

    29,600      211

HQ Sustainable Maritime Industries, Inc. (Æ)

    309      3

IAMGOLD Corp.

    102,724      821

Innophos Holdings, Inc.

    22,187      329

Innospec, Inc.

    9,234      73

Insituform Technologies, Inc. Class A (Æ)(Ñ)

    114,338      1,753

Insteel Industries, Inc.

    118,323      881

Intrepid Potash, Inc. (Æ)(Ñ)

    139,000      3,432

Jacobs Engineering Group, Inc. (Æ)

    87,920      3,344

Kaydon Corp.

    23,900      764

KBR, Inc.

    156,156      2,439

Koppers Holdings, Inc.

    12,337      234

Layne Christensen Co. (Æ)

    58,892      1,276

LB Foster Co. Class A (Æ)

    5,700      187

Lennox International, Inc. (Ñ)

    10,495      335

Lubrizol Corp.

    81,969      3,543

McDermott International, Inc. (Æ)

    376,506      6,077

Momenta Pharmaceuticals, Inc. (Æ)

    6,254      70

Mueller Industries, Inc.

    20,134      442

Mueller Water Products, Inc. Class A

    291,000      1,219

 

Russell U.S. Small & Mid Cap Fund   39

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Myers Industries, Inc.

    140,847      1,413

Nalco Holding Co.

    84,151      1,373

Olin Corp.

    141,800      1,787

Olympic Steel, Inc. (Ñ)

    12,900      237

OM Group, Inc. (Æ)(Ñ)

    81,992      2,284

Pactiv Corp. (Æ)

    99,727      2,180

Pan American Silver Corp. (Æ)(Ñ)

    23,292      384

Perini Corp. (Æ)(Ñ)

    118,100      2,043

PolyOne Corp. (Æ)

    19,000      52

Quaker Chemical Corp.

    7,500      88

Quanex Building Products Corp.

    130,600      1,339

Quanta Services, Inc. (Æ)

    70,450      1,601

Schnitzer Steel Industries, Inc. Class A

    33,000      1,635

Schulman A, Inc.

    96,472      1,514

Shaw Group, Inc. (The) (Æ)(Ñ)

    45,733      1,533

Silgan Holdings, Inc.

    63,578      2,956

Sims Metal Management, Ltd. - ADR

    126,362      1,827

Sonoco Products Co.

    53,600      1,308

Spartech Corp.

    14,500      57

Standard Register Co. (The) (Ñ)

    20,200      105

Steel Dynamics, Inc. (Ñ)

    332,316      4,137

Stepan Co.

    3,200      127

Timken Co.

    40,957      659

Titanium Metals Corp. (Ñ)

    173,683      1,179

Tredegar Corp.

    7,717      136

United States Steel Corp. (Ñ)

    5,500      146

Universal Forest Products, Inc. (Ñ)

    13,400      450

URS Corp. (Æ)

    182,309      8,033

US Concrete, Inc. (Æ)(Ñ)

    8,936      18

Wausau Paper Corp.

    5,100      45
         
        113,341
         
Miscellaneous - 0.8%        

Brunswick Corp.

    147,000      879

Carlisle Cos., Inc.

    15,848      360

Compass Diversified Holdings

    44,694      400

Kaman Corp. Class A

    102,104      1,727

Lancaster Colony Corp.

    40,058      1,754

Teleflex, Inc.

    50,100      2,153

Walter Energy, Inc.

    8,457      193

Wesco Financial Corp.

    5,725      1,711
         
        9,177
         
Other Energy - 5.2%        

Alpha Natural Resources, Inc. (Æ)

    98,935      2,026

Arena Resources, Inc. (Æ)(Ñ)

    56,769      1,628

Atwood Oceanics, Inc. (Æ)(Ñ)

    49,477      1,104

Berry Petroleum Co. Class A (Ñ)

    101,300      1,669

BJ Services Co.

    87,898      1,221

Bolt Technology Corp. (Æ)(Ñ)

    107,331      1,092

Bronco Drilling Co., Inc. (Æ)(Ñ)

    13,397      74

Cameron International Corp. (Æ)

    42,500      1,087

CARBO Ceramics, Inc.

    42,000      1,290

Cimarex Energy Co. (Ñ)

    101,965      2,743

Clayton Williams Energy, Inc. (Æ)

    5,208      156

Complete Production Services, Inc. (Æ)

    10,200      68

Comstock Resources, Inc. (Æ)

    14,184      489

Concho Resources, Inc. (Æ)

    54,175      1,486
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Continental Resources, Inc. (Æ)(Ñ)

    109,150      2,549

Core Laboratories NV (Ñ)

    27,228      2,266

CVR Energy, Inc. (Æ)(Ñ)

    50,961      375

Dawson Geophysical Co. (Æ)(Ñ)

    136,865      2,691

Delek US Holdings, Inc.

    14,900      153

Dril-Quip, Inc. (Æ)

    48,000      1,650

Enbridge Energy Partners, LP Class A (Ñ)

    49,270      1,787

Encore Acquisition Co. (Æ)

    2,900      85

ENSCO International, Inc.

    2,730      77

EXCO Resources, Inc. (Æ)

    87,547      1,031

Exterran Holdings, Inc. (Æ)(Ñ)

    27,456      567

FMC Technologies, Inc. (Æ)

    44,835      1,535

Geokinetics, Inc. (Æ)

    136,811      644

Goodrich Petroleum Corp. (Æ)

    51,000      1,169

GT Solar International, Inc. (Æ)

    76,125      540

Helmerich & Payne, Inc. (Ñ)

    42,500      1,310

Key Energy Services, Inc. (Æ)

    83,205      365

Mariner Energy, Inc. (Æ)(Ñ)

    70,800      806

Matrix Service Co. (Æ)

    6,605      63

McMoRan Exploration Co. (Æ)

    24,563      135

Newfield Exploration Co. (Æ)

    54,500      1,699

Oceaneering International, Inc. (Æ)

    105,797      4,821

Oil States International, Inc. (Æ)

    53,600      1,013

Parker Drilling Co. (Æ)

    96,400      266

Patterson-UTI Energy, Inc. (Ñ)

    363,430      4,619

Penn Virginia Corp.

    164,400      2,313

Penn Virginia GP Holdings, LP (Ñ)

    4,600      55

Reliant Energy, Inc. (Æ)

    26,900      133

Rosetta Resources, Inc. (Æ)

    14,906      105

Rowan Cos., Inc. (Ñ)

    78,197      1,221

RPC, Inc.

    76,150      815

Stone Energy Corp. (Æ)

    16,700      72

Superior Energy Services, Inc. (Æ)

    83,522      1,605

Teekay Tankers, Ltd. (Ñ)

    62,000      748

TEPPCO Partners, LP (Ñ)

    66,000      1,797

Union Drilling, Inc. (Æ)

    14,300      86

Unit Corp. (Æ)(Ñ)

    33,500      914

W&T Offshore, Inc. (Ñ)

    9,334      87

Western Refining, Inc. (Æ)(Ñ)

    36,553      460

Whiting Petroleum Corp. (Æ)

    45,400      1,487

XTO Energy, Inc.

    44,861      1,555
         
        61,802
         
Producer Durables - 5.1%        

AGCO Corp. (Æ)

    46,900      1,140

Altra Holdings, Inc. (Æ)

    177,089      969

AM Castle & Co.

    11,000      107

Ametek, Inc.

    34,000      1,095

AO Smith Corp.

    47,067      1,463

Applied Signal Technology, Inc.

    29,900      591

Argon ST, Inc. (Æ)(Ñ)

    19,600      400

Arris Group, Inc. (Æ)

    59,204      632

Astec Industries, Inc. (Æ)(Ñ)

    31,135      960

Baldor Electric Co.

    112,900      2,619

BE Aerospace, Inc. (Æ)

    62,983      680

Cascade Corp. (Ñ)

    7,500      181

Chart Industries, Inc. (Æ)

    39,984      553

Cognex Corp.

    11,255      158

 

40   Russell U.S. Small & Mid Cap Fund

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Cohu, Inc.

    159,969      1,561

Columbus McKinnon Corp. (Æ)

    82,828      1,073

CommScope, Inc. (Æ)(Ñ)

    89,105      2,237

Crane Co.

    17,017      393

CTS Corp.

    49,000      297

Darling International, Inc. (Æ)

    63,622      364

Dionex Corp. (Æ)(Ñ)

    8,490      535

Dover Corp.

    41,000      1,262

DR Horton, Inc.

    109,428      1,428

Ducommun, Inc.

    9,100      158

Electro Scientific Industries, Inc. (Æ)(Ñ)

    327,475      2,816

Empresa Brasileira de Aeronautica
SA - ADR (Æ)

    53,331      865

EnergySolutions, Inc.

    29,100      282

EnPro Industries, Inc. (Æ)(Ñ)

    6,719      107

Entegris, Inc. (Æ)

    49,200      73

Esterline Technologies Corp. (Æ)

    46,512      1,226

Flowserve Corp.

    15,800      1,073

Franklin Electric Co., Inc.

    5,500      131

Gardner Denver, Inc. (Æ)

    14,854      395

GrafTech International, Ltd. (Æ)

    65,687      577

Herman Miller, Inc.

    40,790      607

HNI Corp. (Ñ)

    12,213      189

IDEX Corp.

    43,000      1,086

Joy Global, Inc.

    64,200      1,637

Kimball International, Inc. Class B

    169,459      930

Knoll, Inc.

    11,534      82

Ladish Co., Inc. (Æ)

    11,300      86

Lam Research Corp. (Æ)(Ñ)

    114,764      3,200

Lennar Corp. Class A

    217,100      2,115

Lexmark International, Inc. Class A (Æ)(Ñ)

    63,700      1,250

Lincoln Electric Holdings, Inc. (Ñ)

    25,500      1,135

LTX-Credence Corp. (Æ)

    29,346      14

MasTec, Inc. (Æ)

    162,975      2,039

MDC Holdings, Inc.

    9,627      329

Meritage Homes Corp. (Æ)(Ñ)

    32,500      676

NACCO Industries, Inc. Class A

    32,571      1,246

NVR, Inc. (Æ)(Ñ)

    1,300      657

Perceptron, Inc. (Æ)

    354,025      1,278

Pitney Bowes, Inc.

    65,703      1,612

Powell Industries, Inc. (Æ)

    8,412      303

Pulte Homes, Inc. (Ñ)

    65,803      757

Ritchie Bros Auctioneers, Inc. (Ñ)

    31,670      709

Robbins & Myers, Inc.

    114,857      2,177

SBA Communications Corp. Class A (Æ)(Ñ)

    136,063      3,429

Spirit Aerosystems Holdings, Inc.
Class A (Æ)(Ñ)

    105,200      1,341

Steelcase, Inc. Class A (Ñ)

    59,100      268

Symmetricom, Inc. (Æ)

    33,423      166

TAL International Group, Inc. (Ñ)

    4,600      44

Technitrol, Inc.

    7,902      32

Tecumseh Products Co. Class A (Æ)(Ñ)

    9,888      101

Teradyne, Inc. (Æ)

    13,232      79

Thomas & Betts Corp. (Æ)

    80,181      2,495

Ultratech, Inc. (Æ)

    28,917      391
         
        60,861
         
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Technology - 15.2%        

3Com Corp. (Æ)

    685,223      2,775

ACI Worldwide, Inc. (Æ)

    89,185      1,540

Acxiom Corp.

    196,454      1,896

Adaptec, Inc. (Æ)

    621,472      1,777

ADC Telecommunications, Inc. (Æ)(Ñ)

    60,404      445

Adtran, Inc.

    3,651      77

Affiliated Computer Services, Inc. Class A (Æ)

    76,213      3,687

Akamai Technologies, Inc. (Æ)(Ñ)

    36,200      797

Amdocs, Ltd. (Æ)

    54,500      1,141

American Reprographics Co. (Æ)

    79,395      512

Amkor Technology, Inc. (Æ)(Ñ)

    99,200      428

Amphenol Corp. Class A

    174,173      5,894

Ansys, Inc. (Æ)

    57,052      1,576

ArcSight, Inc. (Æ)(Ñ)

    130,950      1,977

Ariba, Inc. (Æ)

    170,870      1,642

Arrow Electronics, Inc. (Æ)

    60,400      1,373

AsiaInfo Holdings, Inc. (Æ)

    102,325      1,714

Avnet, Inc. (Æ)

    98,399      2,154

AVX Corp.

    215,500      2,157

Benchmark Electronics, Inc. (Æ)

    117,800      1,429

Broadcom Corp. Class A (Æ)(Ñ)

    212,596      4,930

CACI International, Inc. Class A (Æ)

    2,145      85

Cavium Networks, Inc. (Æ)

    30,350      382

Celestica, Inc. (Æ)

    167,251      988

Check Point Software Technologies (Æ)

    83,500      1,935

Ciber, Inc. (Æ)

    263,000      849

ClearOne Communications, Inc. (Æ)

    333      1

Cogo Group, Inc. (Æ)

    51,300      420

Coherent, Inc. (Æ)(Ñ)

    12,474      237

Commvault Systems, Inc. (Æ)

    10,092      126

Compellent Technologies, Inc. (Æ)(Ñ)

    24,650      275

Compuware Corp. (Æ)

    175,439      1,312

COMSYS IT Partners, Inc. (Æ)

    3,700      20

Concur Technologies, Inc. (Æ)(Ñ)

    67,000      1,814

Constant Contact, Inc. (Æ)(Ñ)

    117,625      1,874

CSG Systems International, Inc. (Æ)

    16,023      232

Cubic Corp.

    35,500      1,019

Cypress Semiconductor Corp. (Æ)

    45,466      361

Digital River, Inc. (Æ)(Ñ)

    48,355      1,858

DSP Group, Inc. (Æ)

    3,100      19

Equinix, Inc. (Æ)(Ñ)

    105,731      7,425

Exar Corp. (Æ)

    6,800      42

Flextronics International, Ltd. (Æ)

    956,964      3,713

Gartner, Inc. (Æ)

    26,279      355

Gerber Scientific, Inc. (Æ)

    10,200      40

Harris Stratex Networks, Inc. Class A (Æ)

    8,800      35

Hittite Microwave Corp. (Æ)(Ñ)

    76,410      2,839

i2 Technologies, Inc. (Æ)(Ñ)

    7,733      69

Imation Corp. (Ñ)

    21,531      215

Informatica Corp. (Æ)

    45,578      725

Ingram Micro, Inc. Class A (Æ)

    62,145      902

Integrated Device Technology, Inc. (Æ)

    260,198      1,413

InterDigital, Inc. (Æ)

    11,630      306

International Rectifier Corp. (Æ)

    178,323      3,010

Intersil Corp. Class A

    91,016      1,056

 

Russell U.S. Small & Mid Cap Fund   41

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

j2 Global Communications, Inc. (Æ)

    82,864      1,988

Jabil Circuit, Inc.

    396,400      3,211

JDA Software Group, Inc. (Æ)

    13,819      195

JDS Uniphase Corp. (Æ)

    80,650      372

Lawson Software, Inc. (Æ)

    41,099      222

Longtop Financial Technologies, Ltd.
- ADR (Æ)(Ñ)

    63,325      1,498

Macrovision Solutions Corp. (Æ)(Ñ)

    187,680      3,795

Marvell Technology Group, Ltd. (Æ)

    397,749      4,367

McAfee, Inc. (Æ)

    27,400      1,029

Methode Electronics, Inc.

    43,400      261

Micrel, Inc.

    135,140      1,014

Microchip Technology, Inc. (Ñ)

    120,936      2,782

Micros Systems, Inc. (Æ)

    152,034      3,190

MicroStrategy, Inc. Class A (Æ)

    9,547      371

MIPS Technologies, Inc. Class A (Æ)

    54,539      181

Monolithic Power Systems, Inc. (Æ)

    120,790      2,235

National Instruments Corp.

    76,600      1,688

NCR Corp. (Æ)

    27,195      276

Ness Technologies, Inc. (Æ)

    18,300      68

Netlogic Microsystems, Inc. (Æ)(Ñ)

    82,502      2,689

Netscout Systems, Inc. (Æ)

    99,593      895

Nice Systems, Ltd. - ADR (Æ)

    193,818      4,964

Novell, Inc. (Æ)

    188,600      709

Nuance Communications, Inc. (Æ)(Ñ)

    133,841      1,787

Nvidia Corp. (Æ)(Ñ)

    147,000      1,688

Omnivision Technologies, Inc. (Æ)(Ñ)

    36,597      348

Open Text Corp. (Æ)

    15,250      501

OSI Systems, Inc. (Æ)

    116,007      2,175

Pegasystems, Inc.

    86,939      1,519

PerkinElmer, Inc.

    87,000      1,268

Perot Systems Corp. Class A (Æ)

    44,845      630

Plexus Corp. (Æ)

    21,300      472

QLogic Corp. (Æ)

    46,280      656

Rackspace Hosting, Inc. (Æ)

    96,100      883

Riverbed Technology, Inc. (Æ)

    19,050      349

SAIC, Inc. (Æ)

    89,961      1,628

Sanmina-SCI Corp. (Æ)

    895,900      502

Sapient Corp. (Æ)

    36,103      185

Scansource, Inc. (Æ)(Ñ)

    17,367      429

Seagate Technology

    252,278      2,059

Semtech Corp. (Æ)

    3,321      48

Silicon Image, Inc. (Æ)

    97,607      265

Siliconware Precision Industries Co.
- ADR (Ñ)

    260,016      1,942

Skyworks Solutions, Inc. (Æ)

    303,738      2,685

Smith Micro Software, Inc. (Æ)

    15,300      133

Solera Holdings, Inc. (Æ)

    138,877      3,169

SPSS, Inc. (Æ)

    5,512      170

Standard Microsystems Corp. (Æ)

    9,126      145

Starent Networks Corp. (Æ)(Ñ)

    75,210      1,484

Sybase, Inc. (Æ)

    86,593      2,941

SYKES Enterprises, Inc. (Æ)

    13,322      262

Synaptics, Inc. (Æ)(Ñ)

    84,034      2,729

Synchronoss Technologies, Inc. (Æ)

    20,640      274

Syniverse Holdings, Inc. (Æ)

    137,592      1,734

SYNNEX Corp. (Æ)(Ñ)

    58,000      1,249
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Synopsys, Inc. (Æ)

    36,300      791

Tekelec (Æ)

    31,568      489

TeleCommunication Systems, Inc. (Æ)

    178,103      1,747

Tellabs, Inc. (Æ)

    325,516      1,706

TIBCO Software, Inc. (Æ)

    277,263      1,752

Tier Technologies, Inc. Class B (Æ)

    454,360      2,858

Trident Microsystems, Inc. (Æ)

    84,882      116

Trimble Navigation, Ltd. (Æ)

    96,372      2,066

TTM Technologies, Inc. (Æ)(Ñ)

    36,300      269

Tyler Technologies, Inc. (Æ)(Ñ)

    106,130      1,751

Varian Semiconductor Equipment Associates, Inc. (Æ)(Ñ)

    133,488      3,416

Verint Systems, Inc. (Æ)

    66,459      369

Vishay Intertechnology, Inc. (Æ)

    855,416      5,021

Western Digital Corp. (Æ)

    128,400      3,020

White Electronic Designs Corp. (Æ)

    754,339      3,327

Wind River Systems, Inc. (Æ)

    24,577      180

Xilinx, Inc. (Ñ)

    124,023      2,535

Zoran Corp. (Æ)

    35,800      320
         
        181,915
         
Utilities - 3.4%        

AGL Resources, Inc.

    38,200      1,191

Allete, Inc. (Ñ)

    23,000      599

Atlantic Tele-Network, Inc.

    11,200      247

Atmos Energy Corp.

    119,400      2,950

Avista Corp.

    62,222      936

Black Hills Corp.

    16,442      327

California Water Service Group

    17,600      687

Centennial Communications Corp. (Æ)

    40,082      332

CenturyTel, Inc. (Ñ)

    70,600      1,917

Cincinnati Bell, Inc. (Æ)

    121,194      338

DG FastChannel, Inc. (Æ)(Ñ)

    21,875      510

El Paso Electric Co. (Æ)

    54,592      753

El Paso Pipeline Partners, LP (Ñ)

    103,500      1,999

Empire District Electric Co. (The)

    7,637      114

Energen Corp.

    64,391      2,326

Frontier Communications Corp.

    171,600      1,220

Hawaiian Electric Industries, Inc. (Ñ)

    47,000      730

Idacorp, Inc.

    68,959      1,653

Laclede Group, Inc. (The) (Ñ)

    8,869      308

Leap Wireless International, Inc. (Æ)(Ñ)

    82,326      2,970

Millicom International Cellular SA

    22,397      1,085

Mirant Corp. (Æ)

    30,400      387

Neutral Tandem, Inc. (Æ)(Ñ)

    100,225      2,866

New Jersey Resources Corp.

    67,099      2,209

Nicor, Inc. (Ñ)

    28,700      922

NorthWestern Corp.

    24,200      506

NTELOS Holdings Corp.

    10,508      168

PAETEC Holding Corp. (Æ)

    35,151      108

Pepco Holdings, Inc.

    38,200      457

Pike Electric Corp. (Æ)

    14,687      153

Portland General Electric Co.

    90,494      1,653

RCN Corp. (Æ)

    32,049      131

Southwest Gas Corp.

    147,681      2,985

Southwest Water Co. (Ñ)

    10,800      62

UGI Corp.

    169,741      3,894

 

42   Russell U.S. Small & Mid Cap Fund

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

  
       

US Cellular Corp. (Æ)

    14,293      486   

USA Mobility, Inc.

    18,423      205   

Westar Energy, Inc.

    16,546      290   

WGL Holdings, Inc.

    10,300      321   
           
        40,995   
           
Total Common Stocks
(cost $1,154,500)		         1,068,835   
           
Short-Term Investments - 10.2%        

Russell Investment Company Russell Money Market Fund

    103,730,001      103,730   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    17,700      17,700   
           
Total Short-Term Investments
(cost $121,430)		         121,430   
           
Other Securities - 27.6%        

Russell Investment Company Russell
Money Market Fund (×)

    163,338,684      163,339   

State Street Securities Lending Quality Trust (×)

    172,021,908      165,826   
           
Total Other Securities
(cost $335,361)		         329,165   
           
Total Investments - 127.3%
(identified cost $1,611,291)		         1,519,430   
Other Assets and Liabilities,
Net - (27.3%)		         (325,485 ) 
           
Net Assets - 100.0%         1,193,945   
           

 

 

See accompanying notes which are an integral part of the financial statements.

 

Russell U.S. Small & Mid Cap Fund   43

Russell Investment Company

Russell U.S. Small & Mid Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

Russell 2000 Mini Index (CME)

    2,590      USD   126,055      06/09      26,115
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     26,115
                     

 

 

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    

Auto and Transportation

      4.2   

Consumer Discretionary

      18.2   

Consumer Staples

      2.3   

Financial Services

      14.2   

Health Care

      11.1   

Integrated Oils

      0.3   

Materials and Processing

      9.5   

Miscellaneous

      0.8   

Other Energy

      5.2   

Producer Durables

      5.1   

Technology

      15.2   

Utilities

      3.4   

Short-Term Investments

      10.2   

Other Securities

      27.6   
        

Total Investments

      127.3   

Other Assets and Liabilities, Net

      (27.3 ) 
        
     100.0   
        

Futures Contracts

      2.2   

 

See accompanying notes which are an integral part of the financial statements.

 

44   Russell U.S. Small & Mid Cap Fund

Russell Investment Company

Russell International Developed Markets Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 953.70    $ 1,018.50

Expenses Paid During Period*

    $ 6.15    $ 6.36

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.27% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 950.30    $ 1,014.78

Expenses Paid During Period*

    $ 9.77    $ 10.09

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.02% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 954.10    $ 1,019.14

Expenses Paid During Period*

    $ 5.52    $ 5.71

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.14% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 955.30    $ 1,020.38

Expenses Paid During Period*

    $ 4.31    $ 4.46

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.89% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Russell International Developed Markets Fund   45

Russell Investment Company

Russell International Developed Markets Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 954.50    $ 1,019.74

Expenses Paid During Period*

    $ 4.94    $ 5.11

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.02% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 955.30    $ 1,020.63

Expenses Paid During Period*

    $ 4.07    $ 4.21

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.84% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

46   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       
Common Stocks - 87.3%        
Australia - 3.8%        

ABC Learning Centres, Ltd. (Æ)

    43,374      17

Allco Finance Group, Ltd. (Æ)(Ñ)

    446,809      45

Amcor, Ltd.

    1,983,201      6,897

AMP, Ltd.

    835,548      3,141

Ansell, Ltd. - GDR

    51,189      311

ASX, Ltd.

    6,102      145

Australia & New Zealand Banking Group, Ltd.

    495,622      5,705

AWB, Ltd.

    202,605      196

BHP Billiton, Ltd.

    404,961      9,749

Billabong International, Ltd.

    30,478      232

BlueScope Steel, Ltd.

    340,997      577

CFS Retail Property Trust (ö)(Ñ)

    87,730      105

Challenger Financial Services Group, Ltd.

    113,515      166

Coca-Cola Amatil, Ltd.

    17,755      118

Commonwealth Bank of Australia

    243,336      6,187

Consolidated Media Holdings, Ltd.

    72,803      113

CSL, Ltd.

    708,368      17,709

David Jones, Ltd.

    95,760      210

Dexus Property Group (ö)

    189,158      100

Downer EDI, Ltd.

    122,497      446

Felix Resources, Ltd.

    32,646      264

Foster’s Group, Ltd.

    3,515,072      13,461

GPT Group (ö)

    290,141      98

Insurance Australia Group, Ltd.

    191,249      482

Lend Lease Corp., Ltd.

    300,425      1,579

Lion Nathan, Ltd. (Æ)

    6,331      54

Macquarie Airports

    438,419      578

Macquarie Group, Ltd.

    38,260      926

Macquarie Infrastructure Group

    892,171      876

Metcash, Ltd.

    82,707      250

Mirvac Group (ö)

    84,477      64

National Australia Bank, Ltd.

    1,230,870      18,391

Newcrest Mining, Ltd.

    239,301      5,203

Origin Energy, Ltd.

    40,629      482

Qantas Airways, Ltd.

    318,248      459

QBE Insurance Group, Ltd.

    102,814      1,622

Rio Tinto, Ltd. (Ñ)

    145,638      6,809

Santos, Ltd.

    65,642      785

Sigma Pharmaceuticals, Ltd.

    111,250      91

Stockland (ö)

    86,859      197

Suncorp-Metway, Ltd.

    119,282      509

TABCORP Holdings, Ltd.

    125,804      682

Telstra Corp., Ltd.

    6,483,013      15,688

Transpacific Industries Group, Ltd.

    29,207      37

Wesfarmers, Ltd.

    565,748      9,289

Westfield Group (ö)

    105,502      820

Westpac Banking Corp.

    146,882      2,044

Woolworths, Ltd.

    23,537      457
         
        134,366
         
Austria - 0.1%        

Erste Group Bank AG (Ñ)

    154,432      3,229
         
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Belgium - 0.6%        

Anheuser-Busch InBev NV (Ñ)

    259,229      7,912

Colruyt SA (Ñ)

    12,145      2,766

Delhaize Group

    82,252      5,535

Euronav NV

    15,348      221

Fortis

    718,051      1,778

Fortis (Æ)

    255,564      —

Hansen Transmissions International
NV (Æ)(Ñ)

    1,445,475      3,132

Nationale A Portefeuille

    1,110      54

Tessenderlo Chemie NV

    15,673      468
         
        21,866
         
Bermuda - 1.0%        

Cheung Kong Infrastructure Holdings, Ltd.

    19,000      74

Chinese Estates Holdings, Ltd.

    153,000      191

Esprit Holdings, Ltd.

    1,583,676      9,707

Invesco, Ltd.

    337,500      4,968

Jardine Matheson Holdings, Ltd.

    244,200      5,507

Li & Fung, Ltd. (Ñ)

    3,087,000      8,690

Orient Overseas International, Ltd.

    27,900      80

Seadrill, Ltd.

    207,000      2,241

Shangri-La Asia, Ltd.

    940,000      1,391

Texwinca Holdings, Ltd.

    117,357      72

VTech Holdings, Ltd.

    12,282      61

Yue Yuen Industrial Holdings, Ltd.

    256,000      567
         
        33,549
         
Brazil - 1.6%        

Banco do Brasil SA

    43,800      369

BM&F Bovespa SA (Æ)

    827,300      3,352

Cia Vale do Rio Doce Class B

    887,800      14,658

Gafisa SA

    486,997      4,223

Itau Unibanco Banco Multiplo SA - ADR

    859,546      11,802

Petroleo Brasileiro SA - ADR

    537,838      18,055

Redecard SA

    137,000      1,724
         
        54,183
         
Canada - 2.6%        

Barrick Gold Corp.

    60,700      1,766

BCE, Inc.

    148,600      3,177

Canadian Imperial Bank of Commerce

    115,700      5,194

Canadian National Railway Co.

    196,750      7,953

Canadian National Railway Co. (Æ)

    64,200      2,595

Canadian Natural Resources, Ltd.

    65,300      3,010

EnCana Corp.

    134,954      6,185

Fairfax Financial Holdings, Ltd.

    9,300      2,460

Husky Energy, Inc.

    103,200      2,500

Inmet Mining Corp.

    116,580      4,040

Kinross Gold Corp.

    69,200      1,066

Magna International, Inc.

    47,900      1,645

National Bank of Canada

    30,300      1,108

Nexen, Inc.

    246,748      4,698

Open Text Corp. (Æ)

    32,800      1,077

Petro-Canada

    150,500      4,750

Potash Corp. of Saskatchewan, Inc.

    158,551      13,713

 

Russell International Developed Markets Fund   47

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Research In Motion, Ltd. (Æ)

    91,700      6,373

Rogers Communications, Inc. Class B (Ñ)

    364,492      8,956

Sun Life Financial, Inc.

    28,900      676

Teck Resources, Ltd. Class B (Æ)

    367,124      3,855

TELUS Corp. Class A

    76,500      1,779

Yamana Gold, Inc.

    302,690      2,394
         
        90,970
         
Cayman Islands - 0.2%        

Belle International Holdings, Ltd. (Ñ)

    3,043,000      2,353

China Resources Land, Ltd. (Ñ)

    1,114,000      1,994

Hopewell Highway Infrastructure, Ltd.

    8,750      5

Hutchison Telecommunications International, Ltd. (Ñ)

    43      —

New Oriental Education & Technology Group - ADR (Æ)

    24,300      1,287

Suntech Power Holdings Co., Ltd. - ADR (Æ)

    84,100      1,256
         
        6,895
         
China - 0.8%        

Anhui Conch Cement Co., Ltd. Class H (Ñ)

    336,000      2,229

China Construction Bank Corp. Class H (Ñ)

    5,863,000      3,391

China Life Insurance Co., Ltd. Class H

    759,000      2,668

China Petroleum & Chemical Corp. Class H

    4,712,000      3,664

China Shipping Container Lines Co., Ltd. Class H (Æ)(Ñ)

    8,500,000      2,051

China South Locomotive and Rolling Stock Corp. (Æ)(Ñ)

    1,727,000      779

Guangzhou R&F Properties Co., Ltd. (Ñ)

    1,036,000      1,664

Industrial & Commercial Bank of China

    21,430,000      12,185

ZTE Corp. Class H (Ñ)

    309,920      1,042
         
        29,673
         
Czech Republic - 0.1%        

CEZ AS

    39,200      1,630

Komercni Banka AS

    20,056      2,715
         
        4,345
         
Denmark - 0.7%        

AP Moller—Maersk A/S (Ñ)

    250      1,448

H Lundbeck A/S (Ñ)

    37,020      669

Novo Nordisk A/S Series B

    89,270      4,236

Vestas Wind Systems A/S

    244,393      15,907

Vestas Wind Systems A/S (Æ)

    32,634      1,872
         
        24,132
         
Finland - 0.8%        

Fortum OYJ (Ñ)

    53,485      1,079

Konecranes OYJ (Ñ)

    28,085      570

Nokia OYJ (Ñ)

    1,543,914      22,005

UPM-Kymmene OYJ

    445,118      3,980
         
        27,634
         
France - 10.0%        

Accor SA (Ñ)

    89,397      3,795

Air Liquide SA (Ñ)

    110,789      9,036
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Alcatel-Lucent (Æ)

    492,695      1,247

Alstom SA

    207,217      12,951

AXA SA

    520,136      8,667

BNP Paribas (Ñ)

    449,892      23,687

Bouygues SA (Ñ)

    69,506      2,977

Capital Gemini SA

    25,650      959

Carrefour SA (Ñ)

    598,928      24,222

Christian Dior SA

    15,153      1,018

Cie de Saint-Gobain (Ñ)

    303,584      10,857

Ciments Francais SA

    3,148      284

CNP Assurances (Ñ)

    26,829      2,119

Credit Agricole SA

    488,472      7,086

France Telecom SA (Ñ)

    768,849      17,061

GDF Suez (Æ)

    55,671      —

GDF Suez (Ñ)

    506,241      18,208

L’Oreal SA (Ñ)

    60,518      4,320

Lagardere SCA (Ñ)

    95,200      2,980

Legrand SA (Ñ)

    282,240      5,643

LVMH Moet Hennessy Louis Vuitton SA (Ñ)

    225,644      17,060

M6-Metropole Television

    19,833      370

Nexans SA

    14,595      673

Pernod-Ricard SA (Ñ)

    110,476      6,515

Renault SA (Ñ)

    142,700      4,561

Sanofi-Aventis SA (Ñ)

    459,536      26,450

Schneider Electric SA (Ñ)

    161,966      12,213

Societe Generale

    383,354      19,398

Sodexo

    22,350      1,068

Technip SA

    83,214      3,565

Teleperformance - GDR

    41,897      1,207

Thales SA

    164,884      6,815

Total SA (Ñ)

    1,149,933      57,506

Total SA - ADR

    137,200      6,822

UBISOFT Entertainment (Æ)

    225,596      4,406

Unibail-Rodamco (ö)

    1,061      158

Valeo SA (Ñ)

    31,577      649

Vallourec SA (Ñ)

    60,263      6,544

Veolia Environnement (Ñ)

    36,295      996

Vivendi

    605,982      16,337
         
        350,430
         
Germany - 7.0%        

Adidas AG

    49,687      1,875

Allianz SE (Ñ)

    128,754      11,813

BASF SE (Ñ)

    301,260      11,326

Bayer AG (Ñ)

    331,082      16,425

Bayerische Motoren Werke AG (Ñ)

    99,100      3,424

Celesio AG

    20,000      443

Daimler AG

    236,890      8,442

Deutsche Bank AG (Ñ)

    149,534      7,978

Deutsche Boerse AG (Ñ)

    122,061      9,010

Deutsche Lufthansa AG (Ñ)

    290,511      3,700

Deutsche Post AG

    304,410      3,491

Deutsche Telekom AG (Ñ)

    1,603,059      19,314

E.ON AG (Ñ)

    481,289      16,256

Generali Deutschland Holding AG

    12      1

Hannover Rueckversicherung AG (Æ)

    82,036      2,664

 

48   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Hochtief AG

    35,412      1,731

K+S AG

    52,137      3,128

Lanxess AG (Ñ)

    27,454      591

Linde AG

    262,383      20,863

Merck KGaA (Ñ)

    117,567      10,526

Metro AG (Ñ)

    221,213      9,404

MTU Aero Engines Holding AG

    31,389      1,054

Muenchener Rueckversicherungs AG (Ñ)

    65,341      9,019

RWE AG (Ñ)

    272,848      19,616

SAP AG (Ñ)

    517,485      19,792

Siemens AG (Ñ)

    226,015      15,171

Solarworld AG (Ñ)

    119,005      3,395

Suedzucker AG (Ñ)

    87,400      1,689

Symrise AG (Ñ)

    487,847      6,664

ThyssenKrupp AG

    63,754      1,364

Tognum AG

    53,227      647

United Internet AG

    44,921      470

Volkswagen AG

    4,291      1,350

Wacker Chemie AG

    1,676      173
         
        242,809
         
Greece - 0.1%        

Diana Shipping, Inc. (Æ)

    75,500      1,185

National Bank of Greece SA

    53,577      1,114

Public Power Corp. SA

    73,082      1,414
         
        3,713
         
Hong Kong - 1.5%        

BOC Hong Kong Holdings, Ltd.

    318,333      450

Cheung Kong Holdings, Ltd.

    945,238      9,763

China Mobile, Ltd.

    90,000      775

CLP Holdings, Ltd.

    126,500      853

CNOOC, Ltd.

    9,067,650      10,099

Hang Lung Group, Ltd.

    42,462      156

Hang Lung Properties, Ltd. - ADR

    665,000      1,888

Henderson Land Development Co., Ltd.

    72,000      336

Hong Kong Exchanges and Clearing, Ltd.

    410,854      4,725

HongKong Electric Holdings (Ñ)

    1,348,500      7,964

Hopewell Holdings, Ltd.

    140,500      364

Hutchison Whampoa, Ltd.

    110,500      649

Hysan Development Co., Ltd.

    116,000      211

Industrial & Commercial Bank of China Asia, Ltd.

    199,000      255

Link REIT (The) (ö)

    104,500      204

New World Development, Ltd.

    273,000      357

Sun Hung Kai Properties, Ltd.

    484,333      4,991

Swire Pacific, Ltd.

    68,321      533

Television Broadcasts, Ltd.

    57,334      202

Wharf Holdings, Ltd.

    2,046,196      6,743

Wheelock & Co., Ltd.

    129,068      278
         
        51,796
         
India - 0.4%        

ICICI Bank, Ltd. - ADR

    391,067      8,068

Infosys Technologies, Ltd.

    184,250      5,583

State Bank of India, Ltd. - GDR

    24,500      1,351
         
        15,002
         
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Indonesia - 0.0%        

Bank Rakyat Indonesia

    738,500      402
         
Ireland - 0.1%        

CRH PLC

    73,917      1,910
         
Israel - 0.6%        

Check Point Software Technologies (Æ)

    111,300      2,579

Teva Pharmaceutical Industries, Ltd. - ADR

    411,998      18,082
         
        20,661
         
Italy - 1.8%        

A2A SpA

    785,600      1,296

Ansaldo STS SpA

    219,881      3,507

Banco Popolare SC

    52,663      344

Buzzi Unicem SpA

    53,322      784

Davide Campari-Milano SpA (Ñ)

    47,345      320

Enel SpA

    201,621      1,092

ENI SpA

    708,261      15,349

Fondiaria-Sai SpA

    21,493      357

Indesit Co. SpA

    34,444      172

Intesa Sanpaolo SpA

    6,358,308      20,141

Mediaset SpA (Ñ)

    279,246      1,568

Milano Assicurazioni SpA (Ñ)

    15,478      47

Pirelli & C SpA

    1,941,498      756

Prysmian SpA

    56,200      683

Saipem SpA

    97,003      2,086

Telecom Italia SpA (Ñ)

    5,850,411      6,570

UniCredit SpA (Æ)

    2,746,059      6,644
         
        61,716
         
Japan - 15.9%        

Acom Co., Ltd. (Ñ)

    6,500      156

Aeon Credit Service Co., Ltd.

    264,300      2,993

Aiful Corp.

    1      —

Aisin Seiki Co., Ltd.

    51,300      1,050

Alps Electric Co., Ltd. (Ñ)

    247,300      1,321

Amada Co., Ltd.

    33,000      202

Aruze Corp. (Æ)(Ñ)

    2      —

Asahi Breweries, Ltd.

    14,000      176

Asahi Glass Co., Ltd.

    336,000      2,003

Astellas Pharma, Inc.

    321,500      10,488

Bank of Yokohama, Ltd. (The)

    938,846      3,972

Bridgestone Corp.

    210,000      3,117

Brother Industries, Ltd.

    90,600      730

Canon Marketing Japan, Inc.

    50,800      618

Canon, Inc.

    1,207,963      36,429

Casio Computer Co., Ltd.

    60,200      455

Central Glass Co., Ltd.

    191,000      724

Central Japan Railway Co.

    34      201

Chiyoda Corp. (Ñ)

    100,000      598

Chubu Electric Power Co., Inc.

    42,700      940

Circle K Sunkus Co., Ltd. (Ñ)

    43,000      602

Coca-Cola West Co., Ltd. (Ñ)

    19,800      325

COMSYS Holdings Corp.

    39,000      316

Credit Saison Co., Ltd. (Ñ)

    30,200      337

Dai Nippon Printing Co., Ltd.

    92,000      974

Daiei, Inc. (The) (Æ)(Ñ)

    89,850      346

 

Russell International Developed Markets Fund   49

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Daifuku Co., Ltd. (Ñ)

    57,000      341

Daiichi Sankyo Co., Ltd.

    45,300      762

Daikin Industries, Ltd.

    120,400      3,213

Daishi Bank, Ltd. (The)

    43,000      162

Daito Trust Construction Co., Ltd.

    8,700      359

Daiwa Securities Group, Inc.

    1,236,510      6,434

Denso Corp.

    97,300      2,290

DIC Corp.

    503,000      819

Doutor Nichires Holdings Co., Ltd.

    20,000      245

East Japan Railway Co.

    53,900      3,036

Ebara Corp. (Æ)(Ñ)

    172,000      463

Elpida Memory, Inc. (Æ)

    49,700      530

Exedy Corp.

    12      —

FamilyMart Co., Ltd.

    17,400      477

Fanuc, Ltd. (Ñ)

    236,450      17,021

Fast Retailing Co., Ltd.

    15,700      1,642

Fuji Fire & Marine Insurance Co., Ltd. (The) (Æ)

    276      —

Fuji Heavy Industries, Ltd.

    128,000      513

Fuji Media Holdings, Inc.

    3,175      3,529

FUJIFILM Holdings Corp.

    37,200      956

Fujitsu, Ltd.

    1,078,000      4,608

Glory, Ltd.

    50,500      929

Gunze, Ltd.

    27,000      87

H2O Retailing Corp.

    59,000      372

Hakuhodo DY Holdings, Inc.

    3,700      170

Hanwa Co., Ltd.

    91,000      255

Higo Bank, Ltd. (The)

    33,000      180

Hirose Electric Co., Ltd.

    28,400      2,954

Hitachi Cable, Ltd.

    11,000      31

Hitachi Capital Corp.

    29,000      318

Hitachi High-Technologies Corp.

    18,600      260

Hitachi Kokusai Electric, Inc.

    32      —

Hitachi Software Engineering Co., Ltd.

    12,800      157

Hitachi, Ltd.

    749,000      2,608

Honda Motor Co., Ltd.

    504,200      14,659

Hosiden Corp. (Ñ)

    60,500      737

Hoya Corp.

    399,900      6,901

Hyakujushi Bank, Ltd. (The)

    14,000      64

Ibiden Co., Ltd.

    30,200      880

IHI Corp. (Æ)

    199,000      302

Inpex Holdings, Inc.

    1,176      7,370

Isuzu Motors, Ltd.

    1,288,000      2,136

Itoham Foods, Inc.

    89,948      271

Japan Tobacco, Inc.

    458      1,144

JFE Holdings, Inc.

    81,500      2,219

JFE Shoji Holdings, Inc.

    64,000      181

JGC Corp.

    55,000      717

Joyo Bank, Ltd. (The) (Ñ)

    1,040,688      4,801

JSR Corp.

    61,900      749

JTEKT Corp.

    34,600      333

Kagoshima Bank, Ltd. (The)

    61,000      408

Kaken Pharmaceutical Co., Ltd.

    62,000      515

Kandenko Co., Ltd. (Ñ)

    78,000      493

Kaneka Corp.

    128,000      737

Kansai Electric Power Co., Inc. (The)

    39,100      797

Kansai Paint Co., Ltd.

    125,000      665
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Kao Corp.

    1,261,800      23,737

Kawasaki Kisen Kaisha, Ltd. (Ñ)

    263,000      988

Kayaba Industry Co., Ltd.

    122      —

KDDI Corp.

    2,328      10,461

Keihin Corp.

    60,100      757

Keiyo Bank, Ltd. (The)

    62,000      230

Keyence Corp.

    22,513      3,973

Kinden Corp.

    76,000      636

Kintetsu World Express, Inc.

    1,300      26

Komatsu, Ltd.

    144,200      1,773

Komori Corp.

    17,400      163

Konica Minolta Holdings, Inc.

    149,000      1,206

Kose Corp. (Ñ)

    360,610      7,257

Kyocera Corp.

    40,400      3,130

Kyoei Steel, Ltd.

    9      —

Lawson, Inc.

    11,900      461

Lintec Corp.

    19,300      262

Marubeni Corp.

    1,699,000      6,106

Mazda Motor Corp.

    158,000      391

MID Reit, Inc. Class A (ö)

    985      1,928

Miraca Holdings, Inc.

    11,300      229

Mitsubishi Chemical Holdings Corp.

    348,500      1,313

Mitsubishi Corp.

    541,100      8,317

Mitsubishi Estate Co., Ltd.

    62,000      809

Mitsubishi Materials Corp.

    88,000      252

Mitsubishi Motors Corp. (Æ)

    380,000      578

Mitsubishi UFJ Financial Group, Inc.

    3,284,364      17,888

Mitsubishi UFJ Lease & Finance Co., Ltd.

    20,530      475

Mitsui & Co., Ltd.

    498,000      5,216

Mitsui Fudosan Co., Ltd.

    145,000      1,822

Mitsui OSK Lines, Ltd. (Ñ)

    51,000      291

Mitsui Sumitomo Insurance Group Holdings, Inc.

    155,385      4,232

Mizuho Financial Group, Inc. (Ñ)

    2,423,700      5,091

Musashino Bank, Ltd. (The)

    10,100      276

Namco Bandai Holdings, Inc.

    114,900      1,137

NEC Corp.

    262,000      862

NEC Electronics Corp. (Æ)(Ñ)

    49,400      519

Nichirei Corp.

    175,000      612

Nifco, Inc.

    13,600      179

Nintendo Co., Ltd.

    55,700      14,902

Nippon Building Fund, Inc. Class A (ö)

    15      122

Nippon Electric Glass Co., Ltd.

    886,200      7,126

Nippon Express Co., Ltd.

    221,000      789

Nippon Kayaku Co., Ltd.

    71,000      383

Nippon Konpo Unyu Soko Co., Ltd.

    14,044      115

Nippon Mining Holdings, Inc.

    806,500      3,677

Nippon Seiki Co., Ltd.

    54      1

Nippon Sheet Glass Co., Ltd. (Ñ)

    316,000      892

Nippon Steel Corp.

    532,000      1,773

Nippon Telegraph & Telephone Corp.

    149,300      5,596

Nipponkoa Insurance Co., Ltd. (Ñ)

    1,254,360      6,812

Nissan Motor Co., Ltd.

    989,500      5,146

Nissan Shatai Co., Ltd.

    77,000      484

Nisshin Seifun Group, Inc.

    30,000      309

Nitto Denko Corp.

    189,100      4,392

Nomura Holdings, Inc.

    2,417,148      14,495

 

50   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Nomura Research Institute, Ltd. (Ñ)

    392,450      6,957

NTT DoCoMo, Inc.

    1,638      2,282

OJI Paper Co., Ltd.

    99,000      426

Okinawa Electric Power Co., Inc. (The)

    4,500      214

OKUMA Corp.

    73,000      319

Omron Corp.

    39,200      585

Ono Pharmaceutical Co., Ltd.

    4,300      182

ORIX Corp. (Ñ)

    43,150      2,036

Osaka Gas Co., Ltd.

    225,000      714

Pacific Metals Co., Ltd. (Ñ)

    55,000      352

Panasonic Corp.

    307,800      4,478

Promise Co., Ltd. (Ñ)

    25,950      342

Rakuten, Inc. (Ñ)

    6,916      3,497

Ricoh Co., Ltd. (Ñ)

    27,000      330

Rohm Co., Ltd.

    22,400      1,364

Sankyo Co., Ltd.

    15,700      794

Sanwa Holdings Corp.

    16,000      44

Secom Co., Ltd.

    26,300      973

Seiko Epson Corp. (Ñ)

    20,700      291

Seino Holdings Corp.

    87,000      474

Sekisui House, Ltd. (Ñ)

    610,000      5,252

Seven & I Holdings Co., Ltd. (Ñ)

    1,015,325      22,947

Sharp Corp. (Ñ)

    478,000      4,986

Shima Seiki Manufacturing, Ltd. - GDR (Ñ)

    13,200      285

Shin-Etsu Chemical Co., Ltd.

    241,000      11,667

Shinsei Bank, Ltd. (Æ)

    290,000      380

Showa Shell Sekiyu KK

    65,679      576

SMC Corp.

    42,448      4,119

Snow Brand Milk Products Co., Ltd.

    75,500      189

Softbank Corp.

    94,200      1,476

Sony Corp.

    340,200      8,802

Sugi Holdings Co., Ltd. - GDR (Ñ)

    249,036      4,689

Sumco Corp.

    60      1

Sumitomo Bakelite Co., Ltd.

    101,000      400

Sumitomo Corp.

    51,000      443

Sumitomo Forestry Co., Ltd.

    79,800      537

Sumitomo Mitsui Financial Group, Inc. (Ñ)

    139,100      4,814

Sumitomo Realty & Development Co., Ltd. (Ñ)

    193,000      2,309

Sumitomo Trust & Banking Co., Ltd. (The)

    781,448      3,256

Suzuki Motor Corp.

    381,675      7,152

Takara Holdings, Inc.

    73,000      356

Takata Corp.

    4      —

Takeda Pharmaceutical Co., Ltd.

    469,400      16,684

Takefuji Corp.

    1      —

TDK Corp.

    15,600      700

THK Co., Ltd.

    162,766      2,246

Toho Holdings Co., Ltd.

    10      —

Tokai Rika Co., Ltd.

    74,700      975

Tokai Rubber Industries, Inc.

    36,193      317

Tokio Marine Holdings, Inc.

    426,800      11,280

Tokuyama Corp.

    154,000      909

Tokyo Electric Power Co., Inc. (The)

    148,000      3,468

Tokyo Electron, Ltd.

    119,200      5,433

Tokyo Gas Co., Ltd.

    135,000      511

Tokyo Ohka Kogyo Co., Ltd.

    6      —

Tokyo Steel Manufacturing Co., Ltd.

    81,700      830
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Tokyu Land Corp. (Ñ)

    554,900      1,854

Toppan Printing Co., Ltd. (Ñ)

    38,000      287

Toshiba Corp. (Ñ)

    1,027,000      3,510

Toshiba Machine Co., Ltd.

    1      —

Toshiba TEC Corp.

    74,891      264

Tosoh Corp.

    125,000      285

Toyo Engineering Corp. Class A (Ñ)

    46,000      146

Toyo Seikan Kaisha, Ltd. (Ñ)

    34,800      576

Toyo Suisan Kaisha, Ltd.

    20,000      390

Toyota Auto Body Co., Ltd.

    43,800      700

Toyota Motor Corp.

    727,100      28,463

Trend Micro, Inc.

    78,500      2,387

TS Tech Co., Ltd.

    5      —

United Urban Investment Corp. Class A (ö)

    437      1,970

USS Co., Ltd. (Ñ)

    6,390      289

West Japan Railway Co.

    1,583      4,843

Yamaha Corp.

    45,100      511

Yamato Holdings Co., Ltd.

    37,000      412

Yamato Kogyo Co., Ltd. - GDR

    8,000      180
         
        554,180
         
Luxembourg - 0.3%        

ArcelorMittal (Ñ)

    244,852      5,748

ArcelorMittal

    152,500      3,596

SES SA

    84,030      1,514
         
        10,858
         
Malaysia - 0.1%        

Sime Darby BHD

    1,657,504      3,065
         
Mexico - 0.4%        

America Movil SAB de CV Series L

    92,140      3,027

Cemex SAB de CV - ADR (Æ)(Ñ)

    1,357,835      10,157

Grupo Modelo SAB de CV (Æ)

    713,300      2,069
         
        15,253
         
Netherlands - 3.2%        

Aegon NV (Æ)

    266,927      1,356

ASML Holding NV

    582,169      11,832

CSM

    45,687      579

European Aeronautic Defence and Space Co. NV

    94,413      1,360

Heineken NV (Ñ)

    868,937      25,841

Imtech NV

    43,157      673

ING Groep NV (Æ)

    1,667,905      15,348

James Hardie Industries NV (Æ)

    109,347      364

Koninklijke Ahold NV (Ñ)

    1,455,994      16,019

Koninklijke Philips Electronics NV

    176,910      3,187

QIAGEN NV (Æ)

    226,290      3,739

Reed Elsevier NV (Ñ)

    675,295      7,427

Royal KPN NV

    698,792      8,396

SNS Reaal (Æ)

    81,679      460

STMicroelectronics NV

    158,229      1,044

TNT NV

    366,058      6,743

Unilever NV

    65,280      1,291

Wolters Kluwer NV (Ñ)

    423,590      6,981
         
        112,640
         

 

Russell International Developed Markets Fund   51

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       
Netherlands Antilles - 0.0%        

Hunter Douglas NV

    9,289      233
         
New Zealand - 0.1%        

Telecom Corp. of New Zealand, Ltd.

    2,709,119      4,327
         
Norway - 0.3%        

StatoilHydro ASA (Ñ)

    528,813      9,904

Tandberg ASA (Ñ)

    74,000      1,048
         
        10,952
         
Portugal - 0.1%        

Energias de Portugal SA (Ñ)

    842,924      3,075
         
Russia - 0.4%        

Gazprom OAO - ADR

    388,779      6,831

Luka Kotor AD Kotor - ADR

    73,550      3,280

MMC Norilsk Nickel - ADR

    158,060      1,317

Vimpel-Communications - ADR (Æ)

    275,200      2,592
         
        14,020
         
Singapore - 1.4%        

Ascendas Real Estate Investment
Trust (Æ)(ö)

    34,000      31

CapitaLand, Ltd.

    2,702,000      4,974

CapitaMall Trust (Æ)(ö)

    74,000      62

China Aviation Oil Singapore Corp., Ltd.

    27,000      15

ComfortDelgro Corp., Ltd.

    373,000      356

DBS Group Holdings, Ltd.

    716,335      4,568

Haw Par Corp., Ltd.

    19,223      49

Jardine Cycle & Carriage, Ltd.

    37,800      363

Keppel Corp., Ltd.

    53,000      212

Oversea-Chinese Banking Corp., Ltd. (Ñ)

    1,526,600      6,010

Pacific Century Regional Developments, Ltd.

    435,000      51

SembCorp Industries, Ltd.

    52,000      95

SembCorp Marine, Ltd.

    206,000      290

Singapore Airlines, Ltd.

    281,340      2,025

Singapore Exchange, Ltd.

    36,000      151

Singapore Petroleum Co., Ltd.

    9,906      22

Singapore Technologies Engineering, Ltd.

    52,000      90

Singapore Telecommunications, Ltd.

    11,790,096      20,275

United Overseas Bank, Ltd.

    933,857      7,189

UOL Group, Ltd.

    59,894      89

Venture Corp., Ltd.

    51,000      204

Wilmar International, Ltd.

    96,000      230
         
        47,351
         
South Africa - 0.2%        

ABSA Group, Ltd.

    92,300      1,068

Gold Fields, Ltd. - ADR

    290,649      3,023

MTN Group, Ltd.

    223,360      2,907

Standard Bank Group, Ltd.

    49,601      479
         
        7,477
         
    

Principal

Amount ($)

or Shares

     

Market

Value
$

South Korea - 0.9%        

Daewoo Securities Co., Ltd. (Æ)

    146,680      2,388

Hana Financial Group, Inc. (Ñ)

    9,900      170

Hyundai Motor Co.

    34,002      1,814

Hyundai Motor Co. - GDR (Þ)

    12,130      297

KB Financial Group, Inc. (Æ)

    79,800      2,457

KB Financial Group, Inc. - ADR (Ñ)

    46,079      1,469

LG Chem, Ltd. (Ñ)

    20,778      2,297

LG Hausys, Ltd. (Æ)

    2,810      252

Samsung Electronics Co., Ltd.

    44,823      20,685

STX Pan Ocean Co., Ltd. (Ñ)

    3,000      26
         
        31,855
         
Spain - 3.2%        

Banco Bilbao Vizcaya Argentaria SA

    519,927      5,605

Banco Santander SA

    1,860,009      17,559

Gamesa Corp. Tecnologica SA

    573,051      10,752

Grifols SA

    115,432      2,027

Iberdrola SA

    2,655,611      20,984

Iberia Lineas Aereas de Espana

    311,110      581

Inditex SA

    101,699      4,340

Prosegur Cia de Seguridad SA

    13,064      373

Red Electrica de Espana

    101,770      4,274

Repsol YPF SA

    93,081      1,771

Tecnicas Reunidas SA

    25,238      890

Telefonica SA

    2,165,831      41,124

Vertice Trescientos Sesenta Grados SA (Æ)

    14,126      16

Viscofan SA

    7,758      144
         
        110,440
         
Sweden - 1.5%        

Electrolux AB (Æ)(Ñ)

    149,774      1,689

Hennes & Mauritz AB Class B (Ñ)

    102,327      4,575

Investor AB Class B

    12,506      181

Loomis AB

    1,270      11

Nordea Bank AB (Ñ)

    386,570      2,875

Scania AB Class B (Ñ)

    40,473      432

Securitas AB Class B (Ñ)

    180,654      1,500

Skanska AB Class B (Ñ)

    68,148      739

Ssab Svenskt Stal AB Series A

    94,381      898

Svenska Cellulosa AB Class B

    524,197      5,071

Svenska Handelsbanken AB Class A

    104,859      1,830

Swedish Match AB

    178,542      2,555

Tele2 AB Class B (Ñ)

    92,422      875

Telefonaktiebolaget LM Ericsson
Class B (Ñ)

    2,780,958      23,992

Volvo AB Class B (Ñ)

    561,400      3,654
         
        50,877
         
Switzerland - 7.5%        

ABB, Ltd. (Æ)

    364,991      5,157

Actelion, Ltd. (Æ)

    135,988      6,209

Alcon, Inc.

    47,100      4,334

Athris Holding AG (Æ)

    98      66

Baloise Holding AG

    9,976      730

Clariant AG (Æ)

    79,073      446

 

52   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Compagnie Financiere Richemont SA

    711,255      12,739

Credit Suisse Group AG

    959,957      36,686

Givaudan SA

    12,470      7,915

Helvetia Holding AG

    3,313      862

Holcim, Ltd.

    6,195      313

Jelmoli Holding AG

    487      161

Julius Baer Holding AG

    453,694      14,880

Lonza Group AG (Ñ)

    103,180      9,494

Nestle SA (Ñ)

    1,801,636      58,595

Nobel Biocare Holding AG (Æ)

    165,291      3,375

Novartis AG (Ñ)

    754,890      28,511

Roche Holding AG

    283,477      35,820

SGS SA

    1,101      1,231

Sonova Holding AG

    67,641      4,430

Swatch Group AG (The)

    73,116      2,110

Swiss Reinsurance

    78,404      1,850

Swisscom AG

    3,129      815

Syngenta AG (Ñ)

    18,469      3,940

Transocean, Ltd. (Æ)

    141,772      9,567

UBS AG (Æ)

    510,261      7,019

Zurich Financial Services AG

    27,575      5,093
         
        262,348
         
Taiwan - 1.3%        

Acer, Inc.

    1,100,000      2,108

AU Optronics Corp.

    2,183,000      2,265

China Steel Corp. Class H

    869,938      672

Compal Electronics, Inc.

    1,010,025      858

HON HAI Precision Industry Co., Ltd.

    2,716,800      7,873

Siliconware Precision Industries Co.

    543,892      684

Taiwan Semiconductor Manufacturing Co., Ltd.

    3,519,250      5,878

Taiwan Semiconductor Manufacturing Co., Ltd. - ADR

    2,182,983      23,074

United Microelectronics Corp.

    1,848,017      690
         
        44,102
         
Thailand - 0.1%        

Bangkok Bank PCL

    955,115      2,302

PTT PCL

    48,200      259

Thai Oil PCL

    1,093,500      999
         
        3,560
         
Turkey - 0.0%        

Turkiye Garanti Bankasi AS (Æ)

    238,100      495
         
United Kingdom - 16.2%        

3i Group PLC

    120,866      565

Aggreko PLC

    8,945      76

AMEC PLC - GDR

    80,830      737

Anglo American PLC

    117,683      2,553

Antofagasta PLC (Ñ)

    846,691      7,277

ARM Holdings PLC

    1,662,615      2,919

Associated British Foods PLC

    262,000      2,769

AstraZeneca PLC (Ñ)

    227,339      7,972

Atkins WS PLC

    104,467      943
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Autonomy Corp. PLC (Æ)

    351,765      7,400

Aviva PLC

    1,674,748      7,643

BAE Systems PLC

    928,227      4,883

Barclays PLC (Æ)

    4,108,373      16,716

BBA Aviation PLC

    363,397      562

BG Group PLC

    1,917,129      30,826

BHP Billiton PLC

    465,650      9,782

BP PLC

    6,026,792      42,736

BP PLC - ADR (Ñ)

    183,680      7,799

Brit Insurance Holdings PLC

    168,666      457

British American Tobacco PLC (Ñ)

    261,822      6,353

British Land Co. PLC (ö)

    45,557      287

British Sky Broadcasting Group PLC

    112,893      804

Burberry Group PLC (Ñ)

    531,750      3,166

Cadbury PLC (Ñ)

    996,146      7,465

Centrica PLC (Ñ)

    1,211,700      4,063

Compass Group PLC

    2,508,337      11,989

Davis Service Group PLC

    55,229      213

De La Rue PLC

    41,052      581

Diageo PLC (Ñ)

    1,739,555      20,880

Drax Group PLC

    174,808      1,324

DSG International PLC (Æ)

    1,606,774      1,017

easyJet PLC (Æ)

    918,560      4,295

Electrocomponents PLC (Ñ)

    233,491      544

Experian PLC (Ñ)

    1,628,032      10,744

Game Group PLC

    258,843      753

GKN PLC

    1,105,908      1,955

GlaxoSmithKline PLC

    2,514,637      38,831

Hays PLC

    1,048,167      1,387

HMV Group PLC (Ñ)

    285,008      599

HSBC Holdings PLC

    3,230,466      22,938

Hutchison Telecommunications Hong Kong Holdings, Ltd. (Æ)

    520,043      69

Imperial Tobacco Group PLC

    231,061      5,283

Intermediate Capital Group PLC (Ñ)

    127,076      913

International Power PLC

    316,536      1,146

J Sainsbury PLC

    851,897      4,142

John Wood Group PLC

    182,453      638

Kesa Electricals PLC

    422,320      828

Kingfisher PLC

    2,678,787      7,293

Ladbrokes PLC

    873,099      3,002

Land Securities Group PLC (ö)(Ñ)

    39,601      325

Lloyds Banking Group PLC

    1,865,470      3,041

Michael Page International PLC

    841,440      3,422

Mondi PLC

    291,336      757

National Grid PLC

    186,426      1,556

Next PLC

    166,264      3,977

Old Mutual PLC

    74,587      75

Persimmon PLC (Æ)(Ñ)

    379,200      2,126

Petrofac, Ltd.

    65,645      553

Reckitt Benckiser Group PLC (Ñ)

    531,358      20,926

Regus PLC

    409,206      462

Rio Tinto PLC

    328,047      13,419

Royal Bank of Scotland Group PLC (Æ)

    801,122      121

Royal Bank of Scotland Group PLC

    2,590,462      1,575

Royal Dutch Shell PLC Class A (Ñ)

    1,804,686      41,895

Royal Dutch Shell PLC Class B

    228,985      5,252

 

Russell International Developed Markets Fund   53

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

RSA Insurance Group PLC

    1,080,272      2,076

Scottish & Southern Energy PLC

    271,188      4,432

Smiths Group PLC (Ñ)

    390,592      4,192

Standard Chartered PLC

    1,026,514      15,786

Tate & Lyle PLC

    220,669      896

Tesco PLC

    2,576,961      12,794

Thomas Cook Group PLC

    384,900      1,481

Tomkins PLC

    548,372      1,395

Treveria PLC (Æ)

    3,592,029      709

Trinity Mirror PLC

    217,491      169

TUI Travel PLC

    354,500      1,317

Tullow Oil PLC

    166,863      1,970

Unilever PLC

    683,554      13,341

United Utilities Group PLC

    204,624      1,536

Vodafone Group PLC

    21,606,338      39,687

Vodafone Group PLC - ADR

    489,120      8,975

William Hill PLC

    2,084,436      6,751

WM Morrison Supermarkets PLC

    1,106,280      4,020

Wolseley PLC (Æ)

    3,494      63

WPP PLC

    3,295,038      22,536

Xstrata PLC

    362,056      3,182
         
        564,907
         
United States - 0.4%        

Philip Morris International, Inc.

    136,010      4,924

Synthes, Inc. (Æ)

    98,319      9,984
         
        14,908
         

Total Common Stocks

(cost $3,683,131)

         3,046,204
         
Preferred Stocks - 0.4%        
Brazil - 0.2%        

Itau Unibanco Banco Multiplo SA

    372,500      5,173

Usinas Siderurgicas de Minas Gerais SA

    17,475      257
         
        5,430
         
Germany - 0.2%        

Henkel AG & Co. KGaA (Ñ)

    235,150      6,365

Porsche Automobil Holding SE

    14,924      1,069

Volkswagen AG

    11,762      745
         
        8,179
         
South Korea - 0.0%        

Samsung Electronics Co., Ltd.

    2,500      645
         

Total Preferred Stocks

(cost $21,693)

         14,254
         

A portion of the portfolio has been fair valued as of period end.

    

Principal

Amount ($)

or Shares

     

Market

Value
$

  
Warrants & Rights - 0.0%        
Australia - 0.0%        

Dexus Property Group (Æ)
2009 Rights

    54,045      3   
           
Belgium - 0.0%        

Fortis (Æ)
2014 Rights

    1,028,666      —   
           

Total Warrants & Rights

(cost $—)

         3   
           
Short-Term Investments - 9.6%     
United States - 9.6%        

Russell Investment Company Russell Money Market Fund

    283,111,001      283,111   

State Street Euro Commercial Paper (ç)(ž) 0.010% due 05/01/09

    51,200      51,200   
           

Total Short-Term Investments

(cost $334,311)

      334,311   
           
Other Securities - 11.7%        

Russell Investment Company Russell Money Market Fund (×)

    202,236,937      202,237   

State Street Securities Lending Quality Trust (×)

    212,988,025      205,316   
           

Total Other Securities

(cost $415,225)

         407,553   
           

Total Investments - 109.0%

(identified cost $4,454,360)

         3,802,325   

Other Assets and Liabilities,

Net - (9.0%)

         (313,578 ) 
           
Net Assets - 100.0%         3,488,747   
           

 

See accompanying notes which are an integral part of the financial statements.

 

54   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$		  
                   
                   
Long Positions                    

AEX Index (Netherlands)

    5      EUR   240      05/09      8   

CAC-40 Index (France)

    1,875      EUR   58,519      05/09      4,445   

DAX Index (Germany)

    200      EUR   23,993      06/09      4,662   

EUR STOXX 50 Index (EMU)

    2,650      EUR   61,692      06/09      12,212   

FTSE-100 Index (UK)

    1,644      GBP   69,163      06/09      10,224   

Hang Seng Index (Hong Kong)

    102      HKD   78,474      05/09      266   

IBEX Plus Index (Spain)

    244      EUR   21,705      05/09      862   

MSCI Singapore Index

    7      SGD   322      05/09      13   

MIB-30 (Italy)

    171      EUR   16,001      06/09      5,827   

SPI 200 Index (Australia)

    343      AUD   32,293      06/09      1,880   

TOPIX Index (Japan)

    996      JPY   8,376,360      06/09      11,697   
Short Positions                    

DAX Index (Germany)

    146      EUR   17,515      06/09      (3,608 ) 

Hang Seng Index (Hong Kong)

    80      HKD   61,548      05/09      (225 ) 

OMX Index (Sweden)

    456      SEK   34,633      05/09      (141 ) 

SPI 200 Index (Australia)

    370      AUD   34,836      06/09      (1,986 ) 

TOPIX Index (Japan)

    169      JPY   1,421,290      06/09      (1,419 ) 
                       

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

      44,717   
                       

 

See accompanying notes which are an integral part of the financial statements.

 

Russell International Developed Markets Fund   55

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   28   AUD   40   05/01/09   1   
USD   71   AUD   101   05/01/09   2   
USD   200   AUD   284   05/01/09   7   
USD   25   AUD   34   05/04/09   —   
USD   73   AUD   102   05/04/09   1   
USD   100   AUD   140   05/04/09   1   
USD   155   AUD   217   05/04/09   2   
USD   68   AUD   93   05/05/09   —   
USD   75   AUD   104   05/05/09   —   
USD   —   AUD   —   06/17/09   —   
USD   692   AUD   1,000   06/17/09   33   
USD   699   AUD   1,000   06/17/09   25   
USD   724   AUD   1,000   06/17/09   1   
USD   992   AUD   1,377   06/17/09   5   
USD   992   AUD   1,377   06/17/09   6   
USD   992   AUD   1,377   06/17/09   6   
USD   1,294   AUD   2,000   06/17/09   155   
USD   1,367   AUD   2,000   06/17/09   82   
USD   1,437   AUD   2,000   06/17/09   12   
USD   1,984   AUD   2,753   06/17/09   11   
USD   2,972   AUD   4,125   06/17/09   18   
USD   3,029   AUD   4,606   06/17/09   308   
USD   3,030   AUD   4,606   06/17/09   307   
USD   3,030   AUD   4,606   06/17/09   308   
USD   3,031   AUD   4,606   06/17/09   307   
USD   3,053   AUD   4,337   06/17/09   90   
USD   4,983   AUD   7,590   06/17/09   518   
USD   5,596   AUD   7,773   06/17/09   37   
USD   5,600   AUD   7,773   06/17/09   33   
USD   5,700   AUD   9,045   06/17/09   855   
USD   5,725   AUD   9,045   06/17/09   831   
USD   5,726   AUD   9,045   06/17/09   829   
USD   5,729   AUD   9,045   06/17/09   827   
USD   6,215   AUD   8,831   06/17/09   183   
USD   6,986   AUD   10,272   06/17/09   458   
USD   228   BRL   495   05/04/09   (1 ) 
USD   88   BRL   192   05/05/09   —   
USD   153   BRL   334   05/05/09   —   
USD   297   BRL   649   05/05/09   (1 ) 
USD   784   BRL   1,711   05/05/09   (2 ) 
USD   981   CAD   1,171   05/05/09   —   
USD   13,441   CAD   16,735   06/15/09   587   
USD   264   CHF   300   05/04/09   (1 ) 
USD   299   CHF   343   05/04/09   2   
USD   894   CHF   1,027   05/04/09   6   
USD   198   CHF   226   05/05/09   —   
USD   10   CHF   11   06/17/09   —   
USD   20   CHF   23   06/17/09   —   
USD   143   CHF   162   06/17/09   (1 ) 
USD   343   CHF   392   06/17/09   —   
USD   585   CHF   683   06/17/09   14   
USD   647   CHF   765   06/17/09   23   
USD   647   CHF   765   06/17/09   23   
Foreign Currency Exchange Contracts      
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   647   CHF   765   06/17/09   23   
USD   647   CHF   765   06/17/09   23   
USD   648   CHF   739   06/17/09   —   
USD   146   DKK   817   05/04/09   (1 ) 
USD   355   DKK   1,983   05/04/09   (3 ) 
USD   1,877   DKK   10,541   05/04/09   (4 ) 
USD   10   DKK   54   06/17/09   —   
USD   33   DKK   188   06/17/09   —   
USD   58   DKK   335   06/17/09   1   
USD   89   DKK   510   06/17/09   2   
USD   91   DKK   511   06/17/09   —   
USD   253   DKK   1,452   06/17/09   5   
USD   253   DKK   1,452   06/17/09   5   
USD   253   DKK   1,452   06/17/09   5   
USD   253   DKK   1,452   06/17/09   5   
USD   261   DKK   1,484   06/17/09   3   
USD   83   EUR   63   05/04/09   1   
USD   108   EUR   82   05/04/09   1   
USD   390   EUR   292   05/04/09   (3 ) 
USD   465   EUR   349   05/04/09   (3 ) 
USD   466   EUR   349   05/04/09   (4 ) 
USD   387   EUR   295   05/05/09   4   
USD   610   EUR   461   05/05/09   (1 ) 
USD   651   EUR   492   05/05/09   (1 ) 
USD   1,096   EUR   827   05/05/09   (1 ) 
USD   1,345   EUR   1,016   05/05/09   (2 ) 
USD   351   EUR   265   05/06/09   —   
USD   614   EUR   464   05/06/09   (1 ) 
USD   5   EUR   4   06/17/09   —   
USD   8   EUR   6   06/17/09   —   
USD   101   EUR   76   06/17/09   —   
USD   674   EUR   510   06/17/09   1   
USD   739   EUR   561   06/17/09   3   
USD   1,001   EUR   733   06/17/09   (31 ) 
USD   2,863   EUR   2,104   06/17/09   (79 ) 
USD   3,967   EUR   3,000   06/17/09   2   
USD   4,085   EUR   3,000   06/17/09   (116 ) 
USD   5,221   EUR   4,000   06/17/09   70   
USD   5,380   EUR   4,000   06/17/09   (89 ) 
USD   6,277   EUR   5,000   06/17/09   338   
USD   9,121   EUR   7,000   06/17/09   139   
USD   12,642   EUR   10,000   06/17/09   586   
USD   13,232   EUR   10,000   06/17/09   (3 ) 
USD   13,562   EUR   10,000   06/17/09   (334 ) 
USD   42,770   EUR   33,933   06/17/09   2,118   
USD   42,837   EUR   33,933   06/17/09   2,052   
USD   42,905   EUR   33,933   06/17/09   1,984   
USD   42,913   EUR   33,933   06/17/09   1,977   
USD   44   GBP   30   05/01/09   1   
USD   60   GBP   41   05/01/09   1   
USD   439   GBP   300   05/01/09   6   
USD   694   GBP   475   05/01/09   9   
USD   715   GBP   484   05/01/09   1   

 

See accompanying notes which are an integral part of the financial statements.

 

56   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   736   GBP   504   05/01/09   9   
USD   1,236   GBP   846   05/01/09   16   
USD   76   GBP   52   05/05/09   —   
USD   204   GBP   138   05/05/09   —   
USD   457   GBP   309   05/05/09   —   
USD   749   GBP   507   05/05/09   —   
USD   762   GBP   515   05/05/09   —   
USD   1,032   GBP   699   05/05/09   2   
USD   986   GBP   666   05/06/09   (1 ) 
USD   4,297   GBP   2,902   06/15/09   (4 ) 
USD   4,481   GBP   3,064   06/15/09   51   
USD   1   GBP   1   06/17/09   —   
USD   4   GBP   3   06/17/09   —   
USD   5   GBP   4   06/17/09   —   
USD   21   GBP   15   06/17/09   1   
USD   267   GBP   187   06/17/09   9   
USD   570   GBP   405   06/17/09   29   
USD   570   GBP   405   06/17/09   29   
USD   571   GBP   405   06/17/09   29   
USD   571   GBP   405   06/17/09   28   
USD   2,201   GBP   1,500   06/17/09   18   
USD   2,216   GBP   1,500   06/17/09   2   
USD   2,911   GBP   2,000   06/17/09   48   
USD   2,926   GBP   2,000   06/17/09   32   
USD   2,928   GBP   2,000   06/17/09   31   
USD   2,933   GBP   2,000   06/17/09   26   
USD   4,253   GBP   3,000   06/17/09   185   
USD   4,332   GBP   3,000   06/17/09   106   
USD   4,475   GBP   3,000   06/17/09   (37 ) 
USD   4,495   GBP   3,068   06/17/09   43   
USD   5,650   GBP   4,000   06/17/09   267   
USD   5,778   GBP   4,000   06/17/09   140   
USD   6,175   GBP   4,205   06/17/09   45   
USD   6,176   GBP   4,205   06/17/09   45   
USD   7,931   GBP   5,642   06/17/09   415   
USD   18,832   GBP   13,641   06/17/09   1,347   
USD   18,845   GBP   13,641   06/17/09   1,334   
USD   18,860   GBP   13,641   06/17/09   1,320   
USD   18,860   GBP   13,641   06/17/09   1,319   
USD   38   HKD   295   05/04/09   —   
USD   170   HKD   1,316   05/04/09   —   
USD   193   HKD   1,499   05/04/09   —   
USD   312   HKD   2,419   05/04/09   —   
USD   209   HKD   1,620   05/05/09   —   
USD   628   HKD   4,863   05/05/09   —   
USD   687   HKD   5,326   05/05/09   —   
USD   788   HKD   6,105   05/05/09   —   
USD   4   HKD   34   06/17/09   —   
USD   17   HKD   134   06/17/09   —   
USD   37   HKD   287   06/17/09   —   
USD   60   HKD   462   06/17/09   —   
USD   72   HKD   558   06/17/09   —   
USD   72   HKD   558   06/17/09   —   
Foreign Currency Exchange Contracts      
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   153   HKD   1,185   06/17/09   —   
USD   169   HKD   1,307   06/17/09   —   
USD   211   HKD   1,634   06/17/09   —   
USD   211   HKD   1,634   06/17/09   —   
USD   211   HKD   1,634   06/17/09   —   
USD   211   HKD   1,634   06/17/09   —   
USD   1,323   JPY   128,012   05/01/09   (25 ) 
USD   267   JPY   25,606   05/07/09   (7 ) 
USD   1,320   JPY   126,811   05/07/09   (34 ) 
USD   1,041   JPY   102,462   05/08/09   (2 ) 
USD   1,114   JPY   109,631   05/08/09   (2 ) 
USD   1,355   JPY   133,399   05/08/09   (3 ) 
USD   1,510   JPY   148,615   05/08/09   (3 ) 
USD   1,741   JPY   171,352   05/08/09   (3 ) 
USD   17   JPY   1,635   06/17/09   (1 ) 
USD   19   JPY   1,955   06/17/09   —   
USD   29   JPY   2,797   06/17/09   (1 ) 
USD   33   JPY   3,259   06/17/09   —   
USD   33   JPY   3,198   06/17/09   (1 ) 
USD   113   JPY   11,321   06/17/09   2   
USD   119   JPY   11,390   06/17/09   (3 ) 
USD   530   JPY   51,330   06/17/09   (9 ) 
USD   1,028   JPY   100,000   06/17/09   (13 ) 
USD   1,060   JPY   102,659   06/17/09   (18 ) 
USD   2,024   JPY   200,000   06/17/09   5   
USD   2,031   JPY   200,000   06/17/09   (2 ) 
USD   2,046   JPY   200,000   06/17/09   (17 ) 
USD   2,048   JPY   200,000   06/17/09   (19 ) 
USD   2,532   JPY   250,390   06/17/09   8   
USD   2,543   JPY   251,342   06/17/09   7   
USD   3,092   JPY   300,000   06/17/09   (48 ) 
USD   3,336   JPY   335,378   06/17/09   66   
USD   3,341   JPY   335,378   06/17/09   61   
USD   4,131   JPY   400,000   06/17/09   (72 ) 
USD   4,177   JPY   400,000   06/17/09   (120 ) 
USD   6,136   JPY   602,966   06/17/09   (18 ) 
USD   6,137   JPY   602,966   06/17/09   (20 ) 
USD   6,137   JPY   602,966   06/17/09   (19 ) 
USD   6,138   JPY   602,966   06/17/09   (20 ) 
USD   7,793   JPY   762,551   06/17/09   (56 ) 
USD   8,094   JPY   800,000   06/17/09   23   
USD   13,287   JPY   1,334,755   06/17/09   255   
USD   24,111   JPY   2,385,500   06/17/09   92   
USD   24,118   JPY   2,385,500   06/17/09   85   
USD   24,125   JPY   2,385,500   06/17/09   78   
USD   24,139   JPY   2,385,500   06/17/09   64   
USD   628   NZD   1,087   06/17/09   (15 ) 
USD   629   NZD   1,087   06/17/09   (15 ) 
USD   1,183   NZD   2,244   06/17/09   83   
USD   1,184   NZD   2,244   06/17/09   83   
USD   1,185   NZD   2,244   06/17/09   82   
USD   1,185   NZD   2,244   06/17/09   81   
USD   1,251   NZD   2,165   06/17/09   (30 ) 

 

See accompanying notes which are an integral part of the financial statements.

 

Russell International Developed Markets Fund   57

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   1,257   NZD   2,174   06/17/09   (31 ) 
USD   9,655   SEK   83,215   06/15/09   689   
USD   1   SEK   7   06/17/09   —   
USD   1   SEK   7   06/17/09   —   
USD   4   SEK   33   06/17/09   —   
USD   30   SEK   239   06/17/09   —   
USD   70   SEK   566   06/17/09   1   
USD   146   SEK   1,182   06/17/09   —   
USD   534   SEK   4,447   06/17/09   19   
USD   653   SEK   5,523   06/17/09   33   
USD   653   SEK   5,523   06/17/09   33   
USD   654   SEK   5,523   06/17/09   33   
USD   654   SEK   5,523   06/17/09   32   
USD   816   SEK   6,979   06/17/09   51   
USD   939   SEK   7,466   06/17/09   (11 ) 
USD   196   SGD   294   05/04/09   3   
USD   62   SGD   92   05/05/09   —   
USD   112   SGD   166   05/05/09   —   
USD   868   SGD   1,282   05/06/09   (2 ) 
USD   3   SGD   4   06/17/09   —   
USD   17   SGD   26   06/17/09   —   
USD   25   SGD   38   06/17/09   —   
USD   27   SGD   40   06/17/09   —   
USD   28   SGD   41   06/17/09   —   
USD   59   SGD   90   06/17/09   2   
USD   60   SGD   91   06/17/09   1   
USD   64   SGD   97   06/17/09   1   
USD   124   SGD   190   06/17/09   4   
USD   124   SGD   190   06/17/09   4   
USD   124   SGD   190   06/17/09   4   
USD   124   SGD   190   06/17/09   4   
USD   499   TRY   795   05/05/09   (2 ) 
AUD   88   USD   64   05/05/09   —   
AUD   208   USD   151   05/05/09   —   
AUD   34   USD   25   06/17/09   —   
AUD   40   USD   28   06/17/09   (1 ) 
AUD   667   USD   469   06/17/09   (14 ) 
AUD   727   USD   489   06/17/09   (38 ) 
AUD   1,000   USD   692   06/17/09   (33 ) 
AUD   1,000   USD   706   06/17/09   (19 ) 
AUD   1,606   USD   1,125   06/17/09   (39 ) 
AUD   2,000   USD   1,316   06/17/09   (134 ) 
AUD   2,000   USD   1,414   06/17/09   (36 ) 
AUD   2,070   USD   1,460   06/17/09   (40 ) 
AUD   3,000   USD   1,910   06/17/09   (265 ) 
AUD   4,000   USD   2,512   06/17/09   (387 ) 
AUD   4,045   USD   2,849   06/17/09   (82 ) 
AUD   4,500   USD   2,909   06/17/09   (353 ) 
AUD   4,817   USD   3,369   06/17/09   (121 ) 
AUD   6,211   USD   4,380   06/17/09   (120 ) 
AUD   9,637   USD   6,740   06/17/09   (243 ) 
BRL   334   USD   153   05/05/09   —   
CAD   564   USD   472   05/01/09   —   
Foreign Currency Exchange Contracts      
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
CAD   681   USD   571   05/01/09   —   
CAD   50   USD   41   05/04/09   —   
CAD   97   USD   81   05/04/09   (1 ) 
CAD   561   USD   470   05/04/09   —   
CAD   142   USD   119   05/05/09   —   
CAD   156   USD   131   05/05/09   —   
CAD   2,701   USD   2,132   06/15/09   (132 ) 
CAD   14,034   USD   11,006   06/15/09   (758 ) 
CAD   3,829   USD   3,159   07/15/09   (51 ) 
CAD   16,735   USD   13,442   07/15/09   (589 ) 
CHF   469   USD   411   05/04/09   —   
CHF   551   USD   482   05/04/09   (1 ) 
CHF   908   USD   796   05/04/09   —   
CHF   2,520   USD   2,201   05/04/09   (7 ) 
CHF   230   USD   202   05/05/09   —   
CHF   327   USD   288   05/05/09   2   
CHF   608   USD   536   05/05/09   4   
CHF   3,949   USD   3,486   05/05/09   26   
CHF   100   USD   88   05/06/09   —   
CHF   248   USD   217   05/06/09   —   
CHF   284   USD   248   06/17/09   (1 ) 
CHF   325   USD   275   06/17/09   (10 ) 
CHF   350   USD   312   06/17/09   5   
CHF   470   USD   419   06/17/09   6   
DKK   74   USD   13   06/17/09   —   
DKK   365   USD   66   06/17/09   1   
DKK   4,026   USD   736   06/17/09   22   
EUR   2   USD   2   05/04/09   —   
EUR   28   USD   38   05/04/09   —   
EUR   50   USD   66   05/04/09   —   
EUR   55   USD   73   05/04/09   —   
EUR   59   USD   77   05/04/09   —   
EUR   118   USD   154   05/04/09   (1 ) 
EUR   137   USD   182   05/04/09   —   
EUR   163   USD   217   05/04/09   2   
EUR   321   USD   422   05/04/09   (3 ) 
EUR   679   USD   898   05/04/09   —   
EUR   690   USD   914   05/04/09   1   
EUR   944   USD   1,250   05/04/09   2   
EUR   2,343   USD   3,103   05/04/09   4   
EUR   38   USD   50   05/05/09   —   
EUR   49   USD   65   05/05/09   —   
EUR   93   USD   123   05/05/09   —   
EUR   103   USD   136   05/05/09   —   
EUR   127   USD   167   05/05/09   —   
EUR   149   USD   197   05/05/09   —   
EUR   155   USD   204   05/05/09   —   
EUR   162   USD   214   05/05/09   —   
EUR   423   USD   559   05/05/09   (1 ) 
EUR   485   USD   647   05/05/09   5   
EUR   579   USD   772   05/05/09   5   
EUR   625   USD   828   05/05/09   1   
EUR   9   USD   11   05/06/09   —   

 

See accompanying notes which are an integral part of the financial statements.

 

58   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
EUR   25   USD   33   05/06/09   —   
EUR   58   USD   76   05/06/09   —   
EUR   74   USD   98   05/06/09   —   
EUR   85   USD   112   05/06/09   —   
EUR   102   USD   135   05/06/09   —   
EUR   104   USD   138   05/06/09   —   
EUR   122   USD   161   05/06/09   —   
EUR   149   USD   197   05/06/09   —   
EUR   157   USD   207   05/06/09   —   
EUR   180   USD   238   05/06/09   —   
EUR   203   USD   269   05/06/09   —   
EUR   218   USD   288   05/06/09   —   
EUR   219   USD   290   05/06/09   —   
EUR   225   USD   297   05/06/09   —   
EUR   17   USD   22   06/17/09   —   
EUR   405   USD   532   06/17/09   (3 ) 
EUR   662   USD   886   06/17/09   10   
EUR   1,000   USD   1,257   06/17/09   (66 ) 
EUR   1,033   USD   1,342   06/17/09   (24 ) 
EUR   2,330   USD   3,052   06/17/09   (30 ) 
EUR   3,000   USD   3,985   06/17/09   17   
EUR   3,785   USD   4,923   06/17/09   (84 ) 
EUR   3,785   USD   4,922   06/17/09   (85 ) 
EUR   3,785   USD   4,926   06/17/09   (82 ) 
EUR   3,785   USD   4,923   06/17/09   (84 ) 
EUR   4,000   USD   5,431   06/17/09   140   
EUR   4,000   USD   5,387   06/17/09   95   
EUR   4,000   USD   5,298   06/17/09   6   
EUR   5,000   USD   6,302   06/17/09   (313 ) 
EUR   5,000   USD   6,510   06/17/09   (104 ) 
EUR   7,000   USD   9,416   06/17/09   156   
EUR   8,000   USD   10,068   06/17/09   (515 ) 
EUR   10,000   USD   13,377   06/17/09   148   
EUR   14,000   USD   17,696   06/17/09   (824 ) 
EUR   31,000   USD   39,603   06/17/09   (1,407 ) 
GBP   18   USD   27   05/01/09   —   
GBP   20   USD   29   05/01/09   —   
GBP   39   USD   57   05/01/09   (1 ) 
GBP   173   USD   256   05/01/09   —   
GBP   190   USD   277   05/01/09   (4 ) 
GBP   260   USD   385   05/01/09   1   
GBP   56   USD   83   05/05/09   —   
GBP   118   USD   174   05/05/09   —   
GBP   542   USD   800   05/05/09   (1 ) 
GBP   1   USD   2   05/06/09   —   
GBP   19   USD   28   05/06/09   —   
GBP   22   USD   32   05/06/09   —   
GBP   39   USD   57   05/06/09   —   
GBP   48   USD   71   05/06/09   —   
GBP   49   USD   73   05/06/09   —   
GBP   96   USD   141   05/06/09   —   
GBP   132   USD   195   05/06/09   —   
GBP   136   USD   201   05/06/09   —   
Foreign Currency Exchange Contracts      
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
GBP   137   USD   203   05/06/09   —   
GBP   152   USD   224   05/06/09   —   
GBP   182   USD   269   05/06/09   —   
GBP   191   USD   282   05/06/09   —   
GBP   5,966   USD   8,333   06/15/09   (493 ) 
GBP   699   USD   1,032   06/17/09   (2 ) 
GBP   1,000   USD   1,373   06/17/09   (107 ) 
GBP   1,060   USD   1,538   06/17/09   (30 ) 
GBP   1,500   USD   2,107   06/17/09   (112 ) 
GBP   2,000   USD   2,756   06/17/09   (202 ) 
GBP   2,000   USD   2,809   06/17/09   (150 ) 
GBP   2,000   USD   2,965   06/17/09   6   
GBP   2,000   USD   2,982   06/17/09   23   
GBP   2,000   USD   2,954   06/17/09   (5 ) 
GBP   2,500   USD   3,563   06/17/09   (135 ) 
GBP   2,500   USD   3,633   06/17/09   (65 ) 
GBP   3,265   USD   4,849   06/17/09   19   
GBP   3,270   USD   4,812   06/17/09   (25 ) 
GBP   3,911   USD   5,594   06/17/09   (192 ) 
GBP   4,000   USD   5,627   06/17/09   (290 ) 
GBP   5,000   USD   7,037   06/17/09   (359 ) 
GBP   5,000   USD   7,353   06/17/09   (43 ) 
GBP   6,592   USD   9,688   06/17/09   (64 ) 
GBP   9,000   USD   12,398   06/17/09   (916 ) 
GBP   3,064   USD   4,481   07/15/09   (51 ) 
HKD   7,882   USD   1,017   05/04/09   —   
HKD   52   USD   7   06/17/09   —   
HKD   571   USD   74   06/17/09   —   
HKD   1,181   USD   152   06/17/09   —   
JPY   2,797   USD   29   05/01/09   1   
JPY   81,031   USD   823   05/01/09   2   
JPY   100,600   USD   1,037   05/01/09   17   
JPY   106,128   USD   1,097   05/01/09   21   
JPY   3,198   USD   33   05/07/09   1   
JPY   1,149   USD   12   05/08/09   —   
JPY   2,877   USD   29   05/08/09   —   
JPY   3,036   USD   31   05/08/09   —   
JPY   4,385   USD   44   05/08/09   —   
JPY   6,897   USD   70   05/08/09   —   
JPY   8,226   USD   83   05/08/09   —   
JPY   8,700   USD   88   05/08/09   —   
JPY   10,474   USD   106   05/08/09   —   
JPY   10,978   USD   111   05/08/09   —   
JPY   11,645   USD   118   05/08/09   —   
JPY   12,379   USD   126   05/08/09   —   
JPY   12,483   USD   127   05/08/09   —   
JPY   12,556   USD   127   05/08/09   —   
JPY   13,100   USD   133   05/08/09   —   
JPY   13,565   USD   138   05/08/09   —   
JPY   14,113   USD   143   05/08/09   —   
JPY   14,758   USD   150   05/08/09   —   
JPY   14,929   USD   151   05/08/09   —   
JPY   20,808   USD   211   05/08/09   —   

 

See accompanying notes which are an integral part of the financial statements.

 

Russell International Developed Markets Fund   59

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
JPY   21,293   USD   216   05/08/09   —   
JPY   21,584   USD   219   05/08/09   —   
JPY   22,398   USD   227   05/08/09   —   
JPY   375   USD   4   06/17/09   —   
JPY   64,528   USD   669   06/17/09   14   
JPY   79,988   USD   814   06/17/09   2   
JPY   84,068   USD   858   06/17/09   5   
JPY   100,000   USD   1,016   06/17/09   1   
JPY   100,000   USD   1,000   06/17/09   (14 ) 
JPY   130,589   USD   1,353   06/17/09   28   
JPY   200,000   USD   2,019   06/17/09   (10 ) 
JPY   300,000   USD   3,123   06/17/09   79   
JPY   400,000   USD   3,973   06/17/09   (85 ) 
JPY   404,462   USD   4,124   06/17/09   20   
JPY   600,000   USD   6,065   06/17/09   (22 ) 
JPY   1,000,000   USD   10,204   06/17/09   58   
JPY   1,114,311   USD   11,226   06/17/09   (79 ) 
JPY   1,114,311   USD   11,222   06/17/09   (84 ) 
JPY   1,200,000   USD   12,167   06/17/09   (8 ) 
JPY   1,400,000   USD   14,352   06/17/09   147   
NOK   736   USD   112   05/04/09   —   
NOK   1,016   USD   155   05/06/09   —   
NZD   144   USD   82   06/17/09   —   
NZD   252   USD   146   06/17/09   4   
NZD   1,544   USD   896   06/17/09   25   
NZD   2,741   USD   1,441   06/17/09   (105 ) 
NZD   4,632   USD   2,689   06/17/09   76   
NZD   6,176   USD   3,584   06/17/09   100   
SEK   1,934   USD   236   05/04/09   (4 ) 
SEK   6,506   USD   810   05/04/09   1   
SEK   1,558   USD   194   05/05/09   1   
SEK   1,799   USD   223   05/06/09   —   
SEK   83,215   USD   9,456   06/15/09   (889 ) 
SEK   3,996   USD   496   06/17/09   (1 ) 
SEK   5,311   USD   622   06/17/09   (38 ) 
SEK   9,308   USD   1,121   06/17/09   (36 ) 
SEK   13,693   USD   1,662   06/17/09   (40 ) 
SEK   23,633   USD   2,967   06/17/09   30   
SEK   29,740   USD   3,510   06/17/09   (187 ) 
SEK   32,750   USD   3,955   06/17/09   (116 ) 
SEK   32,759   USD   3,956   06/17/09   (116 ) 
SGD   150   USD   101   05/06/09   —   
SGD   48   USD   31   06/17/09   (1 ) 
SGD   55   USD   37   06/17/09   (1 ) 
SGD   379   USD   247   06/17/09   (9 ) 
SGD   408   USD   273   06/17/09   (3 ) 
             

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts

   12,973   
             

 

See accompanying notes which are an integral part of the financial statements.

 

60   Russell International Developed Markets Fund

Russell Investment Company

Russell International Developed Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Industry Diversification   

% of
Net

Assets

     

Market

Value

$

  
     
     

Auto and Transportation

    4.3       149,023   

Consumer Discretionary

    7.6       265,365   

Consumer Staples

    8.9       311,589   

Financial Services

    16.5       575,451   

Health Care

    7.2       252,335   

Integrated Oils

    7.2       249,868   

Materials and Processing

    10.0       349,745   

Miscellaneous

    1.0       35,886   

Other Energy

    2.0       68,133   

Producer Durables

    7.2       251,550   

Technology

    5.2       181,365   

Utilities

    10.6       370,148   

Warrants & Rights

    —       3   

Short-Term Investments

    9.6       334,311   

Other Securities

    11.7       407,553   
             

Total Investments

    109.0       3,802,325   

Other Assets and Liabilities, Net

    (9.0 )     (313,578 ) 
             
Net Assets    100.0       3,488,747   
             
Geographic Diversification    % of
Net
Assets		      Market
Value
$		  
     

Africa

    0.2       7,477   

Asia

    10.5       366,147   

Europe

    38.0       1,325,468   

Japan

    15.9       554,180   

Latin America

    3.3       115,310   

Middle East

    0.6       20,661   

Netherlands Antilles

    —       233   

Other Regions

    3.0       106,078   

United Kingdom

    16.2       564,907   

Short-Term Investments

    9.6       334,311   

Other Securities

    11.7       407,553   
             

Total Investments

    109.0       3,802,325   

Other Assets and Liabilities, Net

    (9.0 )     (313,578 ) 
             
Net Assets    100.0       3,488,747   
             

 

See accompanying notes which are an integral part of the financial statements.

 

Russell International Developed Markets Fund   61

Russell Investment Company

Russell International Developed Markets Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories     

% of Net

Assets

  
    
    

Australia

      3.8   

Austria

      0.1   

Belgium

      0.6   

Bermuda

      1.0   

Brazil

      1.6   

Canada

      2.6   

Cayman Islands

      0.2   

China

      0.8   

Czech Republic

      0.1   

Denmark

      0.7   

Finland

      0.8   

France

      10.0   

Germany

      7.0   

Greece

      0.1   

Hong Kong

      1.5   

India

      0.4   

Indonesia

      — * 

Ireland

      0.1   

Israel

      0.6   

Italy

      1.8   

Japan

      15.9   

Luxembourg

      0.3   

Malaysia

      0.1   

Mexico

      0.4   

Netherlands

      3.2   

Netherlands Antilles

      — * 

New Zealand

      0.1   

Norway

      0.3   

Portugal

      0.1   

Russia

      0.4   

Singapore

      1.4   

South Africa

      0.2   

South Korea

      0.9   

Spain

      3.2   

Sweden

      1.5   

Switzerland

      7.5   

Taiwan

      1.3   

Thailand

      0.1   

Turkey

      — * 

United Kingdom

      16.2   

United States

      0.4   

Preferred Stocks

      0.4   

Warrants & Rights

      — * 

Short-Term Investments

      9.6   

Other Securities

      11.7   
        

Total Investments

      109.0   

Other Assets and Liabilities, Net

      (9.0 ) 
        
     100.0   
        

Futures Contracts

      1.3   

Foreign Currency Exchange Contracts

      0.4   

 

* Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

62   Russell International Developed Markets Fund

Russell Investment Company

Russell Global Equity Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 955.90    $ 1,017.16

Expenses Paid During Period*

    $ 7.47    $ 7.70

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.54% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 951.90    $ 1,013.49

Expenses Paid During Period*

    $ 11.03    $ 11.38

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.28% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 955.80    $ 1,017.16

Expenses Paid During Period*

    $ 7.47    $ 7.70

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.54% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 957.20    $ 1,018.40

Expenses Paid During Period*

    $ 6.26    $ 6.46

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.29% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell Global Equity Fund   63

Russell Investment Company

Russell Global Equity Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 958.10    $ 1,019.29

Expenses Paid During Period*

    $ 5.39    $ 5.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.11% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

64   Russell Global Equity Fund

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Common Stocks - 89.7%        
Australia - 0.5%        

Alumina, Ltd. - ADR

    208,600      937

Centennial Coal Co., Ltd.

    161,067      212

Commonwealth Bank of Australia

    39,023      992

CSL, Ltd.

    59,947      1,499

Minara Resources, Ltd. (Æ)

    695,749      295

Mineral Deposits, Ltd. (Æ)

    361,300      195
         
        4,130
         
Belgium - 0.3%        

Anheuser-Busch InBev NV (Ñ)

    72,750      2,221
         
Bermuda - 1.2%        

Accenture, Ltd. Class A

    67,000      1,972

Axis Capital Holdings, Ltd.

    81,400      2,006

Cheung Kong Infrastructure Holdings, Ltd.

    223,000      863

Covidien, Ltd.

    47,800      1,576

GOME Electrical Appliances Holdings, Ltd. (Ñ)

    11,595,000      1,676

RenaissanceRe Holdings, Ltd. (Ñ)

    14,000      681

Warner Chilcott, Ltd. (Æ)(Ñ)

    28,900      283
         
        9,057
         
Brazil - 1.6%        

BM&F Bovespa SA (Æ)

    478,466      1,939

Centrais Eletricas Brasileiras SA
- ADR (Æ)

    150,350      1,920

Cia de Saneamento Basico do Estado de Sao Paulo - ADR (Æ)

    25,275      713

Petroleo Brasileiro SA - ADR

    198,400      5,353

Tam SA - ADR (Æ)(Ñ)

    225,300      1,503

Vivo Participacoes SA

    49,953      798
         
        12,226
         
Canada - 2.0%        

Addax Petroleum Corp. (Ñ)

    87,700      2,414

Alamos Gold, Inc. (Æ)

    46,200      300

Barrick Gold Corp.

    131,030      3,808

Biovail Corp.

    37,100      406

Cameco Corp.

    98,950      2,255

Eastern Platinum, Ltd. (Æ)

    1,365,125      623

EnCana Corp.

    29,000      1,326

Gabriel Resources, Ltd. (Æ)

    397,800      776

Ivanhoe Mines, Ltd. (Æ)

    44,900      288

Laurentian Bank of Canada

    13,800      333

Manulife Financial Corp.

    50,900      867

Metro, Inc.

    19,700      611

Moto Goldmines, Ltd. (Æ)

    164,075      372

Open Text Corp. (Æ)

    7,600      250

Suncor Energy, Inc.

    34,800      883
         
        15,512
         
Cayman Islands - 0.4%        

Endeavor Financial Corp. (Æ)

    503,811      672
     Principal
Amount ($)
or Shares		      Market
Value
$

Fresh Del Monte Produce, Inc. (Æ)

    74,400      1,080

Hutchison Telecommunications International, Ltd. (Ñ)

    6,212,000      1,140
         
        2,892
         
China - 0.8%        

Beijing Capital International Airport Co., Ltd. Class H (Æ)(Ñ)

    1,480,000      936

China Construction Bank Corp. Class H (Ñ)

    7,839,000      4,534

PetroChina Co., Ltd. - ADR

    6,825      593
         
        6,063
         
Denmark - 0.1%        

H Lundbeck A/S

    26,000      470

Novo Nordisk A/S Class B

    7,550      358
         
        828
         
Egypt - 0.5%        

Orascom Telecom Holding SAE

    652,465      3,676
         
Finland - 1.0%        

Fortum OYJ (Ñ)

    258,846      5,222

Nokia OYJ

    143,200      2,041

UPM-Kymmene OYJ

    82,100      734
         
        7,997
         
France - 3.3%        

BNP Paribas (Ñ)

    10,088      531

Compagnie Generale des Etablissements Michelin Class B

    15,000      765

Danone (Ñ)

    79,807      3,804

EDF SA

    13,700      634

France Telecom SA

    55,090      1,223

LVMH Moet Hennessy Louis Vuitton SA (Ñ)

    22,400      1,694

Pernod-Ricard SA (Ñ)

    67,426      3,977

Publicis Groupe (Ñ)

    94,500      2,898

Sanofi-Aventis SA (Ñ)

    51,170      2,945

Sanofi-Aventis SA - ADR

    82,475      2,369

Technip SA

    29,000      1,243

Thales SA

    36,125      1,493

Total SA

    27,342      1,367

Unibail-Rodamco (ö)

    2,662      395
         
        25,338
         
Germany - 2.5%        

Allianz SE (Ñ)

    41,862      3,841

Bayer AG

    35,100      1,741

Daimler AG (Ñ)

    101,600      3,621

E.ON AG (Ñ)

    194,105      6,556

RWE AG (Ñ)

    9,681      696

SAP AG

    59,800      2,287

Software AG

    15,248      951
         
        19,693
         

 

Russell Global Equity Fund   65

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Hong Kong - 1.2%        

Chaoda Modern Agriculture Holdings, Ltd. (Ñ)

    562,640      321

Cheung Kong Holdings, Ltd.

    211,000      2,179

China Mobile, Ltd.

    246,000      2,119

CLP Holdings, Ltd. (Ñ)

    273,500      1,845

Hang Seng Bank, Ltd.

    72,100      799

HongKong Electric Holdings

    262,500      1,550

Hutchison Telecommunications Hong Kong Holdings, Ltd. (Æ)

    6,212,000      826
         
        9,639
         
India - 1.3%        

Bajaj Finserv, Ltd.

    285,000      1,241

Container Corp. of India

    24,212      369

GMR Infrastructure, Ltd. (Æ)

    2,730,954      6,198

ICICI Bank, Ltd. - ADR

    59,505      1,227

Tata Motors, Ltd. - ADR (Æ)

    119,300      920
         
        9,955
         
Ireland - 0.3%        

Elan Corp. PLC - ADR (Æ)(Ñ)

    227,600      1,345

Governor & Co. of the Bank of Ireland (The) (Æ)

    1,095,900      1,103
         
        2,448
         
Israel - 0.7%        

Teva Pharmaceutical Industries, Ltd. - ADR

    131,500      5,772
         
Italy - 1.3%        

Enel SpA

    245,095      1,328

ERG SpA

    65,100      1,007

Intesa Sanpaolo SpA

    1,388,867      4,399

Luxottica Group SpA

    123,100      2,272

Telecom Italia SpA (Ñ)

    323,047      408

Telecom Italia SpA

    820,500      732
         
        10,146
         
Japan - 8.4%        

Advantest Corp.

    60,000      947

Aeon Mall Co., Ltd. (Ñ)

    151,300      1,983

Alpen Co., Ltd. (Ñ)

    20,100      331

Asahi Breweries, Ltd.

    82,800      1,042

Astellas Pharma, Inc.

    16,500      538

Canon, Inc.

    100,100      3,019

Cosmo Oil Co., Ltd.

    332,000      941

Daiwa Securities Group, Inc.

    908,500      4,727

East Japan Railway Co.

    70,900      3,994

Fast Retailing Co., Ltd.

    4,100      429

Fields Corp.

    320      423

Hakuhodo DY Holdings, Inc.

    4,850      223

Honda Motor Co., Ltd.

    33,800      983

Itochu Corp.

    289,000      1,534

JS Group Corp.

    34,600      422

Kao Corp.

    73,000      1,373

KDDI Corp.

    410      1,843
     Principal
Amount ($)
or Shares		      Market
Value
$

Kirin Holdings Co., Ltd.

    60,000      660

Mitsubishi Corp.

    55,900      859

Mitsubishi UFJ Financial Group, Inc.

    128,600      700

Mitsui & Co., Ltd.

    21,000      220

Mitsui OSK Lines, Ltd.

    124,000      708

Mizuho Financial Group, Inc. (Ñ)

    143,000      300

Nintendo Co., Ltd.

    25,900      6,929

Nippon Oil Corp.

    224,000      1,167

Nippon Telegraph & Telephone Corp.

    181,900      6,818

Nipro Corp. (Ñ)

    22,000      319

Nomura Holdings, Inc.

    362,500      2,174

NTT DoCoMo, Inc.

    2,470      3,441

Paramount Bed Co., Ltd.

    85,500      1,131

Ricoh Co., Ltd.

    31,000      379

Rohm Co., Ltd.

    45,800      2,790

Sekisui House, Ltd.

    178,000      1,533

Sumitomo Corp. (Ñ)

    190,600      1,654

Sumitomo Trust & Banking Co., Ltd. (The)

    109,000      454

Toho Holdings Co., Ltd. (Ñ)

    38,300      369

Tokio Marine Holdings, Inc.

    8,500      225

Toppan Printing Co., Ltd.

    181,000      1,366

Toyo Seikan Kaisha, Ltd.

    12,400      205

Toyota Motor Corp.

    140,900      5,516

TV Asahi Corp.

    411      523
         
        65,192
         
Luxembourg - 0.3%        

ArcelorMittal

    27,973      657

Stolt-Nielsen SA

    194,500      1,709
         
        2,366
         
Mexico - 2.2%        

America Movil SAB de CV Series L

    374,200      12,293

Fomento Economico Mexicano SAB de CV - ADR

    30,700      869

Grupo Financiero Banorte SAB de CV Class O (Ñ)

    1,181,000      1,856

Grupo Televisa SA - ADR

    148,000      2,291
         
        17,309
         
Netherlands - 0.5%        

Akzo Nobel NV (Ñ)

    47,200      1,982

Koninklijke Ahold NV (Ñ)

    86,075      947

TNT NV

    38,488      709
         
        3,638
         
Netherlands Antilles - 0.5%        

Schlumberger, Ltd.

    82,200      4,027
         
Norway - 0.5%        

Fred Olsen Energy ASA

    14,660      467

Marine Harvest (Æ)

    5,318,200      2,405

StatoilHydro ASA - ADR

    39,800      740

Yara International ASA (Ñ)

    20,740      561
         
        4,173
         

 

66   Russell Global Equity Fund

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Oman - 0.0%        

Bank Muscat SAOG - GDR

    26,975      182
         
Panama - 0.5%        

Carnival Corp. (Ñ)

    138,700      3,728
         
Papua New Guinea - 0.4%        

Lihir Gold, Ltd. (Æ)

    1,408,800      3,027
         
Russia - 0.3%        

Gazprom OAO - ADR

    105,175      1,848

NovaTek OAO - GDR

    6,200      218
         
        2,066
         
South Africa - 0.7%        

AngloGold Ashanti, Ltd. - ADR

    65,820      2,027

Gold Fields, Ltd.

    185,800      1,934

Gold Fields, Ltd. - ADR

    64,100      667

Remgro, Ltd.

    71,885      614
         
        5,242
         
South Korea - 0.3%        

Korea Electric Power Corp. - ADR

    135,600      1,448

Samsung Electronics Co., Ltd.

    2,000      923
         
        2,371
         
Spain - 1.1%        

Banco Santander SA

    56,950      537

Iberdrola Renovables SA (Æ)(Ñ)

    1,276,930      5,204

Telefonica SA

    143,400      2,723
         
        8,464
         
Sweden - 0.7%        

Assa Abloy AB Class B

    58,600      694

Hennes & Mauritz AB Series B (Ñ)

    14,575      652

Nordea Bank AB (Ñ)

    92,000      684

Swedish Match AB (Ñ)

    128,200      1,834

Telefonaktiebolaget LM Ericsson Series B (Ñ)

    161,600      1,394
         
        5,258
         
Switzerland - 6.3%        

ABB, Ltd. (Æ)

    186,974      2,642

ACE, Ltd.

    60,400      2,798

Adecco SA

    104,000      4,101

Compagnie Financiere Richemont SA

    213,700      3,828

Credit Suisse Group AG

    105,100      4,016

Julius Baer Holding AG

    155,200      5,090

Nestle SA (Ñ)

    191,935      6,242

Noble Corp.

    47,400      1,295

Novartis AG (Ñ)

    129,592      4,894

Roche Holding AG (Ñ)

    47,879      6,050

Transocean, Ltd. (Æ)

    35,991      2,429

UBS AG (Æ)

    308,200      4,228

Zurich Financial Services AG

    7,096      1,311
         
        48,924
         
     Principal
Amount ($)
or Shares		      Market
Value
$
Thailand - 0.2%        

Bangkok Bank PCL

    289,100      697

Krung Thai Bank PCL

    4,674,600      702
         
        1,399
         
Turkey - 0.1%        

Turkcell Iletisim Hizmet AS - ADR

    32,300      410
         
United Kingdom - 8.9%        

Aggreko PLC (Ñ)

    141,537      1,197

AstraZeneca PLC (Ñ)

    97,978      3,436

AstraZeneca PLC - ADR

    17,181      601

Autonomy Corp. PLC (Æ)

    22,082      465

Aviva PLC

    141,488      646

BAE Systems PLC

    350,667      1,845

BG Group PLC

    314,983      5,065

BP PLC

    317,052      2,248

BP PLC - ADR

    17,742      753

British American Tobacco PLC (Ñ)

    117,661      2,855

British Sky Broadcasting Group PLC

    297,400      2,118

Compass Group PLC (Ñ)

    345,005      1,649

Diageo PLC (Ñ)

    111,700      1,341

Experian PLC

    312,199      2,060

GlaxoSmithKline PLC

    300,645      4,643

HSBC Holdings PLC

    380,533      2,703

Mondi PLC

    275,017      715

Pearson PLC (Ñ)

    149,150      1,552

Petrofac, Ltd.

    94,507      796

Prudential PLC

    52,830      305

Rolls-Royce Group PLC (Æ)

    148,250,559      —

Rolls-Royce Group PLC (Æ)(Ñ)

    1,681,262      8,373

Royal Dutch Shell PLC Class B

    158,470      3,635

Tesco PLC

    642,616      3,190

Unilever PLC

    97,300      1,899

Vodafone Group PLC

    3,696,525      6,790

Vodafone Group PLC - ADR

    40,900      750

WPP PLC

    856,348      5,857

Xstrata PLC

    204,900      1,801
         
        69,288
         
United States - 38.8%        

Activision Blizzard, Inc. (Æ)

    108,500      1,169

Advance Auto Parts, Inc.

    12,000      525

Aeropostale, Inc. (Æ)(Ñ)

    24,300      825

Aetna, Inc.

    76,500      1,684

Aflac, Inc.

    20,700      598

AGCO Corp. (Æ)

    51,925      1,262

Alcoa, Inc.

    63,400      575

Altria Group, Inc.

    106,300      1,736

Amazon.com, Inc. (Æ)

    66,900      5,387

Ameren Corp.

    30,300      698

Amgen, Inc. (Æ)

    76,800      3,723

Annaly Capital Management, Inc. (ö)(Ñ)

    103,900      1,462

AON Corp.

    24,300      1,025

Apollo Group, Inc. Class A (Æ)(Ñ)

    8,800      554

Apple, Inc. (Æ)

    98,400      12,382

Archer-Daniels-Midland Co.

    23,000      566

 

Russell Global Equity Fund   67

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

AT&T, Inc.

    187,700      4,809

Autodesk, Inc. (Æ)

    60,800      1,212

Baker Hughes, Inc.

    73,300      2,608

Bank of America Corp. (Ñ)

    229,413      2,049

Bank of New York Mellon Corp. (The)

    161,000      4,102

Baxter International, Inc.

    37,400      1,814

Bed Bath & Beyond, Inc. (Æ)(Ñ)

    91,300      2,777

Best Buy Co., Inc. (Ñ)

    102,100      3,919

BJ Services Co.

    74,700      1,038

BMC Software, Inc. (Æ)

    11,600      402

CB Richard Ellis Group, Inc. Class A (Æ)

    56,200      422

Celgene Corp. (Æ)

    44,300      1,893

CenturyTel, Inc. (Ñ)

    41,300      1,121

Cephalon, Inc. (Æ)(Ñ)

    47,600      3,123

Chevron Corp.

    12,800      846

Chubb Corp.

    12,500      487

Cisco Systems, Inc. (Æ)

    144,500      2,792

Coca-Cola Co. (The)

    97,100      4,180

Compass Minerals International, Inc.

    7,000      338

ConocoPhillips

    79,228      3,248

Consol Energy, Inc.

    53,450      1,672

Corning, Inc.

    31,300      458

Delta Air Lines, Inc. (Æ)(Ñ)

    91,600      565

DIRECTV Group, Inc. (The) (Æ)

    45,900      1,135

Discover Financial Services

    145,200      1,180

Earthlink, Inc. (Æ)(Ñ)

    148,200      1,123

eBay, Inc. (Æ)

    106,000      1,746

ENSCO International, Inc.

    21,900      619

EOG Resources, Inc.

    20,400      1,295

Express Scripts, Inc. (Æ)

    7,400      473

Exxon Mobil Corp.

    39,900      2,660

Fidelity National Financial, Inc. Class A

    66,400      1,204

Franklin Resources, Inc.

    62,300      3,768

Genuine Parts Co.

    25,400      863

Genzyme Corp. (Æ)

    17,400      928

Gilead Sciences, Inc. (Æ)

    139,100      6,371

Goldman Sachs Group, Inc. (The)

    24,100      3,097

Google, Inc. Class A (Æ)

    11,200      4,435

Gulfmark Offshore, Inc. (Æ)

    11,200      301

Healthspring, Inc. (Æ)

    80,500      743

Hewlett-Packard Co.

    308,400      11,096

Humana, Inc. (Æ)

    18,800      541

Illinois Tool Works, Inc.

    59,100      1,938

Intel Corp.

    480,000      7,574

International Business Machines Corp.

    62,600      6,461

Jarden Corp. (Æ)(Ñ)

    28,100      565

JPMorgan Chase & Co.

    494,021      16,303

Juniper Networks, Inc. (Æ)(Ñ)

    389,700      8,437

Kimberly-Clark Corp.

    63,600      3,125

Lincare Holdings, Inc. (Æ)

    18,700      451

Lockheed Martin Corp.

    12,400      974

Marathon Oil Corp.

    33,600      998

Mastercard, Inc. Class A (Ñ)

    22,600      4,146

McDonald’s Corp.

    145,000      7,727

McKesson Corp.

    21,600      799

Medtronic, Inc.

    34,000      1,088

Microsoft Corp.

    418,670      8,482

Monsanto Co.

    64,600      5,484
     Principal
Amount ($)
or Shares		      Market
Value
$

Morgan Stanley

    128,700      3,042

Murphy Oil Corp.

    80,800      3,855

National Oilwell Varco, Inc. (Æ)

    82,800      2,507

Newmont Mining Corp.

    86,575      3,484

Nike, Inc. Class B

    94,930      4,981

Northern Trust Corp.

    56,900      3,093

NVR, Inc. (Æ)(Ñ)

    4,800      2,426

Omnicare, Inc.

    15,400      396

Oracle Corp.

    396,700      7,672

Peabody Energy Corp.

    52,000      1,372

Pfizer, Inc.

    367,000      4,903

Philip Morris International, Inc.

    41,800      1,513

PNC Financial Services Group, Inc. (Ñ)

    10,600      421

Polo Ralph Lauren Corp.

    58,300      3,139

Praxair, Inc.

    38,900      2,902

Procter & Gamble Co. (The)

    31,700      1,567

Red Hat, Inc. (Æ)

    97,900      1,691

Republic Services, Inc.

    22,565      474

Reynolds American, Inc.

    54,800      2,081

Ross Stores, Inc. (Ñ)

    48,200      1,829

Shaw Group, Inc. (The) (Æ)

    28,800      966

Smith International, Inc.

    95,100      2,458

Smithfield Foods, Inc. (Æ)

    128,500      1,110

Sohu.com, Inc. (Æ)(Ñ)

    19,900      1,038

Sprint Nextel Corp. (Æ)

    196,400      856

Starwood Hotels & Resorts Worldwide, Inc. (Ñ)(ö)

    104,700      2,184

Syniverse Holdings, Inc. (Æ)

    29,500      372

Synthes, Inc. (Æ)

    5,527      561

Tech Data Corp. (Æ)

    41,485      1,194

Tesoro Corp.

    25,475      389

Texas Instruments, Inc.

    59,200      1,069

Thermo Fisher Scientific, Inc. (Æ)

    13,600      477

Tiffany & Co.

    52,100      1,508

TJX Cos., Inc.

    21,300      596

Travelers Cos., Inc. (The)

    66,100      2,719

Tyson Foods, Inc. Class A

    205,650      2,168

Union Pacific Corp.

    95,525      4,694

United Online, Inc.

    64,201      340

United Technologies Corp.

    43,000      2,100

Viacom, Inc. Class B (Æ)

    74,350      1,431

Wal-Mart Stores, Inc.

    157,900      7,958

WellPoint, Inc. (Æ)

    215,700      9,223

Wells Fargo & Co.

    33,500      670

Xerox Corp.

    83,200      508

XTO Energy, Inc.

    20,800      721

Yum! Brands, Inc.

    45,300      1,511
         
        300,345
         
Total Common Stocks
(cost $836,553)		         695,002
         
Preferred Stocks - 0.2%        
Brazil - 0.2%        

Centrais Eletricas Brasileiras SA (Æ)

    35,600      462

Tim Participacoes SA

    482,200      808
         
Total Preferred Stocks
(cost $1,463)		         1,270
         

 

68   Russell Global Equity Fund

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$		  
       
Warrants & Rights - 0.0%        
Brazil - 0.0%        

Tim Participacoes SA (Æ)
2009 Rights

    1      —   
Cayman Islands - 0.0%        

Endeavor Financial Corp. (Æ)
2014 Warrants

    252      91   
           
Total Warrants & Rights
(cost $696)		         91   
           
Short-Term Investments - 8.5%        
United States - 8.5%        

Russell Investment Company Russell
Money Market Fund

    54,975,000      54,975   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    11,000      11,000   
           
Total Short-Term Investments
(cost $65,975)		         65,975   
           
Other Securities - 18.2%        

Russell Investment Company Russell
Money Market Fund (×)

    70,113,117      70,113   

State Street Securities Lending Quality
Trust (×)

    73,840,390      71,181   
           
Total Other Securities
(cost $143,953)		         141,294   
           
Total Investments - 116.6%
(identified cost $1,048,640)		         903,632   
Other Assets and Liabilities,
Net - (16.6%)		         (128,914 ) 
           
Net Assets - 100.0%         774,718   
           

A portion of the portfolio has been fair valued as of period end.

 

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Global Equity Fund   69

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

EUR STOXX 50 Index (EMU)

    498      EUR   11,593      06/09      1,853

FTSE-100 Index (UK)

    106      GBP   4,459      06/09      491

Hang Seng Index (Hong Kong)

    10      HKD   7,694      05/09      33

S&P 500 E-Mini Index (CME)

    710      USD   30,885      06/09      3,118

S&P 500 Index (CME)

    24      USD   5,220      06/09      916

SPI 200 Index (Australia)

    33      AUD   3,107      06/09      137

TOPIX Index (Japan)

    96      JPY   807,360      06/09      801

TSE 60 Index (Canada)

    34      CAD   3,835      06/09      195
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

      7,544
                     

 

See accompanying notes which are an integral part of the financial statements.

 

70   Russell Global Equity Fund

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   69   AUD   100   06/17/09   4   
USD   137   AUD   200   06/17/09   8   
USD   145   AUD   200   06/17/09   —   
USD   462   AUD   733   06/17/09   69   
USD   464   AUD   733   06/17/09   67   
USD   464   AUD   733   06/17/09   67   
USD   464   AUD   733   06/17/09   67   
USD   496   AUD   700   06/17/09   12   
USD   120   CAD   145   05/01/09   1   
USD   206   CAD   245   05/04/09   (1 ) 
USD   161   CAD   200   06/17/09   6   
USD   163   CAD   200   06/17/09   5   
USD   165   CAD   200   06/17/09   2   
USD   243   CAD   300   06/17/09   9   
USD   667   CAD   866   06/17/09   59   
USD   667   CAD   866   06/17/09   59   
USD   668   CAD   866   06/17/09   58   
USD   668   CAD   866   06/17/09   58   
USD   738   CAD   900   06/17/09   16   
USD   168   EUR   127   05/04/09   —   
USD   258   EUR   200   06/17/09   6   
USD   399   EUR   300   06/17/09   (2 ) 
USD   657   EUR   500   06/17/09   4   
USD   662   EUR   500   06/17/09   (1 ) 
USD   678   EUR   500   06/17/09   (17 ) 
USD   3,779   EUR   2,900   06/17/09   58   
USD   3,797   EUR   3,013   06/17/09   188   
USD   3,803   EUR   3,013   06/17/09   182   
USD   3,809   EUR   3,013   06/17/09   176   
USD   3,810   EUR   3,013   06/17/09   175   
USD   26   GBP   18   05/05/09   —   
USD   147   GBP   100   06/17/09   1   
USD   286   GBP   200   06/17/09   10   
USD   289   GBP   200   06/17/09   7   
USD   298   GBP   200   06/17/09   (3 ) 
USD   1,600   GBP   1,159   06/17/09   114   
USD   1,601   GBP   1,159   06/17/09   113   
USD   1,602   GBP   1,159   06/17/09   112   
USD   1,602   GBP   1,159   06/17/09   112   
USD   1,757   GBP   1,200   06/17/09   18   
USD   504   HKD   3,902   05/05/09   —   
USD   522   JPY   50,332   05/07/09   (12 ) 
USD   715   JPY   69,782   05/08/09   (7 ) 
USD   206   JPY   20,000   06/17/09   (3 ) 
USD   209   JPY   20,000   06/17/09   (6 ) 
USD   405   JPY   40,000   06/17/09   1   
USD   511   JPY   50,000   06/17/09   (4 ) 
USD   1,862   JPY   180,000   06/17/09   (35 ) 
USD   1,948   JPY   192,750   06/17/09   7   
USD   1,949   JPY   192,750   06/17/09   7   
USD   1,949   JPY   192,750   06/17/09   6   
USD   1,950   JPY   192,750   06/17/09   5   
AUD   100   USD   64   06/17/09   (9 ) 
Foreign Currency Exchange Contracts  
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
AUD   100   USD   66   06/17/09   (7 ) 
AUD   200   USD   129   06/17/09   (16 ) 
AUD   300   USD   188   06/17/09   (29 ) 
AUD   350   USD   226   06/17/09   (27 ) 
AUD   400   USD   285   06/17/09   (5 ) 
BRL   60   USD   27   05/06/09   —   
CAD   233   USD   195   05/05/09   —   
CAD   100   USD   79   06/17/09   (5 ) 
CAD   100   USD   81   06/17/09   (2 ) 
CAD   150   USD   118   06/17/09   (8 ) 
CAD   150   USD   119   06/17/09   (7 ) 
CAD   300   USD   233   06/17/09   (19 ) 
CAD   350   USD   270   06/17/09   (23 ) 
CAD   400   USD   313   06/17/09   (23 ) 
CAD   400   USD   325   06/17/09   (10 ) 
EUR   144   USD   192   05/04/09   1   
EUR   85   USD   113   05/05/09   1   
EUR   117   USD   156   05/05/09   1   
EUR   41   USD   54   05/06/09   —   
EUR   200   USD   272   06/17/09   8   
EUR   200   USD   268   06/17/09   3   
EUR   300   USD   391   06/17/09   (6 ) 
EUR   300   USD   399   06/17/09   2   
EUR   500   USD   632   06/17/09   (29 ) 
EUR   600   USD   755   06/17/09   (39 ) 
EUR   600   USD   759   06/17/09   (35 ) 
EUR   600   USD   756   06/17/09   (38 ) 
EUR   800   USD   1,077   06/17/09   19   
EUR   3,000   USD   3,833   06/17/09   (136 ) 
GBP   99   USD   146   05/05/09   —   
GBP   99   USD   147   05/05/09   —   
GBP   151   USD   223   05/05/09   —   
GBP   100   USD   140   06/17/09   (7 ) 
GBP   150   USD   215   06/17/09   (7 ) 
GBP   300   USD   422   06/17/09   (22 ) 
GBP   300   USD   425   06/17/09   (18 ) 
GBP   300   USD   414   06/17/09   (30 ) 
GBP   400   USD   593   06/17/09   1   
GBP   850   USD   1,171   06/17/09   (86 ) 
HKD   252   USD   32   05/04/09   —   
HKD   4,116   USD   531   05/05/09   —   
JPY   195,666   USD   2,022   05/01/09   38   
JPY   12,451   USD   126   05/08/09   —   
JPY   20,000   USD   204   06/17/09   1   
JPY   40,000   USD   404   06/17/09   (1 ) 
JPY   50,000   USD   506   06/17/09   (1 ) 
JPY   60,000   USD   599   06/17/09   (10 ) 
JPY   90,000   USD   913   06/17/09   (1 ) 
JPY   120,000   USD   1,230   06/17/09   12   
             

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts

   1,209   
             

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Global Equity Fund   71

Russell Investment Company

Russell Global Equity Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Industry Diversification    % of
Net
Assets		      Market
Value
$		  
     
     

Auto and Transportation

    3.6       28,156   

Consumer Discretionary

    12.7       98,519   

Consumer Staples

    6.6       51,302   

Financial Services

    14.5       111,743   

Health Care

    10.4       80,467   

Integrated Oils

    4.3       33,539   

Materials and Processing

    7.1       55,196   

Miscellaneous

    0.3       2,308   

Other Energy

    4.2       32,774   

Producer Durables

    3.8       29,285   

Technology

    11.0       85,266   

Utilities

    11.3       87,717   

Warrants & Rights

    —       91   

Short-Term Investments

    8.5       65,975   

Other Securities

    18.3       141,294   
             

Total Investments

    116.6       903,632   

Other Assets and Liabilities, Net

    (16.6 )     (128,914 ) 
             
Net Assets    100.0       774,718   
             
Geographic Diversification    % of
Net
Assets		      Market
Value
$		  
     

Africa

    0.7       5,242   

Asia

    4.7       36,584   

Europe

    18.6       143,970   

Japan

    8.4       65,192   

Latin America

    6.1       46,573   

Middle East

    1.2       9,630   

Netherlands Antilles

    0.5       4,027   

Other Regions

    40.8       315,857   

United Kingdom

    8.9       69,288   

Short-Term Investments

    8.5       65,975   

Other Securities

    18.2       141,294   
             

Total Investments

    116.6       903,632   

Other Assets and Liabilities, Net

    (16.6 )     (128,914 ) 
             
Net Assets    100.0       774,718   
             

 

See accompanying notes which are an integral part of the financial statements.

 

72   Russell Global Equity Fund

Russell Investment Company

Russell Global Equity Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

     % of Net
Assets		  
  
  

Australia

    0.5   

Belgium

    0.3   

Bermuda

    1.2   

Brazil

    1.6   

Canada

    2.0   

Cayman Islands

    0.4   

China

    0.8   

Denmark

    0.1   

Egypt

    0.5   

Finland

    1.0   

France

    3.3   

Germany

    2.5   

Hong Kong

    1.2   

India

    1.3   

Ireland

    0.3   

Israel

    0.7   

Italy

    1.3   

Japan

    8.4   

Luxembourg

    0.3   

Mexico

    2.2   

Netherlands

    0.5   

Netherlands Antilles

    0.5   

Norway

    0.5   

Oman

    — * 

Panama

    0.5   

Papua New Guinea

    0.4   

Russia

    0.3   

South Africa

    0.7   

South Korea

    0.3   

Spain

    1.1   

Sweden

    0.7   

Switzerland

    6.3   

Thailand

    0.2   

Turkey

    0.1   

United Kingdom

    8.9   

United States

    38.8   

Preferred Stocks

    0.2   

Warrants & Rights

    — * 

Short-Term Investments

    8.5   

Other Securities

    18.2   
      

Total Investments

    116.6   

Other Assets and Liabilities Net

    (16.6 ) 
      
   100.0   
      

Futures Contracts

    1.0   

Foreign Currency Exchange Contracts

    0.2   

 

* Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Global Equity Fund   73

Russell Investment Company

Russell Emerging Markets Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,137.90    $ 1,015.82

Expenses Paid During Period*

    $ 9.59    $ 9.05

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.81% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,134.50    $ 1,012.10

Expenses Paid During Period*

    $ 13.55    $ 12.77

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.56% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,138.60    $ 1,015.82

Expenses Paid During Period*

    $ 9.60    $ 9.05

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.81% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,140.50    $ 1,017.06

Expenses Paid During Period*

    $ 8.28    $ 7.80

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.56% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

74   Russell Emerging Markets Fund

Russell Investment Company

Russell Emerging Markets Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,141.50    $ 1,017.90

Expenses Paid During Period*

    $ 7.38    $ 6.95

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.39% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell Emerging Markets Fund   75

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Common Stocks - 84.6%        
Argentina - 0.1%        

Petrobras Energia Participaciones SA
- ADR

    49,731      320

Telecom Argentina SA - ADR (Æ)

    17,631      163
         
        483
         
Austria - 0.0%        

Wienerberger AG

    36,295      426
         
Bermuda - 1.1%        

C C Land Holdings, Ltd.

    1,510,000      498

Cnpc Hong Kong, Ltd.

    1,410,000      696

Cosco International Holdings, Ltd.

    1,524,000      465

Credicorp, Ltd. (Ñ)

    64,197      3,211

GOME Electrical Appliances Holdings, Ltd.

    5,083,000      734

Huabao International Holdings, Ltd.

    1,370,000      970

Li & Fung, Ltd. (Ñ)

    298,000      839

Shangri-La Asia, Ltd. (Ñ)

    710,000      1,049

Yue Yuen Industrial Holdings, Ltd. (Ñ)

    922,000      2,047
         
        10,509
         
Brazil - 8.2%        

Amil Participacoes SA (Æ)

    210,184      792

Anhanguera Educacional Participacoes SA (Æ)

    175,015      1,223

Aracruz Celulose SA - ADR

    39,600      473

Banco Bradesco SA - ADR (Ñ)

    257,300      3,160

Banco do Brasil SA

    842,877      7,108

BM&F Bovespa SA (Æ)

    783,429      3,175

Brasil Telecom Participacoes SA (Æ)

    51,100      1,471

Centrais Eletricas Brasileiras SA (Æ)

    179,900      2,367

Cia Brasileira de Distribuicao Grupo Pao de Acucar - ADR (Ñ)

    48,252      1,558

Cia de Bebidas das Americas - ADR

    6,600      372

Cia de Saneamento Basico do Estado de Sao Paulo (Æ)

    272,040      3,871

Cia de Saneamento Basico do Estado de Sao Paulo - ADR (Æ)(Ñ)

    22,775      643

Cia de Saneamento de Minas Gerais-COPASA (Æ)

    84,100      917

Cia Vale do Rio Doce Class B (Ñ)

    524,840      8,665

Cia Vale do Rio Doce Class B

    265,400      3,644

Gerdau SA - ADR

    84,400      599

Itau Unibanco Banco Multiplo SA
- ADR (Ñ)

    418,279      5,743

JBS SA

    521,600      1,468

Lojas Renner SA

    172,900      1,580

Marfrig Frigorificos e Comercio de Alimentos SA (Æ)

    138,647      703

MRV Engenharia e Participacoes SA

    28,200      274

OGX Petroleo e Gas Participacoes SA

    702      295

Perdigao SA (Æ)

    141,309      2,082

Petroleo Brasileiro SA - ADR

    639,279      19,547

Redecard SA

    141,200      1,777

Souza Cruz SA (Æ)

    57,300      1,227

Sul America SA

    8,300      83
     Principal
Amount ($)
or Shares		      Market
Value
$

Tele Norte Leste Participacoes SA - ADR

    27,170      423

Tractebel Energia SA (Æ)

    63,634      526

Usinas Siderurgicas de Minas Gerais SA

    88,693      1,228

Votorantim Celulose e Papel SA - ADR (Æ)

    53,000      463

Weg SA

    117,500      753
         
        78,210
         
Canada - 0.4%        

First Quantum Minerals, Ltd.

    97,068      3,713
         
Cayman Islands - 3.1%        

Agile Property Holdings, Ltd. (Ñ)

    1,444,000      1,073

Alibaba.com, Ltd. (Æ)(Ñ)

    999,500      1,178

Belle International Holdings, Ltd. (Ñ)

    4,222,500      3,238

China Mengniu Dairy Co., Ltd.

    613,000      1,091

China Shanshui Cement Group, Ltd. (Æ)

    1,670,000      937

Foxconn International Holdings, Ltd. (Æ)(Ñ)

    1,189,000      734

Hengan International Group Co., Ltd. (Ñ)

    924,000      3,861

Hidili Industry International Development, Ltd.

    1,610,000      644

Ju Teng International Holdings, Ltd. (Æ)

    1,126,000      489

Kingboard Chemical Holdings, Ltd.

    327,000      800

Lifestyle International Holdings, Ltd.

    819,500      781

Lonking Holdings, Ltd.

    2,354,000      1,777

Luen Thai Holdings, Ltd.

    1,369,000      72

Mindray Medical International, Ltd. - ADR

    18,800      429

Pacific Textile Holdings, Ltd. (Ñ)

    1,004,000      105

Parkson Retail Group, Ltd. (Ñ)

    3,059,473      3,860

Shimao Property Holdings, Ltd.

    629,000      698

Sina Corp./China (Æ)(Ñ)

    34,400      964

Tencent Holdings, Ltd.

    610,600      5,413

Uni-President China Holdings, Ltd. (Æ)

    2,655,000      1,339

Xingda International Holdings, Ltd.

    2,462,000      435
         
        29,918
         
Chile - 1.0%        

Banco de Credito e Inversiones

    18,001      387

Banco Santander Chile - ADR (Ñ)

    85,537      3,029

Embotelladora Andina SA - ADR

    53,300      810

Enersis SA - ADR

    83,156      1,246

SACI Falabella (Æ)

    136,887      451

Sociedad Quimica y Minera de Chile SA
- ADR (Ñ)

    103,000      3,246
         
        9,169
         
China - 6.4%        

Air China, Ltd. Class H (Æ)

    1,282,000      599

Angang Steel Co., Ltd. Class H

    582,000      700

Anhui Conch Cement Co., Ltd. Class H (Ñ)

    623,654      4,138

Bank of China, Ltd.

    2,181,000      808

Bank of Communications Co., Ltd. Class H

    1,608,000      1,295

China Communications Construction Co., Ltd. Class H (Ñ)

    2,874,000      3,413

China Construction Bank Corp. Class H (Ñ)

    5,267,000      3,053

China COSCO Holdings Co., Ltd. Class H (Ñ)

    2,033,000      1,649

 

76   Russell Emerging Markets Fund

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

China Life Insurance Co., Ltd. Class H

    493,000      1,723

China National Building Material Co., Ltd. Class H

    902,000      1,908

China Petroleum & Chemical Corp.
- ADR (Ñ)

    7,162      556

China Petroleum & Chemical Corp. Class H (Ñ)

    7,672,000      5,965

China Shenhua Energy Co., Ltd. (Ñ)

    2,400,344      6,652

China Telecom Corp., Ltd. Class H (Ñ)

    7,083,000      3,473

Dongfeng Motor Group Co., Ltd. Class H

    2,030,000      1,518

Huaneng Power International, Inc. Class H (Æ)(Ñ)

    2,026,000      1,380

Industrial & Commercial Bank of China (Ñ)

    9,199,000      5,230

Jiangsu Expressway Co., Ltd. Class H

    2,672,000      1,891

Jiangxi Copper Co., Ltd. Class H (Ñ)

    1,162,000      1,374

PetroChina Co., Ltd. - ADR (Ñ)

    36,599      3,181

PetroChina Co., Ltd. Class H

    2,533,000      2,202

PICC Property & Casualty Co., Ltd. Class H (Æ)(Ñ)

    2,548,000      1,439

Ping An Insurance Group Co. of China, Ltd. Class H (Ñ)

    265,100      1,642

Shandong Weigao Group Medical Polymer Co., Ltd. Class H

    336,000      633

Shanghai Forte Land Co. Class H (Æ)(Ñ)

    1,070,000      207

Weiqiao Textile Co. Class H (Ñ)

    1,146,500      454

Wumart Stores, Inc. Class H (Ñ)

    252,000      224

Yanzhou Coal Mining Co., Ltd. Class H

    4,452,000      4,231
         
        61,538
         
Colombia - 0.4%        

BanColombia SA

    160,900      940

BanColombia SA - ADR (Ñ)

    124,943      2,918
         
        3,858
         
Czech Republic - 0.6%        

CEZ AS

    101,594      4,195

Telefonica O2 Czech Republic AS

    80,900      1,744
         
        5,939
         
Egypt - 0.5%        

Commercial International Bank

    7,160      51

Egyptian Financial Group-Hermes Holding

    190,769      666

Orascom Construction Industries

    101,144      2,869

Orascom Construction Industries - GDR

    2,600      150

Telecom Egypt

    417,040      1,172
         
        4,908
         
Greece - 0.3%        

Coca Cola Hellenic Bottling Co. SA

    166,644      2,662
         
Hong Kong - 3.5%        

Beijing Enterprises Holdings, Ltd. (Ñ)

    687,500      3,024

China Insurance International Holdings Co., Ltd.

    1,381,000      2,305

China Merchants Holdings International Co., Ltd. (Ñ)

    258,658      611
     Principal
Amount ($)
or Shares		      Market
Value
$

China Mobile, Ltd.

    700,496      6,035

China Mobile, Ltd. - ADR

    72,780      3,141

China Overseas Land & Investment,
Ltd. (Ñ)

    2,096,667      3,659

China Resources Enterprise (Ñ)

    1,826,985      3,214

China Unicom Hong Kong, Ltd. (Ñ)

    1,246,000      1,440

CNOOC, Ltd.

    4,604,000      5,128

CNOOC, Ltd. - ADR (Ñ)

    1,003      112

Lenovo Group, Ltd. (Ñ)

    11,184,000      3,053

Shougang Concord International Enterprises Co., Ltd.

    7,132,000      792

Sino-Ocean Land Holdings, Ltd.

    910,000      672

Sinotrans Shipping, Ltd.

    1,832,000      568
         
        33,754
         
Hungary - 0.4%        

Magyar Telekom Telecommunications PLC

    222,127      519

MOL Hungarian Oil and Gas NyRt

    43,279      2,074

MOL Hungarian Oil and Gas NyRt - ADR

    12,898      335

Richter Gedeon Nyrt

    6,755      880
         
        3,808
         
India - 4.9%        

Allahabad Bank

    617,235      648

Andhra Bank

    429,000      485

Axis Bank, Ltd.

    115,000      1,287

Bajaj Auto, Ltd.

    48,460      623

Bank of Baroda

    220,000      1,442

BF Utilities, Ltd. (Æ)

    15,751      187

Bharti Airtel, Ltd. (Æ)

    277,814      4,196

Canara Bank

    265,712      1,055

Container Corp. of India

    71,133      1,083

Dish TV India, Ltd. (Æ)

    3,716      2

Genesis Indian Investment Co., Ltd.

    407,719      12,309

GMR Infrastructure, Ltd. (Æ)

    287,342      652

Great Eastern Shipping Co., Ltd. (The) Class A

    223,050      923

HCL Technologies, Ltd.

    197,972      519

HDFC Bank, Ltd. - ADR (Ñ)

    50,400      3,731

Hindustan Unilever, Ltd.

    290,000      1,362

Housing Development Finance Corp.

    54,360      1,883

ICICI Bank, Ltd. - ADR

    78,000      1,609

IFCI, Ltd. (Æ)

    624,376      317

Indian Overseas Bank

    250,000      323

Infosys Technologies, Ltd.

    8,818      264

Jaiprakash Associates, Ltd.

    512,216      1,441

JSW Steel, Ltd.

    65,776      458

Maruti Suzuki India, Ltd.

    40,056      657

Mundra Port and Special Economic Zone, Ltd.

    108,889      849

NIIT Technologies, Ltd.

    45,816      64

NTPC, Ltd.

    464,830      1,769

Oriental Bank of Commerce

    111,000      301

Reliance Industries, Ltd. - GDR (Þ)

    26,037      1,963

State Bank of India, Ltd. - GDR (Ñ)

    19,497      1,075

Sterlite Industries India, Ltd. - ADR

    168,700      1,432

Sun TV Network, Ltd.

    164,238      609

 

Russell Emerging Markets Fund   77

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Suzlon Energy, Ltd.

    348,623      449

Union Bank of India

    118,000      388

United Spirits, Ltd.

    48,455      687
         
        47,042
         
Indonesia - 2.1%        

Aneka Tambang Tbk PT

    3,432,500      459

Astra Agro Lestari Tbk PT

    290,500      432

Astra International Tbk PT

    764,000      1,294

Bank Danamon Indonesia Tbk PT

    1,361,009      398

Bank Rakyat Indonesia

    11,188,234      6,086

International Nickel Indonesia Tbk PT (Æ)

    6,032,500      1,930

Perusahaan Perkebunan London Sumatra Indonesia Tbk PT (Æ)

    1,241,000      572

Ramayana Lestari Sentosa Tbk PT

    6,191,492      278

Telekomunikasi Indonesia Tbk PT

    7,643,272      5,666

Telekomunikasi Indonesia Tbk PT - ADR

    64,470      1,853

Timah Tbk PT

    6,021,000      800
         
        19,768
         
Israel - 3.0%        

Alvarion, Ltd. (Æ)(Ñ)

    108,982      341

AudioCodes, Ltd. (Æ)

    35,671      53

Azorim-Investment Development & Construction Co., Ltd. (Æ)

    53,111      160

Bezeq Israeli Telecommunication Corp., Ltd.

    1,272,088      1,999

Cellcom Israel, Ltd.

    24,300      539

Check Point Software Technologies (Æ)(Ñ)

    217,615      5,042

Delek Automotive Systems, Ltd.

    78,128      617

Elbit Systems, Ltd.

    16,670      846

Israel Chemicals, Ltd.

    415,510      3,486

Makhteshim-Agan Industries, Ltd.

    327,205      1,441

Nice Systems, Ltd. (Æ)

    13,313      343

Partner Communications

    217,481      3,571

Teva Pharmaceutical Industries, Ltd. - ADR (Ñ)

    235,741      10,347
         
        28,785
         
Luxembourg - 2.2%        

Genesis Smaller Companies

    419,451      17,702

MHP SA - GDR (Æ)

    67,705      355

Millicom International Cellular SA (Ñ)

    30,800      1,492

Reinet Investments SCA (Æ)

    1      —

Tenaris SA - ADR (Ñ)

    64,100      1,604
         
        21,153
         
Malaysia - 1.0%        

Bumiputra-Commerce Holdings BHD

    1,313,363      2,963

Bursa Malaysia BHD

    259,800      446

IGB Corp. BHD

    1,650,100      831

KLCC Property Holdings BHD

    256,000      228

KNM Group BHD

    9,464,800      1,520

Kuala Lumpur Kepong BHD

    232,900      757

Kulim Malaysia BHD

    144,900      225

Lion Industries Corp. BHD

    1,080,600      301
     Principal
Amount ($)
or Shares		      Market
Value
$

MISC BHD

    141,700      352

PPB Group BHD

    123,000      366

Public Bank BHD

    642,331      1,542

TA Enterprise BHD

    1,083,200      285
         
        9,816
         
Mexico - 4.0%        

Alfa SAB de CV Class A (Ñ)

    97,300      170

America Movil SAB de CV Series L (Ñ)

    418,788      13,757

Carso Global Telecom SAB de CV Class A (Æ)(Ñ)

    106,900      382

Cemex SAB de CV (Æ)

    77,720      58

Cemex SAB de CV - ADR (Æ)(Ñ)

    137,175      1,026

Coca-Cola Femsa SAB de CV

    273,300      1,070

Corp. Moctezuma SAB de CV

    263,165      444

Empresas ICA SAB de CV (Æ)

    558,000      1,012

Fomento Economico Mexicano SAB de CV

    227,000      642

Fomento Economico Mexicano SAB de CV - ADR

    77,537      2,195

Grupo Aeroportuario del Pacifico SAB de CV - ADR

    5,900      121

Grupo Aeroportuario del Sureste SAB de CV - ADR (Ñ)

    8,805      273

Grupo Famsa SAB de CV Class A (Æ)

    2,300      2

Grupo Financiero Banorte SAB de CV Class O (Ñ)

    2,070,390      3,254

Grupo Financiero Inbursa SA Class O (Ñ)

    466,276      1,259

Grupo Mexico SAB de CV

    1,822,809      1,432

Grupo Televisa SA - ADR

    49,000      758

Megacable Holdings SAB de CV (Æ)

    510,303      646

Telefonos de Mexico SAB de CV Series L (Ñ)

    89,400      1,430

Urbi Desarrollos Urbanos SAB DE
CV (Æ)(Ñ)

    1,336,000      1,448

Wal-Mart de Mexico SAB de CV (Ñ)

    1,583,584      4,319

Wal-Mart de Mexico SAB de CV - ADR (Ñ)

    76,000      2,083
         
        37,781
         
Netherlands - 0.4%        

X5 Retail Group NV - GDR (Æ)

    292,353      3,883
         
Nigeria - 0.2%        

First City Monument Bank PLC

    15,750,810      612

Guaranty Trust Bank PLC - GDR

    146,845      517

Nigerian Breweries PLC

    1,125,095      327

United Bank for Africa PLC

    7,652,496      554
         
        2,010
         
Oman - 0.2%        

Bank Muscat SAOG - GDR

    182,090      1,229

National Bank of Oman, Ltd.

    611,245      458
         
        1,687
         

 

78   Russell Emerging Markets Fund

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Pakistan - 0.2%        

Fauji Fertilizer Co., Ltd.

    677,826      821

Oil & Gas Development Co., Ltd.

    342,000      315

Pakistan Petroleum, Ltd.

    173,600      372

Pakistan State Oil Co., Ltd.

    224,500      543
         
        2,051
         
Panama - 0.1%        

Copa Holdings SA Class A

    35,300      1,082
         
Philippines - 0.3%        

First Gen Corp. (Æ)

    404,400      156

Philippine Long Distance Telephone Co.

    34,630      1,576

Philippine Long Distance Telephone Co.
- ADR (Ñ)

    21,740      997

Universal Robina Corp.

    2,009,000      300
         
        3,029
         
Poland - 0.4%        

Bank Pekao SA

    46,000      1,640

KGHM Polska Miedz SA

    132,953      2,339

Przedsiebiorstwo Eksportu i Importu Kopex SA (Æ)

    45,300      252
         
        4,231
         
Qatar - 0.1%        

Commercial Bank of Qatar - GDR

    138,500      416

Qatar National Bank SAQ

    31,131      868
         
        1,284
         
Russia - 6.9%        

Gazprom OAO - ADR

    910,578      16,119

Kalina

    15,100      117

LSR Group - GDR (Æ)

    127,200      253

Luka Kotor AD Kotor - ADR

    276,270      12,322

LUKOIL - ADR

    167,126      7,366

Magnit OAO (Æ)

    92,290      2,861

Magnitogorsk Iron & Steel Works -GDR (Å)

    46,100      187

Magnitogorsk Iron & Steel Works - GDR

    298,300      1,196

Mechel - ADR

    189,622      1,009

MMC Norilsk Nickel - ADR (Ñ)

    407,316      3,393

Mobile Telesystems OJSC - ADR

    129,436      4,290

NovaTek OAO - GDR

    84,780      2,985

Novolipetsk Steel OJSC - GDR

    33,183      508

Novorossiysk Commercial Sea Port - GDR

    147,138      920

Novorossiysk Commercial Sea Port - GDR (Þ)

    23,647      148

Raspadskaya

    429,007      675

RBC Information Systems (Æ)

    9,381      9

Rosneft Oil Co. - GDR (Ñ)

    317,169      1,648

Sberbank

    4,666,604      3,869

Seventh Continent (Æ)

    41,351      310

Severstal - GDR

    36,434      142

Surgutneftegaz - ADR (Ñ)

    93,010      665

Tatneft - GDR

    29,500      1,844
     Principal
Amount ($)
or Shares		      Market
Value
$

Vimpel-Communications - ADR (Æ)

    178,500      1,682

VTB Bank OJSC - GDR

    575,485      1,036
         
        65,554
         
Singapore - 0.1%        

Yanlord Land Group, Ltd.

    1,147,000      1,103
         
South Africa - 7.2%        

ABSA Group, Ltd.

    254,592      2,946

Adcock Ingram Holdings, Ltd. (Æ)

    84,640      419

African Bank Investments, Ltd.

    138,206      438

African Rainbow Minerals, Ltd.

    23,377      316

AngloGold Ashanti, Ltd.

    47,048      1,454

ArcelorMittal South Africa, Ltd. Class H

    158,272      1,482

Aspen Pharmacare Holdings, Ltd. (Æ)

    1      —

Astral Foods, Ltd.

    45,058      524

Aveng, Ltd.

    489,822      1,884

Barloworld, Ltd.

    148,151      626

Bidvest Group, Ltd.

    331,078      3,504

DataTec, Ltd. (Æ)

    270,000      534

FirstRand, Ltd.

    1,279,960      1,950

Gold Fields, Ltd. - ADR (Ñ)

    69,471      723

Growthpoint Properties, Ltd.

    127,417      211

Harmony Gold Mining Co., Ltd. - ADR (Æ)

    45,900      428

Impala Platinum Holdings, Ltd.

    195,117      3,760

Imperial Holdings, Ltd.

    143,136      911

Investec, Ltd.

    96,945      459

Massmart Holdings, Ltd.

    144,190      1,252

Mondi, Ltd.

    311,633      1,049

MTN Group, Ltd.

    492,064      6,404

Murray & Roberts Holdings, Ltd.

    300,097      1,685

Naspers, Ltd. Class N

    32,121      657

Nedbank Group, Ltd.

    22,355      228

Netcare, Ltd. Class H (Æ)

    423,815      467

Pick’n Pay Stores, Ltd.

    125,354      452

Pretoria Portland Cement Co., Ltd.

    347,000      1,332

Remgro, Ltd.

    47,353      405

Reunert, Ltd.

    113,383      562

Sanlam, Ltd.

    1,215,321      2,253

Sasol, Ltd.

    364,852      11,040

Shoprite Holdings, Ltd.

    324,924      1,955

Standard Bank Group, Ltd.

    1,334,877      12,902

Steinhoff International Holdings, Ltd.

    219,394      263

Telkom SA, Ltd.

    107,093      1,349

Tiger Brands, Ltd.

    87,671      1,365

Truworths International, Ltd.

    159,521      637

Woolworths Holdings, Ltd.

    249,933      353
         
        69,179
         
South Korea - 9.7%        

Amorepacific Corp.

    677      361

Dongbu Corp.

    41,750      363

Dongbu Insurance Co., Ltd.

    12,290      251

Dongwon F&B Co., Ltd.

    10,420      277

Dongwon Industries Co., Ltd.

    3,108      218

Han Kuk Carbon Co., Ltd.

    20,400      113

 

Russell Emerging Markets Fund   79

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Hana Financial Group, Inc. (Ñ)

    101,800      1,744

Hanjin Heavy Industries & Construction Co., Ltd.

    35,290      982

Hanwha Chem Corp.

    40,900      368

Hanwha Corp.

    22,070      642

Hanyang Securities Co., Ltd. (Æ)

    51,220      435

Honam Petrochemical Corp. (Ñ)

    21,091      1,254

Hynix Semiconductor, Inc. (Æ)(Ñ)

    223,780      2,506

Hyosung Corp. (Ñ)

    28,253      1,756

Hyundai Development Co.

    30,300      941

Hyundai Marine & Fire Insurance Co., Ltd. (Ñ)

    94,930      1,094

Hyundai Mobis

    42,979      3,280

Hyundai Motor Co.

    71,971      3,840

Ilsung Pharmaceuticals Co., Ltd.

    4,003      212

KB Financial Group, Inc. (Æ)

    127,452      3,923

KB Financial Group, Inc. - ADR (Ñ)

    28,770      917

KCC Corp.

    5,922      1,639

Keangnam Enterprises, Ltd. (Æ)

    35,560      325

Korea Electric Power Corp. (Æ)

    115,770      2,502

Korea Electric Power Corp. - ADR (Ñ)

    951      10

Korea Line Corp. (Ñ)

    24,973      1,472

KT Corp.

    36,490      1,060

KT&G Corp. (Ñ)

    31,244      1,718

Kwang Dong Pharmaceutical Co., Ltd.

    131,100      342

LG Chem, Ltd. (Ñ)

    24,286      2,685

LG Corp. Class H (Ñ)

    26,688      1,175

LG Display Co., Ltd.

    129,310      3,166

LG Hausys, Ltd. (Æ)

    4,483      402

LG Household & Health Care, Ltd.

    19,674      2,706

LG Telecom, Ltd.

    340,830      2,390

LIG Insurance Co., Ltd. (Ñ)

    73,400      917

Lotte Samkang Co., Ltd.

    2,216      298

Maeil Dairy Industry Co., Ltd.

    36,580      363

Namyang Dairy Products Co., Ltd.

    272      108

NHN Corp. (Æ)

    11,788      1,425

POSCO

    2,580      797

PSK, Inc. (Æ)

    75,400      258

S&T Daewoo Co., Ltd. (Æ)

    34,360      427

S-Oil Corp.

    38,526      1,796

Samsung Card Co.

    11,751      350

Samsung Electro-Mechanics Co., Ltd.

    14,700      591

Samsung Electronics Co., Ltd. (Ñ)

    37,837      17,461

Samsung Electronics Co., Ltd. - GDR (Þ)

    16,490      3,742

Samsung Electronics Co., Ltd. - GDR

    5,915      750

Samsung Fire & Marine Insurance Co., Ltd.

    42,213      5,744

Samsung SDI Co., Ltd.

    16,904      1,208

Samsung Techwin Co., Ltd.

    12,340      571

Shinhan Financial Group Co., Ltd. (Æ)

    126,117      3,097

Shinsegae Co., Ltd. (Ñ)

    5,552      1,971

SK Holdings Co., Ltd.

    4,224      391

SK Telecom Co., Ltd.

    5,724      816

SODIFF Advanced Materials Co., Ltd.

    2,747      175

STX Engine Co., Ltd.

    29,160      714

Sungwoo Hitech Co., Ltd.

    23,132      113
     Principal
Amount ($)
or Shares		      Market
Value
$

Taewoong Co., Ltd.

    22,000      1,616

Woongjin Coway Co., Ltd.

    10,740      267
         
        93,035
         
Taiwan - 8.2%        

A-DATA Technology Co., Ltd.

    240,000      285

Ability Enterprise Co., Ltd.

    87,000      87

Alpha Networks, Inc.

    522,000      381

Altek Corp.

    731,000      725

Asia Polymer

    457,000      236

Asia Vital Components Co., Ltd.

    668,000      373

Asustek Computer, Inc.

    305,353      404

AU Optronics Corp.

    4,562,177      4,733

AU Optronics Corp. - ADR (Ñ)

    306,793      3,329

Cathay Financial Holding Co., Ltd. - GDR

    37,328      373

Chi Mei Optoelectronics Corp.

    1,627,000      811

China Steel Corp. Class H

    1,168,250      902

Chinatrust Financial Holding Co., Ltd.

    1,565,793      714

Chung Hung Steel Corp.

    904,227      294

Chunghwa Telecom Co., Ltd.

    286,877      545

Chunghwa Telecom Co., Ltd. - ADR (Æ)

    29,848      564

Compal Electronics, Inc.

    3,187,184      2,708

Coretronic Corp.

    698,000      607

Delta Electronics, Inc.

    1,197,030      2,606

Evergreen Marine Corp. Taiwan, Ltd.

    1,439,870      717

Far Eastern Textile Co., Ltd.

    1,248,999      1,162

Formosa Chemicals & Fibre Corp.

    594,000      989

Formosa Plastics Corp.

    509,000      896

Gigabyte Technology Co., Ltd.

    244,000      170

HannStar Display Corp.

    3,659,000      850

Holtek Semiconductor, Inc.

    483,000      483

HON HAI Precision Industry Co., Ltd.

    814,529      2,361

HTC Corp.

    68,100      923

King Yuan Electronics Co., Ltd. (Æ)

    512,000      153

Kinsus Interconnect Technology Corp.

    652,260      1,179

MediaTek, Inc.

    527,381      5,504

Merry Electronics Co., Ltd.

    368,000      362

Nan Ya Plastics Corp.

    1,362,710      1,801

Phihong Technology Co., Ltd.

    846,000      288

Powerchip Semiconductor Corp. (Æ)

    1      —

Quanta Storage, Inc.

    154,000      169

Radiant Opto-Electronics Corp.

    629,000      752

Sanyang Industry Co., Ltd.

    2,321,000      666

Siliconware Precision Industries Co.

    1,763,475      2,217

Siliconware Precision Industries Co. - ADR

    148,582      1,110

Sintek Photronic Corp. (Æ)

    1,719,000      624

Synnex Technology International Corp.

    1,398,100      2,032

Taiwan Fertilizer Co., Ltd. Class H

    298,000      686

Taiwan Semiconductor Manufacturing Co., Ltd.

    5,600,890      9,355

Taiwan Semiconductor Manufacturing Co., Ltd. - ADR

    542,600      5,735

Taiwan Surface Mounting Technology Co., Ltd.

    167,000      264

Teco Electric and Machinery Co., Ltd.

    1,037,000      412

TSRC Corp.

    433,000      497

 

80   Russell Emerging Markets Fund

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

U-Ming Marine Transport Corp.

    609,000      1,098

Uni-President Enterprises Corp.

    1,777,052      1,788

Unimicron Technology Corp.

    1,181,620      802

United Microelectronics Corp.

    11,913,718      4,448

United Microelectronics Corp. - ADR (Ñ)

    679,920      2,074

Universal Scientific Industrial Co., Ltd.

    1,181,000      380

UPC Technology Corp.

    316,000      112

Vanguard International Semiconductor Corp.

    694,854      260

Walsin Lihwa Corp.

    3,254,000      839

Wellypower Optronics Corp.

    289,000      211

Wistron Corp.

    1,582,671      2,005

Wistron Corp. - GDR

    37,918      479

Yuanta Financial Holding Co., Ltd.

    1,934,000      1,130
         
        78,660
         
Thailand - 1.4%        

Charoen Pokphand Foods PCL

    3,300,800      311

CP ALL PCL

    2,100,014      743

Glow Energy PCL - GDR

    942,500      633

Hana Microelectronics Pcl

    623,500      214

PTT Chemical PCL

    1,424,732      1,696

PTT Exploration & Production PCL

    355,300      1,042

PTT PCL

    619,100      3,325

Ratchaburi Electricity Generating Holding PCL

    270,600      291

Regional Container Lines PCL (Æ)

    962,600      188

Siam Commercial Bank PCL

    1,091,900      1,865

Thai Beverage PCL

    10,216,456      1,310

Thai Oil PCL

    725,200      663

Thoresen Thai Agencies Pcl

    3,324,750      1,545
         
        13,826
         
Turkey - 3.2%        

Akbank TAS

    400,000      1,537

Anadolu Efes Biracilik Ve Malt Sanayii AS

    340,140      2,409

BIM Birlesik Magazalar AS

    35,102      963

Cimsa Cimento Sanayi VE Tica

    263,875      675

Dogan Sirketler Grubu Holdings (Æ)

    7,305,835      2,909

Dogus Otomotiv Servis ve Ticaret AS

    128,495      217

EIS Eczacibasi Ilac ve Sinai ve Finansal Yatirimlar Sanayi ve Ticaret AS

    934,227      702

Eregli Demir ve Celik Fabrikalari TAS

    114,668      276

Ford Otomotiv Sanayi AS

    136,893      456

Haci Omer Sabanci Holding AS

    192,600      489

Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS (Æ)

    2,323,454      1,015

Selcuk Ecza Deposu Ticaret ve
Sanayi A.S.

    513,151      576

Trakya Cam Sanayi AS (Æ)

    276,756      195

Tupras Turkiye Petrol Rafine

    128,724      1,277

Turk Hava Yollari (Æ)(Ñ)

    442,743      2,156

Turkiye Garanti Bankasi AS (Æ)

    3,327,980      6,919

Turkiye Is Bankasi Class C

    1,166,009      3,337

Turkiye Vakiflar Bankasi Tao Class D (Æ)

    1,326,900      1,488

Vestel Elektronik Sanayi (Æ)

    1,179,621      1,045
     Principal
Amount ($)
or Shares		      Market
Value
$

Yapi ve Kredi Bankasi AS (Æ)

    1,389,503      1,860
         
        30,501
         
United Arab Emirates - 0.1%        

DP World, Ltd.

    2,488,192      672
         
United Kingdom - 2.4%        

Anglo American PLC

    364,053      7,977

Antofagasta PLC

    246,113      2,115

British American Tobacco PLC

    1      —

Eurasian Natural Resources Corp.

    347,146      3,007

Hikma Pharmaceuticals PLC

    210,410      1,208

Old Mutual PLC (Æ)

    370,000      354

SABMiller PLC

    197,395      3,344

Standard Chartered PLC

    51,273      789

Tullow Oil PLC

    311,000      3,672
         
        22,466
         
United States - 0.3%        

Central European Distribution Corp. (Æ)(Ñ)

    113,710      2,547

CTC Media, Inc. (Æ)(Ñ)

    81,100      636
         
        3,183
         
Venezuela - 0.0%        

Siderurgica Venezolana Sivensa SACA - ADR

    833      1
         
Zimbabwe - 0.0%        

Delta Corp., Ltd. (ß)

    1,323,859      —
         
Total Common Stocks
(cost $853,918)		         810,677
         
Preferred Stocks - 4.2%        
Brazil - 3.1%        

AES Tiete SA

    66,000      543

Banco Bradesco SA

    408,713      5,058

Brasil Telecom Participacoes SA (Æ)

    379,200      2,935

Brasil Telecom SA (Æ)

    110,000      680

Centrais Eletricas Brasileiras SA (Æ)

    259,800      3,368

Cia de Transmissao de Energia Eletrica Paulista

    20,000      428

Cia Paranaense de Energia

    79,400      979

Eletropaulo Metropolitana Eletricidade de Sao Paulo SA

    49,700      638

Investimentos Itau SA

    414,910      1,778

Itau Unibanco Banco Multiplo SA

    232,725      3,232

Metalurgica Gerdau SA Class A

    28,800      270

Petroleo Brasileiro SA

    421,300      5,686

Tam SA (Æ)

    34,200      233

Telemar Norte Leste SA

    40,300      1,006

Usinas Siderurgicas de Minas Gerais SA

    234,889      3,455
         
        30,289
         
Chile - 0.1%        

Embotelladora Andina SA Class A

    331,200      850
         

 

Russell Emerging Markets Fund   81

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Colombia - 0.0%        

BanColombia SA

    7,200      42
         
Russia - 0.2%        

AK Transneft OAO

    3,170      1,268

URSA Bank

    1,376,805      365
         
        1,633
         
South Korea - 0.8%        

Samsung Electronics Co., Ltd.

    28,638      7,386
         
Total Preferred Stocks
(cost $40,184)		         40,200
         
Warrants & Rights - 0.2%        
United States - 0.2%        

Far Eastern Textile Co., Ltd. (Þ)(Æ)
2012 Warrants

    715      665

HON HAI Precision Industry Co., Ltd. (Þ)(Æ)
2012 Warrants

    278      801
         
Total Warrants & Rights
(cost $2,204)		         1,466
         
Certificates of Participation - 0.1%        
Bahamas - 0.1%        

Credit Suisse Group AG Equity Linked Note due 11/18/11

    13,449      445
         
Total Certificates of Participation
(cost $408)		         445
         
Short-Term Investments - 7.1%        
United States - 7.1%        

Russell Investment Company Russell Money Market Fund

    53,494,000      53,494

State Street Euro Commercial Paper (ç)(ž) 0.010% due 05/01/09

    14,100      14,100
         
Total Short-Term Investments (cost $67,594)         67,594
         

A portion of the portfolio has been fair valued as of period end.

     Principal
Amount ($)
or Shares		      Market
Value
$		  
Other Securities - 12.8%        

Russell Investment Company Russell Money Market Fund (×)

    60,764,699      60,765   

State Street Securities Lending Quality Trust (×)

    63,995,002      61,690   
           
Total Other Securities
(cost $124,760)		         122,455   
           
Total Investments - 109.0%
(identified cost $1,089,068)		         1,042,837   
Other Assets and Liabilities,
Net - (9.0%)		         (86,325 ) 
           
Net Assets - 100.0%         956,512   
           

 

See accompanying notes which are an integral part of the financial statements.

 

82   Russell Emerging Markets Fund

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

Hang Seng Index (Hong Kong)

    260      HKD   150,896      05/09      593

JSE-40 Index (South Africa)

    460      ZAR   86,232      06/09      278

Kospi 200 Index Futures (South Korea)

    215      KRW   19,000,625      06/09      1,840

Mexican Bolsa Index

    280      MXN   61,835      06/09      347

MSCI Taiwan Index

    560      USD   13,037      05/09      793

S&P CNX Nifty Index (SGX)

    785      USD   5,475      05/09      16
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                  3,867
                     

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Emerging Markets Fund   83

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   17   BRL   38   05/04/09   —   
USD   142   BRL   310   05/04/09   (1 ) 
USD   152   BRL   333   05/05/09   —   
USD   1,659   BRL   4,000   06/17/09   148   
USD   2,234   BRL   5,000   06/17/09   25   
USD   2,384   BRL   5,900   06/17/09   282   
USD   2,485   BRL   6,100   06/17/09   271   
USD   3,658   BRL   9,000   06/17/09   408   
USD   4,357   BRL   10,000   06/17/09   161   
USD   9   EUR   7   05/04/09   —   
USD   21   EUR   16   05/04/09   —   
USD   11   EUR   8   05/05/09   —   
USD   18   EUR   14   05/05/09   —   
USD   46   GBP   32   05/01/09   1   
USD   49   GBP   33   05/05/09   —   
USD   604   HKD   4,682   05/04/09   —   
USD   21   HKD   163   05/05/09   —   
USD   149   HKD   1,154   05/05/09   —   
USD   281   HKD   2,181   05/05/09   —   
USD   495   HKD   3,835   05/05/09   —   
USD   19   ILS   80   05/01/09   —   
USD   30   ILS   126   05/04/09   —   
USD   189   INR   10,000   06/17/09   10   
USD   321   INR   17,000   06/17/09   17   
USD   567   INR   30,000   06/17/09   31   
USD   993   INR   50,000   06/17/09   2   
USD   1,382   INR   73,000   06/17/09   71   
USD   1,888   INR   100,000   06/17/09   102   
USD   1,955   INR   100,000   06/17/09   35   
USD   72   KRW   100,000   06/17/09   6   
USD   216   KRW   300,000   06/17/09   18   
USD   1,118   KRW   1,500,000   06/17/09   53   
USD   1,342   KRW   1,860,000   06/17/09   110   
USD   1,846   KRW   2,900,000   06/17/09   418   
USD   2,287   KRW   3,600,000   06/17/09   522   
USD   2,696   KRW   3,740,000   06/17/09   223   
USD   5,788   KRW   9,100,000   06/17/09   1,315   
USD   26   MXN   360   05/04/09   —   
USD   106   MXN   1,475   05/04/09   1   
USD   322   MXN   5,000   06/17/09   38   
USD   373   MXN   5,000   06/17/09   (13 ) 
USD   1,400   MXN   20,000   06/17/09   37   
USD   4,176   MXN   65,000   06/17/09   495   
USD   —   THB   8   05/04/09   —   
USD   15   THB   518   05/04/09   —   
USD   64   THB   2,248   05/04/09   —   
USD   17   THB   587   05/06/09   —   
USD   15   TRY   24   05/04/09   —   
USD   90   TRY   144   05/05/09   —   
USD   185   TRY   295   05/05/09   (1 ) 
USD   217   TRY   347   05/05/09   —   
USD   69   ZAR   604   05/05/09   2   
USD   26   ZAR   229   05/06/09   1   
Foreign Currency Exchange Contracts      
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   98   ZAR   849   05/06/09   3   
USD   160   ZAR   1,392   05/06/09   4   
USD   25   ZAR   209   05/07/09   —   
USD   63   ZAR   536   05/07/09   —   
USD   116   ZAR   987   05/07/09   —   
USD   23   ZAR   197   05/08/09   —   
USD   78   ZAR   658   05/08/09   —   
USD   1,106   ZAR   10,000   06/17/09   65   
USD   1,121   ZAR   10,000   06/17/09   49   
USD   3,055   ZAR   30,000   06/17/09   456   
USD   7,423   ZAR   80,000   06/17/09   1,940   
BRL   89   USD   41   05/05/09   —   
BRL   1,053   USD   480   05/05/09   (1 ) 
BRL   1,000   USD   408   06/17/09   (44 ) 
BRL   2,000   USD   847   06/17/09   (57 ) 
BRL   6,000   USD   2,458   06/17/09   (253 ) 
HKD   —   USD   —   05/04/09   —   
HKD   5   USD   1   05/05/09   —   
HKD   56   USD   7   05/05/09   —   
INR   10,000   USD   190   06/17/09   (9 ) 
INR   20,000   USD   380   06/17/09   (18 ) 
INR   40,000   USD   751   06/17/09   (45 ) 
KRW   300,000   USD   191   06/17/09   (44 ) 
KRW   1,000,000   USD   710   06/17/09   (70 ) 
KRW   1,500,000   USD   970   06/17/09   (201 ) 
KRW   1,860,000   USD   1,181   06/17/09   (271 ) 
KRW   2,440,000   USD   1,552   06/17/09   (352 ) 
KRW   3,000,000   USD   1,955   06/17/09   (387 ) 
KRW   3,000,000   USD   2,030   06/17/09   (311 ) 
MXN   567   USD   41   05/04/09   —   
MXN   235   USD   17   05/05/09   —   
MXN   277   USD   20   05/05/09   —   
MXN   535   USD   38   05/05/09   —   
MXN   1,107   USD   80   05/05/09   —   
MXN   3,000   USD   194   06/17/09   (22 ) 
MXN   5,000   USD   321   06/17/09   (38 ) 
MXN   5,000   USD   329   06/17/09   (30 ) 
MXN   6,000   USD   383   06/17/09   (48 ) 
MXN   7,000   USD   491   06/17/09   (12 ) 
MXN   18,000   USD   1,165   06/17/09   (128 ) 
MYR   4,267   USD   1,182   05/04/09   (16 ) 
TRY   42   USD   26   05/04/09   —   
ZAR   44   USD   5   05/04/09   —   
ZAR   99   USD   11   05/04/09   (1 ) 
ZAR   156   USD   17   05/04/09   (1 ) 
ZAR   385   USD   43   05/04/09   (3 ) 
ZAR   584   USD   65   05/04/09   (4 ) 
ZAR   610   USD   68   05/04/09   (4 ) 
ZAR   950   USD   106   05/04/09   (7 ) 
ZAR   963   USD   107   05/04/09   (6 ) 
ZAR   1,093   USD   122   05/04/09   (7 ) 
ZAR   1,116   USD   124   05/04/09   (8 ) 
ZAR   1,465   USD   163   05/04/09   (10 ) 

 

See accompanying notes which are an integral part of the financial statements.

 

84   Russell Emerging Markets Fund

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
ZAR   1,596   USD   178   05/04/09   (11 ) 
ZAR   2,180   USD   243   05/04/09   (14 ) 
ZAR   2,460   USD   274   05/04/09   (16 ) 
ZAR   771   USD   88   05/05/09   (3 ) 
ZAR   898   USD   103   05/05/09   (3 ) 
ZAR   4,300   USD   504   05/05/09   (3 ) 
ZAR   355   USD   41   05/06/09   (1 ) 
ZAR   433   USD   51   05/06/09   (1 ) 
ZAR   1,299   USD   150   05/06/09   (4 ) 
ZAR   6,006   USD   691   05/06/09   (19 ) 
ZAR   74   USD   9   05/07/09   —   
ZAR   198   USD   23   05/07/09   —   
ZAR   264   USD   31   05/07/09   —   
ZAR   290   USD   34   05/07/09   —   
ZAR   196   USD   23   05/08/09   —   
ZAR   890   USD   105   05/08/09   —   
ZAR   5,000   USD   471   06/17/09   (114 ) 
ZAR   5,000   USD   462   06/17/09   (123 ) 
ZAR   5,000   USD   476   06/17/09   (109 ) 
ZAR   6,000   USD   567   06/17/09   (135 ) 
ZAR   8,000   USD   869   06/17/09   (68 ) 
ZAR   10,000   USD   982   06/17/09   (188 ) 
ZAR   11,000   USD   1,061   06/17/09   (226 ) 
             

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts

   3,859   
             

 

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Emerging Markets Fund   85

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Index Swap Contracts

Fund Receives
Underlying Security

   

Counter Party

    Notional
Amount
$		   

Fund Pays
Floating Rate

    Termination
Date		    Unrealized
Appreciation
(Depreciation)
$
                 

Bovespa Index Future

    Goldman Sachs    BRL    18,723    Total Return of Underlying Security at Termination    06/17/09    183

Bovespa Index Future

    Goldman Sachs    BRL    16,585    Total Return of Underlying Security at Termination    06/17/09    69
                   

Total Unrealized Appreciation (Depreciation) on Open Index Swap Contracts

       252
                

 

See accompanying notes which are an integral part of the financial statements.

 

86   Russell Emerging Markets Fund

Russell Investment Company

Russell Emerging Markets Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Industry Diversification

    % of
Net
Assets		      Market
Value
$		  
     
     

Auto and Transportation

    3.0       28,266   

Consumer Discretionary

    4.3       41,415   

Consumer Staples

    5.7       54,136   

Financial Services

    18.8       180,773   

Health Care

    2.1       20,076   

Integrated Oils

    7.8       74,210   

Materials and Processing

    13.4       127,960   

Miscellaneous

    2.0       19,314   

Other Energy

    5.6       53,915   

Producer Durables

    2.8       26,964   

Technology

    11.9       113,549   

Utilities

    11.4       110,299   

Warrants & Rights

    0.2       1,466   

Certificates of Participation

    0.1       445   

Short-Term Investments

    7.1       67,594   

Other Securities

    12.8       122,455   
             

Total Investments

    109.0       1,042,837   

Other Assets and Liabilities, Net

    (9.0 )     (86,325 ) 
             
Net Assets    100.0       956,512   
             
Geographic Diversification    % of
Net
Assets		      Market
Value
$		  
     

Africa

    7.4       71,189   

Asia

    35.2       337,211   

Europe

    14.6       139,790   

Latin America

    17.7       168,840   

Middle East

    3.9       37,336   

Other Regions

    7.9       75,956   

United Kingdom

    2.4       22,466   

Short-Term Investments

    7.1       67,594   

Other Securities

    12.8       122,455   
             

Total Investments

    109.0       1,042,837   

Other Assets and Liabilities, Net

    (9.0 )     (86,325 ) 
             
Net Assets    100.0       956,512   
             

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Emerging Markets Fund   87

Russell Investment Company

Russell Emerging Markets Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Catagories      % of Net
Assets		  
    

Argentina

      0.1   

Austria

      — * 

Bermuda

      1.1   

Brazil

      8.2   

Canada

      0.4   

Cayman Islands

      3.1   

Chile

      1.0   

China

      6.4   

Columbia

      0.4   

Czech Republic

      0.6   

Egypt

      0.5   

Greece

      0.3   

Hong Kong

      3.5   

Hungary

      0.4   

India

      4.9   

Indonesia

      2.1   

Israel

      3.0   

Luxembourg

      2.2   

Malaysia

      1.0   

Mexico

      4.0   

Netherlands

      0.4   

Nigeria

      0.2   

Oman

      0.2   

Pakistan

      0.2   

Panama

      0.1   

Philippines

      0.3   

Poland

      0.4   

Qatar

      0.1   

Russia

      6.9   

Singapore

      0.1   

South Africa

      7.2   

South Korea

      9.7   

Taiwan

      8.2   

Thailand

      1.4   

Turkey

      3.2   

United Arab Emirates

      0.1   

United Kingdom

      2.4   

United States

      0.3   

Venezuela

      — * 

Zimbabwe

      — * 

Preferred Stock

      4.2   

Warrants & Rights

      0.2   

Certificates of Participation

      0.1   

Short-Term Investments

      7.1   

Other Securities

      12.8   
        

Total Investments

      109.0   

Other Assets and Liabilities Net

      (9.0 ) 
        
     100.0   
        

Futures Contracts

      0.4   

Foreign Currency Exchange Contracts

      0.4   

 

* Less than .05% of net assets

 

See accompanying notes which are an integral part of the financial statements.

 

88   Russell Emerging Markets Fund

Russell Investment Company

Russell Tax-Managed U.S. Large Cap Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 932.20    $ 1,015.17

Expenses Paid During Period*

    $ 9.29    $ 9.69

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.94% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 935.10    $ 1,018.89

Expenses Paid During Period*

    $ 5.71    $ 5.96

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.19% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 936.60    $ 1,020.13

Expenses Paid During Period*

    $ 4.51    $ 4.71

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.94% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Russell Tax-Managed U.S. Large Cap Fund   89

Russell Investment Company

Russell Tax-Managed U.S. Large Cap Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       
Common Stocks - 91.4%        
Auto and Transportation - 1.9%        

Burlington Northern Santa Fe Corp.

    1,900      128

CH Robinson Worldwide, Inc.

    8,000      425

CSX Corp.

    49,130      1,454

Norfolk Southern Corp.

    31,400      1,120

PACCAR, Inc. (Ñ)

    25,200      893

United Parcel Service, Inc. Class B

    32,850      1,720
         
        5,740
         
Consumer Discretionary - 12.1%        

Abercrombie & Fitch Co. Class A (Ñ)

    20,800      563

Accenture, Ltd. Class A

    2,400      71

Activision Blizzard, Inc. (Æ)

    33,430      360

Advance Auto Parts, Inc.

    7,800      341

Amazon.com, Inc. (Æ)

    57,300      4,614

Best Buy Co., Inc. (Ñ)

    19,800      760

Coach, Inc.

    3,900      95

Comcast Corp. Class A

    112,500      1,655

Darden Restaurants, Inc.

    6,400      237

Dick’s Sporting Goods, Inc. (Æ)(Ñ)

    7,700      146

eBay, Inc. (Æ)

    49,900      822

Family Dollar Stores, Inc. (Ñ)

    7,800      259

Gap, Inc. (The)

    48,500      754

Guess?, Inc.

    27,360      712

Home Depot, Inc.

    5,600      147

International Game Technology

    25,700      317

Iron Mountain, Inc. (Æ)(Ñ)

    31,050      885

ITT Educational Services, Inc. (Æ)(Ñ)

    2,700      272

Kimberly-Clark Corp.

    11,699      575

Kohl’s Corp. (Æ)

    31,090      1,410

Las Vegas Sands Corp. (Æ)(Ñ)

    214,820      1,680

Lowe’s Cos., Inc.

    128,500      2,763

McDonald’s Corp.

    11,300      602

Nike, Inc. Class B

    19,320      1,014

Omnicom Group, Inc.

    22,500      708

Polo Ralph Lauren Corp. Class A (Ñ)

    6,800      366

Republic Services, Inc. Class A

    73,804      1,550

Royal Caribbean Cruises, Ltd. (Ñ)

    6,500      96

Staples, Inc.

    32,700      674

Starbucks Corp. (Æ)

    159,200      2,302

Starwood Hotels & Resorts Worldwide, Inc. (Ñ)(ö)

    8,400      175

Target Corp.

    16,000      660

Time Warner, Inc.

    53,891      1,176

Urban Outfitters, Inc. (Æ)(Ñ)

    9,900      193

VF Corp.

    6,800      403

Wal-Mart Stores, Inc.

    67,400      3,397

Walt Disney Co. (The)

    74,000      1,621

Wyndham Worldwide Corp.

    84,100      982

Wynn Resorts, Ltd. (Æ)(Ñ)(ö)

    10,300      404
         
        35,761
         
Consumer Staples - 5.3%        

Altria Group, Inc.

    58,600      957

Clorox Co.

    9,860      553
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Coca-Cola Co. (The)

    41,000      1,765

General Mills, Inc.

    16,700      847

Kellogg Co.

    5,900      248

Kraft Foods, Inc. Class A

    87,504      2,048

Molson Coors Brewing Co. Class B

    10,700      409

PepsiCo, Inc.

    47,980      2,387

Philip Morris International, Inc.

    4,600      167

Procter & Gamble Co. (The)

    70,785      3,500

Safeway, Inc.

    27,200      537

SUPERVALU, Inc.

    36,300      593

Sysco Corp.

    53,100      1,239

Whole Foods Market, Inc. (Ñ)

    21,000      435
         
        15,685
         
Financial Services - 15.0%        

ACE, Ltd.

    31,720      1,469

Aflac, Inc.

    3,500      101

Alexandria Real Estate Equities, Inc. (ö)(Ñ)

    2,800      102

Allstate Corp. (The)

    12,500      292

American Express Co. (Ñ)

    10,500      265

Assurant, Inc.

    1,400      34

Automatic Data Processing, Inc.

    4,000      141

Axis Capital Holdings, Ltd.

    10,100      249

Bank of America Corp. (Ñ)

    97,078      867

Bank of New York Mellon Corp. (The)

    121,201      3,088

BB&T Corp. (Ñ)

    5,100      119

Capital One Financial Corp. (Ñ)

    15,270      256

Charles Schwab Corp. (The)

    71,400      1,319

Cigna Corp.

    8,500      168

CIT Group, Inc.

    21,400      48

Citigroup, Inc. (Ñ)

    88,245      269

CME Group, Inc. Class A

    5,700      1,262

Comerica, Inc.

    50,300      1,055

Digital Realty Trust, Inc. (ö)(Ñ)

    5,800      209

Discover Financial Services

    44,200      359

GATX Corp. (Ñ)

    2,600      78

Goldman Sachs Group, Inc. (The)

    40,200      5,166

Health Care REIT, Inc. (ö)

    4,000      136

IntercontinentalExchange, Inc. (Æ)

    31,600      2,768

JPMorgan Chase & Co.

    115,720      3,819

Keycorp (Ñ)

    26,600      164

Kimco Realty Corp. (ö)(Ñ)

    5,800      70

M&T Bank Corp. (Ñ)

    900      47

Mastercard, Inc. Class A (Ñ)

    1,300      238

MetLife, Inc.

    52,380      1,558

Moody’s Corp. (Ñ)

    34,800      1,027

Morgan Stanley

    71,400      1,688

Northern Trust Corp.

    16,700      908

NYSE Euronext

    8,000      185

Paychex, Inc. (Ñ)

    19,200      519

PNC Financial Services Group, Inc. (Ñ)

    50,700      2,013

ProLogis (ö)(Ñ)

    3,000      27

Prudential Financial, Inc.

    8,900      257

Realty Income Corp. (ö)(Ñ)

    6,600      147

RenaissanceRe Holdings, Ltd.

    6,400      311

Simon Property Group, Inc. (ö)(Ñ)

    2,701      139

State Street Corp.

    19,100      652

 

90   Russell Tax-Managed U.S. Large Cap Fund

Russell Investment Company

Russell Tax-Managed U.S. Large Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

T Rowe Price Group, Inc. (Ñ)

    15,240      587

TD Ameritrade Holding Corp. (Æ)

    96,700      1,538

Travelers Cos., Inc. (The)

    7,000      288

Unum Group

    4,200      69

US Bancorp

    33,300      607

Ventas, Inc. (ö)

    3,100      89

Visa, Inc. New (Ñ)

    58,405      3,794

Wells Fargo & Co. (Ñ)

    178,740      3,577

Western Union Co. (The)

    2,240      38

Zions Bancorporation (Ñ)

    4,600      50
         
        44,226
         
Health Care - 15.1%        

Abbott Laboratories

    96,300      4,030

Abraxis Bioscience, Inc. (Æ)

    7,000      340

Aetna, Inc.

    15,900      350

Alexion Pharmaceuticals, Inc. (Æ)

    3,600      120

Allergan, Inc.

    53,400      2,492

Amgen, Inc. (Æ)

    21,040      1,020

Baxter International, Inc.

    25,000      1,212

Bristol-Myers Squibb Co.

    30,300      582

Cardinal Health, Inc.

    10,200      345

Celgene Corp. (Æ)

    18,700      799

Covidien, Ltd.

    48,525      1,600

CR Bard, Inc.

    1,500      107

CVS/Caremark Corp.

    137,290      4,363

Express Scripts, Inc. Class A (Æ)

    9,600      614

Genzyme Corp. (Æ)

    42,100      2,245

Gilead Sciences, Inc. (Æ)

    56,640      2,594

GlaxoSmithKline PLC - ADR (Ñ)

    13,900      428

Intuitive Surgical, Inc. (Æ)(Ñ)

    19,200      2,760

Johnson & Johnson

    46,238      2,421

McKesson Corp.

    10,100      374

Medtronic, Inc.

    13,900      445

Merck & Co., Inc.

    47,000      1,139

Mindray Medical International, Ltd. - ADR (Ñ)

    37,900      865

Pfizer, Inc.

    250,700      3,349

Schering-Plough Corp.

    45,900      1,057

St. Jude Medical, Inc. (Æ)

    19,400      650

Stryker Corp.

    26,700      1,034

Teva Pharmaceutical Industries, Ltd. - ADR

    15,700      689

Thermo Fisher Scientific, Inc. (Æ)

    37,800      1,326

UnitedHealth Group, Inc.

    21,900      515

Varian Medical Systems, Inc. (Æ)

    39,500      1,318

Watson Pharmaceuticals, Inc. Class B (Æ)(Ñ)

    40,700      1,259

WellPoint, Inc. (Æ)

    13,500      577

Wyeth

    26,300      1,115

Zimmer Holdings, Inc. (Æ)

    8,300      365
         
        44,499
         
Integrated Oils - 5.2%        

Chevron Corp.

    63,687      4,210

ConocoPhillips

    50,979      2,090

Exxon Mobil Corp.

    88,146      5,877

Hess Corp.

    5,800      318
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Occidental Petroleum Corp.

    34,900      1,964

Petroleo Brasileiro SA - ADR

    14,500      487

Royal Dutch Shell PLC - ADR

    6,600      301
         
        15,247
         
Materials and Processing - 3.0%        

Air Products & Chemicals, Inc.

    8,900      586

Avery Dennison Corp.

    27,200      782

BHP Billiton, Ltd. - ADR (Ñ)

    9,900      477

Dow Chemical Co. (The)

    57,600      922

EI Du Pont de Nemours & Co.

    17,500      488

Freeport-McMoRan Copper & Gold, Inc. Class B

    13,800      588

Monsanto Co.

    31,250      2,653

Nucor Corp.

    12,500      509

PPG Industries, Inc.

    4,400      194

Praxair, Inc.

    20,010      1,493

United States Steel Corp. (Ñ)

    5,400      143
         
        8,835
         
Miscellaneous - 1.2%        

ABB, Ltd. - ADR

    82,810      1,177

Eaton Corp.

    12,000      526

General Electric Co.

    88,800      1,123

Honeywell International, Inc.

    4,700      147

Johnson Controls, Inc. (Ñ)

    32,700      622

Textron, Inc. (Ñ)

    2,700      29
         
        3,624
         
Other Energy - 5.0%        

Anadarko Petroleum Corp.

    2,180      94

Apache Corp.

    10,500      765

Chesapeake Energy Corp.

    14,100      278

Devon Energy Corp.

    41,600      2,157

Dynegy, Inc. Class A (Æ)

    3,332      6

El Paso Corp.

    156,790      1,082

FMC Technologies, Inc. (Æ)(Ñ)

    44,600      1,527

Halliburton Co.

    30,200      610

National Oilwell Varco, Inc. (Æ)

    100,700      3,049

Schlumberger, Ltd.

    71,000      3,478

Smith International, Inc.

    5,800      150

Southwestern Energy Co. (Æ)

    18,070      648

Valero Energy Corp.

    4,500      89

Weatherford International, Ltd. (Æ)

    58,500      973
         
        14,906
         
Producer Durables - 5.2%        

American Tower Corp. Class A (Æ)

    25,000      794

Applied Materials, Inc.

    119,000      1,453

Boeing Co. (The)

    12,700      509

Caterpillar, Inc. (Ñ)

    16,600      591

Cooper Industries, Ltd. Class A

    5,800      190

Crown Castle International Corp. (Æ)(Ñ)

    6,000      147

Cummins, Inc.

    9,000      306

Danaher Corp.

    2,100      123

Deere & Co.

    18,200      751

 

Russell Tax-Managed U.S. Large Cap Fund   91

Russell Investment Company

Russell Tax-Managed U.S. Large Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

DR Horton, Inc.

    13,100      171

Emerson Electric Co.

    5,300      180

Goodrich Corp.

    7,200      319

Ingersoll-Rand Co., Ltd. Class A

    8,900      194

ITT Corp.

    22,020      903

KB Home (Ñ)

    14,100      255

Lam Research Corp. (Æ)(Ñ)

    38,200      1,065

Lockheed Martin Corp.

    1,400      110

Northrop Grumman Corp.

    11,200      541

NVR, Inc. (Æ)(Ñ)

    1,200      606

Parker Hannifin Corp.

    21,000      952

Rockwell Collins, Inc.

    24,450      938

Toll Brothers, Inc. (Æ)(Ñ)

    3,900      79

United Technologies Corp.

    87,200      4,259
         
        15,436
         
Technology - 17.4%        

Adobe Systems, Inc. (Æ)

    12,800      350

Apple, Inc. (Æ)

    53,030      6,673

Broadcom Corp. Class A (Æ)(Ñ)

    131,120      3,041

CA, Inc.

    11,200      193

Cisco Systems, Inc. (Æ)

    154,430      2,984

Corning, Inc.

    114,400      1,673

EMC Corp. (Æ)

    119,200      1,494

F5 Networks, Inc. (Æ)(Ñ)

    20,620      562

First Solar, Inc. (Æ)(Ñ)

    2,800      524

Google, Inc. Class A (Æ)

    17,520      6,937

Hewlett-Packard Co.

    121,250      4,363

International Business Machines Corp.

    59,770      6,169

Juniper Networks, Inc. (Æ)(Ñ)

    33,900      734

LSI Corp. (Æ)

    40,900      157

Macrovision Solutions Corp. (Æ)

    457      9

Microsoft Corp.

    135,500      2,745

National Semiconductor Corp. (Ñ)

    53,000      656

NetApp, Inc. (Æ)

    14,200      260

Oracle Corp.

    108,600      2,100

QUALCOMM, Inc.

    103,830      4,394

Rockwell Automation, Inc. (Ñ)

    5,200      164

Salesforce.com, Inc. (Æ)(Ñ)

    51,300      2,196

SanDisk Corp. (Æ)

    14,800      233

Seagate Technology, Inc. (Æ)

    26,700      —

Sybase, Inc. (Æ)(Ñ)

    12,200      414

Taiwan Semiconductor Manufacturing Co., Ltd. - ADR

    82,000      867

Tyco Electronics, Ltd.

    4,825      84

VeriSign, Inc. (Æ)

    21,200      436

Xilinx, Inc. (Ñ)

    51,080      1,044
         
        51,456
         
Utilities - 5.0%        

America Movil SAB de CV Series L

    42,800      1,406

American Electric Power Co., Inc.

    9,500      250

AT&T, Inc.

    171,306      4,389

China Mobile, Ltd. - ADR

    8,300      358
    

Principal

Amount ($)

or Shares

     

Market

Value
$

  

CMS Energy Corp. (Ñ)

    20,600      248   

Consolidated Edison, Inc. (Ñ)

    5,700      212   

Edison International

    9,500      271   

Entergy Corp.

    3,600      233   

Exelon Corp.

    33,550      1,548   

FirstEnergy Corp.

    3,300      135   

FPL Group, Inc.

    3,600      194   

MetroPCS Communications, Inc. (Æ)(Ñ)

    30,030      513   

NV Energy, Inc.

    44,600      457   

PG&E Corp.

    16,400      609   

Portland General Electric Co.

    13,800      252   

Public Service Enterprise Group, Inc.

    17,500      522   

Sprint Nextel Corp. (Æ)

    80,200      350   

Time Warner Cable, Inc.

    12,447      401   

Verizon Communications, Inc.

    80,238      2,434   
           
        14,782   
           
Total Common Stocks
(cost $280,476)		         270,197   
           
Short-Term Investments - 7.5%        

Russell Investment Company Russell Money Market Fund

    17,675,000      17,675   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    4,500      4,500   
           
Total Short-Term Investments
(cost $22,175)		         22,175   
           
Other Securities - 11.7%        

Russell Investment Company Russell Money Market Fund (×)

    17,130,629      17,131   

State Street Securities Lending Quality Trust (×)

    18,041,308      17,391   
           
Total Other Securities
(cost $35,172)		         34,522   
           
Total Investments - 110.6%
(identified cost $337,823)		         326,894   
Other Assets and Liabilities,
Net - (10.6%)		         (31,306 ) 
           
Net Assets - 100.0%         295,588   
           

 

See accompanying notes which are an integral part of the financial statements.

 

92   Russell Tax-Managed U.S. Large Cap Fund

Russell Investment Company

Russell Tax-Managed U.S. Large Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		     

Notional
Amount

      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

S&P 500 E-Mini Index (CME)

    414      USD   18,009      06/09      3,042

S&P 500 Index (CME)

    28      USD   6,090      06/09      767
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     3,809
                     

 

 

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    

Auto and Transportation

      1.9   

Consumer Discretionary

      12.1   

Consumer Staples

      5.3   

Financial Services

      15.0   

Health Care

      15.1   

Integrated Oils

      5.2   

Materials and Processing

      3.0   

Miscellaneous

      1.2   

Other Energy

      5.0   

Producer Durables

      5.2   

Technology

      17.4   

Utilities

      5.0   

Short-Term Investments

      7.5   

Other Securities

      11.7   
        

Total Investments

      110.6   

Other Assets and Liabilities, Net

      (10.6 ) 
        
     100.0   
        

Futures Contracts

      1.3   

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Tax-Managed U.S. Large Cap Fund   93

Russell Investment Company

Russell Tax-Managed U.S. Mid & Small Cap Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 940.20    $ 1,013.98

Expenses Paid During Period*

    $ 10.49    $ 10.89

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.18% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 944.00    $ 1,017.70

Expenses Paid During Period*

    $ 6.89    $ 7.15

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.43% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 945.30    $ 1,018.74

Expenses Paid During Period*

    $ 5.88    $ 6.11

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.22% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

94   Russell Tax-Managed U.S. Mid & Small Cap Fund

Russell Investment Company

Russell Tax-Managed U.S. Mid & Small Cap Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		     

Market

Value
$

       
Common Stocks - 89.7%        
Auto and Transportation - 5.4%        

Alexander & Baldwin, Inc. (Ñ)

    8,020      214

AMR Corp. (Æ)(Ñ)

    19,724      94

ArvinMeritor, Inc. (Ñ)

    11,190      14

Bristow Group, Inc. (Æ)(Ñ)

    4,315      98

Con-way, Inc.

    3,997      99

Cooper Tire & Rubber Co. (Ñ)

    42,965      355

Dana Holding Corp. (Æ)(Ñ)

    25,499      20

Delta Air Lines, Inc. (Æ)(Ñ)

    28,004      173

Force Protection, Inc. (Æ)

    11,316      86

Genco Shipping & Trading, Ltd. (Ñ)

    5,230      100

General Maritime Corp. (Ñ)

    29,267      291

Genesee & Wyoming, Inc. Class A (Æ)

    17,647      529

Gentex Corp.

    11,276      151

Goodyear Tire & Rubber Co. (The) (Æ)

    13,310      146

HUB Group, Inc. Class A (Æ)(Ñ)

    21,955      505

Kansas City Southern (Æ)(Ñ)

    66,618      1,016

Knightsbridge Tankers, Ltd.

    5,030      67

Landstar System, Inc. (Ñ)

    21,477      765

Old Dominion Freight Line, Inc. (Æ)(Ñ)

    12,700      357

Overseas Shipholding Group, Inc. (Ñ)

    3,466      100

Skywest, Inc.

    6,092      73

Tenneco, Inc. (Æ)(Ñ)

    93,639      287

UTI Worldwide, Inc. (Æ)

    24,701      332

Wabtec Corp. (Ñ)

    14,620      558
         
        6,430
         
Consumer Discretionary - 16.9%        

99 Cents Only Stores (Æ)

    10,700      115

Aaron’s, Inc. (Ñ)

    4,213      141

Abercrombie & Fitch Co. Class A (Ñ)

    10,515      285

Advance Auto Parts, Inc.

    3,410      149

Advisory Board Co. (The) (Æ)

    3,751      70

Aeropostale, Inc. (Æ)(Ñ)

    4,710      160

American Public Education, Inc. (Æ)

    2,190      79

AMN Healthcare Services, Inc. (Æ)

    10,571      73

Arbitron, Inc. (Ñ)

    11,657      243

Bare Escentuals, Inc. (Æ)

    17,892      166

Brinker International, Inc.

    7,641      135

Cabela’s, Inc. (Æ)(Ñ)

    9,699      124

California Pizza Kitchen, Inc. (Æ)

    4,581      72

Callaway Golf Co.

    10,970      83

Capella Education Co. (Æ)(Ñ)

    15,842      814

Carter’s, Inc. (Æ)

    25,119      537

Cato Corp. (The) Class A

    25,750      495

CDI Corp.

    6,575      79

Cheesecake Factory, Inc. (The) (Æ)(Ñ)

    27,441      477

Chemed Corp. (Ñ)

    14,410      610

Cherokee, Inc.

    3,566      65

Chico’s FAS, Inc. (Æ)(Ñ)

    47,868      366

Consolidated Graphics, Inc. (Æ)(Ñ)

    14,110      274

Core-Mark Holding Co., Inc. (Æ)

    4,680      90

Corinthian Colleges, Inc. (Æ)(Ñ)

    18,707      288

Corrections Corp. of America (Æ)

    8,815      125

Deckers Outdoor Corp. (Æ)(Ñ)

    3,650      206

DeVry, Inc.

    2,353      100
     Principal
Amount ($)
or Shares		     

Market

Value
$

Dollar Tree, Inc. (Æ)

    3,800      161

DreamWorks Animation SKG, Inc. Class A (Æ)

    14,399      346

Earthlink, Inc. (Æ)

    15,131      115

Family Dollar Stores, Inc.

    5,488      182

Fred’s, Inc. Class A (Ñ)

    38,912      532

FTI Consulting, Inc. (Æ)(Ñ)

    17,337      951

Gaylord Entertainment Co. (Æ)(Ñ)

    8,059      112

Guess?, Inc.

    15,390      401

Hasbro, Inc.

    4,726      126

Hertz Global Holdings, Inc. (Æ)(Ñ)

    19,788      135

International Speedway Corp. Class A

    4,383      104

Iron Mountain, Inc. (Æ)(Ñ)

    5,440      155

ITT Educational Services, Inc. (Æ)(Ñ)

    1,556      157

Jack in the Box, Inc. (Æ)(Ñ)

    13,900      342

John Wiley & Sons, Inc. Class A

    3,574      121

MAXIMUS, Inc.

    2,636      106

Meredith Corp. (Ñ)

    19,210      482

MPS Group, Inc. (Æ)

    12,173      98

Navigant Consulting, Inc. (Æ)

    7,474      110

Nordstrom, Inc. (Ñ)

    4,660      105

O’Reilly Automotive, Inc. (Æ)

    4,450      173

PF Chang’s China Bistro, Inc. (Æ)(Ñ)

    9,864      298

Pool Corp. (Ñ)

    7,307      131

priceline.com, Inc. (Æ)(Ñ)

    1,089      106

RadioShack Corp.

    10,666      150

Red Robin Gourmet Burgers, Inc. (Æ)(Ñ)

    20,423      501

Ross Stores, Inc.

    4,272      162

School Specialty, Inc. (Æ)(Ñ)

    19,292      362

Scientific Games Corp. Class A (Æ)(Ñ)

    8,930      156

Service Corp. International (Ñ)

    25,345      115

Shoe Carnival, Inc. (Æ)

    6,357      74

Smith & Wesson Holding Corp. (Æ)(Ñ)

    69,643      499

Sonic Corp. (Æ)(Ñ)

    10,434      114

Starwood Hotels & Resorts Worldwide, Inc. (Ñ)(ö)

    7,630      159

Strayer Education, Inc. (Ñ)

    4,830      915

Tetra Tech, Inc. (Æ)

    15,035      369

Texas Roadhouse, Inc. Class A (Æ)(Ñ)

    14,440      164

TiVo, Inc. (Æ)(Ñ)

    11,785      88

Toro Co. (Ñ)

    14,194      431

Tractor Supply Co. (Æ)(Ñ)

    11,301      456

True Religion Apparel, Inc. (Æ)(Ñ)

    13,150      207

Tupperware Brands Corp.

    5,914      148

Under Armour, Inc. Class A (Æ)(Ñ)

    16,562      390

United Online, Inc.

    14,024      74

United Stationers, Inc. (Æ)(Ñ)

    5,680      186

Urban Outfitters, Inc. (Æ)(Ñ)

    11,390      222

Valueclick, Inc. (Æ)

    75,405      799

VistaPrint, Ltd. (Æ)(Ñ)

    6,290      216

Watson Wyatt Worldwide, Inc. Class A

    2,636      140

WESCO International, Inc. (Æ)

    5,327      139

Weyco Group, Inc. (Ñ)

    3,689      101

Williams-Sonoma, Inc. (Ñ)

    35,370      495

WMS Industries, Inc. (Æ)(Ñ)

    10,815      347

Wynn Resorts, Ltd. (Æ)(Ñ)(ö)

    4,040      158
         
        20,307
         

 

Russell Tax-Managed U.S. Mid & Small Cap Fund   95

Russell Investment Company

Russell Tax-Managed U.S. Mid & Small Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		     

Market

Value
$

       
Consumer Staples - 4.1%        

Casey’s General Stores, Inc. (Ñ)

    15,836      421

Church & Dwight Co., Inc.

    1,097      60

Del Monte Foods Co.

    16,018      121

Green Mountain Coffee Roasters, Inc. (Æ)(Ñ)

    3,930      284

Hain Celestial Group, Inc. (The) (Æ)(Ñ)

    6,651      111

Hansen Natural Corp. (Æ)(Ñ)

    5,259      214

JM Smucker Co. (The)

    3,697      146

Lance, Inc. (Ñ)

    24,394      565

McCormick & Co., Inc.

    4,320      127

Peet’s Coffee & Tea, Inc. (Æ)(Ñ)

    34,826      950

Ralcorp Holdings, Inc. (Æ)

    2,598      149

Ruddick Corp.

    4,588      118

Star Scientific, Inc. (Æ)(Ñ)

    14,678      72

TreeHouse Foods, Inc. (Æ)(Ñ)

    34,895      928

United Natural Foods, Inc. (Æ)(Ñ)

    25,456      580

Whole Foods Market, Inc. (Ñ)

    6,310      131
         
        4,977
         
Financial Services - 15.8%        

American Campus Communities, Inc. (ö)(Ñ)

    12,995      282

American Equity Investment Life Holding Co. (Ñ)

    55,355      312

AmeriCredit Corp. (Æ)(Ñ)

    11,322      115

Anchor Bancorp Wisconsin, Inc. (Ñ)

    10,000      16

Apollo Investment Corp.

    17,877      86

Ares Capital Corp. (Ñ)

    15,853      93

Argo Group International Holdings, Ltd. (Ñ)

    16,993      476

Axis Capital Holdings, Ltd.

    6,444      159

Banco Latinoamericano de Exportaciones SA Class E

    6,654      82

BancTrust Financial Group, Inc. (Ñ)

    11,340      75

Bank of the Ozarks, Inc. (Ñ)

    13,620      338

BioMed Realty Trust, Inc. (ö)(Ñ)

    13,435      153

Broadridge Financial Solutions, Inc.

    6,376      123

Capital Southwest Corp.

    866      67

Cash America International, Inc.

    4,181      93

Cedar Shopping Centers, Inc. (ö)

    30,816      111

Cybersource Corp. (Æ)(Ñ)

    29,495      431

Delphi Financial Group, Inc. Class A

    6,801      117

Dun & Bradstreet Corp.

    2,276      185

E-House China Holdings, Ltd. - ADR (Æ)

    8,510      105

EastGroup Properties, Inc. (ö)(Ñ)

    3,422      115

Eaton Vance Corp. (Ñ)

    9,420      258

Employers Holdings, Inc.

    9,125      76

Equifax, Inc.

    9,585      279

Euronet Worldwide, Inc. (Æ)(Ñ)

    26,237      424

ExlService Holdings, Inc. (Æ)

    7,494      70

Extra Space Storage, Inc. (ö)

    10,878      77

Fair Isaac Corp. (Ñ)

    24,569      413

Federal Realty Investment Trust (ö)(Ñ)

    2,938      162

Fidelity National Financial, Inc. Class A (Ñ)

    8,883      161

First Commonwealth Financial Corp. (Ñ)

    11,304      98

First Horizon National Corp. (Ñ)

    11,452      132

First Industrial Realty Trust, Inc. (ö)(Ñ)

    13,783      52

First Midwest Bancorp, Inc. (Ñ)

    26,037      231

First Niagara Financial Group, Inc. (Ñ)

    8,810      119
     Principal
Amount ($)
or Shares		     

Market

Value
$

First Place Financial Corp.

    14,036      80

Franklin Street Properties Corp. (ö)(Ñ)

    5,720      76

GATX Corp. (Ñ)

    16,827      507

Glacier Bancorp, Inc. (Ñ)

    22,036      338

Greenhill & Co., Inc.

    1,089      84

Hanover Insurance Group, Inc. (The)

    9,608      288

Harleysville Group, Inc. (Ñ)

    5,900      171

Health Care REIT, Inc. (ö)(Ñ)

    4,831      165

Home Properties, Inc. (ö)(Ñ)

    8,141      297

Host Hotels & Resorts, Inc. (ö)(Ñ)

    112,043      862

Huntington Bancshares, Inc. (Ñ)

    23,381      65

IBERIABANK Corp. (Ñ)

    2,234      102

Inland Real Estate Corp. (ö)(Ñ)

    11,861      104

Interactive Brokers Group, Inc. Class A (Æ)

    6,500      96

IntercontinentalExchange, Inc. (Æ)(Ñ)

    3,320      291

Investment Technology Group, Inc. (Æ)

    4,156      95

Investors Real Estate Trust (ö)

    10,156      94

Kayne Anderson Energy Development Co.

    6,281      69

Markel Corp. (Æ)(Ñ)

    397      114

Mercury General Corp.

    2,818      95

MGIC Investment Corp. (Ñ)

    69,481      178

Mid-America Apartment Communities, Inc. (ö)(Ñ)

    20,104      744

MSCI, Inc. Class A (Æ)(Ñ)

    7,100      149

National Penn Bancshares, Inc. (Ñ)

    19,545      158

Nationwide Health Properties, Inc. (ö)

    5,778      143

Navigators Group, Inc. (Æ)

    1,944      88

NewAlliance Bancshares, Inc. (Ñ)

    9,901      128

Old National Bancorp (Ñ)

    39,393      537

Pacific Capital Bancorp NA (Ñ)

    8,949      62

PartnerRe, Ltd. - ADR

    2,400      164

People’s United Financial, Inc.

    10,511      164

Post Properties, Inc. (ö)(Ñ)

    6,054      77

PrivateBancorp, Inc. (Ñ)

    16,415      332

Prosperity Bancshares, Inc. (Ñ)

    7,211      200

Raymond James Financial, Inc. (Ñ)

    6,760      106

Reinsurance Group of America, Inc. Class A

    3,610      115

RLI Corp.

    7,435      357

Selective Insurance Group

    24,270      358

Signature Bank NY (Æ)(Ñ)

    32,360      880

South Financial Group, Inc. (The) (Ñ)

    43,675      72

State Auto Financial Corp.

    5,066      82

Sterling Bancshares, Inc.

    15,016      100

Stewart Information Services Corp. (Ñ)

    14,408      326

Sun Communities, Inc. (ö)(Ñ)

    20,632      302

Tanger Factory Outlet Centers (ö)(Ñ)

    3,322      111

UCBH Holdings, Inc. (Ñ)

    48,736      62

Umpqua Holdings Corp. (Ñ)

    10,473      100

United Bankshares, Inc. (Ñ)

    13,035      338

United Fire & Casualty Co. (Ñ)

    8,915      166

Valley National Bancorp (Ñ)

    26,106      378

Ventas, Inc. (ö)(Ñ)

    5,500      158

Vornado Realty Trust (ö)(Ñ)

    12      1

Waddell & Reed Financial, Inc. Class A

    6,000      134

Walter Investment Management Corp. (Æ)(ö)(Ñ)

    3,697      30

 

96   Russell Tax-Managed U.S. Mid & Small Cap Fund

Russell Investment Company

Russell Tax-Managed U.S. Mid & Small Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		     

Market

Value
$

       

Washington Real Estate Investment Trust (ö)(Ñ)

    5,714      122

Westamerica Bancorporation (Ñ)

    9,635      517

Westwood Holdings Group, Inc. (Ñ)

    1,620      64

Wintrust Financial Corp. (Ñ)

    21,281      362

World Acceptance Corp. (Æ)(Ñ)

    14,554      432

WSFS Financial Corp.

    2,869      78
         
        18,954
         
Health Care - 12.5%        

Alexion Pharmaceuticals, Inc. (Æ)(Ñ)

    10,100      338

Align Technology, Inc. (Æ)(Ñ)

    12,470      155

Amedisys, Inc. (Æ)(Ñ)

    2,434      82

American Medical Systems Holdings, Inc. (Æ)(Ñ)

    9,430      117

AMERIGROUP Corp. Class A (Æ)

    18,175      543

Amsurg Corp. Class A (Æ)

    5,915      122

Auxilium Pharmaceuticals, Inc. (Æ)(Ñ)

    12,655      290

Beckman Coulter, Inc.

    2,423      127

Celera Corp. (Æ)(Ñ)

    42,309      342

Cephalon, Inc. (Æ)(Ñ)

    1,622      106

Cepheid, Inc. (Æ)(Ñ)

    64,775      628

Charles River Laboratories International, Inc. (Æ)(Ñ)

    4,570      126

Chattem, Inc. (Æ)(Ñ)

    7,300      401

Cooper Cos., Inc. (The)

    4,347      125

Covance, Inc. (Æ)(Ñ)

    12,238      481

Dentsply International, Inc. (Ñ)

    5,202      149

Durect Corp. (Æ)(Ñ)

    25,456      62

Edwards Lifesciences Corp. (Æ)

    1,061      67

Endo Pharmaceuticals Holdings, Inc. (Æ)

    5,462      90

Gentiva Health Services, Inc. (Æ)

    17,295      276

Greatbatch, Inc. (Æ)

    4,527      95

Haemonetics Corp. (Æ)

    13,486      696

Healthsouth Corp. (Æ)(Ñ)

    8,681      81

Henry Schein, Inc. (Æ)

    1,797      74

Hlth Corp. (Æ)(Ñ)

    9,832      108

Hologic, Inc. (Æ)

    11,831      176

Human Genome Sciences, Inc. (Æ)(Ñ)

    28,775      63

ICU Medical, Inc. (Æ)

    15,107      568

Idexx Laboratories, Inc. (Æ)(Ñ)

    20,270      797

Illumina, Inc. (Æ)(Ñ)

    9,781      365

Immucor, Inc. (Æ)(Ñ)

    3,810      62

Inverness Medical Innovations, Inc. (Æ)(Ñ)

    4,844      156

Kindred Healthcare, Inc. (Æ)

    15,195      198

Life Technologies Corp. (Æ)

    3,923      146

Martek Biosciences Corp. (Æ)(Ñ)

    26,689      486

Medarex, Inc. (Æ)

    18,979      112

Medical Action Industries, Inc. (Æ)(Ñ)

    31,424      305

Merit Medical Systems, Inc. (Æ)

    38,566      598

Millipore Corp. (Æ)

    1,419      84

Mylan, Inc. (Æ)(Ñ)

    8,180      108

Myriad Genetics, Inc. (Æ)(Ñ)

    10,520      408

Nighthawk Radiology Holdings, Inc. (Æ)(Ñ)

    129,118      461

NuVasive, Inc. (Æ)(Ñ)

    7,702      292

Omnicell, Inc. (Æ)

    8,312      73

Orthofix International NV (Æ)

    4,711      80

OSI Pharmaceuticals, Inc. (Æ)(Ñ)

    8,260      277
     Principal
Amount ($)
or Shares		     

Market

Value
$

Parexel International Corp. (Æ)

    14,970      148

Perrigo Co. (Ñ)

    10,760      279

PharMerica Corp. (Æ)(Ñ)

    4,730      86

PSS World Medical, Inc. (Æ)(Ñ)

    27,240      396

Psychiatric Solutions, Inc. (Æ)(Ñ)

    4,380      85

Quality Systems, Inc. (Ñ)

    13,463      722

Stericycle, Inc. (Æ)(Ñ)

    1,884      89

Sunrise Senior Living, Inc. (Æ)(Ñ)

    37,638      96

Techne Corp.

    2,441      140

Tenet Healthcare Corp. (Æ)

    38,900      88

United Therapeutics Corp. (Æ)(Ñ)

    2,450      154

US Physical Therapy, Inc. (Æ)

    18,880      221

Varian, Inc. (Æ)

    8,158      269

VCA Antech, Inc. (Æ)(Ñ)

    4,900      123

Vertex Pharmaceuticals, Inc. (Æ)(Ñ)

    5,739      177

Viropharma, Inc. (Æ)(Ñ)

    14,052      79

Watson Pharmaceuticals, Inc. (Æ)(Ñ)

    4,125      128

WellCare Health Plans, Inc. (Æ)

    5,605      84

Zoll Medical Corp. (Æ)

    6,230      100
         
        14,960
         
Integrated Oils - 0.1%        

Willbros Group, Inc. (Æ)

    8,577      98
         
Materials and Processing - 6.8%        

AAON, Inc.

    5,434      106

Aecom Technology Corp. (Æ)

    4,617      119

Airgas, Inc.

    10,331      445

American Superconductor Corp. (Æ)(Ñ)

    4,047      104

Arch Chemicals, Inc.

    4,941      119

Ball Corp.

    3,355      127

Ceradyne, Inc. (Æ)

    8,962      154

CF Industries Holdings, Inc.

    2,541      183

Cliffs Natural Resources, Inc. (Ñ)

    5,170      119

Commercial Metals Co. (Ñ)

    20,552      306

Compass Minerals International, Inc. (Ñ)

    10,883      525

Crown Holdings, Inc. (Æ)

    5,924      131

Deltic Timber Corp. (Ñ)

    8,720      367

Dynamic Materials Corp. (Ñ)

    6,150      99

Energy Conversion Devices, Inc. (Æ)(Ñ)

    5,192      95

EnerSys (Æ)

    7,119      121

ENGlobal Corp. (Æ)(Ñ)

    28,615      165

Ferro Corp. (Ñ)

    8,365      23

FMC Corp.

    3,443      168

HB Fuller Co. (Ñ)

    7,066      125

Hexcel Corp. (Æ)(Ñ)

    34,350      329

Horsehead Holding Corp. (Æ)

    14,565      104

Huntsman Corp. (Ñ)

    18,976      102

Interline Brands, Inc. (Æ)(Ñ)

    35,800      464

Kaydon Corp.

    9,050      289

KBR, Inc.

    7,435      116

Lennox International, Inc. (Ñ)

    4,166      133

Martin Marietta Materials, Inc. (Ñ)

    3,266      274

Minerals Technologies, Inc.

    2,930      109

Polypore International, Inc. (Æ)(Ñ)

    28,636      216

Quanex Building Products Corp.

    10,400      107

Quanta Services, Inc. (Æ)(Ñ)

    13,912      316

 

Russell Tax-Managed U.S. Mid & Small Cap Fund   97

Russell Investment Company

Russell Tax-Managed U.S. Mid & Small Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		     

Market

Value
$

       

Rogers Corp. (Æ)

    3,800      97

RPM International, Inc.

    9,016      125

Scotts Miracle-Gro Co. (The) Class A (Ñ)

    4,435      150

Shaw Group, Inc. (The) (Æ)

    3,731      125

Sonoco Products Co.

    6,149      150

Steel Dynamics, Inc. (Ñ)

    9,380      117

Terra Industries, Inc. (Ñ)

    16,162      428

Texas Industries, Inc. (Ñ)

    6,945      222

Universal Forest Products, Inc.

    3,533      119

URS Corp. (Æ)(Ñ)

    5,942      262

Wausau Paper Corp.

    19,000      166
         
        8,121
         
Miscellaneous - 0.4%        

Carlisle Cos., Inc.

    5,604      127

SPX Corp. (Ñ)

    2,570      119

Walter Energy, Inc. Class A (Ñ)

    10,126      231
         
        477
         
Other Energy - 3.2%        

Arena Resources, Inc. (Æ)(Ñ)

    2,883      83

Atwood Oceanics, Inc. (Æ)(Ñ)

    7,190      160

Bill Barrett Corp. (Æ)

    5,680      148

Cabot Oil & Gas Corp.

    4,295      130

Concho Resources, Inc. (Æ)(Ñ)

    4,040      111

Core Laboratories NV (Ñ)

    2,490      207

Encore Acquisition Co. (Æ)(Ñ)

    11,140      325

Forest Oil Corp. (Æ)(Ñ)

    23,218      372

Foundation Coal Holdings, Inc. (Ñ)

    9,070      147

FX Energy, Inc. (Æ)(Ñ)

    21,565      81

Hornbeck Offshore Services, Inc. (Æ)

    5,482      127

Lufkin Industries, Inc.

    2,685      94

McMoRan Exploration Co. (Æ)

    13,165      72

NATCO Group, Inc. Class A (Æ)

    8,215      198

North American Energy Partners, Inc. (Æ)

    32,136      127

Oceaneering International, Inc. (Æ)

    6,780      309

Oil States International, Inc. (Æ)

    5,894      111

Parker Drilling Co. (Æ)

    25,625      71

PetroHawk Energy Corp. (Æ)(Ñ)

    16,221      383

Tesoro Corp. (Ñ)

    8,743      133

USEC, Inc. (Æ)(Ñ)

    18,759      116

Whiting Petroleum Corp. (Æ)

    12,377      405
         
        3,910
         
Producer Durables - 7.3%        

Aerovironment, Inc. (Æ)

    2,627      62

Ametek, Inc.

    3,952      127

AO Smith Corp. (Ñ)

    9,430      293

Applied Industrial Technologies, Inc. (Ñ)

    5,881      132

C&D Technologies, Inc. (Æ)(Ñ)

    41,753      92

Centex Corp.

    12,275      134

Champion Enterprises, Inc. (Æ)(Ñ)

    61,278      36

Covanta Holding Corp. (Æ)(Ñ)

    11,440      161

Dionex Corp. (Æ)(Ñ)

    1,702      107

Donaldson Co., Inc. (Ñ)

    22,740      750

DR Horton, Inc. (Ñ)

    14,592      190
     Principal
Amount ($)
or Shares		     

Market

Value
$

EnergySolutions, Inc.

    31,763      308

EnPro Industries, Inc. (Æ)(Ñ)

    13,460      215

ESCO Technologies, Inc. (Æ)(Ñ)

    7,845      326

Federal Signal Corp.

    14,463      112

Fuel Tech, Inc. (Æ)(Ñ)

    30,348      398

General Cable Corp. (Æ)(Ñ)

    17,559      477

GrafTech International, Ltd. (Æ)

    10,240      90

HNI Corp. (Ñ)

    7,810      121

IDEX Corp. (Ñ)

    34,425      869

Kadant, Inc. (Æ)

    12,120      150

Kennametal, Inc. (Ñ)

    43,972      899

Lexmark International, Inc. Class A (Æ)(Ñ)

    5,588      110

Littelfuse, Inc. (Æ)

    5,526      91

MDC Holdings, Inc.

    3,551      121

Middleby Corp. (Æ)(Ñ)

    6,220      272

Novellus Systems, Inc. (Æ)(Ñ)

    5,870      106

Orbital Sciences Corp. (Æ)

    6,866      106

Pentair, Inc.

    5,797      155

Polycom, Inc. (Æ)(Ñ)

    20,960      391

Pulte Homes, Inc. (Ñ)

    28,160      324

Robbins & Myers, Inc. (Ñ)

    13,946      264

Roper Industries, Inc.

    3,128      143

SBA Communications Corp. Class A (Æ)(Ñ)

    5,930      150

Standard Pacific Corp. (Æ)(Ñ)

    14,632      27

Taser International, Inc. (Æ)

    12,493      60

Tennant Co. (Ñ)

    15,465      230

Waters Corp. (Æ)

    2,712      120
         
        8,719
         
Technology - 13.7%        

Advanced Analogic Technologies, Inc. (Æ)

    17,871      86

Advanced Micro Devices, Inc. (Æ)(Ñ)

    39,174      141

Akamai Technologies, Inc. (Æ)

    5,795      128

American Science & Engineering, Inc. (Ñ)

    6,526      393

Anixter International, Inc. (Æ)(Ñ)

    11,640      463

Ansys, Inc. (Æ)

    5,007      138

Applied Micro Circuits Corp. (Æ)

    13,404      73

Ariba, Inc. (Æ)

    12,043      116

Atheros Communications, Inc. (Æ)(Ñ)

    15,830      273

Atmel Corp. (Æ)

    32,229      124

Avnet, Inc. (Æ)

    7,710      169

Benchmark Electronics, Inc. (Æ)

    29,432      357

Black Box Corp.

    3,804      104

Blackboard, Inc. (Æ)(Ñ)

    10,759      366

CACI International, Inc. Class A (Æ)(Ñ)

    14,585      577

Ciena Corp. (Æ)(Ñ)

    13,270      159

Diodes, Inc. (Æ)(Ñ)

    37,307      555

Double-Take Software, Inc. (Æ)

    8,518      69

Electronics for Imaging, Inc. (Æ)

    20,580      202

Emulex Corp. (Æ)(Ñ)

    52,878      554

F5 Networks, Inc. (Æ)(Ñ)

    37,802      1,031

Fairchild Semiconductor International, Inc. Class A (Æ)

    50,195      309

Flir Systems, Inc. (Æ)(Ñ)

    24,740      549

GTSI Corp. (Æ)

    29,477      133

Harris Stratex Networks, Inc. Class A (Æ)

    11,765      47

Informatica Corp. (Æ)

    61,241      974

 

98   Russell Tax-Managed U.S. Mid & Small Cap Fund

Russell Investment Company

Russell Tax-Managed U.S. Mid & Small Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		     

Market

Value
$

       

Internet Capital Group, Inc. (Æ)

    4,500      24

Intersil Corp. Class A

    8,266      96

ION Geophysical Corp. (Æ)(Ñ)

    48,261      121

IPG Photonics Corp. (Æ)(Ñ)

    6,873      77

Jabil Circuit, Inc.

    15,347      124

LSI Corp. (Æ)

    36,778      141

Macrovision Solutions Corp. (Æ)(Ñ)

    37,477      758

Mantech International Corp. Class A (Æ)

    11,360      411

McAfee, Inc. (Æ)(Ñ)

    10,373      389

Mentor Graphics Corp. (Æ)(Ñ)

    48,453      326

Micron Technology, Inc. (Æ)(Ñ)

    37,240      182

NeuStar, Inc. Class A (Æ)

    22,666      431

Newport Corp. (Æ)

    12,952      65

Nuance Communications, Inc. (Æ)(Ñ)

    10,955      146

ON Semiconductor Corp. (Æ)(Ñ)

    27,727      150

Parametric Technology Corp. (Æ)

    21,895      244

Perot Systems Corp. Class A (Æ)

    37,755      531

Plexus Corp. (Æ)(Ñ)

    28,333      627

PMC - Sierra, Inc. (Æ)(Ñ)

    19,050      151

Progress Software Corp. (Æ)

    24,330      515

Red Hat, Inc. (Æ)

    7,105      123

RF Micro Devices, Inc. (Æ)

    39,075      82

SAIC, Inc. (Æ)

    5,977      108

SAVVIS, Inc. (Æ)

    10,388      118

Sonus Networks, Inc. (Æ)(Ñ)

    124,876      216

Sycamore Networks, Inc. (Æ)

    35,764      105

Synaptics, Inc. (Æ)(Ñ)

    5,050      164

Syntel, Inc. (Ñ)

    4,353      121

Taleo Corp. Class A (Æ)(Ñ)

    61,839      743

Tellabs, Inc. (Æ)

    27,696      145

TIBCO Software, Inc. (Æ)

    18,225      115

Time Warner Telecom, Inc. Class A (Æ)

    9,230      85

Ultimate Software Group, Inc. (Æ)(Ñ)

    21,286      399

Varian Semiconductor Equipment Associates, Inc. (Æ)(Ñ)

    3,641      93

Volterra Semiconductor Corp. (Æ)

    6,900      79

Zebra Technologies Corp. Class A (Æ)

    5,784      123
         
        16,418
         
Utilities - 3.5%        

Alaska Communications Systems Group, Inc. (Ñ)

    58,429      352

Avista Corp.

    16,015      241

Black Hills Corp. (Ñ)

    11,590      230

Centerpoint Energy, Inc.

    12,735      136

Central Vermont Public Service Corp.

    4,099      70

Cleco Corp. (Ñ)

    22,238      469

Connecticut Water Service, Inc.

    3,099      64

El Paso Electric Co. (Æ)(Ñ)

    24,522      338

Empire District Electric Co. (The) (Ñ)

    6,559      98

Fairpoint Communications, Inc. (Ñ)

    23,775      25

Frontier Communications Corp.

    14,056      100

Great Plains Energy, Inc.

    8,785      127

Laclede Group, Inc. (The)

    2,575      89

Leap Wireless International, Inc. (Æ)

    3,653      132
     Principal
Amount ($)
or Shares		     

Market

Value
$

  

National Fuel Gas Co.

    3,419      112   

New Jersey Resources Corp.

    3,309      109   

Northeast Utilities

    6,356      134   

Northwest Natural Gas Co.

    2,661      109   

NorthWestern Corp.

    22,176      464   

NSTAR (Ñ)

    4,936      155   

Otter Tail Corp. (Ñ)

    4,647      103   

SCANA Corp.

    5,278      160   

Southwest Gas Corp.

    5,054      102   

Telephone & Data Systems, Inc.

    4,174      120   

Wisconsin Energy Corp.

    3,838      153   
           
        4,192   
           
Total Common Stocks
(cost $119,797)		         107,563   
           
Short-Term Investments - 10.1%        

Russell Investment Company Russell
Money Market Fund

    10,335,000      10,335   

State Street Euro Commercial Paper (ç)(ž)
0.010% due 05/01/09

    1,800      1,800   
           
Total Short-Term Investments
(cost $12,135)		         12,135   
           
Other Securities - 42.2%        

Russell Investment Company Russell
Money Market Fund (×)

    25,086,225      25,086   

State Street Securities Lending Quality
Trust (×)

    26,419,830      25,468   
           
Total Other Securities
(cost $51,506)		         50,554   
           
Total Investments - 142.0%
(identified cost $183,438)		         170,252   
Other Assets and Liabilities,
Net - (42.0%)		         (50,328 ) 
           
Net Assets - 100.0%         119,924   
           

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Tax-Managed U.S. Mid & Small Cap Fund   99

Russell Investment Company

Russell Tax-Managed U.S. Mid & Small Cap Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$
                   
                   
Long Positions                    

Russell 2000 Mini Index (CME)

    240      USD   11,681      06/09      2,715
                     

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     2,715
                     

 

 

 

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

Categories      % of Net
Assets		  
    

Auto and Transportation

      5.4   

Consumer Discretionary

      16.9   

Consumer Staples

      4.1   

Financial Services

      15.8   

Health Care

      12.5   

Integrated Oils

      0.1   

Materials and Processing

      6.8   

Miscellaneous

      0.4   

Other Energy

      3.2   

Producer Durables

      7.3   

Technology

      13.7   

Utilities

      3.5   

Short-Term Investments

      10.1   

Other Securities

      42.2   
        

Total Investments

      142.0   

Other Assets and Liabilities, Net

      (42.0 ) 
        
     100.0   
        

Futures Contracts

      2.3   

 

See accompanying notes which are an integral part of the financial statements.

 

100   Russell Tax-Managed U.S. Mid & Small Cap Fund

Russell Investment Company

Russell Strategic Bond Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,029.50    $ 1,020.28

Expenses Paid During Period*

    $ 4.58    $ 4.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.91% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,025.50    $ 1,016.61

Expenses Paid During Period*

    $ 8.29    $ 8.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.65% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,030.20    $ 1,020.83

Expenses Paid During Period*

    $ 4.03    $ 4.01

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.80% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,031.50    $ 1,022.07

Expenses Paid During Period*

    $ 2.77    $ 2.76

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.55% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Russell Strategic Bond Fund   101

Russell Investment Company

Russell Strategic Bond Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,030.70    $ 1,021.52

Expenses Paid During Period*

    $ 3.32    $ 3.31

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.66% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,031.80    $ 1,022.27

Expenses Paid During Period*

    $ 2.57    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

102   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Long-Term Investments - 106.8%        
Asset-Backed Securities - 11.1%        

Aames Mortgage Investment Trust (Ê)
Series 2006-1 Class A3
0.598% due 04/25/36

    7,810      5,425

Accredited Mortgage Loan Trust (Ê)
Series 2004-2 Class A2
0.738% due 07/25/34

    260      97

ACE Securities Corp. (Ê)
Series 2003-HE1 Class M1
1.413% due 11/25/33

    5,749      2,911

Series 2003-OP1 Class M2
1.938% due 12/25/33

    422      259

Series 2004-IN1 Class A1
0.758% due 05/25/34

    388      211

Series 2005-HE2 Class M3
0.918% due 04/25/35

    1,305      665

Series 2005-HE3 Class A2C
0.758% due 05/25/35

    1,281      1,247

Series 2005-HE5 Class A2C
0.818% due 08/25/35

    4,328      4,074

Series 2005-SD3 Class A
0.838% due 08/25/45

    1,561      1,257

Series 2006-ASP Class A2A
0.518% due 10/25/36

    123      116

Series 2006-FM1 Class A2C
0.588% due 07/25/36

    7,595      1,649

Series 2006-HE2 Class A2C
0.598% due 05/25/36

    3,600      1,882

Series 2006-OP1 Class M3
0.748% due 04/25/36

    1,697      22

Aegis Asset Backed Securities Trust (Ê)
Series 2003-3 Class M2
2.913% due 01/25/34

    1,520      838

Series 2005-4 Class 1A3
0.708% due 10/25/35

    1,806      1,575

American Airlines Pass Through Trust
Series 01-1
6.817% due 11/23/12

    1,065      756

6.977% due 11/23/22

    225      124

American Express Credit Account Master Trust (Ê)
Series 2004-3 Class C (Å)
0.921% due 12/15/11

    2,000      1,971

Series 2004-4 Class B
0.731% due 03/15/12

    2,243      2,185

Series 2004-5 Class B
0.701% due 04/16/12

    1,570      1,517

Series 2004-C Class C (Å)
0.951% due 02/15/12

    4,295      4,103

American Express Issuance Trust (Ê)
Series 2007-1 Class B
1.001% due 09/15/11

    5,700      4,553

AmeriCredit Automobile Receivables Trust
Series 2005-DA Class A3
4.870% due 12/06/10

    198      198

Series 2006-AF Class A3
5.560% due 09/06/11

    1,315      1,314
     Principal
Amount ($)
or Shares		      Market
Value
$

Ameriquest Mortgage Securities, Inc. (Ê)
Series 2002-D Class M1
4.188% due 02/25/33

    800      246

Series 2004-R8 Class A5
0.808% due 09/25/34

    81      80

Series 2004-R10 Class A5
0.828% due 11/25/34

    3      3

Series 2005-R3 Class A1A
0.638% due 05/25/35

    4,453      3,780

Series 2005-R5 Class A2B
0.668% due 07/25/35

    522      490

Series 2005-R6 Class A2
0.638% due 08/25/35

    9,388      8,052

Series 2005-R7 Class A2C
0.698% due 09/25/35

    1,826      1,633

Series 2005-R10 Class A2B
0.658% due 12/25/35

    1,046      802

Series 2006-R1 Class A2C
0.628% due 08/01/16

    787      639

Argent Securities, Inc. (Ê)
Series 2005-W2 Class A2B1
0.638% due 10/25/35

    6,690      4,976

Series 2005-W2 Class A2B2
0.698% due 10/25/35

    1,226      912

Series 2006-W1 Class A2B
0.598% due 03/25/36

    524      512

Series 2006-W5 Class A2C
0.588% due 06/25/36

    2,100      699

Arlington Street CDO, Ltd. (Þ)
Series 2000-1A Class A2
7.660% due 06/10/12

    2,115      1,922

Asset Backed Funding Certificates (Ê)
Series 2006-HE1 Class A2A
0.498% due 01/25/37

    1,111      927

Series 2006-HE1 Class A2C
0.598% due 01/25/37

    2,745      628

Series 2006-OPT Class A3A
0.498% due 10/25/36

    164      160

Series 2006-OPT Class A3B
0.598% due 11/25/36

    1,390      715

Series 2006-OPT Class M2
0.728% due 09/25/36

    1,493      53

Asset Backed Securities Corp. Home Equity (Ê)
Series 2003-HE1 Class M2
3.976% due 01/15/33

    2,293      1,530

Series 2004-HE6 Class A1
0.713% due 09/25/34

    80      53

Series 2004-HE7 Class M9 (Þ)
4.022% due 10/25/34

    1,159      20

Series 2006-HE2 Class M3
0.828% due 03/25/36

    1,625      3

Series 2006-HE3 Class A4
0.608% due 03/25/36

    1,549      990

Series 2006-HE5 Class A4
0.578% due 07/25/36

    4,770      2,333

 

Russell Strategic Bond Fund   103

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Bank of America Auto Trust (Ê)(Å)
Series 2008-1A Class A2B
1.747% due 06/20/11

    10,000      9,951

Bank of America Credit Card Trust (Ê)
Series 2006-C4 Class C4
0.681% due 11/15/11

    18,374      18,069

Series 2006-C7 Class C7
0.681% due 03/15/12

    1,600      1,494

Series 2007-A12 Class A12
0.651% due 01/15/13

    7,400      7,268

Bank One Issuance Trust
Series 2004-B1 Class B1 (Ê)
0.771% due 03/15/12

    2,491      2,440

Series 2004-B2 Class B2
4.370% due 04/15/12

    7,000      6,871

Bayview Financial Acquisition Trust
Series 2004-C Class A1 (Ê)
1.065% due 05/28/44

    338      207

Series 2006-A Class 1A3
5.865% due 02/28/41

    1,880      861

Series 2006-C Class 2A1 (Ê)
0.545% due 11/28/36

    79      78

Bear Stearns Asset Backed Securities Trust (Ê)
Series 2005-HE1 Class A2
0.728% due 11/25/35

    473      440

Series 2006-EC1 Class A2
0.658% due 12/25/35

    819      744

Series 2006-HE4 Class 1A1
0.498% due 05/25/36

    171      168

Series 2006-HE8 Class 2M1
0.768% due 10/25/36

    2,000      95

Series 2006-HE9 Class 1A2
0.588% due 11/25/36

    4,330      1,486

Black Diamond CLO, Ltd. (Ê)(Å)
Series 2007-1A Class AD
1.434% due 04/29/19

    27,750      17,978

BNC Mortgage Loan Trust (Ê)
Series 2007-2 Class A2
0.538% due 05/25/37

    596      446

Burlington Northern and Santa Fe
Railway Co. 2005-4 Pass Through Trust
4.967% due 04/01/23

    196      175

Capital Auto Receivables Asset Trust
Series 2006-2 Class A3A
4.980% due 05/15/11

    940      951

Series 2006-2 Class A3B (Ê)
0.511% due 05/15/11

    1,617      1,601

Series 2007-1 Class A3B (Ê)
0.461% due 04/15/11

    3,108      3,075

Series 2007-3 Class A3A
5.020% due 09/15/11

    4,590      4,648

Capital One Multi-Asset Execution Trust
Series 2003-B5 Class B5
4.790% due 08/15/13

    4,448      3,928

Series 2004-C4 Class C4 (Ê)
1.101% due 06/15/12

    3,134      2,949
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2005-A3 Class A3
4.050% due 03/15/13

    2,244      2,250

Series 2005-A7 Class A7
4.700% due 06/15/15

    2,287      2,263

Series 2007-A7 Class A7
5.750% due 07/15/20

    3,920      3,561

Carmax Auto Owner Trust (Ê)
Series 2008-1 Class A2
1.151% due 04/15/11

    2,567      2,559

Carrington Mortgage Loan Trust (Ê)
Series 2006-FRE Class A2
0.558% due 10/25/36

    3,226      2,340

Series 2006-NC3 Class A1
0.488% due 08/25/36

    267      264

Series 2006-NC5 Class A1
0.488% due 01/25/37

    2,186      1,828

Cendant Timeshare Receivables Funding LLC (Þ)
Series 2004-1A Class A1
3.670% due 05/20/16

    40      32

Centex Home Equity
Series 2002-D Class AF4
5.210% due 11/25/28

    121      85

Series 2005-D Class AF4
5.270% due 10/25/35

    985      904

Series 2006-A Class AV2 (Ê)
0.538% due 06/25/36

    1,521      1,449

Series 2006-A Class AV4 (Ê)
0.688% due 06/25/36

    1,800      672

Chase Credit Card Master Trust (Ê)
Series 2002-3 Class B
0.901% due 09/15/11

    1,870      1,851

Chase Issuance Trust
Series 2004-C3 Class C3 (Ê)
0.921% due 06/15/12

    1,200      1,107

Series 2005-C1 Class C1 (Ê)
0.821% due 11/15/12

    11,000      9,589

Series 2005-C3 Class C3 (Ê)
0.791% due 11/15/12

    1,495      1,232

Series 2006-A3 Class A3 (Ê)
0.441% due 07/15/11

    2,725      2,724

Series 2006-B2 Class B (Ê)
0.551% due 10/15/12

    3,350      2,882

Series 2007-A17 Class A
5.120% due 10/15/14

    615      625

Series 2008-A7 Class A7 (Ê)
1.101% due 11/15/11

    3,700      3,660

CIT Mortgage Loan Trust (Ê)(Å)
Series 2007-1 Class 2A1
1.438% due 10/25/37

    4,957      3,717

Series 2007-1 Class 2A2
1.688% due 10/25/37

    2,100      609

Series 2007-1 Class 2A3
1.888% due 10/25/37

    3,900      1,073

Citibank Credit Card Issuance Trust (Ê)
Series 2004-A3 Class A3
1.169% due 07/25/11

    3,217      3,204

 

104   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-C4 Class C4
0.698% due 01/09/12

    3,811      3,513

Citigroup Mortgage Loan Trust, Inc. (Ê)
Series 2006-AMC Class A2B
0.682% due 09/25/36

    4,160      1,672

Series 2006-NC2 Class A2B
0.598% due 09/25/36

    13,005      4,383

Series 2006-WFH Class A2A
0.672% due 08/25/36

    2,585      1,742

Series 2006-WFH Class A3
0.588% due 10/25/36

    3,105      1,355

0.588% due 11/25/36

    2,815      1,279

Series 2007-AHL Class A3A
0.498% due 05/25/37

    1,612      1,099

Series 2007-AMC Class A2A
0.498% due 05/25/37

    5,774      4,603

Series 2007-WFH Class A4
0.638% due 01/25/37

    10,880      4,352

Conseco Finance Securitizations Corp.
Series 2001-4 Class A4
7.360% due 09/01/33

    5,227      3,689

Conseco Financial Corp.
Series 1997-5 Class A6
6.820% due 05/15/29

    459      390

Countrywide Asset-Backed Certificates
Series 2004-AB2 Class M3 (Ê)
1.038% due 05/25/36

    1,395      86

Series 2004-BC1 Class M1 (Ê)
0.938% due 02/25/34

    867      553

Series 2004-S1 Class A2
3.872% due 03/25/20

    6      6

Series 2005-4 Class AF3
4.456% due 10/25/35

    793      661

Series 2005-7 Class 3AV3 (Ê)
0.848% due 06/25/35

    1,438      1,381

Series 2005-7 Class AF3
4.454% due 10/25/35

    495      421

Series 2005-11 Class 3AV2 (Ê)
0.728% due 02/25/36

    2,827      2,535

Series 2005-12 Class 2A3
5.069% due 02/25/36

    1,089      990

Series 2005-17 Class 1AF3
5.711% due 05/25/36

    10,900      4,082

Series 2005-AB1 Class A2 (Ê)
0.648% due 10/25/34

    1,508      1,237

Series 2006-1 Class AF3
5.348% due 07/25/36

    2,235      1,582

Series 2006-2 Class 2A2 (Ê)
0.628% due 06/25/36

    1,126      713

Series 2006-3 Class 2A2 (Ê)
0.618% due 06/25/36

    4,709      3,078

Series 2006-6 Class 2A3 (Ê)
0.718% due 09/25/36

    13,985      3,858

Series 2006-11 Class 1AF3
6.050% due 09/25/46

    2,085      771

Series 2006-11 Class 1AF4
6.300% due 09/25/46

    2,340      737
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-13 Class 1AF3
5.944% due 01/25/37

    4,085      3,092

Series 2006-15 Class A1 (Ê)
0.548% due 10/25/46

    220      205

Series 2006-15 Class A3
5.689% due 10/25/46

    1,655      705

Series 2006-16 Class 2A1 (Ê)
0.488% due 12/25/46

    29      29

Series 2006-17 Class 2A1 (Ê)
0.488% due 03/25/47

    41      40

Series 2006-19 Class 2A1 (Ê)
0.498% due 03/25/37

    134      129

Series 2006-22 Class 2A1 (Ê)
0.488% due 05/25/47

    237      209

Series 2006-23 Class 2A1 (Ê)
0.488% due 05/25/37

    211      187

Series 2006-26 Class 2A1 (Ê)
0.518% due 06/25/37

    130      117

Series 2006-BC1 Class 2A2 (Ê)
0.618% due 04/25/36

    601      507

Series 2006-S1 Class A2
5.549% due 08/25/21

    255      200

Series 2006-S3 Class A2
6.085% due 06/25/21

    1,863      418

Series 2006-S6 Class A2
5.519% due 03/25/34

    5,532      3,872

Series 2006-S7 Class A3
5.712% due 11/25/35

    8,435      1,222

Series 2006-S9 Class A3
5.728% due 08/25/36

    2,016      665

Series 2007-4 Class A2
5.530% due 09/25/37

    3,572      2,380

Series 2007-7 Class 2A1 (Ê)
0.518% due 10/25/37

    498      424

Countrywide Home Equity Loan Trust (Ê)
Series 2006-HW Class 2A1B
0.601% due 11/15/36

    3,882      994

Credit Suisse First Boston Mortgage Securities Corp.
Series 2005-AGE Class A2
4.640% due 02/25/32

    582      555

Credit-Based Asset Servicing and Securitization LLC
Series 2004-CB7 Class AF5
4.585% due 10/25/34

    770      580

Series 2007-CB1 Class AF2
5.721% due 01/25/37

    1,895      602

CSAB Mortgage Backed Trust
Series 2006-3 Class A1B2 (Ê)
0.533% due 11/25/36

    388      314

Series 2006-4 Class A1A
5.868% due 12/25/36

    699      608

Daimler Chrysler Auto Trust (Ê)
Series 2008-B Class A2B
1.406% due 07/08/11

    695      693

Series 2008-B Class A3B
1.956% due 09/10/12

    300      283

 

Russell Strategic Bond Fund   105

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Delta Air Lines, Inc.
Series 071A
6.821% due 08/10/22

    2,827      2,007

Dunkin Securitization (Þ)
Series 2006-1 Class A2
5.779% due 06/20/31

    4,295      2,977

FBR Securitization Trust (Ê)
Series 2005-2 Class AV3A
0.728% due 09/25/35

    3,950      3,260

Federal Home Loan Mortgage Corp. Structured Pass Through Securities
Series 2000-30 Class A5
8.610% due 12/25/30

    487      445

Fieldstone Mortgage Investment Corp. (Ê)
Series 2006-1 Class A2
0.628% due 05/25/36

    3,188      1,740

Series 2006-3 Class 2A1
0.508% due 11/25/36

    138      116

Series 2006-3 Class 2A3
0.598% due 11/25/36

    1,465      343

Series 2006-3 Class M1
0.698% due 11/25/36

    3,315      22

First Franklin Mortgage Loan Asset Backed Certificates (Ê)
Series 2006-FF1 Class 2A1
0.478% due 08/25/36

    268      259

Series 2006-FF1 Class 2A3
0.578% due 12/25/36

    6,005      1,696

Series 2006-FF1 Class A2
0.488% due 07/25/36

    54      53

0.498% due 10/25/36

    673      558

Series 2006-FF1 Class A2C
0.598% due 10/25/36

    2,621      526

0.598% due 12/25/37

    8,631      2,112

Series 2006-FF1 Class A3
0.488% due 11/25/36

    673      606

Series 2006-FF1 Class A5
0.598% due 11/25/36

    5,321      776

Series 2006-FF4 Class A2
0.628% due 03/25/36

    365      196

Series 2006-FF9 Class M1
0.688% due 06/25/36

    8,330      137

Series 2007-FF1 Class A2A
0.478% due 01/25/38

    805      721

Series 2007-FF1 Class A2B
0.528% due 01/25/38

    25,000      9,231

Series 2007-FF1 Class A2C
0.578% due 01/25/38

    1,510      322

First NLC Trust (Ê)
Series 2005-2 Class AV2
0.738% due 09/25/35

    738      652

Ford Credit Auto Owner Trust
Series 2006-B Class A3
5.260% due 10/15/10

    1,447      1,456

Series 2008-A Class A2 (Ê)
1.051% due 07/15/10

    2,377      2,372
     Principal
Amount ($)
or Shares		      Market
Value
$

Fremont Home Loan Trust (Ê)
Series 2006-3 Class 2A1
0.508% due 02/25/37

    69      68

Series 2006-3 Class 2A2
0.558% due 02/25/37

    6,070      4,582

Series 2006-A Class 2A2
0.538% due 05/25/36

    137      133

Series 2006-A Class M2
0.758% due 05/25/36

    1,355      7

Series 2006-B Class 2A3
0.598% due 08/25/36

    2,760      650

Series 2006-E Class 2A1
0.498% due 01/25/37

    436      372

GE Capital Credit Card Master Note Trust
Series 2005-3 Class B (Ê)
0.751% due 06/15/13

    1,345      1,188

Series 2006-1 Class A
5.080% due 09/15/12

    5,792      5,809

Series 2006-1 Class B (Ê)
0.561% due 09/15/12

    1,500      1,439

GMAC Mortgage Corp. Loan Trust
Series 2007-HE2 Class A2
6.054% due 12/25/37

    3,340      1,073

Series 2007-HE3 Class 2A1
7.000% due 09/25/37

    1,424      475

Green Tree (Þ)
Series 2008-MH1 Class A3
8.970% due 04/25/38

    7,129      5,632

Green Tree Financial Corp.
Series 1994-1 Class A5
7.650% due 04/15/19

    3,586      3,168

Series 1994-3 Class A5
8.400% due 06/15/19

    2,189      2,288

Series 1994-5 Class A5
8.300% due 12/15/19

    2,476      2,279

GSAA Trust
Series 2006-2 Class 2A3 (Ê)
0.708% due 12/25/35

    3,270      2,775

Series 2006-4 Class 1A2
5.993% due 03/25/36

    390      89

Series 2006-4 Class 3A1
6.103% due 03/25/36

    20,287      9,394

GSAMP Trust (Ê)
Series 2003-HE2 Class M1
1.088% due 08/25/33

    631      401

Series 2004-SEA Class A2A
0.728% due 03/25/34

    29      28

Series 2006-FM2 Class A2A
0.508% due 09/25/36

    561      529

Series 2007-FM1 Class A2A
0.508% due 12/25/36

    675      494

Series 2007-H1 Class M1
0.778% due 02/25/37

    3,621      194

HFC Home Equity Loan Asset Backed Certificates (Ê)
Series 2005-1 Class A
0.737% due 01/20/34

    2,625      1,725

 

106   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-2 Class A1
0.597% due 03/20/36

    5,878      3,944

Series 2007-1 Class AS
0.647% due 03/20/36

    5,041      2,713

Series 2007-2 Class A1V
0.537% due 07/20/36

    1,022      929

Series 2007-2 Class A3V
0.667% due 07/20/36

    5,360      2,746

Series 2007-3 Class A1
1.247% due 11/20/36

    739      662

Series 2007-3 Class APT
1.647% due 11/20/36

    5,996      3,813

Home Equity Asset Trust (Ê)
Series 2005-5 Class 2A2
0.688% due 11/25/35

    3,763      3,376

Series 2005-7 Class M1
0.888% due 01/25/36

    6,285      1,882

Series 2006-3 Class 2A2
0.568% due 07/25/36

    11      11

Series 2006-4 Class M3
0.798% due 08/25/36

    1,267      9

Series 2006-7 Class 2A3
0.588% due 01/25/37

    2,650      259

Household Automotive Trust
Series 2006-1 Class A3
5.430% due 06/17/11

    3,057      3,079

Series 2006-2 Class A3
5.610% due 08/17/11

    1,084      1,093

Household Credit Card Master Note Trust I
Series 2006-1 Class A
5.100% due 06/15/12

    3,235      3,248

Series 2006-1 Class B (Ê)
0.591% due 06/15/12

    1,196      1,110

HSBC Private Label Credit Card Master Note Trust (Ê)
Series 2007-1 Class B
0.561% due 12/16/13

    6,500      5,455

HSI Asset Securitization Corp. Trust (Ê)
Series 2006-HE2 Class 2A1
0.488% due 12/25/36

    2,584      1,437

Series 2006-HE2 Class 2A2
0.548% due 12/25/36

    1,830      404

Series 2006-HE2 Class M1
0.678% due 12/25/36

    1,305      7

Huntington Auto Trust (Ê)(Å)
Series 2008-1A Class A2B
1.451% due 11/15/10

    2,893      2,888

Indymac Residential Asset Backed Trust (Ê)
Series 2006-E Class 2A3
0.608% due 04/25/37

    7,930      1,714

Series 2006-H2 Class A
0.585% due 06/28/36

    1,876      793

IXIS Real Estate Capital Trust (Ê)
Series 2006-HE1 Class A3
0.638% due 03/25/36

    1,013      857

Series 2006-HE2 Class A3
0.598% due 08/25/36

    1,945      643
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-HE2 Class M2
0.758% due 08/25/36

    2,438      6

Series 2006-HE3 Class A1
0.488% due 01/25/37

    65      65

JPMorgan Auto Receivables Trust (Å)
Series 2008-A Class A2
4.820% due 02/15/11

    6,000      5,971

JPMorgan Mortgage Acquisition Corp.
Series 2006-WF1 Class M1
6.240% due 07/25/36

    1,200      96

Series 2006-WMC Class A2 (Ê)
0.488% due 08/25/36

    173      163

Series 2007-HE1 Class AV1 (Ê)
0.498% due 01/25/32

    315      205

Lehman XS Trust (Ê)
Series 2005-1 Class 2A2
1.938% due 07/25/35

    676      373

Series 2005-7N Class 1A1A
0.708% due 12/25/35

    7,049      2,847

Series 2005-9N Class 1A2
0.788% due 02/25/36

    7,548      1,692

Series 2006-2N Class 1A2 (Ø)
0.778% due 02/25/46

    2,678      568

Series 2006-9 Class A1A (Ø)
0.592% due 05/25/46

    23      22

Series 2006-11 Class 1A1 (Ø)
0.518% due 06/25/46

    158      156

Series 2006-11 Class 2A1
0.568% due 06/25/46

    3,302      2,561

Series 2006-12N Class A1A1
0.518% due 08/25/46

    387      385

Series 2006-12N Class A1A2
0.558% due 08/25/46

    1,325      1,242

Series 2006-16N Class A1A (Ø)
0.518% due 11/25/46

    932      729

Long Beach Mortgage Loan Trust (Ê)
Series 2002-5 Class M1
1.683% due 11/25/32

    3,290      1,981

Series 2003-3 Class M1
1.563% due 07/25/33

    4,527      2,243

Series 2004-4 Class 1A1
0.718% due 10/25/34

    39      20

Series 2004-6 Class A3
1.088% due 11/25/34

    2,330      1,229

Series 2005-3 Class 2A2
0.718% due 09/25/35

    1,834      1,531

Series 2005-WL2 Class 3A3
0.708% due 08/25/35

    296      289

Series 2006-9 Class 2A1
0.498% due 10/25/36

    938      836

Loomis Sayles CBO (Ê)(Å)
Series 2006-1A Class A
1.322% due 10/26/20

    23,836      15,166

Massachusetts Educational Financing Authority (Ê)
Series 2008-1 Class A1
2.042% due 10/25/38

    5,065      4,276

 

Russell Strategic Bond Fund   107

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Master Asset Backed Securities Trust (Ê)
Series 2003-WMC Class M2
2.913% due 08/25/33

    534      162

Series 2006-AB1 Class A2
0.668% due 02/25/36

    2,981      1,654

Series 2006-NC2 Class A4
0.588% due 08/25/36

    9,000      2,154

Series 2006-WMC Class M1
0.668% due 10/25/36

    3,306      12

Series 2007-HE1 Class A1
0.518% due 05/25/37

    918      720

MBNA Credit Card Master Note Trust
Series 2005-A6 Class A6
4.500% due 01/15/13

    2,216      2,267

Mid-State Trust
Series 2003-11 Class A1
4.864% due 07/15/38

    167      91

Series 2004-1 Class A
6.005% due 08/15/37

    198      137

Series 2005-1 Class A
5.745% due 01/15/40

    268      179

Series 2006-1 Class A (Þ)
5.787% due 10/15/40

    897      629

Morgan Stanley ABS Capital I (Ê)
Series 2003-NC8 Class M1
1.488% due 09/25/33

    3,233      1,651

Series 2003-NC8 Class M3
3.588% due 09/25/33

    298      29

Series 2006-HE1 Class A3
0.618% due 01/25/36

    6,836      5,637

Series 2006-HE2 Class M1
0.768% due 03/25/36

    10,623      178

Series 2006-HE2 Class M2
0.788% due 03/25/36

    1,283      11

Series 2006-HE3 Class A2C
0.598% due 04/25/36

    2,073      1,549

Series 2006-HE3 Class M2
0.738% due 04/25/36

    12,735      99

Series 2006-HE4 Class A2
0.538% due 06/25/36

    151      145

Series 2006-HE4 Class A3
0.588% due 06/25/36

    945      442

Series 2006-HE5 Class A2C
0.578% due 08/25/36

    6,480      4,056

Series 2006-HE6 Class A2B
0.538% due 09/25/36

    2,945      1,686

Series 2006-HE6 Class A2C
0.588% due 09/25/36

    9,465      2,159

Series 2006-HE7 Class A2A
0.488% due 09/25/36

    946      889

Series 2006-HE8 Class A2C
0.578% due 10/25/36

    4,635      1,263

Series 2006-NC5 Class A2A
0.478% due 10/25/36

    1,947      1,782

Series 2006-NC5 Class A2C
0.588% due 10/25/36

    610      154

Series 2006-WMC Class A2C
0.588% due 06/25/36

    11,670      3,109
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-WMC Class A2FP
0.488% due 07/25/36

    144      92

Series 2007-NC3 Class A2A
0.498% due 05/25/37

    1,839      1,491

Morgan Stanley IXIS Real Estate Capital Trust (Ê)
Series 2006-2 Class A1
0.488% due 11/25/36

    154      143

Series 2006-2 Class A3
0.588% due 11/25/36

    9,980      2,663

Morgan Stanley Mortgage Loan Trust (Ê)
Series 2006-12X Class A1
0.558% due 10/25/36

    206      189

Series 2006-17X Class A1
0.558% due 10/25/46

    1,078      915

Nationstar Home Equity Loan Trust (Ê)
Series 2007-A Class AV4
0.668% due 03/25/37

    6,789      1,931

New Century Home Equity Loan Trust (Ê)
Series 2004-4 Class M2
0.968% due 02/25/35

    2,100      1,065

Series 2006-1 Class M2
0.798% due 05/25/36

    4,114      129

Nissan Auto Receivables Owner Trust
Series 2008-A Class A3
3.890% due 08/15/11

    540      548

Series 2009-A Class A3
3.200% due 02/15/13

    1,915      1,928

Novastar Home Equity Loan (Ê)
Series 2006-3 Class A2B
0.548% due 10/25/36

    225      193

Series 2007-1 Class A2A1
0.538% due 03/25/37

    3,695      2,906

Option One Mortgage Loan Trust (Ê)
Series 2003-2 Class M2
2.988% due 04/25/33

    360      26

Series 2003-3 Class M3
3.438% due 06/25/33

    187      21

Series 2003-4 Class M2
2.088% due 07/25/33

    216      71

Series 2005-2 Class A5
0.768% due 05/25/35

    2,283      1,882

Series 2005-4 Class A3
0.698% due 11/25/35

    1,198      867

Series 2006-1 Class 2A2
0.568% due 01/25/36

    745      704

Series 2007-1 Class 2A1
0.488% due 01/25/37

    416      392

Park Place Securities, Inc. (Ê)
Series 2004-MCW Class A1
0.750% due 10/25/34

    1,132      813

Series 2004-WHQ Class A3D
0.918% due 02/25/35

    5,090      4,610

Series 2004-WHQ Class A3E
0.858% due 02/25/35

    1,219      996

Series 2004-WWF Class A1D
0.898% due 12/25/34

    107      105

 

108   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2005-WCW Class M1
0.888% due 09/25/35

    2,080      861

Series 2005-WHQ Class A2C
0.688% due 09/25/35

    3,571      3,325

Series 2005-WHQ Class A2D
0.768% due 06/25/35

    1,840      1,541

Popular ABS Mortgage Pass-Through Trust
Series 2005-6 Class A3
5.680% due 01/25/36

    2,009      1,681

Renaissance Home Equity Loan Trust
Series 2005-1 Class M1
5.357% due 05/25/35

    817      262

Series 2005-2 Class AF4
4.934% due 08/25/35

    815      500

Series 2005-4 Class A3
5.565% due 02/25/36

    322      280

Series 2006-1 Class AF3
5.608% due 05/25/36

    200      164

Series 2006-1 Class AF6
5.746% due 05/25/36

    1,759      1,309

Series 2006-2 Class AF2
5.762% due 08/25/36

    459      430

Series 2007-1 Class AF2
5.512% due 04/25/37

    5,820      3,631

Series 2007-2 Class AF2
5.675% due 06/25/37

    1,815      972

Residential Asset Mortgage Products, Inc.
Series 2003-RS1 Class AI6A
5.980% due 12/25/33

    1,486      696

Series 2005-RS2 Class AII3 (Ê)
0.788% due 02/25/35

    2,861      2,365

Series 2006-RZ3 Class A1 (Ê)
0.508% due 08/25/36

    223      216

Series 2006-RZ4 Class A1A (Ê)
0.518% due 10/25/36

    75      70

Residential Asset Securities Corp.
Series 2001-KS3 Class AII (Ê)
0.898% due 09/25/31

    172      103

Series 2003-KS2 Class MI1
4.800% due 04/25/33

    1,829      731

Series 2003-KS2 Class MI3
6.100% due 04/25/33

    645      49

Series 2003-KS4 Class AIIB (Ê)
1.018% due 06/25/33

    303      173

Series 2005-AHL Class A2 (Ê)
0.708% due 07/25/35

    1,556      1,376

Series 2005-KS5 Class M1 (Ê)
0.848% due 05/25/35

    4,375      4,192

Series 2005-KS8 Class A3 (Ê)
0.698% due 08/25/35

    714      691

Series 2006-KS3 Class AI3 (Ê)
0.608% due 04/25/36

    849      558

Series 2006-KS7 Class A2 (Ê)
0.538% due 09/25/36

    563      485

Series 2006-KS9 Class AI1 (Ê)
0.508% due 11/25/36

    119      114

Series 2007-KS3 Class AI1 (Ê)
0.548% due 04/25/37

    265      228
     Principal
Amount ($)
or Shares		      Market
Value
$

Saxon Asset Securities Trust (Ê)
Series 2005-4 Class A2C
0.688% due 11/25/37

    2,547      2,312

Series 2006-3 Class A1
0.498% due 10/25/46

    406      391

SBI Heloc Trust (Ê)(Þ)
Series 2006-1A Class 1A2A
0.608% due 08/25/36

    263      234

Securitized Asset Backed Receivables LLC Trust (Ê)
Series 2005-FR5 Class A1A
0.728% due 08/25/35

    3,813      3,387

Series 2005-HE1 Class A1A (Å)
0.738% due 10/25/35

    4,451      4,206

Series 2006-FR4 Class A2A
0.518% due 08/25/36

    4,227      3,267

Series 2006-HE1 Class M1
0.738% due 05/25/36

    3,183      30

Series 2007-BR2 Class A2
0.668% due 02/25/37

    4,695      2,053

Series 2007-HE1 Class A2A
0.498% due 12/25/36

    840      518

Series 2007-NC1 Class A2B
0.588% due 12/25/36

    9,135      2,446

SG Mortgage Securities Trust (Ê)
Series 2006-FRE Class A2B
0.618% due 02/25/36

    2,475      963

SLC Student Loan Trust (Ê)
Series 2007-1 Class A1
1.214% due 02/15/15

    214      213

SLM Student Loan Trust (Ê)
Series 2006-8 Class A2
1.092% due 10/25/16

    1,607      1,600

Series 2007-3 Class A1
1.082% due 10/27/14

    498      494

Series 2008-2 Class A1
1.392% due 01/26/15

    147      145

Series 2008-7 Class A2
1.592% due 10/25/17

    33,000      31,596

Small Business Administration
Series 2000-P10 Class 1
7.449% due 08/10/10

    51      53

Small Business Administration Participation Certificates
Series 1997-20D Class 1
7.500% due 04/01/17

    1,207      1,311

Series 2004-20F Class 1
5.520% due 06/01/24

    274      285

Series 2005-20G Class 1
4.750% due 07/01/25

    3,489      3,615

Soundview Home Equity Loan Trust
Series 2005-4 Class 2A3 (Ê)
0.668% due 03/25/36

    2,892      2,742

Series 2005-OPT Class 2A3 (Ê)
0.698% due 12/25/35

    5,024      3,588

Series 2006-EQ2 Class A1 (Ê)
0.518% due 01/25/37

    942      907

 

Russell Strategic Bond Fund   109

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-EQ2 Class A3 (Ê)
0.598% due 01/25/37

    8,550      2,898

Series 2006-OPT Class 2A4 (Ê)
0.678% due 07/25/36

    3,325      777

Series 2006-OPT Class M3 (Ê)
0.758% due 07/25/36

    2,121      27

Series 2006-WF1 Class A2
5.645% due 10/25/36

    3,693      3,382

Series 2007-OPT Class 2A1 (Ê)
0.518% due 06/25/37

    1,757      1,346

Series 2007-OPT Class 2A2 (Ê)
0.568% due 07/25/37

    4,200      2,017

Specialty Underwriting & Residential Finance (Ê)
Series 2005-BC4 Class A2B
0.668% due 09/25/36

    1,868      1,583

Series 2006-AB2 Class A2B
0.538% due 06/25/37

    424      409

Series 2006-BC1 Class A2B
0.588% due 12/25/36

    647      623

Series 2006-BC3 Class M2
0.728% due 06/25/37

    1,485      11

Series 2006-BC5 Class A2D
0.588% due 11/25/37

    13,185      3,139

Series 2006-BC5 Class M1
0.678% due 11/25/37

    4,800      41

Structured Asset Investment Loan Trust (Ê)
Series 2003-BC1 Class 3A
1.118% due 11/25/33

    12      7

Series 2003-BC1 Class A2
1.118% due 01/25/33

    4,653      2,812

Series 2005-3 Class M2
0.878% due 04/25/35

    885      90

Series 2005-7 Class A4
0.628% due 08/25/35

    1,298      1,256

Series 2005-8 Class A3
0.698% due 10/25/35

    632      564

Series 2005-HE3 Class A2
0.688% due 09/25/35

    412      395

Series 2006-BNC Class A2
0.478% due 09/25/36

    645      609

Series 2006-BNC Class A3
0.588% due 09/25/36

    13,040      5,281

Structured Asset Securities Corp.
Series 2001-SB1 Class A2
3.375% due 08/25/31

    723      585

Series 2005-2XS Class 1A2A
4.510% due 02/25/35

    829      755

Series 2005-4XS Class 1A2B
4.670% due 03/25/35

    321      254

Series 2005-GEL Class A (Ê)
0.788% due 12/25/34

    385      293

Series 2006-BC3 Class A2 (Ê)
0.488% due 10/25/36

    3,222      2,862

Series 2006-BC6 Class A4 (Ê)
0.608% due 01/25/37

    2,775      818

Series 2006-OW1 Class A3 (Ê)(Å)
0.598% due 12/25/35

    1,118      1,078
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2007-BC3 Class 2A2 (Ê)
0.578% due 05/25/47

    9,928      2,200

Triad Auto Receivables Owner Trust
Series 2006-A Class A3
4.770% due 01/12/11

    122      122

Series 2006-B Class A3
5.410% due 08/12/11

    1,152      1,150

Series 2006-C Class A3
5.260% due 11/14/11

    2,265      2,264

TXU Electric Delivery Transition Bond Co. LLC
Series 2004-1 Class A2
4.810% due 11/17/14

    400      415

USAA Auto Owner Trust
Series 2006-2 Class A4
5.370% due 02/15/12

    454      463

Series 2008-1 Class A3
4.160% due 04/16/12

    395      401

Series 2008-3 Class A2
3.580% due 03/15/11

    3,761      3,783

Wachovia Auto Loan Owner Trust 2006-1
Series 2006-2A Class A3 (Å)
5.230% due 08/22/11

    1,246      1,254

Series 2007-1 Class A3A
5.290% due 04/20/12

    10,526      10,701

Washington Mutual Asset-Backed Certificates (Ê)
Series 2006-HE5 Class 2A1
0.498% due 10/25/36

    1,650      1,314

Wells Fargo Home Equity Trust (Ê)
Series 2005-3 Class AI1A
0.708% due 11/25/35

    603      559

Series 2006-3 Class A1
0.488% due 01/25/37

    78      77

World Omni Auto Receivables Trust
Series 2009-A Class A3
3.330% due 05/15/13

    3,545      3,556
         
        655,461
         
Corporate Bonds and Notes - 23.1%     

Abbott Laboratories
5.125% due 04/01/19

    3,000      3,071

6.000% due 04/01/39 (Ñ)

    1,470      1,476

Ace Capital Trust II
9.700% due 04/01/30

    1,425      1,114

Aetna, Inc.
6.500% due 09/15/18

    3,190      3,121

6.750% due 12/15/37

    2,400      2,091

Allied Waste North America, Inc.
Series B
7.125% due 05/15/16

    660      647

Allstate Life Global Funding Trusts
5.375% due 04/30/13

    2,200      2,167

Alltel Corp.
7.000% due 07/01/12

    2,045      2,163

6.800% due 05/01/29

    2,320      2,199

7.875% due 07/01/32

    4,635      4,875

 

110   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Altria Group, Inc.
7.750% due 02/06/14 (Ñ)

    4,560      4,887

9.700% due 11/10/18

    9,125      10,663

9.250% due 08/06/19 (Ñ)

    3,195      3,659

10.200% due 02/06/39

    1,580      1,739

AMB Property, LP (Ñ)
6.300% due 06/01/13

    1,015      808

American Express Bank FSB
Series BKNT
5.500% due 04/16/13

    700      658

6.000% due 09/13/17

    600      510

American Express Centurion Bank
Series BKN1
6.000% due 09/13/17

    600      510

American Express Co.
7.000% due 03/19/18

    400      379

American Express Credit Corp.
5.875% due 05/02/13

    2,000      1,970

Series C (Ñ)
7.300% due 08/20/13

    1,730      1,733

American General Finance Corp.
6.900% due 12/15/17

    800      322

American International Group, Inc.
4.700% due 10/01/10

    845      494

5.050% due 10/01/15

    400      145

5.850% due 01/16/18

    11,970      4,039

8.250% due 08/15/18 (Þ)

    9,100      3,200

6.250% due 03/15/37 (Ñ)

    3,700      463

8.175% due 05/15/58 (Þ)

    1,230      142

Americo Life, Inc. (Þ)
7.875% due 05/01/13

    350      228

Ameriprise Financial, Inc.
5.350% due 11/15/10

    1,895      1,868

7.518% due 06/01/66

    12,320      7,099

AmerisourceBergen Corp.
5.875% due 09/15/15

    15      14

Series WI
5.625% due 09/15/12

    4,585      4,547

Amgen, Inc.
5.850% due 06/01/17

    695      719

6.150% due 06/01/18 (Ñ)

    5,600      5,931

5.700% due 02/01/19 (Ñ)

    3,570      3,672

6.400% due 02/01/39

    500      503

Amsouth Bank (Ñ)(Þ)
Series AI
4.850% due 04/01/13

    1,360      1,119

Anadarko Petroleum Corp.
5.950% due 09/15/16

    695      629

Anheuser-Busch InBev Worldwide, Inc.
7.200% due 01/15/14 (Å)

    9,495      9,899

7.750% due 01/15/19

    19,830      20,761

8.200% due 01/15/39

    5,325      5,336

ANZ Capital Trust (ƒ)(Þ)
4.484% due 12/31/49

    3,125      2,907

Appalachian Power Co.
Series O
5.650% due 08/15/12

    980      977
     Principal
Amount ($)
or Shares		      Market
Value
$

ARAMARK Corp. (Ê)
Series WI
4.670% due 02/01/15

    1,665      1,332

Arantes International, Ltd.
10.250% due 06/19/13

    750      30

ArcelorMittal USA, Inc. (Ñ)
6.500% due 04/15/14

    1,900      1,607

Arizona Public Service Co.
5.800% due 06/30/14

    1,675      1,522

6.250% due 08/01/16

    1,350      1,147

AT&T Corp.
7.300% due 11/15/11 (Ñ)

    475      520

8.000% due 11/15/31

    3,040      3,438

AT&T, Inc.
4.950% due 01/15/13

    100      104

4.850% due 02/15/14 (Ñ)

    2,540      2,634

5.500% due 02/01/18

    100      100

5.800% due 02/15/19 (Ñ)

    5,020      5,104

6.300% due 01/15/38

    4,400      4,070

6.400% due 05/15/38

    6,275      5,882

6.550% due 02/15/39

    10,935      10,516

Axcan Intermediate Holdings, Inc.
9.250% due 03/01/15

    1,000      1,005

BAC Capital Trust XV (Ê)
2.061% due 06/01/56

    3,800      1,007

Bank of America Corp.
5.625% due 10/14/16 (Ñ)

    610      507

5.420% due 03/15/17 (Ñ)

    480      338

6.000% due 09/01/17

    5,165      4,320

5.750% due 12/01/17

    6,640      5,425

8.000% due 12/29/49 (ƒ)

    18,600      10,567

8.125% due 12/29/49 (ƒ)

    26,700      15,163

Bank of America NA
Series BKNT
1.600% due 06/15/16 (Ê)

    3,100      1,866

6.000% due 10/15/36

    500      344

BankAmerica Capital III (Ê)
Series *
1.701% due 01/15/27

    2,300      748

Baxter International, Inc.
4.000% due 03/01/14

    1,180      1,222

Bear Stearns Cos. LLC (The)
1.366% due 05/18/10 (Ê)

    8,400      8,346

1.448% due 08/15/11 (Ê)

    300      282

6.400% due 10/02/17

    725      706

7.250% due 02/01/18

    8,235      8,410

Series * (Ñ)(Ê)
1.360% due 02/01/12

    10,000      9,142

BellSouth Telecommunications, Inc.
7.000% due 12/01/95

    2,865      2,279

Best Buy Co., Inc.
6.750% due 07/15/13

    5,545      5,477

BNP Paribas Capital Trust (ƒ)(Ñ)(Å)
9.003% due 12/29/49

    3,450      1,967

Boardwalk Pipelines, LP
5.875% due 11/15/16

    3,250      2,806

Boeing Co. (Ñ)
6.875% due 03/15/39

    1,565      1,631

 

Russell Strategic Bond Fund   111

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Boston Scientific Corp.
6.400% due 06/15/16

    3,670      3,509

Burlington Northern Santa Fe Corp.
6.875% due 12/01/27

    160      157

6.750% due 03/15/29

    110      108

Calpine Construction Finance Co., LP and CCFC Finance Corp. (Ê)(Ñ)(Þ)
10.248% due 08/26/11

    4,425      4,381

Capmark Financial Group, Inc.
3.106% due 05/10/10 (Ê)(Ñ)

    2,870      1,076

7.375% due 05/10/12

    1,000      255

7.800% due 05/10/17

    3,445      825

Carolina Power & Light Co.
6.500% due 07/15/12

    105      112

5.300% due 01/15/19 (Ñ)

    1,835      1,902

Catlin Insurance Co., Ltd. (ƒ)(Å)
7.249% due 12/31/49

    775      285

CC Holdings GS V LLC (Å)
7.750% due 05/01/17

    1,345      1,358

CCH I Holdings LLC (Ø)
13.500% due 01/15/14

    5,240      52

Centennial Cellular Operating Co.
10.125% due 06/15/13

    1,500      1,556

CenterPoint Energy Houston Electric LLC
Series J2
5.700% due 03/15/13

    605      615

CenterPoint Energy Resources Corp.
6.125% due 11/01/17

    860      756

6.250% due 02/01/37

    225      145

Series B
7.875% due 04/01/13

    3,970      4,163

Charter Communications Operating LLC (Ø)(Ñ)(Þ)
10.875% due 09/15/14

    820      816

Chesapeake Energy Corp.
7.625% due 07/15/13

    1,375      1,313

7.500% due 09/15/13 (Ñ)

    2,425      2,304

9.500% due 02/15/15 (Ñ)

    1,985      2,005

CHS/Community Health Systems, Inc. (Ñ)
Series WI
8.875% due 07/15/15

    5,570      5,542

Chubb Corp.
6.375% due 03/29/67

    2,450      1,481

Series 1
6.500% due 05/15/38

    1,175      1,075

Cisco Systems, Inc.
4.950% due 02/15/19

    770      784

Citigroup Capital XXI
8.300% due 12/21/57

    11,215      6,824

Citigroup, Inc.
5.500% due 08/27/12

    2,500      2,231

5.300% due 10/17/12

    1,000      883

5.500% due 04/11/13

    8,620      7,683

5.850% due 07/02/13 (Ñ)

    5,250      4,699

6.500% due 08/19/13 (Ñ)

    5,094      4,649

1.296% due 11/05/14 (Ê)

    3,000      1,936

4.700% due 05/29/15

    350      274

5.850% due 08/02/16

    150      125

6.000% due 08/15/17

    4,500      3,780
     Principal
Amount ($)
or Shares		      Market
Value
$

6.125% due 11/21/17

    6,395      5,273

6.125% due 05/15/18 (Ñ)

    200      168

6.125% due 08/25/36

    900      532

5.875% due 05/29/37

    1,775      1,345

6.875% due 03/05/38

    1,850      1,575

Series E (ƒ)
8.400% due 04/29/49

    7,800      5,217

Series FXN
1.875% due 05/07/12

    10,400      10,373

CME Group, Inc. (Ñ)
5.750% due 02/15/14

    1,475      1,552

CNA Financial Corp.
6.500% due 08/15/16

    1,125      847

Columbus Southern Power Co. (Ñ)
Series C
5.500% due 03/01/13

    435      440

Comcast Cable Communications Holdings, Inc.
9.455% due 11/15/22

    1,825      2,121

Comcast Cable Holdings LLC
9.800% due 02/01/12

    1,660      1,790

7.875% due 08/01/13

    2,915      3,053

Comcast Corp.
5.500% due 03/15/11

    1,825      1,888

6.300% due 11/15/17

    4,630      4,714

5.875% due 02/15/18

    300      297

6.500% due 11/15/35

    1,105      1,032

6.450% due 03/15/37

    300      278

Comcast Holdings Corp.
10.625% due 07/15/12

    4,800      5,407

Comerica Bank (Ê)
Series BKNT
0.482% due 05/10/10

    500      460

Commonwealth Edison Co.
6.150% due 09/15/17

    1,435      1,414

5.800% due 03/15/18

    2,930      2,789

6.950% due 07/15/18

    400      389

5.900% due 03/15/36

    1,100      914

Series 100
5.875% due 02/01/33

    1,275      1,053

Series 105
5.400% due 12/15/11

    850      853

ConocoPhillips
4.750% due 02/01/14

    550      580

5.750% due 02/01/19

    5,610      5,727

5.900% due 05/15/38

    510      463

6.500% due 02/01/39

    10,250      10,155

Constellation Brands, Inc. (Ñ)
Series B
8.125% due 01/15/12

    2,412      2,400

Continental Airlines, Inc.
Series 01A2
6.503% due 06/15/11

    3,925      3,552

Series 071A
5.983% due 04/19/22

    2,200      1,738

Countrywide Financial Corp.
5.125% due 02/17/11

    100      141

Series MTn
5.800% due 06/07/12

    500      458

 

112   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Countrywide Home Loans, Inc.
Series MTNL
4.000% due 03/22/11

    3,695      3,464

COX Communications, Inc. (Å)
6.250% due 06/01/18

    2,800      2,578

Credit Suisse
5.500% due 05/01/14

    3,000      3,008

Credit Suisse NY
5.000% due 05/15/13

    4,700      4,641

Credit Suisse USA, Inc. (Ñ)
5.500% due 08/15/13

    380      385

4.875% due 01/15/15

    1,200      1,175

Crown Castle International Corp. (Ñ)
9.000% due 01/15/15

    785      801

CSC Holdings, Inc.
Series WI
6.750% due 04/15/12

    660      645

8.625% due 02/15/19 (Þ)

    1,235      1,244

Darden Restaurants, Inc.
6.800% due 10/15/37

    1,245      921

DCP Midstream LLC
6.875% due 02/01/11

    110      110

Delta Air Lines, Inc. (Ñ)
Series 00-1
7.570% due 11/18/10

    9,445      8,784

Series 00A1
7.379% due 11/18/11

    1,005      944

Series 01A2
7.111% due 03/18/13

    750      660

Denbury Resources, Inc.
9.750% due 03/01/16

    735      746

Developers Diversified Realty Corp.
5.000% due 05/03/10

    1,410      1,112

4.625% due 08/01/10

    2,726      2,145

5.250% due 04/15/11

    120      67

5.375% due 10/15/12

    3,390      1,532

Devon Energy Corp. (Ñ)
6.300% due 01/15/19

    1,550      1,604

Dex Media West LLC/Dex Media West Finance Co.
Series B
9.875% due 08/15/13

    1,100      314

DirecTV Holdings LLC
8.375% due 03/15/13

    1,250      1,269

Discover Financial Services (Ê)
Series WI
1.861% due 06/11/10

    7,155      6,305

DISH DBS Corp. (Ñ)
7.125% due 02/01/16

    2,000      1,870

Dominion Resources, Inc.
Series 06-B
6.300% due 09/30/66

    3,370      1,921

DPL, Inc.
6.875% due 09/01/11

    2,116      2,161

Dr Pepper Snapple Group, Inc.
6.820% due 05/01/18

    4,250      4,139

7.450% due 05/01/38

    1,175      1,037

E*TRADE Financial Corp.
12.500% due 11/30/17

    8,031      3,996
     Principal
Amount ($)
or Shares		      Market
Value
$

El Paso Corp.
12.000% due 12/12/13

    1,355      1,463

8.250% due 02/15/16

    1,600      1,560

Series * (Ñ)
9.625% due 05/15/12

    300      304

Series GMTN
8.050% due 10/15/30

    300      229

El Paso Natural Gas Co.
7.500% due 11/15/26

    1,425      1,278

Energy Future Holdings Corp. (Ñ)
10.875% due 11/01/17

    2,275      1,553

Energy Transfer Partners, LP
8.500% due 04/15/14

    775      837

5.950% due 02/01/15

    5,450      5,135

6.700% due 07/01/18 (Ñ)

    775      726

9.700% due 03/15/19

    1,150      1,278

Entergy Gulf States Louisiana LLC
6.000% due 05/01/18

    2,645      2,433

Enterprise Products Operating LLC
6.500% due 01/31/19 (Ñ)

    1,450      1,330

8.375% due 08/01/66

    1,550      1,069

7.034% due 01/15/68

    550      347

Series B (Ñ)
5.750% due 03/01/35

    675      487

Farmers Exchange Capital (Þ)
7.050% due 07/15/28

    4,095      2,395

Farmers Insurance Exchange (Þ)
6.000% due 08/01/14

    1,625      1,215

8.625% due 05/01/24

    1,830      1,153

Federal Express Corp.
7.600% due 07/01/97

    765      674

Fifth Third Bank
8.250% due 03/01/38

    2,000      1,169

First Data Corp. (Ñ)
Series WI
9.875% due 09/24/15

    3,280      2,267

First Union Institutional Capital II
7.850% due 01/01/27

    2,320      1,699

FirstEnergy Corp.
Series B (Ñ)
6.450% due 11/15/11

    4,195      4,261

Series C
7.375% due 11/15/31

    1,905      1,624

Florida Gas Transmission Co. LLC (Å)
7.900% due 05/15/19

    4,115      4,095

Ford Motor Credit Co. LLC
7.875% due 06/15/10 (Ñ)

    200      184

8.625% due 11/01/10

    100      89

7.375% due 02/01/11

    100      86

9.875% due 08/10/11 (Ñ)

    15,455      13,524

7.250% due 10/25/11

    795      652

3.889% due 01/13/12 (Ê)

    3,755      2,685

Series WI
9.750% due 09/15/10

    1,925      1,733

Freeport-McMoRan Copper & Gold, Inc.
8.375% due 04/01/17

    3,920      3,842

Freescale Semiconductor, Inc. (Ñ)
Series WI
8.875% due 12/15/14

    5,355      1,821

 

Russell Strategic Bond Fund   113

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Fresenius US Finance II, Inc.
Series REGS
9.000% due 07/15/15

    500      490

Frontier Communications Corp. (Ñ)
9.250% due 05/15/11

    1,500      1,579

General Electric Capital Corp.
1.357% due 01/08/16 (Ê)

    1,200      842

5.625% due 05/01/18 (Ñ)

    830      724

5.875% due 01/14/38

    6,425      4,434

6.875% due 01/10/39

    2,535      1,986

6.375% due 11/15/67

    27,500      15,785

Series GMTN (Ñ)
5.500% due 04/28/11

    400      412

Series MTNA (Ê)
1.580% due 09/15/14

    7,000      5,289

General Electric Co.
5.250% due 12/06/17

    2,690      2,546

General Mills, Inc.
5.650% due 02/15/19

    1,900      1,940

General Motors Corp. (Ñ)
8.375% due 07/15/33

    5,265      448

GlaxoSmithKline Capital, Inc.
4.850% due 05/15/13

    7,400      7,676

GMAC LLC
5.750% due 05/21/10

    400      429

6.875% due 09/15/11 (Å)

    1,315      1,144

8.000% due 11/01/31 (Þ)

    3,517      2,462

Goldman Sachs Group, Inc. (The)
4.500% due 06/15/10 (Ñ)

    1,650      1,665

1.416% due 02/06/12 (Ê)

    1,700      1,549

6.000% due 05/01/14

    6,795      6,769

5.125% due 01/15/15 (Ñ)

    7,553      7,157

1.677% due 03/22/16 (Ê)

    1,300      979

5.625% due 01/15/17

    2,750      2,356

6.250% due 09/01/17

    7,900      7,471

7.500% due 02/15/19

    10,545      10,820

6.750% due 10/01/37

    9,720      7,409

Goodyear Tire & Rubber Co. (The) (Ñ)
8.625% due 12/01/11

    1,450      1,385

9.000% due 07/01/15

    750      683

GrafTech Finance, Inc.
10.250% due 02/15/12

    211      196

Hanger Orthopedic Group, Inc.
10.250% due 06/01/14

    2,050      2,101

HBOS PLC (Þ)
6.750% due 05/21/18

    9,920      7,301

HCA, Inc.
5.750% due 03/15/14

    2,900      2,291

8.500% due 04/15/19 (Å)

    2,075      2,088

Series WI
9.125% due 11/15/14

    2,375      2,351

9.250% due 11/15/16 (Ñ)

    3,480      3,445

9.625% due 11/15/16

    1,250      1,159

Health Net, Inc.
6.375% due 06/01/17

    2,885      2,019

Healthsouth Corp.
8.323% due 06/15/14 (Ê)

    2,700      2,443

10.750% due 06/15/16 (Ñ)

    2,475      2,524
     Principal
Amount ($)
or Shares		      Market
Value
$

Hertz Corp. (The)
8.875% due 01/01/14

    875      678

Historic TW, Inc.
8.050% due 01/15/16

    2,900      2,918

HRPT Properties Trust
5.750% due 02/15/14

    2,710      2,162

HSBC Finance Corp. (Ê)
1.491% due 05/10/10

    1,300      1,240

HSN, Inc. (Þ)
11.250% due 08/01/16

    3,050      2,226

HUB International Holdings, Inc. (Þ)
10.250% due 06/15/15

    6,180      3,461

Huntsman LLC
11.500% due 07/15/12

    750      690

Inmarsat Finance PLC (Ñ)
10.375% due 11/15/12

    2,000      2,050

Inter-American Development Bank
3.000% due 04/22/14

    12,400      12,353

International Business Machines Corp.
5.700% due 09/14/17

    600      636

International Finance Corp.
Series GMTN
3.000% due 04/22/14

    12,400      12,214

International Lease Finance Corp.
4.950% due 02/01/11

    1,775      1,376

5.450% due 03/24/11

    2,370      1,831

5.750% due 06/15/11

    4,150      3,163

Iron Mountain, Inc. (Ñ)
8.000% due 06/15/20

    1,250      1,206

ITT Corp.
4.900% due 05/01/14

    2,105      2,134

6.125% due 05/01/19

    1,360      1,396

Jackson National Life Fund LLC
1.511% due 08/06/11

    30,400      29,113

JBS USA LLC (Ñ)(Å)
11.625% due 05/01/14

    1,500      1,425

JC Penney Corp., Inc.
6.375% due 10/15/36

    1,765      1,307

Jersey Central Power & Light Co.
5.625% due 05/01/16

    1,515      1,440

JPMorgan Chase Capital XXII
Series V
6.450% due 02/02/37

    1,100      784

JPMorgan Chase & Co.
1.281% due 05/07/10 (Ê)

    3,800      3,763

5.600% due 06/01/11

    235      243

5.375% due 01/15/14 (Ñ)

    2,565      2,611

5.150% due 10/01/15

    3,950      3,613

6.000% due 01/15/18

    9,100      8,847

6.400% due 05/15/38 (Ñ)

    7,333      7,144

Series 1 (Æ)(ƒ)
7.900% due 04/29/49

    13,355      10,160

JPMorgan Chase Bank NA
Series BKNT
5.875% due 06/13/16

    240      222

6.000% due 10/01/17

    3,300      3,079

 

114   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

JPMorgan Chase Capital XIII (Ê)
Series M
2.182% due 09/30/34

    6,050      2,640

JPMorgan Chase Capital XX
Series T
6.550% due 09/29/36

    300      214

Kansas City Southern Railway (Ñ)
13.000% due 12/15/13

    1,500      1,590

KAR Holdings, Inc. (Ñ)
Series WI
10.000% due 05/01/15

    5,290      3,068

KBC Bank Funding Trust II (ƒ)
6.880% due 06/30/49

    600      397

KBC Bank Funding Trust III (ƒ)(Þ)
9.860% due 11/29/49

    2,450      858

KCP&L Greater Missouri Operations Co.
11.875% due 07/01/12

    2,335      2,452

KeyBank NA (Ê)
Series BKNT
3.511% due 06/02/10

    4,100      4,054

Kraft Foods, Inc.
1.456% due 08/11/10 (Ê)

    10,000      9,748

6.125% due 02/01/18

    1,000      1,015

6.125% due 08/23/18 (Ñ)

    505      513

6.875% due 01/26/39

    590      581

L-3 Communications Corp.
Series B
6.375% due 10/15/15

    1,750      1,658

LaBranche & Co., Inc.
11.000% due 05/15/12

    1,340      1,219

Land O’ Lakes, Inc.
8.750% due 11/15/11

    750      752

Lehman Brothers Holdings, Inc. (Ø)
2.951% due 05/25/10

    1,300      182

3.005% due 07/18/11

    900      126

6.625% due 01/18/12

    770      110

6.200% due 09/26/14

    1,000      143

6.875% due 05/02/18

    1,365      203

7.000% due 09/27/27

    1,260      180

2.878% due 04/03/49

    6,300      882

2.520% due 11/24/99

    1,400      196

Liberty Mutual Group, Inc. (Þ)
7.000% due 03/15/37

    7,075      2,604

7.800% due 03/15/37

    11,245      4,610

10.750% due 06/15/58

    4,835      2,659

Limited. Brands, Inc.
7.600% due 07/15/37

    865      568

Lincoln National Corp.
6.200% due 12/15/11

    285      217

Lubrizol Corp.
8.875% due 02/01/19

    1,430      1,552

M&I Marshall & Ilsley Bank (Ê)
1.450% due 06/16/10

    5,510      4,976

MacDermid, Inc. (Þ)
9.500% due 04/15/17

    4,220      2,089

Manufacturers & Traders Trust Co.
5.585% due 12/28/20

    745      469
     Principal
Amount ($)
or Shares		      Market
Value
$

Marathon Oil Corp.
6.500% due 02/15/14

    1,475      1,530

7.500% due 02/15/19

    1,380      1,446

Marsh & McLennan Cos., Inc.
5.150% due 09/15/10

    650      641

Max USA Holdings, Ltd. (Þ)
7.200% due 04/14/17

    2,485      1,686

MBNA Corp.
6.125% due 03/01/13

    2,000      1,774

McDonald’s Corp.
5.800% due 10/15/17

    885      948

6.300% due 10/15/37

    1,595      1,627

Medco Health Solutions, Inc.
6.125% due 03/15/13

    650      653

7.250% due 08/15/13

    4,552      4,687

Medtronic, Inc.
4.500% due 03/15/14

    730      753

Merrill Lynch & Co., Inc.
1.292% due 07/25/11 (Ê)

    1,600      1,387

6.050% due 08/15/12

    6,800      6,255

5.450% due 02/05/13

    2,975      2,605

6.150% due 04/25/13

    3,505      3,222

6.400% due 08/28/17

    2,625      2,135

6.875% due 04/25/18

    4,170      3,514

6.110% due 01/29/37

    2,815      1,644

7.750% due 05/14/38

    4,450      3,039

MetLife Capital Trust X (Þ)
9.250% due 04/08/38

    2,700      1,728

MetLife, Inc.
6.125% due 12/01/11 (Ñ)

    2,870      2,844

5.000% due 06/15/15 (Ñ)

    675      590

7.717% due 02/15/19

    3,995      4,007

6.400% due 12/15/36

    500      268

MetroPCS Wireless, Inc.
9.250% due 11/01/14

    1,000      1,001

9.250% due 11/01/14 (Å)

    1,000      996

Metropolitan Life Global Funding I (Þ)
1.278% due 05/17/10 (Ê)

    5,100      4,779

5.125% due 04/10/13

    1,555      1,486

Midamerican Energy Holdings Co.
5.750% due 04/01/18

    1,600      1,592

Series WI
6.125% due 04/01/36

    3,225      2,797

Midamerican Funding LLC (Ñ)
6.750% due 03/01/11

    2,200      2,301

Mirant Mid Atlantic Pass Through Trust A
Series A
8.625% due 06/30/12

    3,695      3,621

Mohegan Tribal Gaming Authority
8.000% due 04/01/12

    625      406

Monsanto Co. (Ñ)
5.125% due 04/15/18

    5,000      4,949

Morgan Stanley
3.006% due 05/14/10 (Ê)

    4,400      4,296

1.399% due 01/09/12 (Ê)

    5,420      4,738

1.557% due 10/18/16 (Ê)

    5,505      3,883

5.450% due 01/09/17 (Ñ)

    2,425      2,168

 

Russell Strategic Bond Fund   115

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

6.250% due 08/28/17

    1,300      1,188

5.950% due 12/28/17

    2,350      2,129

6.625% due 04/01/18

    9,810      9,336

Series GMTN
5.750% due 08/31/12

    1,950      1,921

1.449% due 01/09/14 (Ê)

    3,950      3,190

National City Bank of Kentucky
Series BKNT
6.300% due 02/15/11

    705      693

National City Bank (Ê)
Series BKNT
1.383% due 06/18/10

    2,830      2,722

National City Corp.
1.490% due 06/16/10 (Ê)

    460      437

4.000% due 02/01/11

    3,875      3,609

Nationwide Financial Services
6.250% due 11/15/11

    660      619

Nationwide Life Global Funding I (Ê)(Þ)
1.446% due 05/19/10

    22,700      21,448

1.420% due 12/14/10

    9,980      9,116

Nationwide Mutual Insurance Co. (Þ)
7.875% due 04/01/33

    1,942      1,064

Series 144a
5.810% due 12/15/24

    7,970      3,720

NB Capital Trust IV
8.250% due 04/15/27

    555      342

Nevada Power Co.
7.125% due 03/15/19

    1,425      1,445

Series L
5.875% due 01/15/15

    725      701

Series O
6.500% due 05/15/18

    450      440

News America Holdings, Inc.
9.250% due 02/01/13

    25      27

7.900% due 12/01/95

    715      562

8.250% due 10/17/96

    240      200

News America, Inc. (Þ)
6.900% due 03/01/19

    5,175      4,870

7.850% due 03/01/39

    4,845      4,159

Nisource Finance Corp.
7.875% due 11/15/10

    1,855      1,853

10.750% due 03/15/16 (Ñ)

    1,325      1,418

6.400% due 03/15/18 (Ñ)

    2,180      1,873

Nokia Corp.
5.375% due 05/15/19

    1,700      1,684

6.625% due 05/15/39

    1,840      1,831

Norfolk Southern Corp.
7.900% due 05/15/97

    7,430      7,115

Nuveen Investments, Inc.
5.000% due 09/15/10

    6,100      4,956

10.500% due 11/15/15 (Å)

    1,171      591

Ohio Power Co. (Ñ)
Series F
5.500% due 02/15/13

    285      286

Oncor Electric Delivery Co. (Þ)
6.800% due 09/01/18

    5,510      5,500

Oracle Corp. (Ñ)
5.750% due 04/15/18

    2,345      2,484
     Principal
Amount ($)
or Shares		      Market
Value
$

Pacific Gas & Electric Co.
6.250% due 12/01/13

    1,375      1,495

6.250% due 03/01/39

    1,950      2,003

Pacificorp
5.650% due 07/15/18

    1,950      2,039

5.500% due 01/15/19 (Ñ)

    1,155      1,192

6.000% due 01/15/39 (Ñ)

    1,245      1,245

Peabody Energy Corp.
7.875% due 11/01/26

    500      458

Pemex Project Funding Master Trust
5.750% due 03/01/18

    1,795      1,624

PetroHawk Energy Corp. (Þ)
10.500% due 08/01/14

    3,430      3,447

Pfizer, Inc.
6.200% due 03/15/19

    6,590      7,083

7.200% due 03/15/39

    2,250      2,472

Philip Morris International, Inc.
6.875% due 03/17/14

    3,980      4,363

5.650% due 05/16/18 (Ñ)

    16,220      16,414

6.375% due 05/16/38

    1,250      1,251

Phoenix Life Insurance Co. (Þ)
7.150% due 12/15/34

    1,975      494

PNC Bank NA
Series BKNT
6.875% due 04/01/18

    2,400      2,286

Polo Ralph Lauren Corp.
4.500% due 10/04/13

    2,050      2,182

Popular NA Capital Trust I
6.564% due 09/15/34

    892      255

Praxair, Inc.
4.375% due 03/31/14

    2,630      2,716

Princeton University (Ñ)
4.950% due 03/01/19

    1,160      1,149

Principal Life Income Funding Trusts (Ñ)
5.300% due 04/24/13

    400      377

Progress Energy, Inc.
7.050% due 03/15/19 (Ñ)

    2,550      2,703

7.750% due 03/01/31

    275      290

Protective Life Secured Trusts (Ê)
0.629% due 11/09/10

    4,600      4,009

Public Service Co. of New Mexico
7.950% due 05/15/18

    3,320      3,054

Qwest Communications International, Inc.
Series *
7.250% due 02/15/11

    2,520      2,482

Qwest Corp.
7.875% due 09/01/11

    5,150      5,111

7.625% due 06/15/15

    1,000      947

8.375% due 05/01/16 (Å)

    2,625      2,612

Rabobank Capital Funding II (ƒ)(Þ)
5.260% due 12/31/49

    1,065      586

Reckson Operating Partnership, LP
5.150% due 01/15/11

    592      504

Reed Elsevier Capital, Inc.
7.750% due 01/15/14

    3,140      3,215

8.625% due 01/15/19

    4,950      5,182

 

116   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Roche Holdings, Inc. (Þ)
5.000% due 03/01/14

    3,855      4,041

6.000% due 03/01/19

    9,315      9,685

7.000% due 03/01/39

    1,095      1,190

Rohm and Haas Co. (Ñ)
6.000% due 09/15/17

    100      86

Roper Industries, Inc.
6.625% due 08/15/13

    1,415      1,422

Sabine Pass LNG, LP (Ñ)
7.250% due 11/30/13

    3,525      2,943

Saks, Inc.
9.875% due 10/01/11

    555      522

Salem Communications Holding Corp.
7.750% due 12/15/10

    800      242

Seagate Technology HDD Holdings
6.375% due 10/01/11

    550      503

Seagate Technology International (Å)
10.000% due 05/01/14

    550      542

Simon Property Group, LP
4.600% due 06/15/10

    405      395

4.875% due 08/15/10 (Ñ)

    175      171

5.600% due 09/01/11

    1,300      1,237

5.750% due 05/01/12

    2,090      1,946

5.300% due 05/30/13 (Ñ)

    3,720      3,323

6.100% due 05/01/16 (Ñ)

    1,955      1,690

6.125% due 05/30/18 (Ñ)

    2,300      1,911

SLM Corp.
5.400% due 10/25/11

    1,450      1,087

5.125% due 08/27/12

    1,150      794

8.450% due 06/15/18

    4,645      2,829

Series MTNA (Ñ)
4.500% due 07/26/10

    2,160      1,884

South Carolina Electric & Gas Co.
6.500% due 11/01/18

    1,240      1,367

Southern Copper Corp. (Ñ)
7.500% due 07/27/35

    2,170      1,635

Southern Union Co.
7.200% due 11/01/66

    1,010      520

Southwestern Energy Co. (Å)
7.500% due 02/01/18

    750      729

Sprint Capital Corp.
7.625% due 01/30/11 (Ñ)

    2,795      2,694

6.875% due 11/15/28

    1,105      746

8.750% due 03/15/32

    2,030      1,543

Sprint Nextel Corp. (Ê)
1.632% due 06/28/10

    3,775      3,506

Staples, Inc.
7.750% due 04/01/11 (Ñ)

    2,005      2,100

9.750% due 01/15/14

    4,670      5,125

Steel Dynamics, Inc. (Å)
7.750% due 04/15/16

    500      395

Stingray Pass-Through Trust (Þ)
5.902% due 01/12/15

    4,000      420

Sun Life Financial Global Funding, LP (Ê)(Þ)
1.416% due 07/06/10

    13,500      12,931

Sungard Data Systems, Inc. (Ñ)
10.250% due 08/15/15

    1,896      1,650
     Principal
Amount ($)
or Shares		      Market
Value
$

Swiss Re Capital I, LP (ƒ)(Þ)
6.854% due 05/29/49

    925      365

Symetra Financial Corp.
6.125% due 04/01/16 (Å)

    1,200      917

8.300% due 10/15/37 (Þ)

    3,430      1,200

Target Corp.
7.000% due 01/15/38

    860      812

Telesat Canada / Telesat LLC (Þ)
12.500% due 11/01/17

    2,700      2,241

Tennessee Gas Pipeline Co.
8.000% due 02/01/16 (Þ)

    3,305      3,371

7.000% due 10/15/28 (Ñ)

    850      737

TEPPCO Partners, LP
6.650% due 04/15/18

    3,625      3,115

Texas Competitive Electric Holdings Co. LLC
10.500% due 11/01/16

    5,000      2,000

Series A (Ñ)
10.250% due 11/01/15

    4,645      2,636

Ticketmaster Entertainment, Inc. (Þ)
10.750% due 07/28/16

    1,990      1,358

Time Warner Cable, Inc.
8.250% due 02/14/14

    1,560      1,711

8.750% due 02/14/19

    3,735      4,199

8.250% due 04/01/19

    500      553

Series WI
5.400% due 07/02/12 (Ñ)

    2,575      2,613

6.550% due 05/01/37

    3,940      3,632

Time Warner Entertainment Co., LP
Series *
8.375% due 03/15/23

    1,251      1,284

Time Warner, Inc.
5.500% due 11/15/11

    2,515      2,582

UBS Preferred Funding Trust V (ƒ)
Series 1
6.243% due 05/12/49

    3,600      1,476

Union Electric Co.
6.400% due 06/15/17

    3,145      3,053

United Rentals North America, Inc.
6.500% due 02/15/12

    1,000      895

United States Steel Corp.
5.650% due 06/01/13 (Ñ)

    1,260      1,012

6.050% due 06/01/17

    2,340      1,609

United Technologies Corp.
6.125% due 02/01/19

    1,055      1,136

UnitedHealth Group, Inc.
5.250% due 03/15/11

    20      20

4.875% due 02/15/13

    400      390

6.000% due 06/15/17

    930      856

6.500% due 06/15/37

    675      543

US Oncology, Inc.
9.000% due 08/15/12

    800      788

USB Capital IX (ƒ)
6.189% due 04/15/49

    300      167

USB Realty Corp. (ƒ)(Þ)
6.091% due 12/22/49

    5,500      2,475

Valero Energy Corp.
6.625% due 06/15/37

    2,850      2,257

 

Russell Strategic Bond Fund   117

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Valero Logistics Operations, LP (Ñ)
6.050% due 03/15/13

    3,527      3,106

Verizon Communications, Inc.
5.250% due 04/15/13

    300      315

6.350% due 04/01/19

    7,310      7,596

6.400% due 02/15/38

    3,025      2,818

Verizon Wireless Capital LLC (Þ)
8.500% due 11/15/18

    15,115      18,102

Viacom, Inc.
5.750% due 04/30/11

    5,270      5,268

Virginia Electric and Power Co.
8.875% due 11/15/38

    2,020      2,613

Wachovia Bank NA
Series BKNT
1.309% due 05/25/10 (Ê)

    3,800      3,646

6.600% due 01/15/38

    2,970      2,337

Wachovia Capital Trust III (ƒ)
5.800% due 03/29/49

    13,460      6,259

Wachovia Corp.
1.261% due 10/15/11 (Ê)

    3,800      3,448

5.500% due 05/01/13

    3,150      3,088

5.625% due 10/15/16

    100      81

5.750% due 06/15/17 (Ñ)

    2,980      2,732

5.750% due 02/01/18 (Ñ)

    3,925      3,591

Wal-Mart Stores, Inc.
6.200% due 04/15/38

    2,830      2,947

Walt Disney Co. (The)
4.500% due 12/15/13

    765      794

Series MTNC (Ê)
1.192% due 07/16/10

    7,900      7,903

Waste Management, Inc.
6.375% due 03/11/15

    1,185      1,187

7.375% due 03/11/19

    1,000      1,014

WellPoint, Inc.
5.850% due 01/15/36

    1,205      937

6.375% due 06/15/37

    1,920      1,586

Wells Fargo & Co.
1.273% due 10/28/15 (Ê)(Ñ)

    7,200      5,181

5.625% due 12/11/17 (Ñ)

    4,340      4,046

Series K (ƒ)
7.980% due 02/28/49

    29,045      16,265

Wells Fargo Capital XIII (ƒ)
Series GMTN
7.700% due 12/29/49

    1,760      1,126

Wells Fargo Capital XV (ƒ)(Ñ)
9.750% due 09/26/44

    4,985      4,237

Whirlpool Corp.
8.000% due 05/01/12

    850      865

8.600% due 05/01/14

    1,125      1,153

Williams Cos., Inc.
7.125% due 09/01/11

    1,625      1,641

7.625% due 07/15/19

    1,407      1,386

8.750% due 01/15/20 (Å)

    4,365      4,485

Willis North America, Inc.
5.125% due 07/15/10

    2,290      2,070

Windstream Corp.
Series WI
8.625% due 08/01/16

    500      498
     Principal
Amount ($)
or Shares		      Market
Value
$

WMG Acquisition Corp. (Ñ)
7.375% due 04/15/14

    1,575      1,173

Xcel Energy, Inc. (Ñ)
6.500% due 07/01/36

    1,200      1,127

XTO Energy, Inc.
6.500% due 12/15/18

    5,180      5,265

Yum! Brands, Inc.
8.875% due 04/15/11

    460      494

ZFS Finance USA Trust I (Þ)

        

5.875% due 05/09/62

    2,620      1,389

6.500% due 05/09/67

    1,910      1,031

Series 144a

        

6.150% due 12/15/65

    5,475      2,902

ZFS Finance USA Trust II (Þ)
6.450% due 12/15/65

    5,205      2,811
         
        1,367,882
         
International Debt - 7.0%        

Anglo American Capital PLC (Å)
9.375% due 04/08/19

    2,110      2,148

ANZ National International, Ltd. (Þ)
6.200% due 07/19/13

    5,000      4,992

Apidos CDO (Ê)(Å)
Series 2007-CA Class A1
1.478% due 05/14/20

    3,500      2,312

ArcelorMittal
6.125% due 06/01/18

    4,500      3,626

ArcelorMittal USA Partnership
9.750% due 04/01/14

    341      309

Aspen Insurance Holdings, Ltd.
6.000% due 08/15/14

    275      223

AstraZeneca PLC (Ñ)
5.900% due 09/15/17

    1,100      1,157

6.450% due 09/15/37

    900      969

AXA SA
6.463% due 12/14/18 (ƒ)(Þ)

    400      160

8.600% due 12/15/30

    515      388

Barclays Bank PLC
5.450% due 09/12/12

    19,100      19,401

6.050% due 12/04/17 (Þ)

    2,700      2,163

7.375% due 06/29/49 (ƒ)(Þ)

    3,075      1,384

Barrick Gold Corp. (Ñ)
6.950% due 04/01/19

    845      894

Barrick Gold Financeco LLC (Ñ)
6.125% due 09/15/13

    3,400      3,522

BAT International Finance PLC (Þ)
9.500% due 11/15/18

    2,100      2,386

BHP Billiton Finance USA, Ltd.
5.500% due 04/01/14

    2,240      2,358

6.500% due 04/01/19

    3,770      4,095

Blue City Investments 1, Ltd. (Ê)
Series A3
5.041% due 11/07/16

    7,250      725

BNP Paribas (ƒ)(Þ)
5.186% due 06/29/49

    600      312

BP Capital Markets PLC
4.750% due 03/10/19

    4,365      4,336

C10 Capital SPV, Ltd. (ƒ)(Ñ)(Þ)
6.722% due 12/31/49

    1,800      807

 

118   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Canadian Natural Resources, Ltd.
5.150% due 02/01/13

    1,575      1,547

5.700% due 05/15/17

    150      143

5.850% due 02/01/35

    100      77

6.500% due 02/15/37

    425      356

6.250% due 03/15/38 (Ñ)

    2,335      1,899

Catalyst Paper Corp.
Series D
8.625% due 06/15/11

    7,220      4,007

China Development Bank Corp.
5.000% due 10/15/15

    400      419

Commonwealth Bank of Australia (ƒ)(Ñ)(Þ)
6.024% due 03/29/49

    3,700      1,905

Corp. Nacional del Cobre de Chile - CODELCO (Þ)
7.500% due 01/15/19

    2,200      2,344

6.150% due 10/24/36

    100      84

Covidien International Finance SA
5.450% due 10/15/12 (Ñ)

    795      825

6.000% due 10/15/17

    1,915      1,963

Series WI
6.550% due 10/15/37

    1,120      1,105

Credit Agricole SA (Ê)(Þ)
1.306% due 05/28/10

    2,700      2,645

Credit Suisse Guernsey, Ltd. (Ê)(ƒ)
Series 1
1.928% due 05/29/49

    3,595      1,438

Deutsche Bank AG (Ñ)
6.000% due 09/01/17

    5,800      5,676

Digicel Group, Ltd.
8.875% due 01/15/15 (Þ)

    1,250      906

9.125% due 01/15/15 (Ñ)(Þ)

    1,800      1,224

Series REGS
8.875% due 01/15/15

    1,093      792

DP World, Ltd. (Þ)
6.850% due 07/02/37

    4,565      2,753

Electricite De France (Þ)
5.500% due 01/26/14

    1,700      1,821

6.500% due 01/26/19

    1,700      1,830

6.950% due 01/26/39

    1,700      1,792

EnCana Corp.
6.500% due 02/01/38

    2,100      1,955

Endurance Specialty Holdings, Ltd.
6.150% due 10/15/15

    675      524

7.000% due 07/15/34

    1,775      990

Enel Finance International SA (Þ)
6.250% due 09/15/17

    1,500      1,383

European Investment Bank (Ñ)
3.000% due 04/08/14

    12,700      12,533

Export Development Canada
3.125% due 04/24/14

    5,200      5,189

Export-Import Bank of China (Þ)
4.875% due 07/21/15

    300      309

Export-Import Bank of Korea
8.125% due 01/21/14

    870      912

FMG Finance Pty, Ltd.
10.625% due 09/01/16 (Å)

    800      700

Series REGS
10.625% due 09/01/16

    900      783
     Principal
Amount ($)
or Shares		      Market
Value
$

Galaxy Entertainment Finance Co., Ltd. (Þ)
9.875% due 12/15/12

    4,640      3,619

Gaz Capital for Gazprom
Series REGS
8.625% due 04/28/34

    17,900      16,378

Gaz Capital SA (Þ)
7.343% due 04/11/13

    600      537

8.146% due 04/11/18

    2,600      2,119

Grupo Senda Autotransporte SA de CV (Å)
10.500% due 10/03/15

    4,500      2,565

HBOS PLC (ƒ)(Þ)
5.375% due 12/29/49

    700      308

HSBC Holdings PLC
6.500% due 05/02/36

    700      606

6.500% due 09/15/37

    1,200      1,023

6.800% due 06/01/38

    1,375      1,211

Indonesia Government International Bond (Þ)
11.625% due 03/04/19

    1,410      1,685

Industrial Bank of Korea (Å)
7.125% due 04/23/14

    3,350      3,296

Invesco, Ltd.
5.625% due 04/17/12

    5,335      4,269

5.375% due 02/27/13 (Ñ)

    2,060      1,515

Kansas City Southern de Mexico SA de CV
9.375% due 05/01/12 (Ñ)

    700      641

12.500% due 04/01/16 (Þ)

    3,600      3,474

Keycorp (Ê)
2.088% due 11/22/10

    10,260      11,688

Korea Electric Power Corp. (Þ)
5.125% due 04/23/34

    485      429

Kreditanstalt fuer Wiederaufbau
Series GMTN
2.250% due 04/16/12

    18,500      18,477

LeasePlan Corp. NV (Å)
3.000% due 05/07/12

    7,500      7,497

Lloyds Banking Group PLC (ƒ)(Þ)
5.920% due 12/31/49

    300      83

Millicom International Cellular SA
10.000% due 12/01/13

    200      200

Montpelier Re Holdings, Ltd.
6.125% due 08/15/13

    5,725      4,021

Mubadala Development Co.
5.750% due 05/06/14

    2,100      2,079

7.625% due 05/06/19

    3,985      3,956

MUFG Capital Finance 1, Ltd. (ƒ)(Ñ)
6.346% due 07/29/49

    4,050      3,194

National Australia Bank, Ltd. (Þ)
5.350% due 06/12/13

    8,725      8,586

Nippon Life Insurance (Þ)
4.875% due 08/09/10

    3,250      3,072

Norske Skogindustrier ASA (Þ)
6.125% due 10/15/15 (Ñ)

    3,255      1,709

7.125% due 10/15/33

    5,400      2,349

Novartis Securities Investment, Ltd.
5.125% due 02/10/19

    540      553

Petroleos Mexicanos (Þ)
8.000% due 05/03/19

    4,400      4,681

 

Russell Strategic Bond Fund   119

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Petroleum Export, Ltd. (Þ)
5.265% due 06/15/11

    170      148

POSCO (Ñ)(Þ)
8.750% due 03/26/14

    3,440      3,657

PSB Finance SA for Promsvyazbank
9.625% due 05/23/12

    1,025      739

Qatar Govt International Bond (Å)
5.150% due 04/09/14

    3,470      3,548

6.550% due 04/09/19

    2,510      2,592

Quebecor World Capital Corp. (Ø)
6.125% due 11/15/13

    1,955      37

Ras Laffan Liquefied Natural Gas Co.,
Ltd. (Þ)
8.294% due 03/15/14

    700      736

Ras Laffan Liquefied Natural Gas Co.,
Ltd. II (Þ)
5.298% due 09/30/20

    750      650

Ras Laffan Liquefied Natural Gas Co.,
Ltd. III (Þ)
5.832% due 09/30/16

    6,560      6,383

5.838% due 09/30/27

    300      230

Reliance Industries, Ltd. (Þ)
10.250% due 01/15/97

    1,000      840

Republic of Peru
7.125% due 03/30/19

    2,500      2,700

Republic of Turkey
7.500% due 11/07/19

    3,180      3,157

RESI Finance, LP (Ê)(Þ)
Series 2003-D Class B3
1.760% due 12/10/35

    2,218      897

Resix Finance, Ltd. Credit-Linked Notes (Ê)(Þ)
Series 2003-D Class B7
6.210% due 12/10/35

    2,580      696

Resona Bank, Ltd. (ƒ)(Þ)
5.850% due 09/29/49

    9,245      5,146

Resona Preferred Global Securities Cayman, Ltd. (ƒ)(Þ)
7.191% due 12/29/49

    17,525      9,639

Rio Tinto Finance USA, Ltd.
5.875% due 07/15/13

    12,085      11,396

8.950% due 05/01/14

    2,210      2,288

9.000% due 05/01/19

    3,730      3,835

7.125% due 07/15/28

    2,340      1,951

Rogers Communications, Inc.
6.800% due 08/15/18

    3,225      3,379

Royal Bank of Scotland Group PLC (ƒ)
7.640% due 03/31/49

    1,600      464

Series 1
9.118% due 03/31/49

    5,375      3,951

RSHB Capital SA for OJSC Russian Agricultural Bank
6.875% due 11/29/10

    1,935      1,907

Russia Government International Bond
Series REGS
5.000% due 03/31/30

    2,635      2,565

Santander Perpetual SA Unipersonal (ƒ)(Þ)
6.671% due 10/29/49

    3,800      2,375
     Principal
Amount ($)
or Shares		      Market
Value
$

Sappi Papier Holding AG (Þ)
6.750% due 06/15/12

    2,120      1,219

Shell International Finance BV
6.375% due 12/15/38

    4,440      4,725

Shinsei Finance II (ƒ)(Þ)
7.160% due 07/25/49

    1,970      473

SMFG Preferred Capital USD 1, Ltd. (ƒ)(Þ)
6.078% due 01/29/49

    1,200      833

Societe Financement de l’Economie Francaise (Å)
3.375% due 05/05/14

    9,700      9,630

StatoilHydro ASA
5.250% due 04/15/19

    2,150      2,199

Stora Enso OYJ (Þ)
7.250% due 04/15/36

    1,840      846

Systems 2001 AT LLC (Þ)
7.156% due 12/15/11

    342      291

Telecom Italia Capital SA
1.717% due 07/18/11 (Ê)

    1,600      1,512

6.200% due 07/18/11 (Ñ)

    1,810      1,824

6.999% due 06/04/18

    2,615      2,460

7.721% due 06/04/38

    4,095      3,576

Telefonica Emisiones SAU
5.984% due 06/20/11

    1,610      1,677

6.421% due 06/20/16

    1,130      1,182

Telemar Norte Leste SA (Å)
9.500% due 04/23/19

    4,095      4,269

Thomson Reuters Corp.
6.500% due 07/15/18

    750      719

TMK Capital SA for OAO TMK
10.000% due 07/29/11

    1,100      741

TNK-BP Finance SA
6.125% due 03/20/12 (Ñ)(Þ)

    500      423

7.500% due 03/13/13 (Þ)

    1,635      1,357

7.875% due 03/13/18 (Ñ)(Å)

    1,200      852

Series REGS
7.875% due 03/13/18

    925      659

TransCapitalInvest, Ltd. for OJSC AK Transneft
5.670% due 03/05/14 (Þ)

    1,730      1,393

8.700% due 08/07/18 (Þ)

    1,000      877

Series REGS
5.670% due 03/05/14

    2,610      2,068

Transocean, Inc.
5.250% due 03/15/13 (Ñ)

    2,145      2,172

6.000% due 03/15/18

    2,185      2,161

6.800% due 03/15/38

    2,475      2,369

Tristan Oil, Ltd.
10.500% due 01/01/12 (Þ)

    1,000      260

Series REGS
10.500% due 01/01/12

    1,295      298

Tyco Electronics Group SA
6.000% due 10/01/12

    8,535      7,781

6.550% due 10/01/17

    5,390      4,148

7.125% due 10/01/37

    2,990      1,824

Tyco International Finance SA
8.500% due 01/15/19

    1,390      1,488

 

120   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

UBS AG
Zero coupon due 12/17/31

    4,690      768

Series DPNT
5.875% due 12/20/17

    6,710      5,885

5.750% due 04/25/18

    1,900      1,643

UBS Luxembourg SA for OJSC Vimpel Communications
Series REGS
8.250% due 05/23/16

    300      212

Vale Overseas, Ltd.
6.250% due 01/23/17 (Ñ)

    200      195

6.875% due 11/21/36

    200      163

Vedanta Resources PLC (Å)
9.500% due 07/18/18

    2,500      1,825

VIP Finance Ireland, Ltd.
9.125% due 04/30/18 (Þ)

    565      403

Series REGS
9.125% due 04/30/18

    5,095      3,630

Virgin Media Finance PLC
Series $
8.750% due 04/15/14

    950      941

WEA Finance LLC / WCI Finance LLC (Þ)
5.400% due 10/01/12

    1,103      1,015

Weatherford International, Ltd.
9.625% due 03/01/19

    1,625      1,754

9.875% due 03/01/39

    620      608

Westfield Capital Corp., Ltd. (Þ)
5.125% due 11/15/14

    925      800

White Mountains Re Group, Ltd. (ƒ)(Å)
7.506% due 05/29/49

    13,600      6,530

XL Capital, Ltd. (ƒ)
Series E
6.500% due 12/31/49

    15,915      4,774

Xstrata Canada Corp. (Ñ)
6.000% due 10/15/15

    1,050      792
         
        413,466
         
Loan Agreements - 1.0%        

Adam Aircraft, Term Loan (Ø)
0.000% due 05/01/12

    871      96

Avis Budget Holdings, Term Loan
4.790% due 04/19/12

    807      368

AWAS, Second Lien Term Loan
7.250% due 03/21/13

    735      507

DaimlerChrysler Financial Services Americas LLC, Second Lien Term Loan
6.950% due 07/01/13

    5,650      2,768

Douglas Dynamics, Term Loan
3.470% due 05/21/13

    2,254      1,871

Energy Future Holdings Corp.,
Term Loan B 2
3.928% due 10/10/14

    65      44

3.969% due 10/10/14

    6,320      4,270

First Data Corp., Term Loan B
3.178% due 09/24/14

    403      293

3.190% due 09/24/14

    6,643      4,835
     Principal
Amount ($)
or Shares		      Market
Value
$

Ford Motor Co. , Term Loan
3.460% due 12/15/13

    7,917      4,987

4.140% due 12/15/13

    3,958      2,494

General Motors Corp., Term Loan B
8.000% due 11/29/13

    3,778      2,453

Georgia-Pacific Corp., Term Loan B
2.428% due 12/20/12

    186      173

3.293% due 12/20/12

    2,682      2,491

HCA, Inc., Term Loan A
3.220% due 11/18/12

    4,281      3,871

HCA, Inc., Term Loan B
3.470% due 12/30/13

    5,597      5,065

Healthsouth Corp., Term Loan B
2.930% due 03/10/13

    51      46

2.960% due 03/10/13

    2,704      2,420

Huntsman International LLC, Term Loan
2.178% due 04/19/14

    2,840      2,343

Idearc, Inc., Term Loan B
6.250% due 11/17/14

    5,884      2,259

Kelson Holdings, Inc.,
First Lien Term Loan
4.470% due 03/08/13

    10,000      8,260

Newsday Corp., Fixed Rate Term Loan
9.750% due 07/09/13

    3,625      3,489

OSI Restaurant Partners, LLC, Revolver
4.500% due 06/14/14

    18      13

OSI Restaurant Partners, LLC, Term Loan B
2.750% due 06/14/14

    2,442      1,612

3.570% due 06/14/14

    135      94

Stallion Oilfield Services, Inc.,
Tranche B Term Loan
7.736% due 06/12/13

    5,810      988

Talecris Biotherapeutics, Inc.,
Second Lien Term Loan
7.740% due 12/06/14

    1,100      957

United Airlines, Inc., Term Loan B
2.438% due 02/01/14

    892      445

2.500% due 02/01/14

    374      186
         
        59,698
         
Mortgage-Backed Securities - 57.9%     

Accredited Mortgage Loan Trust (Ê)
Series 2006-2 Class A2
0.528% due 09/25/36

    3,579      3,003

Adjustable Rate Mortgage Trust (Ê)
Series 2005-1 Class 5A2
0.768% due 05/25/35

    525      304

Series 2005-3 Class 8A2
0.678% due 07/25/35

    1,088      448

Alliance Bancorp Trust (Ê)
Series 2007-OA1 Class A1
0.678% due 07/25/37

    4,971      1,797

American Home Mortgage Assets (Ê)
Series 2006-1 Class 1A3
0.668% due 05/25/46

    7,868      1,617

Series 2006-2 Class 2A2
0.668% due 09/25/46

    8,123      1,674

 

Russell Strategic Bond Fund   121

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-3 Class 1A22
2.883% due 07/25/36

    3,613      819

Series 2006-3 Class 1A3
0.842% due 10/25/46

    8,132      1,165

Series 2006-4 Class 1A11
0.712% due 10/25/46

    12,484      4,693

Series 2006-4 Class 2A2
2.803% due 10/25/46

    10,731      1,989

Series 2006-5 Class A2
2.603% due 11/25/46

    8,552      1,772

Series 2006-6 Class A1C
0.718% due 11/25/36

    2,075      284

Series 2007-2 Class A1
0.563% due 03/25/47

    4,583      1,747

Series 2007-4 Class A2
0.628% due 08/25/37

    12,480      3,713

American Home Mortgage Investment Trust
Series 2004-1 Class 1A (Ê)
0.788% due 04/25/44

    257      132

Series 2004-4 Class 4A (Ê)
4.390% due 02/25/45

    965      586

Series 2005-2 Class 1A1 (Ê)
0.738% due 09/25/45

    5,393      2,221

Series 2005-2 Class 5A3
5.077% due 09/25/35

    2,920      2,631

Series 2005-4 Class 1A1 (Ê)
0.728% due 11/25/45

    1,063      430

Series 2006-1 Class 1A2 (Ê)
0.628% due 03/25/46

    9,603      2,042

Series 2007-1 Class GA1C (Ê)
0.628% due 05/25/47

    6,757      2,619

ARES CLO Funds (Ê)(Å)
Series 2005-10A Class A2
1.549% due 09/18/17

    13,700      10,379

Asset Backed Funding Certificates (Ê)
Series 2006-OPT Class A3A
0.498% due 11/25/36

    180      170

Banc of America Alternative Loan Trust
Series 2003-2 Class CB2 (Ê)
0.938% due 04/25/33

    653      551

Series 2003-10 Class 2A1
6.000% due 12/25/33

    643      595

Series 2003-10 Class 2A2 (Ê)
0.888% due 12/25/33

    1,632      1,190

Series 2004-2 Class 1A1
6.000% due 03/25/34

    1,286      1,087

Series 2004-10 Class 1CB1
6.000% due 11/25/34

    425      347

Series 2004-11 Class 1CB1
6.000% due 12/25/34

    489      364

Series 2005-1 Class 2A1
5.500% due 02/25/20

    3,175      2,511

Series 2005-3 Class 2A1
5.500% due 04/25/20

    585      462

Series 2005-5 Class 2CB1
6.000% due 06/25/35

    759      467

Series 2005-6 Class 7A1
5.500% due 07/25/20

    915      815
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2005-9 Class 5A1
5.500% due 10/25/20

    1,093      809

Series 2006-5 Class CB17
6.000% due 06/25/46

    2,501      1,357

Series 2006-6 Class CB6
6.000% due 07/25/46

    1,770      1,227

Banc of America Commercial Mortgage, Inc.
Series 2003-1 Class SBB (Þ)
5.860% due 03/11/32

    358      396

Series 2003-1 Class SBC (Þ)
5.790% due 03/11/32

    897      990

Series 2003-1 Class SBE (Þ)
6.770% due 03/11/32

    310      352

Series 2004-3 Class A3
4.875% due 06/10/39

    453      452

Series 2005-2 Class A3
4.611% due 07/10/43

    546      540

Series 2005-2 Class A4
4.783% due 07/10/43

    3,855      3,395

Series 2005-3 Class A2
4.501% due 07/10/43

    2,080      2,012

Series 2005-5 Class A4
5.115% due 10/10/45

    7,755      6,774

Series 2005-6 Class A4
5.352% due 09/10/47

    1,500      1,301

Series 2006-1 Class A4
5.372% due 09/10/45

    4,225      3,570

Series 2006-4 Class A4
5.634% due 07/10/46

    4,410      3,596

Series 2007-2 Class A2
5.634% due 04/10/49

    180      154

Series 2007-2 Class A4
5.867% due 04/10/49

    9,238      7,245

Series 2008-1 Class A4
6.166% due 02/10/51

    2,565      2,040

Series 2008-1 Class B (Þ)
6.397% due 02/10/51

    1,562      282

Series 2008-1 Class C (Þ)
6.397% due 02/10/51

    1,507      212

Banc of America Funding Corp.
Series 2005-5 Class 1A11
5.500% due 09/25/35

    794      584

Series 2005-8 Class 1A1
5.500% due 01/25/36

    992      780

Series 2005-D Class A1 (Ê)
3.987% due 05/25/35

    1,356      1,093

Series 2005-F Class 1A2 (Ê)
0.797% due 09/20/35

    368      104

Series 2006-3 Class 5A8
5.500% due 03/25/36

    4,640      3,518

Series 2006-A Class 3A2
5.838% due 02/20/36

    1,504      707

Series 2006-A Class 4A1 (Ê)
5.562% due 02/20/36

    4,100      2,542

Series 2006-F Class 1A2 (Ê)
5.190% due 07/20/36

    315      84

 

122   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-H Class 4A4
6.166% due 09/20/46

    1,214      296

Series 2006-J Class 4A1
6.105% due 01/20/47

    1,163      575

Banc of America Mortgage Securities, Inc.
Series 2003-9 Class 1A12 (Ê)
0.888% due 12/25/33

    3,433      3,177

Series 2003-D Class 1A2 (Ê)
5.372% due 05/25/33

    1      1

Series 2004-1 Class 5A1
6.500% due 09/25/33

    66      65

Series 2004-2 Class 1A9 (Ê)
0.888% due 03/25/34

    2,456      2,180

Series 2004-11 Class 2A1
5.750% due 01/25/35

    3,324      2,876

Series 2004-D Class 1A1 (Ê)
4.909% due 05/25/34

    137      115

Series 2004-F Class 1A1 (Ê)
4.517% due 07/25/34

    1,395      945

Series 2004-I Class 2A2 (Ê)
4.671% due 10/25/34

    247      185

Series 2004-L Class 2A1 (Ê)
4.372% due 01/25/35

    3,728      3,108

Series 2005-8 Class A7
5.500% due 09/25/35

    535      534

Series 2005-G Class 2A1 (Ê)
4.920% due 08/25/35

    1,871      1,341

Series 2005-H Class 2A5 (Ê)
4.802% due 09/25/35

    3,300      1,768

Series 2005-I Class 2A2 (Ê)
4.869% due 10/25/35

    3,213      675

Series 2005-I Class 4A1 (Ê)
5.268% due 10/25/35

    2,003      1,385

Series 2005-L Class 3A1 (Ê)
5.457% due 01/25/36

    1,925      1,510

Series 2006-2 Class A12
6.000% due 07/25/36

    1,558      1,266

Series 2006-2 Class A15
6.000% due 07/25/36

    2,513      2,111

Series 2006-B Class 1A1 (Ê)
6.171% due 11/20/36

    1,508      664

Series 2007-3 Class 1A1
6.000% due 09/25/37

    6,878      4,438

Bear Stearns Adjustable Rate Mortgage Trust
Series 2002-11 Class 1A2
5.320% due 02/25/33

    14      13

Series 2003-1 Class 6A1
5.031% due 04/25/33

    92      81

Series 2003-8 Class 4A1
5.148% due 01/25/34

    310      218

Series 2004-1 Class 21A1
4.861% due 04/25/34

    1,672      1,154

Series 2004-3 Class 1A1 (Ê)
4.568% due 07/25/34

    1,132      828

Series 2004-8 Class 2A1
5.110% due 11/25/34

    3,509      2,815
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2004-9 Class 22A1 (Ê)
4.793% due 11/25/34

    773      588

Series 2004-10 Class 22A1
4.960% due 01/25/35

    1,198      1,079

Series 2005-2 Class A1 (Ê)
2.940% due 03/25/35

    15,271      12,386

Series 2005-2 Class A2 (Ê)
2.388% due 03/25/35

    2,792      2,258

Series 2005-5 Class A2 (Ê)
4.550% due 08/25/35

    3,761      2,932

Series 2005-10 Class A1 (Ê)
4.750% due 10/25/35

    2,763      2,661

Series 2005-10 Class A3 (Ê)
4.650% due 10/25/35

    2,000      1,045

Series 2007-1 Class 3A2
5.749% due 02/25/47

    3,336      1,032

Series 2007-3 Class 1A1
5.463% due 05/25/47

    7,546      4,150

Bear Stearns Alt-A Trust
Series 2005-4 Class 23A1
5.363% due 05/25/35

    1,854      1,054

Series 2005-5 Class 21A1
4.970% due 07/25/35

    3,841      1,840

Series 2005-7 Class 22A1
5.491% due 09/25/35

    722      373

Series 2005-8 Class 11A1 (Ê)
0.708% due 10/25/35

    2,377      1,098

Series 2006-3 Class 22A1
5.994% due 05/25/36

    6,027      3,348

Series 2006-3 Class 33A1 (Ê)
6.104% due 05/25/36

    1,689      854

Series 2006-4 Class 13A1 (Ê)
0.598% due 08/25/36

    12,035      4,303

Bear Stearns Commercial Mortgage Securities
Series 2003-T12 Class A4
4.680% due 08/13/39

    1,115      1,032

Series 2005-PW1 Class A4
5.405% due 12/11/40

    5,000      4,441

Series 2005-PWR Class A4B
4.943% due 09/11/42

    85      61

Series 2005-T18 Class A4
4.933% due 02/13/42

    2,192      1,927

Series 2005-T20 Class A4A
5.299% due 10/12/42

    6,700      5,836

Series 2006-PW1 Class A4
5.201% due 12/11/38

    2,440      2,026

5.540% due 09/11/41

    6,250      5,248

Series 2007-PW1 Class A4
5.909% due 06/11/40

    5,198      4,307

5.331% due 02/11/44

    100      81

5.694% due 06/11/50

    4,500      3,538

Series 2007-T26 Class A4
5.471% due 01/12/45

    400      336

Bear Stearns Mortgage Funding Trust (Ê)
Series 2006-AR1 Class 1A2
0.688% due 07/25/36

    11,846      2,657

 

Russell Strategic Bond Fund   123

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-AR2 Class 1A1
0.638% due 09/25/46

    9,077      3,184

Series 2006-AR2 Class 2A1
0.668% due 10/25/36

    2,394      842

Series 2006-AR3 Class 1A1
0.618% due 10/25/36

    2,371      857

Series 2006-AR4 Class A1
0.648% due 12/25/36

    2,795      1,065

Series 2006-AR5 Class 1A1
0.598% due 12/25/46

    5,896      2,204

Series 2007-AR2 Class A1
0.608% due 03/25/37

    2,952      789

Series 2007-AR2 Class A3
0.668% due 03/25/37

    11,214      1,333

Series 2007-AR3 Class 1A1
0.578% due 03/25/37

    4,385      1,708

Bear Stearns Structured Products, Inc.
Series 2007-R6 Class 1A1
5.652% due 01/26/36

    2,681      1,673

Series 2007-R6 Class 2A1
5.726% due 12/26/46

    1,552      899

Chase Mortgage Finance Corp.
Series 2003-S8 Class A1
4.500% due 09/25/18

    1,645      1,624

Series 2006-S4 Class A3
6.000% due 12/25/36

    2,656      2,270

Series 2006-S4 Class A4
6.000% due 12/25/36

    1,557      1,525

Series 2007-A1 Class 1A3
4.933% due 02/25/37

    2,045      1,750

Series 2007-A1 Class 2A1
4.138% due 02/25/37

    1,463      1,273

Series 2007-A1 Class 4A1
4.831% due 02/25/37

    424      344

Series 2007-A1 Class 5A1
4.160% due 02/25/37

    1,394      1,080

Series 2007-A1 Class 8A1
4.234% due 02/25/37

    6,938      6,195

Citicorp Mortgage Securities, Inc.
Series 2006-3 Class 1A6
6.000% due 06/25/36

    1,091      711

Series 2006-3 Class 1A9
5.750% due 06/25/36

    2,000      1,201

Citigroup Commercial Mortgage Trust
Series 2006-C4 Class A3
5.917% due 03/15/49

    3,650      2,895

Series 2006-C5 Class A4
5.431% due 10/15/49

    905      743

Citigroup Mortgage Loan Trust, Inc.
Series 2005-11 Class A2A (Ê)
4.700% due 12/25/35

    347      279

Series 2006-AR3 Class 2A4A
5.900% due 06/25/36

    3,854      2,209

Series 2006-AR5 Class 2A1A
6.133% due 07/25/36

    3,200      1,480

Series 2006-WFH Class A2 (Ê)
0.538% due 10/25/36

    4,023      3,699
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2007-AR8 Class 2A1A
5.913% due 07/25/37

    3,105      1,741

Series 2008-RR1 Class A1A1 (Ê)(Å)
0.592% due 01/25/37

    548      479

Citigroup/Deutsche Bank Commercial Mortgage Trust
Series 2005-CD1 Class A4
5.399% due 07/15/44

    10,680      9,311

Series 2006-CD3 Class A5
5.617% due 10/15/48

    4,465      3,701

Citimortgage Alternative Loan Trust
Series 2006-A3 Class 1A5
6.000% due 07/25/36

    1,677      1,228

Series 2007-A1 Class 1A5
6.000% due 01/25/37

    3,484      1,523

Commercial Mortgage Loan Trust
Series 2008-LS1 Class A4B
6.220% due 12/10/49

    4,555      3,272

Commercial Mortgage Pass Through Certificates
Series 2001-J1A Class A2 (Þ)
6.457% due 02/14/34

    1,513      1,526

Series 2006-C7 Class A2
5.690% due 06/10/46

    1,060      989

Series 2006-C8 Class A4
5.306% due 12/10/46

    1,400      1,071

Series 2007-C9 Class A4
5.816% due 12/10/49

    5,500      4,413

Countrywide Alternative Loan Trust
Series 2003-20C Class 1A2
5.500% due 10/25/33

    642      588

Series 2004-2CB Class 1A4 (Ê)
0.838% due 03/25/34

    518      359

Series 2004-28C Class 6A1
6.000% due 01/25/35

    678      526

Series 2004-J8 Class 1A1
7.000% due 09/25/34

    635      502

Series 2005-1CB Class 2A1
6.000% due 03/25/35

    9,964      5,551

Series 2005-1CB Class 2A2
5.500% due 03/25/35

    1,646      1,103

Series 2005-16 Class A1 (Ê)
3.278% due 06/25/35

    3,166      1,071

Series 2005-24 Class 3A2 (Ê)
0.847% due 07/20/35

    2,456      428

Series 2005-32T Class A7 (Ê)
0.688% due 08/25/35

    1,704      1,346

Series 2005-38 Class A1 (Ê)
3.133% due 09/25/35

    1,317      518

Series 2005-38 Class A3 (Ê)
0.788% due 09/25/35

    1,317      523

Series 2005-51 Class 1A1 (Ê)
0.767% due 11/20/35

    1,655      678

Series 2005-51 Class 1A2A (Ê)
0.737% due 11/20/35

    3,083      2,416

Series 2005-51 Class 2A1 (Ê)
0.747% due 11/20/35

    377      143

 

124   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2005-51 Class 2A2A (Ê)
0.737% due 11/20/35

    53      45

Series 2005-51 Class 4A1 (Ê)
0.767% due 11/20/35

    577      216

Series 2005-56 Class 2A2 (Ê)
3.673% due 11/25/35

    1,412      617

Series 2005-56 Class 3A1 (Ê)
0.728% due 11/25/35

    456      173

Series 2005-56 Class 4A1 (Ê)
0.748% due 11/25/35

    1,167      470

Series 2005-58 Class A2 (Ê)
0.837% due 12/20/35

    1,622      297

Series 2005-59 Class 1A1 (Ê)
0.852% due 11/20/35

    2,733      1,096

Series 2005-59 Class 1A2B (Ê)
0.805% due 11/20/35

    3,900      3,413

Series 2005-62 Class 1A1 (Ê)
0.738% due 12/25/35

    1,898      712

Series 2005-63 Class 3A1
5.886% due 11/25/35

    2,564      1,424

Series 2005-63 Class 5A1 (Ê)
5.308% due 12/25/35

    3,811      1,856

Series 2005-72 Class A2 (Ê)
0.798% due 01/25/36

    1,489      293

Series 2005-85C Class 2A2
5.500% due 02/25/36

    70      44

Series 2005-J8 Class 1A3
5.500% due 07/25/35

    2,445      1,690

Series 2005-J13 Class 2A3
5.500% due 11/25/35

    1,223      801

Series 2006-9T1 Class A7
6.000% due 05/25/36

    1,170      712

Series 2006-23C Class 1A6
6.000% due 08/25/36

    3,398      2,224

Series 2006-43C Class 1A7
6.000% due 02/25/37

    568      358

Series 2006-J2 Class A3
6.000% due 04/25/36

    1,806      1,156

Series 2006-OA1 Class 1A3 (Ê)
0.747% due 12/20/46

    5,101      593

Series 2006-OA1 Class 2A1 (Ê)
0.657% due 03/20/46

    5,537      2,044

Series 2006-OA1 Class 4A1 (Ê)
0.628% due 08/25/46

    3,226      1,161

Series 2006-OA1 Class A1 (Ê)
0.627% due 02/20/47

    4,136      1,463

Series 2006-OA1 Class A2 (Ê)
0.657% due 09/20/46

    6,329      2,208

Series 2006-OA2 Class A1 (Ê)
0.598% due 02/25/47

    3,329      1,274

Series 2006-OA2 Class A2A (Ê)
0.597% due 05/20/46

    110      91

Series 2006-OA3 Class 1A2 (Ê)
0.698% due 05/25/36

    3,565      534

Series 2006-OA6 Class 1A3 (Ê)
0.708% due 07/25/46

    1,304      227

Series 2006-OA7 Class 1A4 (Ê)
2.573% due 06/25/46

    8,723      1,577
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-OA9 Class 2A2 (Ê)
3.203% due 07/20/46

    4,031      586

Series 2006-OC7 Class 2A1 (Ê)
0.508% due 07/25/36

    1,044      977

Series 2006-OC8 Class 2A2A (Ê)
0.558% due 11/25/36

    4,415      1,396

Series 2006-OC9 Class A1 (Ê)
0.513% due 09/25/35

    4,785      4,359

Series 2006-OC9 Class A2A (Ê)
0.598% due 09/25/35

    8,700      2,715

Series 2007-15C Class A5
5.750% due 07/25/37

    12,392      6,138

Series 2007-HY3 Class 1A1 (Ê)
5.990% due 03/25/47

    19,495      9,817

Series 2007-J2 Class 2A1
6.000% due 07/25/37

    3,849      2,099

Series 2007-OA1 Class A1A (Ê)
3.013% due 04/25/43

    7,623      2,297

Series 2007-OA4 Class A1 (Ê)
0.608% due 05/25/47

    4,328      1,496

Series 2007-OA6 Class A1B (Ê)
0.638% due 06/25/37

    1,906      707

Countrywide Home Loan Mortgage Pass Through Trust
Series 2003-8 Class A2 (Ê)
0.938% due 05/25/18

    2,066      1,721

Series 2003-20 Class 1A9
5.500% due 07/25/33

    1,631      1,626

Series 2003-42 Class M (Ê)
5.395% due 10/25/33

    697      316

Series 2003-52 Class A1
5.267% due 02/19/34

    2,302      1,578

Series 2004-12 Class 1M
4.727% due 08/25/34

    321      89

Series 2004-16 Class 1A1 (Ê)
0.838% due 09/25/34

    1,351      567

Series 2004-22 Class A3
4.787% due 11/25/34

    2,343      1,474

Series 2004-HYB Class 1A1
4.726% due 02/20/35

    4,223      3,076

Series 2004-HYB Class A2
4.533% due 11/20/34

    1,813      1,056

Series 2004-J9 Class 2A1
5.250% due 01/25/35

    1,754      1,725

Series 2005-11 Class 5A1 (Ê)
0.738% due 03/25/35

    41      17

Series 2005-29 Class A1
5.750% due 12/25/35

    2,534      1,838

Series 2005-HYB Class 2A1
4.893% due 08/20/35

    7,372      4,342

Series 2005-HYB Class 3A2A (Ê)
5.250% due 02/20/36

    442      286

Series 2005-HYB Class 4A1
5.544% due 12/20/35

    3,233      1,894

Series 2005-R2 Class 2A4 (Þ)
8.500% due 06/25/35

    321      350

Series 2006-1 Class A2
6.000% due 03/25/36

    1,130      729

 

Russell Strategic Bond Fund   125

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-1 Class A3
6.000% due 03/25/36

    401      219

Series 2006-13 Class 1A23
6.250% due 09/25/36

    474      374

Series 2006-15 Class A3
6.250% due 10/25/36

    952      738

Series 2006-20 Class B1
Interest Only STRIP
6.000% due 02/25/37

    1,228      105

Series 2006-HYB Class 3A1A
6.045% due 05/20/36

    2,337      1,294

Series 2006-J4 Class A2
6.250% due 09/25/36

    845      717

Series 2006-J4 Class A10
6.250% due 09/25/36

    513      388

Series 2006-OA5 Class 2A1 (Ê)
0.638% due 04/25/46

    4,515      1,635

Series 2006-R2 Class AF1 (Ê)(Þ)
0.858% due 07/25/36

    3,574      1,913

Series 2007-14 Class A19
6.000% due 09/25/37

    7,891      5,092

Series 2007-18 Class 2A1
6.500% due 11/25/37

    3,225      2,126

Series 2007-HY1 Class 1A2
5.677% due 04/25/37

    1,119      276

Credit Suisse First Boston Mortgage Securities Corp.
Series 2001-CKN Class A4
5.435% due 09/15/34

    7,314      7,237

Series 2001-SPG Class A2 (Þ)
6.515% due 08/13/18

    985      856

Series 2002-30 Class DB1
7.390% due 11/25/32

    700      661

Series 2003-29 Class 5A1
7.000% due 12/25/33

    116      95

Series 2004-1 Class 3A1
7.000% due 02/25/34

    47      43

Series 2004-C1 Class A3
4.321% due 01/15/37

    2,521      2,458

Series 2005-9 Class 2A1
5.500% due 10/25/35

    6,467      4,436

Series 2005-C6 Class A4
5.230% due 12/15/40

    2,605      2,228

Credit Suisse Mortgage Capital Certificates
Series 2006-8 Class 4A1
6.500% due 10/25/21

    10,730      6,488

Series 2006-C1 Class AAB
5.681% due 02/15/39

    1,610      1,446

Series 2006-C3 Class B
6.020% due 06/15/38

    2,153      389

Series 2006-C4 Class A3
5.467% due 09/15/39

    8,504      6,151

Series 2007-C1 Class A3
5.383% due 02/15/40

    5,350      3,686

Series 2007-C3 Class A4
5.912% due 06/15/39

    3,500      2,472

Series 2007-C3 Class B
5.912% due 06/15/39

    794      148
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2007-C5 Class B
6.325% due 09/15/40

    2,584      460

Crown Castle Towers LLC (Þ)
Series 2005-1A Class AFL (Ê)
0.831% due 06/15/35

    7,395      6,988

Series 2005-1A Class AFX
4.643% due 06/15/35

    2,335      2,265

Series 2005-1A Class C
5.074% due 06/15/35

    741      697

Series 2006-1A Class AFX
5.245% due 11/15/36

    1,710      1,573

CW Capital Cobalt, Ltd.
Series 2006-C1 Class A2
5.174% due 08/15/48

    80      71

Deutsche ALT-A Securities NIM Trust (Å)
Series 2007-AHM Class N1
6.750% due 02/25/47

    51      2

Deutsche ALT-A Securities, Inc.
Alternate Loan Trust
Series 2003-4XS Class A6A
4.820% due 10/25/33

    594      566

Series 2005-AR1 Class 2A3
4.973% due 08/25/35

    925      672

Series 2006-AB4 Class A1C
6.000% due 10/25/36

    2,047      1,347

Series 2007-OA1 Class A1 (Ê)
0.588% due 02/25/47

    8,297      2,989

Series 2007-OA2 Class A1 (Ê)
2.284% due 04/25/47

    18,792      6,376

DLJ Commercial Mortgage Corp.
Series 1999-CG1 Class S
Interest Only STRIP
1.072% due 03/10/32

    4,155      49

Series 1999-CG3 Class A3
7.730% due 10/10/32

    1,470      1,481

Downey Savings & Loan Association Mortgage Loan Trust
Series 2004-AR3 Class 1A1B (Ê)
3.913% due 07/19/44

    504      152

Series 2006-AR1 Class 2A1A (Ê)
2.454% due 04/19/47

    2,033      812

Fannie Mae
5.190% due 2012

    2,572      2,706

5.500% due 2013

    9      9

5.000% due 2014

    37      38

5.500% due 2014

    26      28

6.500% due 2015

    9      10

5.000% due 2016

    243      251

5.500% due 2016

    53      55

6.000% due 2016

    570      604

8.000% due 2016

    10      11

11.000% due 2016

    68      77

5.000% due 2017

    6,001      6,252

5.500% due 2017

    364      381

6.000% due 2017

    441      464

6.500% due 2017

    889      940

7.000% due 2017

    27      29

8.000% due 2017

    31      33

 

126   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

4.000% due 2018

    5,171      5,287

4.500% due 2018

    13,050      13,518

5.000% due 2018

    22,065      22,999

5.500% due 2018

    342      358

6.500% due 2018

    177      188

7.000% due 2018

    101      109

10.000% due 2018

    28      31

5.000% due 2019

    13,788      14,362

5.500% due 2019

    146      154

6.000% due 2019

    4,300      4,539

6.500% due 2019

    88      94

4.000% due 2020

    77      76

4.500% due 2020

    1,034      1,071

5.000% due 2020

    5,643      5,863

5.500% due 2020

    1,012      1,059

6.000% due 2020

    5,835      6,160

6.500% due 2020

    36      38

8.000% due 2020

    5      5

5.000% due 2021

    5,988      6,215

5.500% due 2021

    3,085      3,216

5.000% due 2022

    656      679

5.500% due 2022

    22,143      23,067

6.500% due 2022

    53      57

5.000% due 2023

    3,671      3,802

5.500% due 2023

    5,421      5,647

5.000% due 2024

    500      518

6.500% due 2024

    771      818

7.500% due 2024

    5      6

8.000% due 2024

    64      70

10.000% due 2024

    17      19

5.145% due 2025 (Ê)

    16      16

7.000% due 2025

    2      3

4.498% due 2026 (Ê)

    273      275

6.000% due 2026

    1,854      1,949

7.000% due 2026

    188      204

9.000% due 2026

    23      25

6.000% due 2027

    4,907      5,147

7.000% due 2027

    6      6

7.500% due 2027

    16      18

6.500% due 2028

    247      265

7.000% due 2028

    353      382

5.500% due 2029

    1      1

6.500% due 2029

    573      612

7.000% due 2029

    1,724      1,865

7.500% due 2029

    92      101

8.000% due 2029

    4      5

8.500% due 2029

    2      2

6.500% due 2030

    161      173

7.000% due 2030

    626      680

7.500% due 2030

    331      360

8.000% due 2030

    358      389

8.500% due 2030

    705      772

9.500% due 2030

    106      119

6.500% due 2031

    478      513

7.000% due 2031

    1,595      1,720

7.500% due 2031

    551      598

8.000% due 2031

    668      730

8.500% due 2031

    363      396
     Principal
Amount ($)
or Shares		      Market
Value
$

6.500% due 2032

    1,474      1,581

7.000% due 2032

    4,560      4,913

7.500% due 2032

    394      427

8.000% due 2032

    24      26

8.500% due 2032

    42      46

3.553% due 2033 (Ê)

    538      537

3.708% due 2033 (Ê)

    68      68

3.727% due 2033 (Ê)

    1,465      1,470

3.977% due 2033 (Ê)

    358      356

4.375% due 2033 (Ê)

    16      16

4.390% due 2033 (Ê)

    664      670

5.000% due 2033

    4,291      4,431

5.079% due 2033 (Ê)

    19      19

5.171% due 2033 (Ê)

    130      134

5.500% due 2033

    9,877      10,276

6.000% due 2033

    972      1,024

6.500% due 2033

    1,079      1,153

7.000% due 2033

    1,201      1,292

4.203% due 2034 (Ê)

    264      264

4.691% due 2034 (Ê)

    1,800      1,816

4.708% due 2034 (Ê)

    1,895      1,940

4.960% due 2034 (Ê)

    1,047      1,074

5.000% due 2034

    13,622      14,050

5.500% due 2034

    20,786      21,617

6.000% due 2034

    2,430      2,556

6.500% due 2034

    1,237      1,317

7.000% due 2034

    443      478

7.500% due 2034

    229      247

3.956% due 2035 (Ê)

    705      718

4.017% due 2035 (Ê)

    2,253      2,271

4.330% due 2035 (Ê)

    2,480      2,520

4.342% due 2035 (Ê)

    1,357      1,379

4.750% due 2035 (Ê)

    3,033      3,095

4.805% due 2035 (Ê)

    1,407      1,440

4.827% due 2035 (Ê)

    4,490      4,608

5.000% due 2035

    23,986      24,737

5.008% due 2035 (Ê)

    1,859      1,910

5.045% due 2035 (Ê)

    348      363

5.144% due 2035 (Ê)

    426      438

5.500% due 2035

    11,299      11,746

6.000% due 2035

    9,224      9,716

6.500% due 2035

    89      95

7.000% due 2035

    485      520

7.500% due 2035

    1,249      1,360

4.740% due 2036 (Ê)

    504      519

5.000% due 2036

    7,055      7,272

5.500% due 2036

    8,189      8,448

6.000% due 2036

    35,773      37,442

6.318% due 2036 (Ê)

    88      92

6.500% due 2036

    8,013      8,579

7.000% due 2036

    931      998

4.427% due 2037 (Ê)

    1,633      1,666

5.000% due 2037

    3,785      3,897

5.500% due 2037

    63,727      66,014

5.548% due 2037 (Ê)

    3,512      3,661

6.000% due 2037

    61,151      63,989

6.500% due 2037

    9,824      10,386

7.000% due 2037

    302      321

 

Russell Strategic Bond Fund   127

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

5.000% due 2038

    2,977      3,065

5.500% due 2038

    74,540      77,313

6.000% due 2038

    55,094      57,653

6.500% due 2038

    184      195

5.000% due 2039

    1,448      1,491

5.500% due 2039

    13,885      14,395

6.000% due 2039

    7,038      7,364

3.033% due 2040 (Ê)

    288      285

2.833% due 2043 (Ê)

    202      200

Series 1997-281 Class 2
Interest Only STRIP
9.000% due 11/01/26

    56      11

Series 2000-306 Class IO
Interest Only STRIP
8.000% due 05/01/30

    55      8

Series 2001-317 Class 2
Interest Only STRIP
8.000% due 08/01/31

    96      14

Series 2002-320 Class 2
Interest Only STRIP
7.000% due 04/01/32

    34      4

Series 2003-339 Class 23
Interest Only STRIP
5.000% due 07/01/18

    2,797      290

Series 2003-343 Class 6
Interest Only STRIP
5.000% due 10/01/33

    2,857      322

Series 2003-345 Class 18
Interest Only STRIP
4.500% due 12/01/18

    8,445      730

Series 2003-345 Class 19
Interest Only STRIP
4.500% due 01/01/19

    9,387      810

Series 2005-365 Class 12
Interest Only STRIP
5.500% due 12/01/35

    13,319      1,402

Series 2006-369 Class 8
Interest Only STRIP
5.500% due 04/01/36

    2,464      323

15 Year TBA (Ï)
4.500%

    6,000      6,163

5.000%

    5,060      5,234

5.500%

    26,140      27,202

6.000%

    4,150      4,355

30 Year TBA (Ï)
4.500%

    36,550      36,985

5.000%

    123,597      127,112

5.500%

    482,326      499,044

6.000%

    26,200      27,366

6.500%

    166,350      175,888

Fannie Mae Grantor Trust
Series 1999-T2 Class A1
7.500% due 01/19/39

    28      30

Series 2000-T6 Class A1
7.500% due 06/25/30

    59      64

Series 2001-T8 Class A2
9.500% due 07/25/41

    203      221
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2002-T19 Class A1
6.500% due 07/25/42

    604      642

Series 2003-T4 Class 2A5
5.407% due 09/26/33

    833      589

Fannie Mae REMICS
Series 1996-46 Class ZA
7.500% due 11/25/26

    261      284

Series 1997-68 Class SC (Ê)
Interest Only STRIP
8.031% due 05/18/27

    79      10

Series 1999-56 Class Z
7.000% due 12/18/29

    1,120      1,198

Series 2001-4 Class SA (Ê)
Interest Only STRIP
7.102% due 02/17/31

    140      13

Series 2003-21 Class M
5.000% due 02/25/17

    404      415

Series 2003-25 Class IK
Interest Only STRIP
7.000% due 04/25/33

    321      39

Series 2003-32 Class FH (Ê)
0.838% due 11/25/22

    2,416      2,391

Series 2003-32 Class UI
Interest Only STRIP
6.000% due 05/25/33

    464      44

Series 2003-33 Class IA
Interest Only STRIP
6.500% due 05/25/33

    1,920      236

Series 2003-35 Class FY (Ê)
0.838% due 05/25/18

    4,797      4,737

Series 2003-35 Class IU
Interest Only STRIP
6.000% due 05/25/33

    472      46

Series 2003-35 Class UI
Interest Only STRIP
6.500% due 05/25/33

    451      56

Series 2003-64 Class JI
Interest Only STRIP
6.000% due 07/25/33

    494      49

Series 2003-78 Class FI (Ê)
0.838% due 01/25/33

    2,445      2,398

Series 2003-82 Class IA
Interest Only STRIP
6.000% due 08/25/32

    354      19

Series 2003-82 Class WI
Interest Only STRIP
6.000% due 08/25/32

    55      1

Series 2003-122 Class AJ
4.500% due 02/25/28

    497      507

Series 2004-21 Class FL (Ê)
0.788% due 11/25/32

    1,178      1,164

Series 2004-70 Class EB
5.000% due 10/25/24

    3,275      3,418

Series 2005-65 Class FP (Ê)
0.688% due 08/25/35

    245      244

Series 2005-69 Class IO (Ê)
Interest Only STRIP
Zero coupon due 08/25/35

    40      1

 

128   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2005-79 Class FC (Ê)
0.738% due 02/25/22

    2,719      2,661

Series 2005-110 Class MB
5.500% due 09/25/35

    2,109      2,184

Series 2006-5 Class 3A2 (Ê)
4.628% due 05/25/35

    468      473

Series 2006-22 Class CE
4.500% due 08/25/23

    1,895      1,877

Series 2006-48 Class LG
Zero coupon due 06/25/36

    742      638

Series 2006-81 Class LF (Ê)
1.000% due 09/25/36

    121      117

Series 2006-118 Class A1 (Ê)
0.498% due 12/25/36

    404      364

Series 2006-118 Class A2 (Ê)
0.498% due 12/25/36

    1,456      1,312

Series 2007-27 Class XA (Ê)
Zero coupon due 05/25/35

    77      72

Series 2007-42 Class LF (Ê)
Zero coupon due 05/25/37

    276      263

Series 2007-53 Class UF (Ê)
Zero coupon due 06/25/37

    147      142

Series 2007-56 Class GY (Ê)
Zero coupon due 06/25/37

    74      71

Series 2007-73 Class A1 (Ê)
0.498% due 07/25/37

    4,048      3,591

Series 2008-22 Class FD (Ê)
1.278% due 04/25/48

    11,229      11,087

Series 2008-56 Class FD (Ê)
1.378% due 07/25/48

    12,053      11,834

Series 2008-62 Class DY
4.000% due 07/25/23

    6,440      6,370

Series 2008-70 Class BY
4.000% due 08/25/23

    5,310      5,224

Fannie Mae Whole Loan
Series 2003-W1 Class 2A
7.500% due 12/25/42

    115      124

Series 2003-W4 Class 4A
7.500% due 10/25/42

    55      59

Series 2003-W17 Class 1A6
5.310% due 08/25/33

    7,100      7,249

Series 2004-W9 Class 2A1
6.500% due 02/25/44

    312      326

Series 2004-W11 Class 1A2
6.500% due 05/25/44

    644      673

Fannie Mae-Aces
Series 2006-M2 Class A2F
5.259% due 05/25/20

    300      317

Federal Home Loan Mortgage Corp. Structured Pass Through Securities
Series 2002-42 Class A6
9.500% due 02/25/42

    89      99

Series 2003-58 Class 2A
6.500% due 09/25/43

    298      311

Series 2005-63 Class 1A1 (Ê)
2.833% due 02/25/45

    137      123
     Principal
Amount ($)
or Shares		      Market
Value
$

FHA PJ Reilly 67 NCP
7.430% due 01/01/24

    59      59

First Franklin Mortgage Loan Asset Backed Certificates (Ê)
Series 2006-FF1 Class A5
Interest Only STRIP
0.588% due 12/25/36

   4,675      518

First Horizon Alternative Mortgage Securities
Series 2004-AA3 Class A1 (Ê)
5.310% due 09/25/34

    417      262

Series 2005-AA2 Class 1A1 (Ê)
3.937% due 03/25/35

    202      126

Series 2005-AA5 Class 1A1 (Ê)
5.543% due 07/25/35

    278      161

Series 2005-AA7 Class 2A1 (Ê)
5.402% due 09/25/35

    3,115      1,598

Series 2006-AA5 Class A2 (Ê)
Interest Only STRIP
6.504% due 09/25/36

    1,640      234

Series 2006-FA3 Class A6
6.000% due 07/25/36

    1,706      1,279

First Horizon Asset Securities, Inc.
Series 2003-5 Class 1A17
8.000% due 07/25/33

    122      124

Series 2004-AR5 Class 4A1 (Ê)
5.702% due 10/25/34

    449      316

Series 2004-AR6 Class 2A1 (Ê)
4.750% due 12/25/34

    648      553

Series 2005-AR3 Class 2A1 (Ê)
5.359% due 08/25/35

    804      595

Series 2005-AR5 Class 3A1 (Ê)
5.548% due 10/25/35

    773      633

Series 2006-AR4 Class 1A3 (Ê)
5.483% due 01/25/37

    138      39

Freddie Mac
5.500% due 2013

    1      1

12.000% due 2013

    7      8

12.000% due 2014

    10      12

11.000% due 2015

    8      8

5.500% due 2016

    21      21

6.000% due 2016

    93      98

10.000% due 2016

    45      50

5.500% due 2017

    157      164

8.500% due 2017

    33      35

10.500% due 2017

    10      11

4.000% due 2018

    11,652      11,837

4.500% due 2018

    2,266      2,342

5.000% due 2018

    3,810      3,970

5.500% due 2018

    55      57

4.500% due 2019

    359      372

5.000% due 2019

    5,221      5,434

5.500% due 2019

    157      164

4.500% due 2020

    1,794      1,852

5.000% due 2020

    11,536      11,980

 

Russell Strategic Bond Fund   129

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

5.500% due 2020

    7,004      7,312

8.000% due 2020

    89      97

10.000% due 2020

    32      36

11.000% due 2020

    33      38

5.000% due 2021

    1,096      1,142

10.500% due 2021

    17      20

6.500% due 2025

    4      5

8.500% due 2025

    28      31

5.174% due 2027 (Ê)

    19      20

7.000% due 2027

    162      175

8.500% due 2027

    204      224

4.475% due 2028 (Ê)

    19      19

5.090% due 2028 (Ê)

    18      18

7.500% due 2028

    42      45

6.500% due 2029

    113      122

7.500% due 2029

    64      70

5.275% due 2030 (Ê)

    35      35

6.500% due 2030

    7      8

7.000% due 2030

    38      40

7.500% due 2030

    313      340

8.000% due 2030

    73      80

8.500% due 2030

    108      118

6.500% due 2031

    942      1,008

7.000% due 2031

    387      416

7.500% due 2031

    127      139

8.000% due 2031

    238      261

7.000% due 2032

    185      199

7.500% due 2032

    185      201

4.555% due 2033 (Ê)

    529      533

5.000% due 2033

    1,074      1,107

5.126% due 2033 (Ê)

    88      90

5.500% due 2033

    3,915      4,065

6.000% due 2033

    99      104

6.500% due 2033

    354      379

7.000% due 2033

    479      514

7.500% due 2033

    82      90

2.737% due 2034 (Ê)

    156      155

3.281% due 2034 (Ê)

    212      211

4.757% due 2034 (Ê)

    1,119      1,147

4.812% due 2034 (Ê)

    2,243      2,279

4.884% due 2034 (Ê)

    637      644

5.164% due 2034 (Ê)

    117      121

5.500% due 2034

    1,378      1,430

6.000% due 2034

    123      129

4.867% due 2035 (Ê)

    3,508      3,596

4.888% due 2035 (Ê)

    1,788      1,835

5.000% due 2035

    709      731

5.033% due 2035 (Ê)

    487      500

6.000% due 2035

    658      692

5.000% due 2036

    318      328

5.500% due 2036

    767      796

5.863% due 2036 (Ê)

    1,376      1,435

5.920% due 2036 (Ê)

    2,272      2,363

5.968% due 2036 (Ê)

    1,734      1,809

6.000% due 2036

    603      631

5.000% due 2037

    695      716

5.479% due 2037 (Ê)

    1,845      1,919

5.500% due 2037

    280      290
     Principal
Amount ($)
or Shares		      Market
Value
$

5.687% due 2037 (Ê)

    8,009      8,349

5.704% due 2037 (Ê)

    1,238      1,292

5.714% due 2037 (Ê)

    3,201      3,339

5.745% due 2037 (Ê)

    2,505      2,615

5.805% due 2037 (Ê)

    827      864

5.809% due 2037 (Ê)

    2,448      2,556

5.888% due 2037 (Ê)

    1,218      1,272

6.000% due 2037

    16,469      17,208

5.500% due 2038

    100,482      104,037

6.000% due 2038

    111,570      116,580

6.500% due 2038

    1,668      1,769

5.500% due 2039

    620      642

6.000% due 2039

    369      385

15 Year TBA (Ï)
5.500%

    44,900      46,668

30 Year TBA (Ï)
5.500%

    100,500      103,952

6.000%

    19,300      20,144

Freddie Mac Reference REMIC
Series 2006-R00 Class AK
5.750% due 12/15/18

    1,993      2,045

Freddie Mac REMICS
Series 1991-103 Class Z
9.000% due 02/15/21

    69      69

Series 1994-167 Class J
6.000% due 04/15/23

    79      80

Series 1994-173 Class Z
7.000% due 05/15/24

    316      329

Series 1999-212 Class SG (Ê)
Interest Only STRIP
6.500% due 06/17/27

    1,362      135

Series 2000-224 Class SC (Ê)
Interest Only STRIP
7.049% due 08/15/30

    43      4

Series 2000-226 Class F (Ê)
0.901% due 11/15/30

    73      71

Series 2001-229 Class KF (Ê)
0.688% due 07/25/22

    1,055      1,042

Series 2001-232 Class ZQ
6.500% due 06/15/31

    1,838      1,972

Series 2002-246 Class SJ (Ê)
Interest Only STRIP
7.549% due 03/15/32

    179      18

Series 2003-256 Class FJ (Ê)
0.851% due 02/15/33

    1,608      1,582

Series 2003-259 Class IQ
Interest Only STRIP
5.000% due 06/15/17

    938      53

Series 2003-261 Class UI
Interest Only STRIP
6.500% due 05/15/33

    78      10

Series 2003-262 Class AB
2.900% due 11/15/14

    950      952

Series 2003-262 Class QH
5.000% due 05/15/33

    1,590      1,625

5.000% due 06/15/33

    1,625      1,661

Series 2003-264 Class IM
Interest Only STRIP
7.000% due 07/15/33

    411      51

 

130   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2003-266 Class MA
4.500% due 10/15/31

    963      994

Series 2003-272 Class TA
4.500% due 12/15/33

    1,275      1,235

Series 2004-275 Class FM (Ê)
0.801% due 12/15/30

    227      225

Series 2004-277 Class UF (Ê)
0.751% due 06/15/33

    2,672      2,641

Series 2004-281 Class DF (Ê)
0.901% due 06/15/23

    664      658

Series 2004-282 Class JE
4.500% due 07/15/19

    5,360      5,502

Series 2004-287 Class AL
5.000% due 10/15/24

    2,475      2,608

Series 2005-294 Class FA (Ê)
0.621% due 03/15/20

    1,214      1,187

Series 2005-299 Class KF (Ê)
0.851% due 06/15/35

    521      519

Series 2005-301 Class IM
5.500% due 01/15/31

    1,683      98

Series 2005-303 Class XA (Ê)
Zero coupon due 09/15/35

    333      311

Series 2005-305 Class JF (Ê)
0.751% due 10/15/35

    348      345

Series 2006-312 Class HT
5.000% due 03/15/26

    3,911      4,000

Series 2006-313 Class FP (Ê)
1.000% due 04/15/36

    718      695

Series 2006-313 Class X (Ê)
Zero coupon due 04/15/36

    102      99

Series 2006-314 Class LF (Ê)
0.751% due 05/15/36

    492      481

Series 2006-315 Class EQ
5.000% due 05/15/26

    1,840      1,876

Series 2006-316 Class X (Ê)
Zero coupon due 06/15/36

    251      241

Series 2006-317 Class XI (Ê)
Zero coupon due 10/15/35

    1,145      —

Series 2006-323 Class PA
6.000% due 03/15/26

    2,066      2,081

Series 2007-327 Class SX (Ê)
Zero coupon due 07/15/36

    183      182

Series 2007-327 Class UF (Ê)
Zero coupon due 02/15/37

    200      200

Series 2007-327 Class WF (Ê)
Zero coupon due 09/15/36

    114      113

Series 2007-330 Class GL (Ê)
Zero coupon due 04/15/37

    438      486

Series 2007-333 Class AF (Ê)
0.601% due 10/15/20

    18,933      18,506

Series 2007-333 Class BF (Ê)
0.601% due 07/15/19

    3,065      2,996

Series 2007-333 Class FT (Ê)
0.601% due 08/15/19

    6,866      6,710

Series 2007-334 Class FA (Ê)
0.681% due 02/15/19

    3,826      3,735
     Principal
Amount ($)
or Shares		      Market
Value
$

Freddie Mac Strips
Series 1998-191 Class IO
Interest Only STRIP
8.000% due 01/01/28

    49      8

Series 1998-194 Class IO
Interest Only STRIP
6.500% due 04/01/28

    234      34

Series 2001-212 Class IO
Interest Only STRIP
6.000% due 05/01/31

    296      37

Series 2001-215 Class IO
Interest Only STRIP
8.000% due 06/01/31

    151      21

Fremont Home Loan Trust (Ê)
Series 2006-D Class 2A1
0.498% due 11/25/36

    780      706

GE Capital Commercial Mortgage Corp.
Series 2001-1 Class A2
6.531% due 05/15/33

    5,830      5,911

Series 2002-1A Class A3
6.269% due 12/10/35

    1,240      1,247

Series 2002-3A Class A1
4.229% due 12/10/37

    3,441      3,427

Series 2006-C1 Class A4
5.515% due 03/10/44

    1,010      858

Ginnie Mae I
11.000% due 2010

    2      2

11.000% due 2013

    5      6

10.500% due 2015

    37      40

11.000% due 2015

    2      2

7.000% due 2016

    6      6

10.500% due 2016

    48      53

8.000% due 2017

    —      —

11.000% due 2020

    27      29

10.500% due 2021

    46      51

8.000% due 2022

    17      18

10.000% due 2022

    72      79

9.500% due 2023

    184      201

7.500% due 2024

    22      24

8.000% due 2025

    11      12

10.000% due 2025

    57      62

8.000% due 2030

    255      285

7.500% due 2031

    50      54

8.000% due 2031

    2      2

7.500% due 2032

    18      19

8.000% due 2032

    13      14

6.000% due 2036

    216      226

6.000% due 2037

    502      525

6.000% due 2038

    16,082      16,795

6.000% due 2039

    2,914      3,043

30 Year TBA (Ï)
4.500%

    28,000      28,455

5.500%

    5,215      5,417

Ginnie Mae II
4.125% due 2023 (Ê)

    263      267

4.625% due 2023 (Ê)

    28      28

5.375% due 2023 (Ê)

    177      182

 

Russell Strategic Bond Fund   131

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

4.125% due 2024 (Ê)

    222      225

4.625% due 2024 (Ê)

    178      179

4.125% due 2025 (Ê)

    10      10

4.625% due 2025 (Ê)

    10      10

5.375% due 2025 (Ê)

    319      332

4.125% due 2026 (Ê)

    94      95

8.500% due 2026

    27      29

4.125% due 2027 (Ê)

    6      6

4.625% due 2027 (Ê)

    172      174

5.375% due 2027 (Ê)

    132      136

5.375% due 2028 (Ê)

    3      3

4.125% due 2029 (Ê)

    226      229

5.375% due 2030 (Ê)

    94      97

30 Year TBA (Ï)
5.000%

    5,000      5,167

Global Signal Trust (Þ)
Series 2006-1 Class B
5.588% due 02/15/36

    875      805

Series 2006-1 Class C
5.707% due 02/15/36

    1,670      1,728

Series 2006-1 Class E
6.495% due 02/15/36

    1,145      1,185

GMAC Mortgage Corp. Loan Trust
Series 2004-JR1 Class A6 (Ê)
0.888% due 12/25/33

    1,195      930

Series 2005-AR2 Class 4A (Ê)
5.173% due 05/25/35

    8,587      5,768

Series 2005-AR6 Class 3A1
5.302% due 11/19/35

    3,128      2,135

Series 2007-HE3 Class 1A1
7.000% due 09/25/37

    1,277      445

Goldman Sachs Mortgage Securities Corp. II
Series 2007-GG1 Class A4
5.993% due 08/10/45

    4,025      3,040

Government National Mortgage Association
Series 1998-23 Class ZA
6.500% due 09/20/28

    1,696      1,823

Series 1999-27 Class SE (Ê)
Interest Only STRIP
8.148% due 08/16/29

    175      19

Series 1999-40 Class FE (Ê)
1.003% due 11/16/29

    861      860

Series 1999-44 Class SA (Ê)
Interest Only STRIP
8.098% due 12/16/29

    254      32

Series 2000-29 Class S (Ê)
Interest Only STRIP
8.053% due 09/20/30

    26      3

Series 2001-46 Class SA (Ê)
Interest Only STRIP
7.128% due 09/16/31

    25      3

Series 2002-27 Class SA (Ê)
Interest Only STRIP
7.548% due 05/16/32

    40      4

Greenpoint Mortgage Funding Trust (Ê)
Series 2006-AR5 Class A1A
0.518% due 10/25/46

    1,442      1,184
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-AR6 Class A1A
0.518% due 10/25/46

    1,077      874

Series 2006-AR8 Class 1A1A
0.518% due 01/25/47

    567      486

Series 2007-AR3 Class A1
0.658% due 06/25/37

    5,568      2,096

Greenpoint Mortgage
Pass-Through Certificates (Ê)
Series 2003-1 Class A1
4.823% due 10/25/33

    1,201      849

Greenwich Capital Commercial Funding Corp.
Series 2002-C1 Class XP (Þ)
Interest Only STRIP
1.994% due 01/11/35

    11,567      140

Series 2003-C2 Class A2
4.022% due 01/05/36

    899      888

Series 2004-GG1 Class A7
5.317% due 06/10/36

    6,065      5,593

Series 2005-GG3 Class A4
4.799% due 08/10/42

    100      83

Series 2005-GG5 Class A41
5.243% due 04/10/37

    3,720      3,548

Series 2006-GG7 Class A4
5.917% due 07/10/38

    7,295      6,098

Series 2007-GG9 Class A4
5.444% due 03/10/39

    3,810      2,983

GS Mortgage Securities Corp. II
Series 2004-GG2 Class A3
4.602% due 08/10/38

    584      581

Series 2006-GG6 Class A4
5.553% due 04/10/38

    5,030      4,249

Series 2006-GG8 Class AAB
5.535% due 11/10/39

    2,735      2,498

Series 2007-EOP Class A1 (Ê)(Þ)
0.579% due 03/06/20

    2,345      1,735

GSMPS Mortgage Loan Trust (Þ)
Series 1998-1 Class A
8.000% due 09/19/27

    140      95

Series 1998-3 Class A
7.750% due 09/19/27

    143      142

Series 1999-3 Class A
8.000% due 08/19/29

    344      389

Series 2005-RP1 Class 1A3
8.000% due 01/25/35

    1,352      1,250

Series 2005-RP1 Class 1A4
8.500% due 01/25/35

    998      942

Series 2006-RP1 Class 1A2
7.500% due 01/25/36

    820      683

Series 2006-RP1 Class 1A3
8.000% due 01/25/36

    473      399

GSR Mortgage Loan Trust
Series 2004-5 Class 3A2 (Ê)
1.000% due 05/25/34

    3,743      3,479

Series 2004-7 Class 1A1
4.465% due 06/25/34

    502      414

Series 2004-11 Class 1A1
4.914% due 09/25/34

    362      277

 

132   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2004-12 Class 2A3
5.356% due 12/25/34

    391      255

Series 2005-AR6 Class 2A1 (Ê)
4.541% due 09/25/35

    4,386      3,360

Series 2005-AR7 Class 6A1
5.243% due 11/25/35

    2,890      1,945

Series 2006-1F Class 5A2
6.000% due 02/25/36

    679      336

Series 2006-OA1 Class 2A1 (Ê)
0.628% due 08/25/46

    1,912      1,010

Series 2007-AR1 Class B1
Interest Only STRIP
5.869% due 03/25/37

    2,277      265

Harborview Mortgage Loan Trust
Series 2005-2 Class 2A1A (Ê)
Interest Only STRIP
0.667% due 05/19/35

    194      78

Series 2005-4 Class 3A1
5.142% due 07/19/35

    1,988      1,145

Series 2005-5 Class 2A1B (Ê)
Interest Only STRIP
0.737% due 07/19/45

    398      82

Series 2005-10 Class 2A1A (Ê)
0.757% due 11/19/35

    2,295      877

Series 2005-10 Class 2A1B (Ê)
0.827% due 11/19/35

    10,016      2,233

Series 2005-14 Class 3A1A
5.308% due 12/19/35

    787      399

Series 2005-15 Class 2A11 (Ê)
0.717% due 10/20/45

    1,362      547

Series 2005-16 Class 2A1A (Ê)
0.687% due 01/19/36

    497      208

Series 2005-16 Class 3A1A (Ê)
0.697% due 01/19/36

    6,703      2,533

Series 2005-16 Class 3A1B (Ê)
0.787% due 01/19/36

    967      181

Series 2006-1 Class 2A1A (Ê)
0.687% due 03/19/36

    1,746      665

Series 2006-7 Class 2A1A (Ê)
0.647% due 09/19/46

    1,847      695

Series 2006-9 Class 2A1A (Ê)
0.657% due 11/19/36

    2,475      921

Series 2006-10 Class 2A1A (Ê)
0.627% due 11/19/36

    2,792      1,064

Series 2006-10 Class 2A1B (Ê)
0.687% due 11/19/36

    2,506      464

Series 2006-12 Class 2A2A (Ê)
0.637% due 01/19/38

    14,670      5,238

Series 2006-12 Class 2A2B (Ê)
0.697% due 01/19/38

    5,214      909

Series 2006-14 Class 2A1A (Ê)
0.597% due 03/19/38

    6,999      2,460

Series 2006-14 Class 2A1B (Ê)
0.647% due 03/19/38

    1,925      363

Series 2007-1 Class 2A1A (Ê)
0.686% due 04/19/38

    1,768      650
     Principal
Amount ($)
or Shares		      Market
Value
$

Impac Secured Assets CMN Owner Trust (Ê)
Series 2005-2 Class A1
0.758% due 03/25/36

    1,007      413

Series 2006-4 Class A2A
0.518% due 01/25/37

    226      162

Indymac Index Mortgage Loan Trust
Series 2004-AR1 Class 2A
5.012% due 12/25/34

    123      88

Series 2005-AR1 Class 1A1
4.451% due 08/25/35

    4,437      2,371

Series 2005-AR2 Class 1A21
5.766% due 12/25/35

    977      605

Series 2005-AR3 Class 1A1
4.642% due 01/25/36

    1,236      574

Series 2006-AR1 Class 1A1A (Ê)
0.528% due 11/25/46

    296      274

Series 2006-AR1 Class 1A4A (Ê)
0.608% due 11/25/46

    8,529      2,545

Series 2006-AR2 Class A2 (Ê)
0.518% due 11/25/36

    1,079      982

Series 2006-AR3 Class 2A1A (Ê)
0.608% due 01/25/37

    8,838      3,072

Series 2006-AR4 Class A1B (Ê)
0.738% due 05/25/46

    6,515      1,133

Series 2006-AR7 Class 1A1
4.673% due 05/25/36

    2,069      1,206

Series 2006-AR9 Class 1A1
5.873% due 06/25/36

    9,712      4,450

Series 2007-AR5 Class 1A1
6.068% due 05/25/37

    9,828      4,391

JPMorgan Mortgage Acquisition Corp. (Ê)
Series 2006-WMC Class A3
0.558% due 03/25/36

    798      763

JPMorgan Mortgage Trust
Series 2005-A1 Class 6T1 (Ê)
5.016% due 02/25/35

    918      776

Series 2005-A4 Class 1A1
5.394% due 07/25/35

    2,063      1,598

Series 2005-A4 Class 2A1
5.062% due 07/25/35

    5,659      4,008

Series 2005-A6 Class 1A2
5.139% due 09/25/35

    2,650      1,747

Series 2005-A8 Class 1A1
5.398% due 11/25/35

    6,405      5,130

Series 2006-A3 Class 7A1
1.000% due 04/25/35

    436      376

Series 2006-A6 Class 1A2
6.049% due 10/25/36

    512      357

Series 2007-A1 Class 1A1 (Ê)
4.197% due 07/25/35

    783      646

Series 2007-A1 Class 2A2 (Ê)
4.737% due 07/25/35

    1,372      1,010

Series 2007-A1 Class 4A2 (Ê)
4.068% due 07/25/35

    691      547

Series 2007-A1 Class 5A2 (Ê)
4.769% due 07/25/35

    677      543

 

Russell Strategic Bond Fund   133

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2007-A1 Class B1
4.813% due 07/25/35

    157      22

Series 2007-S3 Class 1A35
6.000% due 07/25/37

    3,793      2,448

JPMorgan Alternative Loan Trust
Series 2006-S1 Class 3A1A
5.350% due 03/25/36

    258      243

Series 2007-A2 Class 12A2 (Ê)
0.538% due 06/25/37

    5,204      4,044

JPMorgan Chase Commercial Mortgage Securities Corp.
Series 2002-C1 Class A3
5.376% due 07/12/37

    7,245      7,026

Series 2002-C2 Class A2
5.050% due 12/12/34

    12,000      11,680

Series 2003-C1 Class A2
4.985% due 01/12/37

    3,738      3,500

Series 2004-LN2 Class A1
4.475% due 07/15/41

    4,208      4,063

Series 2005-LDP Class A3A1
4.871% due 10/15/42

    4,125      3,714

Series 2005-LDP Class A4
4.918% due 10/15/42

    1,595      1,386

5.344% due 12/15/44

    7,280      6,280

Series 2006-CB1 Class A4
5.552% due 05/12/45

    3,960      3,221

Series 2006-LDP Class A3
5.336% due 05/15/47

    5,735      4,428

Series 2006-LDP Class A3B
5.447% due 05/15/45

    3,675      3,033

Series 2006-LDP Class A4
6.065% due 04/15/45

    5,405      4,545

5.399% due 05/15/45

    3,705      2,866

Series 2006-LDP Class AJ
6.065% due 04/15/45

    1,505      450

Series 2007-CB1 Class A4
5.440% due 06/12/47

    7,000      5,308

Series 2007-CB2 Class A4
5.794% due 02/12/51

    6,270      4,629

Series 2007-CB2 Class AJ
6.098% due 02/12/51

    1,300      299

Series 2007-LD1 Class A4
5.882% due 02/15/51

    3,365      2,513

Series 2007-LDP Class A3
5.420% due 01/15/49

    5,350      4,058

LB-UBS Commercial Mortgage Trust
Series 2000-C5 Class A2 (Ø)
6.510% due 12/15/26

    333      336

Series 2001-C2 Class A2 (Ø)
6.653% due 11/15/27

    14,645      14,751

Series 2002-C1 Class A4 (Ø)
6.462% due 03/15/31

    65      66

Series 2002-C2 Class F
5.794% due 07/15/35

    939      763

Series 2002-C2 Class G
5.873% due 07/15/35

    1,433      989

Series 2002-C4 Class A5 (Ø)
4.853% due 09/15/31

    1,000      958
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2003-C8 Class A2 (Ø)
4.207% due 11/15/27

    151      150

Series 2006-C1 Class A4 (Ø)
5.156% due 02/15/31

    4,500      3,718

Series 2006-C3 Class A4
5.661% due 03/15/39

    3,130      2,601

Series 2006-C4 Class A4
6.080% due 06/15/38

    2,975      2,507

Series 2007-C1 Class A3
5.398% due 02/15/40

    3,355      2,547

Series 2007-C1 Class A4
5.424% due 02/15/40

    500      361

Series 2007-C6 Class A4
5.858% due 07/15/40

    3,990      2,895

Series 2007-C7 Class A3
5.866% due 09/15/45

    5,490      4,177

Lehman Brothers Floating Rate Commercial Mortgage Trust (Ê)(Ø)
Series 2006-LLF Class A1 (Þ)
0.531% due 09/15/21

    142      117

Series 2006-LLF Class A2 (Å)
0.571% due 09/15/21

    2,254      1,260

Lehman Mortgage Trust
Series 2005-2 Class 2A3
5.500% due 12/25/35

    922      721

Series 2005-3 Class 1A3 (Ø)
5.500% due 01/25/36

    4,842      3,275

Series 2006-8 Class 2A1 (Ê)(Ø)
0.858% due 12/25/36

    9,502      3,902

Series 2007-8 Class 3A1
7.250% due 09/25/37

    15,540      8,076

Lehman XS Trust (Ê)
Series 2005-5N Class 1A1
0.738% due 11/25/35

    726      286

Series 2005-5N Class 3A1A
0.738% due 11/25/35

    2,310      923

Series 2005-9N Class 1A1
0.708% due 02/25/36

    1,357      515

Series 2006-4N Class A2A
0.658% due 04/25/46

    4,063      1,458

Series 2006-16N Class A4A
0.628% due 11/25/46

    4,168      1,548

Series 2007-4N Class 3A2A (Ø)
2.383% due 03/25/47

    7,568      3,112

Series 2007-7N Class 1A2 (Ø)
0.678% due 06/25/47

    10,937      1,747

Series 2007-16N Class 2A2
1.288% due 09/25/47

    14,016      4,904

Luminent Mortgage Trust (Ê)
Series 2006-1 Class A1
0.678% due 04/25/36

    1,832      650

Series 2006-1 Class A2
0.758% due 04/25/36

    8,697      1,767

Series 2006-2 Class A1A
0.638% due 02/25/46

    3,340      1,208

Series 2006-3 Class 12A2
0.698% due 05/25/36

    6,298      1,385

 

134   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-5 Class A1A
0.628% due 07/25/36

    3,112      1,080

Series 2006-6 Class A1
0.638% due 10/25/46

    1,444      592

Mastr Adjustable Rate Mortgages Trust
Series 2004-10 Class 2A2
5.087% due 10/25/34

    10      3

Series 2004-13 Class 3A4 (Ê)
3.788% due 11/21/34

    346      339

Series 2005-1 Class B1
5.312% due 03/25/35

    1,152      121

Series 2005-6 Class 7A1
5.339% due 06/25/35

    580      361

Series 2005-7 Class 2A2
5.363% due 09/25/35

    2,078      683

Series 2006-1 Class I2A3 (Ê)
2.373% due 01/25/47

    4,171      1,097

Series 2006-2 Class 3A1
4.847% due 01/25/36

    624      430

Series 2006-2 Class 4A1
4.983% due 02/25/36

    5,105      3,786

Series 2006-OA2 Class 4A1B
2.833% due 12/25/46

    14,032      4,266

Series 2007-3 Class 22A1
0.548% due 05/25/47

    716      699

Mastr Alternative Loans Trust
Series 2003-2 Class 6A1
6.000% due 03/25/33

    623      570

Series 2003-4 Class B1
5.694% due 06/25/33

    1,651      1,152

Series 2003-6 Class 3A1
8.000% due 09/25/33

    97      96

Series 2004-10 Class 5A6
5.750% due 09/25/34

    2,220      1,743

Series 2005-3 Class 7A1
6.000% due 04/25/35

    2,272      1,580

Mastr Asset Securitization Trust
Series 2003-7 Class 4A35 (Ê)
0.838% due 09/25/33

    2,279      2,070

Series 2003-11 Class 6A8 (Ê)
0.938% due 12/25/33

    3,609      3,248

Series 2004-4 Class 2A2 (Ê)
0.888% due 04/25/34

    694      617

Series 2005-2 Class 1A1
5.250% due 11/25/35

    1,107      871

Mastr Reperforming Loan Trust (Þ)
Series 2005-1 Class 1A5
8.000% due 08/25/34

    884      930

Series 2005-2 Class 1A4
8.000% due 05/25/35

    1,515      1,683

Mastr Specialized Loan Trust (Þ)
Series 2005-2 Class A2
5.150% due 07/25/35

    558      366

MBNA Master Credit Card Trust
Series 2000-E Class A
7.800% due 10/15/12

    1,305      1,374
     Principal
Amount ($)
or Shares		      Market
Value
$

Mellon Residential Funding Corp. (Ê)
Series 2000-TBC Class A1
0.931% due 06/15/30

    883      734

Merrill Lynch Floating Trust (Ê)(Þ)
Series 2006-1 Class A1
0.521% due 06/15/22

    2,385      1,669

Merrill Lynch Mortgage Investors, Inc.
Series 2005-A8 Class A1B1
5.250% due 08/25/36

    717      660

Series 2005-A10 Class A (Ê)
0.648% due 02/25/36

    652      360

Merrill Lynch Mortgage Trust
Series 2002-MW1 Class J (Þ)
5.695% due 07/12/34

    550      141

Series 2004-MKB Class A2
4.353% due 02/12/42

    1,682      1,656

Series 2005-CIP Class A2
4.960% due 07/12/38

    75      71

Series 2005-CIP Class AM
5.107% due 07/12/38

    2,050      1,247

Series 2006-C1 Class ASB
5.657% due 05/12/39

    215      200

Series 2008-C1 Class A4
5.690% due 02/12/51

    785      526

Series 2008-C1 Class AJ
6.461% due 02/12/51

    3,245      779

Merrill Lynch/Countrywide Commercial Mortgage Trust
Series 2007-6 Class A4
5.485% due 03/12/51

    900      610

Series 2007-8 Class A3
6.156% due 08/12/49

    1,100      829

MLCC Mortgage Investors, Inc. (Ê)
Series 2004-HB1 Class A2
1.998% due 04/25/29

    222      115

Series 2005-2 Class 3A
1.438% due 10/25/35

    254      171

Series 2005-3 Class 5A
0.688% due 11/25/35

    1,201      804

Morgan Stanley Capital I
Series 1999-FNV Class G (Þ)
6.120% due 03/15/31

    630      535

Series 1999-LIF Class A2
7.110% due 04/15/33

    449      450

Series 2005-HQ7 Class A4
5.378% due 11/14/42

    4,000      3,537

Series 2005-IQ1 Class AAB
5.178% due 09/15/42

    4,115      4,017

Series 2006-HQ1 Class A4
5.328% due 11/12/41

    1,975      1,619

Series 2006-HQ8 Class A4
5.386% due 03/12/44

    4,790      3,897

Series 2006-HQ9 Class A4
5.731% due 07/12/44

    4,089      3,413

Series 2007-HQ1 Class D (Þ)
6.485% due 12/15/44

    2,092      260

Series 2007-IQ1 Class A2
5.610% due 04/15/49

    5,000      4,345

 

Russell Strategic Bond Fund   135

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2007-IQ1 Class A4
5.809% due 12/12/49

    8,460      6,567

Morgan Stanley Dean Witter Capital I (Þ)
Series 2001-TOP Class E
7.591% due 02/15/33

    280      191

Morgan Stanley Mortgage Loan Trust
Series 2006-2 Class 6A
6.500% due 02/25/36

    2,767      1,686

MortgageIT Trust (Ê)
Series 2006-1 Class 2A1B
0.718% due 04/25/36

    3,656      699

New Century Alternative Mortgage Loan Trust (Ê)
Series 2006-ALT Class AV1
0.498% due 07/25/36

    230      226

Nomura Asset Acceptance Corp.
Series 2005-WF1 Class 2A2
4.786% due 03/25/35

    1,662      1,266

Series 2006-AF2 Class 1A1 (Ê)
0.538% due 08/25/36

    1,361      1,143

Series 2006-AP1 Class A2
5.515% due 01/25/36

    7,075      3,472

Nomura Asset Securities Corp.
Series 1998-D6 Class A1B
6.590% due 03/15/30

    14      14

PHH Alternative Mortgage Trust (Ê)
Series 2007-3 Class A1
0.548% due 07/25/37

    4,712      3,301

Prime Mortgage Trust
Series 2004-CL1 Class 1A1
6.000% due 02/25/34

    304      273

Series 2004-CL1 Class 1A2 (Ê)
0.838% due 02/25/34

    140      113

Series 2004-CL1 Class 2A2 (Ê)
0.838% due 02/25/19

    32      30

RESI Finance, LP (Ê)(Þ)
Series 2003-D Class B4
1.960% due 12/10/35

    2,580      926

Series 2007-B Class B5
1.551% due 04/15/39

    2,776      56

Residential Accredit Loans, Inc.
Series 2004-QS5 Class A1
4.600% due 04/25/34

    1,133      1,019

Series 2004-QS5 Class A6 (Ê)
1.038% due 04/25/34

    385      257

Series 2004-QS8 Class A4 (Ê)
0.838% due 06/25/34

    2,209      1,834

Series 2005-QA1 Class A41
5.669% due 09/25/35

    1,407      862

Series 2005-QA8 Class NB3
5.498% due 07/25/35

    1,681      1,127

Series 2005-QO4 Class 2A1 (Ê)
0.718% due 12/25/45

    2,302      926

Series 2005-QO5 Class A1 (Ê)
2.633% due 01/25/46

    5,273      2,182

Series 2005-QS1 Class 2A1
6.000% due 09/25/35

    4,223      2,936
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2005-QS1 Class 2A3
5.750% due 09/25/35

    12,160      7,356

Series 2006-QO1 Class 1A1 (Ê)
0.698% due 02/25/46

    502      156

Series 2006-QO1 Class 2A1 (Ê)
0.708% due 02/25/46

    616      196

Series 2006-QO1 Class A1 (Ê)
0.598% due 01/25/37

    757      296

Series 2006-QO1 Class A2 (Ê)
0.638% due 01/25/37

    5,049      1,116

Series 2006-QO4 Class 2A2 (Ê)
0.678% due 04/25/46

    1,167      204

Series 2006-QO5 Class 2A2 (Ê)
0.668% due 05/25/46

    11,840      2,087

Series 2006-QS4 Class A11
6.000% due 04/25/36

    1,043      465

Series 2006-QS6 Class 1A13
6.000% due 06/25/36

    3,473      2,021

Series 2007-QH9 Class A1
6.546% due 11/25/37

    15,239      4,873

Series 2007-QO4 Class A1 (Ê)
0.638% due 05/25/47

    9,150      3,237

Series 2007-QS6 Class A1 (Ê)
0.768% due 04/25/37

    17,125      7,012

Residential Asset Mortgage Products, Inc.
Series 2004-SL1 Class A3
7.000% due 11/25/31

    44      45

Series 2004-SL4 Class A3
6.500% due 07/25/32

    325      296

Residential Asset Securitization Trust
Series 2003-A15 Class 1A2 (Ê)
0.888% due 02/25/34

    2,526      2,067

Series 2007-A5 Class 2A3
6.000% due 05/25/37

    1,734      1,009

Series 2007-A9 Class A6
6.250% due 08/25/13

    11,434      5,957

Residential Funding Mortgage Securities I
Series 2003-S5 Class 1A2 (Ê)
0.888% due 11/25/18

    1,012      1,005

Series 2003-S14 Class A5 (Ê)
0.838% due 07/25/18

    2,081      1,473

Series 2003-S20 Class 1A7 (Ê)
0.938% due 12/25/33

    205      204

Series 2005-SA4 Class 1A21
5.200% due 09/25/35

    2,199      1,528

Series 2005-SA4 Class 2A1
5.205% due 09/25/35

    3,670      2,639

Series 2005-SA4 Class 2A2
5.180% due 09/25/35

    4,117      3,068

Series 2006-SA3 Class 3A1
6.045% due 09/25/36

    1,527      874

Series 2006-SA4 Class 2A1
6.111% due 11/25/36

    1,031      599

Series 2007-S5 Class A9
6.000% due 05/25/37

    875      348

Series 2007-S9 Class 1A1
6.000% due 10/25/37

    4,332      3,142

 

136   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

SBA CMBS Trust (Þ)
Series 2006-1A Class B
5.451% due 11/15/36

    3,680      3,349

Sequoia Mortgage Trust (Ê)
Series 2004-3 Class A
2.114% due 05/20/34

    2,090      1,197

Structured Adjustable Rate Mortgage Loan Trust
Series 2004-5 Class 3A1
4.380% due 05/25/34

    2,392      1,644

Series 2004-12 Class 3A2
5.250% due 09/25/34

    1,050      685

Series 2004-16 Class 3A1
5.450% due 11/25/34

    4,672      2,931

Series 2004-18 Class 5A
5.500% due 12/25/34

    524      457

Series 2004-20 Class 3A1
5.352% due 01/25/35

    2,285      1,317

Series 2005-7 Class 1A3
1.000% due 04/25/35

    1,332      722

Series 2005-17 Class 3A1
5.525% due 08/25/35

    52      29

Series 2005-19X Class 1A1 (Ê)
0.758% due 10/25/35

    656      262

Series 2005-21 Class 7A1
6.006% due 11/25/35

    17,773      10,519

Series 2005-22 Class 4A2
5.368% due 12/25/35

    162      59

Series 2006-1 Class 2A3
5.624% due 02/25/36

    1,553      376

Series 2006-5 Class 2A1
5.942% due 06/25/36

    5,728      2,772

Series 2006-5 Class 5A4
5.518% due 06/25/36

    370      106

Series 2006-12 Class 2A1
5.922% due 01/25/37

    5,344      2,727

Structured Asset Mortgage Investments, Inc. (Ê)
Series 2005-AR5 Class A3
0.697% due 07/19/35

    362      235

Series 2005-AR6 Class 2A1
0.748% due 09/25/45

    1,090      416

Series 2005-AR8 Class A2
3.113% due 02/25/36

    3,162      1,129

Series 2006-AR1 Class 2A1
0.668% due 02/25/36

    882      318

Series 2006-AR1 Class 3A1
0.668% due 02/25/36

    665      236

Series 2006-AR2 Class A2
0.748% due 02/25/36

    329      75

Series 2006-AR3 Class 3A1
0.628% due 02/25/36

    742      258

Series 2006-AR5 Class 1A2
0.698% due 05/25/36

    629      133

Series 2006-AR6 Class 1A2
0.668% due 07/25/36

    7,313      1,467

Series 2006-AR6 Class 1A3
0.628% due 07/25/46

    1,560      513
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-AR7 Class A12
0.688% due 08/25/36

    5,267      1,057

Series 2006-AR8 Class A1A
0.638% due 10/25/36

    7,996      3,030

Series 2007-AR1 Class 1A2
0.638% due 01/25/37

    5,637      1,105

Series 2007-AR4 Class A4A
0.618% due 09/25/47

    6,997      3,461

Series 2007-AR6 Class A1
3.133% due 08/25/47

    14,083      4,995

Structured Asset Securities Corp.
Series 2002-22H Class 1A
6.931% due 11/25/32

    88      81

Series 2003-26A Class 3A5
4.455% due 09/25/33

    2,846      2,129

Series 2004-12H Class 1A
6.000% due 05/25/34

    366      252

Series 2004-21X Class 1A3
4.440% due 12/25/34

    1,799      1,704

Series 2005-6 Class B2
5.333% due 05/25/35

    368      68

Thornburg Mortgage Securities Trust (Ê)
Series 2003-2 Class A1
1.118% due 04/25/43

    966      857

Series 2006-5 Class A1
0.558% due 08/25/11

    5,363      4,633

Series 2006-6 Class A1
0.548% due 11/25/46

    1,479      1,274

Wachovia Bank Commercial Mortgage Trust
Series 2005-C16 Class A2
4.380% due 10/15/41

    4,522      4,439

Series 2005-C20 Class A4
5.285% due 07/15/42

    5,000      4,835

Series 2005-C21 Class A4
5.384% due 10/15/44

    5,500      4,880

Series 2006-C28 Class A2
5.500% due 10/15/48

    2,140      1,884

Series 2006-C29 Class E
5.516% due 11/15/48

    2,682      222

Series 2006-WL7 Class A1 (Ê)(Þ)
0.541% due 09/15/21

    12,157      8,510

Series 2007-C31 Class A2
5.421% due 04/15/47

    5,000      4,186

Series 2007-C31 Class A4
5.509% due 04/15/47

    600      412

Series 2007-WHL Class A1 (Ê)(Þ)
0.531% due 06/15/20

    3,222      2,206

Washington Mutual Alternative Mortgage Pass-Through Certificates
Series 2005-4 Class CB11
5.500% due 06/25/35

    1,200      566

Series 2006-5 Class 3A2
6.000% due 07/25/36

    500      384

Series 2006-AR1 Class 1A1
5.931% due 09/25/36

    1,671      1,020

Series 2006-AR2 Class A1A (Ê)
2.573% due 04/25/46

    1,704      617

 

Russell Strategic Bond Fund   137

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-AR6 Class 1A (Ê)
0.628% due 07/25/46

    875      340

Series 2006-AR8 Class 1A5
5.841% due 08/25/46

    278      74

Series 2006-AR8 Class 2A (Ê)
2.483% due 10/25/46

    2,900      906

Series 2006-AR8 Class 2A3 (Ê)
6.123% due 08/25/36

    183      51

Series 2006-AR9 Class 2A (Ê)
2.473% due 11/25/46

    3,205      962

Series 2007-HY2 Class 3A1
5.881% due 09/25/36

    6,320      3,245

Series 2007-HY3 Class 4A1
5.331% due 03/25/37

    8,511      5,398

Series 2007-OA1 Class 2A (Ê)
2.353% due 12/25/46

    22,267      6,586

Series 2007-OA1 Class CA1B (Ê)
0.638% due 12/25/46

    6,631      1,159

Series 2007-OA1 Class CA1C (Ê)
Interest Only STRIP
0.638% due 12/25/46

    3,314      493

Washington Mutual Mortgage Pass Through Certificates
Series 2002-AR9 Class 1A (Ê)
3.033% due 08/25/42

    203      133

Series 2003-S9 Class A2 (Ê)
0.988% due 10/25/33

    2,667      2,593

Series 2004-AR1 Class A
3.742% due 03/25/34

    222      158

Series 2004-AR3 Class A2
4.176% due 06/25/34

    2,968      2,514

Series 2004-CB3 Class 1A
6.000% due 10/25/34

    349      323

Series 2005-AR1 Class 1A1
4.826% due 10/25/35

    2,099      1,512

Series 2005-AR1 Class A1A (Ê)
0.758% due 08/25/45

    1,140      537

Series 2005-AR1 Class A1A1 (Ê)
0.728% due 10/25/45

    3,503      1,647

0.698% due 11/25/45

    12,914      6,138

0.708% due 12/25/45

    405      189

Series 2005-AR1 Class A1A2 (Ê)
0.718% due 11/25/45

    1,000      322

0.728% due 12/25/45

    1,605      713

Series 2005-AR1 Class A1B1 (Ê)
0.698% due 10/25/45

    33      32

0.688% due 11/25/45

    265      200

0.688% due 12/25/45

    206      165

Series 2005-AR6 Class B3 (Ê)
Interest Only STRIP
1.098% due 04/25/45

    1,746      77

Series 2005-AR8 Class 2A1A (Ê)
0.728% due 07/25/45

    987      465

Series 2005-AR8 Class 2AB3 (Ê)
0.798% due 07/25/45

    641      199

Series 2006-AR1 Class 1A4
5.605% due 11/25/36

    7,367      4,235
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-AR1 Class 2A (Ê)
3.503% due 09/25/46

    543      205

Series 2006-AR1 Class 3A1A (Ê)
2.553% due 09/25/46

    1,417      448

Series 2006-AR2 Class 1A1
5.295% due 03/25/37

    10,693      6,458

Series 2006-AR7 Class 2A (Ê)
2.613% due 07/25/46

    9,570      3,002

Series 2007-HY3 Class 4B1
Interest Only STRIP
5.331% due 03/25/37

    1,765      202

Series 2007-HY4 Class 1A1 (Ê)
5.483% due 04/25/37

    2,133      1,190

Series 2007-OA2 Class 1A (Ê)
2.333% due 03/25/47

    2,295      718

Wells Fargo Alternative Loan Trust
Series 2007-PA2 Class 1A1
6.000% due 06/25/37

    2,584      1,280

Series 2007-PA6 Class A1
6.599% due 12/28/37

    12,928      7,267

Wells Fargo Mortgage Backed Securities Trust
Series 2003-K Class 1A2 (Ê)
4.480% due 11/25/33

    624      558

Series 2004-AA Class A1 (Ê)
4.987% due 12/25/34

    1,912      1,569

Series 2004-CC Class A1 (Ê)
4.948% due 01/25/35

    3,058      2,394

Series 2004-E Class A2 (Ê)
4.500% due 05/25/34

    441      373

Series 2004-EE Class 2A1 (Ê)
4.161% due 12/25/34

    150      119

Series 2004-I Class 1A1
5.104% due 07/25/34

    1,403      1,040

Series 2004-T Class A1 (Ê)
4.598% due 09/25/34

    349      291

Series 2005-12 Class 1A7
5.500% due 11/25/35

    2,111      1,554

Series 2005-14 Class 2A1
5.500% due 12/25/35

    3,559      2,726

Series 2005-17 Class 1A1
5.500% due 01/25/36

    1,950      1,532

Series 2005-17 Class 1A2
5.500% due 01/25/36

    1,421      904

Series 2005-18 Class 1A1
5.500% due 01/25/36

    7,922      5,830

Series 2005-AR1 Class 1A1 (Ê)
4.613% due 06/25/35

    1,625      1,444

Series 2005-AR2 Class 2A2 (Ê)
4.553% due 03/25/35

    122      92

Series 2005-AR6 Class A1 (Ê)
5.034% due 04/25/35

    6,288      5,314

Series 2006-2 Class 2A3
5.500% due 03/25/36

    3,538      3,152

Series 2006-2 Class 3A1
5.750% due 03/25/36

    9,968      7,037

Series 2006-4 Class 1A8
5.750% due 04/25/36

    825      773

 

138   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2006-4 Class 2A3
5.750% due 04/25/36

    741      419

Series 2006-7 Class 2A1
6.000% due 06/25/36

    2,483      1,603

Series 2006-9 Class 1A14
6.000% due 08/25/36

    665      323

Series 2006-AR1 Class 1A2 (Ê)
6.031% due 09/25/36

    782      229

Series 2006-AR1 Class 2A2
5.712% due 11/25/36

    739      204

Series 2006-AR1 Class 2A4 (Ê)
6.076% due 10/25/36

    1,207      301

Series 2006-AR1 Class 5A1 (Ê)
5.592% due 07/25/36

    1,782      1,107

Series 2006-AR1 Class A1
5.625% due 12/25/36

    4,506      3,102

Series 2006-AR1 Class A7
5.508% due 08/25/36

    3,315      817

Series 2006-AR2 Class 2A1
4.950% due 03/25/36

    2,839      1,890

Series 2006-AR4 Class 1A1 (Ê)
5.861% due 04/25/36

    2,469      1,581

Series 2006-AR4 Class 2A1 (Ê)
5.775% due 04/25/36

    4,208      3,064

Series 2006-AR5 Class 2A1 (Ê)
5.537% due 04/25/36

    502      300

Series 2006-AR6 Class 7A1 (Ê)
5.112% due 03/25/36

    11,197      8,228

Series 2007-8 Class 1A16
6.000% due 07/25/37

    894      595

Series 2007-10 Class 2A5
6.250% due 07/25/37

    2,222      1,686

Series 2007-14 Class 1A1
6.000% due 10/25/37

    5,486      3,979

Zuni Mortgage Loan Trust (Ê)
Series 2006-OA1 Class A1
0.568% due 08/25/36

    1,986      1,922
         
        3,432,668
         
Municipal Bonds - 0.9%        

Badger TOB Asset Securitization Corp. Revenue Bonds (æ)
6.375% due 06/01/32

    1,500      1,685

Chicago Transit Authority Revenue Bonds
6.300% due 12/01/21

    500      500

6.899% due 12/01/40

    5,200      5,196

City of Chicago Illinois General Obligation Unlimited (µ)
5.000% due 12/01/24

    17,715      18,061

City of Colorado Springs Colorado Revenue Bonds
5.000% due 11/15/33

    200      202

County of Cook Illinois General Obligation Unlimited (µ)
5.000% due 11/15/26

    15,000      15,106

Massachusetts School Building Authority Revenue Bonds (µ)
5.000% due 08/15/37

    2,000      2,017
     Principal
Amount ($)
or Shares		      Market
Value
$

New Jersey Economic Development Authority Revenue Bonds
5.750% due 06/15/34

      980      688

San Diego Tobacco Settlement Revenue Funding Corp. Revenue Bonds
7.125% due 06/01/32

      1,165      651

State of California General Obligation Unlimited
5.000% due 02/01/33

      345      317

7.500% due 04/01/34

      800      828

5.650% due 04/01/39 (Ê)

      700      722

7.550% due 04/01/39

      800      834

State of Texas General Obligation Unlimited
4.750% due 04/01/35

      700      688

Tobacco Settlement Authority of Iowa Revenue Bonds
6.500% due 06/01/23

      450      323

Tobacco Settlement Finance Authority of West Virginia Revenue Bonds
7.467% due 06/01/47

      6,540      3,671

Tobacco Settlement Financing Corp. Revenue Bonds
5.500% due 06/01/26

      1,500      1,673

University of Arkansas Revenue Bonds (µ)
5.000% due 11/01/31

      500      501

West Virginia Economic Development Authority Revenue Bonds (µ)
5.370% due 07/01/20

      265      255
         
        53,918
         
Non-US Bonds - 0.8%

Bombardier, Inc. (Å)
7.250% due 11/15/16

    EUR  500      483

Brazilian Government International Bond
5.745% due 01/05/22

    BRL  8,670      4,088

10.250% due 01/10/28

    BRL 7,235      2,994

Bundesrepublik Deutschland
Series 08
4.250% due 07/04/18

    EUR 4,315      6,215

Byggingarsjodur Verkamanna
Series 2
3.750% due 04/15/34

    ISK 379,583      2,751

Series 3
3.750% due 06/15/44

    ISK 706,746      5,151

Federative Republic of Brazil
12.500% due 01/05/22

    BRL 2,500      1,173

10.250% due 01/10/28

    BRL 2,600      1,070

Hellas Telecommunications Luxembourg V (Ê)
Series REGS
4.935% due 10/15/12

    EUR 1,875      1,501

Impress Holdings BV (Ê)
Series REGS
5.737% due 09/15/13

    EUR 875      972

 

Russell Strategic Bond Fund   139

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Ineos Group Holdings PLC
Series REGS
7.875% due 02/15/16

    EUR 1,250      277

Mexican Bonos
Series M 10
8.000% due 12/17/15

    MXN 29,485      2,206

Morgan Stanley (Ê)
2.165% due 03/01/13

    EUR 2,100      2,140

New South Wales Treasury Corp.
Series 17RG
5.500% due 03/01/17

    AUD 2,200      1,598

Republic of Colombia
9.850% due 06/28/27

    COP 7,498,000      3,675

Rhodia SA (Ê)
Series REGS
4.185% due 10/15/13

    EUR 1,500      1,310

United Kingdom Gilt
5.000% due 09/07/14

    GBP 3,168      5,300

5.000% due 03/07/25

    GBP 1,140      1,836

United Kingdom Treasury Gilt Bonds
5.000% due 03/07/18

    GBP 2,224      3,722
         
        48,462
         
United States Government Agencies - 2.4%

Fannie Mae (Ñ)
5.250% due 08/01/12

      2,290      2,387

5.000% due 02/13/17

      12,000      13,197

5.000% due 05/11/17

      12,500      13,737

Federal Home Loan Bank
5.000% due 11/17/17

      7,800      8,443

Federal Home Loan Mortgage Corp.
0.926% due 05/04/11 (Ê)

      49,500      49,500

5.750% due 06/27/16 (Ñ)

      1,145      1,175

5.000% due 12/14/18

      6,200      5,869

3.750% due 03/27/19 (Ñ)

      6,400      6,426

Series 1 (Ê)
0.888% due 02/01/11

      1,700      1,700

Federal National Mortgage Association
Zero coupon due 10/09/19

      4,360      2,224

Freddie Mac (Ñ)
4.750% due 11/17/15

      22,400      24,650

4.875% due 06/13/18

      700      770

5.000% due 04/18/17

      7,000      7,709
         
        137,787
         
United States Government Treasuries - 2.6%

United States Treasury Principal (Ñ)
Principal Only STRIP
Zero coupon due 11/15/21

      21,842      13,001

Zero coupon due 08/15/27

      4,100      1,857

Zero coupon due 11/15/28

      3,300      1,420

United States Treasury Inflation Indexed Bonds (Ñ)
2.000% due 01/15/16 (Æ)

      5,902      6,006

2.500% due 07/15/16 (Æ)

      1,471      1,551
     Principal
Amount ($)
or Shares		      Market
Value
$

2.625% due 07/15/17

    819      877

2.375% due 01/15/25

    27,632      27,399

2.000% due 01/15/26

    13,575      12,710

2.375% due 01/15/27

    3,472      3,427

1.750% due 01/15/28 (Æ)

    43,319      38,974

3.625% due 04/15/28

    3,017      3,483

United States Treasury Notes
0.875% due 03/31/11 (Ñ)

    780      780

1.875% due 02/28/14 (Ñ)

    —      —

1.750% due 03/31/14 (Ñ)

    1,310      1,295

3.750% due 11/15/18 (Ñ)

    15,155      15,933

2.750% due 02/15/19 (Ñ)

    24,135      23,377

6.125% due 11/15/27

    1,059      1,338

4.500% due 05/15/38 (Ñ)

    2,625      2,825
         
        156,253
         
Total Long-Term Investments
(cost $7,466,504)		         6,325,595
         
Common Stocks - 0.0%        
Financial Services - 0.0%        

PIMCO Developing Local Markets Fund (Æ)

    14,710      74
         
Total Common Stocks
(cost $69)		         74
         
Preferred Stocks - 0.1%        
Financial Services - 0.1%        

Deutsche Bank Contingent Capital Trust II (Ñ)

    47,300      645

DG Funding Trust (Å)

    479      4,805

Federal Home Loan Mortgage Corp.

    479,700      250

Federal National Mortgage Association

    136,775      123

Federal National Mortgage Association (Ñ)

    130,300      107

Preferred Blocker, Inc. (Þ)

    1,129      339
         
        6,269
         
Producer Durables - 0.0%        

Nexen, Inc.

    9,850      180
         

Total Preferred Stocks

(cost $24,428)

         6,449
         
Warrants & Rights - 0.0%        
Materials and Processing - 0.0%        

Solutia, Inc. (Þ)(Æ)
2009 Warrants

    1,300      —
         
Total Warrants & Rights
(cost $111)		         —
         

 

140   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Notional
Amount
$		      Market
Value
$
       
Options Purchased - 0.1%        
(Number of Contracts)        
Swaptions        

(Fund Pays/Fund Receives)

        
USD 3.600%/USD Three Month LIBOR
Jul 2009 0.00 Call (1)		    18,400      725
USD 3.450%/USD Three Month LIBOR
Aug 2009 0.00 Call (5)		    103,700      3,650
USD 3.850%/USD Three Month LIBOR
Aug 2009 0.00 Call (1)		    23,000      989

United States Treasury Notes

10 Year Futures

        

May 2009 75.00 Put (1,238)

    1,238      19
         
Total Options Purchased
(cost $1,230)		         5,383
         
Short-Term Investments - 11.6%        

AES Corp. (The)
9.500% due 06/01/09

    875      875

American Electric Power Co., Inc.
Series C
5.375% due 03/15/10

    140      143

American Express Centurion Bank (Ê)
Series BKNT
0.388% due 06/12/09

    6,500      6,478

American Honda Finance Corp. (Ê)(Þ)
1.291% due 02/09/10

    1,600      1,591

American International Group, Inc. (Ê)(Þ)
0.503% due 06/16/09

    1,000      901

ANZ National Int’l, Ltd./London (Ê)(Þ)
1.014% due 08/07/09

    4,100      4,098

AT&T, Inc. (Ê)
1.334% due 02/05/10

    200      200

Bank of America Corp. (Ê)
1.356% due 11/06/09

    200      198

Bank of America NA (Ê)
Series BKNT
1.331% due 06/12/09

    7,500      7,500

Bank of Scotland PLC (Ê)(Ñ)(Þ)
Series Mtn
1.153% due 07/17/09

    3,500      3,487

Bear Stearns Cos. LLC (The) (Ê)
1.392% due 07/16/09

    3,700      3,704

1.341% due 08/21/09

    5,100      5,087

Bowater, Inc. (Ø)
9.000% due 08/01/09

    3,300      404

BP AMI Leasing, Inc. (Ê)(Þ)
1.236% due 06/26/09

    5,700      5,702

Canadian Oil Sands, Ltd. (Þ)
4.800% due 08/10/09

    1,331      1,327

Caterpillar Financial Services Corp. (Ê)
1.306% due 05/18/09

    1,600      1,599

CIT Group, Inc. (Ê)
1.394% due 06/08/09

    100      96

1.358% due 08/17/09

    7,000      6,375
     Notional
Amount
$		      Market
Value
$

Citigroup Funding, Inc. (Ê)(Ñ)
1.226% due 06/26/09

    2,200      2,185

Citigroup, Inc.
1.262% due 12/28/09 (Ê)

    2,300      2,219

4.125% due 02/22/10 (Ñ)

    720      708

Comcast Corp. (Ê)
1.439% due 07/14/09

    1,500      1,499

Continental Airlines, Inc.
Series 99A2
7.056% due 09/15/09

    3,150      3,111

Countrywide Home Loans, Inc.
4.125% due 09/15/09

    1,915      1,899

COX Communications, Inc.
4.625% due 01/15/10

    2,245      2,245

Credit Agricole SA (Ê)(Þ)
1.256% due 05/28/09

    2,400      2,398

Daimler Finance NA LLC (Ê)(Ñ)
1.466% due 08/03/09

    1,200      1,189

DnB NOR Bank ASA (Ê)(Þ)
1.209% due 10/13/09

    9,500      9,406

Export-Import Bank of Korea (Ê)
1.351% due 06/01/09

    2,800      2,798

Federal Home Loan Bank Discount
Notes (ç)(ž)
Zero Coupon due 05/18/09

    3,200      3,200

Federal National Mortgage Association Discount Notes (ç)(ž)
Zero Coupon due 05/05/09

    152      152

FedEx Corp.
5.500% due 08/15/09

    665      670

Fifth Third Bank (Ñ)
Series BKNT
4.200% due 02/23/10

    2,755      2,714

Ford Motor Credit Co. LLC
7.375% due 10/28/09

    1,800      1,728

5.700% due 01/15/10 (Ñ)

    200      188

Gazprom
10.500% due 10/21/09

    1,400      1,436

General Electric Capital Corp.
Series GMTn (Ñ)(Ê)
1.361% due 03/12/10

    400      390

Series mtn (Ê)
1.122% due 10/26/09

    500      494

General Mills, Inc. (Ê)
1.231% due 01/22/10

    1,100      1,097

General Motors Acceptance Corp. of Canada, Ltd. (Ê)
2.336% due 05/22/09

    11,905      9,949

2.788% due 06/30/09

    1,700      2,114

Ginnie Mae I
11.000% due 01/15/10

    1      1

GMAC LLC (Ñ)
2.488% due 05/15/09 (Ê)

    4,030      3,980

5.625% due 05/15/09

    1,700      1,682

Goldman Sachs Group, Inc. (The)

        

1.317% due 06/23/09 (Ê)

    4,900      4,896

1.318% due 11/16/09 (Ê)

    800      789

 

Russell Strategic Bond Fund   141

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Notional
Amount
$		      Market
Value
$
       

Series MTNB (Ñ)(Ê)
1.430% due 07/23/09

    4,200      4,195

Goodyear Tire & Rubber Co. (The) (Ê)(Ñ)
6.318% due 12/01/09

    6,805      6,711

Hospira, Inc. (Ê)
1.712% due 03/30/10

    1,840      1,727

HSBC Bank USA NA NY (Ê)
Series BKNT
1.433% due 06/10/09

    500      499

HSBC Finance Corp. (Ê)
1.162% due 10/21/09

    1,800      1,758

International Lease Finance Corp.
5.000% due 04/15/10

    730      654

Invesco, Ltd.
4.500% due 12/15/09

    3,987      3,837

JC Penney Corp., Inc. (Ñ)
8.000% due 03/01/10

    2,390      2,403

K Hovnanian Enterprises, Inc. (Ñ)
6.000% due 01/15/10

    1,550      1,488

Korea Development Bank/Republic of
Korea (Ê)
1.317% due 04/03/10

    8,900      8,675

Kroger Co. (The)
7.250% due 06/01/09

    445      446

Lehman Brothers Holdings, Inc.
2.911% due 08/21/09

    1,100      154

Series MTN (Ø)
2.907% due 11/16/09

    5,900      826

Series MTNG (Ø)
3.053% due 11/10/09

    300      42

Lincoln National Corp. (Ê)
1.411% due 03/12/10

    3,095      2,897

Mandalay Resort Group (Ñ)
6.500% due 07/31/09

    275      256

9.375% due 02/15/10

    7,550      4,020

Martin Marietta Materials, Inc. (Ê)
1.189% due 04/30/10

    4,295      4,105

Masco Corp. (Ê)
1.631% due 03/12/10

    5,242      4,997

Merrill Lynch & Co., Inc.
1.346% due 12/04/09 (Ê)

    1,000      969

Series Mtn (Ê)
1.291% due 05/08/09

    2,700      2,699

Series MTn (Ê)
0.996% due 08/14/09

    1,100      1,082

Merrill Lynch Mortgage Trust
1.072% due 07/07/09

    4,800      3,771

MGM Mirage (Ñ)
6.000% due 10/01/09

    3,150      2,646

Morgan Stanley
1.291% due 05/07/09 (Ê)

    5,300      5,300

Series MTn (Ñ)(Ê)
1.221% due 01/15/10

    2,600      2,543

National Australia Bank, Ltd. (Ê)(Þ)
1.353% due 09/11/09

    400      399

National City Bank (Ê)
Series BKN1
1.414% due 09/09/09

    230      228
     Notional
Amount
$		      Market
Value
$

National City Bank
Series BKNT
4.150% due 08/01/09

    1,260      1,256

Power Contract Financing LLC (Þ)
6.256% due 02/01/10

    579      567

Residential Capital LLC (Ê)
4.351% due 05/22/09

    2,600      2,503

Russell Investment Company
Russell Money Market Fund

   442,328,000      442,328

Santander US Debt SA Unipersonal (Ê)(Þ)
1.331% due 11/20/09

    2,800      2,775

Siemens Financieringsmaatschappij NV (Ê)(Þ)
1.288% due 08/14/09

    2,000      1,994

Simon Property Group, LP (Ñ)
4.875% due 03/18/10

    1,720      1,687

SLM Corp. (Ê)
Series MTNA
1.232% due 07/27/09

    2,600      2,565

Small Business Administration
Series 1999-P10 Class 1
7.540% due 08/10/09

    112      113

Southern California Edison Co. (Ñ)
7.625% due 01/15/10

    510      525

Telecom Italia Capital SA
4.000% due 01/15/10

    1,186      1,178

Telefonica Emisiones SAU (Ê)
1.588% due 06/19/09

    1,500      1,499

Time Warner, Inc. (Ê)(Ñ)
1.150% due 11/13/09

    4,855      4,822

United States Treasury Bills (ç)(ž)

        

0.142% due 05/07/09

    280      280

0.152% due 05/07/09

    4,640      4,640

0.198% due 05/07/09

    780      780

0.123% due 05/14/09

    80      80

0.126% due 05/14/09

    400      400

0.132% due 05/14/09

    2,010      2,010

0.187% due 05/14/09

    160      160

0.462% due 05/14/09

   4,360      1,710

0.025% due 05/15/09

    9,330      9,330

0.041% due 05/15/09

    540      540

0.150% due 05/15/09

    1,680      1,680

0.041% due 05/21/09

    500      500

0.035% due 05/21/09

    2,050      2,050

0.046% due 05/21/09

    1,340      1,340

0.069% due 05/21/09

    1,070      1,070

0.076% due 05/21/09

    1,540      1,540

0.162% due 05/21/09

   7,340      840

0.020% due 05/28/09

   390      390

0.157% due 05/28/09

    225      225

0.276% due 05/28/09

    660      660

0.061% due 06/04/09

    300      300

0.057% due 06/04/09

    860      860

0.233% due 06/04/09

    420      420

0.233% due 06/04/09

   490      490

0.238% due 06/04/09

    40      40

Universal City Development Partners, Ltd.
11.750% due 04/01/10

    1,625      1,540

Unum Group
5.859% due 05/15/09

    980      978

 

142   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Notional
Amount
$		      Market
Value
$		  
       

Wachovia Corp. (Ê)
1.311% due 12/01/09

    400      395   

Wells Fargo & Co. (Ê)
1.420% due 09/15/09

    400      399   

Xstrata Finance Dubai, Ltd. (Ê)(Þ)
1.270% due 11/13/09

    1,175      1,153   
           

(cost $698,975)

         684,841   
           
Repurchase Agreements - 1.2%        

Agreement with Barclays Capital Inc. and the Bank of New York (Tri-Party) of $71,700 dated April 30, 2009, at 0.180% to be repurchased at $71,700 on May 1, 2009 collateralized by: $71,700 par various United States Treasury Obligations, valued at $71,700

    71,700      71,700   
           
Total Repurchase Agreements
(cost $71,700)		         71,700   
           
Other Securities - 6.2%        

Russell Investment Company Russell
Money Market Fund (×)

    183,611,384      183,611   

State Street Securities Lending Quality Trust (×)

    193,372,322      186,407   
           
Total Other Securities
(cost $376,984)		         370,018   
           
Total Investments - 126.0%
(identified cost $8,640,001)		         7,464,060   
Other Assets and Liabilities,
Net - (26.0%)		         (1,539,287 ) 
           
Net Assets -100.0%         5,924,773   
           

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Strategic Bond Fund   143

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$		  
                   
Long Positions                    

Euribor Futures (Germany)

    67      EUR   16,539      06/09      788   

Euribor Futures (Germany)

    55      EUR   13,574      09/09      589   

Euribor Futures (Germany)

    45      EUR   11,089      12/09      468   

Euribor Futures (Germany)

    18      EUR   4,432      03/10      19   

Euribor Futures (Germany)

    16      EUR   3,932      06/10      20   

Euribor Futures (Germany)

    14      EUR   3,434      09/10      18   

Euribor Futures (Germany)

    16      EUR   3,914      12/10      22   

Euro-Bobl Futures (Germany)

    655      EUR   75,967      06/09      (612 ) 

Eurodollar Futures (CME)

    67      USD   16,591      05/09      33   

Eurodollar Futures (CME)

    1,480      USD   366,504      06/09      7,685   

Eurodollar Futures (CME)

    607      USD   150,240      09/09      3,439   

Eurodollar Futures (CME)

    409      USD   101,028      12/09      2,442   

Eurodollar Futures (CME)

    279      USD   68,826      03/10      1,774   

Eurodollar Futures (CME)

    167      USD   41,095      06/10      57   

Euro-Schatz Bond Futures (Germany)

    1,334      EUR   144,146      06/09      (2 ) 

Three Month Short Sterling Interest Rate Futures (UK)

    212      GBP   26,150      06/09      1,643   

Three Month Short Sterling Interest Rate Futures (UK)

    188      GBP   23,129      12/09      1,367   

Three Month Short Sterling Interest Rate Futures (UK)

    16      GBP   1,965      03/10      8   

Three Month Short Sterling Interest Rate Futures (UK)

    16      GBP   1,959      06/10      10   

Three Month Short Sterling Interest Rate Futures (UK)

    16      GBP   1,954      09/10      10   

Three Month Short Sterling Interest Rate Futures (UK)

    16      GBP   1,947      12/10      8   

United States Treasury Bonds

    938      USD   114,963      06/09      (4,215 ) 

United States Treasury 2 Year Notes

    770      USD   167,511      06/09      200   

United States Treasury 5 Year Notes

    2,390      USD   430,140      06/09      (703 ) 

United States Treasury 10 Year Notes

    1,929      USD   233,290      06/09      (1,169 ) 
Short Positions                    

Euro-Bund Futures (Germany)

    104      EUR   12,743      06/09      228   

Long Gilt Bond (UK)

    36      GBP   4,342      06/09      (21 ) 

United States Treasury Bonds

    357      USD   43,755      06/09      1,462   

United States Treasury 2 Year Notes

    402      USD   87,454      06/09      (409 ) 

United States Treasury 5 Year Notes

    19      USD   2,226      06/09      (8 ) 

United States Treasury 10 Year Notes

    152      USD   18,383      06/09      349   
                       

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     15,500   
                       

 

See accompanying notes which are an integral part of the financial statements.

 

144   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Options Written
(Number of Contracts)		    Notional
Amount		      Market
Value
$		  
       
Eurodollar Futures        

Sep 2009 98.63 Put (32)

    USD  80      (5 ) 
Swaptions        
(Fund Pays/Fund Receives)        
USD 2.350%/USD Three Month LIBOR
Jun 2009 0.00 Call (2)		      18,000      (15 ) 
USD 2.750%/USD Three Month LIBOR
May 2009 0.00 Put (5)		      23,000      (68 ) 
USD 2.000%/USD Three Month LIBOR
Jul 2009 0.00 Put (4)		      14,500      (24 ) 
USD 4.400%/USD Three Month LIBOR
Aug 2009 0.00 Put (2)		      9,700      (14 ) 
USD 3.500%/USD Three Month LIBOR
Jun 2009 0.00 Put (2)		      18,000      (62 ) 
United States Treasury Notes
10 Year Futures
        

May 2009 126.00 Call (70)

    USD  70      (4 ) 

May 2009 128.00 Call (84)

    USD  84      (3 ) 

May 2009 119.00 Put (69)

    USD  69      (27 ) 

May 2009 122.00 Put (85)

    USD  85      (143 ) 
           

Total Liability for Options Written
(premiums received $522)

         (365 ) 
           

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Strategic Bond Fund   145

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   679   AUD   937   05/07/09   2   
USD   1,559   AUD   2,200   05/26/09   37   
USD   987   AUD   1,535   06/17/09   125   
USD   1,470   AUD   2,306   06/17/09   201   
USD   1,624   AUD   2,262   06/17/09   15   
USD   2,747   AUD   3,835   06/17/09   32   
USD   2,762   AUD   4,318   06/17/09   367   
USD   5,608   AUD   7,706   06/17/09   (24 ) 
USD   639   BRL   1,400   05/05/09   —   
USD   1,138   BRL   2,500   05/05/09   4   
USD   2,062   BRL   4,600   05/05/09   40   
USD   137   BRL   312   06/02/09   5   
USD   411   BRL   936   06/02/09   13   
USD   177   CAD   223   05/26/09   10   
USD   542   CAD   665   06/08/09   16   
USD   479   CAD   595   06/17/09   19   
USD   1,250   CAD   1,506   06/17/09   12   
USD   915   CHF   1,072   06/17/09   25   
USD   288   EUR   222   05/14/09   5   
USD   1,033   EUR   785   05/26/09   5   
USD   1,472   EUR   1,085   05/26/09   (37 ) 
USD   2,847   EUR   2,160   05/26/09   10   
USD   2,971   EUR   2,170   05/26/09   (100 ) 
USD   3,057   EUR   2,250   05/26/09   (80 ) 
USD   1,031   EUR   782   06/17/09   4   
USD   2,694   EUR   1,997   06/17/09   (52 ) 
USD   2,972   EUR   2,326   06/17/09   105   
USD   3,344   EUR   2,525   06/17/09   (4 ) 
USD   10,705   EUR   8,044   06/17/09   (65 ) 
USD   706   GBP   487   05/21/09   15   
USD   359   GBP   252   06/17/09   13   
USD   1,187   GBP   839   06/17/09   54   
USD   1,247   GBP   836   06/17/09   (10 ) 
USD   1,253   GBP   836   06/17/09   (16 ) 
USD   1,395   GBP   987   06/17/09   65   
USD   2,364   GBP   1,623   06/17/09   37   
USD   3,129   GBP   2,131   06/17/09   23   
USD   5,353   GBP   3,615   06/17/09   (6 ) 
USD   3,020   JPY   296,701   05/01/09   (11 ) 
USD   500   JPY   49,306   05/07/09   (1 ) 
USD   686   JPY   66,799   05/26/09   (8 ) 
USD   1,565   JPY   153,296   05/26/09   (11 ) 
USD   2,090   JPY   208,345   05/26/09   23   
USD   3,086   JPY   296,701   06/10/09   (76 ) 
USD   662   JPY   64,971   06/17/09   (2 ) 
USD   676   JPY   65,400   06/17/09   (12 ) 
USD   1,278   JPY   127,459   06/17/09   15   
USD   1   KRW   1,294   05/01/09   —   
USD   2   KRW   1,480   05/01/09   —   
USD   761   NOK   4,844   06/17/09   (24 ) 
USD   3,059   NOK   20,137   06/17/09   3   
USD   355   NZD   674   06/17/09   25   
USD   1,195   NZD   2,141   06/17/09   13   
Foreign Currency Exchange Contracts  
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   1,296   NZD   2,340   06/17/09   25   
USD   1,575   NZD   2,982   06/17/09   107   
USD   2,463   NZD   4,717   06/17/09   199   
USD   10,259   SEK   84,000   05/13/09   183   
USD   2,874   SEK   23,508   06/17/09   48   
AUD   2,860   CAD   2,507   06/17/09   (17 ) 
AUD   2,860   CAD   2,507   06/17/09   46   
AUD   3,276   CAD   2,853   06/17/09   (69 ) 
AUD   3,276   CAD   2,853   06/17/09   86   
AUD   1,878   JPY   126,004   06/17/09   (59 ) 
AUD   1,878   JPY   126,004   06/17/09   (23 ) 
AUD   3,651   JPY   252,967   06/17/09   (97 ) 
AUD   3,651   JPY   252,967   06/17/09   18   
AUD   4,552   JPY   295,866   06/17/09   (277 ) 
AUD   4,552   JPY   295,866   06/17/09   (20 ) 
AUD   5,207   JPY   364,011   06/17/09   (147 ) 
AUD   5,207   JPY   364,011   06/17/09   67   
AUD   1,172   NZD   1,476   06/17/09   (14 ) 
AUD   1,172   NZD   1,476   06/17/09   (2 ) 
AUD   4,660   USD   3,249   05/26/09   (132 ) 
AUD   4,452   USD   3,144   06/17/09   (82 ) 
BRL   1,400   USD   625   05/05/09   (15 ) 
BRL   2,535   USD   1,139   05/05/09   (19 ) 
BRL   5,530   USD   2,377   05/05/09   (149 ) 
BRL   5,700   USD   2,532   05/05/09   (72 ) 
BRL   5,429   USD   2,213   06/02/09   (248 ) 
BRL   1,400   USD   626   08/03/09   —   
CAD   1,246   AUD   1,498   06/17/09   99   
CAD   1,246   AUD   1,498   06/17/09   (58 ) 
CAD   1,546   AUD   1,747   06/17/09   44   
CAD   1,546   AUD   1,747   06/17/09   (74 ) 
CAD   1,965   AUD   2,256   06/17/09   13   
CAD   1,965   AUD   2,256   06/17/09   (25 ) 
CAD   2,058   AUD   2,361   06/17/09   25   
CAD   2,058   AUD   2,361   06/17/09   (39 ) 
CAD   450   USD   366   05/26/09   (12 ) 
CAD   724   USD   590   05/26/09   (17 ) 
CAD   1,454   USD   1,220   05/26/09   1   
CAD   2,244   USD   1,805   05/26/09   (76 ) 
CAD   4,866   USD   4,100   05/26/09   22   
CAD   5,822   USD   4,631   05/26/09   (248 ) 
CAD   2,118   USD   1,784   06/17/09   9   
CAD   3,078   USD   2,495   06/17/09   (85 ) 
CAD   4,055   USD   3,130   06/17/09   (269 ) 
CHF   1,411   AUD   1,748   06/17/09   45   
CHF   1,411   AUD   1,748   06/17/09   (15 ) 
CHF   1,583   AUD   1,959   06/17/09   17   
CHF   1,583   AUD   1,959   06/17/09   15   
CHF   1,171   EUR   774   06/17/09   (26 ) 
CHF   1,171   EUR   774   06/17/09   23   
CHF   1,840   EUR   1,248   06/17/09   (9 ) 
CHF   1,840   EUR   1,248   06/17/09   47   
CHF   1,075   GBP   641   06/17/09   (41 ) 

 

See accompanying notes which are an integral part of the financial statements.

 

146   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
CHF   1,075   GBP   641   06/17/09   47   
CHF   2,460   JPY   204,032   06/17/09   (49 ) 
CHF   2,460   JPY   204,032   06/17/09   (38 ) 
CHF   2,836   USD   2,449   06/17/09   (37 ) 
CHF   3,901   USD   3,441   06/17/09   21   
COP   2,178,000   USD   847   06/12/09   (98 ) 
COP   2,213,000   USD   923   06/12/09   (38 ) 
COP   3,611,790   USD   1,527   06/12/09   (41 ) 
EUR   2,189   CAD   3,518   06/17/09   64   
EUR   2,189   CAD   3,518   06/17/09   (11 ) 
EUR   1,241   GBP   1,109   06/17/09   (18 ) 
EUR   1,241   GBP   1,109   06/17/09   17   
EUR   645   JPY   86,200   05/26/09   8   
EUR   645   JPY   86,200   05/26/09   13   
EUR   688   NOK   6,061   06/17/09   13   
EUR   688   NOK   6,061   06/17/09   (1 ) 
EUR   1,332   NOK   11,779   06/17/09   (9 ) 
EUR   1,332   NOK   11,779   06/17/09   38   
EUR   907   NZD   2,051   06/17/09   13   
EUR   907   NZD   2,051   06/17/09   (55 ) 
EUR   1,220   SEK   13,410   06/17/09   (39 ) 
EUR   1,220   SEK   13,410   06/17/09   92   
EUR   11,440   USD   15,318   05/07/09   182   
EUR   10,307   USD   13,667   05/14/09   30   
EUR   1,147   USD   1,521   05/22/09   3   
EUR   3,099   USD   4,107   05/22/09   7   
EUR   680   USD   881   05/26/09   (18 ) 
EUR   680   USD   885   05/26/09   (14 ) 
EUR   785   USD   1,041   05/26/09   2   
EUR   1,110   USD   1,486   05/26/09   17   
EUR   1,427   USD   1,930   05/26/09   43   
EUR   2,030   USD   2,721   05/26/09   36   
EUR   2,160   USD   2,859   05/26/09   2   
EUR   1,181   USD   1,601   06/17/09   38   
EUR   1,496   USD   2,020   06/17/09   41   
EUR   1,657   USD   2,184   06/17/09   (8 ) 
EUR   1,707   USD   2,248   06/17/09   (10 ) 
EUR   2,222   USD   2,894   06/17/09   (45 ) 
EUR   2,302   USD   3,118   06/17/09   72   
EUR   2,516   USD   3,200   06/17/09   (129 ) 
EUR   1,435   USD   1,852   07/31/09   (46 ) 
GBP   1,539   CHF   2,626   06/17/09   55   
GBP   1,539   CHF   2,626   06/17/09   (29 ) 
GBP   1,437   EUR   1,579   06/17/09   98   
GBP   1,437   EUR   1,606   06/17/09   47   
GBP   1,437   EUR   1,579   06/17/09   (135 ) 
GBP   1,437   EUR   1,606   06/17/09   (47 ) 
GBP   1,056   JPY   151,730   06/17/09   (33 ) 
GBP   1,056   JPY   151,730   06/17/09   11   
GBP   1,546   JPY   225,574   06/17/09   (40 ) 
GBP   1,546   JPY   225,574   06/17/09   41   
GBP   —   USD   8   05/01/09   8   
GBP   497   USD   733   05/01/09   (2 ) 
Foreign Currency Exchange Contracts  
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
GBP   4,613   USD   6,791   05/21/09   (33 ) 
GBP   8,010   USD   11,747   05/26/09   (101 ) 
GBP   2,514   USD   3,677   05/29/09   (42 ) 
GBP   185   USD   259   06/17/09   (15 ) 
GBP   816   USD   1,199   06/17/09   (8 ) 
GBP   1,690   USD   2,416   06/17/09   (84 ) 
JPY   113,038   AUD   1,749   06/17/09   80   
JPY   113,038   AUD   1,749   06/17/09   40   
JPY   117,270   AUD   1,705   06/17/09   34   
JPY   117,270   AUD   1,705   06/17/09   11   
JPY   165,179   AUD   2,282   06/17/09   (15 ) 
JPY   165,179   AUD   2,282   06/17/09   (8 ) 
JPY   143,738   CHF   1,708   06/17/09   4   
JPY   143,738   CHF   1,708   06/17/09   35   
JPY   85,392   EUR   645   05/26/09   (3 ) 
JPY   85,392   EUR   645   05/26/09   (10 ) 
JPY   117,682   EUR   883   06/17/09   (37 ) 
JPY   117,682   EUR   883   06/17/09   11   
JPY   154,583   EUR   1,161   06/17/09   (43 ) 
JPY   154,583   EUR   1,161   06/17/09   10   
JPY   472,304   GBP   3,241   06/17/09   116   
JPY   472,304   GBP   3,241   06/17/09   (113 ) 
JPY   96,606   NOK   6,742   06/17/09   7   
JPY   96,606   NOK   6,742   06/17/09   38   
JPY   102,244   NOK   6,766   06/17/09   (6 ) 
JPY   102,244   NOK   6,766   06/17/09   (3 ) 
JPY   296,701   USD   3,084   05/01/09   76   
JPY   68,916   USD   709   05/26/09   10   
JPY   215,698   USD   2,160   05/26/09   (28 ) 
JPY   381,761   USD   3,968   06/17/09   95   
JPY   625,842   USD   6,372   06/17/09   22   
MXN   2,763   USD   198   05/01/09   (3 ) 
MXN   14,133   USD   1,053   05/13/09   31   
MXN   19,155   USD   1,409   05/13/09   23   
NOK   13,566   USD   1,913   06/17/09   (149 ) 
NZD   1,851   AUD   1,491   06/17/09   44   
NZD   1,851   AUD   1,491   06/17/09   (8 ) 
NZD   1,303   USD   735   06/17/09   —   
NZD   1,842   USD   1,021   06/17/09   (18 ) 
NZD   4,498   USD   2,357   06/17/09   (181 ) 
NZD   5,875   USD   2,908   06/17/09   (408 ) 
NZD   9,407   USD   5,395   06/17/09   87   
SEK   5,808   EUR   523   06/17/09   (23 ) 
SEK   5,808   EUR   523   06/17/09   (7 ) 
SEK   13,494   EUR   1,219   06/17/09   25   
SEK   13,494   EUR   1,219   06/17/09   (90 ) 
SEK   7,603   USD   834   06/17/09   (111 ) 
SEK   12,345   USD   1,529   06/17/09   (5 ) 
SEK   36,517   USD   4,426   06/17/09   (113 ) 
             

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts

   (1,295 ) 
             

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Strategic Bond Fund   147

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

 

Interest Rate Swap Contracts  

Counter
Party

    Notional
Amount		   

Fund Receives

   

Fund Pays

    Termination
Date		    Market
Value
$		  
                

Bank of America

    USD   22,300    3.500%    Three Month LIBOR    06/17/19    432   

Bank of America

    USD   1,700    Three Month LIBOR    5.000%    12/17/28    (363 ) 

Bank of America

    USD   9,500    5.628%    Three Month LIBOR    06/16/36    3,399   

Barclays Bank PLC

    BRL   3,900    12.540%    Brazil Interbank Deposit Rate    01/02/12    45   

Barclays Bank PLC

    GBP   7,340    Six Month LIBOR    4.000%    06/17/14    (465 ) 

Barclays Bank PLC

    JPY   383,000    Three Month LIBOR    1.250%    06/17/14    (61 ) 

Barclays Bank PLC

    USD   1,018    Three Month LIBOR    4.524%    11/15/21    (133 ) 

Barclays Bank PLC

    USD   1,032    Three Month LIBOR    4.420%    11/15/21    (119 ) 

Barclays Bank PLC

    USD   3,338    Three Month LIBOR    4.540%    11/15/21    (447 ) 

Barclays Bank PLC

    USD   6,658    Three Month LIBOR    4.633%    11/15/21    (988 ) 

BNP Paribas

    EUR   900    Consumer Price Index (France)    2.090%    10/15/10    44   

Citibank

    BRL   5,600    11.360%    Brazil Interbank Deposit Rate    01/04/10    (7 ) 

Citibank

    MXN   195,000    8.210%    Mexico Interbank 28 Day Deposit Rate    12/08/10    520   

Citibank

    MXN   243,000    8.210%    Mexico Interbank 28 Day Deposit Rate    12/09/10    645   

Citibank

    AUD   33,500    4.500%    Three Month BBSW    06/15/11    100   

Citibank

    GBP   20,000    5.000%    Six Month LIBOR    03/18/12    2,204   

Citibank

    USD   9,200    2.750%    Three Month LIBOR    06/18/12    198   

Citibank

    JPY   4,012,000    Six Month LIBOR    1.500%    12/17/13    (1,190 ) 

Citibank

    GBP   160    4.000%    Six Month LIBOR    06/17/14    10   

Citibank

    EUR   5,390    3.500%    Six Month EURIBOR    06/17/14    251   

Citibank

    JPY   1,178,000    Six Month LIBOR    1.250%    06/17/14    (187 ) 

Citibank

    JPY   2,815,000    Six Month LIBOR    1.250%    06/17/14    (447 ) 

Citibank

    USD   600    Three Month LIBOR    3.500%    06/18/29    10   

Citibank

    USD   1,900    Three Month LIBOR    5.000%    12/17/38    (508 ) 

Credit Suisse First Boston

    USD   29,400    2.750%    Three Month LIBOR    06/18/12    632   

Credit Suisse First Boston

    GBP   8,200    5.000%    Six Month LIBOR    03/18/14    1,137   

Credit Suisse First Boston

    GBP   2,720    Six Month LIBOR    4.000%    06/17/14    (172 ) 

Credit Suisse First Boston

    GBP   6,310    Six Month LIBOR    4.000%    06/17/14    (400 ) 

Credit Suisse First Boston

    USD   10,700    Three Month LIBOR    3.500%    06/17/24    80   

Credit Suisse First Boston

    USD   12,600    Three Month LIBOR    3.500%    06/18/29    213   

Credit Suisse First Boston

    USD   13,500    Three Month LIBOR    5.000%    12/17/38    (3,582 ) 

Deutsche Bank

    KRW   5,951,000    2.820%    Korean Interbank Offer Rate    01/28/11    (3 ) 

Deutsche Bank

    AUD   500    4.500    03MBBSW    06/15/11    2   

Deutsche Bank

    GBP   200    5.000%    Six Month LIBOR    03/18/14    28   

Deutsche Bank

    GBP   1,300    5.000%    Six Month LIBOR    03/18/14    250   

Deutsche Bank

    GBP   11,420    4.000%    Six Month LIBOR    06/17/14    724   

Deutsche Bank

    USD   40,000    Three Month LIBOR    3.250%    06/17/14    (1,173 ) 

Deutsche Bank

    USD   56,900    Three Month LIBOR    3.500%    06/17/16    (1,874 ) 

Deutsche Bank

    USD   8,000    3.500%    Three Month LIBOR    06/17/19    155   

Deutsche Bank

    USD   13,800    3.500%    Three Month LIBOR    06/17/19    267   

Deutsche Bank

    USD   30,600    Three Month LIBOR    3.500%    06/17/24    229   

Deutsche Bank

    USD   800    Three Month LIBOR    3.500%    06/18/29    14   

Deutsche Bank

    USD   1,400    Three Month LIBOR    3.500%    06/18/29    24   

Deutsche Bank

    USD   7,300    Three Month LIBOR    3.500%    06/18/29    123   

Goldman Sachs

    GBP   5,300    6.000%    Six Month LIBOR    06/19/09    110   

Goldman Sachs

    GBP   800    6.000%    Six Month LIBOR    12/19/09    43   

Goldman Sachs

    BRL   1,400    11.465%    Brazil Interbank Deposit Rate    01/04/10    —   

Goldman Sachs

    USD   5,600    1.840%    France CPI Ex Tobacco Index    03/15/12    187   

Goldman Sachs

    USD   4,320    4.987%    Three Month LIBOR    05/02/12    470   

Goldman Sachs

    GBP   100    5.000%    Six Month LIBOR    09/17/13    13   

HSBC

    GBP   600    5.100%    Six Month LIBOR    09/15/13    83   

HSBC

    GBP   800    5.000%    Six Month LIBOR    09/17/13    106   

JP Morgan

    BRL   37,000    10.060%    Brazil Interbank Deposit Rate    01/04/10    17   

JP Morgan

    MXN   122,000    8.420%    Mexico Interbank 28 Day Deposit Rate    12/01/10    349   

 

See accompanying notes which are an integral part of the financial statements.

 

148   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Interest Rate Swap Contracts  

Counter
Party

    Notional
Amount		   

Fund Receives

   

Fund Pays

    Termination
Date		    Market
Value
$		  
                

JP Morgan

    MXN   98,000    8.380%    Mexico Interbank 28 Day Deposit Rate    12/03/10    277   

JP Morgan

    KRW   5,785,000    2.830%    Korean Interbank Offer Rate    01/28/11    (2 ) 

JP Morgan

    GBP   7,930    4.000%    Six Month LIBOR    06/17/14    502   

JP Morgan

    USD   40,000    3.250%    Three Month LIBOR    06/17/14    1,173   

JP Morgan

    JPY   574,000    1.250%    Six Month LIBOR    06/17/14    91   

JP Morgan

    JPY   1,549,000    1.250%    Six Month LIBOR    06/17/14    246   

JP Morgan

    USD   56,900    3.500%    Three Month LIBOR    06/17/16    1,874   

JP Morgan

    USD   1,600    3.500%    Three Month LIBOR    06/17/19    31   

JP Morgan

    USD   1,400    Three Month LIBOR    3.500%    06/18/29    24   

JP Morgan

    USD   1,500    Three Month LIBOR    3.500%    06/18/29    25   

JP Morgan

    USD   4,800    Three Month LIBOR    5.000%    12/17/38    (1,303 ) 

Merrill Lynch

    GBP   5,600    4.500%    Six Month LIBOR    09/20/09    (303 ) 

Merrill Lynch

    BRL   1,200    12.948%    Brazil Interbank Deposit Rate    01/04/10    18   

Merrill Lynch

    BRL   3,700    11.430%    Brazil Interbank Deposit Rate    01/04/10    (2 ) 

Merrill Lynch

    BRL   300    14.765%    Brazil Interbank Deposit Rate    01/02/12    9   

Morgan Stanley

    BRL   3,800    12.670%    Brazil Interbank Deposit Rate    01/04/10    36   

Morgan Stanley

    USD   600    4.000%    Three Month LIBOR    06/17/11    29   

Morgan Stanley

    USD   600    Three Month LIBOR    5.000%    12/17/38    (159 ) 

Nippon Credit Bank, LTD.

    JPY   1,330,000    1.250%    Six Month LIBOR    06/17/14    211   

Royal Bank of Scotland

    GBP   1,500    6.000%    Six Month LIBOR    06/19/09    31   

Royal Bank of Scotland

    USD   393,800    3.000%    Three Month LIBOR    12/16/10    5,835   

Royal Bank of Scotland

    USD   2,700    4.000%    Three Month LIBOR    06/17/11    129   

Royal Bank of Scotland

    GBP   7,000    5.000%    Six Month LIBOR    03/18/14    970   

UBS

    BRL   3,800    12.410%    Brazil Interbank Deposit Rate    01/04/10    36   

UBS

    AUD   7,700    4.500%    Three Month LIBOR    06/15/11    23   

UBS

    AUD   1,900    4.250%    Six Month BBSW    09/15/11    13   

UBS

    BRL   1,400    10.575%    Brazil Interbank Deposit Rate    01/02/12    (20 ) 

UBS

    BRL   3,800    12.540%    Brazil Interbank Deposit Rate    01/02/12    44   

UBS

    JPY   226,000    Six Month LIBOR    1.500%    12/17/13    (67 ) 

UBS

    JPY   1,354,000    Six Month LIBOR    1.500%    12/17/13    (402 ) 
                    

Total Market Value of Open Interest Rate Swap Contracts Premiums Paid (Received) - ($3,417)

    10,364   
                    

 

Credit Default Swap Contracts  
Corporate Issues  

Reference
Entity

   

Counter
Party

    Implied
Credit
Spread		    Notional
Amount		    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value
$		  
                    

American International Group

    Deutsche Bank    3.678%    USD    10,000    1.630       06/20/10    (5,580 ) 

Arrow Electronics, Inc.

    Citigroupglobal Markets, Inc.    0.075%    USD    1,730    0.820       03/20/14    (7 ) 

Berkshire Hathaway

    Deutsche Bank    0.334%    USD    17,100    (1.000 )     03/20/13    (1,360 ) 

Centex Corporation

    JP Morgan    0.167%    USD    4,275    4.400       12/20/13    (510 ) 

Darden Rest, Inc.

    Citigroupglobal Markets, Inc.    0.110%    USD    275    2.730       03/20/14    (21 ) 

Darden Restaurants, Inc.

    Deutsche Bank    0.110%    USD    4,775    2.250       03/20/14    (261 ) 

Federative Republic of Brazil

    UBS    0.255%    USD    4,000    1.190       08/20/13    (211 ) 

Ford Motor Credit Co.

    Barclays Bank PLC    0.960%    USD    700    5.650       09/20/12    (70 ) 

Ford Motor Credit Co.

    Goldman Sachs    0.960%    USD    400    3.850       09/20/12    (63 ) 

Ford Motor Credit Co.

    Merrill Lynch    3.882%    USD    3,600    5.000       12/20/09    (674 ) 

Gaz Capital for Gazprom

    Barclays Bank PLC    0.578%    USD    1,100    1.600       12/20/12    (135 ) 

Gaz Capital for Gazprom

    Morgan Stanley    0.572%    USD    1,500    2.480       02/20/13    (148 ) 

Gaz Capital for Gazprom

    UBS    0.534%    USD    1,000    1.050       08/20/09    (12 ) 

Gaz Capital for Gazprom

    UBS    0.549%    USD    4,000    2.260       08/20/13    (451 ) 

GE Capital Corporation

    Banque National De Paris    0.748%    USD    1,700    1.100       12/20/09    (65 ) 

GE Capital Corporation

    Citibank    0.749%    USD    700    1.050       03/20/10    (37 ) 

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Strategic Bond Fund   149

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Credit Default Swap Contracts  
Corporate Issues  

Reference
Entity

   

Counter
Party

    Implied
Credit
Spread		    Notional
Amount		    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value
$		  
                    

GE Capital Corporation

    Citibank    0.749%    USD    600    1.100       03/20/10    (31 ) 

GE Capital Corporation

    Citibank    0.749%    USD    200    1.150       03/20/10    (10 ) 

GE Capital Corporation

    Citibank    0.685%    USD    600    4.800       12/20/13    (39 ) 

GE Capital Corporation

    Citibank    0.736%    USD    5,500    5.000       06/20/10    (133 ) 

GE Capital Corporation

    Credit Suisse First Boston    0.738%    USD    2,535    (6.550 )     12/20/10    (12 ) 

GE Capital Corporation

    Goldman Sachs    0.748%    USD    200    0.830       12/20/09    (8 ) 

GE Capital Corporation

    Merrill Lynch    0.748%    USD    1,000    1.080       12/20/09    (36 ) 

GE Capital Corporation

    Royal Bank of Scotland    0.747%    USD    400    1.100       09/20/09    (8 ) 

General Motors Acceptance Corp.

    Merrill Lynch    1.651%    USD    1,400    1.850       09/20/09    (66 ) 

General Motors Corp.

    Bank of America    14.330%    USD    800    5.000       06/20/13    (687 ) 

General Motors Corp.

    Bank of America    14.580%    USD    900    8.950       03/20/13    (745 ) 

General Motors Corp.

    Chase Securities Inc.    14.851%    USD    200    4.550       12/20/12    (172 ) 

General Motors Corp.

    Citibank    14.851%    USD    10,300    4.630       12/20/12    (8,828 ) 

General Motors Corp.

    Deutsche Bank    14.330%    USD    500    5.000       06/20/13    (430 ) 

Hewelett-Packard Co.

    Citigroupglobal Markets, Inc.    0.050%    USD    1,730    0.720       03/20/14    (19 ) 

Home Depot

    Citigroupglobal Markets, Inc.    0.105%    USD    4,695    2.670       03/20/14    (359 ) 

Lowes

    Citigroupglobal Markets, Inc.    0.095%    USD    4,900    1.200       03/20/14    (63 ) 

Metlife, Inc.

    Deutsche Bank    0.618%    USD    8,500    2.050       03/20/13    (1,058 ) 

Metlife, Inc.

    UBS    0.618%    USD    8,500    2.050       03/20/13    (1,058 ) 

Mexico Government International Bond

    JP Morgan    0.306%    USD    2,600    0.920       03/20/16    (313 ) 

Nordstrom, Inc.

    Deutsche Bank    0.201%    USD    5,125    2.100       03/20/14    (34 ) 

Prudential

    Deutsche Bank    0.675%    USD    8,500    2.300       03/20/13    (1,114 ) 

Prudential

    UBS    0.675%    USD    8,500    2.300       03/20/13    (1,114 ) 

Pulte Homes, Inc.

    JP Morgan    0.183%    USD    9,000    2.550       12/20/13    (299 ) 

Republic of Indonesia

    UBS    0.400%    USD    300    1.300       09/20/10    (9 ) 

Republic of Korea

    JP Morgan    0.246%    USD    1,000    3.800       12/20/09    13   

Republic of Panama

    JP Morgan    0.329%    USD    300    1.250       01/20/17    (37 ) 

Russian Federation

    UBS    0.362%    USD    2,500    1.030       08/20/13    (244 ) 

Russian Federation

    UBS    0.336%    USD    500    1.250       08/20/18    (72 ) 

SLM Corporation

    Barclays    1.950%    USD    400    5.100       06/20/09    (8 ) 

SLM Corporation

    Deutsche Bank    1.344%    USD    10,000    5.000       12/20/13    (2,181 ) 

Wachovia Corporation

    Royal Bank of Scotland    0.241%    USD    300    3.020       03/20/13    13   
                        

Total Market Value of Open Corporate Issue Credit Default Swap Contracts Premiums Paid (Received) - ($3,036)

    (28,766 ) 
                        

 

Credit Indices              

Reference
Entity

   

Counter
Party

    Notional
Amount		    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value
$		  
                 

ABX—HE Index for Sub-Prime Home Equity Sector

    Barclays Bank PLC    USD    16,900    (0.760 )     01/25/38    (12,281 ) 

ABX—HE Index for Sub-Prime Home Equity Sector

    Citibank    USD    8,000    0.170       05/25/46    (7,441 ) 

ABX—HE Index for Sub-Prime Home Equity Sector

    JP Morgan    USD    16,500    (0.090 )     08/25/37    (12,221 ) 

CMBS AAA Index

    Citigroupglobal Markets, Inc.    USD    7,020    0.350       10/03/51    1,883   

CMBS AAA Index

    Credit Suisse First Boston    USD    5,975    0.070       03/15/49    1,381   

CMBS AAA Index

    Credit Suisse First Boston    USD    8,000    0.350       02/17/51    2,146   

CMBS AAA Index

    Deutsche Bank    USD    8,000    0.080       12/13/49    2,129   

CMBS AAA Index

    JP Morgan    USD    5,475    0.080       12/13/49    1,456   

CMBS AAA Index

    JP Morgan    USD    4,650    0.080       12/13/49    1,237   

CMBS AAA Index

    JP Morgan    USD    5,975    0.100       10/12/52    1,011   

CMBS AAA Index

    JP Morgan    USD    7,425    0.350       02/17/51    1,990   

CMBS AAA Index

    JP Morgan    USD    4,650    0.350       02/17/51    1,248   

CMBX AJ Index

    Barclays Bank PLC    USD    6,500    0.840       10/12/52    3,758   

CMBX AJ Index

    Barclays Bank PLC    USD    6,500    0.840       10/12/52    3,758   

 

See accompanying notes which are an integral part of the financial statements.

 

150   Russell Strategic Bond Fund

Russell Investment Company

Russell Strategic Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Credit Indices              

Reference
Entity

   

Counter
Party

    Notional
Amount		    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value
$		  
                 

CMBX AJ Index

    Credit Suisse First Boston    USD    3,690    0.840       10/12/52    2,139   

CMBX AJ Index

    Credit Suisse First Boston    USD    19,795    0.840       10/12/52    11,484   

Dow Jones CDX Index

    Chase Securities Inc.    USD    2,000    1.120       12/20/12    (1 ) 

Dow Jones CDX Index

    Citibank    USD    4,968    0.355       06/20/12    (394 ) 

Dow Jones CDX Index

    Citibank    USD    4,871    0.360       06/20/12    (385 ) 

Dow Jones CDX Index

    Citibank    USD    1,072    0.401       06/20/12    (83 ) 

Dow Jones CDX Index

    Deutsche Bank    USD    86,000    (1.500 )     12/20/13    1,619   

Dow Jones CDX Index

    Deutsche Bank    USD    2,200    (1.000 )     06/20/14    63   

Dow Jones CDX Index

    Deutsche Bank    USD    1,361    0.530       06/20/13    (3 ) 

Dow Jones CDX Index

    Deutsche Bank    USD    9,237    0.708       12/20/12    47   

Dow Jones CDX Index

    Goldman Sachs    USD    1,750    0.463       06/20/13    (9 ) 

Dow Jones CDX Index

    Goldman Sachs    USD    583    0.548       12/20/17    (1 ) 

Dow Jones CDX Index

    Goldman Sachs    USD    7,600    1.120       12/20/12    (3 ) 

Dow Jones CDX Index

    JP Morgan    USD    1,458    0.553       12/20/17    (3 ) 

Dow Jones CDX Index

    Merrill Lynch    USD    9,999    (5.000 )     06/20/14    2,118   

Dow Jones CDX Index

    Merrill Lynch    USD    19,478    1.580       12/20/12    (1,352 ) 

Dow Jones CDX Index

    Merrill Lynch    USD    19,478    1.640       12/20/12    (1,336 ) 

Dow Jones CDX Index

    Merrill Lynch    USD    2,100    1.833       06/20/12    (647 ) 

Dow Jones CDX Index

    Morgan Stanley    USD    2,100    2.080       06/20/12    (632 ) 

Dow Jones CDX Index

    Morgan Stanley    USD    4,950    (5.000 )     06/20/14    1,050   
                     

Total Market Value of Open Credit Index Credit Default Swap Contracts Premiums Paid (Received) - $1,135

    3,725   
                     

Total Market Value of Open Credit Default Swap Contracts Premiums Paid (Received) - ($1,901)

    (25,041 ) 
                     

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Strategic Bond Fund   151

Russell Investment Company

Russell Strategic Bond Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories    % of Net
Assets		  
  
  

Asset-Backed Securities

    11.1   

Corporate Bonds and Notes

    23.1   

International Debt

    7.0   

Loan Agreements

    1.0   

Mortgage-Backed Securities

    57.9   

Municipal Bonds

    0.9   

Non-US Bonds

    0.8   

United States Government Agencies

    2.4   

United States Government Treasuries

    2.6   

Common Stocks

    — * 

Preferred Stocks

    0.1   

Warrants & Rights

    — * 

Options Purchased

    0.1   

Short Term Investments

    11.6   

Repurchase Agreement

    1.2   

Other Securities

    6.2   
      

Total Investments

    126.0   

Other Assets and Liabilities, Net

    (26.0 ) 
      
   100.0   
      

Futures Contracts

    0.3   

Options Written

    — * 

Foreign Currency Exchange Contracts

    — * 

Interest Rate Swap Contracts

    0.2   

Credit Default Swaps

    (0.4 ) 

 

* Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

152   Russell Strategic Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

April 30, 2009

    $ 1,062.10    $ 1,017.11

Expenses Paid During Period*

    $ 7.92    $ 7.75

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.55% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

April 30, 2009

    $ 1,067.00    $ 1,021.47

Expenses Paid During Period*

    $ 3.43    $ 3.36

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.67% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class I

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

April 30, 2009

    $ 1,067.70    $ 1,022.71

Expenses Paid During Period*

    $ 2.15    $ 2.11

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.42% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

April 30, 2009

    $ 1,067.50    $ 1,022.02

Expenses Paid During Period*

    $ 2.87    $ 2.81

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.56% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell Investment Grade Bond Fund   153

Russell Investment Company

Russell Investment Grade Bond Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

April 30, 2009

    $ 1,068.40    $ 1,022.91

Expenses Paid During Period*

    $ 1.95    $ 1.91

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.38% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

154   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Long-Term Investments - 113.8%     
Asset-Backed Securities - 5.5%     

Aames Mortgage Investment Trust (Ê)(Þ)
Series 2005-3 Class A1
0.588% due 08/25/35

    256      238

Accredited Mortgage Loan Trust (Ê)
Series 2004-2 Class A2
0.738% due 07/25/34

    143      53

ACE Securities Corp. (Ê)
Series 2003-OP1 Class M2
1.938% due 12/25/33

    112      69

Series 2005-SD3 Class A
0.838% due 08/25/45

    271      218

Series 2006-HE4 Class A2A
0.498% due 10/25/36

    186      132

Aegis Asset Backed Securities Trust (Ê)
Series 2003-3 Class M2
2.913% due 01/25/34

    350      193

Air 2 US(Þ)
8.027% due 10/01/19

    650      422

Ameriquest Mortgage Securities, Inc. (Ê) Series 2002-D Class M1
4.188% due 02/25/33

    155      48

Series 2004-R10 Class A5
0.828% due 11/25/34

    2      2

Asset Backed Funding Certificates (Ê)
Series 2006-HE1 Class A2A
0.498% due 01/25/37

    212      177

Series 2006-OPT Class A3A
0.498% due 10/25/36

    59      57

Asset Backed Securities Corp. Home Equity (Ê)
Series 2006-HE2 Class A1A
0.688% due 03/25/36

    1,346      48

BA Credit Card Trust (Ê)
Series 2007-A12 Class A12
0.651% due 01/15/13

    8,200      8,053

Bayview Financial Acquisition Trust
Series 2006-A Class 1A3
5.865% due 02/28/41

    410      188

Bear Stearns Asset Backed Securities Trust (Ê)
Series 2003-1 Class A1
0.938% due 11/25/42

    135      93

Series 2003-SD1 Class A
0.888% due 12/25/33

    116      84

Series 2005-2 Class A3
0.838% due 04/25/35

    20      19

Series 2006-SD2 Class A2
0.638% due 06/25/36

    299      220

Series 2007-HE5 Class 1A1
0.528% due 06/25/47

    46      37

Series 2007-HE6 Class 1A1
1.688% due 06/25/37

    765      485

BNC Mortgage Loan Trust (Ê)
Series 2007-2 Class A2
0.538% due 05/25/37

    179      134

Burlington Northern and Santa Fe Railway Co. 2005-4 Pass Through Trust
4.967% due 04/01/23

    181      161
     Principal
Amount ($)
or Shares		      Market
Value
$

Business Loan Express (Ê)(Þ)
Series 2003-2A Class A
1.238% due 01/25/32

    259      153

Carrington Mortgage Loan Trust (Ê)
Series 2005-NC5 Class A2
0.758% due 10/25/35

    191      169

Series 2006-NC3 Class A3
0.588% due 08/25/36

    2,105      587

Cendant Mortgage Corp. (Ê)(Þ)
Series 2003-A Class A3
0.988% due 07/25/43

    55      54

Centex Home Equity (Ê)
Series 2006-A Class AV4
0.688% due 06/25/36

    1,700      634

Chase Issuance Trust (Ê)
Series 2008-A7 Class A7
1.101% due 11/15/11

    4,420      4,372

Citigroup Mortgage Loan Trust, Inc. (Ê)
Series 2006-SHL Class A1 (Þ)
0.638% due 11/25/45

    932      556

Series 2007-AHL Class A3A
0.498% due 05/25/37

    248      169

Series 2007-AMC Class A2A
0.548% due 03/25/37

    346      255

0.498% due 05/25/37

    1,003      799

Series 2007-WFH Class A4
0.722% due 01/25/37

    2,250      900

Countrywide Asset-Backed Certificates
Series 2001-BC3 Class A (Ê)
0.918% due 12/25/31

    79      42

Series 2004-AB2 Class M3 (Ê)
1.038% due 05/25/36

    310      19

Series 2004-BC1 Class M1 (Ê)
0.938% due 02/25/34

    209      133

Series 2005-17 Class 1AF3
5.711% due 05/25/36

    2,250      843

Series 2006-3 Class 3A1 (Ê)
0.558% due 06/25/36

    269      172

Series 2006-6 Class 2A2 (Ê)
0.618% due 09/25/36

    493      319

Series 2006-11 Class 1AF4
6.300% due 09/25/46

    505      159

Series 2006-BC1 Class 1A (Ê)
0.638% due 04/25/36

    999      703

Series 2006-BC4 Class 2A2 (Ê)
0.598% due 07/25/36

    2,220      1,236

Series 2007-7 Class 2A1 (Ê)
0.518% due 10/25/37

    136      116

Countrywide Home Equity Loan Trust (Ê)
Series 2005-A Class 2A
0.691% due 04/15/35

    202      54

Series 2005-G Class 2A
0.681% due 12/15/35

    1,023      398

Series 2006-E Class 2A
0.591% due 07/15/36

    771      233

Series 2007-GW Class A
1.001% due 08/15/37

    1,265      585

 

Russell Investment Grade Bond Fund   155

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Credit-Based Asset Servicing and Securitization LLC
Series 2004-CB7 Class AF5
4.585% due 10/25/34

    550      414

Series 2005-CB5 Class AV2 (Ê)
0.698% due 08/25/35

    194      153

Series 2006-CB6 Class A21 (Ê)
0.478% due 07/25/36

    46      45

Series 2007-RP1 Class A (Ê)(Þ)
0.748% due 05/25/46

    1,196      629

CVS Pass-Through Trust (Þ)
5.789% due 01/10/26

    257      194

5.880% due 01/10/28

    12      9

Daimler Chrysler Auto Trust (Ê)
Series 2008-B Class A2B
1.406% due 07/08/11

    695      693

Series 2008-B Class A3B
1.956% due 09/10/12

    400      377

Delta Air Lines, Inc.
Series 071A
6.821% due 08/10/22

    1,479      1,050

Ellington Loan Acquisition Trust (Ê)(Þ)
Series 2007-1 Class A2A1
1.438% due 05/26/37

    766      575

Series 2007-1 Class A2C
1.688% due 05/25/37

    1,000      292

First Franklin Mortgage Loan Asset Backed Certificates (Ê)
Series 2004-FFH Class 2A1
0.818% due 10/25/34

    12      12

Series 2007-FF1 Class A2C
0.578% due 01/25/38

    1,500      320

Fremont Home Loan Trust (Ê)
Series 2006-3 Class 2A1
0.508% due 02/25/37

    14      14

GE-WMC Mortgage Securities LLC (Ê)
Series 2006-1 Class A2A
0.478% due 08/25/36

    72      54

GMAC Mortgage Corp. Loan Trust (Ê)
Series 2006-HE4 Class A1
0.618% due 12/25/36

    485      146

GSAA Trust
Series 2006-2 Class 2A3 (Ê)
0.708% due 12/25/35

    570      484

Series 2006-4 Class 1A2
5.993% due 03/25/36

    473      108

GSAMP Trust (Ê)
Series 2003-HE2 Class M1
1.088% due 08/25/33

    111      71

HFC Home Equity Loan Asset Backed Certificates (Ê)
Series 2005-1 Class A
0.737% due 01/20/34

    454      298

Series 2006-2 Class A1
0.597% due 03/20/36

    1,328      891

Series 2006-4 Class A3V
0.597% due 03/20/36

    1,900      1,107
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2007-1 Class AS
0.647% due 03/20/36

    2,202      1,185

HSI Asset Securitization Corp. Trust (Ê)
Series 2006-HE2 Class 2A1
0.488% due 12/25/36

    93      51

JPMorgan Mortgage Acquisition Corp. (Ê)
Series 2006-WMC Class A2
0.488% due 08/25/36

    46      44

Series 2007-CH1 Class AV4
0.568% due 11/25/36

    2,575      1,326

Series 2007-CH3 Class A2
0.518% due 03/25/37

    366      298

Lehman XS Trust (Ê)
Series 2005-1 Class 2A1
2.022% due 07/25/35

    496      274

Series 2005-1 Class 2A2
1.938% due 07/25/35

    130      72

Series 2006-16N Class A1A
0.518% due 11/25/46

    289      226

Series 2006-17 Class WF11
0.558% due 11/25/36

    152      147

Long Beach Mortgage Loan Trust (Ê)
Series 2004-4 Class 1A1
0.718% due 10/25/34

    34      18

Series 2006-9 Class 2A1
0.498% due 10/25/36

    566      505

Mastr Asset Backed Securities Trust (Ê)
Series 2003-WMC Class M2
2.913% due 08/25/33

    84      25

Morgan Stanley ABS Capital I (Ê)
Series 2003-NC8 Class M3
3.588% due 09/25/33

    51      5

Series 2006-HE7 Class A2A
0.488% due 09/25/36

    397      373

Series 2007-HE2 Class A2B
0.528% due 01/25/37

    2,800      1,179

Series 2007-HE6 Class A1
0.498% due 05/25/37

    148      92

Series 2007-NC3 Class A2A
0.498% due 05/25/37

    99      81

Morgan Stanley Mortgage Loan Trust (Ê)
Series 2006-12X Class A1
0.558% due 10/25/36

    140      128

MSDWCC Heloc Trust (Ê)
Series 2005-1 Class A
0.712% due 07/25/17

    71      29

Nationstar Home Equity Loan Trust (Ê)
Series 2007-B Class 2AV1
0.558% due 04/25/37

    334      298

Nelnet Student Loan Trust (Ê)
Series 2008-4 Class A4
2.639% due 04/25/24

    490      442

New Century Home Equity Loan Trust (Ê)
Series 2004-4 Class M2
0.968% due 02/25/35

    370      188

Novastar Home Equity Loan (Ê)
Series 2007-1 Class A2A1
0.538% due 03/25/37

    986      775

 

156   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Option One Mortgage Loan Trust (Ê)
Series 2003-2 Class M2
2.988% due 04/25/33

    71      5

Series 2003-3 Class M3
3.438% due 06/25/33

    112      12

Series 2003-4 Class M2
2.088% due 07/25/33

    106      35

Series 2006-3 Class 2A2
0.538% due 02/25/37

    2,160      971

Series 2007-4 Class 2A1
0.528% due 04/25/37

    1,378      1,166

Series 2007-6 Class 2A1
0.498% due 06/25/37

    416      322

Option One Mortgage Securities Corp. NIM Trust (Ê)(Þ)
Series 2006-1A
0.538% due 12/25/10

    884      530

Origen Manufactured Housing
Series 2005-B Class A4
5.910% due 01/15/37

    100      52

Series 2006-A Class A1 (Ê)
0.601% due 11/15/18

    307      261

Ownit Mortgage Loan Asset Backed Certificates (Ê)
Series 2006-6 Class A2C
0.598% due 09/25/37

    2,390      575

Park Place Securities, Inc. (Ê)
Series 2004-WWF Class A1D
0.898% due 12/25/34

    78      76

Series 2005-WCW Class M1
0.888% due 09/25/35

    370      153

Popular ABS Mortgage Pass-Through Trust
Series 2005-6 Class A3
5.680% due 01/25/36

    345      289

RAAC Series (Ê)(Þ)
Series 2006-RP2 Class A
0.772% due 02/25/37

    524      247

Renaissance Home Equity Loan Trust
Series 2003-3 Class A (Ê)
1.022% due 12/25/33

    354      161

Series 2005-1 Class M1
5.357% due 05/25/35

    172      55

Series 2005-2 Class AF4
4.934% due 08/25/35

    585      359

Series 2006-1 Class AF6
5.746% due 05/25/36

    304      226

Residential Asset Mortgage Products, Inc.
Series 2003-RS1 Class AI6A
5.980% due 12/25/33

    256      120

Series 2003-RS2 Class AII (Ê)
1.118% due 03/25/33

    101      41

Series 2003-RS3 Class AII (Ê)
1.158% due 04/25/33

    65      38

Residential Asset Securities Corp.
Series 2001-KS1 Class AI6
6.349% due 03/25/32

    375      204

Series 2001-KS1 Class AII (Ê)
0.908% due 03/25/32

    57      41
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2001-KS3 Class AII (Ê)
0.898% due 09/25/31

    44      27

Series 2003-KS2 Class MI1
4.800% due 04/25/33

    417      167

Series 2003-KS2 Class MI3
6.100% due 04/25/33

    130      10

Series 2003-KS4 Class AIIB (Ê)
1.018% due 06/25/33

    165      94

Residential Funding Mortgage Securities II, Inc. (Ê)
Series 2007-HSA Class AI1
0.558% due 05/25/37

    24      24

SACO I, Inc. (Ê)
Series 2005-WM3 Class A1
1.042% due 09/25/35

    61      20

Series 2006-1 Class A
0.692% due 09/25/35

    331      88

Saxon Asset Securities Trust (Ê)
Series 2004-1 Class A
0.978% due 03/25/35

    57      24

Sierra Receivables Funding Co. (Ê)(Þ)
Series 2006-1A Class A2
0.597% due 05/20/18

    154      121

SLM Student Loan Trust (Ê)
Series 2008-2 Class A1
1.392% due 01/26/15

    147      145

Series 2008-6 Class A1
1.492% due 10/27/14

    1,231      1,222

Small Business Administration
Series 2000-P10 Class 1
7.449% due 08/10/10

    41      43

Small Business Administration Pools (Ê)
3.080% due 09/25/18

    164      168

Soundview Home Equity Loan Trust
Series 2006-WF1 Class A2
5.645% due 10/25/36

    1,030      943

Series 2006-WF2 Class A2C (Ê)
0.578% due 12/25/36

    2,550      1,407

Specialty Underwriting & Residential Finance (Ê)
Series 2003-BC1 Class A
1.118% due 01/25/34

    25      8

Series 2006-AB1 Class A2
0.578% due 12/25/36

    153      148

Structured Asset Investment Loan Trust (Ê)
Series 2005-3 Class M2
0.878% due 04/25/35

    500      51

Structured Asset Securities Corp.
Series 2002-AL1 Class A3
3.450% due 02/25/32

    383      294

Series 2002-HF1 Class A (Ê)
0.728% due 01/25/33

    13      8

Series 2006-BC3 Class A2 (Ê)
0.488% due 10/25/36

    188      167

Series 2007-BC3 Class 2A2 (Ê)
0.578% due 05/25/47

    2,300      510

 

Russell Investment Grade Bond Fund   157

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Truman Capital Mortgage Loan Trust (Ê)(Þ)
Series 2006-1 Class A
0.782% due 03/25/36

    982      658

Wachovia Asset Securitization, Inc. (Ê)
Series 2003-HE3 Class A
0.688% due 11/25/33

    126      51

Wells Fargo Home Equity Trust (Ê)
Series 2007-1 Class A1
0.538% due 03/25/37

    186      170
         
        52,995
         
Corporate Bonds and Notes - 21.4%     

Alcoa, Inc. (Ñ)
6.000% due 07/15/13

    500      446

Allstate Life Global Funding Trusts
5.375% due 04/30/13

    400      394

Altria Group, Inc.
9.700% due 11/10/18

    1,075      1,256

9.950% due 11/10/38

    835      917

10.200% due 02/06/39

    660      727

American Express Co.
7.000% due 03/19/18

    200      190

8.150% due 03/19/38

    385      365

6.800% due 09/01/66

    170      100

American Express Credit Corp.
5.875% due 05/02/13

    1,325      1,305

Series C
7.300% due 08/20/13

    755      756

Series MTNB (Ê)
0.639% due 10/04/10

    1,300      1,192

American General Finance Corp.
1.518% due 08/17/11 (Ê)

    2,000      807

6.900% due 12/15/17

    130      52

American International Group, Inc.
4.700% due 10/01/10

    60      35

5.050% due 10/01/15

    200      73

5.850% due 01/16/18

    80      27

8.250% due 08/15/18 (Þ)

    1,760      619

6.250% due 03/15/37

    1,800      225

Anadarko Petroleum Corp.
5.950% due 09/15/16

    655      593

8.700% due 03/15/19

    440      462

6.450% due 09/15/36

    290      220

Anheuser-Busch InBev Worldwide, Inc. (Þ)
7.750% due 01/15/19

    1,575      1,649

Apache Corp.
6.000% due 09/15/13

    460      497

6.000% due 01/15/37 (Ñ)

    200      195

Appalachian Power Co.
Series O
5.650% due 08/15/12

    175      175

ArcelorMittal USA, Inc. (Ñ)
6.500% due 04/15/14

    465      393

ASIF Global Financing XIX (Þ)
4.900% due 01/17/13

    50      32
     Principal
Amount ($)
or Shares		      Market
Value
$

AT&T, Inc.
5.100% due 09/15/14

    240      249

6.800% due 05/15/36

    345      335

6.550% due 02/15/39

    490      471

BAC Capital Trust XIV (ƒ)(Ñ)
5.630% due 12/31/49

    20      8

BAC Capital Trust XV (Ê)
2.061% due 06/01/56

    1,300      344

Baker Hughes, Inc.
7.500% due 11/15/18

    630      709

Bank of America Corp.
4.375% due 12/01/10 (Ñ)

    1,350      1,312

3.125% due 06/15/12 (Ñ)

    120      124

2.375% due 06/22/12

    1,045      1,059

5.420% due 03/15/17

    20      14

6.000% due 09/01/17

    1,000      836

5.750% due 12/01/17

    1,180      964

8.000% due 12/29/49 (ƒ)

    1,600      909

8.125% due 12/29/49 (ƒ)

    310      176

Bank of America NA
Series BKNT
1.600% due 06/15/16 (Ê)

    1,200      722

6.000% due 10/15/36

    300      206

Bank of Scotland PLC (Þ)
5.250% due 02/21/17

    230      191

BankAmerica Capital III (Ê)
Series *
1.701% due 01/15/27

    700      228

Bear Stearns Cos. LLC (The)
6.400% due 10/02/17

    2,725      2,652

7.250% due 02/01/18

    2,810      2,870

BellSouth Corp.
4.750% due 11/15/12

    20      21

BellSouth Telecommunications, Inc.
7.000% due 12/01/95

    685      545

Boeing Co.
5.000% due 03/15/14

    460      484

Burlington Northern Santa Fe Corp.
6.875% due 12/01/27

    90      88

Cardinal Health, Inc.
5.850% due 12/15/17

    470      422

Carolina Power & Light Co.
6.500% due 07/15/12

    5      5

Caterpillar Financial Services Corp.
6.200% due 09/30/13

    650      668

7.150% due 02/15/19

    930      913

CenterPoint Energy Houston Electric LLC
Series J2
5.700% due 03/15/13

    350      356

CenterPoint Energy Resources Corp.
6.125% due 11/01/17

    125      110

Series B
7.875% due 04/01/13

    745      781

Cisco Systems, Inc.
5.900% due 02/15/39

    1,005      951

Citicorp
7.250% due 10/15/11

    460      402

 

158   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Citigroup Capital XXI
8.300% due 12/21/57

    1,375      837

Citigroup, Inc.
5.500% due 08/27/12

    500      446

5.300% due 10/17/12

    200      177

5.500% due 04/11/13

    675      602

5.850% due 07/02/13

    100      89

6.500% due 08/19/13

    1,955      1,784

5.000% due 09/15/14

    3,035      2,079

4.750% due 05/31/17

    500      364

6.000% due 08/15/17

    300      252

6.125% due 11/21/17

    980      808

6.125% due 05/15/18

    570      479

6.125% due 08/25/36

    500      296

6.875% due 03/05/38

    1,550      1,320

Clear Channel Communications, Inc.
6.250% due 03/15/11

    290      70

Clorox Co.
5.450% due 10/15/12

    295      309

Columbus Southern Power Co. (Ñ)
Series C
5.500% due 03/01/13

    85      86

Comcast Cable Holdings LLC
9.800% due 02/01/12

    715      771

7.875% due 08/01/13

    700      733

Comcast Corp.
6.500% due 01/15/15

    1,050      1,084

6.500% due 01/15/17

    520      535

6.300% due 11/15/17

    1,125      1,145

6.500% due 11/15/35

    350      327

ConocoPhillips
5.900% due 05/15/38

    60      54

6.500% due 02/01/39

    1,335      1,323

ConocoPhillips Holding Co.
6.950% due 04/15/29

    825      850

Consolidated Edison Co. of New York, Inc. (Ñ)
6.650% due 04/01/19

    1,100      1,185

Continental Airlines, Inc.
Series 071A
5.983% due 04/19/22

    2,995      2,366

Countrywide Financial Corp.
Series MTN
5.800% due 06/07/12

    730      669

Countrywide Home Loans, Inc.
Series MTNL
4.000% due 03/22/11

    840      788

COX Communications, Inc.
6.750% due 03/15/11

    790      806

8.375% due 03/01/39 (Þ)

    545      529

Credit Suisse NY
5.500% due 05/01/14

    500      501

Credit Suisse USA, Inc.
5.500% due 08/15/13

    115      116

4.875% due 01/15/15 (Ñ)

    110      108

CVS/Caremark Corp.
6.250% due 06/01/27

    865      816
     Principal
Amount ($)
or Shares		      Market
Value
$

CVS Pass-Through Trust (Å)
6.036% due 12/10/28

    1,055      782

Daimler Finance NA LLC
4.875% due 06/15/10

    1,085      1,077

5.875% due 03/15/11

    300      296

DCP Midstream LLC
6.875% due 02/01/11

    45      45

6.750% due 09/15/37 (Þ)

    785      517

Dell, Inc. (Ñ)
5.650% due 04/15/18

    475      465

Delta Air Lines, Inc.
Series 00-1
7.570% due 11/18/10

    1,635      1,521

Delta Air Lines, Inc.
Series 01A2
7.111% due 03/18/13

    500      440

Dominion Resources, Inc.
4.750% due 12/15/10

    90      92

5.700% due 09/17/12

    455      474

8.875% due 01/15/19

    390      452

DPL, Inc.
6.875% due 09/01/11

    495      506

DTE Energy Co.
7.050% due 06/01/11

    300      308

Duke Energy Carolinas LLC
5.625% due 11/30/12

    265      284

6.000% due 01/15/38

    595      605

Duke Energy Corp.
6.300% due 02/01/14

    175      185

Duke University
4.200% due 04/01/14

    1,300      1,327

5.150% due 04/01/19

    1,000      1,006

Eastman Kodak Co.
7.250% due 11/15/13

    70      43

Energy Future Holdings Corp.
Series P (Ñ)
5.550% due 11/15/14

    150      66

Series Q
6.500% due 11/15/24

    90      28

Series R
6.550% due 11/15/34

    635      193

Enterprise Products Operating LLC
9.750% due 01/31/14

    830      909

6.300% due 09/15/17

    490      453

Erac USA Finance Co. (Þ)
7.000% due 10/15/37

    2,205      1,540

Exelon Corp.
4.900% due 06/15/15

    740      653

5.625% due 06/15/35

    330      227

Federal Express Corp.
7.600% due 07/01/97

    170      150

Financing Corp.
Series 6P
Zero coupon due 08/03/18

    160      106

Series 15P
Zero coupon due 03/07/19

    160      101

FirstEnergy Corp.
Series B
6.450% due 11/15/11

    1,925      1,955

 

Russell Investment Grade Bond Fund   159

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series C
7.375% due 11/15/31

    905      772

FPL Group Capital, Inc.
7.875% due 12/15/15

    740      842

Freeport-McMoRan Copper & Gold, Inc.
8.375% due 04/01/17

    1,090      1,068

General Electric Capital Corp.
1.308% due 08/15/11 (Ê)

    300      272

5.250% due 10/19/12

    1,195      1,193

5.625% due 05/01/18 (Ñ)

    2,765      2,412

5.875% due 01/14/38

    2,015      1,391

6.875% due 01/10/39

    1,500      1,175

5.500% due 09/15/67 (Þ)

    300      175

6.375% due 11/15/67

    4,270      2,451

Series MTNA

6.000% due 06/15/12 (Ñ)

    1,270      1,295

1.580% due 09/15/14 (Ê)

    830      627

General Electric Co.
5.250% due 12/06/17

    505      478

General Motors Corp.
8.375% due 07/05/33

    160      11

GlaxoSmithKline Capital, Inc.
1.856% due 05/13/10 (Ê)

    8,200      8,240

5.650% due 05/15/18

    930      965

Glen Meadow Pass-Through Trust (Þ)
6.505% due 02/12/67

    200      69

GMAC LLC (Þ)
7.500% due 12/31/13

    309      195

8.000% due 12/31/18

    159      64

Goldman Sachs Capital II (ƒ)
5.793% due 12/29/49

    960      475

Goldman Sachs Group, Inc. (The)
4.500% due 06/15/10 (Ñ)

    1,010      1,019

5.300% due 02/14/12 (Ñ)

    2,255      2,287

5.450% due 11/01/12

    80      80

4.750% due 07/15/13

    300      291

5.125% due 01/15/15

    1,000      948

6.250% due 09/01/17

    1,800      1,702

6.150% due 04/01/18

    2,200      2,075

7.500% due 02/15/19

    1,484      1,523

5.950% due 01/15/27

    250      179

6.450% due 05/01/36

    125      91

6.750% due 10/01/37

    2,200      1,677

Hartford Financial Services Group, Inc.
5.250% due 10/15/11

    275      229

HBOS PLC (Þ)
6.750% due 05/21/18

    2,425      1,785

Hess Corp.
8.125% due 02/15/19

    620      679

7.875% due 10/01/29 (Ñ)

    110      104

7.300% due 08/15/31

    465      420

Historic TW, Inc.
8.050% due 01/15/16

    565      569

Humana, Inc. (Ñ)
7.200% due 06/15/18

    160      135

ILFC E-Capital Trust II (Þ)
6.250% due 12/21/65

    290      43
     Principal
Amount ($)
or Shares		      Market
Value
$

International Business Machines Corp.
5.700% due 09/14/17

    700      742

International Lease Finance Corp.
5.625% due 09/15/10

    545      470

5.625% due 09/20/13

    805      454

Jersey Central Power & Light Co.
5.625% due 05/01/16

    260      247

JPMorgan Chase & Co.
5.375% due 10/01/12

    1,620      1,641

5.375% due 01/15/14

    475      484

5.125% due 09/15/14

    1,085      1,005

5.150% due 10/01/15

    520      464

6.000% due 01/15/18

    425      413

6.400% due 05/15/38

    1,542      1,502

Series 1 (Æ)(ƒ)
7.900% due 04/29/49

    1,245      947

Series 2
2.125% due 06/22/12

    40      40

JPMorgan Chase Bank NA
Series BKNT
5.875% due 06/13/16

    85      79

JPMorgan Chase Capital XIII (Ê)
Series M
2.182% due 09/30/34

    625      273

JPMorgan Chase Capital XV
5.875% due 03/15/35

    550      354

JPMorgan Chase Capital XX
Series T
6.550% due 09/29/36

    200      143

KCP&L Greater Missouri Operations Co.
11.875% due 07/01/12

    570      598

Kellogg Co.
5.125% due 12/03/12

    660      693

Kerr-McGee Corp.
6.950% due 07/01/24

    290      231

KeyBank NA
3.200% due 06/15/12 (Ñ)

    240      247

Series BKNT (Ê)
3.511% due 06/02/10

    900      890

Kinder Morgan Energy Partners, LP
7.125% due 03/15/12

    185      192

5.000% due 12/15/13

    115      109

6.000% due 02/01/17 (Ñ)

    60      57

5.950% due 02/15/18

    80      74

6.950% due 01/15/38

    1,365      1,187

Kraft Foods, Inc.
1.456% due 08/11/10 (Ê)

    1,700      1,657

6.125% due 02/01/18

    900      914

Lehman Brothers Holdings Capital Trust VII (ƒ)(Ø)
5.857% due 11/29/49

    1,450      —

Lehman Brothers Holdings, Inc. (Ø)
2.951% due 05/25/10

    300      42

5.250% due 02/06/12

    140      20

6.200% due 09/26/14

    150      21

6.500% due 07/19/17

    390      —

6.750% due 12/28/17

    990      —

6.875% due 05/02/18

    200      30

 

160   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Zero coupon due 04/03/49

    1,000      140

2.889% due 12/31/49

    1,200      168

Manufacturers & Traders Trust Co.
5.585% due 12/28/20

    180      113

MBNA Corp.
6.125% due 03/01/13

    445      395

Merrill Lynch & Co., Inc.
1.934% due 03/22/11 (Ê)

    100      114

1.292% due 07/25/11 (Ê)

    700      607

6.050% due 08/15/12

    200      184

5.450% due 02/05/13

    3,080      2,697

6.400% due 08/28/17

    690      561

6.875% due 04/25/18

    735      619

6.220% due 09/15/26

    905      535

7.750% due 05/14/38

    820      560

MetLife, Inc.
6.125% due 12/01/11

    180      178

6.400% due 12/15/36

    1,010      540

Series A
6.817% due 08/15/18

    675      637

Metropolitan Life Global Funding I (Ê)(Þ)
1.278% due 05/17/10

    900      843

MidAmerican Energy Co.
5.800% due 10/15/36

    300      266

Midamerican Energy Holdings Co.
Series WI
6.125% due 04/01/36

    1,150      997

Morgan Stanley
3.338% due 05/14/10 (Ê)

    1,100      1,074

3.250% due 12/01/11 (Ñ)

    1,350      1,402

5.625% due 01/09/12

    510      508

4.750% due 04/01/14

    250      211

1.557% due 10/18/16 (Ê)

    1,235      871

5.450% due 01/09/17

    600      536

6.250% due 08/28/17

    300      274

6.625% due 04/01/18

    3,105      2,955

Series GMTN (Ê)
1.449% due 01/09/14

    1,100      888

Nationsbank Capital Trust III (Ê)
1.681% due 01/15/27

    500      167

New Cingular Wireless Services, Inc.
7.875% due 03/01/11

    1,950      2,114

8.750% due 03/01/31

    500      572

News America Holdings, Inc.
7.900% due 12/01/95

    295      232

8.250% due 10/17/96

    65      54

News America, Inc.
6.900% due 03/01/19 (Þ)

    520      489

6.200% due 12/15/34

    35      26

6.150% due 03/01/37

    1,735      1,275

6.650% due 11/15/37

    20      16

NGPL Pipeco LLC (Þ)
6.514% due 12/15/12

    2,185      2,157

Nisource Finance Corp.
7.875% due 11/15/10

    465      465

6.400% due 03/15/18

    250      215

Norfolk Southern Corp.
7.900% due 05/15/97

    1,000      958
     Principal
Amount ($)
or Shares		      Market
Value
$

Northern States Power Co.
Series B
8.000% due 08/28/12

    740      829

Occidental Petroleum Corp.
7.000% due 11/01/13

    800      903

Ohio Power Co.
Series F
5.500% due 02/15/13

    45      45

Oncor Electric Delivery Co. (Þ)
5.950% due 09/01/13

    955      961

6.800% due 09/01/18

    1,350      1,348

ONEOK Partners, LP
8.625% due 03/01/19

    720      732

6.650% due 10/01/36

    225      166

Oracle Corp.
5.750% due 04/15/18

    1,250      1,324

Pacific Gas & Electric Co.
8.250% due 10/15/18

    170      203

6.050% due 03/01/34

    340      341

5.800% due 03/01/37

    110      107

6.350% due 02/15/38

    90      94

Pemex Project Funding Master Trust (Ñ)
Series WI
6.625% due 06/15/35

    430      348

PepsiCo, Inc.
7.900% due 11/01/18

    470      567

Pfizer, Inc.
7.200% due 03/15/39

    870      956

Philip Morris International, Inc.
5.650% due 05/16/18

    300      304

Principal Life Income Funding Trusts (Ñ)
5.300% due 04/24/13

    300      283

Progress Energy, Inc.
7.750% due 03/01/31

    130      137

Prudential Financial, Inc.
5.100% due 12/14/11

    430      376

Public Service Co. of New Mexico
7.950% due 05/15/18

    675      621

Public Service Electric & Gas Co.
5.300% due 05/01/18

    800      799

Qwest Corp.
7.875% due 09/01/11

    550      546

Rabobank Capital Funding II (ƒ)(Þ)
5.260% due 12/31/49

    20      11

Rabobank Capital Funding Trust (ƒ)(Þ)
5.254% due 12/29/49

    40      22

Reynolds American, Inc.
7.625% due 06/01/16

    220      193

Roche Holdings, Inc. (Þ)
6.000% due 03/01/19

    1,435      1,492

Simon Property Group, LP
5.300% due 05/30/13

    1,075      960

6.100% due 05/01/16

    295      255

10.350% due 04/01/19

    560      585

Southern Natural Gas Co. (Þ)
5.900% due 04/01/17

    30      27

 

Russell Investment Grade Bond Fund   161

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Southwest Airlines Co. 2007-1
Pass Through Trust
Series 07-1
6.150% due 02/01/24

    162      144

Southwestern Electric Power Co. (Ñ)
6.450% due 01/15/19

    770      747

Sprint Capital Corp.
8.375% due 03/15/12 (Ñ)

    360      345

8.750% due 03/15/32

    30      23

State Street Capital Trust IV (Ê)
2.320% due 06/15/37

    100      40

SunTrust Capital VIII
6.100% due 12/15/36

    630      368

SunTrust Preferred Capital I (ƒ)
5.853% due 12/31/49

    930      302

Tennessee Gas Pipeline Co. (Þ)
8.000% due 02/01/16

    505      515

TEPPCO Partners, LP
7.550% due 04/15/38

    710      544

Texas-New Mexico Power Co. (Þ)
9.500% due 04/01/19

    800      806

Time Warner Cable, Inc.
6.750% due 07/01/18

    1,715      1,735

8.750% due 02/14/19

    740      832

8.250% due 04/01/19

    1,205      1,332

Series WI
5.850% due 05/01/17

    1,225      1,178

Time Warner Entertainment Co., LP
Series *
8.375% due 07/15/33

    105      109

Time Warner, Inc.
6.750% due 04/15/11

    805      840

6.875% due 05/01/12 (Ñ)

    345      363

7.700% due 05/01/32

    100      91

Travelers Cos., Inc. (The)
6.250% due 03/15/37

    620      382

6.250% due 06/15/37

    500      457

Union Electric Co.
6.400% due 06/15/17

    545      529

Union Pacific Corp.
5.700% due 08/15/18

    1,000      960

United Parcel Service, Inc.
4.500% due 01/15/13

    600      633

United Technologies Corp.
5.400% due 05/01/35

    70      61

UnitedHealth Group, Inc.
5.250% due 03/15/11 (Ñ)

    280      284

6.000% due 06/15/17

    65      60

6.000% due 02/15/18

    550      515

6.500% due 06/15/37

    120      97

USB Capital IX (ƒ)
6.189% due 04/15/49

    200      111

Verizon Communications, Inc.
5.350% due 02/15/11 (Ñ)

    685      710

5.500% due 02/15/18

    430      426

6.100% due 04/15/18 (Ñ)

    680      695

6.350% due 04/01/19

    835      868
     Principal
Amount ($)
or Shares		      Market
Value
$

6.400% due 02/15/38

    1,415      1,318

8.950% due 03/01/39

    540      651

Verizon Global Funding Corp.
7.375% due 09/01/12

    275      301

Verizon Wireless Capital LLC (Þ)
8.500% due 11/15/18

    870      1,042

Wachovia Capital Trust III (ƒ)
5.800% due 03/29/49

    340      158

Wachovia Corp.
5.500% due 05/01/13

    1,100      1,078

5.700% due 08/01/13 (Ñ)

    1,530      1,500

5.250% due 08/01/14

    460      409

5.625% due 10/15/16 (Ñ)

    400      326

5.750% due 06/15/17

    460      422

Wal-Mart Stores, Inc.
5.800% due 02/15/18

    410      443

6.200% due 04/15/38

    90      94

Walt Disney Co. (The)
4.500% due 12/15/13

    365      379

Washington Mutual, Inc. (Ø)(Ñ)
5.000% due 03/22/12

    425      337

Waste Management, Inc.
6.375% due 11/15/12

    555      565

WellPoint, Inc.
5.875% due 06/15/17

    30      28

7.000% due 02/15/19

    200      204

Wells Fargo & Co. (ƒ)
Series K
7.980% due 02/28/49

    1,760      986

Wells Fargo Capital X (Ñ)
5.950% due 12/15/36

    200      147

Wells Fargo Capital XV (ƒ)(Ñ)
9.750% due 09/26/44

    960      816

Weyerhaeuser Co.
6.750% due 03/15/12

    475      474

Williams Cos., Inc. (Å)
8.750% due 01/15/20

    900      925

Wyeth
6.950% due 03/15/11

    375      402

5.950% due 04/01/37

    350      336

Xerox Corp.
5.500% due 05/15/12

    620      589

XTO Energy, Inc.
7.500% due 04/15/12

    130      136

5.500% due 06/15/18

    750      713

6.500% due 12/15/18

    650      661

6.750% due 08/01/37

    60      57
         
        207,310
         
International Debt - 4.1%        

Aiful Corp. (Þ)
5.000% due 08/10/10

    400      132

America Movil SAB de CV
5.625% due 11/15/17

    220      207

Anadarko Finance Co.
Series B
7.500% due 05/01/31

    575      454

 

162   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

ANZ National International, Ltd. (Þ)
6.200% due 07/19/13

    1,600      1,597

ArcelorMittal (Ñ)
5.375% due 06/01/13

    1,195      1,076

AstraZeneca PLC
5.900% due 09/15/17

    300      316

AXA SA
8.600% due 12/15/30

    75      57

Banque Centrale de Tunisie
8.250% due 09/19/27

    550      528

Barrick Gold Corp.
6.950% due 04/01/19

    345      365

Barrick Gold Financeco LLC (Ñ)
6.125% due 09/15/13

    700      725

BAT International Finance PLC (Þ)
9.500% due 11/15/18

    690      784

BNP Paribas (ƒ)(Þ)
5.186% due 06/29/49

    1,900      987

BP Capital Markets PLC
5.250% due 11/07/13

    850      916

British Sky Broadcasting Group PLC (Þ)
9.500% due 11/15/18

    605      674

China Development Bank Corp.
5.000% due 10/15/15

    100      105

Corp. Nacional del Cobre de Chile—CODELCO (Þ)
7.500% due 01/15/19

    500      533

6.150% due 10/24/36

    100      84

Credit Agricole SA/London (Ê)(Þ)
1.306% due 05/28/10

    600      588

Credit Suisse Guernsey, Ltd.
5.860% due 05/29/49 (ƒ)

    520      283

Series 1 (Ê)(ƒ)
1.928% due 05/29/49

    725      290

Credit Suisse NY
5.000% due 05/15/13

    1,000      988

6.000% due 02/15/18

    500      446

Depfa ACS Bank (Þ)
5.125% due 03/16/37

    400      226

Deutsche Bank AG
5.375% due 10/12/12

    350      359

Deutsche Bank AG/London
6.000% due 09/01/17

    1,000      979

Deutsche Telekom International Finance BV
8.500% due 06/15/10

    250      263

5.750% due 03/23/16

    300      299

Diageo Capital PLC
7.375% due 01/15/14

    980      1,092

Eksportfinans A/S
5.500% due 05/25/16

    550      570

Electricite De France (Þ)
5.500% due 01/26/14 (Ñ)

    400      428

6.500% due 01/26/19

    400      431

6.950% due 01/26/39

    400      422

EnCana Corp.
6.625% due 08/15/37

    205      192
     Principal
Amount ($)
or Shares		      Market
Value
$

European Investment Bank
2.625% due 05/16/11

    1,575      1,606

Export-Import Bank of China (Þ)
4.875% due 07/21/15

    200      206

Gaz Capital SA (Þ)
7.343% due 04/11/13

    100      89

6.212% due 11/22/16

    890      670

8.146% due 04/11/18

    500      407

6.510% due 03/07/22

    210      140

Glitnir Banki HF (Å)(Ø)
6.330% due 07/28/11

    270      34

6.375% due 09/25/12

    390      50

6.693% due 06/15/16

    700      —

HBOS Capital Funding, LP (ƒ)(Þ)
6.071% due 06/30/49

    110      35

HSBC Holdings PLC
6.500% due 05/02/36

    500      433

6.500% due 09/15/37

    935      797

Ingersoll-Rand Global Holding Co., Ltd.
9.500% due 04/15/14

    390      408

Intergas Finance BV (Þ)
6.375% due 05/14/17

    641      429

Kaupthing Bank Hf (Ø)
5.750% due 10/04/11 (Å)

    100      7

7.625% due 02/28/15 (Þ)

    1,210      94

7.125% due 05/19/16 (Å)

    1,480      —

KazMunaiGaz Finance Sub BV (Þ)
8.375% due 07/02/13

    730      650

Klio Funding, Ltd. (Ê)(Þ)
Series 2004-1A Class A1
1.784% due 04/23/39

    3,520      528

KONINKLIJKE KPN NV
8.000% due 10/01/10

    620      650

Korea Electric Power Corp. (Þ)
5.125% due 04/23/34

    155      137

Lloyds Banking Group PLC (ƒ)(Þ)
5.920% due 12/31/49

    200      55

Mexico Government International Bond
Series MTNA
6.750% due 09/27/34

    973      945

MUFG Capital Finance 1, Ltd. (ƒ)(Ñ)
6.346% due 07/29/49

    200      158

National Australia Bank, Ltd. (Þ)
5.350% due 06/12/13

    2,100      2,066

Newcastle CDO, Ltd. (Þ)
Series 2004-4A Class 3FX
5.110% due 03/24/39

    1,075      11

Petrobras International Finance Co.
6.125% due 10/06/16

    460      469

Petroleum Export, Ltd. (Þ)
5.265% due 06/15/11

    113      99

Ras Laffan Liquefied Natural Gas Co.,
Ltd. III (Þ)
5.838% due 09/30/27

    250      192

Resona Bank, Ltd. (ƒ)(Þ)
5.850% due 09/29/49

    100      56

 

Russell Investment Grade Bond Fund   163

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Resona Preferred Global Securities Cayman, Ltd. (ƒ)(Þ)
7.191% due 12/29/49

    405      223

Rio Tinto Finance USA, Ltd.
6.500% due 07/15/18

    630      568

7.125% due 07/15/28

    630      525

Royal Bank of Scotland Group PLC
7.640% due 03/31/49 (ƒ)

    100      29

Series 1 (ƒ)
9.118% due 03/31/49

    200      147

RSHB Capital SA for OJSC Russian Agricultural Bank (Þ)
6.299% due 05/15/17

    310      239

Russia Government International Bond
Series REGS
5.000% due 03/31/30

    46      45

Santander Perpetual SA Unipersonal (ƒ)(Þ)
6.671% due 10/29/49

    900      562

Shinsei Finance Cayman, Ltd. (ƒ)(Þ)
6.418% due 01/29/49

    630      176

Siemens Financieringsmaatschappij NV (Þ)
5.500% due 02/16/12

    1,400      1,455

SMFG Preferred Capital USD 1, Ltd. (ƒ)(Þ)
6.078% due 01/29/49

    1,120      778

Suncor Energy, Inc. (Ñ)
6.500% due 06/15/38

    765      631

Systems 2001 AT LLC (Þ)
7.156% due 12/15/11

    191      162

Telecom Italia Capital SA
6.200% due 07/18/11

    290      292

5.250% due 10/01/15

    715      635

6.999% due 06/04/18

    470      442

Telefonica Europe BV
7.750% due 09/15/10

    360      378

TNK-BP Finance SA
7.875% due 03/13/18 (Ñ)(Å)

    240      170

Series 144a (Þ)
7.500% due 07/18/16

    540      397

TransCapitalInvest, Ltd. for OJSC AK Transneft (Þ)
8.700% due 08/07/18

    200      175

Tyco International Finance SA
6.750% due 02/15/11

    110      114

6.375% due 10/15/11

    465      486

6.000% due 11/15/13

    835      816

Tyco International, Ltd./Tyco International Finance SA
6.875% due 01/15/21

    210      183

Series WI
7.000% due 12/15/19

    70      64

Vale Overseas, Ltd.
6.250% due 01/23/17 (Ñ)

    100      97

6.875% due 11/21/36

    837      682

Vodafone Group PLC (Ñ)
5.500% due 06/15/11

    230      242
         
        39,530
         
     Principal
Amount ($)
or Shares		      Market
Value
$
Mortgage-Backed Securities - 72.3%     

Adjustable Rate Mortgage Trust (Ê)
Series 2005-3 Class 8A2
0.678% due 07/25/35

    187      77

American Home Mortgage Assets (Ê)
Series 2007-4 Class A2
0.628% due 08/25/37

    2,425      722

American Home Mortgage Investment Trust (Ê)
Series 2004-4 Class 4A
4.390% due 02/25/45

    200      121

Series 2005-4 Class 1A1
0.728% due 11/25/45

    753      305

Banc of America Alternative Loan Trust
Series 2003-2 Class CB2 (Ê)
0.938% due 04/25/33

    112      95

Series 2003-10 Class 2A2 (Ê)
0.888% due 12/25/33

    295      215

Series 2006-5 Class CB17
6.000% due 06/25/46

    722      392

Banc of America Commercial Mortgage, Inc.
Series 2004-3 Class A3
4.875% due 06/10/39

    128      128

Series 2005-2 Class A4
4.783% due 07/10/43

    1,100      969

Series 2005-3 Class A2
4.501% due 07/10/43

    445      430

Series 2005-3 Class A4
4.668% due 07/10/43

    1,200      1,035

Series 2006-1 Class A4
5.372% due 09/10/45

    910      769

Series 2006-3 Class A4
5.889% due 07/10/44

    1,330      986

Series 2007-2 Class AAB
5.817% due 04/10/49

    990      867

Series 2007-3 Class A3
5.837% due 06/10/49

    200      151

Series 2007-5 Class A3
5.620% due 02/10/51

    20      14

Banc of America Funding Corp.
Series 2005-5 Class 1A11
5.500% due 09/25/35

    903      664

Series 2005-D Class A1 (Ê)
3.987% due 05/25/35

    354      285

Series 2006-3 Class 5A8
5.500% due 03/25/36

    1,040      788

Series 2006-A Class 3A2
5.838% due 02/20/36

    344      162

Series 2006-A Class 4A1 (Ê)
5.562% due 02/20/36

    965      598

Series 2007-E Class 4A1 (Ê)
5.830% due 07/20/47

    864      655

Banc of America Mortgage Securities, Inc.
Series 2003-9 Class 1A12 (Ê)
0.888% due 12/25/33

    609      564

Series 2004-1 Class 5A1
6.500% due 09/25/33

    44      43

 

164   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2004-2 Class 5A1
6.500% due 10/25/31

    57      57

Series 2004-11 Class 2A1
5.750% due 01/25/35

    753      652

Series 2005-H Class 2A5 (Ê)
4.802% due 09/25/35

    575      308

Series 2005-L Class 3A1 (Ê)
5.457% due 01/25/36

    456      358

Series 2006-2 Class A15
6.000% due 07/25/36

    701      588

Series 2006-B Class 1A1 (Ê)
6.171% due 11/20/36

    232      102

Bear Stearns Adjustable Rate Mortgage Trust
Series 2002-11 Class 1A1
5.602% due 02/25/33

    24      22

Series 2004-1 Class 23A1 (Ê)
5.439% due 04/25/34

    202      171

Series 2004-8 Class 2A1
5.110% due 11/25/34

    606      486

Series 2004-9 Class 22A1 (Ê)
4.793% due 11/25/34

    193      147

Series 2004-10 Class 22A1
4.960% due 01/25/35

    266      240

Series 2005-2 Class A1 (Ê)
2.940% due 03/25/35

    2,761      2,239

Bear Stearns Alt-A Trust
Series 2005-4 Class 23A1
5.363% due 05/25/35

    443      252

Series 2005-7 Class 22A1
5.491% due 09/25/35

    289      149

Bear Stearns Commercial Mortgage Securities
Series 2005-T20 Class A4A
5.299% due 10/12/42

    1,500      1,307

Bear Stearns Structured Products, Inc.
Series 2007-R6 Class 1A1
5.652% due 01/26/36

    473      295

Series 2007-R6 Class 2A1
5.726% due 12/26/46

    245      142

Centerline REIT, Inc. (Þ)
Series 2004-RR3 Class B
5.040% due 09/21/45

    515      79

Chase Mortgage Finance Corp.
Series 2003-S8 Class A1
4.500% due 09/25/18

    421      416

Series 2005-A1 Class 2A2 (Ê)
5.236% due 12/25/35

    1,258      1,162

Series 2006-A1 Class 1A1 (Ê)
5.998% due 09/25/36

    719      523

Series 2006-S4 Class A3
6.000% due 12/25/36

    734      627

Series 2006-S4 Class A4
6.000% due 12/25/36

    430      421

Citigroup Commercial Mortgage Trust
Series 2006-C4 Class A3
5.917% due 03/15/49

    825      654
     Principal
Amount ($)
or Shares		      Market
Value
$

Citigroup Mortgage Loan Trust, Inc.
Series 2004-HYB Class A2 (Ê)
5.244% due 02/25/34

    25      20

Series 2005-3 Class 2A2B
4.676% due 08/25/35

    622      186

Series 2005-11 Class A2A (Ê)
4.700% due 12/25/35

    347      279

Series 2005-11 Class A3 (Ê)
4.900% due 12/25/35

    490      396

Series 2007-AR8 Class 2A1A
5.913% due 07/25/37

    543      305

Citigroup/Deutsche Bank Commercial Mortgage Trust
Series 2005-CD1 Class A4
5.399% due 07/15/44

    765      667

Series 2006-CD3 Class A5
5.617% due 10/15/48

    685      568

Citimortgage Alternative Loan Trust
Series 2006-A3 Class 1A5
6.000% due 07/25/36

    431      315

Commercial Mortgage Loan Trust
Series 2008-LS1 Class A4B
6.220% due 12/10/49

    1,110      797

Countrywide Alternative Loan Trust
Series 2004-2CB Class 1A4 (Ê)
0.838% due 03/25/34

    375      259

Series 2005-56 Class 4A1 (Ê)
0.748% due 11/25/35

    875      352

Series 2005-59 Class 1A1 (Ê)
0.852% due 11/20/35

    1,051      422

Series 2005-J8 Class 1A3
5.500% due 07/25/35

    699      483

Series 2005-J12 Class 2A1 (Ê)
0.728% due 08/25/35

    487      222

Series 2005-J13 Class 2A3
5.500% due 11/25/35

    280      183

Series 2006-9T1 Class A7
6.000% due 05/25/36

    332      202

Series 2006-43C Class 1A7
6.000% due 02/25/37

    180      114

Series 2006-J2 Class A3
6.000% due 04/25/36

    515      329

Series 2007-J2 Class 2A1
6.000% due 07/25/37

    674      368

Series 2007-OA6 Class A1B (Ê)
0.638% due 06/25/37

    635      236

Series 2007-OA7 Class A1A (Ê)
0.618% due 05/25/47

    623      216

Countrywide Asset-Backed Certificates (Ê)
Series 2006-IM1 Class A2
0.678% due 04/25/36

    4,357      1,590

Countrywide Home Loan Mortgage Pass Through Trust
Series 2004-16 Class 1A1 (Ê)
0.838% due 09/25/34

    241      101

Series 2004-22 Class A3
4.787% due 11/25/34

    391      246

 

Russell Investment Grade Bond Fund   165

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2004-HYB Class 1A1
4.726% due 02/20/35

    896      652

Series 2005-3 Class 1A2 (Ê)
0.728% due 04/25/35

    132      55

Series 2005-HYB Class 3A2A (Ê)
5.250% due 02/20/36

    126      82

Series 2005-R3 Class AF (Ê)(Þ)
0.838% due 09/25/35

    851      548

Series 2006-HYB Class 2A1A
5.697% due 05/20/36

    637      360

Series 2006-OA4 Class A1 (Ê)
2.593% due 04/25/46

    367      114

Series 2007-18 Class 2A1
6.500% due 11/25/37

    565      372

Series 2007-HY1 Class 1A2
5.677% due 04/25/37

    299      74

Credit Suisse First Boston Mortgage Securities Corp.
Series 2004-C1 Class A3
4.321% due 01/15/37

    154      150

Series 2005-9 Class 2A1
5.500% due 10/25/35

    1,127      773

Series 2005-C4 Class A3
5.120% due 08/15/38

    5,050      4,548

Credit Suisse Mortgage Capital Certificates
Series 2006-C1 Class AAB
5.681% due 02/15/39

    1,220      1,096

Series 2006-C2 Class A1
5.250% due 03/15/39

    700      696

Series 2006-C2 Class A2
5.847% due 03/15/39

    1,120      948

Series 2006-TFL Class A1 (Ê)(Þ)
0.571% due 04/15/21

    174      137

Series 2007-C1 Class A3
5.383% due 02/15/40

    2,500      1,722

Series 2007-C3 Class A4
5.912% due 06/15/39

    2,265      1,600

Series 2007-C5 Class A3
5.694% due 09/15/40

    545      442

Series 2007-C5 Class A4
5.695% due 09/15/40

    1,200      849

Series 2008-C1 Class A3
6.425% due 02/15/41

    1,570      1,172

Deutsche ALT-A Securities, Inc. Alternate Loan Trust
Series 2005-AR1 Class 2A3
4.973% due 08/25/35

    1,060      770

Series 2007-OA2 Class A1 (Ê)
2.284% due 04/25/47

    4,249      1,441

Deutsche Mortgage Securities, Inc. (Þ)
Series 2005-WF1 Class 1A3
5.103% due 06/26/35

    920      491

Downey Savings & Loan Association Mortgage Loan Trust
Series 2004-AR3 Class 1A1B (Ê)
3.913% due 07/19/44

    136      41

Series 2005-AR6 Class 2A1A (Ê)
0.737% due 10/19/45

    708      326

Fannie Mae
7.000% due 2011

    4      4

8.000% due 2011

    1      1
     Principal
Amount ($)
or Shares		      Market
Value
$

5.190% due 2012

    728      766

7.000% due 2012

    2      2

5.500% due 2013

    6      6

6.500% due 2013

    34      35

5.500% due 2014

    15      16

6.500% due 2015

    13      14

7.000% due 2015

    9      10

5.500% due 2016

    3      3

6.000% due 2016

    117      123

6.500% due 2016

    81      86

9.000% due 2016

    1      1

5.500% due 2017

    156      162

6.000% due 2017

    966      1,021

6.500% due 2017

    194      206

7.500% due 2017

    —      1

8.500% due 2017

    3      3

4.500% due 2018

    2,430      2,515

5.000% due 2018

    1,746      1,819

5.500% due 2018

    1,823      1,910

6.500% due 2018

    238      252

4.500% due 2019

    326      336

5.000% due 2019

    8,850      9,206

6.500% due 2019

    112      120

4.000% due 2020

    1,527      1,552

4.500% due 2020

    566      586

5.000% due 2020

    7,859      8,166

6.500% due 2020

    46      50

4.000% due 2021

    336      341

5.000% due 2021

    642      665

5.500% due 2021

    17      17

6.000% due 2021

    224      235

5.500% due 2022

    1,056      1,100

5.000% due 2023

    839      869

8.000% due 2024

    88      97

8.500% due 2024

    18      20

9.000% due 2024

    3      4

7.000% due 2025

    15      15

8.000% due 2025

    1      1

8.500% due 2025

    24      26

6.000% due 2026

    325      342

7.000% due 2026

    23      25

9.000% due 2026

    4      5

7.000% due 2027

    7      8

9.000% due 2027

    1      1

6.500% due 2028

    403      431

6.500% due 2029

    1,155      1,243

7.000% due 2029

    100      109

6.500% due 2030

    7      8

8.000% due 2030

    111      122

6.500% due 2031

    125      133

8.000% due 2031

    86      94

5.500% due 2032

    54      56

6.000% due 2032

    1,136      1,201

6.500% due 2032

    1,419      1,524

7.000% due 2032

    704      758

8.000% due 2032

    3      5

3.824% due 2033 (Ê)

    337      339

4.460% due 2033 (Ê)

    152      153

 

166   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

4.500% due 2033

    5,792      5,917

5.000% due 2033

    3,554      3,672

5.500% due 2033

    12,528      13,035

6.000% due 2033

    914      963

6.500% due 2033

    744      796

7.000% due 2033

    180      194

4.500% due 2034

    1,339      1,367

5.000% due 2034

    591      610

5.500% due 2034

    21,862      22,735

6.000% due 2034

    7,011      7,381

6.500% due 2034

    778      829

3.617% due 2035 (Ê)

    421      430

3.625% due 2035 (Ê)

    592      605

3.626% due 2035 (Ê)

    282      288

3.634% due 2035 (Ê)

    277      283

3.635% due 2035 (Ê)

    230      235

3.639% due 2035 (Ê)

    277      283

3.649% due 2035 (Ê)

    228      233

3.654% due 2035 (Ê)

    1,679      1,715

4.374% due 2035 (Ê)

    483      490

4.500% due 2035

    784      799

4.672% due 2035 (Ê)

    1,699      1,753

4.805% due 2035 (Ê)

    281      288

5.000% due 2035

    8,730      8,999

5.500% due 2035

    7,933      8,247

6.000% due 2035

    4,808      5,058

5.000% due 2036

    454      468

5.500% due 2036

    6,628      6,875

6.000% due 2036

    9,267      9,707

6.500% due 2036

    2,656      2,818

7.000% due 2036

    155      166

5.500% due 2037

    20,150      20,928

5.554% due 2037 (Ê)

    652      679

5.581% due 2037 (Ê)

    758      791

5.838% due 2037 (Ê)

    172      180

6.500% due 2037

    7,332      7,762

5.000% due 2038

    14,465      14,894

5.500% due 2038

    17,925      18,602

6.000% due 2038

    2,462      2,576

6.500% due 2038

    105      112

2.713% due 2044 (Ê)

    142      138

15 Year TBA (Ï)

        

4.000%

    60      61

4.500%

    2,410      2,476

5.000%

    1,575      1,629

5.500%

    6,800      7,076

6.000%

    900      944

30 Year TBA (Ï)

        

4.500%

    3,475      3,536

5.000%

    41,587      42,769

5.500%

    19,840      20,543

6.000%

    54,275      56,685

6.500%

    59,400      62,822

Series 2003-343 Class 6

        

Interest Only STRIP

        

5.000% due 10/01/33

    815      92

Series 2003-345 Class 18

        
     Principal
Amount ($)
or Shares		      Market
Value
$

Interest Only STRIP

        

4.500% due 12/01/18

    1,892      164

Series 2003-345 Class 19

        

Interest Only STRIP

        

4.500% due 01/01/19

    2,103      182

Series 2005-365 Class 12

        

Interest Only STRIP

        

5.500% due 12/01/35

    2,325      245

Series 2006-369 Class 8

        

Interest Only STRIP

        

5.500% due 04/01/36

    611      80

Fannie Mae Grantor Trust (Ê)
Series 2002-T5 Class A1
0.678% due 05/25/32

    550      465

Series 2003-T4 Class 1A
0.658% due 09/26/33

    141      89

Fannie Mae REMICS
Series 1992-158 Class ZZ
7.750% due 08/25/22

    173      185

Series 1999-56 Class Z
7.000% due 12/18/29

    320      343

Series 2003-21 Class M
5.000% due 02/25/17

    18      18

Series 2003-32 Class FH (Ê)
0.838% due 11/25/22

    183      181

Series 2003-35 Class FY (Ê)
0.838% due 05/25/18

    922      911

Series 2003-37 Class HY
5.000% due 12/25/16

    384      392

Series 2003-78 Class FI (Ê)
0.838% due 01/25/33

    424      416

Series 2004-21 Class FL (Ê)
0.788% due 11/25/32

    210      207

Series 2005-65 Class FP (Ê)
0.688% due 08/25/35

    177      176

Series 2006-5 Class 3A2 (Ê)
4.629% due 05/25/35

    78      79

Series 2006-48 Class LG

        

Zero coupon due 06/25/36

    193      166

Series 2007-73 Class A1 (Ê)
0.601% due 07/25/37

    714      634

Fannie Mae Whole Loan
Series 2003-W1 Class 1A1
6.500% due 12/25/42

    51      54

Series 2003-W5 Class A (Ê)
0.658% due 04/25/33

    193      169

Series 2003-W9 Class A (Ê)
0.678% due 06/25/33

    294      279

Series 2004-W2 Class 5AF (Ê)
0.788% due 03/25/44

    371      350

Federal Home Loan Mortgage Corp. Structured Pass Through Securities (Ê)
Series 2005-63 Class 1A1
2.833% due 02/25/45

    55      49

FHA Project Citi 68 NP
7.430% due 01/01/21

    70      71

 

Russell Investment Grade Bond Fund   167

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

First Horizon Alternative Mortgage Securities
Series 2004-AA3 Class A1 (Ê)
5.310% due 09/25/34

    268      168

Series 2006-AA5 Class A2 (Ê)
6.504% due 09/25/36

    468      67

Series 2006-AA7 Class A1 (Ê)
6.514% due 01/25/37

    2,181      1,072

Series 2006-FA3 Class A6
6.000% due 07/25/36

    389      292

First Horizon Asset Securities, Inc. (Ê)
Series 2005-AR5 Class 3A1
5.548% due 10/25/35

    182      149

Freddie Mac
6.000% due 2011

    43      44

7.000% due 2011

    3      3

8.000% due 2011

    5      5

8.000% due 2012

    2      3

6.000% due 2013

    17      17

7.000% due 2014

    15      16

12.000% due 2014

    10      10

6.000% due 2016

    232      245

9.000% due 2016

    62      69

6.000% due 2017

    356      376

8.000% due 2017

    12      13

4.500% due 2018

    1,168      1,208

5.000% due 2018

    661      691

4.500% due 2019

    662      685

5.000% due 2019

    548      570

5.500% due 2019

    656      683

4.500% due 2020

    265      273

5.500% due 2020

    1,816      1,896

6.000% due 2022

    29      31

9.000% due 2024

    5      5

6.500% due 2025

    11      12

8.000% due 2025

    11      13

9.000% due 2025

    7      8

9.000% due 2026

    2      2

5.174% due 2027 (Ê)

    18      19

6.500% due 2027

    —      —

8.500% due 2027

    46      50

6.500% due 2028

    148      159

6.500% due 2029

    246      264

5.275% due 2030 (Ê)

    9      9

6.500% due 2031

    396      424

5.500% due 2032

    3,351      3,483

6.000% due 2032

    35      36

6.500% due 2032

    453      484

7.000% due 2032

    375      401

7.500% due 2032

    41      44

5.000% due 2033

    828      854

5.500% due 2033

    4,686      4,865

6.000% due 2033

    11      12

6.500% due 2033

    203      216

4.500% due 2034

    301      307

4.884% due 2034 (Ê)

    144      146

5.000% due 2034

    3,174      3,274
     Principal
Amount ($)
or Shares		      Market
Value
$

5.500% due 2034

    1,919      1,992

6.000% due 2034

    197      207

6.500% due 2034

    173      185

5.000% due 2035

    1,104      1,138

5.500% due 2035

    542      562

6.000% due 2035

    462      485

5.000% due 2036

    819      844

5.863% due 2036 (Ê)

    278      290

5.920% due 2036 (Ê)

    563      586

5.968% due 2036 (Ê)

    436      455

6.000% due 2036

    611      641

6.112% due 2036 (Ê)

    697      725

5.000% due 2037

    695      715

5.479% due 2037 (Ê)

    309      321

5.500% due 2037

    242      250

5.527% due 2037 (Ê)

    998      1,043

5.615% due 2037 (Ê)

    1,464      1,527

5.687% due 2037 (Ê)

    1,331      1,387

5.704% due 2037 (Ê)

    214      223

5.714% due 2037 (Ê)

    528      551

5.745% due 2037 (Ê)

    436      455

5.805% due 2037 (Ê)

    135      141

5.809% due 2037 (Ê)

    430      449

5.819% due 2037 (Ê)

    2,069      2,160

5.882% due 2037 (Ê)

    445      464

5.888% due 2037 (Ê)

    225      235

5.892% due 2037 (Ê)

    461      482

6.000% due 2037

    230      240

6.092% due 2037 (Ê)

    1,487      1,557

4.981% due 2038 (Ê)

    607      631

5.000% due 2038

    148      152

5.500% due 2038

    5,362      5,551

6.000% due 2038

    9,239      9,653

15 Year TBA (Ï)

        

5.000%

    2,500      2,584

30 Year TBA (Ï)

        

5.000%

    6,675      6,845

5.500%

    35,793      36,988

6.000%

    6,590      6,878

6.500%

    230      244

Freddie Mac REMICS
Series 1991-105 Class G
7.000% due 03/15/21

    28      29

Series 1998-210 Class ZM
6.000% due 12/15/28

    487      517

Series 2000-226 Class F (Ê)
0.901% due 11/15/30

    9      9

Series 2001-229 Class KF (Ê)
0.688% due 07/25/22

    279      276

Series 2003-262 Class AB
2.900% due 11/15/14

    221      221

Series 2004-277 Class UF (Ê)
0.751% due 06/15/33

    459      454

Series 2004-281 Class DF (Ê)
0.901% due 06/15/23

    374      371

Series 2005-294 Class FA (Ê)
0.621% due 03/15/20

    686      670

 

168   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2005-295 Class NA
4.250% due 09/15/24

    169      171

Series 2005-299 Class KF (Ê)
0.851% due 06/15/35

    350      348

Series 2005-301 Class IM
5.500% due 01/15/31

    372      22

Series 2005-305 Class JF (Ê)
0.751% due 10/15/35

    251      248

Series 2006-323 Class PA
6.000% due 03/15/26

    576      581

Series 2007-333 Class AF (Ê)
0.601% due 10/15/20

    4,260      4,164

Series 2007-333 Class BF (Ê)
0.601% due 07/15/19

    999      977

Series 2007-333 Class FT (Ê)
0.601% due 08/15/19

    1,188      1,161

Series 2007-334 Class FA (Ê)
0.681% due 02/15/19

    779      761

GE Capital Commercial Mortgage Corp.
Series 2006-C1 Class A4
5.336% due 03/10/44

    1,145      973

Series 2007-C1 Class A4
5.543% due 12/10/49

    250      166

Ginnie Mae I
7.000% due 2011

    3      3

9.500% due 2016

    2      2

8.000% due 2017

    4      5

10.500% due 2020

    6      7

8.000% due 2022

    15      16

8.500% due 2022

    10      10

8.500% due 2024

    8      8

8.000% due 2025

    16      17

9.000% due 2025

    9      10

8.000% due 2026

    50      55

7.000% due 2029

    4      5

8.000% due 2029

    37      41

8.500% due 2029

    20      22

8.000% due 2030

    25      27

8.500% due 2030

    17      19

7.000% due 2031

    303      324

7.000% due 2032

    73      79

5.000% due 2033

    2,338      2,431

7.000% due 2033

    16      16

5.000% due 2035

    385      400

6.000% due 2035

    2,990      3,129

6.000% due 2036

    350      366

6.000% due 2037

    764      799

6.000% due 2038

    551      576

5.500% due 2039

    426      443

30 Year TBA (Ï)

        

5.500%

    990      1,028

6.000%

    950      991

Ginnie Mae II
4.125% due 2027 (Ê)

    31      32

4.625% due 2030 (Ê)

    96      96

5.375% due 2030 (Ê)

    14      15

7.500% due 2032

    9      10
     Principal
Amount ($)
or Shares		      Market
Value
$

GMAC Mortgage Corp. Loan Trust
Series 2005-AR6 Class 3A1
5.302% due 11/19/35

    741      506

Government National Mortgage Association (Ê)
Series 1999-40 Class FE
1.003% due 11/16/29

    622      621

Greenpoint Mortgage Funding Trust (Ê)
Series 2006-AR5 Class A1A
0.518% due 10/25/46

    994      816

Greenpoint Mortgage Pass-Through Certificates (Ê)
Series 2003-1 Class A1
4.823% due 10/25/33

    249      176

Greenwich Capital Commercial Funding Corp.
Series 2004-GG1 Class A7
5.317% due 06/10/36

    1,745      1,609

Series 2005-GG5 Class A41
5.243% due 04/10/37

    695      663

Series 2006-GG7 Class A4
6.114% due 07/10/38

    2,710      2,265

GS Mortgage Securities Corp. II
Series 2005-GG4 Class AABA
4.680% due 07/10/39

    600      540

Series 2006-GG6 Class A4
5.553% due 04/10/38

    1,150      972

Series 2006-GG8 Class AAB
5.535% due 11/10/39

    575      525

GSMPS Mortgage Loan Trust (Ê)(Þ)
Series 2004-4 Class 1AF
0.838% due 06/25/34

    800      581

GSR Mortgage Loan Trust
Series 2004-5 Class 1A3 (Ê)
2.350% due 05/25/34

    256      149

Series 2004-7 Class 4A1
4.847% due 06/25/34

    56      47

Series 2005-AR7 Class 6A1
5.243% due 11/25/35

    547      368

Harborview Mortgage Loan Trust
Series 2004-4 Class 3A (Ê)
1.259% due 06/19/34

    153      66

Series 2005-4 Class 3A1
5.142% due 07/19/35

    357      205

Series 2005-14 Class 3A1A
5.308% due 12/19/35

    178      90

Series 2006-2 Class 1A
5.452% due 02/25/36

    802      379

Series 2006-3 Class 1A1A (Ê)
6.315% due 06/19/36

    4,819      2,276

Impac CMB Trust (Ê)
Series 2004-5 Class 1A1
0.798% due 10/25/34

    225      130

Impac Secured Assets CMN Owner Trust (Ê)
Series 2005-2 Class A1
0.758% due 03/25/36

    685      281

 

Russell Investment Grade Bond Fund   169

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Indymac INDA Mortgage Loan Trust (Ê)
Series 2007-AR7 Class 1A1
6.165% due 11/25/37

    229      134

Indymac Index Mortgage Loan Trust
Series 2005-AR1 Class 1A1
5.135% due 03/25/35

    811      447

Series 2005-AR1 Class A2
5.099% due 09/25/35

    266      156

Series 2006-AR2 Class 1A1B (Ê)
0.648% due 04/25/46

    882      314

Series 2006-AR2 Class A2 (Ê)
0.518% due 11/25/36

    78      71

Series 2006-AR3 Class 2A1A
6.172% due 03/25/36

    6,513      2,941

Series 2007-AR5 Class 1A1
6.068% due 05/25/37

    2,036      910

Indymac Loan Trust (Ê)
Series 2005-L1 Class A
0.638% due 06/25/10

    416      313

Series 2005-L2 Class A1
0.658% due 01/25/11

    525      336

JPMorgan Alternative Loan Trust
Series 2006-A2 Class 3A1
5.940% due 05/25/36

    2,810      1,451

Series 2006-A4 Class A4 (Ê)
0.508% due 09/25/36

    269      248

Series 2006-S4 Class A1B (Ê)
0.518% due 12/25/36

    681      575

Series 2007-A2 Class 12A2 (Ê)
0.538% due 06/25/37

    1,156      899

JPMorgan Chase Commercial Mortgage Securities Corp.
Series 2004-CB8 Class A2
3.837% due 01/12/39

    875      800

Series 2004-LN2 Class A1
4.475% due 07/15/41

    582      562

Series 2005-CB1 Class A4
4.895% due 09/12/37

    160      139

5.458% due 01/12/43

    200      177

Series 2005-FL1 Class A1 (Ê)(Þ)
0.561% due 02/15/19

    100      93

Series 2005-LDP Class A3
4.959% due 08/15/42

    885      729

Series 2005-LDP Class A3A1
4.871% due 10/15/42

    1,940      1,747

Series 2005-LDP Class A4
4.918% due 10/15/42

    690      600

5.344% due 12/15/44

    645      556

Series 2006-CB1 Class A3A (Þ)
5.491% due 12/12/44

    1,765      1,542

Series 2006-CB1 Class A4
5.481% due 12/12/44

    1,090      907

5.552% due 05/12/45

    785      639

Series 2006-CB1 Class ASB
5.506% due 12/12/44

    470      446

Series 2006-LDP Class A3
5.336% due 05/15/47

    485      374
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-LDP Class A3B
5.447% due 05/15/45

    820      677

Series 2006-LDP Class A4
6.065% due 04/15/45

    1,580      1,329

5.399% due 05/15/45

    1,055      816

Series 2007-CB2 Class ASB
5.688% due 11/12/16

    1,165      997

Series 2007-LD1 Class A2
5.827% due 02/15/51

    2,550      2,218

Series 2007-LD1 Class A4
6.007% due 06/15/49

    1,470      1,155

5.882% due 02/15/51

    1,960      1,463

Series 2007-LDP Class A3
5.420% due 01/15/49

    2,870      2,177

Series 2008-C2 Class A1
5.017% due 02/12/51

    400      400

Series 2008-C2 Class ASB
6.125% due 02/12/51

    1,055      919

JPMorgan Mortgage Trust
Series 2004-A3 Class SF3
4.588% due 07/25/34

    719      627

Series 2005-A1 Class 6T1 (Ê)
5.016% due 02/25/35

    402      340

Series 2005-A2 Class 3A1
4.892% due 04/25/35

    21      20

Series 2006-A2 Class 1A1
5.467% due 04/25/36

    1,278      760

Series 2007-A1 Class 3A2 (Ê)
5.003% due 07/25/35

    4,582      3,582

Series 2007-A4 Class 3A1
5.880% due 06/25/37

    1,594      1,171

Series 2007-S3 Class 1A35
6.000% due 07/25/37

    323      208

LB-UBS Commercial Mortgage Trust
Series 2001-C3 Class A1
6.058% due 06/15/20

    76      77

Series 2005-C3 Class A5 (Ø)
4.739% due 07/15/30

    820      699

Series 2005-C3 Class AAB (Ø)
4.664% due 07/15/30

    1,000      964

Series 2005-C5 Class A4 (Ø)
4.954% due 09/15/30

    1,700      1,480

Series 2006-C4 Class A4 (Ø)
6.080% due 06/15/38

    400      337

Series 2007-C6 Class A4 (Ø)
5.858% due 07/15/40

    695      504

Lehman Brothers Floating Rate Commercial Mortgage Trust (Ê)(Þ)
Series 2006-LLF Class A1
0.531% due 09/15/21

    65      54

Lehman Mortgage Trust
Series 2005-3 Class 1A3
5.500% due 01/25/36

    1,110      751

Lehman XS Trust (Ê)
Series 2005-5N Class 1A1
0.738% due 11/25/35

    537      211

Series 2005-7N Class 1A1B
0.822% due 12/25/35

    406      87

 

170   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Mastr Adjustable Rate Mortgages Trust
Series 2004-13 Class 3A4 (Ê)
3.788% due 11/21/34

    62      60

Series 2006-2 Class 3A1
4.847% due 01/25/36

    1,026      707

Series 2006-OA2 Class 1A1 (Ê)
2.433% due 12/25/46

    461      148

Series 2007-3 Class 12A1 (Ê)
0.722% due 05/25/47

    1,535      539

Mastr Alternative Loans Trust
Series 2003-4 Class B1
5.694% due 06/25/33

    380      265

Series 2004-10 Class 5A6
5.750% due 09/25/34

    640      503

Mastr Asset Securitization Trust
Series 2003-7 Class 4A35 (Ê)
0.838% due 09/25/33

    484      440

Series 2003-11 Class 6A8 (Ê)
0.938% due 12/25/33

    623      561

Series 2004-4 Class 2A2 (Ê)
0.888% due 04/25/34

    502      447

Series 2005-2 Class 1A1
5.250% due 11/25/35

    1,208      950

Mastr Reperforming Loan Trust (Þ)
Series 2005-1 Class 1A1
6.000% due 08/25/34

    466      479

Merrill Lynch Mortgage Investors, Inc. (Ê)
Series 2005-A10 Class A
0.648% due 02/25/36

    237      131

Merrill Lynch Mortgage Trust
Series 2004-MKB Class A2
4.353% due 02/12/42

    396      390

Series 2006-C1 Class A4
5.840% due 05/12/39

    660      559

Merrill Lynch/Countrywide Commercial Mortgage Trust
Series 2006-3 Class A2
5.291% due 07/12/46

    1,820      1,648

Series 2007-5 Class A4
5.378% due 08/12/48

    140      93

Series 2007-8 Class A3
6.156% due 08/12/49

    900      679

Series 2007-8 Class ASB
6.089% due 08/12/49

    810      699

MLCC Mortgage Investors, Inc. (Ê)
Series 2004-HB1 Class A2
1.998% due 04/25/29

    123      64

Series 2005-2 Class 3A
1.438% due 10/25/35

    127      85

Series 2005-3 Class 4A
0.688% due 11/25/35

    75      45

Morgan Stanley Capital I
Series 2005-HQ5 Class A4
5.168% due 01/14/42

    1,125      1,010

Series 2005-HQ6 Class A4A
4.989% due 08/13/42

    530      457

Series 2005-IQ1 Class AAB
5.178% due 09/15/42

    940      918
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2006-HQ1 Class A4
5.328% due 11/12/41

    345      283

Series 2006-HQ8 Class A4
5.559% due 03/12/44

    1,025      834

Series 2006-HQ9 Class A4
5.731% due 07/12/44

    965      806

Series 2007-HQ1 Class A4
5.811% due 04/12/49

    1,045      668

Series 2007-IQ1 Class A4
5.809% due 12/12/49

    400      311

Morgan Stanley Mortgage Loan Trust
Series 2006-3AR Class 2A3
5.697% due 03/25/36

    916      461

Novastar Mortgage-Backed Notes (Ê)
Series 2006-MTA Class 2A1A
0.712% due 09/25/46

    768      317

Prime Mortgage Trust
Series 2004-CL1 Class 1A2 (Ê)
0.838% due 02/25/34

    125      101

Series 2004-CL1 Class 2A2 (Ê)
0.838% due 02/25/19

    21      20

Series 2006-DR1 Class 2A1 (Þ)
5.500% due 05/25/35

    2,049      1,406

Series 2006-DR1 Class 2A2 (Þ)
6.000% due 05/25/35

    1,800      1,252

Residential Accredit Loans, Inc.
Series 2004-QS5 Class A6 (Ê)
1.038% due 04/25/34

    210      140

Series 2004-QS8 Class A4 (Ê)
0.838% due 06/25/34

    395      328

Series 2005-QA1 Class 2A1
5.813% due 12/25/35

    1,152      702

Series 2005-QA1 Class A41
5.669% due 09/25/35

    785      481

Series 2005-QA8 Class NB3
5.498% due 07/25/35

    424      284

Series 2005-QO3 Class A1 (Ê)
0.922% due 10/25/45

    861      346

Series 2006-QA1 Class A21
5.948% due 01/25/36

    2,388      1,233

Series 2006-QO7 Class 3A2 (Ê)
0.643% due 09/25/46

    1,340      314

Series 2006-QS6 Class 1A13
6.000% due 06/25/36

    998      581

Residential Asset Securitization Trust
Series 2003-A15 Class 1A2 (Ê)
0.888% due 02/25/34

    458      375

Series 2007-A5 Class 2A3
6.000% due 05/25/37

    319      185

Residential Funding Mortgage Securities I
Series 2003-S5 Class 1A2 (Ê)
0.888% due 11/25/18

    584      580

Series 2003-S14 Class A5 (Ê)
0.838% due 07/25/18

    608      430

Series 2003-S20 Class 1A7 (Ê)
0.938% due 12/25/33

    166      165

Series 2006-SA4 Class 2A1
6.111% due 11/25/36

    1,158      673

 

Russell Investment Grade Bond Fund   171

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Salomon Brothers Mortgage Securities VII, Inc.
Series 2002-KEY Class A2
4.467% due 03/18/36

    949      898

Series 2003-UP2 Class A1
4.000% due 12/25/18

    210      199

Sequoia Mortgage Trust (Ê)
Series 2004-3 Class A
2.114% due 05/20/34

    363      208

Small Business Administration Participation Certificates
Series 2003-20I Class 1
5.130% due 09/01/23

    58      61

Structured Adjustable Rate Mortgage Loan Trust (Ê)
Series 2005-19X Class 1A1
0.758% due 10/25/35

    485      193

Structured Asset Mortgage Investments, Inc. (Ê)
Series 2005-AR5 Class A2
0.697% due 07/19/35

    277      189

Structured Asset Securities Corp.
Series 2003-26A Class 3A5
4.455% due 09/25/33

    740      553

Series 2004-21X Class 1A3
4.440% due 12/25/34

    478      453

Series 2006-11 Class A1 (Þ)
4.688% due 10/25/35

    228      142

Thornburg Mortgage Securities Trust
Series 2003-2 Class A1 (Ê)
1.118% due 04/25/43

    105      93

Series 2006-3 Class A3 (Ê)
0.632% due 06/25/46

    1,401      1,387

Series 2006-6 Class A1 (Ê)
0.548% due 11/25/46

    341      294

Series 2007-4 Class 2A1
6.210% due 09/25/37

    817      596

Series 2007-4 Class 3A1
6.200% due 09/25/37

    705      461

Wachovia Bank Commercial Mortgage Trust
Series 2005-C16 Class A2
4.380% due 10/15/41

    911      894

Series 2005-C22 Class A3
5.460% due 12/15/44

    2,435      2,194

Series 2006-WL7 Class A1 (Ê)(Þ)
0.541% due 09/15/21

    176      123

Series 2007-C33 Class A2
6.055% due 02/15/51

    1,700      1,454

Series 2007-WHL Class A1 (Ê)(Þ)
0.531% due 06/15/20

    150      103

Washington Mutual Alternative Mortgage Pass-Through Certificates
Series 2005-4 Class CB11
5.500% due 06/25/35

    350      165

Series 2007-OA2 Class 2A (Ê)
2.333% due 01/25/47

    487      161
     Principal
Amount ($)
or Shares		      Market
Value
$

Washington Mutual Mortgage Pass Through Certificates
Series 2003-S9 Class A2 (Ê)
0.988% due 10/25/33

    461      448

Series 2005-AR1 Class 1A1
4.826% due 10/25/35

    538      387

Series 2005-AR1 Class A1A1 (Ê)
0.728% due 10/25/45

    664      312

Series 2005-AR1 Class A1A2 (Ê)
0.718% due 11/25/45

    708      228

0.728% due 12/25/45

    365      147

Series 2005-AR6 Class B3 (Ê)
1.098% due 04/25/45

    454      20

Series 2006-AR1 Class 1A1A (Ê)
2.703% due 01/25/46

    398      139

Series 2007-HY3 Class 4B1
5.331% due 03/25/37

    408      47

Series 2007-HY4 Class 1A1 (Ê)
5.483% due 04/25/37

    393      219

Wells Fargo Mortgage Backed Securities Trust
Series 2004-CC Class A1 (Ê)
4.948% due 01/25/35

    537      420

Series 2006-2 Class 2A3
5.500% due 03/25/36

    820      730

Series 2006-AR2 Class 2A1
4.950% due 03/25/36

    546      364

Series 2006-AR7 Class 2A4 (Ê)
5.605% due 05/25/36

    869      605

Series 2006-AR8 Class 2A3
5.240% due 04/25/36

    205      129

Series 2007-8 Class 1A16
6.000% due 07/25/37

    856      569

Series 2007-10 Class 2A5
6.250% due 07/25/37

    393      298

Zuni Mortgage Loan Trust (Ê)
Series 2006-OA1 Class A1
0.568% due 08/25/36

    686      664
         
        701,809
         
Municipal Bonds - 1.2%        

Metropolitan Government Nashville & Davidson County Health & Educational Facs Bd Revenue Bonds
5.000% due 10/01/39

    1,600      1,622

New York State Housing Finance Agency Revenue Bonds
5.000% due 03/15/32

    6,300      6,323

San Diego Tobacco Settlement Revenue Funding Corp. Revenue Bonds
7.125% due 06/01/32

    290      162

State of California General Obligation Unlimited
7.500% due 04/01/34

    100      103

5.650% due 04/01/39 (Ê)

    100      103

7.550% due 04/01/39

    525      547

State of Texas General Obligation Unlimited
4.750% due 04/01/35

    300      295

 

172   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Tobacco Settlement Authority of Iowa Revenue Bonds
6.500% due 06/01/23

      90      65

Tobacco Settlement Finance Authority of West Virginia Revenue Bonds
7.467% due 06/01/47

      495      278

University of California Revenue Bonds
5.250% due 05/15/39

      2,200      2,208
         
        11,706
         
Non-US Bonds - 0.2%        

Bundesrepublik Deutschland
Series 04
3.750% due 01/04/15

    EUR  1,040      1,462

Canadian Government Bond
4.000% due 12/01/31

    CAD  174      197

Poland Government Bond
Series 1013
5.000% due 10/24/13

    PLN  2,540      735
         
        2,394
         
United States Government Agencies - 3.4%     

Fannie Mae
5.250% due 08/01/12 (Ñ)

      330      344

4.750% due 11/19/12

      420      460

4.625% due 10/15/13

      2,065      2,051

4.625% due 10/15/14 (Ñ)

      1,060      1,166

6.625% due 11/15/30 (Ñ)

      185      233

6.210% due 08/06/38

      275      313

Federal Farm Credit Bank
5.125% due 08/25/16

      710      762

Federal Home Loan Bank
3.625% due 09/16/11 (Ñ)

      815      855

5.375% due 05/15/19

      315      331

5.125% due 08/15/19

      330      343

Federal Home Loan Bank Discount Notes
5.625% due 06/11/21

      1,070      1,161

Federal Home Loan Banks
Series VB15
5.000% due 12/21/15

      895      957

Federal Home Loan Mortgage Corp.
5.125% due 08/23/10

      1,820      1,917

0.926% due 05/04/11 (Ê)

      500      500

2.125% due 03/23/12 (Ñ)

      4,480      4,527

5.000% due 12/14/18

      400      379

3.750% due 03/27/19 (Ñ)

      295      296

5.625% due 11/23/35 (Ñ)

      1,240      1,291

Series 1 (Ê)
0.888% due 02/01/11

      100      100

Federal National Mortgage Association
1.875% due 04/20/12 (Ñ)

      895      898

4.350% due 05/29/13

      1,410      1,414

2.750% due 03/13/14 (Ñ)

      515      521

Zero coupon due 07/05/14

      1,235      1,037

5.000% due 04/26/17

      1,315      1,341

Zero coupon due 10/09/19

      300      153

5.625% due 07/15/37 (Ñ)

      80      86
     Principal
Amount ($)
or Shares		      Market
Value
$

Financing Corp.
Series 1P
Zero coupon due 05/11/18

    380      255

Series 7P
Zero coupon due 08/03/18

    290      191

Series 8P
Zero coupon due 08/03/18

    150      99

Series 11P
Zero coupon due 02/08/18

    100      68

Series 19P
Zero coupon due 06/06/19

    50      31

Series A-P
Zero coupon due 02/08/18

    520      353

Series D-P
Zero coupon due 09/26/19

    20      12

Financing Corp. STRIP
Zero coupon due 08/03/18

    360      238

Series B-P
Zero coupon due 04/06/18

    300      202

Series E-P
Zero coupon due 11/02/18

    360      233

Freddie Mac
3.875% due 06/29/11

    1,050      1,105

5.050% due 01/26/15

    690      772

4.750% due 01/19/16

    360      395

5.500% due 08/23/17 (Ñ)

    830      941

5.000% due 04/18/17 (Ñ)

    3,400      3,744

4.875% due 06/13/18 (Ñ)

    200      220

6.750% due 03/15/31 (Ñ)

    55      70

Tennessee Valley Authority
6.150% due 01/15/38

    345      391
         
        32,756
         
United States Government Treasuries - 5.7%     

United States Treasury
Principal Only STRIP(Ñ)
Zero coupon due 11/15/21

    5,506      3,277

United States Treasury Inflation Indexed Bonds
1.625% due 01/15/15 (Ñ)

    56      55

2.000% due 01/15/16 (Æ)(Ñ)

    2,870      2,920

2.500% due 07/15/16 (Æ)(Ñ)

    515      543

2.625% due 07/15/17 (Ñ)

    205      219

2.375% due 01/15/25 (Ñ)

    9,932      9,848

2.000% due 01/15/26 (Ñ)

    396      370

2.375% due 01/15/27 (Ñ)

    379      374

1.750% due 01/15/28 (Æ)(Ñ)

    9,924      8,929

3.875% due 04/15/29

    1,936      2,324

United States Treasury Notes
2.750% due 02/28/13 (Ñ)

    260      271

3.500% due 05/31/13 (Ñ)

    260      278

4.250% due 11/15/13 (Ñ)

    6,895      7,611

4.750% due 05/15/14 (Ñ)

    240      272

12.500% due 08/15/14

    155      160

4.125% due 05/15/15

    1,035      1,137

4.500% due 11/15/15 (Ñ)

    4,390      4,953

5.125% due 05/15/16

    1,310      1,553

3.500% due 02/15/18 (Ñ)

    3,175      3,293

 

Russell Investment Grade Bond Fund   173

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

2.750% due 02/15/19 (Ñ)

    160      155

7.125% due 02/15/23 (Ñ)

    1,255      1,683

6.250% due 08/15/23 (Ñ)

    545      682

6.875% due 08/15/25 (Ñ)

    1,995      2,699

6.000% due 02/15/26

    105      135

6.375% due 08/15/27 (Ñ)

    390      505

6.125% due 11/15/27

    183      231

4.375% due 02/15/38 (Ñ)

    500      526
         
        55,003
         
Total Long-Term Investments
(cost $1,214,642)		         1,103,503
         
Preferred Stocks - 0.5%        
Auto and Transportation - 0.0%        

General Motors Corp.

    31,725      72
         
Financial Services - 0.5%        

American International Group, Inc.

    32,300      165

Bank of America Corp. (Ñ)

    1,400      808

DG Funding Trust (Å)

    392      3,932

Federal Home Loan Mortgage Corp.

    27,050      14

Federal National Mortgage Association (Ñ)

    1,000      1

Federal National Mortgage Association (Ñ)

    18,750      15

Preferred Blocker, Inc. (Þ)

    26      8
         
        4,943
         
Total Preferred Stocks
(cost $9,029)		         5,015
         
    

Notional
Amount
$

       
Options Purchased - 0.0%        
(Number of Contracts)        

Eurodollar Futures
Jun 2009 99.00 Call (10)

    25      3
         
Total Options Purchased
(cost $2)		         3
         
    

Principal
Amount ($)
or Shares

       
Short-Term Investments - 11.9%        

American Electric Power Co., Inc.
Series C
5.375% due 03/15/10

    120      123

American Express Centurion Bank (Ê)
Series BKNT
0.480% due 06/12/09

    1,900      1,894

Bear Stearns Cos. LLC (The) (Ê)
1.392% due 07/16/09

    1,900      1,902

1.341% due 08/21/09

    800      798
     Principal
Amount ($)
or Shares		      Market
Value
$

Citigroup Funding, Inc. (Ê)
1.226% due 06/26/09

    400      397

Citigroup, Inc.
1.262% due 12/28/09 (Ê)

    800      772

4.125% due 02/22/10

    630      620

Clear Channel Communications, Inc.
4.250% due 05/15/09

    230      208

Comcast Cable Communications LLC
6.875% due 06/15/09

    200      201

Continental Airlines, Inc.
Series 99A2
7.056% due 09/15/09

    450      444

Countrywide Home Loans, Inc.
4.125% due 09/15/09

    970      962

Series MTNK
5.625% due 07/15/09

    500      498

Credit Agricole SA (Ê)(Þ)
1.256% due 05/28/09

    400      400

Export-Import Bank of Korea (Ê)
1.351% due 06/01/09

    200      200

Fannie Mae
4.750% due 04/19/10

    3,765      3,898

Ford Motor Credit Co. LLC
7.375% due 10/28/09

    3,240      3,111

Freddie Mac
8.000% due 01/01/10

    4      4

6.000% due 01/01/10

    12      13

7.000% due 01/01/10

    18      18

Gazprom
10.500% due 10/21/09

    700      718

General Electric Capital Corp.
3.250% due 06/15/09 (Ñ)

    600      599

1.177% due 01/20/10 (Ê)(Ñ)

    600      590

Series MTN (Ê)
1.122% due 10/26/09

    300      297

Ginnie Mae I
6.500% due 01/01/10

    1      1

GMAC LLC (Ñ)
5.625% due 05/15/09

    2,250      2,226

7.750% due 01/19/10 (Þ)

    150      138

Goldman Sachs Group, Inc. (The) (Ê)
1.317% due 06/23/09

    500      500

HSBC Bank USA NA NY (Ê)
Series BKNT
1.433% due 06/10/09

    800      799

HSBC Finance Corp.
4.750% due 05/15/09

    1,375      1,373

1.162% due 10/21/09 (Ê)

    400      391

4.125% due 11/16/09

    765      759

1.411% due 03/12/10 (Ê)(Ñ)

    700      670

International Lease Finance Corp. (Ñ)
4.750% due 07/01/09

    675      660

Korea Development Bank/Republic of Korea (Ê)
1.317% due 04/03/10

    700      682

Lehman Brothers Holdings, Inc. (Ø)
2.911% due 08/21/09

    400      56

Morgan Stanley (Ê)
Series MTN
1.221% due 01/15/10

    600      587

 

174   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

National Australia Bank, Ltd. (Ê)(Þ)
1.353% due 09/11/09

    500      499

Residential Capital LLC (Ê)
4.351% due 05/22/09

    200      193

Russell Investment Company Russell Money Market Fund

    76,797,215      76,797

Security National Mortgage Loan Trust (Ê)(Þ)
Series 2006-3A Class A1
0.802% due 10/25/09

    318      247

Small Business Administration
Series 1999-P10 Class 1
7.540% due 08/10/09

    67      68

TD NA, LP (Ê)(Ñ)(Þ)
1.279% due 10/15/09

    6,000      5,959

Telefonica Emisiones SAU (Ê)
1.588% due 06/19/09

    800      800

Time Warner, Inc. (Ê)
1.461% due 11/13/09

    400      397

UDR, Inc.
Series MTNE
3.900% due 03/15/10

    930      885

United States Treasury Bills (ç)(ž)(§)
0.152% due 05/07/09

    260      260

0.193% due 05/14/09

    400      400

0.041% due 05/21/09

    430      430

0.046% due 05/21/09

    510      510

0.050% due 05/21/09

    80      80

0.159% due 05/28/09

    55      55

0.275% due 05/28/09

    195      195

0.173% due 06/04/09

    340      340
         
Total Short-Term Investments
(cost $116,234)		         115,624
         
Repurchase Agreements - 0.1%     

Agreement with Barclays Capital Inc. and the Bank of New York (Tri-Party) of $1,500 dated April 30, 2009, at 0.180% to be repurchased at $1,500 on May 1, 2009 collateralized by: $1,500 par various United States Treasury Obligations, valued at $1,500

    1,500      1,500
         
Total Repurchase Agreements
(cost $1,500)		         1,500
         
     Principal
Amount ($)
or Shares		      Market
Value
$		  
Other Securities - 8.4%        

Russell Investment Company Russell Money Market Fund (×)

    40,222,432      40,222   

State Street Securities Lending Quality Trust (×)

    42,360,691      40,835   
           
Total Other Securities
(cost $82,583)		         81,057   
           
Total Investments - 134.7%
(identified cost $1,423,990)		         1,306,702   
Other Assets and Liabilities, Net - (34.7%)         (336,767 ) 
           
Net Assets - 100.0%         969,935   
           

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Investment Grade Bond Fund   175

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$		  
                   
                   
Long Positions                    

Euribor Futures (Germany)

    13      EUR   3,209      06/09      169   

Euribor Futures (Germany)

    4      EUR   985      03/10      4   

Euribor Futures (Germany)

    4      EUR   983      06/10      5   

Euribor Futures (Germany)

    3      EUR   736      09/10      4   

Euribor Futures (Germany)

    4      EUR   979      12/10      5   

Euro-Bund Futures (Germany)

    2      EUR   245      06/09      (4 ) 

Eurodollar Futures (CME)

    371      USD   91,874      06/09      2,251   

Eurodollar Futures (CME)

    272      USD   67,324      09/09      1,133   

Eurodollar Futures (CME)

    158      USD   39,028      12/09      905   

Eurodollar Futures (CME)

    151      USD   37,250      03/10      786   

Eurodollar Futures (CME)

    73      USD   17,963      06/10      49   

Eurodollar Futures (CME)

    59      USD   14,482      09/10      28   

Eurodollar Futures (CME)

    26      USD   6,363      12/10      (9 ) 

Eurodollar Futures (CME)

    26      USD   6,347      03/11      (14 ) 

Three Month Short Sterling Interest Rate Futures (UK)

    29      GBP   3,577      06/09      239   

Three Month Short Sterling Interest Rate Futures (UK)

    1      GBP   123      12/09      6   

Three Month Short Sterling Interest Rate Futures (UK)

    4      GBP   491      03/10      2   

Three Month Short Sterling Interest Rate Futures (UK)

    4      GBP   490      06/10      23   

Three Month Short Sterling Interest Rate Futures (UK)

    4      GBP   488      09/10      2   

Three Month Short Sterling Interest Rate Futures (UK)

    4      GBP   487      12/10      3   

United States Treasury 2 Year Notes

    73      USD   15,881      06/09      27   

United States Treasury 5 Year Notes

    677      USD   79,304      06/09      (71 ) 

United States Treasury 10 Year Notes

    210      USD   25,398      06/09      (234 ) 

United States Treasury 30 Year Bond

    37      USD   4,535      06/09      (128 ) 
Short Positions                    

United States Treasury 10 Year Notes

    130      USD   15,722      06/09      55   

United States Treasury 30 Year Bond

    88      USD   10,786      06/09      339   
                       

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     5,575   
                       

 

See accompanying notes which are an integral part of the financial statements.

 

176   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

 

Options Written
(Number of Contracts)		   

Notional Amount

      Market
Value
$		  
            
Eurodollar Futures             

Jun 2009 97.25 Put (21)

    USD      53      —   

Jun 2009 98.50 Put (11)

    USD      28      —   

Jun 2009 98.75 Put (19)

    USD      48      (1 ) 

Sep 2009 98.50 Put (35)

    USD      88      (4 ) 
Eurodollar Midcurve 1 Year Futures             

May 2009 98.00 Put (22)

    USD      55      (1 ) 
Swaptions             
(Fund Receives/Fund Pays)             
USD Three Month LIBOR/USD
2.500%
Jun 2009 0.00 Call (1)		         8,000      (19 ) 
USD 2.750%/USD Three Month LIBOR             
May 2009 0.00 Put (4)         4,500      (13 ) 
USD Three Month LIBOR/USD
2.750%
May 2009 0.00 Put (1)		         500      (2 ) 
USD 2.000%/USD Three Month LIBOR Jul 2009 0.00 Put (4)         4,000      (7 ) 
USD 3.500%/USD Three Month LIBOR Aug 2009 0.00 Put (1)         8,000      (27 ) 
USD 4.400%/USD Three Month LIBOR Aug 2009 0.00 Put (2)         4,000      (6 ) 
Options Written
(Number of Contracts)		   

Notional Amount

      Market
Value
$		  
USD 4.550%/USD Three Month LIBOR Aug 2009 0.00 Put (2)         2,500      (3 ) 
United States Treasury Bonds             

May 2009 128.00 Call (16)

    USD      16      (6 ) 

May 2009 131.00 Call (10)

    USD      10      (2 ) 

May 2009 124.00 Put (4)

    USD      4      (11 ) 
United States Treasury Notes             

5 Year Futures

             

May 2009 118.00 Call (44)

    USD      44      (11 ) 
United States Treasury Notes             

10 Year Futures

             

May 2009 124.00 Call (73)

    USD      73      (11 ) 

May 2009 125.00 Call (5)

    USD      5      —   

May 2009 126.00 Call (4)

    USD      4      —   

May 2009 127.00 Call (12)

    USD      12      (1 ) 

May 2009 119.00 Put (16)

    USD      16      (6 ) 

May 2009 120.00 Put (52)

    USD      52      (33 ) 

May 2009 124.00 Put (11)

    USD      11      (34 ) 
                  

Total Liability for Options Written

             

(premiums received $356 )

              (198 ) 
                  

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Investment Grade Bond Fund   177

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts      
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   152   AUD   212   05/07/09   2   
USD   33   BRL   75   06/02/09   1   
USD   99   BRL   226   06/02/09   3   
USD   283   CAD   356   05/12/09   15   
USD   473   CAD   594   05/12/09   25   
USD   868   CAD   1,063   05/12/09   23   
USD   131   CAD   161   06/08/09   4   
USD   291   CAD   356   08/19/09   7   
USD   486   CAD   594   08/19/09   12   
USD   6   EUR   4   05/01/09   —   
USD   1,310   EUR   1,006   05/12/09   21   
USD   188   EUR   145   05/14/09   3   
USD   101   GBP   70   05/21/09   2   
USD   121   JPY   11,962   05/07/09   —   
USD   727   PLN   2,556   05/12/09   38   
CAD   356   USD   291   05/12/09   (8 ) 
CAD   594   USD   486   05/12/09   (12 ) 
CAD   1,063   USD   840   05/12/09   (50 ) 
CAD   1,063   USD   868   08/19/09   (23 ) 
EUR   1,006   USD   1,301   05/12/09   (31 ) 
EUR   532   USD   705   05/14/09   2   
EUR   1,006   USD   1,309   08/19/09   (21 ) 
GBP   1,114   USD   1,640   05/21/09   (8 ) 
PLN   2,556   USD   759   05/12/09   (5 ) 
PLN   2,556   USD   723   08/19/09   (36 ) 
             

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts

   (36 ) 
             

 

See accompanying notes which are an integral part of the financial statements.

 

178   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Interest Rate Swaps Contracts                                     

Counter

Party

    Notional
Amount		   

Fund Receives

   

Fund Pays

    Termination
Date		    Market
Value $		  
                

Bank of America

    USD   400    Three Month LIBOR    5.000%    12/17/38    (109 ) 

Barclays Bank PLC

    USD   344    Three Month LIBOR    4.420%    11/15/21    (40 ) 

Barclays Bank PLC

    USD   339    Three Month LIBOR    4.524%    11/15/21    (44 ) 

Barclays Bank PLC

    USD   1,320    Three Month LIBOR    4.633%    11/15/21    (196 ) 

Barclays Bank PLC

    USD   661    Three Month LIBOR    4.540%    11/15/21    (89 ) 

Citibank

    USD   1,100    Three Month LIBOR    5.000%    12/17/38    (298 ) 

Credit Suisse First Boston

    GBP   200    5.000%    Six Month LIBOR    06/15/09    2   

Deutsche Bank

    AUD   300    4.500%    Three Month BBSW    06/15/11    1   

Deutsche Bank

    GBP   900    5.000%    Six Month LIBOR    03/18/14    125   

Deutsche Bank

    GBP   2,300    5.000%    Six Month LIBOR    03/18/14    319   

Deutsche Bank

    EUR   1,200   

2.090%

    Consumer Price Index (France)    10/15/10    58   

Goldman Sachs

    GBP   100    5.000%    Six Month LIBOR    06/15/09    1   

Goldman Sachs

    GBP   2,300    6.000%    Six Month LIBOR    06/19/09    51   

Goldman Sachs

    GBP   800    6.000%    Six Month LIBOR    12/19/09    43   

Goldman Sachs

    GBP   200    5.000%    Six Month LIBOR    09/17/13    26   

Merrill Lynch

    USD   1,800    4.000%    Three Month LIBOR    06/17/11    87   

Merrill Lynch

    USD   900    Three Month LIBOR    5.000%    12/17/38    (236 ) 

Merrill Lynch

    GBP   5,700    4.500%    Six Month LIBOR    09/20/09    120   

Morgan Stanley

    USD   300    Three Month LIBOR    5.000%    12/17/38    (78 ) 

Royal Bank of Scotland

    GBP   1,500    6.000%    Six Month LIBOR    06/19/09    29   

Royal Bank of Scotland

    GBP   500    5.100%    Six Month LIBOR    09/15/13    70   

UBS

    AUD   5,800    4.500%    Three Month LIBOR    06/15/11    17   
                    

Total Market Value of Open Interest Rate Swap Contracts Premiums Paid (Received) - $15

       (141 ) 
                    

 

Credit Default Swap Contracts                                              
Corporate Issues                                       

Reference

Entity

   

Counter

Party

    Implied
Credit
Spread		    Notional
Amount		    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value $		  
                    

Arrow Electronics, Inc.

    Citgroupglobal Markets, Inc.    0.075%    USD    340    (0.820% )     03/20/14    (1 ) 

Berkshire Hathaway

    Deutsche Bank    0.334%    USD    2,900    1.000%       03/20/13    (228 ) 

Centex Corp.

    Deutsche Bank    0.167%    USD    850    (4.400% )     12/20/13    (102 ) 

Darden Restaurants, Inc

    Citgroupglobal Markets, Inc.    0.110%    USD    225    (2.730% )     03/20/14    (17 ) 

Darden Restaurants, Inc

    Deutsche Bank    0.110%    USD    950    (2.250% )     03/20/14    (52 ) 

Gaz Capital for Gazprom

    Chase Securities Inc.    0.586%    USD    200    0.970%       12/20/12    (29 ) 

Gaz Capital for Gazprom

    Chase Securities Inc.    0.586%    USD    200    1.020%       12/20/12    (29 ) 

Gaz Capital for Gazprom

    Morgan Stanley    0.572%    USD    100    2.180%       02/20/13    (11 ) 

GE Capital Corp.

    Citibank    0.721%    USD    1,000    5.000%       06/20/11    (41 ) 

GE Capital Corp.

    Credit Suisse First Boston    0.738%    USD    600    6.550%       12/20/10    (3 ) 

GE Capital Corp.

    Deutsche Bank    0.702%    USD    1,425    1.070%       12/20/12    (244 ) 

GE Capital Corp.

    Deutsche Bank    0.725%    USD    200    1.500%       09/20/11    (23 ) 

GE Capital Corp.

    Pershing LLC 1st Rebublic P.B. CNS    0.748%    USD    200    0.830%       12/20/09    (8 ) 

GE Capital Corp.

    Royal Bank of Scotland    0.747%    USD    300    1.100%       09/20/09    (7 ) 

GE Capital Corp.

    Royal Bank of Scotland    0.748%    USD    1,900    1.150%       12/20/09    (73 ) 

Hewelett-Packard Company

    Citgroupglobal Markets, Inc.    0.050%    USD    340    (0.720% )     03/20/14    (4 ) 

Home Depot, Inc.

    Citgroupglobal Markets, Inc.    0.105%    USD    1,095    (2.670% )     03/20/14    (84 ) 

Lowe’s Cos., Inc.

    Citgroupglobal Markets, Inc.    0.095%    USD    1,140    (1.200% )     03/20/14    (15 ) 

Metlife, Inc.

    Deutsche Bank    0.618%    USD    1,500    2.050%       03/20/13    (190 ) 

Metlife, Inc.

    UBS    0.618%    USD    1,500    2.050%       03/20/13    (190 ) 

Mexico Government International Bond

    Credit Suisse Financial Products    0.148%    USD    1,000    2.950%       12/20/09    21   

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Investment Grade Bond Fund   179

Russell Investment Company

Russell Investment Grade Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Credit Default Swap Contracts                                              
Corporate Issues                                       

Reference

Entity

   

Counter

Party

    Implied
Credit
Spread		    Notional
Amount		    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value
$		  
                    

Nordstrom, Inc.

    Deutsche Bank    0.201%    USD    1,025    (2.100% )     03/20/14    (6 ) 

Prudential

    Deutsche Bank    0.675%    USD    1,500    2.300%       03/20/13    (200 ) 

Prudential

    UBS    0.675%    USD    1,500    2.300%       03/20/13    (200 ) 

Pulte Homes, Inc.

    JP Morgan    0.183%    USD    1,800    (2.550% )     12/20/13    (59 ) 

Russian Federation

    Morgan Stanley    0.362%    USD    1,000    0.795%       08/20/12    (84 ) 

SLM Corp.

    Barclays Bank PLC    1.950%    USD    100    5.100%       06/20/09    (1 ) 

SLM Corp.

    Citibank    1.951%    USD    900    5.600%       09/20/09    (41 ) 

SLM Corp.

    JP Morgan    1.428%    USD    900    4.300%       03/20/13    (208 ) 

Wachovia

    JP Morgan    0.241%    USD    2,700    3.020%       03/20/13    67   
                        

Total Market Value of Open Corporate Issue Credit Default Swap Contracts Premiums Paid (Received) - ($47)

          (2,062 ) 
                        

 

Credit Indices                                        

Reference

Entity

   

Counter

Party

    Notional
Amount		    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value
$		  
                 

ABX - HE Index for Sub-Prime Home Equity Sector

    Barclays Bank PLC    USD    2,500    0.760%       01/25/38    (1,817 ) 

ABX - HE Index for Sub-Prime Home Equity Sector

    JP Morgan    USD    2,750    0.090%       08/25/37    (2,038 ) 

ABX - HE Index for Sub-Prime Home Equity Sector

    JP Morgan    USD    1,300    0.170%       05/25/46    (1,210 ) 

CMBS AAA Index

    Credit Suisse First Boston    USD    850    (0.350% )     02/17/51    228   

CMBS AAA Index

    Credit Suisse First Boston    USD    800    (0.080% )     12/13/49    213   

CMBS AAA Index

    Credit Suisse First Boston    USD    1,350    (0.070% )     03/15/49    312   

CMBS AAA Index

    Deutsche Bank    USD    640    (0.080% )     12/13/49    170   

CMBS AAA Index

    JP Morgan    USD    1,350    (0.100% )     10/12/52    229   

CMBS AAA Index

    JP Morgan    USD    1,950    (0.080% )     12/13/49    519   

CMBX AAA Index

    JP Morgan    USD    1,520    (0.350% )     02/17/51    408   

CMBX AJ Index

    Barclays Bank PLC    USD    1,600    (0.840% )     10/12/52    927   

CMBX AJ Index

    Barclays Bank PLC    USD    1,600    (0.840% )     10/12/52    927   

CMBX AJ Index

    Barclays Bank PLC    USD    4,320    (0.840% )     10/12/52    2,502   

CMBX AJ Index

    Credit Suisse First Boston    USD    865    (0.840% )     10/12/52    502   

Dow Jones CDX Index

    Chase Securities Inc.    USD    400    1.120%       12/20/12    (1 ) 

Dow Jones CDX Index

    Deutsche Bank    USD    300    (1.000% )     06/20/14    9   

Dow Jones CDX Index

    Deutsche Bank    USD    1,556    0.708%       12/20/12    7   

Dow Jones CDX Index

    Goldman Sachs    USD    292    0.548%       12/20/17    (1 ) 

Dow Jones CDX Index

    Goldman Sachs    USD    1,300    1.120%       12/20/12    (2 ) 

Dow Jones CDX Index

    JP Morgan    USD    681    0.553%       12/20/17    (1 ) 

Dow Jones CDX Index

    Merrill Lynch    USD    1,000    1.833%       06/20/12    (312 ) 

Dow Jones CDX Index

    Morgan Stanley    USD    5,542    0.771%       12/20/12    31   

Dow Jones CDX Index

    Morgan Stanley    USD    600    0.963%       12/20/12    (4 ) 
                     

Total Market Value of Open Credit Index Credit Default Swap Contracts Premiums Paid (Received) - $113

          1,598   
                     

Total Market Value of Open Credit Default Swap Contracts Premiums Paid (Received) - $66

          (464 ) 
                     

 

See accompanying notes which are an integral part of the financial statements.

 

180   Russell Investment Grade Bond Fund

Russell Investment Company

Russell Investment Grade Bond Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    
    

Asset-Backed Securities

      5.5   

Corporate Bonds and Notes

      21.4   

International Debt

      4.1   

Mortgage-Backed Securities

      72.3   

Municipal Bonds

      1.2   

Non-US Bonds

      0.2   

United States Government Agencies

      3.4   

United States Government Treasuries

      5.7   

Preferred Stocks

      0.5   

Options Purchased

      — * 

Short-Term Investments

      11.9   

Repurchase Agreements

      0.1   

Other Securities

      8.4   
        

Total Investments

      134.7   

Other Assets and Liabilities, Net

      (34.7 ) 
        
     100.0   
        

Futures Contracts

      0.6   

Options Written

      (— )* 

Foreign Currency Exchange Contracts

      (— )* 

Interest Rate Swap Contracts

      (— )* 

Credit Default Swap Contracts

      (— )* 

 

* Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Investment Grade Bond Fund   181

Russell Investment Company

Russell Short Duration Bond Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,044.70    $ 1,020.03

Expenses Paid During Period*

    $ 4.87    $ 4.81

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.96% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,041.00    $ 1,016.31

Expenses Paid During Period*

    $ 8.65    $ 8.55

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.71% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,045.30    $ 1,020.03

Expenses Paid During Period*

    $ 4.87    $ 4.81

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.96% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,046.20    $ 1,021.22

Expenses Paid During Period*

    $ 3.65    $ 3.61

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.72% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

182   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,046.30    $ 1,021.72

Expenses Paid During Period*

    $ 3.15    $ 3.11

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.62% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell Short Duration Bond Fund   183

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       
Long-Term Investments - 105.7%        
Asset-Backed Securities - 11.9%        

American Airlines Pass Through Trust
Series 01-1
6.817% due 05/23/11

    370      263

American Express Credit Account Master Trust (Ê)
Series 2005-4 Class A
0.521% due 01/15/15

    1,388      1,243

Series 2007-7 Class A
0.491% due 02/17/15

    3,000      2,675

Ameriquest Mortgage Securities, Inc. (Ê) Series 2005-R10 Class A2B
0.658% due 12/25/35

    670      514

Asset Backed Securities Corp. Home Equity (Ê)
Series 2002-HE1 Class M1
2.101% due 03/15/32

    570      300

Series 2004-HE6 Class A1
0.713% due 09/25/34

    160      105

Atlantic City Electric Transition Funding LLC
Series 2003-1 Class A2
4.460% due 10/20/16

    1,525      1,584

Bear Stearns Asset Backed Securities Trust (Ê)
Series 2007-HE7 Class 1A1
1.438% due 08/25/37

    574      339

Capital Auto Receivables Asset Trust
Series 2008-2 Class A3A
4.680% due 10/15/12

    500      507

Capital One Multi-Asset Execution Trust
Series 2005-A10 Class A (Ê)
0.531% due 09/15/15

    1,365      1,225

Series 2008-A5 Class A5
4.850% due 02/18/14

    2,225      2,208

Cendant Timeshare Receivables Funding LLC (Þ)
Series 2004-1A Class A1
3.670% due 05/20/16

    34      27

Centex Home Equity
Series 2003-C Class AF4
4.960% due 04/25/32

    110      80

Chase Credit Card Master Trust (Ê)
Series 2002-3 Class A
0.621% due 09/15/11

    620      620

Chase Funding Mortgage Loan
Asset-Backed Certificates
Series 2001-4 Class 1A6
6.241% due 01/25/13

    14      12

Series 2003-3 Class 1A4
3.303% due 11/25/29

    2      2

Chase Issuance Trust
Series 2005-A7 Class A7
4.550% due 03/15/13

    1,095      1,119

Series 2005-A10 Class A10
4.650% due 12/17/12

    140      143

Series 2006-A3 Class A3 (Ê)
0.441% due 07/15/11

    600      600
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2007-A9 Class A9 (Ê)
0.481% due 06/16/14

    3,700      3,423

Series 2008-A9 Class A9
4.260% due 05/15/13

    555      562

Chase Manhattan Auto Owner Trust
Series 2006-A Class A3
5.340% due 07/15/10

    72      73

CIT Marine Trust
Series 1999-A Class A4
6.250% due 11/15/19

    250      212

Citibank Credit Card Issuance Trust
Series 2007-A5 Class A5
5.500% due 06/22/12

    2,175      2,233

Community Program Loan Trust
Series 1987-A Class A4
4.500% due 10/01/18

    1,010      1,016

Countrywide Asset-Backed Certificates
Series 2001-BC3 Class A (Ê)
0.918% due 12/25/31

    79      42

Series 2005-1 Class AF4
5.147% due 07/25/35

    655      449

Series 2005-4 Class AF3
4.456% due 10/25/35

    104      86

Series 2005-7 Class AF2
4.367% due 10/25/35

    2      2

Series 2006-15 Class A3
5.689% due 10/25/46

    75      32

Series 2006-16 Class 2A1 (Ê)
0.488% due 12/25/46

    29      29

Daimler Chrysler Auto Trust
Series 2006-C Class A4
4.980% due 11/08/11

    1,700      1,702

Series 2008-A Class A3A
3.700% due 06/08/12

    600      584

Discover Card Master Trust
Series 2008-A3 Class A3
5.100% due 10/15/13

    3,500      3,530

Discover Card Master Trust I (Ê)
Series 1996-4 Class A
0.826% due 10/16/13

    1,180      1,112

Series 2005-4 Class A2
0.541% due 06/16/15

    405      355

Dunkin Securitization (Þ)
Series 2006-1 Class A2
5.779% due 06/20/31

    375      260

E-Trade RV and Marine Trust
Series 2004-1 Class A3
3.620% due 10/08/18

    666      628

Equity One ABS, Inc.
Series 2003-4 Class M1
5.369% due 10/25/34

    1,019      748

Federal Home Loan Mortgage Corp. Structured Pass Through Securities
Series 2002-50 Class A6
3.614% due 09/27/12

    79      71

Ford Credit Auto Owner Trust
Series 2005-C Class B
4.520% due 09/15/10

    1,000      987

 

184   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2008-A Class A2 (Ê)
1.051% due 07/15/10

    158      158

Series 2008-B Class A2 (Ê)
1.651% due 12/15/10

    676      675

Fremont Home Loan Trust (Ê)
Series 2006-E Class 2A1
0.498% due 01/25/37

    278      237

GE Corporate Aircraft Financing LLC (Ê)(Þ)
Series 2004-1A Class B
1.288% due 01/25/18

    95      76

GE-WMC Mortgage Securities LLC (Ê)
Series 2006-1 Class A2A
0.478% due 08/25/36

    72      54

GMAC Mortgage Corp. Loan Trust
Series 2004-GH1 Class A2
4.390% due 12/25/25

    225      211

Series 2007-HE2 Class A2
6.054% due 12/25/37

    280      90

GSAMP Trust (Ê)
Series 2004-SEA Class A2A
0.728% due 03/25/34

    86      85

Series 2007-FM1 Class A2A
0.508% due 12/25/36

    380      278

Harley-Davidson Motorcycle Trust
Series 2006-3 Class A3
5.240% due 01/15/12

    677      676

Series 2007-3 Class A4
5.520% due 11/15/13

    2,000      1,968

HFC Home Equity Loan Asset Backed Certificates (Ê)
Series 2005-1 Class A
0.737% due 01/20/34

    259      170

Honda Auto Receivables Owner Trust
Series 2008-1 Class A2
3.770% due 09/20/10

    938      944

Household Credit Card Master Note
Trust I (Ê)
Series 2007-1 Class A
0.501% due 04/15/13

    750      678

Series 2007-2 Class A
1.001% due 07/15/13

    3,860      3,459

Lehman XS Trust (Ê)
Series 2006-9 Class A1A
0.508% due 05/25/46

    20      19

Long Beach Mortgage Loan Trust (Ê)
Series 2004-4 Class 1A1
0.718% due 10/25/34

    20      10

Mastr Asset Backed Securities Trust (Ê)
Series 2006-HE5 Class A1
0.498% due 11/25/36

    188      170

Nissan Auto Receivables Owner Trust
Series 2008-A Class A3
3.890% due 08/15/11

    430      436

Series 2009-A Class A3
3.200% due 02/15/13

    175      176

PG&E Energy Recovery Funding LLC
Series 2005-1 Class A2
3.870% due 06/25/11

    63      63
     Principal
Amount ($)
or Shares		      Market
Value
$

Popular ABS Mortgage Pass-Through Trust
Series 2005-5 Class AF2
4.973% due 11/25/35

    89      87

Railcar Leasing LLC (Þ)
Series 1997-1 Class A2
7.125% due 01/15/13

    620      552

Renaissance Home Equity Loan Trust
Series 2005-4 Class A3
5.565% due 02/25/36

    161      140

Series 2006-3 Class AF2
5.580% due 11/25/36

    273      231

SBI Heloc Trust (Ê)(Þ)
Series 2006-1A Class 1A2A
0.608% due 08/25/36

    167      149

SLM Student Loan Trust (Ê)
Series 2006-9 Class A2
1.092% due 04/25/17

    199      198

Series 2008-2 Class A1
1.392% due 01/26/15

    73      72

Series 2008-7 Class A2
1.592% due 10/25/17

    2,600      2,489

USAA Auto Owner Trust
Series 2006-2 Class A4
5.370% due 02/15/12

    545      556

Series 2008-1 Class A3
4.160% due 04/16/12

    525      533

Series 2008-2 Class A3
4.640% due 10/15/12

    385      395

Volkswagen Auto Loan Enhanced Trust
Series 2008-1 Class A3
4.500% due 07/20/12

    2,000      2,028

World Omni Auto Receivables Trust
Series 2009-A Class A3
3.330% due 05/15/13

    495      497
         
        50,262
         
Corporate Bonds and Notes - 23.1%     

Abbott Laboratories
5.600% due 05/15/11

    160      172

Aetna, Inc.
7.875% due 03/01/11

    200      212

AIG SunAmerica Global Financing VI (Þ)
6.300% due 05/10/11

    1,500      1,186

Allstate Life Global Funding Trusts
5.375% due 04/30/13

    200      197

Alltel Corp.
7.000% due 07/01/12

    600      635

AMB Property, LP
6.300% due 06/01/13

    650      517

American Express Bank FSB
Series BKNT
5.500% due 04/16/13

    300      282

American Express Centurion Bank
Series BKNT
5.200% due 11/26/10

    500      481

American Express Credit Corp.
0.681% due 12/02/10 (Ê)

    500      453

 

Russell Short Duration Bond Fund   185

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series C
7.300% due 08/20/13

    2,900      2,905

Series MTNB (Ê)
0.639% due 10/04/10

    500      459

American Express Travel Related Services Co., Inc. (Þ)
5.250% due 11/21/11

    4,120      3,817

American International Group, Inc.
4.700% due 10/01/10

    1,950      1,141

4.950% due 03/20/12

    100      40

8.250% due 08/15/18 (Þ)

    100      35

Ameriprise Financial, Inc.
5.350% due 11/15/10

    695      685

Anheuser-Busch InBev Worldwide, Inc. (Å)
7.200% due 01/15/14

    500      521

AT&T Corp.
7.300% due 11/15/11

    455      498

AT&T Mobility LLC
6.500% due 12/15/11

    310      330

AT&T, Inc.
4.950% due 01/15/13

    1,500      1,554

Bank of America Corp.
5.750% due 12/01/17

    310      253

8.000% due 12/29/49 (ƒ)

    4,490      2,551

Bank One Corp.
5.900% due 11/15/11

    1,360      1,380

Baxter International, Inc.
4.000% due 03/01/14

    100      104

Bear Stearns Cos. LLC (The)
6.400% due 10/02/17

    775      754

7.250% due 02/01/18

    330      337

Berkshire Hathaway Finance Corp. (Þ)
4.000% due 04/15/12

    440      447

Best Buy Co., Inc.
6.750% due 07/15/13

    205      202

Boston Scientific Corp.
6.400% due 06/15/16

    390      373

Capmark Financial Group, Inc.
3.106% due 05/10/10 (Ê)

    570      214

7.375% due 05/10/12

    85      22

Carolina Power & Light Co.
5.300% due 01/15/19

    415      430

CenterPoint Energy Houston Electric LLC
Series U
7.000% due 03/01/14

    325      345

Chesapeake Energy Corp.
9.500% due 02/15/15

    255      258

CIT Group, Inc. (Ê)
1.481% due 02/13/12

    830      457

Citigroup, Inc.
1.396% due 05/18/10 (Ê)

    1,900      1,785

5.100% due 09/29/11

    1,200      1,110

5.500% due 04/11/13

    700      624

Commonwealth Edison Co.
Series 98
6.150% due 03/15/12

    250      258

ConocoPhillips
4.750% due 02/01/14

    105      111
     Principal
Amount ($)
or Shares		      Market
Value
$

Constellation Brands, Inc.
Series B
8.125% due 01/15/12

    425      423

Countrywide Home Loans, Inc.
Series MTNL
4.000% due 03/22/11

    640      600

Delta Air Lines, Inc.
Series 00-1
7.570% due 11/18/10

    680      632

Deutsche Bank AG London
4.875% due 05/20/13

    270      268

Devon Energy Corp.
5.625% due 01/15/14

    615      640

Discover Financial Services (Ê)
Series WI
1.861% due 06/11/10

    950      837

Dominion Resources, Inc.
Series B
6.250% due 06/30/12

    350      367

Dr Pepper Snapple Group, Inc.
6.120% due 05/01/13

    500      500

E*TRADE Financial Corp.
12.500% due 11/30/17

    478      238

EI Du Pont de Nemours & Co.
5.875% due 01/15/14

    190      202

Farmers Insurance Exchange (Þ)
6.000% due 08/01/14

    50      37

Ford Motor Credit Co. LLC
9.875% due 08/10/11

    245      214

7.250% due 10/25/11

    600      492

3.889% due 01/13/12 (Ê)

    300      214

Series WI
9.750% due 09/15/10

    100      90

Fortune Brands, Inc.
5.125% due 01/15/11

    350      350

FPL Group Capital, Inc.
5.625% due 09/01/11

    240      255

Frontier Communications Corp.
8.250% due 05/01/14

    290      285

General Electric Capital Corp.
5.625% due 05/01/18

    1,230      1,073

General Mills, Inc.
5.650% due 09/10/12

    415      437

GMAC LLC
6.000% due 12/15/11

    100      65

Goldman Sachs Capital II (ƒ)
5.793% due 12/29/49

    750      371

Goldman Sachs Group, Inc. (The)
5.450% due 11/01/12

    410      410

6.000% due 05/01/14

    685      682

HCA, Inc. (Å)
8.500% due 04/15/19

    325      327

Hewlett-Packard Co.
4.250% due 02/24/12

    330      342

IBM International Group Capital LLC
5.050% due 10/22/12

    335      359

Industrial Bank of Korea (Å)
7.125% due 04/23/14

    530      521

 

186   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

International Lease Finance Corp.
5.450% due 03/24/11

    105      81

5.750% due 06/15/11

    125      95

6.375% due 03/25/13

    1,900      1,160

Jackson National Life Fund LLC (Ê)
1.511% due 08/06/11

    2,600      2,490

John Deere Capital Corp.
4.900% due 09/09/13

    650      657

JPMorgan Chase & Co.
4.850% due 06/16/11

    1,160      1,177

4.750% due 05/01/13

    1,840      1,828

6.300% due 04/23/19

    395      389

Series 1 (ƒ)
7.900% due 04/29/49

    405      308

JPMorgan Chase Bank NA (Ê)
1.656% due 06/13/16

    1,400      988

Kansas City Southern Railway
13.000% due 12/15/13

    125      132

KBC Bank Funding Trust III (ƒ)(Þ)
9.860% due 11/29/49

    650      227

KeyBank NA (Ê)
Series BKNT
3.511% due 06/02/10

    300      297

LaBranche & Co., Inc.
11.000% due 05/15/12

    225      205

Lehman Brothers Holdings Capital
Trust VII (ƒ)(Ø)
5.857% due 11/29/49

    270      —

Lehman Brothers Holdings, Inc. (Ø)
2.951% due 05/25/10

    800      112

1.000% due 04/05/11

    10      2

M&I Marshall & Ilsley Bank (Ê)
1.450% due 06/16/10

    445      402

Marathon Oil Corp.
6.500% due 02/15/14

    150      156

Marsh & McLennan Cos., Inc.
5.150% due 09/15/10

    840      829

Medco Health Solutions, Inc.
6.125% due 03/15/13

    485      487

7.250% due 08/15/13

    370      381

Medtronic, Inc.
4.500% due 03/15/14

    270      278

Merrill Lynch & Co., Inc.
1.292% due 07/25/11 (Ê)

    500      433

Series MTNB
4.500% due 11/04/10

    295      290

MetLife, Inc.
6.400% due 12/15/36

    90      48

Metropolitan Life Global Funding I (Þ)
5.125% due 04/10/13

    4,295      4,106

Miller Brewing Co. (Þ)
5.500% due 08/15/13

    445      427

Morgan Stanley (Ê)
3.338% due 05/14/10

    400      391

Motorola, Inc.
5.375% due 11/15/12

    300      279

Nationwide Life Global Funding I (Ê)(Þ)
1.446% due 05/19/10

    1,800      1,701
     Principal
Amount ($)
or Shares		      Market
Value
$

1.420% due 12/14/10

    780      713

NB Capital Trust IV
8.250% due 04/15/27

    360      222

Nuveen Investments, Inc.
5.000% due 09/15/10

    695      565

ONEOK Partners, LP
5.900% due 04/01/12

    500      488

PACCAR, Inc.
6.875% due 02/15/14

    700      733

Pacific Gas & Electric Co.
4.200% due 03/01/11

    480      492

Pacific Life Global Funding (Þ)
5.150% due 04/15/13

    900      853

Pemex Project Funding Master Trust
5.750% due 03/01/18

    250      226

PetroHawk Energy Corp. (Þ)
10.500% due 08/01/14

    275      276

Pfizer, Inc.
4.450% due 03/15/12

    490      515

Philip Morris International, Inc.
4.875% due 05/16/13

    3,250      3,362

6.875% due 03/17/14

    380      417

Pricoa Global Funding I (Ê)(Þ)
1.139% due 01/30/12

    200      150

1.428% due 09/27/13

    200      134

Principal Life Income Funding Trusts
5.300% due 04/24/13

    200      188

Procter & Gamble Co.
4.600% due 01/15/14

    1,365      1,446

Protective Life Secured Trusts (Ê)
0.629% due 11/09/10

    1,600      1,395

Regions Financial Corp. (Ê)
1.396% due 06/26/12

    1,200      985

Rio Tinto Finance USA, Ltd.
8.950% due 05/01/14

    940      973

Roche Holdings, Inc. (Þ)
5.000% due 03/01/14

    325      341

6.000% due 03/01/19

    1,000      1,040

Simon Property Group, LP
4.875% due 08/15/10

    55      54

SLM Corp.
1.252% due 07/26/10 (Ê)

    100      85

1.322% due 10/25/11 (Ê)

    200      135

Series MTNA
4.500% due 07/26/10

    1,075      938

Sovereign Bancorp, Inc.
4.800% due 09/01/10

    160      151

Sun Life Financial Global Funding, LP (Ê)(Þ)
1.326% due 07/06/11

    1,300      1,160

SunTrust Banks, Inc.
5.250% due 11/05/12

    2,950      2,803

Telemar Norte Leste SA (Å)
9.500% due 04/23/19

    540      563

Textron Financial Corp. (Ê)
1.379% due 02/25/11

    1,350      882

Time Warner Cable, Inc.
8.250% due 02/14/14

    935      1,026

 

Russell Short Duration Bond Fund   187

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Transcontinental Gas Pipe Line Corp.
Series B
7.000% due 08/15/11

    600      624

Union Pacific Corp.
6.500% due 04/15/12

    690      714

Union Planters Corp.
7.750% due 03/01/11

    1,060      1,014

United Technologies Corp.
4.375% due 05/01/10

    425      435

7.125% due 11/15/10

    270      289

Verizon Communications, Inc.
4.350% due 02/15/13

    1,955      1,986

Viacom, Inc.
5.750% due 04/30/11

    675      675

Wachovia Capital Trust III (ƒ)
5.800% due 03/29/49

    895      416

Wachovia Corp.
5.500% due 05/01/13

    1,200      1,176

Wal-Mart Stores, Inc.
4.250% due 04/15/13

    300      315

Walt Disney Co. (The)
4.500% due 12/15/13

    385      400

WellPoint Health Networks, Inc.
6.375% due 01/15/12

    471      483

Wells Fargo & Co.
5.250% due 10/23/12

    1,000      1,004

4.375% due 01/31/13

    725      698

5.625% due 12/11/17

    545      508

Series K (ƒ)
7.980% due 02/28/49

    5,715      3,200

Wells Fargo Capital XIII (ƒ)
Series GMTN
7.700% due 12/29/49

    175      112

Willis NA, Inc.
5.125% due 07/15/10

    230      208

XTO Energy, Inc.
4.625% due 06/15/13

    355      348
         
        97,638
         
International Debt - 2.2%        

ANZ National International, Ltd. (Þ)
6.200% due 07/19/13

    200      200

Bank of Scotland PLC (Ê)(Þ)
1.344% due 12/08/10

    600      533

BHP Billiton Finance USA, Ltd.
5.500% due 04/01/14

    200      211

Catalyst Paper Corp.
Series D
8.625% due 06/15/11

    210      117

Credit Agricole SA (Ê)(Þ)
1.306% due 05/28/10

    300      294

EnCana Corp.
4.750% due 10/15/13

    425      421

Export-Import Bank of Korea
8.125% due 01/21/14

    220      231

Galaxy Entertainment Finance Co., Ltd. (Þ)
9.875% due 12/15/12

    350      273
     Principal
Amount ($)
or Shares		      Market
Value
$

Gaz Capital SA (Þ)
7.510% due 07/31/13

    600      536

ING Bank NV (Þ)
3.900% due 03/19/14

    300      298

Invesco, Ltd.
5.625% due 04/17/12

    390      312

Kansas City Southern de Mexico SA de CV
9.375% due 05/01/12

    200      183

12.500% due 04/01/16 (Þ)

    100      96

Mubadala Development Co.
5.750% due 05/06/14

    650      644

Norske Skogindustrier ASA (Þ)
6.125% due 10/15/15

    215      113

7.125% due 10/15/33

    100      43

Quebecor World Capital Corp. (Ø)
6.125% due 11/15/13

    70      1

Ras Laffan Liquefied Natural Gas Co.,
Ltd. (Þ)
8.294% due 03/15/14

    180      189

Ras Laffan Liquefied Natural Gas Co.,
Ltd. III (Þ)
5.832% due 09/30/16

    500      486

Rio Tinto Finance USA, Ltd.
5.875% due 07/15/13

    875      825

Sappi Papier Holding AG (Þ)
6.750% due 06/15/12

    440      253

TransCapitalInvest, Ltd. for OJSC AK Transneft (Þ)
7.700% due 08/07/13

    1,100      984

5.670% due 03/05/14

    365      294

Transocean, Inc.
5.250% due 03/15/13

    785      795

Tyco Electronics Group SA
6.000% due 10/01/12

    760      693

XL Capital, Ltd.
5.250% due 09/15/14

    165      118

Series E (ƒ)
6.500% due 12/31/49

    530      159
         
        9,302
         
Loan Agreements - 0.3%        

Energy Future Holdings Corp.,
Term Loan B 2
3.928% due 10/10/14

    3      2

3.969% due 10/10/14

    332      224

First Data Corp., Term Loan B 1
3.178% due 09/24/14

    15      11

3.190% due 09/24/14

    255      186

Ford Motor Co., Term Loan
3.460% due 12/15/13

    351      221

4.140% due 12/15/13

    175      110

Idearc, Inc., Term Loan B
6.250% due 11/17/14

    236      91

Newsday Corp., Fixed Rate Term Loan
9.750% due 07/09/13

    275      265

OSI Restaurant Partners, LLC, Revolver
2.750% due 06/14/14

    134      88

 

188   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

OSI Restaurant Partners, LLC, Term Loan B
3.570% due 06/14/14

    6      5

4.500% due 06/14/14

    1      1
         
        1,204
         
Mortgage-Backed Securities - 52.2%     

American Home Mortgage Investment
Trust (Ê)
Series 2004-3 Class 5A
4.290% due 10/25/34

    1,149      800

Series 2004-4 Class 4A
4.390% due 02/25/45

    366      222

Banc of America Commercial Mortgage, Inc.
Series 2000-1 Class A2A
7.333% due 11/15/31

    136      136

Series 2003-1 Class SBB (Þ)
5.860% due 03/11/32

    201      223

Series 2003-1 Class SBC (Þ)
5.790% due 03/11/32

    581      642

Series 2003-1 Class SBE (Þ)
6.770% due 03/11/32

    814      924

Series 2004-3 Class A3
4.875% due 06/10/39

    24      24

Series 2007-2 Class A2
5.634% due 04/10/49

    1,005      860

Banc of America Funding Corp.
Series 2005-D Class A1 (Ê)
3.987% due 05/25/35

    5,896      4,751

Series 2006-2 Class 2A18
5.750% due 03/25/36

    2,361      1,744

Series 2006-A Class 1A1 (Ê)
4.603% due 02/20/36

    298      202

Banc of America Mortgage Securities, Inc.
Series 2004-2 Class 2A1
5.250% due 03/25/34

    575      571

Series 2004-2 Class 5A1
6.500% due 10/25/31

    124      123

Series 2004-I Class 2A2 (Ê)
4.671% due 10/25/34

    441      331

Series 2004-L Class 1A1 (Ê)
5.522% due 01/25/35

    47      41

Series 2004-L Class 2A1 (Ê)
4.372% due 01/25/35

    1,256      1,048

Series 2005-8 Class A7
5.500% due 09/25/35

    187      187

Series 2005-G Class 2A1 (Ê)
4.920% due 08/25/35

    293      210

Bear Stearns Adjustable Rate Mortgage Trust (Ê)
Series 2003-1 Class 5A1
5.425% due 04/25/33

    372      337

Series 2003-8 Class 2A1
5.436% due 01/25/34

    212      163

Bear Stearns Alt-A Trust (Ê)
Series 2005-4 Class 23A1
5.363% due 05/25/35

    766      436

Series 2005-7 Class 22A1
5.491% due 09/25/35

    48      25
     Principal
Amount ($)
or Shares		      Market
Value
$

Bear Stearns Asset Backed Securities Trust
Series 2003-AC3 Class A1
4.000% due 07/25/33

    298      236

Bear Stearns Commercial Mortgage Securities
Series 2001-TOP Class A1
5.060% due 11/15/16

    132      132

Series 2001-TOP Class A2
6.480% due 02/15/35

    150      151

Series 2004-ESA Class H (Þ)
5.426% due 05/14/16

    900      901

Series 2004-PWR Class A2
4.254% due 07/11/42

    395      391

Series 2005-T20 Class A1
4.940% due 10/12/42

    56      56

Series 2007-T26 Class A4
5.471% due 01/12/45

    100      84

Bear Stearns Mortgage Funding Trust (Ê)
Series 2007-AR1 Class 2A1
0.508% due 02/25/37

    588      519

Bear Stearns Structured Products, Inc. (Ê)
Series 2007-R6 Class 1A1
5.652% due 01/26/36

    237      148

Series 2007-R6 Class 2A1
5.726% due 12/26/46

    163      95

Chase Commercial Mortgage
Securities Corp.
Series 1999-2 Class A2
7.198% due 01/15/32

    26      27

Series 1999-2 Class B
7.343% due 01/15/32

    100      100

Series 2000-2 Class B
7.782% due 07/15/32

    415      425

Chase Issuance Trust
Series 2007-A15 Class A
4.960% due 09/17/12

    2,860      2,940

Chase Mortgage Finance Corp. (Ê)
Series 2007-A1 Class 8A1
4.234% due 02/25/37

    889      794

Commercial Mortgage Acceptance Corp. (Ê)
Series 1998-C2 Class E
7.497% due 09/15/30

    490      493

Commercial Mortgage Asset Trust
Series 1999-C2 Class A2
7.546% due 11/17/32

    124      125

Commercial Mortgage Pass Through Certificates
Series 2001-J1A Class A2 (Þ)
6.457% due 02/14/34

    86      87

Series 2006-C7 Class A2
5.690% due 06/10/46

    110      103

Series 2006-C8 Class A4
5.306% due 12/10/46

    400      306

Countrywide Alternative Loan Trust
Series 2003-J2 Class A1
6.000% due 10/25/33

    227      219

 

Russell Short Duration Bond Fund   189

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2004-12C Class 1A1
5.000% due 07/25/19

    1,688      1,493

Countrywide Home Loan Mortgage Pass Through Trust (Ê)
Series 2004-22 Class A3
4.787% due 11/25/34

    228      143

Series 2004-HYB Class 1A1
4.726% due 02/20/35

    427      311

Series 2005-HYB Class 5A1
5.250% due 02/20/36

    797      439

Credit Suisse First Boston Mortgage Securities Corp.
Series 2001-CF2 Class B
6.718% due 02/15/34

    305      303

Series 2002-CKP Class A3
6.439% due 12/15/35

    350      355

Credit Suisse Mortgage Capital Certificates
Series 2006-C2 Class A3
5.847% due 03/15/39

    100      73

Crown Castle Towers LLC (Þ)
Series 2005-1A Class AFX
4.643% due 06/15/35

    155      150

Series 2006-1A Class AFX
5.245% due 11/15/36

    160      147

Deutsche ALT-A Securities, Inc. Alternate Loan Trust (Ê)
Series 2007-AR1 Class A3B
0.508% due 01/25/47

    270      242

DLJ Commercial Mortgage Corp.
Series 1999-CG3 Class A3
7.730% due 10/10/32

    900      907

Fannie Mae
6.000% due 2010

    12      12

6.500% due 2010

    24      25

6.000% due 2011

    42      43

6.500% due 2011

    15      15

5.000% due 2013

    325      334

6.000% due 2013

    149      157

6.000% due 2014

    410      433

5.500% due 2016

    635      668

5.000% due 2017

    57      58

5.500% due 2017

    998      1,045

6.000% due 2017

    114      121

7.000% due 2017

    104      110

5.000% due 2018

    1,881      1,960

5.000% due 2019

    327      340

5.000% due 2020

    204      212

5.000% due 2021

    26      27

5.000% due 2022

    26      27

5.000% due 2023

    1,100      1,139

4.274% due 2033 (Ê)

    64      65

6.000% due 2033

    19      20

4.651% due 2035 (Ê)

    331      338

4.667% due 2035 (Ê)

    2,948      2,963

4.909% due 2035 (Ê)

    19,533      20,056

6.000% due 2036

    400      419

5.500% due 2037

    4,601      4,772
     Principal
Amount ($)
or Shares		      Market
Value
$

6.000% due 2037

    17,785      18,614

5.500% due 2038

    3,621      3,755

6.000% due 2038

    7,478      7,824

5.500% due 2039

    4,500      4,667

2.883% due 2041 (Ê)

    545      538

2.833% due 2042 (Ê)

    235      233

15 Year TBA (Ï)
7.000%

    2,758      2,910

30 Year TBA (Ï)
4.500%

    470      478

5.000%

    29,080      29,907

5.500%

    1,000      1,036

6.000%

    35,760      37,456

Fannie Mae Grantor Trust
Series 2001-T3 Class A1
7.500% due 11/25/40

    421      454

Series 2001-T4 Class A1
7.500% due 07/25/41

    66      71

Series 2001-T10 Class A1
7.000% due 12/25/41

    99      107

Series 2001-T10 Class A2
7.500% due 12/25/41

    55      59

Series 2002-T19 Class A1
6.500% due 07/25/42

    772      820

Fannie Mae REMICS
Series 2001-50 Class BA
7.000% due 10/25/41

    120      129

Series 2003-16 Class BH
5.000% due 03/25/17

    1,182      1,213

Series 2003-24 Class PU
3.500% due 11/25/15

    87      87

Series 2003-63 Class GU
4.000% due 07/25/33

    183      186

Series 2003-75 Class NB
3.250% due 08/25/18

    271      273

Series 2007-73 Class A1 (Ê)
0.601% due 07/25/37

    397      352

Fannie Mae Whole Loan
Series 2002-W3 Class A4
6.500% due 09/25/28

    540      579

Series 2003-W2 Class 1A1
6.500% due 07/25/42

    293      306

Federal Home Loan Mortgage Corp. Structured Pass Through Securities
Series 2002-51 Class 1A
6.500% due 09/25/43

    244      255

Series 2003-54 Class 2A
6.500% due 02/25/43

    205      213

Series 2005-63 Class 1A1 (Ê)
2.833% due 02/25/45

    550      492

Federal National Mortgage Association
2.000% due 01/01/12

    210      212

First Horizon Alternative Mortgage Securities (Ê)
Series 2005-AA7 Class 2A1
5.402% due 09/25/35

    298      153

 

190   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

First Union National Bank
Commercial Mortgage
Series 1999-C4 Class A2
7.390% due 12/15/31

    16      17

Freddie Mac
3.500% due 2010

    121      122

4.000% due 2010

    290      296

6.000% due 2011

    106      111

6.000% due 2013

    50      52

5.500% due 2014

    39      40

6.000% due 2014

    59      61

6.000% due 2016

    267      281

5.000% due 2018

    356      371

6.000% due 2018

    239      252

5.500% due 2029

    589      613

6.000% due 2029

    66      69

9.000% due 2030

    396      425

6.000% due 2031

    177      186

6.000% due 2033

    379      399

4.929% due 2035 (Ê)

    586      602

5.500% due 2038

    500      518

30 Year TBA (Ï)
5.500%

    1,500      1,548

Freddie Mac REMICS
Series 2003-255 Class PB
5.500% due 08/15/30

    4      4

Series 2003-258 Class NS
3.250% due 09/15/15

    396      398

Series 2003-261 Class JA
3.760% due 03/15/29

    790      798

Series 2003-262 Class GE
4.500% due 04/15/17

    217      222

Series 2003-263 Class AB
4.500% due 06/15/18

    970      974

Series 2003-265 Class WT
4.500% due 08/15/18

    810      839

Series 2004-285 Class BA
4.500% due 02/15/20

    704      717

Series 2006-314 Class LF (Ê)
0.751% due 05/15/36

    492      481

Series 2007-333 Class AF (Ê)
0.601% due 10/15/20

    2,096      2,049

Series 2007-333 Class BF (Ê)
0.601% due 07/15/19

    333      326

Series 2007-333 Class FT (Ê)
0.601% due 08/15/19

    792      774

Series 2007-334 Class FA (Ê)
0.681% due 02/15/19

    1,417      1,383

Series 2008-341 Class JB
4.500% due 02/15/23

    360      361

GE Capital Commercial Mortgage Corp.
Series 2001-1 Class A2
6.531% due 05/15/33

    430      436

Series 2001-1 Class B
6.719% due 05/15/33

    345      333

Series 2001-3 Class A1
5.560% due 06/10/38

    429      431

Series 2002-1A Class A3
6.269% due 12/10/35

    370      372
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2005-C1 Class A1
4.012% due 06/10/48

    65      65

Ginnie Mae I
6.500% due 2036

    140      148

6.500% due 2038

    860      905

30 Year TBA (Ï)
6.000%

    3,000      3,129

Ginnie Mae II (Ê)
4.625% due 2027

    52      52

5.000% due 2032

    75      77

Global Signal Trust
Series 2004-2A Class D (Å)
5.093% due 12/15/14

    110      108

Series 2006-1 Class C (Þ)
5.707% due 02/15/36

    395      409

Series 2006-1 Class E (Å)
6.495% due 02/15/36

    90      93

GMAC Commercial Mortgage Securities, Inc.
Series 1999-C3 Class F
8.181% due 08/15/36

    35      34

Series 2000-C2 Class B
7.594% due 06/16/10

    450      448

Series 2001-C1 Class B
6.670% due 04/15/34

    25      24

Series 2004-C3 Class A4
4.547% due 12/10/41

    90      84

GMAC Mortgage Corp. Loan Trust (Ê)
Series 2005-AR2 Class 4A
5.173% due 05/25/35

    99      67

Goldman Sachs Mortgage Securities
Corp. II
Series 2007-GG1 Class A1
5.690% due 08/10/45

    1,189      1,162

Series 2007-GG1 Class A4 (Ê)
5.993% due 08/10/45

    400      302

Government National Mortgage Association
Series 2006-67 Class A
3.947% due 11/16/30

    841      857

Series 2007-4 Class A
4.206% due 06/15/29

    947      968

Greenpoint Mortgage Funding Trust (Ê)
Series 2006-AR8 Class 1A1A
0.518% due 01/25/47

    504      432

Greenwich Capital Commercial Funding Corp.
Series 2007-GG9 Class A4
5.444% due 03/10/39

    100      78

GSMPS Mortgage Loan Trust (Þ)
Series 2005-RP1 Class 1A3
8.000% due 01/25/35

    154      143

Series 2005-RP1 Class 1A4
8.500% due 01/25/35

    91      86

Series 2006-RP1 Class 1A2
7.500% due 01/25/36

    107      89

GSR Mortgage Loan Trust (Ê)
Series 2004-7 Class 1A1
4.304% due 06/25/34

    385      318

 

Russell Short Duration Bond Fund   191

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Series 2005-AR6 Class 2A1
4.509% due 09/25/35

    606      464

Harborview Mortgage Loan Trust (Ê)
Series 2005-4 Class 3A1
5.142% due 07/19/35

    204      117

Series 2006-12 Class 2A11
0.537% due 01/19/38

    489      444

Host Marriott Trust (Þ)
Series 1999-HMT Class E
8.070% due 08/03/15

    650      661

Indymac Index Mortgage Loan Trust (Ê)
Series 2006-AR1 Class 1A1A
0.528% due 11/25/46

    296      274

JPMorgan Chase Commercial Mortgage Securities Corp.
Series 2002-C1 Class A3
5.376% due 07/12/37

    195      189

Series 2002-C2 Class A1
4.326% due 12/12/34

    417      416

Series 2003-C1 Class A2
4.985% due 01/12/37

    310      290

Series 2005-LDP Class A1
4.655% due 08/15/42

    542      540

Series 2007-LD1 Class A4
5.882% due 02/15/51

    100      75

JP Morgan Commercial Mortgage Finance Corp. (Ê)(Þ)
Series 1999-PLS Class E
7.164% due 02/15/32

    62      62

JP Morgan Mortgage Trust (Ê)
Series 2005-A1 Class 6T1
5.016% due 02/25/35

    57      49

Series 2005-A4 Class 1A1
5.394% due 07/25/35

    356      275

Series 2005-A8 Class 1A1
5.398% due 11/25/35

    685      549

Series 2006-A6 Class 1A2
6.049% due 10/25/36

    125      87

LB Commercial Conduit Mortgage Trust
Series 1999-C1 Class B
6.930% due 06/15/31

    60      60

Series 1999-C1 Class D
7.020% due 06/15/31

    650      646

LB-UBS Commercial Mortgage Trust (Ø)
Series 2000-C4 Class B
7.480% due 07/15/32

    200      199

Master Adjustable Rate Mortgages Trust (Ê)
Series 2004-13 Class 3A4
3.788% due 11/21/34

    37      36

Mellon Residential Funding Corp. (Ê)
Series 2000-TBC Class A1
0.931% due 06/15/30

    706      587

Merrill Lynch Mortgage Investors, Inc.
Series 1999-C1 Class A2
7.560% due 11/15/31

    73      73

Series 2005-A8 Class A1B1
5.250% due 08/25/36

    63      58
     Principal
Amount ($)
or Shares		      Market
Value
$

Series 2005-A10 Class A (Ê)
0.648% due 02/25/36

    59      33

Merrill Lynch Mortgage Trust
Series 2005-CIP Class A2
4.960% due 07/12/38

    145      138

Series 2006-C1 Class A1
5.528% due 05/12/39

    740      740

Merrill Lynch/Countrywide Commercial Mortgage Trust
Series 2007-6 Class A4
5.485% due 03/12/51

    200      136

MLCC Mortgage Investors, Inc.
Series 2005-1 Class 2A1
4.957% due 04/25/35

    474      321

Series 2005-1 Class 2A2
4.957% due 04/25/35

    1,016      736

Series 2005-3 Class 5A (Ê)
0.688% due 11/25/35

    109      73

Morgan Stanley Capital I
Series 1999-LIF Class A2
7.110% due 04/15/33

    284      284

Series 2005-HQ6 Class A1
4.646% due 08/13/42

    795      792

Morgan Stanley Dean Witter Capital I (Þ)
Series 2001-DFM Class A
5.996% due 03/14/16

    19      19

PNC Mortgage Acceptance Corp.
Series 1999-CM1 Class A1B
7.330% due 12/10/32

    192      193

Prime Mortgage Trust (Ê)
Series 2004-CL1 Class 1A2
0.838% due 02/25/34

    125      101

Series 2004-CL1 Class 2A2
0.838% due 02/25/19

    21      20

Residential Funding Mortgage Securities I (Ê)
Series 2006-SA3 Class 3A1
6.045% due 09/25/36

    533      305

Salomon Brothers Mortgage
Securities VII, Inc.
Series 2000-C3 Class B
6.758% due 12/18/33

    75      74

Series 2003-UP2 Class A1
4.000% due 12/25/18

    445      421

SBA CMBS Trust (Å)
Series 2006-1A Class B
5.451% due 11/15/36

    65      59

Small Business Administration Participation Certificates
Series 2009-20D Class 1
4.310% due 04/01/29

    600      603

Structured Asset Mortgage Investments,
Inc. (Ê)
Series 2002-AR3 Class A1
1.107% due 09/19/32

    26      20

Structured Asset Securities Corp. (Ê)
Series 2001-21A Class 1A1
4.816% due 01/25/32

    17      16

 

192   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Thornburg Mortgage Securities Trust (Ê)
Series 2006-6 Class A1
0.548% due 11/25/46

    455      392

Wachovia Bank Commercial Mortgage Trust
Series 2005-C20 Class A5
5.087% due 07/15/42

    25      23

Series 2006-C28 Class A2
5.500% due 10/15/48

    170      150

Series 2007-C31 Class A4
5.509% due 04/15/47

    100      69

Washington Mutual Mortgage Pass Through Certificates (Ê)
Series 2002-AR6 Class A
2.914% due 06/25/42

    94      70

Series 2002-AR9 Class 1A
2.914% due 08/25/42

    233      152

Series 2003-AR7 Class A7
3.816% due 08/25/33

    280      222

Series 2004-AR1 Class A2A
0.933% due 11/25/34

    677      343

Series 2005-AR1 Class A1A1
0.728% due 10/25/45

    166      78

Series 2006-AR1 Class 1A4
5.605% due 11/25/36

    143      82

Series 2006-AR1 Class 2A
3.955% due 09/25/46

    543      205

Wells Fargo Mortgage Backed
Securities Trust
Series 2004-CC Class A1 (Ê)
4.948% due 01/25/35

    577      451

Series 2004-E Class A2 (Ê)
4.500% due 05/25/34

    812      687

Series 2004-EE Class 3A1 (Ê)
4.444% due 12/25/34

    163      132

Series 2004-I Class 1A1 (Ê)
5.104% due 07/25/34

    370      274

Series 2005-9 Class 1A1
4.750% due 10/25/35

    1,470      1,378

Series 2005-AR2 Class 2A1 (Ê)
4.554% due 03/25/35

    160      112

Series 2005-AR2 Class 2A2 (Ê)
4.553% due 03/25/35

    582      441

Series 2005-AR4 Class 2A2 (Ê)
4.536% due 04/25/35

    182      146

Series 2005-AR8 Class 2A1 (Ê)
4.335% due 06/25/35

    141      112

Series 2006-AR1 Class 5A1 (Ê)
5.592% due 07/25/36

    414      257

Series 2006-AR2 Class 2A1
4.950% due 03/25/36

    887      591

Series 2006-AR4 Class 1A1 (Ê)
5.861% due 04/25/36

    142      91

Series 2006-AR4 Class 2A1 (Ê)
5.775% due 04/25/36

    692      504

Series 2006-AR5 Class 2A1 (Ê)
5.537% due 04/25/36

    885      529

Series 2006-AR6 Class 7A1 (Ê)
5.112% due 03/25/36

    81      60
         
        221,358
         
     Principal
Amount ($)
or Shares		      Market
Value
$
Municipal Bonds - 0.7%        

Massachusetts Educational Financing Authority (Ê)
Series 2008-1 Class A1
2.042% due 10/25/38

      1,750      1,477

South Carolina Student Loan Corp. (Ê)
Series 2008-1 Class A1
1.761% due 09/02/14

      146      144

Series 2008-1 Class A4
2.261% due 09/03/24

      400      367

South Carolina Student Loan Corp. Revenue Bonds (Ê)
Series 2008-1 Class A2
1.811% due 12/01/15

      600      582

Series 2008-1 Class A3
2.011% due 12/01/18

      700      653
         
        3,223
         
Non-US Bonds - 1.7%        

Bundesrepublik Deutschland
Series 08
4.250% due 07/04/18

    EUR 145      209

German Treasury Bills
5.000% due 01/04/12

    EUR 140      201

Keycorp (Ê)
2.088% due 11/22/10

    EUR 1,100      1,253

Morgan Stanley (Ê)
2.165% due 03/01/13

    EUR  1,700      1,732

New South Wales Treasury Corp.
Series 17RG
5.500% due 03/01/17

    AUD 180      131

United Kingdom Gilt
5.000% due 09/07/14

    GBP 475      795

5.000% due 03/07/25

    GBP 346      557

United Kingdom Treasury Bills
5.000% due 03/07/12

    GBP 775      1,243

United Kingdom Treasury Gilt Bonds
5.000% due 03/07/18

    GBP 655      1,096
         
        7,217
         
United States Government Agencies - 8.1%     

Fannie Mae
6.250% due 02/01/11

      3,925      4,120

Federal Home Loan Mortgage Corp.
0.926% due 05/04/11 (Ê)

      3,100      3,100

2.125% due 03/23/12

      325      328

Series 1 (Ê)
0.888% due 02/01/11

      100      100

Federal National Mortgage Association
1.750% due 03/23/11

      7,000      7,068

1.375% due 04/28/11

      10,200      10,222

2.750% due 03/13/14

      5,255      5,314

0.010% due 10/09/19

      6,705      3,420

Financing Corp.
Principal only STRIP
Series 13
Zero coupon due 06/27/13

      830      722

 

Russell Short Duration Bond Fund   193

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$
       

Freddie Mac
4.875% due 06/13/18

    100      110
         
        34,504
         
United States Government Treasuries - 5.5%     

United States Treasury Inflation
Indexed Bonds
2.000% due 04/15/12

    105      107

United States Treasury Notes
0.875% due 02/28/11

    8,605      8,606

1.375% due 03/15/12

    13,580      13,606

1.875% due 02/28/14

    370      368

2.750% due 02/15/19

    610      591
         
        23,278
         
Total Long-Term Investments
(cost $467,179)		         447,986
         
Preferred Stocks - 0.7%        
Financial Services - 0.7%        

Bank of America Corp.

    1,000      577

DG Funding Trust (Å)

    219      2,197

Federal Home Loan Mortgage Corp.

    19,825      10

Federal National Mortgage Association

    20,825      18

Wells Fargo & Co.

    300      185
         
Total Preferred Stocks
(cost $4,488)		         2,987
         
    

Notional
Amount
$

       
Options Purchased - 0.3%        
(Number of Contracts)        
Swaptions        

(Fund Pays/Fund Receives)

USD Three Month LIBOR/ USD 3.450%
Aug 2009 0.00 Call (5)

    31,900      1,123
         
Total Options Purchased
(cost $334)		         1,123
         
    

Principal
Amount ($)
or Shares

       
Short-Term Investments - 10.4%        

American Airlines Pass Through Trust
Series 99-1
7.324% due 10/15/09

    95      92

American General Finance Corp.
Series MTNI
4.625% due 05/15/09

    530      521
     Principal
Amount ($)
or Shares		      Market
Value
$

Anadarko Petroleum Corp. (Ê)
1.720% due 09/15/09

    300      300

Associates Corp. of NA
8.550% due 07/15/09

    750      749

AT&T, Inc.
4.125% due 09/15/09

    110      111

Capital One Bank USA NA
5.000% due 06/15/09

    530      529

CIT Group, Inc.
4.250% due 02/01/10

    795      660

1.451% due 03/12/10 (Ê)

    1,305      1,035

Citigroup Funding, Inc. (Ê)
1.226% due 06/26/09

    200      199

Comcast Cable Communications LLC
6.875% due 06/15/09

    1,040      1,045

Countrywide Home Loans, Inc.
4.125% due 09/15/09

    390      387

COX Communications, Inc.
4.625% due 01/15/10

    420      420

Credit Agricole SA/London (Ê)(Þ)
1.256% due 05/28/09

    300      300

Diageo Capital PLC
7.250% due 11/01/09

    480      488

Enterprise Products Operating LLC
Series B
4.625% due 10/15/09

    350      350

Ford Motor Credit Co. LLC
7.375% due 10/28/09

    200      192

General Electric Capital Corp. (Ê)
Series GMTN
1.361% due 03/12/10

    425      415

General Motors Acceptance Corp. of Canada, Ltd. (Ê)
2.336% due 05/22/09

    950      794

GMAC LLC (Ê)
2.488% due 05/15/09

    500      494

Goodyear Tire & Rubber Co. (The) (Ê)
6.318% due 12/01/09

    410      404

ICICI Bank, Ltd. (Ê)(Þ)
1.679% due 01/12/10

    1,100      1,056

Kraft Foods, Inc.
4.125% due 11/12/09

    190      192

Lehman Brothers Holdings, Inc. (Ø)
1.000% due 03/05/10

    950      163

Lincoln National Corp. (Ê)
1.411% due 03/12/10

    320      300

Mandalay Resort Group
6.500% due 07/31/09

    25      23

9.375% due 02/15/10

    150      80

Marshall & Ilsley Corp.
5.626% due 08/17/09

    1,655      1,628

Martin Marietta Materials, Inc. (Ê)
1.189% due 04/30/10

    1,300      1,242

Masco Corp. (Ê)
1.631% due 03/12/10

    390      372

Merrill Lynch & Co., Inc. (Ê)
3.051% due 05/20/09

    1,200      1,198

 

194   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		      Market
Value
$		  
       

MGM Mirage
6.000% due 10/01/09

    245      206   

National City Bank
Series BKN1 (Ê)
1.414% due 09/09/09

    250      248   

Series BKNT
4.250% due 01/29/10

    650      647   

Power Contract Financing LLC (Þ)
6.256% due 02/01/10

    71      69   

Russell Investment Company
Russell Money Market Fund

    25,115,334      25,115   

Sovereign Bancorp, Inc. (Ê)
1.457% due 03/23/10

    200      186   

State of Illinois General
Obligation Unlimited Notes
4.500% due 06/24/09

    500      502   

United States Treasury Bills (ç)(ž)(§)
0.187% due 05/07/09

    280      280   

0.162% due 05/14/09

    280      280   

0.067% due 05/21/09

    460      460   

0.220% due 06/11/09

    250      250   

Wachovia Mortgage FSB
Series BKNT
4.125% due 12/15/09

    130      131   
           
Total Short-Term Investments
(cost $45,538)		         44,113   
           
Repurchase Agreement - 1.3%        

Agreement with Barclays Capital Inc. and the Bank of New York (Tri-Party) of $5,600 dated April 30, 2009, at 0.180% to be repurchased at $5,600 on May 1, 2009 collateralized by: $5,600 par various United States Treasury Obligations, valued at $5,600

    5,600      5,600   
           
Total Repurchase Agreements
(cost $5,600)		         5,600   
           
Total Investments - 118.4%
(identified cost $522,139)		         501,809   
Other Assets and Liabilities,
Net - (18.4%)		         (78,144 ) 
           
Net Assets - 100.0%         423,665   
           

 

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Short Duration Bond Fund   195

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts    Number of
Contracts		      Notional
Amount		      Expiration
Date		      Unrealized
Appreciation
(Depreciation)
$		  
                   
                   
Long Positions                    

Euribor Futures (Germany)

    4      EUR   987      06/09      52   

Euribor Futures (Germany)

    3      EUR   739      03/10      3   

Euribor Futures (Germany)

    3      EUR   737      06/10      4   

Euribor Futures (Germany)

    2      EUR   491      09/10      3   

Euribor Futures (Germany)

    3      EUR   734      12/10      4   

Euro-Bobl Futures (Germany)

    50      EUR   5,799      06/09      (54 ) 

Eurodollar Futures (CME)

    109      USD   26,993      06/09      349   

Eurodollar Futures (CME)

    83      USD   20,544      09/09      233   

Eurodollar Futures (CME)

    69      USD   17,044      12/09      102   

Eurodollar Futures (CME)

    68      USD   16,775      03/10      96   

Eurodollar Futures (CME)

    57      USD   14,026      06/10      22   

Eurodollar Futures (CME)

    52      USD   12,764      09/10      13   

Eurodollar Futures (CME)

    44      USD   10,768      12/10      2   

Eurodollar Futures (CME)

    61      USD   14,892      03/11      (32 ) 

Three Month Short Sterling Interest Rate Futures (UK)

    2      GBP   247      06/09      19   

Three Month Short Sterling Interest Rate Futures (UK)

    3      GBP   368      03/10      1   

Three Month Short Sterling Interest Rate Futures (UK)

    3      GBP   367      06/10      2   

Three Month Short Sterling Interest Rate Futures (UK)

    3      GBP   366      09/10      2   

Three Month Short Sterling Interest Rate Futures (UK)

    3      GBP   365      12/10      2   

United States Treasury 2 Year Notes

    63      USD   13,705      06/09      28   

United States Treasury 5 Year Notes

    10      USD   1,171      06/09      —   

United States Treasury 30 Year Bond

    9      USD   1,103      06/09      (50 ) 
Short Positions                    

United States Treasury 2 Year Notes

    250      USD   54,387      06/09      (111 ) 

United States Treasury 10 Year Notes

    43      USD   5,200      06/09      62   
                       

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                     752   
                       

 

See accompanying notes which are an integral part of the financial statements.

 

196   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Options Written

(Number of Contracts)

    Notional
Amount		      Market
Value
$		  
       
       
Eurodollar Futures        

Jun 2009 98.50 Put (4)

    10      —   

Sep 2009 98.50 Put (91)

    228      (10 ) 
Swaptions        

(Fund Pays/Fund Receives)

        

EUR 4.000%/EUR Six Month Euribor

        

June 2009 0.00 Put (2)

    1,000      —   

EUR 4.300%/EUR Six Month Euribor

        

June 2009 0.00 Put (1)

    500      —   

USD 1.750%/USD Three Month LIBOR

        

Jun 2009 0.00 Put (1)

    4,000      (7 ) 

USD 2.000%/USD Three Month LIBOR

        

Jul 2009 0.00 Put (3)

    2,000      (3 ) 

USD 2.750%/USD Three Month LIBOR

        

May 2009 0.00 Put (3)

    1,500      (4 ) 

USD 4.400%/USD Three Month LIBOR

        

Aug 2009 0.00 Put (2)

    2,000      (3 ) 

USD 4.550%/USD Three Month LIBOR

        

Aug 2009 0.00 Put (1)

    500      (1 ) 
           

Total Liability for Options Written
(premiums received $76)

         (28 ) 
           

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Short Duration Bond Fund   197

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
         
Amount
Sold		   Amount
Bought		   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$		  
         
USD   106   AUD   152   05/07/09   4   
USD   128   AUD   180   05/26/09   3   
USD   22   BRL   50   06/02/09   1   
USD   66   BRL   150   06/02/09   2   
USD   15   CAD   19   05/26/09   1   
USD   87   CAD   107   06/08/09   3   
USD   35   EUR   27   05/14/09   1   
USD   81   JPY   7,975   05/07/09   —   
USD   91   JPY   9,065   05/26/09   1   
USD   422   JPY   41,338   05/26/09   (3 ) 
AUD   381   USD   266   05/26/09   (11 ) 
BRL   335   USD   137   06/02/09   (15 ) 
CAD   36   USD   29   05/26/09   (1 ) 
CAD   56   USD   46   05/26/09   (1 ) 
CAD   209   USD   175   05/26/09   —   
CAD   390   USD   329   05/26/09   2   
CAD   465   USD   370   05/26/09   (20 ) 
EUR   2,281   USD   3,025   05/14/09   7   
EUR   472   USD   639   05/26/09   13   
GBP   375   USD   552   05/21/09   (3 ) 
GBP   2,640   USD   3,872   05/26/09   (33 ) 
JPY   29,459   USD   295   05/26/09   (4 ) 
             

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts

   (53 ) 
             

 

See accompanying notes which are an integral part of the financial statements.

 

198   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Interest Rate Swap Contracts  

Counter
Party

    Notional
Amount		    Fund Receives  

Fund Pays

    Termination
Date		    Market
Value
$		  
               

Barclays Bank PLC

    BRL   6,900    13.845%   Brazil Interbank Deposit Rate    01/02/12    163   

Barclays Bank PLC

    USD   7,400    3.000%   Three Month LIBOR    02/04/11    247   

BNP Paribas

    EUR   1,200    Consumer Price Index (France)   2.090%    10/15/10    58   

JP Morgan

    EUR   200    1.948%   Consumer Price Index (France)    03/15/12    6   

Merrill Lynch

    BRL   700    12.948%   Brazil Interbank Deposit Rate    01/04/10    11   

Merrill Lynch

    BRL   100    14.765%   Brazil Interbank Deposit Rate    01/02/12    3   

Morgan Stanley

    BRL   400    12.670%   Brazil Interbank Deposit Rate    01/04/10    4   

Royal Bank of Scotland

    GBP   200    5.100%   Six Month LIBOR    09/15/13    25   

Royal Bank of Scotland

    USD   9,000    3.000%   Three Month LIBOR    02/04/11    298   

UBS

    AUD   1,600    4.250%   Six Month BBSW    09/15/11    11   

UBS

    BRL   400    12.410%   Brazil Interbank Deposit Rate    01/04/10    4   

UBS

    BRL   1,000    10.575%   Brazil Interbank Deposit Rate    01/02/12    (14 ) 

UBS

    BRL   100    11.980%   Brazil Interbank Deposit Rate    01/02/12    1   

UBS

    BRL   800    12.540%   Brazil Interbank Deposit Rate    01/02/12    9   
                   

Total Market Value of Open Interest Rate Swap Contracts Premiums Paid (Received) - ($110)

    826   
                   

 

Credit Default Swap Contracts  
Corporate Issues  

Reference
Entity

   

Counter
Party

    Implied
Credit
Spread		   

Notional
Amount

    Fund (Pays)/
Receives
Fixed Rate		    Termination
Date		    Market
Value
$		  
                    

American International Group

    Goldman Sachs    3.678%    USD    300    1.380%    06/20/13    (165 ) 

American International Group

    Royal Bank of Scotland    3.678%    USD    200    1.360%    06/20/13    (110 ) 

Brazilian Government International Bond

    Barclays Bank PLC    0.048%    USD    900    0.290%    06/20/09    1   

Ford Motor Credit Co.

    Barclays Bank PLC    0.960%    USD    2,000    6.150%    09/20/12    (172 ) 

Gaz Capital for Gazprom

    Morgan Stanley    0.624%    USD    1,400    0.860%    11/20/11    (166 ) 

GE Capital Corp.

    Citibank    0.685%    USD    200    4.325%    12/20/13    (16 ) 

GE Capital Corp.

    Citibank    0.685%    USD    200    4.200%    12/20/13    (17 ) 

GE Capital Corp.

    Deutsche Bank    21.197%    USD    400    5.000%    12/20/09    (282 ) 

GE Capital Corp.

    Deutsche Bank    0.685%    USD    100    4.900%    12/20/13    (6 ) 

GE Capital Corp.

    Deutsche Bank    0.685%    USD    200    4.230%    12/20/13    (18 ) 

GECC SP BPS

    Paribas, Corp.    0.699%    USD    100    1.250%    03/20/13    (18 ) 

GECC SP BPS

    Paribas, Corp.    0.699%    USD    1,200    1.300%    03/20/13    (206 ) 

GECC SP BRC

    Barclays Bank PLC    0.699%    USD    700    1.670%    03/20/13    (112 ) 

General Motors Acceptance Corp.

    Merrill Lynch    1.651%    USD    1,000    1.850%    09/20/09    (54 ) 

General Motors Corp.

    Merrill Lynch    21.197%    USD    1,000    5.000%    12/20/09    (706 ) 

General Motors Corp.

    UBS    14.580%    USD    300    8.150%    03/20/13    (250 ) 

Indonesia Government International Bond

    Indonesia Government International Bond    0.245%    USD    1,000    0.438%    06/20/09    (3 ) 

Russia Government International Bond

    Russia Government International Bond    0.230%    USD    1,000    0.275%    06/20/09    (3 ) 

SLM Corp.

    Citibank    1.951%    USD    500    5.600%    09/20/09    (23 ) 

SLM Corp.

    Paribas, Corp.    1.428%    USD    100    5.050%    03/20/13    (21 ) 

Ukraine Government International Bond

    HSBC    3.523%    USD    1,000    0.490%    06/20/09    (50 ) 
                        

Total Market Value of Open Corporate Issue Credit Default Swap Contracts Premiums Paid (Received) - ($806)

          (2,397 ) 
                        

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Short Duration Bond Fund   199

Russell Investment Company

Russell Short Duration Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Credit Indices  

Reference
Entity

   

Counter
Party

   

Notional
Amount

    Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		    Market
Value
$		  
                    

Dow Jones CDX Index

    Deutsche Bank    USD    778    0.708%       12/20/12    3   

Dow Jones CDX Index

    Deutsche Bank    USD    500    (1.000% )     06/20/14    14   

Dow Jones CDX Index

    Dow Jones CDX Index    USD    97    0.553%       12/20/17    —   

Dow Jones CDX Index

    Dow Jones CDX Index    USD    97    0.548%       12/20/17    —   

Dow Jones CDX Index

    Merrill Lynch    USD    1,782    (5.000% )     06/20/14    374   
                        

Total Market Value of Open Credit Index Credit Default Swap Contracts Premiums Paid (Received) - $450

    391   
                        

Total Market Value of Open Credit Default Swap Contracts Premiums Paid (Received) - ($356)

    (2,006 ) 
                        

 

See accompanying notes which are an integral part of the financial statements.

 

200   Russell Short Duration Bond Fund

Russell Investment Company

Russell Short Duration Bond Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    
    

Asset-Backed Securities

      11.9   

Corporate Bonds and Notes

      23.1   

International Debt

      2.2   

Loan Agreements

      0.3   

Mortgage-Backed Securities

      52.2   

Municipal Bonds

      0.7   

Non US Bonds

      1.7   

United States Government Agencies

      8.1   

United States Government Treasuries

      5.5   

Preferred Stocks

      0.7   

Options Purchased

      0.3   

Short Term Investments

      10.4   

Repurchase Agreement

      1.3   
        

Total Investments

      118.4   

Other Assets and Liabilities, Net

      (18.4 ) 
        
     100.0   
        

Futures Contracts

      — * 

Options Written

      (— )* 

Foreign Currency Exchange Contracts

      (— )* 

Interest Rate Swap Contracts

      0.2   

Credit Default Swap Contracts

      (0.5 ) 

 

* Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Short Duration Bond Fund   201

Russell Investment Company

Russell Tax Exempt Bond Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the

heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,060.30    $ 1,017.31

Expenses Paid During Period*

    $ 7.71    $ 7.55

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,063.50    $ 1,020.98

Expenses Paid During Period*

    $ 3.94    $ 3.86

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.77% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,065.00    $ 1,022.27

Expenses Paid During Period*

    $ 2.61    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

202   Russell Tax Exempt Bond Fund

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 
Municipal Bonds - 95.8%                  
Alabama - 0.4%                  

Courtland Industrial Development Board Revenue Bonds

    250      5.000      11/01/13      242

Mobile Industrial Development Board Revenue Bonds (Ê)

    1,400      4.875      06/01/34      1,459
                   
                  1,701
                   
Alaska - 0.3%                  

City of Anchorage Alaska General Obligation Unlimited (µ)(æ)

    500      5.750      12/01/16      539

Northern TOB Securitization Corp. Revenue Bonds

    845      4.625      06/01/23      710
                   
                  1,249
                   
Arizona - 3.1%                  

Arizona Health Facilities Authority Revenue Bonds

    2,000      5.250      01/01/18      2,073

Arizona Health Facilities Authority Revenue Bonds

    2,000      5.250      01/01/22      1,989

Arizona State Transportation Board Revenue Bonds

    500      5.250      07/01/12      541

Arizona State Transportation Board Revenue Bonds

    1,500      5.000      07/01/14      1,714

Arizona Water Infrastructure Finance Authority Revenue Bonds

    1,165      5.000      10/01/21      1,303

City of Chandler Arizona General Obligation Unlimited

    2,000      5.000      07/01/21      2,218

Scottsdale Industrial Development Authority Revenue Bonds

    1,515      5.000      09/01/22      1,383

Town of Gilbert Arizona General Obligation Unlimited

    1,000      5.000      07/01/19      1,135
                   
                  12,356
                   
California - 5.5%                  

Abag Finance Authority for Nonprofit Corps. Certificate Of Participation

    600      5.700      08/15/14      601

California State Department of Water Resources Revenue Bonds (µ)

    1,000      5.250      05/01/12      1,093

California State Department of Water Resources Revenue Bonds

    1,000      5.000      12/01/21      1,103

California Statewide Communities Development Authority Revenue Bonds

    1,405      6.000      05/15/23      1,260

California Statewide Communities Development Authority Revenue Bonds (Ê)(µ)

    610      4.100      04/01/28      608

California Statewide Communities Development Authority Revenue Bonds (Ê)

    1,000      5.200      12/01/29      1,004

Golden State Tobacco Securitization Corp. Revenue Bonds (µ)

    500      5.000      06/01/20      459

Golden State Tobacco Securitization Corp. Revenue Bonds (µ)

    750      4.600      06/01/23      564

Golden State Tobacco Securitization Corp. Revenue Bonds

    1,175      4.500      06/01/27      949

Kings River Conservation District Certificate Of Participation

    850      5.000      05/01/15      931

Los Angeles Unified School District General Obligation Unlimited (µ)

    1,975      5.000      07/01/31      1,933

Roseville Westpark Community Facilities District No. 1 Special Tax

    600      5.250      09/01/37      361

Southern California Public Power Authority Revenue Bonds (µ)

    405      5.375      01/01/12      442

State of California General Obligation Unlimited

    1,000      6.600      02/01/10      1,037

State of California General Obligation Unlimited

    1,000      5.000      02/01/12      1,070

State of California General Obligation Unlimited

    1,000      5.250      07/01/12      1,088

State of California General Obligation Unlimited (µ)

    1,000      6.000      02/01/17      1,141

State of California General Obligation Unlimited

    2,500      5.500      04/01/21      2,671

State of California General Obligation Unlimited

    2,000      6.500      04/01/33      2,151

Tobacco Securitization Authority of Southern California Revenue Bonds

    910      4.750      06/01/25      669

University of California Revenue Bonds

    500      4.000      05/15/14      536
                   
                  21,671
                   
Colorado - 0.7%                  

Colorado Educational & Cultural Facilities Authority Revenue Bonds (Ê)(µ)

    1,000      0.450      09/01/37      1,000

Colorado Health Facilities Authority Revenue Bonds (µ)(æ)

    1,000      5.500      05/15/14      1,011

Colorado Health Facilities Authority Revenue Bonds

    1,000      5.250      06/01/23      871

Colorado Housing & Finance Authority Revenue Bonds

    10      7.250      04/01/10      10

Colorado Housing & Finance Authority Revenue Bonds

    25      6.300      08/01/12      25

Colorado Housing & Finance Authority Revenue Bonds

    30      6.300      08/01/16      30

Colorado Housing & Finance Authority Revenue Bonds

    15      6.700      10/01/16      16
                   
                  2,963
                   

 

Russell Tax Exempt Bond Fund   203

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 
Connecticut - 0.6%                  

State of Connecticut General Obligation Unlimited

    2,000      5.000      04/15/18      2,327
                   
Delaware - 0.4%                  

Delaware State Economic Development Authority Revenue Bonds (Ê)(µ)

    250      4.900      05/01/26      249

State of Delaware General Obligation Unlimited

    1,000      5.000      01/01/17      1,173
                   
                  1,422
                   
District of Columbia - 0.5%                  

District of Columbia General Obligation Unlimited (µ)

    1,000      5.500      06/01/09      1,002

District of Columbia Revenue Bonds (µ)

    1,000      5.000      02/01/12      1,014
                   
                  2,016
                   
Florida - 7.5%                  

City of Gulf Breeze Florida Revenue Bonds (µ)

    1,825      5.000      12/01/15      1,939

City of Pembroke Pines Florida Revenue Bonds (µ)

    1,000      5.000      10/01/16      1,100

City of Tallahassee Florida Revenue Bonds (µ)

    500      5.000      10/01/11      540

County of Hillsborough Florida Revenue Bonds (µ)

    1,000      5.500      08/01/12      1,116

County of Miami-Dade Florida Revenue Bonds (µ)

    1,000      5.000      06/01/14      1,033

County of Miami-Dade Florida Revenue Bonds (µ)

    1,500      5.250      10/01/19      1,624

Escambia County Health Facilities Authority Revenue Bonds

    1,000      5.250      11/15/11      1,059

Escambia County Health Facilities Authority Revenue Bonds

    1,000      5.250      11/15/13      1,079

Florida Department of Childrens & Family Services Certificate Of Participation (µ)

    1,175      5.000      10/01/15      1,287

Florida Hurricane Catastrophe Fund Finance Corp. Revenue Bonds

    1,600      5.000      07/01/10      1,632

Florida State Board of Education General Obligation Unlimited

    1,000      5.000      06/01/16      1,118

Florida State Board of Education Revenue Bonds (µ)

    1,000      5.250      01/01/13      1,078

Florida State Division of Bond Finance Revenue Bonds (µ)

    1,600      5.250      07/01/13      1,623

Florida State Turnpike Authority Revenue Bonds (µ)

    2,000      5.000      07/01/13      2,228

Florida Water Pollution Control Financing Corp. Revenue Bonds

    500      5.500      01/15/12      541

Florida Water Pollution Control Financing Corp. Revenue Bonds

    2,000      5.000      01/15/25      2,089

Hillsborough County Educational Facilities Authority Revenue Bonds (µ)

    665      5.750      04/01/18      660

Miami-Dade County Educational Facilities Authority Revenue Bonds (µ)(æ)

    1,750      5.000      04/01/34      2,004

Miami-Dade County School Board Certificate Of Participation (µ)

    1,000      5.000      05/01/15      1,048

North Miami Florida Revenue Bonds (µ)

    1,325      5.000      04/01/10      1,359

Orlando Utilities Commission Revenue Bonds (æ)

    630      5.250      10/01/20      698

Orlando Utilities Commission Revenue Bonds

    370      5.250      10/01/20      386

Palm Beach County School Board Certificate Of Participation (µ)

    1,000      5.000      08/01/14      1,073

Palm Glades Community Development District Special Assessment

    795      4.850      08/01/11      543

Tampa-Hillsborough County Expressway Authority Revenue Bonds (µ)

    1,000      5.000      07/01/14      1,042
                   
                  29,899
                   
Georgia - 5.3%                  

Burke County Development Authority Revenue Bonds (Ê)(µ)

    1,660      4.625      01/01/37      1,660

Columbia County Georgia General Obligation Unlimited

    1,730      4.000      04/01/13      1,881

Columbia County Georgia General Obligation Unlimited

    185      5.000      04/01/17      215

Gwinnett County School District General Obligation Unlimited

    1,090      5.000      02/01/21      1,229

Hall County School District General Obligation Unlimited

    1,000      5.000      11/01/12      1,121

Main Street Natural Gas, Inc. Revenue Bonds

    825      5.000      03/15/16      764

Marietta Development Authority Revenue Bonds

    575      6.250      06/15/20      461

Municipal Electric Authority of Georgia Revenue Bonds (µ)

    850      6.250      01/01/17      1,008

State of Georgia General Obligation Unlimited

    15      6.500      12/01/09      16

State of Georgia General Obligation Unlimited

    2,000      5.000      07/01/12      2,228

State of Georgia General Obligation Unlimited

    1,550      5.000      08/01/12      1,731

State of Georgia General Obligation Unlimited

    2,800      5.000      07/01/13      3,188

State of Georgia General Obligation Unlimited

    2,100      5.500      07/01/13      2,433

State of Georgia General Obligation Unlimited

    1,240      5.000      07/01/17      1,457

State of Georgia General Obligation Unlimited

    1,500      5.000      07/01/22      1,675
                   
                  21,067
                   

 

204   Russell Tax Exempt Bond Fund

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 
Hawaii - 0.9%                  

City & County of Honolulu Hawaii Revenue Bonds (µ)

    1,500      5.000      07/01/19      1,665

County of Kauai Hawaii General Obligation Unlimited (µ)(æ)

    375      6.250      08/01/19      402

Hawaii Housing & Community Development Corp. Revenue Bonds

    420      3.700      01/01/22      415

State of Hawaii General Obligation Unlimited (µ)

    1,000      5.750      01/01/10      1,033
                   
                  3,515
                   
Idaho - 0.7%                  

Boise State University Revenue Bonds (µ)

    15      5.375      04/01/22      15

Boise State University Revenue Bonds (µ)(æ)

    1,230      5.375      04/01/22      1,373

Idaho Housing & Finance Association Revenue Bonds (µ)

    1,330      5.250      07/15/21      1,469
                   
                  2,857
                   
Illinois - 2.2%                  

City of Chicago Illinois General Obligation Unlimited (µ)

    750      6.000      01/01/11      780

City of Chicago Illinois General Obligation Unlimited (µ)

    2,135      5.000      12/01/23      2,197

City of Chicago Illinois General Obligation Unlimited (Ê)(µ)

    700      0.250      01/01/37      700

Cook County Community Consolidated School District No. 15-Palatine General Obligation Limited (µ)

    2,235      Zero coupon      12/01/13      1,994

Illinois Finance Authority Revenue Bonds (µ)

    400      Zero coupon      01/01/10      396

Illinois Finance Authority Revenue Bonds

    670      5.500      10/01/12      737

Illinois Health Facilities Authority Revenue Bonds

    200      6.000      05/15/10      204

Lake County Community Unit School District No. 116-Round Lake General Obligation Unlimited (µ)

    400      7.600      02/01/14      504

State of Illinois Revenue Bonds (µ)

    1,000      5.000      06/15/16      1,123
                   
                  8,635
                   
Indiana - 2.0%                  

Ball State University Revenue Bonds (µ)

    1,000      5.000      07/01/16      1,105

Indiana Bond Bank Revenue Bonds (µ)

    190      5.750      08/01/13      197

Indiana Finance Authority Revenue Bonds (µ)

    925      5.000      07/01/11      981

Indiana Finance Authority Revenue Bonds

    1,500      5.250      02/01/18      1,762

Indiana Health Facility Financing Authority Revenue Bonds

    1,000      5.500      11/15/10      1,050

Indiana Health Facility Financing Authority Revenue Bonds (Ê)

    1,000      5.000      11/01/27      1,052

Indiana University Revenue Bonds (æ)

    500      5.750      08/01/10      511

Indianapolis Local Public Improvement Bond Bank Revenue Bonds

    1,000      5.000      02/01/18      1,159
                   
                  7,817
                   
Iowa - 0.6%                  

Iowa Finance Authority Revenue Bonds

    290      6.000      07/01/10      299

Iowa Finance Authority Revenue Bonds (µ)

    1,000      5.000      07/01/14      1,029

Tobacco Settlement Authority of Iowa Revenue Bonds (æ)

    1,000      5.600      06/01/35      1,092
                   
                  2,420
                   
Kansas - 0.3%                  

Butler & Sedgwick Counties Unified School District No. 385 Andover General Obligation Unlimited (µ)

    500      5.000      09/01/09      507

Kansas Development Finance Authority Revenue Bonds (µ)

    150      5.000      08/01/10      156

Wyandotte County-Kansas City Unified Government Revenue Bonds

    305      4.750      12/01/16      286

Wyandotte County-Kansas City Unified Government Transportation Development Dist Revenue Bonds

    715      4.875      10/01/28      433
                   
                  1,382
                   
Louisiana - 0.4%                  

Louisiana State Citizens Property Insurance Corp. Revenue Bonds (µ)

    1,600      6.750      06/01/26      1,706
                   

 

Russell Tax Exempt Bond Fund   205

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 
Maryland - 4.6%                  

County of Prince George’s Maryland General Obligation Limited

    1,000      5.000      07/15/16      1,176

Maryland Economic Development Corp. Revenue Bonds

    885      6.200      09/01/22      942

Maryland Health & Higher Educational Facilities Authority Revenue Bonds

    1,000      5.400      01/01/31      689

Maryland Health & Higher Educational Facilities Authority Revenue Bonds (Ê)

    465      5.000      05/15/48      496

Maryland State Department of Transportation County Transportation Revenue Bonds

    1,100      5.000      05/01/17      1,218

Maryland State Transportation Authority Revenue Bonds

    1,000      5.000      03/01/16      1,158

Maryland State Transportation Authority Revenue Bonds

    2,000      5.250      03/01/18      2,355

State of Maryland General Obligation Unlimited

    2,000      5.000      02/01/12      2,203

State of Maryland General Obligation Unlimited

    2,500      5.250      03/01/13      2,850

State of Maryland General Obligation Unlimited

    1,500      5.000      08/01/14      1,732

State of Maryland General Obligation Unlimited

    1,000      5.000      03/15/17      1,175

State of Maryland General Obligation Unlimited

    1,895      5.000      03/15/19      2,174
                   
                  18,168
                   
Massachusetts - 1.9%                  

Commonwealth of Massachusetts General Obligation Limited (æ)

    430      6.000      02/01/11      451

Commonwealth of Massachusetts General Obligation Unlimited

    1,500      5.250      08/01/13      1,706

Commonwealth of Massachusetts General Obligation Unlimited

    1,000      5.500      10/01/16      1,185

Massachusetts Development Finance Agency Revenue Bonds

    80      5.125      12/01/11      80

Massachusetts Development Finance Agency Revenue Bonds

    50      5.150      10/01/14      49

Massachusetts Health & Educational Facilities Authority Revenue Bonds

    995      5.375      07/01/21      951

Massachusetts Port Authority Revenue Bonds

    150      5.750      07/01/10      156

Massachusetts State Water Pollution Abatement Revenue Bonds

    1,090      5.000      08/01/16      1,269

Massachusetts Water Resources Authority Revenue Bonds (µ)(æ)

    1,425      5.500      08/01/20      1,574
                   
                  7,421
                   
Michigan - 1.3%                  

Bishop International Airport Authority Revenue Bonds (µ)

    30      5.000      12/01/10      31

Detroit Michigan Revenue Bonds (µ)

    1,000      5.000      07/01/14      994

Detroit Michigan Revenue Bonds (µ)

    1,015      5.000      07/01/18      1,028

Kent Hospital Finance Authority Revenue Bonds (Ê)

    500      5.250      01/15/47      510

Michigan Municipal Bond Authority Revenue Bonds

    1,000      5.250      10/01/11      1,095

Michigan State Hospital Finance Authority Revenue Bonds

    1,000      5.500      11/01/14      996

Michigan State Housing Development Authority Revenue Bonds (µ)

    330      4.150      10/01/13      339
                   
                  4,993
                   
Minnesota - 2.3%                  

City of Minneapolis Minnesota Revenue Bonds

    1,855      6.375      11/15/23      1,949

Saint Louis Park Minnesota Revenue Bonds

    1,165      5.500      07/01/17      1,217

Saint Louis Park Minnesota Revenue Bonds

    725      5.500      07/01/18      749

State of Minnesota General Obligation Unlimited

    545      5.000      06/01/14      626

State of Minnesota General Obligation Unlimited

    1,000      5.000      08/01/15      1,162

State of Minnesota General Obligation Unlimited

    2,990      5.000      06/01/17      3,512
                   
                  9,215
                   
Mississippi - 0.3%                  

Mississippi Development Bank Special Obligation Revenue Bonds (µ)

    1,000      5.000      07/01/15      1,085
                   
Missouri - 0.1%                  

Joplin Industrial Development Authority Revenue Bonds

    270      5.500      02/15/13      268
                   
Montana - 0.4%                  

City of Forsyth Montana Revenue Bonds (Ê)

    1,450      5.200      05/01/33      1,450
                   

 

206   Russell Tax Exempt Bond Fund

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 
Nevada - 0.8%                  

Clark County School District General Obligation Limited (µ)(æ)

    330      5.250      06/15/10      332

County of Clark Nevada General Obligation Limited (µ)

    1,000      5.000      11/01/13      1,081

County of Clark Nevada Revenue Bonds

    1,000      5.000      07/01/12      1,064

Truckee Meadows Water Authority Revenue Bonds (µ)

    500      5.500      07/01/11      540
                   
                  3,017
                   
New Jersey - 2.7%                  

New Jersey Economic Development Authority Revenue Bonds

    1,000      5.000      09/01/12      1,072

New Jersey Economic Development Authority Revenue Bonds

    1,000      5.250      03/01/14      1,087

New Jersey Economic Development Authority Revenue Bonds

    1,020      5.375      06/15/15      968

New Jersey Health Care Facilities Financing Authority Revenue Bonds (µ)

    1,000      5.000      09/15/17      1,065

New Jersey State Educational Facilities Authority Revenue Bonds

    1,000      5.750      09/01/10      1,054

New Jersey State Educational Facilities Authority Revenue Bonds

    2,000      5.000      07/01/16      2,351

New Jersey Transportation Trust Fund Authority Revenue Bonds

    1,000      5.000      12/15/16      1,088

New Jersey Transportation Trust Fund Authority Revenue Bonds

    1,000      5.000      12/15/18      1,069

Tobacco Settlement Financing Corp. Revenue Bonds

    1,305      4.500      06/01/23      1,089
                   
                  10,843
                   
New York - 9.4%                  

Battery Park City Authority Revenue Bonds

    1,500      5.250      11/01/22      1,607

City of New York New York General Obligation Unlimited

    1,000      5.000      08/01/11      1,062

City of New York New York General Obligation Unlimited

    125      5.750      08/01/11      132

City of New York New York General Obligation Unlimited

    850      5.000      03/01/12      910

City of New York New York General Obligation Unlimited

    750      5.000      11/01/12      813

City of New York New York General Obligation Unlimited

    235      5.250      11/01/12      253

City of New York New York General Obligation Unlimited

    2,000      5.000      04/01/23      2,045

City of New York New York General Obligation Unlimited

    2,000      5.250      04/01/28      2,034

Metropolitan Transportation Authority Revenue Bonds

    1,000      5.000      11/15/18      1,056

Metropolitan Transportation Authority Revenue Bonds

    1,430      6.500      11/15/28      1,578

New York City Municipal Water Finance Authority Revenue Bonds

    1,500      5.250      06/15/12      1,659

New York State Dormitory Authority Revenue Bonds (µ)

    285      7.000      07/01/09      288

New York State Dormitory Authority Revenue Bonds

    1,000      6.500      12/01/21      877

New York State Dormitory Authority Revenue Bonds

    1,110      5.000      03/15/23      1,188

New York State Dormitory Authority Revenue Bonds (Ê)

    2,000      5.250      11/15/23      2,119

New York State Environmental Facilities Corp. Revenue Bonds (µ)

    1,000      6.000      06/15/12      1,126

New York State Environmental Facilities Corp. Revenue Bonds

    770      5.000      06/15/22      844

New York State Environmental Facilities Corp. Revenue Bonds

    1,640      5.000      09/15/23      1,769

New York State Thruway Authority Revenue Bonds (µ)

    1,575      5.250      04/01/13      1,748

New York State Thruway Authority Revenue Bonds

    1,500      5.000      04/01/14      1,662

New York State Thruway Authority Revenue Bonds

    2,000      5.000      03/15/20      2,207

Sales Tax Asset Receivables Corp. Revenue Bonds (µ)

    1,700      5.000      10/15/25      1,776

Tobacco Settlement Financing Authority Revenue Bonds

    1,030      5.000      06/01/12      1,085

Triborough Bridge & Tunnel Authority Revenue Bonds

    950      5.000      11/15/17      1,083

Triborough Bridge & Tunnel Authority Revenue Bonds (µ)

    1,000      5.500      11/15/20      1,144

Triborough Bridge & Tunnel Authority Revenue Bonds (Ê)

    2,250      5.000      11/15/25      2,417

Triborough Bridge & Tunnel Authority Revenue Bonds (Ê)

    900      5.000      11/15/38      964

TSASC, Inc. Revenue Bonds

    1,000      4.750      06/01/22      758

United Nations Development Corp. Revenue Bonds

    1,000      5.000      07/01/11      1,000
                   
                  37,204
                   
North Carolina - 2.0%                  

County of Wake North Carolina General Obligation Unlimited

    2,000      5.000      03/01/13      2,263

North Carolina Eastern Municipal Power Agency Revenue Bonds

    250      5.500      01/01/10      252

North Carolina Medical Care Commission Revenue Bonds

    410      5.400      10/01/27      314

North Carolina Municipal Power Agency No. 1 Catawba Revenue Bonds (µ)

    1,500      6.000      01/01/12      1,654

North Carolina Municipal Power Agency No. 1 Catawba Revenue Bonds

    200      5.500      01/01/13      217

 

Russell Tax Exempt Bond Fund   207

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 

State of North Carolina General Obligation Unlimited

    1,000      5.000      03/01/12      1,104

State of North Carolina General Obligation Unlimited

    1,000      5.000      03/01/14      1,115

University of North Carolina at Chapel Hill Revenue Bonds (æ)

    1,065      5.375      12/01/14      1,161
                   
                  8,080
                   
North Dakota - 0.1%                  

County of Williams North Dakota Revenue Bonds

    320      5.000      11/01/31      212
                   
Ohio - 2.3%                  

Buckeye Tobacco Settlement Financing Authority Revenue Bonds

    2,215      5.125      06/01/24      1,746

Kent State University Revenues Revenue Bonds (Ê)(µ)

    10      0.350      05/01/31      10

Ohio Air Quality Development Authority Revenue Bonds

    1,110      5.700      02/01/14      1,112

Ohio State Higher Educational Facility Commission Revenue Bonds

    1,000      5.000      12/01/09      1,022

State of Ohio General Obligation Unlimited

    5,000      5.375      08/01/18      5,386
                   
                  9,276
                   
Oklahoma - 0.2%                  

Oklahoma Development Finance Authority Revenue Bonds

    275      5.000      10/01/13      280

Oklahoma Development Finance Authority Revenue Bonds

    500      5.000      02/15/16      514

Oklahoma Housing Finance Agency Revenue Bonds

    30      7.600      09/01/15      30
                   
                  824
                   
Oregon - 1.6%                  

City of Portland Oregon Revenue Bonds

    2,000      5.000      06/15/18      2,291

Clackamas County School Distrist No. 62C Oregon City General Obligation Unlimited (æ)

    435      6.000      06/15/11      462

Morrow County School District No. 1 General Obligation Unlimited (µ)

    1,955      5.500      06/15/21      2,334

Oregon State Department of Administrative Services Revenue Bonds (µ)

    750      5.250      04/01/10      757

State of Oregon General Obligation Limited

    580      5.700      10/01/32      582
                   
                  6,426
                   
Pennsylvania - 5.3%                  

Allegheny County Hospital Development Authority Revenue Bonds

    2,000      5.000      09/01/16      2,095

Allegheny County Port Authority Revenue Bonds (µ)

    250      5.500      03/01/17      258

Berks County Vocational Technical School Authority Revenue Bonds (µ)

    1,260      5.000      06/01/15      1,319

Butler County Hospital Authority Revenue Bonds

    1,000      7.125      07/01/29      1,017

Commonwealth of Pennsylvania General Obligation Unlimited

    2,000      5.000      08/01/13      2,267

Commonwealth of Pennsylvania General Obligation Unlimited

    2,500      5.500      01/01/14      2,884

Commonwealth of Pennsylvania General Obligation Unlimited (µ)

    1,000      5.000      09/01/15      1,130

Commonwealth of Pennsylvania General Obligation Unlimited (µ)

    1,300      5.375      07/01/17      1,551

County of Allegheny Pennsylvania General Obligation Unlimited (µ)

    1,000      5.000      10/01/15      1,159

Erie County Industrial Development Authority Revenue Bonds

    180      5.300      04/01/12      174

Norwin School District General Obligation Unlimited (µ)(æ)

    250      6.000      04/01/20      262

Pennsylvania Higher Educational Facilties Authority Revenue Bonds

    1,000      5.000      09/01/17      1,161

Pennsylvania Higher Educational Facilties Authority Revenue Bonds

    2,060      5.000      09/01/19      2,388

Pennsylvania Turnpike Commission Revenue Bonds (µ)

    1,450      5.500      12/01/13      1,660

Sayre Health Care Facilities Authority Revenue Bonds (æ)

    395      5.300      12/01/12      415

University of Pittsburgh Revenue Bonds

    1,000      5.500      09/15/21      1,126
                   
                  20,866
                   
Puerto Rico - 4.7%                  

Commonwealth of Puerto Rico General Obligation Unlimited

    750      5.250      07/01/15      733

Commonwealth of Puerto Rico General Obligation Unlimited (µ)

    1,060      5.000      07/01/16      1,084

Commonwealth of Puerto Rico General Obligation Unlimited

    1,780      5.250      07/01/22      1,624

Commonwealth of Puerto Rico General Obligation Unlimited (æ)

    620      5.250      07/01/32      742

Commonwealth of Puerto Rico General Obligation Unlimited

    380      5.250      07/01/32      322

Government Development Bank for Puerto Rico Revenue Bonds

    3,250      5.000      12/01/09      3,279

 

208   Russell Tax Exempt Bond Fund

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 

Puerto Rico Electric Power Authority Revenue Bonds (µ)

    500      5.500      07/01/17      512

Puerto Rico Highway & Transportation Authority Revenue Bonds

    2,000      5.000      07/01/13      1,993

Puerto Rico Housing Finance Authority Revenue Bonds

    180      5.500      12/01/15      195

Puerto Rico Housing Finance Authority Revenue Bonds

    1,830      5.500      12/01/16      1,998

Puerto Rico Public Buildings Authority Revenue Bonds

    500      5.750      07/01/16      505

Puerto Rico Public Buildings Authority Revenue Bonds (æ)

    2,000      5.500      07/01/23      2,290

Puerto Rico Public Finance Corp. Revenue Bonds (Ê)(µ)

    3,250      5.750      08/01/27      3,251
                   
                  18,528
                   
Rhode Island - 0.3%                  

Rhode Island Economic Development Corp. Revenue Bonds (µ)

    1,000      5.000      06/15/12      1,067
                   
South Carolina - 1.2%                  

Greenville County School District Revenue Bonds

    1,000      5.000      12/01/11      1,075

Richland-Lexington Airport District Revenue Bonds (µ)

    440      5.000      01/01/10      448

South Carolina State Public Service Authority Revenue Bonds (µ)

    375      5.500      01/01/11      389

South Carolina Transportation Infrastructure Bank Revenue Bonds (µ)(æ)

    2,500      5.250      10/01/31      2,744
                   
                  4,656
                   
South Dakota - 0.4%                  

South Dakota Housing Development Authority Revenue Bonds

    300      4.800      05/01/22      304

South Dakota State Building Authority Revenue Bonds (µ)

    1,330      5.000      09/01/12      1,483
                   
                  1,787
                   
Tennessee - 1.2%                  

Clarksville Natural Gas Acquisition Corp. Revenue Bonds

    750      5.000      12/15/14      643

Memphis-Shelby County Airport Authority Revenue Bonds

    2,160      5.050      09/01/12      2,155

Tennessee Energy Acquisition Corp. Revenue Bonds

    1,000      5.000      02/01/16      901

Tennessee Housing Development Agency Revenue Bonds

    950      5.375      01/01/18      954
                   
                  4,653
                   
Texas - 12.6%                  

Alvin Independent School District General Obligation Unlimited

    515      6.750      08/15/09      524

Alvin Independent School District General Obligation Unlimited

    545      6.750      08/15/10      580

Canadian River Municipal Water Authority Revenue Bonds (µ)

    800      5.000      02/15/17      889

Canadian River Municipal Water Authority Revenue Bonds (µ)

    415      5.000      02/15/18      455

City of Austin Texas Revenue Bonds (µ)

    1,000      5.250      11/15/14      1,148

City of Dallas Texas Revenue Bonds (µ)

    3,500      5.000      10/01/24      3,514

City of San Antonio Texas Revenue Bonds

    1,000      5.250      02/01/13      1,118

City of San Antonio Texas Revenue Bonds

    1,000      5.000      02/01/14      1,120

City of San Antonio Texas Revenue Bonds

    1,000      5.000      02/01/18      1,135

Conroe Independent School District General Obligation Unlimited

    1,445      5.000      02/15/13      1,619

County of Fort Bend Texas General Obligation Limited (µ)

    1,000      5.000      03/01/16      1,136

County of Harris Texas General Obligation Limited

    1,435      5.250      08/15/09      1,454

County of Harris Texas Revenue Bonds (Ê)(µ)

    1,500      5.000      08/15/21      1,511

Dallas Independent School District General Obligation Unlimited

    2,100      5.000      02/15/14      2,378

Dickinson Independent School District General Obligation Unlimited

    1,000      5.000      02/15/21      1,077

Dickinson Independent School District General Obligation Unlimited

    1,500      5.000      02/15/23      1,593

Fort Worth Independent School District General Obligation Unlimited

    2,000      5.000      02/15/18      2,315

Grand Prairie Independent School District General Obligation Unlimited

    750      5.000      02/15/19      841

Laredo Independent School District General Obligation Unlimited (æ)

    1,070      5.375      08/01/16      1,173

Lower Colorado River Authority Revenue Bonds (µ)

    2,000      5.875      05/15/14      2,052

McKinney Independent School District General Obligation Unlimited

    1,200      6.000      02/15/18      1,476

Midlothian Development Authority Tax Allocation (µ)

    500      5.000      11/15/09      507

New Braunfels Texas General Obligation Limited (µ)(æ)

    665      5.250      10/01/21      779

North East Independent School District General Obligation Unlimited

    1,000      5.000      08/01/18      1,148

 

Russell Tax Exempt Bond Fund   209

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 

North East Independent School District General Obligation Unlimited (µ)(æ)

    1,000      5.000      08/01/33      1,157

North Harris Montgomery Community College District General Obligation Limited (µ)

    1,000      5.000      02/15/12      1,091

North Texas Municipal Water District Revenue Bonds (µ)

    2,000      5.000      09/01/13      2,263

North Texas Tollway Authority Revenue Bonds

    960      6.000      01/01/24      1,025

North Texas Tollway Authority Revenue Bonds (Ê)

    1,235      5.750      01/01/38      1,269

Round Rock Independent School District General Obligation Unlimited

    1,000      6.500      08/01/10      1,060

Round Rock Independent School District General Obligation Unlimited

    430      5.375      08/01/12      483

SA Energy Acquisition Public Facility Corp. Revenue Bonds

    1,500      5.250      08/01/15      1,394

Sabine River Authority Revenue Bonds

    1,500      5.200      05/01/28      633

Spring Independent School District General Obligation Unlimited

    1,000      5.000      08/15/16      1,155

Texas A&M University Revenue Bonds

    3,855      5.000      05/15/19      4,389

Texas State Transportation Commission Revenue Bonds

    1,000      5.000      04/01/18      1,141

Tyler Independent School District General Obligation Unlimited

    1,350      5.000      02/15/10      1,395
                   
                  49,997
                   
Utah - 0.4%                  

County of Utah Revenue Bonds

    200      5.050      11/01/17      201

Intermountain Power Agency Revenue Bonds (µ)

    1,400      6.500      07/01/10      1,477
                   
                  1,678
                   
Virgin Islands - 0.7%                  

Virgin Islands Public Finance Authority Revenue Bonds

    200      5.000      10/01/13      199

Virgin Islands Public Finance Authority Revenue Bonds

    2,500      5.500      10/01/14      2,427
                   
                  2,626
                   
Virginia - 1.8%                  

Chesapeake Economic Development Authority Revenue Bonds (Ê)

    550      3.600      02/01/32      530

Commonwealth of Virginia General Obligation Unlimited

    1,000      5.000      06/01/23      1,107

County of Fairfax Virginia General Obligation Unlimited

    1,750      5.250      04/01/14      2,030

University of Virginia Revenue Bonds

    1,295      5.000      06/01/20      1,382

University of Virginia Revenue Bonds

    1,495      5.000      06/01/21      1,585

Virginia Commonwealth Transportation Board Revenue Bonds

    360      5.375      05/15/12      389
                   
                  7,023
                   
Washington - 4.5%                  

County of King Washington Revenue Bonds (µ)

    1,625      5.000      01/01/14      1,833

Energy Northwest Revenue Bonds

    1,000      5.000      07/01/11      1,070

Energy Northwest Revenue Bonds

    1,000      5.000      07/01/14      1,117

Energy Northwest Revenue Bonds

    2,500      5.000      07/01/15      2,803

Energy Northwest Revenue Bonds

    1,000      7.125      07/01/16      1,254

King County Public Hospital District No. 2 General Obligation Limited (µ)

    1,000      5.000      12/01/19      1,051

King County School District No. 405 Bellevue General Obligation Unlimited (µ)

    1,000      5.000      12/01/14      1,147

Kitsap County Washington General Obligation Limited (µ)(æ)

    775      5.750      07/01/14      822

Mason County School District No. 309 Shelton General Obligation Unlimited (µ)

    1,115      5.000      12/01/18      1,282

Pierce County School District No. 3 Puyallup General Obligation Unlimited (µ)

    1,000      5.000      12/01/18      1,112

State of Washington General Obligation Unlimited

    1,000      5.000      07/01/17      1,157

State of Washington General Obligation Unlimited

    1,500      5.000      01/01/20      1,504

Tobacco Settlement Authority of Washington Revenue Bonds

    800      6.500      06/01/26      757

Washington Higher Education Facilities Authority Revenue Bonds (µ)

    1,000      5.000      11/01/13      965
                   
                  17,874
                   
Wisconsin - 1.3%                  

City of Madison Wisconsin Revenue Bonds

    280      4.875      10/01/27      304

State of Wisconsin Certificate Of Participation (µ)

    2,825      5.000      03/01/11      3,017

Wisconsin Health & Educational Facilities Authority Revenue Bonds (µ)

    1,425      5.000      12/01/10      1,500

 

210   Russell Tax Exempt Bond Fund

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity		      Market
Value
$
                 

Wisconsin Health & Educational Facilities Authority Revenue Bonds

    210      5.250      05/01/12      210

Wisconsin Health & Educational Facilities Authority Revenue Bonds

    220      5.250      05/01/13      219
                   
                  5,250
                   
Total Municipal Bonds (cost $374,667)                   379,490
                   
Short-Term Investments - 2.4%                  

Russell Investment Company Russell Money Market Fund

    9,606,000                9,606
                   
Total Short-Term Investments (cost $9,606)                   9,606
                   
Total Investments - 98.2% (identified cost $384,273)                   389,096
Other Assets and Liabilities, Net - 1.8%                   7,282
                   
Net Assets - 100.0%                   396,378
                   

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Tax Exempt Bond Fund   211

Russell Investment Company

Russell Tax Exempt Bond Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     %

Quality Ratings as of % of Value

(Unaudited)

     
  

AAA

    29

AA

    38

A

    20

BBB

    10

BB

    1

Other

    2
    
   100
    

Economic Sector Emphasis as a of % of Value

(Unaudited)

     

General Obligation

    34

Utilities Revenue

    15

Industrial Revenue

    11

Other Revenue

    11

Education Revenue

    9

Cash Equivalents

    7

Health Care Revenue

    7

Leasing Revenue

    3

Pollution Control Revenue

    2

Housing Revenue

    1

Refunded and Special Obligations

    —
    
   100
    

 

See accompanying notes which are an integral part of the financial statements.

 

212   Russell Tax Exempt Bond Fund

Russell Investment Company

Russell Tax Exempt Bond Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets
    
    

Alabama

      0.4

Alaska

      0.3

Arizona

      3.1

California

      5.5

Colorado

      0.7

Connecticut

      0.6

Delaware

      0.4

District of Columbia

      0.5

Florida

      7.5

Georgia

      5.3

Hawaii

      0.9

Idaho

      0.7

Illinois

      2.2

Indiana

      2.0

Iowa

      0.6

Kansas

      0.3

Louisiana

      0.4

Maryland

      4.6

Massachusetts

      1.9

Michigan

      1.3

Minnesota

      2.3

Mississippi

      0.3

Missouri

      0.1

Montana

      0.4

Nevada

      0.8

New Jersey

      2.7

New York

      9.4

North Carolina

      2.0

North Dakota

      0.1

Ohio

      2.3

Oklahoma

      0.2

Oregon

      1.6

Pennsylvania

      5.3

Puerto Rico

      4.7

Rhode Island

      0.3

South Carolina

      1.2

South Dakota

      0.4

Tennessee

      1.2

Texas

      12.6

Utah

      0.4

Virgin Islands

      0.7

Virginia

      1.8

Washington

      4.5

Wisconsin

      1.3

Short-Term Investments

      2.4
      

Total Investments

      98.2

Other Assets and Liabilities, Net

      1.8
      
     100.0
      

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Tax Exempt Bond Fund   213

Russell Investment Company

Russell Real Estate Securities Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 816.10    $ 1,018.05

Expenses Paid During Period*

    $ 6.12    $ 6.80

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.36% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 812.20    $ 1,014.33

Expenses Paid During Period*

    $ 9.48    $ 10.54

 

* Expenses are equal to the Fund’s annualized expense ratio of 2.11% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 814.80    $ 1,018.05

Expenses Paid During Period*

    $ 6.12    $ 6.80

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.36% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 816.20    $ 1,019.29

Expenses Paid During Period*

    $ 5.00    $ 5.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.11% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

214   Russell Real Estate Securities Fund

Russell Investment Company

Russell Real Estate Securities Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class Y

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 817.00    $ 1,020.13

Expenses Paid During Period*

    $ 4.23    $ 4.71

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.94% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

Russell Real Estate Securities Fund   215

Russell Investment Company

Russell Real Estate Securities Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       
Common Stocks - 97.5%        
Apartments - 14.8%        

American Campus Communities, Inc. (ö)(Ñ)

    860,449      18,655

Apartment Investment & Management Co. Class A (ö)

    131,680      961

AvalonBay Communities, Inc. (ö)(Ñ)

    921,865      52,371

Boardwalk Real Estate Investment Trust (ö)

    27,877      639

Camden Property Trust (ö)(Ñ)

    1,050,611      28,503

Canadian Apartment Properties REIT (ö)

    16,604      169

China Overseas Land & Investment, Ltd.

    1,999,920      3,490

China Resources Land, Ltd.

    1,211,000      2,168

Country Garden Holdings Co.

    3,092,000      1,020

Equity Residential (ö)(Ñ)

    2,903,825      66,469

Essex Property Trust, Inc. (ö)(Ñ)

    233,800      14,844

Home Properties, Inc. (ö)(Ñ)

    84,300      3,072

Mid-America Apartment Communities, Inc. (ö)(Ñ)

    152,484      5,640

Shimao Property Holdings, Ltd.

    1,080,000      1,199

UDR, Inc. (ö)(Ñ)

    336,753      3,391
         
        202,591
         
Diversified - 9.5%        

Agile Property Holdings, Ltd.

    1,910,800      1,420

British Land Co. PLC (ö)

    844,249      5,312

Canadian Real Estate Investment Trust (ö)

    95,831      1,566

CapitaLand, Ltd.

    1,546,500      2,847

Castellum AB

    156,294      985

Cheung Kong Holdings, Ltd.

    66,000      687

Cominar Real Estate Investment Trust (ö)

    28,200      314

Dexus Property Group (Æ)

    1,385,449      735

Dexus Property Group (ö)

    2,704,321      1,428

Gecina SA (ö)

    11,205      607

Hang Lung Properties, Ltd. - ADR

    517,900      1,460

Henderson Land Development Co., Ltd.

    506,984      2,364

Hysan Development Co., Ltd.

    733,083      1,335

Keppel Land, Ltd.

    229,000      264

Kerry Properties, Ltd.

    327,000      998

Land Securities Group PLC (ö)

    644,978      5,295

Mirvac Group (ö)

    959,337      725

Mitsubishi Estate Co., Ltd.

    368,000      4,801

Mitsui Fudosan Co., Ltd.

    237,600      2,986

Sino Land Co.

    318,000      405

Sun Hung Kai Properties, Ltd.

    906,541      9,341

Unibail-Rodamco (ö)

    27,344      4,061

Vornado Realty Trust (ö)(Ñ)

    1,376,068      67,276

Washington Real Estate Investment Trust (ö)(Ñ)

    544,384      11,612

Wereldhave NV (ö)

    6,074      415

Wharf Holdings, Ltd.

    147,000      485
         
        129,724
         
Free Standing Retail - 1.1%        

National Retail Properties, Inc. (ö)(Ñ)

    504,078      8,942

Realty Income Corp. (ö)(Ñ)

    286,100      6,389
         
        15,331
         
    

Principal

Amount ($)

or Shares

     

Market

Value
$

Health Care - 13.9%        

Cogdell Spencer, Inc. (ö)(Ñ)

    222,700      1,381

HCP, Inc. (ö)(Ñ)

    1,806,694      39,657

Health Care REIT, Inc. (ö)(Ñ)

    771,655      26,290

LTC Properties, Inc. (ö)

    87,000      1,567

Medical Properties Trust, Inc. (ö)(Ñ)

    747,613      3,992

Nationwide Health Properties, Inc. (ö)(Ñ)

    1,522,703      37,595

Omega Healthcare Investors, Inc. (ö)(Ñ)

    1,091,832      17,164

Senior Housing Properties Trust (ö)

    1,213,021      19,881

Ventas, Inc. (ö)(Ñ)

    1,467,245      42,022
         
        189,549
         
Industrial - 6.4%        

AMB Property Corp. (ö)(Ñ)

    1,318,795      25,176

Ascendas Real Estate Investment Trust (Æ)(ö)

    340,000      306

DCT Industrial Trust, Inc. (ö)(Ñ)

    3,170,975      14,016

EastGroup Properties, Inc. (ö)(Ñ)

    286,462      9,628

First Potomac Realty Trust (ö)(Ñ)

    369,200      3,614

ProLogis (ö)(Ñ)

    3,729,350      33,974

ProLogis European Properties

    195,143      506
         
        87,220
         
Lodging/Resorts - 3.0%        

DiamondRock Hospitality Co. (ö)

    177,000      1,149

Hospitality Properties Trust (ö)

    3,770      46

Host Hotels & Resorts, Inc. (ö)(Ñ)

    3,926,555      30,195

LaSalle Hotel Properties (ö)(Ñ)

    482,098      5,766

Orient-Express Hotels, Ltd. Class A

    57,061      369

Starwood Hotels & Resorts Worldwide, Inc. (ö)(Ñ)

    199,800      4,168
         
        41,693
         
Manufactured Homes - 0.6%        

Equity Lifestyle Properties, Inc. (ö)(Ñ)

    222,012      8,807
         
Mixed Industrial/Office - 3.0%        

Duke Realty Corp. (ö)(Ñ)

    663,698      6,484

Liberty Property Trust (ö)

    1,033,307      25,151

PS Business Parks, Inc. (ö)

    203,543      8,905
         
        40,540
         
Office - 10.5%        

Alexandria Real Estate Equities, Inc. (ö)(Ñ)

    300,987      10,980

BioMed Realty Trust, Inc. (ö)(Ñ)

    805,234      9,188

Boston Properties, Inc. (ö)(Ñ)

    1,300,392      64,265

Brandywine Realty Trust (ö)

    309,100      1,913

Brookfield Properties Corp. (Ñ)

    886,076      6,619

Commonwealth Property Office Fund (ö)

    620,931      369

Corporate Office Properties Trust (ö)(Ñ)

    137,500      4,202

Fabege AB

    16,933      71

Great Portland Estates PLC (ö)

    210,832      953

Highwoods Properties, Inc. (ö)(Ñ)

    311,200      7,466

Hongkong Land Holdings, Ltd.

    492,600      1,221

HRPT Properties Trust (ö)(Ñ)

    821,400      3,540

ICADE (ö)

    17,107      1,319

 

216   Russell Real Estate Securities Fund

Russell Investment Company

Russell Real Estate Securities Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

    

Principal

Amount ($)

or Shares

     

Market

Value
$

       

Japan Prime Realty Investment Corp. Class A (ö)

    155      267

Japan Real Estate Investment Corp. Class A (ö)

    100      705

Kilroy Realty Corp. (ö)(Ñ)

    563,400      12,136

Mack-Cali Realty Corp. (ö)(Ñ)

    393,544      10,454

Nippon Building Fund, Inc. Class A (ö)

    128      1,038

Nomura Real Estate Office Fund, Inc. Class A (ö)

    89      459

NTT Urban Development Corp.

    649      525

Parkway Properties, Inc. (ö)

    5,248      73

PSP Swiss Property AG (Æ)

    3,769      177

SL Green Realty Corp. (ö)(Ñ)

    277,748      4,905
         
        142,845
         
Regional Malls - 10.8%        

Aeon Mall Co., Ltd.

    60,200      789

CFS Retail Property Trust (ö)

    533,801      639

Macerich Co. (The) (ö)(Ñ)

    787,747      13,809

Simon Property Group, Inc. (ö)(Ñ)

    2,370,436      122,314

Taubman Centers, Inc. (ö)(Ñ)

    152,600      3,635

Westfield Group (ö)

    785,226      6,101
         
        147,287
         
Self Storage - 6.2%        

Extra Space Storage, Inc. (ö)(Ñ)

    1,069,990      7,608

Public Storage (ö)

    1,147,892      76,748
         
        84,356
         
Shopping Centers - 9.9%        

Acadia Realty Trust (ö)

    226,408      3,283

Alexander’s, Inc. (ö)

    2,800      611

CapitaMall Trust (Æ)(ö)

    327,400      275

Corio NV (ö)

    27,266      1,207

Federal Realty Investment Trust (ö)(Ñ)

    679,904      37,531

First Capital Realty, Inc.

    23,644      300

Hammerson PLC (ö)

    269,794      1,245

Japan Retail Fund Investment Corp. Class A (ö)

    74      260

Jelmoli Holding AG

    1,000      330

Kimco Realty Corp. (ö)(Ñ)

    2,132,867      25,637

Kite Realty Group Trust (ö)(Ñ)

    577,400      2,021

Link REIT (The) (ö)

    688,075      1,342

Mercialys SA (ö)

    55      2

Primaris Retail Real Estate Investment Trust (ö)

    39,494      345

Regency Centers Corp. (ö)(Ñ)

    1,322,420      49,525

Saul Centers, Inc. (ö)

    7,050      224

Tanger Factory Outlet Centers (ö)(Ñ)

    155,900      5,194

Weingarten Realty Investors (ö)(Ñ)

    416,533      6,473
         
        135,805
         
    

Principal

Amount ($)

or Shares

     

Market

Value
$

  
Specialty - 7.8%        

Digital Realty Trust, Inc. (ö)(Ñ)

    1,283,082      46,204   

DuPont Fabros Technology, Inc. (ö)(Ñ)

    447,700      3,801   

Entertainment Properties Trust (ö)(Ñ)

    139,580      3,226   

Plum Creek Timber Co., Inc. (ö)(Ñ)

    1,021,368      35,258   

Rayonier, Inc. (ö)

    458,660      17,714   
           
        106,203   
           
Total Common Stocks
(cost $1,424,449)		         1,331,951   
           
Short-Term Investments - 2.8%        

Russell Investment Company Russell Money Market Fund

    37,516,000      37,516   
           
Total Short-Term Investments
(cost $37,516)		         37,516   
           
Other Securities - 34.5%        

Russell Investment Company
Russell Money Market Fund (×)

    233,838,523      233,839   

State Street Securities Lending Quality Trust (×)

    246,269,578      237,399   
           
Total Other Securities
(cost $480,108)		         471,238   
           
Total Investments - 134.8% (identified cost $1,942,073)         1,840,705   
Other Assets and Liabilities,
Net - (34.8%)		         (474,953 ) 
           
Net Assets - 100.0%         1,365,752   
           

A portion of the portfolio has been fair valued as of period end.


 

See accompanying notes which are an integral part of the financial statements.

 

Russell Real Estate Securities Fund   217

Russell Investment Company

Russell Real Estate Securities Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts
         
Amount Sold   Amount Bought   Settlement
Date		   Unrealized
Appreciation
(Depreciation)
$
         
USD   649   AUD   901   5/5/2009   10
USD   30   CAD   36   5/1/2009   —
USD   8   CAD   10   5/4/2009   —
USD   19   CAD   22   5/4/2009   —
USD   18   GBP   12   5/1/2009   —
USD   18   GBP   12   5/5/2009   —
USD   2   HKD   13   5/4/2009   —
USD   9   HKD   69   5/4/2009   —
USD   13   HKD   99   5/4/2009   —
USD   16   HKD   122   5/4/2009   —
USD   71   SEK   577   5/5/2009   —
USD   255   SGD   379   5/4/2009   1
CAD   8   USD   7   5/1/2009   —
CAD   27   USD   22   5/4/2009   —
CHF   42   USD   37   5/4/2009   —
CHF   56   USD   49   5/5/2009   —
EUR   26   USD   34   5/4/2009   —
EUR   —   USD   1   5/5/2009   —
GBP   23   USD   34   5/1/2009   —
GBP   10   USD   15   5/5/2009   —
HKD   75   USD   10   5/4/2009   —
           

Total Unrealized Appreciation (Depreciation) on Open
Foreign Currency Exchange Contracts

   11
           

 

See accompanying notes which are an integral part of the financial statements.

 

218   Russell Real Estate Securities Fund

Russell Investment Company

Russell Real Estate Securities Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets		  
    

Apartments

      14.8   

Diversified

      9.5   

Free Standing Retail

      1.1   

Health Care

      13.9   

Industrial

      6.4   

Lodging/Resorts

      3.0   

Manufactured Homes

      0.6   

Mixed Industrial/Office

      3.0   

Office

      10.5   

Regional Malls

      10.8   

Self Storage

      6.2   

Shopping Center

      9.9   

Specialty

      7.8   

Short-Term Investments

      2.8   

Other Securities

      34.5   
        

Total Investments

      134.8   

Other Assets and Liabilities, Net

      (34.8 ) 
        
     100.0   
        

Foreign Currency Exchange Contracts

      — * 

 

 

* Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Real Estate Securities Fund   219

Russell Investment Company

Russell Money Market Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,003.80    $ 1,023.11

Expenses Paid During Period*

    $ 1.69    $ 1.71

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.34% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed by the investment adviser. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,004.30    $ 1,023.60

Expenses Paid During Period*

    $ 1.19    $ 1.20

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.24% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed by the investment adviser. Without the waiver and/or reimbursement, expenses would have been higher.

 

220   Russell Money Market Fund

Russell Investment Company

Russell Money Market Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity#		      Value
$
                 
Corporate Bonds and Notes - 21.4%                  

Bank of America Corp. (Ê)(Þ)

    66,000      1.397      10/03/09      66,000

Bank of America NA (Ê)

    50,000      1.331      06/12/09      49,988

Credit Agricole (Ê)(Þ)

    100,000      1.477      10/22/09      100,000

General Electric Capital Corp. (Ê)

    5,715      1.420      06/15/09      5,715

JPMorgan Chase & Co. (Ê)

    12,384      1.307      06/05/09      12,383

JPMorgan Chase & Co. (Ê)

    56,000      1.382      10/02/09      55,990

Metropolitan Life Insurance Co. (Ê)(Å)

    50,000      1.581      05/18/09      50,000

Protective Life Insurance Co. (Ê)(Å)

    50,000      1.501      08/24/09      50,000

Protective Life Insurance Co. (Ê)(Å)

    48,000      1.506      08/31/09      48,000

Royal Bank of Scotland Group PLC (Ê)(Þ)

    130,000      1.538      06/12/09      130,000

Royal Bank of Scotland Group PLC (Ê)(Þ)

    10,000      1.401      08/21/09      9,997

Toyota Motor Credit Corp. (Ê)

    200,000      0.620      06/19/09      200,000

Toyota Motor Credit Corp. (Ê)

    125,000      0.730      06/29/09      125,000

Wells Fargo & Co (Ê)

    100,000      0.585      05/28/09      100,000
                   
Total Corporate Bonds and Notes (amortized cost $1,003,073)                   1,003,073
                   
Domestic Commercial Paper - 39.3%                  

Alpine Securitization Corp

    3,000      0.400      05/01/09      3,000

Alpine Securitization Corp

    50,000      0.520      05/05/09      49,998

Alpine Securitization Corp

    50,000      0.380      05/21/09      49,991

ANZ National Bank Ltd.

    40,000      0.910      07/17/09      39,949

Bank of Nova Scotia

    35,000      0.560      07/15/09      34,960

Chariot Funding LLC

    5,000      0.550      05/01/09      5,000

Chariot Funding LLC

    30,000      0.400      05/06/09      29,999

Citigroup, Inc.

    15,000      0.280      05/04/09      15,000

Danske Corp.

    20,000      0.920      05/14/09      19,997

Danske Corp.

    65,000      0.950      05/28/09      64,979

Danske Corp.

    15,000      0.750      07/16/09      14,978

Deutsche Bank AG

    50,000      0.300      05/01/09      50,000

Erasmus Capital Corp.

    40,000      0.750      05/14/09      39,990

Erasmus Capital Corp.

    15,000      0.750      05/21/09      14,996

Erasmus Capital Corp.

    29,235      0.500      06/03/09      29,223

Fairway Finance Corp.

    20,000      0.700      05/04/09      19,999

Falcon Asset Securitization Corp.

    50,000      0.450      05/01/09      50,000

Fox Trot CDO Ltd.

    75,000      0.230      05/01/09      75,000

Gemini Securitization Corp.

    55,000      0.930      05/01/09      55,000

Gemini Securitization Corp.

    25,000      0.950      05/26/09      24,994

General Electric Capital Corp.

    25,000      0.250      05/01/09      25,000

General Electric Capital Corp.

    70,000      3.650      05/27/09      69,986

Gotham Funding Corp.

    35,000      0.730      05/01/09      35,000

Gotham Funding Corp.

    10,000      0.800      05/11/09      9,999

Gotham Funding Corp.

    25,000      0.410      05/18/09      24,996

HSBC North America Holdings, Inc.

    25,000      0.300      05/08/09      24,998

HSBC North America Holdings, Inc.

    25,000      0.310      05/13/09      24,998

HSBC North America Holdings, Inc.

    50,000      0.290      05/21/09      49,994

Liberty Street Funding Corp.

    25,000      0.800      05/01/09      25,000

Liberty Street Funding Corp.

    30,000      0.800      05/05/09      29,999

Liberty Street Funding Corp.

    35,000      0.800      05/15/09      34,995

Long Lane Master Trust IV

    15,000      0.210      05/01/09      15,000

National Australia Bank Ltd

    30,000      0.570      07/09/09      29,968

National Australia Bank Ltd

    30,000      0.520      07/20/09      29,968

Nordea North America, Inc.

    25,000      0.700      05/08/09      24,999

Nordea North America, Inc.

    30,000      0.470      05/29/09      29,989

Nordea North America, Inc.

    30,000      1.050      06/05/09      29,987

Nordea North America, Inc.

    20,000      0.400      06/16/09      19,987

Park Avenue Receivables Co. LLC

    40,000      0.350      05/01/09      40,000

 

Russell Money Market Fund   221

Russell Investment Company

Russell Money Market Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity#		      Value
$
                 

Park Avenue Receivables Co. LLC

    50,000      0.550      05/06/09      49,998

Starbird Funding Corp.

    95,000      1.350      05/01/09      95,000

Svenska Handelsbanken AB

    20,000      0.360      05/11/09      19,998

Svenska Handelsbanken AB

    20,000      0.350      05/20/09      19,996

Svenska Handelsbanken AB

    36,115      0.705      07/13/09      36,067

Toronto Dominion Holdings (USA)

    40,000      0.500      06/29/09      39,967

UBS AG

    25,000      1.000      05/01/09      25,000

UBS AG

    35,000      1.000      05/01/09      35,000

UBS AG

    40,000      1.000      05/04/09      39,998

UBS AG

    30,000      1.000      05/06/09      29,998

UBS AG

    30,000      1.000      05/26/09      29,991

UBS AG

    15,000      1.000      06/15/09      14,989

Victory Receivables Corp.

    25,000      0.230      05/01/09      25,000

Victory Receivables Corp.

    25,000      0.750      05/11/09      24,997

Victory Receivables Corp.

    10,000      0.430      05/18/09      9,998

Victory Receivables Corp.

    40,000      0.400      05/21/09      39,992

Victory Receivables Corp.

    17,000      0.830      06/05/09      16,991

Wells Fargo & Co.

    25,000      0.150      05/01/09      25,000
                   
Total Domestic Commercial Paper (amortized cost $1,839,896)                   1,839,896
                   
Municipal Bonds - 2.2%                  

Detroit Economic Development Corp. (Ê)

    41,830      0.850      05/01/09      41,830

Miami-Dade County Industrial Development Authority (Ê)

    37,400      1.300      07/01/31      37,400

Nassau Health Care Corp. (Ê)

    5,500      0.750      08/01/22      5,500

New Jersey State Housing & Mortgage Finance Agency (Ê)

    10,060      0.800      11/01/39      10,060

New York State Housing Finance Agency (Ê)

    7,500      0.570      05/01/42      7,500
                   
Total Municipal Bonds (amortized cost $102,290)                   102,290
                   
Registered Investment Company Funds - 1.1%                  

Merrill Lynch Premier Institutional Fund (Ê)

    50,000,000                50,000
                   
Total Registered Investment Company Funds (amortized cost $50,000)                   50,000
                   
Time Deposits - 11.4%                  

Bank of Montreal

    40,000      0.120      05/01/09      40,000

BNP Paribas

    95,000      0.200      05/01/09      95,000

Calyon Grand Cayman

    100,000      0.220      05/01/09      100,000

New York Life Insurance Co. (Ê)(Å)

    200,000      1.364      05/14/09      200,000

Nordea Bank AB

    50,000      0.150      05/01/09      50,000

Royal Bank of Scotland Group PLC

    30,000      0.230      05/01/09      30,000

Societe Generale

    19,000      0.280      05/07/09      19,000
                   
Time Deposits (amortized cost $534,000)                   534,000
                   
United States Government Agencies - 3.9%                  

AID to INH Portugal Guaranteed Note, weekly demand (LIBOR Floater) (Ê)(Å)

    5,625      1.775      12/01/17      5,666

Federal Home Loan Banks (Ê)

    85,000      0.483      01/28/10      85,000

Puttable Floating Optional Taxable Receipts (Ê)(Þ)

    91,465      1.410      04/01/26      91,465
                   
Total United States Government Agencies (amortized cost $182,131)                   182,131
                   
Yankee Certificates of Deposit - 9.9%                  

Bank of Montreal

    37,000      0.350      05/06/09      37,000

Bank of Montreal

    29,000      0.310      05/14/09      29,000

Barclays Bank PLC (Ê)

    100,000      1.100      05/13/09      100,000

Barclays Bank PLC (Ê)

    75,000      1.200      06/11/09      75,000

Calyon New York

    28,000      0.520      05/06/09      28,000

 

222   Russell Money Market Fund

Russell Investment Company

Russell Money Market Fund

Schedule of Investments, continued — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

      Principal
Amount ($)
or Shares		      Rate
%		      Date
of
Maturity#		      Value
$
                 

Rabobank

    20,000      0.700      07/02/09      20,000

Royal Bank of Canada

    58,673      0.125      05/01/09      58,673

Royal Bank of Canada (Ê)

    23,485      1.202      06/30/09      23,476

Societe Generale (Ê)

    50,000      1.060      06/02/09      50,000

Svenska Handelsbanken AB

    40,000      0.320      05/07/09      40,000
                   
Total Yankee Certificates of Deposit (amortized cost $461,149)                   461,149
                   
Total Investments - 89.2% (amortized cost $4,172,539)(†)                   4,172,539
Capital Support Agreement - 7.4% (see notes to financial statements for further disclosures)                   346,345
Other Assets and Liabilities, Net - 3.4%                   158,634
                   
Net Assets - 100.0%                   4,677,518
                   

 

See accompanying notes which are an integral part of the financial statements.

 

Russell Money Market Fund   223

Russell Investment Company

Russell Money Market Fund

Presentation of Portfolio Holdings — April 30, 2009 (Unaudited)

 

Categories      % of Net
Assets
    

Corporate Bonds and Notes

      21.4

Domestic Commercial Paper

      39.3

Municipal Bonds

      2.2

Registered Investment Company Funds

      1.1

Time Deposits

      11.4

United States Government Agencies

      3.9

Yankee Certificates of Deposit

      9.9
      

Total Investments

      89.2

Capital Support Agreement

      7.4

Other Assets and Liabilities, Net

      3.4
      
     100.0
      

 

See accompanying notes which are an integral part of the financial statements.

 

224   Russell Money Market Fund

Russell Investment Company

Russell Funds

Notes to Schedules of Investments — April 30, 2009 (Unaudited)

 

 

 

Footnotes:

(Æ) Nonincome-producing security.
(Ï) Forward commitment.
(Ê) Adjustable or floating rate security. Rate shown reflects rate in effect at period end.
(ƒ) Perpetual floating rate security. Rate shown reflects rate in effect at period end.
(ö) Real Estate Investment Trust (REIT).
(µ) Bond is insured by a guarantor.
(ß) Illiquid security.
(Ø) In default.
(ç) At amortized cost, which approximates market.
(ž) Rate noted is yield-to-maturity from date of acquisition.
(æ) Pre-refunded: These bonds are collateralized by US Treasury securities, which are held in escrow by a trustee and used to pay principal and interest in the tax-exempt issue and to retire the bonds in full at the earliest refunding date.
(§) All or a portion of the shares of this security are held as collateral in connection with futures contracts purchased (sold), options written, or swaps entered into by the Fund.
(×) The security is purchased with the cash collateral from the securities loaned.
(Ñ) All or a portion of the shares of this security are on loan.
(Þ) Restricted security. Security may have contractual restrictions on resale, may have been offered in a private placement transaction, and may not be registered under the Securities Act of 1933.
(Å) Illiquid and restricted security.
(å) Currency balances were held in connection with futures contracts purchased (sold), options written, or swaps entered into by the Fund. See Note 2.
(Û) All or a portion of the shares of this security are held as collateral in connection with securities sold short.
(†) The identified cost for Federal income tax purposes is the same as shown above.
(#) All securities with a maturity greater than thirteen months have a demand feature or an optional or mandatory put, or are pre-refunded, resulting in an effective maturity of thirteen months or less. Additionally, all daily and weekly demand securities are backed by direct payment of letters of credit.

Abbreviations:

ADR - American Depositary Receipt

ADS - American Depositary Share

CIBOR - Copenhagen Interbank Offered Rate

CME - Chicago Mercantile Exchange

CMO - Collateralized Mortgage Obligation

CVO - Contingent Value Obligation

EMU - European Economic and Monetary Union

FDIC - Federal Deposit Insurance Company

GDR - Global Depositary Receipt

GDS - Global Depositary Share

LIBOR - London Interbank Offered Rate

NIBOR - Norwegian Interbank Offered Rate

PIK - Payment in Kind

REMIC - Real Estate Mortgage Investment Conduit

STRIP - Separate Trading of Registered Interest and Principal of Securities

TBA - To Be Announced Security

Foreign Currency Abbreviations:

 

ARS - Argentine peso   HUF - Hungarian forint   PKR - Pakistani rupee
AUD - Australian dollar   IDR - Indonesian rupiah   PLN - Polish zloty
BRL - Brazilian real   ILS - Israeli shekel   RUB - Russian ruble
CAD - Canadian dollar   INR - Indian rupee   SEK - Swedish krona
CHF - Swiss franc   ISK - Iceland krona   SGD - Singapore dollar
CLP - Chilean peso   ITL - Italian lira   SKK - Slovakian koruna
CNY - Chinese renminbi yuan   JPY - Japanese yen   THB - Thai baht
COP - Colombian peso   KES - Kenyan schilling   TRY - Turkish lira
CRC - Costa Rica colon   KRW - South Korean won   TWD - Taiwanese dollar
CZK - Czech koruna   MXN - Mexican peso   USD - United States dollar
DKK - Danish krone   MYR - Malaysian ringgit   VEB - Venezuelan bolivar
EGP - Egyptian pound   NOK - Norwegian krone   VND - Vietnam dong
EUR - Euro   NZD - New Zealand dollar   ZAR - South African rand
GBP - British pound sterling   PEN - Peruvian nouveau sol  
HKD - Hong Kong dollar   PHP - Philippine peso  

 

Notes to Schedules of Investments   225

Russell Investment Company

Russell Funds

Statements of Assets and Liabilities — For the Periods Ended April 30, 2009 (Unaudited)

 

Amounts in thousands   Russell U.S. Core
Equity Fund		    Russell U.S.
Quantitative
Equity Fund		    Russell U.S.
Growth Fund		    Russell U.S.
Value Fund
          

Assets

           

Investments, at identified cost

   $ 4,399,709    $ 4,733,136    $ 118,168    $ 189,523

Investments, at market***

     3,992,162      3,920,350      115,768      164,599

Cash

     —      —      —      —

Cash (restricted)

     41,000      39,250      1,550      2,000

Foreign currency holdings*

     —      —      —      —

Unrealized appreciation on foreign currency exchange contracts

     —      —      —      —

Receivables:

           

Dividends and interest

     3,394      4,044      76      198

Dividends from affiliated Russell Money Market Fund

     87      71      2      3

Investments sold

     27,170      37,751      1,247      825

Fund shares sold

     5,299      4,881      158      61

Foreign taxes recoverable

     —      —      —      —

Investments matured

     —      —      —      —

Daily variation margin on futures contracts

     352      299      36      15

Capital support agreement from affiliate

     —      —      —      —

Prepaid expenses

     28      37      1      8

Unrealized appreciation on index swap contracts

     —      —      —      —

Interest rate swap contracts, at market value*****

     —      —      —      —

Credit default swap contracts, at market value****

     —      —      —      —
                          

Total assets

     4,069,492      4,006,683      118,838      167,709
                          
          

Liabilities

           

Payables:

           

Due to Custodian or Broker

     —      —      —      —

Investments purchased

     27,441      47,068      2,102      967

Fund shares redeemed

     3,621      3,609      215      394

Accrued fees to affiliates

     2,089      1,994      94      111

Other accrued expenses

     382      214      90      105

Daily variation margin on futures contracts

     —      —      —      —

Dividends for securities sold short

     —      76      —      —

Deferred tax liability

     —      —      —      —

Income distribution

     —      —      —      —

Other payable

     —      —      —      —

Unrealized depreciation on foreign currency exchange contracts

     —      —      —      —

Options written, at market value**

     —      —      —      —

Securities sold short at market value******

     —      356,639      —      —

Payable upon return of securities loaned

     274,664      —      17,095      23,724

Interest rate swap contracts, at market value*****

     —      —      —      —

Credit default swap contracts, at market value****

     —      —      —      —
                          

Total liabilities

     308,197      409,600      19,596      25,301
                          
          

Net Assets

   $ 3,761,295    $ 3,597,083    $ 99,242    $ 142,408
                          

 

See accompanying notes which are an integral part of the financial statements.

 

226   Statements of Assets and Liabilities

 

Russell U.S. Small &
Mid Cap Fund		    Russell International
Developed Markets
Fund		    Russell Global
Equity Fund		    Russell Emerging
Markets Fund		    Russell Tax-
Managed U.S.
Large Cap Fund		    Russell Tax-
Managed U.S. Mid
& Small Cap Fund		    Russell Strategic
Bond Fund
                 
                 
                 
$ 1,611,291    $ 4,454,360    $ 1,048,640    $ 1,089,068    $ 337,823    $ 183,438    $ 8,640,001
  1,519,430      3,802,325      903,632      1,042,837      326,894      170,252      7,464,060
  —      157      —      10      —      —      1,748
  13,000      58,155      7,800      19,831      2,900      1,100      25,861
  —      12,732      3,504      3,314      —      —      5,558
  —      26,535      1,956      7,320      —      —      4,335
                 
  773      13,152      3,205      3,171      315      39      54,451
  33      94      13      14      6      3      148
  22,665      55,083      11,525      12,431      9,129      787      713,647
  1,540      5,785      1,005      1,662      1,097      238      16,574
  —      1,121      196      63      —      —      —
  —      —      —      —      —      —      126
  —      8,397      779      2,581      25      —      43,562
  —      —      —      —      —      —      —
  14      38      39      8      15      1      83
  —      —      —      252      —      —      —
  —      —      —      —      —      —      24,741
  —      —      —      —      —      —      40,543
                                             
  1,557,455      3,983,574      933,654      1,093,494      340,381      172,420      8,395,437
                                             
                 
                 
                 
  —      —      —      349      —      —      15,611
  24,664      54,736      11,935      5,775      9,207      523      1,938,380
  1,889      3,193      515      1,106      136      247      5,926
  813      2,322      673      1,002      208      127      2,698
  221      552      134      189      70      43      366
  562      1,125      30      7      —      50      34,220
  —      —      —      —      —      —      —
  —      —      15      333      —      —      —
  —      —      —      —      —      —      —
  —      4,112      934      —      —      —      10,523
  —      13,562      747      3,461      —      —      5,630
  —      —      —      —      —      —      365
  —      —      —      —      —      —      —
  335,361      415,225      143,953      124,760      35,172      51,506      376,984
  —      —      —      —      —      —      14,377
  —      —      —      —      —      —      65,584
                                             
  363,510      494,827      158,936      136,982      44,793      52,496      2,470,664
                                             
                 
$ 1,193,945    $ 3,488,747    $ 774,718    $ 956,512    $ 295,588    $ 119,924    $ 5,924,773
                                             

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Assets and Liabilities   227

Russell Investment Company

Russell Funds

Statements of Assets and Liabilities, continued — For the Periods Ended April 30, 2009 (Unaudited)

 

Amounts in thousands   Russell U.S. Core
Equity Fund		     Russell U.S.
Quantitative
Equity Fund		     Russell U.S.
Growth Fund		     Russell U.S.
Value Fund		  
       
Net Assets Consist of:        

Undistributed (overdistributed) net investment income

   $ 1,708      $ 1,367      $ 86      $ 112   

Accumulated net realized gain (loss)

     (1,643,413 )      (1,357,628 )      (51,372 )      (143,234 ) 

Unrealized appreciation (depreciation) on:

        

Investments (Russell non-U.S. funds — net of deferred tax liability for foreign capital gains taxes)

     (407,547 )      (812,786 )      (2,400 )      (24,924 ) 

Futures contracts

     49,170        47,038        806        1,404   

Options written

     —        —        —        —   

Credit default swaps

     —        —        —        —   

Index swap contracts

     —        —        —        —   

Interest rate swap contracts

     —        —        —        —   

Investments matured

     —        —        —        —   

Securities sold short

     —        22,980        —        —   

Foreign currency-related transactions

     —        —        —        —   

Capital support agreement from affiliate

     —        —        —        —   

Shares of beneficial interest

     1,971        1,777        179        269   

Additional paid-in capital

     5,759,406        5,694,335        151,943        308,781   
                               

Net Assets

   $ 3,761,295      $ 3,597,083      $ 99,242      $ 142,408   
                               

Net Asset Value, offering and redemption price per share:

        

Net asset value per share: Class A*******

   $ 19.11      $ 20.23      $ —      $ —   

Maximum offering price per share (Net asset value plus sales charge of 5.75%********): Class A

   $ 20.28      $ 21.47      $ —      $ —   

Class A — Net assets

   $ 16,856,175      $ 13,898,688      $ —      $ —   

Class A — Shares outstanding ($.01 par value)

     881,837        686,884        —        —   

Net asset value per share: Class C*******

   $ 19.08      $ 20.19      $ 5.07      $ 5.18   

Class C — Net assets

   $ 72,644,964      $ 65,290,550      $ 5,200,697      $ 8,915,139   

Class C — Shares outstanding ($.01 par value)

     3,808,316        3,233,220        1,025,051        1,722,643   

Net asset value per share: Class E*******

   $ 19.09      $ 20.22      $ 5.45      $ 5.30   

Class E — Net assets

   $ 90,311,753      $ 79,956,965      $ 4,942,443      $ 5,518,416   

Class E — Shares outstanding ($.01 par value)

     4,730,775        3,955,120        906,265        1,042,129   

Net asset value per share: Class I*******

   $ 19.09      $ 20.24      $ 5.61      $ 5.31   

Class I — Net assets

   $ 699,360,512      $ 648,721,509      $ 51,416,666      $ 42,753,265   

Class I — Shares outstanding ($.01 par value)

     36,637,308        32,053,426        9,164,490        8,049,121   

Net asset value per share: Class S*******

   $ 19.09      $ 20.25      $ 5.56      $ 5.30   

Class S — Net assets

   $ 1,150,953,254      $ 1,102,974,667      $ 37,682,409      $ 85,221,460   

Class S — Shares outstanding ($.01 par value)

     60,304,168        54,472,235        6,774,292        16,088,599   

Net asset value per share: Class Y*******

   $ 19.07      $ 20.24      $ —      $ —   

Class Y — Net assets

   $ 1,731,168,228      $ 1,686,240,247      $ —      $ —   

Class Y — Shares outstanding ($.01 par value)

     90,759,883        83,303,092        —        —   

Amounts in thousands

        

*               Foreign currency holdings - cost

   $ —      $ —      $ —      $ —   

**             Premiums received on options written

   $ —      $ —      $ —      $ —   

***            Securities on loan included in investments

   $ 269,612      $ —      $ 16,942      $ 23,848   

****          Credit default swap contracts - premiums paid (received)

   $ —      $ —      $ —      $ —   

*****        Interest rate swap contracts - premiums paid (received)

   $ —      $ —      $ —      $ —   

******       Proceeds on securities sold short

   $ —      $ 379,619      $ —      $ —   

*******     Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding.

        

********   Russell Strategic Bond and Short Duration Bond Funds’ maximum sale charge is 3.75%.

        

*********Russell Money Market Fund investments at amortized cost        which approximates value.

        

 

See accompanying notes which are an integral part of the financial statements.

 

228   Statements of Assets and Liabilities

 

Rudssell U.S. Small &
Mid Cap Fund		     Russell International
Developed Markets
Fund		     Russell Global
Equity Fund		     Russell Emerging
Markets Fund		     Russell Tax-
Managed U.S.
Large Cap Fund		      Russell Tax-
Managed U.S. Mid
& Small Cap Fund		      Russell Strategic
Bond Fund		  
             
             
             
$ 3,082      $ 48,936      $ 5,662      $ (60 )    $ 711       $ (38 )     $ 34,587   
  (750,761 )      (1,551,466 )      (416,747 )      (225,667 )      (153,991 )       (40,538 )       (30,312 ) 
             

 

(91,861

) 

     (652,035 )      (145,023 )      (46,564 )      (10,929 )       (13,186 )       (1,175,941 ) 
  26,115        44,717        7,544        3,867        3,809         2,715         15,500   
  —        —        —        —        —         —         157   
  —        —        —        —        —         —         (23,140 ) 
  —        —        —        252        —         —         —   
  —        —        —        —        —         —         13,781   
  —        —        —        —        —         —         (1,207 ) 
  —        —        —        —        —         —         —   
  —        12,952        1,205        4,020        —         —         (439 ) 
  —        —        —        —        —         —         —   
  857        1,538        1,349        830        229         135         6,468   
  2,006,513        5,584,105        1,320,728        1,219,834        455,759         170,836         7,085,319   
                                                       
$ 1,193,945      $ 3,488,747      $ 774,718      $ 956,512      $ 295,588       $ 119,924       $ 5,924,773   
                                                       
             
$ 13.86      $ 22.67      $ 5.73      $ 11.49      $ —       $ —       $ 9.21   

$

14.71

  

   $ 24.06      $ 6.08      $ 12.19      $ —       $ —       $ 9.57   
$ 7,170,674      $ 14,441,100      $ 2,954,631      $ 8,156,753      $ —       $ —       $ 28,323,971   
  517,222        636,884        515,578        709,737        —         —         3,076,524   
$ 13.83      $ 22.56      $ 5.73      $ 10.90      $ 12.62       $ 8.18       $ 9.20   
$ 27,516,494      $ 63,807,118      $ 7,083,883      $ 24,544,693      $ 9,955,545       $ 6,723,030       $ 93,089,065   
  1,989,622        2,828,532        1,236,795        2,250,948        789,124         821,828         10,116,027   
$ 13.89      $ 22.68      $ 5.74      $ 11.52      $ 12.89       $ 8.79       $ 9.15   
$ 37,239,974      $ 83,033,625      $ 11,198,909      $ 20,418,486      $ 12,381,281       $ 2,599,898       $ 118,609,193   
  2,681,890        3,660,632        1,952,511        1,773,146        960,860         295,795         12,964,508   
$ 13.97      $ 22.69      $ —      $ 11.54      $ —       $ —       $ 9.13   
$ 202,355,057      $ 756,286,576      $ —      $ 588,779,318      $ —       $ —       $ 1,146,853,780   
  14,485,214        33,333,028        —        51,026,080        —         —         125,618,171   
$ 13.94      $ 22.67      $ 5.74      $ 11.55      $ 12.92       $ 8.95       $ 9.22   
$ 438,470,163      $ 1,039,636,974      $ 323,442,761      $ 314,612,281      $ 273,251,399       $ 110,601,048       $ 1,730,713,137   
  31,464,708        45,854,148        56,340,023        27,242,878        21,142,614         12,359,285         187,750,711   
$ 13.93      $ 22.70      $ 5.74      $ —      $ —       $ —       $ 9.14   
$ 481,193,012      $ 1,531,541,485      $ 430,038,275      $ —      $ —       $ —       $ 2,807,184,337   
  34,550,172        67,473,037        74,904,890        —        —         —         307,242,494   
             
$ —      $ 12,769      $ 3,482      $ 3,245      $ —       $ —       $ 5,583   
$ —      $ —      $ —      $ —      $ —       $ —       $ 522   
$ 339,056      $ 397,546      $ 137,936      $ 121,862      $ 34,470       $ 50,361       $ 370,005   
$ —      $ —      $ —      $ —      $ —       $ —       $ (1,901 ) 
$ —      $ —      $ —      $ —      $ —       $ —       $ (3,417 ) 
$ —      $ —      $ —      $ —      $ —       $ —       $ —   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Assets and Liabilities   229

Russell Investment Company

Russell Funds

Statements of Assets and Liabilities, continued — For the Periods Ended April 30, 2009 (Unaudited)

 

Amounts in thousands   Russell
Investment Grade
Bond Fund		    Russell Short
Duration
Bond Fund		    Russell Tax Exempt
Bond Fund		    Russell Real
Estate Securities
Fund		    Russell Money
Market Fund		  
             

Assets

              

Investments, at identified cost

   $ 1,423,990    $ 522,139    $ 384,273    $ 1,942,073    $ 4,172,539   

Investments, at market***

     1,306,702      501,809      389,096      1,840,705      4,172,539 ********* 

Cash

     28      11      —      —      —   

Cash (restricted)

     3,117      649      —      —      —   

Foreign currency holdings*

     565      780      —      333      —   

Unrealized appreciation on foreign currency exchange contracts

     158      38      —      11      —   

Receivables:

              

Dividends and interest

     7,982      2,676      5,196      1,877      3,687   

Dividends from affiliated Russell Money Market Fund

     23      11      2      19      —   

Investments sold

     241,689      21,126      2,188      24,986      99,636   

Fund shares sold

     917      1,358      673      2,343      —   

Foreign taxes recoverable

     —      —      —      —      —   

Investments matured

     —      4      —      —      56,420   

Daily variation margin on futures contracts

     647      19      —      —      —   

Capital support agreement from affiliate

     —      —      —      —      346,345   

Prepaid expenses

     6      30      16      9      1,527   

Unrealized appreciation on index swap contracts

     —      —      —      —      —   

Interest rate swap contracts, at market value*****

     949      840      —      —      —   

Credit default swap contracts, at market value****

     7,072      392      —      —      —   
                                   

Total assets

     1,569,855      529,743      397,171      1,870,283      4,680,154   
                                   
             

Liabilities

              

Payables:

              

Due to Custodian or Broker

     5,000      620      —      —      —   

Investments purchased

     501,471      101,937      —      21,696      —   

Fund shares redeemed

     938      673      544      1,530      —   

Accrued fees to affiliates

     312      220      165      1,017      440   

Other accrued expenses

     156      80      84      180      506   

Daily variation margin on futures contracts

     442      17      —      —      —   

Dividends for securities sold short

     —      —      —      —      —   

Deferred tax liability

     —      —      —      —      —   

Income distribution

     —      —      —      —      1,690   

Other payable

     —      —      —      —      —   

Unrealized depreciation on foreign currency exchange contracts

     194      91      —      —      —   

Options written, at market value**

     198      28      —      —      —   

Securities sold short at Market Value******

     —      —      —      —      —   

Payable upon return of securities loaned

     82,583      —      —      480,108      —   

Interest rate swap contracts, at market value*****

     1,090      14      —      —      —   

Credit default swap contracts, at market value****

     7,536      2,398      —      —      —   
                                   

Total liabilities

     599,920      106,078      793      504,531      2,636   
                                   
             

Net Assets

   $ 969,935    $ 423,665    $ 396,378    $ 1,365,752    $ 4,677,518   
                                   

 

See accompanying notes which are an integral part of the financial statements.

 

230   Statements of Assets and Liabilities

 

Amounts in thousands   Russell
Investment Grade
Bond Fund		     Russell Short
Duration
Bond Fund		     Russell Tax Exempt
Bond Fund		     Russell Real
Estate Securities
Fund		      Russell Money
Market Fund		  
          
          
Net Assets Consist of:           

Undistributed (overdistributed) net investment income

   $ 6,736      $ 3,364      $ 1,130      $ (1,521 )     $ 25   

Accumulated net realized gain (loss)

     (3,949 )      (26,105 )      (6,213 )      (559,575 )       (99,766 ) 

Unrealized appreciation (depreciation) on:

           

Investments (Russell non-U.S. funds — net of deferred tax liablilty for foreign capital gains taxes)

     (117,288 )      (20,330 )      4,823        (101,368 )       —   

Futures contracts

     5,575        752        —        —         —   

Options written

     158        48        —        —         —   

Credit default swaps

     (530 )      (1,650 )      —        —         —   

Index swap contracts

     —        —        —        —         —   

Interest rate swap contracts

     (156 )      936        —        —         —   

Investments matured

     —        (196 )      —        —         —   

Securities sold short

     —        —        —        —         —   

Foreign currency-related transactions

     (13 )      (42 )      —        (12 )       —   

Capital support agreement from affiliate

     —        —        —        —         346,345   

Shares of beneficial interest

     496        240        184        633         46,799   

Additional paid-in capital

     1,078,906        466,648        396,454        2,027,595         4,384,115   
                                        

Net Assets

   $ 969,935      $ 423,665      $ 396,378      $ 1,365,752       $ 4,677,518   
                                        

Net Asset Value, offering and redemption price per share:

           

Net asset value per share: Class A*******

   $ —      $ 17.65      $ —      $ 21.30       $ 1.00   

Maximum offering price per share (Net asset value plus sales charge of 5.75%********): Class A

   $ —      $ 18.34      $ —      $ 22.60       $ 1.00   

Class A — Net assets

   $ —      $ 10,434,443      $ —      $ 12,760,823       $ 314,573,622   

Class A — Shares outstanding ($.01 par value)

     —        591,065        —        599,168         314,760,997   

Net asset value per share: Class C*******

   $ 19.47      $ 17.60      $ 21.46      $ 20.89       $ —   

Class C — Net assets

   $ 31,577,375      $ 22,828,326      $ 19,194,472      $ 37,706,891       $ —   

Class C — Shares outstanding ($.01 par value)

     1,621,801        1,297,170        894,560        1,804,738         —   

Net asset value per share: Class E*******

   $ 19.53      $ 17.68      $ 21.52      $ 21.32       $ —   

Class E — Net assets

   $ 42,177,814      $ 12,821,714      $ 18,384,413      $ 32,051,237       $ —   

Class E — Shares outstanding ($.01 par value)

     2,159,175        725,354        854,232        1,503,554         —   

Net asset value per share: Class I*******

   $ 19.54      $ —      $ —      $ —       $ —   

Class I — Net assets

   $ 357,438,841      $ —      $ —      $ —       $ —   

Class I — Shares outstanding ($.01 par value)

     18,294,373        —        —        —         —   

Net asset value per share: Class S*******

   $ 19.53      $ 17.66      $ 21.49      $ 21.60       $ 1.00   

Class S — Net assets

   $ 118,211,114      $ 268,369,579      $ 358,799,141      $ 769,145,213       $ 4,362,944,677   

Class S — Shares outstanding ($.01 par value)

     6,053,758        15,199,917        16,696,444        35,615,701         4,365,099,606   

Net asset value per share: Class Y*******

   $ 19.55      $ 17.65      $ —      $ 21.59       $ —   

Class Y — Net assets

   $ 420,529,705      $ 109,210,950      $ —      $ 514,087,815       $ —   

Class Y — Shares outstanding ($.01 par value)

     21,510,245        6,186,075        —        23,807,701         —   

Amounts in thousands

           

*                Foreign currency holdings - cost

   $ 560      $ 774      $ —      $ 330       $ —   

**              Premiums received on options written

   $ 356      $ 76      $ —      $ —       $ —   

***             Securities on loan included in investments

   $ 80,749      $ —      $ —      $ 465,366       $ —   

****           Credit default swap contracts - premiums paid (received)

   $ 66      $ (356 )    $ —      $ —       $ —   

*****         Interest rate swap contracts - premiums paid (received)

   $ 15      $ (110 )    $ —      $ —       $ —   

******       Proceeds on securities sold short

   $ —      $ —      $ —      $ —       $ —   

*******      Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding.

           

********    Russell Strategic Bond and Short Duration Bond Funds’ maximum sale charge is 3.75%.

           

*********  Russell Money Market Fund investments at amortized cost which approximates value.

           

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Assets and Liabilities   231

Russell Investment Company

Russell Funds

Statements of Operations — For the Period Ended April 30, 2009 (Unaudited)

 

Amounts in thousands   Russell U.S. Core
Equity Fund		     Russell U.S.
Quantitative
Equity Fund		  
   

Investment Income

    

Dividends

   $ 40,352      $ 50,610   

Dividends from affiliated Russell Money Market Fund

     790        483   

Interest

     —        17   

Securities lending income

     1,398        398   

Less foreign taxes withheld

     —        —   
               

Total investment income

     42,540        51,508   
               
   

Expenses

    

Advisory fees

     9,917        9,638   

Administrative fees

     901        876   

Custodian fees

     355        340   

Distribution fees - Class A

     20        17   

Distribution fees - Class C

     266        250   

Transfer agent fees - Class A

     14        12   

Transfer agent fees - Class C

     63        60   

Transfer agent fees - Class E

     72        68   

Transfer agent fees - Class I

     331        327   

Transfer agent fees - Class S

     946        934   

Transfer agent fees - Class Y

     37        36   

Professional fees

     103        109   

Registration fees

     159        109   

Shareholder servicing fees - Class C

     89        83   

Shareholder servicing fees - Class E

     102        94   

Trustees’ fees

     53        51   

Printing fees

     195        176   

Dividends from securities sold short

     —        3,198   

Interest expense from securities sold short

     —        1,769   

Miscellaneous

     51        50   

US Treasury Guarantee Program fee

     —        —   
               

Expenses before reductions

     13,674        18,197   

Expense reductions

     (244 )      (227 ) 
               

Net expenses

     13,430        17,970   
               

Net investment income (loss)

     29,110        33,538   
               
   

Net Realized and Unrealized Gain (Loss)

    

Net realized gain (loss) on:

    

Investments (Russell non-U.S. funds - net of deferred tax liability for foreign capital gains taxes)

     (911,488 )      (1,068,879 ) 

Futures contracts

     (166,778 )      (113,423 ) 

Options written

     —        —   

Credit default swap contracts

     —        —   

Index swap contracts

     —        —   

Interest rate swap contracts

     —        —   

Securities sold short

     —        194,573   

Foreign currency-related transactions

     —        —   
               

Net realized gain (loss)

     (1,078,266 )      (987,729 ) 
               

Net change in unrealized appreciation (depreciation) on:

    

Investments (Russell non-U.S. funds - net of deferred tax liability for foreign capital gains taxes)

     598,051        686,731   

Futures contracts

     122,832        89,478   

Options written

     —        —   

Credit default swap contracts

     —        —   

Index swap contracts

     —        —   

Interest rate swap contracts

     —        —   

Investments matured

     —        —   

Securities sold short

     —        (178,511 ) 

Foreign currency-related transactions

     —        —   

Capital support agreement from affiliate

     —        —   
               

Net change in unrealized appreciation (depreciation)

     720,883        597,698   
               

Net realized and unrealized gain (loss)

     (357,383 )      (390,031 ) 
               

Net Increase (Decrease) in Net Assets from Operations

   $ (328,273 )    $ (356,493 ) 
               

 

See accompanying notes which are an integral part of the financial statements.

 

232   Statements of Operations

 

    
Russell U.S.
Growth Fund		     Russell U.S.
Value Fund		     Russell U.S.
Small & Mid
Cap Fund		     Russell International
Developed Markets
Fund		     Russell Global
Equity Fund		      Russell Emerging
Markets Fund		  
          
          
$ 619      $ 2,084      $ 9,759      $ 50,859      $ 14,448       $ 9,358   
  21        30        308        1,058        186         194   
  —        —        3        5        9         31   
  152        201        1,880        2,647        623         827   
  —        —        —        (4,546 )      (487 )       (805 ) 
                                              
  792        2,315        11,950        50,023        14,779         9,605   
                                              
          
          
  387        503        3,890        11,608        3,425         4,682   
  24        36        278        827        180         203   
  62        52        203        986        243         591   
  —        —        8        18        4         8   
  18        32        98        243        25         80   
  —        —        6        13        3         6   
  4        8        23        60        6         19   
  4        5        30        67        8         14   
  25        21        99        374        —         —   
  28        75        348        848        260         422   
  —        —        10        32        9         6   
  21        22        61        115        43         64   
  11        12        86        137        51         41   
  6        11        33        81        8         27   
  6        7        43        92        12         21   
  2        2        16        48        11         12   
  5        9        72        170        43         47   
  —        —        —        —        —         —   
  —        —        —        —        —         —   
  3        1        17        49        7         9   
  —        —        —        —        —         —   
                                              
  606        796        5,321        15,768        4,338         6,252   
  (69 )      (1 )      (28 )      (247 )      (4 )       (5 ) 
                                              
  537        795        5,293        15,521        4,334         6,247   
                                              
  255        1,520        6,657        34,502        10,445         3,358   
                                              
          
          
          
  (25,043 )      (54,673 )      (390,570 )      (680,919 )      (177,849 )       (192,163 ) 
  (1,858 )      (3,409 )      (60,039 )      (137,442 )      (29,055 )       5,900   
  —        —        —        407        —         (1,883 ) 
  —        —        —        —        —         —   
  —        —        —        —        —         —   
  —        —        —        —        —         —   
  —        —        —        —        —         —   
  —        —        5        (45,074 )      (4,949 )       (15,033 ) 
                                              
  (26,901 )      (58,082 )      (450,604 )      (863,028 )      (211,853 )       (203,179 ) 
                                              
          
  23,492        35,880        301,080        492,924        142,849         293,735   
  1,365        2,265        49,377        118,015        19,987         845   
  —        —        —        —        —         4,910   
  —        —        —        —        —         —   
  —        —        —        —        —         252   
  —        —        —        —        —         —   
  —        —        —        —        —         —   
  —        —        —        —        —         —   
  —        —        —        44,419        4,318         15,142   
  —        —        —        —        —         —   
                                              
  24,857        38,145        350,457        655,358        167,154         314,884   
                                              
  (2,044 )      (19,937 )      (100,147 )      (207,670 )      (44,699 )       111,705   
                                              
$ (1,789 )    $ (18,417 )    $ (93,490 )    $ (173,168 )    $ (34,254 )     $ 115,063   
                                              

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Operations   233

Russell Investment Company

Russell Funds

Statements of Operations, continued — For the Period Ended April 30, 2009 (Unaudited)

 

Amounts in thousands   Russell Tax-
Managed U.S.
Large Cap Fund		     Russell Tax-
Managed U.S. Mid
& Small Cap Fund		  
   

Investment Income

    

Dividends

   $ 3,110      $ 705   

Dividends from affiliated Russell Money Market Fund

     45        25   

Interest

     1        1   

Securities lending income

     245        351   

Less foreign taxes withheld

     —        —   
               

Total investment income

     3,401        1,082   
               
   

Expenses

    

Advisory fees

     989        562   

Administrative fees

     71        29   

Custodian fees

     53        54   

Distribution fees - Class A

     —        —   

Distribution fees - Class C

     39        25   

Transfer agent fees - Class A

     —        —   

Transfer agent fees - Class C

     9        5   

Transfer agent fees - Class E

     9        2   

Transfer agent fees - Class I

     —        —   

Transfer agent fees - Class S

     233        95   

Transfer agent fees - Class Y

     —        —   

Professional fees

     25        22   

Registration fees

     37        24   

Shareholder servicing fees - Class C

     13        8   

Shareholder servicing fees - Class E

     13        3   

Trustees’ fees

     4        1   

Printing fees

     13        6   

Dividends from securities sold short

     —        —   

Interest expense from securities sold short

     —        —   

Miscellaneous

     4        2   

US Treasury Guarantee Program fee

     —        —   
               

Expenses before reductions

     1,512        838   

Expense reductions

     (113 )      (104 ) 
               

Net expenses

     1,399        734   
               

Net investment income (loss)

     2,002        348   
               
   

Net Realized and Unrealized Gain (Loss)

    

Net realized gain (loss) on:

    

Investments (Russell non-U.S. funds - net of deferred tax liability for foreign capital gains taxes)

     (45,200 )      (21,705 ) 

Futures contracts

     (5,387 )      (3,482 ) 

Options written

     —        —   

Credit default swap contracts

     —        —   

Index swap contracts

     —        —   

Interest rate swap contracts

     —        —   

Securities sold short

     —        —   

Foreign currency-related transactions

     —        —   
               

Net realized gain (loss)

     (50,587 )      (25,187 ) 
               

Net change in unrealized appreciation (depreciation) on:

    

Investments (Russell non-U.S. funds - net of deferred tax liability for foreign capital gains taxes)

     20,046        11,479   

Futures contracts

     3,027        2,422   

Options written

     —        —   

Credit default swap contracts

     —        —   

Index swap contracts

     —        —   

Interest rate swap contracts

     —        —   

Investments matured

     —        —   

Securities sold short

     —        —   

Foreign currency-related transactions

     —        —   

Capital support agreement from affiliate

     —        —   
               

Net change in unrealized appreciation (depreciation)

     23,073        13,901   
               

Net realized and unrealized gain (loss)

     (27,514 )      (11,286 ) 
               

Net Increase (Decrease) in Net Assets from Operations

   $ (25,512 )    $ (10,938 ) 
               

 

See accompanying notes which are an integral part of the financial statements.

 

234   Statements of Operations

 

Russell Strategic
Bond Fund		     Russell
Investment Grade
Bond Fund		     Russell Short
Duration Bond
Fund		     Russell Tax Exempt
Bond Fund		     Russell Real
Estate Securities
Fund		      Russell Money
Market Fund		  
          
          
$ 171      $ 412      $ 84      $ —      $ 35,256       $ —   
  1,913        346        126        47        189         —   
  186,896        25,185        9,914        7,917        —         26,510   
  —        450        —        —        1,602         —   
  1,277        —        —        —        —         —   
                                              
  190,257        26,393        10,124        7,964        37,047         26,510   
                                              
          
          
  15,118        1,295        878        583        4,689         4,734   
  1,512        259        98        97        293         1,184   
  865        206        108        47        276         383   
  30        —        9        —        15         185   
  342        109        80        67        134         —   
  22        —        6        —        11         333   
  81        26        19        16        32         —   
  114        40        12        18        23         —   
  590        187        —        —        —         —   
  1,538        112        217        315        606         3,925   
  62        10        2        —        9         —   
  150        62        48        20        48         211   
  106        51        44        32        64         122   
  114        36        27        22        45         —   
  161        56        17        24        32         —   
  88        15        5        6        17         63   
  286        47        17        16        69         202   
  —        —        —        —        —         —   
  —        —        —        —        —         —   
  81        14        5        5        14         65   
  —        —        —        —        —         2,067   
                                              
  21,260        2,525        1,592        1,268        6,377         13,474   
  (3,594 )      (124 )      (113 )      (155 )      —         (7,702 ) 
                                              
  17,666        2,401        1,479        1,113        6,377         5,772   
                                              
  172,591        23,992        8,645        6,851        30,670         20,738   
                                              
          
          
          
  (82,832 )      11,300        (8,945 )      (23 )      (378,945 )       (96,906 ) 
  101,198        8,060        2,379        —        —         —   
  (18,980 )      1,231        (3,950 )      —        —         —   
  1,014        2,066        229        —        —         —   
  —        —        —        —        —         —   
  (13,821 )      (8,232 )      (690 )      —        —         —   
  —        —        —        —        —         —   
  (1,067 )      899        338        —        30         —   
                                              
  (14,488 )      15,324        (10,639 )      (23 )      (378,915 )       (96,906 ) 
                                              
          
  13,827        28,054        20,524        17,833        119,729         106,547   
  (7,344 )      (2,384 )      (1,552 )      —        —         —   
  (738 )      57        (398 )      —        —         —   
  1,313        346        533        —        —         —   
  —        —        —        —        —         —   
  14,303        2,359        1,317        —        —         —   
  (1,207 )      —        (196 )      —        —         —   
  —        —        —        —        —         —   
  (5,657 )      (899 )      (293 )      —        (14 )       —   
  —        —        —        —        —         (9,067 ) 
                                              
  14,497        27,533        19,935        17,833        119,715         97,480   
                                              
  9        42,857        9,296        17,810        (259,200 )       574   
                                              
$ 172,600      $ 66,849      $ 17,941      $ 24,661      $ (228,530 )     $ 21,312   
                                              

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Operations   235

Russell Investment Company

Russell Funds

Statements of Changes in Net Assets

 

    Russell U.S. Core
Equity Fund		     Russell U.S. Quantitative
Equity Fund		  
Amounts in thousands   Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		  
       

Increase (Decrease) in Net Assets

        

Operations

        

Net investment income (loss)

   $ 29,110      $ 29,885      $ 33,538      $ 21,290   

Net realized gain (loss)

     (1,078,266 )      (369,280 )      (987,729 )      (164,525 ) 

Net change in unrealized appreciation (depreciation)

     720,883        (1,473,111 )      597,698        (1,494,745 ) 
                               

Net increase (decrease) in net assets from operations

     (328,273 )      (1,812,506 )      (356,493 )      (1,637,980 ) 
                               

Distributions

        

From net investment income

        

Class A

     (118 )      (16 )      (105 )      (15 ) 

Class C

     (245 )      (32 )      (232 )      (66 ) 

Class E

     (628 )      (774 )      (624 )      (671 ) 

Class I

     (6,121 )      (16,483 )      (6,103 )      (13,808 ) 

Class S

     (8,851 )      (1,275 )      (9,327 )      (1,372 ) 

Class Y

     (15,299 )      (8,895 )      (15,780 )      (6,341 ) 

From net realized gain

        

Class A

     —        —        —        —   

Class C

     —        —        —        —   

Class E

     —        (5,138 )      —        (6,616 ) 

Class I

     —        (106,920 )      —        (118,102 ) 

Class S

     —        —        —        —   

Class Y

     —        (46,131 )      —        (32,896 ) 

Return of capital

        

Class A

     —        —        —        —   

Class C

     —        —        —        —   

Class E

     —        —        —        —   

Class I

     —        —        —        —   

Class S

     —        —        —        —   

Class Y

     —        —        —        —   
                               

Net decrease in net assets from distributions

     (31,262 )      (185,664 )      (32,171 )      (179,887 ) 
                               

Share Transactions

        

Net increase (decrease) in net assets from share transactions

     (125,187 )      4,222,471        (140,998 )      4,141,934   
                               

Total Net Increase (Decrease) in Net Assets

     (484,722 )      2,224,301        (529,662 )      2,324,067   

Net Assets

        

Beginning of period

     4,246,017        2,021,716        4,126,745        1,802,678   
                               

End of period

   $ 3,761,295      $ 4,246,017      $ 3,597,083      $ 4,126,745   
                               

Undistributed (overdistributed) net investment income included in net assets

   $ 1,708      $ 3,860      $ 1,367      $ —   

 

See accompanying notes which are an integral part of the financial statements.

 

236   Statements of Changes in Net Assets

 

Russell U.S. Growth
Fund		     Russell U.S. Value
Fund		     Russell U.S. Small & Mid Cap
Fund		     Russell International Developed
Markets Fund		  
Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		  
             
             
             
$ 255      $ 301      $ 1,520      $ 4,996      $ 6,657      $ 5,266      $ 34,502      $ 49,640   
  (26,901 )      (22,765 )      (58,082 )      (80,180 )      (450,604 )      (166,651 )      (863,028 )      (558,025 ) 
  24,857        (62,357 )      38,145        (103,624 )      350,457        (485,590 )      655,358        (1,503,838 ) 
                                                             
  (1,789 )      (84,821 )      (18,417 )      (178,808 )      (93,490 )      (646,975 )      (173,168 )      (2,012,223 ) 
                                                             
             
             
  —        —        —        —        (30 )      —        —        —   
  —        —        (52 )      (114 )      (36 )      —        —        —   
  (5 )      —        (52 )      (155 )      (92 )      (249 )      —        (1,775 ) 
  (336 )      —        (498 )      (1,672 )      (942 )      (3,982 )      —        (45,917 ) 
  (129 )      —        (953 )      (3,175 )      (2,029 )      —        —        —   
  —        —        —        —        (2,703 )      (1,043 )      —        (10,245 ) 
             
  —        —        —        —        —        —        —        —   
  —        (515 )      —        (3,872 )      —        —        —        —   
  —        (323 )      —        (1,962 )      —        (6,217 )      —        (10,099 ) 
  —        (4,846 )      —        (19,387 )      —        (69,029 )      —        (246,649 ) 
  —        (3,359 )      —        (40,157 )      —        —        —        —   
  —        —        —        —        —        (14,095 )      —        (51,323 ) 
             
  —        —        —        —        —        —        —        —   
  —        —        —        —        —        —        —        —   
  —        —        —        —        —        —        —        (1,120 ) 
  —        —        —        —        —        —        —        (29,026 ) 
  —        —        —        —        —        —        —        —   
  —        —        —        —        —        —        —        (6,463 ) 
                                                             
  (470 )      (9,043 )      (1,555 )      (70,494 )      (5,832 )      (94,615 )      —        (402,617 ) 
                                                             
             
  (12,941 )      (3,953 )      (21,827 )      (16,846 )      (24,602 )      1,446,973        (77,057 )      3,940,041   
                                                             
  (15,200 )      (97,817 )      (41,799 )      (266,148 )      (123,924 )      705,383        (250,225 )      1,525,201   
             
  114,442        212,259        184,207        450,355        1,317,869        612,486        3,738,972        2,213,771   
                                                             
$ 99,242      $ 114,442      $ 142,408      $ 184,207      $ 1,193,945      $ 1,317,869      $ 3,488,747      $ 3,738,972   
                                                             
$ 86      $ 301      $ 112      $ 147      $ 3,082      $ 2,257      $ 48,936      $ 14,434   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets   237

Russell Investment Company

Russell Funds

Statements of Changes in Net Assets, continued

 

    Russell Global
Equity Fund		     Russell Emerging
Markets Fund		  
Amounts in thousands   Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		  
       

Increase (Decrease) in Net Assets

        

Operations

        

Net investment income (loss)

   $ 10,445      $ 11,419      $ 3,358      $ 31,295   

Net realized gain (loss)

     (211,853 )      (200,212 )      (203,179 )      21,831   

Net change in unrealized appreciation (depreciation)

     167,154        (415,008 )      314,884        (1,118,139 ) 
                               

Net increase (decrease) in net assets from operations

     (34,254 )      (603,801 )      115,063        (1,065,013 ) 
                               

Distributions

        

From net investment income

        

Class A

     (59 )      (30 )      —        (235 ) 

Class C

     (14 )      (64 )      —        (955 ) 

Class E

     (120 )      (148 )      —        (806 ) 

Class I

     —        —        —        —   

Class S

     (7,130 )      (13,124 )      —        (37,200 ) 

Class Y

     (4,698 )      —        —        —   

From net realized gain

        

Class A

     —        (51 )      (346 )      (1,939 ) 

Class C

     —        (196 )      (1,147 )      (11,713 ) 

Class E

     —        (267 )      (829 )      (7,102 ) 

Class I

     —        —        (14,874 )      —   

Class S

     —        (19,733 )      (23,558 )      (300,166 ) 

Class Y

     —        —        —        —   

Return of capital

        

Class A

     —        —        —        —   

Class C

     —        —        —        —   

Class E

     —        —        —        —   

Class I

     —        —        —        —   

Class S

     —        —        —        —   

Class Y

     —        —        —        —   
                               

Net decrease in net assets from distributions

     (12,021 )      (33,613 )      (40,754 )      (360,116 ) 
                               

Share Transactions

        

Net increase (decrease) in net assets from share transactions

     28,548        272,787        5,925        428,859   
                               

Total Net Increase (Decrease) in Net Assets

     (17,727 )      (364,627 )      80,234        (996,270 ) 

Net Assets

        

Beginning of period

     792,445        1,157,072        876,278        1,872,548   
                               

End of period

   $ 774,718      $ 792,445      $ 956,512      $ 876,278   
                               

Undistributed (overdistributed) net investment income included in net assets

   $ 5,662      $ 7,238      $ (60 )    $ (3,418 ) 

 

See accompanying notes which are an integral part of the financial statements.

 

238   Statements of Changes in Net Assets

 

Russell Tax-Managed
U.S. Large Cap Fund		     Russell Tax-Managed
U.S. Mid & Small Cap Fund		     Russell Strategic
Bond Fund		      Russell Investment Grade
Bond Fund		  
Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		      Fiscal Year
Ended
October 31, 2008		      Period Ended
April 30, 2009
(Unaudited)		      Fiscal Year
Ended
October 31, 2008		  
                
                
                
$ 2,002      $ 4,854      $ 348      $ 752      $ 172,591       $ 119,425       $ 23,992       $ 65,970   
  (50,587 )      (54,961 )      (25,187 )      (14,261 )      (14,488 )       43,062         15,324         15,158   
  23,073        (201,917 )      13,901        (83,786 )      14,497         (659,832 )       27,533         (139,768 ) 
                                                                
  (25,512 )      (252,024 )      (10,938 )      (97,295 )      172,600         (497,345 )       66,849         (58,640 ) 
                                                                
                
                
  —        —        —        —        (654 )       (49 )       —         —   
  (11 )      —        —        —        (2,121 )       (196 )       (517 )       (1,370 ) 
  (138 )      (82 )      (14 )      —        (3,587 )       (1,684 )       (866 )       (2,827 ) 
  —        —        —        —        (34,900 )       (79,819 )       (7,662 )       (27,909 ) 
  (4,396 )      (4,030 )      (1,095 )      (94 )      (49,199 )       (4,000 )       (2,466 )       (8,764 ) 
  —        —        —        —        (83,339 )       (16,948 )       (9,414 )       (28,345 ) 
                
  —        —        —        —        (109 )       —         —         —   
  —        —        —        (1,169 )      (410 )       —         —         —   
  —        —        —        (276 )      (603 )       —         —         —   
  —        —        —        —        (5,577 )       —         —         —   
  —        —        —        (19,428 )      (8,216 )       —         —         —   
  —        —        —        —        (13,183 )       —         —         —   
                
  —        —        —        —        —         —         —         —   
  —        —        —        —        —         —         —         —   
  —        —        —        —        —         —         —         —   
  —        —        —        —        —         —         —         —   
  —        —        —        —        —         —         —         —   
  —        —        —        —        —         —         —         —   
                                                                
  (4,545 )      (4,112 )      (1,109 )      (20,967 )      (201,898 )       (102,696 )       (20,925 )       (69,215 ) 
                                                                
                
  (31,992 )      3,052        (22,291 )      (11,025 )      (714,035 )       5,699,545         (173,968 )       (389,847 ) 
                                                                
  (62,049 )      (253,084 )      (34,338 )      (129,287 )      (743,333 )       5,099,504         (128,044 )       (517,702 ) 
                
  357,637        610,721        154,262        283,549        6,668,106         1,568,602         1,097,979         1,615,681   
                                                                
$ 295,588      $ 357,637      $ 119,924      $ 154,262      $ 5,924,773       $ 6,668,106       $ 969,935       $ 1,097,979   
                                                                
$ 711      $ 3,254      $ (38 )    $ 723      $ 34,587       $ 35,796       $ 6,736       $ 3,669   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets   239

Russell Investment Company

Russell Funds

Statements of Changes in Net Assets, continued

 

    Russell Short Duration Bond Fund  
Amounts in thousands   Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		  
   

Increase (Decrease) in Net Assets

    

Operations

    

Net investment income (loss)

   $ 8,645      $ 18,337   

Net realized gain (loss)

     (10,639 )      4,776   

Net change in unrealized appreciation (depreciation)

     19,935        (40,228 ) 
               

Net increase (decrease) in net assets from operations

     17,941        (17,115 ) 
               

Distributions

    

From net investment income

    

Class A

     (138 )      (161 ) 

Class C

     (324 )      (637 ) 

Class E

     (236 )      (687 ) 

Class I

     —        —   

Class S

     (4,721 )      (16,008 ) 

Class Y

     (2,109 )      (1,381 ) 

From net realized gain

    

Class A

     —        —   

Class C

     —        —   

Class E

     —        —   

Class I

     —        —   

Class S

     —        —   

Class Y

     —        —   

Return of capital

    

Class A

     —        —   

Class C

     —        —   

Class E

     —        —   

Class I

     —        —   

Class S

     —        —   

Class Y

     —        —   
               

Net decrease in net assets from distributions

     (7,528 )      (18,874 ) 
               

Share Transactions

    

Net increase (decrease) in net assets from share transactions

     28,613        (49,606 ) 
               

Total Net Increase (Decrease) in Net Assets

     39,026        (85,595 ) 

Net Assets

    

Beginning of period

     384,639        470,234   
               

End of period

   $ 423,665      $ 384,639   
               

Undistributed (overdistributed) net investment income included in net assets

   $ 3,364      $ 2,247   

 

See accompanying notes which are an integral part of the financial statements.

 

240   Statements of Changes in Net Assets

 

Russell Tax Exempt Bond Fund     Russell Real Estate Securities Fund     Russell Money Market Fund  
Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31, 2008		     Period Ended
April 30, 2009
(Unaudited)		      Fiscal Year
Ended
October 31, 2008		  
          
          
          
$ 6,851      $ 14,223      $ 30,670      $ 45,686      $ 20,738       $ 238,814   
  (23 )      (4,001 )      (378,915 )      (163,051 )      (96,906 )       (251,614 ) 
  17,833        (12,972 )      119,715        (810,817 )      97,480         248,865   
                                              
  24,661        (2,750 )      (228,530 )      (928,182 )      21,312         236,065   
                                              
          
          
  —        —        (292 )      (427 )      (1,483 )       (16,294 ) 
  (236 )      (412 )      (715 )      (990 )      —         —   
  (331 )      (668 )      (675 )      (955 )      —         —   
  —        —        —        —        —         —   
  (6,396 )      (13,084 )      (17,853 )      (40,325 )      (19,255 )       (222,520 ) 
  —        —        (12,602 )      (3,810 )      —         —   
          
  —        —        —        (1,778 )      —         —   
  —        —        —        (10,592 )      —         —   
  —        —        —        (5,508 )      —         —   
  —        —        —        —        —         —   
  —        —        —        (232,515 )      —         —   
  —        —        —        —        —         —   
          
  —        —        —        (35 )      —         —   
  —        —        —        (85 )      —         —   
  —        —        —        (75 )      —         —   
  —        —        —        —        —         —   
  —        —        —        (3,070 )      —         —   
  —        —        —        (343 )      —         —   
                                              
  (6,963 )      (14,164 )      (32,137 )      (300,508 )      (20,738 )       (238,814 ) 
                                              
          
  (22,990 )      50,145        171,378        399,017        (612,532 )       (429,063 ) 
                                              
  (5,292 )      33,231        (89,289 )      (829,673 )      (611,958 )       (431,812 ) 
          
  401,670        368,439        1,455,041        2,284,714        5,289,476         5,721,288   
                                              
$ 396,378      $ 401,670      $ 1,365,752      $ 1,455,041      $ 4,677,518       $ 5,289,476   
                                              
$ 1,130      $ 1,242      $ (1,521 )    $ (54 )    $ 25       $ 25   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets   241

Russell Investment Company

Russell U.S. Quantitative Equity Fund

Statement of Cash Flows — For the Period Ended April 30, 2009 (Unaudited)

 

Increase (decrease) in Cash

Cash flows from operating activities

  
 

Net decrease in net assets from operations

   $ (356,493 ) 

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

  

Purchase of investment securities

     (4,252,573 ) 

Proceeds from disposition of investment securities

     4,307,253   

Increase in collateral for securities loaned

     101,018   

Increase in receivables for dividends and interest

     2,249   

Decrease in receivables for investments sold

     (14,186 ) 

Increase in receivables for fund shares sold

     4,562   

Increase in receivables for daily variation margin on futures contracts

     1,722   

Increase in prepaid expenses

     (36 ) 

Decrease in payables for investments purchased

     24,277   

Increase in payables for fund shares redeemed

     (5,836 ) 

Increase in payables for accrued fees to affiliates

     (529 ) 

Increase in payables for other accrued expenses

     (113 ) 

Increase in payables for dividends from securities sold short

     (62 ) 

Increase in payables for daily variation margin on futures contracts

     —   

Increase in payables upon return of securities loaned

     (101,018 ) 

Change in unrealized appreciation on securities on investments

     (508,220 ) 

Net realized gain on investments

     874,306   
       

Net cash provided by operating activities

     76,321   
       
Cash flows from financing activities  

Proceeds from shares sold

     450,171   

Payment on shares redeemed

     (621,955 ) 

Cash distributions paid

     (1,387 ) 
       

Net cash used in financing activities

     (173,171 ) 
       

Net increase in cash

     (96,850 ) 

Cash

  

Beginning balance

     136,100   
       

Ending balance

   $ 39,250   
       

 

See accompanying notes which are an integral part of the financial statements.

 

242   Statement of Cash Flows

 

(This page intentionally left blank)

Russell Investment Company

Russell Funds

Financial Highlights — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		     $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell U.S. Core Equity Fund

  

              
Class A                    

April 30, 2009*

    20.73    .11      (1.60 )     (1.49 )     (.13 )     —       —

October 31, 2008(5)

    28.57    .03      (7.85 )     (7.82 )     (.02 )     —       —
Class C                    

April 30, 2009*

    20.71    .05      (1.62 )     (1.57 )     (.06 )     —       —

October 31, 2008(5)

    28.57    — (d)    (7.85 )     (7.85 )     (.01 )     —       —
Class E                    

April 30, 2009*

    20.73    .12      (1.62 )     (1.50 )     (.14 )     —       —

October 31, 2008

    38.09    .31      (14.35 )     (14.04 )     (.35 )     (2.97 )     —

October 31, 2007

    33.51    .29      6.08       6.37       (.28 )     (1.51 )     —

October 31, 2006

    30.81    .25      3.96       4.21       (.24 )     (1.27 )     —

October 31, 2005

    27.56    .25      3.24       3.49       (.24 )     —       —

October 31, 2004

    25.75    .16      1.82       1.98       (.17 )     —       —
Class I                    

April 30, 2009*

    20.73    .15      (1.63 )     (1.48 )     (.16 )     —       —

October 31, 2008

    38.08    .41      (14.37 )     (13.96 )     (.42 )     (2.97 )     —

October 31, 2007

    33.49    .37      6.10       6.47       (.37 )     (1.51 )     —

October 31, 2006

    30.79    .32      3.96       4.28       (.31 )     (1.27 )     —

October 31, 2005

    27.54    .32      3.24       3.56       (.31 )     —       —

October 31, 2004

    25.72    .23      1.82       2.05       (.23 )     —       —
Class S                    

April 30, 2009*

    20.72    .14      (1.62 )     (1.48 )     (.15 )     —       —

October 31, 2008(5)

    28.56    .05      (7.87 )     (7.82 )     (.02 )     —       —
Class Y                    

April 30, 2009*

    20.71    .15      (1.63 )     (1.48 )     (.16 )     —       —

October 31, 2008

    38.07    .37      (14.33 )     (13.96 )     (.43 )     (2.97 )     —

October 31, 2007

    33.49    .39      6.09       6.48       (.39 )     (1.51 )     —

October 31, 2006

    30.77    .34      3.98       4.32       (.33 )     (1.27 )     —

October 31, 2005

    27.53    .31      3.26       3.57       (.33 )     —       —

October 31, 2004

    25.72    .25      1.81       2.06       (.25 )     —       —

 

See accompanying notes which are an integral part of the financial statements.

 

244   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		   %
Portfolio
Turnover Rate(b)
           
             
(.13 )    19.11   (7.19 )    16,856   1.08   1.08   1.25   55
(.02 )    20.73   (27.38 )    16,179   1.09   1.10   .73   121
             
(.06 )    19.08   (7.62 )    72,645   1.82   1.82   .55   55
(.01 )    20.71   (27.49 )    86,199   1.83   1.84   —   121
             
(.14 )    19.09   (7.23 )    90,312   .95   1.07   1.40   55
(3.32 )    20.73   (40.01 )    94,785   .95   1.00   1.07   121
(1.79 )    38.09   19.82      49,355   .93   .95   .82   113
(1.51 )    33.51   14.07      43,911   .93   .96   .78   98
(.24 )    30.81   12.70      37,666   .92   .96   .83   110
(.17 )    27.56   7.69      33,143   .94   .96   .61   130
             
(.16 )    19.09   (7.12 )    699,361   .70   .75   1.68   55
(3.39 )    20.73   (39.85 )    872,188   .70   .73   1.37   121
(1.88 )    38.08   20.17      1,396,706   .68   .70   1.07   113
(1.58 )    33.49   14.34      1,095,931   .71   .73   1.01   98
(.31 )    30.79   12.97      825,172   .69   .73   1.06   110
(.23 )    27.54   7.99      697,537   .71   .72   .84   130
             
(.15 )    19.09   (7.18 )    1,150,953   .83   .83   1.53   55
(.02 )    20.72   (27.39 )    1,249,003   .83   .85   1.01   121
             
(.16 )    19.07   (7.10 )    1,731,168   .65   .65   1.70   55
(3.40 )    20.71   (39.87 )    1,927,663   .66   .67   1.35   121
(1.90 )    38.07   20.23      575,655   .63   .65   1.12   113
(1.60 )    33.49   14.48      504,168   .64   .66   1.07   98
(.33 )    30.77   13.00      341,294   .65   .67   1.03   110
(.25 )    27.53   8.07      104,440   .63   .65   .92   130

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   245

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		      $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell U.S. Quantitative Equity Fund

  

               
Class A                     

April 30, 2009*

    22.26    .18       (2.06 )     (1.88 )     (.15 )     —       —

October 31, 2008(5)

    30.15    .01       (7.88 )     (7.87 )     (.02 )     —       —
Class C                     

April 30, 2009*

    22.23    .11       (2.08 )     (1.97 )     (.07 )     —       —

October 31, 2008(5)

    30.15    (.02 )     (7.89 )     (7.91 )     (.01 )     —       —
Class E                     

April 30, 2009*

    22.26    .19       (2.07 )     (1.88 )     (.16 )     —       —

October 31, 2008

    40.29    .29       (14.34 )     (14.05 )     (.26 )     (3.72 )     —

October 31, 2007

    39.35    .31       3.80       4.11       (.33 )     (2.84 )     —

October 31, 2006

    35.20    .35       5.02       5.37       (.35 )     (.87 )     —

October 31, 2005

    32.32    .35       2.88       3.23       (.35 )     —       —

October 31, 2004

    30.10    .23       2.24       2.47       (.25 )     —       —
Class I                     

April 30, 2009*

    22.29    .22       (2.09 )     (1.87 )     (.18 )     —       —

October 31, 2008

    40.30    .38       (14.35 )     (13.97 )     (.32 )     (3.72 )     —

October 31, 2007

    39.36    .40       3.81       4.21       (.43 )     (2.84 )     —

October 31, 2006

    35.20    .44       5.03       5.47       (.44 )     (.87 )     —

October 31, 2005

    32.32    .44       2.88       3.32       (.44 )     —       —

October 31, 2004

    30.10    .30       2.24       2.54       (.32 )     —       —
Class S                     

April 30, 2009*

    22.30    .21       (2.09 )     (1.88 )     (.17 )     —       —

October 31, 2008(5)

    30.18    .02       (7.88 )     (7.86 )     (.02 )     —       —
Class Y                     

April 30, 2009*

    22.29    .22       (2.08 )     (1.86 )     (.19 )     —       —

October 31, 2008

    40.30    .36       (14.31 )     (13.95 )     (.34 )     (3.72 )     —

October 31, 2007

    39.36    .42       3.80       4.22       (.44 )     (2.84 )     —

October 31, 2006

    35.20    .46       5.02       5.48       (.45 )     (.87 )     —

October 31, 2005

    32.32    .45       2.88       3.33       (.45 )     —       —

October 31, 2004

    30.09    .32       2.25       2.57       (.34 )     —       —

 

See accompanying notes which are an integral part of the financial statements.

 

246   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		     %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		     %
Portfolio
Turnover Rate(b)
             
             
(.15 )    20.23   (8.46 )    13,899   1.36 (r)    1.36   1.84      45
(.02 )    22.26   (26.11 )    14,403   1.26 (g)    1.26   .32      118
             
(.07 )    20.19   (8.88 )    65,291   2.10 (s)    2.10   1.14      45
(.01 )    22.23   (26.23 )    82,787   2.00 (h)    2.01   (.43 )    118
             
(.16 )    20.22   (8.44 )    79,957   1.23 (t)    1.36   1.97      45
(3.98 )    22.26   (38.26 )    86,593   1.15 (l)    1.20   .94      118
(3.17 )    40.29   11.11      61,842   1.07 (i)    1.09   .79      121
(1.22 )    39.35   15.56      56,703   .94 (f)    .96   .93      106
(.35 )    35.20   10.03      46,352   .91      .93   1.01      117
(.25 )    32.32   8.22      47,570   .92      .93   .71      103
             
(.18 )    20.24   (8.37 )    648,721   .98 (u)    1.03   2.27      45
(4.04 )    22.29   (38.11 )    815,038   .93 (o)    .96   1.22      118
(3.27 )    40.30   11.40      1,369,379   .82 (j)    .84   1.04      121
(1.31 )    39.36   15.87      1,201,844   .70 (k)    .72   1.18      106
(.44 )    35.20   10.30      1,009,002   .66      .69   1.26      117
(.32 )    32.32   8.46      1,018,806   .69      .69   .94      103
             
(.17 )    20.25   (8.42 )    1,102,975   1.11 (v)    1.11   2.12      45
(.02 )    22.30   (26.05 )    1,245,509   1.00 (p)    1.02   .36      118
             
(.19 )    20.24   (8.34 )    1,686,240   .93 (j)    .93   2.28      45
(4.06 )    22.29   (38.07 )    1,882,415   .85 (q)    .86   1.27      118
(3.28 )    40.30   11.44      371,457   .77 (k)    .79   1.09      121
(1.32 )    39.36   15.93      393,292   .64 (n)    .67   1.23      106
(.45 )    35.20   10.34      338,308   .63      .65   1.30      117
(.34 )    32.32   8.58      336,836   .61      .61   1.05      103

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   247

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		     $
Net Realized
and Unrealized
Gain (Loss)		     $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		     $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell U.S. Growth Fund

               
Class C                  

April 30, 2009*

    5.09    (.01 )    (.01 )    (.02 )     —      —       —

October 31, 2008

    9.17    (.07 )    (3.60 )    (3.67 )     —      (.41 )     —

October 31, 2007

    7.84    (.09 )    1.42      1.33       —      —       —

October 31, 2006

    7.45    (.09 )    .48      .39       —      —       —

October 31, 2005

    6.85    (.08 )    .68      .60       —      —       —

October 31, 2004

    6.85    (.11 )    .11      —       —      —       —
Class E                  

April 30, 2009*

    5.46    .01      (.01 )    —       (.01 )    —       —

October 31, 2008

    9.72    — (d)    (3.85 )    (3.85 )     —      (.41 )     —

October 31, 2007

    8.25    (.02 )    1.49      1.47       —      —       —

October 31, 2006

    7.76    (.03 )    .52      .49       —      —       —

October 31, 2005

    7.08    (.01 )    .69      .68       —      —       —

October 31, 2004

    7.03    (.05 )    .10      .05       —      —       —
Class I                  

April 30, 2009*

    5.63    — (d)    .01      .01       (.03 )    —       —

October 31, 2008

    9.98    .03      (3.97 )    (3.94 )     —      (.41 )     —

October 31, 2007

    8.44    .01      1.53      1.54       —      —       —

October 31, 2006

    7.91    .01      .52      .53       — (d)    —       —

October 31, 2005

    7.19    .01      .71      .72       —      —       —

October 31, 2004

    7.10    (.02 )    .11      .09       —      —       —
Class S                  

April 30, 2009*

    5.57    .01      — (d)    .01       (.02 )    —       —

October 31, 2008

    9.89    .01      (3.92 )    (3.91 )     —      (.41 )     —

October 31, 2007

    8.38    (.01 )    1.52      1.51       —      —       —

October 31, 2006

    7.87    (.01 )    .52      .51       —      —       —

October 31, 2005

    7.15    — (d)    .72      .72       —      —       —

October 31, 2004

    7.08    (.03 )    .10      .07       —      —       —

 

See accompanying notes which are an integral part of the financial statements.

 

248   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		     %
Portfolio
Turnover Rate(b)
             
             
—      5.07   (.39 )    5,201   2.12   2.23   (.47 )    68
(.41 )    5.09   (41.76 )    6,211   2.21   2.31   (.90 )    120
—      9.17   16.96      11,204   2.23   2.27   (1.14 )    138
—      7.84   5.23      9,764   2.22   2.27   (1.20 )    148
—      7.45   8.76      8,149   2.23   2.32   (1.15 )    128
—      6.85   (.15 )    5,942   2.25   2.50   (1.53 )    134
             
(.01 )    5.45   (.07 )    4,942   1.38   1.49   .26      68
(.41 )    5.46   (41.23 )    5,308   1.37   1.48   (.06 )    120
—      9.72   17.82      7,104   1.37   1.41   (.28 )    138
—      8.25   6.31      6,590   1.36   1.42   (.34 )    148
—      7.76   9.60      4,255   1.28   1.40   (.15 )    128
—      7.08   .71      5,749   1.36   1.54   (.65 )    134
             
(.03 )    5.61   .29      51,417   .99   1.16   .64      68
(.41 )    5.63   (41.05 )    58,509   .98   1.13   .33      120
—      9.98   18.25      113,989   1.00   1.06   .09      138
—      8.44   6.75      90,953   .95   1.13   .07      148
—      7.91   10.17      112,112   .92   1.08   .12      128
—      7.19   1.13      60,006   .95   1.20   (.23 )    134
             
(.02 )    5.56   .14      37,682   1.10   1.21   .54      68
(.41 )    5.57   (41.19 )    44,414   1.19   1.30   .12      120
—      9.89   18.02      79,962   1.16   1.20   (.07 )    138
—      8.38   6.48      71,433   1.15   1.21   (.13 )    148
—      7.87   10.07      57,324   1.06   1.18   .04      128
—      7.15   .99      51,569   1.09   1.27   (.38 )    134

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   249

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		      $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell U.S. Value Fund

                  
Class C                     

April 30, 2009*

    5.69    .03       (.51 )     (.48 )     (.03 )     —       —

October 31, 2008

    12.84    .05       (5.19 )     (5.14 )     (.06 )     (1.95 )     —

October 31, 2007

    12.44    .01       1.16       1.17       (.02 )     (.75 )     —

October 31, 2006

    11.27    .01       1.83       1.84       (.03 )     (.64 )     —

October 31, 2005

    10.15    (.02 )     1.16       1.14       (.01 )     (.01 )     —

October 31, 2004

    8.97    (.03 )     1.22       1.19       (.01 )     —       —
Class E                     

April 30, 2009*

    5.82    .05       (.52 )     (.47 )     (.05 )     —       —

October 31, 2008

    13.10    .12       (5.31 )     (5.19 )     (.14 )     (1.95 )     —

October 31, 2007

    12.66    .11       1.19       1.30       (.11 )     (.75 )     —

October 31, 2006

    11.43    .11       1.87       1.98       (.11 )     (.64 )     —

October 31, 2005

    10.28    .09       1.16       1.25       (.09 )     (.01 )     —

October 31, 2004

    9.05    .05       1.23       1.28       (.05 )     —       —
Class I                     

April 30, 2009*

    5.84    .05       (.52 )     (.47 )     (.06 )     —       —

October 31, 2008

    13.13    .15       (5.32 )     (5.17 )     (.17 )     (1.95 )     —

October 31, 2007

    12.69    .16       1.18       1.34       (.15 )     (.75 )     —

October 31, 2006

    11.46    .15       1.87       2.02       (.15 )     (.64 )     —

October 31, 2005

    10.30    .13       1.17       1.30       (.13 )     (.01 )     —

October 31, 2004

    9.07    .10       1.22       1.32       (.09 )     —       —
Class S                     

April 30, 2009*

    5.82    .05       (.52 )     (.47 )     (.05 )     —       —

October 31, 2008

    13.10    .14       (5.32 )     (5.18 )     (.15 )     (1.95 )     —

October 31, 2007

    12.67    .14       1.17       1.31       (.14 )     (.75 )     —

October 31, 2006

    11.44    .13       1.87       2.00       (.13 )     (.64 )     —

October 31, 2005

    10.29    .11       1.16       1.27       (.11 )     (.01 )     —

October 31, 2004

    9.05    .08       1.24       1.32       (.08 )     —       —

 

See accompanying notes which are an integral part of the financial statements.

 

250   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		     %
Portfolio
Turnover Rate(b)
             
             
(.03 )    5.18   (8.62 )    8,915   2.06   2.06   1.16      55
(2.01 )    5.69   (46.49 )    11,225   2.13   2.13   .54      156
(.77 )    12.84   9.73      25,688   2.09   2.09   .06      128
(.67 )    12.44   17.01      26,168   2.11   2.11   .08      87
(.02 )    11.27   11.23      21,228   2.18   2.20   (.18 )    85
(.01 )    10.15   13.24      16,834   2.25   2.32   (.31 )    96
             
(.05 )    5.30   (8.26 )    5,519   1.31   1.31   1.91      55
(2.09 )    5.82   (46.08 )    6,852   1.31   1.31   1.35      156
(.86 )    13.10   10.64      10,774   1.27   1.27   .88      128
(.75 )    12.66   18.15      10,871   1.27   1.27   .91      87
(.10 )    11.43   12.14      8,770   1.25   1.30   .78      85
(.05 )    10.28   14.31      9,167   1.39   1.39   .55      96
             
(.06 )    5.31   (8.08 )    42,753   .98   .98   2.22      55
(2.12 )    5.84   (45.86 )    54,530   .98   .98   1.69      156
(.90 )    13.13   10.97      139,538   .94   .94   1.21      128
(.79 )    12.69   18.47      131,494   .94   .94   1.26      87
(.14 )    11.46   12.63      135,759   .86   .91   1.14      85
(.09 )    10.30   14.77      102,397   .95   .95   1.00      96
             
(.05 )    5.30   (7.97 )    85,221   1.06   1.06   2.17      55
(2.10 )    5.82   (45.98 )    111,600   1.13   1.13   1.55      156
(.88 )    13.10   10.87      274,355   1.05   1.05   1.10      128
(.77 )    12.67   18.32      253,586   1.09   1.10   1.09      87
(.12 )    11.44   12.36      198,551   1.07   1.10   .95      85
(.08 )    10.29   14.61      173,635   1.10   1.10   .84      96

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   251

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		      $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell U.S. Small & Mid Cap Fund

  

               
Class A                     

April 30, 2009*

    14.95    .06       (1.09 )     (1.03 )     (.06 )     —       —

October 31, 2008(5)

    21.95    .02       (7.02 )     (7.00 )     —       —       —
Class C                     

April 30, 2009*

    14.93    .01       (1.09 )     (1.08 )     (.02 )     —       —

October 31, 2008(5)

    21.95    (.01 )     (7.01 )     (7.02 )     —       —       —
Class E                     

April 30, 2009*

    14.95    .06       (1.09 )     (1.03 )     (.03 )     —       —

October 31, 2008

    31.79    .13       (11.98 )     (11.85 )     (.17 )     (4.82 )     —

October 31, 2007

    34.16    .05       4.59       4.64       —       (7.01 )     —

October 31, 2006

    38.43    .02       5.76       5.78       —       (10.05 )     —

October 31, 2005

    39.28    (.04 )     4.44       4.40       (.06 )     (5.19 )     —

October 31, 2004

    36.12    .04       3.12       3.16       —       —       —
Class I                     

April 30, 2009*

    15.05    .08       (1.10 )     (1.02 )     (.06 )     —       —

October 31, 2008

    31.98    .17       (12.02 )     (11.85 )     (.26 )     (4.82 )     —

October 31, 2007

    34.31    .12       4.60       4.72       (.04 )     (7.01 )     —

October 31, 2006

    38.57    .09       5.79       5.88       (.09 )     (10.05 )     —

October 31, 2005

    39.39    .04       4.45       4.49       (.12 )     (5.19 )     —

October 31, 2004

    36.19    .10       3.15       3.25       (.05 )     —       —
Class S                     

April 30, 2009*

    15.03    .07       (1.09 )     (1.02 )     (.07 )     —       —

October 31, 2008(5)

    22.06    .03       (7.06 )     (7.03 )     —       —       —
Class Y                     

April 30, 2009*

    15.02    .08       (1.09 )     (1.01 )     (.08 )     —       —

October 31, 2008

    31.98    .19       (12.02 )     (11.83 )     (.31 )     (4.82 )     —

October 31, 2007

    34.32    .15       4.59       4.74       (.07 )     (7.01 )     —

October 31, 2006

    38.58    .12       5.79       5.91       (.12 )     (10.05 )     —

October 31, 2005

    39.41    .07       4.45       4.52       (.16 )     (5.19 )     —

October 31, 2004

    36.22    .14       3.14       3.28       (.09 )     —       —

 

See accompanying notes which are an integral part of the financial statements.

 

252   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		     %
Portfolio
Turnover Rate(b)
             
             
(.06 )    13.86   (6.89 )    7,171   1.26   1.26   .88      73
—      14.95   (31.89 )    6,982   1.37   1.38   .47      163
             
(.02 )    13.83   (7.25 )    27,516   2.00   2.00   .16      73
—      14.93   (31.98 )    33,486   2.11   2.13   (.28 )    163
             
(.03 )    13.89   (6.86 )    37,240   1.13   1.25   1.01      73
(4.99 )    14.95   (43.26 )    40,553   1.17   1.22   .60      163
(7.01 )    31.79   15.98      38,520   1.13   1.15   .17      143
(10.05 )    34.16   17.91      39,987   1.11   1.14   .07      155
(5.25 )    38.43   11.53      34,849   1.08   1.11   (.09 )    156
—      39.28   8.72      80,542   1.09   1.09   .09      126
             
(.06 )    13.97   (6.79 )    202,355   .93   .93   1.23      73
(5.08 )    15.05   (43.08 )    260,535   .97   .99   .77      163
(7.05 )    31.98   16.21      480,645   .93   .95   .38      143
(10.14 )    34.31   18.17      471,745   .91   .94   .27      155
(5.31 )    38.57   11.77      496,716   .87   .91   .12      156
(.05 )    39.39   8.98      674,280   .90   .90   .27      126
             
(.07 )    13.94   (6.87 )    438,470   1.01   1.01   1.14      73
—      15.03   (31.87 )    475,057   1.10   1.11   .73      163
             
(.08 )    13.93   (6.73 )    481,193   .84   .84   1.31      73
(5.13 )    15.02   (43.09 )    501,256   .92   .93   .97      163
(7.08 )    31.98   16.30      93,321   .83   .85   .47      143
(10.17 )    34.32   18.31      111,605   .82   .85   .36      155
(5.35 )    38.58   11.85      112,625   .81   .83   .18      156
(.09 )    39.41   9.05      159,820   .79   .79   .37      126

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   253

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital		  

Russell International Developed Markets Fund

               
Class A                     

April 30, 2009*

    23.75    .18    (1.26 )     (1.08 )     —       —       —   

October 31, 2008(5)

    34.84    .07    (11.16 )     (11.09 )     —       —       —   
Class C                     

April 30, 2009*

    23.73    .10    (1.27 )     (1.17 )     —       —       —   

October 31, 2008(5)

    34.84    .03    (11.14 )     (11.11 )     —       —       —   
Class E                     

April 30, 2009*

    23.76    .20    (1.28 )     (1.08 )     —       —       —   

October 31, 2008

    56.97    .76    (23.85 )     (23.09 )     (1.29 )     (8.01 )     (.82 ) 

October 31, 2007

    50.51    .83    12.10       12.93       (1.41 )     (5.06 )     —   

October 31, 2006

    40.45    .87    9.87       10.74       (.68 )     —       —   

October 31, 2005

    35.15    .57    5.41       5.98       (.68 )     —       —   

October 31, 2004

    31.22    .38    4.29       4.67       (.74 )     —       —   
Class I                     

April 30, 2009*

    23.74    .22    (1.27 )     (1.05 )     —       —       —   

October 31, 2008

    57.01    .92    (23.89 )     (22.97 )     (1.41 )     (8.01 )     (.88 ) 

October 31, 2007

    50.55    .95    12.10       13.05       (1.53 )     (5.06 )     —   

October 31, 2006

    40.47    1.00    9.86       10.86       (.78 )     —       —   

October 31, 2005

    35.16    .68    5.39       6.07       (.76 )     —       —   

October 31, 2004

    31.20    .46    4.29       4.75       (.79 )     —       —   
Class S                     

April 30, 2009*

    23.74    .22    (1.29 )     (1.07 )     —       —       —   

October 31, 2008(5)

    34.79    .11    (11.16 )     (11.05 )     —       —       —   
Class Y                     

April 30, 2009*

    23.74    .23    (1.27 )     (1.04 )     —       —       —   

October 31, 2008

    57.03    .64    (23.60 )     (22.96 )     (1.42 )     (8.01 )     (.90 ) 

October 31, 2007

    50.56    1.01    12.07       13.08       (1.55 )     (5.06 )     —   

October 31, 2006

    40.47    .92    9.96       10.88       (.79 )     —       —   

October 31, 2005

    35.17    .68    5.40       6.08       (.78 )     —       —   

October 31, 2004

    31.21    .45    4.33       4.78       (.82 )     —       —   

 

See accompanying notes which are an integral part of the financial statements.

 

254   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		   %
Portfolio
Turnover Rate(b)
             
             
—      22.67   (4.63 )    14,441   1.27   1.27   1.69   53
—      23.75   (31.83 )    14,638   1.31   1.32   1.27   100
             
—      22.56   (4.97 )    63,807   2.02   2.02   1.00   53
—      23.73   (31.92 )    78,972   2.05   2.06   .53   100
             
—      22.68   (4.59 )    83,034   1.14   1.27   1.92   53
(10.12 )    23.76   (48.26 )    83,902   1.17   1.22   2.04   100
(6.47 )    56.97   28.47      61,533   1.16   1.18   1.64   108
(.68 )    50.51   26.84      51,470   1.17   1.19   1.88   83
(.68 )    40.45   17.19      41,415   1.15   1.18   1.49   80
(.74 )    35.15   15.20      35,442   1.19   1.20   1.13   81
             
—      22.69   (4.47 )    756,287   .89   .94   2.10   53
(10.30 )    23.74   (48.14 )    882,731   .92   .95   2.33   100
(6.59 )    57.01   28.75      1,792,063   .91   .93   1.87   108
(.78 )    50.55   27.17      1,420,218   .91   .93   2.15   83
(.76 )    40.47   17.48      1,127,303   .90   .93   1.76   80
(.79 )    35.16   15.47      915,469   .95   .96   1.36   81
             
—      22.67   (4.55 )    1,039,637   1.02   1.02   2.02   53
—      23.74   (31.79 )    1,052,420   1.06   1.08   2.00   100
             
—      22.70   (4.47 )    1,531,541   .84   .84   2.18   53
(10.33 )    23.74   (48.08 )    1,626,309   .88   .90   1.89   100
(6.61 )    57.03   28.85      360,175   .86   .88   1.98   108
(.79 )    50.56   27.24      378,505   .86   .89   1.99   83
(.78 )    40.47   17.53      587,751   .86   .89   1.76   80
(.82 )    35.17   15.54      491,855   .87   .88   1.35   81

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   255

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		     $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell Global Equity Fund

                 
Class A                    

April 30, 2009*

    6.07    .06      (.32 )     (.26 )     (.08 )     —       —

October 31, 2008

    11.37    .08      (5.07 )     (4.99 )     (.12 )     (.19 )     —

October 31, 2007(2)

    10.00    .05      1.32       1.37       —       —       —
Class C                    

April 30, 2009*

    6.02    .05      (.33 )     (.28 )     (.01 )     —       —

October 31, 2008

    11.31    .01      (5.04 )     (5.03 )     (.07 )     (.19 )     —

October 31, 2007(2)

    10.00    — (d)    1.31       1.31       —       —       —
Class E                    

April 30, 2009*

    6.07    .07      (.33 )     (.26 )     (.07 )     —       —

October 31, 2008

    11.37    .08      (5.08 )     (5.00 )     (.11 )     (.19 )     —

October 31, 2007(2)

    10.00    .06      1.31       1.37       —       —       —
Class S                    

April 30, 2009*

    6.09    .07      (.33 )     (.26 )     (.09 )     —       —

October 31, 2008

    11.39    .10      (5.08 )     (4.98 )     (.13 )     (.19 )     —

October 31, 2007(2)

    10.00    .08      1.31       1.39       —       —       —
Class Y                    

April 30, 2009*

    6.09    .08      (.34 )     (.26 )     (.09 )     —       —

October 31, 2008(6)

    8.16    — (d)    (2.07 )     (2.07 )     —       —       —

Russell Emerging Markets Fund

                 
Class A                    

April 30, 2009*

    10.59    .03      1.37       1.40       —       (.50 )     —

October 31, 2008

    30.85    .42      (14.73 )     (14.31 )     (.73 )     (5.22 )     —

October 31, 2007(3)

    20.50    .14      10.21       10.35       —       —       —
Class C                    

April 30, 2009*

    10.11    (.01 )    1.30       1.29       —       (.50 )     —

October 31, 2008

    29.66    .22      (14.06 )     (13.84 )     (.49 )     (5.22 )     —

October 31, 2007

    21.17    (.02 )    11.80       11.78       (.25 )     (3.04 )    

October 31, 2006

    16.73    .01      5.14       5.15       (.28 )     (.43 )     —

October 31, 2005

    12.52    .04      4.22       4.26       (.05 )     —       —

October 31, 2004

    10.68    — (d)    2.08       2.08       (.24 )     —       —
Class E                    

April 30, 2009*

    10.61    .03      1.38       1.41       —       (.50 )     —

October 31, 2008

    30.84    .38      (14.71 )     (14.33 )     (.68 )     (5.22 )     —

October 31, 2007

    21.89    .16      12.24       12.40       (.41 )     (3.04 )     —

October 31, 2006

    17.25    .17      5.29       5.46       (.39 )     (.43 )     —

October 31, 2005

    12.93    .16      4.34       4.50       (.18 )     —       —

October 31, 2004

    10.98    .09      2.15       2.24       (.29 )     —       —
Class S                    

April 30, 2009*

    10.62    .04      1.38       1.42       —       (.50 )     —

October 31, 2008

    30.86    .44      (14.72 )     (14.28 )     (.74 )     (5.22 )     —

October 31, 2007

    21.91    .22      12.23       12.45       (.46 )     (3.04 )     —

October 31, 2006

    17.25    .21      5.31       5.52       (.43 )     (.43 )     —

October 31, 2005

    12.94    .20      4.34       4.54       (.23 )     —       —

October 31, 2004

    10.98    .12      2.15       2.27       (.31 )     —       —
Class Y                    

April 30, 2009*

    10.62    .04      1.39       1.43       —       (.50 )     —

October 31, 2008(6)

    15.72    .01      (5.11 )     (5.10 )     —       —       —

 

See accompanying notes which are an integral part of the financial statements.

 

256   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		     %
Portfolio
Turnover Rate(b)
             
             
(.08 )    5.73   (4.41 )    2,954   1.54   1.54   2.21      50
(.31 )    6.07   (45.03 )    2,382   1.55   1.55   .82      160
—      11.37   13.70      2,445   1.58   1.58   .77      62
             
(.01 )    5.73   (4.81 )    7,084   2.28   2.28   1.81      50
(.26 )    6.02   (45.45 )    7,534   2.30   2.30   .07      160
—      11.31   13.10      10,802   2.33   2.33   (.04 )    62
             
(.07 )    5.74   (4.42 )    11,199   1.54   1.54   2.63      50
(.30 )    6.07   (45.07 )    10,096   1.55   1.55   .81      160
—      11.37   13.70      15,683   1.58   1.58   .90      62
             
(.09 )    5.74   (4.28 )    323,443   1.29   1.29   2.77      50
(.32 )    6.09   (44.87 )    306,198   1.30   1.30   1.09      160
—      11.39   13.90      1,128,142   1.33   1.33   1.12      62
             
(.09 )    5.74   (4.19 )    430,038   1.11   1.11   3.01      50
—      6.09   (25.37 )    466,235   1.22   1.22   .52      160
             
             
(.50 )    11.49   13.79      8,157   1.81   1.81   .55      40
(5.95 )    10.59   (56.41 )    7,595   1.92   1.92   2.15      65
—      30.85   50.49      3,537   1.88   1.89   .86      67
             
(.50 )    10.90   13.45      24,545   2.56   2.56   (.22 )    40
(5.71 )    10.11   (56.77 )    25,058   2.66   2.66   1.12      65
(3.29 )    29.66   63.90      66,707   2.63   2.64   (.07 )    67
(.71 )    21.17   31.63      44,977   2.68   2.68   .07      69
(.05 )    16.73   33.98      33,961   2.74   2.76   .29      72
(.24 )    12.52   20.04      20,467   2.83   2.87   .02      82
             
(.50 )    11.52   13.86      20,418   1.81   1.81   .56      40
(5.90 )    10.61   (56.41 )    17,976   1.91   1.91   1.86      65
(3.45 )    30.84   65.17      41,911   1.88   1.89   .68      67
(.82 )    21.89   32.64      27,862   1.93   1.93   .83      69
(.18 )    17.25   34.94      18,855   1.99   2.01   1.02      72
(.29 )    12.93   20.88      14,169   2.07   2.12   .75      82
             
(.50 )    11.54   14.05      588,779   1.56   1.56   .81      40
(5.96 )    10.62   (56.33 )    520,064   1.65   1.65   2.15      65
(3.50 )    30.86   65.53      1,760,393   1.63   1.64   .94      67
(.86 )    21.91   33.04      1,092,083   1.68   1.68   1.06      69
(.23 )    17.25   35.27      794,086   1.73   1.76   1.30      72
(.31 )    12.94   21.22      549,626   1.83   1.87   1.00      82
             
(.50 )    11.55   14.15      314,613   1.39   1.39   .93      40
—      10.62   (32.44 )    305,585   1.63   1.63   1.06      65

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   257

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		      $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell Tax-Managed U.S. Large Cap Fund

  

            
Class C                     

April 30, 2009*

    13.55    .03       (.95 )     (.92 )     (.01 )     —       —

October 31, 2008

    22.78    (.01 )     (9.22 )     (9.23 )     —       —       —

October 31, 2007

    19.62    (.06 )     3.22       3.16       —       —       —

October 31, 2006

    17.68    (.02 )     1.96       1.94       —       —       —

October 31, 2005

    16.55    .01       1.14       1.15       (.02 )     —       —

October 31, 2004

    15.02    (.06 )     1.59       1.53       —       —       —
Class E                     

April 30, 2009*

    13.96    .07       (.98 )     (.91 )     (.16 )     —       —

October 31, 2008

    23.41    .14       (9.48 )     (9.34 )     (.11 )     —       —

October 31, 2007

    20.12    .10       3.31       3.41       (.12 )     —       —

October 31, 2006

    18.09    .11       2.02       2.13       (.10 )     —       —

October 31, 2005

    16.93    .15       1.15       1.30       (.14 )     —       —

October 31, 2004

    15.30    .06       1.63       1.69       (.06 )     —       —
Class S                     

April 30, 2009*

    14.03    .09       (1.00 )     (.91 )     (.20 )     —       —

October 31, 2008

    23.52    .19       (9.52 )     (9.33 )     (.16 )     —       —

October 31, 2007

    20.21    .15       3.32       3.47       (.16 )     —       —

October 31, 2006

    18.16    .17       2.02       2.19       (.14 )     —       —

October 31, 2005

    16.99    .20       1.15       1.35       (.18 )     —       —

October 31, 2004

    15.34    .10       1.63       1.73       (.08 )     —       —

Russell Tax-Managed U.S. Mid & Small Cap Fund

  

            
Class C                     

April 30, 2009*

    8.69    (.01 )     (.50 )     (.51 )     —       —       —

October 31, 2008

    15.07    (.07 )     (5.09 )     (5.16 )     —       (1.22 )     —

October 31, 2007

    13.22    (.13 )     2.18       2.05       —       (.20 )     —

October 31, 2006

    11.59    (.14 )     1.77       1.63       —       —       —

October 31, 2005

    10.17    (.12 )     1.54       1.42       —       —       —

October 31, 2004

    9.33    (.13 )     .97       .84       —       —       —
Class E                     

April 30, 2009*

    9.37    .02       (.55 )     (.53 )     (.05 )     —       —

October 31, 2008

    16.03    .01       (5.45 )     (5.44 )     —       (1.22 )     —

October 31, 2007

    13.93    (.03 )     2.33       2.30       —       (.20 )     —

October 31, 2006

    12.13    (.05 )     1.85       1.80       —       —       —

October 31, 2005

    10.56    (.04 )     1.61       1.57       —       —       —

October 31, 2004

    9.62    (.06 )     1.00       .94       —       —       —
Class S                     

April 30, 2009*

    9.56    .03       (.56 )     (.53 )     (.08 )     —       —

October 31, 2008

    16.30    .05       (5.56 )     (5.51 )     (.01 )     (1.22 )     —

October 31, 2007

    14.13    .01       2.36       2.37       —       (.20 )     —

October 31, 2006

    12.27    (.01 )     1.87       1.86       —       —       —

October 31, 2005

    10.65    (.01 )     1.63       1.62       —       —       —

October 31, 2004

    9.68    (.03 )     1.00       .97       —       —       —

 

See accompanying notes which are an integral part of the financial statements.

 

258   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		     %
Portfolio
Turnover Rate(b)
             
             
(.01 )    12.62   (6.78 )    9,956   1.94   2.02   .48      29
—      13.55   (40.52 )    13,387   1.92   1.94   (.04 )    54
—      22.78   16.11      21,692   1.92   1.92   (.30 )    50
—      19.62   10.97      19,112   1.92   1.92   (.13 )    61
(.02 )    17.68   6.94      16,955   1.91   1.91   .08      43
—      16.55   10.19      13,304   1.92   1.92   (.38 )    32
             
(.16 )    12.89   (6.49 )    12,381   1.19   1.27   1.18      29
(.11 )    13.96   (40.06 )    12,645   1.18   1.19   .71      54
(.12 )    23.41   17.01      16,891   1.17   1.17   .45      50
(.10 )    20.12   11.82      12,726   1.17   1.17   .60      61
(.14 )    18.09   7.72      8,695   1.16   1.16   .84      43
(.06 )    16.93   11.05      5,991   1.17   1.17   .37      32
             
(.20 )    12.92   (6.34 )    273,251   .94   1.02   1.46      29
(.16 )    14.03   (39.91 )    331,605   .93   .94   .97      54
(.16 )    23.52   17.28      572,138   .92   .92   .70      50
(.14 )    20.21   12.12      458,002   .92   .92   .87      61
(.18 )    18.16   7.98      386,605   .90   .91   1.12      43
(.08 )    16.99   11.33      342,640   .92   .92   .62      32
             
             
—      8.18   (5.98 )    6,723   2.18   2.36   (.30 )    26
(1.22 )    8.69   (36.71 )    8,653   2.23   2.34   (.63 )    72
(.20 )    15.07   15.70      14,088   2.25   2.30   (.93 )    57
—      13.22   14.06      11,975   2.25   2.35   (1.09 )    54
—      11.59   13.96      9,295   2.24   2.37   (1.06 )    58
—      10.17   9.00      6,041   2.25   2.34   (1.33 )    203
             
(.05 )    8.79   (5.60 )    2,600   1.43   1.61   .41      26
(1.22 )    9.37   (36.29 )    2,570   1.48   1.59   .11      72
(.20 )    16.03   16.70      3,654   1.50   1.55   (.19 )    57
—      13.93   14.84      2,523   1.50   1.60   (.34 )    54
—      12.13   14.87      1,663   1.48   1.62   (.32 )    58
—      10.56   9.77      1,279   1.50   1.59   (.58 )    203
             
(.08 )    8.95   (5.47 )    110,601   1.22   1.40   .67      26
(1.23 )    9.56   (36.14 )    143,039   1.23   1.34   .37      72
(.20 )    16.30   16.97      265,807   1.25   1.30   .07      57
—      14.13   15.16      198,081   1.25   1.35   (.09 )    54
—      12.27   15.21      156,596   1.22   1.38   (.06 )    58
—      10.65   10.02      123,045   1.25   1.34   (.32 )    203

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   259

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell Strategic Bond Fund

               
Class A                     

April 30, 2009*

    9.23    .28    (.02 )     .26       (.24 )     (.04 )     —

October 31, 2008(5)

    9.99    .08    (.82 )     (.74 )     (.02 )     —       —
Class C                     

April 30, 2009*

    9.23    .28    (.06 )     .22       (.21 )     (.04 )     —

October 31, 2008(5)

    9.99    .06    (.80 )     (.74 )     (.02 )     —       —
Class E                     

April 30, 2009*

    9.18    .28    (.02 )     .26       (.25 )     (.04 )     —

October 31, 2008

    10.53    .49    (1.33 )     (.84 )     (.51 )     —       —

October 31, 2007

    10.48    .50    .01       .51       (.46 )     —       —

October 31, 2006

    10.44    .45    .04       .49       (.42 )     (.03 )     —

October 31, 2005

    10.70    .35    (.21 )     .14       (.32 )     (.08 )     —

October 31, 2004

    10.67    .28    .31       .59       (.38 )     (.18 )     —
Class I                     

April 30, 2009*

    9.16    .28    (.01 )     .27       (.26 )     (.04 )     —

October 31, 2008

    10.51    .52    (1.33 )     (.81 )     (.54 )     —       —

October 31, 2007

    10.46    .52    .02       .54       (.49 )     —       —

October 31, 2006

    10.43    .47    .03       .50       (.44 )     (.03 )     —

October 31, 2005

    10.69    .38    (.22 )     .16       (.34 )     (.08 )     —

October 31, 2004

    10.65    .30    .32       .62       (.40 )     (.18 )     —
Class S                     

April 30, 2009*

    9.24    .28    —       .28       (.26 )     (.04 )     —

October 31, 2008(5)

    9.98    .08    (.80 )     (.72 )     (.02 )     —       —
Class Y                     

April 30, 2009*

    9.16    .28    —       .28       (.26 )     (.04 )     —

October 31, 2008

    10.51    .51    (1.32 )     (.81 )     (.54 )     —       —

October 31, 2007

    10.46    .52    .02       .54       (.49 )     —       —

October 31, 2006

    10.43    .64    (.13 )     .51       (.45 )     (.03 )     —

October 31, 2005(1)

    10.74    .14    (.26 )     (.12 )     (.19 )     —       —

 

See accompanying notes which are an integral part of the financial statements.

 

260   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		   %
Portfolio
Turnover Rate(b)
             
             
(.28 )    9.21   2.95      28,324   .91   1.03   6.32   48
(.02 )    9.23   (7.42 )    22,437   .93   1.07   4.40   131
             
(.25 )    9.20   2.55      93,089   1.65   1.77   6.31   48
(.02 )    9.23   (7.54 )    97,063   1.68   1.82   3.63   131
             
(.29 )    9.15   3.02      118,609   .80   1.03   6.30   48
(.51 )    9.18   (8.45 )    135,857   .88   1.00   4.79   131
(.46 )    10.53   4.99      18,101   .93   .96   4.69   698
(.45 )    10.48   4.81      15,119   .92   .96   4.27   270
(.40 )    10.44   1.37      9,268   .93   .95   3.32   198
(.56 )    10.70   5.65      7,489   .96   .96   2.64   196
             
(.30 )    9.13   3.15      1,146,854   .55   .70   6.29   48
(.54 )    9.16   (8.26 )    1,330,676   .66   .69   5.10   131
(.49 )    10.51   5.27      1,415,575   .67   .70   4.97   698
(.47 )    10.46   4.95      744,559   .70   .73   4.51   270
(.42 )    10.43   1.65      560,896   .69   .71   3.55   198
(.58 )    10.69   5.99      461,966   .72   .72   2.85   196
             
(.30 )    9.22   3.07      1,730,713   .66   .78   6.29   48
(.02 )    9.24   (7.23 )    1,915,099   .69   .82   4.33   131
             
(.30 )    9.14   3.18      2,807,184   .51   .61   6.29   48
(.54 )    9.16   (8.11 )    3,166,974   .55   .66   5.20   131
(.49 )    10.51   5.30      134,926   .63   .66   5.01   698
(.48 )    10.46   5.03      101,240   .63   .67   4.60   270
(.19 )    10.43   (1.15 )    40,259   .64   .67   3.74   198

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   261

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell Investment Grade Bond Fund

               
Class C                     

April 30, 2009*

    18.68    .34    .79       1.13       (.34 )     —       —

October 31, 2008

    20.76    .72    (2.00 )     (1.28 )     (.80 )     —       —

October 31, 2007(4)

    20.76    .08    (.08 )     —       —       —       —
Class E                     

April 30, 2009*

    18.70    .42    .79       1.21       (.38 )     —       —

October 31, 2008

    20.77    .92    (2.00 )     (1.08 )     (.99 )     —       —

October 31, 2007

    20.82    .96    (.02 )     .94       (.99 )     —       —

October 31, 2006

    20.75    .92    .04       .96       (.89 )     —       —

October 31, 2005

    21.88    .74    (.61 )     .13       (.73 )     (.53 )     —

October 31, 2004

    22.12    .63    .48       1.11       (.69 )     (.66 )     —
Class I                     

April 30, 2009*

    18.69    .45    .80       1.25       (.40 )     —       —

October 31, 2008

    20.76    .97    (2.00 )     (1.03 )     (1.04 )     —       —

October 31, 2007

    20.82    1.04    (.06 )     .98       (1.04 )     —       —

October 31, 2006

    20.75    .97    .05       1.02       (.95 )     —       —

October 31, 2005

    21.87    .80    (.61 )     .19       (.78 )     (.53 )     —

October 31, 2004

    22.11    .68    .49       1.17       (.75 )     (.66 )     —
Class S                     

April 30, 2009*

    18.69    .43    .80       1.23       (.39 )     —       —

October 31, 2008

    20.76    .95    (2.01 )     (1.06 )     (1.01 )     —       —

October 31, 2007(4)

    20.75    .01    —       .01       —       —       —
Class Y                     

April 30, 2009*

    18.70    .45    .80       1.25       (.40 )     —       —

October 31, 2008

    20.77    .98    (2.00 )     (1.02 )     (1.05 )     —       —

October 31, 2007

    20.83    1.04    (.05 )     .99       (1.05 )     —       —

October 31, 2006

    20.76    .99    .04       1.03       (.96 )     —       —

October 31, 2005

    21.88    .80    (.61 )     .19       (.78 )     (.53 )     —

October 31, 2004

    22.12    .70    .48       1.18       (.76 )     (.66 )     —

 

See accompanying notes which are an integral part of the financial statements.

 

262   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		   %
Portfolio
Turnover Rate(b)
             
             
(.34 )    19.47   6.21      31,577   1.55   1.55   3.57   39
(.80 )    18.68   (6.47 )    29,741   1.60   1.63   3.54   105
—      20.76   —      35,689   1.60   1.62   4.21   199
             
(.38 )    19.53   6.70      42,178   .67   .80   4.42   39
(.99 )    18.70   (5.57 )    48,193   .67   .71   4.48   105
(.99 )    20.77   4.64      53,663   .65   .67   4.76   199
(.89 )    20.82   4.79      31,504   .64   .67   4.45   125
(1.26 )    20.75   .60      29,632   .65   .68   3.49   202
(1.35 )    21.88   5.22      27,515   .65   .66   2.88   154
             
(.40 )    19.54   6.77      357,439   .42   .47   4.67   39
(1.04 )    18.69   (5.29 )    406,332   .41   .44   4.74   105
(1.04 )    20.76   4.85      689,651   .40   .42   4.99   199
(.95 )    20.82   5.06      829,914   .40   .42   4.70   125
(1.31 )    20.75   .88      788,808   .38   .40   3.76   202
(1.41 )    21.87   5.52      752,229   .39   .40   3.15   154
             
(.39 )    19.53   6.75      118,211   .56   .56   4.55   39
(1.01 )    18.69   (5.46 )    133,108   .54   .57   4.61   105
—      20.76   .05      226,995   .53   .55   5.30   199
             
(.40 )    19.55   6.84      420,530   .38   .38   4.71   39
(1.05 )    18.70   (5.24 )    480,605   .37   .40   4.78   105
(1.05 )    20.77   4.90      609,683   .36   .38   5.04   199
(.96 )    20.83   5.11      550,383   .35   .38   4.77   125
(1.31 )    20.76   .91      398,882   .35   .37   3.81   202
(1.42 )    21.88   5.58      285,228   .33   .34   3.18   154

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   263

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Russell Short Duration Bond Fund

                  
Class A                     

April 30, 2009*

    17.22    .36    .39       .75       (.32 )     —       —

October 31, 2008

    18.81    .74    (1.55 )     (.81 )     (.78 )     —       —

October 31, 2007(3)

    18.71    .49    .09       .58       (.48 )     —       —
Class C                     

April 30, 2009*

    17.17    .30    .40       .70       (.27 )     —       —

October 31, 2008

    18.76    .60    (1.55 )     (.95 )     (.64 )     —       —

October 31, 2007

    18.66    .59    .14       .73       (.63 )     —       —

October 31, 2006

    18.63    .50    .03       .53       (.50 )     —       —

October 31, 2005

    19.04    .31    (.40 )     (.09 )     (.31 )     (.01 )     —

October 31, 2004

    19.01    .19    (.01 )     .18       (.15 )     —       —
Class E                     

April 30, 2009*

    17.24    .37    .39       .76       (.32 )     —       —

October 31, 2008

    18.82    .74    (1.55 )     (.81 )     (.77 )     —       —

October 31, 2007

    18.73    .72    .14       .86       (.77 )     —       —

October 31, 2006

    18.70    .65    .03       .68       (.65 )     —       —

October 31, 2005

    19.10    .46    (.41 )     .05       (.44 )     (.01 )     —

October 31, 2004

    19.08    .34    (.01 )     .33       (.31 )     —       —
Class S                     

April 30, 2009*

    17.21    .38    .41       .79       (.34 )     —       —

October 31, 2008

    18.79    .79    (1.55 )     (.76 )     (.82 )     —       —

October 31, 2007

    18.70    .75    .16       .91       (.82 )     —       —

October 31, 2006

    18.67    .69    .03       .72       (.69 )     —       —

October 31, 2005

    19.07    .51    (.41 )     .10       (.49 )     (.01 )     —

October 31, 2004

    19.05    .38    (.01 )     .37       (.35 )     —       —
Class Y                     

April 30, 2009*

    17.21    .39    .40       .79       (.35 )     —       —

October 31, 2008(6)

    18.11    .08    (.78 )     (.70 )     (.20 )     —       —

Russell Tax Exempt Bond Fund

                  
Class C                     

April 30, 2009*

    20.51    .27    .96       1.23       (.28 )     —       —

October 31, 2008

    21.31    .55    (.80 )     (.25 )     (.55 )     —       —

October 31, 2007

    21.63    .58    (.32 )     .26       (.58 )     —       —

October 31, 2006

    21.45    .57    .17       .74       (.56 )     —       —

October 31, 2005

    22.03    .51    (.61 )     (.10 )     (.48 )     —       —

October 31, 2004

    21.99    .53    .04       .57       (.53 )     —       —
Class E                     

April 30, 2009*

    20.57    .35    .95       1.30       (.35 )     —       —

October 31, 2008

    21.38    .72    (.82 )     (.10 )     (.71 )     —       —

October 31, 2007

    21.70    .76    (.34 )     .42       (.74 )     —       —

October 31, 2006

    21.52    .73    .17       .90       (.72 )     —       —

October 31, 2005

    22.10    .67    (.60 )     .07       (.65 )     —       —

October 31, 2004

    22.06    .69    .04       .73       (.69 )     —       —
Class S                     

April 30, 2009*

    20.54    .37    .96       1.33       (.38 )     —       —

October 31, 2008

    21.36    .77    (.82 )     (.05 )     (.77 )     —       —

October 31, 2007

    21.67    .80    (.32 )     .48       (.79 )       

October 31, 2006

    21.49    .79    .16       .95       (.77 )     —       —

October 31, 2005

    22.07    .72    (.60 )     .12       (.70 )     —       —

October 31, 2004

    22.03    .75    .03       .78       (.74 )     —       —

 

See accompanying notes which are an integral part of the financial statements.

 

264   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		   %
Portfolio
Turnover Rate(b)
             
             
(.32 )    17.65   4.47      10,434   .96   1.04   4.15   98
(.78 )    17.22   (4.60 )    4,566   .96   .99   3.98   146
(.48 )    18.81   3.16      1,363   .92   .93   3.92   173
             
(.27 )    17.60   4.10      22,828   1.71   1.79   3.48   98
(.64 )    17.17   (5.28 )    21,508   1.70   1.73   3.23   146
(.63 )    18.76   3.98      16,075   1.67   1.68   3.18   173
(.50 )    18.66   2.89      21,840   1.65   1.66   2.71   112
(.32 )    18.63   (.50 )    30,290   1.65   1.66   1.65   203
(.15 )    19.04   .97      38,427   1.63   1.66   1.00   132
             
(.32 )    17.68   4.53      12,822   .96   1.04   4.23   98
(.77 )    17.24   (4.59 )    14,144   .95   .98   3.96   146
(.77 )    18.82   4.72      17,092   .92   .93   3.95   173
(.65 )    18.73   3.69      26,800   .90   .91   3.49   112
(.45 )    18.70   .25      24,851   .90   .91   2.43   203
(.31 )    19.10   1.74      23,181   .88   .91   1.76   132
             
(.34 )    17.66   4.62      268,370   .72   .79   4.45   98
(.82 )    17.21   (4.30 )    233,223   .70   .72   4.20   146
(.82 )    18.79   4.99      435,704   .67   .68   4.20   173
(.69 )    18.70   3.95      1,106,946   .65   .65   3.73   112
(.50 )    18.67   .51      1,158,439   .65   .66   2.67   203
(.35 )    19.07   1.98      1,135,332   .63   .66   2.01   132
             
(.35 )    17.65   4.63      109,211   .62   .62   4.58   98
(.20 )    17.21   (3.88 )    111,198   .65   .73   4.28   146
             
             
(.28 )    21.46   6.03      19,195   1.51   1.59   2.59   23
(.55 )    20.51   (1.25 )    16,541   1.54   1.56   2.61   54
(.58 )    21.31   1.21      12,722   1.55   1.55   2.72   72
(.56 )    21.63   3.50      11,819   1.56   1.56   2.66   63
(.48 )    21.45   (.46 )    10,493   1.53   1.53   2.31   43
(.53 )    22.03   2.62      10,611   1.53   1.53   2.39   37
             
(.35 )    21.52   6.35      18,384   .77   .85   3.34   23
(.71 )    20.57   (.46 )    18,422   .79   .81   3.37   54
(.74 )    21.38   1.96      19,442   .80   .80   3.48   72
(.72 )    21.70   4.26      11,805   .80   .81   3.41   63
(.65 )    21.52   .31      8,572   .78   .78   3.07   43
(.69 )    22.10   3.38      6,488   .78   .78   3.14   37
             
(.38 )    21.49   6.50      358,799   .51   .59   3.58   23
(.77 )    20.54   (.23 )    366,707   .54   .56   3.61   54
(.79 )    21.36   2.26      336,275   .55   .55   3.72   72
(.77 )    21.67   4.53      274,438   .55   .56   3.66   63
(.70 )    21.49   .55      228,604   .53   .53   3.31   43
(.74 )    22.07   3.64      185,587   .53   .53   3.39   37

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   265

Russell Investment Company

Russell Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

          
$
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)		      $
Net Realized
and Unrealized
Gain (Loss)		      $
Total from
Investment
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital		  

Russell Real Estate Securities Fund

  

               
Class A                     

April 30, 2009*

    26.79    .49       (5.49 )     (5.00 )     (.49 )     —       —   

October 31, 2008

    52.29    .88       (19.82 )     (18.94 )     (.86 )     (5.64 )     (.06 ) 

October 31, 2007(3)

    57.37    .11       (4.50 )     (4.39 )     (.69 )     —       —   
Class C                     

April 30, 2009*

    26.30    .41       (5.42 )     (5.01 )     (.40 )     —       —   

October 31, 2008

    51.42    .60       (19.49 )     (18.89 )     (.55 )     (5.64 )     (.04 ) 

October 31, 2007

    56.11    .20       .27       .47       (.34 )     (4.82 )     —   

October 31, 2006

    46.08    .22       15.14       15.36       (.35 )     (4.98 )     —   

October 31, 2005

    43.10    .42       6.66       7.08       (.43 )     (3.67 )     —   

October 31, 2004

    33.94    .46       9.92       10.38       (1.21 )     (.01 )     —   
Class E                     

April 30, 2009*

    26.84    .48       (5.52 )     (5.04 )     (.48 )     —       —   

October 31, 2008

    52.36    .89       (19.87 )     (18.98 )     (.84 )     (5.64 )     (.06 ) 

October 31, 2007

    56.95    .62       .28       .90       (.67 )     (4.82 )     —   

October 31, 2006

    46.62    .59       15.36       15.95       (.64 )     (4.98 )     —   

October 31, 2005

    43.55    .76       6.74       7.50       (.76 )     (3.67 )     —   

October 31, 2004

    34.24    .75       10.04       10.79       (1.47 )     (.01 )     —   
Class S                     

April 30, 2009*

    27.19    .52       (5.59 )     (5.07 )     (.52 )     —       —   

October 31, 2008

    52.94    1.02       (20.12 )     (19.10 )     (.94 )     (5.64 )     (.07 ) 

October 31, 2007

    57.53    .75       .28       1.03       (.80 )     (4.82 )     —   

October 31, 2006

    47.03    .73       15.51       16.24       (.76 )     (4.98 )     —   

October 31, 2005

    43.90    .88       6.79       7.67       (.87 )     (3.67 )     —   

October 31, 2004

    34.51    .87       10.09       10.96       (1.56 )     (.01 )     —   
Class Y                     

April 30, 2009*

    27.19    .54       (5.60 )     (5.06 )     (.54 )     —       —   

October 31, 2008(6)

    38.52    (.32 )     (10.79 )     (11.11 )     (.20 )     —       (.02 ) 

Russell Money Market Fund

  

               
Class A                     

April 30, 2009*

    1.0000    .0040       (.0002 )     .0038       (.0038 )     —       —   

October 31, 2008

    1.0000    .0324       .0016       .0340       (.0340 )     —       —   

October 31, 2007

    1.0000    .0517       —       .0517       (.0517 )     —       —   

October 31, 2006

    1.0000    .0464       —       .0464       (.0464 )     —       —   

October 31, 2005

    1.0000    .0271       —       .0271       (.0271 )     —       —   

October 31, 2004

    1.0000    .0108       —       .0181       (.0108 )     —       —   
Class S                     

April 30, 2009*

    1.0000    .0044       (.0001 )     .0043       (.0043 )     —       —   

October 31, 2008

    1.0000    .0344       .0007       .0351       (.0351 )     —       —   

October 31, 2007

    1.0000    .0527       —       .0527       (.0527 )     —       —   

October 31, 2006

    1.0000    .0474       —       .0474       (.0474 )     —       —   

October 31, 2005

    1.0000    .0280       —       .0280       (.0280 )     —       —   

October 31, 2004

    1.0000    .0117       —       .0117       (.0117 )     —       —   

 

See accompanying notes which are an integral part of the financial statements.

 

266   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(b)(f)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(c)(e)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(c)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(e)		     %
Portfolio
Turnover Rate(b)
             
             
(.49 )    21.30   (18.39 )    12,761   1.36   1.36   4.98      60
(6.56 )    26.79   (39.97 )    15,978   1.34   1.34   2.30      66
(.69 )    52.29   (7.70 )    7,868   1.32   1.33   .35      70
             
(.40 )    20.89   (18.78 )    37,707   2.11   2.11   4.24      60
(6.23 )    26.30   (40.42 )    51,273   2.09   2.09   1.56      66
(5.16 )    51.42   .56      98,745   2.07   2.08   .38      70
(5.33 )    56.11   36.63      110,287   2.07   2.08   .45      49
(4.10 )    46.08   17.22      81,876   2.10   2.10   .95      64
(1.22 )    43.10   30.97      61,089   2.12   2.12   1.20      38
             
(.48 )    21.32   (18.52 )    32,051   1.36   1.36   4.90      60
(6.54 )    26.84   (39.99 )    32,758   1.34   1.34   2.29      66
(5.49 )    52.36   1.33      51,299   1.32   1.33   1.13      70
(5.62 )    56.95   37.65      59,768   1.32   1.32   1.19      49
(4.43 )    46.62   18.09      40,296   1.35   1.35   1.71      64
(1.48 )    43.55   32.00      29,436   1.37   1.37   1.95      38
             
(.52 )    21.60   (18.38 )    769,145   1.11   1.11   5.20      60
(6.65 )    27.19   (39.83 )    884,480   1.09   1.09   2.57      66
(5.62 )    52.94   1.57      2,126,802   1.07   1.08   1.38      70
(5.74 )    57.53   38.04      1,903,365   1.07   1.07   1.46      49
(4.54 )    47.03   18.35      1,434,109   1.10   1.10   1.95      64
(1.57 )    43.90   32.30      1,171,513   1.11   1.11   2.23      38
             
(.54 )    21.59   (18.30 )    514,088   .94   .94   5.40      60
(.22 )    27.19   (28.98 )    470,552   1.01   1.01   (10.48 )    66
             
             
(.0038 )    1.0000   0.38      314,573   .34   .66   .80      —
(.0340 )    1.0000   3.45      415,233   .26   .42   3.24      —
(.0517 )    1.0000   5.30      291,636   .25   .40   5.18      —
(.0464 )    1.0000   4.74      76,031   .25   .40   4.82      —
(.0271 )    1.0000   2.74      14,410   .25   .40   2.91      —
(.0108 )    1.0000   1.08      3,989   .25   .40   1.18      —
             
(.0043 )    1.0000   0.43      4,362,945   .24   .56   .88      —
(.0351 )    1.0000   3.56      4,874,243   .16   .32   3.44      —
(.0527 )    1.0000   5.40      5,429,652   .15   .30   5.27      —
(.0474 )    1.0000   4.84      4,166,051   .15   .30   4.78      —
(.0280 )    1.0000   2.82      3,145,592   .15   .30   2.83      —
(.0117 )    1.0000   1.17      2,958,692   .15   .30   1.16      —

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   267

Russell Investment Company

Russell Funds

Notes to Financial Highlights — April 30, 2009 (Unaudited)

 

 

 

* For the period ended April 30, 2009 (Unaudited).
(1) For the period June 23, 2005 (commencement of operations) to October 31, 2005.
(2) For the period February 28, 2007 (commencement of operations) to October 31, 2007.
(3) For the period March 1, 2007 (commencement of operations) to October 31, 2007.
(4) For the period October 22, 2007 (commencement of operations) to October 31, 2007.
(5) For the period September 2, 2008 (commencement of operations) to October 31, 2008.
(6) For the period September 26, 2008 (commencement of operations) to October 31, 2008.
(a) Average month-end shares outstanding were used for this calculation.
(b) Periods less than one year are not annualized.
(c) The ratios for periods less than one year are annualized.
(d) Less than $.01 per share.
(e) May reflect amounts waived and/or reimbursed by RIMCo (“Russell Investment Management Company”) and/or RFSC (“Russell Fund Services Company”), and for certain funds, custody credit arrangements.
(f) Total return for Class A does not reflect a front-end sales charge. If sales charges were included, the total return would be lower.
(g) The annualized net expense ratio is 1.09% not including the dividend and interest expense from short sales.
(h) The annualized net expense ratio is 1.84% not including the dividend and interest expense from short sales.
(i) The annualized net expense ratio is 0.94% not including the dividend and interest expense from short sales.
(j) The annualized net expense ratio is 0.93% not including the dividend and interest expense from short sales.
(k) The annualized net expense ratio is 0.69% not including the dividend and interest expense from short sales.
(l) The annualized net expense ratio is 0.63% not including the dividend and interest expense from short sales.
(m) The annualized net expense ratio is 0.68% not including the dividend and interest expense from short sales.
(n) The annualized net expense ratio is 0.64% not including the dividend and interest expense from short sales.
(o) The annualized net expense ratio is 0.71% not including the dividend and interest expense from short sales.
(p) The annualized net expense ratio is 0.83% not including the dividend and interest expense from short sales.
(q) The annualized net expense ratio is 0.65% not including the dividend and interest expense from short sales.
(r) The annualized net expense ratio is 1.36% not including the dividend and interest expense from short sales.
(s) The annualized net expense ratio is 2.10% not including the dividend and interest expense from short sales.
(t) The annualized net expense ratio is 1.23% not including the dividend and interest expense from short sales.
(u) The annualized net expense ratio is 0.98% not including the dividend and interest expense from short sales.
(v) The annualized net expense ratio is 1.11% not including the dividend and interest expense from short sales.

 

See accompanying notes which are an integral part of the financial statements.

 

268   Notes to Financial Highlights

Russell Investment Company

Russell Funds

Notes to Financial Statements — April 30, 2009 (Unaudited)

 

 

 

1.   Organization

Russell Investment Company (the “Investment Company” or “RIC”) is a series investment company with 38 different investment portfolios referred to as Funds. These financial statements report on 16 of these Funds (each a “Fund” and collectively the “Funds”). The Investment Company is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. It is organized and operates as a Massachusetts business trust under a second amended and restated master trust agreement dated October 1, 2008. The Investment Company’s master trust agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.

Russell Investment Company (“RIMCo”) is the Funds’ adviser and Russell Fund Services Company (“RFSC”), a wholly-owned subsidiary of RIMCo, is the Funds’ administrator and transfer agent.

 

2.   Significant Accounting Policies

The Funds’ financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following is a summary of the significant accounting policies consistently followed by each Fund in the preparation of its financial statements.

Security Valuation

The Funds value portfolio securities according to Board-approved securities valuation procedures and pricing services which include market value procedures, fair value procedures and a description of the pricing services used by the Funds. Russell money market fund securities are priced using the amortized cost method of valuation, as are debt obligation securities maturing within 60 days at the time of purchase, unless the Board determines that amortized cost does not represent market value of short-term debt obligations. The Board has delegated the responsibility for administration of the securities valuation procedures to RFSC.

Ordinarily, the Funds value each portfolio security based on market quotations provided by pricing services or alternative pricing services or dealers (when permitted by the market value procedures). Generally, Fund securities are valued at the close of the market on which they are traded as follows:

 

  •  

U.S. listed equities, equity and fixed income options and rights/warrants: Last sale price; last bid price if no last sale price

 

  •  

U.S. over-the-counter equities: Official closing price; last bid price if no closing price.

 

  •  

Listed ADRs/GDRs: Last sale price; last bid price if no last sale price.

 

  •  

Municipal bonds, U.S. bonds, Eurobonds/foreign bonds: Evaluated bid price; broker quote if no evaluated bid price.

 

  •  

Futures: Settlement price.

 

  •  

Bank loans and forwards: Mean between bid and asking price.

 

  •  

Investments in other mutual funds are valued at their net asset value per share, calculated at 4 p.m. Eastern time or as of the close of the New York Stock Exchange, whichever is earlier.

 

  •  

The value of swap agreements is equal to the Funds’ obligation (or rights) under swap contracts which will generally be equal to the net amounts to be paid or received under the contracts based upon the relative values of the positions held by each party to the contracts.

 

  •  

Equity securities traded on a national foreign securities exchange or a foreign over the counter market are valued on the basis of the official closing price, or lacking the official closing price, at the last sale price of the primary exchange on which the security is traded.

If market quotations are not readily available for a security or if subsequent events suggest that a market quotation is not reliable, the Funds will use the security’s fair value, as determined in accordance with the fair value procedures. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, but rather may be priced by another method that the Board believes reflects fair value. The fair value procedures may involve subjective judgments as to the fair value of securities. The use of fair value pricing by a Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using normal pricing methods. Fair value pricing could also cause discrepancies between the daily movement of the value of Fund shares and the daily movement of the benchmark index if the index is valued using another pricing method.

 

Notes to Financial Statements   269

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

This policy is intended to assure that the Funds’ net asset values fairly reflect security values as of the time of pricing. Events or circumstances affecting the values of Fund securities that occur between the closing of the principal markets on which they trade and the time the net asset value of Fund shares is determined may be reflected in the calculation of net asset values for each applicable Fund when the Funds deem that the particular event or circumstance would materially affect such Fund’s net asset value. Funds that invest primarily in frequently traded exchange-listed securities will use fair value pricing in limited circumstances since reliable market quotations will often be readily available. Funds that invest in foreign securities are likely to use fair value pricing more often since significant events may occur between the close of foreign markets and the time of pricing which would trigger fair value pricing of the foreign securities. Funds that invest in low-rated debt securities are also likely to use fair value pricing more often since the markets in which such securities are traded are generally thinner, more limited and less active than those for higher rated securities. Examples of events that could trigger fair value pricing of one or more securities are: a material market movement of the U.S. securities market (defined in the fair value procedures as the movement by a single major U.S. index greater than a certain percentage) or other significant event; foreign market holidays if on a daily basis, Fund exposure exceeds 20% in aggregate (all closed markets combined); a company development; a natural disaster; or an armed conflict.

Because foreign securities can trade on non-business days, the net asset value of a Fund’s portfolio that includes foreign securities may change on days when shareholders will not be able to purchase or redeem fund shares.

The Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective November 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. SFAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

  •  

Level 1 — quoted prices in active markets for identical investments

 

  •  

Level 2 — other significant observable inputs (including 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)

Inputs used in valuing the Funds’ investments for the period ended April 30, 2009 were as follows:

 

    Russell U.S. Core
Equity Fund		   Russell U.S.
Quantitative Equity Fund		   Russell U.S.
Growth Fund		   Russell U.S.
Value Fund
                 
    Investments in
Securities		   Other Financial
Instruments*		   Investments in
Securities		   Securities Sold
Short		     Other Financial
Instruments*		   Investments in
Securities		   Other Financial
Instruments*		   Investments in
Securities		   Other Financial
Instruments*

Level 1

   $ 3,937,862,031   $ 49,169,998   $ 3,866,549,881   $ (356,638,592 )    $ 47,037,559   $ 114,268,255   $ 806,091   $ 162,598,850   $ 1,404,053

Level 2

     54,300,000     —     53,800,000     —        —     1,500,000     —     2,000,000     —

Level 3

     —     —     —     —        —     —     —     —     —
                                                       
  $ 3,992,162,031   $ 49,169,998   $ 3,920,349,881   $ (356,638,592 )    $ 47,037,559   $ 115,768,255   $ 806,091   $ 164,598,850   $ 1,404,053
                                                       
    Russell U.S.
Small & Mid Cap Fund		   Russell International
Developed Markets Fund		     Russell Global
Equity Fund 		  Russell Emerging
Markets Fund		    
    Investments in
Securities		   Other Financial
Instruments*		   Investments in
Securities		   Other Financial
Instruments*		     Investments in
Securities		   Other Financial
Instruments*		   Investments in
Securities		   Other Financial
Instruments*		    

Level 1

   $ 1,501,730,060   $ 26,115,131   $ 1,008,811,955   $ 44,746,502      $ 587,926,274   $ 7,561,758   $ 464,720,154   $ 3,988,959  

Level 2

     17,700,000     —     2,793,413,720     12,943,717        313,267,886     1,190,685     547,371,461     3,990,416  

Level 3

     —     —     99,496     —        2,437,924     —     30,745,188     —  
                                                   
  $ 1,519,430,060   $ 26,115,131   $ 3,802,325,171   $ 57,690,219      $ 903,632,084   $ 8,752,443   $ 1,042,836,803   $ 7,979,375  
                                                   

 

270   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

     Russell Tax-Managed
U.S. Large Cap Fund		     Russell Tax-Managed
U.S. Small & Mid Cap Fund		    Russell Strategic
Bond Fund		     Russell Investment
Grade Bond Fund		  
     Investments in
Securities		    Other Financial
Instruments*		     Investments in
Securities		    Other Financial
Instruments*		    Investments in
Securities		    Other Financial
Instruments*		     Investments in
Securities		    Other Financial
Instruments*		  
                     

Level 1

    $ 322,394,299    $ 3,808,770      $ 168,451,840    $ 2,715,145    $ 818,813,732    $ 15,237,298      $ 162,872,139    $ 5,451,998   

Level 2

      4,500,000      —        1,800,000      —      6,623,125,844      (6,969,789 )      1,141,842,241      (1,148,650 ) 

Level 3

      —      —        —      —      22,120,086      (3,851,202 )      1,987,336      239,973   
                                                           
   $ 326,894,299    $ 3,808,770      $ 170,251,840    $ 2,715,145    $ 7,464,059,662    $ 4,416,307      $ 1,306,701,716    $ 4,543,321   
                                                           
     Russell Short
Duration Bond Fund		     Russell Tax Exempt
Bond Fund		    Russell Real Estate
Securities Fund		     Russell Money
Market Fund		  
     Investments in
Securities		    Other Financial
Instruments*		     Investments in
Securities		    Other Financial
Instruments*		    Investments in
Securities		    Other Financial
Instruments*		     Investments in
Securities		    Other Financial
Instruments*		  

Level 1

    $ 28,101,952    $ 751,663      $ 9,606,000    $ —    $ 1,764,499,622    $ 1,583      $ 50,000,000    $ —   

Level 2

      436,863,589      54,561        379,489,509      —      76,204,971      9,545        3,974,539,370      346,580,000   

Level 3

      36,843,675      (975,566 )      —      —      —      —        148,000,000      —   
                                                           
   $ 501,809,216    $ (169,342 )    $ 389,095,509    $ —    $ 1,840,704,593    $ 11,128      $ 4,172,539,370    $ 346,580,000   
                                                           

 

* Other financial instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instruments.

A reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining a value for the period ending April 30, 2009 were as follows:

 

     Russell International
Developed Markets Fund		     Russell Global
Equity Fund		     Russell Emerging
Markets Fund		     Russell Strategic
Bond Fund		  

Balance as of 11/01/08

    $ 718,463      $ —      $ 32,894,355      $ 110,916,096   

Accrued discounts/(premiums)

      —        —        —        767,744   

Realized gain/(loss)

      (342,884 )      —        (4,840,273 )      (3,484,045 ) 

Net change in unrealized appreciation/(depreciation) from investments still held as of 04/30/09

      347,007        (773,758 )      7,166,929        (16,996,921 ) 

Net purchases (sales)

      (613,559 )      946,414        (4,600,443 )      (25,831,646 ) 

Net transfers in and/or out of Level 3

      (9,530 )      2,265,267        124,621        (47,102,344 ) 
                                

Balance as of 04/30/09

    $ 99,497      $ 2,437,923      $ 30,745,189      $ 18,268,884   
                                
      Russell Investment
Grade Bond Fund		     Russell Short
Duration Bond Fund		     Russell Money
Market Fund		        

Balance as of 11/01/08

    $ 4,514,051      $ 1,004,152      $ 148,000,000     

Accrued discounts/(premiums)

      288        16,336        —     

Realized gain/(loss)

      (61,311 )      (2,348 )      —     

Net change in unrealized appreciation/(depreciation) from investments still held as of 04/30/09

      (266,821 )      593,040        —     

Net purchases (sales)

      (1,797,870 )      36,746,819        —     

Net transfers in and/or out of Level 3

      (161,028 )      (2,489,890 )      —     
                          

Balance as of 04/30/09

    $ 2,227,309      $ 35,868,109      $ 148,000,000     
                          

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 is effective for fiscal years or interim periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures about the Funds’ derivative and hedging activities. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Funds’ financial statements disclosures.

Investment Transactions

Investment transactions are recorded on a trade date basis. Realized gains and losses from securities transactions, if any, are recorded on the basis of specific identified cost incurred by each money manager within a particular Fund.

Investment Income

Dividend income is recorded net of applicable withholding taxes on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon thereafter as the Funds are informed of the ex-dividend date. Interest income is recorded

 

Notes to Financial Statements   271

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

daily on the accrual basis. The fixed income funds classify gains and losses realized on prepayments received on mortgage-backed securities as part of the interest income. All premiums and discounts, including original issue discounts, are amortized/accreted using the interest method.

Federal Income Taxes

Since the Investment Company is a Massachusetts business trust, each Fund is a separate corporate taxpayer and determines its net investment income and capital gains (or losses) and the amounts to be distributed to each Fund’s shareholders without regard to the income and capital gains (or losses) of the other Funds.

It is each Fund’s intention to qualify as a regulated investment company and distribute all of its taxable income and capital gains. Therefore, no federal income or excise tax provision is required for the Funds.

In accordance with the provisions set forth in the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement 109” (“FIN 48”), adopted by the Funds on November 1, 2007, management has reviewed the Funds’ tax positions for all open tax years, and concluded that adoption had no effect on the Funds’ financial position or results of operations. At April 30, 2009, the Funds have recorded no liabilities for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.

Each Fund files a U. S. tax return. While the statute of limitations remains open to examine the Funds’ U.S. tax returns filed for the fiscal years ending October 31, 2005 through October 31, 2007, no examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Dividends and Distributions to Shareholders

For all Funds, income and capital gain distributions, if any, are recorded on the ex-dividend date. Income distributions are generally declared and paid according to the following schedule:

 

Declared    Payable    Funds

Daily

    Monthly    Russell Money Market Fund

Monthly

    Early in the following month    Russell Strategic Bond, Russell Investment Grade Bond, Russell Short Duration Bond and Russell Tax Exempt Bond Funds

Quarterly

    April, July, October and December    Russell U.S. Core Equity, Russell U.S. Quantitative Equity, Russell U.S. Value, and Russell Real Estate Securities Funds

Annually

    Mid-December    Russell U.S. Growth, Russell U.S. Small & Mid Cap, Russell International Developed Markets, Russell Global Equity, Russell Emerging Markets, Russell Tax-Managed U.S. Large Cap and Russell Tax-Managed U.S. Mid & Small Cap Funds

Capital gain distributions are generally declared and paid annually. An additional distribution may be paid by the Funds to avoid imposition of federal income and excise tax on any remaining undistributed capital gains and net investment income.

The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax regulations which may differ from GAAP. As a result, net investment income and net realized gain (or loss) on investment and foreign currency-related transactions for a reporting period may differ significantly from distributions during such period. The differences between tax regulations and GAAP primarily relate to investments in options, futures, forward contracts, swap contracts, passive foreign investment companies, foreign-denominated investments, mortgage-backed securities, certain securities sold at a loss and capital loss carryforwards.

Expenses

The Funds will pay their own expenses other than those expressly assumed by RIMCo or RFSC. Most expenses can be directly attributed to the individual Funds. Expenses which cannot be directly attributed to a specific Fund are allocated among all Funds principally based on their relative net assets.

Class Allocation

Each of the Funds presented herein may offer certain of the following classes of shares: Class A, Class C, Class E, Class I, Class S and Class Y. All share classes have identical voting, dividend, liquidation and other rights and the same terms and conditions. The separate classes of shares differ principally in the applicable transfer agent fees, distribution fees and shareholder servicing

 

272   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

fees. Shareholders of each class bear certain expenses that pertain to that particular class. Realized and unrealized gains (losses), net investment income, and expenses with the exception of class level expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

Foreign Currency Translations

The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts and transactions of the Funds are translated into U.S. dollars on the following basis:

 

  (a) Market value of investment securities, other assets and liabilities at the closing rate of exchange on the valuation date.

 

  (b) Purchases and sales of investment securities and income at the closing rate of exchange prevailing on the respective trade dates of such transactions.

Net realized gains or losses from foreign currency-related transactions arise from: sales and maturities of short-term securities; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized gains or losses from foreign currency-related transactions arise from changes in the value of assets and liabilities, other than investments in securities, at year-end, as a result of changes in the exchange rates.

The Funds do not isolate that portion of the results of operations of the Funds that arises as a result of changes in exchange rates from that portion that arises from changes in market prices of investments during the year. Such fluctuations are included with the net realized and unrealized gain or loss from investments. However, for federal income tax purposes the Funds do isolate the effects of changes in foreign exchange rates from the fluctuations arising from changes in market prices for realized gain (or loss) on debt obligations.

Capital Gains Taxes

The Russell International Developed Markets, Russell Global Equity and Russell Emerging Markets Funds may be subject to capital gains taxes and repatriation taxes imposed by certain countries in which they invest. The Funds may record a deferred tax liability in respect of the unrealized appreciation on foreign securities for potential capital gains and repatriation taxes at April 30, 2009. The accrual for capital gains and repatriation taxes is included in net unrealized appreciation (depreciation) on investments in the Statements of Assets and Liabilities for the Funds. The amounts related to capital gains taxes are included in net realized gain (loss) on investments in the Statements of Operations for the Funds.

 

      Deferred Tax
Liability		    Capital Gains
Taxes
     

Russell Global Equity Fund

    $ 14,724    $ —

Russell Emerging Markets Fund

      332,915      38,732

Derivatives

To the extent permitted by the investment objectives, restrictions and policies set forth in the Funds’ Prospectus and Statement of Additional Information, the Funds may participate in various derivative-based transactions. Derivative securities are instruments or agreements whose value is derived from an underlying security or index. They include options, futures, swaps, forwards, structured notes and stripped securities. These instruments offer unique characteristics and risks that assist the Funds in meeting its investment strategies.

The Funds typically use derivatives in three ways: exposing cash reserves to markets, hedging and return enhancement. The Funds, other than the Russell Real Estate Securities Fund and Russell Tax Exempt Bond Fund, may pursue their strategy of being fully invested by exposing cash reserves to the performance of appropriate markets by purchasing securities and/or derivatives. This is intended to cause the Funds to perform as though cash reserves were actually invested in those markets. Hedging is also used by the Funds to limit or control risks, such as adverse movements in exchange rates and interest rates. Return enhancement can be accomplished through the use of derivatives in a Fund. By purchasing certain instruments, the Funds may more effectively achieve the desired portfolio characteristics that assist them in meeting their investment objectives. Depending on how the derivatives are structured and utilized, the risks associated with them may vary widely. These risks are generally categorized as market risk, liquidity risk and counterparty or credit risk.

 

Notes to Financial Statements   273

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Foreign Currency Exchange Contracts

In connection with investment transactions consistent with the Funds’ investment objectives and strategies, certain Funds may enter into foreign currency exchange spot contracts and forward foreign currency exchange contracts (“contracts”). From time to time certain Funds may enter into contracts to hedge certain foreign currency-denominated assets. Contracts are recorded at market value. Certain risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and are generally limited to the amount of unrealized gain on the contracts, if any, that are recognized in the Statements of Assets and Liabilities. Realized gains or losses arising from such transactions are included in net realized gain (or loss) from foreign currency-related transactions.

Forward Commitments

The Funds may contract to purchase securities for a fixed price at a future date beyond customary settlement time consistent with a Fund’s ability to manage its investment portfolio and meet redemption requests. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The Funds may dispose of a forward commitment transaction prior to settlement if it is appropriate to do so and realize short-term gains (or losses) upon such sale. When effecting such transactions, cash or liquid high-grade debt obligations of the Fund in a dollar amount sufficient to make payment for the portfolio securities to be purchased will be segregated on the Fund’s records at the trade date and maintained until the transaction is settled. A forward commitment transaction involves a risk of loss if the value of the security to be purchased declines prior to the settlement date or the other party to the transaction fails to complete the transaction.

Loan Agreements

The Russell Strategic Bond, Russell Investment Grade Bond and Russell Short Duration Bond Funds may invest in direct debt instruments which are interests in amounts owed by corporate, governmental, or other borrowers to lenders or lending syndicates. The Funds’ investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. A loan is often administered by a bank or other financial institution (the “lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the Funds have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the loan agreement and only upon receipt by the lender of payments from the borrower. The Funds generally have no right to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Funds may be subject to the credit risk of both the borrower and the lender that is selling the loan agreement. When the Funds purchase assignments from lenders it acquires direct rights against the borrower on the loan. At the period ended April 30, 2009, the Russell Strategic Bond Fund had $4,000,000 in unfunded loan commitments.

Options

The Funds may purchase and sell (write) call and put options on securities and securities indices, provided such options are traded on a national securities exchange or in an over-the-counter market. The Funds may also purchase and sell call and put options on foreign currencies. The domestic equity Funds may utilize options to equitize liquidity reserve balances.

When a Fund writes a covered call or a put option, an amount equal to the premium received by the Fund is included in the Fund’s Statement of Assets and Liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. The Fund receives a premium on the sale of a call option but gives up the opportunity to profit from any increase in stock value above the exercise price of the option, and when the Fund writes a put option it is exposed to a decline in the price of the underlying security.

Whether an option which the Fund has written expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss, if the cost of a closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a call option which the Fund has written is exercised, the Fund realizes a capital gain or loss from the sale of the underlying security, and the proceeds from such sale are increased by the premium originally received. When a put option which a Fund has written is exercised, the amount of the premium originally received will reduce the cost of the security which a Fund purchases upon exercise of the option. Realized gains (losses) on purchased options are included in net realized gain (loss) from investments on the Statements of Operations.

The Funds’ use of written options involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The face or contract amounts of these instruments reflect the extent of the Funds’ exposure to market risk. The risks may be caused by an imperfect correlation between movements in the price of the instrument and the price of the underlying securities and interest rates.

 

274   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

A Fund may enter into a swaption (swap option). In a swaption, the buyer gains the right but not the obligation to enter into a specified swap agreement with the issuer on a specified future date. The writer of the contract receives the premium and bears the risk of unfavorable changes in the preset rate on the underlying interest rate swap. Unrealized gains/losses on swaptions are reflected in investment assets and investment liabilities in the Fund’s Statement of Assets and Liabilities.

Futures Contracts

The Funds may invest in futures contracts (i.e., interest rate, foreign currency and index futures contracts) to a limited extent. The face or contract amounts of these instruments reflect the extent of the Funds’ exposure to off balance sheet risk. The primary risks associated with the use of futures contracts are an imperfect correlation between the change in market value of the securities held by the Fund and the prices of futures contracts and the possibility of an illiquid market. Upon entering into a futures contract, the Funds are required to deposit with a broker an amount, termed the initial margin, which typically represents 5% of the purchase price indicated in the futures contract. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement value are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. As of April 30, 2009, the Funds had cash collateral balances in connection with futures contracts purchased (sold) as follows:

 

      Cash
Collateral
for Futures		    Due to
Broker		  
     

Russell U.S. Core Equity Fund

    $ 41,000,000    $ —   

Russell U.S. Quantitative Equity Fund

      39,250,000      —   

Russell U.S. Growth Fund

      1,550,000      —   

Russell U.S. Value Fund

      2,000,000      —   

Russell U.S. Small & Mid Cap Fund

      13,000,000      —   

Russell International Developed Markets Fund

      58,154,087      —   

Russell Global Equity Fund

      7,800,000      —   

Russell Emerging Markets Fund

      13,830,891      —   

Russell Tax-Managed U.S. Large Cap Fund

      2,900,000      —   

Russell Tax-Managed U.S. Mid & Small Cap Fund

      1,100,000      —   

Russell Strategic Bond Fund

      7,237,500      (990,000 ) 

Russell Investment Grade Bond Fund

      1,598,400      (1,340,000 ) 

Russell Short Duration Bond Fund

      649,200      —   

Swap Agreements

The Funds may enter into swap agreements, on either an asset-based or liability-based basis, depending on whether they are hedging their assets or their liabilities, and will usually enter into swaps on a net basis, i.e., the two payment streams are netted out, with the Funds receiving or paying, as the case may be, only the net amount of the two payments. When a Fund engages in a swap, it exchanges its obligations to pay or rights to receive payments for the obligations or rights to receive payments of another party (i.e., an exchange of floating rate payments for fixed rate payments).

Certain Funds may enter into several different types of agreements including interest rate, credit default and currency swaps. The Funds may enter into index swap agreements as an additional hedging strategy for cash reserves held by those Funds or to effect investment transactions consistent with those Funds’ investment objectives and strategies. Interest rate swaps are a counterparty agreement, can be customized to meet each party’s needs, and involve the exchange of a fixed payment per period for a payment that is not fixed. Currency swaps are an agreement where two parties exchange specified amounts of different currencies which are followed by a series of interest payments that are exchanged based on the principal cash flow. At maturity the principal amounts are exchanged back. Credit default swaps are a counterparty agreement which allows the transfer of third party credit risk (the possibility that an issuer will default on their obligation by failing to pay principal or interest in a timely manner) from one party to another. The lender faces the credit risk from a third party and the counterparty in the swap agrees to insure this risk in exchange for regular periodic payments.

The Funds expect to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of their portfolios or to protect against any increase in the price of securities they anticipate purchasing at a later date. The net amount of the excess, if any, of the Funds’ obligations over their entitlements with respect to each swap will be accrued on a daily basis and an amount of cash or liquid high-grade debt securities having an aggregate net asset value at least equal to the accrued excess will be segregated. To the extent that the Funds enter into swaps on other than a net basis, the amount maintained in a segregated account will be the full amount of the Funds’ obligations, if any, with respect to such interest rate swaps, accrued on a daily basis. The Funds will not enter into any swaps unless the unsecured senior debt or the claims-paying ability of the other party thereto is rated in the highest rating category of at least one nationally recognized rating organization at the time of entering

 

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into such transaction. If there is a default by the other party to such a transaction, the Funds will have contractual remedies pursuant to the agreement related to the transaction. The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become more liquid.

A Fund may not receive the expected amount under a swap agreement if the other party to the agreement defaults or becomes bankrupt. The market for swap agreements is largely unregulated. The Funds will only enter into swap agreements with counterparties that would be eligible for consideration as repurchase agreement counterparties under the Funds’ repurchase agreement guidelines.

As of April 30, 2009, the Funds had cash collateral balances in connection with swap contracts purchased (sold) as follows:

 

      Cash
Collateral
for Swaps		    Due to
Broker		  
     

Russell Emerging Markets Fund

    $ 6,000,000    $ —   

Russell Strategic Bond Fund

      18,624,000      (13,284,000 ) 

Russell Investment Grade Bond Fund

      1,519,000      (3,070,000 ) 

Russell Short Duration Bond Fund

      —      (620,000 ) 

Credit Default Swaps

FASB issued FASB Staff Position (“FSP”) No. 133-1 and 45-4 “Disclosures about Credit Derivatives and Certain Guarantees” which requires enhanced disclosure about the Funds’ credit derivatives. Management adopted FSP No. 133-1 and 45-4 on November 1, 2008.

The fixed income funds may enter into credit default swaps. A credit default swap can refer to corporate issues, asset-backed securities or an index of assets, each known as the reference entity or underlying asset. The fixed income funds may act as either the buyer or the seller of a credit default swap. Depending upon the terms of the contract, the credit default swap may be closed via physical settlement. However, if there is instability in the market, there is a risk that the fixed income funds may be unable to deliver the underlying debt security to the other party to the agreement. Additionally, the fixed income funds may not receive the expected amount under the swap agreement if the other party to the agreement defaults or becomes bankrupt. The market for credit default swap agreements is largely unregulated. In an unhedged credit default swap, the fixed income funds enter into a credit default swap without owning the underlying asset or debt issued by the reference entity. Credit default swaps allow the fixed income funds to acquire or reduce credit exposure to a particular issuer, asset or basket of assets.

As the seller in a credit default swap, the fixed income funds would be required to pay the par or other agreed-upon value (or otherwise perform according to the swap contract) of a reference debt obligation to the counterparty in the event of a default (or other specified credit event); the counterparty would be required to surrender the reference debt obligation. In return, the fixed income funds would receive from the counterparty a periodic stream of payments over the term of the contract provided that no credit event has occurred. If no credit event occurs, the fixed income funds would keep the stream of payments and would have no payment obligations. As a seller, the fixed income funds would effectively add leverage to its portfolio because in addition to its total net assets, that Fund would be subject to investment exposure on the notional amount of the swap.

The fixed income funds may also purchase credit default swap contracts in order to offset the risk of default of debt securities held in its portfolio, in which case the fixed income funds would function as the counterparty referenced in the preceding paragraph.

Credit default swap agreements on corporate issues involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection’s right to choose the deliverable obligation with the lowest value following a credit event). The fixed income funds may use credit default swaps on corporate issues to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the fixed income funds own or have exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood (as measured by the credit default swap’s spread) of a particular issuer’s default.

Credit default swap agreements on asset-backed securities involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. Unlike credit default swaps on corporate issues, deliverable obligations in most instances would be limited to the specific referenced obligation as performance for asset-backed securities can vary across deals. Prepayments, principal paydowns, and other write-down or loss events on the underlying mortgage loans will reduce the outstanding principal balance of the referenced obligation. These reductions may be

 

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temporary or permanent as defined under the terms of the swap agreement and the notional amount for the swap agreement generally will be adjusted by corresponding amounts. The fixed income funds may use credit default swaps on asset-backed securities to provide a measure of protection against defaults (or other defined credit events) of the referenced obligation or to take an active long or short position with respect to the likelihood of a particular referenced obligation’s default (or other defined credit events).

Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is of a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. Traders may use credit-default swaps on indices to speculate on changes in credit quality.

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues as of period end are disclosed in the Schedules of Investments and generally serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default (or other defined credit event) for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of entering into a credit default swap and may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads and increasing market values, in absolute terms when compared to the notional amount of the swap, generally represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. The maximum potential amount of future payments (undiscounted) that a fixed income fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of April 30, 2009 for which a fixed income fund is the seller of protection are disclosed in the Schedules of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a fixed income fund for the same referenced entity or entities.

Credit default swaps could result in losses if the fixed income funds do not correctly evaluate the creditworthiness of the company or companies on which the credit default swap is based. Credit default swap agreements may involve greater risks than if the fixed income funds had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. The fixed income funds will generally incur a greater degree of risk when it sells a credit default swap than when it purchases a credit default swap. As a buyer of credit default swap, the fixed income funds may lose its investment and recover nothing should a credit event fail to occur and the swap is held to its termination date. As seller of a credit default swap, if a credit event were to occur, the value of any deliverable obligation received by the fixed income funds, coupled with the upfront or periodic payments previously received, may be less than what it pays to the buyer, resulting in a loss of value to the fixed income funds.

If the creditworthiness of the fixed income funds’ swap counterparty declines, the risk that the counterparty may not perform could increase, potentially resulting in a loss to the fixed income funds. To limit the counterparty risk involved in swap agreements, the fixed income funds will only enter into swap agreements with counterparties that meet certain standards of creditworthiness. Although there can be no assurance that the fixed income funds will be able to do so, the fixed income funds may be able to reduce or eliminate its exposure under a swap agreement either by assignment or other disposition, or by entering into an offsetting swap agreement with the same party or another creditworthy party. The fixed income funds may have limited ability to eliminate its exposure under a credit default swap if the credit of the reference entity or underlying asset has declined.

Swap agreements generally are entered into by “eligible participants” and in compliance with certain other criteria necessary to render them excluded from regulation under the Commodity Exchange Act (“CEA”) and, therefore not subject to regulation as futures or commodity option transactions under the CEA.

 

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Interest Rate Swaps

The use of interest rate swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If a money manager using this technique is incorrect in its forecast of market values, interest rates and other applicable factors, the investment performance of a Fund would diminish compared to what it would have been if this investment technique were not used.

Interest rate swaps do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that the Funds are contractually obligated to make. If the other party to an interest rate swap defaults, the Funds’ risk of loss consists of the net amount of interest payments that the Funds are contractually entitled to receive. Since interest rate swaps are individually negotiated, the Funds expect to achieve an acceptable degree of correlation between their rights to receive interest on their portfolio securities and their rights and obligations to receive and pay interest pursuant to interest rate swaps.

Index Swaps

Certain Funds may enter into index swap agreements as an additional hedging strategy for cash reserves held by those Funds or to effect investment transactions consistent with these Funds’ investment objectives and strategies. Swap agreements are two party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard swap transaction, the two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular investments or instruments. The returns to be exchanged between the parties are calculated with respect to a “notional amount” (i.e. a specified dollar amount that is hypothetically invested in a “basket” of securities representing a particular index).

Short Sales

The Russell U.S. Quantitative Equity Fund may enter into short sale transactions. In a short sale, the seller sells a security that it does not own, typically a security borrowed from a broker or dealer. Because the seller remains liable to return the underlying security that it borrowed from the broker or dealer, the seller must purchase the security prior to the date on which delivery to the broker or dealer is required. The Fund will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Fund must return the borrowed security. The Fund will realize a gain if the security declines in price between those dates. The making of short sales exposes the Fund to the risk of liability for the market value of the security that is sold (the amount of which increases as the market value of the underlying security increases), in addition to the costs associated with establishing, maintaining and closing out the short position.

Although the Fund’s potential for gain as a result of a short sale is limited to the price at which it sold the security short less the cost of borrowing the security, its potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. When the Fund makes a short sale, the Fund may use all or a portion of the cash proceeds of short sales to purchase other securities or for any other permissible Fund purpose. To the extent necessary to meet collateral requirements, the Fund is required to pledge assets in a segregated account maintained by the Fund’s custodian for the benefit of the broker. The Fund also may use securities it owns to meet any such collateral obligations. Until a Fund replaces a borrowed security in connection with a short sale, the Fund will: (a) maintain daily a segregated account, containing cash, cash equivalents, or liquid marketable securities, at such a level that the amount deposited in the segregated account plus the amount deposited with the broker as collateral will equal the current requirement under Regulation T promulgated by the Board of Governors of the Federal Reserve System under the authority of section 7 and 8 of the Securities Exchange Act of 1934, as amended; or (b) otherwise cover its short position in accordance with positions taken by the staff of the Securities and Exchange Commission (e.g., taking an offsetting long position in the security sold short.) As of April 30, 2009, $1,107,880,876 was held as collateral.

Investments in Emerging Markets

Investing in emerging markets may involve special risks and considerations not typically associated with investing in the United States markets. These risks include revaluation of currencies, high rates of inflation, repatriation, restrictions on income and capital, and future adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls, delayed settlements, and their prices may be more volatile than those of comparable securities in the United States.

Repurchase Agreements

The fixed income funds and the Russell Money Market Fund may enter into repurchase agreements. A repurchase agreement is an agreement under which the Fund acquires a fixed income security from a commercial bank, broker or dealer and simultaneously agrees to resell such security to the seller at an agreed upon price and date (normally the next business day). The

 

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resale price reflects an agreed upon interest rate effective for the period the security is held by the Fund and is unrelated to the interest rate on the security. The securities acquired by the Fund constitute collateral for the repurchase obligation. In these transactions, the securities acquired by the Fund (including accrued interest earned thereon) must have a total value in excess of the value of the repurchase agreement and must be held by the custodian bank until repurchased. In addition, RIMCo will monitor the Fund’s repurchase agreement transactions generally and will evaluate the credit worthiness of any bank, broker or dealer party to a repurchase agreement with the Fund. A Fund will not invest more than 15% (10% in the case of the Russell Money Market Fund) of its net assets (taken at current market value) in repurchase agreements maturing in more than seven days.

Mortgage-Related and Other Asset-Backed Securities

Certain Funds may invest in mortgage or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgage obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities (“SMBSs”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property. The value of a Fund’s mortgage-backed securities (“MBS”) may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The quality and value of the underlying assets may decline, or default. This has become an increasing risk for collateral related to sub-prime, Alt-A and non-conforming mortgage loans, especially in a declining residential real estate market. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.

MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of a Fund’s portfolio at the time the Fund receives the payments for reinvestment.

Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS, making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.

MBS may have less potential for capital appreciation than comparable fixed income securities due to the likelihood of increased prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a price above par. In such an environment, this risk limits the potential price appreciation of these securities.

Through its investments in MBS, including those that are issued by private issuers, the Funds have exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage and credit markets generally. Private issuers include commercial banks, savings associations, mortgage companies, investment banking firms, finance companies and special purpose finance entities (called special purpose vehicles or SPVs) and other entities that acquire and package mortgage loans for resale as MBS. These privately issued non-governmental MBS may offer higher yields than those issued by government entities, but also may be subject to greater price changes than governmental issues. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their loans. Alt-A loans refer to loans extended to borrowers who have incomplete documentation of income, assets, or other variables that are important to the credit underwriting processes. Nonconforming mortgages are loans that do not meet the standards that allow purchase by government-sponsored enterprises. MBS with exposure to subprime loans, Alt-A loans or non-conforming loans have had in many cases higher default rates than those loans that meet government underwriting requirements. The risk of non-payment is greater for MBS that are backed by mortgage pools that contain subprime, Alt-A and non-conforming loans, but a level of risk exists for all loans.

Unlike MBS issued or guaranteed by the U.S. government or a government sponsored entity (e.g., Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation)), MBS issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit enhancements provided by external entities such as banks or financial institutions or achieved through the structuring of the transaction itself. Examples of such credit support arising out of the structure of the transaction include the issue of senior and subordinated securities (e.g., the issuance of securities by an SPV in multiple classes or “tranches,” with one or more classes being senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying mortgage loans are borne first by the holders of the subordinated class); creation of “reserve funds” (in which case cash or investments, sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and “overcollateralization” (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds that required to make payment on the securities and pay any servicing or other fees). However, there can be no guarantee that credit enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgages loans. In addition, MBS that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgage that are

 

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applicable to those MBS that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private MBS may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or government-sponsored MBS and have wider variances in a number of terms including interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon rates and maturities of the underlying mortgage loans in a private-label MBS pool may vary to a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans.

Privately issued MBS are not traded on an exchange and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, MBS held in a Fund’s portfolio may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.

Asset-backed securities may include MBS, loans, receivables or other assets. The value of the Funds’ asset-backed securities may be affected by, among other things, actual or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the receivables, the market’s assessment of the quality of underlying assets or actual or perceived changes in the credit worthiness of the individual borrowers, the originator, the servicing agent or the financial institution providing the credit support.

Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities. Rising or high interest rates tend to extend the duration of asset-backed securities, making them more volatile and more sensitive to changes in interest rates. The underlying assets are sometimes subject to prepayments which can shorten the security’s weighted average life and may lower its return. Defaults on loans underlying asset-backed securities have become an increasing risk for asset-backed securities that are secured by home-equity loans related to sub-prime, Alt-A or non-conforming mortgage loans, especially in a declining residential real estate market.

Asset-backed securities (other than MBS) present certain risks that are not presented by MBS. Primarily, these securities may not have the benefit of any security interest in the related assets. Credit card receivables are generally unsecured and the debtors are entitled to the protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set off certain amounts owed on the credit cards, thereby reducing the balance due. There is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. To lessen the effect of failures by obligors on underlying assets to make payments, the securities may contain elements of credit support which fall into two categories: (i) liquidity protection, and (ii) protection against losses resulting from ultimate default by an obligor on the underlying assets. Liquidity protection refers to the provision of advances, generally by the entity administering the pool of assets, to ensure that the receipt of payments on the underlying pool occurs in a timely fashion. Protection against losses results from payment of the insurance obligations on at least a portion of the assets in the pool. This protection may be provided through guarantees, policies or letters of credit obtained by the issuer or sponsor from third parties, through various means of structuring the transaction or through a combination of such approaches. The Funds will not pay any additional or separate fees for credit support. The degree of credit support provided for each issue is generally based on historical information respecting the level of credit risk associated with the underlying assets. Delinquency or loss in excess of that anticipated or failure of the credit support could adversely affect the return on an investment in such a security. The availability of asset-backed securities may be affected by legislative or regulatory developments. It is possible that such developments may require the Funds to dispose of any then existing holdings of such securities.

To be announced (“TBA”) is a forward mortgage-backed securities trade. The securities are purchased and sold on a forward commitment basis with an approximate principal amount and maturity date. The actual principal amount and maturity date will be determined upon settlement when the specific mortgage pools are assigned. As of April 30, 2009, the Funds had cash collateral balances in connection with TBAs as follows:

 

      Cash
Collateral
for TBA		    Due to
Broker		  
     

Russell Strategic Bond Fund

    $ —    $ (1,337,000 ) 

Russell Investment Grade Bond Fund

      —      (590,000 ) 

Inflation-Indexed Bonds

Certain Funds may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on a principal value, which is adjusted for inflation. Any increase in the principal amount of an inflation-indexed bond will be included as interest income in the Statement of Operations, even though investors do not receive their principal until maturity.

 

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Guarantees

In the normal course of business the Funds enter into contracts that contain a variety of representations which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds expect the risk of loss to be remote.

Market and Credit Risk

In the normal course of business the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to a transaction to perform (credit risk). Similar to the credit risk, the Funds may be exposed to counterparty risk or risk that an institution or other entity with which the Funds have unsettled or open transactions will default. The potential loss could exceed the value of the assets recorded in the financial statements (the “Assets”). Assets, which potentially expose the Funds to credit risk, consist principally of cash due from counterparties and investments. The extent of the Funds’ exposure to credit and counterparty risks in respect to the Assets approximates their carrying value as recorded in the Funds’ Statements of Assets and Liabilities.

On September 15, 2008, Lehman Brothers Holdings Inc. filed for protection under Chapter 11 of the United States Bankruptcy Code. On September 19, 2008, a proceeding under the Securities Investor Protection Act (SIPA) was commenced with respect to Lehman Brothers Inc., a broker-dealer. A trustee appointed under SIPA is administering the bankruptcy estate of Lehman Brothers Inc. Lehman Brothers International (Europe) was placed in administration under the UK Insolvency Act on September 15, 2008. Lehman Brothers Special Financing Inc., among other Lehman subsidiaries, filed for protection under Chapter 11 of the United States Bankruptcy Code on October 3, 2008. In connection with these filings, the Lehman Brothers group of companies (collectively “Lehman Brothers”) will be reorganized and/or liquidated in an orderly fashion, subject to court approval. Each Lehman Brothers entity is a separate legal entity that is subject to its own bankruptcy proceeding. The court overseeing the Lehman Brothers Inc. case has set a claims filing deadline of January 30, 2009 for all customer claims and June 1, 2009 for all general creditor claims related to Lehman Brothers Inc. To the extent that the Funds held accounts with Lehman Brothers Inc., the Funds filed the appropriate customer claims on January 29, 2009. No claims filing deadline has been set with respect to any other Lehman Brothers entity.

Certain Funds had direct holdings, swap agreements, and securities and derivatives transactions outstanding with Lehman Brothers entities as issuers, counterparties or guarantors at the time the relevant Lehman Brothers entities filed for protection or were placed in administration. The direct holdings associated with Lehman Brothers have been written down to their estimated recoverable values. Unrealized gain on foreign exchange swaps or other derivatives transactions have been written down to zero, while anticipated losses for such transactions associated with Lehman Brothers have been incorporated as components of other liabilities on the Statement of Assets and Liabilities and net changes in realized gain (loss) or unrealized appreciation (depreciation) on the Statements of Operations.

RIMCo or the Funds’ Money Managers have delivered notices of default and early termination to the relevant Lehman Brothers entities where required. For transactions with Lehman Brothers counterparties, RIMCo or the Funds’ Money Managers have terminated trades, obtained quotations from brokers for replacement trades and, where deemed appropriate, re-opened positions with new counterparties.

Capital Support Agreement

A Capital Support Agreement (the “Agreement”) was entered into as of September 15, 2008, by and between RIMCo and RIC, on behalf of Russell Money Market Fund (the “Fund”). The Agreement requires RIMCo to make a payment to the Fund under certain circumstances in the event there are payment defaults or a restructuring with respect to certain specified Lehman Brothers Holdings, Inc. securities (the “Lehman Securities”) or realized losses from the disposition of Lehman Securities that cause the Fund’s market-based valuation to fall below a stated threshold compared to the Fund’s net asset value calculated under the amortized cost method. As of April 30, 2009, the market value of the Lehman Securities totaled $56,420,000 and the securities at amortized cost were $403,000,000. To the extent that the Fund subsequently recovers defaulted payments on the Lehman Securities with respect to which RIMCo has made a payment to the Fund, the Fund is obligated to repay RIMCo for its related prior payments, subject to certain limitations. The maximum amount RIMCo could be required to contribute under the Agreement is limited to $403,000,000 in the aggregate. As of April 30, 2009 the value of the Agreement was $346,580,000. The performance of RIMCo’s obligations under the Agreement is guaranteed by Frank Russell Company (the “Primary Guarantor”) and Northwestern Mutual Life Insurance Company (the “Secondary Guarantor” and, together with the Primary Guarantor, the “Guarantors”) both affiliates of RIMCo.

The contribution obligation under the Agreement is subject to stated conditions and restrictions. The Agreement terminates on the earlier to occur of: (i) the repayment in full, in cash, of all Lehman Securities; (ii) RIMCo and the Guarantors having made

 

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Capital Contributions (as defined in the Agreement), in the aggregate, equal to the Maximum Contribution Amount (as defined in the Agreement); and (iii) so long as RIMCo, the Primary Guarantor and the Secondary Guarantor are not in default with respect to their obligations arising under this Agreement or any Guaranty (as defined in the Agreement), September 15, 2009 (the “Termination Date”).

The Fund will sell the Lehman Securities: (i) within fifteen (15) calendar days following any change in the Secondary Guarantor’s financial strength ratings such that the Secondary Guarantor’s obligations no longer qualify as “First Tier Securities,” as defined in sub-paragraph (a)(12) of Rule 2a-7; or (ii) on the business day immediately prior to the Termination Date, provided that the Fund shall not be required to complete any such sale if (A) the amount the Fund expects to receive on such sale date would not result in a Loss (as defined in the Agreement) or the payment of a Capital Contribution Amount (as defined in the Agreement), or (B) with respect to an event described above in clause (i), if RIMCo substitutes an obligation or credit support that satisfies the requirement of a First Tier Security within fifteen (15) calendar days from the occurrence of such event and during that 15 day period the Secondary Guarantor’s obligations qualify as “Second Tier Securities” (as defined in Rule 2a-7).

Temporary Guarantee Program

The U.S. Treasury Department has established a Temporary Guarantee Program (“Program”) for money market funds. Under the Program, the U.S. Treasury will guarantee to investors in participating money market funds that they will receive $1.00 for each money market fund share held as of the close of business on September 19, 2008. The guarantee will be triggered if the participating money market fund’s net asset value per share falls below $0.995, commonly referred to as breaking the buck. At a meeting held on September 29, 2008, the Board determined that the Russell Money Market Fund would participate in the Program. By written consent dated December 3, 2008, the Board determined that the Russell Money Market Fund would participate in the first extended term of the Program. At a meeting held on April 8, 2009, the Board determined that the Russell Money Market Fund will participate in the second extended term of the program. The Russell Money Market Fund is responsible for the fees required to participate in the Program.

The Program provides coverage to shareholders of the Russell Money Market Fund for amounts that they held in the Russell Money Market Fund as of the close of business on September 19, 2008. Any increase in the number of shares of the Russell Money Market Fund held in an account after the close of business on September 19, 2008 will not be guaranteed. Any purchase of shares of the Russell Money Market Fund for a new account after the close of business on September 19, 2008 will not be guaranteed. In the event that shares held as of the close of business on September 19, 2008 are sold prior to the date the guarantee is triggered, then the shares covered by the guarantee will be the lesser of (i) the amounts held in the Russell Money Market Fund as of the close of business on September 19, 2008 or (ii) the amounts held in the Russell Money Market Fund on the date the guarantee is triggered.

Under the terms of the Program, if the guarantee is triggered, the Board will be required to initiate the actions necessary under applicable state and federal law to commence the liquidation of the Russell Money Market Fund. For shares covered by the guarantee, any difference between the amount received by a shareholder in connection with the liquidation and $1.00 per share will be covered under the Program.

The Program is designed to address temporary dislocations in credit markets. The initial term of the Program was a three month term beginning September 19, 2008. The Program was then extended from December 19, 2008 until April 30, 2009. On March 31, 2009, The Secretary of the Treasury determined to extend the Program until September 18, 2009. The Secretary does not have the option to renew the Program past September 18, 2009. Guarantee payments to participants under the Program will not exceed the amount available in the U.S. Treasury Department’s Exchange Stabilization Fund (“ESF”) on the date of payment. Currently, ESF assets are approximately $50 billion.

The Russell Money Market Fund is not in any manner approved, endorsed, sponsored or authorized by the U.S. Treasury Department.

 

282   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

3.   Investment Transactions

Securities

During the period ended April 30, 2009, purchases and sales of investment securities (excluding U.S. Government and Agency obligations, short-term investments, options, futures and repurchase agreements) were as follows:

 

      Purchases    Sales
     

Russell U.S. Core Equity Fund

    $ 1,867,965,869    $ 2,028,109,948

Russell U.S. Quantitative Equity Fund

      2,007,822,429      2,248,260,092

Russell U.S. Growth Fund

      61,569,126      78,635,870

Russell U.S. Value Fund

      74,568,494      96,306,309

Russell U.S. Small & Mid Cap Fund

      758,877,345      782,133,875

Russell International Developed Markets Fund

      1,577,000,804      1,567,625,476

Russell Global Equity Fund

      352,121,004      328,765,185

Russell Emerging Markets Fund

      299,090,948      305,120,219

Russell Tax-Managed U.S. Large Cap Fund

      78,503,877      121,617,762

Russell Tax-Managed U.S. Mid & Small Cap Fund

      28,957,386      56,299,138

Russell Strategic Bond Fund

      1,477,974,329      1,378,941,303

Russell Investment Grade Bond Fund

      121,407,531      140,289,473

Russell Short Duration Bond Fund

      212,888,439      229,421,901

Russell Tax Exempt Bond Fund

      85,767,562      112,763,953

Purchases and sales of US Government and Agency obligations (excluding short-term investments, options, futures and repurchase agreements) were as follows:

 

      Purchases    Sales
     

Russell Strategic Bond Fund

    $ 1,958,136,619    $ 1,378,941,303

Russell Investment Grade Bond Fund

      351,993,365      456,247,123

Russell Short Duration Bond Fund

      194,284,181      147,917,860

Written Options Contracts

Transactions in written options contracts for the period ended April 30, 2009 for the following Funds were as follows:

 

     Russell Emerging Markets Fund     Russell Strategic Bond Fund  
      Number of
Contracts		     Premiums
Received		     Number of
Contracts		     Premiums
Received		  
        

Outstanding October 31, 2008

    1,270      $ 1,286,053      1,302      $ 7,274,574   

Opened

    2,350        462,415      1,028        878,373   

Closed

    (3,620 )      (1,748,468 )    (599 )      (6,750,547 ) 

Expired

    —        —      (1,376 )      (880,253 ) 
                            

Outstanding April 30, 2009

    —      $ —      355      $ 522,147   
                            
     Russell Investment Grade Bond Fund     Russell Short Duration Bond Fund  
      Number of
Contracts		     Premiums
Received		     Number of
Contracts		     Premiums
Received		  
        

Outstanding October 31, 2008

    884      $ 699,567      15      $ 1,499,077   

Opened

    1,144        1,044,715      151        116,039   

Closed

    (468 )      (414,492 )    (27 )      (1,530,465 ) 

Expired

    (1,190 )      (973,654 )    (31 )      (9,021 ) 
                            

Outstanding April 30, 2009

    370      $ 356,136      108      $ 75,630   
                            

Securities Lending

The Investment Company has a securities lending program whereby each Fund can loan securities with a value up to 33 1/3% of each Fund’s total assets. The Fund receives cash (U.S. currency), U.S. Government or U.S. Government Agency obligations as collateral against the loaned securities. To the extent that a loan is collateralized by cash, such collateral is invested by the securities lending agent, State Street Bank and Trust Company (“State Street”) in short-term instruments, money market mutual funds and other short-term investments that meet certain quality and diversification requirements. Cash collateral invested in the Russell Money Market Fund is included in the Schedules of Investments. The collateral received is recorded on a lending Fund’s Statement of Assets and Liabilities along with the related obligation to return the collateral.

 

Notes to Financial Statements   283

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Income generated from the investment of cash collateral, less negotiated rebate fees paid to participating brokers and transaction costs, is divided between the Fund and State Street and is recorded as income for the Fund. To the extent that a loan is secured by non-cash collateral, brokers pay the Fund negotiated lenders’ fees, which are divided between the Fund and State Street and are recorded as securities lending income for the Fund. All collateral received will be in an amount at least equal to 102% (for loans of U.S. securities) or 105% (for loans of non-U.S. securities) of the market value of the loaned securities at the inception of each loan. The market value of the loaned securities is determined at the close of business of the Funds and any additional required collateral is delivered to the Fund the next day. Should the borrower of the securities fail financially, there is a risk of delay in recovery of the securities or loss of rights in the collateral. Consequently, loans are made only to borrowers which are deemed to be of good financial standing.

The Funds that participate in securities lending have cash collateral invested in the State Street Securities Lending Quality Trust Fund (“SLQT”). The short-term portfolio instruments held by SLQT are valued on the basis of amortized cost. Issuances and redemptions of interests in SLQT are made on each business day (“valuation date”). Currently, interests in SLQT are purchased and redeemed at a constant net asset value of $1.00 per unit for daily operational liquidity purposes, although redemptions for certain other purposes may be in-kind. In the event that a significant disparity develops between the net asset value based on amortized cost and the market based net asset value of SLQT, the Trustee of SLQT may determine that continued redemption at a constant $1.00 net asset value would create inequitable results for the SLQT’s interest holders. In these circumstances, the Trustee of SLQT, in its sole discretion and acting on behalf of the SLQT interest holders, may direct that interests be redeemed at the market-based net asset value until such time as the disparity between the market-based and the constant net asset value per unit is deemed to be insignificant.

At April 30, 2009, the SLQT was transacting at its amortized cost value of $1.00 per unit for daily operational liquidity purposes. The SLQT’s market value per unit is lower than its amortized cost value per unit. Effective February 10, 2009, the Funds began valuing the units of SLQT for purposes of the Funds’ daily valuation calculation at the unit’s market value rather than the unit’s amortized cost value.

The Funds that participate in securities lending also invest their cash collateral in the Russell Money Market Fund.

As of April 30, 2009, the non-cash collateral pledged for the securities on loan in the following funds was as follows:

 

     

Non-Cash

Collateral Value

    Non-Cash Collateral Holding
     

Russell U.S. Core Equity Fund

    $ 102,343    Pool of US Government Securities

Russell U.S. Growth Fund

      83,500    Pool of US Government Securities

Russell U.S. Value Fund

      543,250    Pool of US Government Securities

Russell U.S. Small & Mid Cap Fund

      11,506,313    Pool of US Government Securities

Russell Tax-Managed U.S. Mid & Small Cap Fund

      128,807    Pool of US Government Securities

Russell Real Estate Fund

      188,267    Pool of US Government Securities

Custodian

The Funds have entered into arrangements with their Custodian whereby custody credits realized as a result of uninvested cash balances are used to reduce a portion of the Funds’ expenses. During the period ended April 30, 2009, the Funds’ custodian fees were reduced by the following amounts under these arrangements which are included in expense reductions on the Statements of Operations:

 

     

Amount

Paid

  

Russell U.S. Core Equity Fund

    $ 17,980

Russell U.S. Quantitative Equity Fund

      15,187

Russell U.S. Growth Fund

      361

Russell U.S. Value Fund

      604

Russell U.S. Small & Mid Cap Fund

      6,412

Russell International Developed Markets Fund

      14,033

Russell Global Equity Fund

      3,662

Russell Emerging Markets Fund

      5,006

Russell Tax-Managed U.S. Large Cap Fund

      1,234

Russell Tax-Managed U.S. Mid & Small Cap Fund

      576

Russell Strategic Bond Fund

      2,567

Russell Investment Grade Bond Fund

      180

Russell Short Duration Bond Fund

      115

Russell Tax Exempt Bond Fund

      46

Russell Real Estate Securities Fund

      24

Russell Money Market Fund

      507

 

284   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Brokerage Commissions

The Funds effect certain transactions through LJR Recapture Services, division of BNY ConvergeEX Execution Solution LLC (“LJR”) and its global network of correspondent brokers. LJR is a registered broker and is not an affiliate of the Funds or RIMCo. Trades placed through LJR and its correspondents are used to generate commission rebates to the Funds on whose behalf the trades were made. For purposes of trading to generate commission rebates to the Funds, the Funds’ money managers are requested to and RIMCo may, with respect to transactions it places, effect transactions with or through LJR and its correspondents or other brokers only to the extent that the Funds will receive competitive execution, price and commissions. In addition, RIMCo recommends targets for the amount of trading that money managers allocate through LJR based upon asset class, investment style and other factors.

LJR may also rebate to the Funds a portion of commissions earned on certain trading by the Funds through LJR and their correspondents in the form of commission recapture. Commission recapture is paid solely to those Funds generating the applicable trades. Commission recapture is generated on the instructions of the Soft Dollar Committee once RIMCo’s research budget has been met, as determined annually in the Soft Dollar Committee budgeting process.

Additionally, the Funds paid brokerage commissions to non-affiliated brokers who provided brokerage and research services to the Adviser.

 

4.   Related Party Transactions, Fees and Expenses

Adviser and Administrator

RIMCo is the Funds’ adviser and RFSC, a wholly-owned subsidiary of RIMCo, is the Funds’ administrator and transfer agent. RIMCo is a wholly-owned subsidiary of Frank Russell Company (a subsidiary of The Northwestern Mutual Life Insurance Company). Frank Russell Company provides ongoing money manager research and trade placement services to RIC and RIMCo.

The Investment Company Funds are permitted to invest their cash reserves (i.e., cash awaiting investment or cash held to meet redemption requests or to pay expenses) in the Russell Money Market Fund. As of April 30, 2009, $1,594,472,738 represents Investment Company Funds and investment by the Russell Investment Funds (“RIF”) in the Russell Money Market Fund. RIF employs the same investment adviser as RIC. In addition, a portion of the collateral received from the Investment Company’s securities lending program in the amount of $1,150,000,000 is invested in the Russell Money Market Fund.

The advisory and administrative fees are based upon the average daily net assets of each Fund and the rates specified in the table below, are payable monthly and total $72,898,028 and $6,868,191 respectively, for the period ended April 30, 2009.

 

     Annual Rate  
Funds    Adviser     Administrator  

Russell U.S. Core Equity

    0.55 %    .05 % 

Russell U.S. Quantitative Equity

    0.55      .05   

Russell U.S. Growth

    0.80      .05   

Russell U.S. Value

    0.70      .05   

Russell U.S. Small & Mid Cap

    0.70      .05   

Russell International Developed Markets

    0.70      .05   

Russell Global Equity

    0.95      .05   

Russell Emerging Markets

    1.15      .05   

Russell Tax-Managed U.S. Large Cap

    0.70      .05   

Russell Tax-Managed U.S. Mid & Small Cap

    0.98      .05   

Russell Strategic Bond

    0.50      .05   

Russell Investment Grade Bond

    0.25      .05   

Russell Short Duration Bond

    0.45      .05   

Russell Tax Exempt Bond

    0.30      .05   

Russell Real Estate Securities

    0.80      .05   

Russell Money Market

    0.20      .05   

For the Russell U.S. Growth Fund RIMCo has contractually agreed, at least until February 28, 2010, to waive up to the full amount of its 0.80% advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses exceed 0.98% of the average daily net assets of that Fund on an annual basis. This waiver may not be terminated during the relevant period except at the Board’s discretion. Direct Fund-level expenses for the Russell U.S. Growth Fund do not include 12b-1, shareholder services, transfer agency fees, the expenses of other investment companies in which the Fund invests which are borne indirectly by the Fund or extraordinary expenses. The total amount of the waiver for the period ended April 30, 2009 was $54,287. There were no reimbursements for the period ended April 30, 2009.

 

Notes to Financial Statements   285

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

For the Russell Tax-Managed U.S. Mid & Small Cap Fund RIMCo has contractually agreed, at least until February 28, 2010, to waive up to the full amount of its 0.98% advisory fees and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses exceed 1.10% of the average daily net assets of that Fund on an annual basis. This waiver may not be terminated during the relevant period except at the Board’s discretion. Direct Fund-level expenses for the Russell Tax-Managed U.S. Mid & Small Cap Fund do not include 12b-1 fees, shareholder services fees, transfer agency fees, the expenses of other investment companies in which the Fund invests which are borne indirectly by the Fund or extraordinary expenses. The total amount of the waiver for the period ended April 30, 2009 was $86,365. There were no reimbursements for the period ended April 30, 2009.

For the Russell Strategic Bond Fund RIMCo has contractually agreed, at least until February 28, 2010, to waive .0.07% of its 0.50% advisory fee. This waiver may not be terminated during the relevant period except at the Board’s discretion. The total amount of the waiver for the period ended April 30, 2009 was $3,032,695.

For the Russell Money Market Fund RIMCo has contractually agreed, at least until February 28, 2010, to waive 0.15% of its 0.20% advisory fee. This waiver may not be terminated during the relevant period except at the Board’s discretion. The total amount of the waiver for the period ended April 30, 2009 was $3,679,903.

The Adviser does not have the ability to recover amounts waived or reimbursed from previous periods.

Transfer and Dividend Disbursing Agent

RFSC serves as Transfer and Dividend Disbursing Agent for the Investment Company. For this service, RFSC is paid a fee for transfer agency and dividend disbursing services provided to the Funds. RFSC retains a portion of this fee for its services provided to the Funds and pays the balance to unaffiliated agents who assist in providing these services. Total transfer agency fees paid by the Funds presented herein for the period ended April 30, 2009 was $14,412,430.

Effective September 1, 2008, (October 1, 2008 for the Russell Money Market Fund) transfer agent fees were charged at the class level. Prior to this date, transfer agent fees were charged at the Fund level.

RFSC has contractually agreed to waive, at least through February 28, 2010, a portion of its transfer agency fees as follows:

 

Funds/Classes      Waivers  

Russell U.S. Core Equity - Class E

      0.13 % 

Russell U.S. Core Equity - Class I

      0.05   

Russell U.S. Quantitative Equity - Class E

      0.13   

Russell U.S. Quantitative Equity - Class I

      0.05   

Russell U.S. Growth - Class I

      0.05   

Russell U.S. Small & Mid Cap - Class E

      0.13   

Russell International Developed Markets - Class E

      0.13   

Russell International Developed Markets - Class I

      0.05   

Russell Tax-Managed U.S. Large Cap - Class C, E & S

      0.08   

Russell Tax-Managed U.S. Mid & Small Cap - Class C, E & S

      0.03   

Russell Strategic Bond - Class A, C & S

      0.02   

Russell Strategic Bond - Class E

      0.13   

Russell Strategic Bond - Class I

      0.05   

Russell Investment Grade Bond - Class E

      0.13   

Russell Investment Grade Bond - Class I

      0.05   

Russell Short Duration Bond - Class A, C, E & S

      0.08   

Russell Tax Exempt Bond - Class C, E & S

      0.08   

Russell Money Market - Class A

      0.01   

Russell Money Market - Class S

      0.12   

 

286   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

For the period ended April 30, 2009, the total transfer agent fee waivers are as follows:

 

      Amount
  

Russell U.S. Core Equity Fund

    $ 225,649

Russell U.S. Quantitative Equity Fund

      212,207

Russell U.S. Growth Fund

      14,822

Russell U.S. Small & Mid Cap Fund

      22,074

Russell International Developed Markets Fund

      232,843

Russell Tax-Managed U.S. Large Cap Fund

      112,053

Russell Tax-Managed U.S. Mid & Small Cap Fund

      17,035

Russell Strategic Bond Fund

      558,574

Russell Investment Grade Bond Fund

      123,886

Russell Short Duration Bond Fund

      113,097

Russell Tax Exempt Bond Fund

      154,882

Russell Money Market Fund

      4,021,998

Distributor and Shareholder Servicing

On June 2, 2008, Russell Fund Distributors, Inc., a wholly owned subsidiary of RIMCo, changed its name to Russell Financial Services, Inc. (the “Distributor”). The Distributor serves as distributor for RIC, pursuant to the Distribution Agreement with the Investment Company.

The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the “Plan”) under the 1940 Act. Under this Plan, the Investment Company is authorized to make payments to the Distributor, or any Selling Agents, as defined in the Plan, for sales support services provided and related expenses incurred which were primarily intended to result in the sale of the Class A and Class C shares subject to the Distribution Plan. With the exception of the Russell Money Market Fund, the 12b-1 distribution payments shall not exceed 0.25% or 0.75% of the average daily net assets of a Fund’s Class A or Class C shares, respectively, on an annual basis. The 12b-1 distribution payments shall not exceed 0.15% of the Russell Money Market Fund’s average daily net assets of the Fund’s Class A shares on an annual basis.

In addition, the Investment Company has adopted a Shareholder Services Plan (the “Services Plan”) under which the Funds may make payments to the Distributor or any Servicing Agent for any activities or expenses primarily intended to assist, support or service the Servicing Agents’ clients who beneficially own Class C or Class E shares of the Funds. The shareholder servicing payments shall not exceed 0.25% of the average daily net assets of a Fund’s Class C and Class E shares on an annual basis.

Pursuant to the rules of the Financial Industry Regulatory Authority (“FINRA”), these limitations are imposed at the class level of each Fund rather than on a per shareholder basis. Therefore, long-term shareholders may pay more than the economic equivalent of the maximum sales charges permitted by FINRA.

The aggregate initial sales charges, deferred sales charges and asset-based sales charges on Class A, Class C and Class E Shares of the Funds may not exceed 7.25%, 6.25% and 6.25%, respectively, of total gross sales, subject to certain exclusions.

For the period ended April 30, 2009, the Distributor retained the following amounts in sales charges:

 

Contingent Deferred

Sales Charges

    Class A Shares
  

Russell U.S. Core Equity Fund

    $ 16

Russell U.S. Quantitative Equity Fund

      —

Russell U.S. Small & Mid Cap Fund

      5

Russell International Developed Markets Fund

      15

Russell Global Equity Fund

      —

Russell Emerging Markets Fund

      852

Russell Strategic Bond Fund

      6,697

Russell Short Duration Bond Fund

      2,699

Russell Real Estate Securities Fund

      7,456

Russell Money Market Fund

   

 

Notes to Financial Statements   287

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

For the period ended April 30, 2009, the sales commissions paid to the selling agents for the sales of Class A shares are as follows:

 

     

Aggregate

Front-End

Sales Charges

on Class A Shares

   

Class A Front-End

Sales Charges

Retained by

Distributor

     

Russell U.S. Core Equity Fund

    $ 23,189    $ 4,051

Russell U.S. Quantitative Equity Fund

      18,571      3,397

Russell U.S. Small & Mid Cap Fund

      16,889      2,854

Russell International Developed Markets Fund

      18,110      3,302

Russell Global Equity Fund

      7,445      1,420

Russell Emerging Markets Fund

      25,365      4,546

Russell Strategic Bond Fund

      48,660      9,691

Russell Short Duration Bond Fund

      22,614      4,651

Russell Real Estate Securities Fund

      50,601      17,893

Russell Money Market Fund

      —      —

Accrued Fees Payable to Affiliates

Accrued fees payable to affiliates as April 30, 2009 were as follows:

 

     Russell U.S. Core
Equity Fund		   Russell U.S.
Quantitative Equity
Fund		   Russell U.S. Growth
Fund		   Russell U.S. Value.
Fund		   Russell U.S. Small
& Mid Cap
Fund		   Russell International
Developed Markets
Fund
           

Advisory Fees

   $ 1,641,293   $ 1,572,441   $ 76,156   $ 79,313   $ 649,648   $ 1,915,591

Administration Fees

     149,208     142,949     3,991     5,665     46,403     136,828

Distribution Fees

     46,859     41,957     3,082     5,205     17,390     40,687

Shareholder Servicing Fees

     32,402     29,011     2,004     2,822     12,886     28,876

Transfer Agent Fees

     214,308     203,493     9,041     17,693     84,829     196,015

Trustee Fees

     4,543     3,927     129     —     1,362     3,954
                                   
  $ 2,088,613   $ 1,993,778   $ 94,403   $ 110,698   $ 812,518   $ 2,321,951
                                   
     Russell Global
Equity Fund		   Russell Emerging
Markets Fund		   Russell Tax-Managed
U.S. Large Cap Fund		   Russell Tax-Managed
U.S. Small &
Mid Cap Fund		   Russell Strategic
Bond Fund		   Russell Investment
Grade Bond Fund
           

Advisory Fees

   $ 582,192   $ 850,291   $ 162,727   $ 102,351   $ 2,048,706   $ 198,084

Administration Fees

     30,642     36,969     11,623     4,582     238,222     39,617

Distribution Fees

     4,807     15,864     5,996     3,879     62,184     18,699

Shareholder Servicing Fees

     3,598     8,669     4,434     1,787     42,885     14,826

Transfer Agent Fees

     50,441     89,649     23,316     13,816     299,965     40,067

Trustee Fees

     964     1,054     298     128     6,081     1,157
                                   
  $ 672,644   $ 1,002,496   $ 208,394   $ 126,543   $ 2,698,043   $ 312,450
                                   
     Russell Short
Duration Bond Fund		   Russell Tax Exempt
Bond Fund		   Russell Real Estate
Securities Fund		   Russell Money
Market fund		          
           

Advisory Fees

   $ 153,726   $ 96,587   $ 812,569   $ 170,079    

Administration Fees

     17,081     16,098     50,786     189,884    

Distribution Fees

     15,481     11,677     23,258     27,560    

Shareholder Servicing Fees

     7,118     7,652     12,892     —    

Transfer Agent Fees

     25,786     32,336     115,646     37,993    

Trustee Fees

     548     457     1,468     14,353    
                           
  $ 219,740   $ 164,807   $ 1,016,619   $ 439,869    
                           

Affiliated Brokerage Commissions

The Funds will effect certain transactions through Russell Implementation Services Inc. (“RIS”) and its global network of unaffiliated correspondent brokers. RIS is a registered broker and investment adviser and an affiliate of RIMCo. Trades placed through RIS and its correspondents are made (i) to manage trading associated with changes in managers, rebalancing across existing managers, cash flows and other portfolio transitions or (ii) to execute portfolio securities transactions for each Fund’s assets that RIMCo determines not to allocate to money managers and for each Fund’s cash reserves.

 

288   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Board of Trustees

The Russell Fund Complex consists of RIC, which has 38 Funds, and RIF, which has nine Funds. Each of the Trustees is a Trustee for both RIC and RIF. During the period, the Russell Fund Complex paid each of its independent Trustees a retainer of $60,000 per year, $6,500 for each regular quarterly meeting attended in person, $2,500 for each special meeting attended in person, and $2,500 for each Audit Committee meeting, Nominating and Governance Committee meeting, Investment Committee meeting or any other committee meeting established and approved by the Board that is attended in person. Each Trustee receives a $1,000 fee for attending quarterly and special meetings and a $500 fee for attending committee meetings by phone instead of receiving the full fee had the member attended in person. Trustees’ out of pocket expenses are also paid by the Russell Fund Complex. The Audit Committee Chair and Investment Committee Chair are each paid a fee of $12,000 per year and the Nominating and Governance Committee chair is paid a fee of $6,000 per year. The chairman of the Board receives additional annual compensation of $52,000.

 

5.   Federal Income Taxes

At October 31, 2008, the following Funds had net tax basis capital loss carryforwards which may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first. Available capital loss carryforwards and expiration dates are as follows:

 

Funds    10/31/09    10/31/10    10/31/11    10/31/12    10/31/13
              

Russell U.S. Core Equity

    $ —    $ —    $ —    $ —    $ —

Russell U.S. Quantitative Equity

      —      —      —      —      —

Russell U.S. Growth

      —      —      —      —      —

Russell U.S. Value

      1,393,793      362,611      —      —      —

Russell U.S. Small & Mid Cap

      —      —      —      —      —

Russell International Developed Markets

      —      —      —      —      —

Russell Global Equity

      —      —      —      —      —

Russell Emerging Markets

      —      —      —      —      —

Russell Tax-Managed U.S. Large Cap

      —      46,414,873      —      —      —

Russell Tax-Managed U.S. Mid & Small Cap

      —      —      —      —      —

Russell Strategic Bond

      —      —      —      —      —

Russell Investment Grade Bond

      —      —      —      —      —

Russell Short Duration Bond

      —      —      —      —      4,743,484

Russell Tax Exempt Bond

      —      —      —      357,343      —

Russell Real Estate Securities

      —      —      —      —      —

Russell Money Market

      35,378      —      43,223      —      3,147

Funds

    10/31/14    10/31/15    10/31/16    Totals     

Russell U.S. Core Equity

    $ —    $ —    $ 448,494,718    $ 448,494,718   

Russell U.S. Quantitative Equity

      —      —      300,317,173      300,317,173   

Russell U.S. Growth

      —      —      20,065,350      20,065,350   

Russell U.S. Value

      —      —      71,282,905      73,039,309   

Russell U.S. Small & Mid Cap

      —      —      294,033,706      294,033,706   

Russell International Developed Markets

      —      —      506,675,262      506,675,262   

Russell Global Equity

      —      —      174,572,421      174,572,421   

Russell Emerging Markets

      —      —      —      —   

Russell Tax-Managed U.S. Large Cap

      —      —      52,837,432      99,252,305   

Russell Tax-Managed U.S. Mid & Small Cap

      —      —      11,463,649      11,463,649   

Russell Strategic Bond

      —      —      —      —   

Russell Investment Grade Bond

      9,735,242      —      —      9,735,242   

Russell Short Duration Bond

      7,439,440      1,010,941      —      13,193,865   

Russell Tax Exempt Bond

      634,298      1,197,042      4,001,028      6,189,711   

Russell Real Estate Securities

      —      —      96,444,114      96,444,114   

Russell Money Market

      11,753      17,488      2,749,077      2,860,066   

Russell U.S. Value Fund had a capital loss carryforward of $11,874,284 that it acquired from the Equity Income Fund and Equity III Fund of which $1,393,793 and $362,611 will expire on October 31 of the years of 2009 and 2010, respectively.

Russell Investment Grade Bond Fund had a capital loss carryforward of $13,283,390 that it acquired from the Diversified Bond Fund which will expire on October 31, 2013. This capital loss carryforward can be utilized without any limitation until its expiration date.

 

Notes to Financial Statements   289

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

At April 30, 2009, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

 

     Russell U.S.
Core Equity
Fund		     Russell U.S.
Quantitative
Equity Fund		     Russell U.S.
Growth
Fund		     Russell U.S.
Value
Fund		     Russell U.S.
Small & Mid
Cap Fund		  
          

Cost of Investments

    $ 4,698,190,935      $ 4,960,149,603      $ 122,705,574      $ 201,575,221      $ 1,659,165,706   
                                        

Unrealized Appreciation

      414,901,200        216,006,907        27,112,882        17,271,117        199,371,760   

Unrealized Depreciation

      (1,120,930,105 )      (1,255,806,629 )      (34,050,197 )      (54,247,588 )      (339,107,405 ) 
                                        

Net Unrealized Appreciation (Depreciation)

    $ (706,028,905 )    $ (1,039,799,722 )    $ (6,937,315 )    $ (36,976,471 )    $ (139,735,645 ) 
                                        
     

Russell
International
Developed

Markets Fund

    

Russell

Global Equity
Fund

    

Russell

Emerging

Markets

Fund

     Russell
Tax-Managed
U.S. Large
Cap Fund		    

Russell

Tax-Managed
U.S. Mid & Small

Cap Fund

  

Cost of Investments

    $ 4,715,988,105      $ 1,073,909,722      $ 1,147,142,005      $ 343,144,896      $ 186,354,789   
                                        

Unrealized Appreciation

      266,218,492        36,368,276        320,570,248        54,325,845        14,746,159   

Unrealized Depreciation

      (1,179,881,435 )      (206,645,913 )      (424,875,446 )      (70,576,441 )      (30,849,107 ) 
                                        

Net Unrealized Appreciation (Depreciation)

    $ (913,662,943 )    $ (170,277,637 )    $ (104,305,198 )    $ (16,250,596 )    $ (16,102,948 ) 
                                        
     

Russell

Strategic

Bond Fund

    

Russell
Investment
Grade

Bond Fund

    

Russell
Short Duration

Bond Fund

     Russell
Tax Exempt
Bond Fund		    

Russell

Real Estate
Securities Fund

  

Cost of Investments

    $ 8,650,452,357      $ 1,425,661,489      $ 522,365,839      $ 384,273,080      $ 2,214,432,923   
                                        

Unrealized Appreciation

      98,474,095        23,069,972        5,884,891        12,150,041        418,986,314   

Unrealized Depreciation

      (1,284,867,293 )      (142,029,744 )      (26,441,515 )      (7,327,612 )      (792,714,645 ) 
                                        

Net Unrealized Appreciation (Depreciation)

    $ (1,186,393,198 )    $ (118,959,772 )    $ (20,556,624 )    $ 4,822,429      $ (373,728,331 ) 
                                        

 

290   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands)

Share transactions for the periods ended April 30, 2009 and October 31, 2008 were as follows:

 

     Shares     Dollars  
        
Russell U.S. Core Equity Fund    2009     2008     2009     2008  
        

Class A(1)

         

Proceeds from shares sold

    356      49      $ 6,338      $ 1,040   

Shares issued in connection with acquisition of Diversified Equity Fund

    —      788        —        21,768   

Proceeds from reinvestment of distributions

    6      1        105        15   

Payments for shares redeemed

    (261 )    (57 )      (4,492 )      (1,200 ) 
                            

Net increase (decrease)

    101      781        1,951        21,623   
                            
        

Class C(1)

         

Proceeds from shares sold

    429      81        7,837        1,833   

Shares issued in connection with acquisition of Diversified Equity Fund

    —      4,360        —        120,382   

Proceeds from reinvestment of distributions

    12      1        226        30   

Payments for shares redeemed

    (794 )    (281 )      (14,090 )      (6,413 ) 
                            

Total net increase (decrease)

    (353 )    4,161        (6,027 )      115,832   
                            
        

Class E

         

Proceeds from shares sold

    738      1,542        13,070        48,472   

Shares issued in connection with acquisition of Diversified Equity Fund

    —      2,376        —        65,598   

Proceeds from reinvestment of distributions

    31      166        575        5,392   

Payments for shares redeemed

    (611 )    (807 )      (10,702 )      (21,785 ) 
                            

Total net increase (decrease)

    158      3,277        2,943        97,677   
                            
        

Class I

         

Proceeds from shares sold

    8,071      14,102        145,780        411,577   

Proceeds from reinvestment of distributions

    308      3,580        5,708        116,547   

Payments for shares redeemed

    (13,824 )    (12,279 )      (243,953 )      (359,017 ) 
                            

Net increase (decrease)

    (5,445 )    5,403        (92,465 )      169,107   
                            
        

Class S(1)

         

Proceeds from shares sold

    14,878      4,511        266,919        103,706   

Shares issued in connection with acquisition of Diversified Equity Fund

    —      138,687        —        3,827,755   

Proceeds from reinvestment of distributions

    440      49        8,149        1,176   

Payments for shares redeemed

    (15,288 )    (82,973 )      (267,338 )      (2,193,369 ) 
                            

Net increase (decrease)

    30      60,274        7,730        1,739,268   
                            
        

Class Y

         

Proceeds from shares sold

    4,722      86,858        82,552        2,335,213   

Proceeds from reinvestment of distributions

    815      1,548        15,080        49,634   

Payments for shares redeemed

    (7,857 )    (10,447 )      (136,951 )      (305,883 ) 
                            

Net increase (decrease)

    (2,320 )    77,959        (39,319 )      2,078,964   
                            

Total increase (decrease)

    (7,829 )    151,855      $ (125,187 )    $ 4,222,471   
                            

 

Notes to Financial Statements   291

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell U.S. Quantitative Equity Fund    2009     2008     2009     2008  
        

Class A(1)

         

Proceeds from shares sold

    187      35      $ 3,741      $ 807   

Shares issued in connection with acquisition of Quantitative Equity Fund

    —      637        —        18,674   

Proceeds from reinvestment of distributions

    5      —        97        12   

Payments for shares redeemed

    (152 )    (25 )      (2,957 )      (564 ) 
                            

Net increase (decrease)

    40      647        881        18,929   
                            
        

Class C(1)

         

Proceeds from shares sold

    216      39        4,317        931   

Shares issued in connection with acquisition of Quantitative Equity Fund

    —      3,893        —        114,059   

Proceeds from reinvestment of distributions

    11      2        214        48   

Payments for shares redeemed

    (718 )    (210 )      (14,041 )      (4,843 ) 
                            

Net increase (decrease)

    (491 )    3,724        (9,510 )      110,195   
                            
        

Class E

         

Proceeds from shares sold

    528      912        10,121        30,643   

Shares issued in connection with acquisition of Quantitative Equity Fund

    —      2,241        —        65,716   

Proceeds from reinvestment of distributions

    30      202        599        6,891   

Payments for shares redeemed

    (493 )    (1,000 )      (9,498 )      (30,090 ) 
                            

Net increase (decrease)

    65      2,355        1,222        73,160   
                            
        

Class I

         

Proceeds from shares sold

    5,870      11,477        116,095        352,169   

Proceeds from reinvestment of distributions

    278      3,667        5,620        125,065   

Payments for shares redeemed

    (10,667 )    (12,551 )      (206,336 )      (393,403 ) 
                            

Net increase (decrease)

    (4,519 )    2,593        (84,621 )      83,831   
                            
        

Class S(1)

         

Proceeds from shares sold

    11,269      3,362        222,367        80,296   

Shares issued in connection with acquisition of Quantitative Equity Fund

    —      129,013        —        3,787,829   

Proceeds from reinvestment of distributions

    431      40        8,713        1,022   

Payments for shares redeemed

    (13,089 )    (76,554 )      (252,871 )      (2,151,043 ) 
                            

Net increase (decrease)

    (1,389 )    55,861        (21,791 )      1,718,104   
                            
        

Class Y

         

Proceeds from shares sold

    5,100      77,514        93,534        2,201,716   

Proceeds from reinvestment of distributions

    769      1,158        15,540        38,914   

Payments for shares redeemed

    (7,018 )    (3,436 )      (136,253 )      (102,915 ) 
                            

Net increase (decrease)

    (1,149 )    75,236        (27,179 )      2,137,715   
                            

Total increase (decrease)

    (7,443 )    140,416      $ (140,998 )    $ 4,141,934   
                            

 

292   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell U.S. Growth Fund    2009     2008     2009     2008  
        

Class C

         

Proceeds from shares sold

    140      386      $ 655      $ 3,026   

Proceeds from reinvestment of distributions

    —      59        —        496   

Payments for shares redeemed

    (336 )    (447 )      (1,526 )      (3,349 ) 
                            

Net increase (decrease)

    (196 )    (2 )      (871 )      173   
                            
        

Class E

         

Proceeds from shares sold

    54      358        261        2,826   

Proceeds from reinvestment of distributions

    1      36        5        323   

Payments for shares redeemed

    (121 )    (152 )      (587 )      (1,187 ) 
                            

Net increase (decrease)

    (66 )    242        (321 )      1,962   
                            
        

Class I

         

Proceeds from shares sold

    1,309      2,118        6,662        17,849   

Proceeds from reinvestment of distributions

    61      496        312        4,557   

Payments for shares redeemed

    (2,592 )    (3,648 )      (12,861 )      (28,748 ) 
                            

Net increase (decrease)

    (1,222 )    (1,034 )      (5,887 )      (6,342 ) 
                            
        

Class S

         

Proceeds from shares sold

    1,941      2,838        9,686        22,676   

Proceeds from reinvestment of distributions

    24      354        120        3,220   

Payments for shares redeemed

    (3,164 )    (3,301 )      (15,668 )      (25,642 ) 
                            

Net increase (decrease)

    (1,199 )    (109 )      (5,862 )      254   
                            

Total increase (decrease)

    (2,683 )    (903 )    $ (12,941 )    $ (3,953 ) 
                            
     Shares     Dollars  
Russell U.S. Value Fund    2009     2008     2009     2008  
        

Class C

         

Proceeds from shares sold

    65      272      $ 319      $ 2,524   

Proceeds from reinvestment of distributions

    10      387        48        3,762   

Payments for shares redeemed

    (326 )    (686 )      (1,539 )      (5,936 ) 
                            

Net increase (decrease)

    (251 )    (27 )      (1,172 )      350   
                            
        

Class E

         

Proceeds from shares sold

    104      596        494        5,942   

Proceeds from reinvestment of distributions

    10      215        50        2,115   

Payments for shares redeemed

    (249 )    (456 )      (1,173 )      (3,831 ) 
                            

Net increase (decrease)

    (135 )    355        (629 )      4,226   
                            
        

Class I

         

Proceeds from shares sold

    1,687      2,576        8,523        23,618   

Proceeds from reinvestment of distributions

    96      2,060        483        20,349   

Payments for shares redeemed

    (3,077 )    (5,920 )      (14,994 )      (54,303 ) 
                            

Net increase (decrease)

    (1,294 )    (1,284 )      (5,988 )      (10,336 ) 
                            
        

Class S

         

Proceeds from shares sold

    2,549      5,201        12,561        46,975   

Proceeds from reinvestment of distributions

    179      4,220        903        41,639   

Payments for shares redeemed

    (5,813 )    (11,191 )      (27,502 )      (99,700 ) 
                            

Net increase (decrease)

    (3,085 )    (1,770 )      (14,038 )      (11,086 ) 
                            

Total increase (decrease)

    (4,765 )    (2,726 )    $ (21,827 )    $ (16,846 ) 
                            

 

Notes to Financial Statements   293

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell U.S. Small & Mid Cap Fund    2009     2008     2009     2008  
        

Class A(1)

         

Proceeds from shares sold

    144      29      $ 1,838      $ 540   

Shares issued in connection with acquisition of Special Growth Fund

    —      468        —        9,842   

Proceeds from reinvestment of distributions

    2      —        28        —   

Payments for shares redeemed

    (96 )    (30 )      (1,192 )      (514 ) 
                            

Net increase (decrease)

    50      467        674        9,868   
                            
        

Class C(1)

         

Proceeds from shares sold

    192      59        2,427        1,027   

Shares issued in connection with acquisition of Special Growth Fund

    —      2,322        —        48,878   

Proceeds from reinvestment of distributions

    2          33        —   

Payments for shares redeemed

    (446 )    (139 )      (5,626 )      (2,307 ) 
                            

Net increase (decrease)

    (252 )    2,242        (3,166 )      47,598   
                            
        

Class E

         

Proceeds from shares sold

    496      767        6,146        17,761   

Shares issued in connection with acquisition of Special Growth Fund

    —      1,148        —        24,167   

Proceeds from reinvestment of distributions

    7      261        87        6,343   

Payments for shares redeemed

    (534 )    (675 )      (6,866 )      (14,853 ) 
                            

Net increase (decrease)

    (31 )    1,501        (633 )      33,418   
                            
        

Class I

         

Proceeds from shares sold

    2,633      5,656        33,554        120,374   

Proceeds from reinvestment of distributions

    66      2,916        882        71,050   

Payments for shares redeemed

    (5,529 )    (6,288 )      (68,836 )      (143,610 ) 
                            

Net increase (decrease)

    (2,830 )    2,284        (34,400 )      47,814   
                            
        

Class S(1)

         

Proceeds from shares sold

    7,666      2,552        97,511        42,399   

Shares issued in connection with acquisition of Special Growth Fund

    —      59,237        —        1,252,855   

Proceeds from reinvestment of distributions

    140      —        1,883        —   

Payments for shares redeemed

    (7,955 )    (30,175 )      (98,339 )      (603,517 ) 
                            

Net increase (decrease)

    (149 )    31,614        1,055        691,737   
                            
        

Class Y

         

Proceeds from shares sold

    3,533      30,169        42,322        608,874   

Proceeds from reinvestment of distributions

    199      622        2,667        15,138   

Payments for shares redeemed

    (2,557 )    (334 )      (33,121 )      (7,474 ) 
                            

Net increase (decrease)

    1,175      30,457        11,868        616,538   
                            

Total increase (decrease)

    (2,037 )    68,565      $ (24,602 )    $ 1,446,973   
                            

 

294   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell International Developed Markets Fund    2009     2008     2009     2008  
        

Class A(1)

         

Proceeds from shares sold

    175      38      $ 3,868      $ 1,022   

Shares issued in connection with acquisition of International Securities Fund

    —      615        —        20,043   

Proceeds from reinvestment of distributions

    —      —        —        —   

Payments for shares redeemed

    (155 )    (37 )      (3,310 )      (1,058 ) 
                            

Net increase (decrease)

    20      616        558        20,007   
                            
        

Class C(1)

         

Proceeds from shares sold

    206      68        4,528        1,812   

Shares issued in connection with acquisition of International Securities Fund

    —      3,524        —        114,815   

Proceeds from reinvestment of distributions

    —      —        —        —   

Payments for shares redeemed

    (705 )    (264 )      (15,183 )      (7,259 ) 
                            

Net increase (decrease)

    (499 )    3,328        (10,655 )      109,368   
                            
        

Class E

         

Proceeds from shares sold

    680      1,091        14,317        42,444   

Shares issued in connection with acquisition of International Securities Fund

    —      2,219        —        72,286   

Proceeds from reinvestment of distributions

    —      287        —        12,223   

Payments for shares redeemed

    (550 )    (1,146 )      (11,744 )      (35,887 ) 
                            

Net increase (decrease)

    130      2,451        2,573        91,066   
                            
        

Class I

         

Proceeds from shares sold

    7,925      13,131        172,659        482,224   

Proceeds from reinvestment of distributions

    —      7,125        —        302,631   

Payments for shares redeemed

    (11,778 )    (14,502 )      (251,413 )      (540,930 ) 
                            

Net increase (decrease)

    (3,853 )    5,754        (78,754 )      243,925   
                            
        

Class S(1)

         

Proceeds from shares sold

    12,265      4,745        264,656        128,454   

Shares issued in connection with acquisition of International Securities Fund

    —      100,726          3,277,639   

Proceeds from reinvestment of distributions

    —      —        —        —   

Payments for shares redeemed

    (10,750 )    (61,132 )      (228,373 )      (1,941,393 ) 
                            

Net increase (decrease)

    1,515      44,339        36,283        1,464,700   
                            
        

Class Y

         

Proceeds from shares sold

    4,461      62,545        91,298        2,015,787   

Proceeds from reinvestment of distributions

    —      1,608        —        68,012   

Payments for shares redeemed

    (5,483 )    (1,973 )      (118,360 )      (72,824 ) 
                            

Net increase (decrease)

    (1,022 )    62,180        (27,062 )      2,010,975   
                            

Total increase (decrease)

    (3,709 )    118,668      $ (77,057 )    $ 3,940,041   
                            

 

Notes to Financial Statements   295

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell Global Equity Fund    2009     2008     2009     2008  
        

Class A

         

Proceeds from shares sold

    427      280      $ 2,355      $ 2,732   

Proceeds from reinvestment of distributions

    10      7        57        77   

Payments for shares redeemed

    (314 )    (110 )      (1,697 )      (1,009 ) 
                            

Net increase (decrease)

    123      177        715        1,800   
                            
        

Class C

         

Proceeds from shares sold

    290      562        1,586        5,243   

Proceeds from reinvestment of distributions

    2      24        13        253   

Payments for shares redeemed

    (306 )    (290 )      (1,639 )      (2,505 ) 
                            

Net increase (decrease)

    (14 )    296        (40 )      2,991   
                            
        

Class E

         

Proceeds from shares sold

    449      508        2,376        4,578   

Proceeds from reinvestment of distributions

    21      40        119        415   

Payments for shares redeemed

    (180 )    (265 )      (937 )      (2,343 ) 
                            

Net increase (decrease)

    290      283        1,558        2,650   
                            
        

Class S

         

Proceeds from shares sold

    17,543      35,054        94,684        324,167   

Proceeds from reinvestment of distributions

    758      3,135        4,272        32,505   

Payments for shares redeemed

    (12,249 )    (86,923 )      (64,125 )      (707,623 ) 
                            

Net increase (decrease)

    6,052      (48,734 )      34,831        (350,951 ) 
                            
        

Class Y(2)

         

Proceeds from shares sold

    3,066      76,684        16,068        617,039   

Proceeds from reinvestment of distributions

    1,266      —        7,130        —   

Payments for shares redeemed

    (5,997 )    (114 )      (31,714 )      (742 ) 
                            

Net increase (decrease)

    (1,665 )    76,570        (8,516 )      616,297   
                            

Total increase (decrease)

    4,786      28,592      $ 28,548      $ 272,787   
                            

 

296   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell Emerging Markets Fund    2009     2008     2009     2008  
        

Class A

         

Proceeds from shares sold

    136      686      $ 1,322      $ 16,260   

Proceeds from reinvestment of distributions

    31      90        313        1,983   

Payments for shares redeemed

    (174 )    (174 )      (1,653 )      (3,254 ) 
                            

Net increase (decrease)

    (7 )    602        (18 )      14,989   
                            
        

Class C

         

Proceeds from shares sold

    177      510        1,615        9,946   

Proceeds from reinvestment of distributions

    116      565        1,103        12,037   

Payments for shares redeemed

    (520 )    (846 )      (4,640 )      (15,712 ) 
                            

Net increase (decrease)

    (227 )    229        (1,922 )      6,271   
                            
        

Class E

         

Proceeds from shares sold

    425      848        4,162        16,454   

Proceeds from reinvestment of distributions

    79      348        789        7,725   

Payments for shares redeemed

    (425 )    (861 )      (4,086 )      (17,113 ) 
                            

Net increase (decrease)

    79      335        865        7,066   
                            
        

Class S

         

Proceeds from shares sold

    14,588      23,398        140,039        435,199   

Proceeds from reinvestment of distributions

    2,226      14,622        22,211        324,016   

Payments for shares redeemed

    (14,756 )    (46,096 )      (140,243 )      (796,088 ) 
                            

Net increase (decrease)

    2,058      (8,076 )      22,007        (36,873 ) 
                            
        

Class Y(2)

         

Proceeds from shares sold

    2,717      28,801        25,268        437,719   

Proceeds from reinvestment of distributions

    1,490      —        14,874        —   

Payments for shares redeemed

    (5,740 )    (25 )      (55,149 )      (313 ) 
                            

Net increase (decrease)

    (1,533 )    28,776        (15,007 )      437,406   
                            

Total increase (decrease)

    370      21,866      $ 5,925      $ 428,859   
                            
     Shares     Dollars  
Russell Tax-Managed U.S. Large Cap Fund    2009     2008     2009     2008  
        

Class C

         

Proceeds from shares sold

    144      365      $ 1,745      $ 7,218   

Proceeds from reinvestment of distributions

    1      —        9        —   

Payments for shares redeemed

    (344 )    (329 )      (4,020 )      (6,080 ) 
                            

Net increase (decrease)

    (199 )    36        (2,266 )      1,138   
                            
        

Class E

         

Proceeds from shares sold

    187      295        2,183        5,728   

Proceeds from reinvestment of distributions

    11      4        138        82   

Payments for shares redeemed

    (143 )    (115 )      (1,693 )      (2,169 ) 
                            

Net increase (decrease)

    55      184        628        3,641   
                            
        

Class S

         

Proceeds from shares sold

    7,513      7,676        91,503        144,863   

Proceeds from reinvestment of distributions

    328      170        4,086        3,770   

Payments for shares redeemed

    (10,338 )    (8,532 )      (125,943 )      (150,360 ) 
                            

Net increase (decrease)

    (2,497 )    (686 )      (30,354 )      (1,727 ) 
                            

Total increase (decrease)

    (2,641 )    (466 )    $ (31,992 )    $ 3,052   
                            

 

Notes to Financial Statements   297

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell Tax-Managed U.S. Mid & Small Cap Fund    2009     2008     2009     2008  
        

Class C

         

Proceeds from shares sold

    175      338      $ 1,352      $ 4,041   

Proceeds from reinvestment of distributions

    —      89        —        1,124   

Payments for shares redeemed

    (349 )    (367 )      (2,543 )      (4,194 ) 
                            

Net increase (decrease)

    (174 )    60        (1,191 )      971   
                            
        

Class E

         

Proceeds from shares sold

    90      104        684        1,308   

Proceeds from reinvestment of distributions

    2      20        14        276   

Payments for shares redeemed

    (70 )    (78 )      (540 )      (982 ) 
                            

Net increase (decrease)

    22      46        158        602   
                            
        

Class S

         

Proceeds from shares sold

    3,545      8,242        28,931        109,484   

Proceeds from reinvestment of distributions

    119      1,340        1,023        18,522   

Payments for shares redeemed

    (6,263 )    (10,935 )      (51,212 )      (140,604 ) 
                            

Net increase (decrease)

    (2,599 )    (1,353 )      (21,258 )      (12,598 ) 
                            

Total increase (decrease)

    (2,751 )    (1,247 )    $ (22,291 )    $ (11,025 ) 
                            

 

298   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell Strategic Bond Fund    2009     2008     2009     2008  
        

Class A(1)

         

Proceeds from shares sold

    1,361      110      $ 12,369      $ 1,063   

Shares issued in connection with acquisition of Multistrategy Bond Fund

    —      2,421        —        23,851   

Proceeds from reinvestment of distributions

    76      5        694        45   

Payments for shares redeemed

    (791 )    (106 )      (7,199 )      (1,003 ) 
                            

Net increase (decrease)

    646      2,430        5,864        23,956   
                            
        

Class C(1)

         

Proceeds from shares sold

    1,614      241        14,646        2,330   

Shares issued in connection with acquisition of Multistrategy Bond Fund

    —      11,048        —        108,821   

Proceeds from reinvestment of distributions

    260      19        2,362        185   

Payments for shares redeemed

    (2,279 )    (786 )      (20,726 )      (7,504 ) 
                            

Net increase (decrease)

    (405 )    10,522        (3,718 )      103,832   
                            
        

Class E

         

Proceeds from shares sold

    1,531      2,892        13,831        29,293   

Shares issued in connection with acquisition of Multistrategy Bond Fund

    —      12,041        —        117,884   

Proceeds from reinvestment of distributions

    452      150        4,083        1,524   

Payments for shares redeemed

    (3,824 )    (1,996 )      (34,293 )      (19,591 ) 
                            

Net increase (decrease)

    (1,841 )    13,087        (16,379 )      129,110   
                            
        

Class I

         

Proceeds from shares sold

    22,221      57,395        200,505        591,988   

Proceeds from reinvestment of distributions

    4,175      7,262        37,628        74,121   

Payments for shares redeemed

    (46,075 )    (54,112 )      (414,831 )      (543,129 ) 
                            

Net increase (decrease)

    (19,679 )    10,545        (176,698 )      122,980   
                            
        

Class S(1)

         

Proceeds from shares sold

    39,397      12,772        358,711        122,494   

Shares issued in connection with acquisition of Multistrategy Bond Fund

    —      594,483        —        5,855,655   

Proceeds from reinvestment of distributions

    5,814      404        52,889        3,919   

Payments for shares redeemed

    (64,663 )    (400,456 )      (590,840 )      (3,899,588 ) 
                            

Net increase (decrease)

    (19,452 )    207,203        (179,240 )      2,082,480   
                            
        

Class Y

         

Proceeds from shares sold

    21,519      390,011        192,819        3,783,974   

Proceeds from reinvestment of distributions

    10,582      1,709        95,402        16,948   

Payments for shares redeemed

    (70,425 )    (58,988 )      (632,085 )      (563,735 ) 
                            

Net increase (decrease)

    (38,324 )    332,732        (343,864 )      3,237,187   
                            

Total increase (decrease)

    (79,055 )    576,519      $ (714,035 )    $ 5,699,545   
                            

 

Notes to Financial Statements   299

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell Investment Grade Bond Fund    2009     2008     2009     2008  
        

Class C

         

Proceeds from shares sold

    290      411      $ 5,537      $ 8,499   

Shares issued in connection with acquisition of Diversified Bond Fund

    —      —        —        —   

Proceeds from reinvestment of distributions

    24      62        463        1,249   

Payments for shares redeemed

    (284 )    (600 )      (5,424 )      (12,191 ) 
                            

Net increase (decrease)

    30      (127 )      576        (2,443 ) 
                            
        

Class E

         

Proceeds from shares sold

    168      1,314        3,229        27,277   

Shares issued in connection with acquisition of Diversified Bond Fund

    —      —        —        —   

Proceeds from reinvestment of distributions

    40      128        773        2,589   

Payments for shares redeemed

    (626 )    (1,449 )      (12,071 )      (29,606 ) 
                            

Net increase (decrease)

    (418 )    (7 )      (8,069 )      260   
                            
        

Class I

         

Proceeds from shares sold

    2,925      4,934        56,084        101,224   

Proceeds from reinvestment of distributions

    355      1,246        6,815        25,149   

Payments for shares redeemed

    (6,724 )    (17,661 )      (128,942 )      (361,232 ) 
                            

Net increase (decrease)

    (3,444 )    (11,481 )      (66,043 )      (234,859 ) 
                            
        

Class S

         

Proceeds from shares sold

    1,140      1,271        21,796        26,118   

Shares issued in connection with acquisition of Diversified Bond Fund

    —      —        —        —   

Proceeds from reinvestment of distributions

    113      377        2,163        7,618   

Payments for shares redeemed

    (2,321 )    (5,459 )      (44,556 )      (111,969 ) 
                            

Net increase (decrease)

    (1,068 )    (3,811 )      (20,597 )      (78,233 ) 
                            
        

Class Y

         

Proceeds from shares sold

    628      4,298        12,025        87,677   

Proceeds from reinvestment of distributions

    451      1,407        8,683        28,346   

Payments for shares redeemed

    (5,268 )    (9,361 )      (100,543 )      (190,595 ) 
                            

Net increase (decrease)

    (4,189 )    (3,656 )      (79,835 )      (74,572 ) 
                            

Total increase (decrease)

    (9,089 )    (19,082 )    $ (173,968 )    $ (389,847 ) 
                            

 

300   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell Short Duration Bond Fund    2009     2008     2009     2008  
        

Class A

         

Proceeds from shares sold

    440      332      $ 7,624      $ 6,233   

Proceeds from reinvestment of distributions

    6      8        103        144   

Payments for shares redeemed

    (120 )    (147 )      (2,093 )      (2,741 ) 
                            

Net increase (decrease)

    326      193        5,634        3,636   
                            
        

Class C

         

Proceeds from shares sold

    482      738        8,347        13,630   

Proceeds from reinvestment of distributions

    17      31        290        567   

Payments for shares redeemed

    (454 )    (374 )      (7,883 )      (6,863 ) 
                            

Net increase (decrease)

    45      395        754        7,334   
                            
        

Class E

         

Proceeds from shares sold

    274      361        4,776        6,779   

Proceeds from reinvestment of distributions

    11      34        190        629   

Payments for shares redeemed

    (380 )    (483 )      (6,617 )      (8,993 ) 
                            

Net increase (decrease)

    (95 )    (88 )      (1,651 )      (1,585 ) 
                            
        

Class S

         

Proceeds from shares sold

    6,044      6,502        104,875        121,643   

Proceeds from reinvestment of distributions

    256      831        4,448        15,427   

Payments for shares redeemed

    (4,651 )    (16,966 )      (80,596 )      (312,420 ) 
                            

Net increase (decrease)

    1,649      (9,633 )      28,727        (175,350 ) 
                            
        

Class Y(2)

         

Proceeds from shares sold

    360      6,811        6,257        122,471   

Proceeds from reinvestment of distributions

    121      78        2,109        1,380   

Payments for shares redeemed

    (755 )    (429 )      (13,217 )      (7,492 ) 
                            

Net increase (decrease)

    (274 )    6,460        (4,851 )      116,359   
                            

Total increase (decrease)

    1,651      (2,673 )    $ 28,613      $ (49,606 ) 
                            
     Shares     Dollars  
Russell Tax Exempt Bond Fund    2009     2008     2009     2008  
        

Class C

         

Proceeds from shares sold

    262      490      $ 5,471      $ 10,397   

Proceeds from reinvestment of distributions

    9      15        197        321   

Payments for shares redeemed

    (183 )    (295 )      (3,873 )      (6,181 ) 
                            

Net increase (decrease)

    88      210        1,795        4,537   
                            
        

Class E

         

Proceeds from shares sold

    192      331        4,002        7,077   

Proceeds from reinvestment of distributions

    14      30        301        647   

Payments for shares redeemed

    (247 )    (375 )      (5,211 )      (8,000 ) 
                            

Net increase (decrease)

    (41 )    (14 )      (908 )      (276 ) 
                            
        

Class S

         

Proceeds from shares sold

    5,388      9,123        113,064        193,938   

Proceeds from reinvestment of distributions

    271      544        5,651        11,538   

Payments for shares redeemed

    (6,813 )    (7,562 )      (142,592 )      (159,592 ) 
                            

Net increase (decrease)

    (1,154 )    2,105        (23,877 )      45,884   
                            

Total increase (decrease)

    (1,107 )    2,301      $ (22,990 )    $ 50,145   
                            
        

 

Notes to Financial Statements   301

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
        
Russell Real Estate Securities Fund    2009     2008     2009     2008  
        

Class A

         

Proceeds from shares sold

      86        489      $ 1,733      $ 20,243   

Proceeds from reinvestment of distributions

      15        54        274        2,084   

Payments for shares redeemed

      (98 )      (97 )      (1,882 )      (3,594 ) 
                                

Net increase (decrease)

      3        446        125        18,733   
                                
        

Class C

         

Proceeds from shares sold

      137        273        2,637        10,439   

Proceeds from reinvestment of distributions

      36        294        658        11,238   

Payments for shares redeemed

      (318 )      (538 )      (6,107 )      (20,271 ) 
                                

Net increase (decrease)

      (145 )      29        (2,812 )      1,406   
                                
        

Class E

         

Proceeds from shares sold

      485        517        9,247        19,853   

Proceeds from reinvestment of distributions

      35        167        646        6,486   

Payments for shares redeemed

      (237 )      (443 )      (4,614 )      (16,915 ) 
                                

Net increase (decrease)

      283        241        5,279        9,424   
                                
        

Class S

         

Proceeds from shares sold

      10,562        17,347        210,687        679,199   

Proceeds from reinvestment of distributions

      861        6,766        16,384        266,946   

Payments for shares redeemed

      (8,337 )      (31,755 )      (166,260 )      (1,254,352 ) 
                                

Net increase (decrease)

      3,086        (7,642 )      60,811        (308,207 ) 
                                
        

Class Y(2)

         

Proceeds from shares sold

      9,470        17,644        172,923        690,002   

Proceeds from reinvestment of distributions

      663        101        12,602        3,594   

Payments for shares redeemed

      (3,631 )      (439 )      (77,550 )      (15,935 ) 
                                

Net increase (decrease)

      6,502        17,306        107,975        677,661   
                                

Total increase (decrease)

      9,729        10,380      $ 171,378      $ 399,017   
                                
     On a Constant Dollar Basis              
Russell Money Market Fund    2009     2008              
        

Class A

         

Proceeds from shares sold

    $ 101,129      $ 982,562       

Proceeds from reinvestment of distributions

      1,990        15,144       

Payments for shares redeemed

      (203,824 )      (873,877 )     
                    

Net increase (decrease)

      (100,705 )      123,829       
                    
        

Class S

         

Proceeds from shares sold

      11,855,439        38,761,557       

Proceeds from reinvestment of distributions

      10,443        87,571       

Payments for shares redeemed

      (12,377,709 )      (39,402,020 )     
                    

Net increase (decrease)

      (511,827 )      (552,892 )     
                    

Total increase (decrease)

    $ (612,532 )    $ (429,063 )     
                    

 

(1) For the period September 2, 2008 (commencement of operations) to October 31, 2008.
(2) For the period September 29, 2008 (commencement of operations) to October 31, 2008.

 

302   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

7.   Interfund Lending Program

The Investment Company Funds have been granted permission from the Securities and Exchange Commission to participate in a joint lending and borrowing facility (the “Credit Facility”). Portfolios of the Funds may borrow money from each other for temporary purposes. All such borrowing and lending will be subject to a participating Fund’s fundamental investment limitations. Typically, Funds will borrow from the Russell Money Market Fund. The Russell Money Market Fund will lend through the program only when the returns are higher than those available from an investment in repurchase agreements or short-term reserves and the portfolio manager determines it is in the best interest of the Russell Money Market Fund. The Investment Company Funds will borrow through the program only when the costs are equal to or lower than the cost of bank loans. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one business day’s notice. A participating fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to the Russell Money Market Fund could result in a lost investment opportunity or additional borrowing costs. For the period ended April 30, 2009, the Funds presented did not borrow through the interfund lending program.

 

8.   Record Ownership

As of April 30, 2009, the following table includes shareholders of record with greater than 10% of the total outstanding shares of each respective Fund:

 

      # of Shareholders    %
     

Russell U.S. Core Equity Fund

    3    47.2

Russell U.S. Quantitative Equity Fund

    3    47.6

Russell U.S. Growth Fund

    3    46.7

Russell U.S. Value Fund

    2    53.3

Russell U.S. Small & Mid Cap Fund

    4    55.1

Russell International Developed Markets Fund

    4    55.9

Russell Global Equity Fund

    4    67.4

Russell Emerging Markets Fund

    4    54.9

Russell Tax-Managed U.S. Large Cap Fund

    1    42.2

Russell Tax-Managed U.S. Mid & Small Cap Fund

    1    36.4

Russell Strategic Bond Fund

    2    42.5

Russell Investment Grade Bond Fund

    2    25.2

Russell Short Duration Bond Fund

    3    52.6

Russell Tax Exempt Bond Fund

    2    48.6

Russell Real Estate Securities Fund

    4    54.2

Russell Money Market Fund

    2    38.4

 

9.   Restricted Securities

Restricted securities are subject to contractual limitations on resale, are often issued in private placement transactions, and are not registered under the Securities Act of 1933 (the “Act”). The most common types of restricted securities are those sold under Rule 144A of the Act and commercial paper sold under Section 4(2) of the Act.

A Fund may invest a portion of its net assets not to exceed 15% (10% for the Money Market Fund) in securities that are illiquid. This limitation is applied at the time of purchase. Illiquid securities are securities that may not be readily marketable, and that cannot be sold within seven days in the ordinary course of business at the approximate amount at which the Fund has valued the securities. Restricted securities are generally considered to be illiquid.

The following table lists restricted securities held by a Fund that are illiquid. The following table does not include (1) securities deemed liquid by RIMCo or a money manager pursuant to Board approved policies and procedures or (2) illiquid securities that are not restricted securities as designated on the Fund’s Schedule of Investments.

 

Fund - % of Net Assets
Securities		    Acquistion
Date		    Principal
Amount ($)
or Shares		    Cost per
Unit
$		    Cost
(000)
$		    Market Value
(000)
$
              

Russell Emerging Markets Fund - 0.0%

               

Magnitogorsk Iron & Steel Works - GDR

    04/27/07    46,100    12.50    576    187
                

Russell Strategic Bond Fund - 2.9%

               

American Express Credit Account Master Trust

    08/02/07    4,295,000    99.96    4,293    4,103

American Express Credit Account Master Trust

    08/03/07    2,000,000    98.09    1,961    1,971

 

Notes to Financial Statements   303

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Fund - % of Net Assets
Securities		    Acquistion
Date		    Principal
Amount ($)
or Shares		    Cost per
Unit
$		    Cost
(000)
$		    Market Value
(000)
$
              

Anglo American Capital PLC

    04/02/09    2,110,000    100.00    2,110    2,148

Anheuser-Busch InBev

    01/07/09    9,495,000    99.97    9,492    9,899

Apidos CDO

    01/29/09    3,500,000    70.71    2,475    2,312

ARES CLO Funds

    01/15/09    13,700,000    71.26    9,762    10,379

BNP Paribas Capital Trust

    06/01/06    3,450,000    112.13    3,868    1,967

Bank of America Auto Trust

    09/09/08    10,000,000    99.30    9,930    9,951

Black Diamond CLO, Ltd.

    09/11/08    27,750,000    76.32    21,137    17,978

Bombardier, Inc.

    11/10/06    500,000    128.47    642    483

Catlin Insurance Co., Ltd.

    11/01/07    775,000    100.00    775    285

Citigroup Mortgage Loan Trust, Inc.

    10/18/06    4,956,572    100.00    4,957    3,717

Citigroup Mortgage Loan Trust, Inc.

    10/18/06    2,100,000    100.00    2,100    609

Citigroup Mortgage Loan Trust, Inc.

    10/18/06    3,900,000    100.00    3,900    1,073

CC Holdings GS V LLC

    04/15/09    1,345,000    97.09    1,306    1,358

Citigroup Commercial Mortgage Trust

    10/18/06    548,008    100.00    548    478

COX Communications, Inc.

    05/29/08    2,800,000    99.63    2,790    2,578

Deutsche ALT-A Securities NIM Trust

    03/12/07    50,993    99.66    51    2

DG Funding Trust

    11/04/03    479    10,585.30    5,070    4,805

FMG Finance Pty, Ltd.

    10/03/08    800,000    95.11    761    700

Florida Gas Transmission Co. LLC

    04/29/09    4,115,000    99.82    4,108    4,095

GMAC LLC

    12/31/08    1,315,000    83.82    1,102    1,144

Grupo Senda Autotransporte SA de CV

    03/07/08    4,500,000    95.24    4,286    2,565

HCA, Inc.

    04/16/09    2,075,000    98.26    2,039    2,088

Huntington Auto Trust

    06/03/08    2,892,829    100.00    2,893    2,888

Industrial Bank of Korea

    04/16/09    3,350,000    99.27    3,325    3,297

JBS USA LLC

    04/22/09    1,500,000    95.05    1,426    1,425

JPMorgan Auto Receivables Trust

    09/19/08    6,000,000    99.99    6,000    5,971

LeasePlan Corp. NV

    04/28/09    7,500,000    99.97    7,498    7,497

Lehman Brothers Floating Rate Commercial Mortgage Trust

    02/14/07    2,254,383    99.93    2,253    1,260

Loomis Sayles CBO

    12/17/08    23,836,067    67.17    16,011    15,166

MetroPCS Wirless, Inc.

    01/14/09    1,000,000    89.87    899    996

Nuveen Investments, Inc.

    02/15/08    1,171,000    88.28    1,034    591

Qatar Govt International Bond

    04/02/09    3,470,000    99.91    3,467    3,548

Qatar Govt International Bond

    04/14/09    2,510,000    100.45    2,521    2,592

Qwest Corp.

    04/07/09    2,625,000    95.45    2,506    2,612

Seagate Technology International

    04/16/09    550,000    95.32    524    542

Securitized Asset Backed Receivables LLC Trust

    02/14/08    4,451,054    97.52    4,341    4,206

Societe Financement de I’Elconomie Francaise

    04/23/09    9,700,000    99.61    9,662    9,630

Southwestern Energy Co.

    01/11/08    750,000    100.00    750    729

Steel Dynamics, Inc.

    03/27/08    500,000    100.00    500    395

Structured Asset Securities Corp.

    02/11/08    1,118,437    95.71    1,070    1,078

Symetra Financial Corp.

    10/04/07    1,200,000    98.53    1,182    917

Telemar Norte Leste SA

    04/16/09    4,095,000    99.83    4,088    4,269

TNK-BP Finance SA

    10/03/07    1,200,000    98.86    1,186    852

Vedanta Resources PLC

    06/25/08    2,500,000    100.00    2,500    1,825

Wachovia Auto Loan Owner Trust 2006-1

    08/13/08    1,246,200    100.03    1,247    1,254

White Mountains Re Group, Ltd.

    01/25/08    13,600,000    93.88    12,768    6,530

Williams Cos., Inc.

    02/26/09    4,365,000    99.43    4,340    4,485
                
               171,243
                

Russell Investment Grade Bond Fund - 0.6%

               

CVS Pass-Through Trust

    05/31/07    1,054,982    99.19    1,046    782

DG Funding Trust

    11/04/03    392    10,587.26    4,150    3,932

Glitnir Banki HF

    06/12/06    700,000    99.92    699    —

Glitnir Banki HF

    07/21/06    270,000    100.00    270    34

Glitnir Banki HF

    09/20/07    390,000    99.82    389    50

Kaupthing Bank Hf

    05/12/06    100,000    99.72    100    7

Kaupthing Bank Hf

    05/12/06    1,480,000    99.57    1,474    —

TNK-BP Finance SA

    10/03/07    240,000    98.86    237    170

Williams Cos., Inc.

    02/26/09    900,000    99.68    897    925
                
               5,900
                

 

304   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Fund - % of Net Assets
Securities		    Acquistion
Date		    Principal
Amount ($)
or Shares		    Cost per
Unit
$		    Cost
(000)
$		    Market Value
(000)
$
              

Russell Short Duration Bond Fund - 1.0%

               

Anheuser-Busch InBev

    01/07/09    500,000    103.52    518    521

DG Funding Trust

    11/04/03    219    10,537.12    2,308    2,197

Global Signal Trust

    04/20/09    110,000    95.59    105    108

Global Signal Trust

    04/20/09    90,000    98.70    88    93

HCA, Inc.

    04/16/09    325,000    98.02    319    327

Industrial Bank of Korea

    04/16/09    530,000    99.27    526    521

SBA CMBS Trust

    04/07/09    65,000    83.98    55    59

Telemar Norte Leste SA

    04/16/09    540,000    99.59    538    563
                
               4,389
                

Russell Money Market Fund - 7.6%

               

Metropolitan Life Insurance Company

    08/28/08    50,000,000    100.00    50,000    50,000

AID to INH Portugal Guaranteed Note, weekly demand (LIBOR Floater)

    05/06/94    5,625,000    100.00    5,625    5,666

Protective Life Insurance Co.

    02/25/08    50,000,000    100.00    50,000    50,000

Protective Life Insurance Co.

    05/29/08    48,000,000    100.00    48,000    48,000

New York Life Insurance Co.

    05/14/08    200,000,000    100.00    200,000    200,000
                
               353,666
                

Illiquid securities and restricted securities may be priced by the Funds using fair value procedures approved by the Board.

 

10.   Dividends

On May 1, 2009, the Board declared the following dividends payable from net investment income. Dividends were paid on May 5, 2009, to shareholders of record May 4, 2009.

 

      Net Investment
Income		    Short-Term
Capital Gains		    Long-Term
Capital Gains
        

Russell Investment Grade Bond Fund - Class I

    $ 0.0962    $ —    $ —

Russell Investment Grade Bond Fund - Class E

      0.0929      —      —

Russell Investment Grade Bond Fund - Class Y

      0.0968      —      —

Russell Investment Grade Bond Fund - Class C

      0.0797      —      —

Russell Investment Grade Bond Fund - Class S

      0.0923      —      —

Russell Short Duration Fund - Class S

      0.0568      —      —

Russell Short Duration Fund - Class E

      0.0511      —      —

Russell Short Duration Fund - Class C

      0.0376      —      —

Russell Short Duration Fund - Class A

      0.0511      —      —

Russell Short Duration Fund - Class Y

      0.0544      —      —

Russell Strategic Bond Fund - Class I

      0.0434      —      —

Russell Strategic Bond Fund - Class E

      0.0416      —      —

Russell Strategic Bond Fund - Class Y

      0.0438      —      —

Russell Strategic Bond Fund - Class A

      0.0409      —      —

Russell Strategic Bond Fund - Class C

      0.0351      —      —

Russell Strategic Bond Fund - Class S

      0.0426      —      —

Russell Tax Exempt Bond - Class S

      0.0602      —      —

Russell Tax Exempt Bond - Class E

      0.0558      —      —

Russell Tax Exempt Bond - Class C

      0.0434      —      —

 

Notes to Financial Statements   305

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

On June 1, 2009, the Board declared the following dividends payable from net investment income. Dividends were paid on June 3, 2009, to shareholders of record June 2, 2009.

 

      Net Investment
Income		    Short-Term
Capital Gains		    Long-Term
Capital Gains
        

Russell Investment Grade Bond Fund - Class I

    $ 0.0778    $ —    $ —

Russell Investment Grade Bond Fund - Class E

      0.0739      —      —

Russell Investment Grade Bond Fund - Class Y

      0.0785      —      —

Russell Investment Grade Bond Fund - Class C

      0.0603      —      —

Russell Investment Grade Bond Fund - Class S

      0.0757      —      —

Russell Short Duration Fund - Class S

      0.0577      —      —

Russell Short Duration Fund - Class E

      0.0484      —      —

Russell Short Duration Fund - Class C

      0.0443      —      —

Russell Short Duration Fund - Class A

      0.0542      —      —

Russell Short Duration Fund - Class Y

      0.0587      —      —

Russell Strategic Bond Fund - Class I

      0.0453      —      —

Russell Strategic Bond Fund - Class E

      0.0435      —      —

Russell Strategic Bond Fund - Class Y

      0.0455      —      —

Russell Strategic Bond Fund - Class A

      0.0426      —      —

Russell Strategic Bond Fund - Class C

      0.0370      —      —

Russell Strategic Bond Fund - Class S

      0.0443      —      —

Russell Tax Exempt Bond - Class S

      0.0605      —      —

Russell Tax Exempt Bond - Class E

      0.0564      —      —

Russell Tax Exempt Bond - Class C

      0.0432      —      —

 

11.   Reorganizations

On September 8, 2008, the Russell U.S. Core Equity, Russell U.S. Small & Mid Cap, and Russell International Developed Markets Funds (“Acquiring Funds”) acquired the assets and liabilities of the Diversified Equity, Special Growth and International Securities Funds (“Acquired Funds”), respectively, and on September 22, 2008, Russell U.S. Quantitative Equity and Russell Strategic Bond Funds (“Acquiring Funds”) acquired the assets and liabilities of the Quantitative Equity and Multistrategy Bond Funds (“Acquired Funds”), respectively, through separate tax free reorganizations pursuant to plans of reorganization approved by the Board. The following is a summary of shares outstanding, net assets, net asset value per share, unrealized appreciation/(depreciation) and accumulated net realized gain (losses) immediately before and after the reorganizations:

 

     Before Reorganization     After Reorganization  
     Diversified Equity
Fund		     Equity I Fund     Russell U.S. Core
Equity Fund		  
      
      

Class A

       

Shares

      536,491        3,500        791,928   

Net assets

    $ 21,768,501      $ 96,638      $ 21,865,139   

Net asset value

    $ 40.58      $ 27.61      $ 27.61   

Unrealized appreciation/(depreciation)

    $ (2,929,906 )    $ (3,181 )    $ (2,933,087 ) 

Accumulated net realized gains/(losses)

    $ (1,206,103 )    $ (214 )    $ (214 ) 

Class C

       

Shares

      3,096,982        3,500        4,363,604   

Net assets

    $ 120,382,374      $ 96,630      $ 120,479,004   

Net asset value

    $ 38.87      $ 27.61      $ 27.61   

Unrealized appreciation/(depreciation)

    $ 1,224,198      $ (3,181 )    $ 1,221,017   

Accumulated net realized gains/(losses)

    $ (599,355 )    $ (214 )    $ (214 ) 

Class E

       

Shares

      1,615,359        2,341,760        4,717,642   

Net assets

    $ 65,598,094      $ 64,650,922      $ 130,249,016   

Net asset value

    $ 40.61      $ 27.61      $ 27.61   

Unrealized appreciation/(depreciation)

    $ (774,383 )    $ (11,316,807 )    $ (12,091,190 ) 

Accumulated net realized gains/(losses)

    $ (2,263,986 )    $ (6,521,747 )    $ (6,521,747 ) 

Class I

       

Shares

        41,843,109        41,843,109   

Net assets

      $ 1,154,791,657      $ 1,154,791,657   

Net asset value

      $ 27.60      $ 27.60   

Unrealized appreciation/(depreciation)

      $ 49,108,440      $ 49,108,440   

Accumulated net realized gains/(losses)

      $ (37,102,239 )    $ (37,102,239 ) 

 

306   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

     Before Reorganization     After Reorganization  
     Diversified Equity
Fund		     Equity I Fund     Russell U.S. Core
Equity Fund		  
      
      

Class S

       

Shares

      94,268,076        61,192        138,747,976   

Net assets

    $ 3,827,759,699      $ 1,688,773      $ 3,829,448,472   

Net asset value

    $ 40.61      $ 27.60      $ 27.60   

Unrealized appreciation/(depreciation)

    $ (3,299,586 )    $ (17,874 )    $ (3,317,460 ) 

Accumulated net realized gains/(losses)

    $ (155,291,577 )    $ (2,550 )    $ (2,550 ) 

Class Y

       

Shares

        13,338,805        13,338,805   

Net assets

      $ 367,922,262      $ 367,922,262   

Net asset value

      $ 27.58      $ 27.58   

Unrealized appreciation/(depreciation

      $ (29,641,265 )    $ (29,641,265 ) 

Accumulated net realized gains/(losses)

      $ (28,757,924 )    $ (28,757,924 ) 
     Before Reorganization     After Reorganization  
     Special Growth
Fund		     Equity II Fund     Russell U.S. Small &
Mid Cap Fund		  
      

Class A

       

Shares

      256,578        4,556        472,127   

Net assets

    $ 9,842,363      $ 95,895      $ 9,938,258   

Net asset value

    $ 38.36      $ 21.05      $ 21.05   

Unrealized appreciation/(depreciation)

    $ (702,461 )    $ (4,059 )    $ (706,520 ) 

Accumulated net realized gains/(losses)

    $ (1,156,690 )    $ (49 )    $ (49 ) 

Class C

       

Shares

      1,420,061        4,556        2,326,548   

Net assets

    $ 48,877,899      $ 95,887      $ 48,973,786   

Net asset value

    $ 34.42      $ 21.05      $ 21.05   

Unrealized appreciation/(depreciation)

    $ (3,543,588 )    $ (4,058 )    $ (3,547,646 ) 

Accumulated net realized gains/(losses)

    $ (6,834,443 )    $ (49 )    $ (49 ) 

Class E

       

Shares

      629,631        1,650,886        2,798,944   

Net assets

    $ 24,166,613      $ 34,743,912      $ 58,910,525   

Net asset value

    $ 38.38      $ 21.05      $ 21.05   

Unrealized appreciation/(depreciation)

    $ (380,996 )    $ (6,526,780 )    $ (6,907,776 ) 

Accumulated net realized gains/(losses)

    $ (2,527,797 )    $ (1,607,523 )    $ (1,607,523 ) 

Class I

       

Shares

        17,007,646        17,007,646   

Net assets

      $ 359,777,146      $ 359,777,146   

Net asset value

      $ 21.15      $ 21.15   

Unrealized appreciation/(depreciation)

      $ 17,761,630      $ 17,761,630   

Accumulated net realized gains/(losses)

      $ (34,407,396 )    $ (34,407,396 ) 

Class S

       

Shares

      30,983,491        43,383        59,280,008   

Net assets

    $ 1,252,854,771      $ 917,681      $ 1,253,772,452   

Net asset value

    $ 40.44      $ 21.15      $ 21.15   

Unrealized appreciation/(depreciation)

    $ (8,887,223 )    $ (11,047 )    $ (8,898,270 ) 

Accumulated net realized gains/(losses)

    $ (121,235,027 )    $ (502 )    $ (502 ) 

Class Y

       

Shares

        4,169,285        4,169,285   

Net assets

      $ 88,107,870      $ 88,107,870   

Net asset value

      $ 21.13      $ 21.13   

Unrealized appreciation/(depreciation

      $ (15,844,359 )    $ (15,844,359 ) 

Accumulated net realized gains/(losses)

      $ (2,452,542 )    $ (2,452,542 ) 

 

Notes to Financial Statements   307

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

     Before Reorganization     After Reorganization  
     International
Securities Fund		     International
Fund		     Russell International
Developed Markets
Fund		  
      
      

Class A

       

Shares

      381,576        2,870        618,048   

Net assets

    $ 20,042,496      $ 93,525      $ 20,136,021   

Net asset value

    $ 52.53      $ 32.58      $ 32.58   

Unrealized appreciation/(depreciation)

    $ (5,496,578 )    $ (6,333 )    $ (5,502,911 ) 

Accumulated net realized gains/(losses)

    $ (2,127,644 )    $ (165 )    $ (165 ) 

Class C

       

Shares

      2,277,673        2,870        3,526,972   

Net assets

    $ 114,815,281      $ 93,517      $ 114,908,798   

Net asset value

    $ 50.41      $ 32.58      $ 32.58   

Unrealized appreciation/(depreciation)

    $ (7,269,216 )    $ (6,332 )    $ (7,275,548 ) 

Accumulated net realized gains/(losses)

    $ 5,705,552      $ (165 )    $ (165 ) 

Class E

       

Shares

      1,372,393        1,646,284        3,865,020   

Net assets

    $ 72,286,412      $ 53,636,309      $ 125,922,721   

Net asset value

    $ 52.67      $ 32.58      $ 32.58   

Unrealized appreciation/(depreciation)

    $ (7,663,252 )    $ (11,050,977 )    $ (18,714,229 ) 

Accumulated net realized gains/(losses)

    $ (683,439 )    $ 3,115,766      $ 3,115,766   

Class I

       

Shares

        38,083,681        38,083,681   

Net assets

      $ 1,239,108,684      $ 1,239,108,684   

Net asset value

      $ 32.54      $ 32.54   

Unrealized appreciation/(depreciation)

      $ (187,706,830 )    $ (187,706,830 ) 

Accumulated net realized gains/(losses)

      $ (79,803,372 )    $ (79,803,372 ) 

Class S

       

Shares

      61,423,863        51,013        100,777,466   

Net assets

    $ 3,277,639,959      $ 1,659,723      $ 3,279,299,682   

Net asset value

    $ 53.36      $ 32.54      $ 32.54   

Unrealized appreciation/(depreciation)

    $ (284,078,295 )    $ (48,731 )    $ (284,127,026 ) 

Accumulated net realized gains/(losses)

    $ (86,167,740 )    $ (1,082 )    $ (1,082 ) 

Class Y

       

Shares

        8,889,896        8,889,896   

Net assets

      $ 289,228,418      $ 289,228,418   

Net asset value

      $ 32.53      $ 32.53   

Unrealized appreciation/(depreciation

      $ 79,794,838      $ 79,794,838   

Accumulated net realized gains/(losses)

      $ 50,096,519      $ 50,096,519   
     Before Reorganization     After Reorganization  
     Quantitative
Equity Fund		     Equity Q Fund     Russell U.S.
Quantitative Equity
Fund		  
      

Class A

       

Shares

      571,010        3,995        640,893   

Net assets

    $ 18,673,825      $ 117,115      $ 18,790,940   

Net asset value

    $ 32.70      $ 29.32      $ 29.32   

Unrealized appreciation/(depreciation)

    $ (2,285,536 )    $ (2,170 )    $ (2,287,706 ) 

Accumulated net realized gains/(losses)

    $ (1,215,689 )    $ (13 )    $ (13 ) 

Class C

       

Shares

      3,613,681        4,704        3,897,501   

Net assets

    $ 114,058,897      $ 137,847      $ 114,196,744   

Net asset value

    $ 31.56      $ 29.30      $ 29.30   

Unrealized appreciation/(depreciation)

    $ (5,404,233 )    $ (1,173 )    $ (5,405,406 ) 

Accumulated net realized gains/(losses)

    $ (3,503,708 )    $ (64 )    $ (64 ) 

 

308   Notes to Financial Statements

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

     Before Reorganization     After Reorganization  
     Quantitative
Equity Fund		     Equity Q Fund     Russell U.S.
Quantitative Equity
Fund		  
      
      

Class E

       

Shares

      2,007,779        1,779,655        4,020,993   

Net assets

    $ 65,716,078      $ 52,182,859      $ 117,898,937   

Net asset value

    $ 32.73      $ 29.32      $ 29.32   

Unrealized appreciation/(depreciation)

    $ (3,035,638 )    $ (9,961,422 )    $ (12,997,060 ) 

Accumulated net realized gains/(losses)

    $ (3,490,564 )    $ (1,255,759 )    $ (1,255,759 ) 

Class I

       

Shares

        36,726,809        36,726,809   

Net assets

      $ 1,077,724,372      $ 1,077,724,372   

Net asset value

      $ 29.34      $ 29.34   

Unrealized appreciation/(depreciation)

      $ (28,045,352 )    $ (28,045,352 ) 

Accumulated net realized gains/(losses)

      $ 6,170,666      $ 6,170,666   

Class S

       

Shares

      115,323,672        257,505        129,270,757   

Net assets

    $ 3,787,828,798      $ 7,560,518      $ 3,795,389,316   

Net asset value

    $ 32.85      $ 29.36      $ 29.36   

Unrealized appreciation/(depreciation)

    $ (116,972,702 )    $ 115,133      $ (116,857,569 ) 

Accumulated net realized gains/(losses)

    $ (195,827,705 )    $ (8,223 )    $ (8,223 ) 

Class Y

       

Shares

        10,922,517        10,922,517   

Net assets

      $ 320,535,410      $ 320,535,410   

Net asset value

      $ 29.35      $ 29.35   

Unrealized appreciation/(depreciation

      $ 1,790,623      $ 1,790,623   

Accumulated net realized gains/(losses)

      $ (49,729,231 )    $ (49,729,231 ) 
     Before Reorganization     After Reorganization  
     Multistrategy Bond
Fund		     Fixed Income III Fund     Russell Strategic Bond
Fund		  
      

Class A

       

Shares

      2,531,148        29,543        2,450,939   

Net assets

    $ 23,850,764      $ 291,046      $ 24,141,810   

Net asset value

    $ 9.42      $ 9.85      $ 9.85   

Unrealized appreciation/(depreciation)

    $ (1,967,283 )    $ (2,529 )    $ (1,969,812 ) 

Accumulated net realized gains/(losses)

    $ (216,514 )    $ 71      $ 71   

Class C

       

Shares

      11,554,827        25,833        11,073,655   

Net assets

    $ 108,821,567      $ 254,411      $ 109,075,978   

Net asset value

    $ 9.42      $ 9.85      $ 9.85   

Unrealized appreciation/(depreciation)

    $ (9,633,085 )    $ (3,752 )    $ (9,636,837 ) 

Accumulated net realized gains/(losses)

    $ 454,733      $ 228      $ 228   

Class E

       

Shares

      12,509,964        2,878,304        14,919,559   

Net assets

    $ 117,884,144      $ 28,169,258      $ 146,053,402   

Net asset value

    $ 9.42      $ 9.79      $ 9.79   

Unrealized appreciation/(depreciation)

    $ (10,217,638 )    $ (2,394,457 )    $ (12,612,095 ) 

Accumulated net realized gains/(losses)

    $ (66,619 )    $ 808,276      $ 808,276   

Class I

       

Shares

        158,333,557        158,333,557   

Net assets

      $ 1,546,528,112      $ 1,546,528,112   

Net asset value

      $ 9.77      $ 9.77   

Unrealized appreciation/(depreciation)

      $ (127,395,854 )    $ (127,395,854 ) 

Accumulated net realized gains/(losses)

      $ 22,419,156      $ 22,419,156   

 

Notes to Financial Statements   309

Russell Investment Company

Russell Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

     Before Reorganization     After Reorganization  
     Multistrategy Bond
Fund		     Fixed Income III Fund     Russell Strategic Bond
Fund		  
      
      

Class S

       

Shares

      620,940,454        878,047        595,360,764   

Net assets

    $ 5,855,637,412      $ 8,644,418      $ 5,864,281,830   

Net asset value

    $ 9.43      $ 9.85      $ 9.85   

Unrealized appreciation/(depreciation)

    $ (524,847,713 )    $ (171,212 )    $ (525,018,925 ) 

Accumulated net realized gains/(losses)

    $ (36,112,658 )    $ (4,590 )    $ (4,590 ) 

Class Y

       

Shares

        18,716,732        18,716,732   

Net assets

      $ 182,900,254      $ 182,900,254   

Net asset value

      $ 9.77      $ 9.77   

Unrealized appreciation/(depreciation

      $ (17,142,131 )    $ (17,142,131 ) 

Accumulated net realized gains/(losses)

      $ 3,365,339      $ 3,365,339   

 

310   Notes to Financial Statements

Russell Investment Company

Russell Funds

Basis for Approval of Investment Advisory Contracts (Unaudited)

 

 

 

Approval of Investment Advisory Agreement

The Board of Trustees, including all of the Independent Trustees, last considered and approved the continuation of the advisory agreement with RIMCo (the “RIMCo Agreement”) and the portfolio management contract with each Money Manager of the Funds (collectively, the “portfolio management contracts”) at a meeting held on April 21, 2009. During the course of a year, the Trustees receive a wide variety of materials regarding the investment performance of the Funds, sales and redemptions of the Funds’ shares, management of the Funds by RIMCo and compliance with applicable regulatory requirements. In preparation for the annual review, the Independent Trustees, with the advice and assistance of their independent counsel, also requested and the Board considered (1) information and reports prepared by RIMCo relating to the services provided by RIMCo (and its affiliates) to the Funds; and (2) information (the “Third-Party Information”) received from an independent, nationally recognized provider of investment company information comparing the performance of each of the Funds and their respective operating expenses over various periods of time with other peer funds (“Comparable Funds”) not managed by RIMCo, believed by the provider to be generally comparable in investment objectives to the Funds. The foregoing information requested by the Trustees or provided by RIMCo is collectively called the “Agreement Renewal Information.” The Trustees’ evaluations also reflected the knowledge and familiarity gained as Board members of the Funds and other funds in the same complex with respect to services provided by RIMCo, RIMCo’s affiliates and each Money Manager. The Trustees received a memorandum from counsel to the Funds discussing the legal standards for their consideration of the continuations of the RIMCo Agreement and the portfolio management contracts and the Independent Trustees separately received a memorandum regarding their responsibilities from their independent counsel.

On April 20, 2009, the Independent Trustees met to review the Agreement Renewal Information in a private session with their independent counsel at which no representatives of RIMCo or the Funds’ management were present. At the April 21 meeting of the Board of Trustees, the Board, including the Independent Trustees, reviewed the proposed continuance of the RIMCo Agreement and the portfolio management contracts with management, counsel to the Funds and independent counsel to the Independent Trustees. Presentations made by RIMCo to the Board as part of this review encompassed the Funds and all other RIMCo-managed funds for which the Board has supervisory responsibility. Following this review, but prior to voting, the Independent Trustees again met in a private session with their independent counsel to evaluate additional information and analyses received from RIMCo and management at the Board meeting. The discussion below reflects all of these reviews.

In evaluating the portfolio management contracts, the Board considered that the Funds, in employing a manager-of-managers method of investment, operate in a manner that is distinctly different from most other investment companies. In the case of most other investment companies, an advisory fee is paid by the investment company to its adviser which, in turn, employs and compensates individual portfolio managers to make specific securities selections consistent with the adviser’s style and investment philosophy. RIMCo has engaged multiple unaffiliated Money Managers for all Funds except the Russell Money Market Fund (the “Money Market Fund”), which is currently managed by RIMCo.

The Board considered that RIMCo (rather than any Money Manager) is responsible under the RIMCo Agreement for determining, implementing and maintaining the investment program for each Fund. Assets of each Fund generally have been allocated among the multiple Money Managers selected by RIMCo, subject to Board approval, for that Fund. RIMCo manages directly a portion of certain Funds’ assets employing a “select holdings strategy,” as described below, and directly manages the investment of each Fund’s cash reserves. RIMCo also may manage directly any portion of each Fund’s assets that RIMCo determines not to allocate to the Money Managers and portions of a Fund during transitions between Money Managers. In all cases, assets are managed directly by RIMCo pursuant to authority provided by the RIMCo Agreement.

RIMCo is responsible for selecting, subject to Board approval, Money Managers for each Fund and for actively managing allocations and reallocations of assets among the Money Managers. The Board has been advised that RIMCo’s goal is to construct and manage diversified portfolios in a risk-aware manner. Each Money Manager for a Fund in effect performs the function of an individual portfolio manager who is responsible for selecting portfolio securities for the portion of the Fund assigned to it by RIMCo (each, a “segment”) in accordance with the Fund’s applicable investment objective, policies and restrictions, any constraints placed by RIMCo upon their selection of portfolio securities and the Money Manager’s specified role in a Fund. RIMCo is responsible for communicating performance expectations to each Money Manager; supervising compliance by each Money Manager with each Fund’s investment objective and policies; authorizing Money Managers to engage in certain investment strategies for a Fund; and recommending annually to the Board whether portfolio management contracts should be renewed, modified or terminated. In addition to its annual recommendation as to the renewal, modification or termination of portfolio management contracts, RIMCo is responsible for recommending to the Board additions of new Money Managers or replacements of existing Money Managers at any time when, based on RIMCo’s research and ongoing review and analysis, such actions are appropriate. RIMCo may impose specific investment constraints from time to time for each Money Manager intended to capitalize on the strengths of that Money Manager or to coordinate the investment activities of Money Managers for the Fund in a complementary manner. Therefore, RIMCo’s selection of Money Managers is made not only on the basis of performance considerations but anticipated compatibility with other Money Managers in the same Fund. In light of the foregoing, the overall performance of each Fund over appropriate periods reflects, in great

 

Basis for Approval of Investment Advisory Contracts   311

Russell Investment Company

Russell Funds

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

part, the performance of RIMCo in designing the Fund’s investment program, structuring the Fund, selecting an effective Money Manager with a particular investment style or sub-style for a segment that is complementary to the styles of the Money Managers of other Fund segments, and allocating assets among the Money Managers in a manner designed to achieve the objectives of the Fund.

The Board considered that the prospectuses for the Funds and other public disclosures emphasize to investors RIMCo’s role as the principal investment manager for each Fund, rather than the investment selection role of the Funds’ Money Managers, and describe the manner in which the Funds operate so that investors may take that information into account when deciding to purchase shares of any such Fund.

The Board also considered the demands and complexity of managing the Funds pursuant to the manager-of-managers structure, the special expertise of RIMCo with respect to the manager-of-managers structure of the Funds and the likelihood that, at the current expense ratio of each Fund, there would be no acceptable alternative investment managers to replace RIMCo on comparable terms given the need to continue the manager-of-managers strategy of such Fund selected by shareholders in purchasing their shares.

In addition to these general factors relating to the manager-of-managers structure of the Funds, the Trustees considered, with respect to each Fund, various specific factors in evaluating renewal of the RIMCo Agreement, including the following:

 

1. The nature, scope and quality of the services provided, and expected to be provided, to the Fund by RIMCo;

 

2. The advisory fee paid by the Fund to RIMCo (the “Advisory Fee”) and the fact that it encompasses all investment advisory fees paid by the Fund, including the fees for any Money Managers of such Fund;

 

3. Information provided by RIMCo as to other fees and benefits received by RIMCo or its affiliates from the Fund, including any administrative, transfer agent or cash management fees and fees received for management of securities lending cash collateral, soft dollar arrangements and commissions in connection with portfolio securities transactions;

 

4. Information provided by RIMCo as to expenses incurred by the Fund; and

 

5. Information provided by RIMCo as to the profits that RIMCo derives from its mutual fund operations generally and from the Fund.

In evaluating the nature, quality and scope of services provided and which are expected to be provided to the Funds, including Fund portfolio management services, the Board considered the possible impact of changes in RIMCo’s senior management during the course of 2008 and 2009 and a restructuring of the Russell organization, which was announced to the Board in January 2009 and detailed to the Board on April 15, 2009 and included a significant reduction in Russell’s workforce. Prior to the Independent Trustees’ private meeting on April 20 and at the April 21 meeting of the Board of Trustees, senior representatives of Russell and RIMCo discussed this organizational restructuring with the Board and assured the Board that the restructuring would not result in a diminution of the nature, quality or scope of the services provided to the Funds. The Board also discussed with these representatives the impact of developments over the past year in the financial services industry upon the financial resources available to the Russell organization.

As noted above, RIMCo, pursuant to the terms of the RIMCo Agreement, directly managed during the past year, and continues to manage, a portion — up to 10% — of the assets of each of the Russell U.S. Core Equity Fund, the Russell International Developed Markets Fund and the Russell U.S Quantitative Equity Fund (each a “Participating Fund”) during the past year, utilizing a select holdings strategy, the actual allocation being determined by each Participating Fund’s RIMCo portfolio manager. The select holdings strategy utilized by RIMCo in managing such assets for a Participating Fund is designed to increase the Participating Fund’s exposure to stocks that are viewed as attractive by multiple Money Managers of that Participating Fund. The Board reviewed the results of the select holdings strategy in respect of each Participating Fund during the past year. The Trustees considered that RIMCo is not required to pay investment advisory fees to a Money Manager with respect to assets for which the select holdings strategy is utilized and that the profits derived by RIMCo generally and from each Participating Fund consequently may increase incrementally. The Board, however, also considered RIMCo’s advice that it pays certain Money Managers additional fees for providing information and other services in connection with the select holdings strategy and incurs additional costs in carrying out the select holdings strategy, the limited amount of assets that are managed directly by RIMCo pursuant to the select holdings strategy, and the fact that the aggregate investment advisory fees paid by each Participating Fund are not increased as a result of the select holdings strategy.

In evaluating the reasonableness of the Funds’ Advisory Fees in light of Fund performance, the Board considered that, in the Agreement Renewal Information and at past meetings, RIMCo noted differences between the investment strategies of certain Funds and their respective Comparable Funds in pursuing their investment objectives, including fund strategies which seek to achieve a lower tracking error (i.e., the difference, whether positive or negative, between the return of a fund and its benchmark) and resulting lower return volatility than their Comparable Funds. According to RIMCo, these strategies may be expected to result, and for certain

 

312   Basis for Approval of Investment Advisory Contracts

Russell Investment Company

Russell Funds

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

Funds during the periods covered by the Third-Party Information did result, in lower performance than that of some of their Comparable Funds. According to RIMCo, the strategies pursued by the Funds, among other things, are intended to result in less volatile, more moderate returns relative to each Fund’s performance benchmark rather than more volatile, more extreme returns that its Comparable Funds may experience over time.

With respect to the Funds’ Advisory Fees, the Third-Party Information showed that the Russell Tax-Managed U.S. Mid & Small Cap Fund, Russell Global Equity Fund, Russell Emerging Markets Fund, Russell Tax-Managed U.S. Large Cap Fund and Russell Short Duration Bond Fund each had an Advisory Fee which on a contractual basis, an actual basis (i.e., giving effect to any voluntary fee waivers implemented by RIMCo and the advisers to such Fund’s Comparable Funds) or on both a contractual and actual basis was ranked more than 5 basis points below the third quintile, in either the fourth or fifth quintile, for the 1-year period ended December 31, 2008. The Board considered RIMCo’s advice as to the reasons for these Funds’ Advisory Fee rankings and its undertaking to continue to monitor those fees against the Funds’ Comparable Funds’ fees.

In discussing the Funds’ Advisory Fees generally, RIMCo noted, among other things, that its Advisory Fees for Funds other than the Money Market Fund encompass services that may not be provided by investment advisers to the Funds’ Comparable Funds, such as cash equitization and management of portfolio transition costs when Money Managers are added, terminated or replaced. RIMCo also explained that its “margins” in providing investment advisory services to the Funds tend to be lower than competitors’ margins because of the demands and complexities of managing the Funds’ manager-of-managers structure, including RIMCo’s payment of a significant portion of the Funds’ Advisory Fees to their Money Managers.

The Board considered for each Fund whether economies of scale have been realized and whether the Advisory Fee for such Fund appropriately reflects or should be revised to reflect any such economies. During 2008, the Board noted that, generally, there was a reduction in the Funds’ assets as a result of market declines and related investor redemptions. The Board determined that, after giving effect to any applicable fee or expense caps, waivers or reimbursements, the Advisory Fee for each Fund appropriately reflect any economies of scale realized by that Fund, based upon any decline in assets during 2008 and such factors as the variability of Money Manager investment advisory fees and other factors associated with the manager-of-managers structure employed by the Funds.

The Board considered, as a general matter, that fees payable to RIMCo by institutional clients with investment objectives similar to those of the Funds and other RIC funds under the Board’s supervision are lower, and may, in some cases, be substantially lower, than the rates paid by RIC funds supervised by the Board, including the Funds. The Trustees considered the differences in the scope of services RIMCo provides to institutional clients and the Funds. In response to the Trustees’ inquiries, RIMCo, as it has in the past, noted, among other things, that institutional clients have fewer administrative needs than the Funds. RIMCo also noted that since the Funds must constantly issue and redeem their shares, they are more difficult to manage than institutional accounts, where assets are relatively stable. In addition, RIMCo noted that the Funds are subject to heightened regulatory requirements relative to institutional clients. Accordingly, the Trustees did not regard these fee differences as relevant to their deliberations.

With respect to the Funds’ total expenses, the Board noted that the total expenses for the Russell Tax-Managed U.S. Mid & Small Cap Fund, Russell U.S. Growth Fund, Russell U.S. Value Fund, Russell Global Equity Fund, Russell Emerging Markets Fund and Russell Short Duration Bond Fund each were ranked in the fourth quintile relative to its Comparable Funds for the 1-year period ended December 31, 2008. In the case of the Russell U.S. Value, Russell U.S. Growth and Russell Emerging Markets Funds, the Board noted that new custody and transfer agent fee arrangements are expected to reduce those Funds’ total expenses in 2009. In the case of all such Funds, RIMCo undertook to continue to monitor the total expense levels.

On the basis of the Agreement Renewal Information, and other information previously received by the Board from RIMCo during the course of the current year or prior years, or presented at or in connection with the April 21 Board meeting by RIMCo, the Board, in respect of each Fund, found, after giving effect to any applicable waivers and/or reimbursements (1) the Advisory Fee charged by RIMCo to be reasonable in light of the nature, scope and quality of the services provided, and expected to be provided, to the Funds; (2) the relative expense ratio of the Fund was comparable to those of its Comparable Funds; (3) RIMCo’s methodology of allocating expenses of operating funds in the complex was reasonable; and (4) RIMCo’s profitability with respect to the Fund was not excessive in light of the nature, scope and quality of the services provided by RIMCo.

The Board further concluded that, under the circumstances, the performance of each of the Funds supported continuation of the RIMCo Agreement, except the Board concluded, as discussed below, that the performance of the Russell U.S. Value Fund, Russell U.S. Growth Fund, Russell U.S. Small & Mid Cap Fund, Russell Tax-Managed U.S. Large Cap and Russell U.S. Core Equity Funds, while disappointing, did not support a determination against continuation of the RIMCo Agreement in respect of those Funds. The Board, in assessing the Funds’ performance, focused upon each Fund’s performance for the 1-, 3- and 5-year periods as most relevant. Although the relative performance of the Money Market Fund through December 31, 2008 supported continuation of the RIMCo Agreement with respect to that Fund, the Board, as discussed below, expressed concern regarding developments in 2008 which have affected the Money Market Fund’s performance since the date of the Third-Party Information and may affect the Fund’s future performance.

 

Basis for Approval of Investment Advisory Contracts   313

Russell Investment Company

Russell Funds

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

In evaluating the performance of the Funds generally relative to their Comparable Funds, the Board also noted RIMCo’s advice that many of the Funds’ Comparable Funds do not “equitize” their cash (i.e., cash awaiting investment or disbursement to satisfy redemptions or other fund obligations) and may hold large positions uninvested in their investment portfolios. By contrast, the Funds generally follow a strategy of equitizing their cash and fully investing their assets in pursuit of their investment objectives (the Funds’ strategy of equitizing cash and fully investing their assets is hereinafter referred to as their “full investment strategy”). In support of the Funds’ full investment strategy, RIMCo advised the Board of its belief that investors manage their own cash positions based upon their personal investment goals, strategies and risk tolerances and generally expect Fund assets to be fully invested. RIMCo noted that the Funds are distributed primarily through financial intermediaries who determine and manage clients’ cash positions rather than rely on the Funds to hold uninvested cash. RIMCo noted that the Funds’ full investment strategy generally will detract from relative performance in a declining market, such as 2008, but may enhance the Funds’ relative performance in a rising market.

With respect to the Russell U.S. Value Fund, the Third-Party Information showed that the Fund’s performance was ranked in the fifth quintile for the 1-, 3- and 5-year periods ended December 31, 2008. The Trustees considered management’s belief that the Fund tends to have a deeper value orientation than its Comparable Funds, a tendency which led to greater Fund exposure to market segments that performed poorly during the past year, such as mortgage and housing related stocks. The Trustees also considered RIMCo’s belief that the Russell U.S. Value Fund has a more contrarian approach than its Comparable Funds. RIMCo advised the Trustees that the Fund’s underperformance for the 1-year period ended December 31, 2008 significantly affected its performance for the 3- and 5-year periods ended such date.

With respect to the Russell U.S. Growth Fund, the Third-Party Information showed that the Fund’s performance was ranked in the fourth quintile for the 1-year period ended December 31, 2008 and in the fifth quintile for the 3- and 5-year periods ended such date. RIMCo expressed its belief that the Russell U.S. Growth Fund’s full investment strategy was a significant contributor to the Fund’s underperformance relative to its Comparable Funds. RIMCo noted further that the Comparable Funds for the Russell U.S. Growth Fund include many funds that typically have smaller capitalization stocks than the Fund or its benchmark. Over the 3- and 5-year periods ended December 31, 2008, according to RIMCo, smaller cap stocks outperformed larger cap stocks.

With respect to the Russell U.S. Small & Mid Cap Fund, the Third-Party Information indicated that the Fund’s performance was ranked in the fifth quintile for the 1- and 5-year periods ended December 31, 2008 and was ranked in the fourth quintile for the 3-year period ended such date. RIMCo noted that the Comparable Funds consist of funds investing in small cap stocks while the Russell U.S. Small & Mid Cap Fund invests in both small and mid cap stocks and is managed against a different index. Over the past three years, small and mid cap stocks, as a single class, have underperformed small cap stocks. RIMCo noted further that the Russell U.S. Small & Mid Cap Fund’s full investment strategy was a significant contributor to the Fund’s underperformance relative to its Comparable Funds.

With respect to the Russell U.S. Core Equity Fund, the Third-Party Information showed that the Fund’s performance was ranked in the fifth quintile for the 1-year period ended December 31, 2008; in the fourth quintile for the 3-year period ended such date; and the third quintile for the 5-year period ended such date. RIMCo noted that the Russell U.S. Core Equity Fund’s underperformance for the 1-year period had a significant negative impact on its performance for the 3-year period. RIMCo noted further that the Fund’s full investment strategy was a significant contributor to the Fund’s underperformance relative to its Comparable Funds. Lastly, RIMCo expressed its belief that the Russell U.S. Core Equity Fund’s more concentrated active managers were particularly affected by the risk-averse market environment of 2008.

With respect to the Russell Tax-Managed U.S. Large Cap Fund, the Third-Party Information showed that the Fund’s performance was ranked in the fifth quintile for the 1- and 3-year periods ended December 31, 2008, and that its performance for the 5-year period ended on such date was ranked in the fourth quintile. RIMCo noted that the Russell Tax-Managed U.S. Large Cap Fund’s underperformance for the 1-year period had a significant negative impact on its performance for the 3-year period. RIMCo noted further that the Fund’s full investment strategy was a significant contributor to the Fund’s underperformance relative to its Comparable Funds. Lastly, RIMCo noted that Comparable Funds included not only funds that are managed in a tax-aware manner, such as the Russell Tax-Managed U.S. Large Cap Fund, but funds that are focused on maximizing returns without regard to tax consequences. According to RIMCo, constraints in managing the Russell Tax-Managed U.S. Large Cap Fund in a tax-aware manner put the Fund at a disadvantage relative to its Comparable Funds universe.

With respect to the Money Market Fund, the Board noted that the Third-Party Information showed that the Fund’s performance was ranked in the first quintile for each of the 1-, 3-, and 5-year periods ended December 31, 2008 and noted RIMCo’s advice that the Money Market Fund outperformed its benchmark for the 1- and 3-year periods ended such date. However, the Board in evaluating the Fund’s performance also noted that the Money Market Fund held a position in Lehman Brothers debt which defaulted in September 2008 and remains in default. RIMCo has provided a capital support agreement which requires RIMCo, subject to certain terms and conditions, to pay an amount up to approximately $403 million in the event that a disposition of the Lehman debt causes

 

314   Basis for Approval of Investment Advisory Contracts

Russell Investment Company

Russell Funds

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

the Fund’s market-based net asset value to fall below a stated threshold compared to the Fund’s net asset value calculated pursuant to regulatory requirements; it being the intent of the arrangement to support, to the extent of the $403 million cap, maintenance of the Money Market Fund’s net asset value at $1 notwithstanding the Fund’s investments in the Lehman debt. RIMCo noted that the Money Market Fund’s Lehman debt holdings are a non-yielding asset which will have a negative impact on the Fund’s yield. The magnitude of the impact of the Lehman debt holdings will depend, among other things, upon the length of time they are held in the Money Market Fund and also the overall level of nominal rates. A disposition of the Lehman debt holdings must occur prior to the termination of the capital support agreement in September 2009. The Board further considered RIMCo’s advice that it has shifted the Money Market Fund’s focus from yield to preservation of capital; that the portfolio management team has changed since the Lehman debt default; and that RIMCo has undertaken enhancements to its risk management, pre-trade review and credit review processes.

The Board also considered that the performance of certain Funds that have loaned portfolio securities has been subject to a negative impact associated with declining values of investments of cash collateral held in respect of such loans. In considering the performance of the affected Funds, the Board, among other things, considered RIMCo’s assessment of the benefits and risks of continuation of the Funds’ securities lending program notwithstanding this negative impact and steps which have been taken by RIMCo to enhance the process for selection and monitoring of investments of cash collateral held in respect of portfolio securities loans.

In evaluating performance, the Board considered each Fund’s absolute performance and performance relative to appropriate benchmarks and indices in addition to such Fund’s performance relative to its Comparable Funds. In assessing the Funds’ performance relative to their Comparable Funds or benchmarks or in absolute terms, the Board also considered RIMCo’s stated investment strategy of managing the Funds in a risk-aware manner and the extraordinary capital market conditions during 2008.

After considering the foregoing and other relevant factors, the Board concluded that continuation of the RIMCo Agreement on its current terms and conditions would be in the best interests of each Fund and its respective shareholders and voted to approve the continuation of the RIMCo Agreement.

At the April 21 Board meeting, with respect to the evaluation of the terms of portfolio management contracts with Money Managers, the Board received and considered information from RIMCo reporting, among other things, for each Money Manager, the Money Manager’s performance over various periods; RIMCo’s assessment of the performance of each Money Manager; any significant business relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the Funds’ underwriter; and RIMCo’s recommendation to retain the Money Manager at the current fee rate, to retain the Money Manager at a reduced fee rate or to terminate the Money Manager. The Board received reports during the course of the year from the Funds’ Chief Compliance Officer regarding each Money Manager’s compliance program. RIMCo recommended that each Money Manager be retained at its current fee rate. RIMCo has advised the Board that it does not regard Money Manager profitability as relevant to its evaluation of the portfolio management contracts with Money Managers because the willingness of Money Managers to serve in such capacity depends upon arm’s-length negotiations with RIMCo; RIMCo is aware of the fees charged by Money Managers to other clients; and RIMCo believes that the fees agreed upon with Money Managers are reasonable in light of the anticipated quality of investment advisory services to be rendered. The Board accepted RIMCo’s explanation in light of the Board’s findings as to the reasonableness of the Advisory Fee paid by each Fund and the fact that each Money Manager’s fee is paid by RIMCo.

Based substantially upon RIMCo’s recommendations, together with the information received from RIMCo in support of its recommendations at the April 21 Board meeting, the Board concluded that the fees paid to the Money Managers of each Fund are reasonable in light of the quality of the investment advisory services provided and that continuation of the portfolio management contract with each Money Manager of each Fund would be in the best interests of the Fund and its shareholders.

In their deliberations, the Trustees did not identify any particular information as to the RIMCo Agreement or, other than RIMCo’s recommendation, the portfolio management contract with any Money Manager that was all-important or controlling and each Trustee attributed different weights to the various factors considered. The Trustees evaluated all information available to them on a Fund-by-Fund basis and their determinations were made in respect of each Fund.

 

Basis for Approval of Investment Advisory Contracts   315

Russell Investment Company

Russell Funds

Shareholder Requests for Additional Information — April 30, 2009 (Unaudited)

 

 

 

A complete unaudited schedule of investments is made available generally no later than 60 days after the end of the first and third quarters of each fiscal year. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, (ii) at www.russell.com, (iii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iv) at the Securities and Exchange Commission’s public reference room.

The Board has delegated to RIMCo, as RIC’s investment adviser, the primary responsibility for monitoring, evaluating and voting proxies solicited by or with respect to issuers of securities in which assets of the Funds may be invested. RIMCo has established a proxy voting committee (“Committee”) and has adopted written proxy voting policies and procedures (“P&P”) and proxy voting guidelines (“Guidelines”). The Funds maintain a Portfolio Holdings Disclosure Policy that governs the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Funds. A description of the P&P, Guidelines, Portfolio Holdings Disclosure Policy and additional information about Fund Trustees are contained in the Funds’ Statement of Additional Information (“SAI”). The SAI is available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, (ii) at www.russell.com, and (iii) on the Securities and Exchange Commission’s website at www.sec.gov.

To reduce expenses, we may mail only one copy of the Funds’ prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution.

Some Financial Intermediaries may offer electronic delivery of the Funds’ prospectus and annual and semiannual reports. Please contact your Financial Intermediary for further details.

 

316   Shareholder Requests for Additional Information

Russell Investment Company

Russell Funds

Disclosure of Information about Fund Trustees and Officers — April 30, 2009 (Unaudited)

 

 

 

The following tables provide information for each officer and Trustee of the Russell Fund Complex. The Russell Fund Complex consists of RIC, which has 38 funds, and RIF, which has nine funds. Each of the Trustees is a Trustee of both RIC and RIF. The first table provides information for the interested Trustee. The second table provides information for the independent Trustees. The third table provides information for the Trustees emeritus. The fourth table provides information for the officers.

 

Name,
Age,
Address		   Position(s) Held
with Fund and
Length of
Time Served		   Term
of
Office*		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

INTERESTED TRUSTEE

            

# Greg J. Stark
Born May 3, 1968

 

909 A Street
Tacoma, Washington 98402-1616

  

President and Chief Executive Officer since 2004

 

Trustee since 2007

  

Appointed until successor is duly elected and qualified

 

Until successor is chosen and qualified by Trustees

  

•  President and CEO RIC and RIF

•  Chairman of the Board, President and CEO, RIMCo

•  Chairman of the Board, President and CEO, Russell Fund Services Company (“RFSC”)

•  Chairman of the Board, President and CEO, Russell Financial Services, Inc.

•  Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

•  Until 2004, Managing Director, of Individual Investor Services, FRC

•  2000 to 2004 Managing Director, Sales and Client Service, RIMCo

   47   None

INDEPENDENT TRUSTEES

        

Thaddas L. Alston

Born April 7, 1945

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee since 2006   Appointed until successor is duly elected and qualified  

•  Senior Vice President, Larco Investments, Ltd. (real estate firm)

   47   None
             

Kristianne Blake,

Born January 22, 1954

 

909 A Street

Tacoma, Washington

98402-1616

  

Trustee since 2000

 

Chairman since 2005

  

Appointed until successor is duly elected and qualified

 

Annual

  

•  Director and Chairman of the Audit Committee, Avista Corp.

•  Trustee and Chairman of the Operations Committee, Principal Investor Funds and Principal Variable Contracts Funds

•  Regent, University of Washington

•  President, Kristianne Gates Blake, P.S. (accounting services)

•  February 2002 to June 2005, Chairman of the Audit Committee, RIC and RIF

•  Trustee and Chairman of the Operations and Distribution Committee, WM Group of Funds, 1999-2006

   47  

•  Director, Avista Corp (electric utilities)

•  Trustee, Principal Investor Funds (investment company);

•  Trustee, Principal Variable Contracts Funds (investment company)

 

# Mr. Stark is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore an Interested Trustee.

 

Disclosure of Information about Fund Trustees and Officers   317

Russell Investment Company

Russell Funds

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009 (Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
with Fund and
Length of
Time Served		   Term
of
Office*		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

INDEPENDENT TRUSTEES (continued)

        

Daniel P. Connealy

Born June 6, 1946

 

909 A Street

Tacoma, Washington

98402-1616

  

Trustee since 2003

 

Chairman of the Audit Committee since 2005

  

Appointed until successor is duly elected and qualified

 

Appointed until successor is duly elected and qualified

  

•  June 2004 to present, Senior Vice President and Chief Financial Officer, Waddell & Reed Financial, Inc.

   47   None
             

Jonathan Fine,

Born July 8, 1954

 

909 A Street

Tacoma, Washington

98402-1616

  

Trustee

since 2004

  

Appointed until

successor is duly

elected and

qualified

  

•  President and Chief Executive Officer, United Way of King County, WA

   47   None
             

Raymond P. Tennison, Jr.

Born December 21, 1955

 

909 A Street

Tacoma, Washington

98402-1616

  

Trustee since 2000

 

Chairman of the Nominating and Governance Committee since 2007

  

Appointed until successor is duly elected and qualified

 

Appointed until successor is duly elected and qualified

  

•  President, Simpson Investment Company and several additional subsidiary companies, including Simpson Timber Company, Simpson Paper Company and Simpson Tacoma Kraft Company

   47   None
             

Jack R. Thompson,

Born March 21, 1949

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee since 2005   Appointed until successor is duly elected and qualified  

•  September 2003 to present, Independent Board Chair and Chairman of the Audit Committee, Sparx Asia Funds

•  September 2007 to present, Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation (health products company)

   47  

•  Director, Sparx Asia Funds (investment company)

•  Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation (health products company)

             

Julie W. Weston,
Born October 2, 1943

 

909 A Street Tacoma, Washington 98402-1616

  

Trustee since 2002

 

Chairperson of the Investment Committee since 2006

  

Appointed until successor is duly elected and qualified

 

Appointed until successor is duly elected and qualified

  

•  Retired

   47   None

 

* Each Trustee is subject to mandatory retirement at age 72.

 

318   Disclosure of Information about Fund Trustees and Officers

Russell Investment Company

Russell Funds

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009 (Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
with Fund and
Length of
Time Served		   Term
of
Office		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

TRUSTEES EMERITUS

            

* George F. Russell, Jr., Born July 3, 1932

 

909 A Street
Tacoma, Washington 98402-1616

   Trustee Emeritus and Chairman Emeritus since 1999   Until resignation or removal  

•  Director Emeritus, Frank Russell Company (investment consultant to institutional investors (“FRC”)) and RIMCo

•  Chairman Emeritus, RIC and RIF; Russell Implementation Services Inc. (broker-dealer and investment adviser (“RIS”)); Russell 20-20 Association (non-profit corporation); and Russell Trust Company (non-depository trust company (“RTC”))

•  Chairman, Sunshine Management Services, LLC (investment adviser)

  47   None
             

Paul E. Anderson,

Born October 15, 1931

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus since 2007   Five year term  

•  President, Anderson Management Group LLC (private investments consulting)

•  Trustee, RIC and RIF until 2006

•  February 2002 to June 2005, Lead Trustee, RIC and RIF

•  Chairman of the Nominating and Governance Committee, 2006

   47   None
             

Lee C. Gingrich,

Born October 6, 1930

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus since 2006   Five year term  

•  Retired since 1995

•  Trustee of RIC and RIF until 2005

•  Chairman of the Nominating and Governance Committee 2001-2005

   47   None

 

* Mr. Russell is also a director emeritus of one or more affiliates of RIC and RIF.

 

Disclosure of Information about Fund Trustees and Officers   319

Russell Investment Company

Russell Funds

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009 (Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
with Fund and
Length of
Time Served		   Term
of
Office		   Principal Occupation(s)
During the
Past 5 Years

OFFICERS

        

Cheryl Wichers
Born December 16, 1966

 

909 A Street
Tacoma, Washington
98402-1616

   Chief Compliance Officer since 2005   Until removed by Independent Trustees  

•  Chief Compliance Officer, RIC

•  Chief Compliance Officer, RIF

•  Chief Compliance Officer, RIMCo

•  Chief Compliance Officer, RFSC

•  April 2002-May 2005, Manager, Global Regulatory Policy

         

Greg J. Stark,
Born May 3, 1968

 

909 A Street
Tacoma, Washington
98402-1616

   President and Chief Executive Officer since 2004   Until successor is chosen and qualified by Trustees  

•  President and CEO, RIC and RIF

•  Chairman of the Board, President and CEO, RIMCo

•  Chairman of the Board, President and CEO, Russell Financial Services, Inc.

•  Chairman of the Board, President and CEO, RFSC

•  Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

•  Until 2004, Managing Director of Individual Investor Services, FRC

•  2000 to 2004, Managing Director, Sales and Client Service, RIMCo

         

Mark E. Swanson,
Born November 26, 1963

 

909 A Street
Tacoma, Washington
98402-1616

   Treasurer and Chief Accounting Officer since 1998   Until successor is chosen and qualified by Trustees  

•  Treasurer, Chief Accounting Officer and CFO, RIC and RIF

•  Director, Funds Administration, RIMCo, RFSC, RTC and Russell Financial Services, Inc.

•  Treasurer and Principal Accounting Officer, SSgA Funds

         

Peter Gunning,
Born February 22, 1967

 

909 A Street
Tacoma, Washington
98402-1616

   Chief Investment Officer since 2008   Until removed by Trustees  

•  Chief Investment Officer, RIC and RIF

•  Director, RIMCo and FRC

•  1996 to 2008 Chief Investment Officer, Russell, Asia Pacific

         

Gregory J. Lyons,
Born August 24, 1960

 

909 A Street
Tacoma, Washington
98402-1616

   Secretary since 2007   Until successor is chosen and qualified by Trustees  

•  U.S. General Counsel and Assistant Secretary, FRC

•  Director and Assistant Secretary, RIA

•  Secretary, RIMCo, RFSC and Russell Financial Services, Inc.

•  Secretary and Chief Legal Counsel, RIC and RIF

 

320   Disclosure of Information about Fund Trustees and Officers

Russell Funds

Russell Investment Company

909 A Street, Tacoma, Washington 98402

(800) 787-7354

 

 

 

Interested Trustee

Greg J. Stark

Independent Trustees

Thaddas L. Alston

Kristianne Blake

Daniel P. Connealy

Jonathan Fine

Raymond P. Tennison, Jr.

Jack R. Thompson

Julie W. Weston

Trustees Emeritus

George F. Russell, Jr.

Paul E. Anderson

Lee C. Gingrich

Officers

Greg J. Stark, President and Chief Executive Officer

Cheryl Wichers, Chief Compliance Officer

Peter Gunning, Chief Investment Officer

Mark E. Swanson, Treasurer and Chief Accounting Officer

Gregory J. Lyons, Secretary

Adviser

Russell Investment Management Company

909 A Street

Tacoma, WA 98402

Administrator and Transfer and Dividend Disbursing Agent

Russell Fund Services Company

909 A Street

Tacoma, WA 98402

Custodian

State Street Bank and Trust Company

Josiah Quincy Building

200 Newport Avenue

North Quincy, MA 02171

Office of Shareholder Inquiries

909 A Street

Tacoma, WA 98402

(800) 787-7354

Legal Counsel

Dechert LLP

200 Clarendon Street, 27th Floor

Boston, MA 02116-5021

Distributor

Russell Financial Services, Inc.

909 A Street

Tacoma, WA 98402

Money Managers as of April 30, 2009

Russell U.S. Core Equity Fund

AllianceBernstein L.P., New York, NY

Arnhold and S. Bleichroeder Advisers, LLC, New York, NY

Columbus Circle Investors, Stamford, CT

Institutional Capital LLC, Chicago, IL

Marsico Capital Management, LLC, Denver, CO

MFS Institutional Advisors, Inc., Boston, MA

Montag & Caldwell, Inc., Atlanta, GA

Schneider Capital Management Corporation, Wayne, PA

Suffolk Capital Management, LLC, New York, NY

Turner Investment Partners, Inc., Berwyn, PA

Russell U.S. Quantitative Equity Fund

Aronson+Johnson+Ortiz, LP, Philadelphia, PA

Goldman Sachs Asset Management, L.P., New York, NY

INTECH Investment Management LLC, West Palm Beach, FL

Jacobs Levy Equity Management, Inc., Florham Park, NJ

Mellon Capital Management Corporation, Boston, MA

Russell U.S. Growth Fund

Cornerstone Capital Management, Inc., Bloomington, MN

Delaware Management Company, a series of Delaware Management Business Trust, Philadelphia, PA

Fuller & Thaler Asset Management, Inc., San Mateo, CA

Suffolk Capital Management, LLC, New York, NY

Sustainable Growth Advisers, LP, Stamford, CT

Turner Investment Partners, Inc., Berwyn, PA

Russell U.S. Value Fund

DePrince, Race & Zollo, Inc., Winter Park, FL

Iridian Asset Management LLC, Westport, CT

JS Asset Management, LLC, West Conshohocken, PA

Systematic Financial Management, L.P., Teaneck, NJ

Russell U.S. Small & Mid Cap Fund

ClariVest Asset Management LLC, San Diego, CA

Delphi Management, Inc., Boston, MA

DePrince, Race & Zollo, Inc., Winter Park, FL

Gould Investment Partners LLC, Berwyn, PA

Jacobs Levy Equity Management, Inc., Florham Park, NJ

PanAgora Asset Management, Inc., Boston, MA

Ranger Investment Management, L.P., Dallas, TX

Signia Capital Management, LLC, Spokane, WA

Tygh Capital Management, Inc., Portland, OR

Russell International Developed Markets Fund

AllianceBernstein L.P., New York, NY

Altrinsic Global Advisors, LLC, Stamford, CT

AQR Capital Management, LLC, Greenwich, CT

Axiom International Investors LLC, Greenwich, CT

Marsico Capital Management, LLC, Denver, CO

MFS Institutional Advisors, Inc., Boston, MA

Mondrian Investment Partners Limited, London, United Kingdom

UBS Global Asset Management (Americas) Inc., Chicago, IL

Wellington Management Company, LLP, Boston, MA

Russell Global Equity Fund

ClariVest Asset Management LLC, San Diego, CA

Gartmore Global Partners, London, United Kingdom

Harris Associates, L.P., Chicago, IL

Tradewinds Global Investors, LLC, Los Angeles, CA

T. Rowe Price International, Inc., Baltimore, MD

Russell Emerging Markets Fund

AllianceBernstein L.P., New York, NY

Arrowstreet Capital, Limited Partnership, Boston, MA

Genesis Asset Managers, LLP, London, United Kingdom

Harding Loevner LLC, Somerville, NJ

T. Rowe Price International, Inc., Baltimore, MD

UBS Global Asset Management (Americas) Inc., Chicago, IL

Russell Tax-Managed U.S. Large Cap Fund

Armstrong Shaw Associates Inc., New Canaan, CT

J.P. Morgan Investment Management Inc., New York, NY

Palisades Investment Partners, LLC, Santa Monica, CA

Sands Capital Management, Inc., Arlington, VA

Turner Investment Partners, Inc., Berwyn, PA


 

Adviser, Money Managers and Service Providers   321

Russell Funds

Russell Investment Company

909 A Street, Tacoma, Washington 98402

(800) 787-7354

 

 

 

Russell Tax-Managed U.S. Mid & Small Cap Fund

Chartwell Investment Partners, Berwyn, PA

Netols Asset Management, Inc., Mequon, WI

Parametric Portfolio Associates LLC, Seattle, WA

Transamerica Investment Management, LLC, Los Angeles, CA

Turner Investment Partners, Inc., Berwyn, PA

Russell Strategic Bond Fund

Drake Capital Management, LLC, New York, NY

Goldman Sachs Asset Management, L.P., New York, NY

Hyperion Brookfield Asset Management, Inc., New York, NY

Logan Circle Partners, L.P., Philadelphia, PA

Metropolitan West Asset Management, LLC, Los Angeles, CA

Pacific Investment Management Company LLC, Newport Beach, CA

Russell Investment Grade Bond Fund

Metropolitan West Asset Management, LLC, Los Angeles, CA

Neuberger Berman Fixed Income LLC, Chicago, IL

Pacific Investment Management Company LLC, Newport Beach, CA

Western Asset Management Company, Pasadena, CA

Western Asset Management Company Limited, London, England

Russell Short Duration Bond Fund

Logan Circle Partners, L.P., Philadelphia, PA

Pacific Investment Management Company LLC, Newport Beach, CA

Russell Tax Exempt Bond Fund

Delaware Management Company, a series of Delaware Management Business Trust, Philadelphia, PA

Standish Mellon Asset Management Company LLC, Boston, MA

Russell Real Estate Securities Fund

AEW Capital Management, L.P., Boston, MA

Cohen & Steers Capital Management, Inc., New York, NY

Heitman Real Estate Securities LLC, Chicago, IL

INVESCO Institutional (N.A.), Inc. which acts as a money manager to the Fund through its INVESCO Real Estate Division, Dallas, TX

RREEF America L.L.C., Chicago, IL

Russell Money Market Fund

Russell Investment Management Company, Tacoma, WA


 

This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained is to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Company. Such offering is made only by Prospectus, which includes details as to offering price and other material information.

 

322   Manager, Money Managers and Service Providers

 

Russell Investment Company    909 A Street      800-787-7354
   Tacoma, Washington 98402      Fax: 253-591-3495
        www.russell.com

 

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36-08-226

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2009 SEMIANNUAL REPORT

 

 

LifePoints® Funds

 

 

APRIL 30, 2009

 

FUND    SHARE CLASS
Conservative Strategy Fund    A, C, E, R1, R2, R3, S
Moderate Strategy Fund    A, C, E, R1, R2, R3, S
Balanced Strategy Fund    A, C, E, R1, R2, R3, S
Growth Strategy Fund    A, C, E, R1, R2, R3, S
Equity Growth Strategy Fund    A, C, E, R1, R2, R3, S
2010 Strategy Fund    A, E, R1, R2, R3, S
2015 Strategy Fund    R1, R2, R3
2020 Strategy Fund    A, E, R1, R2, R3, S
2025 Strategy Fund    R1, R2, R3
2030 Strategy Fund    A, E, R1, R2, R3, S
2035 Strategy Fund    R1, R2, R3
2040 Strategy Fund    A, E, R1, R2, R3, S
2045 Strategy Fund    R1, R2, R3
2050 Strategy Fund    R1, R2, R3
In Retirement Fund    R1, R2, R3

 

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Russell Investment Company

Russell Investment Company is a series investment company with 38 different investment portfolios referred to as Funds. These financial statements report on 15 of these Funds.

 

Russell Investment Company

LifePoints® Funds

Semiannual Report

April 30, 2009 (Unaudited)

Table of Contents

 

     Page
Conservative Strategy Fund    3
Moderate Strategy Fund    6
Balanced Strategy Fund    9
Growth Strategy Fund    12
Equity Growth Strategy Fund    15
2010 Strategy Fund    18
2015 Strategy Fund    21
2020 Strategy Fund    23
2025 Strategy Fund    26
2030 Strategy Fund    28
2035 Strategy Fund    31
2040 Strategy Fund    33
2045 Strategy Fund    36
2050 Strategy Fund    38
In Retirement Fund    40
Statements of Assets and Liabilities    42
Statements of Operations    48
Statements of Changes in Net Assets    52
Financial Highlights    58
Notes to Financial Highlights    78
Notes to Financial Statements    79
Basis for Approval of Investment Advisory Contracts    104
Shareholder Requests for Additional Information    108
Disclosure of Information about Fund Trustees and Officers    109
Adviser, Money Managers and Service Providers    113

 

Russell Investment Company - LifePoints® Funds.

Copyright © Russell Investments 2009. All rights reserved.

Russell Investments is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Fund objectives, risks, charges and expenses should be carefully considered before investing. A prospectus containing this and other important information must precede or accompany this material. Please read the prospectus carefully before investing.

Securities distributed through Russell Financial Services, Inc. (effective June 2, 2008, the name changed from Russell Fund Distributors, Inc.) member FINRA, part of Russell Investments.

Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Current to the most recent month-end performance data may be obtained by visiting www.russell.com/us/fundperformance.

Russell Investment Company

Conservative Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,016.20    $ 1,022.46

Expenses Paid During Period*

    $ 2.35    $ 2.36

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.47% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,013.40    $ 1,018.74

Expenses Paid During Period*

    $ 6.09    $ 6.11

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.22% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,016.20    $ 1,022.46

Expenses Paid During Period*

    $ 2.35    $ 2.36

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.47% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Conservative Strategy Fund   3

Russell Investment Company

Conservative Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,018.30    $ 1,023.70

Expenses Paid During Period*

    $ 1.10    $ 1.10

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.22% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,016.10    $ 1,022.46

Expenses Paid During Period*

    $ 2.35    $ 2.36

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.47% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,015.10    $ 1,021.22

Expenses Paid During Period*

    $ 3.60    $ 3.61

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.72% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,017.20    $ 1,023.70

Expenses Paid During Period*

    $ 1.10    $ 1.10

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.22% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

4   Conservative Strategy Fund

Russell Investment Company

Conservative Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 99.9%        
Other Russell Investment Company
Series Mutual Funds		        
Bonds - 77.6%        

Russell Short Duration Bond Fund

    4,944,017      87,262

Russell Strategic Bond Fund

    28,886,905      264,026
         
        351,288
         
Domestic Equities - 15.7%        

Russell Real Estate Securities Fund

    770,117      16,634

Russell U.S. Core Equity Fund

    1,563,243      29,811

Russell U.S. Quantitative Equity Fund

    1,214,765      24,587
         
        71,032
         
International Equities - 6.6%        

Russell Global Equity Fund

    1,727,514      9,916

Russell International Developed Markets Fund

    873,316      19,807
         
        29,723
         
Total Investments - 99.9%
(identified cost $515,967)		         452,043
Other Assets and Liabilities,
Net - 0.1%		         429
         
Net Assets - 100.0%         452,472
         

 

See accompanying notes which are an integral part of the financial statements.

 

Conservative Strategy Fund   5

Russell Investment Company

Moderate Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 999.00    $ 1,022.32

Expenses Paid During Period*

    $ 2.48    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 996.00    $ 1,018.60

Expenses Paid During Period*

    $ 6.19    $ 6.26

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 999.00    $ 1,022.32

Expenses Paid During Period*

    $ 2.48    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

6   Moderate Strategy Fund

Russell Investment Company

Moderate Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,001.20    $ 1,023.51

Expenses Paid During Period*

    $ 1.29    $ 1.30

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 999.00    $ 1,022.32

Expenses Paid During Period*

    $ 2.48    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 998.00    $ 1,021.08

Expenses Paid During Period*

    $ 3.72    $ 3.76

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.75% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,000.00    $ 1,023.51

Expenses Paid During Period*

    $ 1.29    $ 1.30

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Moderate Strategy Fund   7

Russell Investment Company

Moderate Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$		  
       
Investments - 100.0%        
Other Russell Investment Company Series Mutual Funds        
Bonds - 59.3%        

Russell Strategic Bond Fund

    53,775,556      491,509  
           
Domestic Equities - 26.5%        

Russell Real Estate Securities Fund

    1,260,049      27,217  

Russell U.S. Core Equity Fund

    4,385,299      83,628  

Russell U.S. Quantitative Equity Fund

    4,118,444      83,357  

Russell U.S. Small & Mid Cap Fund

    1,847,458      25,735  
           
        219,937  
           
International Equities - 14.2%        

Russell Emerging Markets Fund

    1,489,167      17,200  

Russell Global Equity Fund

    4,357,976      25,015  

Russell International Developed Markets Fund

    3,331,270      75,553  
           
        117,768  
           
Total Investments - 100.0%
(identified cost $1,032,821)		         829,214  
Other Assets and Liabilities,
Net - (0.0%)		         (9 )
           
Net Assets - 100.0%         829,205  
           

 

See accompanying notes which are an integral part of the financial statements.

 

8   Moderate Strategy Fund

Russell Investment Company

Balanced Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 983.00    $ 1,022.27

Expenses Paid During Period*

    $ 2.51    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 978.80    $ 1,018.55

Expenses Paid During Period*

    $ 6.18    $ 6.31

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 983.10    $ 1,022.27

Expenses Paid During Period*

    $ 2.51    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Balanced Strategy Fund   9

Russell Investment Company

Balanced Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 984.20    $ 1,023.51

Expenses Paid During Period*

    $ 1.28    $ 1.30

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 983.10    $ 1,022.27

Expenses Paid During Period*

    $ 2.51    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 980.90    $ 1,021.03

Expenses Paid During Period*

    $ 3.73    $ 3.81

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.76% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 984.10    $ 1,023.51

Expenses Paid During Period*

    $ 1.28    $ 1.30

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

10   Balanced Strategy Fund

Russell Investment Company

Balanced Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$		  
       
Investments - 100.0%        
Other Russell Investment Company
Series Mutual Funds		     
Bonds - 39.2%        

Russell Strategic Bond Fund

    152,826,468      1,396,834  
           
Domestic Equities - 39.7%        

Russell Real Estate Securities Fund

    9,180,735      198,304  

Russell U.S. Core Equity Fund

    28,165,721      537,120  

Russell U.S. Quantitative Equity Fund

    26,362,416      533,575  

Russell U.S. Small & Mid Cap Fund

    10,589,356      147,510  
           
        1,416,509  
           
International Equities - 21.1%        

Russell Emerging Markets Fund

    9,613,288      111,034  

Russell Global Equity Fund

    24,818,815      142,460  

Russell International Developed
Markets Fund

    21,993,757      498,818  
           
        752,312  
           
Total Investments - 100.0%
(identified cost $4,769,424)		         3,565,655  
Other Assets and Liabilities,
Net - (0.0%)		         (296 )
           
Net Assets - 100.0%         3,565,359  
           

 

See accompanying notes which are an integral part of the financial statements.

 

Balanced Strategy Fund   11

Russell Investment Company

Growth Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 959.70    $ 1,022.27

Expenses Paid During Period*

    $ 2.48    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 956.70    $ 1,018.55

Expenses Paid During Period*

    $ 6.11    $ 6.31

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 961.10    $ 1,022.77

Expenses Paid During Period*

    $ 2.48    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

12   Growth Strategy Fund

Russell Investment Company

Growth Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 962.20    $ 1,023.51

Expenses Paid During Period*

    $ 1.26    $ 1.30

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 961.10    $ 1,022.27

Expenses Paid During Period*

    $ 2.48    $ 2.56

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.51% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 958.90    $ 1,021.03

Expenses Paid During Period*

    $ 3.69    $ 3.81

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.76% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 962.20    $ 1,023.51

Expenses Paid During Period*

    $ 1.26    $ 1.30

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Growth Strategy Fund   13

Russell Investment Company

Growth Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$		  
       
Investments - 100.0%        
Other Russell Investment Company
Series Mutual Funds		     
Bonds - 18.3%        

Russell Strategic Bond Fund

    49,164,495      449,363  
           
Domestic Equities - 54.2%        

Russell Real Estate Securities Fund

    7,595,061      164,053  

Russell U.S. Core Equity Fund

    27,198,670      518,679  

Russell U.S. Quantitative Equity Fund

    24,199,788      489,804  

Russell U.S. Small & Mid Cap Fund

    11,108,993      154,748  
           
        1,327,284  
           
International Equities - 27.5%        

Russell Emerging Markets Fund

    9,103,437      105,145  

Russell Global Equity Fund

    25,744,074      147,771  

Russell International Developed
Markets Fund

    18,539,158      420,468  
           
        673,384  
           
Total Investments - 100.0%
(identified cost $3,597,915)		         2,450,031  
Other Assets and Liabilities,
Net - (0.0%)		         (1,197 )
           
Net Assets - 100.0%         2,448,834  
           

 

See accompanying notes which are an integral part of the financial statements.

 

14   Growth Strategy Fund

Russell Investment Company

Equity Growth Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 935.80    $ 1,022.22

Expenses Paid During Period*

    $ 2.50    $ 2.61

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.52% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 933.00    $ 1,018.55

Expenses Paid During Period*

    $ 6.04    $ 6.31

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.26% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 936.00    $ 1,022.22

Expenses Paid During Period*

    $ 2.50    $ 2.61

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.52% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Equity Growth Strategy Fund   15

Russell Investment Company

Equity Growth Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 937.40    $ 1,023.46

Expenses Paid During Period*

    $ 1.30    $ 1.35

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.27% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 936.00    $ 1,022.22

Expenses Paid During Period*

    $ 2.50    $ 2.61

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.52% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 933.80    $ 1,020.98

Expenses Paid During Period*

    $ 3.69    $ 3.86

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.77% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 937.40    $ 1,023.46

Expenses Paid During Period*

    $ 1.30    $ 1.35

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.27% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

16   Equity Growth Strategy Fund

Russell Investment Company

Equity Growth Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 100.0%        
Other Russell Investment Company Series Mutual Funds        
Domestic Equities - 65.0%        

Russell Real Estate Securities Fund

    3,939,376      85,090

Russell U.S. Core Equity Fund

    15,518,005      295,928

Russell U.S. Quantitative Equity Fund

    13,944,991      282,247

Russell U.S. Small & Mid Cap Fund

    5,915,474      82,403
         
        745,668
         
International Equities - 35.0%        

Russell Emerging Markets Fund

    5,209,364      60,168

Russell Global Equity Fund

    13,850,604      79,503

Russell International Developed
Markets Fund

    11,579,809      262,630
         
        402,301
         
Total Investments - 100.0%
(identified cost $1,792,975)		         1,147,969
Other Assets and Liabilities,
Net - 0.0%		         182
         
Net Assets - 100.0%         1,148,151
         

 

See accompanying notes which are an integral part of the financial statements.

 

Equity Growth Strategy Fund   17

Russell Investment Company

2010 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,003.60    $ 1,023.55

Expenses Paid During Period*

    $ 1.24    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,003.60    $ 1,023.55

Expenses Paid During Period*

    $ 1.24    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,003.40    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

18   2010 Strategy Fund

Russell Investment Company

2010 Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,002.60    $ 1,023.55

Expenses Paid During Period*

    $ 1.24    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,000.40    $ 1,022.32

Expenses Paid During Period*

    $ 2.48    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,004.60    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.


 

2010 Strategy Fund   19

Russell Investment Company

2010 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 100.0%        
Other Russell Investment Company        
Series Mutual Funds        
Bonds - 64.6%        

Russell Short Duration Bond Fund

    183,336      3,236

Russell Strategic Bond Fund

    3,548,967      32,438
         
        35,674
         
Domestic Equities - 23.4%        

Russell Real Estate Securities Fund

    86,409      1,866

Russell U.S. Core Equity Fund

    257,335      4,907

Russell U.S. Quantitative Equity Fund

    240,953      4,877

Russell U.S. Small & Mid Cap Fund

    89,425      1,246
         
        12,896
         
International Equities - 12.0%        

Russell Emerging Markets Fund

    73,059      844

Russell Global Equity Fund

    265,958      1,527

Russell International Developed
Markets Fund

    187,853      4,260
         
        6,631
         
Total Investments - 100.0%
(identified cost $64,648)		         55,201
Other Assets and Liabilities,
Net - 0.0%		         3
         
Net Assets - 100.0%         55,204
         

 

See accompanying notes which are an integral part of the financial statements.

 

20   2010 Strategy Fund

Russell Investment Company

2015 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 993.60    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 992.80    $ 1,023.55

Expenses Paid During Period*

    $ 1.24    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 991.00    $ 1,022.32

Expenses Paid During Period*

    $ 2.47    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

2015 Strategy Fund   21

Russell Investment Company

2015 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 99.5%        
Other Russell Investment Company        
Series Mutual Funds        
Bonds - 55.0%        

Russell Strategic Bond Fund

    311,028      2,843
         
Domestic Equities - 28.9%        

Russell Real Estate Securities Fund

    8,958      193

Russell U.S. Core Equity Fund

    29,785      568

Russell U.S. Quantitative Equity Fund

    27,942      566

Russell U.S. Small & Mid Cap Fund

    12,067      168
         
        1,495
         
International Equities - 15.6%        

Russell Emerging Markets Fund

    10,131      117

Russell Global Equity Fund

    28,800      165

Russell International Developed
Markets Fund

    23,012      522
         
        804
         
Total Investments - 99.5%
(identified cost $4,960)		         5,142
Other Assets and Liabilities,
Net - 0.5%		         27
         
Net Assets - 100.0%         5,169
         

 

See accompanying notes which are an integral part of the financial statements.

 

22   2015 Strategy Fund

Russell Investment Company

2020 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 983.60    $ 1,023.55

Expenses Paid During Period*

    $ 1.23    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 984.90    $ 1,023.55

Expenses Paid During Period*

    $ 1.23    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 985.80    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

2020 Strategy Fund   23

Russell Investment Company

2020 Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 985.00    $ 1,023.55

Expenses Paid During Period*

    $ 1.23    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 984.00    $ 1,022.32

Expenses Paid During Period*

    $ 2.46    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 987.00    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

24   2020 Strategy Fund

Russell Investment Company

2020 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 100.0%        
Other Russell Investment Company        
Series Mutual Funds        
Bonds - 44.1%        

Russell Strategic Bond Fund

    6,325,568      57,816
         
Domestic Equities - 36.4%        

Russell Real Estate Securities Fund

    308,185      6,657

Russell U.S. Core Equity Fund

    945,552      18,032

Russell U.S. Quantitative Equity Fund

    887,507      17,963

Russell U.S. Small & Mid Cap Fund

    370,830      5,165
         
        47,817
         
International Equities - 19.5%        

Russell Emerging Markets Fund

    333,029      3,846

Russell Global Equity Fund

    856,432      4,916

Russell International Developed
Markets Fund

    743,830      16,870
         
        25,632
         
Total Investments - 100.0%
(identified cost $158,959)		         131,265

Other Assets and Liabilities,

Net - 0.0%

         33
         
Net Assets - 100.0%         131,298
         

 

 

See accompanying notes which are an integral part of the financial statements.

 

2020 Strategy Fund   25

Russell Investment Company

2025 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 970.60    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 968.60    $ 1,023.55

Expenses Paid During Period*

    $ 1.22    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 966.50    $ 1,022.32

Expenses Paid During Period*

    $ 2.44    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

26   2025 Strategy Fund

Russell Investment Company

2025 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 99.3%        
Other Russell Investment Company Series Mutual Funds        
Bonds - 29.1%        

Russell Strategic Bond Fund

    127,660      1,167
         
Domestic Equities - 46.1%        

Russell Real Estate Securities Fund

    11,095      240

Russell U.S. Core Equity Fund

    36,903      704

Russell U.S. Quantitative Equity Fund

    34,663      701

Russell U.S. Small & Mid Cap Fund

    14,490      202
         
        1,847
         
International Equities - 24.1%        

Russell Emerging Markets Fund

    12,334      142

Russell Global Equity Fund

    34,609      199

Russell International Developed
Markets Fund

    27,442      622
         
        963
         
Total Investments - 99.3%
(identified cost $3,825)		         3,977
Other Assets and Liabilities,
Net - 0.7%		         28
         
Net Assets - 100.0%         4,005
         

 

See accompanying notes which are an integral part of the financial statements.

 

2025 Strategy Fund   27

Russell Investment Company

2030 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 952.90    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 947.70    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 949.90    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

28   2030 Strategy Fund

Russell Investment Company

2030 Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 947.80    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 946.90    $ 1,022.32

Expenses Paid During Period*

    $ 2.41    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 948.60    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

2030 Strategy Fund   29

Russell Investment Company

2030 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 100.0%        

Other Russell Investment Company

Series Mutual Funds

     
Bonds - 9.8%        

Russell Strategic Bond Fund

    1,079,035      9,862
         
Domestic Equities - 59.1%        

Russell Real Estate Securities Fund

    328,136      7,088

Russell U.S. Core Equity Fund

    1,206,729      23,012

Russell U.S. Quantitative Equity Fund

    1,133,122      22,935

Russell U.S. Small & Mid Cap Fund

    474,686      6,612
         
        59,647
         
International Equities - 31.1%        

Russell Emerging Markets Fund

    401,125      4,633

Russell Global Equity Fund

    1,133,437      6,506

Russell International Developed
Markets Fund

    891,003      20,208
         
        31,347
         

Total Investments - 100.0%

(identified cost $135,937)

         100,856

Other Assets and Liabilities,

Net - 0.0%

         39
         
Net Assets - 100.0%         100,895
         

 

See accompanying notes which are an integral part of the financial statements.

 

30   2030 Strategy Fund

Russell Investment Company

2035 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 952.00    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 951.40    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 950.90    $ 1,022.32

Expenses Paid During Period*

    $ 2.42    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

2035 Strategy Fund   31

Russell Investment Company

2035 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 98.9%        
Other Russell Investment Company
Series Mutual Funds		        
Bonds - 9.8%        

Russell Strategic Bond Fund

    28,754      263
         
Domestic Equities - 58.4%        

Russell Real Estate Securities Fund

    8,484      183

Russell U.S. Core Equity Fund

    31,728      605

Russell U.S. Quantitative Equity Fund

    29,824      604

Russell U.S. Small & Mid Cap Fund

    12,318      171
         
        1,563
         
International Equities - 30.7%        

Russell Emerging Markets Fund

    10,413      120

Russell Global Equity Fund

    29,755      171

Russell International Developed
Markets Fund

    23,397      531
         
        822
         
Total Investments - 98.9%
(identified cost $2,604)		         2,648
Other Assets and Liabilities,
Net - 1.1%		         30
         
Net Assets - 100.0%         2,678
         

 

 

See accompanying notes which are an integral part of the financial statements.

 

32   2035 Strategy Fund

Russell Investment Company

2040 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class A

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 949.20    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

Class E

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 949.40    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 950.30    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

2040 Strategy Fund   33

Russell Investment Company

2040 Strategy Fund

Shareholder Expense Example, continued — April 30, 2009 (Unaudited)

 

 

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 949.40    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 948.40    $ 1,022.32

Expenses Paid During Period*

    $ 2.42    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 950.30    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

34   2040 Strategy Fund

Russell Investment Company

2040 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 100.0%        
Other Russell Investment Company Series Mutual Funds        
Bonds - 9.8%        

Russell Strategic Bond Fund

    795,280      7,269
         
Domestic Equities - 59.1%        

Russell Real Estate Securities Fund

    234,020      5,055

Russell U.S. Core Equity Fund

    886,077      16,898

Russell U.S. Quantitative Equity Fund

    832,711      16,854

Russell U.S. Small & Mid Cap Fund

    346,818      4,831
         
        43,638
         
International Equities - 31.1%        

Russell Emerging Markets Fund

    294,457      3,401

Russell Global Equity Fund

    832,265      4,777

Russell International Developed
Markets Fund

    653,488      14,821
         
        22,999
         
Total Investments - 100.0%
(identified cost $97,962)		         73,906
Other Assets and Liabilities,
Net - 0.0%		         7
         
Net Assets - 100.0%         73,913
         

 

See accompanying notes which are an integral part of the financial statements.

 

2040 Strategy Fund   35

Russell Investment Company

2045 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 951.40    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 950.80    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 950.20    $ 1,022.32

Expenses Paid During Period*

    $ 2.42    $ 2.51

 

• Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

36   2045 Strategy Fund

Russell Investment Company

2045 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 98.6%        
Other Russell Investment Company Series Mutual Funds        
Bonds - 9.8%        

Russell Strategic Bond Fund

    23,595      216
         
Domestic Equities - 58.2%        

Russell Real Estate Securities Fund

    6,495      140

Russell U.S. Core Equity Fund

    26,028      497

Russell U.S. Quantitative Equity Fund

    24,523      496

Russell U.S. Small & Mid Cap Fund

    10,070      140
         
        1,273
         
International Equities - 30.6%        

Russell Emerging Markets Fund

    8,409      97

Russell Global Equity Fund

    24,438      140

Russell International Developed Markets Fund

    19,032      432
         
        669
         
Total Investments - 98.6%
(identified cost $2,394)		         2,158
Other Assets and Liabilities,
Net - 1.4%		         30
         
Net Assets - 100.0%         2,188
         

 

See accompanying notes which are an integral part of the financial statements.

 

2045 Strategy Fund   37

Russell Investment Company

2050 Strategy Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 954.20    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 953.70    $ 1,023.55

Expenses Paid During Period*

    $ 1.21    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 952.60    $ 1,022.32

Expenses Paid During Period*

    $ 2.42    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

38   2050 Strategy Fund

Russell Investment Company

2050 Strategy Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 99.6%        
Other Russell Investment Company Series Mutual Funds        
Bonds - 9.8%        

Russell Strategic Bond Fund

    73,307      670
         
Domestic Equities - 58.8%        

Russell Real Estate Securities Fund

    20,863      450

Russell U.S. Core Equity Fund

    82,315      1,570

Russell U.S. Quantitative Equity Fund

    77,272      1,564

Russell U.S. Small & Mid Cap Fund

    32,003      446
         
        4,030
         
International Equities - 31.0%        

Russell Emerging Markets Fund

    26,913      311

Russell Global Equity Fund

    77,273      444

Russell International Developed Markets Fund

    60,493      1,372
         
        2,127
         
Total Investments - 99.6%
(identified cost $6,557)		         6,827
Other Assets and Liabilities,
Net - 0.4%		         30
         
Net Assets - 100.0%         6,857
         

 

See accompanying notes which are an integral part of the financial statements.

 

2050 Strategy Fund   39

Russell Investment Company

In Retirement Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class R1

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,008.50    $ 1,024.79

Expenses Paid During Period*

    $ 0.00    $ 0.00

 

* There were no expenses charged to the Class. Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R2

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,007.80    $ 1,023.55

Expenses Paid During Period*

    $ 1.24    $ 1.25

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.25% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class R3

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 1,005.90    $ 1,022.32

Expenses Paid During Period*

    $ 2.49    $ 2.51

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.50% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

40   In Retirement Fund

Russell Investment Company

In Retirement Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$
       
Investments - 98.9%        
Other Russell Investment Company Series Mutual Funds        
Bonds - 67.2%        

Russell Short Duration Bond Fund

    12,147      214

Russell Strategic Bond Fund

    175,928      1,608
         
        1,822
         
Domestic Equities - 21.0%        

Russell Real Estate Securities Fund

    3,722      80

Russell U.S. Core Equity Fund

    11,524      220

Russell U.S. Quantitative Equity Fund

    10,858      220

Russell U.S. Small & Mid Cap Fund

    3,463      48
         
        568
         
International Equities - 10.7%        

Russell Emerging Markets Fund

    2,784      32

Russell Global Equity Fund

    12,139      70

Russell International Developed Markets Fund

    8,271      188
         
        290
         
Total Investments - 98.9%
(identified cost $2,615)		         2,680
Other Assets and Liabilities,
Net - 1.1%		         31
         
Net Assets - 100.0%         2,711
         

 

See accompanying notes which are an integral part of the financial statements.

 

In Retirement Fund   41

Russell Investment Company

LifePoints® Funds

Statements of Assets and Liabilities — April 30, 2009 (Unaudited)

 

Amounts in thousands   Conservative Strategy
Fund		    Moderate Strategy
Fund		    Balanced Strategy
Fund		    Growth Strategy
Fund
          

Assets

           

Investments, at identified cost

   $ 515,967    $ 1,032,821    $ 4,769,424    $ 3,597,915

Investments, at market

     452,043      829,214      3,565,655      2,450,031

Receivables:

           

Investments sold

     783      —      —      10

Fund shares sold

     1,077      2,178      6,252      3,991

From affiliates

     53      44      62      65

Prepaid expenses

     44      45      28      49
                          

Total assets

     454,000      831,481      3,571,997      2,454,146
                          
          

Liabilities

           

Payables:

           

Investments purchased

     —      973      315      —

Fund shares redeemed

     1,232      764      4,035      3,637

Accrued fees to affiliates

     252      459      2,045      1,505

Other accrued expenses

     44      80      243      170
                          

Total liabilities

     1,528      2,276      6,638      5,312
                          
          

Net Assets

   $ 452,472    $ 829,205    $ 3,565,359    $ 2,448,834
                          

 

See accompanying notes which are an integral part of the financial statements.

 

42   Statements of Assets and Liabilities

 

Equity Growth
Strategy Fund		    2010 Strategy
Fund		    2015 Strategy
Fund		    2020 Strategy
Fund		   

2025 Strategy

Fund

    2030 Strategy
Fund		    2035 Strategy
Fund
                 
                 
$ 1,792,975    $ 64,648    $ 4,960    $ 158,959    $ 3,825    $ 135,937    $ 2,604
  1,147,969      55,201      5,142      131,265      3,977      100,856      2,648
                 
  226      25      —      —      1      —      5
  2,291      140      1      357      —      295      —
  35      33      26      38      28      37      28
  36      8      23      8      23      8      24
                                             
  1,150,557      55,407      5,192      131,668      4,029      101,196      2,705
                                             
                 
                 
                 
  —      —      1      274      —      90      —
  1,651      163      —      33      1      157      4
  660      12      2      29      1      22      1
  95      28      20      34      22      32      22
                                             
  2,406      203      23      370      24      301      27
                                             
                 
$ 1,148,151    $ 55,204    $ 5,169    $ 131,298    $ 4,005    $ 100,895    $ 2,678
                                             

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Assets and Liabilities   43

Russell Investment Company

LifePoints® Funds

Statements of Assets and Liabilities, continued — April 30, 2009 (Unaudited)

 

     Conservative Strategy
Fund		     Moderate Strategy
Fund		     Balanced Strategy
Fund		     Growth Strategy
Fund		  
       
Net Assets Consist of:        

Undistributed (overdistributed) net investment income

   $ (277 )   $ (509 )   $ (2,202 )   $ (1,561 )

Accumulated net realized gain (loss)

     (7,892 )     (34,161 )     (229,089 )     (142,285 )

Unrealized appreciation (depreciation) on investments

     (63,924 )     (203,607 )     (1,203,769 )     (1,147,884 )

Shares of beneficial interest

     524       1,014       4,649       3,518  

Additional paid-in capital

     524,041       1,066,468       4,995,770       3,737,046  
                               

Net Assets

   $ 452,472     $ 829,205     $ 3,565,359     $ 2,448,834  
                               

Net Asset Value, offering and redemption price per share:

        

Net asset value per share: Class A*

   $ 8.62     $ 8.17     $ 7.67     $ 6.96  
       

Maximum offering price per share
(Net asset value plus sales charge of 5.75%): Class A

   $ 9.15     $ 8.67     $ 8.14     $ 7.39  

Class A — Net assets

   $ 65,361,617     $ 152,012,062     $ 839,257,962     $ 629,681,581  

Class A — Shares outstanding ($.01 par value)

     7,582,962       18,599,855       109,434,493       90,423,594  

Net asset value per share: Class C*

   $ 8.58     $ 8.13     $ 7.62     $ 6.91  

Class C — Net assets

   $ 97,955,890     $ 185,484,690     $ 1,016,319,226     $ 654,773,773  

Class C — Shares outstanding ($.01 par value)

     11,416,666       22,816,372       133,379,591       94,809,347  

Net asset value per share: Class E*

   $ 8.64     $ 8.18     $ 7.69     $ 6.98  

Class E — Net assets

   $ 68,046,687     $ 141,559,904     $ 459,806,758     $ 341,948,513  

Class E — Shares outstanding ($.01 par value)

     7,871,946       17,313,392       59,815,835       49,021,920  

Net asset value per share: Class R1*

   $ 8.67     $ 8.21     $ 7.73     $ 7.02  

Class R1 — Net assets

   $ 4,252,232     $ 3,954,656     $ 26,219,633     $ 12,907,518  

Class R1 — Shares outstanding ($.01 par value)

     490,462       481,897       3,393,482       1,839,518  

Net asset value per share: Class R2*

   $ 8.63     $ 8.17     $ 7.68     $ 6.98  

Class R2 — Net assets

   $ 6,248,217     $ 12,709,644     $ 48,367,490     $ 22,648,313  

Class R2 — Shares outstanding ($.01 par value)

     723,620       1,555,610       6,301,095       3,246,110  

Net asset value per share: Class R3*

   $ 8.67     $ 8.20     $ 7.69     $ 6.99  

Class R3 — Net assets

   $ 150,955,843     $ 239,740,122     $ 734,437,753     $ 523,340,996  

Class R3 — Shares outstanding ($.01 par value)

     17,408,418       29,226,808       95,526,463       74,859,336  

Net asset value per share: Class S*

   $ 8.67     $ 8.20     $ 7.73     $ 7.02  

Class S — Net assets

   $ 59,651,195     $ 93,743,983     $ 440,949,978     $ 263,533,704  

Class S — Shares outstanding ($.01 par value)

     6,877,370       11,429,486       57,054,297       37,551,562  

*      Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding.

        

  

 

See accompanying notes which are an integral part of the financial statements.

 

44   Statements of Assets and Liabilities

 

Equity Growth
Strategy Fund		     2010 Strategy
Fund		     2015 Strategy
Fund		     2020 Strategy
Fund		     2025 Strategy
Fund		      2030 Strategy
Fund		     2035 Strategy
Fund		  
            
            
$ (707 )   $ (14 )   $ (2 )   $ (27 )   $ (1 )    $ (22 )   $ —  
  (133,918 )     (1,791 )     (127 )     (7,543 )     (210 )      (5,249 )     (214 )
  (645,006 )     (9,447 )     182       (27,694 )     152        (35,081 )     44  
  1,867       67       7       166       6        144       4  
  1,925,915       66,389       5,109       166,396       4,058        141,103       2,844  
                                                      
$ 1,148,151     $ 55,204     $ 5,169     $ 131,298     $ 4,005      $ 100,895     $ 2,678  
                                                      
            
$ 6.33     $ 8.29     $ —     $ 7.94     $ —      $ 7.04     $ —  
            
    
$		  
6.71		  
 		   $ 8.79     $ —     $ 8.43     $ —      $ 7.47     $ —  
$ 213,163,692     $ 1,008,842     $ —     $ 1,242,821     $ —      $ 1,478,243     $ —  
  33,689,764       121,760       —       156,449       —        209,880       —  
$ 5.92     $ —     $ —     $ —     $ —      $ —     $ —  
$ 327,286,201     $ —     $ —     $ —     $ —      $ —     $ —  
  55,284,192       —       —       —       —        —       —  
$ 6.20     $ 8.30     $ —     $ 7.94     $ —      $ 7.01     $ —  
$ 156,396,606     $ 4,376,081     $ —     $ 8,816,282     $ —      $ 8,706,262     $ —  
  25,232,316       527,375       —       1,110,042       —        1,241,456       —  
$ 6.31     $ 8.30     $ 7.62     $ 7.95     $ 6.92      $ 7.02     $ 6.49  
$ 6,240,868     $ 7,178,366     $ 498,755     $ 19,038,136     $ 339,198      $ 11,641,590     $ 528,793  
  989,187       864,542       65,441       2,395,546       49,047        1,659,505       81,540  
$ 6.20     $ 8.29     $ 7.62     $ 7.93     $ 6.90      $ 7.00     $ 6.48  
$ 24,780,487     $ 14,661,904     $ 1,015,858     $ 35,878,409     $ 1,124,536      $ 29,279,147     $ 705,356  
  3,996,916       1,767,893       133,358       4,522,261       162,864        4,182,603       108,813  
$ 6.17     $ 8.28     $ 7.61     $ 7.92     $ 6.89      $ 7.00     $ 6.48  
$ 254,536,840     $ 20,303,775     $ 3,654,444     $ 51,976,788     $ 2,541,054      $ 37,682,867     $ 1,443,360  
  41,224,781       2,450,797       480,008       6,562,023       368,577        5,381,531       222,757  
$ 6.31     $ 8.31     $ —     $ 7.95     $ —      $ 7.01     $ —  
$ 165,746,569     $ 7,674,775     $ —     $ 14,345,706     $ —      $ 12,106,764     $ —  
  26,263,824       923,762       —       1,805,540       —        1,726,148       —  

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Assets and Liabilities   45

Russell Investment Company

LifePoints® Funds

Statements of Assets and Liabilities, continued — April 30, 2009 (Unaudited)

 

Amounts in thousands   2040 Strategy
Fund		    2045 Strategy
Fund		    2050 Strategy
Fund		    In Retirement
Fund
          

Assets

           

Investments, at identified cost

   $ 97,962    $ 2,394    $ 6,557    $ 2,615

Investments, at market

     73,906      2,158      6,827      2,680

Receivables:

           

Investments sold

     276      29      18      64

Fund shares sold

     —      8      —      —

From affiliates

     35      27      28      26

Prepaid expenses

     9      25      26      26
                          

Total assets

     74,226      2,247      6,899      2,796
                          
          

Liabilities

           

Payables:

           

Investments purchased

     224      —      —      —

Fund shares redeemed

     43      37      19      63

Accrued fees to affiliates

     17      —      1      1

Other accrued expenses

     29      22      22      21
                          

Total liabilities

     313      59      42      85
                          
          

Net Assets

   $ 73,913    $ 2,188    $ 6,857    $ 2,711
                          

 

See accompanying notes which are an integral part of the financial statements.

 

46   Statements of Assets and Liabilities

Russell Investment Company

LifePoints® Funds

Statements of Assets and Liabilities, continued — April 30, 2009 (Unaudited)

 

     2040 Strategy
Fund		     2045 Strategy
Fund		     2050 Strategy
Fund		     In Retirement
Fund		  
       
Net Assets Consist of:        

Undistributed (overdistributed) net investment income

   $ 1,017     $ —     $ (2 )   $ (1 )

Accumulated net realized gain (loss)

     (3,648 )     (89 )     (98 )     (54 )

Unrealized appreciation (depreciation) on investments

     (24,056 )     (236 )     270       65  

Shares of beneficial interest

     105       3       10       3  

Additional paid-in capital

     100,495       2,510       6,677       2,698  
                               

Net Assets

   $ 73,913     $ 2,188     $ 6,857     $ 2,711  
                               

Net Asset Value, offering and redemption price per share:

        

Net asset value per share: Class A*

   $ 7.05     $ —     $ —     $ —  
       

Maximum offering price per share
(Net asset value plus sales charge of 5.75%): Class A

   $ 7.48     $ —     $ —     $ —  

Class A — Net assets

   $ 724,270     $ —     $ —     $ —  

Class A — Shares outstanding ($.01 par value)

     102,693       —       —       —  

Net asset value per share: Class C*

   $ —     $ —     $ —     $ —  

Class C — Net assets

   $ —     $ —     $ —     $ —  

Class C — Shares outstanding ($.01 par value)

     —       —       —       —  

Net asset value per share: Class E*

   $ 7.06     $ —     $ —     $ —  

Class E — Net assets

   $ 5,867,032     $ —     $ —     $ —  

Class E — Shares outstanding ($.01 par value)

     831,523       —       —       —  

Net asset value per share: Class R1*

   $ 7.06     $ 6.48     $ 6.57     $ 8.02  

Class R1 — Net assets

   $ 6,661,456     $ 827,362     $ 100,710     $ 121,611  

Class R1 — Shares outstanding ($.01 par value)

     943,300       127,591       15,319       15,163  

Net asset value per share: Class R2*

   $ 7.05     $ 6.48     $ 6.57     $ 8.02  

Class R2 — Net assets

   $ 22,937,920     $ 960,379     $ 5,776,137     $ 2,078,441  

Class R2 — Shares outstanding ($.01 par value)

     3,252,470       148,194       879,721       259,161  

Net asset value per share: Class R3*

   $ 7.04     $ 6.48     $ 6.57     $ 8.01  

Class R3 — Net assets

   $ 28,786,002     $ 400,307     $ 980,371     $ 510,836  

Class R3 — Shares outstanding ($.01 par value)

     4,089,100       61,812       149,315       63,764  

Net asset value per share: Class S*

   $ 7.06     $ —     $ —     $ —  

Class S — Net assets

   $ 8,936,310     $ —     $ —     $ —  

Class S — Shares outstanding ($.01 par value)

     1,265,381       —       —       —  

*      Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding.

        

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Assets and Liabilities   47

Russell Investment Company

LifePoints® Funds

Statements of Operations — For the Period Ended April 30, 2009 (Unaudited)

 

Amounts in thousands   Conservative Strategy
Fund		     Moderate Strategy
Fund		  
   

Investment Income

    

Income distributions from Underlying Funds

   $ 10,369     $ 17,859  
               

Expenses

    

Advisory fees

     420       806  

Administrative fees

     105       201  

Custodian fees

     20       20  

Distribution fees - Class A

     74       185  

Distribution fees - Class C

     334       678  

Distribution fees - Class R3

     185       298  

Transfer agent fees - Class A

     54       134  

Transfer agent fees - Class C

     81       163  

Transfer agent fees - Class E

     58       119  

Transfer agent fees - Class R1

     3       3  

Transfer agent fees - Class R2

     5       10  

Transfer agent fees - Class R3

     134       215  

Transfer agent fees - Class S

     44       79  

Professional fees

     22       31  

Registration fees

     59       65  

Shareholder servicing fees - Class C

     111       226  

Shareholder servicing fees - Class E

     80       166  

Shareholder servicing fees - Class R2

     7       15  

Shareholder servicing fees - Class R3

     185       298  

Trustees’ fees

     6       11  

Printing fees

     18       38  

Miscellaneous

     5       10  
               

Expenses before reductions

     2,010       3,771  

Expense reductions

     (563 )     (875 )
               

Net expenses

     1,447       2,896  
               

Net investment income (loss)

     8,922       14,963  
               
   

Net Realized and Unrealized Gain (Loss)

    

Net realized gain (loss) on:

    

Investments

     (6,438 )     (29,348 )

Capital gain distributions from Underlying Funds

     730       2,265  
               

Net realized gain (loss)

     (5,708 )     (27,083 )

Net change in unrealized appreciation (depreciation) on investments

     4,786       7,067  
               

Net realized and unrealized gain (loss)

     (922 )     (20,016 )
               

Net Increase (Decrease) in Net Assets from Operations

   $ 8,000     $ (5,053 )
               

 

See accompanying notes which are an integral part of the financial statements.

 

48   Statements of Operations

 

Balanced Strategy
Fund		     Growth Strategy
Fund		     Equity Growth Strategy
Fund		     2010 Strategy
Fund		     2015 Strategy
Fund		      2020 Strategy
Fund		  
          
          
$ 62,441      $ 31,516      $ 9,302      $ 1,053      $ 43       $ 1,918   
                                              
          
  3,495        2,364        1,104        46        2         105   
  874        591        276        12        1         26   
  24        24        22        19        1         18   
  1,036        764        254        1        —         2   
  3,756        2,370        1,157        —        —         —   
  897        625        302        20        2         49   
  747        551        183        1        —         1   
  903        570        278        —        —         —   
  647        291        132        4        —         7   
  391        11        5        6        —         15   
  20        19        20        10        1         25   
  38        451        218        14        1         35   
  387        227        153        6        —         11   
  85        67        42        17        14         22   
  118        98        74        37        12         40   
  1,252        790        386        —        —         —   
  897        404        183        6        —         9   
  543        26        28        14        1         34   
  53        625        302        20        2         49   
  51        35        16        1        —         1   
  180        125        60        2        —         4   
  42        29        14        2        1         2   
                                              
  16,436        11,057        5,209        238        38         455   
  (3,416 )      (2,349 )      (1,111 )      (178 )      (34 )       (313 ) 
                                              
  13,020        8,708        4,098        60        4         142   
                                              
  49,421        22,808        5,204        993        39         1,776   
                                              
          
          
          
  (178,277 )      (105,752 )      (74,664 )      (1,635 )      (123 )       (5,954 ) 
  9,676        6,402        2,943        113        2         259   
                                              
  (168,601 )      (99,350 )      (71,721 )      (1,522 )      (121 )       (5,695 ) 
  17,324        (53,219 )      (27,958 )      1,209        355         4,426   
                                              
  (151,277 )      (152,569 )      (99,679 )      (313 )      234         (1,269 ) 
                                              
$ (101,856 )    $ (129,761 )    $ (94,475 )    $ 680      $ 273       $ 507   
                                              

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Operations   49

Russell Investment Company

LifePoints® Funds

Statements of Operations, continued — For the Period Ended April 30, 2009 (Unaudited)

 

Amounts in thousands    2025 Strategy
Fund		  
  

Investment Income

   

Income distributions from Underlying Funds

    $ 25  
        

Expenses

   

Advisory fees

      2  

Administrative fees

      —  

Custodian fees

      1  

Distribution fees - Class A

      —  

Distribution fees - Class C

      —  

Distribution fees - Class R3

      1  

Transfer agent fees - Class A

      —  

Transfer agent fees - Class C

      —  

Transfer agent fees - Class E

      —  

Transfer agent fees - Class R1

      —  

Transfer agent fees - Class R2

      1  

Transfer agent fees - Class R3

      1  

Transfer agent fees - Class S

      —  

Professional fees

      15  

Registration fees

      11  

Shareholder servicing fees - Class C

      —  

Shareholder servicing fees - Class E

      —  

Shareholder servicing fees - Class R2

      1  

Shareholder servicing fees - Class R3

      1  

Trustees’ fees

      —  

Printing fees

      —  

Miscellaneous

      1  
        

Expenses before reductions

      35  

Expense reductions

      (32 )
        

Net expenses

      3  
        

Net investment income (loss)

      22  
        
  

Net Realized and Unrealized Gain (Loss)

   

Net realized gain (loss) on:

   

Investments

      (117 )

Capital gain distributions from Underlying Funds

      2  
        

Net realized gain (loss)

      (115 )

Net change in unrealized appreciation (depreciation) on investments

      349  
        

Net realized and unrealized gain (loss)

      234  
        

Net Increase (Decrease) in Net Assets from Operations

    $ 256  
        

 

See accompanying notes which are an integral part of the financial statements.

 

50   Statements of Operations

 

2030 Strategy
Fund		     2035 Strategy
Fund		     2040 Strategy
Fund		     2045 Strategy
Fund		     2050 Strategy
Fund		      In Retirement
Fund		  
          
          
$ 870      $ 13      $ 1,664      $ 13      $ 44       $ 44   
                                              
          
  79        1        57        1        4         2   
  20        —        14        —        1         —   
  18        1        19        1        2         2   
  2        —        1        —        —         —   
  —        —        —        —        —         —   
  35        1        28        —        —         —   
  1        —        1        —        —         —   
  —        —        —        —        —         —   
  7        —        4        —        —         —   
  9        —        5        1        —         —   
  20        —        15        —        3         2   
  25        1        20        —        —         —   
  9        —        6        —        —         —   
  20        15        19        15        15         15   
  38        10        37        10        10         10   
  —        —        —        —        —         —   
  9        —        6        —        —         —   
  27        —        21        1        5         2   
  35        1        28        —        —         —   
  1        —        1        —        —         —   
  4        —        3        —        —         —   
  2        1        2        1        1         1   
                                              
  361        31        287        30        41         34   
  (253 )      (29 )      (203 )      (29 )      (36 )       (31 ) 
                                              
  108        2        84        1        5         3   
                                              
  762        11        1,580        12        39         41   
                                              
          
          
          
  (1,814 )      (129 )      (1,022 )      (66 )      (104 )       (57 ) 
  190        2        137        2        8         5   
                                              
  (1,624 )      (127 )      (885 )      (64 )      (96 )       (52 ) 
  (898 )      290        (1,751 )      123        358         121   
                                              
  (2,522 )      163        (2,636 )      59        262         69   
                                              
$ (1,760 )    $ 174      $ (1,056 )    $ 71      $ 301       $ 110   
                                              

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Operations   51

Russell Investment Company

LifePoints® Funds

Statements of Changes in Net Assets

 

    Conservative Strategy
Fund		     Moderate Strategy
Fund		  
Amounts in thousands   Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		  
       

Increase (Decrease) in Net Assets

        

Operations

        

Net investment income (loss)

   $ 8,922      $ 24,452      $ 14,963      $ 61,179   

Net realized gain (loss)

     (5,708 )      2,507        (27,083 )      14,607   

Net change in unrealized appreciation (depreciation)

     4,786        (107,970 )      7,067        (379,097 ) 
                               

Net increase (decrease) in net assets from operations

     8,000        (81,011 )      (5,053 )      (303,311 ) 
                               

Distributions

        

From net investment income

        

Class A

     (1,816 )      (2,669 )      (4,333 )      (10,089 ) 

Class C

     (2,520 )      (3,475 )      (4,712 )      (10,201 ) 

Class E

     (1,953 )      (3,781 )      (3,885 )      (9,306 ) 

Class R1

     (114 )      (126 )      (95 )      (135 ) 

Class R2

     (171 )      (262 )      (349 )      (542 ) 

Class R3

     (4,346 )      (8,225 )      (6,721 )      (16,195 ) 

Class S

     (1,560 )      (2,628 )      (2,586 )      (7,502 ) 

From net realized gain

        

Class A

     (302 )      (599 )      (2,027 )      (5,299 ) 

Class C

     (482 )      (944 )      (2,447 )      (6,386 ) 

Class E

     (344 )      (954 )      (1,792 )      (5,016 ) 

Class R1

     (17 )      (23 )      (39 )      (50 ) 

Class R2

     (29 )      (57 )      (163 )      (190 ) 

Class R3

     (810 )      (2,178 )      (3,296 )      (9,264 ) 

Class S

     (239 )      (558 )      (1,128 )      (3,588 ) 

From return of capital

        

Class A

     —        —        —        —   

Class C

     —        —        —        —   

Class E

     —        —        —        —   

Class R1

     —        —        —        —   

Class R2

     —        —        —        —   

Class R3

     —        —        —        —   

Class S

     —        —        —        —   
                               

Net decrease in net assets from distributions

     (14,703 )      (26,479 )      (33,573 )      (83,763 ) 
                               

Share Transactions

        

Net increase (decrease) in net assets from share transactions

     31,645        57,979        (7,160 )      20,888   
                               

Total Net Increase (Decrease) in Net Assets

     24,942        (49,511 )      (45,786 )      (366,186 ) 

Net Assets

        

Beginning of period

     427,530        477,041        874,991        1,241,177   
                               

End of period

   $ 452,472      $ 427,530      $ 829,205      $ 874,991   
                               

Undistributed (overdistributed) net investment income included in net assets

   $ (277 )    $ 3,281      $ (509 )    $ 7,209   

 

* For the period March 31, 2008 (commencement of operations) to October 31, 2008.

 

See accompanying notes which are an integral part of the financial statements.

 

52   Statements of Changes in Net Assets

 

Balanced Strategy
Fund		     Growth Strategy
Fund		     Equity Growth Strategy
Fund		     2010 Strategy
Fund		  
Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		  
             
             
             
$ 49,421      $ 266,228      $ 22,808      $ 174,443      $ 5,204      $ 83,560      $ 993      $ 1,783   
  (168,601 )      170,752        (99,350 )      184,611        (71,721 )      108,282        (1,522 )      (182 ) 
  17,324        (2,300,440 )      (53,219 )      (2,014,588 )      (27,958 )      (1,189,736 )      1,209        (12,375 ) 
                                                             
  (101,856 )      (1,863,460 )      (129,761 )      (1,655,534 )      (94,475 )      (997,894 )      680        (10,774 ) 
                                                             
             
             
  (17,367 )      (61,834 )      (7,829 )      (45,707 )      (1,160 )      (15,418 )      (20 )      (71 ) 
  (18,271 )      (65,267 )      (6,306 )      (40,534 )      (1,399 )      (22,684 )       —        —   
  (9,203 )      (32,902 )      (4,143 )      (25,479 )      (895 )      (11,900 )      (91 )      (240 ) 
  (509 )      (1,381 )      (167 )      (746 )      (39 )      (416 )      (146 )      (280 ) 
  (913 )      (2,373 )      (273 )      (1,329 )      (136 )      (1,258 )       (265 )      (279 ) 
  (14,520 )      (51,551 )      (5,979 )      (37,139 )      (1,285 )      (19,460 )       (333 )      (646 ) 
  (9,396 )      (32,363 )      (3,468 )      (19,713 )      (997 )      (12,424 )       (152 )      (266 ) 
             
  (39,665 )      (43,034 )      (50,218 )      (38,519 )      (18,941 )      (16,208 )      —        (14 ) 
  (48,357 )      (54,476 )      (52,226 )      (41,405 )      (30,314 )      (27,122 )       —        —   
  (20,642 )      (23,303 )      (26,698 )      (21,957 )      (14,060 )      ( 12,567 )       —        (37 ) 
  (1,053 )      (823 )      (1,014 )      (535 )      (502 )      (412 )       —        (38 ) 
  (1,951 )      (1,590 )      (1,698 )      (1,106 )      (2,061 )      (1,272 )       —        (41 ) 
  (34,634 )      (38,603 )      (41,235 )      (33,813 )      (23,270 )      (21,722 )       —        (113 ) 
  (20,335 )      (21,117 )      (19,898 )      (16,064 )      (16,951 )      (12,107 )       —        (22 ) 
             
  —        —        —        —        —        —        —        (2 ) 
  —        —        —        —        —        —        —        —   
  —        —        —        —        —        —        —        (9 ) 
  —        —        —        —        —        —        —        (11 ) 
  —        —        —        —        —        —        —        (11 ) 
  —        —        —        —        —        —        —        (22 ) 
  —        —        —        —        —        —        —        (14 ) 
                                                             
  (236,816 )      (430,617 )      (221,152 )      (324,046 )      (112,010 )      (174,970 )      (1,007 )      (2,116 ) 
                                                             
             
  (80,519 )      292,415        62,196        327,406        32,077        222,506        13,930        21,733   
                                                             
  (419,191 )      (2,001,662 )      (288,717 )      (1,652,174 )      (174,408 )      (950,358 )      13,603        8,843   
             
  3,984,550        5,986,212        2,737,551        4,389,725        1,322,559        2,272,917        41,601        32,758   
                                                             
$ 3,565,359      $ 3,984,550      $ 2,448,834      $ 2,737,551      $ 1,148,151      $ 1,322,559      $ 55,204      $ 41,601   
                                                             
$ (2,202)      $ 18,556      $ (1,561 )    $ 3,796      $ (707 )    $ —      $ (14 )    $ —   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets   53

Russell Investment Company

LifePoints® Funds

Statements of Changes in Net Assets, continued

 

    2015 Strategy
Fund		     2020 Strategy
Fund		  
Amounts in thousands   Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008*		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		  
       

Increase (Decrease) in Net Assets

        

Operations

        

Net investment income (loss)

   $ 39      $ 10      $ 1,776      $ 4,229   

Net realized gain (loss)

     (121 )      (6 )      (5,695 )      (1,514 ) 

Net change in unrealized appreciation (depreciation)

     355        (173 )      4,426        (38,827 ) 
                               

Net increase (decrease) in net assets from operations

     273        (169 )      507        (36,112 ) 
                               

Distributions

        

From net investment income

        

Class A

     —        —        (19 )      (81 ) 

Class C

     —        —        —        —   

Class E

     —        —        (125 )      (392 ) 

Class R1

     (5 )      (4 )      (290 )      (869 ) 

Class R2

     (9 )      (4 )      (507 )      (831 ) 

Class R3

     (27 )      (3 )      (646 )      (1,522 ) 

Class S

     —        —        (216 )      (528 ) 

From net realized gain

        

Class A

     —        —        —        (23 ) 

Class C

     —        —        —        —   

Class E

     —        —        —        (106 ) 

Class R1

     —        —        —        (213 ) 

Class R2

     —        —        —        (212 ) 

Class R3

     —        —        —        (423 ) 

Class S

     —        —        —        (117 ) 

From return of capital

        

Class A

     —        —        —        (4 ) 

Class C

     —        —        —        —   

Class E

     —        —        —        (24 ) 

Class R1

     —        —        —        (61 ) 

Class R2

     —        —        —        (66 ) 

Class R3

     —        —        —        (83 ) 

Class S

     —        —        —        (41 ) 
                               

Net decrease in net assets from distributions

     (41 )      (11 )      (1,803 )      (5,596 ) 
                               

Share Transactions

        

Net increase (decrease) in net assets from share transactions

     4,210        907        39,587        45,813   
                               

Total Net Increase (Decrease) in Net Assets

     4,442        727        38,291        4,105   

Net Assets

        

Beginning of period

     727        —        93,007        88,902   
                               

End of period

   $ 5,169      $ 727      $ 131,298      $ 93,007   
                               

Undistributed (overdistributed) net investment income included in net assets

   $ (2 )    $ —      $ (27 )    $ —   

 

* For the period March 31, 2008 (commencement of operations) to October 31, 2008.

 

See accompanying notes which are an integral part of the financial statements.

 

54   Statements of Changes in Net Assets

 

2025 Strategy
Fund		     2030 Strategy
Fund		     2035 Strategy
Fund		     2040 Strategy
Fund		  
Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008*		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008*		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		  
             
             
             
$ 22      $ 11      $ 762      $ 2,986      $ 11      $ 7      $ 1,580      $ 1,199   
  (115 )      (95 )      (1,624 )      (3,239 )      (127 )      (87 )      (885 )      (2,625 ) 
  349        (197 )      (898 )      (40,787 )      290        (246 )      (1,751 )      (27,688 ) 
                                                             
  256        (281 )      (1,760 )      (41,040 )      174        (326 )      (1,056 )      (29,114 ) 
                                                             
             
             
  —        —        (12 )      (136 )      —        —        (6 )      (43 ) 
  —        —        —        —        —        —        —        —   
  —        —        (69 )      (381 )      —        —        (45 )      (127 ) 
  (3 )      (8 )      (102 )      (425 )      (3 )      (6 )      (57 )      (82 ) 
  (6 )      (1 )      (234 )      (728 )      (2 )      (1 )      (181 )      (278 ) 
  (14 )      (2 )      (266 )      (941 )      (6 )      (1 )      (199 )      (543 ) 
  —        —        (101 )      (370 )      —        —        (75 )      (126 ) 
             
  —        —        —        (55 )      —        —        —        (33 ) 
  —        —        —        —        —        —        —        —   
  —        —        —        (148 )      —        —        —        (88 ) 
  —        —        —        (149 )      —        —        —        (44 ) 
  —        —        —        (279 )      —        —        —        (193 ) 
  —        —        —        (366 )      —        —        —        (400 ) 
  —        —        —        (124 )      —        —        —        (71 ) 
             
  —        —        —        (11 )      —        —        —        (45 ) 
  —        —        —        —        —        —        —        —   
  —        —        —        (38 )      —        —        —        (133 ) 
  —        (2 )      —        (58 )      —        (2 )      —        (84 ) 
  —        —        —        (72 )      —        —        —        (292 ) 
  —        —        —        (102 )      —        —        —        (574 ) 
  —        —        —        (58 )      —        —        —        (133 ) 
                                                             
  (23 )      (13 )      (784 )      (4,441 )      (11 )      (10 )      (563 )      (3,289 ) 
                                                             
             
  3,148        918        31,131        54,496        1,890        961        25,143        34,970   
                                                             
  3,381        624        28,587        9,015        2,053        625        23,524        2,567   
             
  624        —        72,308        63,293        625        —        50,389        47,822   
                                                             
$ 4,005      $ 624      $ 100,895      $ 72,308      $ 2,678      $ 625      $ 73,913      $ 50,389   
                                                             
$ (1 )    $ —      $ (22 )    $ —      $ —      $ —      $ 1,017      $ —   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets   55

Russell Investment Company

LifePoints® Funds

Statements of Changes in Net Assets, continued

 

    2045 Strategy
Fund		     2050 Strategy
Fund		  
Amounts in thousands   Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008*		     Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008*		  
       

Increase (Decrease) in Net Assets

        

Operations

        

Net investment income (loss)

   $ 12      $ 7      $ 39      $ 2   

Net realized gain (loss)

     (64 )      (25 )      (96 )      (2 ) 

Net change in unrealized appreciation (depreciation)

     123        (359 )      358        (88 ) 
                               

Net increase (decrease) in net assets from operations

     71        (377 )      301        (88 ) 
                               

Distributions

        

From net investment income

        

Class A

     —        —        —        —   

Class C

     —        —        —        —   

Class E

     —        —        —        —   

Class R1

     (5 )      (6 )      (1 )      (1 ) 

Class R2

     (5 )      (1 )      (38 )      (1 ) 

Class R3

     (2 )      (1 )      (2 )      (1 ) 

Class S

     —        —        —        —   

From net realized gain

        

Class A

     —        —        —        —   

Class C

     —        —        —        —   

Class E

     —        —        —        —   

Class R1

     —        —        —        —   

Class R2

     —        —        —        —   

Class R3

     —        —        —        —   

Class S

     —        —        —        —   

From return of capital

        

Class A

     —        —        —        —   

Class C

     —        —        —        —   

Class E

     —        —        —        —   

Class R1

     —        (3 )      —        —   

Class R2

     —        —        —        —   

Class R3

     —        —        —        —   

Class S

     —        —        —        —   
                               

Net decrease in net assets from distributions

     (12 )      (11 )      (41 )      (3 ) 
                               

Share Transactions

        

Net increase (decrease) in net assets from share transactions

     1,327        1,190        6,384        304   
                               

Total Net Increase (Decrease) in Net Assets

     1,386        802        6,644        213   

Net Assets

        

Beginning of period

     802        —        213        —   
                               

End of period

   $ 2,188      $ 802      $ 6,857      $ 213   
                               

Undistributed (overdistributed) net investment income included in net assets

   $ —      $ —      $ (2 )    $ —   

 

* For the period March 31, 2008 (commencement of operations) to October 31, 2008.

 

See accompanying notes which are an integral part of the financial statements.

 

56   Statements of Changes in Net Assets

 

In Retirement
Fund		  
Period
Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008*		  
 
 
 
$ 41      $ 7   
  (52 )      (2 ) 
  121        (56 ) 
             
  110        (51 ) 
             
 
 
  —        —   
  —        —   
  —        —   
  (2 )      (3 ) 
  (35 )      (2 ) 
  (5 )      (2 ) 
  —        —   
 
  —        —   
  —        —   
  —        —   
  —        —   
  —        —   
  —        —   
  —        —   
 
  —        —   
  —        —   
  —        —   
  —        —   
  —        —   
  —        —   
  —        —   
             
  (42 )      (7 ) 
             
 
  2,391        310   
             
  2,459        252   
 
  252        —   
             
$ 2,711      $ 252   
             
$ (1 )    $ —   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets   57

Russell Investment Company

LifePoints® Funds

Financial Highlights — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Conservative Strategy Fund

               
Class A                     

April 30, 2009*

    8.79    .19    (.06 )    .13      (.25 )    (.05 )    —

October 31, 2008

    11.03    .52    (2.16 )    (1.64 )    (.48 )    (.12 )    —

October 31, 2007

    10.98    .42    .29      .71      (.42 )    (.24 )    —

October 31, 2006

    10.66    .34    .40      .74      (.35 )    (.07 )    —

October 31, 2005

    10.65    .24    .05      .29      (.24 )    (.04 )    —

October 31, 2004

    10.42    .20    .28      .48      (.21 )    (.04 )    —
Class C                     

April 30, 2009*

    8.75    .15    (.04 )    .11      (.23 )    (.05 )    —

October 31, 2008

    10.99    .46    (2.17 )    (1.71 )    (.41 )    (.12 )    —

October 31, 2007

    10.93    .34    .30      .64      (.34 )    (.24 )    —

October 31, 2006

    10.62    .25    .39      .64      (.26 )    (.07 )    —

October 31, 2005

    10.61    .16    .05      .21      (.16 )    (.04 )    —

October 31, 2004

    10.38    .12    .28      .40      (.13 )    (.04 )    —
Class E                     

April 30, 2009*

    8.81    .19    (.06 )    .13      (.25 )    (.05 )    —

October 31, 2008

    11.06    .55    (2.20 )    (1.65 )    (.48 )    (.12 )    —

October 31, 2007

    11.00    .42    .30      .72      (.42 )    (.24 )    —

October 31, 2006

    10.68    .30    .43      .73      (.34 )    (.07 )    —

October 31, 2005

    10.66    .24    .06      .30      (.24 )    (.04 )    —

October 31, 2004

    10.43    .20    .27      .47      (.20 )    (.04 )    —
Class R1                     

April 30, 2009*

    8.83    .20    (.05 )    .15      (.26 )    (.05 )    —

October 31, 2008

    11.08    .56    (2.18 )    (1.62 )    (.51 )    (.12 )    —

October 31, 2007(13)

    10.77    .40    .22      .62      (.31 )    —      —
Class R2                     

April 30, 2009*

    8.80    .19    (.06 )    .13      (.25 )    (.05 )    —

October 31, 2008

    11.05    .50    (2.14 )    (1.64 )    (.49 )    (.12 )    —

October 31, 2007

    10.99    .40    .31      .71      (.41 )    (.24 )    —

October 31, 2006(4)

    10.86    .33    .09      .42      (.29 )    —      —
Class R3(5)                     

April 30, 2009*

    8.84    .18    (.06 )    .12      (.24 )    (.05 )    —

October 31, 2008

    11.09    .52    (2.19 )    (1.67 )    (.46 )    (.12 )    —

October 31, 2007

    11.03    .39    .30      .69      (.39 )    (.24 )    —

October 31, 2006

    10.71    .31    .40      .71      (.32 )    (.07 )    —

October 31, 2005

    10.69    .21    .06      .27      (.21 )    (.04 )    —

October 31, 2004

    10.47    .18    .26      .44      (.18 )    (.04 )    —
Class S                     

April 30, 2009*

    8.84    .20    (.06 )    .14      (.26 )    (.05 )    —

October 31, 2008

    11.09    .57    (2.19 )    (1.62 )    (.51 )    (.12 )    —

October 31, 2007

    11.03    .44    .31      .75      (.45 )    (.24 )    —

October 31, 2006

    10.72    .36    .39      .75      (.37 )    (.07 )    —

October 31, 2005

    10.70    .27    .05      .32      (.26 )    (.04 )    —

October 31, 2004

    10.47    .23    .27      .50      (.23 )    (.04 )    —

 

See accompanying notes which are an integral part of the financial statements.

 

58   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g) 		  %
Portfolio
Turnover Rate(c)
             
             
(.30 )   8.62   1.62     65,362   .47   .74   2.22   8
(.60 )   8.79   (15.56 )   55,163   .27   .66   5.05   86
(.66 )   11.03   6.76     52,516   .25   .65   3.87   79
(.42 )   10.98   7.04     46,364   .25   .65   3.14   16
(.28 )   10.66   2.74     40,225   .25   .62   2.26   9
(.25 )   10.65   4.62     20,709   .25   .66   1.89   6
             
(.28 )   8.58   1.34     97,956   1.22   1.49   1.84   8
(.53 )   8.75   (16.24 )   88,276   1.02   1.41   4.50   86
(.58 )   10.99   6.04     84,747   1.00   1.40   3.10   79
(.33 )   10.93   6.16     80,692   1.00   1.40   2.34   16
(.20 )   10.62   1.99     88,226   1.00   1.37   1.47   9
(.17 )   10.61   3.87     75,976   1.00   1.38   1.15   6
             
(.30 )   8.64   1.62     68,047   .47   .74   2.21   8
(.60 )   8.81   (15.60 )   66,526   .27   .66   5.27   86
(.66 )   11.06   6.84     83,894   .25   .65   3.84   79
(.41 )   11.00   6.96     80,224   .25   .65   2.90   16
(.28 )   10.68   2.81     183,219   .25   .62   2.20   9
(.24 )   10.66   4.57     187,993   .25   .63   1.95   6
             
(.31 )   8.67   1.83     4,252   .22   .49   2.30   8
(.63 )   8.83   (15.36 )   3,026   .02   .42   5.44   86
(.31 )   11.08   5.72     1,914   —   .40   2.98   79
             
(.30 )   8.63   1.61     6,248   .47   .74   2.19   8
(.61 )   8.80   (15.60 )   5,701   .27   .66   4.84   86
(.65 )   11.05   6.75     3,156   .25   .65   3.64   79
(.29 )   10.99   3.95     1,466   .25   .67   2.72   16
             
(.29 )   8.67   1.51     150,956   .72   .99   2.09   8
(.58 )   8.84   (15.78 )   160,491   .52   .91   5.03   86
(.63 )   11.09   6.53     194,815   .50   .90   3.59   79
(.39 )   11.03   6.74     187,837   .50   .90   2.85   16
(.25 )   10.71   2.55     163,499   .50   .87   1.97   9
(.22 )   10.69   4.23     146,230   .50   .88   1.65   6
             
(.31 )   8.67   1.72     59,651   .22   .49   2.36   8
(.63 )   8.84   (15.34 )   48,347   .02   .41   5.48   86
(.69 )   11.09   7.10     55,999   —   .40   4.02   79
(.44 )   11.03   7.16     46,312   —   .40   3.36   16
(.30 )   10.72   3.06     44,293   —   .37   2.46   9
(.27 )   10.70   4.82     42,949   —   .38   2.17   6

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   59

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Moderate Strategy Fund

               
Class A                     

April 30, 2009*

    8.53    .16    (.18 )    (.02 )    (.23 )    (.11 )    —

October 31, 2008

    12.09    .58    (3.32 )    (2.74 )    (.53 )    (.29 )    —

October 31, 2007

    11.54    .42    .74      1.16      (.43 )    (.18 )    —

October 31, 2006

    10.81    .29    .81      1.10      (.30 )    (.07 )    —

October 31, 2005

    10.50    .22    .35      .57      (.23 )    (.03 )    —

October 31, 2004

    10.03    .17    .51      .68      (.19 )    (.02 )    —
Class C                     

April 30, 2009*

    8.49    .12    (.16 )    (.04 )    (.21 )    (.11 )    —

October 31, 2008

    12.04    .50    (3.31 )    (2.81 )    (.45 )    (.29 )    —

October 31, 2007

    11.49    .33    .73      1.06      (.33 )    (.18 )    —

October 31, 2006

    10.77    .21    .80      1.01      (.22 )    (.07 )    —

October 31, 2005

    10.45    .14    .36      .50      (.15 )    (.03 )    —

October 31, 2004

    10.01    .05    .55      .60      (.14 )    (.02 )    —
Class E                     

April 30, 2009*

    8.54    .16    (.18 )    (.02 )    (.23 )    (.11 )    —

October 31, 2008

    12.10    .59    (3.33 )    (2.74 )    (.53 )    (.29 )    —

October 31, 2007

    11.55    .42    .74      1.16      (.43 )    (.18 )    —

October 31, 2006

    10.82    .29    .81      1.10      (.30 )    (.07 )    —

October 31, 2005

    10.50    .22    .36      .58      (.23 )    (.03 )    —

October 31, 2004

    10.03    .19    .49      .68      (.19 )    (.02 )    —
Class R1                     

April 30, 2009*

    8.56    .16    (.16 )    —      (.24 )    (.11 )    —

October 31, 2008

    12.14    .56    (3.30 )    (2.74 )    (.55 )    (.29 )    —

October 31, 2007

    11.58    .33    .87      1.20      (.46 )    (.18 )    —

October 31, 2006(11)

    11.47    .11    .09      .20      (.09 )    —      —
Class R2                     

April 30, 2009*

    8.53    .15    (.17 )    (.02 )    (.23 )    (.11 )    —

October 31, 2008

    12.09    .45    (3.19 )    (2.74 )    (.53 )    (.29 )    —

October 31, 2007

    11.54    .39    .76      1.15      (.42 )    (.18 )    —

October 31, 2006(4)

    11.25    .25    .27      .52      (.23 )    —      —
Class R3(5)                     

April 30, 2009*

    8.56    .15    (.18 )    (.03 )    (.22 )    (.11 )    —

October 31, 2008

    12.13    .56    (3.34 )    (2.78 )    (.50 )    (.29 )    —

October 31, 2007

    11.58    .39    .73      1.12      (.39 )    (.18 )    —

October 31, 2006

    10.84    .27    .81      1.08      (.27 )    (.07 )    —

October 31, 2005

    10.52    .20    .35      .55      (.20 )    (.03 )    —

October 31, 2004

    10.06    .16    .49      .65      (.17 )    (.02 )    —
Class S                     

April 30, 2009*

    8.56    .16    (.17 )    (.01 )    (.24 )    (.11 )    —

October 31, 2008

    12.13    .61    (3.34 )    (2.73 )    (.55 )    (.29 )    —

October 31, 2007

    11.58    .45    .74      1.19      (.46 )    (.18 )    —

October 31, 2006

    10.84    .32    .82      1.14      (.33 )    (.07 )    —

October 31, 2005

    10.52    .25    .35      .60      (.25 )    (.03 )    —

October 31, 2004

    10.05    .21    .49      .70      (.21 )    (.02 )    —

 

See accompanying notes which are an integral part of the financial statements.

 

60   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g)		   %
Portfolio
Turnover Rate(c)
             
             
(.34 )   8.17   (.10 )   152,012   .50   .72   1.96   11
(.82 )   8.53   (24.05 )   162,970   .27   .64   5.36   86
(.61 )   12.09   10.36     211,856   .25   .63   3.56   78
(.37 )   11.54   10.34     165,654   .25   .63   2.63   6
(.26 )   10.81   5.44     121,343   .25   .61   2.03   5
(.21 )   10.50   6.87     55,049   .25   .63   1.71   4
             
(.32 )   8.13   (.40 )   185,485   1.25   1.47   1.58   11
(.74 )   8.49   (24.67 )   196,167   1.02   1.39   4.65   86
(.51 )   12.04   9.52     262,501   1.00   1.38   2.86   78
(.29 )   11.49   9.51     252,478   1.00   1.38   1.88   6
(.18 )   10.77   4.78     183,445   1.00   1.36   1.31   5
(.16 )   10.45   6.00     146,515   1.00   1.37   .48   4
             
(.34 )   8.18   (.10 )   141,560   .50   .72   1.95   11
(.82 )   8.54   (24.03 )   144,684   .27   .64   5.46   86
(.61 )   12.10   10.34     208,296   .25   .63   3.60   78
(.37 )   11.55   10.32     181,883   .25   .63   2.64   6
(.26 )   10.82   5.52     164,151   .25   .61   2.07   5
(.21 )   10.50   6.85     132,822   .25   .62   1.85   4
             
(.35 )   8.21   .12     3,955   .26   .48   2.04   11
(.84 )   8.56   (23.92 )   3,047   .02   .40   5.29   86
(.64 )   12.14   10.70     2,104   —   .38   2.74   78
(.09 )   11.58   .96     215   —   .20   .89   6
             
(.34 )   8.17   (.10 )   12,710   .50   .72   1.94   11
(.82 )   8.53   (24.03 )   12,817   .27   .65   4.26   86
(.60 )   12.09   10.28     4,068   .25   .63   3.26   78
(.23 )   11.54   4.68     1,654   .25   .64   2.01   6
             
(.33 )   8.20   (.20 )   239,740   .75   .97   1.82   11
(.79 )   8.56   (24.27 )   265,507   .52   .89   5.22   86
(.57 )   12.13   10.02     394,039   .50   .88   3.36   78
(.34 )   11.58   10.13     364,759   .50   .88   2.39   6
(.23 )   10.84   5.25     309,824   .50   .86   1.81   5
(.19 )   10.52   6.55     254,060   .50   .87   1.55   4
             
(.35 )   8.20   —     93,744   .26   .48   2.06   11
(.84 )   8.56   (23.85 )   89,799   .02   .39   5.67   86
(.64 )   12.13   10.61     158,313   —   .38   3.86   78
(.40 )   11.58   10.67     126,487   —   .38   2.89   6
(.28 )   10.84   5.76     113,097   —   .36   2.33   5
(.23 )   10.52   7.03     106,031   —   .37   2.04   4

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   61

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Balanced Strategy Fund

Class A                     
April 30, 2009*    8.35    .11    (.27 )    (.16 )    (.16 )    (.36 )    —
October 31, 2008    13.10    .57    (4.37 )    (3.80 )    (.55 )    (.40 )    —
October 31, 2007    12.18    .40    1.18      1.58      (.42 )    (.24 )    —
October 31, 2006    10.99    .25    1.27      1.52      (.26 )    (.07 )    —
October 31, 2005    10.33    .20    .71      .91      (.22 )    (.03 )    —

October 31, 2004

    9.64    .16    .74      .90      (.21 )    —      —
Class C                     
April 30, 2009*    8.31    .09    (.28 )    (.19 )    (.14 )    (.36 )    —
October 31, 2008    13.03    .48    (4.34 )    (3.86 )    (.46 )    (.40 )    —
October 31, 2007    12.12    .30    1.18      1.48      (.33 )    (.24 )    —
October 31, 2006    10.93    .17    1.27      1.44      (.18 )    (.07 )    —
October 31, 2005    10.29    .13    .69      .82      (.15 )    (.03 )    —

October 31, 2004

    9.61    .12    .72      .84      (.16 )    —      —
Class E                     
April 30, 2009*    8.37    .11    (.27 )    (.16 )    (.16 )    (.36 )    —
October 31, 2008    13.12    .58    (4.38 )    (3.80 )    (.55 )    (.40 )    —
October 31, 2007    12.20    .41    1.17      1.58      (.42 )    (.24 )    —
October 31, 2006    11.00    .26    1.27      1.53      (.26 )    (.07 )    —
October 31, 2005    10.35    .22    .68      .90      (.22 )    (.03 )    —

October 31, 2004

    9.65    .22    .69      .91      (.21 )    —      —
Class R1                     
April 30, 2009*    8.41    .12    (.27 )    (.15 )    (.17 )    (.36 )    —
October 31, 2008    13.18    .56    (4.35 )    (3.79 )    (.58 )    (.40 )    —
October 31, 2007    12.26    .30    1.32      1.62      (.46 )    (.24 )    —

October 31, 2006(8)

    11.62    .10    .73      .83      (.19 )    —      —
Class R2                     
April 30, 2009*    8.36    .11    (.27 )    (.16 )    (.16 )    (.36 )    —
October 31, 2008    13.12    .44    (4.25 )    (3.81 )    (.55 )    (.40 )    —
October 31, 2007    12.19    .40    1.19      1.59      (.42 )    (.24 )    —

October 31, 2006(6)

    11.76    .12    .49      .61      (.18 )    —      —
Class R3(5)                     
April 30, 2009*    8.38    .10    (.28 )    (.18 )    (.15 )    (.36 )    —
October 31, 2008    13.12    .56    (4.38 )    (3.82 )    (.52 )    (.40 )    —
October 31, 2007    12.20    .38    1.17      1.55      (.39 )    (.24 )    —
October 31, 2006    11.01    .23    1.26      1.49      (.23 )    (.07 )    —
October 31, 2005    10.35    .19    .70      .89      (.20 )    (.03 )    —

October 31, 2004

    9.66    .17    .71      .88      (.19 )    —      —
Class S                     
April 30, 2009*    8.41    .12    (.27 )    (.15 )    (.17 )    (.36 )    —
October 31, 2008    13.18    .60    (4.39 )    (3.79 )    (.58 )    (.40 )    —
October 31, 2007    12.26    .45    1.17      1.62      (.46 )    (.24 )    —
October 31, 2006    11.05    .29    1.28      1.57      (.29 )    (.07 )    —
October 31, 2005    10.39    .25    .69      .94      (.25 )    (.03 )    —

October 31, 2004

    9.68    .23    .71      .94      (.23 )    —      —

 

See accompanying notes which are an integral part of the financial statements.

 

62   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g)		   %
Portfolio
Turnover Rate(c)
             
(.52 )   7.67   (1.70 )   839,258   .51   .71   1.52   9
(.95 )   8.35   (30.88 )   964,226   .27   .67   5.12   18
(.66 )   13.10   13.49     1,352,284   .25   .67   3.21   34
(.33 )   12.18   14.03     996,628   .25   .67   2.15   3
(.25 )   10.99   8.91     593,609   .25   .62   1.88   1
(.21 )   10.33   9.49     281,685   .25   .59   1.63   6
             
(.50 )   7.62   (2.12 )   1,016,319   1.26   1.45   1.15   9
(.86 )   8.31   (31.37 )   1,166,957   1.02   1.42   4.35   18
(.57 )   13.03   12.60     1,770,369   1.00   1.42   2.44   34
(.25 )   12.12   13.29     1,328,971   1.00   1.42   1.43   3
(.18 )   10.93   7.96     964,203   1.00   1.37   1.22   1
(.16 )   10.29   8.82     653,463   1.00   1.34   1.23   6
             
(.52 )   7.69   (1.69 )   459,807   .51   .71   1.52   9
(.95 )   8.37   (30.84 )   489,750   .27   .67   5.18   18
(.66 )   13.12   13.47     760,312   .25   .67   3.26   34
(.33 )   12.20   14.09     615,865   .25   .67   2.23   3
(.25 )   11.00   8.77     506,587   .25   .62   2.03   1
(.21 )   10.35   9.54     416,942   .25   .59   2.25   6
             
(.53 )   7.73   (1.58 )   26,220   .26   .46   1.63   9
(.98 )   8.41   (30.66 )   24,105   .02   .42   5.06   18
(.70 )   13.18   13.69     27,053   —   .42   2.42   34
(.19 )   12.26   6.60     4,295   —   .43   .80   3
             
(.52 )   7.68   (1.69 )   48,367   .51   .71   1.50   9
(.95 )   8.36   (30.89 )   42,341   .27   .68   4.00   18
(.66 )   13.12   13.48     22,546   .25   .67   3.21   34
(.18 )   12.19   5.26     15,035   .25   .68   1.14   3
             
(.51 )   7.69   (1.91 )   734,438   .76   .96   1.39   9
(.92 )   8.38   (30.95 )   812,715   .52   .92   4.97   18
(.63 )   13.12   13.16     1,307,641   .50   .92   3.04   34
(.30 )   12.20   13.72     1,129,000   .50   .92   1.97   3
(.23 )   11.01   8.61     892,607   .50   .87   1.75   1
(.19 )   10.35   9.25     676,342   .50   .84   1.70   6
             
(.53 )   7.73   (1.59 )   440,950   .26   .46   1.64   9
(.98 )   8.41   (30.66 )   484,456   .02   .42   5.33   18
(.70 )   13.18   13.69     746,007   —   .42   3.59   34
(.36 )   12.26   14.40     690,959   —   .42   2.46   3
(.28 )   11.05   9.10     518,148   —   .37   2.28   1
(.23 )   10.39   9.82     426,147   —   .34   2.23   6

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   63

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Growth Strategy Fund

Class A                     

April 30, 2009*

    7.97    .07    (.41 )     (.34 )     (.09 )     (.58 )     —

October 31, 2008

    13.76    .52    (5.29 )     (4.77 )     (.55 )     (.47 )     —

October 31, 2007

    12.47    .34    1.61       1.95       (.37 )     (.29 )     —

October 31, 2006

    10.90    .17    1.65       1.82       (.19 )     (.06 )     —

October 31, 2005

    9.95    .15    .98       1.13       (.18 )     —       —

October 31, 2004

    9.12    .11    .87       .98       (.15 )     —       —
Class C                     

April 30, 2009*

    7.92    .05    (.41 )     (.36 )     (.07 )     (.58 )     —

October 31, 2008

    13.67    .44    (5.26 )     (4.82 )     (.46 )     (.47 )     —

October 31, 2007

    12.39    .25    1.59       1.84       (.27 )     (.29 )     —

October 31, 2006

    10.84    .09    1.62       1.71       (.10 )     (.06 )     —

October 31, 2005

    9.89    .09    .96       1.05       (.10 )     —       —

October 31, 2004

    9.09    .06    .84       .90       (.10 )     —       —
Class E                     

April 30, 2009*

    7.98    .07    (.40 )     (.33 )     (.09 )     (.58 )     —

October 31, 2008

    13.78    .54    (5.32 )     (4.78 )     (.55 )     (.47 )     —

October 31, 2007

    12.49    .36    1.59       1.95       (.37 )     (.29 )     —

October 31, 2006

    10.91    .19    1.64       1.83       (.19 )     (.06 )     —

October 31, 2005

    9.96    .17    .96       1.13       (.18 )     —       —

October 31, 2004

    9.13    .15    .82       .97       (.14 )     —       —
Class R1                     

April 30, 2009*

    8.02    .08    (.41 )     (.33 )     (.09 )     (.58 )     —

October 31, 2008

    13.85    .50    (5.28 )     (4.78 )     (.58 )     (.47 )     —

October 31, 2007

    12.55    .21    1.79       2.00       (.41 )     (.29 )     —

October 31, 2006(7)

    11.76    .08    .84       .92       (.13 )     —       —
Class R2                     

April 30, 2009*

    7.98    .07    (.40 )     (.33 )     (.09 )     (.58 )     —

October 31, 2008

    13.79    .40    (5.19 )     (4.79 )     (.55 )     (.47 )     —

October 31, 2007

    12.48    .34    1.62       1.96       (.36 )     (.29 )     —

October 31, 2006(4)

    11.86    .09    .64       .73       (.11 )     —       —
Class R3(5)                     

April 30, 2009*

    8.00    .06    (.41 )     (.35 )     (.08 )     (.58 )     —

October 31, 2008

    13.81    .52    (5.34 )     (4.82 )     (.52 )     (.47 )     —

October 31, 2007

    12.51    .33    1.60       1.93       (.34 )     (.29 )     —

October 31, 2006

    10.93    .15    1.65       1.80       (.16 )     (.06 )     —

October 31, 2005

    9.97    .14    .97       1.11       (.15 )     —       —

October 31, 2004

    9.15    .11    .84       .95       (.13 )     —       —
Class S                     

April 30, 2009*

    8.02    .08    (.41 )     (.33 )     (.09 )     (.58 )     —

October 31, 2008

    13.85    .58    (5.36 )     (4.78 )     (.58 )     (.47 )     —

October 31, 2007

    12.55    .40    1.60       2.00       (.41 )     (.29 )     —

October 31, 2006

    10.97    .22    1.64       1.86       (.22 )     (.06 )     —

October 31, 2005

    10.00    .20    .98       1.18       (.21 )     —       —

October 31, 2004

    9.16    .16    .84       1.00       (.16 )     —       —

 

See accompanying notes which are an integral part of the financial statements.

 

64   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g)		   %
Portfolio
Turnover Rate(c)
             
             
(.67 )   6.96   (4.03 )   629,682   .51   .71   1.07   6
(1.02 )   7.97   (36.98 )   728,441   .28   .69   4.66   12
(.66 )   13.76   16.26     1,055,684   .25   .68   2.62   16
(.25 )   12.47   16.87     680,892   .25   .67   1.49   2
(.18 )   10.90   11.44     365,024   .25   .64   1.43   1
(.15 )   9.95   10.76     154,884   .25   .63   1.11   2
             
(.65 )   6.91   (4.33 )   654,774   1.26   1.46   .70   6
(.93 )   7.92   (37.44 )   742,998   1.02   1.44   3.91   12
(.56 )   13.67   15.39     1,176,448   1.00   1.43   1.93   16
(.16 )   12.39   15.95     856,552   1.00   1.42   .77   2
(.10 )   10.84   10.70     572,129   1.00   1.39   .82   1
(.10 )   9.89   9.90     381,245   1.00   1.38   .67   2
             
(.67 )   6.98   (3.89 )   341,948   .51   .71   1.07   6
(1.02 )   7.98   (37.01 )   372,580   .27   .69   4.80   12
(.66 )   13.78   16.23     632,163   .25   .68   2.81   16
(.25 )   12.49   16.93     503,741   .25   .67   1.58   2
(.18 )   10.91   11.40     394,842   .25   .64   1.63   1
(.14 )   9.96   10.72     307,304   .25   .63   1.54   2
             
(.67 )   7.02   (3.78 )   12,907   .26   .46   1.18   6
(1.05 )   8.02   (36.86 )   14,138   .03   .44   4.46   12
(.70 )   13.85   16.53     15,576   —   .43   1.62   16
(.13 )   12.55   7.41     1,857   —   .43   .62   2
             
(.67 )   6.98   (3.89 )   22,648   .51   .71   1.06   6
(1.02 )   7.98   (37.04 )   21,959   .28   .69   3.62   12
(.65 )   13.79   16.30     16,800   .25   .68   2.61   16
(.11 )   12.48   6.23     10,647   .25   .68   .71   2
             
(.66 )   6.99   (4.11 )   523,341   .76   .96   .95   6
(.99 )   8.00   (37.17 )   577,865   .52   .94   4.57   12
(.63 )   13.81   15.97     992,589   .50   .93   2.55   16
(.22 )   12.51   16.62     822,822   .50   .92   1.32   2
(.15 )   10.93   11.22     616,939   .50   .89   1.35   1
(.13 )   9.97   10.41     452,502   .50   .88   1.14   2
             
(.67 )   7.02   (3.78 )   263,534   .26   .46   1.17   6
(1.05 )   8.02   (36.86 )   279,570   .02   .44   5.08   12
(.70 )   13.85   16.53     500,465   —   .43   3.08   16
(.28 )   12.55   17.12     420,671   —   .42   1.83   2
(.21 )   10.97   11.83     308,795   —   .39   1.88   1
(.16 )   10.00   10.99     247,011   —   .38   1.70   2

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   65

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital

Equity Growth Strategy Fund

               
Class A                     

April 30, 2009*

    7.46    .04    (.54 )    (.50 )    (.03 )    (.60 )    —

October 31, 2008

    14.27    .53    (6.27 )    (5.74 )    (.54 )    (.53 )    —

October 31, 2007

    12.55    .28    2.08      2.36      (.32 )    (.32 )    —

October 31, 2006

    10.63    .10    2.00      2.10      (.10 )    (.08 )    —

October 31, 2005

    9.42    .10    1.22      1.32      (.11 )    —      —

October 31, 2004

    8.50    .06    .95      1.01      (.09 )    —      —
Class C                     

April 30, 2009*

    7.03    .01    (.50 )    (.49 )    (.02 )    (.60 )    —

October 31, 2008

    13.54    .38    (5.88 )    (5.50 )    (.48 )    (.53 )    —

October 31, 2007

    12.00    .17    1.97      2.14      (.28 )    (.32 )    —

October 31, 2006

    10.20    .01    1.93      1.94      (.06 )    (.08 )    —

October 31, 2005

    9.07    .03    1.17      1.20      (.07 )    —      —

October 31, 2004

    8.23    .01    .89      .90      (.06 )    —      —
Class E                     

April 30, 2009*

    7.32    .04    (.53 )    (.49 )    (.03 )    (.60 )    —

October 31, 2008

    14.02    .51    (6.14 )    (5.63 )    (.54 )    (.53 )    —

October 31, 2007

    12.35    .32    1.99      2.31      (.32 )    (.32 )    —

October 31, 2006

    10.46    .11    1.96      2.07      (.10 )    (.08 )    —

October 31, 2005

    9.27    .11    1.19      1.30      (.11 )    —      —

October 31, 2004

    8.37    .08    .91      .99      (.09 )    —      —
Class R1                     

April 30, 2009*

    7.43    .04    (.53 )    (.49 )    (.03 )    (.60 )    —

October 31, 2008

    14.23    .54    (6.24 )    (5.70 )    (.57 )    (.53 )    —

October 31, 2007

    12.51    .15    2.22      2.37      (.33 )    (.32 )    —

October 31, 2006(7)

    11.57    .04    .95      .99      (.05 )    —      —
Class R2                     

April 30, 2009*

    7.32    .03    (.52 )    (.49 )    (.03 )    (.60 )    —

October 31, 2008

    14.03    .39    (6.03 )    (5.64 )    (.54 )    (.53 )    —

October 31, 2007

    12.35    .31    1.99      2.30      (.30 )    (.32 )    —

October 31, 2006(4)

    11.60    .03    .76      .79      (.04 )    —      —
Class R3(5)                     

April 30, 2009*

    7.30    .03    (.53 )    (.50 )    (.03 )    (.60 )    —

October 31, 2008

    13.98    .49    (6.12 )    (5.63 )    (.52 )    (.53 )    —

October 31, 2007

    12.33    .27    2.00      2.27      (.30 )    (.32 )    —

October 31, 2006

    10.46    .08    1.95      2.03      (.08 )    (.08 )    —

October 31, 2005

    9.27    .09    1.19      1.28      (.09 )    —      —

October 31, 2004

    8.38    .06    .91      .97      (.08 )    —      —
Class S                     

April 30, 2009*

    7.43    .04    (.53 )    (.49 )    (.03 )    (.60 )    —

October 31, 2008

    14.23    .52    (6.22 )    (5.70 )    (.57 )    (.53 )    —

October 31, 2007

    12.51    .35    2.02      2.37      (.33 )    (.32 )    —

October 31, 2006

    10.59    .14    1.99      2.13      (.13 )    (.08 )    —

October 31, 2005

    9.37    .15    1.20      1.35      (.13 )    —      —

October 31, 2004

    8.45    .11    .91      1.02      (.10 )    —      —

 

See accompanying notes which are an integral part of the financial statements.

 

66   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g) 		  %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g) 		  %
Portfolio
Turnover Rate(c)
             
             
(.63 )   6.33   (6.42 )   213,164   .52   .72   .58   3
(1.07 )   7.46   (42.93 )   238,694   .27   .70   4.71   9
(.64 )   14.27   19.54     391,792   .25   .68   2.12   18
(.18 )   12.55   19.99     211,813   .25   .68   .85   3
(.11 )   10.63   14.09     94,182   .25   .66   .95   3
(.09 )   9.42   11.92     43,148   .25   .65   .69   12
             
(.62 )   5.92   (6.70 )   327,286   1.26   1.47   .19   3
(1.01 )   7.03   (43.44 )   372,623   1.02   1.45   3.55   9
(.60 )   13.54   18.51     654,858   1.00   1.43   1.39   18
(.14 )   12.00   19.16     438,483   1.00   1.43   .07   3
(.07 )   10.20   13.29     284,152   1.00   1.41   .31   3
(.06 )   9.07   10.94     192,211   1.00   1.40   .13   12
             
(.63 )   6.20   (6.40 )   156,397   .52   .72   .58   3
(1.07 )   7.32   (42.95 )   172,463   .27   .70   4.63   9
(.64 )   14.02   19.44     317,412   .25   .68   2.45   18
(.18 )   12.35   20.02     241,818   .25   .68   .99   3
(.11 )   10.46   14.08     192,258   .25   .66   1.13   3
(.09 )   9.27   11.83     152,589   .25   .65   .89   12
             
(.63 )   6.31   (6.26 )   6,241   .27   .47   .71   3
(1.10 )   7.43   (42.83 )   6,152   .02   .45   5.00   9
(.65 )   14.23   19.74     10,544   —   .43   1.18   18
(.05 )   12.51   8.32     1,391   —   .44   .28   3
             
(.63 )   6.20   (6.40 )   24,780   .52   .72   .58   3
(1.07 )   7.32   (42.99 )   23,180   .27   .71   3.56   9
(.62 )   14.03   19.40     25,130   .25   .68   2.42   18
(.04 )   12.35   6.82     19,094   .25   .69   .26   3
             
(.63 )   6.17   (6.62 )   254,537   .77   .97   .45   3
(1.05 )   7.30   (43.12 )   287,938   .52   .95   4.46   9
(.62 )   13.98   19.16     553,383   .50   .93   2.12   18
(.16 )   12.33   19.61     432,147   .50   .93   .68   3
(.09 )   10.46   13.88     308,388   .50   .91   .85   3
(.08 )   9.27   11.59     225,187   .50   .90   .64   12
             
(.63 )   6.31   (6.26 )   165,746   .27   .47   .72   3
(1.10 )   7.43   (42.87 )   221,509   .02   .45   4.65   9
(.65 )   14.23   19.74     319,798   —   .43   2.63   18
(.21 )   12.51   20.34     228,432   —   .43   1.17   3
(.13 )   10.59   14.47     133,943   —   .41   1.42   3
(.10 )   9.37   12.09     111,266   —   .40   1.21   12

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   67

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital		  

2010 Strategy Fund

               
Class A                     

April 30, 2009*

    8.43    .17    (.14 )    .03      (.17 )    —      —  

October 31, 2008

    11.45    .51    (2.96 )    (2.45 )    (.47 )    (.08 )    (.02 )

October 31, 2007

    10.88    .40    .68      1.08      (.38 )    (.13 )    —  

October 31, 2006

    10.06    .27    .83      1.10      (.28 )    —      —  

October 31, 2005(2)

    10.21    .04    (.11 )    (.07 )    (.08 )    —      —  
Class E                     

April 30, 2009*

    8.44    .18    (.16 )    .02      (.16 )    —      —  

October 31, 2008

    11.46    .46    (2.90 )    (2.44 )    (.48 )    (.08 )    (.02 )

October 31, 2007

    10.90    .35    .72      1.07      (.38 )    (.13 )    —  

October 31, 2006

    10.07    .27    .83      1.10      (.27 )    —      —  

October 31, 2005(1)

    10.00    .12    .07      .19      (.12 )    —      —  
Class R1                     

April 30, 2009*

    8.45    .18    (.16 )    .02      (.17 )    —      —  

October 31, 2008

    11.47    .48    (2.90 )    (2.42 )    (.50 )    (.08 )    (.02 )

October 31, 2007

    10.90    .35    .76      1.11      (.41 )    (.13 )    —  

October 31, 2006(9)

    10.45    .13    .53      .66      (.21 )    —      —  
Class R2                     

April 30, 2009*

    8.44    .17    (.15 )    .02      (.17 )    —      —  

October 31, 2008

    11.46    .30    (2.74 )    (2.44 )    (.48 )    (.08 )    (.02 )

October 31, 2007(12)

    10.91    .31    .76      1.07      (.39 )    (.13 )    —  
Class R3(5)                     

April 30, 2009*

    8.44    .16    (.16 )    —      (.16 )    —      —  

October 31, 2008

    11.45    .50    (2.96 )    (2.46 )    (.46 )    (.08 )    (.01 )

October 31, 2007

    10.89    .31    .74      1.05      (.36 )    (.13 )    —  

October 31, 2006

    10.07    .23    .84      1.07      (.25 )    —      —  

October 31, 2005(1)

    10.00    .10    .08      .18      (.11 )    —      —  
Class S                     

April 30, 2009*

    8.45    .18    (.15 )    .03      (.17 )    —      —  

October 31, 2008

    11.47    .39    (2.81 )    (2.42 )    (.50 )    (.08 )    (.02 )

October 31, 2007

    10.91    .45    .65      1.10      (.41 )    (.13 )    —  

October 31, 2006

    10.08    .29    .84      1.13      (.30 )    —      —  

October 31, 2005(1)

    10.00    .15    .07      .22      (.14 )    —      —  

 

See accompanying notes which are an integral part of the financial statements.

 

68   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g) 		  %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g) 		  %
Portfolio
Turnover Rate(c)
             
             
(.17 )   8.29   .36     1,009   .25   1.02   2.14   12
(.57 )   8.43   (22.28 )   1,028   .25   .93   4.85   108
(.51 )   11.45   10.22     1,957   .25   1.36   3.61   93
(.28 )   10.88   11.02     1,723   .25   3.41   2.53   71
(.08 )   10.06   (1.01 )   990   .25   4.84   .37   1
             
(.16 )   8.30   .36     4,376   .25   1.02   2.17   12
(.58 )   8.44   (22.24 )   5,375   .25   .93   4.46   108
(.51 )   11.46   10.12     4,797   .25   1.36   3.14   93
(.27 )   10.90   11.08     1,485   .25   2.90   2.54   71
(.12 )   10.07   1.96     1,020   .25   5.32   1.25   1
             
(.17 )   8.30   .34     7,178   —   .77   2.27   12
(.60 )   8.45   (22.02 )   6,866   —   .68   4.64   108
(.54 )   11.47   10.49     5,138   —   1.11   3.27   93
(.21 )   10.90   5.69     150   —   3.35   1.11   71
             
(.17 )   8.29   .26     14,662   .25   1.01   2.11   12
(.58 )   8.44   (22.21 )   6,670   .25   .92   2.92   108
(.52 )   11.46   10.10     691   .25   1.36   2.62   93
             
(.16 )   8.28   .04     20,304   .50   1.26   2.00   12
(.55 )   8.44   (22.37 )   14,347   .50   1.18   4.86   108
(.49 )   11.45   9.91     17,600   .50   1.61   2.78   93
(.25 )   10.89   10.73     4,028   .50   3.15   2.27   71
(.11 )   10.07   1.79     1,768   .50   5.56   1.06   1
             
(.17 )   8.31   .46     7,675   —   .77   2.26   12
(.60 )   8.45   (22.02 )   7,315   —   .67   3.75   108
(.54 )   11.47   10.38     2,575   —   1.11   3.93   93
(.30 )   10.91   11.35     1,360   —   2.69   2.73   71
(.14 )   10.08   2.25     1,023   —   5.07   1.45   1

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   69

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital		  

2015 Strategy Fund

                     
Class R1                     

April 30, 2009*

    7.80    .15    (.21 )    (.06 )    (.12 )    —      —  

October 31, 2008(15)

    10.00    .18    (2.20 )    (2.02 )    (.16 )    —      (.02 )
Class R2                     

April 30, 2009*

    7.80    .12    (.19 )    (.07 )    (.11 )    —      —  

October 31, 2008(15)

    10.00    .16    (2.19 )    (2.03 )    (.15 )    —      (.02 )
Class R3                     

April 30, 2009*

    7.80    .11    (.19 )    (.08 )    (.11 )    —      —  

October 31, 2008(15)

    10.00    .14    (2.19 )    (2.05 )    (.13 )    —      (.02 )

2020 Strategy Fund

                     
Class A                     

April 30, 2009*

    8.20    .13    (.27 )    (.14 )    (.12 )    —      —  

October 31, 2008

    12.42    .50    (4.07 )    (3.57 )    (.48 )    (.14 )    (.03 )

October 31, 2007

    11.24    .34    1.19      1.53      (.32 )    (.03 )    —  

October 31, 2006

    10.14    .23    1.11      1.34      (.24 )    —      —  

October 31, 2005(2)

    10.29    .03    (.11 )    (.08 )    (.07 )    —      —  
Class E                     

April 30, 2009*

    8.19    .13    (.26 )    (.13 )    (.12 )    —      —  

October 31, 2008

    12.42    .48    (4.06 )    (3.58 )    (.48 )    (.14 )    (.03 )

October 31, 2007

    11.25    .29    1.23      1.52      (.32 )    (.03 )    —  

October 31, 2006

    10.14    .22    1.13      1.35      (.24 )    —      —  

October 31, 2005(1)

    10.00    .11    .14      .25      (.11 )    —      —  
Class R1                     

April 30, 2009*

    8.20    .14    (.26 )    (.12 )    (.13 )    —      —  

October 31, 2008

    12.42    .49    (4.03 )    (3.54 )    (.51 )    (.14 )    (.03 )

October 31, 2007

    11.25    .24    1.31      1.55      (.35 )    (.03 )    —  

October 31, 2006(9)

    10.62    .09    .70      .79      (.16 )    —      —  
Class R2                     

April 30, 2009*

    8.18    .13    (.26 )    (.13 )    (.12 )    —      —  

October 31, 2008

    12.41    .27    (3.84 )    (3.57 )    (.49 )    (.14 )    (.03 )

October 31, 2007

    11.24    .27    1.25      1.52      (.32 )    (.03 )    —  

October 31, 2006(10)

    10.82    .02    .50      .52      (.10 )    —      —  
Class R3(5)                     

April 30, 2009*

    8.17    .12    (.25 )    (.13 )    (.12 )    —      —  

October 31, 2008

    12.39    .51    (4.10 )    (3.59 )    (.47 )    (.14 )    (.02 )

October 31, 2007

    11.23    .28    1.21      1.49      (.30 )    (.03 )    —  

October 31, 2006

    10.13    .18    1.14      1.32      (.22 )    —      —  

October 31, 2005(1)

    10.00    .08    .14      .22      (.09 )    —      —  
Class S                     

April 30, 2009*

    8.19    .14    (.25 )    (.11 )    (.13 )    —      —  

October 31, 2008

    12.42    .45    (4.00 )    (3.55 )    (.51 )    (.14 )    (.03 )

October 31, 2007

    11.24    .42    1.14      1.56      (.35 )    (.03 )    —  

October 31, 2006

    10.14    .22    1.14      1.36      (.26 )    —      —  

October 31, 2005(1)

    10.00    .13    .14      .27      (.13 )    —      —  

 

See accompanying notes which are an integral part of the financial statements.

 

70   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g) 		  %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g) 		  %
Portfolio
Turnover Rate(c)
             
             
(.12 )   7.62   (.64 )   499   —   3.53   2.03   16
(.18 )   7.80   (20.60 )   153   —   13.08   1.85   13
             
(.11 )   7.62   (.72 )   1,016   .25   3.46   1.65   16
(.17 )   7.80   (20.68 )   274   .25   10.64   1.75   13
             
(.11 )   7.61   (.90 )   3,654   .50   3.23   1.62   16
(.15 )   7.80   (20.81 )   300   .50   10.45   1.56   13
             
             
(.12 )   7.94   (1.64 )   1,243   .25   .85   1.71   11
(.65 )   8.20   (29.99 )   1,391   .25   .74   4.63   103
(.35 )   12.42   13.83     2,016   .25   .86   2.93   44
(.24 )   11.24   13.33     2,165   .25   2.38   2.12   47
(.07 )   10.14   (1.02 )   990   .25   4.74   .30   7
             
(.12 )   7.94   (1.51 )   8,816   .25   .85   1.70   11
(.65 )   8.19   (30.07 )   7,207   .25   .74   4.46   103
(.35 )   12.42   13.79     9,498   .25   .86   2.44   44
(.24 )   11.25   13.42     2,118   .25   1.95   2.12   47
(.11 )   10.14   2.52     1,025   .25   5.13   1.11   7
             
(.13 )   7.95   (1.42 )   19,038   —   .60   1.82   11
(.68 )   8.20   (29.80 )   17,283   —   .49   4.53   103
(.38 )   12.42   14.05     19,194   —   .61   2.02   44
(.16 )   11.25   6.98     702   —   1.77   .80   47
             
(.12 )   7.93   (1.50 )   35,878   .25   .85   1.73   11
(.66 )   8.18   (30.07 )   18,247   .25   .74   2.58   103
(.35 )   12.41   13.81     4,135   .25   .86   2.20   44
(.10 )   11.24   4.34     641   .25   1.62   .27   47
             
(.12 )   7.92   (1.60 )   51,977   .50   1.10   1.55   11
(.63 )   8.17   (30.24 )   35,919   .50   .99   4.80   103
(.33 )   12.39   13.50     44,038   .50   1.11   2.33   44
(.22 )   11.23   13.14     9,355   .50   2.12   1.70   47
(.09 )   10.13   2.23     1,545   .50   5.38   .89   7
             
(.13 )   7.95   (1.30 )   14,346   —   .60   1.82   11
(.68 )   8.19   (29.88 )   12,960   —   .49   4.26   103
(.38 )   12.42   14.16     10,021   —   .61   3.49   44
(.26 )   11.24   13.59     5,953   —   1.63   2.15   47
(.13 )   10.14   2.71     1,027   —   4.88   1.31   7

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   71

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital		  

2025 Strategy Fund

                     
Class R1                     

April 30, 2009*

    7.21    .10    (.32 )    (.22 )    (.07 )    —      —  

October 31, 2008(15)

    10.00    .10    (2.77 )    (2.67 )    (.10 )    —      (.02 )
Class R2                     

April 30, 2009*

    7.20    .07    (.31 )    (.24 )    (.06 )    —      —  

October 31, 2008(15)

    10.00    .12    (2.82 )    (2.70 )    (.08 )    —      (.02 )
Class R3                     

April 30, 2009*

    7.20    .07    (.32 )    (.25 )    (.06 )    —      —  

October 31, 2008(15)

    10.00    .09    (2.80 )    (2.71 )    (.07 )    —      (.02 )

2030 Strategy Fund

                     
Class A                     

April 30, 2009*

    7.45    .07    (.42 )    (.35 )    (.06 )    —      —  

October 31, 2008

    13.23    .50    (5.59 )    (5.09 )    (.46 )    (.19 )    (.04 )

October 31, 2007

    11.53    .31    1.77      2.08      (.31 )    (.07 )    —  

October 31, 2006

    10.19    .21    1.34      1.55      (.21 )    —      —  

October 31, 2005(2)

    10.33    .03    (.11 )    (.08 )    (.06 )    —      —  
Class E                     

April 30, 2009*

    7.46    .05    (.45 )    (.40 )    (.05 )    —      —  

October 31, 2008

    13.23    .46    (5.54 )    (5.08 )    (.46 )    (.19 )    (.04 )

October 31, 2007

    11.54    .23    1.85      2.08      (.32 )    (.07 )    —  

October 31, 2006

    10.20    .18    1.37      1.55      (.21 )    —      —  

October 31, 2005(1)

    10.00    .10    .19      .29      (.09 )    —      —  
Class R1                     

April 30, 2009*

    7.46    .07    (.45 )    (.38 )    (.06 )    —      —  

October 31, 2008

    13.24    .44    (5.50 )    (5.06 )    (.48 )    (.19 )    (.05 )

October 31, 2007

    11.54    .14    1.98      2.12      (.35 )    (.07 )    —  

October 31, 2006(9)

    10.75    .07    .86      .93      (.14 )    —      —  
Class R2                     

April 30, 2009*

    7.45    .07    (.46 )    (.39 )    (.06 )    —      —  

October 31, 2008

    13.22    .16    (5.24 )    (5.08 )    (.46 )    (.19 )    (.04 )

October 31, 2007

    11.53    .16    1.92      2.08      (.32 )    (.07 )    —  

October 31, 2006(10)

    10.98    .02    .62      .64      (.09 )    —      —  
Class R3(5)                     

April 30, 2009*

    7.45    .05    (.45 )    (.40 )    (.05 )    —      —  

October 31, 2008

    13.22    .48    (5.59 )    (5.11 )    (.44 )    (.19 )    (.03 )

October 31, 2007

    11.54    .17    1.87      2.04      (.29 )    (.07 )    —  

October 31, 2006

    10.19    .16    1.38      1.54      (.19 )    —      —  

October 31, 2005(1)

    10.00    .07    .20      .27      (.08 )    —      —  
Class S                     

April 30, 2009*

    7.46    .07    (.46 )    (.39 )    (.06 )    —      —  

October 31, 2008

    13.24    .39    (5.45 )    (5.06 )    (.48 )    (.19 )    (.05 )

October 31, 2007

    11.55    .29    1.82      2.11      (.35 )    (.07 )    —  

October 31, 2006

    10.20    .23    1.35      1.58      (.23 )    —      —  

October 31, 2005(1)

    10.00    .12    .19      .31      (.11 )    —      —  

 

See accompanying notes which are an integral part of the financial statements.

 

72   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g)		   %
Portfolio
Turnover Rate(c)
             
             
(.07 )   6.92   (2.94 )   339   —   4.60   1.47   14
(.12 )   7.21   (27.03 )   226   —   6.19   1.04   113
             
(.06 )   6.90   (3.14 )   1,125   .25   3.70   1.15   14
(.10 )   7.20   (27.25 )   73   .25   8.56   1.31   113
             
(.06 )   6.89   (3.35 )   2,541   .50   3.88   1.19   14
(.09 )   7.20   (27.32 )   325   .50   7.71   .99   113
             
             
(.06 )   7.04   (4.71 )   1,478   .25   .89   .98   6
(.69 )   7.45   (40.22 )   2,069   .25   .77   4.66   86
(.38 )   13.23   18.51     3,739   .25   .98   2.51   31
(.21 )   11.53   15.38     2,854   .25   2.38   1.93   104
(.06 )   10.19   (1.01 )   990   .25   4.86   .25   1
             
(.05 )   7.01   (5.23 )   8,706   .25   .89   .97   6
(.69 )   7.46   (40.14 )   7,847   .25   .77   4.25   86
(.39 )   13.23   18.42     10,490   .25   .98   1.88   31
(.21 )   11.54   15.35     4,616   .25   2.15   1.72   104
(.09 )   10.20   2.96     1,029   .25   5.37   .95   1
             
(.06 )   7.02   (5.01 )   11,642   —   .64   1.08   6
(.72 )   7.46   (40.03 )   10,413   —   .52   4.14   86
(.42 )   13.24   18.80     8,582   —   .73   1.21   31
(.14 )   11.54   8.22     347   —   2.07   .65   104
             
(.06 )   7.00   (5.22 )   29,279   .25   .89   1.01   6
(.69 )   7.45   (40.15 )   14,938   .25   .77   1.56   86
(.39 )   13.22   18.46     3,359   .25   .98   1.26   31
(.09 )   11.53   5.40     633   .25   1.79   .18   104
             
(.05 )   7.00   (5.31 )   37,683   .50   1.14   .83   6
(.66 )   7.45   (40.33 )   26,547   .50   1.02   4.49   86
(.36 )   13.22   18.08     29,200   .50   1.23   1.39   31
(.19 )   11.54   15.22     8,249   .50   2.33   1.42   104
(.08 )   10.19   2.69     1,452   .50   5.62   .75   1
             
(.06 )   7.01   (5.14 )   12,107   —   .64   1.08   6
(.72 )   7.46   (40.02 )   10,494   —   .52   3.66   86
(.42 )   13.24   18.70     7,923   —   .73   2.32   31
(.23 )   11.55   15.70     2,513   —   1.85   2.13   104
(.11 )   10.20   3.15     1,031   —   5.12   1.16   1

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   73

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		      $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		      $
Return of
Capital		  

2035 Strategy Fund

 

               
Class R1                     

April 30, 2009*

    6.86    .06      (.39 )    (.33 )    (.04 )    —      —  

October 31, 2008(15)

    10.00    .07      (3.11 )    (3.04 )    (.07 )    —      (.03 )
Class R2                     

April 30, 2009*

    6.87    .05      (.40 )    (.35 )    (.04 )    —      —  

October 31, 2008(15)

    10.00    .08      (3.13 )    (3.05 )    (.06 )    —      (.02 )
Class R3                     

April 30, 2009*

    6.87    .05      (.41 )    (.36 )    (.03 )    —      —  

October 31, 2008(15)

    10.00    .06      (3.12 )    (3.06 )    (.05 )    —      (.02 )

2040 Strategy Fund

 

               
Class A                     

April 30, 2009*

    7.49    .18      (.56 )    (.38 )    (.06 )    —      —  

October 31, 2008

    13.44    .40      (5.66 )    (5.26 )    (.25 )    (.18 )    (.26 )

October 31, 2007

    11.71    .31      1.86      2.17      (.31 )    (.13 )    —  

October 31, 2006

    10.23    .19      1.48      1.67      (.19 )    —      —  

October 31, 2005(2)

    10.36    .02      (.12 )    (.10 )    (.03 )    —      —  
Class E                     

April 30, 2009*

    7.50    .18      (.56 )    (.38 )    (.06 )    —      —  

October 31, 2008

    13.46    .28      (5.55 )    (5.27 )    (.25 )    (.18 )    (.26 )

October 31, 2007

    11.72    .24      1.94      2.18      (.31 )    (.13 )    —  

October 31, 2006

    10.24    .17      1.50      1.67      (.19 )    —      —  

October 31, 2005(1)

    10.00    .08      .24      .32      (.08 )    —      —  
Class R1                     

April 30, 2009*

    7.50    .19      (.57 )    (.38 )    (.06 )    —      —  

October 31, 2008

    13.46    .19      (5.43 )    (5.24 )    (.26 )    (.18 )    (.28 )

October 31, 2007

    11.73    .12      2.08      2.20      (.34 )    (.13 )    —  

October 31, 2006(9)

    10.89    .06      .90      .96      (.12 )    —      —  
Class R2                     

April 30, 2009*

    7.49    .18      (.56 )    (.38 )    (.06 )    —      —  

October 31, 2008

    13.46    (.04 )    (5.23 )    (5.27 )    (.25 )    (.18 )    (.27 )

October 31, 2007

    11.71    .28      1.90      2.18      (.30 )    (.13 )    —  

October 31, 2006(3)

    11.14    .09      .59      .68      (.11 )    —      —  
Class R3(5)                     

April 30, 2009*

    7.48    .17      (.56 )    (.39 )    (.05 )    —      —  

October 31, 2008

    13.43    .33      (5.61 )    (5.28 )    (.24 )    (.18 )    (.25 )

October 31, 2007

    11.71    .12      2.02      2.14      (.29 )    (.13 )    —  

October 31, 2006

    10.24    .14      1.50      1.64      (.17 )    —      —  

October 31, 2005(1)

    10.00    .06      .24      .30      (.06 )    —      —  
Class S                     

April 30, 2009*

    7.50    .19      (.57 )    (.38 )    (.06 )    —      —  

October 31, 2008

    13.46    .21      (5.45 )    (5.24 )    (.26 )    (.18 )    (.28 )

October 31, 2007

    11.73    .26      1.94      2.20      (.34 )    (.13 )    —  

October 31, 2006

    10.24    .22      1.49      1.71      (.22 )    —      —  

October 31, 2005(1)

    10.00    .10      .24      .34      (.10 )    —      —  

 

See accompanying notes which are an integral part of the financial statements.

 

74   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g) 		  %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g) 		    %
Portfolio
Turnover Rate(c)
             
             
(.04 )    6.49   (4.80 )    529   —   5.12   1.06      16
(.10 )    6.86   (30.73 )    428   —   6.44   .70      90
             
(.04 )    6.48   (4.86 )    705   .25   4.96   .79      16
(.08 )    6.87   (30.84 )    73   .25   8.66   .86      90
             
(.03 )    6.48   (4.91 )    1,444   .50   4.95   .79      16
(.07 )    6.87   (30.93 )    124   .50   8.56   .69      90
             
             
(.06 )    7.05   (5.08 )    724   .25   .97   2.75      4
(.69 )    7.49   (40.84 )    944   .25   .84   3.64      96
(.44 )    13.44   19.04      2,363   .25   1.14   2.49      22
(.19 )    11.71   16.49      1,886   .25   2.64   1.72      88
(.03 )    10.23   (.95 )    991   .25   4.81   .21      2
             
(.06 )    7.06   (5.06 )    5,867   .25   .96   2.75      4
(.69 )    7.50   (40.85 )    4,523   .25   .85   2.59      96
(.44 )    13.46   19.12      6,353   .25   1.14   1.96      22
(.19 )    11.72   16.48      3,096   .25   2.30   1.55      88
(.08 )    10.24   3.20      1,032   .25   5.26   .78      2
             
(.06 )    7.06   (4.97 )    6,662   —   .71   2.87      4
(.72 )    7.50   (40.69 )    4,824   —   .60   1.80      96
(.47 )    13.46   19.31      2,935   —   .89   .99      22
(.12 )    11.73   8.47      93   —   2.27   .56      88
             
(.06 )    7.05   (5.06 )    22,938   .25   .95   2.80      4
(.70 )    7.49   (40.91 )    9,936   .25   .85   (.42 )    96
(.43 )    13.46   19.11      2,061   .25   1.14   2.28      22
(.11 )    11.71   6.11      1,256   .25   2.16   .86      88
             
(.05 )    7.04   (5.16 )    28,786   .50   1.21   2.61      4
(.67 )    7.48   (41.02 )    22,913   .50   1.10   3.09      96
(.42 )    13.43   18.75      29,700   .50   1.39   .96      22
(.17 )    11.71   16.11      5,506   .50   2.48   1.25      88
(.06 )    10.24   3.03      1,701   .50   5.52   .59      2
             
(.06 )    7.06   (4.97 )    8,936   —   .71   2.87      4
(.72 )    7.50   (40.69 )    7,249   —   .61   2.00      96
(.47 )    13.46   19.30      4,410   —   .89   2.07      22
(.22 )    11.73   16.84      1,666   —   1.97   2.00      88
(.10 )    10.24   3.39      1,035   —   5.02   .99      2

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   75

Russell Investment Company

LifePoints® Funds

Financial Highlights, continued — For the Periods Ended

For a Share Outstanding Throughout Each Period.

 

      $
Net Asset Value,
Beginning of
Period		    $
Net
Investment
Income (Loss)(a)(b)		    $
Net Realized
and Unrealized
Gain (Loss)		      $
Total Income
(Loss) from
Operations		      $
Distributions
from Net
Investment Income		      $
Distributions
from Net
Realized Gain		    $
Return of
Capital		  

2045 Strategy Fund

               
Class R1                     

April 30, 2009*

    6.87    .06    (.41 )    (.35 )    (.04 )    —    —  

October 31, 2008(15)

    10.00    .07    (3.10 )    (3.03 )    (.06 )    —    (.04 )
Class R2                     

April 30, 2009*

    6.87    .05    (.40 )    (.35 )    (.04 )    —    —  

October 31, 2008(15)

    10.00    .07    (3.11 )    (3.04 )    (.06 )    —    (.03 )
Class R3                     

April 30, 2009*

    6.87    .05    (.40 )    (.35 )    (.04 )    —    —  

October 31, 2008(15)

    10.00    .06    (3.12 )    (3.06 )    (.04 )    —    (.03 )

2050 Strategy Fund

               
Class R1                     

April 30, 2009*

    6.98    .07    (.42 )    (.35 )    (.06 )    —    —  

October 31, 2008(15)

    10.00    .09    (2.99 )    (2.90 )    (.08 )    —    (.04 )
Class R2                     

April 30, 2009*

    6.98    .06    (.41 )    (.35 )    (.06 )    —    —  

October 31, 2008(15)

    10.00    .07    (2.98 )    (2.91 )    (.08 )    —    (.03 )
Class R3                     

April 30, 2009*

    6.99    .03    (.40 )    (.37 )    (.05 )    —    —  

October 31, 2008(15)

    10.00    .06    (2.98 )    (2.92 )    (.06 )    —    (.03 )

In Retirement Fund

               
Class R1                     

April 30, 2009*

    8.12    .17    (.14 )    .03      (.13 )    —    —  

October 31, 2008(15)

    10.00    .25    (1.87 )    (1.62 )    (.25 )    —    (.01 )
Class R2                     

April 30, 2009*

    8.12    .17    (.14 )    .03      (.13 )    —    —  

October 31, 2008(15)

    10.00    .23    (1.86 )    (1.63 )    (.24 )    —    (.01 )
Class R3                     

April 30, 2009*

    8.12    .14    (.13 )    .01      (.12 )    —    —  

October 31, 2008(15)

    10.00    .22    (1.87 )    (1.65 )    (.22 )    —    (.01 )

 

See accompanying notes which are an integral part of the financial statements.

 

76   Financial Highlights

 

$
Total
Distributions		     $
Net Asset Value,
End of
Period		   %
Total
Return(c)(e)		     $
Net Assets,
End of Period
(000)		   %
Ratio of Expenses
to Average
Net Assets,
Net(d)(f)(g)		   %
Ratio of Expenses
to Average
Net Assets,
Gross(d)(f)		   %
Ratio of Net
Investment Income
to Average
Net Assets(c)(g)		   %
Portfolio
Turnover Rate(c)
             
             
(.04 )    6.48   (4.86 )    827   —   4.61   1.05   11
(.10 )    6.87   (30.60 )    660   —   6.27   .72   34
             
(.04 )    6.48   (4.92 )    961   .25   5.20   .78   11
(.09 )    6.87   (30.71 )    70   .25   8.21   .74   34
             
(.04 )    6.48   (4.98 )    400   .50   5.53   .80   11
(.07 )    6.87   (30.82 )    72   .50   8.43   .60   34
             
             
(.06 )    6.57   (4.58 )    101   —   5.04   1.08   12
(.12 )    6.98   (29.54 )    71   —   21.57   .90   6
             
(.06 )    6.57   (4.63 )    5,776   .25   1.95   1.06   12
(.11 )    6.98   (29.65 )    71   .25   21.83   .76   6
             
(.05 )    6.57   (4.74 )    980   .50   2.81   .55   12
(.09 )    6.99   (29.77 )    71   .50   22.08   .61   6
             
             
(.13 )    8.02   .85      122   —   5.34   2.21   19
(.26 )    8.12   (16.82 )    84   —   20.48   2.58   11
             
(.13 )    8.02   .78      2,078   .25   3.21   2.15   19
(.25 )    8.12   (16.95 )    83   .25   20.73   2.43   11
             
(.12 )    8.01   .59      511   .50   4.95   1.88   19
(.23 )    8.12   (17.08 )    85   .50   20.94   2.28   11

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights   77

Russell Investment Company

LifePoints® Funds

Notes to Financial Highlights

 

 

 

* For the period ended April 30, 2009 (Unaudited).
** Less than .5%.
(1) For the period January 1, 2005 (commencement of operations) to October 31, 2005.
(2) For the period September 1, 2005 (commencement of operations) to October 31, 2005.
(3) For the period March 17, 2006 (commencement of operations) to October 31, 2006.
(4) For the period March 29, 2006 (commencement of operations) to October 31, 2006.
(5) Class D Shares were redesignated Class R3 Shares on March 1, 2006.
(6) For the period April 3, 2006 (commencement of operations) to October 31, 2006.
(7) For the period May 19, 2006 (commencement of operations) to October 31, 2006.
(8) For the period June 6, 2006 (commencement of operations) to October 31, 2006.
(9) For the period June 7, 2006 (commencement of operations) to October 31, 2006.
(10) For the period September 8, 2006 (commencement of operations) to October 31, 2006.
(11) For the period October 3, 2006 (commencement of operations) to October 31, 2006.
(12) For the period November 10, 2006 (commencement of operations) to October 31, 2007.
(13) For the period December 29, 2006 (commencement of operations) to October 31, 2007.
(14) For the period December 31, 2007 (commencement of operations) to October 31, 2008.
(15) For the period March 31, 2008 (commencement of operations) to October 31, 2008.
(a) Average month-end shares outstanding were used for this calculation.
(b) Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the Underlying Funds in which the Fund invests.
(c) Periods less than one year are not annualized.
(d) The ratios for periods less than one year are annualized.
(e) Total return for Class A does not reflect a front end sales charge.
(f) The calculation includes only those expenses charged directly to the Fund and does not include expenses charged to the Underlying Funds in which the Fund invest.
(g) May reflect amounts waived and/or reimbursed by RIMCo and/or RFSC.

 

See accompanying notes which are an integral part of the financial statements.

 

78   Notes to Financial Highlights

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements — April 30, 2009 (Unaudited)

 

 

 

1.   Organization

Russell Investment Company (the “Investment Company” or “RIC”) is a series investment company with 38 different investment portfolios referred to as Funds. These financial statements report on 15 of these Funds (each a “Fund” and collectively the “Funds”). The Investment Company is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. It is organized and operates as a Massachusetts business trust under a second amended and restated master trust agreement dated October 1, 2008. The Investment Company’s master trust agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.

Russell Investment Company (“RIMCo”) is the Fund’s adviser and Russell Fund Services Company (“RFSC”), a wholly-owned subsidiary of RIMCo, is the Fund’s administrator and transfer agent.

Target Portfolio Funds

The Funds seek to achieve their objective by investing in the Class Y Shares of the Investment Company’s Funds (the “Underlying Funds”) as set forth in the table below. RIMCo may modify the target asset allocation for any Fund and/or the Underlying Funds in which the Funds invest. From time to time, each Fund may adjust its investments within set limits based on RIMCo’s outlook for the economy, financial markets generally and relative market valuation of the asset classes represented by each Underlying Fund. Additionally, each Fund may deviate from set limits when, in RIMCo’s opinion, it is necessary to do so to pursue the Fund’s investment objective. In the future, the Funds may also invest in other funds which are not currently Underlying Funds.

 

    Asset Allocation Targets as of March 1, 2009  
Asset Class/Underlying Funds   Conservative
Strategy Fund		     Moderate
Strategy Fund		     Balanced
Strategy Fund		     Growth
Strategy Fund		     Equity Growth
Strategy Fund		  

Bonds

          

Russell Short Duration Bond Fund

   20 %   — %   — %   — %   — %

Russell Strategic Bond Fund

   60     60     40     20     —  

Domestic Equities

          

Russell Real Estate Securities Fund

   3     3     5     6     7  

Russell U.S. Core Equity Fund

   6     10     15     21     26  

Russell U.S. Quantitative Equity Fund

   5     10     15     20     25  

Russell U.S. Small & Mid Cap Fund

   —     3     4     6     7  

International Equities

          

Russell Emerging Markets Fund

   —     2     3     4     5  

Russell Global Equity Fund

   2     3     4     6     7  

Russell International Developed Markets Fund

   4     9     14     17     23  
                             
  100 %   100 %   100 %   100 %   100 %
                             

Target Date Funds

Each of the Funds listed in the table below seeks to achieve its objective by investing in the Class Y Shares of Underlying Funds. The allocation of these Funds’ assets to the Underlying Funds in which they invest will become more conservative over time. Currently, RIMCo will manage each Fund according to its target asset allocation strategy and will not trade actively among Underlying Funds or attempt to capture short-term market opportunities. However, from time to time, RIMCo expects to modify the target asset allocation for the Funds and/or the Underlying Funds in which the Funds invest. In addition, the Funds may in the future invest in other funds which are not currently Underlying Funds.

 

    Asset Allocation Targets as of March 1, 2009  
Assets Class/Underlying Funds   2010
Strategy Fund		     2015
Strategy Fund		     2020
Strategy Fund		     2025
Strategy Fund		     2030
Strategy Fund		  

Bonds

          

Russell Short Duration Bond Fund

   6 %   — %   — %   — %   — %

Russell Strategic Bond Fund

   60     56     45     30     10  

Domestic Equities

          

Russell Real Estate Securities Fund

   3     4     4     5     6  

Russell U.S. Core Equity Fund

   9     11     14     18     23  

Russell U.S. Quantitative Equity Fund

   9     11     13     18     23  

Russell U.S. Small & Mid Cap Fund

   2     3     4     5     6  

International Equities

          

Russell Emerging Markets Fund

   1     2     3     4     5  

Russell Global Equity Fund

   3     3     4     5     7  

Russell International Developed Markets Fund

   7     10     13     15     20  
                             
  100 %   100 %   100 %   100 %   100 %
                             

 

Notes to Financial Statements   79

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

    Asset Allocation Targets as of March 1, 2009  
Asset Class/Underlying Funds   2035
Strategy Fund		     2040
Strategy Fund		     2045
Strategy Fund		     2050
Strategy Fund		     In Retirement
Fund		  

Bonds

          

Russell Short Duration Bond Fund

   — %   — %   — %   — %   8 %

Russell Strategic Bond Fund

   10     10     10     10     60  

Domestic Equities

          

Russell Real Estate Securities Fund

   6     6     6     6     3  

Russell U.S. Core Equity Fund

   23     23     23     23     8  

Russell U.S. Quantitative Equity Fund

   23     23     23     23     8  

Russell U.S. Small & Mid Cap Fund

   6     6     6     6     2  

International Equities

          

Russell Emerging Markets Fund

   5     5     5     5     1  

Russell Global Equity Fund

   7     7     7     7     3  

Russell International Developed Markets Fund

   20     20     20     20     7  
                             
  100 %   100 %   100 %   100 %   100 %
                             

 

2.   Significant Accounting Policies

The Funds’ financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following is a summary of the significant accounting policies consistently followed by each Fund in the preparation of its financial statements.

Security Valuation

The Funds value their portfolio securities, the shares of the Underlying Funds, at the current net asset value per share of each Underlying Fund.

The Underlying Funds value portfolio securities according to Board-approved securities valuation procedures, and pricing services which include market value procedures, fair value procedures and a description of the pricing services used by the Fund. Money market fund securities are priced using the amortized cost method of valuation, as are debt obligation securities maturing within 60 days at the time of purchase, unless the Board determines that amortized cost does not represent market value of short-term debt obligations. The Board has delegated the responsibility for administration of the securities valuation procedures to RFSC.

Ordinarily, the Underlying Funds value each portfolio security based on market quotations provided by pricing services or alternative pricing services or dealers (when permitted by the market value procedures). Generally, Underlying Fund securities are valued at the close of the market on which they are traded as follows:

 

  •  

U.S. listed equities, equity and fixed income options and rights/warrants: Last sale price; last bid price if no last sale price.

 

  •  

U.S. over-the-counter equities: Official closing price; last bid price if no closing price.

 

  •  

Listed ADRs/GDRs: Last sale price; last bid price if no last sale price.

 

  •  

Municipal bonds, U.S. bonds, Eurobonds/foreign bonds: Evaluated bid price; broker quote if no evaluated bid price.

 

  •  

Futures: Settlement price.

 

  •  

Bank loans and forwards: Mean between bid and asking price.

 

  •  

Investments in other mutual funds are valued at their net asset value per share, calculated at 4 p.m. Eastern time or as of the close of the New York Stock Exchange, whichever is earlier.

 

  •  

The value of swap agreements is equal to the Funds’ obligation (or rights) under swap contracts which will generally be equal to the net amounts to be paid or received under the contracts based upon the relative values of the positions held by each party to the contracts.

 

  •  

Equity securities traded on a national foreign securities exchange or a foreign over the counter market are valued on the basis of the official closing price, or lacking the official closing price, at the last sale price of the primary exchange on which the security is traded.

 

80   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

If market quotations are not readily available for a security or if subsequent events suggest that a market quotation is not reliable, the Underlying Funds will use the security’s fair value, as determined in accordance with the fair value procedures. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market on which they are traded, but rather may be priced by another method that the Board believes reflects fair value. The fair value procedures may involve subjective judgments as to the fair value of securities. The use of fair value pricing by an Underlying Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using normal pricing methods. Fair value pricing could also cause discrepancies between the daily movement of the value of Underlying Fund shares and daily movement of the benchmark index if the index is valued using another pricing method.

This policy is intended to assure that the Underlying Funds’ net asset values fairly reflect security values as of the time of pricing. Events or circumstances affecting the values of Underlying Fund securities that occur between the closing of the principal markets on which they trade and the time the net asset value of Underlying Fund shares is determined may be reflected in the calculation of net asset values for each applicable Underlying Fund (and each Fund which invests in such Underlying Fund) when the Underlying Funds deem that the particular event or circumstance would materially affect such Underlying Fund’s net asset value. Underlying Funds that invest primarily in frequently traded exchange-listed securities will use fair value pricing in limited circumstances since reliable market quotations will often be readily available. Underlying Funds that invest in foreign securities are likely to use fair value pricing more often since significant events may occur between the close of foreign markets and the time of pricing which would trigger fair value pricing of the foreign securities. Underlying Funds that invest in low-rated debt securities are also likely to use fair value pricing more often since the markets in which such securities are traded are generally thinner, more limited and less active than those for higher rated securities. Examples of events that could trigger fair value pricing of one or more securities are: a material market movement of the U.S. securities market (defined in the fair value procedures as the movement by a single major U.S. index greater than a certain percentage) or other significant event; foreign market holidays if on a daily basis, Fund exposure exceeds 20% in aggregate (all closed markets combined); a company development; a natural disaster; or an armed conflict.

Because foreign securities can trade on non-business days, the net asset value of a Fund’s portfolio that includes an Underlying Fund which invests in foreign securities may change on days when shareholders will not be able to purchase or redeem fund shares.

The Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective November 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. SFAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

  •  

Level 1 — quoted prices in active markets for identical investments

 

  •  

Level 2 — other significant observable inputs (including 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)

 

Notes to Financial Statements   81

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Inputs used in valuing the Funds’ investments for the period ended April 30, 2009 were as follows:

 

     Conservative
Strategy Fund		    Moderate Strategy
Fund		    Balanced Strategy
Fund		    Growth Strategy
Fund		    Equity Growth
Strategy Fund		    2010 Strategy
Fund
      Investments in
Securities		    Investments in
Securities		    Investments in
Securities		    Investments in
Securities		    Investments in
Securities		    Investments in
Securities
                 

Level 1

    $ 452,043,376    $ 829,213,547    $ 3,565,654,981    $ 2,450,031,185    $ 1,147,968,765    $ 55,200,779

Level 2

      —      —      —      —      —      —

Level 3

      —      —      —      —      —      —
                                         
   $ 452,043,376    $ 829,213,547    $ 3,565,654,981    $ 2,450,031,185    $ 1,147,968,765    $ 55,200,779
                                         
     2015 Strategy
Fund		    2020 Strategy
Fund		    2025 Strategy
Fund		    2030 Strategy
Fund		    2035 Strategy
Fund		    2040 Strategy
Fund
      Investments in
Securities		    Investments in
Securities		    Investments in
Securities		    Investments in
Securities		    Investments in
Securities		    Investments in
Securities

Level 1

    $ 5,142,164    $ 131,265,445    $ 3,977,129    $ 100,856,067    $ 2,648,040    $ 73,905,726

Level 2

      —      —      —      —      —      —

Level 3

      —      —      —      —      —      —
                                         
   $ 5,142,164    $ 131,265,445    $ 3,977,129    $ 100,856,067    $ 2,648,040    $ 73,905,726
                                         
     2045 Strategy
Fund		    2050 Strategy
Fund		    In Retirement
Fund		               
      Investments in
Securities		    Investments in
Securities		    Investments in
Securities		               

Level 1

    $ 2,157,969    $ 6,826,584    $ 2,679,964         

Level 2

      —      —      —         

Level 3

      —      —      —         
                             
   $ 2,157,969    $ 6,826,584    $ 2,679,964         
                             

As of April 30, 2009, there were no Level 3 securities held by the Funds.

Investment Transactions

Investment transactions are recorded on a trade date basis. Realized gains and losses from securities transactions, if any, are recorded on the basis of specific identified cost.

Investment Income

Distributions of income and capital gains from the Underlying Funds are recorded on the ex-dividend date.

Federal Income Taxes

Since the Investment Company is a Massachusetts business trust, each Fund is a separate corporate taxpayer and determines its net investment income and capital gains (or losses) and the amounts to be distributed to each Fund’s shareholders without regard to the income and capital gains (or losses) of the other Funds.

It is each Fund’s intention to qualify as a regulated investment company and distribute all of its taxable income and capital gains. Therefore, no federal income tax provision was required for the Funds.

In accordance with provisions set forth in the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement 109” (“FIN 48”), adopted by the Funds on November 1, 2007, management has reviewed the Funds’ tax positions for all open tax years, and concluded that adoption had no effect on the Funds’ financial position or results of operations. At April 30, 2009, the Funds have recorded no liabilities for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.

Each Fund files a U.S. tax return. While the statute of limitations remains open to examine the Funds’ U.S. tax returns filed for the fiscal years ending October 31, 2005 through October 31, 2007, no examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

82   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Dividends and Distributions to Shareholders

Income, dividends and capital gain distributions, if any, are recorded on the ex-dividend date. Income dividends are generally declared and paid quarterly. Capital gain distributions are generally declared and paid annually. An additional distribution may be paid by the Funds to avoid imposition of federal income and excise tax on any remaining undistributed capital gains and net investment income.

The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax regulations which may differ from GAAP. As a result, net investment income and net realized gain (or loss) from investment transactions for a reporting period may differ significantly from distributions during such period. The differences between tax regulations and GAAP relate primarily to investments in the Underlying Funds sold at a loss, wash sale deferrals, and capital loss carryforwards. Accordingly, the Funds may periodically make reclassifications among certain of their capital accounts without impacting their net asset values.

Expenses

Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include those expenses incurred by the Underlying Funds. Because the Underlying Funds have varied expense and fee levels and the Funds may own different proportions of the Underlying Funds at different times, the amount of the fees and expenses incurred indirectly by the Funds will vary.

Class Allocation

Each of the Funds presented herein offer certain of the following classes of shares: Class A, Class C, Class E, Class R1, Class R2, Class R3 and Class S. All share classes have identical voting, dividend, liquidation and other rights and the same terms and conditions. The separate classes of shares differ principally in the applicable sales charges, distribution fees and shareholder servicing fees. Shareholders of each class bear certain expenses that pertain to that particular class. Realized and unrealized gains (losses), net investment income, and expenses with the exception of class level expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

Guarantees

In the normal course of business the Funds enter into contracts that contain a variety of representations which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds expect the risk of loss to be remote.

 

3.   Investment Transactions

Securities

During the period ended April 30, 2009, purchases and sales of the Underlying Funds (excluding short-term investments) were as follows:

 

Funds    Purchases    Sales
     

Conservative Strategy Fund

    $ 60,842,797    $ 34,847,058

Moderate Strategy Fund

      94,034,989      118,257,351

Balanced Strategy Fund

      318,000,334      576,728,723

Growth Strategy Fund

      139,945,672      268,999,244

Equity Growth Strategy Fund

      38,520,260      110,566,750

2010 Strategy Fund

      19,540,881      5,508,498

2015 Strategy Fund

      4,594,512      405,866

2020 Strategy Fund

      51,420,719      11,633,235

2025 Strategy Fund

      242,637      261,828

2030 Strategy Fund

      35,748,303      4,486,757

2035 Strategy Fund

      256,078      216,019

2040 Strategy Fund

      27,724,095      2,428,467

2045 Strategy Fund

      1,440,567      136,031

2050 Strategy Fund

      6,828,508      462,130

In Retirement Fund

      2,725,780      354,603

 

Notes to Financial Statements   83

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

4.   Related Party Transactions, Fees and Expenses

Adviser, Administrator and Transfer and Dividend Disbursing Agent

RIMCo advises the Funds and RFSC is the Funds’ administrator. RFSC is a wholly-owned subsidiary of RIMCo. RIMCo is a wholly-owned subsidiary of Frank Russell Company (a subsidiary of The Northwestern Mutual Life Insurance Company). Frank Russell Company provides ongoing money manager research and trade placement services to RIC and RIMCo.

The advisory fee of 0.20% and administrative fee of 0.05% are based upon the average daily net assets of the Funds and are payable monthly totaling $8,488,256 and $2,122,064 respectively, for the period ended April 30, 2009.

RFSC serves as the Transfer and Dividend Disbursing Agent for the Investment Company. For this service, RFSC is paid a fee for transfer agency and dividend disbursing services provided to the Funds. RFSC retains a portion of this fee for its services provided to the Funds and pays the balance to unaffiliated agents who assist in providing these services. Total fees for the Funds presented herein for the period ended April 30, 2009, were $7,614,016.

Effective October 1, 2008 transfer agent fees were charged at the class level. Prior to this date, transfer agent fees were charged at the Fund level.

Waivers and Reimbursements

Target Portfolio Funds

For each Fund individually, RIMCo has contractually agreed, until February 28, 2010, to waive up to the full amount of its 0.20% advisory fee and then reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses exceed 0.09% of the average daily net assets of the Fund on an annual basis.

Direct Fund-level operating expenses do not include transfer agency fees, Rule 12b-1 distribution fees, shareholder servicing fees, extraordinary expenses or the expenses of other investment companies in which the Funds invest which are borne indirectly by the Funds. These waivers and reimbursements may not be terminated during the relevant period except at the Board’s discretion.

Target Date Funds

RIMCo and RFSC, have agreed to waive and/or reimburse the Target Date Funds for all operating expenses other than Rule 12b-1 distribution fees, shareholder services fees, the expenses of other investment companies in which the Target Date Funds invest which are borne indirectly by the Target Date Funds or extraordinary expenses until February 28, 2010. These waivers and reimbursements may not be terminated during the relevant period except at the Board’s discretion.

As of April 30, 2009, RIMCo and RFSC waived/reimbursed the following expenses:

 

      RIMCo
Waiver		    RFSC
Waiver		    RIMCo/RFSC
Reimbursement		    Total

Conservative Strategy Fund

    $ 420,100    $ —    $ 142,382    $ 562,482

Moderate Strategy Fund

      805,773      —      68,969      874,742

Balanced Strategy Fund

      3,415,957      —      —      3,415,957

Growth Strategy Fund

      2,349,168      —      —      2,349,168

Equity Growth Strategy Fund

      1,103,944      —      7,081      1,111,025

2010 Strategy Fund

      58,015      41,807      77,752      177,574

2015 Strategy Fund

      2,867      2,092      28,541      33,500

2020 Strategy Fund

      130,836      94,287      88,027      313,150

2025 Strategy Fund

      2,235      1,630      27,919      31,784

2030 Strategy Fund

      98,594      71,017      83,282      252,893

2035 Strategy Fund

      1,548      1,122      26,646      29,316

2040 Strategy Fund

      71,569      51,578      79,931      203,078

2045 Strategy Fund

      1,543      1,115      26,795      29,453

2050 Strategy Fund

      4,850      3,534      27,045      35,429

In Retirement Fund

      2,409      1,747      27,017      31,173

Distributor and Shareholder Servicing

On June 2, 2008, Russell Fund Distributors, Inc., a wholly owned subsidiary of RIMCo, changed its name to Russell Financial Services, Inc. (the “Distributor”). The Distributor serves as a distributor for RIC, pursuant to the Distribution Agreement with the Investment Company.

 

84   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the “Plan”) under the 1940 Act. Under this Plan, the Investment Company is authorized to make payments to the Distributor or any Selling Agents, as defined in the Plan for sales support services provided, and related expenses incurred which are primarily intended to result in the sale of the Class A, Class C and Class R3 shares subject to the Distribution Plan. The 12b-1 distribution payments shall not exceed 0.25% of the average daily net assets of a Fund’s Class A or Class R3 shares or 0.75% of the average daily net assets of a Fund’s Class C shares on an annual basis.

In addition, the Investment Company has adopted a Shareholder Services Plan (the “Services Plan”) under which the Funds may make payments to the Distributor or any Servicing Agent for any activities or expenses primarily intended to assist, support or service the Servicing Agents’ clients who beneficially own Class C, Class E, Class R2 and Class R3 shares of the Funds. The shareholder servicing payments shall not exceed 0.25% of the average daily net assets of a Fund’s Class C, Class E, Class R2 and Class R3 shares on an annual basis.

Pursuant to the rules of the Financial Industry Regulatory Authority (“FINRA”), the aggregate initial sales charges, deferred sales charges and asset-based sales charges on Class A, Class C, Class E, Class R2 and Class R3 Shares of the Funds may not exceed 7.25%, 6.25%, 6.25%, 6.25% and 6.25%, respectively, of total gross sales, subject to certain exclusions. These limitations are imposed at the class level on each class of shares of each Fund rather than on a per shareholder basis. Therefore, long-term shareholders of the Class A, Class C, Class E, Class R2 and Class R3 Shares may pay more than the economic equivalent of the maximum sales charges permitted by FINRA.

For the period ended April 30, 2009, the Distributor retained the following amounts in sales charges:

 

Contingent Deferred
Sales Charges		    Class A
Shares		  
  

Conservative Strategy

    $ —   

Moderate Strategy

      5,703   

Balanced Strategy

      17,518   

Growth Strategy

      (58 ) 

Equity Growth Strategy

      5,476   

2010 Strategy

      —   

2020 Strategy

      —   

2030 Strategy

      —   

2040 Strategy

      —   

For the period ended April 30, 2009, the sales commissions paid to the selling agents for the sale of Class A shares are as follows:

 

Funds    Aggregate Front-End
Sales Charges
on Class A Shares		   

Class A Front-End

Sales Charges

Retained by

Distributor

     
     
Conservative Strategy    $ 177,446    $ 36,539
Moderate Strategy      213,504      39,428
Balanced Strategy      1,187,781      206,760
Growth Strategy      1,336,212      216,787
Equity Growth Strategy      331,704      49,368
2010 Strategy      314      51
2020 Strategy      95      13
2030 Strategy      397      53
2040 Strategy      1,232      160

Accrued Fees Payable to Affiliates

Accrued fees payable to affiliates for the period ended April 30, 2009 were as follows:

 

    

Conservative

Strategy Fund

    Moderate Strategy
Fund		    Balanced Strategy
Fund		    Growth Strategy
Fund		    Equity Growth
Strategy Fund		    2010 Strategy
Fund
                
                

Advisory fees

   $ —    $ —    $ 17,515    $ 134,501    $ 16,604    $ —

Administration fees

     18,205      33,114      141,744      96,974      45,072      —

Distribution fees

     102,672      189,767      921,229      616,710      284,747      4,124

Shareholder servicing fees

     65,024      115,814      449,279      304,681      149,722      7,701

Transfer agent fees

     65,372      119,327      510,930      349,545      162,478      —

Trustee fees

     554      931      3,939      2,751      1,265      75
                                        
  $ 251,827    $ 458,953    $ 2,044,636    $ 1,505,162    $ 659,888    $ 11,900
                                        

 

Notes to Financial Statements   85

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

      2015 Strategy
Fund		    2020 Strategy
Fund		    2025 Strategy
Fund		    2030 Strategy
Fund		    2035 Strategy
Fund		    2040 Strategy
Fund
                 

Advisory fees

    $ —    $ —    $ —    $ —    $ —    $ —

Administration fees

      —      —      —      —      —      —

Distribution fees

      716      10,114      498      7,470      269      5,629

Shareholder servicing fees

      916      18,616      714      14,576      399      11,073

Transfer agent fees

      —      —      —      —      —      —

Trustee fees

      10      181      8      128      5      97
                                         
   $ 1,642    $ 28,911    $ 1,220    $ 22,174    $ 673    $ 16,799
                                         
      2045 Strategy
Fund		    2050 Strategy
Fund		    In Retirement
Fund		                  

Advisory fees

    $ —    $ —    $ —         

Administration fees

      —      —      —         

Distribution fees

      76      140      95         

Shareholder servicing fees

      251      1,275      528         

Transfer agent fees

      —      —      —         

Trustee fees

      3      15      7         
                             
   $ 330    $ 1,430    $ 630         
                             

Board of Trustees

The Russell Fund Complex consists of RIC, which has 38 Funds, and Russell Investment Funds (“RIF”), which has nine Funds. Each of the Trustees is a Trustee of both RIC and RIF. During the period, the Russell Fund Complex paid each of its independent Trustees a retainer of $60,000 per year, $6,500 for each regular quarterly meeting attended in person, $2,500 for each special meeting attended in person, and $2,500 for each Audit Committee meeting, Nominating and Governance Committee meeting, Investment Committee meeting or any other committee meeting established and approved by the Board that is attended in person. Each Trustee receives a $1,000 fee for attending quarterly and special meetings and a $500 fee for attending committee meetings by phone instead of receiving the full fee had the member attended in person. Trustees’ out of pocket expenses are also paid by the Russell Fund Complex. The Audit Committee Chair and Investment Committee Chair are each paid a fee of $12,000 per year and the Nominating and Governance Committee chair is paid a fee of $6,000 per year. The chairman of the Board receives additional annual compensation of $52,000.

Transactions with Affiliated Companies

An affiliated company is a company in which a Fund has ownership of at least 5% of the voting securities or under common control. Transactions during the period ended April 30, 2009 with Underlying Funds which are, or were, an affiliated company are as follows:

 

Affiliate    Market Value    Purchases
Cost		    Sales Cost    Realized Gain
(Loss)		     Income
Distributions		    Capital Gains
Distributions
                

Conservative Strategy

                 

Russell U.S. Core Equity Fund

    $ 29,811,052    $ 8,719,965    $ 4,828,764    $ (1,217,324 )   $ 228,907    $ —

Russell U.S. Quantitative Equity Fund

      24,586,840      7,596,071      4,407,522      (1,151,426 )     207,287      —

Russell International Developed Markets Fund

      19,806,801      5,708,085      3,490,331      (1,031,189 )     —      —

Russell Global Equity Fund

      9,915,933      2,836,428      1,640,856      (414,555 )     134,258      —

Russell Strategic Bond Fund

      264,026,312      22,134,006      16,667,714      (1,205,842 )     7,720,136      729,578

Russell Short Duration Bond Fund

      87,261,906      5,089,186      6,485,870      (309,565 )     1,678,800      —

Russell Real Estate Securities Fund

      16,634,532      8,759,055      4,072,670      (1,107,918 )     399,756      —
                                          
   $ 452,043,376    $ 60,842,796    $ 41,593,727    $ (6,437,819 )   $ 10,369,144    $ 729,578
                                          

Moderate Strategy

                 

Russell U.S. Core Equity Fund

    $ 83,627,650    $ 9,328,187    $ 11,302,932    $ (3,531,791 )   $ 729,222    $ —

Russell U.S. Quantitative Equity Fund

      83,357,312      9,806,516      11,202,835      (3,190,881 )     775,629      —

Russell U.S. Small & Mid Cap Fund

      25,735,084      4,128,408      4,552,692      (1,376,981 )     144,210      —

Russell International Developed Markets Fund

      75,553,203      8,047,960      11,852,460      (4,396,444 )     —      —

Russell Global Equity Fund

      25,014,783      2,230,135      3,060,206      (948,261 )     409,041      —

Russell Emerging Markets Fund

      17,199,884      2,878,406      5,697,061      (2,156,260 )     —      816,524

Russell Strategic Bond Fund

      491,508,584      45,909,418      93,679,449      (12,248,188 )     15,112,979      1,447,976

Russell Real Estate Securities Fund

      27,217,048      11,705,958      6,922,733      (1,499,462 )     688,368      —
                                          
   $ 829,213,548    $ 94,034,988    $ 148,270,368    $ (29,348,268 )   $ 17,859,449    $ 2,264,500
                                          

 

86   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Affiliate    Market Value    Purchases
Cost		    Sales Cost    Realized Gain
(Loss)		     Income
Distributions		    Capital Gains
Distributions
                

Balanced Strategy

                 

Russell U.S. Core Equity Fund

    $ 537,120,304    $ 16,411,125    $ 44,530,305    $ (12,974,350 )    $ 4,788,549    $ —

Russell U.S. Quantitative Equity Fund

      533,575,292      23,792,362      62,792,638      (21,706,800 )      5,059,076      —

Russell U.S. Small & Mid Cap Fund

      147,509,723      16,364,701      20,082,454      (5,888,451 )      851,269      —

Russell International Developed Markets Fund

      498,818,399      20,573,901      69,037,403      (29,118,116 )      —      —

Russell Global Equity Fund

      142,459,997      5,122,084      16,516,174      (6,264,145 )      2,417,128      —

Russell Emerging Markets Fund

      111,033,475      15,573,713      39,600,676      (18,372,544 )      —      5,385,166

Russell Strategic Bond Fund

      1,396,833,917      143,749,767      454,110,787      (67,241,656 )      44,522,845      4,290,914

Russell Real Estate Securities Fund

      198,303,874      76,412,681      51,337,386      (16,711,358 )      4,802,510      —
                                          
   $ 3,565,654,981    $ 318,000,334    $ 758,007,823    $ (178,277,420 )    $ 62,441,377    $ 9,676,080
                                          

Growth Strategy

                 

Russell U.S. Core Equity Fund

    $ 518,678,628    $ 10,317,914    $ 40,631,877    $ (15,079,560 )    $ 4,515,506    $ —

Russell U.S. Quantitative Equity Fund

      489,803,709      14,396,965      51,909,632      (19,730,663 )      4,533,229      —

Russell U.S. Small & Mid Cap Fund

      154,748,271      9,869,777      9,132,180      (2,730,283 )      863,656      —

Russell International Developed Markets Fund

      420,468,098      5,851,179      38,573,546      (17,507,833 )      

Russell Global Equity Fund

      147,770,986      2,818,710      13,804,734      (5,508,598 )      2,459,369      —

Russell Emerging Markets Fund

      105,144,692      11,202,423      27,779,326      (13,605,481 )      —      4,924,129

Russell Strategic Bond Fund

      449,363,487      28,864,946      166,246,342      (24,690,023 )      15,211,571      1,478,057

Russell Real Estate Securities Fund

      164,053,314      56,623,758      27,940,322      (6,899,457 )      3,932,176      —
                                          
   $ 2,450,031,185    $ 139,945,672    $ 376,017,959    $ (105,751,898 )    $ 31,515,507    $ 6,402,186
                                          

Equity Growth Strategy

                 

Russell U.S. Core Equity Fund

    $ 295,928,364    $ 3,961,228    $ 43,152,035    $ (19,194,873 )    $ 2,660,418    $ —

Russell U.S. Quantitative Equity Fund

      282,246,620      4,558,576      40,076,359      (15,457,070 )      2,689,576      —

Russell U.S. Small & Mid Cap Fund

      82,402,559      2,691,449      9,914,697      (3,253,330 )      485,757      —

Russell International Developed Markets Fund

      262,630,064      4,385,335      44,427,732      (19,389,022 )      —      —

Russell Global Equity Fund

      79,502,469      1,646,211      14,347,902      (5,752,010 )      1,383,115      —

Russell Emerging Markets Fund

      60,168,158      3,580,535      22,139,247      (9,496,534 )      —      2,942,454

Russell Real Estate Securities Fund

      85,090,531      17,696,926      11,620,146      (2,120,938 )      2,083,381      —
                                          
   $ 1,147,968,765    $ 38,520,260    $ 185,678,118    $ (74,663,777 )    $ 9,302,247    $ 2,942,454
                                          

2010 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 4,907,371    $ 2,030,374    $ 1,080,985    $ (334,054 )    $ 38,092    $ —

Russell U.S. Quantitative Equity Fund

      4,876,895      2,068,013      1,015,443      (281,060 )      41,190      —

Russell U.S. Small & Mid Cap Fund

      1,245,693      562,473      481,870      (172,494 )      6,432      —

Russell International Developed Markets Fund

      4,260,513      1,770,996      1,076,901      (333,904 )      —      —

Russell Global Equity Fund

      1,526,596      598,704      295,476      (88,049 )      20,838      —

Russell Emerging Markets Fund

      843,835      314,595      342,267      (124,011 )      —      34,968

Russell Strategic Bond Fund

      32,437,560      9,276,797      1,998,139      (104,625 )      847,117      78,338

Russell Short Duration Bond Fund

      3,235,888      1,657,340      179,391      (9,258 )      56,243      —

Russell Real Estate Securities Fund

      1,866,426      1,261,589      674,810      (188,028 )      43,587      —
                                          
   $ 55,200,777    $ 19,540,881    $ 7,145,282    $ (1,635,483 )    $ 1,053,499    $ 113,306
                                          

2015 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 568,003    $ 483,105    $ 67,019    $ (21,305 )    $ 1,803    $ —

Russell U.S. Quantitative Equity Fund

      565,554      496,065      58,598      (17,258 )      2,496      —

Russell U.S. Small & Mid Cap Fund

      168,089      141,739      23,601      (8,082 )      131      —

Russell International Developed Markets Fund

      521,908      438,290      45,957      (15,976 )      —      —

Russell Global Equity Fund

      165,310      138,671      15,988      (5,379 )      373      —

Russell Emerging Markets Fund

      117,014      93,156      25,676      (8,621 )      —      770

Russell Strategic Bond Fund

      2,842,798      2,643,979      256,842      (32,141 )      34,480      1,069

Russell Real Estate Securities Fund

      193,489      159,507      34,381      (13,436 )      3,791      —
                                          
   $ 5,142,165    $ 4,594,512    $ 528,062    $ (122,198 )    $ 43,074    $ 1,839
                                          

 

Notes to Financial Statements   87

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Affiliate    Market Value    Purchases
Cost		    Sales Cost    Realized Gain
(Loss)		     Income
Distributions		    Capital Gains
Distributions
                

2020 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 18,031,683    $ 7,174,002    $ 3,200,998    $ (1,205,678 )   $ 134,883    $ —

Russell U.S. Quantitative Equity Fund

      17,963,148      7,359,327      3,082,272      (1,116,156 )     146,405      —

Russell U.S. Small & Mid Cap Fund

      5,165,663      2,189,423      1,001,739      (405,100 )     23,007      —

Russell International Developed Markets Fund

      16,870,054      6,654,811      3,041,542      (1,237,111 )     —      —

Russell Global Equity Fund

      4,915,920      1,896,580      822,256      (348,869 )     63,838      —

Russell Emerging Markets Fund

      3,846,489      1,379,342      1,069,394      (531,654 )     —      139,531

Russell Strategic Bond Fund

      57,815,691      20,363,901      2,987,551      (369,664 )     1,397,500      120,142

Russell Real Estate Securities Fund

      6,656,798      4,403,331      2,389,519      (740,074 )     152,250      —
                                          
   $ 131,265,446    $ 51,420,717    $ 17,595,271    $ (5,954,306 )   $ 1,917,883    $ 259,673
                                          

2025 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 703,736    $ 30,848    $ 69,974    $ (24,150 )   $ 2,334    $ —

Russell U.S. Quantitative Equity Fund

      701,580      36,449      61,543      (19,668 )     3,150      —

Russell U.S. Small & Mid Cap Fund

      201,848      3,024      23,041      (9,071 )     200      —

Russell International Developed Markets Fund

      622,388      26,598      35,355      (16,134 )     —      —

Russell Global Equity Fund

      198,653      8,065      15,021      (4,980 )     553      —

Russell Emerging Markets Fund

      142,463      1,037      27,526      (12,633 )     —      1,114

Russell Strategic Bond Fund

      1,166,808      132,171      93,440      (7,956 )     14,313      463

Russell Real Estate Securities Fund

      239,652      4,447      52,867      (22,346 )     4,692      —
                                          
   $ 3,977,128    $ 242,639    $ 378,767    $ (116,938 )   $ 25,242    $ 1,577
                                          

2030 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 23,012,328    $ 7,790,148    $ 736,531    $ (248,033 )   $ 165,640    $ —

Russell U.S. Quantitative Equity Fund

      22,934,386      8,154,466      860,145      (237,947 )     180,065      —

Russell U.S. Small & Mid Cap Fund

      6,612,372      2,273,952      470,867      (168,559 )     29,545      —

Russell International Developed Markets Fund

      20,207,942      6,779,761      598,244      (249,759 )     —      —

Russell Global Equity Fund

      6,505,930      2,114,286      188,904      (70,744 )     82,212      —

Russell Emerging Markets Fund

      4,632,999      1,336,737      669,933      (273,853 )     —      166,919

Russell Strategic Bond Fund

      9,862,377      3,540,391      1,527,060      (159,738 )     245,769      22,582

Russell Real Estate Securities Fund

      7,087,733      3,758,562      1,250,665      (405,578 )     167,242      —
                                          
   $ 100,856,067    $ 35,748,303    $ 6,302,349    $ (1,814,211 )   $ 870,473    $ 189,501
                                          

2035 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 605,045    $ 60,483    $ 69,409    $ (28,536 )   $ 2,120    $ —

Russell U.S. Quantitative Equity Fund

      603,630      65,766      71,310      (26,066 )     2,747      —

Russell U.S. Small & Mid Cap Fund

      171,592      10,135      24,121      (10,315 )     220      —

Russell International Developed Markets Fund

      530,636      50,303      69,802      (28,896 )     —      —

Russell Global Equity Fund

      170,792      16,093      20,694      (9,182 )     616      —

Russell Emerging Markets Fund

      120,272      5,929      20,738      (9,745 )     —      1,264

Russell Strategic Bond Fund

      262,814      44,030      43,141      (3,690 )     3,425      237

Russell Real Estate Securities Fund

      183,260      3,339      26,027      (12,794 )     3,601      —
                                          
   $ 2,648,041    $ 256,078    $ 345,242    $ (129,224 )   $ 12,729    $ 1,501
                                          

2040 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 16,897,485    $ 6,125,517    $ 332,499    $ (112,991 )   $ 120,064    $ —

Russell U.S. Quantitative Equity Fund

      16,854,075      6,461,703      430,590      (107,851 )     130,659      —

Russell U.S. Small & Mid Cap Fund

      4,831,170      1,761,244      280,935      (100,927 )     58,019      —

Russell International Developed Markets Fund

      14,821,111      5,412,040      409,764      (159,004 )     957,653      —

Russell Global Equity Fund

      4,777,204      1,699,764      129,506      (48,021 )     59,377      —

Russell Emerging Markets Fund

      3,400,983      1,038,050      448,292      (187,524 )     —      120,780

Russell Strategic Bond Fund

      7,268,857      2,420,556      492,551      (64,958 )     178,844      16,142

Russell Real Estate Securities Fund

      5,054,842      2,805,221      927,680      (241,072 )     159,452      —
                                          
   $ 73,905,727    $ 27,724,095    $ 3,451,817    $ (1,022,348 )   $ 1,664,068    $ 136,922
                                          

 

88   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Affiliate    Market Value    Purchases
Cost		    Sales Cost    Realized Gain
(Loss)		     Income
Distributions		    Capital Gains
Distributions
                

2045 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 496,352    $ 316,693    $ 23,127    $ (8,474 )   $ 2,214    $ —

Russell U.S. Quantitative Equity Fund

      496,344      326,274      17,879      (4,893 )     2,657      —

Russell U.S. Small & Mid Cap Fund

      140,279      86,839      8,718      (2,751 )     305      —

Russell International Developed Markets Fund

      431,636      290,078      50,417      (22,191 )     —      —

Russell Global Equity Fund

      140,273      89,684      8,132      (3,435 )     858      —

Russell Emerging Markets Fund

      97,127      54,372      11,899      (3,983 )     —      1,755

Russell Strategic Bond Fund

      215,659      165,694      32,685      (2,468 )     3,533      240

Russell Real Estate Securities Fund

      140,298      110,933      48,789      (17,420 )     2,979      —
                                          
   $ 2,157,968    $ 1,440,567    $ 201,646    $ (65,615 )   $ 12,546    $ 1,995
                                          

2050 Strategy Fund

                 

Russell U.S. Core Equity Fund

    $ 1,569,742    $ 1,523,386    $ 102,701    $ (22,955 )   $ 8,479    $ —

Russell U.S. Quantitative Equity Fund

      1,563,991      1,566,364      93,094      (27,004 )     9,754      —

Russell U.S. Small & Mid Cap Fund

      445,800      432,943      48,568      (9,642 )     1,321      —

Russell International Developed Markets Fund

      1,371,989      1,357,689      59,793      (12,458 )     —      —

Russell Global Equity Fund

      443,547      429,087      20,945      (4,868 )     3,662      —

Russell Emerging Markets Fund

      310,848      292,413      42,849      (5,722 )     —      7,452

Russell Strategic Bond Fund

      670,025      695,135      56,509      (3,594 )     11,123      979

Russell Real Estate Securities Fund

      450,642      531,491      142,171      (18,256 )     10,143      —
                                          
   $ 6,826,584    $ 6,828,508    $ 566,630    $ (104,499 )   $ 44,482    $ 8,431
                                          

In Retirement Fund

                 

Russell U.S. Core Equity Fund

    $ 219,757    $ 234,626    $ 56,131    $ (9,404 )   $ 1,763    $ —

Russell U.S. Quantitative Equity Fund

      219,757      237,217      47,701      (8,178 )     1,902      —

Russell U.S. Small & Mid Cap Fund

      48,239      52,345      15,224      (1,973 )     249      —

Russell International Developed Markets Fund

      187,597      206,491      48,757      (10,430 )     —      —

Russell Global Equity Fund

      69,679      75,295      18,017      (3,381 )     995      —

Russell Emerging Markets Fund

      32,160      36,087      13,548      (1,630 )     —      1,350

Russell Strategic Bond Fund

      1,607,978      1,570,564      149,464      (16,249 )     32,790      3,994

Russell Short Duration Bond Fund

      214,397      207,456      20,114      (1,415 )     3,910      —

Russell Real Estate Securities Fund

      80,399      105,700      43,267      (4,831 )     2,245      —
                                          
   $ 2,679,963    $ 2,725,781    $ 412,223    $ (57,491 )   $ 43,854    $ 5,344
                                          

 

5.   Federal Income Taxes

At October 31, 2008, the following Funds had net tax basis capital loss carryforwards which may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first. Available capital loss carryforwards and expiration dates are as follows:

 

Funds    10/31/16    Totals
     

2010 Strategy Fund

    $ 8,421    $ 8,421

2015 Strategy Fund

      244      244

2020 Strategy Fund

      1,603,911      1,603,911

2025 Strategy Fund

      67,749      67,749

2030 Strategy Fund

      3,494,307      3,494,307

2035 Strategy Fund

      72,222      72,222

2040 Strategy Fund

      2,610,042      2,610,042

2045 Strategy Fund

      13,873      13,873

2050 Strategy Fund

      1,195      1,195

In Retirement Fund

      1,507      1,507

At April 30, 2009, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

 

     Equity Growth
Strategy Fund		     Growth
Strategy Fund		     Balanced
Strategy Fund		     Moderate
Strategy Fund		     Conservative
Strategy Fund		  
          

Cost of Investments

    $ 1,854,352,318     $ 3,650,440,714     $ 4,899,608,772     $ 1,056,825,453     $ 522,937,626  
                                        

Unrealized Appreciation

      —       —       —       —       —  

Unrealized Depreciation

      (706,383,553 )     (1,200,409,529 )     (1,333,953,791 )     (227,611,906 )     (70,894,250 )
                                        

Net Unrealized Appreciation (Depreciation)

    $ (706,383,553 )   $ (1,200,409,529 )   $ (1,333,953,791 )   $ (227,611,906 )   $ (70,894,250 )
                                        
     2010 Strategy
Fund		     2015 Strategy
Fund		     2020 Strategy
Fund		     2025 Strategy
Fund		     2030 Strategy
Fund		  
          

Cost of Investments

    $ 66,528,952     $ 5,081,732     $ 165,634,836     $ 3,967,997     $ 138,267,020  
                                        

Unrealized Appreciation

      —       60,432       —       9,132       —  

Unrealized Depreciation

      (11,328,173 )     —       (34,369,391 )     —       (37,410,953 )
                                        

Net Unrealized Appreciation (Depreciation)

    $ (11,328,173 )   $ 60,432     $ (34,369,391 )   $ 9,132     $ (37,410,953 )
                                        

 

Notes to Financial Statements   89

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

     2035 Strategy
Fund		     2040 Strategy
Fund		     2045 Strategy
Fund		     2050 Strategy
Fund		    In Retirement
           

Cost of Investments

    $ 2,748,702     $ 99,420,679     $ 2,472,985     $ 6,664,073    $ 2,645,039
                                     

Unrealized Appreciation

      23,978       —       2,220       162,511      34,925

Unrealized Depreciation

      (124,640 )     (25,514,953 )     (317,236 )     —      —
                                     

Net Unrealized Appreciation (Depreciation)

    $ (100,662 )   $ (25,514,953 )   $ (315,016 )   $ 162,511    $ 34,925
                                     

 

6.   Fund Share Transactions (amounts in thousands)

Share transactions for the periods ended April 30, 2009 and October 31, 2008 were as follows:

 

     Shares     Dollars  
Conservative Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    3,539     5,964     $ 29,778     $ 60,862  

Proceeds from reinvestment of distributions

    235     282       1,981       2,901  

Payments for shares redeemed

    (2,470 )   (4,728 )     (20,735 )     (47,856 )
                            

Net increase (decrease)

    1,304     1,518       11,024       15,907  
                            
        

Class C

         

Proceeds from shares sold

    4,097     6,042       34,256       61,110  

Proceeds from reinvestment of distributions

    338     409       2,834       4,210  

Payments for shares redeemed

    (3,103 )   (4,078 )     (26,015 )     (40,884 )
                            

Net increase (decrease)

    1,332     2,373       11,075       24,436  
                            
        

Class E

         

Proceeds from shares sold

    1,873     3,836       15,783       39,666  

Proceeds from reinvestment of distributions

    270     453       2,277       4,691  

Payments for shares redeemed

    (1,823 )   (4,325 )     (15,427 )     (44,095 )
                            

Net increase (decrease)

    320     (36 )     2,633       262  
                            
        

Class R1

         

Proceeds from shares sold

    208     226       1,780       2,317  

Proceeds from reinvestment of distributions

    15     15       131       150  

Payments for shares redeemed

    (76 )   (71 )     (644 )     (712 )
                            

Net increase (decrease)

    147     170       1,267       1,755  
                            
        

Class R2

         

Proceeds from shares sold

    182     660       1,547       6,898  

Proceeds from reinvestment of distributions

    24     31       200       319  

Payments for shares redeemed

    (130 )   (329 )     (1,095 )     (3,356 )
                            

Net increase (decrease)

    76     362       652       3,861  
                            
        

Class R3

         

Proceeds from shares sold

    1,717     5,053       14,483       52,719  

Proceeds from reinvestment of distributions

    608     1,001       5,155       10,403  

Payments for shares redeemed

    (3,075 )   (5,463 )     (26,202 )     (56,372 )
                            

Net increase (decrease)

    (750 )   591       (6,564 )     6,750  
                            
        

Class S

         

Proceeds from shares sold

    3,677     5,081       30,875       52,287  

Proceeds from reinvestment of distributions

    205     301       1,738       3,103  

Payments for shares redeemed

    (2,475 )   (4,961 )     (21,055 )     (50,382 )
                            

Net increase (decrease)

    1,407     421       11,558       5,008  
                            

Total increase (decrease)

    3,836     5,399     $ 31,645     $ 57,979  
                            

 

90   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
Moderate Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    3,617     7,745     $ 28,636     $ 83,738  

Proceeds from reinvestment of distributions

    728     1,307       5,800       14,209  

Payments for shares redeemed

    (4,854 )   (7,462 )     (38,129 )     (78,093 )
                            

Net increase (decrease)

    (509 )   1,590       (3,693 )     19,854  
                            
        

Class C

         

Proceeds from shares sold

    5,218     8,033       41,505       85,384  

Proceeds from reinvestment of distributions

    852     1,442       6,770       15,714  

Payments for shares redeemed

    (6,349 )   (8,180 )     (49,980 )     (84,689 )
                            

Net increase (decrease)

    (279 )   1,295       (1,705 )     16,409  
                            
        

Class E

         

Proceeds from shares sold

    2,315     5,048       18,307       54,389  

Proceeds from reinvestment of distributions

    707     1,312       5,642       14,283  

Payments for shares redeemed

    (2,660 )   (6,621 )     (21,034 )     (69,065 )
                            

Net increase (decrease)

    362     (261 )     2,915       (393 )
                            
        

Class R1

         

Proceeds from shares sold

    163     228       1,301       2,476  

Proceeds from reinvestment of distributions

    17     17       134       185  

Payments for shares redeemed

    (54 )   (63 )     (426 )     (687 )
                            

Net increase (decrease)

    126     182       1,009       1,974  
                            
        

Class R2

         

Proceeds from shares sold

    218     1,329       1,748       14,758  

Proceeds from reinvestment of distributions

    64     69       511       732  

Payments for shares redeemed

    (229 )   (232 )     (1,833 )     (2,283 )
                            

Net increase (decrease)

    53     1,166       426       13,207  
                            
        

Class R3

         

Proceeds from shares sold

    2,197     5,391       17,554       58,778  

Proceeds from reinvestment of distributions

    1,252     2,325       10,017       25,459  

Payments for shares redeemed

    (5,227 )   (9,183 )     (41,606 )     (97,054 )
                            

Net increase (decrease)

    (1,778 )   (1,467 )     (14,035 )     (12,817 )
                            
        

Class S

         

Proceeds from shares sold

    5,539     10,336       43,979       110,854  

Proceeds from reinvestment of distributions

    434     974       3,472       10,576  

Payments for shares redeemed

    (5,035 )   (13,865 )     (39,528 )     (138,776 )
                            

Net increase (decrease)

    938     (2,555 )     7,923       (17,346 )
                            

Total increase (decrease)

    (1,087 )   (50 )   $ (7,160 )   $ 20,888  
                            

 

Notes to Financial Statements   91

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
Balanced Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    9,135     29,194     $ 68,164     $ 334,210  

Proceeds from reinvestment of distributions

    7,342     8,847       54,813       101,061  

Payments for shares redeemed

    (22,458 )   (25,885 )     (164,932 )     (277,165 )
                            

Net increase (decrease)

    (5,981 )   12,156       (41,955 )     158,106  
                            
        

Class C

         

Proceeds from shares sold

    13,148     31,324       97,878       348,929  

Proceeds from reinvestment of distributions

    8,627     10,075       64,083       115,430  

Payments for shares redeemed

    (28,818 )   (36,890 )     (212,348 )     (389,324 )
                            

Net increase (decrease)

    (7,043 )   4,509       (50,387 )     75,035  
                            
        

Class E

         

Proceeds from shares sold

    5,629     10,958       41,899       123,073  

Proceeds from reinvestment of distributions

    3,974     4,884       29,745       55,944  

Payments for shares redeemed

    (8,278 )   (15,293 )     (61,613 )     (163,642 )
                            

Net increase (decrease)

    1,325     549       10,031       15,375  
                            
        

Class R1

         

Proceeds from shares sold

    938     1,233       7,098       13,936  

Proceeds from reinvestment of distributions

    208     193       1,563       2,203  

Payments for shares redeemed

    (619 )   (613 )     (4,627 )     (6,579 )
                            

Net increase (decrease)

    527     813       4,034       9,560  
                            
        

Class R2

         

Proceeds from shares sold

    1,563     4,219       11,759       50,155  

Proceeds from reinvestment of distributions

    38     348       2,864       3,963  

Payments for shares redeemed

    (708 )   (1,222 )     (5,218 )     (13,542 )
                            

Net increase (decrease)

    893     3,345       9,405       40,576  
                            
        

Class R3

         

Proceeds from shares sold

    6,292     15,328       47,353       172,864  

Proceeds from reinvestment of distributions

    6,565     7,843       49,149       90,154  

Payments for shares redeemed

    (14,355 )   (25,781 )     (105,801 )     (283,097 )
                            

Net increase (decrease)

    (1,498 )   (2,610 )     (9,299 )     (20,079 )
                            
        

Class S

         

Proceeds from shares sold

    14,767     28,888       111,341       321,848  

Proceeds from reinvestment of distributions

    3,844     4,457       28,923       51,088  

Payments for shares redeemed

    (19,144 )   (32,349 )     (142,612 )     (359,094 )
                            

Net increase (decrease)

    (533 )   996       (2,348 )     13,842  
                            

Total increase (decrease)

    (12,310 )   19,758     $ (80,519 )   $ 292,415  
                            

 

92   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
Growth Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    8,259     22,544     $ 56,698     $ 260,425  

Proceeds from reinvestment of distributions

    8,368     6,979       56,664       81,722  

Payments for shares redeemed

    (17,609 )   (14,814 )     (118,806 )     (158,939 )
                            

Net increase (decrease)

    (982 )   14,709       (5,444 )     183,208  
                            
        

Class C

         

Proceeds from shares sold

    11,222     20,502       76,735       229,788  

Proceeds from reinvestment of distributions

    8,434     6,772       56,704       79,676  

Payments for shares redeemed

    (18,706 )   (19,462 )     (125,460 )     (208,845 )
                            

Net increase (decrease)

    950     7,812       7,979       100,619  
                            
        

Class E

         

Proceeds from shares sold

    4,229     8,474       28,693       96,005  

Proceeds from reinvestment of distributions

    4,535     4,023       30,758       47,274  

Payments for shares redeemed

    (6,419 )   (11,684 )     (42,893 )     (127,162 )
                            

Net increase (decrease)

    2,345     813       16,558       16,117  
                            
        

Class R1

         

Proceeds from shares sold

    445     1,014       3,013       11,483  

Proceeds from reinvestment of distributions

    173     110       1,182       1,281  

Payments for shares redeemed

    (540 )   (487 )     (3,501 )     (5,051 )
                            

Net increase (decrease)

    78     637       694       7,713  
                            
        

Class R2

         

Proceeds from shares sold

    787     1,870       5,581       23,071  

Proceeds from reinvestment of distributions

    291     208       1,971       2,434  

Payments for shares redeemed

    (582 )   (546 )     (3,875 )     (5,821 )
                            

Net increase (decrease)

    496     1,532       3,677       19,684  
                            
        

Class R3

         

Proceeds from shares sold

    4,293     8,648       29,189       98,785  

Proceeds from reinvestment of distributions

    6,941     6,008       47,213       70,952  

Payments for shares redeemed

    (8,606 )   (14,298 )     (57,653 )     (155,328 )
                            

Net increase (decrease)

    2,628     358       18,749       14,409  
                            
        

Class S

         

Proceeds from shares sold

    10,171     13,018       70,182       145,756  

Proceeds from reinvestment of distributions

    3,343     2,913       22,802       34,270  

Payments for shares redeemed

    (10,803 )   (17,214 )     (73,001 )     (194,370 )
                            

Net increase (decrease)

    2,711     (1,283 )     19,983       (14,344 )
                            

Total increase (decrease)

    8,226     24,578     $ 62,196     $ 327,406  
                            

 

Notes to Financial Statements   93

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
Equity Growth Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    5,358     8,932     $ 33,197     $ 102,913  

Proceeds from reinvestment of distributions

    3,122     2,511       19,268       29,779  

Payments for shares redeemed

    (6,807 )   (6,891 )     (41,634 )     (74,019 )
                            

Net increase (decrease)

    1,673     4,552       10,831       58,673  
                            
        

Class C

         

Proceeds from shares sold

    7,106     11,327       40,836       118,908  

Proceeds from reinvestment of distributions

    5,335     4,277       30,859       48,428  

Payments for shares redeemed

    (10,133 )   (10,988 )     (58,381 )     (110,697 )
                            

Net increase (decrease)

    2,308     4,616       13,314       56,639  
                            
        

Class E

         

Proceeds from shares sold

    3,438     5,149       20,655       56,562  

Proceeds from reinvestment of distributions

    2,469     2,088       14,919       24,324  

Payments for shares redeemed

    (4,242 )   (6,305 )     (25,384 )     (67,057 )
                            

Net increase (decrease)

    1,665     932       10,190       13,829  
                            
        

Class R1

         

Proceeds from shares sold

    191     405       1,157       4,542  

Proceeds from reinvestment of distributions

    88     70       541       830  

Payments for shares redeemed

    (118 )   (388 )     (706 )     (4,205 )
                            

Net increase (decrease)

    161     87       992       1,167  
                            
        

Class R2

         

Proceeds from shares sold

    906     1,525       5,645       17,362  

Proceeds from reinvestment of distributions

    364     219       2,197       2,533  

Payments for shares redeemed

    (440 )   (368 )     (2,530 )     (3,798 )
                            

Net increase (decrease)

    830     1,376       5,312       16,097  
                            
        

Class R3

         

Proceeds from shares sold

    3,256     6,501       19,599       73,226  

Proceeds from reinvestment of distributions

    4,077     3,529       24,555       41,166  

Payments for shares redeemed

    (5,569 )   (10,139 )     (32,685 )     (109,062 )
                            

Net increase (decrease)

    1,764     (109 )     11,469       5,330  
                            
        

Class S

         

Proceeds from shares sold

    7,081     15,916       43,727       163,923  

Proceeds from reinvestment of distributions

    2,807     1,999       17,267       23,491  

Payments for shares redeemed

    (13,425 )   (10,591 )     (81,025 )     (116,643 )
                            

Net increase (decrease)

    (3,537 )   7,324       (20,031 )     70,771  
                            

Total increase (decrease)

    4,864     18,778     $ 32,077     $ 222,506  
                            

 

94   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2010 Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    2     1     $ 18     $ 12  

Proceeds from reinvestment of distributions

    2     8       20       87  

Payments for shares redeemed

    (4 )   (58 )     (38 )     (611 )
                            

Net increase (decrease)

    —     (49 )     —       (512 )
                            
        

Class E

         

Proceeds from shares sold

    128     359       1,031       3,768  

Proceeds from reinvestment of distributions

    11     27       91       285  

Payments for shares redeemed

    (248 )   (168 )     (2,014 )     (1,739 )
                            

Net increase (decrease)

    (109 )   218       (892 )     2,314  
                            
        

Class R1

         

Proceeds from shares sold

    211     531       1,714       5,403  

Proceeds from reinvestment of distributions

    18     32       146       329  

Payments for shares redeemed

    (177 )   (198 )     (1,428 )     (1,982 )
                            

Net increase (decrease)

    52     365       432       3,750  
                            
        

Class R2

         

Proceeds from shares sold

    1,140     935       9,142       9,925  

Proceeds from reinvestment of distributions

    33     32       265       331  

Payments for shares redeemed

    (195 )   (237 )     (1,578 )     (2,421 )
                            

Net increase (decrease)

    978     730       7,829       7,835  
                            
        

Class R3

         

Proceeds from shares sold

    1,361     1,530       10,949       15,995  

Proceeds from reinvestment of distributions

    41     75       333       781  

Payments for shares redeemed

    (652 )   (1,442 )     (5,216 )     (15,257 )
                            

Net increase (decrease)

    750     163       6,066       1,519  
                            
        

Class S

         

Proceeds from shares sold

    163     844       1,313       8,912  

Proceeds from reinvestment of distributions

    19     30       152       302  

Payments for shares redeemed

    (124 )   (233 )     (970 )     (2,387 )
                            

Net increase (decrease)

    58     641       495       6,827  
                            

Total increase (decrease)

    1,729     2,068     $ 13,930     $ 21,733  
                            

 

Notes to Financial Statements   95

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2015 Strategy Fund    2009     2008(1)     2009     2008(1)  
        
        

Class R1

         

Proceeds from shares sold

    46     31     $ 331     $ 312  

Proceeds from reinvestment of distributions

    1     —       5       4  

Payments for shares redeemed

    (1 )   (12 )     (3 )     (118 )
                            

Net increase (decrease)

    46     19       333       198  
                            
        

Class R2

         

Proceeds from shares sold

    121     35       888       335  

Proceeds from reinvestment of distributions

    1     —       9       4  

Payments for shares redeemed

    (24 )   —       (183 )     (1 )
                            

Net increase (decrease)

    98     35       714       338  
                            
        

Class R3

         

Proceeds from shares sold

    477     40       3,410       382  

Proceeds from reinvestment of distributions

    4     —       27       3  

Payments for shares redeemed

    (39 )   (2 )     (274 )     (14 )
                            

Net increase (decrease)

    442     38       3,163       371  
                            

Total increase (decrease)

    586     92     $ 4,210     $ 907  
                            

 

96   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2020 Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    —     31     $ 2     $ 347  

Proceeds from reinvestment of distributions

    2     9       18       104  

Payments for shares redeemed

    (15 )   (33 )     (115 )     (362 )
                            

Net increase (decrease)

    (13 )   7       (95 )     89  
                            
        

Class E

         

Proceeds from shares sold

    319     317       2,429       3,359  

Proceeds from reinvestment of distributions

    16     48       125       522  

Payments for shares redeemed

    (105 )   (250 )     (791 )     (2,625 )
                            

Net increase (decrease)

    230     115       1,763       1,256  
                            
        

Class R1

         

Proceeds from shares sold

    599     1,007       4,605       10,819  

Proceeds from reinvestment of distributions

    38     105       290       1,143  

Payments for shares redeemed

    (350 )   (548 )     (2,611 )     (5,545 )
                            

Net increase (decrease)

    287     564       2,284       6,417  
                            
        

Class R2

         

Proceeds from shares sold

    3,152     2,193       23,514       24,762  

Proceeds from reinvestment of distributions

    66     102       507       1,109  

Payments for shares redeemed

    (926 )   (398 )     (6,634 )     (4,151 )
                            

Net increase (decrease)

    2,292     1,897       17,387       21,720  
                            
        

Class R3

         

Proceeds from shares sold

    3,141     3,405       23,821       36,192  

Proceeds from reinvestment of distributions

    84     186       646       2,028  

Payments for shares redeemed

    (1,058 )   (2,751 )     (7,979 )     (30,360 )
                            

Net increase (decrease)

    2,167     840       16,488       7,860  
                            
        

Class S

         

Proceeds from shares sold

    372     949       2,869       10,303  

Proceeds from reinvestment of distributions

    28     64       211       687  

Payments for shares redeemed

    (176 )   (238 )     (1,320 )     (2,519 )
                            

Net increase (decrease)

    224     775       1,760       8,471  
                            

Total increase (decrease)

    5,187     4,198     $ 39,587     $ 45,813  
                            

 

Notes to Financial Statements   97

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2025 Strategy Fund    2009     2008(1)     2009     2008(1)  
        
        

Class R1

         

Proceeds from shares sold

    18     149     $ 116     $ 1,526  

Proceeds from reinvestment of distributions

    —     1       3       9  

Payments for shares redeemed

    —     (118 )     (4 )     (1,137 )
                            

Net increase (decrease)

    18     32       115       398  
                            
        

Class R2

         

Proceeds from shares sold

    184     10       1,207       100  

Proceeds from reinvestment of distributions

    1     —       6       1  

Payments for shares redeemed

    (32 )   —       (209 )     —  
                            

Net increase (decrease)

    153     10       1,004       101  
                            
        

Class R3

         

Proceeds from shares sold

    344     48       2,157       441  

Proceeds from reinvestment of distributions

    2     —       15       3  

Payments for shares redeemed

    (23 )   (3 )     (143 )     (25 )
                            

Net increase (decrease)

    323     45       2,029       419  
                            

Total increase (decrease)

    494     87     $ 3,148     $ 918  
                            
        

 

98   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2030 Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    1     27     $ 8     $ 313  

Proceeds from reinvestment of distributions

    1     10       5       110  

Payments for shares redeemed

    (70 )   (42 )     (460 )     (466 )
                            

Net increase (decrease)

    (68 )   (5 )     (447 )     (43 )
                            
        

Class E

         

Proceeds from shares sold

    323     382       2,140       3,993  

Proceeds from reinvestment of distributions

    10     51       69       566  

Payments for shares redeemed

    (144 )   (173 )     (936 )     (1,879 )
                            

Net increase (decrease)

    189     260       1,273       2,680  
                            
        

Class R1

         

Proceeds from shares sold

    388     882       2,577       9,620  

Proceeds from reinvestment of distributions

    15     57       102       633  

Payments for shares redeemed

    (140 )   (191 )     (887 )     (1,958 )
                            

Net increase (decrease)

    263     748       1,792       8,295  
                            
        

Class R2

         

Proceeds from shares sold

    2,442     2,024       16,215       23,533  

Proceeds from reinvestment of distributions

    35     97       234       1,079  

Payments for shares redeemed

    (301 )   (369 )     (1,948 )     (3,911 )
                            

Net increase (decrease)

    2,176     1,752       14,501       20,701  
                            
        

Class R3

         

Proceeds from shares sold

    2,731     2,866       17,999       31,013  

Proceeds from reinvestment of distributions

    40     127       266       1,409  

Payments for shares redeemed

    (953 )   (1,638 )     (6,330 )     (18,491 )
                            

Net increase (decrease)

    1,818     1,355       11,935       13,931  
                            
        

Class S

         

Proceeds from shares sold

    445     980       2,919       10,498  

Proceeds from reinvestment of distributions

    15     50       101       552  

Payments for shares redeemed

    (141 )   (221 )     (943 )     (2,118 )
                            

Net increase (decrease)

    319     809       2,077       8,932  
                            

Total increase (decrease)

    4,697     4,919     $ 31,131     $ 54,496  
                            

 

Notes to Financial Statements   99

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2035 Strategy Fund    2009     2008(1)     2009     2008(1)  
        
        

Class R1

         

Proceeds from shares sold

    28     155     $ 170     $ 1,567  

Proceeds from reinvestment of distributions

    —     1       3       8  

Payments for shares redeemed

    (9 )   (94 )     (57 )     (895 )
                            

Net increase (decrease)

    19     62       116       680  
                            
        

Class R2

         

Proceeds from shares sold

    103     11       625       104  

Proceeds from reinvestment of distributions

    —     —       3       1  

Payments for shares redeemed

    (5 )   —       (29 )     —  
                            

Net increase (decrease)

    98     11       599       105  
                            
        

Class R3

         

Proceeds from shares sold

    229     18       1,315       174  

Proceeds from reinvestment of distributions

    1     —       6       2  

Payments for shares redeemed

    (25 )   —       (146 )     —  
                            

Net increase (decrease)

    205     18       1,175       176  
                            

Total increase (decrease)

    322     91     $ 1,890     $ 961  
                            

 

100   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2040 Strategy Fund    2009     2008     2009     2008  
        
        

Class A

         

Proceeds from shares sold

    5     17     $ 32     $ 198  

Proceeds from reinvestment of distributions

    1     9       5       104  

Payments for shares redeemed

    (29 )   (76 )     (176 )     (815 )
                            

Net increase (decrease)

    (23 )   (50 )     (139 )     (513 )
                            
        

Class E

         

Proceeds from shares sold

    265     213       1,771       2,280  

Proceeds from reinvestment of distributions

    7     31       45       348  

Payments for shares redeemed

    (44 )   (113 )     (290 )     (1,160 )
                            

Net increase (decrease)

    228     131       1,526       1,468  
                            
        

Class R1

         

Proceeds from shares sold

    506     513       3,382       5,365  

Proceeds from reinvestment of distributions

    8     19       57       210  

Payments for shares redeemed

    (214 )   (107 )     (1,406 )     (1,050 )
                            

Net increase (decrease)

    300     425       2,033       4,525  
                            
        

Class R2

         

Proceeds from shares sold

    2,086     1,492       14,035       17,519  

Proceeds from reinvestment of distributions

    27     67       181       763  

Payments for shares redeemed

    (187 )   (386 )     (1,244 )     (4,215 )
                            

Net increase (decrease)

    1,926     1,173       12,972       14,067  
                            
        

Class R3

         

Proceeds from shares sold

    1,806     2,336       11,996       25,517  

Proceeds from reinvestment of distributions

    30     134       199       1,516  

Payments for shares redeemed

    (808 )   (1,620 )     (5,415 )     (18,472 )
                            

Net increase (decrease)

    1,028     850       6,780       8,561  
                            
        

Class S

         

Proceeds from shares sold

    427     826       2,824       8,801  

Proceeds from reinvestment of distributions

    11     30       75       330  

Payments for shares redeemed

    (139 )   (217 )     (928 )     (2,269 )
                            

Net increase (decrease)

    299     639       1,971       6,862  
                            

Total increase (decrease)

    3,758     3,168     $ 25,143     $ 34,970  
                            

 

Notes to Financial Statements   101

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares     Dollars  
2045 Strategy Fund    2009     2008(1)     2009     2008(1)  
        
        

Class R1

         

Proceeds from shares sold

    49     131     $ 298     $ 1,327  

Proceeds from reinvestment of distributions

    1     1       5       9  

Payments for shares redeemed

    (18 )   (36 )     (112 )     (352 )
                            

Net increase (decrease)

    32     96       191       984  
                            
        

Class R2

         

Proceeds from shares sold

    144     10       872       100  

Proceeds from reinvestment of distributions

    1     —       5       1  

Payments for shares redeemed

    (7 )   —       (41 )     —  
                            

Net increase (decrease)

    138     10       836       101  
                            
        

Class R3

         

Proceeds from shares sold

    57     11       331       104  

Proceeds from reinvestment of distributions

    —     —       2       1  

Payments for shares redeemed

    (6 )   —       (33 )     —  
                            

Net increase (decrease)

    51     11       300       105  
                            

Total increase (decrease)

    221     117     $ 1,327     $ 1,190  
                            
     Shares     Dollars  
2050 Strategy Fund    2009     2008(1)     2009     2008(1)  
        
        

Class R1

         

Proceeds from shares sold

    5     10     $ 30     $ 100  

Proceeds from reinvestment of distributions

    —     —       1       1  

Payments for shares redeemed

    —     —       —       —  
                            

Net increase (decrease)

    5     10       31       101  
                            
        

Class R2

         

Proceeds from shares sold

    940     10       5,887       100  

Proceeds from reinvestment of distributions

    6     —       37       1  

Payments for shares redeemed

    (76 )   —       (472 )     —  
                            

Net increase (decrease)

    870     10       5,452       101  
                            
        

Class R3

         

Proceeds from shares sold

    213     10       1,346       100  

Proceeds from reinvestment of distributions

    —     —       2       2  

Payments for shares redeemed

    (74 )   —       (447 )     —  
                            

Net increase (decrease)

    139     10       901       102  
                            

Total increase (decrease)

    1,014     30     $ 6,384     $ 304  
                            

 

102   Notes to Financial Statements

Russell Investment Company

LifePoints® Funds

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

6.   Fund Share Transactions (amounts in thousands) (continued)

 

     Shares    Dollars
In Retirement Fund    2009     2008(1)    2009     2008(1)
         
         

Class R1

          

Proceeds from shares sold

    5     10    $ 40     $ 100

Proceeds from reinvestment of distributions

    —     —      2       3

Payments for shares redeemed

    —     —      (4 )     —
                         

Net increase (decrease)

    5     10      38       103
                         
         

Class R2

          

Proceeds from shares sold

    282     10      2,205       100

Proceeds from reinvestment of distributions

    4     —      35       2

Payments for shares redeemed

    (37 )   —      (295 )     —
                         

Net increase (decrease)

    249     10      1,945       102
                         
         

Class R3

          

Proceeds from shares sold

    54     11      411       103

Proceeds from reinvestment of distributions

    1     —      6       2

Payments for shares redeemed

    (2 )   —      (9 )     —
                         

Net increase (decrease)

    53     11      408       105
                         

Total increase (decrease)

    307     31    $ 2,391     $ 310
                         

 

(1) For the period March 31, 2008 (commencement of operations) to October 31, 2008

 

7.   Interfund Lending Program

The Investment Company Funds have been granted permission from the Securities and Exchange Commission to participate in a joint lending and borrowing facility (the “Credit Facility”). Portfolios of the Funds may borrow money from each other for temporary purposes. All such borrowing and lending will be subject to a participating Fund’s fundamental investment limitations. Typically, Funds will borrow from the Russell Money Market Fund. The Russell Money Market Fund will lend through the program only when the returns are higher than those available from an investment in repurchase agreements or short-term reserves and the portfolio manager determines it is in the best interest of the Russell Money Market Fund. The Investment Company Funds will borrow through the program only when the costs are equal to or lower than the cost of bank loans. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one business day’s notice. A participating fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to the Russell Money Market Fund could result in a lost investment opportunity or additional borrowing costs. For the period ended April 30, 2009, the Funds did not borrow through the interfund lending program.

 

8.   Record Ownership

As of April 30 2009, the following table includes shareholders of record with greater than 10% of the total outstanding shares of each respective Fund.

 

      # of Shareholders    %
     

Conservative Strategy Fund

    1    21.9

Moderate Strategy Fund

    1    18.2

Balanced Strategy Fund

    1    12.5

Growth Strategy Fund

    1    13.9

Equity Growth Strategy Fund

    2    25.3

2010 Strategy Fund

    4    53.6

2015 Strategy Fund

    2    68.4

2020 Strategy Fund

    4    50.2

2025 Strategy Fund

    3    77.6

2030 Strategy Fund

    4    52.5

2035 Strategy Fund

    2    69.9

2040 Strategy Fund

    3    40.6

2045 Strategy Fund

    3    78.5

2050 Strategy Fund

    1    83.6

In Retirement Fund

    2    90.4

 

Notes to Financial Statements   103

Russell Investment Company

LifePoints® Funds

Basis for Approval of Investment Advisory Contracts (Unaudited)

 

 

 

Approval of Investment Advisory Agreement

The Board of Trustees, including all of the Independent Trustees, last considered and approved the continuation of the advisory agreement with RIMCo (the “RIMCo Agreement”) and the portfolio management contract (collectively, the “portfolio management contracts”) with each Money Manager of the funds in which the Funds invest (the “Underlying Funds”) at a meeting held on April 21, 2009. During the course of a year, the Trustees receive a wide variety of materials regarding the investment performance of the Funds, sales and redemptions of the Funds’ and Underlying Funds’ shares, management of the Funds and the Underlying Funds by RIMCo and compliance with applicable regulatory requirements. In preparation for the annual review, the Independent Trustees, with the advice and assistance of their independent counsel, also requested and the Board considered (1) information and reports prepared by RIMCo relating to the services provided by RIMCo (and its affiliates) to the Funds and the Underlying Funds; and (2) information (the “Third-Party Information”) received from an independent, nationally recognized provider of investment company information comparing the performance of each of the Funds and the Underlying Funds and their respective operating expenses over various periods of time with other peer funds (“Comparable Funds”) not managed by RIMCo believed by the provider to be generally comparable in investment objectives to the Funds and the Underlying Funds. The foregoing information requested by the Trustees or provided by RIMCo is collectively called the “Agreement Renewal Information.” The Trustees’ evaluations also reflected the knowledge and familiarity gained as Board members of the Funds and other funds in the same complex with respect to services provided by RIMCo, RIMCo’s affiliates and each Money Manager. The Trustees received a memorandum from counsel to the Funds and Underlying Funds discussing the legal standards for their consideration of the continuations of the RIMCo Agreement and the portfolio management contracts and the Independent Trustees separately received a memorandum regarding their responsibilities from their independent counsel.

On April 20, 2009, the Independent Trustees met to review the Agreement Renewal Information in a private session with their independent counsel at which no representatives of RIMCo or the Funds’ management were present. At the April 21 meeting of the Board of Trustees, the Board, including the Independent Trustees, reviewed the proposed continuance of the RIMCo Agreement and the portfolio management contracts with management, counsel to the Funds and Underlying Funds and independent counsel to the Independent Trustees. Presentations made by RIMCo to the Board as part of this review encompassed the Funds and all other RIMCo-managed funds for which the Board has supervisory responsibility. Following this review, but prior to voting, the Independent Trustees again met in a private session with their independent counsel to evaluate additional information and analyses received from RIMCo and management at the Board meeting. The discussion below reflects all of these reviews.

In evaluating the portfolio management contracts, the Board considered that the Underlying Funds, in employing a manager-of-managers method of investment, operate in a manner that is distinctly different from most other investment companies. In the case of most other investment companies, an advisory fee is paid by the investment company to its adviser which in turn employs and compensates individual portfolio managers to make specific securities selections consistent with the adviser’s style and investment philosophy. RIMCo has engaged multiple unaffiliated Money Managers for all Underlying Funds.

The Board considered that RIMCo (rather than any Money Manager) is responsible under the RIMCo Agreement for allocating assets of each Fund among its Underlying Funds and for determining, implementing and maintaining the investment program for each Underlying Fund. The assets of each Fund are invested in different combinations of the Underlying Funds pursuant to target asset allocations set by RIMCo. RIMCo may modify the target asset allocation for any Fund and/or the Underlying Funds in which the Funds invest. Assets of each Underlying Fund generally have been allocated among the multiple Money Managers selected by RIMCo, subject to Board approval, for that Underlying Fund. RIMCo manages directly a portion of certain Underlying Funds’ assets employing a “select holdings strategy,” as described below, and directly manages the investment of each Underlying Fund’s cash reserves. RIMCo also may manage directly any portion of each Underlying Fund’s assets that RIMCo determines not to allocate to the Money Managers and portions of an Underlying Fund during transitions between Money Managers. In all cases, assets are managed directly by RIMCo pursuant to authority provided by the RIMCo Agreement.

RIMCo is responsible for selecting, subject to Board approval, Money Managers for each Underlying Fund and for actively managing allocations and reallocations of its assets among the Money Managers. The Board has been advised that RIMCo’s goal is to construct and manage diversified portfolios in a risk-aware manner. Each Money Manager for an Underlying Fund in effect performs the function of an individual portfolio manager who is responsible for selecting portfolio securities for the portion of the Underlying Fund assigned to it by RIMCo (each, a “segment”) in accordance with the Underlying Fund’s applicable investment objective, policies and restrictions, any constraints placed by RIMCo upon their selection of portfolio securities and the Money Manager’s specified role in an Underlying Fund. RIMCo is responsible for communicating performance expectations to each Money Manager; supervising compliance by each Money Manager with each Underlying Fund’s investment objective and policies; authorizing Money Managers to engage in certain investment strategies for an Underlying Fund; and recommending annually to the Board whether portfolio management contracts should be renewed, modified or terminated. In addition to its annual recommendation as to the renewal, modification or termination of portfolio management contracts, RIMCo is responsible for recommending to the Board additions of new Money Managers or replacements of existing Money Managers at any time when, based on RIMCo’s research and ongoing review

 

104   Basis for Approval of Investment Advisory Contracts

Russell Investment Company

LifePoints® Funds

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

and analysis, such actions are appropriate. RIMCo may impose specific investment constraints from time to time for each Money Manager intended to capitalize on the strengths of that Money Manager or to coordinate the investment activities of Money Managers for an Underlying Fund in a complementary manner. Therefore, the performance of individual Money Managers for an Underlying Fund may reflect the roles assigned to them by RIMCo in the Underlying Fund’s investment activities and any constraints placed by RIMCo upon their selection of portfolio securities. In light of the foregoing, the overall performance of each Underlying Fund over appropriate periods reflects, in great part, the performance of RIMCo in designing the Underlying Fund’s investment program, structuring an Underlying Fund, selecting an effective Money Manager with a particular investment style or sub-style for a segment that is complementary to the styles of the Money Managers of other Underlying Fund segments, and allocating assets among the Money Managers in a manner designed to achieve the objectives of the Underlying Fund.

The Board considered that the prospectuses for the Funds and the Underlying Funds and other public disclosures emphasize to investors RIMCo’s role as the principal investment manager for each Underlying Fund, rather than the investment selection role of the Underlying Funds’ Money Managers, and describe the manner in which the Funds or Underlying Funds operate so that investors may take that information into account when deciding to purchase shares of any Fund.

The Board also considered the demands and complexity of managing the Underlying Funds pursuant to the manager-of-managers structure, the special expertise of RIMCo with respect to the manager-of-managers structure of the Underlying Funds and the likelihood that, at the current expense ratio of each Underlying Fund, there would be no acceptable alternative investment managers to replace RIMCo on comparable terms given the need to continue the manager-of-managers strategy of such Underlying Fund selected by shareholders in purchasing their shares of a Fund or Underlying Fund.

In addition to these general factors relating to the manager-of-managers structure of the Underlying Funds, the Trustees considered, with respect to each Fund and Underlying Fund, various specific factors in evaluating renewal of the RIMCo Agreement, including the following:

 

1. The nature, scope and quality of the services provided, and expected to be provided, to the Fund or the Underlying Fund by RIMCo;

 

2. The advisory fee paid by the Fund or the Underlying Fund to RIMCo (the “Advisory Fee”) and the fact that it encompasses all investment advisory fees paid by the Fund or Underlying Fund, including the fees for any Money Managers of such Underlying Fund;

 

3. Information provided by RIMCo as to other fees and benefits received by RIMCo or its affiliates from the Fund or Underlying Fund, including any administrative, transfer agent or cash management fees and fees received for management of securities lending cash collateral, soft dollar arrangements and commissions in connection with portfolio securities transactions;

 

4. Information provided by RIMCo as to expenses incurred by the Fund or the Underlying Fund; and

 

5. Information provided by RIMCo as to the profits that RIMCo derives from its mutual fund operations generally and from the Fund or Underlying Fund.

In evaluating the nature, quality and scope of services provided and which are expected to be provided to the Funds, including Fund portfolio management services, the Board considered the possible impact of changes in RIMCo’s senior management during the course of 2008 and 2009 and a restructuring of the Russell organization, which was announced to the Board in January 2009 and detailed to the Board on April 15, 2009, and included a significant reduction in Russell’s workforce. Prior to the Independent Trustees’ private meeting on April 20 and at the April 21 meeting of the Board of Trustees, senior representatives of Russell and RIMCo discussed this organizational restructuring with the Board and assured the Board that the restructuring would not result in a diminution of the nature, quality or scope of the services provided to the Funds. The Board also discussed with these representatives the impact of developments over the past year in the financial services industry upon the financial resources available to the Russell organization.

As noted above, RIMCo, pursuant to the terms of the RIMCo Agreement, directly managed during the past year, and continues to manage, a portion — up to 10% — of the assets of each of the Russell U.S. Core Equity Fund, the Russell U.S. Quantitative Equity Fund and the Russell International Developed Markets Fund (each a “Participating Underlying Fund”) during the past year, utilizing a select holdings strategy, the actual allocation being determined by each Participating Underlying Fund’s RIMCo portfolio manager. The select holdings strategy utilized by RIMCo in managing such assets for a Participating Underlying Fund is designed to increase the Participating Underlying Fund’s exposure to stocks that are viewed as attractive by multiple Money Managers of that Participating Underlying Fund. The Board reviewed the results of the select holdings strategy in respect of each Participating Underlying Fund during the past year. With respect to each Participating Underlying Fund, the Trustees considered that RIMCo is not required to pay investment advisory fees to a Money Manager with respect to assets for which the select holdings strategy is

 

Basis for Approval of Investment Advisory Contracts   105

Russell Investment Company

LifePoints® Funds

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

utilized and that the profits derived by RIMCo generally and from the Participating Underlying Fund consequently may increase incrementally. The Board, however, also considered RIMCo’s advice that it pays certain Money Managers additional fees for providing information and other services in connection with the select holdings strategy and incurs additional costs in carrying out the select holdings strategy, the limited amount of assets that are managed directly by RIMCo pursuant to the select holdings strategy, and the fact that the aggregate investment advisory fees paid by the Participating Underlying Fund are not increased as a result of the select holdings strategy.

In evaluating the reasonableness of the Funds’ and Underlying Funds’ Advisory Fees in light of Fund and Underlying Fund performance, the Board considered that, in the Agreement Renewal Information and at past meetings, RIMCo noted differences between the investment strategies of certain Underlying Funds and their respective Comparable Funds in pursuing their investment objectives, including fund strategies which seek to achieve a lower tracking error (i.e., the difference, whether positive or negative, between the return of a fund and its benchmark) and resulting lower return volatility than their Comparable Funds. According to RIMCo, these strategies may be expected to result, and for certain Underlying Funds during the periods covered by the Third-Party Information did result, in lower performance of the Underlying Funds than that of some of their respective Comparable Funds. According to RIMCo, the strategies pursued by the Underlying Funds, among other things, are intended to result in less volatile, more moderate returns relative to each Underlying Fund’s performance benchmark rather than more volatile, more extreme returns that its Comparable Funds may experience over time.

In discussing the Advisory Fees for the Underlying Funds generally, RIMCo noted, among other things, that its Advisory Fees for Underlying Funds encompass services that may not be provided by investment advisers to the Underlying Funds’ Comparable Funds, such as cash equitization and management of portfolio transition costs when Money Managers are added, terminated or replaced. RIMCo also explained that its “margins” in providing investment advisory services to the Underlying Funds tend to be lower than competitors’ margins because of the demands and complexities of managing the Underlying Funds’ manager-of-managers structure, including RIMCo’s payment of a significant portion of the Underlying Funds’ Advisory Fees to their Money Managers.

The Board considered for each Fund and Underlying Fund whether economies of scale have been realized and whether the Advisory Fees for such Fund or Underlying Fund appropriately reflect or should be revised to reflect any such economies. During 2008, the Board noted that, generally, there was a reduction in the assets of the Funds and Underlying Funds as a result of market declines and related investor redemptions. The Board determined that, after giving effect to any applicable fee or expense caps, waivers or reimbursements, the Advisory Fees for each Fund or Underlying Fund appropriately reflect any economies of scale realized by such Fund, based upon any decline in assets during 2008 and such factors as the variability of Money Manager investment advisory fees and other factors associated with the manager-of-managers structure employed by the Underlying Funds.

The Board considered, as a general matter, that fees payable to RIMCo by institutional clients with investment objectives similar to those of certain Funds and other RIC funds under the Board’s supervision, including the Underlying Funds are lower, and may, in some cases, be substantially lower, than the rates paid by RIC funds supervised by the Board, including the Funds. The Trustees considered the differences in the scope of services RIMCo provides to institutional clients and the funds under its supervision, including the Underlying Funds. In response to the Trustees’ inquiries, RIMCo, as it has in the past, noted, among other things, that institutional clients have fewer administrative needs than the Funds. RIMCo also noted that since the Funds must constantly issue and redeem their shares, they are more difficult to manage than institutional accounts, where assets are relatively stable. In addition, RIMCo noted that the Funds are subject to heightened regulatory requirements relative to institutional clients. Accordingly, the Trustees did not regard these fee differences as relevant to their deliberations.

On the basis of the Agreement Renewal Information, and other information previously received by the Board from RIMCo during the course of the current year or prior years, or presented at or in connection with the April 21 Board meeting by RIMCo, the Board, in respect of each Fund and Underlying Fund, found, after giving effect to any applicable waivers and/or reimbursements and considering differences in the composition and investment strategies of their respective Comparable Funds (1) the Advisory Fees charged by RIMCo to be reasonable in light of the nature, scope and quality of the services provided, and expected to be provided, to the Funds or Underlying Funds; (2) the relative expense ratio of each Fund and Underlying Fund was comparable to those of its Comparable Funds; (3) RIMCo’s methodology of allocating expenses of operating funds in the complex was reasonable; and (4) RIMCo’s profitability with respect to the Funds and each Underlying Fund was not excessive in light of the nature, scope and quality of the services provided by RIMCo.

In evaluating the performance of the Funds and Underlying Funds generally relative to their Comparable Funds, the Board also noted RIMCo’s advice that many of the Underlying Funds’ Comparable Funds do not “equitize” their cash (i.e., cash awaiting investment or disbursement to satisfy redemptions or other fund obligations) and may hold large positions uninvested in their investment portfolios. By contrast, the Underlying Funds generally follow a strategy of equitizing their cash and fully investing their assets in pursuit of their investment objectives (the Underlying Funds’ strategy of equitizing cash and fully investing their assets is hereinafter referred to as their “full investment strategy”). RIMCo noted that the Underlying Funds’ full investment strategy

 

106   Basis for Approval of Investment Advisory Contracts

Russell Investment Company

LifePoints® Funds

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

generally will detract from their relative performance, and therefore the relative performance of the Funds, in a declining market, such as 2008, but may enhance relative performance in a rising market.

The Board further concluded that, under the circumstances, the performance of each of the Funds supported continuation of the RIMCo Agreement. In evaluating performance, the Board considered each Fund’s and Underlying Fund’s absolute performance and its performance relative to appropriate benchmarks and indices in addition to its performance relative to its Comparable Funds. In assessing performance, the Board also considered RIMCo’s investment strategy of managing the Underlying Funds in a risk-aware manner and the extraordinary capital market conditions during 2008.

With respect to the LifePoints Balanced Strategy Fund, the Third-Party Information showed that the Fund’s performance was ranked in the fifth quintile for the 1-year period ended December 31, 2008 and that its performance was ranked in the fourth quintile for the 3-year period ended such date. RIMCo noted that the LifePoints Balanced Strategy Fund maintains a target equity allocation of 60%, exposing it to a broad array of globally diversified equity investments. By contrast, the LifePoints Balanced Strategy Fund’s Comparable Funds have target equity allocations ranging from 40% to 60% of their total portfolios. The Fund’s larger target equity allocation may detract from its performance relative to its Comparable Funds in periods of declining equity markets such as 2008, but may enhance its relative performance in periods of rising equity markets. RIMCo noted further that the equity sell-off of 2008 and its impact on the Fund’s performance for the 1-year period contributed significantly to its underperformance for the 3-year period.

With respect to the LifePoints Growth Strategy Fund, the Third-Party Information showed that the Fund’s performance was ranked in the fifth quintile for the 1-year period ended December 31, 2008 and its performance was ranked in the fourth quintile for the 3-year period ended such date. RIMCo noted that the LifePoints Growth Strategy Fund maintains a target equity allocation of 80% for exposure to a broad mix of globally diversified equity investments. By contrast, the LifePoints Growth Strategy Fund’s Comparable Funds have target equity allocations ranging from 60% to 80% of their total portfolios. The LifePoints Growth Strategy Fund’s larger target equity allocation may detract from its performance relative to its Comparable Funds in periods of declining equity markets such as 2008, but may enhance its relative performance in periods of rising equity markets. RIMCo noted further that the equity sell-off of 2008 and its impact on the Fund’s performance for the 1-year period contributed significantly to its underperformance for the 3-year period.

After considering the foregoing and other relevant factors, the Board concluded that continuation of the RIMCo Agreement on its current terms and conditions would be in the best interests of the Funds and their respective shareholders and voted to approve the continuation of the RIMCo Agreement.

At the April 21 Board meeting, with respect to the evaluation of the terms of portfolio management contracts with Money Managers for the Underlying Funds, the Board received and considered information from RIMCo reporting, among other things, for each Money Manager, the Money Manager’s performance over various periods; RIMCo’s assessment of the performance of each Money Manager; any significant business relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the Funds’ and Underlying Funds’ underwriter; and

RIMCo’s recommendation to retain the Money Manager at the current fee rate, to retain the Money Manager at a reduced fee rate or to terminate the Money Manager. The Board received reports during the course of the year from the Funds’ Chief Compliance Officer regarding each Money Manager’s compliance program. RIMCo recommended that each Money Manager be retained at its current fee rate. RIMCo has advised the Board that it does not regard Money Manager profitability as relevant to its evaluation of the portfolio management contracts with Money Managers because the willingness of Money Managers to serve in such capacity depends upon arm’s-length negotiations with RIMCo; RIMCo is aware of the fees charged by Money Managers to other clients; and RIMCo believes that the fees agreed upon with Money Managers are reasonable in light of the anticipated quality of investment advisory services to be rendered. The Board accepted RIMCo’s explanation in light of the Board’s findings as to the reasonableness of the Advisory Fee paid by each Fund and Underlying Fund and the fact that each Money Manager’s fee is paid by RIMCo.

Based substantially upon RIMCo’s recommendations, together with the information received from RIMCo in support of its recommendations at the April 21 Board meeting, the Board concluded that the fees paid to the Money Managers of each Underlying Fund are reasonable in light of the quality of the investment advisory services provided and that continuation of the portfolio management contract with each Money Manager of each Underlying Fund would be in the best interests of such Underlying Fund and its shareholders.

In their deliberations, the Trustees did not identify any particular information as to the RIMCo Agreement or, other than RIMCo’s recommendation, the portfolio management contract with any Money Manager for an Underlying Fund that was all-important or controlling and each Trustee attributed different weights to the various factors considered. The Trustees evaluated all information available to them on a Fund-by-Fund basis and their determinations were made in respect of each Fund and Underlying Fund.

 

Basis for Approval of Investment Advisory Contracts   107

Russell Investment Company

LifePoints® Funds

Shareholder Requests for Additional Information — April 30, 2009 (Unaudited)

 

 

 

A complete unaudited schedule of investments is made available generally no later than 60 days after the end of the first and third quarters of each fiscal year. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, (ii) at www.russell.com, (iii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iv) at the Securities and Exchange Commission’s public reference room.

The Board has delegated to RIMCo, as RIC’s investment adviser, the primary responsibility for monitoring, evaluating and voting proxies solicited by or with respect to issuers of securities in which assets of the Funds may be invested. RIMCo has established a proxy voting committee (“Committee”) and has adopted written proxy voting policies and procedures (“P&P”) and proxy voting guidelines (“Guidelines”). The Funds maintain a Portfolio Holdings Disclosure Policy that governs the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Funds. A description of the P&P, Guidelines, Portfolio Holdings Disclosure Policy and additional information about Fund Trustees are contained in the Funds’ Statement of Additional Information (“SAI”). The SAI is available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, (ii) at www.russell.com, and (iii) on the Securities and Exchange Commission’s website at www.sec.gov. To reduce expenses, we may mail only one copy of the Funds’ prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution.

Some Financial Intermediaries may offer electronic delivery of the Funds’ prospectus and annual and semiannual reports. Please contact your Financial Intermediary for further details.

Financial Statements of the Underlying Funds can be obtained at no charge by calling the Funds at (800) 787-7354.

 

108   Shareholder Requests for Additional Information

Russell Investment Company

LifePoints® Funds

Disclosure of Information about Fund Trustees and Officers — April 30, 2009

(Unaudited)

 

 

 

The following tables provide information for each officer and Trustee of the Russell Fund Complex. The Russell Fund Complex consists of RIC, which has 38 funds, and RIF, which has nine funds. Each of the Trustees is a Trustee of both RIC and RIF. The first table provides information for the interested Trustee. The second table provides information for the independent Trustees. The third table provides information for the Trustees emeritus. The fourth table provides information for the officers.

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office*		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

INTERESTED TRUSTEE

# Greg J. Stark

Born May 3, 1968

 

909 A Street

Tacoma, Washington

98402-1616

  

• President and Chief Executive Officer since 2004

 

• Trustee since 2007

  

• Appointed until successor is duly elected and qualified

 

• Until successor is chosen and qualified by Trustees

  

• President and CEO RIC and RIF

• Chairman of the Board, President and CEO, RIMCo

• Chairman of the Board, President and CEO, Russell Fund Services Company (“RFSC”)

• Chairman of the Board, President and CEO, Russell Financial Services, Inc.

• Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

• Until 2004, Managing Director, of Individual Investor Services, FRC

• 2000 to 2004 Managing Director, Sales and Client Service, RIMCo

   47   None

INDEPENDENT TRUSTEES

Thaddas L. Alston

Born April 7, 1945

 

909 A Street

Tacoma, Washington

98402-1616

  

• Trustee since 2006

  

• Appointed until successor is duly elected and qualified

  

• Senior Vice President, Larco Investments, Ltd. (real estate firm)

   47   None
             

Kristianne Blake,

Born January 22, 1954

 

909 A Street

Tacoma, Washington

98402-1616

  

• Trustee since 2000

 

• Chairman since 2005

 

• Appointed until successor is duly elected and qualified

 

• Annual

  

• Director and Chairman of the Audit Committee, Avista Corp.

• Trustee and Chairman of the Operations Committee, Principal Investor Funds and Principal Variable Contracts Funds

• Regent, University of Washington

• President, Kristianne Gates Blake, P.S. (accounting services)

• February 2002 to June 2005, Chairman of the Audit Committee, RIC and RIF

• Trustee and Chairman of the Operations and Distribution Committee, WM Group of Funds, 1999–2006

   47  

• Director, Avista Corp (electric utilities)

• Trustee, Principal Investor Funds (investment company);

• Trustee, Principal Variable Contracts Funds (investment company)

 

# Mr. Stark is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore an Interested Trustee.

 

Disclosure of Information about Fund Trustees and Officers   109

Russell Investment Company

LifePoints® Funds

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009 (Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office*		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

INDEPENDENT TRUSTEES (continued)

Daniel P. Connealy

Born June 6, 1946

 

909 A Street

Tacoma, Washington

98402-1616

  

• Trustee since 2003

 

• Chairman of the Audit Committee since 2005

  

• Appointed until successor is duly elected and qualified

• Appointed until successor is duly elected and qualified

  

• June 2004 to present, Senior Vice President and Chief Financial Officer, Waddell & Reed Financial, Inc.

   47   None

Jonathan Fine,

Born July 8, 1954

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee since 2004  

Appointed until

successor is duly

elected and

qualified

  

• President and Chief Executive Officer, United Way of King County, WA

   47   None

Raymond P. Tennison, Jr.

Born December 21, 1955

 

909 A Street

Tacoma, Washington

98402-1616

  

• Trustee since 2000

 

• Chairman of the Nominating and Governance Committee since 2007

  

• Appointed until successor is duly elected and qualified

• Appointed until successor is duly elected and qualified

  

• President, Simpson Investment Company and several additional subsidiary companies, including Simpson Timber Company, Simpson Paper Company and Simpson Tacoma Kraft Company

   47   None

Jack R. Thompson,

Born March 21, 1949

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee since 2005   Appointed until successor is duly elected and qualified  

• September 2003 to present, Independent Board Chair and Chairman of the Audit Committee, Sparx Asia Funds

• September 2007 to present, Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation (health products company)

   47  

• Director, Sparx Asia Funds (investment company)

• Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation (health products company)

Julie W. Weston,

Born October 2, 1943

 

909 A Street

Tacoma, Washington

98402-1616

  

• Trustee since 2002

 

• Chairperson of the Investment Committee since 2006

  

• Appointed until successor is duly elected and qualified

• Appointed until successor is duly elected and qualified

  

Retired

   47   None

 

* Each Trustee is subject to mandatory retirement at age 72.

 

110   Disclosure of Information about Fund Trustees and Officers

Russell Investment Company

LifePoints® Funds

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009

(Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

TRUSTEES EMERITUS

            

* George F. Russell, Jr.,

Born July 3, 1932

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus and Chairman Emeritus since 1999   Until resignation or removal  

• Director Emeritus, Frank Russell Company (investment consultant to institutional investors (“FRC”)) and RIMCo

• Chairman Emeritus, RIC and RIF; Russell Implementation Services Inc. (broker-dealer and investment adviser (“RIS”)); Russell 20-20 Association (non-profit corporation); and Russell Trust Company (non-depository trust company (“RTC”))

• Chairman, Sunshine Management Services, LLC (investment adviser)

   47   None
             

Paul E. Anderson,

Born October 15, 1931

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus since 2007   Five year term  

• President, Anderson Management Group LLC (private investments consulting)

• Trustee, RIC and RIF until 2006

• February 2002 to June 2005, Lead Trustee, RIC and RIF

• Chairman of the Nominating and Governance Committee, 2006

   47   None
             

Lee C. Gingrich,

Born October 6, 1930

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus since 2006   Five year term  

• Retired since 1995

• Trustee of RIC and RIF until 2005

• Chairman of the Nominating and Governance Committee 2001–2005

   47   None

 

* Mr. Russell is also a director emeritus of one or more affiliates of RIC and RIF.

 

Disclosure of Information about Fund Trustees and Officers   111

Russell Investment Company

LifePoints® Funds

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009

(Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office		   Principal Occupation(s)
During the
Past 5 Years

OFFICERS

        

Cheryl Wichers

Born December 16, 1966

 

909 A Street

Tacoma, Washington

98402-1616

   Chief Compliance Officer since 2005   Until removed by Independent Trustees  

• Chief Compliance Officer, RIC

• Chief Compliance Officer, RIF

• Chief Compliance Officer, RIMCo

• Chief Compliance Officer, RFSC

• April 2002–May 2005, Manager, Global Regulatory Policy

         

Greg J. Stark,

Born May 3, 1968

 

909 A Street

Tacoma, Washington

98402-1616

   President and Chief Executive Officer since 2004   Until successor is chosen and qualified by Trustees  

• President and CEO, RIC and RIF

• Chairman of the Board, President and CEO, RIMCo

• Chairman of the Board, President and CEO, Russell Financial Services, Inc.

• Chairman of the Board, President and CEO, RFSC

• Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

• Until 2004, Managing Director of Individual Investor Services, FRC

• 2000 to 2004, Managing Director, Sales and Client Service, RIMCo

         

Mark E. Swanson,

Born November 26, 1963

 

909 A Street

Tacoma, Washington

98402-1616

   Treasurer and Chief Accounting Officer since 1998   Until successor is chosen and qualified by Trustees  

• Treasurer, Chief Accounting Officer and CFO, RIC and RIF

• Director, Funds Administration, RIMCo, RFSC, RTC and Russell Financial Services, Inc.

• Treasurer and Principal Accounting Officer, SSgA Funds

         

Peter Gunning,

Born February 22, 1967

 

909 A Street

Tacoma, Washington

98402-1616

   Chief Investment Officer since 2008   Until removed by Trustees  

• Chief Investment Officer, RIC and RIF

• Director, RIMCo and FRC

• 1996 to 2008 Chief Investment Officer, Russell, Asia Pacific

         

Gregory J. Lyons,

Born August 24, 1960

 

909 A Street

Tacoma, Washington

98402-1616

   Secretary since 2007  

Until successor is chosen and qualified by

Trustees

  

• U.S. General Counsel and Assistant Secretary, FRC

• Director and Assistant Secretary, RIA

• Secretary, RIMCo, RFSC and Russell Financial Services, Inc.

• Secretary and Chief Legal Counsel, RIC and RIF

 

112   Disclosure of Information about Fund Trustees and Officers

LifePoints® Funds

Russell Investment Company

909 A Street, Tacoma, Washington 98402

(800) 787-7354

 

 

 

Interested Trustee

Greg J. Stark

Independent Trustees

Thaddas L. Alston

Kristianne Blake

Daniel P. Connealy

Jonathan Fine

Raymond P. Tennison, Jr.

Jack R. Thompson

Julie W. Weston

Trustees Emeritus

George F. Russell, Jr.

Paul E. Anderson

Lee C. Gingrich

Officers

Greg J. Stark, President and Chief Executive Officer

Cheryl Wichers, Chief Compliance Officer

Peter Gunning, Chief Investment Officer

Mark E. Swanson, Treasurer and Chief Accounting Officer

Gregory J. Lyons, Secretary

Adviser

Russell Investment Management Company

909 A Street

Tacoma, WA 98402

Administrator and Transfer and Dividend Disbursing Agent

Russell Fund Services Company

909 A Street

Tacoma, WA 98402

Custodian

State Street Bank and Trust Company

Josiah Quincy Building

200 Newport Avenue

North Quincy, MA 02171

Office of Shareholder Inquiries

909 A Street

Tacoma, WA 98402

(800) 787-7354

Legal Counsel

Dechert LLP

200 Clarendon Street, 27th Floor

Boston, MA 02116-5021

Distributor

Russell Financial Services, Inc.

909 A Street

Tacoma, WA 98402

Money Managers of Underlying Funds as of April 30, 2009

Russell U.S. Core Equity Fund

AllianceBernstein L.P., New York, NY

Arnhold and S. Bleichroeder Advisers, LLC, New York, NY

Columbus Circle Investors, Stamford, CT

Institutional Capital LLC, Chicago, IL

Marsico Capital Management, LLC, Denver, CO

MFS Institutional Advisors, Inc., Boston, MA

Montag & Caldwell, Inc., Atlanta, GA

Schneider Capital Management Corporation, Wayne, PA

Suffolk Capital Management, LLC, New York, NY

Turner Investment Partners, Inc., Berwyn, PA

Russell U.S. Quantitative Equity Fund

Aronson+Johnson+Ortiz, LP, Philadelphia, PA

Goldman Sachs Asset Management, L.P., New York, NY

INTECH Investment Management LLC, West Palm Beach, FL

Jacobs Levy Equity Management, Inc., Florham Park, NJ

Mellon Capital Management Corporation, Boston, MA

Russell U.S. Small & Mid Cap Fund

ClariVest Asset Management LLC, San Diego, CA

Delphi Management, Inc., Boston, MA

DePrince, Race & Zollo, Inc., Winter Park, FL

Gould Investment Partners LLC, Berwyn, PA

Jacobs Levy Equity Management, Inc., Florham Park, NJ

PanAgora Asset Management, Inc., Boston, MA

Ranger Investment Management, L.P., Dallas, TX

Signia Capital Management, LLC, Spokane, WA

Tygh Capital Management, Inc., Portland, OR

Russell Real Estate Securities Fund

AEW Capital Management, L.P., Boston, MA

Cohen & Steers Capital Management, Inc., New York, NY

Heitman Real Estate Securities LLC, Chicago, IL

INVESCO Institutional (N.A.), Inc. which acts as a money manager to the Fund through its INVESCO Real Estate Division, Dallas, TX

RREEF America L.L.C., Chicago, IL

Russell Global Equity Fund

ClariVest Asset Management LLC, San Diego, CA

Gartmore Global Partners, London, United Kingdom

Harris Associates, L.P., Chicago, IL

Tradewinds Global Investors, LLC, Los Angeles, CA

T. Rowe Price International, Inc., Baltimore, MD

Russell International Developed Markets Fund

AllianceBernstein L.P., New York, NY

Altrinsic Global Advisors, LLC, Stamford, CT

AQR Capital Management, LLC, Greenwich, CT

Axiom International Investors LLC, Greenwich, CT

Marsico Capital Management, LLC, Denver, CO

MFS Institutional Advisors, Inc., Boston, MA

Mondrian Investment Partners Limited, London, United Kingdom

UBS Global Asset Management (Americas) Inc., Chicago, IL

Wellington Management Company, LLP, Boston, MA


 

Adviser, Money Managers and Service Providers   113

LifePoints® Funds

Russell Investment Company

909 A Street, Tacoma, Washington 98402

(800) 787-7354

 

 

 

Russell Emerging Markets Fund

AllianceBernstein L.P., New York, NY

Arrowstreet Capital, Limited Partnership, Boston, MA

Genesis Asset Managers, LLP, London, United Kingdom

Harding Loevner LLC, Somerville, NJ

T. Rowe Price International, Inc., Baltimore, MD

UBS Global Asset Management (Americas) Inc., Chicago, IL

Russell Strategic Bond Fund

Drake Capital Management, LLC, New York, NY

Goldman Sachs Asset Management, L.P., New York, NY

Hyperion Brookfield Asset Management, Inc., New York, NY

Logan Circle Partners, L.P., Philadelphia, PA

Metropolitan West Asset Management, LLC, Los Angeles, CA

Pacific Investment Management Company LLC, Newport Beach, CA

Russell Short Duration Bond Fund

Logan Circle Partners, L.P., Philadelphia, PA

Pacific Investment Management Company LLC, Newport Beach, CA


 

This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained is to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Company. Such offering is made only by Prospectus, which includes details as to offering price and other material information.

114   Adviser, Money Managers and Service Providers

 

Russell Investment Company    909 A Street      800-787-7354
   Tacoma, Washington 98402      Fax: 253-591-3495
        www.russell.com

 

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36-08-227

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2009 SEMIANNUAL REPORT

 

 

Russell Tax-Managed

Global Equity Fund

 

 

APRIL 30, 2009

 

FUND    SHARE CLASS    FUND NAME PRIOR TO
SEPTEMBER 2, 2008
Russell Tax-Managed Global Equity Fund    C, S    Tax-Managed Global Equity

 

LOGO

 

Russell Investment Company

Russell Investment Company is a series investment company with 38 different investment portfolios referred to as Funds. These financial statements report on one of these Funds.

 

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Semiannual Report

April 30, 2009 (Unaudited)

Table of Contents

 

     Page
Shareholder Expense Example    3
Schedule of Investments    4
Statement of Assets and Liabilities    5
Statement of Operations    6
Statements of Changes in Net Assets    7
Financial Highlights - Class C    8
Financial Highlights - Class S    9
Notes to Financial Statements    10
Basis for Approval of Investment Advisory Contracts    16
Shareholder Requests for Additional Information    20
Disclosure of Information about Fund Trustees and Officers    21
Adviser, Money Managers and Service Providers    25

 

Russell Investment Company - Russell Tax-Managed Global Equity Fund.

Copyright © Russell Investments 2009. All rights reserved.

Russell Investments is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Fund objectives, risks, charges and expenses should be carefully considered before investing. A prospectus containing this and other important information must precede or accompany this material. Please read the prospectus carefully before investing.

Securities distributed through Russell Financial Services, Inc. (effective June 2, 2008, the name changed from Russell Fund Distributors, Inc.) member FINRA, part of Russell Investments.

Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Current to the most recent month-end performance data may be obtained by visiting www.russell.com/us/fundperformance.

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Shareholder Expense Example — April 30, 2009 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding the Fund’s Expense Example. Please refer to this information when reviewing the Expense Example for the Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from November 1, 2008 to April 30, 2009.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Class C

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 946.20    $ 1,019.54

Expenses Paid During Period*

    $ 5.12    $ 5.31

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.06% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Class S

    Actual
Performance		    Hypothetical
Performance
(5% return
before expenses)
     

Beginning Account Value

      

November 1, 2008

    $ 1,000.00    $ 1,000.00

Ending Account Value

      

April 30, 2009

    $ 949.60    $ 1,024.50

Expenses Paid During Period*

    $ 0.29    $ 0.30

 

* Expenses are equal to the Fund’s annualized expense ratio of 0.06% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Shareholder Expense Example   3

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Schedule of Investments — April 30, 2009 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares      Market
Value
$		  
       
Investments - 100.0%        
Other Russell Investment Company
Series Mutual Funds		        
Domestic Equities - 74.9%        

Russell Tax-Managed U.S. Large Cap Fund

    1,507,054      19,486   

Russell Tax-Managed U.S. Mid & Small Cap Fund

    665,865      5,960   

Russell U.S. Quantitative Equity Fund

    191,949      3,885   
           
        29,331   
           
International Equities - 25.1%        

Russell Emerging Markets Fund

    171,841      1,985   

Russell International Developed Markets Fund

    346,960      7,869   
           
        9,854   
           
Total Investments - 100.0%
(identified cost $42,716)		         39,185   
Other Assets and Liabilities,
Net - (0.0%)		         (1 ) 
           
Net Assets - 100.0%         39,184   
           

 

See accompanying notes which are an integral part of the financial statements.

 

4   Schedule of Investments

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Statement of Assets and Liabilities — April 30, 2009 (Unaudited)

 

Amounts in thousands            
   

Assets

    

Investments at market (identified cost $42,716)

     $ 39,185   

Receivables:

    

Investments sold

       19   

Fund shares sold

       2   

From affiliates

       31   

Prepaid expenses

       19   
         

Total assets

       39,256   
   
   

Liabilities

    

Payables:

    

Fund shares redeemed

   $ 26  

Accrued fees to affiliates

     17  

Other accrued expenses

     29  
       

Total liabilities

       72   
         
   

Net Assets

     $ 39,184   
         
   
Net Assets Consist of:    

Undistributed (overdistributed) net investment income

     $ 128   

Accumulated net realized gain (loss)

       (20,333 ) 

Unrealized appreciation (depreciation) on investments

       (3,531 ) 

Shares of beneficial interest

       56   

Additional paid-in capital

       62,864   
         

Net Assets

     $ 39,184   
         
               
   

Net Asset Value, offering and redemption price per share:

    

Net asset value per share: Class C*

     $ 6.87   

Class C — Net assets

     $ 14,863,091   

Class C — Shares outstanding ($.01 par value)

       2,164,865   

Net asset value per share: Class S*

     $ 7.10   

Class S — Net assets

     $ 24,320,518   

Class S — Shares outstanding ($.01 par value)

       3,426,390   

 

* Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding.

 

See accompanying notes which are an integral part of the financial statements.

 

Statement of Assets and Liabilities   5

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Statement of Operations — For the Period Ended April 30, 2009 (Unaudited)

 

Amounts in thousands              
   

Investment Income

    

Income distributions from Underlying Funds

     $ 499  
   

Expenses

    

Advisory fees

   $ 41    

Administrative fees

     10    

Custodian fees

     10    

Distribution fees - Class C

     62    

Transfer agent fees - Class C

     15    

Transfer agent fees - Class S

     22    

Professional fees

     19    

Registration fees

     26    

Shareholder servicing fees - Class C

     21    

Trustees’ fees

     1    

Printing fees

     4    

Miscellaneous

     1    
         

Expenses before reductions

     232    

Expense reductions

     (136 )  
         

Net expenses

       96  
         

Net investment income (loss)

       403  
         
   

Net Realized and Unrealized Gain (Loss)

    

Net realized gain (loss) on:

    

Investments

     (5,881 )  

Capital gain distributions from Underlying Funds

     115       (5,766 )
         

Net change in unrealized appreciation (depreciation) on investments

       2,244  
         

Net realized and unrealized gain (loss)

       (3,522 )
         

Net Increase (Decrease) in Net Assets from Operations

     $ (3,119 )
         

 

See accompanying notes which are an integral part of the financial statements.

 

6   Statement of Operations

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Statements of Changes in Net Assets

 

Amounts in thousands   Period Ended
April 30, 2009
(Unaudited)		     Fiscal Year
Ended
October 31,
2008		  
   

Increase (Decrease) in Net Assets

    

Operations

    

Net investment income (loss)

   $ 403      $ 2,333   

Net realized gain (loss)

     (5,766 )      204   

Net change in unrealized appreciation (depreciation)

     2,244        (43,789 ) 
               

Net increase (decrease) in net assets from operations

     (3,119 )      (41,252 ) 
               

Distributions

    

From net investment income

    

Class C

     (27 )      (779 ) 

Class S

     (359 )      (1,443 ) 
               

Net decrease in net assets from distributions

     (386 )      (2,222 ) 
               

Share Transactions

    

Net increase (decrease) in net assets from share transactions

     (8,786 )      (3,884 ) 
               

Total Net Increase (Decrease) in Net Assets

     (12,291 )      (47,358 ) 

Net Assets

    

Beginning of period

     51,475        98,833   
               

End of period

   $ 39,184      $ 51,475   
               

Underdistributed (overdistributed) net investment income included in net assets

   $ 128      $ 111   

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets   7

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Financial Highlights — Class C

For a Share Outstanding Throughout Each Period.

 

 

     For the Periods Ended October 31,  
      2009*     2008     2007     2006     2005     2004  
            

Net Asset Value, Beginning of Period

    $ 7.27      $ 12.88      $ 10.87      $ 9.39      $ 8.44      $ 7.61   
                                                

Income From Operations

             

Net investment income (loss) (a)(b)

      .05        .22        .07        (.03 )      — (g)      (.02 ) 

Net realized and unrealized gain (loss)

      (.44 )      (5.56 )      2.05        1.51        .95        .86   
                                                

Total from investment operations

      (.39 )      (5.34 )      2.12        1.48        .95        .84   
                                                

Distributions

             

From net investment income

      (.01 )      (.27 )      (.11 )      —        —        (.01 ) 
                                                

Net Asset Value, End of Period

    $ 6.87      $ 7.27      $ 12.88      $ 10.87      $ 9.39      $ 8.44   
                                                

Total Return (%) (c)

      (5.38 )      (42.23 )      19.68        15.76        11.26        10.99   

Ratios/Supplemental Data:

             

Net Assets, end of period (in thousands)

    $ 14,863      $ 19,477      $ 27,993      $ 19,439      $ 14,801      $ 12,766   

Ratios to average net assets (%):

             

Operating expenses, net (d)(e)(f)

      1.06        1.01        1.00        1.00        1.00        1.00   

Operating expenses, gross (d)

      1.72        1.55        1.54        1.58        1.55        1.58   

Net investment income (loss) (d)(f)

      .84        2.12        .57        (.27 )      (.03 )      (.19 ) 

Portfolio turnover rate (%)(c)

      29        25        12        9        12        21   

 

* For the period ended April 30, 2009 (Unaudited).
(a) Average month-end shares outstanding were used for this calculation.
(b) Recognition of net investment income by the Fund is affected by the timing of the declarations of dividends by the Underlying Funds in which the Fund invests.
(c) Periods less than one year are not annualized.
(d) The ratios for periods less than one year are annualized.
(e) The calculation includes only those expenses charged directly to the Fund and does not include expenses charged to the Underlying Funds in which the Fund invests.
(f) May reflect amounts waived and/or reimbursed by Russell Investment Management Company (“RIMCo”) as the adviser and/or Russell Fund Services Company (“RFSC”) as the transfer agent.
(g) Less than $.01 per share.

 

See accompanying notes which are an integral part of the financial statements.

 

8   Financial Highlights - Class C

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Financial Highlights — Class S

For a Share Outstanding Throughout Each Period.

 

     For the Periods Ended October 31,  
      2009*     2008     2007     2006     2005     2004  
            

Net Asset Value, Beginning of Period

    $ 7.58      $ 13.29      $ 11.20      $ 9.65      $ 8.67      $ 7.80   
                                                

Income From Operations

             

Net investment income (loss) (a)(b)

      .07        .35        .20        .08        .09        .07   

Net realized and unrealized gain (loss)

      (.46 )      (5.77 )      2.10        1.55        .97        .87   
                                                

Total from investment operations

      (.39 )      (5.42 )      2.30        1.63        1.06        .94   
                                                

Distributions

             

From net investment income

      (.09 )      (.29 )      (.21 )      (.08 )      (.08 )      (.07 ) 
                                                

Net Asset Value, End of Period

    $ 7.10      $ 7.58      $ 13.29      $ 11.20      $ 9.65      $ 8.67   
                                                

Total Return (%) (c)

      (5.04 )      (41.59 )      20.86        16.95        12.31        12.14   

Ratios/Supplemental Data:

             

Net Assets, end of period (in thousands)

    $ 24,321      $ 31,998      $ 70,840      $ 55,019      $ 42,596      $ 34,708   

Ratios to average net assets (%):

             

Operating expenses, net (d)(e)(f)

      .06        .01        —        —        —        —   

Operating expenses, gross (d)

      .73        .54        .54        .58        .55        .58   

Net investment income (loss) (d)(f)

      1.07        3.14        1.63        .79        .95        .87   

Portfolio Turnover Rate (%) (c)

      29        25        12        9        12        21   

 

* For the period ended April 30, 2009 (Unaudited).
(a) Average month-end shares outstanding were used for this calculation.
(b) Recognition of net investment income by the Fund is affected by the timing of the declarations of dividends by the Underlying Funds in which the Fund invests.
(c) Periods less than one year are not annualized.
(d) The ratios for periods less than one year are annualized.
(e) The calculation includes only those expenses charged directly to the Fund and does not include expenses charged to the Underlying Funds in which the Fund invests.
(f) May reflect amounts waived and/or reimbursed by RIMCo as the adviser and/or RFSC as the transfer agent.
(g) Less than $.01 per share.

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights - Class S   9

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Notes to Financial Statements — April 30, 2009 (Unaudited)

 

 

 

1.   Organization

Russell Investment Company (the “Investment Company” or “RIC”) is a series investment company with 38 different investment portfolios referred to as Funds. These financial statements report on one of these Funds (the “Fund”). The Investment Company is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. It is organized and operates as a Massachusetts business trust under a second amended and restated master trust agreement dated October 1, 2008. The Investment Company’s master trust agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.

Russell Investment Company (“RIMCo”) is the Fund’s adviser and Russell Fund Services Company (“RFSC”), a wholly-owned subsidiary of RIMCo, is the Fund’s administrator and transfer agent.

Effective September 2, 2008, the Tax-Managed Global Equity Fund changed its name to the Russell Tax-Managed Global Equity Fund.

The Fund seeks to achieve its objective by investing in Class S Shares and Class Y Shares of the Investment Company’s Funds (the “Underlying Funds”) as set forth in table below. RIMCo may modify the target asset allocation for the Fund and/or the Underlying Funds in which the Fund invests. From time to time, the Fund may adjust its investments within set limits based on RIMCo’s outlook for the economy, financial markets generally and relative market valuation of the asset classes represented by each Underlying Fund. Additionally, the Fund may deviate from set limits when, in RIMCo’s opinion, it is necessary to do so to pursue the Fund’s investment objective. In the future, the Fund may also invest in other funds which are not currently Underlying Funds.

 

Asset Class/Underlying Funds    Asset Allocation
as of March 1, 2009		  
  

Domestic Equities

   

Russell Tax-Managed U.S. Large Cap Fund, Class S

    50 %

Russell Tax-Managed U.S. Mid & Small Cap Fund, Class S

    15  

Russell U.S. Quantitative Equity Fund, Class Y

    10  

International Equities

   

Russell Emerging Markets Fund, Class Y

    5  

Russell International Developed Markets Fund, Class Y

    20  
      
   100 %

 

2.   Significant Accounting Policies

The Funds’ financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following is a summary of the significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

Security Valuation

The Fund values its portfolio securities, the shares of the Underlying Funds, at the current net asset value per share of each Underlying Fund.

The Underlying Funds value portfolio securities according to Board-approved securities valuation procedures, and pricing services, which include market value procedures, fair value procedures and a description of the pricing services used by the Fund. Money market fund securities are priced using the amortized cost method of valuation, as are debt obligation securities maturing within 60 days at the time of purchase, unless the Board determines that amortized cost does not represent market value of short-term debt obligations. The Board has delegated the responsibility for administration of the securities valuation procedures to RFSC.

Ordinarily, the Underlying Funds value each portfolio security based on market quotations provided by pricing services or alternative pricing services or dealers (when permitted by the market value procedures). Generally, Underlying Fund securities are valued at the close of the market on which they are traded as follows:

 

  •  

U.S. listed equities, equity and fixed income options and Rights/Warrants: Last sale price; last bid price if no last sale price.

 

  •  

U.S. over-the-counter equities: Official closing price; last bid price if no closing price.

 

  •  

Listed ADRs/GDRs: Last sale price; last bid price if no last sale price.

 

  •  

Municipal bonds, U.S. bonds, Eurobonds/foreign bonds: Evaluated bid price; broker quote if no evaluated bid price.

 

10   Notes to Financial Statements

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

  •  

Futures: Settlement price.

 

  •  

Bank loans and forwards: Mean between bid and asking price.

 

  •  

Investments in other mutual funds are valued at their net asset value per share, calculated at 4 p.m. Eastern time or as of the close of the New York Stock Exchange, whichever is earlier.

 

  •  

The value of swap agreements is equal to the Funds’ obligation (or rights) under swap contracts which will generally be equal to the net amounts to be paid or received under the contracts based upon the relative values of the positions held by each party to the contracts.

 

  •  

Equity securities traded on a national foreign securities exchange or a foreign over the counter market are valued on the basis of the official closing price, or lacking the official closing price, at the last sale price of the primary exchange on which the security is traded.

If market quotations are not readily available for a security or if subsequent events suggest that a market quotation is not reliable, the Underlying Funds will use the security’s fair value, as determined in accordance with the fair value procedures. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market on which they are traded, but rather may be priced by another method that the Board believes reflects fair value. The fair value procedures may involve subjective judgments as to the fair value of securities. The use of fair value pricing by an Underlying Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using normal pricing methods. Fair value pricing could also cause discrepancies between the daily movement of the value of Underlying Fund shares and daily movement of the benchmark index if the index is valued using another pricing method.

This policy is intended to assure that the Underlying Funds’ net asset values fairly reflect security values as of the time of pricing. Events or circumstances affecting the values of Underlying Fund securities that occur between the closing of the principal markets on which they trade and the time the net asset value of Underlying Fund shares is determined may be reflected in the calculation of net asset values for each applicable Underlying Fund (and each Fund which invests in such Underlying Fund) when the Underlying Funds deem that the particular event or circumstance would materially affect such Underlying Fund’s net asset value. Underlying Funds that invest primarily in frequently traded exchange-listed securities will use fair value pricing in limited circumstances since reliable market quotations will often be readily available. Underlying Funds that invest in foreign securities are likely to use fair value pricing more often since significant events may occur between the close of foreign markets and the time of pricing which would trigger fair value pricing of the foreign securities. Underlying Funds that invest in low-rated debt securities are also likely to use fair value pricing more often since the markets in which such securities are traded are generally thinner, more limited and less active than those for higher rated securities. Examples of events that could trigger fair value pricing of one or more securities are: a material market movement of the U.S. securities market (defined in the fair value procedures as the movement by a single major U.S. index greater than a certain percentage) or other significant event; foreign market holidays if on a daily basis, Fund exposure exceeds 20% in aggregate (all closed markets combined); a company development; a natural disaster; or an armed conflict.

Because foreign securities can trade on non-business days, the net asset value of a Fund’s portfolio that includes an Underlying Fund which invests in foreign securities may change on days when shareholders will not be able to purchase or redeem fund shares.

The Fund adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective November 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. SFAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

  •  

Level 1 — quoted prices in active markets for identical investments

 

Notes to Financial Statements   11

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

  •  

Level 2 — other significant observable inputs (including 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)

Inputs used in valuing the Fund’s investments for the period ended April 30, 2009 were as follows:

 

     

Investments in

Securities

  

Level 1

    $ 39,184,499

Level 2

      —

Level 3

      —
      
   $ 39,184,499
      

As of April 30, 2009, there were no Level 3 securities held by the Fund.

Investment Transactions

Investment transactions are recorded on a trade date basis. Realized gains and losses from securities transactions, if any, are recorded on the basis of specific identified cost.

Investment Income

Distributions of income and capital gains from the Underlying Funds are recorded on the ex-dividend date.

Federal Income Taxes

Since the Investment Company is a Massachusetts business trust, the Fund is a separate corporate taxpayer and determines its net investment income and capital gains (or losses) and the amounts to be distributed to the Fund’s shareholders without regard to the income and capital gains (or losses) of the other Funds.

It is the Fund’s intention to qualify as a regulated investment company and distribute all of its taxable income and capital gains. Therefore, no federal income tax provision was required for the Fund.

In accordance with provisions set forth in the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement 109” (“FIN 48”), adopted by the Fund on November 1, 2007, management has reviewed the Fund’s tax positions for all open tax years, and concluded that adoption had no effect on the Fund’s financial position or results of operations. At April 30, 2009, the Fund has recorded no liabilities for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.

The Fund files a U.S. tax return. While the statute of limitations remains open to examine the Fund’s U.S. tax returns filed for the fiscal years ending October 31, 2005 through October 31, 2007, no examinations are in progress or anticipated at this time. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Dividends and Distributions to Shareholders

Income dividends and capital gain distributions, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are generally declared and paid annually. An additional distribution may be paid by the Fund to avoid imposition of federal income and excise tax on any remaining undistributed capital gains and net investment income.

The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax regulations which may differ from GAAP. As a result, net investment income and net realized gain (or loss) from investment transactions for a reporting period may differ significantly from distributions during such period. The differences between tax regulations and GAAP relate primarily to wash sale deferrals and capital loss carryforwards. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting its net asset value.

Expenses

Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include those expenses incurred by the Underlying Funds. Because the Underlying Funds have varied expense and fee levels and the Fund may own different proportions of the Underlying Funds at different times, the amount of the fees and expenses incurred indirectly by the Fund will vary.

 

12   Notes to Financial Statements

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

Class Allocation

The Fund presented herein offers the following classes of shares: Class C and Class S. All share classes have identical voting, dividend, liquidation and other rights and the same terms and conditions. The separate classes of shares differ principally in the applicable distribution fees and shareholder servicing fees. Shareholders of each class bear certain expenses that pertain to that particular class. Realized and unrealized gains (losses), net investment income, and expenses with the exception of class level expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

Guarantees

In the normal course of business the Fund enters into contracts that contain a variety of representations which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund expects the risk of loss to be remote.

 

3.   Investment Transactions

Securities

During the period ended April 30, 2009, the Fund had purchases and sales of the Underlying Funds (excluding short-term investments) of $12,574,596 and $21,215,076, respectively.

 

4.   Related Party Transactions, Fees and Expenses

Adviser, Administrator and Transfer and Dividend Disbursing Agent

RIMCo advises the Fund and RFSC is the Fund’s administrator. RFSC is a wholly-owned subsidiary of RIMCo. RIMCo is a wholly-owned subsidiary of Frank Russell Company (a subsidiary of The Northwestern Mutual Life Insurance Company). Frank Russell Company provides ongoing money manager research and trade placement services to RIC and RIMCo.

The advisory fee of 0.20% and administrative fee of 0.05% are based upon the average daily net assets of the Fund and are payable monthly and total $41,066 and $10,266 respectively, for the period ended April 30, 2009.

RFSC serves as the Transfer and Dividend Disbursing Agent for the Investment Company. For this service, RFSC is paid a fee for transfer agency and dividend disbursing services provided to the Fund. RFSC retains a portion of this fee for its services provided to the Fund and pays the balance to unaffiliated agents who assist in providing these services. Total fees for the Fund for the period ended April 30, 2009 were $36,710.

Effective October 1, 2008 transfer agent fees were charged at the class level. Prior to this date transfer agent fees were charged at the fund level.

Waivers

RFSC, as transfer agent, has contractually agreed to waive, at least through February 28, 2010, 0.07% of its transfer agency fees. For the period ended April 30, 2009, the amount waived by RFSC as transfer agent amounted to $14,276.

After giving effect to the transfer agency waiver above RIMCo has contractually agreed, at least until February 28, 2010, to waive up to the full amount of its 0.20% advisory fee and then to reimburse the Fund for other direct Fund-Level expenses to the extent that direct Fund-Level expenses exceed 0.09% of the average daily net assets of the Fund on an annual basis. Direct Fund-Level expenses do not include transfer agency fees, 12b-1 distribution fees, shareholder servicing fees, extraordinary expenses or the expenses of other investment companies in which the Fund invests which are borne indirectly by the Fund. For the period ended April 30, 2009, the amount waived was $121,508.

Distributor and Shareholder Servicing

On June 2, 2008, Russell Fund Distributors Inc., a wholly owned subsidiary of RIMCo, changed its name to Russell Financial Services, Inc. (the “Distributor”). The Distributor serves as distributor for RIC, pursuant to the Distribution Agreement with the Investment Company.

The Investment Company has a Distribution Plan pursuant to Rule 12b-1 (the “Plan”) under the 1940 Act. Under this Plan, the Investment Company is authorized to make payments to the Distributor or any Selling Agents, as defined in the Plan, for sales support services provided, and related expenses incurred which are primarily intended to result in the sale of Class C shares subject to the Distribution Plan. The 12b-1 distribution payments shall not exceed 0.75% of the average daily net assets of the Fund’s Class C shares on an annual basis.

 

Notes to Financial Statements   13

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

In addition, the Investment Company has adopted a Shareholder Services Plan (the “Services Plan”) under which the Fund may make payments to the Distributor or any Servicing Agent for any activities or expenses primarily intended to assist, support or service the Servicing Agents’ clients who beneficially own Class C shares of the Fund. The shareholder servicing payments shall not exceed 0.25% of the average daily net assets of the Fund’s Class C shares on an annual basis.

Pursuant to the rules of the Financial Industry Regulatory Authority (“FINRA”), the aggregate initial sales charges, deferred sales charges and asset-based sales charges on Class C shares of the fund may not exceed 6.25% of total gross sales, subject to certain exclusions. These limitations are imposed on each class of shares of the Fund rather than on a per shareholder basis. Therefore, long-term shareholders of the Class C shares may pay more than the economic equivalent of the maximum sales charges permitted by FINRA.

Accrued Fees Payable to Affiliates

Accrued fees payable to affiliates for the period ended April 30, 2009 were as follows:

 

  

Administration fees

    $                 1,558

Distribution fees

      8,824

Shareholder servicing fees

      2,941

Transfer agent fees

      3,440

Trustee fees

      35
      
   $ 16,798
      

Board of Trustees

The Russell Fund Complex consists of RIC, which has 38 Funds, and Russell Investment Funds (“RIF”), which has nine Funds. Each of the Trustees is a Trustee of both RIC and RIF. During the period, the Russell Fund Complex paid each of its independent Trustees a retainer of $60,000 per year, $6,500 for each regular quarterly meeting attended in person, $2,500 for each special meeting attended in person, and $2,500 for each Audit Committee meeting, Nominating and Governance Committee meeting, Investment Committee meeting or any other committee meeting established and approved by the Board that is attended in person. Each Trustee receives a $1,000 fee for attending quarterly and special meetings and a $500 fee for attending committee meetings by phone instead of receiving the full fee had the member attended in person. Trustees’ out of pocket expenses are also paid by the Russell Fund Complex. The Audit Committee Chair and Investment Committee Chair are each paid a fee of $12,000 per year and the Nominating and Governance Committee chair is paid a fee of $6,000 per year. The chairman of the Board receives additional annual compensation of $52,000.

Transactions with Affiliated Companies

An affiliated company is a company in which a Fund has ownership of at least 5% of the voting securities or under common control. Transactions during the period ended April 30, 2009 with Underlying Funds which are or were an affiliated company are as follows:

 

Affiliate    Market Value    Purchases
Cost		    Sales Cost    Realized
Gain (Loss)		     Income
Distributions		    Capital Gains
Distributions
                

Russell Tax-Managed U.S. Large Cap Fund

    $ 19,486,144    $ 6,266,193    $ 12,825,173    $ (2,341,559 )   $ 387,084    $ —

Russell Tax-Managed U.S. Mid & Small Cap Fund

      5,959,493      1,724,181      3,622,428      (624,601 )     71,101      —

Russell U.S. Quantitative Equity Fund

      3,885,038      1,213,996      2,717,796      (694,685 )     40,945      —

Russell Emerging Markets Fund

      1,984,761      754,435      1,925,550      (552,505 )     —      114,635

Russell International Developed Markets Fund

      7,869,063      2,615,790      6,044,521      (1,667,314 )     —      —
                                          
   $ 39,184,499    $ 12,574,595    $ 27,135,468    $ (5,880,664 )   $ 499,130    $ 114,635
                                          

 

5.   Federal Income Taxes

The Fund may have a net tax basis capital loss carryforward which may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first. At October 31, 2008, available capital carryforwards of $2,165,416 and 2,224,666 expire on October 31, 2011 and October 31, 2016, respectively.

 

14   Notes to Financial Statements

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Notes to Financial Statements, continued — April 30, 2009 (Unaudited)

 

 

 

At April 30, 2009, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

 

      Russell
Tax-Managed
Global Equity
Fund		  
  

Cost of Investments

    $ 53,200,114  
        

Unrealized Appreciation

      5,010,888  

Unrealized Depreciation

      (19,026,435 )
        

Net Unrealized Appreciation (Depreciation)

    $ (14,015,547 )
        

 

6.   Fund Share Transactions (amounts in thousands)

Share transactions for the periods ended April 30, 2009 and October 31, 2008 were as follows:

 

     Shares     Dollars  
     2009     2008     2009     2008  
        
        

Class C

         

Proceeds from shares sold

    1,349     1,237     8,779     14,247  

Proceeds from reinvestment of distributions

    4     65     26     758  

Payments for shares redeemed

    (1,866 )   (798 )   (12,231 )   (8,359 )
                        

Net increase (decrease)

    (513 )   504     (3,426 )   6,646  
                        
        

Class S

         

Proceeds from shares sold

    1,818     1,587     12,179     17,820  

Proceeds from reinvestment of distributions

    35     98     238     1,176  

Payments for shares redeemed

    (2,648 )   (2,793 )   (17,777 )   (29,526 )
                        

Net increase (decrease)

    (795 )   (1,108 )   (5,360 )   (10,530 )
                        

Total increase (decrease)

    (1,308 )   604     (8,786 )   (3,884 )
                        

 

7.   Interfund Lending Program

The Investment Company Funds have been granted permission from the Securities and Exchange Commission to participate in a joint lending and borrowing facility (the “Credit Facility”). Portfolios of the Funds may borrow money from each other for temporary purposes. All such borrowing and lending will be subject to a participating Fund’s fundamental investment limitations. Typically, Funds will borrow from the Russell Money Market Fund. The Russell Money Market Fund will lend through the program only when the returns are higher than those available from an investment in repurchase agreements or short-term reserves and the Portfolio Manager determines it is in the best interest of the Russell Money Market Fund. The Investment Company Funds will borrow through the program only when the costs are equal to or lower than the cost of bank loans. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one business day’s notice. A participating fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to the Russell Money Market Fund could result in a lost investment opportunity or additional borrowing costs. For the period ended April 30, 2009, the Fund did not borrow through the interfund lending program.

 

8.   Record Ownership

As of April 30, 2009, the Fund had three shareholders of record with greater than 10% of the total outstanding shares of the Fund in the amount of 46.9%.

 

Notes to Financial Statements   15

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Basis for Approval of Investment Advisory Contracts (Unaudited)

 

 

 

Approval of Investment Advisory Agreement

The Board of Trustees, including all of the Independent Trustees, last considered and approved the continuation of the advisory agreement with RIMCo (the “RIMCo Agreement”) and the portfolio management contract (collectively, the “portfolio management contracts”) with each Money Manager of the funds in which the Fund invests (the “Underlying Funds”) at a meeting held on April 21, 2009. During the course of a year, the Trustees receive a wide variety of materials regarding the investment performance of the Fund, sales and redemptions of the Fund’s and Underlying Funds’ shares, management of the Fund and the Underlying Funds by RIMCo and compliance with applicable regulatory requirements. In preparation for the annual review, the Independent Trustees, with the advice and assistance of their independent counsel, also requested and the Board considered (1) information and reports prepared by RIMCo relating to the services provided by RIMCo (and its affiliates) to the Fund and the Underlying Funds; and (2) information (the “Third-Party Information”) received from an independent, nationally recognized provider of investment company information comparing the performance of the Fund and the Underlying Funds and their respective operating expenses over various periods of time with other peer funds (“Comparable Funds”) not managed by RIMCo, believed by the provider to be generally comparable in investment objectives to the Fund and the Underlying Funds. The foregoing information requested by the Trustees or provided by RIMCo is collectively called the “Agreement Renewal Information.” The Trustees’ evaluations also reflected the knowledge and familiarity gained as Board members of the Fund and other funds in the same complex with respect to services provided by RIMCo, RIMCo’s affiliates and each Money Manager. The Trustees received a memorandum from counsel to the Fund and Underlying Funds discussing the legal standards for their consideration of the continuations of the RIMCo Agreement and the portfolio management contracts and the Independent Trustees separately received a memorandum regarding their responsibilities from their independent counsel.

On April 20, 2009, the Independent Trustees met to review the Agreement Renewal Information in a private session with their independent counsel at which no representatives of RIMCo or the Fund’s management were present. At the April 21 meeting of the Board of Trustees, the Board, including the Independent Trustees, reviewed the proposed continuance of the RIMCo Agreement and the portfolio management contracts with management, counsel to the Fund and Underlying Funds and independent counsel to the Independent Trustees. Presentations made by RIMCo to the Board as part of this review encompassed the Fund and all other RIMCo-managed funds for which the Board has supervisory responsibility. Following this review, but prior to voting, the Independent Trustees again met in a private session with their independent counsel to evaluate additional information and analyses received from RIMCo and management at the Board meeting. The discussion below reflects all of these reviews.

In evaluating the portfolio management contracts, the Board considered that the Underlying Funds, in employing a manager-of-managers method of investment, operate in a manner that is distinctly different from most other investment companies. In the case of most other investment companies, an advisory fee is paid by the investment company to its adviser which, in turn, employs and compensates individual portfolio managers to make specific securities selections consistent with the adviser’s style and investment philosophy. RIMCo has engaged multiple unaffiliated Money Managers for all Underlying Funds.

The Board considered that RIMCo (rather than any Money Manager) is responsible under the RIMCo Agreement for allocating assets of the Fund among its Underlying Funds and for determining, implementing and maintaining the investment program for each Underlying Fund. The assets of the Fund are invested in different combinations of the Underlying Funds pursuant to target asset allocations set by RIMCo. RIMCo may modify the target asset allocation for the Fund and/or the Underlying Funds in which the Fund invests. Assets of each Underlying Fund generally have been allocated among the multiple Money Managers selected by RIMCo, subject to Board approval, for that Underlying Fund. RIMCo manages directly a portion of certain Underlying Funds’ assets employing a “select holdings strategy,” as described below, and directly manages the investment of each Underlying Fund’s cash reserves. RIMCo also may manage directly any portion of each Underlying Fund’s assets that RIMCo determines not to allocate to the Money Managers and portions of an Underlying Fund during transitions between Money Managers. In all cases, assets are managed directly by RIMCo pursuant to authority provided by the RIMCo Agreement.

RIMCo is responsible for selecting, subject to Board approval, Money Managers for each Underlying Fund and for actively managing allocations and reallocations of its assets among the Money Managers. The Board has been advised that RIMCo’s goal is to construct and manage diversified portfolios in a risk-aware manner. Each Money Manager for an Underlying Fund in effect performs the function of an individual portfolio manager who is responsible for selecting portfolio securities for the portion of the Underlying Fund assigned to it by RIMCo (each, a “segment”) in accordance with the Underlying Fund’s applicable investment objective, policies and restrictions, any constraints placed by RIMCo upon their selection of portfolio securities and the Money Manager’s specified role in an Underlying Fund. RIMCo is responsible for communicating performance expectations to each Money Manager; supervising compliance by each Money Manager with each Underlying Fund’s investment objective and policies; authorizing Money Managers to engage in certain investment strategies for an Underlying Fund; and recommending annually to the Board whether portfolio management contracts should be renewed, modified or terminated. In addition to its annual recommendation as to the renewal,

 

16   Basis for Approval of Investment Advisory Contracts

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

modification or termination of portfolio management contracts, RIMCo is responsible for recommending to the Board additions of new Money Managers or replacements of existing Money Managers at any time when, based on RIMCo’s research and ongoing review and analysis, such actions are appropriate. RIMCo may impose specific investment constraints from time to time for each Money Manager intended to capitalize on the strengths of that Money Manager or to coordinate the investment activities of Money Managers for an Underlying Fund in a complementary manner. Therefore, the performance of individual Money Managers for an Underlying Fund may reflect the roles assigned to them by RIMCo in the Underlying Funds’ investment activities and any constraints placed by RIMCo upon their selection of portfolio securities. In light of the foregoing, the overall performance of each Underlying Fund over appropriate periods reflects, in great part, the performance of RIMCo in designing the Underlying Fund’s investment program, structuring an Underlying Fund, selecting an effective Money Manager with a particular investment style or sub-style for a segment that is complementary to the styles of the Money Managers of other Underlying Fund segments, and allocating assets among the Money Managers in a manner designed to achieve the objectives of the Underlying Fund.

The Board considered that the prospectuses for the Fund and the Underlying Funds and other public disclosures emphasize to investors RIMCo’s role as the principal investment manager for each Underlying Fund, rather than the investment selection role of the Underlying Funds’ Money Managers, and describe the manner in which the Fund or Underlying Funds operate so that investors may take that information into account when deciding to purchase shares of the Fund.

The Board also considered the demands and complexity of managing the Underlying Funds pursuant to the manager-of-managers structure, the special expertise of RIMCo with respect to the manager-of-managers structure of the Underlying Funds and the likelihood that, at the current expense ratio of each Underlying Fund, there would be no acceptable alternative investment managers to replace RIMCo on comparable terms given the need to continue the manager-of-managers strategy of such Underlying Fund selected by shareholders in purchasing their shares of the Fund or Underlying Fund.

In addition to these general factors relating to the manager-of-managers structure of the Underlying Funds, the Trustees considered, with respect to the Fund and each Underlying Fund, various specific factors in evaluating renewal of the RIMCo Agreement, including the following:

 

1. The nature, scope and quality of the services provided, and expected to be provided, to the Fund or Underlying Fund by RIMCo;

 

2. The advisory fee paid by the Fund or Underlying Fund to RIMCo (the “Advisory Fee”) and the fact that it encompasses all investment advisory fees paid by the Fund or Underlying Fund, including the fees for any Money Managers of such Underlying Fund;

 

3. Information provided by RIMCo as to other fees and benefits received by RIMCo or its affiliates from the Fund or Underlying Fund, including any administrative, transfer agent or cash management fees and fees received for management of securities lending cash collateral, soft dollar arrangements and commissions in connection with portfolio securities transactions;

 

4. Information provided by RIMCo as to expenses incurred by the Fund or Underlying Fund; and

 

5. Information provided by RIMCo as to the profits that RIMCo derives from its mutual fund operations generally and from the Fund or Underlying Fund.

In evaluating the nature, quality and scope of services provided and which are expected to be provided to the Fund, including Fund portfolio management services, the Board considered the possible impact of changes in RIMCo’s senior management during the course of 2008 and 2009 and a restructuring of the Russell organization, which was announced to the Board in January 2009 and detailed to the Board on April 15, 2009, and included a significant reduction in Russell’s workforce. Prior to the Independent Trustees’ private meeting on April 20 and at the April 21 meeting of the Board of Trustees, senior representatives of Russell and RIMCo discussed this organizational restructuring with the Board and assured the Board that the restructuring would not result in a diminution of the nature, quality or scope of the services provided to the Fund. The Board also discussed with these representatives the impact of developments over the past year in the financial services industry upon the financial resources available to the Russell organization.

As noted above, RIMCo, pursuant to the terms of the RIMCo Agreement, directly managed during the past year, and continues to manage, a portion—up to 10%—of the assets of each of the Russell U.S. Quantitative Equity Fund and the Russell International Developed Markets Fund (each a “Participating Underlying Fund”) during the past year, utilizing a select holdings strategy, the actual allocation being determined by each Participating Underlying Fund’s RIMCo portfolio manager. The select holdings strategy utilized by RIMCo in managing such assets for a Participating Underlying Fund is designed to increase the Participating Underlying Fund’s exposure to stocks that are viewed as attractive by multiple Money Managers of that Participating Underlying Fund. The Board reviewed the results of the select holdings strategy in respect of each Participating Underlying Fund during the past year.

 

Basis for Approval of Investment Advisory Contracts   17

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

With respect to each Participating Underlying Fund, the Trustees considered that RIMCo is not required to pay investment advisory fees to a Money Manager with respect to assets for which the select holdings strategy is utilized and that the profits derived by RIMCo generally and from the Participating Underlying Fund consequently may increase incrementally. The Board, however, also considered RIMCo’s advice that it pays certain Money Managers additional fees for providing information and other services in connection with the select holdings strategy and incurs additional costs in carrying out the select holdings strategy, the limited amount of assets that are managed directly by RIMCo pursuant to the select holdings strategy, and the fact that the aggregate investment advisory fees paid by the Participating Underlying Fund are not increased as a result of the select holdings strategy.

In evaluating the reasonableness of the Fund’s and Underlying Funds’ Advisory Fees in light of Fund and Underlying Fund performance, the Board considered that, in the Agreement Renewal Information and at past meetings, RIMCo noted differences between the investment strategies of certain Underlying Funds and their respective Comparable Funds in pursuing their investment objectives, including fund strategies which seek to achieve a lower tracking error (i.e., the difference, whether positive or negative, between the return of a fund and its benchmark) and resulting lower return volatility than their Comparable Funds. According to RIMCo, these strategies may be expected to result, and for certain Underlying Funds during the periods covered by the Third-Party Information did result, in lower performance of the Underlying Funds than that of some of their respective Comparable Funds. According to RIMCo, the strategies pursued by the Underlying Funds, among other things, are intended to result in less volatile, more moderate returns relative to each Underlying Fund’s performance benchmark rather than more volatile, more extreme returns that its Comparable Funds may experience over time.

The Trustees noted that the Third-Party Information showed that the Fund’s Advisory Fee on a contractual basis was ranked in the fourth quintile for the 1-year period ended December 31, 2008 but on an actual basis (i.e., giving effect to any waivers implemented by RIMCo with respect to the Fund and by the advisers for the Comparable Funds) was ranked in the first quintile for such period.

In discussing the Underlying Funds’ Advisory Fees generally, RIMCo noted, among other things, that its Advisory Fees for Underlying Funds encompass services that may not be provided by investment advisers to the Underlying Funds’ Comparable Funds, such as cash equitization and management of portfolio transition costs when Money Managers are added, terminated or replaced. RIMCo also explained that its “margins” in providing investment advisory services to the Underlying Funds tend to be lower than competitors’ margins because of the demands and complexities of managing the Underlying Funds’ manager-of-managers structure, including RIMCo’s payment of a significant portion of the Underlying Funds’ Advisory Fees to their money managers.

The Board considered for the Fund and each Underlying Fund whether economies of scale have been realized and whether the fees for the Fund or Underlying Fund appropriately reflect or should be revised to reflect any such economies. During 2008, the Board noted that, generally, there was a reduction in the assets of the Fund and Underlying Funds as a result of market declines and related investor redemptions. The Board determined that, after giving effect to any applicable fee or expense caps, waivers or reimbursements, the Advisory Fee for the Fund or Underlying Funds appropriately reflects any economies of scale realized by such Fund, based upon any decline in assets during 2008 and such factors as the variability of Money Manager investment advisory fees and other factors associated with the manager-of-managers structure employed by the Underlying Funds.

The Board considered, as a general matter, that fees payable to RIMCo by institutional clients with investment objectives similar to RIC funds under the Board’s supervision, including the Underlying Funds, are lower and may in some cases be substantially lower than the rates paid by RIC funds supervised by the Board. RIMCo noted that it has no institutional clients with investment objectives similar to the Fund. The Trustees considered the differences in the scope of services RIMCo provides to institutional clients and the other RIC funds under its supervision, including the Underlying Funds. In response to the Trustees’ inquiries, RIMCo, as it has in the past, noted, among other things, that institutional clients have fewer administrative needs than the Fund. RIMCo also noted that since RIC funds, including the Underlying Funds, must constantly issue and redeem their shares, they are more difficult to manage than institutional accounts, where assets are relatively stable. In addition, RIMCo noted that RIC funds, including the Underlying Funds, are subject to heightened regulatory requirements relative to institutional clients. Accordingly, the Trustees did not regard these fee differences as relevant to their deliberations.

On the basis of the Agreement Renewal Information and other information previously received by the Board from RIMCo during the course of the current year or prior years, or presented at or in connection with the April 21 Board meeting by RIMCo, the Board, in respect of the Fund and Underlying Funds, found, after giving effect to any applicable waivers and/or reimbursements and considering differences in the composition and investment strategies of their respective Comparable Funds, (1) the Advisory Fees charged by RIMCo to be reasonable in light of the nature, scope and quality of the services provided, and expected to be provided, to the Fund or Underlying Funds; (2) the relative expense ratio of the Fund and each Underlying Fund was comparable to those of its Comparable Funds; (3) RIMCo’s methodology of allocating expenses of operating funds in the complex was reasonable; and (4) RIMCo’s profitability with respect to the Fund and each Underlying Fund was not excessive in light of the nature, scope and quality of the services provided by RIMCo.

 

18   Basis for Approval of Investment Advisory Contracts

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

 

 

 

In evaluating the performance of the Fund and Underlying Funds generally relative to their Comparable Funds, the Board also noted RIMCo’s advice that many of the Underlying Funds’ Comparable Funds do not “equitize” their cash (i.e., cash awaiting investment or disbursement to satisfy redemptions or other fund obligations) and may hold large positions uninvested in their investment portfolios. By contrast, the Underlying Funds generally follow a strategy of equitizing their cash and fully investing their assets in pursuit of their investment objectives (the Underlying Funds’ strategy of equitizing cash and fully investing their assets is hereinafter referred to as their “full investment strategy”). RIMCo noted that the Underlying Funds’ full investment strategy generally will detract from their relative performance, and therefore the relative performance of the Fund, in a declining market, such as 2008, but may enhance relative performance in a rising market.

The Board further concluded that, under the circumstances, the performance of the Fund did not support a determination against continuation of the RIMCo Agreement in respect of that Fund. The Board, in assessing the performance of the Fund and Underlying Funds, focused upon the performance for the 1-, 3- and 5- year periods as most relevant. In evaluating performance, the Board considered the Fund’s and each Underlying Fund’s absolute performance and performance relative to appropriate benchmarks and indices in addition to such Fund’s performance relative to its Comparable Funds. In assessing performance, the Board also considered RIMCo’s investment strategy of managing the Underlying Funds in a risk-aware manner and the extraordinary capital market conditions during 2008.

The Third-Party Information showed that the Fund’s performance relative to its Comparable Funds was ranked in the third quintile for the 1-year period ended December 31, 2008 but in the fourth quintile for the 3-year and 5-year periods ended such date. In discussing the Fund’s performance relative to its Comparable Funds for the 3- and 5-year periods, RIMCo noted that the Fund fully invests its assets in equity securities while many of the Fund’s Comparable Funds make non-equity investments. Because the Fund and Underlying Funds invest only in equities, the Fund may be expected to underperform Comparable Funds during periods of declining equity markets such as 2008. In addition, the Fund is managed to provide long-term capital growth on an after-tax basis and that tax-managed strategies may limit returns relative to funds managed to maximize total returns regardless of tax consequences. According to RIMCo, the Fund’s Comparable Funds included funds which are managed without the constraints imposed by a tax-efficient strategy and performance discrepancies between the Fund and the Comparable Funds therefore may result. As an indication of the success of the Fund’s tax-efficient strategy, RIMCo noted the Fund paid out no capital gains in the period 2006 to 2008.

After considering the foregoing and other relevant factors, the Board concluded that continuation of the RIMCo Agreement on its current terms and conditions would be in the best interests of the Fund and its shareholders and voted to approve the continuation of the RIMCo Agreement.

At the April 21 Board meeting, with respect to the evaluation of the terms of portfolio management contracts with Money Managers for the Underlying Funds, the Board received and considered information from RIMCo reporting, among other things, for each Money Manager, the Money Manager’s performance over various periods; RIMCo’s assessment of the performance of each Money Manager; any significant business relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the Fund’s and Underlying Funds’ underwriter; and RIMCo’s recommendation to retain the Money Manager at the current fee rate, to retain the Money Manager at a reduced fee rate or to terminate the Money Manager. The Board received reports during the course of the year from the Fund’s Chief Compliance Officer regarding each Money Manager’s compliance program. RIMCo recommended that each Money Manager be retained at its current fee rate. RIMCo has advised the Board that it does not regard Money Manager profitability as relevant to its evaluation of the portfolio management contracts with Money Managers because the willingness of Money Managers to serve in such capacity depends upon arm’s-length negotiations with RIMCo; RIMCo is aware of the fees charged by Money Managers to other clients; and RIMCo believes that the fees agreed upon with Money Managers are reasonable in light of the anticipated quality of investment advisory services to be rendered. The Board accepted RIMCo’s explanation in light of the Board’s findings as to the reasonableness of the Advisory Fee paid by the Fund and each Underlying Fund and the fact that each Money Manager’s fee is paid by RIMCo.

Based substantially upon RIMCo’s recommendations, together with the information received from RIMCo in support of its recommendations at the April 21 Board meeting, the Board concluded that the fees paid to the Money Managers of each Underlying Fund are reasonable in light of the quality of the investment advisory services provided and that continuation of the portfolio management contract with each Money Manager of such Underlying Fund would be in the best interests of the shareholders of such Underlying Fund.

In their deliberations, the Trustees did not identify any particular information as to the RIMCo Agreement or, other than RIMCo’s recommendation, the portfolio management contract with any Money Manager for an Underlying Fund that was all-important or controlling and each Trustee attributed different weights to the various factors considered. The Trustees evaluated all information available to them on a Fund-by-Fund basis and their determinations were made in respect of the Fund and Underlying Funds.

 

Basis for Approval of Investment Advisory Contracts   19

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Shareholder Requests for Additional Information — April 30, 2009 (Unaudited)

 

 

 

A complete unaudited schedule of investments is made available generally no later than 60 days after the end of the first and third quarters of each fiscal year. These reports are available (i) free of charge, upon request, by calling the Fund at (800) 787-7354, (ii) at www.russell.com, (iii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iv) at the Securities and Exchange Commission’s public reference room.

The Board has delegated to RIMCo, as RIC’s investment adviser, the primary responsibility for monitoring, evaluating and voting

proxies solicited by or with respect to issuers of securities in which assets of the Fund may be invested. RIMCo has established a

proxy voting committee (“Committee”) and has adopted written proxy voting policies and procedures (“P&P”) and proxy voting

guidelines (“Guidelines”). The Fund maintains a Portfolio Holdings Disclosure Policy that governs the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Fund. A description of the P&P, Guidelines, Portfolio Holdings Disclosure Policy and additional information about Fund Trustees are contained in the Fund’s Statement of Additional Information (“SAI”). The SAI is available (i) free of charge, upon request, by calling the Fund at

(800) 787-7354, (ii) at www.russell.com, and (iii) on the Securities and Exchange Commission’s website at www.sec.gov.

To reduce expenses, we may mail only one copy of the Fund’s prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution.

Some Financial Intermediaries may offer electronic delivery of the Fund’s prospectus and annual and semiannual reports. Please

contact your Financial Intermediary for further details.

Financial Statements of the Underlying Funds can be obtained at no charge by calling the Funds at (800) 787-7354.

 

20   Shareholder Requests for Additional Information

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Disclosure of Information about Fund Trustees and Officers — April 30, 2009 (Unaudited)

 

 

 

The following tables provide information for each officer and Trustee of the Russell Fund Complex. The Russell Fund Complex consists of RIC, which has 38 funds, and RIF, which has nine funds. Each of the Trustees is a Trustee of both RIC and RIF. The first table provides information for the interested Trustee. The second table provides information for the independent Trustees. The third table provides information for the Trustees emeritus. The fourth table provides information for the officers.

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office*		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

INTERESTED TRUSTEE

          

# Greg J. Stark
Born May 3, 1968

 

909 A Street

Tacoma, Washington

98402-1616

  

•  President and Chief Executive Officer since 2004

 

 

 

•  Trustee since 2007

  

•  Appointed until successor is duly elected and qualified

 

•  Until successor is chosen and qualified by Trustees

  

•  President and CEO RIC and RIF

•  Chairman of the Board, President and CEO, RIMCo

•  Chairman of the Board, President and CEO, Russell Fund Services Company (“RFSC”)

•  Chairman of the Board, President and CEO, Russell Financial Services, Inc.

•  Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

•  Until 2004, Managing Director, of Individual Investor Services, FRC

•  2000 to 2004 Managing Director, Sales and Client Service, RIMCo

   47   None

INDEPENDENT TRUSTEES

          

Thaddas L. Alston

Born April 7, 1945

909 A Street

Tacoma, Washington

98402-1616

  

•  Trustee since 2006

  

•  Appointed until successor is duly elected and qualified

  

•  Senior Vice President, Larco Investments, Ltd. (real estate firm)

   47   None
             

Kristianne Blake,

Born January 22, 1954

 

909 A Street Tacoma, Washington 98402-1616

  

•  Trustee since 2000

 

 

 

 

•  Chairman since 2005

  

•  Appointed until successor is duly elected and qualified

 

•  Annual

  

•  Director and Chairman of the Audit Committee, Avista Corp.

•  Trustee and Chairman of the Operations Committee, Principal Investor Funds and Principal Variable Contracts Funds

•  Regent, University of Washington

•  President, Kristianne Gates Blake, P.S. (accounting services)

•  February 2002 to June 2005, Chairman of the Audit Committee, RIC and RIF

•  Trustee and Chairman of the Operations and Distribution Committee, WM Group of Funds, 1999-2006

   47  

•  Director, Avista Corp (electric utilities)

•  Trustee, Principal Investor Funds (investment company);

•  Trustee, Principal Variable Contracts Funds (investment company)

 

# Mr. Stark is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore an Interested Trustee.

 

Disclosure of Information about Fund Trustees and Officers   21

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009 (Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office*		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

INDEPENDENT TRUSTEES (continued)

      

Daniel P. Connealy

Born June 6, 1946

 

909 A Street

Tacoma, Washington

98402-1616

  

•  Trustee since 2003

 

 

 

•  Chairman of the Audit Committee since 2005

  

•  Appointed until successor is duly elected and qualified

 

•  Appointed until successor is duly elected and qualified

  

•  June 2004 to present, Senior Vice President and Chief Financial Officer, Waddell & Reed Financial, Inc.

   47   None
             

Jonathan Fine,

Born July 8, 1954

 

909 A Street

Tacoma, Washington

98402-1616

  

•  Trustee since 2004

  

•  Appointed until successor is duly elected and qualified

  

•  President and Chief Executive Officer, United Way of King County, WA

   47   None
             

Raymond P. Tennison, Jr.

Born December 21, 1955

 

909 A Street

Tacoma, Washington

98402-1616

  

•  Trustee since 2000

 

•  Chairman of the Nominating and Governance Committee since 2007

  

•  Appointed until successor is duly elected and qualified

 

•  Appointed until successor is duly elected and qualified

  

•  President, Simpson Investment Company and several additional subsidiary companies, including Simpson Timber Company, Simpson Paper Company and Simpson Tacoma Kraft Company

   47   None
             

Jack R. Thompson,

Born March 21, 1949

 

909 A Street

Tacoma, Washington

98402-1616

  

•  Trustee since 2005

  

•  Appointed until successor is duly elected and qualified

  

•  September 2003 to present, Independent Board Chair and Chairman of the Audit Committee, Sparx Asia Funds

•  September 2007 to present, Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation (health products company)

   47  

•  Director, Sparx Asia Funds (investment company)

 

•  Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation (health products company)

             

Julie W. Weston,

Born October 2, 1943

 

909 A Street

Tacoma, Washington

98402-1616

  

•  Trustee since 2002

 

•  Chairperson of the Investment Committee since 2006

  

•  Appointed until successor is duly elected and qualified

 

•  Appointed until successor is duly elected and qualified

  

•  Retired

   47   None

 

* Each Trustee is subject to mandatory retirement at age 72.

 

22   Disclosure of Information about Fund Trustees and Officers

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009 (Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office		   Principal Occupation(s)
During the
Past 5 Years		   No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee		   Other
Directorships Held
by Trustee

TRUSTEES EMERITUS

          

* George F. Russell, Jr.,
Born July 3, 1932

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus and Chairman Emeritus since 1999   Until resignation or removal  

•  Director Emeritus, Frank Russell Company (investment consultant to institutional investors (“FRC”)) and RIMCo

•  Chairman Emeritus, RIC and RIF; Russell Implementation Services Inc. (broker-dealer and investment adviser (“RIS”)); Russell 20-20 Association (non-profit corporation); and Russell Trust Company (non-depository trust company (“RTC”))

•  Chairman, Sunshine Management Services, LLC (investment adviser)

  47   None
             

Paul E. Anderson,

Born October 15, 1931

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus since 2007   Five year term  

•  President, Anderson Management Group LLC (private investments consulting)

•  Trustee, RIC and RIF until 2006

•  February 2002 to June 2005, Lead Trustee, RIC and RIF

•  Chairman of the Nominating and Governance Committee, 2006

   47   None
             

Lee C. Gingrich,

Born October 6, 1930

 

909 A Street

Tacoma, Washington

98402-1616

   Trustee Emeritus since 2006   Five year term  

•  Retired since 1995

•  Trustee of RIC and RIF until 2005

•  Chairman of the Nominating and Governance Committee 2001-2005

   47   None

 

* Mr. Russell is also a director emeritus of one or more affiliates of RIC and RIF.

 

Disclosure of Information about Fund Trustees and Officers   23

Russell Investment Company

Russell Tax-Managed Global Equity Fund

Disclosure of Information about Fund Trustees and Officers, continued — April 30, 2009 (Unaudited)

 

 

 

Name,
Age,
Address		   Position(s) Held
With Fund and
Length of
Time Served		   Term
of
Office		   Principal Occupation(s)
During the
Past 5 Years

OFFICERS

Cheryl Wichers

Born December 16, 1966

 

909 A Street

Tacoma, Washington

98402-1616

   Chief Compliance Officer since 2005   Until removed by Independent Trustees  

•  Chief Compliance Officer, RIC

•  Chief Compliance Officer, RIF

•  Chief Compliance Officer, RIMCo

•  Chief Compliance Officer, RFSC

•  April 2002-May 2005, Manager, Global Regulatory Policy

         

Greg J. Stark,

Born May 3, 1968

 

909 A Street

Tacoma, Washington

98402-1616

   President and Chief Executive Officer since 2004   Until successor is chosen and qualified by Trustees  

•  President and CEO, RIC and RIF

•  Chairman of the Board, President and CEO, RIMCo

•  Chairman of the Board, President and CEO, Russell Financial Services, Inc.

•  Chairman of the Board, President and CEO, RFSC

•  Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

•  Until 2004, Managing Director of Individual Investor Services, FRC

•  2000 to 2004, Managing Director, Sales and Client Service, RIMCo

         

Mark E. Swanson,

Born November 26, 1963

 

909 A Street

Tacoma, Washington

98402-1616

   Treasurer and Chief Accounting Officer since 1998   Until successor is chosen and qualified by Trustees  

•  Treasurer, Chief Accounting Officer and CFO, RIC and RIF

•  Director, Funds Administration, RIMCo, RFSC, RTC and Russell Financial Services, Inc.

•  Treasurer and Principal Accounting Officer, SSgA Funds

         

Peter Gunning,

Born February 22, 1967

 

909 A Street

Tacoma, Washington

98402-1616

   Chief Investment Officer since 2008   Until removed by Trustees  

•  Chief Investment Officer, RIC and RIF

•  Director, RIMCo and FRC

•  1996 to 2008 Chief Investment Officer, Russell, Asia Pacific

         

Gregory J. Lyons,

Born August 24, 1960

 

909 A Street

Tacoma, Washington

98402-1616

   Secretary since 2007   Until successor is chosen and qualified by Trustees  

•  U.S. General Counsel and Assistant Secretary, FRC

•  Director and Assistant Secretary, RIA

•  Secretary, RIMCo, RFSC and Russell Financial Services, Inc.

•  Secretary and Chief Legal Counsel, RIC and RIF

 

24   Disclosure of Information about Fund Trustees and Officers

Russell Tax-Managed Global Equity Fund

Russell Investment Company

909 A Street, Tacoma, Washington 98402

(800) 787-7354

 

 

 

Interested Trustee

Greg J. Stark

Independent Trustees

Thaddas L. Alston

Kristianne Blake

Daniel P. Connealy

Jonathan Fine

Raymond P. Tennison, Jr.

Jack R. Thompson

Julie W. Weston

Trustees Emeritus

George F. Russell, Jr.

Paul E. Anderson

Lee C. Gingrich

Officers

Greg J. Stark, President and Chief Executive Officer

Cheryl Wichers, Chief Compliance Officer

Peter Gunning, Chief Investment Officer

Mark E. Swanson, Treasurer and Chief Accounting Officer

Gregory J. Lyons, Secretary

Adviser

Russell Investment Management Company

909 A Street

Tacoma, WA 98402

Administrator and Transfer and Dividend Disbursing Agent

Russell Fund Services Company

909 A Street

Tacoma, WA 98402

Custodian

State Street Bank and Trust Company

Josiah Quincy Building

200 Newport Avenue

North Quincy, MA 02171

Office of Shareholder Inquiries

909 A Street

Tacoma, WA 98402

(800) 787-7354

Legal Counsel

Dechert LLP

200 Clarendon Street, 27th Floor

Boston, MA 02116-5021

Distributor

Russell Financial Services, Inc.

909 A Street

Tacoma, WA 98402

Money Managers of Underlying Funds as of April 30, 2009

Russell Tax-Managed U.S. Large Cap Fund

Armstrong Shaw Associates Inc., New Canaan, CT

J.P. Morgan Investment Management Inc., New York, NY

Palisades Investment Partners, LLC, Santa Monica, CA

Sands Capital Management, Inc., Arlington, VA

Turner Investment Partners, Inc., Berwyn, PA

Russell International Developed Markets Fund

AllianceBernstein L.P., New York, NY

Altrinsic Global Advisors, LLC, Stamford, CT

AQR Capital Management, LLC, Greenwich, CT

Axiom International Investors LLC, Greenwich, CT

Marsico Capital Management, LLC, Denver, CO

MFS Institutional Advisors, Inc., Boston, MA

Mondrian Investment Partners Limited, London, United Kingdom

UBS Global Asset Management (Americas) Inc., Chicago, IL

Wellington Management Company, LLP, Boston, MA

Russell Tax-Managed U.S. Mid & Small Cap Fund

Chartwell Investment Partners, Berwyn, PA

Netols Asset Management, Inc., Mequon, WI

Parametric Portfolio Associates LLC, Seattle, WA

Transamerica Investment Management, LLC, Los Angeles, CA

Turner Investment Partners, Inc., Berwyn, PA

Russell U.S. Quantitative Equity Fund

Aronson+Johnson+Ortiz, LP, Philadelphia, PA

Goldman Sachs Asset Management, L.P., New York, NY

INTECH Investment Management LLC, West Palm Beach, FL

Jacobs Levy Equity Management, Inc., Florham Park, NJ

Mellon Capital Management Corporation, Boston, MA

Russell Emerging Markets Fund

AllianceBernstein L.P., New York, NY

Arrowstreet Capital, Limited Partnership, Boston, MA

Genesis Asset Managers, LLP, London, United Kingdom

Harding Loevner LLC, Somerville, NJ

T. Rowe Price International, Inc., Baltimore, MD

UBS Global Asset Management (Americas) Inc., Chicago, IL


 

This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained is to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Company. Such offering is made only by Prospectus, which includes details as to offering price and other material information.

 

Adviser, Money Managers and Service Providers   25

 

Russell Investment Company    909 A Street      800-787-7354
   Tacoma, Washington 98402      Fax: 253-591-3495
        www.russell.com

 

LOGO

LOGO

LOGO

36-08-228

Item 2. Code of Ethics. [Annual Report Only]

 

Item 3. Audit Committee Financial Expert. [Annual Report Only]

 

Item 4. Principal Accountant Fees and Services. [Annual Report Only]

 

Item 5. Audit Committee of Listed Registrants. [Not Applicable]

 

Item 6. [Schedules of Investments are included as part of the Report to Stockholders filed under Item 1 of this form]

 

Items 7-9. [Not Applicable]

 

Item 10. Submission of Matters to a Vote of Security Holders

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

 

Item 11. Controls and Procedures

(a) Registrant’s principal executive officer and principal financial officer have concluded that Registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of these controls and procedures as of a date within 90 days of the date this report is filed with the Securities and Exchange Commission.

(b) There were no significant changes in Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected or is likely to materially affect Registrant’s internal control over financial reporting.

 

Item 12. Exhibit List

(a) Certification for principal executive officer of Registrant as required by Rule 30a-2(a) under the Act and certification for principal financial officer of Registrant as required by Rule 30a-2(a) under the Act.

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.

 

Russell Investment Company
By:  

/s/ Greg J. Stark

  Greg J. Stark
  President, Principal Executive Officer and Chief Executive Officer

Date: June 30, 2009

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/ Greg J. Stark

  Greg J. Stark
  President, Principal Executive Officer and Chief Executive Officer

Date: June 30, 2009

 

By:  

/s/ Mark E. Swanson

  Mark E. Swanson
  Principal Financial Officer, Principal Accounting Officer and Treasurer

Date: June 30, 2009