N-Q 1 dnq.htm FORM N-Q Form N-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-05371

 

Russell Investment Funds

(Exact name of registrant as specified in charter)

1301 2nd Avenue 18th Floor, Seattle Washington 98101

(Address of principal executive offices) (Zip code)

Sandra G. Richardson, Secretary and Chief Legal Officer

1301 2nd Avenue

18th Floor

Seattle, Washington 98101

206-505-3598

(Name and address of agent for service)

Registrant’s telephone number, including area code: 206-505-7877

Date of fiscal year end: December 31

Date of reporting period: December 31, 2009 – September 30, 2010

 

 

 

Table of Contents

 

Item 1. Schedule of Investments

Table of Contents

LOGO

 

2010 QUARTERLY REPORT

 

 

Russell Investment Funds

 

 

SEPTEMBER 30, 2010

FUND

Multi-Style Equity Fund

Aggressive Equity Fund

Non-U.S. Fund

Core Bond Fund

Real Estate Securities Fund

 

LOGO

Table of Contents

 

Russell Investment Funds

Russell Investment Funds is a series investment company with nine different investment portfolios referred to as Funds. This Quarterly Report reports on five of these Funds.

Table of Contents

Russell Investment Funds

Quarterly Report

September 30, 2010 (Unaudited)

Table of Contents

 

     Page  
Multi-Style Equity Fund      3   
Aggressive Equity Fund      8   
Non-U.S. Fund      15   
Core Bond Fund      23   
Real Estate Securities Fund      47   
Notes to Schedules of Investments      53   
Notes to Quarterly Report      55   
Shareholder Requests for Additional Information      69   

Table of Contents

Russell Investment Funds

Copyright © Russell Investments 2010. 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 products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments.

Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Common Stocks - 95.8%        
Consumer Discretionary - 13.7%        

Amazon.com, Inc. (Æ)

      22,822           3,584   

Avon Products, Inc.

      15,800           507   

Bed Bath & Beyond, Inc. (Æ)

      18,260           793   

Best Buy Co., Inc.

      16,299           666   

BJ’s Wholesale Club, Inc. (Æ)

      3,900           162   

CBS Corp. Class B

      141,058           2,237   

Comcast Corp. Class A

      120,270           2,174   

Costco Wholesale Corp.

      29,700           1,915   

Ctrip.com International, Ltd. - ADR (Æ)

      8,600           411   

Darden Restaurants, Inc.

      1,200           51   

Estee Lauder Cos., Inc. (The) Class A

      10,324           653   

Ford Motor Co. (Æ)(Ñ)

      234,301           2,868   

Harman International Industries, Inc. (Æ)

      2,900           97   

Home Depot, Inc.

      47,427           1,503   

Hyatt Hotels Corp. Class A (Æ)

      5,300           198   

International Speedway Corp. Class A

      1,000           24   

Johnson Controls, Inc.

      78,050           2,381   

Kohl’s Corp. (Æ)

      25,024           1,318   

Las Vegas Sands Corp. (Æ)(Ñ)

      51,290           1,787   

Lennar Corp. Class A

      6,359           98   

Lowe’s Cos., Inc.

      100,000           2,229   

McDonald’s Corp.

      36,400           2,712   

NetFlix, Inc. (Æ)(Ñ)

      3,600           584   

Nike, Inc. Class B

      28,900           2,316   

priceline.com, Inc. (Æ)

      3,186           1,110   

Pulte Group, Inc. (Æ)

      10,241           90   

Stanley Black & Decker, Inc.

      27,372           1,677   

Starbucks Corp.

      42,495           1,087   

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

      6,600           347   

Target Corp.

      27,700           1,480   

Tech Data Corp. (Æ)

      6,300           254   

Tiffany & Co. (Ñ)

      12,300           578   

Time Warner, Inc.

      18,000           552   

TJX Cos., Inc.

      34,529           1,541   

United Continental Holdings, Inc. (Æ)

      12,800           302   

Urban Outfitters, Inc. (Æ)

      6,700           211   

Viacom, Inc. Class B

      119,392           4,321   

Wal-Mart Stores, Inc.

      55,653           2,979   

Walt Disney Co. (The)

      54,000           1,788   

Wendy’s/Arby’s Group, Inc. Class A

      17,300           78   
             
          49,663   
             
Consumer Staples - 8.6%        

Archer-Daniels-Midland Co.

      19,400           619   

Clorox Co.

      4,300           287   

Coca-Cola Co. (The)

      103,092           6,033   

Colgate-Palmolive Co.

      15,700           1,207   

Constellation Brands, Inc. Class A (Æ)

      12,700           225   

Corn Products International, Inc.

      13,600           510   

CVS Caremark Corp.

      14,800           466   

JM Smucker Co. (The)

      12,300           744   

Kellogg Co.

      26,100           1,318   

Kraft Foods, Inc. Class A

      42,700           1,318   

Lorillard, Inc.

      5,500           442   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Molson Coors Brewing Co. Class B

      20,350           961   

PepsiCo, Inc.

      128,473           8,536   

Procter & Gamble Co. (The)

      85,238           5,112   

Ralcorp Holdings, Inc. (Æ)

      14,700           859   

Safeway, Inc. (Ñ)

      24,800           525   

Walgreen Co.

      22,300           747   

Whole Foods Market, Inc. (Æ)

      29,171           1,082   
             
          30,991   
             
Energy - 10.8%        

Anadarko Petroleum Corp.

      7,500           428   

Apache Corp.

      32,441           3,171   

Cameron International Corp. (Æ)

      28,400           1,220   

Chevron Corp.

      69,200           5,609   

ConocoPhillips

      82,397           4,732   

Devon Energy Corp.

      8,232           533   

EOG Resources, Inc.

      6,900           641   

Exxon Mobil Corp.

      14,600           902   

Hess Corp.

      15,400           910   

Marathon Oil Corp.

      120,747           3,997   

Massey Energy Co.

      16,000           496   

Murphy Oil Corp.

      18,100           1,121   

National Oilwell Varco, Inc.

      7,200           320   

NextEra Energy, Inc.

      20,300           1,104   

Occidental Petroleum Corp.

      91,557           7,169   

Pioneer Natural Resources Co. (Ñ)

      22,140           1,440   

Pride International, Inc. (Æ)

      7,500           221   

Rowan Cos., Inc. (Æ)

      4,800           146   

Royal Dutch Shell PLC - ADR

      12,000           724   

Schlumberger, Ltd.

      32,900           2,027   

SEACOR Holdings, Inc. (Æ)

      1,600           136   

Statoil ASA - ADR

      34,200           718   

Valero Energy Corp.

      19,700           345   

Williams Cos., Inc. (The)

      48,300           923   
             
          39,033   
             
Financial Services - 14.5%        

Aflac, Inc.

      31,650           1,637   

Allied World Assurance Co. Holdings, Ltd.

      3,100           175   

Allstate Corp. (The)

      36,100           1,139   

American Express Co.

      63,313           2,661   

American Financial Group, Inc.

      7,500           229   

Ameriprise Financial, Inc.

      6,900           327   

AON Corp. (Ñ)

      31,750           1,242   

Aspen Insurance Holdings, Ltd.

      10,900           330   

Assurant, Inc.

      7,900           321   

Axis Capital Holdings, Ltd.

      5,700           188   

Bank of America Corp.

      88,900           1,165   

Bank of Hawaii Corp.

      1,900           85   

Bank of New York Mellon Corp. (The)

      31,700           828   

BB&T Corp.

      59,600           1,435   

Berkshire Hathaway, Inc. Class B (Æ)

      2,600           215   

BlackRock, Inc. Class A

      2,550           434   

Camden Property Trust (ö)

      5,600           269   

Capital One Financial Corp.

      24,983           988   

Citigroup, Inc. (Æ)

      316,600           1,235   

City National Corp.

      2,800           149   

 

Multi-Style Equity Fund   3

Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

CNA Financial Corp. (Æ)

      2,700           76   

Comerica, Inc. (Ñ)

      10,400           386   

Cullen/Frost Bankers, Inc.

      1,500           81   

Discover Financial Services

      24,400           407   

Endurance Specialty Holdings, Ltd.

      7,000           279   

Everest Re Group, Ltd.

      1,500           130   

Federated Investors, Inc. Class B (Ñ)

      21,700           494   

Fifth Third Bancorp

      60,970           733   

First Citizens BancShares, Inc. Class A

      500           93   

Fulton Financial Corp.

      17,500           159   

Goldman Sachs Group, Inc. (The)

      14,749           2,132   

Hartford Financial Services Group, Inc.

      36,100           828   

HCC Insurance Holdings, Inc.

      8,800           230   

Hudson City Bancorp, Inc.

      53,300           653   

Huntington Bancshares, Inc.

      155,200           880   

Jefferies Group, Inc.

      12,800           290   

JPMorgan Chase & Co.

      110,451           4,205   

KeyCorp

      66,400           529   

Lincoln National Corp.

      34,700           830   

Loews Corp.

      11,000           417   

Marsh & McLennan Cos., Inc.

      29,000           699   

Mastercard, Inc. Class A

      3,395           760   

Mercury General Corp.

      12,900           527   

MetLife, Inc.

      77,544           2,982   

Moody’s Corp.

      25,700           642   

Morgan Stanley

      62,300           1,538   

New York Community Bancorp, Inc. (Ñ)

      12,500           203   

Northern Trust Corp.

      17,900           863   

NYSE Euronext

      7,400           211   

PartnerRe, Ltd. - ADR

      5,100           409   

People’s United Financial, Inc.

      31,600           414   

Plum Creek Timber Co., Inc. (ö)(Ñ)

      17,400           614   

PNC Financial Services Group, Inc.

      10,500           545   

ProLogis (ö)

      19,600           231   

Prudential Financial, Inc.

      24,800           1,344   

Reinsurance Group of America, Inc. Class A

      3,100           150   

State Street Corp.

      22,500           847   

SunTrust Banks, Inc.

      31,500           814   

Transatlantic Holdings, Inc.

      5,900           300   

Travelers Cos., Inc. (The)

      8,500           443   

Unitrin, Inc.

      1,800           44   

Unum Group

      9,300           206   

US Bancorp

      91,950           1,988   

Valley National Bancorp

      35,339           456   

Verisk Analytics, Inc. Class A (Æ)

      322           9   

Visa, Inc. Class A

      24,207           1,798   

Washington Federal, Inc.

      6,100           93   

Wells Fargo & Co.

      158,109           3,973   

White Mountains Insurance Group, Ltd.

      500           154   

Wilmington Trust Corp. (Ñ)

      19,300           173   

XL Group PLC Class A

      12,000           260   
             
          52,574   
             
Health Care - 11.2%        

Abbott Laboratories

      80,962           4,229   

Aetna, Inc.

      3,300           104   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Alexion Pharmaceuticals, Inc. (Æ)

      2,900           187   

Allergan, Inc.

      36,100           2,402   

Amgen, Inc. (Æ)

      26,973           1,486   

Baxter International, Inc.

      17,300           825   

Boston Scientific Corp. (Æ)

      21,600           132   

Bristol-Myers Squibb Co.

      16,870           457   

Cardinal Health, Inc.

      3,800           126   

Celgene Corp. (Æ)

      12,510           721   

Cerner Corp. (Æ)

      5,400           454   

Cigna Corp.

      9,000           322   

Covance, Inc. (Æ)

      11,000           515   

Coventry Health Care, Inc. (Æ)

      12,100           260   

Covidien PLC

      28,000           1,125   

Dendreon Corp. (Æ)

      6,800           280   

Eli Lilly & Co. (Ñ)

      14,400           526   

Express Scripts, Inc. Class A (Æ)

      14,700           716   

Hospira, Inc. (Æ)

      15,200           867   

Humana, Inc. (Æ)

      8,600           432   

Illumina, Inc. (Æ)

      16,208           797   

Intuitive Surgical, Inc. (Æ)

      2,327           660   

Johnson & Johnson

      29,100           1,803   

King Pharmaceuticals, Inc. (Æ)

      31,200           311   

LifePoint Hospitals, Inc. (Æ)

      1,100           39   

Lincare Holdings, Inc.

      16,400           411   

Medicis Pharmaceutical Corp. Class A

      15,800           468   

Medtronic, Inc.

      16,916           568   

Merck & Co., Inc.

      179,350           6,602   

Pfizer, Inc.

      277,200           4,760   

Sanofi-Aventis SA - ADR

      72,050           2,396   

St. Jude Medical, Inc. (Æ)

      2,416           95   

Stryker Corp. (Ñ)

      36,000           1,802   

Teleflex, Inc. (Ñ)

      7,200           409   

Thermo Fisher Scientific, Inc. (Æ)

      7,745           371   

UnitedHealth Group, Inc.

      38,500           1,352   

Watson Pharmaceuticals, Inc. Class B (Æ)

      6,100           258   

WellPoint, Inc. (Æ)

      24,400           1,382   
             
          40,650   
             
Materials and Processing - 5.2%        

Agnico-Eagle Mines, Ltd.

      2,400           171   

Air Products & Chemicals, Inc.

      26,471           2,192   

Allegheny Technologies, Inc. (Ñ)

      7,390           343   

CF Industries Holdings, Inc.

      12,768           1,219   

Cytec Industries, Inc.

      4,700           265   

Dow Chemical Co. (The) (Ñ)

      31,200           857   

Ecolab, Inc.

      5,900           299   

EI du Pont de Nemours & Co.

      16,700           745   

Freeport-McMoRan Copper & Gold, Inc. Class B

      10,100           863   

Huntsman Corp.

      66,000           763   

MeadWestvaco Corp.

      8,600           210   

Newmont Mining Corp.

      54,146           3,401   

Nucor Corp.

      19,900           760   

Owens-Illinois, Inc. (Æ)

      29,550           829   

Packaging Corp. of America

      7,900           183   

Potash Corp. of Saskatchewan, Inc.

      6,835           985   

PPG Industries, Inc. (Ñ)

      5,800           422   

 

  4      Multi-Style Equity Fund

Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Praxair, Inc.

      21,182           1,912   

Sealed Air Corp.

      38,000           854   

Teck Resources, Ltd. Class B

      17,100           704   

Vulcan Materials Co. Series REGS (Ñ)

      21,800           805   
             
          18,782   
             
Producer Durables - 10.9%        

3M Co.

      21,800           1,890   

Accenture PLC Class A

      23,750           1,009   

Agilent Technologies, Inc. (Æ)

      5,441           182   

Automatic Data Processing, Inc. (Ñ)

      17,700           744   

Avery Dennison Corp.

      13,000           483   

Boeing Co. (The)

      12,530           834   

Caterpillar, Inc.

      48,817           3,841   

Crane Co.

      4,300           163   

Cummins, Inc.

      6,000           543   

Danaher Corp.

      23,200           942   

Deere & Co.

      12,264           856   

Delta Air Lines, Inc. (Æ)

      62,200           724   

Emerson Electric Co.

      23,000           1,211   

Empresa Brasileira de Aeronautica SA - ADR

      17,700           502   

FedEx Corp.

      12,620           1,079   

Fluor Corp.

      29,800           1,476   

General Dynamics Corp.

      11,666           733   

General Electric Co.

      92,260           1,499   

Harsco Corp.

      21,700           533   

Honeywell International, Inc.

      93,398           4,104   

Joy Global, Inc.

      10,200           717   

L-3 Communications Holdings, Inc.

      4,600           332   

Lexmark International, Inc. Class A (Æ)

      8,300           370   

Lockheed Martin Corp.

      12,300           877   

Manpower, Inc.

      13,500           705   

Norfolk Southern Corp.

      500           30   

Northrop Grumman Corp.

      7,400           449   

PACCAR, Inc.

      16,900           814   

Pitney Bowes, Inc.

      29,900           639   

Raytheon Co.

      19,800           905   

Regal-Beloit Corp.

      1,900           111   

Robert Half International, Inc.

      19,100           497   

Rockwell Automation, Inc.

      7,400           457   

SPX Corp.

      21,900           1,386   

SunPower Corp. Class B (Æ)

      58,800           815   

Textron, Inc.

      15,000           308   

Tidewater, Inc.

      16,000           717   

Tyco International, Ltd.

      23,700           870   

Union Pacific Corp.

      5,300           434   

United Parcel Service, Inc. Class B

      49,462           3,299   

URS Corp. (Æ)

      6,600           251   

Waste Management, Inc.

      12,700           454   

Watts Water Technologies, Inc. Class A

      2,100           71   

Xerox Corp.

      40,000           414   
             
          39,270   
             
Technology - 16.8%        

Akamai Technologies, Inc. (Æ)

      6,100           306   

Altera Corp.

      34,800           1,050   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Amdocs, Ltd. (Æ)

      5,800           166   

Amphenol Corp. Class A

      25,714           1,259   

Apple, Inc. (Æ)

      28,582           8,110   

Applied Materials, Inc.

      72,600           848   

Baidu, Inc. - ADR (Æ)

      4,100           421   

Broadcom Corp. Class A (Ñ)

      88,324           3,126   

Check Point Software Technologies, Ltd. (Æ)(Ñ)

      17,100           632   

Cisco Systems, Inc. (Æ)

      212,203           4,647   

Citrix Systems, Inc. (Æ)

      6,920           472   

Cognizant Technology Solutions Corp. Class A (Æ)

      18,603           1,199   

Coherent, Inc. (Æ)

      2,100           84   

Computer Sciences Corp.

      8,000           368   

Cree, Inc. (Æ)

      6,100           331   

Dell, Inc. (Æ)

      74,900           971   

Diebold, Inc.

      11,800           367   

Electronic Arts, Inc. Series C (Æ)

      12,800           210   

Equinix, Inc. (Æ)

      4,080           418   

F5 Networks, Inc. (Æ)

      11,400           1,183   

Google, Inc. Class A (Æ)

      10,585           5,565   

Harris Corp.

      9,100           403   

Hewlett-Packard Co.

      11,300           475   

Ingram Micro, Inc. Class A (Æ)

      11,300           191   

Intel Corp.

      36,500           702   

International Business Machines Corp.

      14,254           1,912   

Intuit, Inc. (Æ)

      8,150           357   

Juniper Networks, Inc. (Æ)

      14,700           446   

Lam Research Corp. (Æ)

      8,700           364   

LSI Corp. (Æ)

      37,700           172   

Maxim Integrated Products, Inc.

      54,900           1,016   

Micron Technology, Inc. (Æ)(Ñ)

      50,600           365   

Microsoft Corp.

      158,650           3,885   

Molex, Inc. (Ñ)

      14,800           310   

Motorola, Inc. (Æ)

      57,700           492   

National Semiconductor Corp.

      64,600           825   

NetApp, Inc. (Æ)

      33,460           1,666   

Nokia OYJ - ADR

      36,700           368   

Oracle Corp.

      71,500           1,920   

QUALCOMM, Inc.

      143,848           6,490   

Red Hat, Inc. (Æ)

      24,110           989   

Salesforce.com, Inc. (Æ)

      6,000           671   

SanDisk Corp. (Æ)

      11,380           417   

Seagate Technology PLC (Æ)

      34,100           402   

Synopsys, Inc. (Æ)

      13,200           327   

Texas Instruments, Inc.

      106,301           2,885   

Tyco Electronics, Ltd.

      20,164           589   

VMware, Inc. Class A (Æ)

      3,400           289   
             
          60,661   
             
Utilities - 4.1%        

AGL Resources, Inc.

      1,700           65   

American Electric Power Co., Inc.

      4,600           167   

American Water Works Co., Inc.

      23,300           542   

AT&T, Inc.

      54,800           1,567   

Atmos Energy Corp.

      5,700           167   

BCE, Inc.

      49,000           1,592   

 

Multi-Style Equity Fund   5

Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

CenterPoint Energy, Inc.

      28,800           453   

Constellation Energy Group, Inc.

      6,000           193   

Duke Energy Corp.

      25,900           459   

Edison International

      11,600           399   

Energen Corp.

      4,300           197   

Entergy Corp.

      5,000           383   

Exelon Corp.

      9,400           400   

Frontier Communications Corp.

      57,700           471   

Great Plains Energy, Inc.

      23,900           452   

MDU Resources Group, Inc.

      22,900           457   

NII Holdings, Inc. (Æ)

      6,600           271   

NiSource, Inc. (Ñ)

      23,500           409   

Northeast Utilities

      10,900           322   

NV Energy, Inc.

      22,600           297   

Pepco Holdings, Inc.

      21,900           407   

PG&E Corp.

      8,100           368   

Pinnacle West Capital Corp.

      9,400           388   

PNM Resources, Inc.

      7,400           84   

PPL Corp.

      11,400           310   

Progress Energy, Inc.

      7,700           342   

Questar Corp.

      9,400           165   

Veolia Environnement - ADR

      15,200           401   

Verizon Communications, Inc.

      33,800           1,102   

Vodafone Group PLC - ADR

      85,800           2,129   
             
          14,959   
             
Total Common Stocks
(cost $305,446)		            346,583   
             
Short-Term Investments - 3.3%        

Russell U.S. Cash Management Fund (£)

      12,002,051           12,002   
             
Total Short-Term Investments
(cost $12,002)		            12,002   
             
Other Securities - 0.7%        

State Street Securities Lending Quality Trust (×)

      2,551,579           2,544   
             
Total Other Securities
(cost $2,552)		            2,544   
             
Total Investments - 99.8%
(identified cost $320,000)		            361,129   
Other Assets and Liabilities,
Net - 0.2%		            690   
             
Net Assets - 100.0%           361,819   
             

 

See accompanying notes which are an integral part of this quarterly report.

 

  6      Multi-Style Equity Fund

Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts      Number of
Contracts		       

Notional

Amount

        Expiration
Date		        Unrealized
Appreciation
(Depreciation)
$		  
                     
                     
Long Postitions                      

Russell 1000 Mini Index

        27           USD        1,694           12/10           22   

S&P 500 E-Mini Index (CME)

        201           USD        11,424           12/10           88   

S&P 500 Index (CME)

        7           USD        1,989           12/10           88   

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

        17           USD        1,360           12/10           34   
                           

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å)

                         232   
                           

 

 

Presentation of Portfolio Holdings — September 30, 2010 (Unaudited)

 

       Market Value  
Categories      Level 1        Level 2        Level 3        Total  
                   

Common Stock

                    

Consumer Discretionary

      $ 49,663         $ —         $ —         $ 49,663   

Consumer Staples

        30,991           —           —           30,991   

Energy

        39,033           —           —           39,033   

Financial Services

        52,574           —           —           52,574   

Health Care

        40,650           —           —           40,650   

Materials and Processing

        18,782           —           —           18,782   

Producer Durables

        39,270           —           —           39,270   

Technology

        60,661           —           —           60,661   

Utilities

        14,959           —           —           14,959   

Short-Term Investments

        —           12,002           —           12,002   

Other Securities

        —           2,544           —           2,544   
                                           

Total Investments

        346,583           14,546           —           361,129   
                                           

Other Financial Instruments

                    

Futures Contracts

        232           —           —           232   
                                           

Total Other Financial Instruments*

        232           —           —           232   
                                           

 

*   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.

For a description of the levels see note 2 in the Notes to Quarterly Report.

 

See accompanying notes which are an integral part of this quarterly report.

 

Multi-Style Equity Fund   7

Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Common Stocks - 95.2%   
Consumer Discretionary - 12.0%        

99 Cents Only Stores (Æ)

      27,660           522   

ABM Industries, Inc.

      11,700           253   

Amerco, Inc. (Æ)

      2,100           167   

America’s Car-Mart, Inc. (Æ)

      9,610           242   

Arctic Cat, Inc. (Æ)

      1,800           18   

Asbury Automotive Group, Inc. (Æ)

      12,631           178   

Bebe Stores, Inc.

      51,500           371   

Big 5 Sporting Goods Corp.

      1,300           17   

BJ’s Wholesale Club, Inc. (Æ)

      5,600           232   

Bob Evans Farms, Inc.

      8,700           244   

Brown Shoe Co., Inc.

      4,700           54   

Callaway Golf Co.

      45,556           319   

Chico’s FAS, Inc.

      7,500           79   

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

      4,890           239   

Chipotle Mexican Grill, Inc. Class A (Æ)

      2,100           361   

Christopher & Banks Corp.

      29,282           232   

Columbia Sportswear Co. (Ñ)

      6,548           383   

Corinthian Colleges, Inc. (Æ)(Ñ)

      33,900           238   

Cracker Barrel Old Country Store, Inc.

      1,200           61   

CROCS, Inc. (Æ)

      26,495           345   

Dick’s Sporting Goods, Inc. (Æ)

      12,153           341   

Dillard’s, Inc. Class A (Ñ)

      23,200           548   

Dollar Tree, Inc. (Æ)

      13,300           649   

Dress Barn, Inc. (The) (Æ)

      9,619           228   

Elizabeth Arden, Inc. (Æ)

      3,100           62   

Expedia, Inc.

      21,091           595   

Fastenal Co. (Ñ)

      5,834           310   

Federal-Mogul Corp. (Æ)

      11,500           218   

Finish Line, Inc. (The) Class A

      32,935           458   

Foot Locker, Inc.

      39,550           575   

Fossil, Inc. (Æ)

      6,700           360   

Fred’s, Inc. Class A

      18,100           214   

Group 1 Automotive, Inc. (Æ)(Ñ)

      4,700           140   

Guess?, Inc.

      6,551           266   

Harman International Industries, Inc. (Æ)

      14,984           501   

Haverty Furniture Cos., Inc.

      1,300           14   

Hillenbrand, Inc.

      16,700           359   

Hyatt Hotels Corp. Class A (Æ)

      3,800           142   

IAC/InterActiveCorp (Æ)

      8,394           221   

Jones Apparel Group, Inc.

      10,200           200   

Kenneth Cole Productions, Inc. Class A (Æ)

      19,577           326   

Leapfrog Enterprises, Inc. Class A (Æ)

      6,200           34   

Lifetime Brands, Inc. (Æ)(Ñ)

      1,500           23   

LKQ Corp. (Æ)

      30,392           632   

Mediacom Communications Corp. Class A (Æ)

      13,800           91   

Men’s Wearhouse, Inc. (The)

      7,600           181   

MGM Resorts International (Æ)(Ñ)

      22,398           253   

Movado Group, Inc. (Æ)

      3,000           33   

MSC Industrial Direct Co. Class A

      4,816           260   

Multimedia Games, Inc. (Æ)

      2,100           8   

O’Reilly Automotive, Inc. (Æ)

      5,949           317   

OfficeMax, Inc. (Æ)

      19,662           257   

Panera Bread Co. Class A (Æ)

      5,440           482   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

PF Chang’s China Bistro, Inc. (Ñ)

      14,548           672   

Pool Corp.

      11,400           229   

Rent-A-Center, Inc. Class A

      3,400           76   

Ryland Group, Inc.

      3,400           61   

Scholastic Corp.

      5,400           150   

Shoe Carnival, Inc. (Æ)

      1,400           28   

Skechers U.S.A., Inc. Class A (Æ)

      9,800           230   

Sonic Automotive, Inc. Class A (Æ)(Ñ)

      1,400           14   

Stage Stores, Inc.

      1,800           23   

Standard Motor Products, Inc.

      21,211           223   

Steven Madden, Ltd. (Æ)

      23,644           971   

Stewart Enterprises, Inc. Class A (Ñ)

      55,600           300   

Superior Industries International, Inc.

      30,025           519   

Tech Data Corp. (Æ)

      6,300           254   

Tempur-Pedic International, Inc. (Æ)

      9,004           279   

Under Armour, Inc. Class A (Æ)(Ñ)

      9,100           410   

Urban Outfitters, Inc. (Æ)

      7,040           221   

Vishay Precision Group, Inc. (Æ)(Ñ)

      2,061           32   

Warnaco Group, Inc. (The) (Æ)

      6,260           320   

WESCO International, Inc. (Æ)

      2,100           83   

WMS Industries, Inc. (Æ)

      5,719           218   

Wolverine World Wide, Inc.

      12,200           354   

Wyndham Worldwide Corp.

      20,000           549   
             
          20,069   
             
Consumer Staples - 3.6%        

Alberto-Culver Co. Class B

      13,354           503   

Alliance One International, Inc. (Æ)

      23,967           99   

Andersons, Inc. (The)

      5,388           204   

Chiquita Brands International, Inc. (Æ)

      4,300           57   

Church & Dwight Co., Inc.

      4,930           320   

Constellation Brands, Inc. Class A (Æ)

      42,200           747   

Corn Products International, Inc.

      21,900           821   

Del Monte Foods Co.

      5,900           77   

Energizer Holdings, Inc. (Æ)

      6,300           424   

Fresh Del Monte Produce, Inc. (Æ)

      700           15   

Hansen Natural Corp. (Æ)

      9,000           420   

Helen of Troy, Ltd. (Æ)

      3,100           78   

Lance, Inc.

      22,200           473   

Nash Finch Co.

      3,300           140   

Seneca Foods Corp. Class A (Æ)

      1,000           26   

Spartan Stores, Inc.

      4,600           67   

SUPERVALU, Inc.

      25,900           299   

Tootsie Roll Industries, Inc. (Ñ)

      8,700           216   

TreeHouse Foods, Inc. (Æ)(Ñ)

      10,980           506   

Tyson Foods, Inc. Class A

      29,009           465   

Winn-Dixie Stores, Inc. (Æ)

      2,900           21   
             
          5,978   
             
Energy - 4.9%        

Alpha Natural Resources, Inc. (Æ)

      9,108           375   

Berry Petroleum Co. Class A

      13,400           425   

Cloud Peak Energy, Inc. (Æ)

      10,100           184   

Complete Production Services, Inc. (Æ)

      7,172           147   

Comstock Resources, Inc. (Æ)

      8,862           199   

Continental Resources, Inc. (Æ)

      5,070           235   

 

  8      Aggressive Equity Fund

Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Core Laboratories NV (Ñ)

      5,256           463   

Dawson Geophysical Co. (Æ)

      1,300           35   

Dril-Quip, Inc. (Æ)

      8,990           558   

Exterran Holdings, Inc. (Æ)

      9,876           224   

Forest Oil Corp. (Æ)

      2,286           68   

Gulf Island Fabrication, Inc.

      2,200           40   

Helix Energy Solutions Group, Inc. (Æ)

      18,253           203   

Helmerich & Payne, Inc.

      1,200           48   

Oceaneering International, Inc. (Æ)

      13,099           705   

Oil States International, Inc. (Æ)

      8,600           400   

Ormat Technologies, Inc. (Ñ)

      11,900           347   

Parker Drilling Co. (Æ)

      2,500           11   

Patterson-UTI Energy, Inc.

      22,098           377   

Penn Virginia Corp.

      25,500           409   

Petroleum Development Corp. (Æ)

      5,100           141   

Precision Drilling Corp. (Æ)

      28,161           193   

Rosetta Resources, Inc. (Æ)

      27,020           635   

Rowan Cos., Inc. (Æ)

      14,881           452   

SEACOR Holdings, Inc. (Æ)

      500           43   

Sunoco, Inc.

      6,687           244   

Tesoro Corp.

      21,600           289   

Tetra Technologies, Inc. (Æ)

      3,300           34   

Unit Corp. (Æ)

      8,681           324   

USEC, Inc. (Æ)

      15,200           79   

Walter Energy, Inc. Class A

      3,874           315   
             
          8,202   
             
Financial Services - 18.2%        

Advance America Cash Advance Centers, Inc.

      6,100           25   

Affiliated Managers Group, Inc. (Æ)

      15,484           1,208   

Allied World Assurance Co. Holdings, Ltd.

      2,000           113   

American Capital Agency Corp. (ö)(Ñ)

      21,000           558   

American Equity Investment Life Holding Co.

      46,020           471   

American Financial Group, Inc.

      11,400           349   

American National Insurance Co.

      700           53   

American Safety Insurance Holdings, Ltd. (Æ)

      1,000           16   

Ameriprise Financial, Inc.

      5,324           252   

Amtrust Financial Services, Inc.

      800           12   

Apollo Commercial Real Estate Finance, Inc. (ö)

      1,500           24   

Arch Capital Group, Ltd. (Æ)

      1,900           159   

Ares Capital Corp.

      58,431           914   

Argo Group International Holdings, Ltd.

      3,800           132   

Artio Global Investors, Inc. Class A

      24,200           370   

Aspen Insurance Holdings, Ltd.

      11,100           336   

Axis Capital Holdings, Ltd.

      1,100           36   

BancorpSouth, Inc.

      16,800           238   

Banner Corp. (Ñ)

      2,000           4   

BioMed Realty Trust, Inc. (ö)

      13,550           243   

BOK Financial Corp.

      11,122           502   

Boston Private Financial Holdings, Inc.

      35,199           230   

Brandywine Realty Trust (ö)

      6,100           75   

Brookline Bancorp, Inc. (Ñ)

      28,700           286   

Camden Property Trust (ö)

      5,200           249   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Chesapeake Lodging Trust (ö)

      200           3   

Chimera Investment Corp. (ö)

      84,300           333   

City National Corp.

      5,900           313   

Colonial Properties Trust (ö)

      53,162           861   

CommonWealth REIT (ö)

      6,475           166   

Community Bank System, Inc. (Ñ)

      13,700           315   

Community Trust Bancorp, Inc. (Ñ)

      1,000           27   

Cousins Properties, Inc. (ö)

      12,989           93   

Cullen/Frost Bankers, Inc.

      800           43   

CVB Financial Corp. (Ñ)

      9,800           74   

Cypress Sharpridge Investments, Inc. (ö)

      11,353           152   

DCT Industrial Trust, Inc. (ö)

      20,400           98   

DiamondRock Hospitality Co. (ö)

      41,769           396   

Dime Community Bancshares, Inc.

      16,300           226   

Duff & Phelps Corp. Class A

      30,800           415   

Dynex Capital, Inc. (Æ)

      14,400           155   

Education Realty Trust, Inc. (ö)

      2,700           19   

Endurance Specialty Holdings, Ltd.

      6,600           263   

Equity One, Inc. (ö)(Ñ)

      7,500           127   

Extra Space Storage, Inc. (ö)

      8,200           132   

Ezcorp, Inc. Class A (Æ)

      24,774           496   

FBL Financial Group, Inc. Class A

      1,800           47   

Federal Realty Investment Trust (ö)

      3,200           261   

First Financial Bancorp

      10,700           178   

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

      15,900           81   

First Mercury Financial Corp.

      2,000           20   

First Niagara Financial Group, Inc.

      9,900           115   

First Potomac Realty Trust (ö)

      4,400           66   

FirstMerit Corp.

      17,600           322   

Flushing Financial Corp.

      2,500           29   

FPIC Insurance Group, Inc. (Æ)

      900           32   

Franklin Street Properties Corp. (ö)

      22,243           276   

Fulton Financial Corp.

      39,600           359   

Glacier Bancorp, Inc.

      12,100           177   

Glimcher Realty Trust (ö)

      5,600           34   

Global Indemnity PLC Class A (Æ)

      1,200           19   

Greenhill & Co., Inc.

      4,746           376   

Hallmark Financial Services (Æ)

      1,800           16   

Hancock Holding Co.

      12,100           364   

Hatteras Financial Corp. (ö)

      10,500           299   

HCC Insurance Holdings, Inc.

      12,400           324   

Hercules Technology Growth Capital, Inc.

      3,900           39   

Home Bancshares, Inc.

      2,750           56   

Horace Mann Educators Corp.

      7,600           135   

Hospitality Properties Trust (ö)

      17,243           385   

Huntington Bancshares, Inc.

      15,000           85   

Iberiabank Corp.

      8,450           422   

Infinity Property & Casualty Corp.

      1,100           54   

IntercontinentalExchange, Inc. (Æ)

      2,817           295   

Invesco Mortgage Capital, Inc. (ö)

      24,000           516   

Investment Technology Group, Inc. (Æ)

      1,900           27   

JER Investors Trust, Inc. (Æ)(Å)

      1,771           —   

Jones Lang LaSalle, Inc.

      4,400           380   

Knight Capital Group, Inc. Class A (Æ)

      16,823           208   

LaSalle Hotel Properties (ö)

      10,497           246   

Lazard, Ltd. Class A

      26,257           921   

Mack-Cali Realty Corp. (ö)

      7,300           239   

MarketAxess Holdings, Inc.

      9,630           164   

 

Aggressive Equity Fund   9

Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

MCG Capital Corp.

      8,900           52   

Meadowbrook Insurance Group, Inc.

      4,385           39   

Medical Properties Trust, Inc. (ö)

      26,700           271   

MFA Financial, Inc. (ö)

      38,300           292   

Montpelier Re Holdings, Ltd.

      15,800           274   

MSCI, Inc. Class A (Æ)

      9,014           299   

Nelnet, Inc. Class A

      8,800           201   

NewAlliance Bancshares, Inc.

      22,400           283   

OceanFirst Financial Corp.

      1,700           21   

Och-Ziff Capital Management Group LLC Class A (Ñ)

      20,474           305   

Old National Bancorp

      34,900           366   

OneBeacon Insurance Group, Ltd. Class A

      2,800           40   

Park National Corp. (Ñ)

      900           58   

Parkway Properties, Inc. (ö)

      2,400           36   

PennantPark Investment Corp.

      27,758           295   

Piper Jaffray Cos. (Æ)

      6,868           200   

Platinum Underwriters Holdings, Ltd.

      6,300           274   

Post Properties, Inc. (ö)

      6,900           193   

Prosperity Bancshares, Inc.

      12,300           399   

Protective Life Corp.

      7,600           165   

Provident New York Bancorp

      1,800           15   

PS Business Parks, Inc. (ö)

      2,300           130   

Raymond James Financial, Inc.

      10,497           266   

Reinsurance Group of America, Inc. Class A

      7,200           348   

Renasant Corp. (Ñ)

      1,500           23   

Republic Bancorp, Inc. Class A (Ñ)

      1,100           23   

Resource Capital Corp. (ö)

      44,713           284   

Selective Insurance Group, Inc.

      22,300           363   

Signature Bank NY (Æ)

      9,060           352   

Simmons First National Corp. Class A

      700           20   

SL Green Realty Corp. (ö)

      4,700           298   

Southwest Bancorp, Inc.

      900           12   

Sovran Self Storage, Inc. (ö)

      2,200           83   

StanCorp Financial Group, Inc.

      5,700           217   

StellarOne Corp. (Ñ)

      19,587           249   

Sterling Bancorp Class N

      10,700           93   

Sterling Bancshares, Inc.

      37,200           200   

SVB Financial Group (Æ)(Ñ)

      10,370           439   

SWS Group, Inc.

      25,800           185   

Symetra Financial Corp.

      27,300           286   

Territorial Bancorp, Inc.

      900           15   

Texas Capital Bancshares, Inc. (Æ)

      12,619           218   

Textainer Group Holdings, Ltd.

      19,673           526   

TICC Capital Corp.

      1,800           19   

Transatlantic Holdings, Inc.

      6,700           341   

Trustmark Corp.

      19,800           430   

UMB Financial Corp.

      8,800           312   

Umpqua Holdings Corp.

      21,700           246   

United Financial Bancorp, Inc.

      1,500           20   

Unitrin, Inc.

      4,800           117   

Washington Federal, Inc.

      29,899           456   

Webster Financial Corp.

      7,600           133   

Westamerica Bancorporation (Ñ)

      200           11   

White Mountains Insurance Group, Ltd.

      400           123   

Whitney Holding Corp.

      20,887           171   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

World Acceptance Corp. (Æ)

      1,100           49   

WSFS Financial Corp.

      500           19   
             
          30,284   
             
Health Care - 10.6%        

Albany Molecular Research, Inc. (Æ)

      24,017           153   

Allscripts Healthcare Solutions, Inc. (Æ)

      25,476           471   

Amedisys, Inc. (Æ)(Ñ)

      6,968           166   

AMERIGROUP Corp. Class A (Æ)

      4,400           187   

Analogic Corp.

      8,394           377   

Angiodynamics, Inc. (Æ)

      2,700           41   

Brookdale Senior Living, Inc. (Æ)

      20,369           332   

Catalyst Health Solutions, Inc. (Æ)

      15,855           558   

Centene Corp. (Æ)

      9,900           234   

CONMED Corp. (Æ)

      10,879           244   

Cooper Cos., Inc. (The)

      7,312           338   

Coventry Health Care, Inc. (Æ)

      17,100           368   

Cynosure, Inc. Class A (Æ)

      16,320           167   

Emergency Medical Services Corp. Class A (Æ)

      13,597           724   

Endo Pharmaceuticals Holdings, Inc. (Æ)

      13,100           435   

Ensign Group, Inc. (The)

      3,800           68   

Five Star Quality Care, Inc. (Æ)

      3,500           18   

Gentiva Health Services, Inc. (Æ)

      7,551           165   

Greatbatch, Inc. (Æ)

      12,136           281   

Harvard Bioscience, Inc. (Æ)

      39,716           151   

Health Management Associates, Inc. Class A (Æ)

      55,310           424   

Health Net, Inc. (Æ)

      28,800           783   

Healthsouth Corp. (Æ)

      11,697           225   

Healthspring, Inc. (Æ)

      26,755           691   

Healthways, Inc. (Æ)

      2,600           30   

Hill-Rom Holdings, Inc.

      5,302           190   

HMS Holdings Corp. (Æ)(Ñ)

      10,450           616   

Hologic, Inc. (Æ)

      10,300           165   

Humana, Inc. (Æ)

      10,200           512   

Icon PLC - ADR (Æ)

      7,015           152   

IDEXX Laboratories, Inc. (Æ)(Ñ)

      5,858           362   

Illumina, Inc. (Æ)

      8,936           440   

Impax Laboratories, Inc. (Æ)

      12,800           253   

Invacare Corp.

      5,700           151   

Kindred Healthcare, Inc. (Æ)

      15,048           196   

King Pharmaceuticals, Inc. (Æ)

      36,900           368   

LifePoint Hospitals, Inc. (Æ)

      5,300           186   

Magellan Health Services, Inc. (Æ)

      8,700           411   

Medicines Co. (The) (Æ)

      8,800           125   

Mednax, Inc. (Æ)

      5,884           314   

Meridian Bioscience, Inc. (Ñ)

      18,000           394   

Molina Healthcare, Inc. (Æ)

      9,700           262   

OSI Systems, Inc. (Æ)

      7,966           289   

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

      900           9   

Par Pharmaceutical Cos., Inc. (Æ)

      23,000           669   

Patterson Cos., Inc.

      564           16   

PerkinElmer, Inc.

      8,968           207   

Perrigo Co.

      6,430           413   

Quality Systems, Inc.

      2,691           178   

Salix Pharmaceuticals, Ltd. (Æ)

      6,675           265   

Sun Healthcare Group, Inc. Class W (Æ)

      7,600           64   

 

  10      Aggressive Equity Fund

Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

SXC Health Solutions Corp. (Æ)

      20,040           731   

Symmetry Medical, Inc. (Æ)

      12,818           124   

Techne Corp.

      4,228           261   

Triple-S Management Corp. Class B (Æ)

      2,400           40   

United Therapeutics Corp. (Æ)

      6,710           376   

Universal American Corp.

      7,500           111   

Viropharma, Inc. (Æ)

      26,100           389   

Watson Pharmaceuticals, Inc. Class B (Æ)

      7,400           313   

West Pharmaceutical Services, Inc.

      14,000           480   
             
          17,663   
             
Materials and Processing - 8.8%        

A Schulman, Inc.

      19,900           401   

Aceto Corp.

      1,000           7   

Albemarle Corp.

      9,130           427   

Apogee Enterprises, Inc.

      7,400           68   

Arch Chemicals, Inc.

      7,500           263   

Ashland, Inc.

      20,000           975   

Ball Corp.

      5,200           306   

Brady Corp. Class A

      12,500           365   

Buckeye Technologies, Inc.

      2,200           32   

Cabot Corp.

      12,601           410   

Comfort Systems USA, Inc.

      9,800           105   

Commercial Metals Co.

      20,900           303   

Cytec Industries, Inc.

      25,136           1,417   

Domtar Corp.

      2,600           168   

Eastman Chemical Co.

      2,200           163   

Ferro Corp. (Æ)

      27,402           353   

Griffon Corp. (Æ)

      3,000           37   

Haynes International, Inc.

      1,200           42   

HB Fuller Co.

      17,600           350   

Horsehead Holding Corp. (Æ)

      17,254           170   

Huntsman Corp.

      23,700           274   

Interline Brands, Inc. (Æ)

      12,300           222   

Kaiser Aluminum Corp.

      11,900           509   

KapStone Paper and Packaging Corp. (Æ)

      25,300           307   

Koppers Holdings, Inc.

      16,400           441   

Kraton Performance Polymers, Inc. (Æ)

      19,811           538   

MeadWestvaco Corp.

      2,500           61   

Minerals Technologies, Inc.

      7,500           442   

Mueller Water Products, Inc. Class A

      54,900           166   

Neenah Paper, Inc.

      1,800           27   

OM Group, Inc. (Æ)

      13,634           411   

Owens Corning (Æ)

      5,400           138   

Packaging Corp. of America

      13,900           322   

Pan American Silver Corp.

      8,249           244   

PolyOne Corp. (Æ)

      12,800           155   

Reliance Steel & Aluminum Co.

      4,400           183   

RPM International, Inc.

      15,892           316   

RTI International Metals, Inc. (Æ)

      7,474           229   

Scotts Miracle-Gro Co. (The) Class A

      6,585           341   

Sensient Technologies Corp.

      5,100           155   

Sims Metal Management, Ltd. - ADR

      13,536           230   

SuperGen, Inc. (Æ)

      4,200           9   

Timken Co.

      11,600           445   

Titanium Metals Corp. (Æ)

      24,317           485   

TPC Group, Inc. (Æ)

      10,498           250   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Universal Forest Products, Inc.

      8,350           244   

Valspar Corp.

      10,600           338   

Watsco, Inc.

      5,002           278   

Westlake Chemical Corp.

      5,000           150   

WR Grace & Co. (Æ)

      12,548           351   
             
          14,623   
             
Producer Durables - 17.8%        

AAR Corp. (Æ)

      7,000           131   

Actuant Corp. Class A

      14,872           341   

AGCO Corp. (Æ)

      12,139           474   

Aircastle, Ltd.

      9,500           81   

Alaska Air Group, Inc. (Æ)

      12,800           653   

Albany International Corp. Class A

      3,000           57   

Alexander & Baldwin, Inc.

      11,693           407   

AM Castle & Co. (Æ)

      1,200           16   

American Railcar Industries, Inc. (Æ)

      1,300           20   

AO Smith Corp.

      5,600           324   

Applied Industrial Technologies, Inc.

      17,600           539   

Astec Industries, Inc. (Æ)

      6,703           191   

Avery Dennison Corp.

      2,100           78   

Axcelis Technologies, Inc. (Æ)

      7,300           14   

Barnes Group, Inc.

      18,200           320   

BE Aerospace, Inc. (Æ)(Ñ)

      20,040           607   

Briggs & Stratton Corp.

      25,600           487   

Brink’s Co. (The)

      13,500           310   

Bristow Group, Inc. (Æ)

      2,307           83   

Bucyrus International, Inc. Class A

      6,670           463   

CAI International, Inc. (Æ)

      8,800           133   

Carlisle Cos., Inc.

      2,400           72   

CDI Corp.

      2,000           26   

Celadon Group, Inc. (Æ)

      2,300           32   

Ceradyne, Inc. (Æ)

      10,059           235   

Chart Industries, Inc. (Æ)

      10,983           224   

Compass Diversified Holdings

      15,700           254   

Con-way, Inc.

      7,600           235   

Consolidated Graphics, Inc. (Æ)

      2,280           94   

Convergys Corp. (Æ)

      1,700           18   

Copart, Inc. (Æ)

      12,164           401   

CoreLogic, Inc. (Æ)

      13,600           261   

Corporate Executive Board Co. (The)

      5,900           186   

CRA International, Inc. (Æ)

      1,100           20   

Crane Co.

      7,200           273   

Cross Country Healthcare, Inc. (Æ)

      2,800           20   

Cubic Corp.

      2,300           94   

Curtiss-Wright Corp.

      16,100           488   

Ducommun, Inc.

      1,800           39   

Dycom Industries, Inc. (Æ)

      2,500           25   

Electro Rent Corp.

      12,045           160   

Electronics for Imaging, Inc. (Æ)

      4,952           60   

EMCOR Group, Inc. (Æ)

      5,300           130   

EnerSys (Æ)

      19,730           493   

Ennis, Inc.

      1,600           29   

EnPro Industries, Inc. (Æ)

      8,186           256   

Esterline Technologies Corp. (Æ)

      10,700           612   

FEI Co. (Æ)

      1,000           20   

Flowserve Corp.

      800           88   

 

Aggressive Equity Fund   11

Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Foster Wheeler AG (Æ)

      4,115           101   

Franklin Electric Co., Inc.

      2,100           70   

G&K Services, Inc. Class A

      14,100           322   

Genesee & Wyoming, Inc. Class A (Æ)

      11,350           492   

GrafTech International, Ltd. (Æ)

      19,109           299   

Granite Construction, Inc.

      13,700           312   

Great Lakes Dredge & Dock Corp.

      1,600           9   

Greenbrier Cos., Inc. (Æ)

      6,700           104   

Harsco Corp.

      14,400           354   

HUB Group, Inc. Class A (Æ)

      15,384           450   

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

      6,542           158   

JB Hunt Transport Services, Inc.

      17,570           610   

Joy Global, Inc.

      9,395           661   

Kadant, Inc. (Æ)

      1,000           19   

Kansas City Southern (Æ)

      17,000           636   

KBR, Inc.

      24,657           608   

Kelly Services, Inc. Class A (Æ)

      3,100           36   

Kennametal, Inc.

      13,398           414   

Knight Transportation, Inc.

      12,009           232   

Kulicke & Soffa Industries, Inc. (Æ)

      14,100           87   

Layne Christensen Co. (Æ)

      9,305           241   

Lexmark International, Inc. Class A (Æ)

      10,500           468   

Littelfuse, Inc. (Æ)

      3,200           140   

LMI Aerospace, Inc. (Æ)

      3,900           62   

M&F Worldwide Corp. (Æ)

      3,600           88   

Manpower, Inc.

      6,347           331   

MAXIMUS, Inc.

      3,990           246   

McDermott International, Inc. (Æ)

      55,132           815   

Measurement Specialties, Inc. (Æ)

      1,100           20   

NACCO Industries, Inc. Class A

      800           70   

Nalco Holding Co.

      12,121           306   

On Assignment, Inc. (Æ)

      1,000           5   

Oshkosh Corp. (Æ)

      16,800           462   

Overseas Shipholding Group, Inc. (Ñ)

      3,700           127   

PHI, Inc. (Æ)

      6,216           101   

Regal-Beloit Corp.

      3,779           222   

Resources Connection, Inc.

      26,200           360   

Robbins & Myers, Inc.

      9,662           259   

Robert Half International, Inc.

      11,767           306   

Roper Industries, Inc.

      11,517           751   

RR Donnelley & Sons Co.

      13,400           227   

Ryder System, Inc.

      12,900           552   

Saia, Inc. (Æ)(Ñ)

      2,100           31   

Sensata Technologies Holding NV (Æ)

      12,768           252   

SFN Group, Inc. (Æ)

      6,800           41   

Skywest, Inc.

      34,200           477   

Southwest Airlines Co.

      15,879           208   

Steelcase, Inc. Class A

      36,300           302   

TAL International Group, Inc.

      9,100           220   

Teekay Corp.

      4,900           131   

Teledyne Technologies, Inc. (Æ)

      10,600           422   

TeleTech Holdings, Inc. (Æ)

      1,500           22   

Thermadyne Holdings Corp. (Æ)

      1,500           21   

Tidewater, Inc.

      1,800           81   

TransDigm Group, Inc.

      5,360           333   

Trinity Industries, Inc.

      14,600           325   

Triumph Group, Inc.

      12,120           904   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Tsakos Energy Navigation, Ltd. (Ñ)

      27,200           362   

Tutor Perini Corp. (Æ)

      8,600           173   

Unifirst Corp.

      1,500           66   

URS Corp. (Æ)

      19,263           732   

UTi Worldwide, Inc.

      22,940           369   

Wabtec Corp. (Ñ)

      15,817           756   

Watts Water Technologies, Inc. Class A

      4,800           163   

Werner Enterprises, Inc.

      10,000           205   

Woodward Governor Co.

      12,037           390   
             
          29,693   
             
Technology - 14.5%        

Actel Corp. (Æ)

      1,800           29   

ADTRAN, Inc.

      14,123           499   

Amdocs, Ltd. (Æ)

      5,800           166   

Amkor Technology, Inc. (Æ)(Ñ)

      21,300           140   

Amphenol Corp. Class A

      18,212           892   

Anadigics, Inc. (Æ)

      3,700           23   

Ansys, Inc. (Æ)

      15,159           641   

AOL, Inc. (Æ)

      6,800           168   

Applied Signal Technology, Inc.

      1,000           25   

Ariba, Inc. (Æ)

      42,250           799   

Arris Group, Inc. (Æ)

      5,900           58   

Aruba Networks, Inc. (Æ)

      11,081           237   

Atmel Corp. (Æ)

      45,909           365   

Aviat Networks, Inc. (Æ)

      8,100           33   

Avid Technology, Inc. (Æ)

      3,900           51   

AVX Corp.

      18,100           250   

Benchmark Electronics, Inc. (Æ)

      8,000           131   

Black Box Corp.

      3,000           96   

Ciber, Inc. (Æ)

      4,100           12   

Cogent, Inc. (Æ)

      14,087           150   

Coherent, Inc. (Æ)

      13,133           525   

Cohu, Inc.

      17,850           225   

Concur Technologies, Inc. (Æ)

      9,435           466   

CSG Systems International, Inc. (Æ)

      17,837           325   

Digi International, Inc. (Æ)

      2,000           19   

Dolby Laboratories, Inc. Class A (Æ)

      4,980           283   

DSP Group, Inc. (Æ)

      1,700           12   

Earthlink, Inc. (Ñ)

      71,700           652   

Electro Scientific Industries, Inc. (Æ)

      28,388           315   

Emulex Corp. (Æ)

      13,231           138   

Epicor Software Corp. (Æ)

      4,900           43   

Equinix, Inc. (Æ)

      7,724           791   

Exar Corp. (Æ)

      1,100           7   

Extreme Networks (Æ)

      13,800           43   

F5 Networks, Inc. (Æ)

      2,360           245   

Fairchild Semiconductor International, Inc. Class A (Æ)

      9,500           89   

Flextronics International, Ltd. (Æ)(Ñ)

      18,570           112   

Hittite Microwave Corp. (Æ)

      7,353           350   

Imation Corp. (Æ)

      4,000           37   

Informatica Corp. (Æ)

      23,147           889   

Infospace, Inc. (Æ)

      3,800           33   

Ingram Micro, Inc. Class A (Æ)

      18,300           309   

Integrated Device Technology, Inc. (Æ)

      22,300           130   

Internap Network Services Corp. (Æ)

      15,082           74   

 

  12      Aggressive Equity Fund

Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

International Rectifier Corp. (Æ)

      14,595           308   

Intersil Corp. Class A

      44,900           525   

Intevac, Inc. (Æ)

      2,000           20   

Lam Research Corp. (Æ)

      8,428           353   

Lattice Semiconductor Corp. (Æ)

      66,900           318   

LSI Corp. (Æ)

      62,500           285   

MEMC Electronic Materials, Inc. (Æ)

      14,426           172   

Methode Electronics, Inc.

      20,000           182   

MICROS Systems, Inc. (Æ)

      14,013           593   

Microsemi Corp. (Æ)

      20,814           357   

MIPS Technologies, Inc. Class A (Æ)

      27,240           265   

MKS Instruments, Inc. (Æ)

      8,600           155   

Molex, Inc. (Ñ)

      16,400           343   

Ness Technologies, Inc. (Æ)

      4,100           18   

Newport Corp. (Æ)

      3,900           44   

NICE Systems, Ltd. - ADR (Æ)

      18,173           569   

Novellus Systems, Inc. (Æ)

      22,800           606   

Perceptron, Inc. (Æ)(Þ)

      80           —   

QLogic Corp. (Æ)

      43,756           772   

Radisys Corp. (Æ)

      1,900           18   

RF Micro Devices, Inc. (Æ)

      55,331           340   

Rovi Corp. (Æ)

      18,690           942   

Salesforce.com, Inc. (Æ)(Ñ)

      3,410           381   

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

      10,514           424   

Seachange International, Inc. (Æ)

      4,400           33   

Sigma Designs, Inc. (Æ)(Ñ)

      4,900           56   

Silicon Image, Inc. (Æ)

      12,200           58   

Skyworks Solutions, Inc. (Æ)

      21,270           440   

Smith Micro Software, Inc. (Æ)

      18,751           186   

Standard Microsystems Corp. (Æ)

      3,300           75   

SuccessFactors, Inc. (Æ)

      28,107           706   

Symmetricom, Inc. (Æ)

      3,000           17   

Synopsys, Inc. (Æ)

      14,800           367   

Taleo Corp. Class A (Æ)

      12,220           354   

Tellabs, Inc.

      35,500           265   

Tier Technologies, Inc. Class B (Æ)(Þ)

      21,377           118   

Trident Microsystems, Inc. (Æ)(Ñ)

      7,800           13   

Trimble Navigation, Ltd. (Æ)

      9,938           348   

TTM Technologies, Inc. (Æ)

      4,000           39   

Unisys Corp. (Æ)

      5,600           156   

United Online, Inc.

      81,157           464   

Varian Semiconductor Equipment Associates, Inc. (Æ)

      8,854           255   

VeriFone Systems, Inc. (Æ)

      20,098           624   

Verint Systems, Inc. (Æ)

      5,209           154   

Vishay Intertechnology, Inc. (Æ)

      28,859           279   

Volterra Semiconductor Corp. (Æ)

      15,910           342   

Zoran Corp. (Æ)

      5,300           41   
             
          24,257   
             
Utilities - 4.8%        

AGL Resources, Inc.

      12,800           491   

Allete, Inc.

      11,300           412   

Atmos Energy Corp.

      9,700           284   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

California Water Service Group

      7,500           277   

Chesapeake Utilities Corp.

      1,200           44   

DPL, Inc.

      2,800           73   

El Paso Electric Co. (Æ)

      27,300           649   

Energen Corp.

      7,300           334   

Great Plains Energy, Inc.

      10,100           191   

Idacorp, Inc.

      5,800           208   

IDT Corp. Class B (Æ)

      7,700           137   

Integrys Energy Group, Inc. (Ñ)

      3,700           193   

Laclede Group, Inc. (The)

      1,000           34   

MDU Resources Group, Inc.

      11,600           231   

Mirant Corp. (Æ)

      2,700           27   

NII Holdings, Inc. (Æ)

      9,406           387   

NiSource, Inc. (Ñ)

      32,800           571   

NorthWestern Corp.

      2,300           66   

NV Energy, Inc.

      21,400           281   

Otter Tail Corp.

      18,500           377   

Pinnacle West Capital Corp.

      9,800           404   

PNM Resources, Inc.

      16,100           183   

Portland General Electric Co.

      29,700           602   

Questar Corp.

      3,200           56   

Southern Union Co.

      3,600           87   

Southwest Gas Corp.

      6,200           208   

Telephone & Data Systems, Inc.

      5,800           190   

UGI Corp.

      900           26   

UIL Holdings Corp.

      9,500           268   

US Cellular Corp. (Æ)

      2,300           106   

Vectren Corp.

      10,100           261   

Westar Energy, Inc.

      13,200           320   
             
          7,978   
             
Total Common Stocks
(cost $139,596)		            158,747   
             
Short-Term Investments - 4.9%        

Russell U.S. Cash Management Fund (£)

      8,220,709           8,221   
             
Total Short-Term Investments
(cost $8,221)		            8,221   
             
Other Securities - 4.3%        

State Street Securities Lending Quality Trust (×)

      7,155,879           7,134   
             
Total Other Securities
(cost $7,156)		            7,134   
             
Total Investments - 104.4%
(identified cost $154,973)		            174,102   
Other Assets and Liabilities,
Net - (4.4%)		            (7,299 ) 
             
Net Assets - 100.0%           166,803   
             

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


 

See accompanying notes which are an integral part of this quarterly report.

 

Aggressive Equity Fund   13

Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — September 30, 2010 (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)

        125           USD        8,068           12/10           364   
                           

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å)

                         364   
                           

 

 

Presentation of Portfolio Holdings — September 30, 2010 (Unaudited)

 

       Market Value  
Portfolio Summary      Level 1        Level 2        Level 3        Total  
                   

Common Stock

                    

Consumer Discretionary

      $ 20,069         $ —         $ —         $ 20,069   

Consumer Staples

        5,978           —           —           5,978   

Energy

        8,202           —           —           8,202   

Financial Services

        30,284           —           —           30,284   

Health Care

        17,663           —           —           17,663   

Materials and Processing

        14,623           —           —           14,623   

Producer Durables

        29,693           —           —           29,693   

Technology

        24,257           —           —           24,257   

Utilities

        7,978           —           —           7,978   

Short-Term Investments

        —           8,221           —           8,221   

Other Securities

        —           7,134           —           7,134   
                                           

Total Investments

        158,747           15,355           —           174,102   
                                           

Other Financial Instruments

                    

Futures Contracts

        364           —           —           364   
                                           

Total Other Financial Instruments*

        364           —           —           364   
                                           

 

*   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.

For a description of the levels see note 2 in the Notes to Quarterly Reports.

 

See accompanying notes which are an integral part of this quarterly report.

 

  14      Aggressive Equity Fund

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Common Stocks - 93.0%        
Australia - 0.4%        

Billabong International, Ltd. (Ñ)

      174,700           1,346   
             
Austria - 0.1%        

Erste Group Bank AG

      8,029           322   
             
Belgium - 0.6%        

Anheuser-Busch InBev NV

      20,304           1,194   

KBC Groep NV (Æ)

      17,798           799   
             
          1,993   
             
Bermuda - 2.8%        

Esprit Holdings, Ltd.

      272,629           1,479   

Jardine Matheson Holdings, Ltd.

      68,500           3,092   

Li & Fung, Ltd.

      598,000           3,364   

RenaissanceRe Holdings, Ltd. (Ñ)

      13,200           792   

Seadrill, Ltd.

      32,271           932   
             
          9,659   
             
Brazil - 2.2%        

Anhanguera Educacional Participacoes SA

      22,300           396   

Banco Santander Brasil SA - ADR (Ñ)

      37,630           518   

BR Malls Participacoes SA

      107,800           901   

OGX Petroleo e Gas Participacoes SA (Æ)

      230,600           3,005   

PDG Realty SA Empreendimentos e Participacoes

      147,200           1,753   

Vale SA Class B

      25,200           788   
             
          7,361   
             
Canada - 1.4%        

Canadian National Railway Co.

      62,813           4,021   

Teck Resources, Ltd. Class B

      19,000           782   
             
          4,803   
             
Cayman Islands - 0.5%        

Alibaba.com, Ltd. (Æ)(Ñ)

      188,000           392   

Baidu, Inc. - ADR (Æ)

      7,517           771   

Ctrip.com International, Ltd. - ADR (Æ)

      13,400           640   
             
          1,803   
             
China - 0.5%        

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

      103,500           1,056   

Tencent Holdings, Ltd.

      36,000           787   
             
          1,843   
             
Czech Republic - 0.2%        

Komercni Banka AS

      2,719           593   
             
Denmark - 0.7%        

Danske Bank A/S (Æ)

      26,851           648   

Novo Nordisk A/S Series B

      12,188           1,209   

Novozymes A/S Class B (Ñ)

      5,357           682   
             
          2,539   
             
     Principal
Amount ($)
or Shares		        Market
Value
$		  
Finland - 0.7%        

Fortum OYJ

      26,700           699   

Pohjola Bank PLC Class A

      141,525           1,722   
             
          2,421   
             
France - 9.1%        

Accor SA

      36,406           1,329   

Air France-KLM (Æ)

      48,206           739   

Air Liquide SA

      13,774           1,680   

AXA SA

      43,618           763   

BNP Paribas

      11,133           792   

Capital Gemini SA

      18,800           943   

CNP Assurances

      39,164           727   

Credit Agricole SA

      80,710           1,261   

Danone

      19,973           1,195   

Lagardere SCA

      28,681           1,120   

Legrand SA

      21,189           717   

LVMH Moet Hennessy Louis Vuitton SA

      23,422           3,436   

Natixis (Æ)

      72,658           416   

Pernod-Ricard SA (Ñ)

      24,116           2,014   

Publicis Groupe SA (Ñ)

      41,351           1,964   

Rallye SA (Ñ)

      46,585           1,724   

Sanofi-Aventis SA

      26,682           1,778   

Schneider Electric SA

      35,867           4,548   

SCOR SE

      38,780           927   

Total SA

      14,364           740   

UBISOFT Entertainment (Æ)(Ñ)

      87,045           969   

Vivendi SA

      45,000           1,230   
             
          31,012   
             
Germany - 8.4%        

Adidas AG

      16,786           1,039   

BASF SE

      36,890           2,326   

Bayer AG

      21,622           1,508   

Beiersdorf AG

      21,660           1,326   

Daimler AG (Æ)

      25,564           1,619   

Deutsche Boerse AG

      15,690           1,047   

E.ON AG

      49,494           1,459   

Henkel AG & Co. KGaA

      16,462           745   

Infineon Technologies AG (Æ)

      63,515           440   

Linde AG

      23,830           3,102   

MAN SE

      22,000           2,398   

Merck KGaA

      10,840           910   

Metro AG

      11,985           780   

MTU Aero Engines Holding AG

      38,871           2,222   

Muenchener Rueckversicherungs AG

      4,599           637   

SAP AG

      13,810           683   

Siemens AG

      29,869           3,153   

ThyssenKrupp AG

      30,293           988   

Volkswagen AG

      20,080           2,213   
             
          28,595   
             
Hong Kong - 1.2%        

China Unicom Hong Kong, Ltd. (Ñ)

      254,000           372   

CNOOC, Ltd.

      734,000           1,423   

Hang Lung Properties, Ltd. - ADR

      157,000           767   

 

Non-U.S. Fund   15

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Industrial & Commercial Bank of China Asia, Ltd.

      398,600           1,464   
             
          4,026   
             
India - 1.4%        

ICICI Bank, Ltd. - ADR

      65,493           3,265   

Infosys Technologies, Ltd. - ADR

      21,010           1,414   
             
          4,679   
             
Indonesia - 0.1%        

Astra International Tbk PT

      31,000           197   
             
Ireland - 0.4%        

Accenture PLC Class A (Ñ)

      16,900           718   

Cooper Industries PLC

      15,575           762   
             
          1,480   
             
Israel - 0.7%        

Teva Pharmaceutical Industries,
Ltd. - ADR

      44,757           2,361   
             
Italy - 2.9%        

Banca Popolare di Milano Scarl

      137,336           655   

ENI SpA

      59,807           1,291   

Finmeccanica SpA

      192,447           2,287   

Parmalat SpA

      723,870           1,857   

Snam Rete Gas SpA

      296,525           1,502   

UniCredit SpA

      614,941           1,570   

Unione di Banche Italiane SCPA

      77,720           753   
             
          9,915   
             
Japan - 12.7%        

Aeon Credit Service Co., Ltd. (Ñ)

      28,700           309   

Amada Co., Ltd.

      148,700           1,019   

Canon, Inc.

      133,800           6,243   

Dai-ichi Life Insurance Co., Ltd. (The)

      500           604   

Daikin Industries, Ltd. (Ñ)

      19,700           741   

Denso Corp.

      18,800           557   

FamilyMart Co., Ltd. (Ñ)

      28,100           1,007   

Fanuc, Ltd.

      7,800           993   

Hirose Electric Co., Ltd.

      2,200           222   

Honda Motor Co., Ltd. (Ñ)

      44,000           1,562   

Hoya Corp.

      64,000           1,560   

Inpex Corp.

      240           1,130   

ITOCHU Corp. (Ñ)

      207,600           1,900   

Japan Tobacco, Inc.

      296           985   

Komatsu, Ltd.

      50,600           1,175   

Konica Minolta Holdings, Inc.

      43,000           419   

Lawson, Inc.

      20,500           939   

Mabuchi Motor Co., Ltd. (Ñ)

      29,100           1,488   

Marubeni Corp.

      222,000           1,255   

Mitsubishi Chemical Holdings Corp. (Ñ)

      224,000           1,138   

Mitsubishi UFJ Financial Group, Inc. (Ñ)

      138,800           647   

Mizuho Financial Group, Inc.

      666,900           975   

Mori Seiki Co., Ltd. (Ñ)

      73,600           685   

MS&AD Insurance Group Holdings (Ñ)

      40,000           919   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

NGK Spark Plug Co., Ltd. (Ñ)

      52,400           701   

Nintendo Co., Ltd. (Ñ)

      3,000           750   

Nissan Motor Co., Ltd.

      93,400           816   

Nomura Holdings, Inc.

      89,200           432   

NTT DoCoMo, Inc. - ADR

      2,050           34   

NTT DoCoMo, Inc. (Ñ)

      900           1,499   

Omron Corp.

      57,900           1,315   

Panasonic Corp. (Ñ)

      58,200           788   

Shin-Etsu Chemical Co., Ltd. (Ñ)

      27,400           1,334   

Sumitomo Mitsui Financial Group, Inc. (Ñ)

      48,400           1,410   

Suzuken Co., Ltd.

      25,300           837   

Takeda Pharmaceutical Co., Ltd. (Ñ)

      22,600           1,038   

THK Co., Ltd. (Ñ)

      50,500           946   

Toshiba TEC Corp. (Ñ)

      308,379           1,130   

Toyota Motor Corp.

      38,900           1,397   

Yahoo! Japan Corp.

      1,015           351   
             
          43,250   
             
Luxembourg - 0.6%        

ArcelorMittal

      31,673           1,043   

Millicom International Cellular SA

      11,500           1,104   
             
          2,147   
             
Mexico - 0.1%        

America Movil SAB de C Series L

      5,350           285   
             
Netherlands - 6.2%        

Aegon NV (Æ)

      166,382           997   

Akzo Nobel NV

      54,279           3,349   

Brit Insurance Holdings NV

      61,859           996   

Core Laboratories NV (Ñ)

      3,732           328   

EADS (Æ)

      59,190           1,476   

Heineken NV

      49,540           2,569   

ING Groep NV (Æ)

      451,451           4,683   

Koninklijke Philips Electronics NV

      44,880           1,411   

Randstad Holding NV (Æ)

      20,330           924   

Reed Elsevier NV

      93,400           1,178   

TNT NV

      31,742           853   

Unilever NV

      36,450           1,089   

Wolters Kluwer NV

      62,210           1,306   
             
          21,159   
             
Norway - 0.8%        

DnB NOR ASA

      136,900           1,863   

Statoil ASA

      43,600           910   
             
          2,773   
             
Russia - 0.4%        

Gazprom OAO - ADR

      66,670           1,399   
             
Singapore - 2.2%        

CapitaLand, Ltd.

      314,000           969   

Jardine Cycle & Carriage, Ltd.

      134,200           4,011   

Keppel Corp., Ltd.

      31,000           212   

SingTel

      385,000           919   

United Overseas Bank, Ltd.

      111,400           1,552   
             
          7,663   
             

 

  16      Non-U.S. Fund

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
South Africa - 0.8%        

MTN Group, Ltd.

      125,675           2,272   

Naspers, Ltd.

      8,982           439   
             
          2,711   
             
South Korea - 0.3%        

Samsung Electronics Co., Ltd.

      1,600           1,090   
             
Spain - 2.4%        

Banco Bilbao Vizcaya Argentaria SA (Ñ)

      172,787           2,333   

Banco Santander SA

      208,592           2,650   

Inditex SA

      29,777           2,365   

Indra Sistemas SA (Ñ)

      18,000           343   

Red Electrica Corp. SA

      7,163           337   
             
          8,028   
             
Sweden - 1.1%        

Assa Abloy AB Class B

      23,144           584   

Skandinaviska Enskilda Banken Class A

      55,751           413   

Svenska Cellulosa AB Class B

      45,600           693   

Telefonaktiebolaget LM Ericsson Class B

      172,595           1,895   
             
          3,585   
             
Switzerland - 8.7%        

ACE, Ltd. (Ñ)

      19,550           1,139   

Actelion, Ltd. (Æ)

      8,628           346   

Cie Financiere Richemont SA

      29,827           1,436   

Clariant AG (Æ)

      53,200           778   

Credit Suisse Group AG

      42,596           1,821   

GAM Holding AG (Æ)

      58,201           882   

Georg Fischer AG (Æ)

      5,403           2,161   

Givaudan SA

      1,006           1,028   

Helvetia Holding AG

      4,615           1,604   

Julius Baer Group, Ltd.

      41,452           1,509   

Nestle SA

      80,557           4,292   

Novartis AG

      38,500           2,208   

Roche Holding AG

      15,812           2,159   

Sonova Holding AG

      3,393           414   

Swatch Group AG (The) Class B

      5,104           1,920   

Swiss Reinsurance Co., Ltd.

      11,789           517   

Tyco Electronics, Ltd.

      64,750           1,892   

UBS AG (Æ)

      141,171           2,396   

Zurich Financial Services AG

      5,053           1,184   
             
          29,686   
             
Taiwan - 0.9%        

Hon Hai Precision Industry Co., Ltd. - GDR

      70,168           539   

Hon Hai Precision Industry Co., Ltd.

      189,760           714   

HTC Corp.

      33,200           753   

Taiwan Semiconductor Manufacturing Co., Ltd. - ADR

      96,255           976   
             
          2,982   
             
     Principal
Amount ($)
or Shares		        Market
Value
$		  
Thailand - 0.3%        

Bangkok Bank PCL

      207,500           1,104   
             
United Kingdom - 19.8%        

Aegis Group PLC

      755,902           1,467   

Anglo American PLC

      43,674           1,733   

Autonomy Corp. PLC (Æ)

      40,780           1,161   

Aviva PLC

      152,921           958   

BAE Systems PLC

      279,500           1,503   

Barclays PLC

      797,701           3,754   

BG Group PLC

      23,200           408   

BP PLC

      523,047           3,515   

BP PLC - ADR (Ñ)

      6,700           276   

Bunzl PLC

      62,900           750   

Burberry Group PLC

      52,780           862   

Cable & Wireless Worldwide PLC

      1,149,700           1,328   

Carillion PLC

      213,025           1,049   

Compass Group PLC

      90,723           756   

Dairy Crest Group PLC

      162,809           948   

Diageo PLC

      108,891           1,875   

Ensco PLC - ADR (Ñ)

      24,400           1,091   

Hays PLC

      236,050           419   

Home Retail Group PLC

      227,803           737   

HSBC Holdings PLC

      788,415           7,989   

Imperial Tobacco Group PLC

      71,947           2,144   

International Power PLC

      149,687           912   

Ladbrokes PLC

      98,325           207   

National Grid PLC

      132,514           1,124   

Reckitt Benckiser Group PLC

      71,631           3,940   

Rolls-Royce Group PLC (Æ)(Å)

      83,809           795   

Royal Bank of Scotland Group PLC (Æ)

      991,298           735   

Royal Dutch Shell PLC Class A

      169,083           5,109   

Sage Group PLC (The)

      470,167           2,041   

Smith & Nephew PLC

      144,960           1,322   

Smiths Group PLC

      52,867           1,012   

Spectris PLC

      103,513           1,745   

Standard Chartered PLC

      91,946           2,638   

Tesco PLC

      359,207           2,393   

Travis Perkins PLC (Æ)

      113,950           1,510   

Tullow Oil PLC

      87,052           1,742   

Vodafone Group PLC

      1,712,992           4,228   

William Hill PLC

      79,497           207   

WPP PLC

      113,520           1,256   
             
          67,639   
             
United States - 1.4%        

MercadoLibre, Inc. (Æ)(Ñ)

      11,300           816   

Philip Morris International, Inc. (Ñ)

      44,600           2,498   

Synthes, Inc. (Æ)

      13,606           1,573   
             
          4,887   
             
Total Common Stocks
(cost $284,851)		            317,336   
             

 

Non-U.S. Fund   17

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Short-Term Investments - 5.4%        
United States - 5.4%        

Russell U.S. Cash Management Fund (£)

      18,500,604           18,501   
             
Total Short-Term Investments
(cost $18,501)		            18,501   
             
Other Securities - 5.6%        

State Street Securities Lending Quality Trust (×)

      19,119,814           19,060   
             
Total Other Securities
(cost $19,120)		            19,060   
             
Total Investments - 104.0%
(identified cost $322,472)		            354,897   
Other Assets and Liabilities,
Net - (4.0%)		            (13,754 ) 
             
Net Assets - 100.0%           341,143   
             

 

See accompanying notes which are an integral part of this quarterly report.

 

  18      Non-U.S. Fund

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except contracts)

 

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

CAC-40 Index (France)

        46           EUR        1,707           10/10           (39)   

DAX Index (Germany)

        9           EUR        1,404           12/10           (10)   

EUR STOXX 50 Index (EMU)

        130           EUR        3,559           12/10           (86)   

FTSE-100 Index (UK)

        50           GBP        2,765           12/10           (13)   

TOPIX Index (Japan)

        78           JPY        644,670           12/10           (6)   
                           

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å)

                         (154)   
                           

 

See accompanying notes which are an integral part of this quarterly report.

 

Non-U.S. Fund   19

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
           

Counterparty

   Amount
Sold		     Amount
Bought		     Settlement
Date		     Unrealized
Appreciation
(Depreciation)
$		  
           

Bank of America

     USD        1,029        EUR        760        12/15/10        5   

Bank of America

     USD        506        GBP        320        12/15/10        (3 ) 

Bank of America

     JPY        20,000        USD        238        12/15/10        (1 ) 

Bank of America

     JPY        40,000        USD        477        12/15/10        (3 ) 

Barclays Bank PLC

     USD        19        CHF        19        10/05/10        —   

Barclays Bank PLC

     USD        1,400        EUR        1,102        12/15/10        100   

Barclays Bank PLC

     USD        761        GBP        493        12/15/10        13   

Barclays Bank PLC

     USD        30        GBP        19        10/05/10        —   

Barclays Bank PLC

     USD        114        GBP        73        10/05/10        —   

BNP Paribas SA

     USD        1,401        EUR        1,102        12/15/10        99   

BNP Paribas SA

     USD        761        GBP        493        12/15/10        13   

BNP Paribas SA

     USD        1,442        JPY        120,833        12/15/10        6   

Brown Brothers Harriman Co.

     USD        66        EUR        49        10/01/10        —   

Brown Brothers Harriman Co.

     USD        211        EUR        155        10/05/10        —   

Brown Brothers Harriman Co.

     USD        381        EUR        300        12/15/10        28   

Brown Brothers Harriman Co.

     USD        84        GBP        53        10/04/10        —   

Brown Brothers Harriman Co.

     USD        66        JPY        5,520        10/01/10        —   

Brown Brothers Harriman Co.

     USD        8        JPY        665        10/04/10        —   

Brown Brothers Harriman Co.

     USD        73        JPY        6,103        10/05/10        —   

Brown Brothers Harriman Co.

     EUR        5        USD        6        10/01/10        —   

Brown Brothers Harriman Co.

     EUR        92        USD        125        10/04/10        —   

Brown Brothers Harriman Co.

     SEK        1,248        USD        186        10/04/10        1   

Brown Brothers Harriman Co.

     SEK        1,280        USD        190        10/04/10        1   

Citibank

     EUR        200        USD        262        12/15/10        (11 ) 

Credit Suisse First Boston

     USD        53        CAD        55        10/05/10        —   

Credit Suisse First Boston

     USD        144        EUR        106        10/05/10        —   

Credit Suisse First Boston

     EUR        301        USD        410        10/04/10        —   

Deutsche Bank

     USD        761        GBP        493        12/15/10        13   

Deutsche Bank

     USD        1,443        JPY        120,833        12/15/10        6   

HSBC

     USD        1,400        EUR        1,102        12/15/10        101   

HSBC

     USD        761        GBP        493        12/15/10        13   

HSBC

     USD        1,443        JPY        120,833        12/15/10        6   

JP Morgan

     USD        1,400        EUR        1,102        12/15/10        100   

JP Morgan

     USD        84        GBP        53        10/01/10        —   

JP Morgan

     USD        761        GBP        493        12/15/10        12   

JP Morgan

     USD        1,442        JPY        120,833        12/15/10        6   

JP Morgan

     SGD        556        USD        423        10/05/10        —   

Mellon Bank

     USD        761        GBP        493        12/15/10        13   

Morgan Stanley

     USD        34        EUR        22        10/01/10        (4 ) 

Morgan Stanley

     USD        14        GBP        9        10/01/10        —   

Morgan Stanley

     USD        218        JPY        18,330        10/01/10        2   

Royal Bank of Canada

     USD        1,401        EUR        1,102        12/15/10        101   

Royal Bank of Canada

     USD        1,442        JPY        120,833        12/15/10        7   

Royal Bank of Scotland

     USD        116        SEK        786        10/05/10        —   

Royal Bank of Scotland

     EUR        96        USD        131        10/04/10        —   

Royal Bank of Scotland

     EUR        83        USD        112        10/05/10        —   

Royal Bank of Scotland

     EUR        200        USD        272        12/15/10        —   

Royal Bank of Scotland

     HKD        732        USD        94        10/05/10        —   

Royal Bank of Scotland

     GBP        200        USD        316        12/15/10        2   

Societe Generale

     USD        1,401        EUR        1,102        12/15/10        100   

Societe Generale

     USD        1,442        JPY        120,833        12/15/10        7   

State Street Bank and Trust Company

     USD        1        BRL        2        10/01/10        —   

State Street Bank and Trust Company

     USD        44        BRL        76        10/01/10        —   

 

See accompanying notes which are an integral part of this quarterly report.

 

  20      Non-U.S. Fund

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts              
           

Counterparty

   Amount
Sold		     Amount
Bought		     Settlement
Date		     Unrealized
Appreciation
(Depreciation)
$		  
           

State Street Bank and Trust Company

     USD        2        BRL        3        10/05/10        —   

State Street Bank and Trust Company

     USD        76        BRL        128        10/05/10        —   

State Street Bank and Trust Company

     USD        782        EUR        600        12/15/10        35   

State Street Bank and Trust Company

     USD        42        GBP        27        10/05/10        —   

State Street Bank and Trust Company

     USD        469        GBP        300        12/15/10        2   

State Street Bank and Trust Company

     USD        584        JPY        50,000        12/15/10        15   

State Street Bank and Trust Company

     EUR        77        USD        105        10/04/10        —   

State Street Bank and Trust Company

     EUR        25        USD        34        10/05/10        —   

State Street Bank and Trust Company

     EUR        200        USD        270        12/15/10        (3 ) 

State Street Bank and Trust Company

     EUR        350        USD        460        12/15/10        (17 ) 

State Street Bank and Trust Company

     GBP        250        USD        389        12/15/10        (4 ) 

State Street Bank and Trust Company

     HKD        677        USD        87        10/04/10        —   

State Street Bank and Trust Company

     HKD        247        USD        32        10/05/10        —   

State Street Bank and Trust Company

     JPY        20,000        USD        237        12/15/10        (3 ) 

State Street Bank and Trust Company

     JPY        45,000        USD        527        12/15/10        (12 ) 

State Street Bank and Trust Company

     THB        280        USD        9        10/01/10        —   

UBS

     USD        128        GBP        81        10/05/10        —   

UBS

     USD        34        JPY        2,824        10/05/10        —   

UBS

     EUR        195        USD        265        10/04/10        —   

Westpac Banking Corporation

     USD        84        CHF        82        10/01/10        (1 ) 

Westpac Banking Corporation

     USD        1        GBP        1        10/01/10        —   

Westpac Banking Corporation

     USD        239        JPY        20,000        12/15/10        1   

Westpac Banking Corporation

     EUR        300        USD        391        12/15/10        (17 ) 

Westpac Banking Corporation

     GBP        150        USD        234        12/15/10        (1 ) 

Westpac Banking Corporation

     JPY        20,000        USD        233        12/15/10        (7 ) 
                 

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Contracts

  

     721   
                 

 

See accompanying notes which are an integral part of this quarterly report.

 

Non-U.S. Fund   21

Table of Contents

Russell Investment Funds

Non-U.S. Fund

Presentation of Portfolio Holdings — September 30, 2010 (Unaudited)

Amounts in thousands

 

       Market Value  
Portfolio Summary      Level 1      Level 2        Level 3        Total  
                 

Common Stocks

                  

Australia

      $ 1,346       $ —         $ —         $ 1,346   

Austria

        322         —           —           322   

Belgium

        1,993         —           —           1,993   

Bermuda

        9,659         —           —           9,659   

Brazil

        7,361         —           —           7,361   

Canada

        4,803         —           —           4,803   

Cayman Islands

        1,803         —           —           1,803   

China

        1,843         —           —           1,843   

Czech Republic

        593         —           —           593   

Denmark

        2,539         —           —           2,539   

Finland

        2,421         —           —           2,421   

France

        31,012         —           —           31,012   

Germany

        28,595         —           —           28,595   

Hong Kong

        4,026         —           —           4,026   

India

        4,679         —           —           4,679   

Indonesia

        197         —           —           197   

Ireland

        1,480         —           —           1,480   

Israel

        2,361         —           —           2,361   

Italy

        9,915         —           —           9,915   

Japan

        43,250         —           —           43,250   

Luxembourg

        2,147         —           —           2,147   

Mexico

        285         —           —           285   

Netherlands

        21,159         —           —           21,159   

Norway

        2,773         —           —           2,773   

Russia

        1,399         —           —           1,399   

Singapore

        7,663         —           —           7,663   

South Africa

        2,711         —           —           2,711   

South Korea

        1,090         —           —           1,090   

Spain

        8,028         —           —           8,028   

Sweden

        3,585         —           —           3,585   

Switzerland

        29,686         —           —           29,686   

Taiwan

        2,982         —           —           2,982   

Thailand

        1,104         —           —           1,104   

United Kingdom

        67,639         —           —           67,639   

United States

        4,887         —           —           4,887   

Short-Term Investments

        —         18,501           —           18,501   

Other Securities

        —         19,060           —           19,060   
                                         

Total Investments

        317,336         37,561           —           354,897   
                                         

Other Financial Instruments

                  

Futures Contracts

        (154 )       —           —           (154 ) 

Foreign Currency Exchange Contracts

        —         721           —           721   
                                         

Total Other Financial Instruments*

        (154 )       721           —           567   
                                         

 

*   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.

For a description of the levels see note 2 in the Notes to Quarterly Report.

 

See accompanying notes which are an integral part of this quarterly report.

 

  22      Non-U.S. Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Long-Term Investments - 92.8%        
Asset-Backed Securities - 5.5%        

Access Group, Inc. (Ê)
Series 2008-1 Class A
1.798% due 10/27/25

      777           797   

Accredited Mortgage Loan Trust (Ê)
Series 2004-2 Class A2
0.556% due 07/25/34

      28           21   

ACE Securities Corp. (Ê)
Series 2003-OP1 Class M2
2.506% due 12/25/33

      17           14   

Series 2005-SD3 Class A
0.656% due 08/25/45

      95           89   

Aegis Asset Backed Securities Trust (Ê)
Series 2003-3 Class M2
2.731% due 01/25/34

      94           67   

Ally Auto Receivables Trust (Þ)
Series 2009-A Class A2
1.320% due 03/15/12

      123           124   

Ameriquest Mortgage Securities, Inc. (Ê) Series 2002-D Class M1
4.006% due 02/25/33

      90           40   

ARES CLO Funds (Ê)(Å)
Series 2003-7A Class A1B
0.968% due 05/08/15

      467           439   

Series 2005-10A Class A3
0.531% due 09/18/17

      730           675   

Armstrong Loan Funding, Ltd. (Ê)(Å)
Series 2008-1A Class A
1.016% due 08/01/16

      408           393   

Bank of America Credit Card Trust (Ê) Series 2008-A1 Class A1
0.837% due 04/15/13

      200           200   

Bank of America Student Loan Trust (Ê)(Þ) Series 2010-1A Class A
1.362% due 02/25/43

      500           500   

Bayview Financial Acquisition Trust
Series 2006-A Class 1A3
5.865% due 02/28/41

      190           156   

Black Diamond CLO, Ltd. (Ê)(Å)
Series 2007-1A Class AD
0.731% due 04/29/19

      750           665   

Brazos Higher Education Authority (Ê)
Series 2005-3 Class A14
0.399% due 09/25/23

      441           438   

Centex Home Equity (Ê)
Series 2006-A Class AV4
0.506% due 06/25/36

      700           440   

Chatham Light CLO, Ltd. (Ê)(Å)
Series 2005-2A Class A1
0.704% due 08/03/19

      495           461   

CIT Mortgage Loan Trust (Ê)(Å)
Series 2007-1 Class 2A1
1.256% due 10/25/37

      114           107   

Series 2007-1 Class 2A2
1.506% due 10/25/37

      130           81   

Series 2007-1 Class 2A3
1.706% due 10/25/37

      180           90   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Citigroup Mortgage Loan Trust, Inc. (Ê)
Series 2003-HE4 Class A (Þ)
0.666% due 12/25/33

      556           458   

Series 2006-WFH Class A2
0.356% due 10/25/36

      139           139   

Series 2007-WFH Class A2B
1.306% due 07/25/37

      1,290           710   

Series 2007-WFH Class A3
0.406% due 01/25/37

      1,045           746   

Series 2007-WFH Class A4
0.456% due 01/25/37

      840           384   

Conseco Financial Corp.
Series 1996-10 Class M1
7.240% due 11/15/28

      700           727   

Series 1999-2 Class A5
6.680% due 12/01/30

      893           911   

Countrywide Asset-Backed Certificates
Series 2004-AB2 Class M3 (Ê)
0.856% due 05/25/36

      95           16   

Series 2004-BC1 Class M1 (Ê)
1.006% due 02/25/34

      80           64   

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

      167           59   

Countrywide Home Equity Loan Trust (Ê)
Series 2006-HW Class 2A1B
0.407% due 11/15/36

      350           254   

First Franklin Mortgage Loan Asset Backed Certificates (Ê)
Series 2006-FF1 Class A3
0.306% due 11/25/36

      27           27   

Series 2007-FF1 Class A2B
0.346% due 01/25/38

      911           543   

GMAC Mortgage Corp. Loan Trust
Series 2007-HE3 Class 1A1
7.000% due 09/25/37

      50           33   

Series 2007-HE3 Class 2A1
7.000% due 09/25/37

      61           36   

Goal Capital Funding Trust (Ê)(Þ)
Series 2010-1 Class A
0.964% due 08/25/48

      294           291   

GSAA Trust
Series 2006-2 Class 2A3 (Ê)
0.526% due 12/25/35

      320           289   

GSAMP Trust (Ê)
Series 2003-HE2 Class M1
1.231% due 08/25/33

      61           40   

HSBC Home Equity Loan Trust (Ê)
Series 2005-1 Class A
0.547% due 01/20/34

      167           151   

Series 2006-4 Class A3V
0.407% due 03/20/36

      800           757   

Series 2007-1 Class AS
0.457% due 03/20/36

      606           563   

Series 2007-3 Class APT
1.457% due 11/20/36

      272           247   

HSI Asset Securitization Corp. Trust (Ê)
Series 2006-HE2 Class 2A1
0.306% due 12/25/36

      8           7   

 

Core Bond Fund   23

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Indymac Residential Asset Backed Trust (Ê)
Series 2006-H2 Class A
0.406% due 06/28/36

      229           98   

IXIS Real Estate Capital Trust (Ê)
Series 2005-HE1 Class M2
0.991% due 06/25/35

      432           408   

JP Morgan Mortgage Acquisition Corp. (Ê)
Series 2007-CH4 Class A4
0.416% due 05/25/37

      1,000           440   

Knowledgeworks Foundation (Ê)
Series 2010-1 Class A
1.242% due 02/25/42

      300           296   

Lehman XS Trust (Ê)
Series 2005-5N Class 3A1A
0.556% due 11/25/35

      329           231   

Series 2005-7N Class 1A1A
0.526% due 12/25/35

      361           238   

Series 2006-16N Class A4A
0.446% due 11/25/46

      587           326   

Long Beach Mortgage Loan Trust (Ê)
Series 2004-4 Class 1A1
0.536% due 10/25/34

      5           4   

Master Asset Backed Securities Trust (Ê)
Series 2003-WMC Class M2
2.731% due 08/25/33

      57           38   

Series 2005-WMC Class M1
0.676% due 03/25/35

      303           302   

Morgan Stanley ABS Capital I (Ê)
Series 2003-NC8 Class M3
3.406% due 09/25/33

      25           5   

Series 2006-HE1 Class A4
0.546% due 01/25/36

      1,950           1,075   

Series 2007-HE2 Class A2B
0.346% due 01/25/37

      1,043           537   

Nelnet Student Loan Trust (Ê)(Þ)
Series 2010-3A Class A
1.212% due 07/27/48

      400           400   

New Century Home Equity Loan Trust (Ê)
Series 2004-4 Class M2
0.786% due 02/25/35

      215           142   

Option One Mortgage Loan Trust (Ê)
Series 2003-2 Class M2
2.806% due 04/25/33

      36           17   

Series 2003-3 Class M3
3.256% due 06/25/33

      23           11   

Series 2003-4 Class M2
2.731% due 07/25/33

      24           9   

Park Place Securities, Inc. (Ê)
Series 2005-WCW Class M1
0.706% due 09/25/35

      210           143   

Popular ABS Mortgage Pass-Through Trust
Series 2005-6 Class A3
5.680% due 01/25/36

      134           120   

Renaissance Home Equity Loan Trust
Series 2005-1 Class M1
5.357% due 05/25/35

      61           29   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Series 2005-2 Class AF4
4.934% due 08/25/35

      85           72   

Series 2006-1 Class AF6
5.746% due 05/25/36

      168           121   

Residential Asset Mortgage Products, Inc.
Series 2003-RS1 Class AI6A
5.980% due 12/25/33

      120           120   

Series 2003-RS9 Class AI6A
6.110% due 10/25/33

      388           370   

Residential Asset Securities Corp.
Series 2003-KS2 Class MI1
4.800% due 04/25/33

      122           77   

Series 2003-KS2 Class MI3
6.100% due 04/25/33

      50           7   

Series 2003-KS4 Class AIIB (Ê)
0.836% due 06/25/33

      33           16   

Series 2007-KS2 Class AI1 (Ê)
0.326% due 02/25/37

      51           49   

SBI Heloc Trust (Ê)(Þ)
Series 2006-1A Class 1A2A
0.426% due 08/25/36

      4           4   

SG Mortgage Securities Trust (Ê)
Series 2006-OPT Class A3C
0.406% due 10/25/36

      1,500           602   

SLM Student Loan Trust (Ê)
Series 2008-2 Class A1
0.798% due 01/25/15

      46           46   

Series 2008-7 Class A2
0.998% due 10/25/17

      2,800           2,806   

Small Business Administration Participation Certificates
Series 2005-20G Class 1
4.750% due 07/01/25

      620           675   

Soundview Home Equity Loan Trust (Ê)
Series 2005-OPT Class A4
0.556% due 11/25/35

      604           574   

Structured Asset Securities Corp. (Ê)
Series 2006-BC3 Class A2
0.306% due 10/25/36

      16           16   

Series 2007-BC3 Class 2A2
0.396% due 05/25/47

      1,220           815   

WG Horizons CLO (Ê)(Å)
Series 2006-1A Class A1
0.564% due 05/24/19

      800           721   
             
          25,209   
             
Corporate Bonds and Notes - 18.9%   

AES Corp. (The) (Ñ)(Þ)
8.750% due 05/15/13

      267           271   

Agilent Technologies, Inc.
5.500% due 09/14/15

      300           337   

Alcoa, Inc.
5.375% due 01/15/13

      800           851   

Allied Waste NA, Inc.
Series B
7.125% due 05/15/16

      90           96   

 

  24      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Allstate Life Global Funding Trusts
5.375% due 04/30/13

      200           221   

Ally Financial, Inc.
7.500% due 12/31/13 (Ñ)

      1,900           2,019   

7.500% due 09/15/20 (Þ)

      100           107   

Series UNRE
7.000% due 02/01/12

      400           414   

Altria Group, Inc.
9.700% due 11/10/18

      200           271   

American Express Bank FSB
Series BKNT
5.500% due 04/16/13

      300           327   

6.000% due 09/13/17

      400           456   

American Express Centurion Bank
Series BKN1
6.000% due 09/13/17

      400           456   

American Express Co.
7.000% due 03/19/18

      200           241   

American General Finance Corp.
6.900% due 12/15/17

      300           251   

Series MTNI (Ñ)
4.875% due 07/15/12

      100           95   

American International Group, Inc. (Ñ)
5.600% due 10/18/16

      700           714   

5.450% due 05/18/17

      1,000           1,018   

5.850% due 01/16/18

      900           932   

Amgen, Inc.
6.900% due 06/01/38

      1,000           1,294   

Anadarko Petroleum Corp.
6.375% due 09/15/17

      225           248   

Anheuser-Busch InBev Worldwide, Inc.
7.200% due 01/15/14 (Þ)

      125           146   

4.125% due 01/15/15

      225           242   

7.750% due 01/15/19 (Þ)

      125           162   

Appalachian Power Co.
Series O
5.650% due 08/15/12

      65           70   

Arizona Public Service Co.
5.800% due 06/30/14 (Ñ)

      100           112   

6.250% due 08/01/16

      75           87   

AT&T, Inc.
4.950% due 01/15/13

      200           217   

5.500% due 02/01/18

      200           232   

6.300% due 01/15/38

      900           1,017   

6.400% due 05/15/38

      175           200   

BAC Capital Trust XV(Ê)
1.097% due 06/01/56

      375           237   

Bank of America Corp.
5.625% due 10/14/16

      115           124   

6.000% due 09/01/17

      335           363   

5.750% due 12/01/17

      140           150   

5.625% due 07/01/20

      125           132   

Bank of America NA
Series BKNT
0.572% due 06/15/16 (Ê)

      200           178   

6.100% due 06/15/17

      175           187   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

BankAmerica Capital III (Ê)
Series *
0.859% due 01/15/27

      350           248   

Bear Stearns Cos. LLC (The)
6.950% due 08/10/12

      600           663   

7.250% due 02/01/18

      445           542   

BNP Paribas Capital Trust (ƒ)(Å)
9.003% due 12/29/49

      450           452   

Boardwalk Pipelines, LP
5.875% due 11/15/16

      225           255   

Boston Scientific Corp.
4.500% due 01/15/15

      125           128   

6.000% due 01/15/20

      100           107   

7.000% due 11/15/35

      63           64   

Burlington Northern Santa Fe LLC
6.875% due 12/01/27

      25           30   

6.750% due 03/15/29

      10           12   

Capital One Capital III
7.686% due 08/15/36

      100           102   

Caterpillar Financial Services Corp.
4.850% due 12/07/12

      100           108   

Cellco Partnership / Verizon Wireless Capital LLC
5.250% due 02/01/12

      700           741   

8.500% due 11/15/18

      175           238   

CenterPoint Energy Resources Corp.
6.125% due 11/01/17

      50           58   

Chase Capital III (Ê)
Series C

        

0.847% due 03/01/27

      295           224   

CHS/Community Health Systems, Inc. (Ñ)
8.875% due 07/15/15

      335           356   

Chubb Corp.
6.375% due 03/29/67

      175           172   

CIT Group, Inc.
7.000% due 05/01/13

      156           157   

7.000% due 05/01/14 (Ñ)

      85           84   

7.000% due 05/01/15 (Ñ)

      285           283   

7.000% due 05/01/16 (Ñ)

      141           139   

7.000% due 05/01/17

      198           193   

Citigroup Capital XXI (Ñ)
8.300% due 12/21/57

      500           525   

Citigroup, Inc.
5.500% due 08/27/12

      200           213   

5.625% due 08/27/12

      200           211   

5.500% due 04/11/13

      700           751   

5.850% due 07/02/13

      100           108   

2.384% due 08/13/13 (Ê)

      100           101   

6.375% due 08/12/14

      150           167   

5.000% due 09/15/14

      400           415   

4.700% due 05/29/15 (Ñ)

      50           52   

5.850% due 08/02/16 (Ñ)

      55           59   

6.000% due 08/15/17

      850           919   

6.125% due 11/21/17

      405           442   

5.375% due 08/09/20 (Ñ)

      250           259   

6.125% due 08/25/36

      300           292   

6.875% due 03/05/38

      600           670   

8.125% due 07/15/39

      165           208   

 

Core Bond Fund   25

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Columbus Southern Power Co.
Series C

        

5.500% due 03/01/13

      10           11   

Comcast Cable Communications Holdings, Inc.
9.455% due 11/15/22

      100           141   

Comcast Cable Holdings LLC
9.800% due 02/01/12

      180           200   

Comcast Holdings Corp.
10.625% due 07/15/12

      125           144   

Continental Airlines 1999-1 Class A Pass Through Trust
Series 991A

        

6.545% due 02/02/19

      190           198   

Continental Airlines 2007-1 Class A Pass Through Trust
Series 071A

        

5.983% due 04/19/22

      147           152   

Continental Airlines 2009-1 Pass Through Trust
9.000% due 07/08/16

      240           273   

Countrywide Financial Corp. (Ñ)
Series MTN

        

5.800% due 06/07/12

      100           106   

COX Communications, Inc. (Þ)
5.875% due 12/01/16

      75           87   

Credit Suisse USA, Inc. (Ñ)
5.500% due 08/15/13

      45           50   

DCP Midstream LLC (Þ)
9.750% due 03/15/19

      100           133   

Dell, Inc.
4.700% due 04/15/13

      400           436   

Delta Air Lines, Inc. (Þ)
9.500% due 09/15/14

      382           414   

Developers Diversified Realty Corp.
7.500% due 04/01/17

      175           182   

Discover Bank Series BKNT
8.700% due 11/18/19

      250           295   

DISH DBS Corp.
7.125% due 02/01/16

      125           131   

Dow Chemical Co. (The)
7.600% due 05/15/14

      300           350   

Dynegy Roseton / Danskammer Pass Through Trust
Series B (Ñ)

        

7.670% due 11/08/16

      700           649   

Edison Mission Energy (Ñ)
7.000% due 05/15/17

      675           488   

El Paso Corp. (Ñ)
Series GMTN

        

8.050% due 10/15/30

      200           208   

El Paso Natural Gas Co.
7.500% due 11/15/26

      100           112   

El Paso Pipeline Partners Operating Co. LLC
6.500% due 04/01/20

      75           81   

Energy Transfer Partners, LP
5.950% due 02/01/15

      300           333   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Enterprise Products Operating LLC
6.650% due 04/15/18

      250           296   

Series A

        

8.375% due 08/01/66

      100           104   

Farmers Exchange Capital (Þ)
7.050% due 07/15/28

      500           494   

7.200% due 07/15/48

      300           287   

Fifth Third Bancorp
8.250% due 03/01/38

      1,100           1,308   

Fifth Third Bank (Ê)
Series BKNT
0.479% due 05/17/13

      250           239   

First Niagara Financial Group, Inc.
6.750% due 03/19/20

      125           138   

FirstEnergy Corp. (Ñ)
Series B
6.450% due 11/15/11

      12           13   

Ford Motor Credit Co. LLC
7.500% due 08/01/12

      1,000           1,062   

FPL Energy Wind Funding LLC (Þ)
6.876% due 06/27/17

      235           228   

Freeport-McMoRan Copper & Gold, Inc.
8.375% due 04/01/17

      300           335   

General Electric Capital Corp.
1.239% due 05/22/13 (Ê)

      75           75   

5.900% due 05/13/14 (Ñ)

      350           396   

5.625% due 05/01/18

      230           255   

4.375% due 09/16/20

      300           301   

5.875% due 01/14/38

      300           305   

6.375% due 11/15/67

      1,900           1,895   

Series EMTN (Ê)

        

0.595% due 03/20/14

      400           379   

Series GMTN

        

2.000% due 09/28/12

      1,400           1,439   

2.625% due 12/28/12

      690           719   

General Electric Co.
5.250% due 12/06/17

      250           281   

Goldman Sachs Group, Inc. (The)
1.057% due 12/05/11 (Ê)

      1,020           1,030   

4.750% due 07/15/13

      350           376   

6.000% due 05/01/14 (Ñ)

      150           167   

6.250% due 09/01/17

      600           672   

6.150% due 04/01/18

      150           166   

7.500% due 02/15/19

      550           654   

6.000% due 06/15/20

      285           313   

6.750% due 10/01/37

      800           832   

Series MTNB (Ê)

        

0.913% due 07/22/15

      100           94   

HCA, Inc.
8.500% due 04/15/19

      300           335   

7.875% due 02/15/20

      125           137   

HCP, Inc.
6.700% due 01/30/18

      425           468   

Health Care REIT, Inc.
4.700% due 09/15/17

      400           404   

Healthcare Realty Trust, Inc.
6.500% due 01/17/17

      700           758   

 

  26      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Historic TW, Inc.
8.050% due 01/15/16

      195           239   

Hospira, Inc.
5.600% due 09/15/40

      150           155   

HSBC Bank USA NA
4.875% due 08/24/20

      600           626   

Indiantown Cogeneration, LP
Series A-10
9.770% due 12/15/20

      275           305   

International Lease Finance Corp. (Þ)
6.500% due 09/01/14

      720           772   

6.750% due 09/01/16

      100           107   

International Paper Co.
7.950% due 06/15/18

      75           91   

Jersey Central Power & Light Co.
5.625% due 05/01/16

      90           102   

JPMorgan Chase & Co.
5.375% due 01/15/14 (Ñ)

      170           188   

6.000% due 01/15/18

      200           228   

Series 1 (Æ)(ƒ)

        

7.900% due 04/29/49

      300           321   

JPMorgan Chase Bank NA
Series BKNT

        

5.875% due 06/13/16

      70           79   

6.000% due 10/01/17

      570           647   

JPMorgan Chase Capital XIII (Ê)
Series M
1.239% due 09/30/34

      480           362   

JPMorgan Chase Capital XXI (Ê)
Series U
1.416% due 02/02/37

      335           240   

JPMorgan Chase Capital XXIII (Ê)
1.376% due 05/15/47

      545           392   

KCP&L Greater Missouri Operations Co.
11.875% due 07/01/12

      640           736   

Kinder Morgan Energy Partners, LP (Ñ)
5.950% due 02/15/18

      700           791   

Kraft Foods, Inc.
6.125% due 02/01/18

      200           236   

6.125% due 08/23/18

      125           148   

5.375% due 02/10/20 (Ñ)

      700           782   

6.500% due 02/09/40

      175           205   

L-3 Communications Corp.
Series B
6.375% due 10/15/15

      125           129   

Lehman Brothers Holdings, Inc. (Ø)
5.625% due 01/24/13

      200           46   

6.200% due 09/26/14

      200           44   

Liberty Property, LP
4.750% due 10/01/20

      275           277   

Life Technologies Corp.
6.000% due 03/01/20

      145           164   

Manufacturers & Traders Trust Co.
5.585% due 12/28/20

      84           81   

MBNA Capital B (Ê)
Series B 1.266% due 02/01/27

      985           691   

MBNA Corp.
6.125% due 03/01/13

      200           217   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Merrill Lynch & Co., Inc.
6.050% due 08/15/12

      100           107   

6.050% due 05/16/16

      300           319   

6.400% due 08/28/17

      325           356   

6.875% due 04/25/18

      725           813   

MetLife, Inc.
6.125% due 12/01/11 (Ñ)

      205           217   

4.750% due 02/08/21

      350           371   

6.400% due 12/15/36

      100           94   

Series A

        

6.817% due 08/15/18

      200           241   

Metropolitan Life Global Funding I (Þ)
5.125% due 06/10/14

      200           222   

Mirant Mid Atlantic Pass Through Trust A
Series A
8.625% due 06/30/12

      151           155   

Mirant Mid Atlantic Pass Through Trust B
Series B
9.125% due 06/30/17

      282           302   

Morgan Stanley
5.375% due 10/15/15

      500           537   

0.975% due 10/18/16 (Ê)

      435           382   

5.450% due 01/09/17

      225           237   

6.250% due 08/28/17

      100           109   

5.950% due 12/28/17

      125           134   

6.625% due 04/01/18

      450           499   

7.300% due 05/13/19

      100           115   

5.625% due 09/23/19

      100           104   

5.500% due 07/24/20 (Ñ)

      425           438   

Series GMTN (Ê)
2.876% due 05/14/13

      200           204   

National City Bank (Ê)
Series BKNT
0.663% due 06/07/17

      700           628   

NBC Universal, Inc. (Å)
4.375% due 04/01/21

      300           304   

Nevada Power Co.
Series L
5.875% due 01/15/15

      100           115   

News America Holdings, Inc.
7.900% due 12/01/95

      90           111   

8.250% due 10/17/96

      20           25   

NGPL PipeCo LLC (Ñ)(Þ)
6.514% due 12/15/12

      200           213   

Nisource Finance Corp.
10.750% due 03/15/16

      100           132   

6.400% due 03/15/18

      145           168   

6.125% due 03/01/22 (Ñ)

      335           379   

North American Development Bank
4.375% due 02/11/20

      400           434   

Oncor Electric Delivery Co. LLC (Ñ)
6.800% due 09/01/18

      550           674   

Oracle Corp. (Þ)
5.375% due 07/15/40

      1,700           1,828   

Panhandle Eastern Pipeline Co., LP (Ñ)
8.125% due 06/01/19

      450           545   

Philip Morris International, Inc.
6.375% due 05/16/38

      100           123   

 

Core Bond Fund   27

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

PNC Bank NA
Series BKNT
6.875% due 04/01/18

      175           206   

Progress Energy, Inc.
5.625% due 01/15/16 (Ñ)

      40           46   

7.050% due 03/15/19

      200           248   

ProLogis (Ñ)
1.875% due 11/15/37

      150           141   

Prudential Financial, Inc.
3.875% due 01/14/15

      375           394   

Prudential Holdings LLC (Þ)
8.695% due 12/18/23

      550           697   

Public Service Co. of New Mexico
7.950% due 05/15/18

      260           287   

Puget Sound Energy, Inc.
Series A
6.974% due 06/01/67

      125           117   

Pulte Group, Inc.
5.250% due 01/15/14

      1,000           1,003   

Qwest Corp.
7.625% due 06/15/15

      100           114   

8.375% due 05/01/16

      175           207   

Reinsurance Group of America, Inc.
6.750% due 12/15/65

      75           66   

Reliant Energy Mid-Atlantic Power Holdings LLC
Series B
9.237% due 07/02/17

      299           311   

Rensselaer Polytechnic Institute
5.600% due 09/01/20

      325           360   

Sabine Pass LNG, LP
7.250% due 11/30/13

      730           704   

7.500% due 11/30/16 (Ñ)

      65           59   

Simon Property Group, LP
6.100% due 05/01/16

      130           151   

5.650% due 02/01/20

      275           307   

4.375% due 03/01/21

      100           101   

SLM Corp. (Ñ)
Series MTNA
5.000% due 04/15/15

      1,800           1,726   

Southern Union Co.
7.200% due 11/01/66

      740           668   

Sprint Capital Corp.
8.375% due 03/15/12

      125           134   

State Street Capital Trust III (ƒ)(Ñ)
8.250% due 01/29/49

      200           205   

Symetra Financial Corp. (Å)
6.125% due 04/01/16

      150           155   

Target Corp.
5.125% due 01/15/13

      400           437   

Tennessee Gas Pipeline Co.
8.000% due 02/01/16

      200           238   

7.500% due 04/01/17

      75           88   

8.375% due 06/15/32

      100           121   

Time Warner, Inc.
5.875% due 11/15/16

      400           466   

Transatlantic Holdings, Inc.
8.000% due 11/30/39

      150           156   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

UAL 2009-1 Pass Through Trust
10.400% due 11/01/16

      97           109   

Union Electric Co.
6.400% due 06/15/17

      205           241   

Union Pacific Corp. (Ñ)
5.700% due 08/15/18

      400           466   

UnitedHealth Group, Inc.
4.875% due 02/15/13

      200           215   

6.000% due 06/15/17

      3           4   

6.500% due 06/15/37

      45           52   

Valero Energy Corp.
9.375% due 03/15/19 (Ñ)

      450           575   

6.125% due 02/01/20

      100           109   

Wachovia Corp.
5.625% due 10/15/16

      100           111   

5.750% due 02/01/18 (Ñ)

      500           570   

WEA Finance LLC/WT Finance Aust Pty, Ltd. (Þ)
7.500% due 06/02/14

      205           239   

6.750% due 09/02/19

      95           113   

Wells Fargo & Co. (Ñ)
5.625% due 12/11/17

      300           342   

Series K (ƒ)
7.980% due 03/29/49

      3,300           3,473   

Whirlpool Corp.
8.000% due 05/01/12

      25           27   

8.600% due 05/01/14

      75           89   

Williams Cos., Inc. (The)
7.875% due 09/01/21

      516           627   

8.750% due 03/15/32

      175           219   

Windstream Corp.
8.625% due 08/01/16

      125           132   

ZFS Finance USA Trust I (Þ)
6.150% due 12/15/65

      200           197   

ZFS Finance USA Trust II (Þ)
6.450% due 12/15/65

      300           285   
             
          86,496   
             
International Debt - 9.3%   

Achmea Hypotheekbank NV (Þ)
3.200% due 11/03/14

      900           957   

AK Transneft OJSC Via TransCapitalInvest, Ltd.(Þ)
8.700% due 08/07/18

      100           123   

Anglo American Capital PLC (Þ)
9.375% due 04/08/14

      100           123   

9.375% due 04/08/19

      100           135   

ANZ National International, Ltd. (Þ)
6.200% due 07/19/13

      600           667   

ArcelorMittal
6.125% due 06/01/18

      175           189   

AstraZeneca PLC
5.900% due 09/15/17

      100           120   

Bank of Montreal (Þ)
2.850% due 06/09/15

      100           105   

Bank of Nova Scotia (Þ)
1.450% due 07/26/13

      1,400           1,415   

 

  28      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Barclays Bank PLC
5.450% due 09/12/12

      1,300           1,408   

6.050% due 12/04/17 (Þ)

      200           217   

BAT International Finance PLC (Þ)
9.500% due 11/15/18

      150           204   

BBVA Bancomer SA (Þ)
7.250% due 04/22/20

      300           322   

BM&FBovespa SA (Þ)
5.500% due 07/16/20

      100           106   

BNP Paribas (ƒ)(Þ)
5.186% due 06/29/49

      300           282   

Bolivarian Republic of Venezuela
9.000% due 05/07/23

      80           54   

8.250% due 10/13/24

      40           26   

BP Capital Markets PLC
5.250% due 11/07/13 (Ñ)

      175           191   

3.875% due 03/10/15

      150           156   

4.500% due 10/01/20

      150           153   

BRFkredit AS (Þ)
2.050% due 04/15/13

      1,200           1,230   

Canadian Imperial Bank (Þ)
2.000% due 02/04/13

      500           513   

2.600% due 07/02/15

      200           208   

Canadian Natural Resources, Ltd.
5.150% due 02/01/13

      100           108   

Cie de Financement Foncier (Þ)
1.625% due 07/23/12

      600           602   

2.125% due 04/22/13

      200           204   

Corp. Nacional del Cobre de Chile (Þ)
7.500% due 01/15/19

      200           254   

Covidien International Finance SA
4.200% due 06/15/20

      175           187   

Credit Agricole SA (ƒ)(Þ)
8.375% due 10/29/49

      150           160   

Credit Suisse NY
6.000% due 02/15/18

      770           850   

CSN Islands XI Corp. (Þ)
6.875% due 09/21/19

      200           220   

Danske Bank A/S (Þ)
2.500% due 05/10/12

      500           512   

Deutsche Bank AG
6.000% due 09/01/17

      600           692   

Dexia Credit Local SA (Ê)(Þ)
0.961% due 04/29/14

      500           498   

Dolphin Energy, Ltd. (Þ)
5.888% due 06/15/19

      125           135   

Electricite De France (Þ)
5.500% due 01/26/14

      200           226   

6.500% due 01/26/19

      200           244   

6.950% due 01/26/39

      200           261   

Endurance Specialty Holdings, Ltd.
6.150% due 10/15/15

      100           108   

Enel Finance International SA (Þ)
6.250% due 09/15/17

      300           340   

5.125% due 10/07/19

      175           186   

Export-Import Bank of Korea
5.875% due 01/14/15

      700           782   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

FIH Erhvervsbank A/S (Þ)
2.450% due 08/17/12

      500           513   

Gazprom International SA for Gazprom
Series regs
7.201% due 02/01/20

      58           63   

HBOS PLC (Þ)
Series GMTN
6.750% due 05/21/18

      825           829   

HSBC Bank USA
Series CLN
Zero coupon due 08/15/40

      590           408   

HSBC Holdings PLC
6.500% due 05/02/36

      100           111   

6.500% due 09/15/37

      100           112   

Indian Oil Corp., Ltd.
4.750% due 01/22/15

      400           425   

Israel Government AID Bond
5.500% due 09/18/33

      400           482   

Korea Electric Power Corp. (Þ)
5.125% due 04/23/34

      60           65   

Landwirtschaftliche Rentenbank
1.875% due 09/24/12

      1,700           1,739   

Series GMTN

        

5.250% due 07/02/12

      700           754   

LeasePlan Corp. NV (Þ)
3.000% due 05/07/12

      400           413   

Lloyds TSB Bank PLC(Å)
6.500% due 09/14/20

      200           202   

Macquarie Bank, Ltd. (Þ)
3.300% due 07/17/14

      1,000           1,066   

Majapahit Holding BV
Series REGS
7.750% due 10/17/16

      100           117   

Mexico Government International Bond
6.050% due 01/11/40

      260           298   

Morgan Stanley Bank AG for OAO Gazprom
Series REGS
9.625% due 03/01/13

      900           1,023   

MUFG Capital Finance 1, Ltd. (ƒ)
6.346% due 07/29/49

      200           200   

National Australia Bank, Ltd.(Þ)
5.350% due 06/12/13

      800           877   

Nexen, Inc.
7.500% due 07/30/39

      25           31   

Noble Group, Ltd. (Þ)
6.750% due 01/29/20

      100           108   

Petro-Canada
6.050% due 05/15/18

      100           116   

Petrobras International Finance
Co. - Pifco (Ñ)
7.875% due 03/15/19

      800           998   

Petroleos Mexicanos
8.000% due 05/03/19

      320           397   

Province of Ontario Canada
4.100% due 06/16/14

      400           439   

Qatar Government International Bond (Þ)
5.250% due 01/20/20

      520           572   

 

Core Bond Fund   29

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Ras Laffan Liquefied Natural Gas Co., Ltd. III
5.838% due 09/30/27 (Å)

      250           279   

Series REGS (Ñ)

        

6.750% due 09/30/19

      300           358   

Resona Bank, Ltd. (ƒ)(Þ)
5.850% due 09/29/49

      100           100   

Royal Bank of Scotland Group PLC
6.990% due 10/29/49 (ƒ)(Þ)

      300           243   

Series 1 (ƒ)

        

9.118% due 03/31/49

      300           295   

Royal Bank of Scotland PLC (The)
3.000% due 12/09/11 (Þ)

      400           411   

1.500% due 03/30/12 (Þ)

      1,200           1,212   

2.625% due 05/11/12 (Þ)

      300           308   

4.875% due 08/25/14 (Þ)

      1,000           1,061   

5.625% due 08/24/20

      200           210   

Russia Government International Bond Series REGS
7.500% due 03/31/30

      107           128   

RZD Capital, Ltd.
5.739% due 04/03/17

      500           526   

Santander US Debt SA Unipersonal (Å)
2.991% due 10/07/13

      400           399   

Stadshypotek AB (Å)
1.450% due 09/30/13

      800           801   

State of Qatar
5.150% due 04/09/14

      100           109   

Suncor Energy, Inc.
6.100% due 06/01/18

      100           117   

Swedbank AB (Þ)(Ñ)
3.000% due 12/22/11

      500           514   

2.800% due 02/10/12

      100           103   

2.900% due 01/14/13

      100           104   

Swedish Housing Finance Corp. (Þ)
3.125% due 03/23/12

      1,000           1,034   

Systems 2001 AT LLC (Þ)
7.156% due 12/15/11

      33           34   

Teck Resources, Ltd.
10.750% due 05/15/19

      200           252   

Telecom Italia Capital SA
7.200% due 07/18/36

      225           242   

Telemar Norte Leste SA (Þ)
5.500% due 10/23/20

      125           127   

Toronto-Dominion Bank (The) (Þ)
2.200% due 07/29/15

      500           507   

TransCanada PipeLines, Ltd.
6.350% due 05/15/67

      225           210   

Transocean, Inc.
6.500% due 11/15/20

      300           327   

UBS AG
5.850% due 12/31/17 (Å)

      270           150   

Series DPNT
5.875% due 12/20/17

      400           453   

5.750% due 04/25/18

      100           113   

US Bank National Associtaion
4.375% due 02/28/17

      100           135   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Vale Overseas, Ltd.
5.625% due 09/15/19

      400           441   

Venezuela Government International Bond
5.750% due 02/26/16

      210           146   

WCI Finance LLC / WEA Finance LLC (Þ)
5.400% due 10/01/12

      75           80   

Wells Fargo & Co.
0.933% due 03/23/16

      400           516   

Westpac Banking Corp. (Þ)
3.250% due 12/16/11

      300           309   

1.900% due 12/14/12 (Ñ)

      800           818   

3.585% due 08/14/14

      700           752   

Westpac Securities NZ, Ltd. (Ñ)(Þ)
2.500% due 05/25/12

      100           102   

White Nights Gazprom
10.500% due 03/08/14

      200           240   

10.500% due 03/25/14

      300           360   

Xstrata Canada Corp.
6.000% due 10/15/15

      45           50   
             
          42,507   
             
Loan Agreements - 0.6%        

Adam Aircraft Term Loan (Å)(Ø)
15.290% due 05/01/12

      49           —   

CIT Bank Term Loan
6.250% due 08/11/15

      1,000           1,007   

HCA, Inc., Term Loan (Å)(Ê)
1.789% due 11/17/12

      507           490   

Kelson Holdings, Inc., 1st Lien Term Loan (Ê)
3.539% due 03/08/13

      1,000           987   
             
          2,484   
             
Mortgage-Backed Securities - 41.6%        

ABN Amro Mortgage Corp.
Series 2003-13 Class A3
5.500% due 01/25/34

      1,883           1,762   

Adjustable Rate Mortgage Trust
Series 2004-5 Class 2A1
3.080% due 04/25/35

      54           49   

American Home Mortgage Assets (Ê)
Series 2007-4 Class A2
0.446% due 08/25/37

      1,060           772   

American Home Mortgage Investment Trust (Ê)
Series 2004-4 Class 4A
2.678% due 02/25/45

      74           64   

Banc of America Commercial Mortgage, Inc.
Series 2002-PB2 Class A4
6.186% due 06/11/35

      537           563   

Series 2005-2 Class A4
4.783% due 07/10/43

      315           329   

Series 2006-1 Class A4

        

5.372% due 09/10/45

      280           304   

Series 2006-2 Class A4 (Ê)

        

5.740% due 05/10/45

      200           219   

 

  30      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Series 2006-4 Class A4

        

5.634% due 07/10/46

      500           541   

Banc of America Funding Corp.
Series 2005-D Class A1 (Ê)
2.893% due 05/25/35

      89           88   

Series 2006-3 Class 5A8
5.500% due 03/25/36

      475           432   

Series 2006-A Class 4A1 (Ê)
5.520% due 02/20/36

      364           274   

Series 2006-I Class 5A1 (Ê)
6.065% due 10/20/46

      1,436           1,286   

Banc of America Mortgage Securities, Inc.
Series 2004-1 Class 5A1
6.500% due 09/25/33

      7           7   

Series 2004-11 Class 2A1
5.750% due 01/25/35

      238           246   

Series 2005-H Class 2A5 (Ê)
3.179% due 09/25/35

      220           176   

Series 2006-2 Class A15
6.000% due 07/25/46

      112           108   

Series 2006-B Class 1A1 (Ê)
4.110% due 10/20/46

      74           43   

Bear Stearns Adjustable Rate Mortgage Trust
Series 2003-1 Class 6A1
2.961% due 04/25/33

      28           27   

Series 2003-8 Class 4A1
3.349% due 01/25/34

      74           71   

Series 2004-9 Class 22A1 (Ê)
3.691% due 11/25/34

      48           46   

Series 2005-2 Class A1 (Ê)
2.760% due 03/25/35

      815           777   

Series 2007-3 Class 1A1
5.347% due 05/25/47

      285           218   

Bear Stearns Alt-A Trust
Series 2005-4 Class 23A1
2.848% due 05/25/35

      169           132   

Series 2005-7 Class 22A1
2.984% due 09/25/35

      81           61   

Citigroup Mortgage Loan Trust, Inc.
Series 2005-11 Class A2A (Ê)
2.650% due 12/25/35

      50           48   

Series 2006-AR7 Class 1A4A
5.548% due 11/25/36

      652           500   

Series 2007-AR8 Class 2A1A
5.815% due 07/25/37

      851           632   

Citigroup/Deutsche Bank Commercial Mortgage Trust
Series 2005-CD1 Class A4
5.396% due 07/15/44

      340           374   

Series 2006-CD3 Class A5
5.617% due 10/15/48

      190           207   

Commercial Mortgage Pass Through Certificates
Series 2006-C8 Class A4
5.306% due 12/10/46

      200           208   

Series 2007-C9 Class A4
5.815% due 12/10/49

      360           392   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Countrywide Alternative Loan Trust
Series 2005-32T Class A7 (Ê)
0.506% due 08/25/35

      49           44   

Series 2005-48T Class A6
5.500% due 11/25/35

      897           667   

Series 2006-36T Class 1A9 (Ê)
1.156% due 12/25/36

      288           150   

Series 2006-OA1 Class A1 (Ê)
0.437% due 02/20/47

      689           387   

Series 2006-OA1 Class A2 (Ê)
0.446% due 10/25/46

      1,636           990   

Series 2007-15C Class A5
5.750% due 07/25/37

      702           526   

Series 2007-J2 Class 2A1
6.000% due 07/25/37

      198           155   

Series 2007-OA1 Class A1A (Ê)
1.750% due 11/25/47

      905           462   

Countrywide Home Loan Mortgage Pass Through Trust
Series 2003-52 Class A1 (Ê)
3.325% due 02/19/34

      117           106   

Series 2004-22 Class A3 (Ê)
3.466% due 11/25/34

      158           137   

Series 2004-HYB Class 1A1 (Ê)
3.172% due 02/20/35

      260           227   

Series 2005-1 Class 2A1 (Ê)
0.546% due 03/25/35

      1,584           879   

Series 2005-3 Class 1A2 (Ê)
0.546% due 04/25/35

      24           15   

Series 2005-HYB Class 3A2A (Ê)
4.669% due 02/20/36

      50           39   

Series 2007-1 Class A1
6.000% due 03/25/37

      1,469           1,299   

Series 2007-2 Class A2
6.000% due 03/25/37

      2,100           1,828   

Series 2007-4 Class 1A10
6.000% due 05/25/37

      2,000           1,638   

Series 2007-HY1 Class 1A2
5.535% due 04/25/37

      68           12   

Credit Suisse First Boston Mortgage Securities Corp.
Series 2005-9 Class 2A1
5.500% due 10/25/35

      347           314   

Credit Suisse Mortgage Capital Certificates
Series 2006-8 Class 4A1
6.500% due 10/25/21

      498           372   

Series 2006-C2 Class A3
5.846% due 03/15/39

      100           106   

Deutsche ALT-A Securities, Inc. Alternate Loan Trust
Series 2005-AR1 Class 2A3
2.012% due 08/25/35

      465           245   

Series 2007-OA1 Class A1 (Ê)
0.406% due 02/25/47

      2,316           1,258   

Series 2007-OA2 Class A1 (Ê)
1.140% due 04/25/47

      1,265           777   

Fannie Mae
2.961% due 2017 (Ê)

      28           28   

 

Core Bond Fund   31

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

6.000% due 2017

      30           33   

4.000% due 2018

      464           492   

4.500% due 2018

      121           129   

6.000% due 2019

      236           256   

5.500% due 2020

      121           131   

6.000% due 2020

      292           316   

5.500% due 2021

      189           203   

5.500% due 2022

      246           265   

5.500% due 2023

      250           270   

4.500% due 2025

      1,302           1,374   

6.000% due 2026

      500           542   

6.000% due 2027

      264           286   

6.000% due 2028

      20           22   

5.500% due 2029

      26           28   

6.000% due 2032

      280           308   

5.000% due 2033

      120           128   

5.500% due 2033

      18           19   

6.000% due 2033

      14           15   

5.000% due 2034

      873           926   

5.500% due 2034

      635           684   

5.500% due 2035

      6           6   

3.909% due 2036 (Ê)

      284           286   

5.500% due 2037

      531           566   

6.000% due 2037

      644           700   

5.500% due 2038

      2,970           3,187   

6.000% due 2038

      1,257           1,366   

4.500% due 2039

      2,714           2,863   

5.000% due 2039

      1,776           1,899   

4.500% due 2040

      5,586           5,843   

5.000% due 2040

      290           311   

Series 2003-343 Class 6
Interest Only STRIP
5.000% due 10/01/33

      163           22   

Series 2003-345 Class 18 Interest Only STRIP
4.500% due 12/01/18

      410           39   

Series 2003-345 Class 19
Interest Only STRIP
4.500% due 01/01/19

      453           43   

Series 2005-365 Class 12
Interest Only STRIP
5.500% due 12/01/35

      617           92   

Series 2006-369 Class 8
Interest Only STRIP
5.500% due 04/01/36

      114           15   

Series 2010-95 Class S (Ê)
Interest Only STRIP
6.344% due 09/25/40

      3,340           531   

15 Year TBA (Ï)
3.500%

      15,150           15,601   

30 Year TBA (Ï)

        

3.500%

      1,000           1,007   

4.500%

      12,000           12,495   

5.500%

      7,000           7,441   

6.000%

      4,000           4,291   

6.500%

      11,000           11,993   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Fannie Mae REMICS
Series 1999-56 Class Z
7.000% due 12/18/29

      66           77   

Series 2003-32 Class FH (Ê)
0.656% due 11/25/22

      144           145   

Series 2003-35 Class FY (Ê)
0.656% due 05/25/18

      217           218   

Series 2005-79 Class FC (Ê)
0.556% due 02/25/22

      15           15   

Series 2006-27 Class SH (Ê)
Interest Only STRIP
6.444% due 04/25/36

      3,232           494   

Series 2006-48 Class LG
Principal Only STRIP
Zero coupon due 06/25/36

      19           19   

Series 2007-30 Class AF (Ê)
0.566% due 04/25/37

      112           112   

Fannie Mae Whole Loan
Series 2003-W1 Class 1A1
6.500% due 12/25/42

      29           33   

Federal Home Loan Mortgage Corp. Structured Pass Through Securities (Ê)
Series 2005-63 Class 1A1
1.586% due 02/25/45

      23           24   

Freddie Mac
6.000% due 2016

      13           14   

5.000% due 2018

      195           208   

5.000% due 2019

      369           394   

5.000% due 2020

      339           362   

2.813% due 2030 (Ê)

      1           1   

5.000% due 2035

      1,228           1,298   

5.952% due 2036 (Ê)

      3           3   

5.306% due 2037 (Ê)

      241           257   

5.500% due 2037

      1,130           1,195   

5.668% due 2037 (Ê)

      15           16   

5.744% due 2037 (Ê)

      3           3   

5.810% due 2037 (Ê)

      4           4   

5.826% due 2037 (Ê)

      4           4   

5.971% due 2037 (Ê)

      2           2   

6.000% due 2037

      1,004           1,098   

5.000% due 2038

      74           79   

5.500% due 2038

      5,237           5,644   

6.000% due 2038

      6,471           7,038   

4.500% due 2039

      3,532           3,718   

5.000% due 2039

      3,007           3,209   

6.000% due 2039

      98           108   

4.500% due 2040

      2,000           2,082   

5.000% due 2040

      1,172           1,254   

Freddie Mac REMICS
Series 2000-226 Class F (Ê)
0.707% due 11/15/30

      10           10   

Series 2005-301 Class IM
Interest Only STRIP
5.500% due 01/15/31

      63           3   

Series 2007-330 Class GL (Ê)(Å)
Zero coupon due 04/15/37

      4           4   

Series 2007-333 Class BF (Ê)
0.406% due 07/15/19

      162           161   

 

  32      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Series 2007-333 Class FT (Ê)
0.406% due 08/15/19

      334           333   

Ginnie Mae I
6.000% due 2029

      8           9   

6.500% due 2037

      592           651   

6.500% due 2038

      2,029           2,235   

4.500% due 2039

      1,840           1,940   

5.500% due 2039

      169           182   

6.500% due 2039

      803           885   

30 Year TBA (Ï)
4.000%

      12,125           12,522   

Ginnie Mae II (Ê)
3.375% due 2026

      122           126   

3.625% due 2027

      8           8   

2.750% due 2032

      44           45   

Government National Mortgage Association (Ê)
Series 2000-29 Class F
0.757% due 09/20/30

      13           13   

Series 2007-26 Class SD
Interest Only STRIP
6.543% due 05/16/37

      3,122           414   

Greenwich Capital Commercial Funding Corp.
Series 2002-C1 Class A4
4.948% due 01/11/35

      685           728   

Series 2004-GG1 Class A7
5.317% due 06/10/36

      465           510   

Series 2006-GG7 Class A4
6.080% due 07/10/38

      1,105           1,211   

Series 2007-GG9 Class A4
5.444% due 03/10/39

      315           332   

GS Mortgage Securities Corp. II
Series 2006-GG6 Class A4
5.553% due 04/10/38

      320           345   

Series 2006-GG8 Class AAB
5.535% due 11/10/39

      200           218   

GSR Mortgage Loan Trust
Series 2005-AR7 Class 6A1 (Ê)
5.196% due 11/25/35

      174           169   

Series 2006-2F Class 3A3
6.000% due 02/25/36

      796           633   

Series 2006-3F Class 2A3
5.750% due 03/25/36

      435           384   

Series 2006-8F Class 4A17
6.000% due 09/25/36

      572           478   

Series 2007-AR1 Class 1A1 (Ê)
3.278% due 03/25/37

      1,733           1,102   

Harborview Mortgage Loan Trust
Series 2005-3 Class 2A1A (Ê)
0.497% due 06/19/35

      1,422           924   

Series 2005-4 Class 3A1
2.956% due 07/19/35

      124           100   

Indymac Index Mortgage Loan Trust
Series 2005-AR1 Class A1
5.090% due 09/25/35

      528           403   

Series 2006-AR3 Class 2A1A (Ê)
0.426% due 01/25/37

      564           293   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Series 2007-AR5 Class 1A1
5.177% due 05/25/37

      665           347   

JPMorgan Chase Commercial Mortgage Securities Corp.
Series 2001-CIB Class A3
6.465% due 11/15/35

      675           702   

Series 2004-LN2 Class A1
4.475% due 07/15/41

      243           249   

Series 2005-LDP Class A3A1
4.871% due 10/15/42

      210           213   

Series 2005-LDP Class A4
4.918% due 10/15/42

      325           350   

5.363% due 12/15/44

      390           429   

Series 2006-CB1 Class A4
5.552% due 05/12/45

      220           238   

Series 2006-LDP Class A3B
5.447% due 05/15/45

      250           265   

Series 2006-LDP Class A4
6.062% due 04/15/45

      650           721   

5.399% due 05/15/45

      290           312   

Series 2007-CB1 Class A4
5.440% due 06/12/47

      1,200           1,258   

5.932% due 02/12/49

      340           373   

Series 2007-LD1 Class A4
5.882% due 02/15/51

      100           105   

Series 2007-LDP Class A3
5.420% due 01/15/49

      700           728   

JPMorgan Mortgage Trust
Series 2005-A1 Class 6T1 (Ê)
5.022% due 02/25/35

      70           71   

Series 2005-A5 Class TA1
5.428% due 08/25/35

      606           619   

Series 2005-S3 Class 1A2
5.750% due 01/25/36

      100           91   

Series 2007-A1 Class 2A2 (Ê)
3.309% due 07/25/35

      437           411   

Series 2007-A4 Class 3A1
5.877% due 06/25/37

      2,332           2,079   

Series 2007-S3 Class 1A8
6.000% due 08/25/37

      1,490           1,410   

LB-UBS Commercial Mortgage Trust
Series 2006-C1 Class A4
5.156% due 02/15/31

      1,500           1,632   

Lehman Mortgage Trust
Series 2005-3 Class 1A3
5.500% due 01/25/36

      301           256   

Series 2006-8 Class 2A1 (Ê)
0.676% due 12/25/36

      668           366   

Series 2007-8 Class 3A1
7.250% due 09/25/37

      810           460   

Lehman XS Trust (Ê)
Series 2007-7N Class 1A2
0.496% due 06/25/47

      808           399   

MASTR Alternative Loans Trust
Series 2003-4 Class B1
5.726% due 06/25/33

      152           105   

Series 2004-10 Class 5A6
5.750% due 09/25/34

      161           161   

 

Core Bond Fund   33

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Mellon Residential Funding Corp. (Ê)
Series 2000-TBC Class A1
0.737% due 06/15/30

      115           112   

Merrill Lynch Floating Trust (Ê)(Þ)
Series 2006-1 Class A1
0.326% due 06/15/22

      444           426   

Merrill Lynch Mortgage Investors, Inc. (Ê)
Series 2005-A10 Class A
0.466% due 02/25/36

      83           65   

Merrill Lynch/Countrywide Commercial Mortgage Trust
Series 2007-6 Class A4
5.485% due 03/12/51

      100           100   

MLCC Mortgage Investors, Inc. (Ê)
Series 2005-3 Class 5A
0.506% due 11/25/35

      51           45   

Morgan Stanley Capital I
Series 2005-HQ6 Class A4A
4.989% due 08/13/42

      740           803   

Series 2005-IQ1 Class AAB
5.178% due 09/15/42

      415           439   

Series 2006-HQ1 Class A4
5.328% due 11/12/41

      130           139   

Series 2006-HQ9 Class A4
5.731% due 07/12/44

      295           326   

Series 2007-T27 Class A4
5.802% due 06/11/42

      675           749   

Prime Mortgage Trust (Ê)
Series 2004-CL1 Class 1A2
0.656% due 02/25/34

      20           18   

Residential Accredit Loans, Inc.
Series 2005-QO5 Class A1 (Ê)
1.370% due 01/25/46

      1,769           992   

Series 2005-QS1 Class 2A3
5.750% due 09/25/35

      421           365   

Series 2007-QH9 Class A1
6.374% due 11/25/37

      863           424   

Series 2007-QO4 Class A1 (Ê)
0.456% due 05/25/47

      1,431           847   

Residential Asset Securitization Trust
Series 2003-A15 Class 1A2 (Ê)
0.706% due 02/25/34

      166           153   

Series 2005-A10 Class A3
5.500% due 09/25/35

      351           278   

Series 2006-A9C Class A6
6.000% due 09/25/36

      269           154   

Residential Funding Mortgage Securities I (Ê)
Series 2005-SA4 Class 2A1
3.205% due 09/25/35

      452           356   

Series 2006-SA4 Class 2A1
6.069% due 11/25/36

      295           221   

Sequoia Mortgage Trust (Ê)
Series 2001-5 Class A
0.607% due 10/19/26

      48           41   

Structured Adjustable Rate Mortgage Loan Trust
Series 2004-12 Class 3A2 (Ê)
2.716% due 09/25/34

      49           45   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Series 2004-16 Class 3A1 (Ê)
2.644% due 11/25/34

      189           169   

Series 2006-12 Class 2A1
5.705% due 01/25/37

      639           487   

Structured Asset Mortgage Investments, Inc. (Ê)
Series 2005-AR5 Class A3
0.507% due 07/19/35

      141           130   

Series 2006-AR2 Class A1
0.486% due 02/25/36

      461           264   

Series 2006-AR8 Class A1A
0.456% due 10/25/36

      637           377   

Suntrust Adjustable Rate Mortgage Loan Trust (Ê)
Series 2007-2 Class 3A3
5.624% due 04/25/37

      3,300           2,773   

Thornburg Mortgage Securities Trust (Ê)
Series 2006-5 Class A1
0.376% due 10/25/46

      580           576   

Series 2006-6 Class A1
0.366% due 11/25/46

      82           79   

Wachovia Bank Commercial Mortgage Trust
Series 2005-C21 Class A4 (Ê)
5.374% due 10/15/44

      1,000           1,103   

Washington Mutual Alternative Mortgage Pass-Through Certificates (Ê)
Series 2007-OA1 Class 2A
1.073% due 12/25/46

      598           247   

Washington Mutual Mortgage Pass Through Certificates
Series 2005-AR1 Class A1A1 (Ê)
0.546% due 10/25/45

      28           23   

0.526% due 12/25/45

      340           281   

Series 2005-AR6 Class B3 (Ê)(Å)
0.916% due 04/25/45

      190           11   

Series 2006-AR2 Class 1A1
5.200% due 03/25/37

      493           404   

Series 2007-HY3 Class 4B1
5.178% due 03/25/37

      124           8   

Wells Fargo Mortgage Backed Securities Trust
Series 2006-2 Class 2A3
5.500% due 03/25/36

      267           249   

Series 2006-6 Class 1A22 (Ê)
6.000% due 05/25/36

      1,300           1,196   

Series 2006-AR1 Class 1A7
5.781% due 10/25/36

      1,700           1,513   

Series 2006-AR1 Class 4A1 (Ê)
5.468% due 07/25/36

      56           45   

Series 2006-AR1 Class A1 (Ê)
5.073% due 10/25/36

      1,173           991   

Series 2006-AR2 Class 2A1
4.950% due 03/25/36

      214           189   

Series 2007-8 Class 1A16
6.000% due 07/25/37

      243           220   
             
          189,923   
             

 

  34      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Municipal Bonds - 1.7%        

Chicago Transit Authority Revenue Bonds
6.899% due 12/01/40

      400           432   

City of New York New York General Obligation Unlimited
6.246% due 06/01/35

      1,100           1,161   

County of Clark Nevada Revenue Bonds
6.820% due 07/01/45

      100           111   

Illinois Municipal Electric Agency Revenue Bonds
6.832% due 02/01/35

      100           112   

Los Angeles Unified School District General Obligation Unlimited (µ)
4.500% due 07/01/22

      400           421   

Missouri Higher Education Loan Authority Revenue Bonds (Ê)
Series 2010-1 Class A1
1.268% due 11/26/32

      940           946   

North Carolina Turnkpike Authority Revenue Bonds
6.700% due 01/01/39

      100           109   

Northern California Power Agency Revenue Bonds
7.311% due 06/01/40

      1,000           1,106   

Public Power Generation Agency Revenue Bonds 7.242% due 01/01/41

      100           107   

State of California General Obligation Unlimited
7.500% due 04/01/34

      425           462   

7.950% due 03/01/36

      110           118   

5.650% due 04/01/39 (Ê)

      100           108   

7.550% due 04/01/39

      655           712   

7.625% due 03/01/40

      400           440   

State of Illinois General Obligation Unlimited
4.071% due 01/01/14

      100           103   

7.350% due 07/01/35

      550           577   

State of Louisiana Revenue Bonds (Ê)
3.000% due 05/01/43

      400           404   

University of California Revenue Bonds
6.270% due 05/15/31

      400           419   
             
          7,848   
             
Non-US Bonds - 1.7%        

ARGENTINA REP
Zero coupon due 12/15/35

    EUR  1,450           211   

Canadian Government Bond
2.500% due 09/01/13

    CAD  400           399   

2.000% due 12/01/14

    CAD 1,000           979   

FCE Bank plc
7.125% due 01/15/13

    EUR 600           851   

Federative Republic of Brazil
12.500% due 01/05/22

    BRL 300           218   

10.250% due 01/10/28

    BRL 1,400           924   

Fortis Bank Nederland
Holding NV
3.000% due 04/17/12

    EUR 200           279   

Hellas Telecommunications
Luxembourg V (Ê)(Å)
Series REGS
4.835% due 10/15/12

    EUR 126           55   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Impress Holdings BV (Ê)
Series REGS
3.960% due 09/15/13

    EUR 125           170   

Mexican Bonos
Series M 20
10.000% due 12/05/24

    MXN 6,000           633   

Series MI10
9.000% due 12/20/12

    MXN 8,800           753   

Morgan Stanley (Ê)
1.029% due 03/01/13

    EUR 600           777   

Province of Ontario Canada
4.700% due 06/02/37

    CAD 400           417   

4.600% due 06/02/39

    CAD 100           103   

Societe Financement de l’Economie Francaise
2.125% due 05/20/12

    EUR 100           138   

South Africa Government Bond
Series R186
10.500% due 12/21/26

    ZAR  5,130           902   
             
          7,809   
             
United States Government Agencies - 1.6%   

Federal Home Loan Banks
4.500% due 09/13/19

      1,100           1,247   

Federal Home Loan Mortgage Corp.
1.750% due 09/10/15

      900           909   

Federal National Mortgage Association 0.276% due 08/23/12 (Ê)

      855           855   

0.420% due 09/13/12 (Ê)

      1,455           1,456   

1.125% due 09/30/13

      100           101   

1.625% due 10/26/15

      100           100   

Freddie Mac
5.000% due 11/13/14

      2,200           2,524   

Tennessee Valley Authority
4.625% due 09/15/60

      200           208   
             
          7,400   
             
United States Government Treasuries - 11.6%   

United States Treasury Inflation Indexed Bonds
3.000% due 07/15/12

      728           773   

2.000% due 01/15/16

      1,058           1,159   

2.375% due 01/15/25

      1,810           2,081   

2.000% due 01/15/26

      110           121   

2.375% due 01/15/27

      1,946           2,246   

2.500% due 01/15/29

      1,015           1,198   

3.375% due 04/15/32

      860           1,161   

2.125% due 02/15/40

      1,014           1,133   

United States Treasury Principal
Principal Only STRIP
Zero coupon due 05/15/21

      100           73   

Zero coupon due 11/15/21

      1,938           1,388   

United States Treasury Notes
0.625% due 06/30/12

      2,900           2,912   

2.500% due 04/30/15 (Ñ)

      700           742   

1.875% due 06/30/15

      4,240           4,369   

1.750% due 07/31/15

      2,395           2,453   

 

Core Bond Fund   35

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

1.250% due 09/30/15

      925           924   

9.250% due 02/15/16

      400           563   

2.375% due 03/31/16

      4,170           4,372   

2.750% due 11/30/16

      1,300           1,381   

3.250% due 12/31/16

      600           655   

3.125% due 01/31/17

      600           650   

3.000% due 02/28/17

      1,000           1,075   

3.250% due 03/31/17

      3,000           3,272   

3.125% due 04/30/17

      7,060           7,640   

2.375% due 07/31/17

      2,900           2,994   

3.125% due 05/15/19

      2,100           2,231   

3.625% due 08/15/19

      500           550   

3.375% due 11/15/19

      410           442   

8.000% due 11/15/21

      840           1,267   

4.250% due 05/15/39

      735           808   

4.375% due 11/15/39

      300           337   

4.375% due 05/15/40

      900           1,011   

3.875% due 08/15/40

      1,000           1,034   
             
          53,015   
             
Total Long-Term Investments
(cost $410,455)		           423,903   
             
Preferred Stocks - 0.3%        
Consumer Discretionary - 0.2%        

Motors Liquidation Co. (Ñ)

      80,000           628   
             
Financial Services - 0.1%        

Citigroup Capital XIII (Æ)

      6,000           150   

DG Funding Trust (Å)(Æ)

      49           379   
             
          529   
             
Total Preferred Stocks
(cost $917)		           1,157   
             
Short-Term Investments - 20.0%        

Ally Financial, Inc.
6.875% due 09/15/11

      525           538   

Series*
7.250% due 03/02/11

      525           534   

American Express Travel Related Services Co., Inc. (Ê)
0.554% due 06/01/11

      100           99   

Cellco Partnership / Verizon
Wireless Capital LLC (Ê)
2.946% due 05/20/11

      400           407   

Countrywide Home Loans, Inc.
Series MTNL
4.000% due 03/22/11

      290           295   

DCP Midstream LLC
6.875% due 02/01/11

      20           20   

Delta Air Lines 2000-1 Class A-2 Pass Through Trust (Ñ)
Series 00A2
7.570% due 11/18/10

      205           206   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

Delta Air Lines 2001-1 Class A-2 Pass Through Trust
Series 01A2
7.111% due 09/18/11

      400           418   

Deutsche Bank AG
Zero coupon due 04/07/11

    EGP 7,250           1,212   

DPL, Inc.
6.875% due 09/01/11

      193           203   

Fannie Mae Discount Notes (ç)(ž)
Zero Coupon due 01/12/11

      1,430           1,429   

Federal National Mortgage Association Discount Notes (ç)(ž)
Zero coupon due 10/13/10

      3,000           3,000   

Zero coupon due 11/08/10

      8,000           7,998   

Freddie Mac Discount Notes (ç)(ž)
Zero coupon due 10/13/10

      310           310   

General Electric Capital Corp. (Ñ)
Series GMTN
5.500% due 04/28/11

      220           226   

HCP, Inc. (Ñ)
5.950% due 09/15/11

      585           608   

International Lease Finance Corp.
5.450% due 03/24/11

      600           602   

5.750% due 06/15/11

      800           804   

1.058% due 08/15/11 (Ê)

      100           130   

Jackson National Life Fund LLC
0.628% due 08/06/11

      2,800           2,772   

Nisource Finance Corp.
7.875% due 11/15/10

      125           126   

Progress Energy, Inc.
7.100% due 03/01/11

      77           79   

Qwest Corp.
7.875% due 09/01/11

      120           127   

Reckson Operating Partnership, LP
5.150% due 01/15/11

      92           92   

Royal Bank of Scotland PLC (The) (Ê)(Þ)
0.784% due 04/08/11

      800           801   

Russell U.S. Cash Management Fund (£)

      42,768,154           42,768   

Telecom Italia Capital SA (Ñ)
6.200% due 07/18/11

      255           264   

United States Treasury Bills (ž)
0.171% due 02/10/11

      32           32   

0.175% due 02/10/11

      25           25   

0.183% due 02/10/11

      90           90   

United States Treasury Inflation Indexed Bonds
3.500% due 01/15/11

      720           727   

2.375% due 04/15/11

      659           667   

United States Treasury Notes
0.875% due 04/30/11

      7,145           7,172   

1.000% due 08/31/11

      7,150           7,197   

UnitedHealth Group, Inc.
5.250% due 03/15/11

      95           97   
             
Total Short-Term Investments
(cost $80,695)		            82,075   
             

 

  36      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Repurchase Agreements - 5.4%        

Agreement with Barclays Capital Inc. and State Street Bank & Co. (Tri-party) of $7,400 dated September 30, 2010, at 0.190% to be repurchased at $7,400 on October 1, 2010 collateralized by: $6,564 par United States Treasury Obligation, valued at $7,518

      7,400           7,400   

Agreement with J.P. Morgan Securities LLC and State Street Bank & Co. (Tri-party) of $17,300 dated September 30, 2010, at 0.260% to be repurchased at $17,300 on October 1, 2010 collateralized by: $11,995 par United States Treasury Obligations, valued at $17,561

      17,300           17,300   
             
Total Repurchase Agreements
(cost $24,700)		            24,700   
             
Other Securities - 3.8%        

State Street Securities Lending Quality Trust (×)

      17,339,844           17,286   
             
Total Other Securities
(cost $17,340)		            17,286   
             
Total Investments - 120.0%
(identified cost $534,107)		            547,909   
Other Assets and Liabilities,
Net - (20.0%)		            (91,308 ) 
             
Net Assets - 100.0%           456,601   
             

 

See accompanying notes which are an integral part of this quarterly report.

 

Core Bond Fund   37

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except contracts)

 

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

Australian 10 Year Bond (Austrailia)

        12           AUD         1,295           12/10           7   

Euro-Bund Futures (Germany)

        9           EUR         1,183           12/10           10   

Eurodollar Futures (CME)

        89           USD         22,170           12/10           164   

Eurodollar Futures (CME)

        88           USD         21,910           03/11           61   

Eurodollar Futures (CME)

        29           USD         7,215           06/11           20   

Eurodollar Futures (CME)

        12           USD         2,983           09/11           7   

Eurodollar Futures (CME)

        7           USD         1,738           12/11           4   

Eurodollar Futures (CME)

        7           USD         1,735           03/12           5   

Eurodollar Futures (CME)

        7           USD         1,733           06/12           6   

Long Gilt Bond (UK)

        1           GBP         124           12/10           (1 ) 

United States Treasury 2 Year Notes

        27           USD         5,926           12/10           9   

United States Treasury 5 Year Notes

        102           USD         12,328           12/10           82   

United States Treasury 10 Year Notes

        186           USD         23,445           12/10           116   

United States Treasury 30 Year Bond

        46           USD         6,151           12/10           2   
Short Positions                       

Euro-Bobl Futures (Germany)

        1           EUR         121           12/10           —   

Japanese 10 Year Mini Bond (Japan)

        3           JPY         430,260           12/10           (80 ) 

United States Treasury 5 Year Notes

        1           USD         121           12/10           (1 ) 
                            

Total Unrealized Appreciation (Depreciation) on Open Futures Contracts

                          411   
                            

 

See accompanying notes which are an integral part of this quarterly report.

 

  38      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except contracts)

 

Options Written
(Number of Contracts)		    Notional
Amount		      Market
Value
$		  
       
       
Inflationary Floor        

Mar 2020 0.00 Put (2)

      USD        2,400         (28 ) 

Apr 2020 0.00 Put (1)

      USD        5,500         (70 ) 

Sep 2020 0.00 Put (1)

      USD        300         (4 ) 
Swaptions        
(Fund Receives/Fund Pays)        
USD Three Month LIBOR/USD 1.450%        
Oct 2010 0.00 Call (5)        4,200         (8 ) 
USD Three Month LIBOR/USD 1.600%        
Jan 2011 0.00 Call (3)        10,800         (54 ) 
USD 1.950%/USD Three Month LIBOR        
Oct 2010 0.00 Put (4)        3,300         (1 ) 
USD 2.100%/USD Three Month LIBOR        
Oct 2010 0.00 Put (3)        10,800         (1 ) 
USD 4.000%/USD Three Month LIBOR        
Oct 2010 0.00 Put (1)        7,900         (— ) 
USD 1.200%/USD Three Month LIBOR        
Dec 2010 0.00 Put (2)        500         (2 ) 
USD 4.000%/USD Three Month LIBOR        
Dec 2010 0.00 Put (2)        10,100         (— ) 
USD 5.000%/USD Three Month LIBOR        
Jan 2011 0.00 Put (1)        1,100         (— ) 
USD 4.000%/USD Three Month LIBOR        
Jun 2011 0.00 Put (5)        1,700         (10 ) 
USD 3.000%/USD Three Month LIBOR        
Jun 2012 0.00 Put (6)        17,100         (91 ) 
USD 10.000%/USD Three Month LIBOR        
Jul 2012 0.00 Put (2)        10,200         (2 ) 
USD 2.250%/USD Three Month LIBOR        
Sep 2012 0.00 Put (4)        9,500         (63 ) 
United States Treasury Notes        

5 Year Futures

        

Nov 2010 121.00 Call (5)

      USD        5         (3 ) 

Nov 2010 121.50 Call (4)

      USD        4         (2 ) 

Nov 2010 119.00 Put (9)

      USD        9         (2 ) 

10 Year Futures

        

Nov 2010 127.00 Call (30)

      USD        30         (28 ) 

Nov 2010 121.00 Put (10)

      USD        10         (1 ) 
             

Total Liability for Options Written (premiums received $668)

           (370 ) 
             

 

See accompanying notes which are an integral part of this quarterly report.

 

Core Bond Fund   39

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts                          
           

Counterparty

   Amount
Sold		     Amount
Bought		     Settlement
Date		     Unrealized
Appreciation
(Depreciation)
$		  
           

Bank of America

     USD        100        BRL        178        10/04/10        5   

Bank of America

     USD        100        CAD        103        11/18/10        —   

Bank of America

     USD        200        CAD        206        11/18/10        —   

Bank of America

     USD        35        KRW        41,585        11/12/10        1   

Bank of America

     USD        100        ZAR        723        10/28/10        3   

Bank of America

     AUD        2        USD        2        10/29/10        —   

Bank of America

     NZD        1,223        USD        872        12/15/10        (20 ) 

Barlcays Bank PLC

     USD        89        CNY        600        11/23/10        1   

Barlcays Bank PLC

     USD        118        CNY        800        11/23/10        1   

Barlcays Bank PLC

     USD        100        IDR        896,500        11/24/10        —   

Barlcays Bank PLC

     USD        100        INR        4,658        11/12/10        3   

Barlcays Bank PLC

     USD        100        INR        4,523        11/12/10        —   

Barlcays Bank PLC

     USD        101        NOK        611        12/15/10        3   

Barlcays Bank PLC

     EUR        480        NOK        3,797        12/15/10        (10 ) 

Barlcays Bank PLC

     EUR        100        USD        132        11/23/10        (4 ) 

BNP Paribas

     USD        99        CAD        102        11/18/10        —   

Citibank

     USD        185        CAD        192        12/15/10        1   

Citibank

     USD        384        IDR        3,457,142        10/14/10        2   

Citibank

     USD        308        MXN        3,977        01/14/11        5   

Citibank

     USD        100        PHP        4,402        11/15/10        —   

Citibank

     USD        100        PHP        4,406        11/15/10        —   

Citibank

     CHF        427        EUR        322        12/15/10        4   

Citibank

     EUR        160        USD        210        12/15/10        (8 ) 

Citibank

     EUR        247        NZD        434        12/15/10        (20 ) 

Citibank

     SEK        2,998        EUR        325        12/15/10        (1 ) 

Credit Suisse First Boston

     USD        187        AUD        200        10/29/10        6   

Credit Suisse First Boston

     USD        99        CAD        102        11/18/10        —   

Credit Suisse First Boston

     USD        100        CAD        103        11/18/10        —   

Credit Suisse First Boston

     USD        76        CAD        78        12/15/10        —   

Credit Suisse First Boston

     USD        423        EUR        316        12/15/10        8   

Credit Suisse First Boston

     USD        517        EUR        395        12/15/10        21   

Credit Suisse First Boston

     USD        209        NZD        285        12/15/10        (1 ) 

Credit Suisse First Boston

     CHF        214        USD        211        12/15/10        (7 ) 

Credit Suisse First Boston

     EUR        154        NZD        278        12/15/10        (7 ) 

Credit Suisse First Boston

     JPY        8,780        USD        104        12/15/10        (1 ) 

Credit Suisse First Boston

     JPY        20,284        USD        241        12/15/10        (2 ) 

Deutsche Bank

     USD        209        AUD        220        12/15/10        2   

Deutsche Bank

     USD        420        AUD        441        12/15/10        3   

Deutsche Bank

     USD        200        BRL        356        10/04/10        10   

Deutsche Bank

     USD        421        CAD        440        12/15/10        6   

Deutsche Bank

     USD        2,105        EUR        1,644        11/23/10        135   

Deutsche Bank

     USD        57        MYR        180        10/12/10        1   

Deutsche Bank

     USD        95        TWD        3,017        10/12/10        1   

Deutsche Bank

     CAD        50        USD        49        11/18/10        —   

Deutsche Bank

     CAD        87        USD        85        11/18/10        1   

Deutsche Bank

     GBP        139        EUR        163        12/15/10        3   

Deutsche Bank

     MXN        17,776        USD        1,408        11/24/10        4   

HSBC

     USD        100        BRL        180        10/04/10        6   

HSBC

     USD        100        BRL        177        10/04/10        5   

HSBC

     USD        400        BRL        728        10/04/10        30   

HSBC

     USD        50        BRL        87        12/02/10        1   

HSBC

     USD        100        BRL        173        12/02/10        1   

HSBC

     USD        1,232        BRL        2,212        12/02/10        59   

 

See accompanying notes which are an integral part of this quarterly report.

 

  40      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts                          
           

Counterparty

   Amount
Sold		     Amount
Bought		     Settlement
Date		     Unrealized
Appreciation
(Depreciation)
$		  
           

HSBC

     USD        205        EUR        160        12/15/10        13   

HSBC

     USD        100        ZAR        733        10/28/10        5   

HSBC

     BRL        1,062        USD        620        10/04/10        (8 ) 

HSBC

     BRL        2,212        USD        1,249        10/04/10        (58 ) 

HSBC

     EUR        165        CHF        214        12/15/10        (7 ) 

HSBC

     EUR        321        SEK        2,954        12/15/10        —   

HSBC

     EUR        327        NZD        576        12/15/10        (25 ) 

HSBC

     EUR        630        USD        843        12/15/10        (15 ) 

HSBC

     GBP        271        EUR        321        12/15/10        12   

HSBC

     IDR        9,719,055        USD        1,060        10/14/10        (28 ) 

HSBC

     NOK        1,250        EUR        157        12/15/10        2   

HSBC

     NOK        1,290        EUR        161        12/15/10        1   

HSBC

     SEK        3,020        EUR        327        12/15/10        (2 ) 

JP Morgan

     USD        77        AUD        83        12/15/10        2   

JP Morgan

     USD        168        EUR        133        12/15/10        12   

JP Morgan

     USD        420        EUR        313        12/15/10        7   

JP Morgan

     USD        111        IDR        1,000,000        10/14/10        1   

JP Morgan

     USD        257        IDR        2,350,700        10/14/10        6   

JP Morgan

     USD        327        IDR        2,911,212        10/14/10        (1 ) 

JP Morgan

     USD        100        IDR        904,000        11/24/10        —   

JP Morgan

     USD        100        IDR        901,500        11/24/10        —   

JP Morgan

     BRL        124        USD        69        10/04/10        (4 ) 

JP Morgan

     CAD        73        USD        71        12/15/10        —   

JP Morgan

     EUR        192        USD        245        10/22/10        (17 ) 

JP Morgan

     GBP        134        USD        208        10/29/10        (2 ) 

Morgan Stanley

     USD        100        BRL        178        10/04/10        5   

Morgan Stanley

     USD        493        BRL        889        12/02/10        26   

Morgan Stanley

     USD        51        KRW        60,900        11/12/10        2   

Morgan Stanley

     USD        64        KRW        76,200        11/12/10        2   

Morgan Stanley

     USD        100        KRW        115,110        01/19/11        —   

Morgan Stanley

     BRL        889        USD        499        10/04/10        (26 ) 

Morgan Stanley

     CAD        529        USD        503        11/18/10        (11 ) 

Morgan Stanley

     JPY        178,650        USD        2,123        11/01/10        (18 ) 

Morgan Stanley

     ZAR        6,248        USD        866        11/10/10        (25 ) 

Royal Bank of Canada

     USD        100        BRL        177        10/04/10        4   

Royal Bank of Canada

     USD        425        EUR        311        12/15/10        (1 ) 

Royal Bank of Canada

     BRL        82        USD        45        10/14/10        (3 ) 

Royal Bank of Canada

     CAD        382        USD        365        11/18/10        (6 ) 

Royal Bank of Canada

     CAD        220        USD        212        12/15/10        (1 ) 

Royal Bank of Canada

     CAD        325        EUR        240        12/15/10        12   

Royal Bank of Canada

     EUR        161        CHF        212        12/15/10        (4 ) 

Royal Bank of Canada

     EUR        327        CAD        432        12/15/10        (26 ) 

Royal Bank of Scotland

     USD        224        AUD        253        10/29/10        20   

Royal Bank of Scotland

     USD        100        BRL        177        10/04/10        5   

Royal Bank of Scotland

     USD        100        BRL        178        10/04/10        5   

Royal Bank of Scotland

     USD        100        BRL        179        10/04/10        6   

Royal Bank of Scotland

     USD        100        BRL        180        10/04/10        6   

Royal Bank of Scotland

     USD        100        BRL        180        10/04/10        6   

Royal Bank of Scotland

     USD        200        BRL        359        10/04/10        12   

Royal Bank of Scotland

     USD        100        IDR        911,500        11/24/10        1   

Royal Bank of Scotland

     USD        50        KRW        58,075        11/12/10        1   

Royal Bank of Scotland

     CAD        64        USD        63        11/18/10        —   

UBS

     USD        21        AUD        22        10/05/10        —   

 

See accompanying notes which are an integral part of this quarterly report.

 

Core Bond Fund   41

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts                          
           

Counterparty

   Amount
Sold		     Amount
Bought		     Settlement
Date		     Unrealized
Appreciation
(Depreciation)
$		  
           

UBS

     USD        2        AUD        2        10/05/10        —   

UBS

     USD        21        AUD        22        10/05/10        —   

UBS

     USD        622        BRL        1,062        10/04/10        6   

UBS

     USD        211        EUR        156        12/15/10        1   

UBS

     USD        212        EUR        158        12/15/10        3   

UBS

     USD        210        EUR        160        12/15/10        8   

UBS

     USD        100        ZAR        723        10/28/10        3   

UBS

     BRL        1,062        USD        609        01/18/11        (5 ) 

UBS

     CAD        326        EUR        235        12/15/10        4   

UBS

     EUR        163        CHF        213        12/15/10        (5 ) 

UBS

     EUR        165        JPY        17,583        12/15/10        (14 ) 

UBS

     EUR        385        SEK        3,579        12/15/10        5   

UBS

     EUR        3,705        USD        4,782        10/26/10        (269 ) 

Westpac Banking Corporation

     USD        711        GBP        464        12/15/10        18   

Westpac Banking Corporation

     USD        209        AUD        222        12/15/10        3   

Westpac Banking Corporation

     AUD        316        USD        287        12/15/10        (16 ) 

Westpac Banking Corporation

     EUR        161        AUD        224        12/15/10        (4 ) 
                 

Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Contracts

  

       (125 ) 
                 

 

See accompanying notes which are an integral part of this quarterly report.

 

  42      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Interest Rate Swaps Contracts  

Counterparty

    Notional
Amount		     

Fund Receives

   

Fund Pays

    Termination
Date		      Market
Value
$		  
                

Bank of Amercia

      EUR        3,000       2.000%    Six Month EURIBOR      09/15/15         6   

Bank of Amercia

      USD        3,000       Three Month LIBOR    2.100%      08/15/17         —   

Bank of Amercia

      USD        4,500       Three Month LIBOR    2.080%      08/15/17         6   

Barclays Bank PLC

      BRL        600       10.835%    Brazil Interbank Deposit Rate      01/02/12         5   

Barclays Bank PLC

      EUR        500       2.000%    Six Month EURIBOR      09/15/15         1   

Barclays Bank PLC

      GBP        5,700       Six Month LIBOR    2.500%      11/09/15         (159 ) 

Barclays Bank PLC

      EUR        2,100       4.259%    Six Month EURIBOR      04/23/20         127   

Barclays Bank PLC

      EUR        2,370       4.270%    Six Month EURIBOR      05/12/20         143   

Barclays Bank PLC

      GBP        9,570       3.380%    Six Month LIBOR      11/09/20         440   

Barclays Bank PLC

      USD        144       Three Month LIBOR    4.524%      11/15/21         (32 ) 

Barclays Bank PLC

      USD        146       Three Month LIBOR    4.420%      11/15/21         (30 ) 

Barclays Bank PLC

      USD        266       Three Month LIBOR    4.540%      11/15/21         (60 ) 

Barclays Bank PLC

      USD        530       Three Month LIBOR    4.633%      11/15/21         (128 ) 

Barclays Bank PLC

      GBP        4,770       Six Month LIBOR    3.760%      11/09/25         (281 ) 

Barclays Bank PLC

      EUR        630       Six Month EURIBOR    4.085%      04/23/40         (130 ) 

Barclays Bank PLC

      EUR        700       Six Month EURIBOR    3.953%      05/12/40         (125 ) 

BNP Paribas

      EUR        500       2.090%    Consumer Price Index (France)      10/15/10         22   

BNP Paribas

      BRL        300       11.390%    Brazil Interbank Deposit Rate      01/02/12         2   

BNP Paribas

      BRL        200       12.110%    One Month LIBOR      01/02/14         3   

BNP Paribas

      EUR        200       2.000%    Six Month EURIBOR      09/15/15         —   

Citibank

      EUR        2,100       4.286%    Six Month EURIBOR      04/23/20         130   

Citibank

      EUR        630       Six Month EURIBOR    4.119%      04/23/40         (135 ) 

Citibank

      GBP        200       4.250%    Six Month LIBOR      12/15/40         35   

Credit Suisse First Boston

      BRL        300       12.480%    Brazil Interbank Deposit Rate      01/02/13         4   

Credit Suisse First Boston

      EUR        700       2.000%    Six Month EURIBOR      09/15/15         1   

Credit Suisse First Boston

      EUR        500       3.760%    Six Month EURIBOR      08/06/20         15   

Credit Suisse First Boston

      EUR        150       Six Month EURIBOR    3.630%      08/06/40         (17 ) 

Deutsche Bank

      KRW        416,000       2.820%    Korean Interbank Offer Rate      01/28/11         —   

Deutsche Bank

      KRW        200,000       3.870%    Korean Interbank Offer Rate      06/12/11         1   

Deutsche Bank

      AUD        200       4.500%    Three Month BBSW      06/15/11         (1 ) 

Deutsche Bank

      KRW        1,120,000       3.693%    Korean Interbank Offer Rate      06/26/11         6   

Deutsche Bank

      KRW        467,700       3.620%    Korean Interbank Offer Rate      07/06/11         2   

Deutsche Bank

      KRW        781,412       3.626%    Three Month LIBOR      07/07/11         4   

Deutsche Bank

      USD        3,200       Three Month LIBOR    2.110%      08/15/17         (3 ) 

Deutsche Bank

      USD        6,400       Three Month LIBOR    2.240%      08/15/17         (58 ) 

Goldman Sachs

      BRL        400       10.835%    Brazil Interbank Deposit Rate      01/02/12         4   

Goldman Sachs

      BRL        600       10.990%    Brazil Interbank Deposit Rate      01/02/12         5   

Goldman Sachs

      BRL        1,200       11.890%    Brazil Interbank Deposit Rate      01/02/13         10   

Goldman Sachs

      BRL        400       12.650%    One Month LIBOR      01/02/14         11   

HSBC

      BRL        400       11.140%    One Month LIBOR      01/02/12         6   

HSBC

      BRL        400       11.360%    Brazil Interbank Deposit Rate      01/02/12         5   

HSBC

      BRL        1,200       11.890%    Brazil Interbank Deposit Rate      01/02/13         10   

HSBC

      BRL        100       12.540%    One Month LIBOR      01/02/14         2   

HSBC

      MXN        2,000       7.330%    Mexico Interbank 28 Day Deposit Rate      01/28/15         10   

JP Morgan

      KRW        405,000       2.830%    Korean Interbank Offer Rate      01/28/11         —   

JP Morgan

      KRW        350,000       3.900%    Korean Interbank Offer Rate      06/15/11         2   

JP Morgan

      KRW        1,100,000       3.720%    Korean Interbank Offer Rate      06/22/11         6   

JP Morgan

      KRW        371,651       3.660%    Korean Interbank Offer Rate      07/08/11         2   

JP Morgan

      BRL        500       12.170%    Brazil Interbank Deposit Rate      01/02/13         7   

JP Morgan

      USD        3,300       Three Month LIBOR    2.160%      08/15/17         (13 ) 

JP Morgan

      EUR        480       3.650%    Six Month EURIBOR      08/07/20         11   

JP Morgan

      EUR        640       Six Month EURIBOR    3.040%      08/10/20         8   

JP Morgan

      EUR        940       3.530%    Six Month EURIBOR      08/10/20         15   

JP Morgan

      EUR        130       Six Month EURIBOR    3.540%      08/07/40         (12 ) 

 

See accompanying notes which are an integral part of this quarterly report.

 

Core Bond Fund   43

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Interest Rate Swaps Contracts  

Counterparty

    Notional
Amount		     

Fund Receives

   

Fund Pays

    Termination
Date		      Market
Value
$		  
                

JP Morgan

      EUR        260       Six Month EURIBOR    3.420%      08/10/40         (17 ) 

JP Morgan

      EUR        460       2.920%    Six Month EURIBOR      08/10/40         (17 ) 

Merrill Lynch

      BRL        100       14.765%    Brazil Interbank Deposit Rate      01/02/12         9   

Merrill Lynch

      BRL        500       10.990%    Brazil Interbank Deposit Rate      01/02/12         4   

Merrill Lynch

      BRL        700       11.980%    Brazil Interbank Deposit Rate      01/02/12         23   

Merrill Lynch

      BRL        800       12.540%    Brazil Interbank Deposit Rate      01/02/12         38   

Morgan Stanley

      BRL        200       11.630%    Brazil Interbank Deposit Rate      01/02/12         1   

Morgan Stanley

      BRL        100       12.590%    Brazil Interbank Deposit Rate      01/02/13         1   

Morgan Stanley

      BRL        400       12.510%    Brazil Interbank Deposit Rate      01/02/14         9   

Morgan Stanley

      EUR        700       2.000%    Six Month EURIBOR      09/15/15         1   

Royal Bank of Scotland

      CAD        1,500       5.700%    Canadian Dealer Offer Rate      12/18/24         50   

UBS

      AUD        1,900       4.500%    Three Month LIBOR      06/15/11         (8 ) 

UBS

      BRL        800       10.575%    Brazil Interbank Deposit Rate      01/02/12         (10 ) 

UBS

      AUD        1,600       6.000%    Six Month BBSW      09/15/12         23   

UBS

      BRL        300       12.070%    Brazil Interbank Deposit Rate      01/02/13         3   

UBS

      BRL        200       12.250%    One Month LIBOR      01/02/14         3   
                      

Total Market Value of Open Interest Rate Swap Contracts Premiums Paid (Received) - ($10) (å)

            (4 ) 
                      

 

Credit Default Swap Contracts  
Corporate Issues                                              

Reference
Entity

   

Counterparty

    Implied
Credit
Spread		      Notional
Amount		      Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		      Market
Value
$		  
                   

Brazil Government International Bond

    HSBC      1.128%         USD        100         1.000%         09/20/15         (1 ) 

Brazil Government International Bond

    JP Morgan      1.128%         USD        100         1.000%         09/20/15         (1 ) 

Centex Corporation

    JP Morgan      1.449%         USD        325         (4.400% )       12/20/13         (30 ) 

Darden Restaurants, Inc.

    Deutsche Bank      0.830%         USD        400         (2.250% )       03/20/14         (19 ) 

DR Horton, Inc.

    Citibank      2.852%         USD        100         (1.000% )       09/20/16         10   

DR Horton, Inc.

    Deutsche Bank      2.852%         USD        80         (1.000% )       09/20/16         8   

DR Horton, Inc.

    Goldman Sachs      2.852%         USD        80         (1.000% )       09/20/16         8   

Federative Republic of Brazil

    Barclays Bank PLC      1.099%         USD        500         1.000%         06/20/15         (2 ) 

Federative Republic of Brazil

    Deutsche Bank      1.099%         USD        1,000         1.000%         06/20/15         (5 ) 

Federative Republic of Brazil

    Goldman Sachs      1.099%         USD        500         (1.000% )       06/20/15         (2 ) 

GE Capital Corp.

    Citibank      1.681%         USD        200         4.000%         12/20/13         15   

GE Capital Corp.

    Deutsche Bank      1.681%         USD        100         4.900%         12/20/13         10   

Japan Government Bond

    Bank of America      0.500%         USD        300         1.000%         03/20/15         6   

Japan Government Bond

    Deutsche Bank      0.500%         USD        100         1.000%         03/20/15         2   

Japan Government Bond

    JP Morgan      0.500%         USD        600         1.000%         03/20/15         13   

Lowe’s Companies, Inc.

    Citigroupglobal Markets, Inc.      0.527%         USD        340         (1.450% )       03/20/14         (11 ) 

Mexico Government International Bond

    Morgan Stanley      0.638%         USD        100         0.750%         01/20/12         —   

Pulte Homes, Inc.

    Goldman Sachs      3.095%         USD        725         (1.000% )       09/20/16         78   

Pulte Homes, Inc.

    JP Morgan      2.539%         USD        1,000         (3.870% )       03/20/14         (43 ) 

SLM Corp.

    Citibank      4.223%         USD        200         4.850%         03/20/13         3   

Target Corp.

    Credit Suisse First Boston      0.526%         USD        125         (1.000% )       12/20/14         (2 ) 

Target Corp.

    Deutsche Bank      0.526%         USD        125         (1.000% )       12/20/14         (2 ) 

The Home Depot, Inc.

    Citigroupglobal Markets, Inc.      0.524%         USD        340         (3.250% )       03/20/14         (32 ) 

Toll Brothers, Inc.

    Credit Suisse First Boston      2.294%         USD        255         (1.000% )       09/20/16         18   

United Kingdom Gilt

    Deutsche Bank      0.567%         USD        300         1.000%         12/20/14         5   

United Kingdom Gilt

    JP Morgan      0.590%         USD        300         1.000%         03/20/15         5   

United Kingdom Gilt

    JP Morgan      0.590%         USD        700         1.000%         03/20/15         12   

United Kingdom Gilt

    Morgan Stanley      0.567%         USD        100         1.000%         12/20/14         2   

United Kingdom Gilt

    Societe Generale      0.590%         USD        500         1.000%         03/20/15         9   
                         

Total Market Value of Open Corporate Issue Credit Default Swap Contracts Premiums Paid (Received) - $33

  

      54   
                         

 

See accompanying notes which are an integral part of this quarterly report.

 

  44      Core Bond Fund

Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Credit Indices  

Reference
Entity

   

Counterparty

   Notional
Amount		      Fund (Pays)/
Receives
Fixed Rate		      Termination
Date		      Market
Value
$		  
               

ABX - HE Index for Sub-Prime Home Equity Sector

    Barclays Bank PLC     USD        3         0.760%         01/25/38         (1 ) 

ABX - HE Index for Sub-Prime Home Equity Sector

    Citibank     USD        5         0.170%         05/25/46         (4 ) 

ABX - HE Index for Sub-Prime Home Equity Sector

    JP Morgan     USD        3         0.090%         08/25/37         (2 ) 

CMBX AJ Index

    Bank of America     USD        100         (0.840% )       10/12/52         11   

CMBX AJ Index

    Bank of America     USD        460         (0.840% )       10/12/52         52   

CMBX AJ Index

    Barclays Bank PLC     USD        340         (0.840% )       10/12/52         38   

CMBX AJ Index

    Barclays Bank PLC     USD        360         (0.840% )       10/12/52         41   

CMBX AJ Index

    Credit Suisse First Boston     USD        930         (0.840% )       10/12/52         105   

Dow Jones CDX Index

    Bank of America     USD        800         1.000%         12/20/15         (3 ) 

Dow Jones CDX Index

    Barclays Bank PLC     USD        300         5.000%         06/20/15         37   

Dow Jones CDX Index

    Barclays Bank PLC     USD        100         5.000%         12/20/15         13   

Dow Jones CDX Index

    Citibank     USD        100         1.000%         12/20/15         —   

Dow Jones CDX Index

    Citibank     USD        100         5.000%         12/20/15         (3 ) 

Dow Jones CDX Index

    Credit Suisse First Boston     USD        500         1.000%         12/20/15         (2 ) 

Dow Jones CDX Index

    Deutsche Bank     USD        772         0.708%         12/20/12         9   

Dow Jones CDX Index

    Deutsche Bank     USD        900         5.000%         06/20/15         110   

Dow Jones CDX Index

    Deutsche Bank     USD        200         5.000%         12/20/15         26   

Dow Jones CDX Index

    Deutsche Bank     USD        800         1.000%         12/20/15         (3 ) 

Dow Jones CDX Index

    Deutsche Bank     USD        3,000         1.000%         12/20/15         (9 ) 

Dow Jones CDX Index

    Goldman Sachs     USD        100         1.000%         12/20/15         —   

Dow Jones CDX Index

    JP Morgan     USD        100         5.000%         12/20/15         (2 ) 

Dow Jones CDX Index

    JP Morgan     USD        2,000         1.000%         12/20/15         (6 ) 

Dow Jones CDX Index

    JP Morgan     USD        386         0.553%         12/20/17         4   

Dow Jones CDX Index

    Morgan Stanley     USD        800         5.000%         06/20/15         98   

Dow Jones CDX Index

    Morgan Stanley     USD        300         5.000%         12/20/15         40   

Dow Jones CDX Index

    Pershing LLC 1st Republic P.B. CNS     USD        193         0.548%         12/20/17         2   
                     

Total Market Value of Open Credit Index Credit Default Swap Contracts Premiums Paid (Received) - $1,077

  

      551   
                     

Total Market Value of Open Credit Default Swap Contracts Premiums Paid (Received) - $1,110 (å)

  

      605   
                     

 

See accompanying notes which are an integral part of this quarterly report.

 

Core Bond Fund   45

Table of Contents

Russell Investment Funds

Core Bond Fund

Presentation of Portfolio Holdings — September 30, 2010 (Unaudited)

Amounts in thousands

 

       Market Value  
Portfolio Summary      Level 1      Level 2      Level 3      Total  
             

Long-Term Investments

              

Asset-Backed Securities

      $ —       $ 25,209       $ —       $ 25,209   

Corporate Bonds and Notes

        —         86,496         —         86,496   

International Debt

        —         42,507         —         42,507   

Loan Agreements

        —         2,484         —         2,484   

Mortgage-Backed Securities

        —         189,923         —         189,923   

Municipal Bonds

        —         7,848         —         7,848   

Non-US Bonds

        —         7,809         —         7,809   

United States Government Agencies

        —         7,400         —         7,400   

United States Government Treasuries

        —         53,015         —         53,015   

Preferred Stocks

        778         —         379         1,157   

Short-Term Investments

        —         80,863         1,212         82,075   

Repurchase Agreements

        —         24,700         —         24,700   

Other Securities

        —         17,286         —         17,286   
                                     

Total Investments

        778         545,540         1,591         547,909   
                                     

Other Financial Instruments

              

Futures Contracts

        411         —         —         411   

Options Written

        (36 )       (229 )       (105 )       (370 ) 

Foreign Currency Exchange Contracts

        —         (125 )       —         (125 ) 

Interest Rate Swap Contracts

        —         (17 )       23         6   

Credit Default Swaps Contracts

        —         (505 )       —         (505 ) 
                                     

Total Other Financial Instruments*

        375         (876 )       (82 )       (583 ) 
                                     

 

*   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.

For a description of the levels see note 2 in the Notes to Quarterly Report.

Investments in which significant unobservable inputs (Level 3) used in determining a value for the period ending September 30, 2010 were less than 1% of net assets.

 

See accompanying notes which are an integral part of this quarterly report.

 

  46      Core Bond Fund

Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       
Common Stocks - 95.4%        
Diversified - 21.1%        

Agile Property Holdings, Ltd. (Ñ)

      665,000           754   

Allgreen Properties, Ltd.

      631,200           566   

BGP Holdings PLC (Æ)(ö)(Ø)

      926,311           —   

BR Properties SA

      63,939           616   

British Land Co. PLC (ö)

      231,953           1,694   

Canadian Real Estate Investment Trust (ö)

      16,520           502   

Capital & Counties Properties PLC (Æ)

      15,260           31   

CapitaLand, Ltd.

      724,012           2,235   

Castellum AB

      180,169           2,396   

Charter Hall Group (ö)

      1,493,417           844   

Cominar Real Estate Investment Trust (ö)

      3,396           72   

Cousins Properties, Inc. (ö)

      23,824           170   

Dexus Property Group (ö)

      2,449,798           2,025   

Dundee Real Estate Investment Trust (ö)

      3,187           87   

FKP Property Group (ö)

      473,113           389   

Fonciere Des Regions (ö)

      3,749           400   

Forest City Enterprises, Inc. Class A (Æ)

      79,134           1,015   

Gecina SA (ö)

      2,541           301   

Glorious Property Holdings, Ltd.

      1,329,666           380   

GPT Group (ö)

      383,934           1,091   

H&R Real Estate Investment Trust (ö)

      10,705           206   

Hang Lung Properties, Ltd. - ADR

      389,475           1,903   

Helical Bar PLC

      22,239           104   

Henderson Land Development Co., Ltd.

      340,000           2,421   

Hufvudstaden AB Class A

      8,160           88   

Hysan Development Co., Ltd.

      293,493           1,052   

Keppel Land, Ltd. (Ñ)

      212,005           653   

Kerry Properties, Ltd.

      476,875           2,594   

KWG Property Holding, Ltd. (Ñ)

      918,691           705   

Land Securities Group PLC (ö)

      99,241           999   

London & Stamford Property PLC (ö)

      116,100           207   

Longfor Properties Co., Ltd.

      153,625           174   

Mirvac Group (ö)(Ñ)

      1,299,338           1,670   

Mitsubishi Estate Co., Ltd. (Ñ)

      402,000           6,539   

Mitsui Fudosan Co., Ltd. (Ñ)

      315,104           5,315   

Morguard Real Estate Investment Trust (ö)

      12,989           174   

New World Development, Ltd.

      1,360,995           2,743   

Norwegian Property ASA (Æ)

      308,965           533   

Shaftesbury PLC (ö)

      93,460           636   

Sino Land Co., Ltd.

      274,000           567   

Sino-Ocean Land Holdings, Ltd.

      566,000           393   

Sponda OYJ

      212,015           1,029   

Stockland (ö)

      494,644           1,836   

Sumitomo Realty & Development Co., Ltd.

      129,000           2,666   

Sun Hung Kai Properties, Ltd.

      1,201,606           20,752   

Suntec Real Estate Investment Trust (ö)

      209,000           240   

Unibail-Rodamco SE (ö)

      26,415           5,857   

Vornado Realty Trust (ö)

      191,654           16,392   

Washington Real Estate Investment Trust (ö)(Ñ)

      46,878           1,487   

Wereldhave NV (ö)

      3,913           380   

Wharf Holdings, Ltd.

      353,000           2,270   

Wihlborgs Fastigheter AB (Ñ)

      10,066           277   
             
          98,430   
             
     Principal
Amount ($)
or Shares		        Market
Value
$		  
Free Standing Retail - 0.6%        

National Retail Properties, Inc. (ö)(Ñ)

      107,952           2,711   
             
Health Care - 8.9%        

Brookdale Senior Living, Inc. (Æ)(Ñ)

      47,700           778   

HCP, Inc. (ö)

      269,296           9,689   

Health Care REIT, Inc. (ö)

      169,913           8,044   

Nationwide Health Properties, Inc. (ö)

      224,972           8,700   

Omega Healthcare Investors, Inc. (ö)

      167,403           3,758   

Senior Housing Properties Trust (ö)

      199,765           4,694   

Ventas, Inc. (ö)(Ñ)

      113,071           5,831   
             
          41,494   
             
Industrial - 3.1%        

AMB Property Corp. (ö)(Ñ)

      93,942           2,487   

Ascendas Real Estate Investment Trust (Æ)(ö)(Ñ)

      229,000           381   

DCT Industrial Trust, Inc. (ö)(Ñ)

      364,762           1,747   

EastGroup Properties, Inc. (ö)

      31,861           1,191   

First Potomac Realty Trust (ö)(Ñ)

      41,700           625   

Goodman Group (ö)

      5,130,996           3,199   

Hansteen Holdings PLC (ö)

      809           1   

ING Industrial Fund (ö)

      3,050,807           1,445   

Mapletree Logistics Trust (ö)

      1,052,091           696   

ProLogis (ö)(Ñ)

      214,336           2,525   

Segro PLC (ö)

      58,657           252   
             
          14,549   
             
Lodging/Resorts - 3.8%        

City Developments, Ltd.

      131,000           1,271   

DiamondRock Hospitality Co. (ö)(Ñ)

      122,883           1,166   

Hersha Hospitality Trust (ö)

      125,150           648   

Host Hotels & Resorts, Inc. (ö)(Ñ)

      686,161           9,936   

Hyatt Hotels Corp. (Æ)(Ñ)

      20,400           763   

LaSalle Hotel Properties (ö)(Ñ)

      22,701           531   

Marriott International, Inc. Class A (Ñ)

      29,900           1,071   

Overseas Union Enterprise, Ltd.

      195,000           437   

Pebblebrook Hotel Trust (Æ)(ö)(Ñ)

      31,100           560   

Shangri-La Asia, Ltd.

      270,000           615   

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

      15,100           794   

Strategic Hotels & Resorts, Inc. (Æ)(ö)

      6,388           27   

Sunstone Hotel Investors, Inc. (Æ)(ö)(Ñ)

      22,701           206   
             
          18,025   
             
Mixed Industrial/Office - 2.1%        

Duke Realty Corp. (ö)

      86,416           1,001   

Liberty Property Trust (ö)(Ñ)

      235,270           7,505   

PS Business Parks, Inc. (ö)

      24,639           1,394   
             
          9,900   
             
Office - 11.9%        

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

      35,732           2,501   

Beni Stabili SpA

      770,810           724   

BioMed Realty Trust, Inc. (ö)(Ñ)

      143,333           2,569   

Boston Properties, Inc. (ö)

      159,960           13,296   

 

Real Estate Securities Fund   47

Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Brookfield Properties Corp. (Ñ)

      62,541           973   

CapitaCommercial Trust (Æ)(ö)(Ñ)

      2,348,312           2,643   

Corporate Office Properties Trust (ö)

      17,106           638   

Daiwa Office Investment Corp. Class A (ö)(Ñ)

      3           8   

Derwent London PLC (ö)

      80,517           1,902   

Douglas Emmett, Inc. (ö)(Ñ)

      61,084           1,070   

Fabege AB (Ñ)

      81,443           819   

Great Portland Estates PLC (ö)

      67,516           362   

Highwoods Properties, Inc. (ö)(Ñ)

      36,648           1,190   

Hongkong Land Holdings, Ltd. (Ñ)

      1,485,489           9,225   

Hudson Pacific Properties, Inc. (ö)

      19,869           325   

ICADE (ö)

      2,700           284   

ING Office Fund (ö)

      910,608           528   

Japan Prime Realty Investment Corp. Class A (ö)

      215           473   

Japan Real Estate Investment Corp. Class A (ö)

      260           2,364   

Kenedix Realty Investment Corp. Class A (ö)

      18           68   

Kilroy Realty Corp. (ö)(Ñ)

      132,643           4,396   

Mack-Cali Realty Corp. (ö)

      41,942           1,372   

Nippon Building Fund, Inc. Class A (ö)

      226           1,979   

NTT Urban Development Corp.

      981           825   

Piedmont Office Realty Trust, Inc. Class A (ö)

      72,300           1,367   

PSP Swiss Property AG (Æ)

      3,194           236   

SL Green Realty Corp. (ö)(Ñ)

      36,400           2,305   

Societe Immobiliere de Location pour l’Industrie et le Commerce (ö)

      5,278           681   

Swiss Prime Site AG (Æ)

      5,649           401   
             
          55,524   
             
Regional Malls - 12.3%        

Aeon Mall Co., Ltd.

      17,300           421   

BR Malls Participacoes SA

      145,787           1,218   

CapitaMall Trust (Æ)(ö)

      1,571,000           2,568   

CapitaMalls Asia, Ltd.

      1,022,201           1,679   

Macerich Co. (The) (ö)(Ñ)

      131,900           5,665   

Simon Property Group, Inc. (ö)

      401,789           37,262   

SM Prime Holdings, Inc.

      1,333,700           384   

Taubman Centers, Inc. (ö)(Ñ)

      31,406           1,401   

Westfield Group (ö)

      563,488           6,677   
             
          57,275   
             
Residential - 14.0%        

Advance Residence Investment Corp. Class A (ö)

      63           106   

American Campus Communities, Inc. (ö)

      34,800           1,059   

Apartment Investment & Management Co. Class A (ö) (Ñ)

      60,967           1,303   

AvalonBay Communities, Inc. (ö)(Ñ)

      111,826           11,622   

Boardwalk Real Estate Investment Trust (ö)

      27,850           1,272   

BRE Properties, Inc. Class A (ö)

      41,268           1,713   

Camden Property Trust (ö)(Ñ)

      127,289           6,106   

China Overseas Land & Investment, Ltd. (Ñ)

      2,581,200           5,463   
     Principal
Amount ($)
or Shares		        Market
Value
$		  

China Resources Land, Ltd. (Ñ)

      1,358,000           2,762   

Colonial Properties Trust (ö)(Ñ)

      2,860           46   

Conwert Immobilien Invest SE

      41,418           597   

Deutsche Wohnen AG (Æ)

      3,235           39   

Education Realty Trust, Inc. (ö)

      16,957           121   

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

      63,179           3,442   

Equity Residential (ö)

      393,812           18,734   

Essex Property Trust, Inc. (ö)(Ñ)

      48,808           5,342   

GAGFAH SA

      12,285           98   

Mid-America Apartment Communities, Inc. (ö)

      25,830           1,505   

MRV Engenharia e Participacoes SA

      81,700           775   

Post Properties, Inc. (ö)

      45,350           1,266   

Shimao Property Holdings, Ltd. (Ñ)

      509,000           846   

UDR, Inc. (ö)

      36,894           779   

Unite Group PLC (Æ)

      137,964           477   
             
          65,473   
             
Self Storage - 4.1%        

Big Yellow Group PLC (ö)

      85,202           437   

Extra Space Storage, Inc. (ö)(Ñ)

      100,900           1,618   

Public Storage (ö)

      161,745           15,696   

Sovran Self Storage, Inc. (ö)

      32,205           1,221   
             
          18,972   
             
Shopping Centers - 9.6%        

Acadia Realty Trust (ö)(Ñ)

      41,804           794   

Alexander’s, Inc. (ö)

      1,416           447   

Atrium European Real Estate, Ltd.

      12,641           70   

Capital Shopping Centres Group PLC Class H (ö)

      34,778           201   

CFS Retail Property Trust (ö)(Ñ)

      1,803,777           3,304   

Citycon OYJ

      108,559           463   

Corio NV (ö)

      58,191           3,978   

Developers Diversified Realty Corp. (ö)(Ñ)

      165,900           1,862   

Eurocommercial Properties NV (ö)

      31,462           1,458   

Excel Trust, Inc. (ö)(Ñ)

      14,653           165   

Federal Realty Investment Trust (ö)(Ñ)

      58,023           4,738   

First Capital Realty, Inc.

      4,017           61   

Frasers Centrepoint Trust (ö)

      457,000           514   

Frontier Real Estate Investment Corp. (ö)

      40           330   

Hammerson PLC (ö)

      721,973           4,472   

Japan Retail Fund Investment Corp. Class A (ö)

      439           618   

Kimco Realty Corp. (ö)

      222,247           3,500   

Kite Realty Group Trust (ö)(Ñ)

      206,448           917   

Klepierre - GDR (ö)

      78,689           3,035   

Link REIT (The) (ö)

      241,125           715   

Mercialys SA (ö)

      22,737           887   

Metric Property Investments PLC (Æ)(ö)

      58,772           98   

Multiplan Empreendimentos Imobiliarios SA

      14,390           305   

Primaris Retail Real Estate Investment Trust (ö)

      44,946           853   

Ramco-Gershenson Properties Trust (ö)

      49,440           530   

Regency Centers Corp. (ö)(Ñ)

      89,200           3,521   

Renhe Commercial Holdings Co., Ltd.

      1,912,000           357   

 

  48      Real Estate Securities Fund

Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Principal
Amount ($)
or Shares		        Market
Value
$		  
       

Retail Opportunity Investments Corp.

      158,029           1,512   

RioCan Real Estate Investment Trust (ö)

      25,503           568   

Tanger Factory Outlet Centers (ö)(Ñ)

      66,924           3,155   

Vastned Retail NV (ö)

      2,368           161   

Weingarten Realty Investors (ö)

      62,239           1,358   
             
          44,947   
             
Specialty - 3.9%        

Digital Realty Trust, Inc. (ö)(Ñ)

      165,187           10,192   

DuPont Fabros Technology, Inc. (ö)(Ñ)

      92,902           2,337   

Entertainment Properties Trust (ö)

      38,375           1,657   

Plum Creek Timber Co., Inc. (ö)(Ñ)

      49,814           1,758   

Rayonier, Inc. (ö)

      42,628           2,137   
             
          18,081   
             
Total Common Stocks
(cost $281,422) 		          445,381   
             
Warrants & Rights - 0.0%        
Diversified - 0.0%        

Henderson Land Development Co., Ltd. (Æ)
2011 Warrants

      9,067           3   
             
Industrial – 0.0%        

Mapletree Logistics Trust Pte Ltd. (Æ)
2010 Rights

      34,608           1   
             
Total Warrants & Rights
(cost $58,839)		           4   
             
Short-Term Investments - 4.1%        

Russell U.S. Cash Management Fund (£)

      19,130,787           19,131   
             
Total Short-Term Investments
(cost $19,131) 		          19,131   
             
Other Securities - 14.7%        

State Street Securities Lending Quality
Trust (×)

      68,580,418           68,367   
             
Total Other Securities
(cost $68,580)		           68,367   
             
Total Investments - 114.2%
(identified cost $427,972)		           532,883   
Other Assets and Liabilities,
Net - (14.2%)		           (66,272 ) 
             
Net Assets - 100.0%           466,611   
             

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

 

See accompanying notes which are an integral part of this quarterly report.

 

Real Estate Securities Fund   49

Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
           

Counterparty

   Amount
Sold		     Amount
Bought		     Settlement
Date		     Unrealized
Appreciation
(Depreciation)
$		  
           

Brown Brothers Harriman Co.

     USD        4,311        AUD        4,453        10/06/10        (7 ) 

Brown Brothers Harriman Co.

     USD        5,187        AUD        5,358        10/06/10        (9 ) 

Brown Brothers Harriman Co.

     USD        6,457        AUD        6,669        10/06/10        (12 ) 

Brown Brothers Harriman Co.

     USD        16        CAD        16        10/01/10        —   

Brown Brothers Harriman Co.

     USD        29        CAD        30        10/01/10        —   

Brown Brothers Harriman Co.

     USD        40        CAD        41        10/01/10        —   

Brown Brothers Harriman Co.

     USD        735        CAD        754        10/05/10        (2 ) 

Brown Brothers Harriman Co.

     USD        836        CAD        858        10/05/10        (2 ) 

Brown Brothers Harriman Co.

     USD        963        CAD        988        10/05/10        (3 ) 

Brown Brothers Harriman Co.

     USD        41        CHF        40        10/05/10        —   

Brown Brothers Harriman Co.

     USD        62        CHF        61        10/05/10        —   

Brown Brothers Harriman Co.

     USD        119        CHF        117        10/05/10        (1 ) 

Brown Brothers Harriman Co.

     USD        253        CHF        248        10/05/10        (1 ) 

Brown Brothers Harriman Co.

     USD        137        EUR        100        10/04/10        —   

Brown Brothers Harriman Co.

     USD        165        EUR        121        10/05/10        —   

Brown Brothers Harriman Co.

     USD        1,224        EUR        897        10/05/10        —   

Brown Brothers Harriman Co.

     USD        1,544        EUR        1,131        10/05/10        (2 ) 

Brown Brothers Harriman Co.

     USD        2,625        EUR        1,923        10/05/10        (4 ) 

Brown Brothers Harriman Co.

     USD        202        GBP        128        10/05/10        —   

Brown Brothers Harriman Co.

     USD        484        GBP        308        10/05/10        —   

Brown Brothers Harriman Co.

     USD        677        GBP        430        10/05/10        (2 ) 

Brown Brothers Harriman Co.

     USD        1,261        GBP        800        10/05/10        (4 ) 

Brown Brothers Harriman Co.

     USD        7,916        HKD        61,457        10/05/10        4   

Brown Brothers Harriman Co.

     USD        9,118        HKD        70,785        10/05/10        5   

Brown Brothers Harriman Co.

     USD        9,141        HKD        70,967        10/05/10        5   

Brown Brothers Harriman Co.

     USD        2,506        JPY        209,317        10/05/10        2   

Brown Brothers Harriman Co.

     USD        5,656        JPY        472,519        10/05/10        4   

Brown Brothers Harriman Co.

     USD        6,897        JPY        576,183        10/05/10        5   

Brown Brothers Harriman Co.

     USD        35        NOK        205        10/01/10        —   

Brown Brothers Harriman Co.

     USD        43        NOK        252        10/01/10        —   

Brown Brothers Harriman Co.

     USD        2        NOK        14        10/05/10        —   

Brown Brothers Harriman Co.

     USD        20        NOK        117        10/05/10        —   

Brown Brothers Harriman Co.

     USD        29        NOK        168        10/05/10        —   

Brown Brothers Harriman Co.

     USD        95        SEK        636        10/05/10        —   

Brown Brothers Harriman Co.

     USD        180        SEK        1,213        10/05/10        —   

Brown Brothers Harriman Co.

     USD        230        SEK        1,547        10/05/10        —   

Brown Brothers Harriman Co.

     USD        235        SEK        1,582        10/05/10        —   

Brown Brothers Harriman Co.

     USD        1,715        SGD        2,255        10/05/10        —   

Brown Brothers Harriman Co.

     USD        1,742        SGD        2,292        10/05/10        —   

Brown Brothers Harriman Co.

     USD        1,909        SGD        2,511        10/05/10        —   

State Street Bank and Trust Company

     USD        73        AUD        75        10/05/10        —   

State Street Bank and Trust Company

     USD        189        AUD        195        10/05/10        (1 ) 

State Street Bank and Trust Company

     USD        20        CAD        20        10/04/10        —   

State Street Bank and Trust Company

     USD        63        CAD        65        10/04/10        —   

State Street Bank and Trust Company

     USD        156        CAD        161        10/04/10        —   

State Street Bank and Trust Company

     USD        130        EUR        96        10/04/10        —   

State Street Bank and Trust Company

     USD        484        EUR        355        10/04/10        —   

State Street Bank and Trust Company

     USD        589        EUR        432        10/04/10        —   

 

See accompanying notes which are an integral part of this quarterly report.

 

  50      Real Estate Securities Fund

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Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments, continued — September 30, 2010 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
           

Counterparty

   Amount
Sold		     Amount
Bought		     Settlement
Date		     Unrealized
Appreciation
(Depreciation)
$		  
           

State Street Bank and Trust Company

     USD        53        GBP        33        10/04/10        —   

State Street Bank and Trust Company

     USD        303        GBP        192        10/04/10        (2 ) 

State Street Bank and Trust Company

     USD        376        GBP        238        10/04/10        (2 ) 

State Street Bank and Trust Company

     USD        1,237        HKD        9,596        10/04/10        —   

State Street Bank and Trust Company

     USD        1,749        HKD        13,570        10/04/10        —   

State Street Bank and Trust Company

     USD        1,923        HKD        14,918        10/04/10        —   

State Street Bank and Trust Company

     USD        208        JPY        17,366        10/04/10        —   

State Street Bank and Trust Company

     USD        350        JPY        29,266        10/04/10        1   

State Street Bank and Trust Company

     USD        1,102        JPY        92,164        10/04/10        2   

State Street Bank and Trust Company

     USD        29        NOK        170        10/04/10        —   

State Street Bank and Trust Company

     USD        36        NOK        209        10/04/10        —   

State Street Bank and Trust Company

     USD        161        SEK        1,078        10/04/10        (1 ) 

State Street Bank and Trust Company

     USD        198        SEK        1,331        10/04/10        (1 ) 

State Street Bank and Trust Company

     USD        229        SEK        1,537        10/04/10        (1 ) 

State Street Bank and Trust Company

     USD        225        SGD        296        10/04/10        —   

State Street Bank and Trust Company

     USD        233        SGD        307        10/04/10        —   

State Street Bank and Trust Company

     USD        639        SGD        840        10/04/10        —   

State Street Bank and Trust Company

     JPY        218        USD        3        10/01/10        —   

State Street Bank and Trust Company

     JPY        220        USD        3        10/04/10        —   

State Street Bank and Trust Company

     JPY        220        USD        3        10/04/10        —   

Westpac Banking Corporation

     USD        292        AUD        302        10/01/10        —   

Westpac Banking Corporation

     USD        707        AUD        730        10/01/10        (1 ) 

Westpac Banking Corporation

     USD        679        EUR        500        10/01/10        3   

Westpac Banking Corporation

     USD        1,050        EUR        774        10/01/10        4   

Westpac Banking Corporation

     USD        1,656        EUR        1,220        10/01/10        7   

Westpac Banking Corporation

     USD        684        GBP        433        10/01/10        (4 ) 

Westpac Banking Corporation

     USD        812        GBP        514        10/01/10        (5 ) 

Westpac Banking Corporation

     USD        899        GBP        569        10/01/10        (5 ) 

Westpac Banking Corporation

     USD        26        JPY        2,169        10/01/10        —   

Westpac Banking Corporation

     USD        199        JPY        16,708        10/01/10        1   

Westpac Banking Corporation

     USD        419        JPY        35,171        10/01/10        2   

Westpac Banking Corporation

     USD        133        SEK        903        10/01/10        1   

Westpac Banking Corporation

     USD        165        SEK        1,115        10/01/10        1   

Westpac Banking Corporation

     USD        190        SEK        1,288        10/01/10        1   

Westpac Banking Corporation

     USD        123        SGD        162        10/01/10        —   

Westpac Banking Corporation

     USD        144        SGD        189        10/01/10        —   

Westpac Banking Corporation

     USD        474        SGD        624        10/01/10        1   
                 

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

  

       (23 ) 
                 

 

See accompanying notes which are an integral part of this quarterly report.

 

Real Estate Securities Fund   51

Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Presentation of Portfolio Holdings — September 30, 2010 (Unaudited)

Amounts in thousands

 

       Market Value  
Portfolio Summary      Level 1      Level 2        Level 3        Total  
                 

Common Stocks

                  

Diversified

      $ 98,430       $ —         $ —         $ 98,430   

Free Standing Retail

        2,711         —           —           2,711   

Health Care

        41,494         —           —           41,494   

Industrial

        14,549         —           —           14,549   

Lodging/Resorts

        18,025         —           —           18,025   

Mixed Industrial/Office

        9,900         —           —           9,900   

Office

        55,524         —           —           55,524   

Regional Malls

        57,275         —           —           57,275   

Residential

        65,473         —           —           65,473   

Self Storage

        18,972         —           —           18,972   

Shopping Centers

        44,947         —           —           44,947   

Specialty

        18,081         —           —           18,081   

Warrants & Rights

        3         1           —           4   

Short-Term Investments

        —         19,131           —           19,131   

Other Securities

        —         68,367           —           68,367   
                                         

Total Investments

        445,384         87,499           —           532,883   
                                         

Other Financial Instruments

                  

Foreign Currency Exchange Contracts

        (23 )       —           —           (23 ) 
                                         

Total Other Financial Instruments*

        (23 )       —           —           (23 ) 
                                         

 

*   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.

For a description of the levels see note 2 in the Notes to Quarterly Report.

 

See accompanying notes which are an integral part of this quarterly report.

 

  52      Real Estate Securities Fund

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Russell Investment Funds

Notes to Schedules of Investments — September 30, 2010 (Unaudited)

 

 

 

Footnotes:

(Æ) Nonincome-producing security.
(ö) Real Estate Investment Trust (REIT).
(§) 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.
(ž) Rate noted is yield-to-maturity from date of acquisition.
(ç) At amortized cost, which approximates market.
(Ê) Adjustable or floating rate security. Rate shown reflects rate in effect at period end.
(Ï) Forward commitment.
(ƒ) Perpetual floating rate security. Rate shown reflects rate in effect at period end.
(µ) Bond is insured by a guarantor.
(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. The rate noted is for descriptive purposes; effective yield may vary.
(Ø) In default.
(ß) Illiquid security.
(×) 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.
(£) A portion of this asset has been segregated to cover the liability caused by the valuation of the SLQT.
(å) Currency balances were held in connection with futures contracts purchased (sold), options written, or swaps entered into by the Fund. See Note 2.

Abbreviations:

144A - Represents private placement security for qualified buyers according to rule 144A of the Securities Act of 1933.

ADR - American Depositary Receipt

ADS - American Depositary Share

BBSW - Australian Bank Bill Short Term Rate

CIBOR - Copenhagen Interbank Offered Rate

CME - Chicago Mercantile Exchange

CMO - Collateralized Mortgage Obligation

CVO - Contingent Value Obligation

EMU - European Economic and Monetary Union

EURIBOR - Euro Interbank Offered Rate

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

 

Notes to Schedules of Investments   53

Table of Contents

Russell Investment Funds

Notes to Schedule of Investments, continued — September 30, 2010 (Unaudited)

 

 

 

Foreign Currency Abbreviations:

 

ARS - Argentine peso   HKD - Hong Kong dollar   PLN - Polish zloty
AUD - Australian dollar   HUF - Hungarian forint   RUB - Russian ruble
BRL - Brazilian real   IDR - Indonesian rupiah   SEK - Swedish krona
CAD - Canadian dollar   ILS - Israeli shekel   SGD - Singapore dollar
CHF - Swiss franc   INR - Indian rupee   SKK - Slovakian koruna
CLP - Chilean peso   JPY - Japanese yen   THB - Thai baht
CNY - Chinese renminbi yuan   KES - Kenyan schilling   TRY - Turkish lira
COP - Colombian peso   KRW - South Korean won   TWD - Taiwanese dollar
CRC - Costa Rica colon   MXN - Mexican peso   USD - United States dollar
CZK - Czech koruna   MYR - Malaysian ringgit   VEB - Venezuelan bolivar
DKK - Danish krone   NOK - Norweigian Krone   VND - Vietnamese dong
EGP - Egyptian pound   NZD - New Zealand dollar   ZAR - South African rand
EUR - Euro   PEN - Peruvian nouveau sol  
GBP - British pound sterling   PHP - Philippine peso  

 

  54      Notes to Schedules of Investments

Table of Contents

Russell Investment Funds

Notes to Quarterly Report — September 30, 2010 (Unaudited)

 

 

 

1.   Organization

Russell Investment Funds (the “Investment Company” or “RIF”) is a series investment company with nine different investment portfolios referred to as Funds. This Quarterly Report reports on five of these Funds (each a “Fund” and collectively the “Funds”). The Investment Company provides the investment base for one or more variable insurance products issued by one or more insurance companies. These Funds are offered at net asset value to qualified insurance company separate accounts offering variable insurance products. 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 an Amended and Restated Master Trust Agreement dated October 1, 2008 (“Master Trust Agreement”). The Investment Company’s Master Trust Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.

 

2.   Significant Accounting Policies

The following is a summary of the significant accounting policies consistently followed by the Funds in the preparation of this Quarterly Report. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for investment companies. The presentation of these schedules of investments in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Quarterly Report. Actual results could differ from those estimates.

Security Valuation

The Funds value portfolio securities according to Board-approved securities valuation procedures which include market and fair value procedures. Debt obligation securities maturing within 60 days at the time of purchase are priced using the amortized cost method of valuation, 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 Russell Fund Services Company (“RFSC”).

Ordinarily, the Funds value each portfolio security based on market quotations provided by independent pricing services or alternative pricing services or dealers (when permitted by the market value procedures). Pricing services may utilize evaluated pricing models which apply available market information through the use of benchmark curves, benchmarking of similar securities, sector groupings, spread adjustments and ratings. Generally, Fund portfolio securities are valued at the close of the principal exchange 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 (“OTC”) 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.

 

  •  

Options on futures: Last sale price; settlement price if no last sale price.

 

  •  

Bank loans and forwards: Mean between bid and ask price.

 

  •  

Investments in other mutual funds (including unregistered collective vehicles) are valued at their net asset value per share, as provided in the applicable fund prospectus or offering document and applicable law.

 

  •  

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 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 (e.g. trade information, news, broker quotes) 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

 

Notes to Quarterly Report   55

Table of Contents

Russell Investment Funds

Notes to Quarterly Report, continued — September 30, 2010 (Unaudited)

 

 

 

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.

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 foreign exposure exceeds 20% in aggregate (all closed markets combined); a company development; a natural disaster; or an armed conflict.

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, since foreign securities can trade on non-business days.

Fair value of securities 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. To increase consistency and comparability in fair value measurement, the fair value hierarchy was established 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 fair value hierarchy of inputs is summarized in the three broad levels listed below.

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

Level 2 — other significant observable inputs including quoted market prices in non-active markets or prices derived from market data. Included are the following:

 

  •  

common stocks traded or quoted only on inactive markets

 

  •  

privately placed bonds whose values are derived from a similar bond that is publicly traded

 

  •  

interest rate swaps valued based on compilation of primarily observable swap curves incorporated into a model or matrix price

 

  •  

euro commercial paper valued at amortized cost which approximates market and is not priced daily or a broker quote in a non-active market with inputs incorporated into a model or matrix price

 

  •  

non registered mutual funds that are daily priced, but not publicly traded

 

  •  

currency forwards valued based on a compilation of primarily observable market currency spot rates incorporated into a model or matrix price

 

  •  

corporate bonds and notes, domestic commercial paper, time deposits, U.S. Government Agencies, U.S. Treasury and Yankee Certificates of Deposit using evaluated pricing based on a compilation of primarily observable market information and or live data sources, active market makers and inter-dealer broker inputs incorporated into a model or matrix price

 

  •  

mortgage-related and other asset backed securities are valued based on evaluators analyzing features such as the pricing speed, spread and volatility in order to confirm the deal structure. Spreads and other information solicited from Wall Street buy and sell-side sources, including primary and secondary dealers, portfolio managers, and research analysts are used as model inputs. Using evaluated pricing based on a compilation of primarily observable market information and or live data sources, active market makers and inter-dealer broker inputs are incorporated into a model or matrix price (security characteristics including coupon rates and maturity dates are disclosed in the Statement of Investments).

 

  56      Notes to Quarterly Report

Table of Contents

Russell Investment Funds

Notes to Quarterly Report, continued — September 30, 2010 (Unaudited)

 

 

 

Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Level 3 — significant unobservable inputs including the Fund’s own assumptions in determining the fair value of investments. Included are the following:

 

  •  

OTC securities using the Company’s own data/models

 

  •  

prices with significant haircuts applied

 

  •  

staled securities — fair valuation procedures are applied

 

  •  

securities that have broken tolerance outlined in the Board-approved securities valuation procedures

 

  •  

no current market quotations — fair valuation procedures are applied

 

  •  

unreliable prices — fair valuation procedures are applied

Level 3 investments include positions with prices not derived from existing market data. As such, Level 3 assets typically involve the use of financial models, such as discounted cash flow analysis for investments in privately held companies, or other non-market based methods to determine an investment’s Fair Value. One may consider Level 3 investments as those that cannot be quickly liquidated for their stated market value.

The levels associated with valuing the Funds’ investments for the period ended September 30, 2010 are disclosed in the Presentation of Portfolio Holdings.

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 daily on the accrual basis. The Core Bond Fund classifies gains and losses realized on prepayments received on mortgage-backed securities as an adjustment to interest income. All premiums and discounts, including original issue discounts, are amortized/accreted using the effective interest method.

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 Non-U.S. Fund’s 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, 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 within 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.

 

Notes to Quarterly Report   57

Table of Contents

Russell Investment Funds

Notes to Quarterly Report, continued — September 30, 2010 (Unaudited)

 

 

 

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 their investment strategies.

The Funds typically use derivatives in three ways: exposing cash reserves to markets, hedging and return enhancement. In addition, the Non-U.S. and Real Estate Securities Funds may enter into foreign exchange contracts for trade settlement purposes. The Funds, other than the Real Estate Securities Fund, may pursue their strategy to be 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 some 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, 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.

The Funds’ period end derivatives, as presented in the Schedule of Investments, generally are indicative of the volume of their derivative activity during the period ended September 30, 2010.

Foreign Currency Exchange Contracts

In connection with investment transactions consistent with the Funds’ investment objective and strategies, certain Funds may enter into foreign currency exchange spot contracts and forward foreign currency exchange contracts (“contracts”). From time to time, the 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.

For the period ended September 30, 2010, the following Funds entered into foreign currency exchange contracts primarily for the strategies listed below:

 

Funds    Strategies

Non-U.S. Fund

   

Exposing cash reserves to markets and trade settlement

Core Bond Fund

   

Return enhancement and hedging

Real Estate Securities Fund

   

Trade settlement

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 expose cash reserves to markets.

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.

 

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The Funds’ use of written options involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements 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.

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.

For the period ended September 30, 2010, the Core Bond Fund purchased/sold options primarily for return enhancement and hedging.

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.

For the period ended September 30, 2010, the following funds entered into future contracts primarily for the strategies listed below:

 

Funds    Strategies

Multi Style Equity Fund

   

Exposing cash reserves to markets and trade settlement

Aggressive Equity Fund

   

Exposing cash reserves to markets and trade settlement

Non-U.S. Fund

   

Exposing cash reserves to markets and trade settlement

Core Bond Fund

   

Return enhancement, hedging and exposing cash reserves to markets

As of September 30, 2010, the Funds had cash collateral balances in connection with futures contracts purchased (sold) as follows:

 

      Cash Collateral  
  

Multi-Style Equity Fund

    $ 1,950,000   

Aggressive Equity Fund

      700,000   

Non-U.S. Fund

      2,000,000   

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 to expose cash reserves to markets 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 followed by each paying the other a series of interest payments based on the principal cash flow. At maturity the principal amounts are returned. 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.

 

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The Funds expect to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of their portfolios, to protect against any increase in the price of securities they anticipate purchasing at a later date or for return enhancement. 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 earmarked on the Funds’ records will be the full amount of the Funds’ obligations, if any, with respect to such interest rate swaps, accrued on a daily basis. 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.

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 may enter into swap agreements with counterparties that meet RIMCo’s credit quality limitations. The Funds will not enter into any swap unless the counterparty has a minimum senior unsecured credit rating or long term counterparty credit rating, including reassignments, of A- or better as defined by Standard & Poor’s or an equivalent rating from any nationally recognized statistical rating organization (using highest or split ratings) at the time of entering into such transaction.

Swap agreements generally are entered into by “eligible contract 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.

As of September 30, 2010, no Funds had cash collateral balances in connection with swaps contracts purchased (sold) as follows:

 

      Cash Collateral
for Swaps		      Due to Broker  
     

Core Bond Fund

    $ 565,071       $ 1,390,120   

Credit Default Swaps

The Core Bond Fund 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 Fund may act as either the buyer or the seller of a credit default swap involving 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. Depending upon the terms of the contract, the credit default swap may be closed via physical settlement. However, due to the possible or potential instability in the market, there is a risk that the Fund may be unable to deliver the underlying debt security to the other party to the agreement. Additionally, the Fund may not receive the expected amount under the swap agreement if the other party to the agreement defaults or becomes bankrupt. In an unhedged credit default swap, the Fund enters into a credit default swap without owning the underlying asset or debt issued by the reference entity. Credit default swaps allow the Fund to acquire or reduce credit exposure to a particular issuer, asset or basket of assets.

As the seller in a credit default swap, the Fund 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 Fund 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 Fund would keep the stream of payments and would have no payment obligations. As a seller, the Fund 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 Fund may also purchase protection via credit default swap contracts in order to offset the risk of default of debt securities held in its portfolio, in which case the Fund would function as the counterparty referenced in the preceding paragraph.

If a credit event occurs on a corporate issue 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 Fund 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 Fund owns or has 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.

Unlike credit default swaps on corporate issues, deliverable obligations for credit default swaps on asset-backed securities in most instances are 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

 

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outstanding principal balance of the referenced obligation. These reductions may be 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 Fund 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, assetbacked 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 Schedule 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 currentstatus 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 the 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 September 30, 2010 for which the 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 the Fund for the same referenced entity or entities.

Credit default swaps could result in losses if the Fund does 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 Fund had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity and counterparty risk. The Fund will generally incur a greater degree of risk when it sells a credit default swap than when its purchases a credit default swap. As a buyer of credit default swap, the Fund 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 Fund, 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 Fund.

If the creditworthiness of the Fund’s swap counterparty declines, the risk that the counterparty may not perform could increase, potentially resulting in a loss to the Fund. To limit the counterparty risk involved in swap agreements, the Fund will only enter into swap agreements with counterparties that meet certain standards of creditworthiness. Although there can be no assurance that the Fund will be able to do so, the Fund 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 Fund 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.

For the period ended September 30, 2010, the Core Bond Fund entered into credit default swaps primarily for return enhancement and hedging.

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.

 

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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.

For the period ended September 30, 2010, the Core Bond Fund entered into interest rate swaps primarily for return enhancement and hedging.

Index Swaps

Certain Funds may enter into index swap agreements to expose cash reserves to markets 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).

For the period ended September 30, 2010, the Core Bond Fund did not enter into index swaps.

ISDA Master Agreements

The Funds are parties to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties that govern transactions in over-the-counter derivative and foreign exchange contracts entered into by the Funds and those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to early terminate could be material to the financial statements.

Loan Agreements

The Core Bond Fund may invest in direct debt instruments which are interests in amounts owed by corporate, governmental, or other borrowers to lenders or lending syndicates. The Fund’s 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 “agent”) 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 Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the agent selling the loan agreement and only upon receipt by the agent of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Fund may be subject to the credit risk of both the borrower and the agent that is selling the loan agreement. When a Fund purchases assignments from agents it acquires direct rights against the borrower on the loan. At September 30, 2010, the Core Bond Fund had no unfunded loan commitments.

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 Core Bond 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 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

 

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transactions generally and will evaluate the credit worthiness of any bank, broker or dealer party to a repurchase agreement with the Fund. The Fund will not invest more than 15% 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

The Core Bond Fund 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 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 Fund has 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 refers to loans extended to borrowers who have incomplete documentation of income, assets, or other variables that are important to the credit underwriting processes. Non-conforming 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 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

 

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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 Fund’s 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 Fund to dispose of any then existing holdings of such securities.

Forward Commitments

Certain Funds may contract to purchase securities for a fixed price at a future date beyond customary settlement time consistent with the Funds’ investment strategies. 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 Funds in a dollar amount sufficient to make payment for the portfolio securities to be purchased will be earmarked on the Funds’ records at the trade date and 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.

A to be announced (“TBA”) security 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 September 30, 2010, the Core Bond Fund had no cash collateral balances in connection with TBAs.

Inflation-Indexed Bonds

The Core Bond Fund may invest in inflation-indexed securities, which are typically bonds or notes designed to provide a return higher than the rate of inflation (based on a designated index) if held to maturity. A common type of inflation-indexed security is

 

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the U.S. Treasury Inflation-Protected Security, or TIPS. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, the adjusted principal or original principal is paid, whichever is greater. TIPS pay interest twice a year, at a fixed rate. The rate is applied to the adjusted principal; so, like the principal, interest payments rise with inflation and fall with deflation.

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 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 Core Bond Fund and Non-U.S. Fund had direct holdings, swap agreements, and securities and derivatives transactions outstanding with Lehman Brothers entities as issuers or counterparties 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 and incorporated as components of other receivable and liabilities on the Statements of Assets and Liabilities and net change in realized gain (loss) or unrealized appreciation (depreciation) on the Statement of Operations. The Funds have also utilized certain netting arrangements to offset payables and receivables of Lehman securities.

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.

The court overseeing all the U.S. Lehman entities’ bankruptcy cases set a filing deadline for all those entities. The Lehman Brothers Inc. claims filing deadline was January 30, 2009 for all customer claims and June 1, 2009 for all general creditor claims related to Lehman Brothers Inc. The Lehman Brothers Holdings, Inc. and Lehman Brothers Special Financing, Inc. court set filing deadlines of September 22, 2009 and November 2, 2009 (for certain “Program Securities”). The Lehman Brothers International (Europe) court set filing deadline of December 31, 2010. To the extent that the Funds held accounts with Lehman Brothers Inc., the Funds filed the appropriate customer claims on January 29, 2009 and filed all other claims related to U.S. Lehman entities on the foregoing deadlines. The relevant Funds have entered into a confidential settlement agreement with respect to certain claims for terminated derivatives transactions between the Funds, Lehman Brothers Special Financing Inc. its parent company Lehman Brothers Holdings Inc. and securities positions facing Lehman Brothers Inc.

 

Notes to Quarterly Report   65

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Russell Investment Funds

Notes to Quarterly Report, continued — September 30, 2010 (Unaudited)

 

 

 

3.   Investment Transactions

Written Options Contracts

Transactions in written options contracts for the period ended September 30, 2010 were:

 

     Core Bond  
     Number of
Contracts		     Premiums
Received		  

Outstanding December 31, 2009

      88      $ 484,268   

Opened

      403        960,528   

Closed

      (45 )      (62,844 ) 

Expired

      (346 )      (713,494 ) 
                

Outstanding September 30, 2010

      100      $ 668,458   
                

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. The collateral received is recorded on a lending Fund’s Statement of Assets and Liabilities along with the related obligation to return the collateral.

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 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 creditworthy.

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 September 30, 2010, the SLQT Fund 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. Each Fund has earmarked liquid assets to cover the difference between SLQT’s market value per unit and its amortized cost value per unit.

As of September 30, 2010, the non-cash collateral received for the securities on loan in the following funds was:

 

Funds    Non-Cash
Collateral Value		      Non-Cash Collateral Holding  
     

Multi-Style Equity

    $ 17,422,942         Pool of US Government Securities and Corporate Bonds   

Aggressive Equity

      1,498,166         Pool of US Government Securities and Corporate Bonds   

Core Bond

      82,061         Pool of US Government Securities and Corporate Bonds   

Real Estate Securities

      1,353,108         Pool of US Government Securities and Corporate Bonds   

 

  66      Notes to Quarterly Report

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Russell Investment Funds

Notes to Quarterly Report, continued — September 30, 2010 (Unaudited)

 

 

 

 

4.   Related Party Transactions

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 U.S. Cash Management Fund, an unregistered Fund advised by RIMCo. As of September 30, 2010, the Investment Company Funds have invested $100,622,305 in the Russell U.S. Cash Management Fund.

 

5.   Federal Income Taxes

At September 30, 2010, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

 

     Multi-Style
Equity Fund		     Aggressive
Equity Fund		     Non-U.S. Fund     Core
Bond Fund		     Real Estate
Securities Fund		  

Cost of Investments for Tax Purposes

    $ 329,969,947      $ 156,278,163      $ 326,174,227      $ 534,162,215      $ 439,751,340   
                                        

Gross Tax Unrealized Appreciation

    $ 37,190,922      $ 21,992,532      $ 40,684,989      $ 22,393,136      $ 95,237,083   

Gross Tax Unrealized Depreciation

      (6,031,860 )      (4,168,636 )      (11,962,304 )      (8,646,176 )      (2,105,692 ) 
                                        

Net Tax Unrealized Appreciation (Depreciation)

    $ 31,159,062      $ 17,823,896      $ 28,722,685      $ 13,746,960      $ 93,131,391   
                                        

 

6.   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% 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		    Acquisition
Date		      Principal
Amount ($) or
Shares		      Cost per
Unit
$		      Cost
(000)
$		      Market Value
(000)
$		  
              

Aggressive Equity Fund - 0.0%

               

JER Investors Trust, Inc.

      05/27/04         1,771         81.87         145         —   
                    

Non-U.S. Fund - 0.2%

               

Rolls-Royce Group PLC

      03/18/10         83,809         8.70         729         795   
                    

Core Bond Fund - 1.5%

               

Adam Aircraft Term Loan

      02/13/08         48,786         99.00         48         —   

ARES CLO Funds

      01/15/09         730,000         76.04         555         675   

ARES CLO Funds

      01/15/09         467,199         95.27         445         439   

Armstrong Loan Funding, Ltd.

      05/21/09         407,761         87.64         357         393   

BNP Paribas Capital Trust

      06/01/06         450,000         112.07         504         452   

Black Diamond CLO, Ltd.

      09/11/08         750,000         85.49         641         665   

Chatham Light CLO, Ltd

      11/25/09         495,121         90.64         449         461   

CIT Mortgage Loan Trust

      10/05/07         114,110         100.00         114         107   

CIT Mortgage Loan Trust

      10/05/07         130,000         100.00         130         81   

CIT Mortgage Loan Trust

      10/05/07         180,000         100.00         180         90   

DG Funding Trust

      11/04/03         49         10,537.12         516         379   

Freddie Mac REMICS

      07/07/06         3,654         108.86         4         4   

Hellas Telecommunications Luxembourg V

      01/17/08         EUR 125,967         142.89         180         55   

Lloyds TSB Bank PLC

      09/27/10         200,000         101.80         204         202   

NBC Universal, Inc.

      09/27/10         300,000         100.00         300         304   

 

Notes to Quarterly Report   67

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Russell Investment Funds

Notes to Quarterly Report, continued — September 30, 2010 (Unaudited)

 

 

 

Fund - % of Net Assets
Securities		    Acquisition
Date		      Principal
Amount ($) or
Shares		      Cost per
Unit
$		      Cost
(000)
$		      Market Value
(000)
$		  
              

RAS Laffan Liquefied Natural Gas Co., Ltd. III

      08/04/05         250,000         100.00         250         279   

Santander US Debt SA Unipersonal

      09/27/10         400,000         100.00         400         399   

Stadshypotek AB

      09/23/10         800,000         99.98         800         801   

Symetra Financial Corp.

      06/02/06         150,000         98.78         148         155   

UBS AG

      01/11/08         270,000         49.20         133         150   

Washington Mutual Mortgage Pass Through Certificates

      04/01/05         190,000         100.00         190         11   

WG Horizons CLO

      04/12/10         800,000         92.50         740         721   
                    
                 6,823   
                    

Illiquid securities and restricted securities may be priced by the Funds using fair value procedures approved by the Board.

 

7.   Subsequent Events

Management has evaluated events or transactions that may have occurred since September 30, 2010, that would merit recognition or disclosure in this Quarterly Report. This evaluation was completed through the date the Quarterly Report was issued, that would merit recognition or disclosure in the Quarterly Report. During this review nothing was discovered which would require further disclosure within the quarterly report with the exception noted below.

In late 2010, the Real Estate Securities Fund changed its investment objective by concentrating in equity securities of real estate companies located in a number of countries around the world, including the U.S, in a globally diversified manner.

 

  68      Notes to Quarterly Report

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Russell Investment Funds

Shareholder Requests for Additional Information — September 30, 2010 (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 year. These reports are available (i) free of charge, upon request, by calling the Fund at (800) 787-7354, (ii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iii) at the Securities and Exchange Commission’s public reference room.

The Board has delegated to RIMCo, as RIF’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 Fund. 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, and (ii) on the Securities and Exchange Commission’s website at www.sec.gov.

If possible, depending on contract owner registration and address information, and unless you have otherwise opted out, only one copy of the RIF prospectus and each annual and semi-annual report will be sent to contract owners at the same address. If you would like to receive a separate copy of these documents, please contact your Insurance Company. If you currently receive multiple copies of the prospectus, annual report and semi-annual report and would like to request to receive a single copy of these documents in the future, please call your Insurance Company.

Some Insurance Companies may offer electronic delivery of the Funds’ prospectus and annual and semiannual reports. Please contact your Insurance Company for further details.

 

Shareholder Requests for Additional Information   69

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Russell Investment Funds    909 A Street      800-787-7354
   Tacoma, Washington 98402      Fax: 253-591-3495
        www.russell.com

 

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36-08-308

Table of Contents

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2010 QUARTERLY REPORT

 

 

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

 

 

SEPTEMBER 30, 2010

FUND
Moderate Strategy Fund
Balanced Strategy Fund
Growth Strategy Fund
Equity Growth Strategy Fund

 

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Table of Contents

Russell Investment Funds

Russell Investment Funds is a series investment company with nine different investment portfolios referred to as Funds. This Quarterly Report reports on four of these Funds.

Table of Contents

Russell Investment Funds

LifePoints® Funds

Variable Target Portfolio Series

Quarterly Report

September 30, 2010 (Unaudited)

Table of Contents

 

     Page  
Moderate Strategy Fund      3   
Balanced Strategy Fund      4   
Growth Strategy Fund      5   
Equity Growth Strategy Fund      6   
Notes to Quarterly Report      7   
Shareholder Requests for Additional Information      9   

Table of Contents

Russell Investment Funds - LifePoints® Funds Variable Target Portfolio Series

Copyright © Russell Investments 2010. 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 products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments.

Table of Contents

Russell Investment Funds

Moderate Strategy Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares        Market
Value
$		  
       
Investments - 100.0%        
Other Russell Investment Funds (“RIF”) and Russell Investment Company (“RIC”) Series Mutual Funds        
Bonds - 58.0%        

RIF Core Bond Fund

      1,593,730           17,515   

RIC Russell Global Credit Strategies Fund

      97,306           973   

RIC Russell Investment Grade Bond Fund

      428,284           9,731   
             
          28,219   
             
Domestic Equities - 13.0%        

RIF Aggressive Equity Fund

      94,198           973   

RIF Multi-Style Equity Fund

      199,725           2,433   

RIC Russell U.S. Quantitative Equity Fund

      112,018           2,919   
             
          6,325   
             
International Equities - 20.0%        

RIF Non-U.S. Fund

      458,510           4,379   

RIC Russell Emerging Markets Fund

      73,199           1,459   

RIC Russell Global Equity Fund

      479,340           3,892   
             
          9,730   
             
Real Assets - 9.0%        

RIF Real Estate Securities Fund

      108,681           1,460   

RIC Russell Commodity Strategies Fund

      131,495           1,460   

RIC Russell Global Infrastructure Fund

      145,959           1,459   
             
          4,379   
             
Total Investments - 100.0%
(identified cost $43,721)		           48,653   
Other Assets and Liabilities,
Net - (0.0%)		           (15 ) 
             
Net Assets - 100.0%           48,638   
             

 

See accompanying notes which are an integral part of this quarterly report.

 

Moderate Strategy Fund   3

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Russell Investment Funds

Balanced Strategy Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares        Market
Value
$		  
       
Investments - 100.0%        
Other Russell Investment Funds (“RIF”) and Russell Investment Company (“RIC”) Series Mutual Funds        
Bonds - 38.0%        

RIF Core Bond Fund

      4,407,997           48,444   

RIC Russell Global Credit Strategies Fund

      415,233           4,152   
             
          52,596   
             
Domestic Equities - 23.0%        

RIF Aggressive Equity Fund

      535,958           5,537   

RIF Multi-Style Equity Fund

      1,136,380           13,841   

RIC Russell U.S. Quantitative Equity Fund

      478,012           12,457   
             
          31,835   
             
International Equities - 29.0%        

RIF Non-U.S. Fund

      2,173,997           20,762   

RIC Russell Emerging Markets Fund

      277,655           5,536   

RIC Russell Global Equity Fund

      1,704,570           13,841   
             
          40,139   
             
Real Assets - 10.0%        

RIF Real Estate Securities Fund

      309,183           4,152   

RIC Russell Commodity Strategies Fund

      498,779           5,537   

RIC Russell Global Infrastructure Fund

      415,233           4,152   
             
          13,841   
             
Total Investments - 100.0%
(identified cost $128,370)		           138,411   
Other Assets and Liabilities,
Net - (0.0%)		           (23 ) 
             
Net Assets - 100.0%           138,388   
             

 

See accompanying notes which are an integral part of this quarterly report.

 

  4      Balanced Strategy Fund

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Russell Investment Funds

Growth Strategy Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares        Market
Value
$		  
       
Investments - 100.0%        
Other Russell Investment Funds (“RIF”) and Russell Investment Company (“RIC”) Series Mutual Funds        
Bonds - 19.0%        

RIF Core Bond Fund

      1,072,810           11,790   

RIC Russell Global Credit Strategies Fund

      314,405           3,144   
             
          14,934   
             
Domestic Equities - 29.0%        

RIF Aggressive Equity Fund

      456,542           4,716   

RIF Multi-Style Equity Fund

      774,396           9,432   

RIC Russell U.S. Quantitative Equity Fund

      331,778           8,646   
             
          22,794   
             
International Equities - 38.0%        

RIF Non-U.S. Fund

      1,563,794           14,935   

RIC Russell Emerging Markets Fund

      197,094           3,930   

RIC Russell Global Equity Fund

      1,355,194           11,004   
             
          29,869   
             
Real Assets - 14.0%        

RIF Real Estate Securities Fund

      234,106           3,144   

RIC Russell Commodity Strategies Fund

      424,872           4,716   

RIC Russell Global Infrastructure Fund

      314,405           3,144   
             
          11,004   
             
Total Investments - 100.0%
(identified cost $75,195)		           78,601   
Other Assets and Liabilities,
Net - (0.0% )		           (21 ) 
             
Net Assets - 100.0%           78,580   
             

 

See accompanying notes which are an integral part of this quarterly report.

 

Growth Strategy Fund   5

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Russell Investment Funds

Equity Growth Strategy Fund

Schedule of Investments — September 30, 2010 (Unaudited)

Amounts in thousands (except share amounts)

 

     Shares        Market
Value
$		  
       
Investments - 100.1%        
Other Russell Investment Funds (“RIF”) and Russell Investment Company (“RIC”) Series Mutual Funds        
Bonds - 5.0%        

RIC Russell Global Credit Strategies Fund

      118,652           1,186   
             
Domestic Equities - 36.0%        

RIF Aggressive Equity Fund

      160,807           1,661   

RIF Multi-Style Equity Fund

      292,247           3,560   

RIC Russell U.S. Quantitative Equity Fund

      127,485           3,322   
             
          8,543   
             
International Equities - 44.1%        

RIF Non-U.S. Fund

      571,519           5,458   

RIC Russell Emerging Markets Fund

      83,307           1,661   

RIC Russell Global Equity Fund

      409,146           3,322   
             
          10,441   
             
Real Assets - 15.0%        

RIF Real Estate Securities Fund

      88,349           1,187   

RIC Russell Commodity Strategies Fund

      128,273           1,424   

RIC Russell Global Infrastructure Fund

      94,922           949   
             
          3,560   
             
Total Investments - 100.1%
(identified cost $21,639)		           23,730   
Other Assets and Liabilities,
Net - (0.1%)		           (16 ) 
             
Net Assets - 100.0%           23,714   
             

 

See accompanying notes which are an integral part of this quarterly report.

 

  6      Equity Growth Strategy Fund

Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Quarterly Report — September 30, 2010 (Unaudited)

 

 

 

1.   Organization

Russell Investment Funds (the “Investment Company” or “RIF”) is a series investment company with nine different investment portfolios referred to as Funds. This Quarterly Report reports on four of these Funds (each a “Fund” and collectively the “Funds”). The Investment Company provides the investment base for one or more variable insurance products issued by one or more insurance companies. These Funds are offered at net asset value to qualified insurance company separate accounts offering variable insurance products. 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 an Amended and Restated Master Trust Agreement dated October 1, 2008 (“Master Trust Agreement”). The Investment Company’s Master Trust Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.

The Funds seek to achieve their objective by investing in a combination of Russell Investment Company (“RIC”) Funds and other of the Investment Company’s Funds (the “Underlying Funds”) as set forth in the table below. Russell Investment Management Company (“RIMCo”) is the Funds’ adviser and may modify the target asset allocation for any Fund and/or the Underlying Funds in which the Funds invest from time to time based on strategic capital markets research or on factors such as RIMCo’s outlook for the economy, financial markets generally and/or relative market valuation of the asset classes represented by each Underlying Fund. In the future, the Fund may also invest in other Underlying Funds. Any modification in the asset allocation or changes to the Underlying Funds will be based on strategic, long-term allocation decisions and not tactical, short-term positioning and may be made one or more times per year. In the future, the Funds may also invest in other funds which are not currently Underlying Funds.

 

     Target Asset Allocation Range as of September 30, 2010  
Asset Class/Underlying Funds    Moderate
Strategy Fund		     Balanced
Strategy Fund		     Growth
Strategy Fund		     Equity Growth
Strategy Fund		  
        

Bonds

         

RIF Core Bond Fund

      31-41 %      30-40 %      10-20 %      0 % 

RIC Russell Global Credit Strategies Fund

      0-7        0-8        0-9        0-10   

RIC Russell Investment Grade Bond Fund

      15-25        0        0        0   

Domestic Equities

         

RIF Aggressive Equity Fund

      0-7        0-9        1-11        2-12   

RIF Multi-Style Equity Fund

      0-10        5-15        7-17        10-20   

RIC Russell U.S. Quantitative Equity Fund

      1-11        4-14        6-16        9-19   

International Equities

         

RIF Non-U.S. Fund

      4-14        10-20        14-24        18-28   

RIC Russell Emerging Markets Fund

      0-8        0-9        0-10        2-12   

RIC Russell Global Equity Fund

      3-13        5-15        9-19        9-19   

Real Assets

         

RIF Real Estate Securities Fund

      0-8        0-8        0-9        0-10   

RIC Russell Commodity Strategies Fund

      0-8        0-9        1-11        1-11   

RIC Russell Global Infrastructure Fund

      0-8        0-8        0-9        0-9   

 

2.   Significant Accounting Policies

The following is a summary of the significant accounting policies consistently followed by the Funds in the preparation of this Quarterly Report. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for investment companies. The presentation of these schedules of investments in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Quarterly Report. Actual results could differ from those estimates.

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. Generally, Underlying Fund portfolio securities are valued at the close of the principal exchange on which they are traded.

Fair value of securities 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. To increase consistency and comparability in fair value measurement, the fair value hierarchy was established 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,

 

Notes to Quarterly Report   7

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Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Quarterly Report, continued — September 30, 2010 (Unaudited)

 

 

 

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 fair value hierarchy of inputs is summarized in the three broad levels listed below.

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

Level 2 — other significant observable inputs including quoted market prices in non-active markets or prices derived from market data.

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

The levels associated with valuing the Funds’ investments for the period ended September 30, 2010 were level one for all 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.

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.   Federal Income Taxes

At September 30, 2010, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

 

     Moderate
Strategy Fund		      Balanced
Strategy Fund		     Growth
Strategy Fund		     Equity Growth
Strategy Fund		  
         

Cost of Investments for Tax Purposes

    $ 46,421,862       $ 133,846,546      $ 78,025,637      $ 25,470,531   
                                 

Gross Tax Unrealized Appreciation

    $ 2,231,183       $ 4,888,086      $ 740,348      $ —   

Gross Tax Unrealized Depreciation

      —         (323,514 )      (164,747 )      (1,740,079 ) 
                                 

Net Tax Unrealized Appreciation (Depreciation)

    $ 2,231,183       $ 4,564,572      $ 575,601      $ (1,740,079 ) 
                                 

 

4.   Subsequent Events

Management has evaluated events or transactions that may have occurred since September 30, 2010, that would merit recognition or disclosure in this Quarterly Report. This evaluation was completed through the date the Quarterly Report was issued, that would merit recognition or disclosure in the Quarterly Report. During this review nothing was discovered which would require further disclosure within the quarterly report with the exception noted below.

In late 2010, The Real Estate Securities Fund’s investment strategy changed from a predominantly U.S.-based investment strategy to a global investment strategy.

 

  8      Notes to Quarterly Report

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Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Shareholder Requests for Additional Information — September 30, 2010 (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 year. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, (ii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iii) at the Securities and Exchange Commission’s public reference room.

The Board has delegated to RIMCo, as RIF’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 Underlying 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, and (ii) on the Securities and Exchange Commission’s website at www.sec.gov.

If possible, depending on contract owner registration and address information, and unless you have otherwise opted out, only one copy of the RIF prospectus and each annual and semi-annual report will be sent to contract owners at the same address. If you would like to receive a separate copy of these documents, please contact your Insurance Company. If you currently receive multiple copies of the prospectus, annual report and semi-annual report and would like to request to receive a single copy of these documents in the future, please call your Insurance Company.

Some Insurance Companies may offer electronic delivery of the Funds’ prospectus and annual and semiannual reports. Please contact your Insurance Company for further details.

 

Shareholder Requests for Additional Information   9

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Russell Investment Funds    909 A Street      800-787-7354
   Tacoma, Washington 98402      Fax: 253-591-3495
        www.russell.com

 

LOGO

 

LOGO

 

36-08-309

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Item 2. 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-3(c) under the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the Act and Rule 13a-15(b) or 15d-15(b) under the Exchange Act as of a date within 90 days of the date this report is filed with the Securities and Exchange Commission.

(b) There were no material changes in Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

Item 3. Exhibits

(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.

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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 Funds
By:   /S/    SANDRA CAVANAUGH        
 

Sandra Cavanaugh

Principal Executive Officer and Chief Executive Officer

Date: November 26, 2010

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/    SANDRA CAVANAUGH        
 

Sandra Cavanaugh

Principal Executive Officer and Chief Executive Officer

Date: November 26, 2010

 

By:   /S/    MARK E. SWANSON        
 

Mark E. Swanson

Principal Financial Officer, Principal Accounting

Officer and Treasurer

Date: November 26, 2010